HL Deb 21 June 1842 vol 64 cc283-344

The Order of the Day for resuming the adjourned debate on the third reading of the Income-tax Bill was read.

The Marquess of Clanricarde

said, that having moved the adjournment of this debate the other evening, in opposition to the majority of noble Lords, and knowing very well how incapable he was to explain to their Lordships what he deemed to be the grounds upon which this measure ought to be rejected, he owned that he should have felt much embarrassed in the position in which he now stood if it were not that the more he considered the matter—the more reflection he was able to give to the speeches by which the bill had been, supported, the more he felt himself strengthened in the conviction that their Lordships, should not allow this measure to pass into a Jaw, The argument that it was too late in the Session for their Lordships to throw put the measure, was one which ought not for one moment to prevail, Their Lordships were not there merely, to register the edicts of the other House of Parliament; and if they were, to reject, this bill, there would, he abundance of time for a new measure, There was no reason why an. entirely new, provision should not be made to meet the financial difficulties of the country, He was sure that no such argument would be used by any of their Lordships; but that independent of all such considerations their Lordships would exercise their deliberate judgment with respect to this measure. It was difficult for him to say anything in opposition to it which had not been said much better before. If he wanted to show their Lordships that this bill would be extremely injurious in its effects upon trade —that it was vexations in its spirit—odious to the people—degrading to their charactepr—repugnant to their feelings, he should read to their Lordships the petition presented to their Lordships' House in 1816 from the merchants of London, or the petition which he had had the honour to present from Finsbury in the course of the present Session. If he wanted to show this, he should in the best manner, tread to their Lordships the speeches which had been delivered against such a proposition by Members of that and the other House of Parliament, some of them Members of her Majesty's present Ministry. But the evils of this system of taxation had not been denied, and there- fore he should not dwell upon them; but if the arguments against a Property-tax were agreed to be great and stringent— and no one had attempted to deny that they were—he could not help saying that all the evils and bad characteristics of such a tax were to be found in this bill, in their grossest and most aggravated form. He must admit, that, the other evening, something had been said, in favour of an Income-tax; but that was not said by any Member pf her Majesty's Government, but by a noble Friend of his, who was not now in his place (Viscount Melbourne), and as that noble Viscount was the only individual who had spoken in favour of the measure, but had voted against it, he must notice his arguments. What the noble Viscount had said was, that the bill would produce money; and that argument had been taken up by the noble Duke, who said that the Government wanted money; that this measure would produce money; and that that afforded a reason for passing this bill. But the noble Viscount had found. put that this tax ought to have been relied on more; and that the country had rejected it somewhat hastily, in 1816, And the noble Viscount had gone further, and by an illustration—a classical illustration —of his own position, when he was at the head of her Majesty's, late Government, certainly left it to be inferred that he him-self would, if possible, have proposed some such bill to the country. This was the first time that either in or out of the House he had ever heard that such an opinion was entertained by the noble Viscount while he held the position to, which he had alluded. His noble Friend, however, was not in the House, and he would not say much that he had intended, he would only remark that his noble Friend did not declare this to be a bad bill, he only said he would vote against it because he had got a bill of his own. He did not vote against it because he had a choice of evils, but because, to use a French phrase, there was un embarras de richesses. The only substantial plea for this bill advanced by his noble Friend was that solely relied upon by her Majesty's Ministers, the plea of necessity. The only plea that justified her Majesty's Ministers was that upon which his noble Friend likewise relied. He thought that her Majesty's Government ought to have proved that a necessity existed; they had declined this, they had done no such thing. Instead of proving this necessity, the speech of his noble Friend the President of the Board of Trade (the Earl of Ripon), proved that so far from there being any necessity, they had to go out of their way to create a necessity for justifying the Parliament in imposing this tax upon the country. If an immediate necessity actually existed, he would not say that he would oppose an Income-tax. He was free to admit that although there were great evils in a property tax and an Income-tax, still he might vote for such a tax. If they showed him that the safety, the honour, or the credit of the country required an Income-tax, odious as it was he would vote for it. Nay, if they showed him that, for the extension and the opening of our commerce, and that the carrying out those measures which would really relieve the springs of industry, it would be necessary that the enactment of an Income-tax should be taken into consideration, he would not be unwilling to enter into that consideration. Nay more; if her Majesty's Ministers had proposed to Parliament any great and permanent plan of finance, of which a direct taxation on the property of the country should form a, material part, he would not be unwilling to apply himself to the consideration whether an Income-tax could not be devised which would press equally on all incomes, and by which the evils contained in the present bill would be removed. Still he saw a great objection to any mode of levying money by direct, taxation, and he thought there would be much danger, in a financial point of view, in supplying a large portion of the revenue by such a mode. He contended, however, that her Majesty's Government had this year done no such thing, and that the necessity for this tax was not in any way proved. His noble Friend the President of the Board of Trade had put the necessity of the Income-tax upon three grounds:—First, he said it was necessary to equalize the income of the country and the expenditure; secondly, that it was necessary, for the purpose of revising that heterogeneous mass of import duties commonly called the tariff; and, thirdly, it was necessary, because it was impossible to find any tax less objectionable and equally efficient at the present moment. In his opinion, throughout the views of her Majesty's Ministers there was a great pervading error. In the first place the Government had exaggerated, or, rather, over-estimated the financial difficulties in which we were placed; and in the next place they underestimated the powers of the trading, commercial, and social interests which were bound up with these difficulties. His noble Friend, in applying himself to the first point, had discussed almost entirely the expenditure of the country. He hoped his noble Friend had exaggerated those expenses, or the difficulty of having them speedily reduced. Very slight mention was made of the resources of the country. He had said nothing of the reason why the income had not equalled the expenditure. His noble Friend did touch upon the loss by the reduction of the Post-office duties, and had said that Parliament had engaged to make it good—an engagement which, the noble Duke added, had not been performed; and had then touched very lightly on the addition of 5 per cent, on the customs, and 10 per cent, on the assessed taxes. His noble Friend should have shown why these taxes had failed. That, he said, was an essential point for their consideration. The votes had failed to make good the deficiency in the Post-office duties, either on account of some sudden or unforeseen cause, or because the Ministers who had proposed these taxes, the opposition who had readily accepted them, and the Parliament which had voted them, had acted in very great error. This point was particularly necessary to be considered, if they looked forward to the glimmering of a hope that the tax would be temporary. He said that it was impossible to entertain the glimmering of this hope, unless they examined why the taxes imposed to make good the Post-office deficiency had not answered the intended purpose. The cause for our difficulties which was mainly urged was the state of America. If that were the cause, it ought to have been by this time somewhat surmounted. If it were said, as his noble Friends behind him said, that these difficulties arose from the Corn-laws, taken in conjunction with bad harvests, the cause would still be liable to a recurrence. If there were a gradual decline of our commerce and manufactures, as a noble Friend of his connected with Yorkshire (Earl Fitzwilliam) asserted, he then said that our embarrassments were more serious, and that they ought to enter deeply into the subject; and that in the mean time it was impossible for noble Lords opposite to hold out any hope of I relieving the country from the tax they now placed upon them. Although he did not disagree to the proposition laid down by the noble Earl, that the income and expenditure of the country ought to be equal, yet if ever there was a time when they ought not to overlay the resources of the country, when taxation ought to be imposed most carefully, when they should not lay imposts on profits or expenditure —if ever there was a time when, according to an expression which had been much in vogue, they should leave the money in the pockets of the people to fructify, it was the present moment. He came now to the second point on which the necessity for this tax was declared—the revision of that heterogeneous mass of import duties commonly called the tariff. He was somewhat surprised at the view just now taken by the Government of these duties. It was remarkable that the present Ministers of the Crown, who had held high office before, should have found out the real nature of the tariff at that particular moment. When he saw men who had been long eminent in public stations, who had held offices which must have forced upon them the consideration of questions of finance and of commerce, and particularly of these duties, so long in being awakened to the real character of those duties, and to the necessity of legislation, it was not too much to say, that their conduct rather strengthened the views of the late Government than went the other way—that they were in favour of the policy they had so long maintained, and that they had now adopted these measures to create a necessity for the Income-tax. His noble Friend had called this a heterogeneous mass of legislation, and had declared that it was founded on no intelligible principle. He thought, however, that no one would venture to take up the new tariff when it should come before the House, and say, that it was consistent with any one principle whatsoever. He would not at present enter into the tariff, they would upon the proper occasion have enough to do when the tariff was before them. When he said this, however, he did not defend the old tariff. He said that tariff for tariff he infinitely preferred the new. But, then, if he were asked whether he would have preferred that the old tariff should have remained a little longer—and a little longer only could it have remained with indirect taxation, or the new tariff with the Income-tax, he would then say, that he would have preferred submitting to the old tariff a little longer. All the good he saw in the new tariff was, the principle on which its introduction had been founded, and the speeches it had drawn forth, which did not appear to him to originate so much with the new tariff as in the measures of the old Government. But as they had got the announcement of the principle, and these speeches, he would not object to the postponement of the new tariff for one year, provided they could avoid a tax which they so much dreaded. When he looked at the tariff and the report of the committee on import duties, he found that the measures adopted by the Government were the very reverse of some of the recommendations. It was true, that if they lowered the duties from which a large revenue was derived, they could not expect an increase of revenue till after the lapse of a considerable interval of time. If they could expect such a sudden increase they would reduce the matter to the couplet in the old song:— My revenue is great, because it is so small, Then it had been greater had you none at all! In the tariff there were differential duties, and protective duties; and if they re-arranged the differential duties and decreased the protective duties, they would be able to increase the revenue. He said that the whole system of the new tariff was a system of protection and of large differential duties. He knew that all protection could not be taken away, but they might still avoid much difficulty and ensure a more satisfactory state of things. Instead of this the Government had done the very reverse. He said more; if, in consequence of the present distress, particular interests were called upon to make sacrifices, they ought to be the great protected interests for which the country had made such sacrifices, and had submitted to such a large amount of taxation, whether they were colonial or domestic. He, therefore, said, that the second element on which his noble Friend founded the justice of this tax wholly failed, although he admitted, that a tariff founded upon sound principles might have done much to alleviate the necessity of the Income-tax. He came next to the third point in his noble Friend's (the Earl of Ripon's) argument, which, as he thought, involved the whole question, and in which his noble Friend said, that it was impossible to find any articles which would produce as much money, and which would not be more injurious. His noble Friend went over the repealed duties on the several articles of raw material, and had asked whether they would re-impose any of these. His noble Friend had raised a host of shadows, and had cut them down very valiantly. His noble Friend had touched very gently on some which he might have dwelt upon. He had said little of the wine duties and assessed taxes. But noble Lords on the Opposition side of the House were not called upon to specify from what sources the money could be derived. He did not want the authority of Sir Robert Peel to say, that they were not bound to find him a budget. He found, however, that the amount of taxes repealed or reduced since 1821 was 23,181,060l., of which had been re-imposed 1,023,81ll., leaving upwards of 22,000,000l. of taxes repealed since 1821. There was also the Excise—on the Customs he did not rely. It was not by taking out a single article and arguing upon it that the noble Earl could show that no more money could be raised. There was no tax which could be selected against which somebody could not raise objections. In 1819 the noble Lord opposite (Lord Bexley), who preceded the noble Earl in the office of Chancellor of the Exchequer, had increased the revenue, and yet had not imposed the Income-tax. And three years afterwards, in 1822, the noble Earl had repealed two millions of taxes; in 1823 he repealed four millions, and in 1825 he repealed a million and a half more. This showed that the additional taxation then imposed had not impaired the resources of the country. He asked, therefore, why the resources of the country could not now bear a resort to the same means as well as they did in 1819? That was what his noble Friend refused to tell—when prosperity was regained before the fresh taxes were repealed. It was true, that when Parliament imposed an additional duty of 5 per cent, on the Customs, and 10 per cent. on the assessed taxes, the produce of the Customs had not answered expectation, but the assessed taxes had been more productive than had been anticipated. That measure, therefore, could not be looked upon as an entire failure. It would not be said that out of the 22,000,000l. of duties repealed, it was impossible to raise two and a half or three millions by resorting to some of those repealed duties. The real necessities for which they were to provide was only two and a half or three millions of money. It was impossible to say that no tax could be found to provide this sum which would not press more heavily upon the country than an Income-tax. He said, then, that his noble Friend had on every point failed to prove the necessity of an Income-tax. Still the Government said, and it was fair to say, that an Income-tax was not only to provide for this deficiency, but also to enable them to couple with it a reduction of taxation, and that, taking the whole together, the country would benefit by a reduction of duties. He objected to the whole plan. He said that this attempt to relieve the distress of the country was contemptible. He said that the proposed relief was ridiculous in relation to the largeness of the distress; and that for this relief, small as it was, a tax was to be put upon the country which was vexatious and injurious, and to his mind ill adapted to the present circumstances of the country. To take, however, the entire plan. The Government found a deficiency in the income of two and a half millions, and the first thing they did was to throw away 600,00l/. by giving up the timber duties. He said that this proposal was wholly unjustifiable in the present state of the revenue. He did not deny that a reduction of the timber duties would be productive of considerable advantage; but when this advantage was put into competition with the evil of an Income-tax, it was nothing. The Government did not give cheap and good timber; they gave the country cheap timber, but they gave it bad timber. It was true that they would let in some Baltic timber, on which the duty was now almost prohibitive, but the principal was still protection; they kept up high differential duties. If they wanted a direct trade with the Baltic, why did they not leave on the 8s. duty? He asked where would be the advantage to the community now? If this were a moment when trade was going on profitably, and when many houses were building, the reduction of the duties on timber might be important, but at the present moment houses were falling to decay, and workshops were deserted, and the only houses to which the poor could look were the workhouses. The only way in which the reduction of the duties could do good to this country was by opening the trade, and this the Government had refused to do. They chose rather to keep up the differential duties. Nay, some of her Majesty's Ministers had, elsewhere, taken credit to themselves and said that the persons connected with Canada were quite content with the proposed change. [Lord Fitzgerald: They are not satisfied.] It had been so stated in that place, and the statement had been eagerly caught up. The Government had also reduced the duty upon coffee. Taken by itself and abstractedly, this was a good thing; but when for this reduction, the country was to have the Income-tax, the sacrifice was too great. He did not wish to discuss the budget proposed by his noble Friend near him, but it was impossible to hear of the duty on coffee being reduced and not to revert to the duties upon sugar. The duties on sugar were kept up, although the reduction of them would have been a far greater boon than the reduction of the coffee duties, and would have materially increased consumption. The great argument used last year was, "We cannot let in foreign sugar because we cannot encourage slave-grown sugar." Although he would be as happy as any one to see the abolition of slavery throughout the world, and would assist that abolition to the utmost of his power, still he did not think that such a doctrine ought to be introduced into our system of taxation, and at any rate her Majesty's Government had wholly abandoned that argument, when they permitted coffee to come into this country from the Brazils and from Cuba. In reducing the duty on coffee they would have acted infinitely wiser if they had made no differential duties in favour of our East Indian possessions, and had allowed the coffee to come direct from the Brazils and from Cuba with the imposition of an additional duty, less than the cost of the voyage round by the Cape of Good Hope. The whole amount of the reduction of the coffee duties was only 170,000l., and for that there was no necessity to impose an Income-tax! but he objected to the reduction as being badly carried into effect. A word or two before he concluded upon the promised surplus. His noble Friend had stated that it would amount to half a million; and supposing it not to be very much under-estimated, how was it to be applied? His noble Friend had stated that it was wanted to carry on pending negotiations with foreign countries. He would like to hear what were the negotiations which were in such a condition as to need that expenditure; and it seemed to him that it would have been much more becoming if Ministers had simply taken a vote, that any deficiency to be thus occasioned would be made good. The country ought not to be called upon to provide half a million, at a time when it was not at all likely to be wanted. But if it were not wanted for negotiations, it seemed that it would be wanted for the purpose of reducing other taxes. If it were to be so applied, what chance was there of ever getting rid of the Income-tax? Was it not, in fact, the grossest deception to say that the Income-tax should determine in three years, when everything showed that it would then be quite as much wanted as now? If it did not expire in three years, the bill upon the Table would become part of the permanent taxation of the country, and to that he must feel the greatest possible objection. Sure he was that the country would never consent to it, and nothing could be worse than to commence such a system, if it were not meant to persevere in it. A noble Earl (the Earl of Wicklow) on Friday had made it matter of complaint, and with reason, that Ireland was not included in the measure. Ireland was to be permanently taxed to the extent of 400,000l. a year, while in England, according to the showing of Ministers, the evil was only to be of three years' continuance. If, however, it was not really intended that the Income-tax should expire (and he for one could not see how that was possible) the two countries might be considered pretty much on an equality. He entreated the House to consider what a compound of injustice the bill amounted to: the powers of the commissioners were so tyrannical as absolutely to be inconsistent with the principles of free government. He had presented a petition from persons who had experienced the working of the old Income-tax, but it was impossible that that could have been worse than some of the provisions of the present bill. Could any injustice be more crying than that persons in mercantile pursuits were to pay the tax not upon their profits of last year, but on the average of the three last years? Thus, at a time when busi- ness was least advantageous, when, in truth, to many it was ruinous, they were required not to pay upon their actual incomes, but upon their receipts when trade had not so seriously declined. He might detain their Lordships all night by pointing out the manifold injustice of the measure, but he Would only advert to a few others. A noble Duke (the Duke of Richmond) on a former night had spoken of the present as a landed Parliament, and had intimated that good care would therefore be taken of the land. Certainly it seemed as if in this bill landed proprietors had paid due regard to their own property and interests, and, in order to save themselves, had taxed more severely the rest of the community.

