INCOME TAX.

HC Deb 19 June 1884 vol 289 cc886-932

Clause 5 (Grant of duties of income tax).

MR. MACFARLANE

said, when the Motion for the second reading of the Bill was before the House, he gave Notice to the Chancellor of the Exchequer that at this point of the Bill he should draw attention to a Motion which was derided against him when the Bill of last year was in Committee. He claimed exemption from the payment of Income Tax for all moneys accruing to persons in the United Kingdom, but which moneys never came into the United Kingdom. He claimed that the Income Tax should only be paid on that money which came into the United Kingdom. But he had put down the Amendment, which he was about to move, for the purpose of affording the Chancellor of the Exchequer an opportunity of offering an explanation about a case which the right hon. Gentleman, had cited in support of the view taken by the right hon. Gentleman in reference to this question. He had asked the right hon. Gentleman last year if the law had been settled upon this question; if a decision had ever been come to upon the question as to whether a person in the United Kingdom was liable for the tax upon his whole income, if received in the United Kingdom or not? The right hon. Gentleman stated in reply that the case was settled in 1808, and he quoted an Exchequer case which led him to take for granted that the law had been settled at that time. He went to his solicitor, and got him to look up the Law Reports; but he could not find the case, and for a very good reason —it had never been tried. He (Mr. Macfarlane) wrote to the right hon. Gentleman the Chancellor of the Exchequer requesting him to give a reference, and the right hon. Gentleman was good enough not only to give him a reference, but a copy of the case. When he read the case, however, he found that the precedent did not at all support the view of the right hon. Gentleman, while it did support the Amendment he (Mr. Macfarlane) moved. As the case was very short, he would road it to the Committee. It was a case raised at Hemel Hempsted, Hertfordshire, in the year 1805, and at that period the Income Tax did not extend to Ireland. The gentleman concerned, Mr. William Hilton, lived at Hemel Hempsted, and was a trader in Ireland. He had been in the habit of returning an Income Tax of £1,000 a-year. It was pointed out to him he was injuring his own case, because he was only required to return in England as much as he received from Ireland. That being so, he tried the experiment; and on the next occasion when he made a return he returned £500, being the sum that he received in England from his trade in Ireland. The Income Tax Commissioners charged him with the full £1,000, on the ground that he had returned it before, and Mr. Hilton appealed. He appealed to the Local Income Tax Commissioners, and they upheld the appeal, and charged him on £500 only. The case was sent up to the Board of Inland Revenue, and from the copy of an official document, which he held in his hand—a document dated the 29th of February, 1808, and prepared by Mr. Harry Grover, clerk to the Commissioners of the Hundred of Daconum, Hertfordshire—he found that this gentleman— Claims relief of the Commissioners against the advance on him of the £500 in 1805, when from the foregoing circumstances he had lost the opportunity of applying on the appeal day, and to have remitted him the sum of £31 5s. charged on him— He (Mr. Macfarlane) had made the case rather weaker than it really was, because it appeared that, during the absence of Mr. Hilton, Mrs. Hilton had paid the full amount, and what Mr. Hilton claimed was the actual repayment of the sum paid. He claimed to be repaid— £31 5s. charged on him above the return he so made in that year; but the Commissioners did not feel themselves empowered to afford him any relief, as the duplicates were perfected and delivered to the Tax Office and to the Receiver General. The foregoing matters were stated by the said William Hilton on oath before the Commissioners on the last appeal day, on the 8th of April instant, and at his instance the Commissioners have directed me to transmit thereof to the Commissioners for the affairs of Taxes, in order that he may obtain the relief prayed, if there were any means of affording it him. The Board are not aware that the Commissioners have any authority to remit the duty, nor do they see upon what ground the Commissioners assessed him the last year in £500 only as on the sum received from Ireland. Every trader living in Great Britain is answerable for the whole profits of trade arising in another country. That was the opinion of the Inland Revenue Commissioners; but was it what was conveyed to him last year? It was conveyed to him that the law had been definitely decided, not that the Inland Revenue Commissioners had decided in their own favour that such and such was the law. Here was a case, and the Exchequer never appealed against it; they never brought the case into Court. He did not make these remarks in order to raise the question just now, because he did not think the time was opportune, but in order to give the right hon. Gentleman the Chan- cellor of the Exchequer an opportunity of explaining how it came about that the precedent that was quoted against him (Mr. Macfarlane) last year turned out to be a precedent entirely in his favour. He awaited the explanation of the right hon. Gentleman with some curiosity.

Amendment proposed, In page 2, line 29, after the word "profits," to insert the words "received in the United Kingdom."—(Mr. Macfarlane.)

Question proposed, "That those words be there inserted."

MR. COURTNEY

understood that the hon. Member did not propose to amend the law—[Mr. MACFARLANE: The law is not settled]—but he desired to get from the Chancellor of the Exchequer a declaration as to what the law was. The hon. Gentleman himself had allowed that the Inland Revenue authorities were the supreme authorities in these matters, and that they had decided that a person living in England was taxable for an income obtained in a foreign country. If the law was laid down by the supreme authority, and acquiesced in by every taxpayer, it was no objection to say it had not been decided by the Court of Exchequer. Last year the right hon. Gentleman the Chancellor of the Exchequer referred to the case of Hilton in 1806, and also to the case of Cankrien in 1808, and he said the contention was that the profits did not come into England, and were not and should not be subject to Income Tax. In both cases the decision of the authorities was to the effect that the profits were subject to Income Tax; and that had been the invariable decision of the authorities ever since. Oil the 5th of June of last year, the right hon. Gentleman referred to the case of Hilton, and made the quotation the hon. Member (Mr. Macfarlane) had made tonight. He acknowledged the act of the Local Commissioners, and then said— In the case of Hilton the particulars as to the year 1805 were transmitted to the Board in London, with a view to his being allowed a repayment; and he added the words— Every trader living in Great Britain is answerable for the whole profits of trade arising in another country."—(3 Hansard, [279] 1741.) That was what was laid down by the supreme authorities—the Inland Re- venue—at the time; it had been acquiesced in by every taxpayer, and it was what constituted the law. His right hon. Friend the Chancellor of the Exchequer was perfectly justified in declaring that to be the law, for it had been acted upon and observed, and never questioned since. That being the only point raised by the hon. Member, it was not necessary to go into the question as to whether the demand was a just one. Justice required every person who lived in the Kingdom, and who had an income, wherever obtained, to pay Income Tax upon that income; it did not make any difference whether or not the person brought the income home, or left it where it was made to be reinvested. There could be no question whatever as to the justice of the law, or as to the accuracy of the statement made by the right hon. Gentleman the Chancellor of the Exchequer.

MR. MACFARLANE

said, he did not charge the Chancellor of the Exchequer with having stated that which he did not believe to be accurate; but he considered that the right hon. Gentleman had been misled by the permanent officials of the Inland Revenue. Those officials considered that an opinion of theirs given in 1805 was the ruling of English law. He did not think that the majority of people would agree with, them in that matter. What he understood when the subject was discussed last year was, that the decision had been given according to law, and not merely according to the opinion of the officials of Somerset House. He took it for granted that law was administered by Judges, and not by the officials of the Inland Revenue. The hon. Gentleman the Secretary to the Treasury had said that whatever was acquiesced in was law. A great many people acquiesced in what was called law, but which was not law. No one knew better than the Secretary to the Treasury and the Chancellor of the Exchequer what an odious thing it was to appeal against the Income Tax assessment. No one knew better than they did what an odious power was possessed by the Inland Revenue authorities for the purpose of squeezing Income Tax out of people. They knew that, as a rule, people would pay almost anything rather than be dragged into a Court and have nil their private affairs exposed, and they had played upon that fact for their own advantage. He would not enter into a controversy with, the hon. Gentleman the Secretary to the Treasury, though he thought the hon. Gentleman's dogmas on the question of the law relating to the Income Tax might be very easily refuted. The hon. Gentleman said there was no doubt as to the justice of the principle on which Income Tax was assessed. He (Mr. Macfarlane) had very great doubt on the point. A lawyer discussing the question would probably say that the present system of assessment was an anomaly, which was much worse than an injustice, because an anomaly was a thing for which nothing at all was to be said. At the present time he only wished to put on record that, in his opinion, in the statement which the right hon. Gentleman the Chancellor of the Exchequer made last year he was misled by the Inland Revenue officials, and that he quoted a case which was virtually one in his (Mr. Macfarlane's) favour.

THE CHANCELLOR OF THE EXCHEQUER (Mr. CHILDERS)

said, that the hon. Gentleman did not wish to discuss the general question; but he (the Chancellor of the Exchequer) was only anxious to maintain his consistency. The words he used last year were quite correct. He referred to two cases, and he said— The case of Cankrien, which occurred in 1808, is perfectly clear. He claimed not to be assessed on certain profits made abroad; "but his claim was disallowed, and the tax was paid. The case of Hilton, 'in 1806, was as follows:—He had paid the full tax in 1804 and in 1805; but I find that in 1800 the Local Commissioners relieved him from the tax on certain profits made abroad, and desired the particulars as to the year 1805 to be transmitted to the Board in London, with a view to his being allowed a repayment. The Board declined to do so, replying that they were 'not aware that the Commissioners have any authority to remit the duty,' and adding—'Every trader living in Great Britain is answerable for the whole profits of trade arising in another country.'"—(3 Hansard, [279] 1741.) He merely said that that was the decision of the authorities, and he adhered to that statement.

MR. MACFARLANE

asked leave to withdraw his Amendment.

Amendment, by leave, withdrawn.

