The Duke of Buckinghamsaid, that he had observed by the Votes of the House of Commons, that a sum had been moved for in part of the Supplies of the year, and he learned from common rumour, that one of the means by which it was intended to raise the Supply was by imposing a duty on the transfer of stock and landed property. He hoped, however, that his Majesty's Ministers had ceased to contemplate that mode of raising money; but if not, he took the present opportunity of giving notice, that considering as he did that measure to be a breach of faith with the public creditor, and considering such a measure most mischievous to the country at all times, but more especially in its present situation, he should think it his duty to call their Lordships' attention to the bill when introduced into that House, in the hope of inducing their Lordships to express an opinion of condemnation on a measure which he was sorry to feel obliged to consider of a revolutionary character.
§ Earl Greysaid, it was quite clear, and did not need to be announced by the noble Duke, that when a bill, whether having reference to the subject to which the noble Duke had alluded, or to any other, was brought before their Lordships for discussion, it was necessary for their Lordships' attention to be drawn to it. But before he made any reply to the noble Duke, which reply might, perhaps, prevent his promised interposition in the matter, he must declare, that he could not stand in that House, and hear it stated by the noble Duke, or any other person, that the measure to which he had alluded was of a revolutionary character, or deserved to be described as a breach of the public faith. If he had thought that that measure could be described as justly liable to either of those imputations, he never should have con- 468 curred in proposing it to Parliament. But it was because he thought that, strictly speaking, it could not be construed into a breach of faith,—because he considered it, far from possessing a revolutionary character, to be, in conjunction with other measures with which it was connected, the best calculated to promote the welfare of the country, give new activity to industry, and assist all those interests, on the prosperity of which depended peace and content, and that spirit of order and satisfaction the most contrary to any thing of a revolutionary nature,—it was because he contemplated in that view the measure to which the noble Duke had alluded, that he consented to its being proposed to Parliament. In looking at the situation of the country,—when he found how necessary it was to relieve the industrious classes of the community from some of those taxes which pressed most heavily on them, and when he found it was not possible for him, owing to the circumstances of the time, and of the country, to propose any considerable reduction in the great establishments of the country,— the public safety, on the contrary, requiring considerable additions to those establishments, he did seek after some means of removing from the industrious portion of the country that pressure which, in the present state of depression of the labouring classes, threatened to cripple the energies and resources of the country. Therefore, with the most anxious wish to take off taxes of that description, he sought the means of doing so by imposing others (for, without a commutation, DO such relief could be given)which he thought would operate with comparatively little pressure on the public resources, and not have the effect of endangering the interests of the country. With that view, he confessed that he did concur in the proposal for levying a tax on the transfer of funded property, being convinced that it was just in policy; nor did it now appear to him either iniquitous or unjust. In looking to its operation, he found that it would affect a species of property which, amidst the general distress that had assailed every oilier interest—the commercial, agricultural, and manufacturing—not only had not suffered depression, but which, from those very circumstances, had increased infinitely in value. It did, then, appear a fair, just, and equitable proposition to him to make the persons possessing that property in some degree 469 contribute to the taxes which were necessary for the State, and relieve their fellow-subjects who were labouring under such severe pressure. He did not think that Government, in proposing the measure, had been guilty of any breach of faith, but had, as he thought, only consulted the well-understood interest of those persons themselves, which must depend on the general prosperity of the country. The Government, in proposing to relieve the industrious classes from the pressure which they suffered, believed at the same time that they were promoting the interest of the fundholders themselves; for they would be benefited in a much greater proportion than they would suffer from the demand made upon them, by the reduction of taxation which Government had thought it necessary to propose. Yet this measure had been characterized by the noble Duke as a breach of faith. He (Earl Grey) did not mean to say that it was right to justify one breach of faith by a preceding breach of faith; but when a breach of faith was spoken of, could their Lordships omit to look back to a tax which had been imposed on this species of property equally against the positive words of the Act of Parliament—he alluded to the Property-tax,—and avoid perceiving, that when the necessities of the Government required it, the country had thought right to call upon the fundholders for a proportional contribution to the necessities of the State? One of the great inducements for Government to propose this measure was, because they heard the general cry for the imposition of a property-tax, to which, in time of peace, he had great objection. The Government, therefore, thought it desirable to lay a tax on the