The Duke of Richmond

The noble Marquess had misunderstood what had fallen from him. He could not, with any justice, have stated that the present Government had paid the slightest attention to the wishes of the landed interest.

The Marquess of Clanricarde

was prepared to show to what extent the landed interest had been benefitted at the expense of the rest of her Majesty's subjects. For this purpose he would take the figures of the right hon. Baronet at the head of the Government, from which it appeared that the income derived from land, and including tithes, was 82,796,000l., the amount of tax to be derived from it was calculated at 1,127,000l. The income derived from other sources was supposed to be 114,426,000l., and the tax from it was calculated at 2,470,000l. Thus it was admitted that 114,000,000l. paid more than double the amount of tax obtained from 82,000,000l., and the injustice therefore was evident. He had said early in the evening that he thought it a perfect fallacy to suppose that the people were not aware of the Operation of the bill, and of the mode in which it would affect their interests, and Ministers in framing it had taken care to throw a sop to the lower classes which contained in itself a very dangerous principle. All incomes not amounting to 150l. were exempted. The noble Earl, in introducing the measure, had stated the fact, but he had not attempted to support the provision by one word of reasoning. It would be said, however, that the bill of 1806 contained a similar exemption; but that was no answer, because the circumstances were entirely different: what might be just in 1806 might be the height of injustice in 1842. The exemption then was of incomes under 60l.; but war prices then prevailed for all the necessaries of life, and the currency was depreciated so that 60l. then could hardly be considered more than a quarter of 150l. now. Supposing the bill to continue, as he feared it would, for a long period, what security on earth was there that in case of pressure the tax might not be raised to 6 per cent., and the exemption raised to incomes of 250l.? In time, it might be raised to 10 per cent., or even to 20 per cent., and then incomes of 500l. might be exempted. This was the dangerous principle involved in the tax and in the mode in which it was imposed. Whether Ministers had or had not remembered their friends of the landed interest, they had certainly remembered their friends the Chartists, and this most dangerous principle had been apparently adopted in order to secure their good graces. He was sorry to have troubled the House at so much length; but he objected to the whole scheme. As a measure of relief it would be trifling, inefficient, and even contemptible; while, as a tax, it would weigh most oppressively on the income and capital of the country; this, to, at a moment when, instead of taxing profits, modes ought to have been found to induce capitalists to employ their money in trade and speculation. It had been asserted that the measure had had the effect of keeping up the credit of the country. True it was that the price of the funds was high, but any man who considered that a proof of prosperity would be most grossly mistaken. He believed that the funds were kept up by the fact that capitalists were afraid to embark their money in any speculative adventure. He was convinced that the Ministerial scheme, instead of relieving distress, would increase it; the truth was, that Ministers had only considered how they could raise a certain sum, regardless of the consequences to the country, and of the perils to which it would be exposed. The noble Marquess concluded by moving, that the bill be read a third time on that day three months.

The Earl of Wicklow

observed, that what had fallen from him on a former night had been incorrectly reported. He had been represented to have said that Government, in not applying the bill to Ireland, had been guilty of an insult to that country, and remarks had been made, founded upon the error, which might be of some consequence when they reached the other side of the water. He had never said any such thing, and he had never imputed any such intention to Ministers. He was convinced that they had given the fullest consideration to the subject, and that they would have extended the bill to Ireland if they had thought the country fit for it. They had not done so, and he was satisfied that they were right. What he had said was, that he was extremely sorry it was not so extended, because it showed that the deliberate opinion of Ministers was, that Ireland was not fit to bear it, while it was in fact subjected to nearly as great an amount of taxation as if the Income-tax had been applied to it. The operation of the whole measure would affect that country as much as if Ireland had had to bear the Income-tax. He therefore repeated his regret that the Income-tax had not been found a fit tax to be applied to Ireland.