MR. CLARE READ

moved the omission of the words "twopence halfpenny," in page 2, line 34, and the substitution of the words "one penny three farthings." He understood there were to be equal laws for England, Ireland, and Scotland, and, therefore, he thought the time had come that the Committee should know the reoson why the tenant farmers of England were taxed at a higher rate than their brethren in the two more favoured countries. He asked the question in the late Parliament, and he received the very Conservative reply—it was so in the beginning, and it must be so to the end. He trusted the law would be altered, because it appeared to him to be totally unsatisfactory and entirely unjust. In the first place, agricultural depression had been much more severely felt throughout all the corn-growing districts of England than it had ever been in Scotland or in Ireland; and he undertook to say that if, during the last five years, the farmers of England could have produced correct accounts before the Commissioners, not one farmer in 10 would have been called upon to pay any Income Tax at all. In consequence of farmers, as a rule, not keeping their accounts properly, there was extreme difficulty in. appealing against the tax. In good years, he cheerfully admitted that the rough-and-ready way of taking half the rent was a fair criterion of a farmer's profits. He understood that one argument in favour of the distinction in the amount of Income Tax paid by English, and Scotch, and Irish farmers, was that the rents in Scotland and Ireland were higher than they were in England. Ireland, of course, stood in an exceptional position; but he believed it would be found that the reduction of rents had been much greater in England than in Scotland. In England there had been a return of a great number of percentages which did not appear in the shape of reduction of rent, yet in a vast number of instances both landlord and tenant had had to pay on the full rent. He should be glad if the Chancellor of the Exchequer would be good enough to take, this matter into his serious consideration, and that, at least, he would inform the Committee how it came to pass that the distinction was ever made, and whether there was anything to justify it.

Amendment proposed, In page 2, line 34, to leave out the words "twopence halfpenny," and insert the words "one penny three farthings."—(Mr. Clare Read.) Question proposed, "That the words 'twopence halfpenny' stand part of the Clause."

COLONEL NOLAN

said, that if the hon. Member, who always spoke authoritatively on English agricultural questions, would only propose to take throe farthings off the Income Tax paid by the farmers of Ireland and Scotland, he (Colonel Nolan) would very cheerfully give him his support. He had no objection to the Amendment in itself, because he knew that for some years past agriculturists in this country had suffered very severely from the agricultural depression. He could not help, however, finding fault with the arguments by which the hon. Gentleman had supported his Amendment. It was a little surprising that the hon. Member had not seen fit to show the differences which existed between England and Ireland in regard to agricultural matters. The Irish fanners suffered very greatly from the want of sufficient market accommodation. He noticed that the farmers of England could get £5 a-ton for their hay; indeed, it had been given in evidence before a Committee now sitting up-stairs, that recently a large contract for hay at £9 per ton was made at Liverpool. The farmers of Ireland never got such prices; they sometimes got £2 10s. and £3 per ton. Occasionally they got a little more; but £2 10s. might be taken as the average price. The case of potatoes was just the same. He found that here potatoes were now selling at 7d. and 8d. a-stone; last year they were sold at 9d. and 10d. a-stone. This year they were selling at 5d. and 6d. a-stone; but usually it was hard to get more than 3d. a-stone. English farmers were able to prevent Irish cattle being moved through England, and this Irish farmers resented very greatly, because it seriously interfered with their profits. These were some of the reasons why it might very easily be supposed that Irish farmers did not make as much profit as an English farmer. The Income Tax, during the last two years at least, might very properly have been remitted in the case of a large number of farmers. Many farmers had made no money at all; certainly many in his own part of the country (Galway) had bought a large number of cattle, but they had not even made their rent. It was hard upon these people that they should be called upon to pay even l¾d. Income Tax. He did not strongly oppose the Amendment of the hon. Member who so ably represented agriculture in the House; but he thought it was right to present the Irish side of the question, and not let the Committee run away with the idea that people in Ireland were making money. As a matter of fact, the Irish farmers were losing money upon almost everything in which they dealt.

THE CHANCELLOR OF THE EXCHEQUER (Mr. CHILDERS)

said, he was not aware that the hon. Gentleman (Mr. Clare Read) intended to raise this question. If he had given Notice of his intention, he (the Chancellor of the Exchequer) would have been prepared to speak more positively and authoritatively on the subject. What, however, he had to say was that this had been the Income Tax rule with respect to Schedule B for many years, and he was not aware it had been disputed. The reason was that the proportion which farmers' profits in England bore to the valuation of the land had always been held to be considerably higher than in Ireland and Scotland. The proportion of farmers' profits in England had generally been taken to be one-half; whereas it had been taken at one-third in Scotland and Ireland. There were also reasons as to rating, to which he need not now refer in detail. That rule had been observed in Acts of Parliament for many years past. There was another reason why he thought it would be quite unnecessary to make this change, and that was that the law provided the method under which, if the assessment was too high, the farmer was able to obtain a reduction of the assessment. The 3rd section of the Act of 1851—the 14 & 15 Vict. c. xii—related expressly to Schedule B, and it provided that if any person occupying land, and assessed under Schedule B, should find and prove to the satisfaction of the Commissioners by whom the assessment was made, that his profits and gain from the occupation of his land fell short of the sum on which the assessment was made, it should be lawful for the Commissioners to cause an abatement to be made from the amount charged against him. There- fore, what a farmer had to do was to look sharply after his rights under that clause. He would undertake, between now and next year, to look carefully into the question, and if he could do anything to strengthen the provision of the Act of 1851, he would do it. He trusted the hon. Gentleman would not press his Amendment.

SIR WALTER B. BARTTELOT

said, he listened attentively to the arguments of the Chancellor of the Exchequer; but he failed to find that the right hon. Gentleman had grasped the situation, the situation being that during the last 10 years farmers in England had scarcely made any profit. There might be a few who had made a little profit; but he was fully persuaded that particularly since the year 1879 a large number of farmers in the great corn-growing counties had made no profit at all. If they looked at the price of wheat at the present time, they must come to the conclusion that, even with a good crop, it barely covered the cost of cultivating the land and so wing the wheat. Such being the case, it was but right that the right hon. Gentleman the Chancellor of the Exchequer should give some attention to the matter, with the view, if possible, of making an abatement in the Income Tax paid by agriculturists in England. In. spite of what his hon. and gallant Friend (Colonel Nolan) said, he asserted that during the last few years two-thirds of the farmers of Ireland had been doing better than the farmers of England. All the Irish farmers who had been able to grow cattle had received very high prices indeed for their stock. He admitted the truth of the hon. and gallant Gentleman's (Colonel Nolan's) statement, that since foot-and-mouth disease had been rampant in this country, cattle farmers had experienced some difficulty in carrying on their trade; but, looking at the whole circumstances of the case, he was confident Irish farmers, particularly those in certain parts of Ireland, had done a great deal better than English farmers had done. In Scotland, too, although higher rents were to be paid, the farmers made greater profits than the agriculturists of England made. What English agriculturists complained of was that in respect of the Income Tax there should be any distinction made between them and their Irish and Scotch brethren. They had a right to ask that the Chancellor of the Exchequer should, if possible, reduce the tax this year, or, at any rate, that he should most carefully consider the subject, with the view of making a reduction in the immediate future. The right hon. Gentleman talked about the law, and he had shown what could be done under the law as it at present stood. The right hon. Gentleman knew perfectly well, as he (Sir Walter B. Barttelot) knew perfectly well, that there were very few farmers who could produce such accounts as would enable them to obtain the proper reduction. They could not pay their rents, and in many instances it had been necessary to give them a bonus—they had not been able to show by their accounts that they had made sufficient money to necessitate their paying tins 2½ per cent Income Tax. He would not go into the question further, except to say that he should like to see the right hon. Gentleman the Chancellor of the Exchequer give them a little more encouragement, because, looking at the manner in which the farmers had borne their distress, and looking at the outcry which was raised against everything proposed which had a semblance to Protection, even when it was protection against the introduction of cattle disease, he thought they did deserve everything that could be done to relieve them from charges upon the land. Local taxation, as well as Income Tax, all bore very heavily upon the farmer; therefore, he (Sir Walter B. Barttelot) cordially agreed with the hon. Member for West Norfolk (Mr. Clare Read), and ventured to hope that the right hon. Gentleman the Chancellor of the Exchequer would, at any rate, give the matter his most serious consideration.

THE CHANCELLOR OF THE EXCHEQUER (Mr. CHILDERS)

said, he had promised to give the matter careful consideration.

GENERAL SIR GEORGE BALFOUR

thanked the Chancellor of the Exchequer for the very liberal offer he had made to consider the claims of farmers for exemption from the Income Tax when the profits fell below the fixed proportion of the rental. An hon. Member had very justly said that there was one mode of remedying the evil complained of—namely, by farmers keeping accounts, and thereby being able to substantiate their claim for the deductions to which they were entitled; he was very sorry that the farmers generally did not avail themselves of this mode. He himself was acquainted with only a few Scotch fanners who had obtained relief from taxation in this way. The Inland Revenue officer had, on proof by production of accounts, granted relief; and he should cordially agree with any proposition which contemplated getting them to adopt this general system. The Inland Revenue Department attended very carefully to all representations on the part of the farmers. He wished to point out that in Scotland farmers paid on their full incomes, while in England a very large reduction was made.

MR. BIRKBECK

said, he wished to suggest to the Chancellor of the Exchequer whether it would not be well for him to take into consideration the desirability of coming to some more satisfactory settlement on this question, between now and the Report stage, without waiting till next year. They ought not to be put off for another year. The agricultural distress had now been going on for eight years, and the farmers of the country ought not to be put to the necessity of waiting any longer. If the right hon. Gentleman did not give the promise asked of him, it was to be hoped the Amendment would be pressed to a Division, so that the country might see who were the real friends of the farmers on this question.

MR. ILLINGWORTH

said, he hoped the Chancellor of the Exchequer would be slow to hold out expectations to hon. Gentlemen on this question which were not likely to be realized. It seemed to him that this was not so much a question between the farmers of England and those of Ireland and Scotland as it was a question between the farmers of England and the other taxpayers. They were told that the farmers had had a series of bad years; but if the case of other traders was fully stated, it would be found that they had quite as strong a claim, to consideration as had the agriculturalists of the country. The farmers had had their rents very largely reduced all round; and he did not hesitate to say that, in the average of years, this class had got on very well—much better than those concerned in other trades. It was said that the farmers should not be charged upon the basis upon which the tax was at present levied, on account of the succession of bad years they had suffered; but it seemed to him that the answer which the Chancellor of the Exchequer had given to that contention was complete. The right hon. Gentleman had pointed out that the farmer had redress. They had the same relief given as any other trader under the Income Tax system; and he was, therefore, at a loss to imagine why this special boon should be given to the farmers, and refused to the other taxpayers. For his own part, he thought the Chancellor of the Exchequer should wish to see a much stronger case put before him before he agreed to any such change as that proposed. Surely farmers were not to come to that House and claim an exemption at the expense of all the other taxpayers of the country. If they did, it would be absolutely necessary that those who represented large constituencies carrying on the great industries of the country, and who had been suffering for quite as many years as the agriculturalists, should come forward, and each declare that the special conditions of his constituents had a right to be considered. He maintained that there had been, unfortunately, more Income Tax paid on money which had not been earned by the manufacturing classes than by the farmers.