transfer of funded property, which could only in a slight degree affect the general interest of the country; and he was surprised to find it complained of by those very persons who would impose on the country a general property-tax, which, by operating on parts of the community in great distress, would be most impolitic, and by being imposed on funds, would tend to drive capital out of the country more than any other. It was to save the country from a tax of this nature that he, in common with his colleagues, particularly the noble Lord who explained the proposition of Government to the other House of Parliament, did intend, without any breach of faith, and contemplating great advantage to the pub- 470 lic interests, to impose a tax on the transfer of funded property. However, he was ready to admit that there might be some difficulty in the adoption of a measure which did not admit of being submitted to the judgment of persons not being members of the Government; for, from the nature of the tax proposed, it was impossible, without divulging it in such a manner as to produce inconvenient results, to consult many persons on the subject. But his noble friend (the Chancellor of the Exchequer), before he proposed the tax, took the opinion of a gentleman whom the noble Duke would, perhaps, admit to be the best authority respecting it,—he meant the Governor of the Bank, who thought the tax might be imposed and collected without difficulty. Yet, though the Government had that gentleman's opinion that the tax might be collected without difficulty, looking to the public feeling on the subject, his noble friend had already given notice in the other House of the intention of his Majesty's Government to withdraw the proposition. There would, therefore, be no such tax; and no such bill, as the noble Duke so eagerly expected would be introduced into their Lordships House; nor would the noble Duke have an opportunity of calling the attention of their Lordships to it. It grieved him, however, to state, that in renouncing the measure which Government contemplated as a means of lightening the burthens of the country, and thus giving a spring to the energies of the people, the means of Government to effect that good were diminished by being deprived of this resource, and the Government was compelled to give up proposing the reduction of some other taxes, which, unless they could be supplied by impositions as unobjectionable as he conceived the proposed lax to be, could not be removed in the present state of the finances. He was sorry that Government felt it necessary to withdraw that tax, because he believed in his conscience, if the financial measures which his noble friend proposed had been suffered to go on without interruption, there was a prospect of such an increase and activity in the commerce and industry of the country as would have relieved the existing distress; and Government would have had the satisfaction of coming down to Parliament next year to propose the reduction of some other taxes, without being under the ne- 471 cessity of imposing new taxes in lieu of them. He was grieved that the power to do this was taken away; and he grieved for the disappointment which they must have sustained who had been led to entertain expectations of the reduction of some of those taxes which Government intended to remove. But though Government found itself deprived of the resources which it thought calculated to effect the object in view, yet it would endeavour to attain that object by all other means in its power, limited and crippled as, he was sorry to say, the Government would be in its means of reducing the taxation which pressed on the industry of the country. He, however, would not have the House indulge in any irrational hopes on the subject. "Amidst all the difficulties which surround us," said the noble Earl, in conclusion, "we have always exerted ourselves to the best of our power, and our endeavours have so far been attended with satisfactory results; and I do hope that we shall be still enabled to persevere in them, so long as the confidence of Parliament shall be extended to us, and our measures shall be satisfactory and useful. I have nothing further to say at present, except that if the noble Duke, on this or any other subject, is disposed to attack the conduct of his Majesty's Government, I shall be ready to meet him on any proposition he pleases to bring forward; but if the noble Duke looks forward to the proposition of the tax on transfers as giving him a good opportunity to attack the Government, I inform the noble Duke that it will not be afforded him, for the proposition is withdrawn."
The Marquis of Londonderrythought the noble Earl was incapable of imposing any thing like a revolutionary tax. The object of the Government was only to make the fundholder bear his just proportion of the public burthens. He had looked generally at the features of the Budget, and he thought that Government had displayed an anxious desire to relieve the poorer classes, and to transfer the burthens on those who were best able to bear them. The tax on transfers was far from being a revolutionary tax; it was imposed to supply the means of maintaining the country in its present condition.
The Duke of Buckinghamcongratulated their Lordships on the withdrawal of that part of the ministerial plan of finance, which he considered so very ob- 472 jectionable in many points. The noble Earl had quoted the opinion of the Governor of the Bank of England, but he (the Duke of Buckingham) had it from the highest authority, that the opinion of that gentleman was only his individual opinion, and was not meant to convey the opinion of the body to which he belonged.
§ Earl Greysaid, he had not described it in any manner as the opinion of the whole body. He had only mentioned that it was the opinion of the Governor that the tax could be collected without difficulty.