Earl Stanhope

objected strongly to some of the financial measures of the late Administration, which he considered not only injurious to the landed interest, but destructive to our North American colonies. To such measures he would prefer even the Income-tax, odious, unjust, and inquisitorial as it was. When the tariff should be brought before the House he should think it his duty to move its rejection, although it had been the fashion to say that that and the Income-tax were to be looked upon as one measure. It had been stated that the tariff would afford so much relief in the cheapness of various articles of consumption, that really the Income-tax would not be felt. Had he not long ceased to be surprised at anything said or done, he should have been astonished at the boldness of such an assertion. But if the tariff were connected with the Income-tax, it seemed to him that the new Corn-law was quite as intimately involved; since landlords would find that the new Corn-law would put so much money into their pockets that they could well afford the small deduction of 3 per cent. Much had been said of the existing deficiency, but he did not attribute it entirely to the depressed state of trade. It was, in his opinion, to be traced to the mismangement of the late Administration. Year by year they had continued a reckless reduction of taxes, and that course must in time lead to defalcation. Perhaps the first experiment of this kind by the late Ministers was the notable Penny Postage scheme, recommended by Mr. Rowland Hill, who had had very good reason to rejoice in the adoption of it. The country, however, had suffered, inasmuch as it cost it a revenue of not less than 1,200,000l. A deficiency having- been found, the natural remedy would seem to be the re-imposition of certain taxes, the removal of which had not afforded the relief expected. He was not one of the provincial Chancellors of the Exchequer who had been treated with so much contempt elsewhere; on the contrary, he had never offered advice to any Minister under the conviction that it would not be followed, and perhaps not even received. Were he to recommend a course, he would suggest that a well-regulated house-tax ought to have been adopted, exempting houses occupied by the lower classes—and governed by the number of windows, increasing in proportion to that number. Next, he would have proposed a modified increase of the assessed taxes; relieving those who kept one manservant, one horse, or one carriage, and augmenting the burden upon those who could afford to keep many servants, horses, and carriages. Instead of objecting to the exemption of incomes under 150l., although he might be called Chartist, or worse, he would have carried it further. In the third place, he would have raised the postage to two-pence; and, lastly, he should have considered it extremely judicious to have placed an additional duty on French wines, which were solely consumed by those who could well afford to pay. It might be said that an Income-tax was most convenient, because it might be raised to any amount, and because there could be no evasion; but the mere fact that it had not been recommended by former Governments, excepting under extraordinary circumstances, and for a limited time, showed that it was liable to the strongest objections. Pro tanto it might be said to amount to a confiscation of property; for where was the difference between depriving a man of 10 or 20 per cent, of his income, and taking away 10 or 20 per cent. of his property? No man had attempted to deny the inquisitorial nature of the Income-tax, and the power entrusted to the commissioners was as unlimited as it was arbitrary. Its inquisitorial character was destructive of that con- fidence which was essential in a commercial country. But he especially entreated their Lordships to reflect upon the effect of this inquisitorial tax upon the middle classes, hitherto the best and foremost supporters of our national institutions. Was there such general prosperity and happiness throughout the empire that Ministers feared no disturbance of the public peace, and could afford to alienate the affections of those who were most sincerely attached to social order? The Income-tax was to be imposed because former taxes had been repealed, but had they been repealed because they were unproductive, or because they could be dispensed with? Not many years ago a much heavier weight of taxation had been borne, not only without suffering, but without murmuring: then, however, the country had a currency commensurate to its wants. The subject of the currency was not foreign to the question before their Lordships; for if they should be engaged in war, and endeavoured to raise a revenue adequate to the expenditure, either by direct or indirect taxation, so long as that measure called Peel's bill continued in existence, they would attempt to effect that which was utterly impracticable. The first effect of an expensive war would be to blow that bill to atoms; and if the Bank of England should not be restricted by an order in council, the Bank of England would restrict itself, for it would be utterly unable to make its payments. He knew that these opinions were unpopular in their Lordships' House. He remembered well what was said of them by his noble and learned Friend (Lord Brougham); but it was his full and firm conviction that the opinion of the late Sir Robert Peel would sooner or later be verified. He had learned from certain information that the opinion the late Sir Robert Peel gave his son was this—"You never can carry that bill (meaning the bill for the resumption of cash payments) into full operation without ruining and revolutionizing this country." He should consider an Income-tax, notwithstanding the numerous and weighty objections which might be justly urged against it, to have at least one merit, if it did possess that advantage, which had been sometimes ascribed to it—that of taxing the rich, and not the poor. But he believed the result would be found, that it taxed the poor through the rich; and to that point he was anxious to call their Lordships' attention. This alone was to him a sufficient reason for opposing the tax. Had not their Lordships observed in all quarters the reductions about to be made in private establishments? Was it not obvious, that when they imposed a tax upon any consumable article, they might or not diminish the amount of production; they might or not increase the amount of revenue to be derived from it, but that at least they did not by necessary consequence diminish the amount of labour; but that when they imposed an Income-tax, they obliged every prudent person whose income did not much exceed his usual expenditure to form for himself a new budget, to review all his pecuniary affairs, and to consider what reductions he could make; and what would be the effect of the curtailment of that expenditure at a time like the present, and in the circumstances in which the country was now placed? How much would it increase and aggravate the present distress, of which the immediate and proximate cause, whatever might be the ultimate cause, was an insufficiency of employment and remuneration of labour. With respect to that distress, differing as he did with regard to the causes of it from noble Lords opposite, he fully and entirely concurred with them, that it was a subject which immediately and imperatively demanded the serious consideration of Parliament. Not an instant of time should be lost in applying an efficient and adequate remedy. The continuance of that distress was most afflicting and alarming. The consequences of that distress also, and at no distant period, could be nothing less than anarchy throughout the land. There was another consideration which ought to weigh deeply on their Lordships' minds; they ought to husband in time of peace, and not exhaust wholly, or in part, those resources which were applicable only in a state of war. He knew it would be said, and it was unfortunately too true, that they were not at present entirely in a state of peace; that hostilities were now being carried on in China and in Affghanistan. He would upon this occasion say nothing of the extreme impolicy, of the flagrant injustice of the war they were now waging in China—a war commenced without any attempt at negotiation, and without even the formality of a declaration of war; and continued without even the consent of Parliament being obtained. He was aware that they all read a proclamation in the Gazette that letters of mark and reprisals were issued, but was any message sent to the Mouse of Commons? Why did he mention this? Not in order to renew a discussion upon the subject, but because the consent of Parliament not having been obtained for that war, he did not think that Parliament could be justly or reasonably required to make good any expenses that had been incurred. But suppose the contrary had been the case, still for a temporary object, for so inconsiderable a matter in point of expense, though not in regard to its ultimate consequences, he thought other means might have been devised to defray the charge. If they were to exhaust in a time of peace those resources which ought to be reserved for a time of war, in what position would they be placed with respect to the other powers of Europe? What must be the direct and necessary consequence but to invite insult, aggression, and attack? What was another consequence that might result? He alluded to the evils and embarrassments to which this country might be exposed, if foreigners, who had property in the English funds, should be induced, in consequence of the Income-tax, to withdraw their capital? The effect it would produce must necessarily be very prejudicial. He had not ascertained the exact amount of capital so invested, but it was supposed to be between 12,000,000l. and 14,000,000l. If this were to be suddenly abstracted, it would so far diminish the amount of bullion in the Bank of England, and derange the whole circulation of the country. It would withdraw a large amount of capital, paralyse the energies and industry of the people, and tend to produce numerous bankruptcies throughout the land. He considered, therefore, this measure, for the reasons he had stated, to be pregnant with evil. But he would even yet allow that it was the least mischievous measure which had been proposed by the present Government. He should support the amendment of the noble Marquess (the Marquess of Clanricarde), although he differed from him in several respects. He was anxious to bear his testimony to the ability and judgment and extensive knowledge with which the noble Marquess had enforced his views. He felt the extreme impolicy of the present measure. It was not required by the exigency of the country, and could only tend to aggravate the present distress under which the nation was suffering.