MR. D. DAVIES

said, if the hon. Gentleman (Mr. Clare Read) went to a Division on his Amendment, he should support him. Thirty years ago he was a farmer himself, and he did keep accounts for one year—and, as he thought, pretty correct accounts. He was very busy at the time, and these accounts bothered him. so much that at last he had to give them up. That was his experience, and he believed, also, that it was the experience of the generality of farmers. Taking the agricultural class as a whole since 1879—he did not say that there were not exceptions in cases where farmers had good grass land, and a large amount of healthy stock—they had lost money that could not pay Income Tax. He himself was willing to pay Income Tax; in fact, if it would relieve the farmers, he should be very glad, so far as he was concerned, to pay a little more. He did not wish to vote against the Government; and, he supposed, if he did he should be called to Order. If, however, the Amendment were pressed to a Division, he should feel bound to vote for it.

MR. GREGORY

was understood to say that this subject had been unexpectedly raised, and it was new to him that there was a difference of assessment between the farmers of the three countries, nor could he understand the principle upon which the tax was so levied; but he felt that the burden, was most unfair to the English farmer, falling more heavily on him than on the Irish or Scotch farmer.

MR. COURTNEY

said, the hon. Member for East Sussex (Mr. Gregory) had declared that this was a new subject to him, and the hon. Member's speech had proved that to be the case; because, for the first time in his (Mr. Courtney's) experience of the hon. Member, he had that evening spoken upon a subject with which he was not acquainted. Such a proceeding was of the rarest occurrence on the part of the hon. Member. When the Income Tax was revived by Sir Robert Peel, it was a great question how the tax was to be assessed on farmers, because farmers, as a rule, were unable to make out accounts, as the hon. Member for Cardigan Boroughs (Mr. D. Davies) had declared to have been his own experience. It was said that there was no trustworthy test as to the property of a farmer; but, taking good years with the bad, it was thought that in England the farmer's profits might fairly be taken at half his rental. That was to say, supposing he paid £500 a-year rent, his profit would be £250. It was assumed, at the same time, that the Scotch and Irish farmers' profits would be, as a rule, a third of their rental—that was to say where they paid a rental of £600 a-year their profit would be some £200. That was the rule adopted by Sir Robert Peel, and it was in accordance with that rule that the Schedule had been prepared. The landowner, under Schedule A, paid 5d. in the pound on his rental; and the English farmer paid 2½d., that being supposed to be 5d. on his profits. The Scotch and Irish farmers had to pay l¾d on their rental, that being supposed to be at the same rate—namely, 5d. on their profits. The scheme of taxation of profits was the same in the Three Kingdoms—that was to say, all paid the same rate. There was no idea of taxing the English farmer to the extent of 2½d. on his rental, and the Scotch and Irish farmers a smaller amount. He was not going to argue the rule under which the charge was made; he had explained the principle which the hon. Gentleman (Mr. Gregory) could not understand. But the law had done something more for the farmer. There was an Act of 1851, giving farmers the privilege to pay on the actual profits they made in bad years—that was to say, they had the privilege of saying—"I will take the average in good years; but whenever bad years come, I will pay on the actual profits I have made." That was an extraordinary exemption, only embodied in the law in favour of the English farmer. It came to this—that the farmer had the privilege of paying as if his profits were half his rental, although the amount realized might be more than half his rental; and, furthermore, the privilege, whenever a bad year turned up, of saying—"My profits will not reach a half of my rental; therefore I must have a reduction." English farmers had largely availed themselves of this privilege in recent times. The English farmers had the advantage, therefore, both ways, and the Exchequer could never make a gain by him. He (Mr. Courtney) thought, after this explanation, hon. Gentlemen must see that the charge which had been brought against the Government fell entirely to the ground.

MR. BIDDELL

, after remarking that the hon. Member (Mr. Courtney), in correcting the previous speaker, was not right himself, stated that the fact was the English farmer was assessed on more than half his rent. The tithe was added to his rent, and from the amount thus obtained one-eighth was deducted, and the remainder was the sum on which he was assessed. [Mr. GLADSTONE and Mr. CHILDERS: No, no!] Thus, assuming his rent was £500 and tithe £120, his tax would be calculated on £620, less one-eighth, or £542 10s. 2½d. in the pound on that would be £5 12s. 10d., which was 15 or 20 per cent more than the Scotch farmer had to pay. He had stated these facts in the form of a Question to the right hon. Gentleman [Mr. Gladstone) some three years ago, when he was Chancellor of the Exchequer, and the right hon. Gentleman had deputed the answer to the gentleman (Lord Frederick Cavendish) who was, unfortunately, murdered in Ireland. The answer given on that occasion was that his (Mr. Biddell's) calculations were right. He would stand on his calculations, and would still maintain that where the rent, tithes, and rates were the same the English farmer paid from 15 to 20 per cent more than the Scotch or Irish farmer. He would take a further opportunity of publishing his figures, in order that he might convince the right hon. Gentlemen he was right and they were in error.

MR. GLADSTONE

said, that when he heard the hon. Member (Mr. Biddell) fall into what appeared to him to be a most manifest error just now he shook his head, because it was impossible for him to hear such a statement without taking exception to it. He would not go back into figures of which the hon. Member had spoken, but would address himself to the point the hon. Member had put before the Committee. He understood the hon. Member to state that the tithe paid by the farmer entered into the computation of his rent. [Mr. BIDDELL: That is so.] He was not sure whether the hon. Member also said that the rates were added, and that one-eighth was deducted either from the rent plus the tithe, or the tithe plus the rate, or from the rent plus the tithe and rates. Certainly, if the experience of the hon. Member had been such as he had described, his position had been most unfortunate. If he, or any of his friends, had been assessed on the basis of adding to the rent the tithe, or the tithe and rates, they had, unquestionably, been imposed upon by those who levied the tax. There could be no doubt in the world that, according to law, there was no connection whatever between the rent and tithe in the computation of the tax. The charge on the rent was made without the slightest reference to what was paid for tithe or for taxes. No such addition as the hon. Member had alluded to ought to have been made, the Act of Parliament being perfectly clear on the subject; and that fact ought to have been known throughout the country by this time, after the experience it had had of the Income Tax. As to the question whether, when the tax was levied on the rent, the hon. Gentleman paid a larger proportion than was paid in Scotland, it was an important subject, which ought to be discussed on its merits; but, without doubt, it appeared to him that the question was much more whether the Scotch farmer should have his tax raised than whether the English farmer should have his reduced. The English farmer could not possibly be damnified, as the rule of taxation in proportion to his rent was a rule entirely in his favour, and entirely against the Exchequer, because if he made profits beyond his rent he had the benefit of being charged on only a portion of those profits; whereas, if he made profits short of half of his rent, he could decline altogether to pay on the ordinary assessment. The Income Tax, no doubt, was a tax full of anomalies and inequalities; but in this case it certainly seemed to him that those anomalies were on behalf of the farmer, and not of the State.

SIR BALDWYN LEIGHTON

said, he rose to correct an observation which had been made by the hon. and gallant Member for Kincardineshire (Sir George Balfour). He had understood the hon. and gallant Member to say that the farmer ought to be rated higher for Imperial taxes, for the reason that 30 per cent was taken off his rent in the assessment of the local taxes.

GENERAL SIR GEORGE BALFOUR

was understood to say that he had only pointed out the difference between England and Scotland in this matter. In England the local rates were not paid on the gross rental. In Bedfordshire, for instance, he believed about 30 per cent was deducted from the gross rental before the taxes were rated and paid.

SIR BALDWYN LEIGHTON

said, if that were so, Bedford must be very exceptionally situated, because it was not the case in the county he represented (South Shropshire). The deductions from rental were 5 per cent for land and building, and 2½ per cent for land without building, and this for repairs, not for rates or tithe. The Chancellor of the Exchequer had promised to give the matter his best consideration; and, under the circumstances, he would appeal to his hon. Friend (Mr. Clare Read) not to press his Amendment to a Division. With regard to the statement of the Prime Minister, that the tithe was not reckoned with the rent, he thought that if the Chancellor of the Exchequer would inquire into the matter he would find that the Prime Minister was mistaken, and that if a man paid £500 a-year rent and £100 a-year tithe, the Commissioners charged his Income Tax upon the one half—namely, £300 a-year, I upon which he was obliged to pay. There was evidently a very important question at issue here. His hon. Friend (Mr. Clare Read) had stated that it was the rent and the tithe together that the tax was assessed upon; and he (Sir Baldwyn Leighton) was almost sure that he was right in his contention. Of course, rates were not reckoned; but certainly the tithe was. At any rate, if the right hon. Gentleman the Chancellor of the Exchequer would look into the matter to see whether the case was as represented by the hon. Member (Mr. Biddell) he would be doing a great justice to a large number of people. The concession which had been announced by the Prime Minister depended very much upon how it worked, and the facilities afforded for its use.