The Earl of Winchilseasaid, that so far was he from agreeing in the opinion that no tax should be laid on the fundholders, that he regretted extremely that any difficulty should have presented itself to the collection of that proposed by his Majesty's Ministers. He was one of those who held that the fundholder was not taxed in proportion to the burthens which fell upon other portions of the community; and so far was he from thinking that the imposition of a tax on funded property would involve a breach of faith with the public creditor, that he thought that it was virtually, under the present circumstances of the country, a breach of faith with the public debtor—that was, with the great mass of the community—that the fund-holder should remain untaxed. He would ask their Lordships on what principle of justice it was, that the landowner should have to bear the pressure of so many burthens, while the person who had.50,000l. or even 100,000l. a-year in the funds was exempted from any such contributions? In what way did the fundholder contribute to the maintenance of the poor? In what way did he contribute to the repairs of public roads, and other matters involving heavy disbursements, which were paid by the holders of landed property? He repeated, that, under these circumstances, the breach of faith was with the public debtor, who was in the present state of the currency called upon to pay 20s. for every 13s. which were borrowed in his name. He, then, for one, would never assent to the doctrine, that the taxing of the fundholder would be a violation of faith with the public creditor. He contended, that the fundholder, like every other member of the community, should bear his share of those burthens which the necessities of the State might require. He owned that he heard with regret from the noble Earl (Grey) that he was averse to 473 the introduction of a property-tax, which in his (the Earl of Winchilsea's) opinion, was the most just and equitable that could be devised. He thought, that if, in addition to the taxes proposed to be taken off, other taxes that pressed on the land were also remitted, and a reasonable property-tax imposed instead, the public would be greatly benefited by the change. At the same time he admitted that the taxes now to be taken off would be found to afford a great relief to the country. All he regretted was, that the principle of reduction in that way had not gone further, and a tax which would fall equally on those able to bear it had not been substituted for the taxes that now ruined the productive power of the country. He would not trespass further on the attention of their Lordships, but after what had fallen from the noble Duke, he could not remain silent on the subject.
Lord Farnhamsaid, that there was a great difference between a tax on the transfer of funded property, and the produce of that property, because it was well known that many persons had often occasion to transfer that kind of property from one to the other; but a tax on the produce of funded property was a different thing. So far was he from objecting to a tax on property, which should fall equally on funded and landed property, that he thought such a tax would be greatly preferable to the existing mode of taxation. He would take away all indirect taxation, including the land-tax, and substitute a property-tax; and, though he did not know how it might be received, he would charge the maintenance of the poor on the fund arising out of that tax; for he was firmly of opinion, that their Lordships never would give a proper stimulus to improve landed property until they relieved it from the great burthens to which it was almost exclusively subject. Their Lordships knew not how soon they might have to draw upon all their resources in a struggle for the safety of the State. All Europe was now in arms. England was, very prudently, at present lying upon her oars, but there was no saying how soon she might be called upon to make a great effort for her own safety; and in order to bring the resources she really possessed to bear, there ought to be a different system of finance from that which had been adopted for a long time back.
Lord Ellenboroughsaid, he did not 474 feel it necessary to enter upon the question concerning the principle of a property-tax in the presence of the noble and learned Lord on the Woolsack, whom he had heard over and over again, in another place, exert his powerful eloquence against the principle of a property-tax in time of peace; and of course the noble and learned Lord still continued of the same opinion on that important question. He rose, however, not for that purpose, but to put a question to the noble Marquis (Lansdown) opposite, on a subject also of considerable importance. The noble Marquis was Chairman of their Lordships' Committee on Trade, of which he (Lord Ellenborough) was also a member; and he wished to know from him, what were the intentions of Government as to the duty on timber. He hoped the noble Marquis would have no objection to give their Lordships some information on a subject of such importance to the country.
The Marquis of Lansdownesaid, as no resolutions on the subject had yet been introduced into the other House, he trusted their Lordships would see the propriety of his not entering upon the subject at pre- sent. When those resolutions had been submitted, he would be ready on the pro- per occasion to enter fully into the subject before their Lordships.
Lord Ellenboroughwas aware that no resolution had yet been submitted to the other House on this subject, and he thought it was an oversight that it had not; but the very mention of a subject of such importance made the public interested therein naturally very anxious to know the intentions of Government respecting it; and on that ground it was, that he asked the noble Marquis to state what those intentions were.
The Marquis of Lansdownsaid, that he had no wish, and it would not become him, to usurp the functions of the Chancellor of the Exchequer in that House. At the proper time he should be ready to give the noble Lord and the House full information as to the intentions of Government on the subject.