Lord Beaumont

said, that he would fain throw himself on the indulgence of the House while he stated to their Lordships his opinions on the question, for, although he had been contented to give a silent vote on a former evening against the resolution moved by the noble Marquess, because that resolution contained principles and embodied doctrines of free-trade to which he could never subscribe, he felt unwilling on the present occasion to give an unqualified support to the Government measure. It was not to the principle of an Income-tax that he objected; it was not the necessity of its imposition that he denied; but his motives for qualifying his vote in its favour were the incorrect grounds on which it had been attempted to found it, the false reasoning with which its proposers had defended it, and the ruinous tendency of the measures with which it was surrounded and accompanied. As to the necessity of this or some equally efficient tax, he believed they were all agreed, for both sides of the House had admitted that it was incumbent on the Government, and absolutely necessary for the country to equalize the income with the expenditure of the State. Looking at the aspect of affairs not only here but on the continent, or more properly speaking, not only in Europe but throughout the world, no Minister would be justified in evading the immediate consideration of our financial difficulties, or of allowing any longer the annual increase of the deficit to continue. If noble Lords paid any attention to the periodical press of the continent, or took the trouble to read the numerous pamphlets with which political writers inundated France and Germany, they could not fail to observe that all these scribblers dwelt upon the state of our finance as the most important feature of our approaching decline, and pointed to the deficit in our revenue as the gangrene that was eating into the vitals of the country. Anxious as many of these authors are to run down our resources and anticipate our fall, they already calculate the slow degrees by which our financial embarrassment is destined to advance, and eagerly fix the period when it shall have arrived at such a height, that no Government will be able to raise a revenue equal to our expenditure. Under these circumstances it must be admitted that the moment is arrived when it becomes absolutely necessary that some effectual means should be adopted which would meet the present deficit, and remove the injurious impression such a state of our finances has naturally created abroad. The only question that remains is the choice of the measure which is to produce the desired effect. Until the noble Earl who spoke last proposed his scheme of finance, the only measure which had been brought forward or even alluded to, besides that of an Income-tax, was the one embodied in the resolution of the noble Marquess, which professed to raise the revenue by means of alterations in the customs' duties on sugar, timber, and corn. He (Lord Beaumont) would not question the calculations of the noble Marquess, nor throw out a doubt as to the realization of the noble Marquess's anticipations; but it should be remembered that all revenue, raised by means of the customs, depends upon the reciprocity of trade between this and other countries, and that reciprocity of trade depends upon the maintenance of peace; and that, therefore, a revenue raised from such a source, would not impress foreign nations with a belief in the unexhausted condition of our own internal resources, but rather with the conviction that our means to meet any danger was consequent on our commercial relations with them, and liable to be interrupted by the interruption of peace. On this ground he would have objected to the noble Marquess's proposition; and even if no other motive existed, he would have considered this circumstance as sufficient reason for opposing any measure which attempted to apply a permanent remedy to an existing deficiency by means of simply altering our customs' duties. But he (Lord Beaumont) had higher grounds for objecting to raising the revenue from that source, namely, that by adopting such a course they must completely abandon the principle of protection. In this respect he must acknowledge that the late Government were consistent—when they proposed to alter the customs' duties they boldly abandoned the principle of protection. A tariff must be adjusted on one of two principles—either for the purpose of protection or revenue. They must either raise duties so high as to protect home produce from foreign competition, or relax them so low as to increase the revenue from them by an increase of consumption. The present Government did neither; they threw away protection, and yet did not attempt to increase the revenue by increasing the foreign trade. They had adopted the bad part of the policy of their predecessors in office, without availing themselves of the counteracting good which accompanied it —that is to say, they threw away protection, and did not raise revenue by their alterations in the customs' duties tariff. But this was not all; for they not only abandoned protection, and neglected the opportunity of increasing the revenue from the customs, but actually added to the existing deficit, and thus increased the difficulty they were called upon to meet. There might have been reasonable expectations of supplying the deficiency in the revenue by the late Government's proposed alterations of the customs, and those expectations were naturally put forward as the grounds on which they argued the necessity of a change; but what was the course adopted by the present Government? They first made the deficit much greater than they found it, and then pleaded that deficit as a necessity for the imposition of an Income-tax. As had been clearly shown by the noble Marquess, they created the necessity of an Income-tax, and were themselves the authors of the evil, which, by its imposition, they expected to remove. But he (Lord Beaumont) would like to know on what data they calculated the actual loss the alterations of the customs was expected to inflict on the revenue, because, to all the questions put, either in their Lordships' House or elsewhere, as to the probable sum which would be derived from the diminished duties on corn, cattle, timber, &c., either the most contradictory answers had been given, or no answer at all. On one occasion they were told that it was as impossible to estimate the probable returns of the customs'-house, by considering the operations of the tariff, as it was to tell the name of a ship's captain by merely knowing the height of the vessel's mast, and the degree of longitude in which she was sailing. Again, when the agriculturists complained of the injury they would sustain by the importation of foreign cattle, they were told that no foreign calves had as yet been born, and no cattle could be brought in,—in fact, that the alteration of the tariff would make no difference; but when any person complained of the Income-tax, he was told that the price of meat, bread, and other agricultural produce would be so much reduced, that the weight of the Income-tax would be fully compensated for by the diminished expense of living. If the last answer was true, fatal must be the effect upon the great agricultural interests of the country, for prices must be reduced to the amount of the tax paid by the consumers, and thus the whole of the additional burden would be defrayed by the land. The Government had often complained that the measures of their predecessors were merely experiments, but in this respect the present Ministers far outstript the former Government, for they not only made experiments in corn and timber, but in all the three or four hundred articles named in the new tariff. With respect to the limitation of time, he agreed in what had been so clearly stated and ably argued by the noble Marquess, that it was a fallacy to limit the duration of this tax to the term of three years, for what prospect had they of such an overflowing Exchequer at the end of three years as to entitle them to calculate on the repeal of it at the termination of that period? Did they rely on the increase of our commerce and the improvement of our trade with foreign countries? Did they look for an increase of our linen trade with France, or was it in America that they anticipated a more friendly tariff? Had Mr. Tyler improved on the commercial system of Mr. Clay, or had not Mr. Clay retreated rather than advanced in the march of free-trade principles. Had he not even gone so far as to assert, that free-trade was a chimera, and totally inapplicable to the civilised society of the United States. Neither in France or America could they therefore anticipate the abandonment of the present protecting duties, and the adoption of a more favourable tariff. To what country, then, did they look for this increase of trade. They would scarcely say to Russia, and he did not think they could expect much from the Prussian League in Germany. What was their trade with the emperor's dominions? In return for the hides, hemp, and tallow imported from Russia, they exported to that country so small a quantity of manufactured goods, that, in real value, the imports exceeded by an enormous sum the exports. Was it then in the Levant, on the shores of the Black Sea, or in the vast regions of Central Asia that they looked for an extension of their trade? Their power was dead in the East—they had no longer a paramount influence there. At the dictation of Russia the Dardanelles were closed against their steamships, in the Black Sea they had no flag—already the Russian name had gained the ascendancy —sending her best generals to conquer Circassia, encircling the shores of the Euxine, and effacing our influence in Western Asia by the instrumentality of Persia. Was it then in Central Asia that they expected to extend their field of commercial enterprise? There they had, indeed, attempted to establish political relations, but with so little success, that the British name was hated throughout the land, and the British troops driven back beyond the frontier. They could not maintain political relations with those countries, and without political influence it was impossible to maintain any great commercial intercourse. Where then were they to derive the means which would enable the Government to abandon this tax at the end of three years? It could not be from the increase of revenue consequent on a great extension of their foreign trade. Was it, then, he would ask, from an anticipated diminution of the public expenditure? Had any one pointed out in what quarter or in what way further economy could be introduced into the public establishments? The army was already reduced to the lowest point proposed, and it was not safe, in the present state of European affairs, to put their navy on a less efficient footing. Had it not been clearly shown, that their ordinary expenditure must remain the same at the termination of the three years duration of the Income-tax as it was at the commencement of that period? And yet Government boasted that it would enable them to take off other taxes. So, indeed, it might, if the revenue from it exceeded the deficit now in the Exchequer, but if they availed themselves of the surplus to remove other taxes the first year, and even repeated the experiment the second year, what would be the consequence the third year, when, according to law, the Income-tax must cease, and the source of their surplus, as well as the source of a portion of their necessary revenue, would be suddenly cut off? They would be obliged to supply the deficiency by the re-imposition of the very taxes they had the two previous years taken off, or ask for a renewal and continuation of this: for, under no circumstances, could any plan of economy be suggested that would supply the loss which the termination of this tax would inevitably occasion. It was a mockery to talk of this tax as merely a temporary imposition, for having once raised the machinery necessary to carry it into effect, there was every inducement to continue it, and as the noble Viscount lately at the head of her Majesty's Government, had candidly acknowledged, it was so effectual, and at the same time so easy an instrument in the hands of a Minister, that he doubted the willingness of any Government; that once experienced its advantages, to take it off. The noble Viscount had admirably descanted on the facilities it afforded to a minister, and he (Lord Beaumont) feared that the noble Viscount had read a lesson to those who knew well how to better the instruction. It was the duty of Government, at least to show on what grounds they calculated their ability, at the end of three years, to repeal the Income-tax, or what course they intended to pursue, if driven by outward pressure to adopt such a measure. They held out no hopes—they spoke of no chance of a diminished expenditure—no commissions were to be dropped — no offices to be destroyed, nor was there any prospect that local taxation would be so lightened as to enable the people to bear more easily the burdens of the State. Their legislation on the contrary tended to increase rather than diminish local expenses, as for instance, their lately adopted measure to limit the jurisdiction of justices which would swell the county rate by removing so many cases to assizes which now were tried at Sessions. In no way, therefore, could he discover any just grounds for the promise held out by Government, that they would, at the end of three years, take off this as well as other taxes, and he candidly confessed, that in giving his vote for this bill, he felt he was supporting not a temporary but a permanent tax. To the principle of that tax, however, he had not objected—he was willing to concede that it even had advantages. It caught all who could pay, the niggardly rich could not escape it, and it only weighed in proportion on the comparatively poor. It did not control expenditure, as the assessed and other taxes did, which often by taxing certain articles of luxury induced the wealthy to spend their money in other objects of fancy which had escaped the burden of a tax. A tax upon windows or upon houses, interfered with a healthy system of ventilation, and crampt the genius of architecture, while an Income-tax deducted so much from the spending capital of the individual, and left him to lay out the surplus in whatever manner he liked. To tax merely articles of luxury, was eventually to tax the labour which produced them, and if they looked to the history of some other countries, they would find the misery which always followed the imposition of sumptuary laws. The noble Earl who spoke last, had said, that a portion of the expenses lately incurred were of a temporary nature, and did not require the enactment of a new tax, for being the mere consequences of our wars in the east, they ought, like all former war expenditure, to be met by a loan. But to this proposal he (Lord Beaumont) would never consent, nor would he be a party to any measure by which the expenses of our present proceedings in the east should be added by way of loan to the national debt. Had the wars alluded to, been wars of defence—wars to preserve either the country's independence, or the nation's honour wars such as that memorable war which had been brought to a glorious conclusion by the genius of the noble Duke now present—a war unparalleled in history, both for its glory and its importance—if such had been the nature of their present wars, he would then have allowed that posterity might have been justly taxed with the expenses incurred, for in such a war, not only we who live to-day, but our children, and our children's children, are deeply interested; and the Legislature would have a just right to leave to them, as a fair legacy, a portion of the expenses entailed on the country, because without such a war, neither they nor their children would have existed as a nation. But to compare a war like that— a war glorious in the annals of the country, with the wars in which this country was now engaged—to compare the late European war, to which he could not allude without emotion, because he was speaking in the presence of the greatest actor who performed in the greatest drama the world ever witnessed—to compare such a contest as that with what he would not hesitate to pronounce their unholy wars—their unconstitutional wars—their disastrous wars, now carried on without principle or success in Central Asia and in China—to make a comparison of this description was of all fallacies the grossest that ever was attempted to be sustained in argument. No; let us have done as soon as we can with such wars—let us, as the noble Duke said the other night, pay the bill, and efface it, if we can, from the volume of our country's history, this, the greatest blot that ever stained its pages. He would not follow the noble Earl into the currency question, but merely remark how hardly the changes alluded to now pressed upon those landowners who had encumbered their estates in the time of a depreciated money, and were now called upon to pay all their burdens in a gold currency. After alluding to some other points, the noble Lord concluded by saying, that if his noble Friend had not forced the Corn-laws into his amendment, he might have been inclined to have supported him, but now he was left no choice but to vote with Government. The noble Marquess would not leave the Corn question alone, but by forcing it in every where, had destroyed the effect of his argument. If he voted for the amendment, he was voting against the Corn-laws; and though there was much he disliked in the manner in which the Government measure had been brought forward, he would support it as the least bad of the two propositions submitted to their choice. He had, however, felt it to be his duty to qualify his vote, and having done so by the observations he had made, it only remained for him to thank their Lordships for the patience and attention with which they had listened to him.