MR. MAGNIAC

said, the whole question of rating for Income Tax and other purposes depended on the annual value; but the hon. Gentleman below him (Mr. Courtney) had said that rates did not enter into the question. In his (Mr. Magniac's) opinion they did; and they really lay at the whole root of the question. The farmers had a certain percentage deducted from their rents for rates and taxes, for rates could not be profit to the farmer. In many counties the deduction was large according to the valuation. In his county (Bedford) they had a very careful valuation of the lands and houses. It was made some years ago, and was a very high valuation indeed; and the consequence was that a much larger amount was assessed upon there than in counties in which there had been no such valuation. It was very well to say that farmers ought to keep accounts; but there was nothing more difficult than to make out the accounts of a farm. Profits must depend on circumstances occurring over a term of years; and it was impossible to lay down a general rule applicable to every locality and every description of land by which to ascertain the value of a farm. Farmers would have to pay Income Tax upon profits which they never made; unless they were able to take a long series of years it would be impossible to show their average profits or losses. This state of things ought to be remedied; but he did not know how that was to be done. An hon. Member had said that farmers were in a better position than other traders in the country; but he believed they were worse off: and he thought the plan of requiring them to show the profits of each year separately as a trader could do would be altogether inapplicable to them, unworkable, and unjust. This was a matter which certainly demanded examination, for it was one of very serious importance; but he hoped the hon. Member (Mr. Clare Read) would not go to a Division, because it was a ease in which it would be utterly impossible for a responsible Minister to give an answer off-hand. At the same time, he hoped the right hon. Gentleman would fulfil the promise he had made to have the question properly looked into in justice to the farmers.

MR. W. H. SMITH

said, he thought it would be most unwise for his hon. Friend to press this matter to a Division. The question was one of very great importance, and he was sure the Chancellor of the Exchequer would consider it during the Recess. He was not prepared to recommend the right hon. Gentleman to make an alteration at once, because the alteration of an Act which had been in existence for a great many years was a very serious matter indeed; but there could be no doubt that the views expressed by the hon. Member for Bedford (Mr. Magniac), and by other hon. Members on both sides of the House, were unfortunately too true. The farmers of England had for many years sustained losses under circumstances which had been most disastrous to them, and to a great many other persons also. It would be difficult for them to convey to the Commissioners before whom they would have to prove their case facts and evidence which would justify their claim for an entire remission of taxation. Farmer after farmer, tenant after tenant, had failed and disappeared, and the land had fallen back into the landlords' hands, and been re-let at a great reduction of rent; and the Chancellor of the Exchequer and the country would have to face a serious condition of things, in regard to which there appeared to be no prospect of improvement at the present time. The farming industry was now of a character of which few persons in London had the slightest idea; and if that was the case in the greater part of England, it was not borne out to the same extent in Ireland or Scotland, where the proportion of the Income Tax was much smaller in relation to the rent paid. He was not aware that there was any reduction in respect of rates referred to by the hon. Member for Bedford, and he had always understood that the rent paid to the landlord was the basis upon which the Income Tax was paid; and some authoritative statement upon that subject should be made by the Chancellor of the Exchequer, in order to remove misapprehension in the minds of persons interested in the matter. He believed the Income Tax was paid in reference to the rent in many cases, plus the tithe. In many cases the rent paid included the tithe; in others they were separate payments. The whole matter was a very important one, and required to be considered during the Recess.

MR. RAMSAY

wished to draw attention to the discrepancy between England and Scotland in respect to Income Tax charged upon farmers. In England the practice was for the tenant to pay, in addition to his rent, the rates and taxes due in respect of the land he occupied; but in Scotland those would be charged on the owner of the land. That was the sole ground why, in 1842, a distinction was made between England and Scotland. In Scotland the tenant was charged in respect of rack rent; and he thought no better reason could be assigned for the distinction between England and Scotland as to the rate at which the Income Tax should be assessed than the fact that in Scotland the principal rates were divided equally between the landlord and the tenant, while in England the tenant, as a rule, undertook to pay the rates for the landlord. In these circumstances, it was obvious that it would not be fair or reasonable to charge farmers in Scotland with respect to Income Tax at the same rate as in England, where the tenants, in addition to the rent, also paid the whole of the rates.

THE CHANCELLOR OF THE EXCHEQUER (Mr. CHILDERS)

The right hon. Member for Westminster (Mr. W. H. Smith) has asked me to make some authoritative statement on this subject; but I have nothing to add to my previous remarks, except that I should like to see the machinery of the assessment for taxes and rates in force throughout the country. Beyond this, I can only repeat that what I will undertake to do is, not to examine the basis of the principle upon which the farmer should pay the same Income Tax as other people upon his profits, but to see whether the particular machinery under which he is assessed is good or bad.

MR. CLARE READ

said, he thought the tenant farmers had already gained considerably from this discussion, for the Committee had heard from the highest authority in the House that they had been taxed for years and years on the tithe they paid, and that that had been an illegal tax upon them. He had paid Income Tax upon his tithes for 30 years, and he should certainly now make a demand for a repayment, and should advise every tenant farmer to do the same. He was sure the Chancellor of the Exchequer was wrong in saying that that was not the universal custom of the Inland Revenue authorities. His hon. Friend the Member for West Suffolk (Mr. Biddell) had put the case so plainly that he would not repeat the arguments of his hon. Friend; but the case was this. The farmer's rent and tithes were added together; then a certain amount was deducted, and that was supposed to represent the rates; but that balance of rent and tithes was what the tenant farmers of England had been paying for years and years. Now, however, they were told by the Prime Minister that that had been illegal, and henceforth they would not have to pay that. He thanked the Chancellor of the Exchequer for his assurance that he would consider this question. He did not care about the facilities given for appeal, because he was sure that the majority of the farmers in this country did not keep accounts well enough to furnish the necessary information for an appeal; but even with the best arrangement of farm accounts, he considered the case put by the hon. Member for Bedford (Mr. Magniac) unanswerable. Farmers had to go through their accounts, not for a single year, but for a series of years, to ascertain whether they had made a profit or not. The Secretary to the Treasury had rightly put before the Committee the origin of the difficulty. That was in 1840, when Sir Robert Peel revived the Property Tax; but the case was now entirely altered. Ireland and Scotland might be considered pastoral countries, and England had been, until recently, more or less arable land. It was quite true that in 1840 the farmers' profits in pastoral districts were different from the profits in arable districts; but now, whereas pastoral districts in this country had suffered hardly at all under the operations of Free Trade, and in some eases had benefited, the whole of the losses had been sustained by the tillers of the arable parts of the country; and therefore, although one-half of the rent might have been a fair criterion of the farmer's profits in the days of Sir Robert Peel, he contended that that ought now to be altered, and that the calculation ought to be one-third in England, as it was in Scotland and Ireland. The statement of the Chancellor of the Exchequer was a distinct gain to the farmers, and he hoped the right hon. Gentleman would not forget his promise. Under these circumstances, he would withdraw his Amendment.

SIR MICHAEL HICKS-BEACH

said, he thought the tenant farmers of England owed a debt of gratitude to the hon. Member (Mr. Clare Read) for bringing forward this matter, and extracting a declaration from the Chancellor of the Exchequer; and he hoped some instruction would be given to the officers of the Inland Revenue that they were not in future to charge tenants Income Tax on the tithes they paid. His experience went to corroborate the statement of the hon. Member, for he had paid Income Tax under Schedule B on tithes as well as on rent, and had always supposed that he was liable as an occupier to that charge. As, however, that was not legal, he thought some instruction should be given to the Inland Revenue officers that such a charge should not be made; or, at any rate, that there should be no trouble in assenting to appeals by tenant farmers.

MR. MAGNIAC

wished to say further that if there was one thing more erroneous than another it was that rent represented real value as a basis for Income Tax. There might be cases in which the farmer paid rent according to the real value; but there were others who paid beyond the value, or less than the value, the difference being settled in other ways.

MR. ILLINGWORTH

urged that trade and manufactures should be considered in reference to this matter. Some tenants would be taxed on the full rent; while in other cases, according to the Prime Minister, tenants would be assessed at a lower rate. He saw no injustice in the rent being divided between two or more landlords.

THE CHANCELLOR OF THE EXCHEQUER (Mr. CHILDERS)

said, he would undertake to look into the question as affecting tithes as well as other matters of assessment. The whole subject should be considered.

Amendment, by leave, withdrawn.

Clause agreed to.

Clauses 6 to 8, inclusive, agreed to.

Clause 9 (Provisions of Income Tax Acts to apply to duties to be granted for succeeding year).

MR. WARTON

moved the insertion of the following words at the end of the clause:— Provided, That nothing in this section shall be deemed to render necessary or authorize the appointment of assessors for such of the said Duties as may he grunted and payable under Schedules (A) and (B) of 'The Income Tax Act, 1853. The hon. and learned Gentleman said, he had been somewhat struck by the rapidity with which the Bill was carried through its second reading; and, when he came to look at the text, he found a vast difference between the Bill of last year and the present Bill. The Bill of last year contained provisions very similar to those in the last clauses of the present Bill—in fact, two or three of the last clauses wore identical with the clauses of last year's Bill, with this exception—that the last clauses in last year's Bill contained at the end the words which he was now proposing to add to this clause. Knowing what was done last year when an attempt was made by the Government to increase their patronage to a considerable extent by appointing a new means of collecting the Income Tax, and remembering the effort that was made in that House, and successfully made, to defeat that attempt—an effort which was successful by a majority of eight—it had struck him, on reading the 9th clause of the present Bill, that this was the same attempt being made under another form; and that impression was confirmed when he remembered the suspicious rapidity with which the Bill had been passed through its stages. He was under the impression that that was the meaning of it. He might or might not be right; but he hoped the right hon. Gentleman the Chancellor of the Exchequer would not be angry with him for putting down this Amendment, which he now begged to move.

Amendment proposed, In page 4, at end, add—"Provided, That nothing in this section shall be deemed to render necessary or authorize the appointment of assessors for such of the said Duties as may be granted and payable under Schedules (A) and (B) of 'The Income Tax Act, 1853.'"—(Mr. Warton.)

Question proposed, "That those words be there added."

MR. COURTNEY

said, he did not wish in the least degree to interfere with the freedom of the hon. and learned Gentleman. There was a little discussion on this point last year. The proposed words formed a provision which it was very necessary and desirable to insert in the Bill in two years out of every three; but in the third year it was not necessary, and should not be inserted, for this reason—that there was a fresh assessment every third year, and, when that was made, it was necessary that assessors should be appointed. In the other two years the assessors were not appointed. As a fresh assessment would be made next year, it was necessary that these words should not be in the Bill.