The Lord Chancellorsaid, he should not have felt it necessary to trespass on the attention of their Lordships, in prolonging a conversation on this subject, but for the good-natured, though rather sarcastic, allusion, made by his noble friend (Lord Ellenborough) as to the opinions which he had held on the subject of 475 a property-tax. Certainly, he had no wish at that moment to renew a debate in which he admitted he had taken a very prominent part. Such a renewal, at the present moment, could not prove very agreeable to their Lordships, since, as most of them were aware, it was one which had lasted eight weeks with little interruption, beginning at half-past four each day, and lasting till midnight, and often till half-past three in the morning. In that debate he had, it was true, taken a very prominent, and, as it proved, a very successful part. He had objected, and he still should continue to object — unless such particular circumstances, which he did not see at all probable, should show a necessity to the contrary—to the principle of a property-tax in a time of peace. The tax had arisen in that which was the parent of all bad taxes—hateful war; and unless a similar cause should arise—or, as he had said, unless such circumstances should occur as would justify him in changing his opinion, he should still continue to hold the same opinion as he had at the period to which his noble friend had alluded. But be it remembered at the same time, with reference to his opinions at that period, that they referred chiefly to that most hateful of all systems of taxation, a tax on income, a tax which was opposed to all good and sound principles of finance. His great objections at that time were to an income-tax, which that tax was; but he would admit that even a property-tax, distinct from one on income, he should have also opposed at that time, under the then circumstances of the country. If circumstances did call for a property-tax at present, the objections he had made to an income-tax would not apply to it; but he must concur with his noble friend (Earl Grey) that such circumstances were not now in existence. He should have thought this a sufficient notice of what had fallen from his noble friend (Lord Ellenborough) near him, but for what fell from the noble Lord (Farnham) on the cross-bench, who always put forth his opinions on any question with great candour and good sense. As to the question, then, whether a tax on funded property would be a breach of faith with the public creditor, he did not mean to oppose the position that it would not. Indeed, the tax proposed by his noble friend in another place would have affected the holders of but a comparatively small por- 476 tion of funded property. 600,000,000l. out of the 800,000,000l. was so vested, that there would be little probability of its transfer. Indeed, the manner in which the announcement of the plan was received in the City, where it had not produced a reduction of one-twentieth per cent, showed that it was not looked upon, in the most sensitive quarter, as any violation of faith with the public creditor. He could not see how the noble Duke could maintain that it was a violation of faith, unless he were also prepared to contend, that his kinsman, Mr. Pitt, had been guilty of such a violation in the imposition of a tax on funded as well as landed property, after the passing of an Act the most stringent that legislative ingenuity could devise, for the protection of funded property; yet after this Act, Mr. Pitt and his friends appeared to have no idea that they were committing any violation of faith with the public creditor, in the imposition of the tax on public funds as well as on other property. He admitted that funded property was liable, and that landed property was now pressed down with many burthens from which other property was free. He felt this statement necessary, lest by his silence it should for an instant be supposed that he was a party to any measure which was a violation of faith with the public creditor. The plan of his noble friend involved no such violation. He was not now called upon to pronounce any opinion as to whether funded property should be taxed equally with land, as there was no intention of putting a tax on either; but he would beg their Lordships to bear in mind, that when income from funded property was taxed ten percent, in common with income from land, and even with income arising from trade, the circumstances of the country, with respect to the fundholder, were different from the present circumstances. At that time the fundholder had no opportunity of transferring his property elsewhere. France was closed upon him as a secure place of investment. At present, the security of the French funds was such as to afford confidence to every reasonable man in the stability of its government; and at present, the English fundholder could find no difficulty in the transfer. He said this in the presence of a large portion of the landed interest—of men with much landed, and little funded property; and he would beg of their 477 Lordships to consider the different circumstances of the fundholder now, from what they were at the time of the property or income-tax. At present, the communication between London and Paris was as open, and nearer, than the communication between London and the north. The three per cents at Paris were at sixty. In London, it would require eighty to produce the same interest. Here, then, of itself, was a temptation to invest in the French funds. The trading-stock-holder was a man of no country— he was here to-day, and gone to-morrow, whithersoever his capital could be most advantageously invested. If, then, in addition to the eighty, you take from him seven, or eight, or ten per cent, see what an additional inducement would be given to him to transfer his property. He did not urge this as an all-sufficient reason against the imposition of a tax on the fundholder, equally with the landed proprietor; but he thought it was a reason why they should pause before they consented to the imposition of any such tax. He regretted, nevertheless, that the proposed plan was given up, because it would involve the continuance of two taxes from which it was intended to relieve the public. Before he concluded his remarks on this subject, he must add, that he took his full share of any blame which might attach to the failure of the plan proposed by his noble friend in the difficulty of enforcing it. If he were asked why he had not seen farther into this millstone than others, he would say, that he was tied up by motives of delicacy from putting a few questions to some practical Conveyancer, which, if he had done, might have afforded the information, that the plan, if persevered in, might have led to making stock the object of deeds of trust, leading possibly to litigation, which would have found full employment for—not one, but two or three Chancellors. He repeated his regret that the change of the plan would perhaps render it necessary to continue taxes during, at least, the present Session, which it was hoped Government would be enabled to reduce. These would, for the present, be left to that which was the best source of a remission of taxes— the growing prosperity of the country. As to those taxes which it was still in the power of Government to remit, he thought those on coals and candles, and newspaper-stamps and advertisements — he 478 thought these, and all other parts of his noble friend's plan, as judicious and as well considered as any plan of finance which he had ever heard laid before Parliament, and he was sure that their Lordships, as well as other portions of the community, would each, and all, derive great advantage from the development of those plans.
§ Lord Wynfordwished to know from the noble Earl (Grey), whether that part of the plan which related to the tax on transfers of landed property was to be given up as well as that on the transfer of funded property.