Lord Fitzgerald

said, he was anxious to address to the House a few observations with reference to the measure then under their Lordships' consideration, as well as to the amendment which had been proposed by the noble Marquess opposite. He did not rise then particularly to reply to the speech of the noble Lord who had just resumed his seat—not that he felt any intense gratitude to the noble Lord for the vote which he had expressed his intention to give, or for the reasons which he had that night advanced for the course which he was about to pursue. After so many of their Lordships had addressed the House it might be considered wanting in respect, if he or some other noble Friend near him did not rise for the purpose of stating the reasons which had induced her Majesty's Government to prepare the measure then under discussion. He would first address himself to one or two observations which fell from the noble Lord who had last addressed their Lordships. If he (Lord Fitzgerald) were not previously disposed to support the measure of the Government, the speech of the noble Lord would have convinced him of the necessity of an Income-tax. The noble Lord told the House that even at the end of three years there was little hope that the Government would he able so far to reduce the establishments of the country as to permit them to repeal the engagements which they had entered into for the repeal of this tax. But the tax had been proposed for three years for the purpose of affording the Parliament an opportunity of reviewing the whole financial state of the country, and he did not think it would be in the power of the present or of any other Government to withhold from Parliament the opportunity of making that review. The noble Lord had drawn a terrific picture of the state of our foreign relations, and had stated that he saw no prospect of such a state of things as would permit the repeal of the tax now proposed, and the noble Lord protested against the war in which this country was now engaged in the east. If in proposing this tax the Government had been found vindicating that war either in its origin or in its policy—if the present Government were responsible for the embarrassments in which the country was placed—then the arguments of the noble Lord might have been quite relevant in their application; but such was the case. Now, supposing the war in the east to be as the noble Lord characterised it—unholy, oppressive, and unjust—were the Government to neglect their duty? It was their duty to maintain the interest and the honour of the country, both in their internal as well as in their home policy; and he thought it would be unbecoming in Government, if at a time when they were called on to meet difficulties of this kind, they mixed up this question with party interests, or made any allusion to the circumstances which had produced the present necessity, except such allusions as they were called on to make to justify Parliament in submitting to the sacrifice proposed. The noble Lord further proceeded in his review of their foreign relations, and stated that he did not see anything in the state of their relations with the United States to lead him to believe that there would be any increase in our commercial resources or any improvement in our financial condition. He did not share in the despondency of the noble Lord on that point. He did not share in that despondency, and if he had he would have been slow to express anything like despair. Recollecting that the people of England and the people of the United States claimed a common origin, that they spoke the same language, that they had similar institutions—all of which circumstances, far more than national interests, bound nations together—he felt some hesitation in assenting to the opinion of the noble Lord that there was no prospect of an improvement in the commercial relations of the two countries. He trusted that the long pending differences between the two countries would be speedily settled. He trusted that those differences would, by the moderation, good sense, and ability of the noble Lord who had undertaken the mission to the United States, be brought to a satisfactory conclusion; and judging even from the imperfect news which had recently been received in reference to the negotiation, he did think that the prospect was rather a more cheering one than that in which the noble Lord indulged. The noble Lord had also alluded to Russia; but what connection the fact of Russia having the command of the Dardanelles or of the Black Sea had with the Property-tax now under consideration, he was at a loss to conceive. The noble Lord also said, that he saw no prospect of the extension of our commerce with Asia. The noble Lord would, however, permit him to express a different opinion. He could not look to the restoration of peace in Central Asia without contemplating the extensive markets which would be opened up for the produce of this country. He saw in the opening of the navigation of the great rivers in Central Asia, the herald and harbinger of great commercial improvement, with all the advantages which would result to Asia from a commercial intercourse with a civilized country. He would now address himself to the speech of the noble Earl (Earl Stanhope). He would not undertake to reconcile the differences in the speeches of noble Lords on this question. It was not for him tantas componere lites—nor was it necessary for him to answer all those speeches, because each afforded the best answer to the other. But really he had not heard from the noble Earl any argument against the principle of the bill except that which all admitted, namely, that the tax was unequal, oppressive, and inquisitorial. These were strong objections, but against them he could only place the opinion of the noble Marquess opposite who moved the amendment, and who admitted that Government were bound to supply the deficiency, and to maintain the establishments of the country. So far, then, the speech of the noble Marquess and that of the noble Earl might be allowed to pair off together. But in proposing this tax they were not bound to discuss every other proposal of taxation. The noble Earl near him (Earl Stanhope), who seemed to feel sorely the allusions made to provincial Chancellors of the Exchequer, stated that he was disposed to supply the annual deficiency of two millions and a half by a renewal of the house-tax, and by increasing the assessed taxes. He left that proposal to the public, and he would ask them to compare it with the proposition of the Government. He did not know whether the noble Lord proposed to restore those taxes to the extent they were repealed by Lord Althorp, or to their whole extent; but to whatever extent the noble Earl proposed to restore them, he would leave it to the public to judge whether it would be for their benefit if these taxes were re-imposed. The noble Earl said he could conceive no objection to such a tax—a tax free from objection was certainly a novelty, and the noble Earl proposed that a large class of the lower rented houses should be exempted from its operation, and that only the larger houses should be liable. But had it never occurred to the noble Earl, that there might be means of evading this tax? Had it never occurred to him that the larger proprietors might exempt themselves from the tax by shutting up their houses? The noble Earl would not do so; he was so much of a patriot that he would in such circumstances rather enlarge than diminish his establishment; but would others follow the noble Earl's example? He was afraid they would not, and he could not therefore consider such a tax altogether free from objection. He would now say a few words in answer to what had fallen from the noble Marquess opposite (the Marquess of Clanricarde). The noble Marquess was most eager and ardent the other night that this discussion should be adjourned, because, the noble Marquess said, he was anxious to discuss the principle and details of the bill, and because the discussion on Friday night had been confined exclusively to the resolutions proposed by the noble Marquess (the Marquess of Lansdowne) in reference to the financial proposals of the late Government. Now, he thought, and others thought, that a great part of that discussion was on the principle and on the details of the bill. The speech of the noble Viscount, the head of the late I Government, was exclusively directed to the principle of the bill; and he was glad that he had the sanction of the noble Viscount for a tax which he described as having been most unfairly treated and condemned as unjust, and as one which he himself was not prepared to say ought not to be resorted to. Excepting a single sentence at the conclusion of the noble Viscount's speech, not one word fell from him touching the resolutions proposed by the noble Marquess opposite, or in defence of the propositions which his own Government had brought forward. Such was the speech of the noble Viscount, and a great part of the speech of the noble and learned Lord (Lord Brougham), not now in the House, was directed, not only to the resolution of the noble Marquess, which he discussed at great length and with great power, but also the details and the principle of the bill. The noble Lord also stated that they were entitled to treat the bill as if it was in committee, and went into a long examination and reprobation of particular clauses of the act. His noble Friend (the Marquess of Clanricarde), notwithstanding he had expressed his great anxiety to discuss the principle of the bill, had to-night made a speech, three-fourths of which were applicable, not to that which he was anxious to discuss, but to the resolutions of the tariff, and to the commercial policy of the Government. He did not complain of that, and the noble Marquess was perfectly justified in saying that it was impossible to consider the two subjects separately. But did it not occur to the noble Lord that they were just as inseparable on Friday night as they were now. There were some other parts of his noble Friend's speech to which he now wished to draw the attention of their Lordships. His noble Friend, after having replied to the speech of the noble Viscount (Viscount Melbourne), applied himself to reply to a speech made by his noble Friend near him (the Earl of Ripon) on the other evening, and set out by saying that he was not opposed to the principle of this tax or its general policy. The noble Marquess, it was true, guarded himself against particular clauses and provisions of the tax, but made that general admission, provided the necessity existed for its establishment. The noble Marquess, however, contended that the necessity was not established, and charged the Government with creating the necessity for a justification of the measure they had proposed. He afterwards explained the meaning of the words "creating the necessity" by stating that the Government had exaggerated the financial difficulties of the country, and called upon the country to provide for them as if they were unexaggerated. Now he would ask their Lordships, and every man who had attended to the de bates on the subject, for it was impossible to say that the question now came before them for the first time, whether the financial difficulties had been exaggerated or not by the Government, whose duty it was to call the attention of the Legislature to this important matter? and in order to consider the question of exaggeration, be begged the House to look at the facts of the case. They found that in six years a growing deficiency had existed, and that in the course of these six years the deficiency had amounted to the sum of 10,000,000l. sterling, which had been added to the national debt in times which had been described by the noble Lord as times of profound peace; and times of peace they might certainly be called as compared with the days of those great struggles when recourse was had to similar financial measures. But they had not then, as now, a deficiency, at the end of six years, which amounted to the sum of 6,000,000l. to be added to the national debt, and a deficiency of 2,500,000l. still to be provided for. He knew not what was meant by creating a necessity, or overstating and exaggerating the deficiency. He thought it would be rather difficult to exaggerate it. He could conceive no state of things more precarious than the present, and nothing more likely to excite great public alarm, to affect the public credit of the country, or be more inconsistent with those high and resolute principles of financial administration on which this country in times of great difficulty had always acted. His noble Friend had not stated how he would supply this admitted deficiency—as, although he had called it an exaggerated deficiency, he did not mean to question the figures, or deny the truth of the deficiency as stated by the Government. He had not heard, with the exception of a recurrence to the proposition of last year, any alternative proposed; and it was an extraordinary thing that this measure, which the Government had proposed from a perfect conviction of the deep financial difficulties in which the country was placed, had not only not been opposed on its introduction, but had remained unopposed for several days. Public attention was not called to it either by the public, Parliament, or the press. That part of the subject had been dwelt upon by the noble and learned Lord (Lord Brougham) on the former evening, and at the last stage which the bill had to pass through, it was charged on the Government that they had created the necessity on which they meant to found this tax, which was characterised as a mere pretence on the part of the Government, to get into their hands a convenient fical instrument to use hereafter, notwithstanding the assurances and pledges they had given to Parliament. It was a little remarkable, however, to observe, that the proposition when laid before Parliament did not receive that strong opposition which it now appeared to experience; for some of those who concurred in opinions with the noble Lord opposite, and with his Colleagues, might be found at different times and in other places vindicating the principle of a property-tax,—in fact, advocating that very measure which the noble Lord had denounced as so unequal, so inquisitorial, and so uncalled for. They were to be found advocating this very tax, not as a measure of taxation to cover any particular deficiency, or supplying any temporary necessity, but arguing for its expediency on the very grounds on which their successors now brought it forward. He could refer to the recorded opinion of Lord Al-thorp, when Chancellor of the Exchequer. The same opinion had been expressed by Mr. Poulett Thomson, when President of the Board of Trade. He also found, not certainly in a debate, but in a less perishable record—in a printed and published form—the opinion of the late Lord Congleton recorded more than once in favour of such a tax. The lamented noble Lord had advocated the tax as a sure means of relieving the working classes, and of lightening the burdens on the productive sources of national industry. Under these circumstances, he was surprised to find that so many noble Lords indulged in denunciations of this measure of her Majesty's Government at this moment, and more especially when he recollected that for a whole week no particular indignation had been exhibited, so as to lead to the inference that the proposition would be treated with so much warmth as noble Lords now bestowed upon it. In stating the amount of the deficiency—an amount not disputed—which led to the expediency of the present measure, the question naturally embraced other branches of legislation, which mainly affected