MR. WARTON

expressed his readiness to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause agreed to.

MR. MACFARLANE

moved, in page 1, after Clause 2, to insert the following Clause: — (Reduction of Tobacco Duties.) The Duty of Customs chargeable upon unmanufactured tobacco shall be three shillings per pound, and upon manufactured Cavendish, Negrohead, and other cake tobacco, two shillings. The hon. Gentleman said, he had put down this Amendment in consequence of the unsatisfactory result, in his opinion, which attended a recent discussion in that House on the Tobacco Duties. He was not able on that occasion to answer the right hon. Gentleman the Chancellor of the Exchequer, and, therefore, he was not able to argue the question; but it would be in the recollection of the Committee that the right hon. Gentleman admitted the essential accuracy of the figures which he (Mr. Macfarlane) then quoted. Those figures were never disputed in any way. He (Mr. Macfarlane) showed that the principle upon which the duty was levied upon tobacco in this country was not an equitable principle; but he did not, upon the occasion he was referring to, raise the whole question of the Tobacco Duties in general, for he did not then wish to wander into the whole subject. He must, however, now say that the refusal of the Chancellor of the Exchequer on that occasion to grant a Select Committee to inquire into the question left him and others no option but to go into the whole question in order to create a public opinion upon the point; for that was the only thing that would have any influence upon the Chancellor of the Exchequer, or upon any other Minister. He had, therefore, put down this Amendment raising the question in a specific manner. The figures which he had put into the Amendment were, he dared say, quite inaccurate, and did not properly represent the relative duties that ought to be charged on one kind of tobacco as distinguished from another; but he had simply put them down so as to raise the question, and to enable the Chancellor of the Exchequer to say whether he would now grant a Select Committee to inquire into the whole question. He (Mr. Macfarlane) explained, when he brought the matter forward before on the Order for going into Committee of Ways and Means, that he did not do it for the purpose of making a raid upon the Exchequer. All he asked for was an equitable adjustment of duties to enable manufacturers outside the United Kingdom to compete on fair and equitable terms with manufacturers inside the United Kingdom. He had shown the right hon. Gentleman the Chancellor of the Exchequer, in the previous discussion to which he referred, that 1 1b. of tobacco, brought into this country in a dry condition, contained, when sold to the working classes after manufacture, something like only 2s. 4d. or 2s. 5d. worth of duty-paid article, the rest being made up of water and other matter. He showed, also, at the same time, that the Chancellor of the Exchequer not only charged for the water and matter contained in foreign-manufactured tobacco at the rate of 3s. 6d. per 1b. duty, but he actually penalized the foreign manufac- turer by charging 4s. 10d., or 1s. per 1b. more; and the result was that the tobacco—the actual leaf—contained in tobacco manufactured outside the United Kingdom, and brought in here to be sold, had duty levied upon it actually at the rate of about 7s. 6d. per 1b. The right hon. Gentleman the Chancellor of the Exchequer had admitted that he could not deny that foreign-manufactured tobacco could not compete in this country with English-manufactured tobacco; but the right hon. Gentleman declared that that was due to circumstances, and not to the amount of the duty. The circumstances were that in the one case the right hon. Gentleman charged 2s. 5d. per 1b. in duty, while in the other he charged 7s. 6d. per 1b. That was a very tangible circumstance, no doubt, and quite accounted for the whole thing. But there was another statement which the right hon. Gentleman had made, and which he (Mr. Macfarlane) desired to controvert. It was this—that the importation of manufactured tobacco into this country showed that the duty was not prohibitory, and did not keep such tobacco out. But what were the figures which the Chancellor of the Exchequer relied upon? He (Mr. Macfarlane) would quote two or three of them. The hon. Gentleman the Member for Portsmouth (Sir H Drummond Wolff) recently obtained a Return for 40 years, showing the importation of manufactured tobacco into this country. The Return commenced with the year 1841, when the total quantity of manufactured tobacco imported into the United Kingdom in that one year was 1,896,000 1bs. But that did not go into consumption. It was imported and exported again, with the exception of 213,000 1bs., which was entered for home consumption. That was the total in that year, 1841; and in 1861, 20 years afterwards, the quantity entered for home consumption was 517,000 1bs. Now, the last year given in the Returns from which he was quoting was the year 1880, and in that year the total quantity of foreign-manufactured tobacco imported for home consumption was 153,000 1bs., or 50,000 1bs. less than it had been 40 years before. Now, he did not quite understand how it was that the right hon. Gentleman was able to argue that the duty was not a prohibitive duty because the importation was increasing under it, when, as a matter of fact, these figures showed that, though the consumption of tobacco in general had largely increased, the importation of manufactured tobacco had fallen off by 50,000 1bs. in 40 years. Now, what he (Mr. Macfarlane) wanted to ask the Chancellor of the Exchequer was this. He did not propose to put the Committee to the trouble of dividing upon the Amendment; because, if the right hon. Gentleman had not arguments enough in his head, he had sufficient arguments, at all events, in the Smoking Room, and in other places about the House, to come in when the bell rang, and gave notice that he required them. There was no occasion for argument when a Minister had big battalions at his back. But he (Mr. Macfarlane) was satisfied that the public, having their eyes opened, would not rest under this injustice, and would not be content until the whole question had been dealt with, and a proper and equitable plan devised for charging the duty on tobacco. Such a proper and equitable plan was to charge the duty in bond, no matter where the tobacco came from. He had pointed out before that they owed nothing to America in this matter. America had her own Protectional duties, which formed only an indirect way of taxing her own people; and the least that the British Chancellor of the Exchequer could do was to try and tax the British people on some equitable principle, and in such a way as would not force them into the consumption of an atrociously bad article when they could get a good one at the same price. If the right hon. Gentleman were to place a duty on corn, and so were to force the people not only to use English corn, but to use bad English corn instead of good foreign corn, what would the country say? Yet, that was just what went on in the case of tobacco, and the people of England did not know what good tobacco was—the Chancellor of the Exchequer would not let them have the opportunity of tasting it. They got rubbish composed of 65 per cent of some sort of tobacco, and the balance made up of water. He (Mr. Macfarlane) asked the Home Secretary a Question on this point the other day, as to the atrocious system of watering and adulteration practised. He understood that the officials of the Government were sent for certain pur- poses to every manufactory in the Kingdom. Was it, or was it not, their duty to see that the article sold to the public was not watered and adulterated by anything but fair means? He did not wish to use hard words with regard to the manufacturers; but they themselves admitted that when the ex-Chancellor of the Exchequer put 4d. per 1b. extra upon the Tobacco Duty, they simply added so much water to the article they sold. They admitted it themselves. What he wanted to ask was, whether the right hon. Gentleman the Chancellor of the Exchequer would now agree to the appointment of a Select Committee to consider the whole question? The right hon. Gentleman know very well that questions of this kind grew very fast. He (Mr. Macfarlane) had no desire to harass the manufacturers in any way; but they themselves were beginning to see that an inferior trade was a disadvantage to the public and no advantage to the Revenue. Would the Government, then, consent to appoint a Select Committee to consider the whole question of the duties upon cigars and the rest of the present system? It was, no doubt, a great convenience to the Custom House officials to charge precisely the same duty upon a miserable cigar which came from Burmah and was worth 1d., and upon the finer one which was worth 1s. He did not wish to trouble the Custom House officials to go into every petty little detail; but, surely, analogous duties could be imposed upon cigars of different qualities to those which were imposed upon wines of different strengths; and one duty could be imposed on cigars worth less than 40s. per 1b., while another duty was imposed on those which were worth more than 40s. per 1b. He did not see how there could be any difficulty in making such a change; and it certainly was not equitable that a 1d. cigar should pay the same duty as a 1s. 6d. Yet that was the practice now, and the person who bought cigars at 100s. per 100 paid only 5s. 6d. per cent duty on their purchase, while the tobacco consumed by the working classes paid 600 or 700 per cent in duty. He did not think that was a defensible system, and he did not see why the right hon. Gentleman should not deal with it. He could assure the Government that the matter would not be allowed to rest where it was, and the agitation aroused on the subject would become greater and greater each Session. The working man would not be content to smoke wet rubbish when he could get good dry tobacco for the same price. He (Mr. Macfarlane) would not go any further if the right hon. Gentleman would agree to the appointment of a Select Committee. The right hon. Gentleman said the other day that he was not prepared to submit £8,500,000 of Revenue to a Select Committee. But he (Mr. Macfarlane) did not propose that the right hon. Gentleman should leave it to a Select Committee to remit £8,500,000; all he proposed was that a Committee should consider the question, and see whether a more equitable system of taxation could not be introduced, not to reduce the Revenue—that might be unnecessary—but only to allow the duty to be more fairly and equitably charged. The rich man's cigar should pay as much as the poor man's tobacco—indeed, it ought to pay a good deal more. The right hon. Gentleman knew very well that a Select Committee, if appointed, would have no power to remit taxation; they would only have power to inquire and report to that House, and that House could deal with their Report as they pleased. He thought he had now shown that his request was a reasonable one. If a Select Committee were appointed, the public would wait patiently until they had made their Report, and then the right hon. Gentleman would be in a position to deal with it. This was really a most important question; because he (Mr. Macfarlane) held that tobacco and temperance went together. There was an old-fashioned, absurd theory, that people who smoked drank; but the fact was quite the contrary. People who smoked, as a rule, did not drink. People who drank smoked in addition, but people who smoked did not naturally drink in addition. The fact was, that many of the greatest smokers were among the most temperate of men; and smoking was really the only enjoyable luxury that the poor man possessed. He wanted to see the poor man get as good a tobacco to put in his pips of a morning as circumstances would permit, and as the exigencies of taxation would allow.

New Clause (Reduction of Tobacco Duties,)—(Mr. Macfarlane,)—brought up, and read the first time.

Motion made, and Question proposed, "That the Clause be read a second time."

THE CHANCELLOR OF THE EXCHEQUER (Mr. CHILDERS)

said, the hon. Gentleman, under cover of this Motion, had made an appeal to him, asking him to assent to the appointment of a Select Committee to consider the Tobacco Duty. The hon. Gentleman, in giving his reasons for the adoption of such a course, had said that he was in favour of a system under which the duty should be levied in proportion to the value of the tobacco on which it was charged, and not in proportion to its weight, whether it was manufactured or unmanufactured. What he (the Chancellor of the Exchequer) had said was that in this country they had abandoned the system of ad valorem duties—their day was passed. As to wines, to which reference had been made, there was no ad valorem duty on them; but the duty was levied according to the amount of alcoholic strength contained in each wine, and had no relation to value, directly or indirectly. This country had had great experience of ad valorem duties—it had had them for something like two centuries, with respect to one article or another. All the arguments that could be used in favour of ad valorem duties were used years ago; but we almost unanimously determined to abolish the system as one open to every possible kind of fraud, and bad from the point of view of the Revenue. Under these circumstances, the hon. Gentleman appealed to the Government to appoint a Select Committee for the purpose of re-introducing the system of ad valorem duties on tobacco.

MR. MACFARLANE

I did not ask for that. I merely expressed my own opinion. A Committee would consider the whole question, and would not be guided by my opinion.

THE CHANCELLOR OF THE EXCHEQUER (Mr. CHILDERS)

said, that when the hon. Gentleman asked for a Committee because he was in favour of a particular system it was fair to assume that the revival of that system was the object which he had in view, and that that was the question which the Committee would primarily have to consider. He (the Chancellor of the Exchequer) was not prepared to say that the re-introduction of an ad valorem system was practicable; and, therefore, as he had said on a previous occasion, he could not assent to the appointment of such a Committee as was proposed. He came now to the actual Motion of his hon. Friend. The hon. Gentleman proposed that whereas the duty now charged on unmanufactured tobacco was either 3s. 6d. or 3s. 10d. per lb., as the case might be, and the duty charged on manufactured tobacco lay between 4s. and 5s., there should be instead a duty on unmanufactured tobacco of 3s., and on manufactured or other tobacco of 2s. The hon. Gentleman shook his head; but he (the Chancellor of the Exchequer) was quoting the hon. Gentleman's own figures.

MR. MACFARLANE

I only put thorn down to raise discussion.

THE CHANCELLOR OF THE EXCHEQUER (Mr. CHILDERS)

said, that if the hon. Gentleman put a Motion down on the Paper, it was his (the Chancellor of the Exchequer's) duty to show its effect, and he found that the effect of this particular Motion would be to take off about one-seventh of the present amount of duty. If, therefore, the hon. Gentleman's clause should be carried it would entail a loss of more than £1,000,000 to the Revenue; and, therefore, he could not assent to it. But the hon. Gentleman said he had only put the words of his Motion on the Paper in order to raise discussion, and see whether the Government would persist in their objection to the appointment of a Committee. Now, he (the Chancellor of the Exchequer) had gone very carefully into the question in the course of a former debate, and he would not now repeat all that he then stated. All he would now say was that if they taxed manufactured tobacco at 2s. and tobacco in its unmanufactured state at 3s., they would invert what was the universal practice in their fiscal system. The hon. Gentleman had stated that the importation of manufactured tobacco had not increased within the last few years, and he had given as an illustration the amount of manufactured tobacco imported in 1841 and 1861, and lately. The hon. Gentleman quoted figures showing some such result as this—that while in 1841 200,000 1bs. were imported, last year the amount imported was 150,000 1bs. But in 1841 and in 1861 the old duties were in force—that was to say, a duty of 9s. in the 1b. upon manufactured tobacco—and those duties only lasted until the year 1863, when they gave way to the present duties; but the amount of manufactured tobacco imported during last year was over 1,000,000 lbs.

MR. MACFARLANE

For home consumption?

THE CHANCELLOR OF THE EXCHEQUER (Mr. CHILDERS)

said, yes. He had gone through all he said on the subject the other day, and he must still adhere to the conclusion at which he arrived. He could not accept the clause, nor agree to the appointment of a Select Committee.

MR. EUSTACE SMITH

said, there was great disappointment among those who took an interest in the subject at the manner in which the Chancellor of the Exchequer had dealt with it. There could be no doubt that though it might seem but a small question it was one that would attract more and more attention. The right hon. Gentleman, in addressing himself to meet the arguments brought forward, had lost sight of the view the hon. Member advocated—not by any particular proposal, though he stated his own opinion—the broad principle that this was a question which ought to be investigated by a Select Committee. The whole point of it was the state of the Tobacco Duties, and the protection these afforded to the English manufacturers. It was a question of nothing else than Protection in the trade against Free Trade. Those who wanted an alteration in the duty did not want to inflict any injury to the Exchequer, or to the financial interests of the country; they wanted the English consumer to get the best supply he could, without regard to the manufacturer in this country or in any other country. He would appeal to the Chancellor of the Exchequer's large acquaintance with the Australian Colonies and the working of the tobacco trade there. In the Australian Colonies and in New Zealand there were little sale of English tobacco, simply because English and American tobaccos were subject to the same duty as manufactured tobacco, and the Colonist never thought of buying an ounce of English tobacco. This was a fair test of English opinion of the two articles, if it had a fair chance of judging between them; but under the present state of the law it was quite impossible that American tobacco could be sold at a price the working man could approach. The hon. Member for Carlow (Mr. Macfarlane) was a little unfair to the English manufacturer, when he said the whole question of the weight of English tobacco was explained by adulteration. It could not fairly be called adulteration. The fact was, the process of manufacture in the two countries was totally different. In the English manufacture the exigencies of climate required the use of steam in the manufacture, and this left a certain amount of water in the tobacco; whereas, in America, the sun being more available, there was not so much water, and the weight of the tobacco was considerably reduced. It would be quite possible, without much disturbance of duty, to get the article from the country in which it was manufactured under the greatest advantage; and they had a right to ask the Chancellor of the Exchequer, not to commit himself to any particular proposal of ad valorem duties, or any great principle of political economy, but to consider the manner in which Tobacco Duties were levied, and whether this could be altered in such a manner that there would be increased advantages to the consumer without detriment to the Revenue.

MR. PUGH

said, he hoped the Chancellor of the Exchequer would re-consider this question. It was one of great importance, pecuniarily, to the poorer classes; and it was also a question of immense importance to India and the financial condition of that country. Every source of Revenue there should be carefully encouraged. The growth of tobacco in India had increased to a large extent in recent years. During the time he had known it the manufacture had increased and improved to a very large extent. It would be clear to the Committee that the Chancellor of the Exchequer devoted himself entirely in his remarks to criticising the various suggestions made by the hon. Member for Car-low; but the two main questions he did not touch upon. The present duties added much to the expenses of the consumer. If a poor man wished to find the best tobacco, and bought foreign manufactured, he paid a higher rate than for English tobacco. That was clearly Protection, and Protection of the worst form. Then, again, in reference to cigars. He was not going to advocate a return to ad valorem duties; but surely the Chancellor of the Exchequer could see some way, without recurring to that principle of ad valorem duties, to equalize the anomalies that existed in the duty upon Havannah cigars and Trichinopoly cigars. Putting these two points together, he hoped the right hon. Gentleman would re-consider the question, and make some further inquiries into it. Without wishing to have recourse to ad valorem duties—certainly not with, any intention of decreasing the Revenue— with no intention of advocating any less duty than at present, he wished to see a more fair and equitable way of raising the duty, so that the consumer might buy English or foreign manufacture as he wished, and a man who could only afford to smoke a 1d. cigar should pay less duty than a man who paid 1s. 6d.

LORD GEORGE HAMILTON

said, it was impossible not to sympathize with the object of the hon. Member for Carlow (Mr. Macfarlane), and from one point of view he had made out his case. It was indisputable that, although the consumption of tobacco in this country was very great, calculated per head of the population, unquestionably it was much adulterated. Owing to their fiscal arrangements, the manufacture of the tobacco consumed was confined to the United Kingdom; therefore this might be taken as one of the causes of adulteration, and one of the consequences of the fiscal arrangements in force. At all events, it was not an unfair proposal that this question should be thoroughly investigated, and, if necessary, referred to a Select Committee. At the same time, he agreed with one objection of the Chancellor of the Exchequer, that it was not always understood if the House assented to the Budget proposals it was hardly consistent to make such an alteration in the Inland Revenue Bill. Unquestionably, if the Amendment were carried, it would place the Chancellor of the Exchequer, according to his figures, in such a position that he would have a deficiency to meet. It was a very complicated question, with which he thought the Chancellor of the Exchequer attempted to deal fairly; but he very naturally objected to refer to a Select Committee such a large question as the Tobacco Duties, which might, perhaps, make a Report which, if adopted, would largely decrease the Revenue at the exact time when the Revenue could least afford it. But would it not be possible to refer to a Committee the incidence of the tax, leaving the amount of Revenue, as far as possible, where it now was? The Chancellor of the Exchequer was very adroit in the drafting of Resolutions; and the hon. Member for Carlow would be satisfied if that assisted him to secure what he wished — as good an article as possible for consumption by the poorer classes. The hon. Member for Carlow wished to improve the tobacco, and he, moreover, contended that there was less duty imposed on the rich man's cigar than on the poor man's tobacco. If that were so—and he believed it was not disputed—he hoped the Chancellor of the Exchequer would consider the proposition he (Lord George Hamilton) had ventured to make; and between now and when he introduced his next Budget make such a proposal as would tend to equalize the inequalities to which the hon. Member for Carlow had called attention, not objecting to some inquiry into the subject.

MR. WILLS

said, he should not have intervened in the discussion but for a remark from the noble Lord opposite (Lord George Hamilton), who had spoken of the adulteration of tobacco. In no country with which he was acquainted were the laws against adulteration more stringent or more strictly enforced. There was a Return in the Library, moved for by himself a year or two ago, and that would show the convictions for adulteration in process of manufacture. A very heavy duty was imposed by the State for Revenue purposes, and the only thing allowed by the Excise to be used in the manufacture was pure water. The addition of water to the tobacco consumed by the working classes was made to bring it to the price at which the British working man wished to have his tobacco. If a man, instead of giving 3d. an ounce, would give 4d an ounce, he would get as good tobacco as could be produced in India, in America, or any part of the world. The higher classes of tobacco manufactured and consumed in this country were probably the finest in the world. The increasing export trade in tobacco from this country to all parts of the world, and the price that British manufactured tobacco commanded in the market, showed there were consumers in other countries who appreciated the high quality that the British manufacturers had secured.