public credit. It was necessary not only to advert to the deficiency in our own revenue, but to allude to the deficiency in our Indian finances. He did not mean to say that, because of the embarrassed state of our finances in India, that it was necessary to propose a measure of relief which the noble Lord opposite had admitted was an economical and a certain source of revenue. He did not rest the necessity for this measure alone on the embarrassments of the Indian finances, but he felt that, in alluding to the subject of our financial situation, it was quite impossible to keep wholly out of view the embarrassments of so important a portion of our empire. He found that, in the year 1836, about the same period when the deficiency commenced in this country, that there was a net surplus available to the Government for the internal improvements of the empire of 1,500,00l.. in the Indian finances. Now, without taking into account any increased expenditure owing to war and to the necessity for an augmentation of the military establishments, there at the present time existed, in place of a surplus of of 1,500,000l. a deficiency of 2,500,000l.. Now was it at a time like this, with 10,000,000 deficiency in six years, and 2,500,000l. of deficiency in the Indian revenue, was it now, he asked, under these circumstances, and in that place, that Government could be charged with exaggerating the financial difficulties of the country, and so presuming on this exaggeration as to make it a pretext for their present fiscal proposition? Did the House go with him, or with the noble Lord opposite, in the pictures which had been respectively drawn of the financial situation of the country 1 He thought it was not necessary, at least not desirable, and he should be the last man to wish such a thing to go so far, as to attempt to fix upon the late Administration the difficulties which the present Government had to contend with. But willing as he was to avoid this, and feeling the necessity for an examination into the exact state of affairs, he was bound to ask the House to look at the situation of the country when the Ministry were called to office. Did he charge the noble Lord (Lord Monteagle), who, when Chancellor of the Exchequer, introduced a measure for the reduction of the postage, with having caused this deficiency; or did he impute the deficiency to the noble Lord On account of that measure? He knew, and his noble Friend would recollect, that when he introduced his proposition he gave notice to the House, that he would not, without first receiving a pledge that the deficiency caused by this speculation, if he might call it so, should be supplied —that, in fact, if Parliament refused to give this pledge he would decline to bring forward the proposition. At that time the deficiency in the revenue was somewhere about 800,000l. or 900,000l. His noble Friend did not attempt to conceal the position of the country at that time—he Stated it manfully; but he contemplated an advantage from his proposed alteration in the postage which, in a financial point of view, had certainly not been realised. His noble Friend had, in fact, been coerced into the measure by the force of public opinion, and by a combination of parties which left him but little alternative. Add the loss from the Post-office to the deficiency then existing, and then see how near they came to the present deficiency. The net revenue from postage, including foreign and inland, was about 1,500,000l. [Lord Monteagle: Very near 1,700,000l.] Then, if this sum, 1,700,000l. were added to the deficiency in 1836 of 900,000l., the sum total would exactly account for the present deficiency. It had been said that the Post-office still yielded 400,000l. to the revenue, but the noble Lord opposite knew better. The packet establishment cost 400,000l., so in fact there was no revenue whatever derived from the Post-office. He considered that the question as to the policy of a revenue from the Post-office was gone by. It was admitted that it might be used as a source of revenue, but it was contended that revenue ought not to be the first object. But he would leave that question, and come to the circumstances under which his noble Friend had introduced his resolution relative to the penny-postage, and the distinct assurance he required from Parliament to supply the deficiency. would the noble Lord oppose the Government when they were attempting to supply the present deficiency? would he not rather give them his support when about to supply that deficiency, which if he were now in office he would not allow his pledge to sleep, but he would make it his duty to call on Parliament to supply the deficiency? The noble Lord ought not, and could not, have permitted his pledge to sleep when the deficiency occurred, for to attempt to compensate it by a recurrence to the old rates of postage would be impossible, and, if possible, ought not to be attempted. He said the country would willingly allow the alteration. He himself was desirous that the experiment should have a fair, and he would add, a successful trial. Now, with respect to other points urged against the tax, he dissented from that one which gave the preference to the financial policy of the late Administration. He was of opinion, that in the course of three years, if both systems could be in operation, that the preference would be given to the propositions of the present Government; and he founded his opinion on the spirit with which the Government proposals had been received. He did not wish to use too strong a term; but, judging from the sentiments which appeared to prevail, he was of opinion that the public had given the proposition its support. He did not find any very strong manifestations of adverse public feeling. He found no strong or insuperable objections to the scheme either in the debates or the votes in Parliament—he found that the whole number of petitions presented to Parliament on the subject against the tax was 130, having 9,000 signatures. He found that after the tax had been proposed, after the time had been afforded by the recess for its thorough consideration, after the House of Commons had relaxed a rule—he rejoiced at the circumstance— which prohibited petitions from being received on any subject relating to taxation when under discussion—he found that the whole number of petitions presented to the House of Commons against the tax was 130. Now he was willing to admit that the petitions had not been got up as some petitions were, but that they truly represented the sentiments of the petitioners, and that the signatures were bonâ fide signatures; yet as he had personally examined some of the signatures he could not help remarking that if the writers really possessed all the comforts which 150l. a year, or above, was calculated to afford, that their education could not have been carefully attended to. He had se- lected a few of the petitions of those who objected not to the principle of a Property-tax, but to particular parts. He found the sensibility of these petitioners only excited when the tax affected themselves. This was all the opposition which the tax met with. The whole number of petitions against the tax was 130. Such was the feeling of the people towards a tax which had that night been denounced by his noble Friend near him (Earl Stanhope), and by the noble Lords opposite, as one so monstrous in its character, so fatal in its consequences, so subversive of every right of Englishmen, so interfering with the liberty of every man, so affecting public credit, that it ought not to be entertained for an hour, but to be repudiated at once by the House, even though the only alternative left should be to adopt the financial scheme of his noble Friend near him. But when he thus adverted to the comparative absence of petitions upon this subject, let it not be supposed that he or any man connected with the Government endeavoured to defend the proposition upon the ground of its being acceptable to the people. He did no such thing. He denied not the inconvenience of its inquisitorial character. He denied not the inequality of its operation. He lamented the manner in which it fell upon property of different descriptions—upon property that was permanent, and upon property that was not permanent. He lamented the necessity for extending it to professions and trades upon the same scale as it was applied to permanent and solid income. Let it not be supposed that he endeavoured to defend these inconveniences and inequalities. But he believed that the people of this country, although aware of these evils, were still reconciled to bear the infliction of them, on account of the public exigency which pressed upon the State. He believed that the first feeling of the public of this country was the necessity of maintaining the public credit of England. He believed that the first principle of an Englishman in public matters, as well as in private affairs, was to maintain the inviolability of his word and his faith. He believed that as long as that was the animating principle of the public of this country, they would be reconciled to greater inconveniences, greater hardships, and greater inequalities than any that would be imposed by this tax; knowing, as they did, that there was no tax that could by possibility be proposed, the operation of which would not, in some respects, be unequal. To say that a tax was an unequal tax was only to state that which was an objection to all taxation. He purposely passed by the arguments advanced by the noble Marquess (the Marquess of Clanricarde) upon the subjects of sugar and coffee, conceiving that they applied rather to the debate of the other evening than to the question then under the consideration of the House. The short answer to these arguments was, that there was no parallel between the cultivation of sugar and coffee. If nothing but coffee were produced in Cuba and Brazil there would be no necessity for the importation of a single additional slave into those countries; but increase the demand for their sugar, and it was impossible to say that the horrors of the slave-trade would not be revived to an extent at which humanity shuddered. He came now to that part of his noble Friend's argument which related to the exemption of Ireland from the Property-tax. He could not share with his noble Friend in the regrets he had expressed upon that point. He believed that there never had been an occasion in which the interference of Parliament for the exemption of Ireland from a tax of this nature had been hailed with greater satisfaction than the present. It was to be remarked that the exemption of Ireland applied only to a particular tax— it was not a general exemption. The amount of tax which Ireland would pay for income derived from land, or for other income derived from sources described in the schedules of the bill, would not, in fact amount to so much as the estimated produce of the other taxes to which she was to be subjected. And under what circumstances did Ireland escape this exemption from the Property-tax? The Legislature was precluded, by the provisions of the Act of Union, from laying any tax upon Ireland which was not imposed upon Great Britain, or from levying a higher duty upon any article in Ireland than was imposed upon the same article in Great Britain. There remained then, for any financial operation in Ireland, only those subjects of taxation which were liable to tax in this country. The state of Ireland, the condition of her society, the circumstances in which she was placed, rendered her peculiarly unfit for the application of an Income-tax. Such being the case, he would ask, where there were sources of taxation yielding revenue in this country, but as yet untouched in Ireland—and where there was the choice of means by which the supply of revenue from Ireland should be contributed — whether it were a blame to the Government that they had considered the social and political circumstances by which that country was so remarkably distinguished from England—whether it was a blame to the Government that, instead of requiring a Property-lax which Ireland had never paid, they had resorted to those unexhausted sources of taxation which, yielding revenue in this country, were properly subject to the operation of fiscal laws in Ireland? He believed that Government had acted rightly and prudently in this respect, and that they would have acted neither with wisdom nor prudence if they had attempted to create in Ireland a new machinery for the collection of a tax to which that country had never yet been subject. He thought that his noble Friend's argument to have justice done to Ireland in respect to the Income-tax would not be responded to in that country. There were many points in the speech of his noble Friend, and in the speeches of other noble Lords delivered on that and the former occasion, to which he should be unwilling under any circumstances to advert in detail, but he really thought at present their Lordships would rather complain if he led them now into a repetition of the arguments which had been adduced in reply, or if he prolonged the debate in a manner which he himself thought would be unnecessary. He should, therefore, not trespass longer upon their attention. He thanked them for the indulgence he had received in the course of the observations he had felt it his duty to address to their Lordships on the part of the Government who had presented this proposition to them, and he would not delay them from coming to the vote which he anticipated they would deliver. He believed that decision would be to affirm by a great majority their approbation of the course pursued by the Government. He knew not whether that was doubted, but if it was, then with great confidence he declared he believed the result of their discussions would be an expression of approbation by a great majority of their Lordships in favour of the proposition of the Government. They had made that proposition in the confidence that it would receive such approbation. They had made it in the belief, in which they had not been disappointed, that the country would receive without repugnance the measure which was now submitted to their Lordships for their assent. They had made it in the belief and the confidence—which had been confirmed by the result—that it would receive the approbation also of a large majority of the representatives of the people in the other House of Parliament. They had believed, and they still believed, that in the difficulties of the country—in the face of augmenting difficulties—with large establishments to sustain, and with the prospect, perhaps, of augmented establishments—they still believed that the country would rather support those who presented to it what had been called by one of their political opponents an honest and a bold measure, rather than those who would propose what had been called the speculative chance of a revenue, or transitory or uncertain schemes of temporary finance. He would not believe that in that House, where their Lordships enjoyed hereditary rents, and which comprised so large a proportion of those who inherited great possessions—he would not believe that the appeal which had been made to the possessors of that property would not be responded to in a satisfactory manner. He had perfect confidence, that in the same spirit with which our ancestors had acted in times of greater difficulty, and which called for greater sacrifices, but still times of financial difficulty, their Lordships would not shrink from the duty which was imposed] upon them by the present circumstances of the country, but would affirm by their votes a measure which had received the sanction of so large a majority of the representatives of the people.