MR. MACFARLANE

said, the hon. Member who had just spoken claimed that adulteration was practised for the benefit of the working man, that the latter would only pay 3d. per ounce; therefore, if he only got 25 per cent of water he should be satisfied. He was careful to point out that there was no adulteration except with pure water. Now, if the Aylesbury Dairy Company offered such a plea, what would be the result? If a dealer put 5 per cent of water in his milk, he was summoned and fined. To be sure the fine was so small, perhaps he made more out of the water than would cover the fine. But that was not the question. Pure water though it might be, the man was fined; but in the tobacco trade it was alleged it was merely to satisfy the demand of the working classes for wet stuff. The hon. Member said if the working man would pay 4d. per ounce the manufacturer would leave the water out! Such an argument he had never heard advanced before. He was afraid all the arguments he had put before the Chancellor of the Exchequer had totally failed; but he thought this last argument ought to settle the question. Let the tobacco manufacturer be dealt with as the milk dealer was dealt with. He did not care whether the water used was pure or impure; he wanted to have the thing he paid for, and that which it was called, not a spongy stuff, which took half-an-hour to light in a pipe. A considerable part of a working man's leisure time must be taken up in efforts to light his wet tobacco, but he should be satisfied! But he would leave the Chancellor of the Exchequer to the conviction that the brief statement of the hon. Member ought to carry.

Clause negatived.

MR. WILLS

said, the Clause he had to move was simply one of interpretation, and was intended to remove a practical inconvenience that had arisen in working under the Manufactured Tobacco Act of 1863. The term "Cavendish," which was employed all through that Act, was one that it was very difficult to define with strict accuracy, because it was only employed in this country, and was neither used nor understood abroad. To the description used in the Act of 1863 he thought it desirable to add a few words of explanation, which would clear up a doubt that had existed for some time past whether certain sorts of tobacco were completely covered by the words of the Statute as originally framed. The Committee would see the clause was simply one of definition and explanation; it did not touch the principle of the Act of 1863 in any way, or in the slightest degree interfere with the Revenue. It would remove some difficulty and trouble with the Customs, from which the trade would be glad to be relieved, and he hoped the right hon. Gentleman would accept it.

New Clause (Amendment of the "Manufactured Tobacco Act, 1863,")—(Mr. Wills,)—brought up, and read the first time.

Motion made, and Question proposed, "That the Clause be read a second time."

MR. COURTNEY

said, since this Clause was placed upon the Paper, the subject had occupied their attention a good deal; but he was sorry to say they had not been able to come to a definite conclusion on the matter, and he must ask the hon. Member to defer consideration of it to a later stage of the Bill at all events. He could not accept the statement that the clause would merely remove difficulties that arose out of the Act of 1863. There was no reason to doubt that that Act referred to tobacco in cakes; but this was a proposal to allow tobacco not pressed into cakes—to allow in bond—

MR. WILLS

said, the tobacco would be manufactured precisely in the same way as Cut Cavendish.

MR. COURTNEY

said, but it was different from that contemplated in the Act of 1863. It might be possible to accept the clause; but they had to consider the effect it might have on other branches of the trade, especially on tobacco made out of bond in the United Kingdom. He preferred to have it further considered in consultation with the Board of Inland Revenue. Without prejudging the decision, he thought if the hon. Member would withdraw his Motion it might be possible to come to some decision on Report; but, in any event, he could promise the matter should have fair consideration.

Clause, by leave, withdrawn.

MR. WHITLEY

said, the clause he had to propose, reducing the Carriage Duty to 15s., he put off on a former occasion. The question raised was not new to the Chancellor of the Exchequer. The House could depend on the right hon. Gentleman when he turned his attention to the figures; but he (Mr. Whitley) wished to impress on the right hon. Gentleman, and on the Committee, the fact that the tax to which he was referring was sui generis. He was not aware that there was any tax pressing so directly on an industry of the country. The duty on plate might occur to some; but that duty was paid once for all, whereas this tax recurred every year, pressing directly on an industry of the country. No doubt, when it was instituted it was a tax on luxury; and if it were so now he would not be proposing this clause. The Chancellor of the Exchequer proposed to reduce the duty on two-wheeled carriages to 15s., and also made another reduction on all carriages from October 1 to 21s; but there was no provision respecting carriages for hire at makers, or at livery stables, or for the very common case of carriages being let out without charge while private carriages were under repair. These were the two cases he had endeavoured to meet by his Amendment. He would point out that in consequence of the heavy taxation upon carriage licences there had been a great reduction in the use of carriages; and with the reduction in the Railway Passenger Duty competition was greater, and the pressure had been very severe indeed over the carriage industry all over the country. In Scotland and in the North of England there had been great loss to the trade through taxation. He hoped, therefore, the Chancellor of the Exchequer would be in a position to say that if not this year, at least in the future it would be taken off. As the one remaining duty on an industry of the country, he was sure the Chancellor of the Exchequer would be anxious to remove it. He believed the present reduction would amount to £25,000, and a total reduction would be considerable; but, still, seeing that it was a tax on an industry, and the great competition those engaged in that industry had to meet, he really hoped the right hon. Gentleman would see his way to looking into the subject carefully in the future, with the object of a total reduction of the duty. In doing so, he would give a great relief to a most industrious class of the community. Many Members had had this view strongly urged upon them by their constituents; and the tax could not be defended upon any ground but the necessities of the Exchequer.

New Clause (Duty on carriages to be reduced to fifteen shillings,)—(Mr. Whitley,) — brought up, and read the first time.

Motion made, and Question proposed, "That the Clause be read the second time."

THE CHANCELLOR OF THE EXCHEQUER (Mr. CHILDERS)

said, the hon. Gentleman, in moving this clause, had referred to the general question of the Carriage Duty; but his clause did not touch the general question, but a very minute matter. As to the Carriage Duty itself, the amount of that duty was £500,000 or £600,000, a sum not to be lightly dealt with. But he did not think the hon. Gentleman had seen Clauses 3 and 4, which the Committee had passed. Clause 3 was almost identical with that of the hon. Gentleman, though it differed in one important particular. Under that clause it had been provided that hackney carriages, which were plying for hire either in the Metropolis or in any town or any borough in Scotland, under the Towns Police Act or the General Police Improvement Act, if of four wheels, should pay the same duty as those of two wheels. The hon. Gentleman's proposal was the same; he proposed that carriages plying for hire where fares were fixed by law should pay 15s.; but the difference between the two clauses was that the hon. Gentleman had used the words "plying for hire or to be let;" whereas in the clause in the Bill the carriages must be licensed under either the Metropolitan Act, the Towns Police Act, or the corresponding Act for Scotland. The fact was that, unless the distinction was drawn in this way, anyone might let his carriage for a day, and claim the reduced payment. As to the other part of the proposed clause, he, with his hon. Friend (Mr. Courtney), was, at first, rather prepossessed in favour of the proposal; but, on looking into the subject with the Revenue Board, it appeared that to adopt it would so open the door to fraud that they could not accept it.

LORD ALGERNON PERCY

called attention to the fact that there were in certain towns in the North of England carriages which plied for hire at the Railway Stations, and which belonged to private firms of jobmasters. The carriages were kept simply for that purpose; and the jobmasters felt it very unfair that as the carriages in question did not come under the Police Acts, or the Metropolitan Public Carriage Act, they were shut out from the advantages under this Bill. As the right hon. Gentleman said it was impossible, from the point of view of the Revenue, to deal with the matter then, he trusted he would give it his merciful consideration hereafter.

THE CHANCELLOR OF THE EXCHEQUER (Mr. CHILDERS)

suggested that in the case of Durham, which did not appear on his list, the municipality of the City should be applied to for the purpose of their passing a bye-law, which would obviate this difficulty.

MR. WARTON

suggested that the clause should be read a second time, and then amended, to meet the case of the jobmasters, by the addition of the words "kept for the purpose."

THE CHANCELLOR OF THE EXCHEQUER (Mr. CHILDERS)

said, he was afraid that would not do. There would be no means of registering the names of persons having carriages for hire except under the Police Acts. He was not prepared to go beyond the words of the clause.

MR. BIDDELL

said, the Bill, as it at present stood, would not remove the great hardship on coachmakers who did not let, but lent carriages to their customers, and who would still have to pay the tax.

MR. WARTON

said, he must press his point upon the right hon. Gentleman, who seemed to be under the impression that it was not possible to ascertain the number of carriages under hire except by means of a register. No difficulty was experienced when the Parliamentary Elections (Corrupt and Illegal Practices) Bill was passing through the House in defining and settling the question with reference to persons who let and persons who lent carriages.

Clause, by leave, withdrawn.

MR. SLAGG

said, he wished to give the Chancellor of the Exchequer another opportunity of removing the very objectionable tax on silver and gold plate. He might remind the right hon. Gentleman and the Committee of the very serious nature of the burden that it entailed upon an important industry. There was no doubt that the silver trade in the country was languishing seriously under the influence of the duty and the system of Hall Marking. Not only was their own trade being stifled, but in America, their rival in artistic work, the trade was advancing in such a degree as to put us to shame in consequence of the merit of their productions. It seemed to him, then, that they could not afford to lose any industry—not even small industries. Surely, every obstacle should be removed from the path of trade and manufacture in a country which admitted the principle of Free Trade. It was known that in India was produced a very large quantity of artistic silver work. And how did they deal with it? They imposed upon it a tax of 1s. 6d. per ounce, or the equivalent of one-third of its cost, and not only that, but they subjected those artistic productions to a process to which they were entirely unadapted; they sent them to be stamped, a process which often destroyed them, because they were generally of such a nature that they could not undergo the operation without injury. He believed it was necessary, at the earliest possible moment, to remove this tax, as they had removed the taxes upon Indian imports. The origin of the practice of Hall Marking dated from those times when nominally articles of all sorts were subjected to State supervision and control, not only as to quality but as to price, and this practice was the sole remnant of those barbarous enactments. He would also point out that one of the principal objects of the custom of Hall Marking was not secured by the process to which the goods were submitted; and it would be easy for him to prove, were it necessary for him to do so, that counterfeit marks were made with perfect impunity. The small Revenue of £80,000 was not, in his opinion, anything like compensation for the effect that the duty had upon the silver trade, which was falling off year by year. As far as he could understand with regard to the abolition of this very objectionable tax and undesirable custom of Hall Marking, the authorities were all upon his side. The Committee would remember that a (select Committee sat in 1879 to consider the question of Hall Marking, and that exports gave evidence before it who were largely engaged in the trade, as well as gentlemen from the Board of Trade, and others well versed in finance, who were unanimously in favour of the abolition of Hall Marking at the earliest possible date. But nothing had boon done. He believed that every Member of the Government entertained the same opinion as to the unjust nature of these practices. There was another aspect of the case to which he desired to call the attention of the Chancellor of the Exchequer. The trade felt that the end of these duties must be approaching; and the consequence was that although not lacking in enterprize manufacturers were afraid to increase their stocks; while, on the other hand, they were anxious to get rid of the present stocks as soon as they possibly could. No doubt the question of drawback was an important consideration; but he had already pointed out to the Chancellor of the Exchequer that the question was not so serious as it appeared to some; and he believed that for the sum of £100,000 the trade would be perfectly willing to compound for the drawback on all stock in first hands. For the reasons he had advanced he made a strong appeal to the right hon. Gentleman to adopt his proposal, which would enable the Treasury to effect the reform which was so strongly desired.

New Clause (Silver and Gold Plate,) —(Mr. Slagg,)—brought up, and read the first time.

Motion made, and Question proposed, "That the Clause be read a second time."

GENERAL SIR GEORGE BALFOUR

pleaded on behalf of India that the silver wares of that country should be admitted free into this country, on the broad ground that India had done what had been done in no other part of the world—made the extensive coasts free to all merchandize of the whole world by having, in 1882, taken the import duties oil' £40,000,000 of imports, so that all goods, excepting spirits and wines, were now entirely free from duty. He appealed, therefore, to those Members who had any regard for the principle of fair dealing to say that justice should be done to the people of India by removing the tax upon their silver manufactures imported into this country. He knew well that the right hon. Gentleman the Chancellor of the Exchequer and his Colleagues were quite willing to do away with the tax on all silver wares, the product of India as well as at Home; but that they felt the difficulty with regard to drawback to be repaid, which the Prime Minister, in his Budget Speeches of 1881 and 1882, had, in some degree, recognized, as also had the Chancellor of the Exchequer in his Budget Speech of 1883. Now, his hon. Friend (Mr. Slagg) said that £100,000 would be sufficient to compound for the duties which had been paid on plate in the hands of first holders; but he believed that a much smaller sum would be necessary for the drawback on silver plate. The question was what precedents existed for repaying duties; and here it was shown that only five precedents could be found, and the amounts refunded were only fractions of the duty paid in a year. Again, his hon. Friend had stated that the Revenue on plate amounted to £80,000; but it appeared, from the account furnished to him by the Inland Revenue Department, which was always willing to give information, that the net year's income from the duty on silver plate was £48,000, besides which there was the sum of £5,000 derived through the Customs which need not be considered. In this view a refund of a year's Excise Duty ought to suffice for first holders of stock, and the Goldsmith's Company ought to undertake to appropriate this sum, so as to satisfy all equitable claims. Of course, articles which had been in stock for years ago might have been used, and those pieces ought not to be entitled to drawback. The present time was favourable for a settlement. For four years the silversmiths had had warnings of the change, and he might mention that at no time had the manufacture of plate been so small and so few persons employed. His hon. Friend had said the amount of duty was small, having regard to the large trade in silver ornaments; but he would point out that the articles were likewise few that were subject to the Excise Duty, these being but a mere fraction of the whole work produced. The silver plate, as exempted from Stamping and Excise Duty, might be stated at thousands of tons, and the manufacture was in a flourishing condition, while the dutiable protected articles were in a decaying state. He thought his hon. Friend the Secretary to the Treasury was especially bound to support this proposal, because he had taken a very active part in the inquiry which took place with reference to the question of Duties and Hall Marking in 1878 and 1879. He thought the time had come when they should make a stand against the Government in this matter, and he should be glad to go to a Division on the clause.

THE CHANCELLOR OF THE EXCHEQUER (Mr. CHILDERS)

said, he did not think that Parliament was at all likely to introduce all the important provisions contained in the proposal of the hon. Member for Manchester into one clause of a Bill, particularly under the circumstances which he would now describe. For instance, the question of Hall Marking was one which, required to be dealt with as a separate matter. Nor did he think that the powers asked were such as the Committee would agree to give to the Crown. Whatever might be his own opinion, a Committee of that House had deliberately approved compulsory Hall Mai king; and, therefore, bethought the Committee would be unwilling to deal with it in the summary way now proposed. In the same clause, the hon. Member proposed to abolish the duties on gold and silver plate, producing, with the licences, nearly £150,000 a-year, and to settle, in a particular way, the claims for drawback. These claims were very much larger than his hon. Friend thought, and it would be unwise to assume that they would be covered by the sum of £100,000. Anyhow, they would have to deal with something like £250,000 if the clause were accepted, a sum which he was not in a position to take away from the Revenue of the year. It was, therefore, quite impossible to admit the clause into the present Bill. His own views on this subject remained the same as he had expressed in the year 1881–2 and last year—that was to say, he was in favour of abolishing both the gold and silver plate duty, and of amending the system of Hall Marking. Therefore, so far as his opinion and that of his hon. Friend the Secretary to the Treasury were concerned, they were in favour of the proposal of the hon. Member for Manchester. The Government, however, could not assent at that time to the clause, which, for the reasons given, would require much consideration. But he thought that, when the state of the Revenue admitted, they might well repeal these duties, and make Hall Marking no longer compulsory. He was anxious, however, not to be understood to assent to the opinion which had been expressed that the diminution of the trade in silver plate had much to do with the duty. As a matter of fact, silver was being superseded in common use by such articles as electro-plate and nickel goods; and his impression was that, although the abolition of the duty might do something, yet, just as the fall in the price of silver had not increased the demand for silver goods, the repeal of the duty would do no more. He did not think, therefore, that the trade ought to be sanguine as to the effect of the repeal of the duty, though the Government would be glad to repeal the duty when the financial position of the country would permit of their doing so. His hon. Friend (Mr. Slagg) had referred to the impediments placed in the way of the importation of silver work from abroad, and particularly from India. Clauses with respect to filigree work had already been considered by the Treasury, and he hoped might be introduced later. He could only repeat that he entirely sympathized with the object of the hon. Member (Mr. Slagg), who had stated his case frankly and fully. On one point he would say a word. Reference had been made to the United States. It was perfectly true that two large houses of silversmiths in the United States turned out excellent silver work; but he thought the silversmiths of this country did their work equally as well. It must be remembered that the American silver trade was protected by high duties. He hoped the Committee would accept the undertaking he had given, and that the clause would not be pressed.

MR. SLAGG

said, he did not wish to press a clause which the right hon. Gen- tleman the Chancellor of the Exchequer considered to be in any way impracticable, although he was perfectly sure of this—that such was the public conviction on this matter, and such was the mind of the Committee in regard to it, that if he were to go to a Division he should carry the clause by a considerable majority. He very gladly accepted the right hon. Gentleman's declaration that he would avail himself of the first opportunity to get rid of these objectionable duties. If it was his (Mr. Slagg's) good fortune to be a Member of the House next year, he should consider it his duty to remind the right hon. Gentleman of his specific promise that the remission of those duties should take first rank in any remission of taxation which might then take place. He had not ventured on mere surmise as to the amount which was necessary to deal with this matter, and he should take an opportunity of showing the right hon. Gentleman the Chancellor of the Exchequer that £100,000 would be quite sufficient to effect the purpose in view. In regard to the silver trade in America, he had only to say that, although Protection might be an element in the matter, America was drawing the whole of our skilled silversmiths into their silver trade. It was alleged that the use of silver was falling off in this country, owing to the competition of electroplate. That, however, was not the case in America, where, concurrently with the enormous development of the electroplate trade, there was a great business done in the most beautiful objects of silver. He begged leave to withdraw the clause.

GENERAL SIR, GEORGE BALFOUR

agreed with his hon. Friend (Mr. Slagg) in the propriety of accepting the assurance of the right hon. Gentleman the Chancellor of the Exchequer. He was satisfied if the Treasury recognized the repayment of drawback on duty-paid silver articles that £100,000 would be more than sufficient to meet the drawback on one year's stock of silver or gold plate, calculating the net excise on both classes of plate at £72,000; and he begged the Chancellor of the Exchequer, who seemed to have formed an exaggerated estimate as to the sum, which would be required, to look carefully into the matter, with a view of testing the accuracy of the statement.

Clause, by leave, withdrawn.

Motion made, and Question proposed, "That the Bill, as amended, be reported to the House."

MR. CLARE READ

asked leave to reiterate the request he made to the Chancellor of the Exchequer some little time ago, with regard to the brewing licences paid by cottagers. The licences expired about the 1st of October, and if the right hon. Gentleman did not insert some such clause as he (Mr. Clare Read) desired, but was prepared to do it next year, it would be unfair to those persons who had taken a licence for 12 months. The Revenue would lose nothing by the change; but a great gain would accrue to the agricultural labourers, who, in this cottage or kettle brewing, did not want a licence for more than three months in the year.

THE CHANCELLOR OF THE EXCHEQUER (Mr. CHILDERS)

promised the hon. Gentleman that during the course of the year he would give his attention to the subject.

Motion agreed to.

Bill reported; as amended, to be considered To-morrow, at Two of the clock.