Lord Monteagle

having been personally alluded to in the course of the debate, hoped to be pardoned if he took the opportunity of explaining the views which he took of the question under consideration. He frankly admitted the pledge which he had forced upon the other House of Parliament at the time of the reduction of the postage duties. By that pledge he acknowledged himself bound. In the spirit of that pledge he was prepared to act. Even independent of that pledge, he should conceive himself bound to assist, by all just means, in making up the difference between the income and expenditure of the country. But surely his noble Friend would not contend, that because he had given such a pledge, he was therefore bound to give his assent to the general proposition now under the consideration of the House. Surely his noble Friend would not contend that because he had been a party to the reduction of a particular tax to the extent of 1,200,000l., therefore he was to be a party to the imposition of another tax to the extent of 4,000,000l. a-year. The proposal for the imposition of a tax upon property was not new—it had been submitted to Parliament as a substitute for other taxes year after year—it had been advanced with much pertinacity, and advocated with much ingenuity; but he had always been opposed to it, and had always resisted it. When his noble Friend (Lord Fitzgerald) adverted to the revenue formerly derived from the Post-office, and stated that the whole of the revenue had disappeared, his noble Friend was labouring under a very great mistake. The expense of the packet service, which was said to swallow up the whole of the revenue now derived from the Post-office, had no more to do with the penny postage than the expense of the war in Affghanistan or China. It was as distinct from the Post-office as the expense of the army or navy. The great packet communication between Great Britain and the British North American colonies was undertaken upon much higher principles than any connected with mere considerations of revenue. It was felt by the Government of Lord Melbourne, that it was not wise to allow the only rapid mode of communication between the British possessions in North America and the mother country to be dependent upon the means afforded by the United States. Means were accordingly taken to establish a line of communication of our own. He admitted, that this was not done except at a very heavy expense; but it was not right to place that expense to the account of the Post-office. His noble Friend (Lord Fitzgerald), not venturing to say, that the Property-tax was a popular proposition, yet insinuated, from the smallness of the number of petitions that had been presented against it, that it was not so unpalatable to the country as its opponents in the Legislature would have their Lordships believe. But let his noble Friend look back to the experience of the year 1806, and judge from the public opinion then expressed, what the popular expression of feeling might next year be. Let him remember what were the complaints in 1806, when the Property-tax had actually come into operation—when the Property-tax was understood—when its unequal pressure upon certain interests was felt-when men were really suffering from its operation. His noble Friend might depend upon it, that at the end of another year, it would not be in his power to found a defence of the Property-tax upon the ground of the smallness of the number of petitions presented against it. But why had the number of petitions been so few? This question opened a serious chapter in its history. He concurred with his noble Friend in thinking, that the exemptions from the operation of the Income-tax were made in the wrong direction; Ministers exempted certain classes of persons in respect to the amount of their income, and refused to exempt classes of persons by reason of the nature of their income. By this mode of exemption they swept away a larger amount of taxable property than was ever before exempted from the imposition of an Income-tax, while, at the same time, they brought within the network of their tax several descriptions of property, which hitherto had never been subject to such an impost. He lamented, nay, he 'almost blushed, to say, that it included the I property of foreigners, which, up to this period, had never been touched. Looking at the number and the class of persons! exempted from the tax, and who, by that exemption, would enjoy almost an immunity from any taxation whatever, he must say, that never, within his experience, had so great an inducement, so great a bribe been held out by a Government to secure in the silence and the acquiescence, if not the entire support of a large portion of the community. He would take the liberty of | briefly stating to what extent the exemptions would extend. A short time since J he had moved for a paper now upon their Lordships' Table, showing the number of persons receiving dividends for stock and annuities. From that paper, it appeared,! that there were 282,326 dividend warrants issued annually. How many of these did their Lordships suppose exceeded 150l.? Only 13,968. Out of the 282,326 to whom dividends were paid out of the public funds, there were only 13,968 whose incomes exceeded 150l. a-year. What wonder, then, that there should be an absence of petitions? In 1801 the exemption was limited to income under 60l. a-year. At that time the assessable property in the kingdom was estimated at 80,600,000l. By the nearest calculation he could make, the persons included in that assessment holding property between the two fixed amounts of 60l. and 150l., were, in fact, the possessors of 20,000,000l., or one-fourth of the whole of the assessable property of the kingdom. The exemption, under the present bill, of so large a portion of the community, naturally accounted for the silence to which his noble Friend had adverted with so much apparent satisfaction. In the course of the debate many authorities had been cited against the view which he took of this question. He had been asked how he and his noble Friends who thought with him could make up their minds to take a course which was opposed to the authority of some of the greatest names of their own party? The authority of the late Lord Sydenham and of the late Lord Congleton had been referred to as very favourable to the imposition of an income-tax. He would appeal to an authority who was now living—he would refer to the authority of that venerable nobleman who was at the head of the Government of this country when the momentous war in which the country had been some years engaged ceased, and who came down to the other House and asked for the immediate repeal of this tax. He alluded to Lord Sidmouth, who, at the conclusion of the peace in 1802, then stated that nothing should induce him to recommend the continuance of the Property-tax after the war had ceased. Lord Sidmouth said, It is my intention to propose a repeal of the tax on income. I am desirous that the sentiments I entertain towards that measure he perfectly understood. As a war-tax I am persuaded that it was a legitimate source of revenue; but I have ever considered it in no other light than a war-tax, inapplicable to a time of peace. And again Lord Sidmouth said, on the 5th of April, 1802— I recommend that the burden of the Income-tax should not be allowed to rest on the shoulders of the public in time of peace, because it should be reserved for the important occasions which he trusted would not soon recur. He thought it worthy of the credit and the character of the country to look for- ward to such a resource in the fearful event of being obliged to struggle for our honour and independence. He then proposed to substitute new taxes to the amount of 4,000,000l. on malt, hops, and beer. That venerable nobleman then stated, that he thought any tax in time of peace was better than a Property-tax. Such were his opinions now. This was not the only opinion that he could quote in support of his argument. He could refer to the opinion of one who took an active part in the debates on this tax in 1816. He found at that period Lord Ashburton thus described this tax:— Lord Ashburton said, all the good he could say of the Property-tax was, that it was dead, for all the opprobrious epithets heaped upon it seemed only to come up to its deserts. He would rather be summoned before a bench of bishops to be questioned on points of doctrine, than appear before the tax commissioners to give an account of his goods and chattels. He would appeal, then, to the opinion of Lord Ashburton, who at that time was the most eminent merchant in Europe. He then used the playful expressions which he had quoted, because the tax had then been repealed; but their Lordships might depend upon it if the tax had been continued he would have used much stronger and harsher language on the subject. But it might be said that these were by-gone instances; but he would take the liberty of adverting to an authority which had been referred to by his noble Friend opposite, and to whom his noble Friend might look up with more confidence, but certainly not with greater respect than he did. When a proposition was made in 1833 for a repeal of the malt-tax and the introduction of a Property-tax, the right hon. Gentleman to whom he alluded said, He thought that the noble Lord had done well in not proposing an income or Property-tax. Nothing but a case of extreme necessity could justify parliament in subjecting the people of this country in a time of peace to the inquisitorial process which must be resorted to in order to render that impost productive, and to have recourse to such machinery for the purpose of raising 2 or 3 per cent., would be most unwise With respect to a tax on property, as distinguished from a tax on income, he very much doubted whether it would promote the interest of the labouring classes, because it would diminish the funds at present appropriated to the encouragement of industry and the promotion of labour, and it would ul- timately he found that the tax did not affect the person who paid it so much as the labourer, by diminishing his means of employment. The application of the tax to Ireland would be attended with extreme difficulty. He really believed that this circumstance formed the main obstacle to the establishment of the tax. It could hardly be contended that if a Property-tax were established, Ireland should be exempted from its operation. He wished to see Ireland as much favoured as possible, consistent with justice. But to impose a Property-tax on England and Scotland, and to exempt Ireland from its operation, would, in his opinion, however unpopular that opinion might be, be exceedingly unjust. There was a surplus revenue then, but the argument would not be affected on that account, as he would show presently. They then came to the year 1840—the lamentable year 1840—when his misdeeds produced, according to the allegations of some, such an immense deficiency. In that year a proposition was made to meet the deficiency that existed, and his right hon. Friend the then Chancellor of the Exchequer did not propose a Property-tax for that purpose, nor was it done by authorities on the other side to whom he could refer. His noble Friend opposite would see, on referring to the case, that in those days of deficiency such a proposition or such a plan did not exist in the minds of persons well qualified to judge on this subject, who declared that a Property-tax, levied for the purpose of making up a deficiency of two or three millions, would be unjust. On the occasion to which he referred Sir Robert Peel said, There being about 2,500,000l. to be raised, to attempt to raise that small sum by a Property-tax, or a tax on general consumption, would not be advisable, and therefore, on the whole, he gave the preference to the plan of the right hon. the Chancellor of the Exchequer. Now, this authority against raising so small a revenue from such a source of income, the noble Lord was aware, was the present First Lord of the Treasury. He did not mention this in an invidious manner, nor did he intend to do more so than in referring to the opinions of Lord Spencer, Lord Congleton, or Lord Sydenham. He did not, however, believe -that these authorities would have small weight with their Lordships. He, however, would take the liberty of saying that the circumstances which had produced this deficiency in the revenue had no reference whatever to it. He believed that there was no cause of complaint as to there being a falling off in the resources of the country. But what were the grievances gone over in the review that had been made of the recent financial measures of this country. So complaining of the mode in which they had been dealt with, he would at once say that he believed that been treated in a liberal and candid spirit, but still there was one and a prominent fallacy put forward, of which he had a right to complain—namely, when it was so constantly said that there was a deficiency of 10,000,000l. to deal with. He would appeal to the House, when he had shown what were really the facts of the case, whether this was a just ground to ask the country to submit to the imposition of the Income-tax. The truth was, that in the present case they had only to deal with the deficiency of the year, for the past deficiencies had already been supplied, and made up by finance means. If noble Lords would look to papers on the Table they would find many instances of deficient revenue in years previous to the present Government coming into office. For instance, in the year 1826, he found a deficiency of 645,000l., and in 1827, a deficiency of 826,000l. In subsequent years, he found the following to be the state of the surplus and deficiency:—

Surplus. Deficiency.
£. £.
1831 698,857
1832 614,000
1833 1,513,000
1834 1,608,000
1835 1,620,000
1836 2,130,000
1837 655,000
1838 345,000
1839 1,512,000
1840 1,593,000
1841 2,101,000
Excess of income over expenditure in ten years, from 1831 to 1840 2,685,000
Or in eleven years, to January, 1842 584,000
It appeared, then, that in the course of three years, there was as much deficiency to provide for as they now were called upon in the present year to make up by means of an Income-tax. He was quite willing to strike a balance with his noble Friend opposite on this point. He believed that he had shown that the danger of the country, in consequence of our financial embarrassments, had been erroneously described to be most alarming. And if he had shown that this embarrassment had been exaggerated he had shown that they were not justified in imposing an Income-tax. It was apparent from the statement which he had made, that from the year 1833 to 1841, there had been repeatedly a deficient revenue, but this had not arisen from the falling off in the former revenue, but from the great, and he would say, wise reduction, that had been made in taxation by the Government, of which the noble Duke opposite was the head. That reduction had amounted to upwards of 3,000,000l. a year, and the greatest deficiency in any year, from 1831 to 1841, had been only 2,600,000l. The result, no doubt, of this, and the subsequent reduction in taxation that had been made, undoubtedly was, that during this period, the Government had not paid off so much of the debt as might appear to some to be expedient, but taking the whole in come for the time he had just stated, there would be a surplus as compared with the whole of the deficiency. It had been said, for the purpose of argument, that the Government had been driven to the Income-tax because all other sources of taxation had been exhausted. Do not let that sound go forth to the enemies of your country. If a Minister of the Crown said, that he had exhausted all the financial resources of the country, and that he could not with expectation of success resort to the Excise, or the Customs, or the stamps, or the assessed taxes, he would say that never was there such a groundless and unfounded declaration made. He trusted in God that there was not an enemy of England to hear such a declaration from a Minister of England, that he could not raise further supplies by the common means of taxation in this country, for all that could be procured from these sources had been already raised; and that therefore, it became necessary to resort to direct taxation. And how had this been resorted to, after what had taken place in this country, and which must be known to every one? Was the great growth of capital that had taken place within these last few years to be entirely overlooked. Was it to be forgotten that they had repealed 40,000,000l. of taxes since 1815; and were they now to be told that there were no means of restoring public credit but by resorting to a Property-tax? There was, he asserted, no ground for believing that the statement that he had alluded to could at all justify the resorting to such a step. But it should also be recollected that the circumstances which led to our financial deficiencies arose from causes with which, he was sure, that neither their Lordships nor the country would quarrel. He would quote, as clearly as he could, the details which involved a matter of figures—he was aware that it might be tedious, but, as he was dealing with the credit of the country, he trusted that the House would give him its attention. He considered it to be the duty of every Member of their Lordships' House to state fairly the facts of the case, and, in doing so, he thought that he could show that we were in a situation to meet our difficulties with a light heart. If he could succeed in making out this case, he was sure that their Lordships would not think that he had occupied too much of their time. During the interval of time which he had referred to a few months ago, several mighty financial operations were undertaken, and when they talked of a deficiency in their finances, they should recollect that it was not altogether attributable to the falling off in the revenue, or to the increase of our expenditure. He asserted that the income of this country had not fallen off, but had sustained itself. Taking, then, the period which he had previously alluded to, namely, from 1831 to 1841, it would be found that the income of the country had sustained itself, although there undoubtedly had been some increase of expenditure. It should be remembered, in the first place, that during this period they had added to the national debt not less than 20,000,000l. for the purpose of getting rid of the curse of slavery in our colonies. You had added by this means a sum which was more than the amount of the deficiency. By another financial operation also, with which his noble Friend (the Earl of Ripon) was perfectly conversant, but which might have escaped the attention of other noble Lords, an addition had been made to our expenditure. During the period, then, which he had just mentioned, there had been a gradual and increasing change of the per- manent debt into terminable annuities. This he considered a sensible and most just mode of reducing the burden of our debt. This system had gone on increasing from year to year to the present time; but just as much as it had gone on increasing, it held out the prospect of an ultimate falling off. Compare the state of the debt in 1831 and 1841, and it would be found that there had been an increase in the charge, in consequence of the transference of permanent into terminable annuities, to no less an amount than 782,000l. a year. Could this charge be put down under the head of a financial deficiency, when the charge was incurred for the purpose of resorting to the safest and best means of reducing the national debt? He had mentioned this additional charge, excluding the loan for the abolition of slavery, and only taking into account the transference of the present debt into life annuities. But over and above all this charge there had, taking the average of years from 1828 to 1831, been an annual surplus of 142,000l. The following, he believed, would be a tolerably accurate account of the state of our debt, regarding it in the which light he had just pointed out:—
Funded Unredeemed Annuities Total Charge Unredeemed Debt
January 5, 1888 777,476,000 2,610,000 28,389,000
1831 757,486,000 3,597,000 27,674,000
1841 766,371,000 4,114,000 28,566,000
Excess of 1841 9,000,000 817,000 872.000
The same account, excluding Slave Loan £20,000,000. £631,000 Interest.
101,000 Long Annuity.
5th January, 1828 777,476,000 2,610,000 28,389,000
1831 757,486,000 3,297,000 27,674,000
1841 746,200,000 4,012,000 27,816,000
11,000,000 1,285,000 142,000
less. more. more.
The same Account, converting Terminable into Perpetual Annuities, and excluding Slave Loan.
January 5,1828 822,000,000 27,365,000
January 5,1831 811,000,000 26,258,000
January 5, 1841 793,000,000 25,464,000
Diminution in 1841 below 1831 18,000,000 Annual Charge 794,000
Diminution in 1841 below 1828 29,000,000 Annual Charge 1,901,000
1828 850,325,000 28,203,000
1831 838,549,000 26,880,000
1841 837,52,000 (including slave-loan) 26,909,000
1841 815,957,000 (excluding slave loan) 26,223,000
Diminution form 1831 to 1841 1,028,000 Increased charge £29,000
After providing for slave loan of £20,000,000.
This, he thought was a species of expense of which the country had no right to complain. Undoubtedly the slave-loan must be considered a charge, but the other, if additional charge it could be called, was one which must end in the diminution of the amount of the debt. If his noble Friend would call for the returns of the terminable annuities that would fall in between this time and 1860, he would see what a great falling off in the amount of charge would take place at that time. At present the state of the matter, as compared with 1831, was as follows:—
1831— Terminable annuities £3,297,000
Equivalent in perpetual annuities 1,882,000
Excess of annual charge. £1,415,000
1841— Terminable annuities £4,114,000
Equivalent in perpetual annuities 1,710,000
Excess of annual charge. £2,404,000
Excess of annual charge in 1831 £1,415,000
Excess of annual charge in 1841 2,404,000
Increased annual charge in 1841 £909,000
In addition to this there had also been a great reduction in the unfunded debt. He had to apologize to the House for troubling it with these details, but, in taking into account the amount of the deficiency, as it was called, it was necessary to do so, to show that this financial deficiency was not so great as it had been described. He must now proceed to refer to the savings' banks, because his noble Friend on the opposite side of the House, in the observations which he had made on the subject, altogether misapprehended the matter. On a former occasion when this subject was under discussion he had taken no part in the debate, but he would now endeavour to explain what had taken place in the financial arrangement which had been so much adverted to. The acts of Parliament respecting savings banks expressly provided with respect to the deposits and interest, and as to the mode in which they should be invested. The funds from the savings banks might be invested, at the pleasure of the commissioners, either in the funded or the unfunded debt. The commissioners also had power under the recent act to direct that the money belonging to savings' banks, invested in Exchequer-bills, might be funded in stock. The clauses of the two acts were as follows:— Savings' Banks, act 9, Geo. 4th, c. 92, sec. 15. The said commissioners of the national debt shall cause all the monies paid into the Banks of England and Ireland to be invested from time to time in the purchase of bank annuities, or Exchequer-bills; and the interest which shall arise from time to time, and become due thereon, shall in like manner be invested in the purchase of Government annuities, or Exchequer-bills, Sec. 50. The said commissioners are empowered to lay out the whole or any part of the monies standing in their names in the purchase of Exchequer bills held by the Bank, or by the public; and the commissioners shall be entitled to receive for any such sums laid out by them in Exchequer-bills such an amount of 3 per cents, consols, or reduced, as the same sums would have produced if laid out at the quarterly average price. Sec. 51. Certificate of Treasury; 52. Annuities chargeable on consolidated fund; 53 Exchequer bills to be cancelled; 54. Stock may be sold for purchase of Exchequer bills. Vict., sess. 2, c. 9, sec. 1: And whereas a large amount of the Exchequer bills so outstanding are now held by the commissioners for the reduction of the national debt, on account of savings' banks, and may be funded under the provisions of an act passed in the 9th Geo. 4th, c. 92, and it is unnecessary to make provisions for paying off the same. This was a power which could not be abused; for, independent of efficient checks, a return stating all the circumstances of each transaction of this kind was laid before Parliament every Session. He believed that there was nothing in the state of the debt to lead to alarm. As for the alleged 10,000,000l. deficiency, it was a mere bubble, about which, at the same time, much had been and much might be said in the course of debate. He thought, therefore, that he had shown that there was nothing in the present state of things which called for this extreme measure; and, above all, that it was not the only measure that could be resorted to, to sup- ply the deficiency. His first proposition was, that our financial situation was not quite so had as it had been represented; and, in the second place, he would endeavour to show that the Income-tax was not quite so good as it had been described by his noble Friend. Nothing, in his mind, could be so preposterous as to tax men in equal degree who received the same amount of annuity from a terminable as from a permanent source. Again, there was a portion of England where large farms were common. For instance, in Northumberland, where the farms were of great size, and where they would be taxed; but these in many parts of England would entirely escape. Would not one of the operations of this tax then be, to lead to the divisions of these large farms with the view to avoid taxation, and thus drive capital into channels where it would not otherwise flow? Was it an immaterial matter, he would ask, to interfere in this way with such an important class as the tenantry of this country. It might appear very paradoxical, but he felt in these evils some consolation, for from the existence of these evils, he derived the best hopes of getting rid of the tax altogether. He recollected his late noble Friend, Lord Congleton, often used to say, that when a law was brought forward to interfere with the public liberty, he would rather have it above the mark than below it, for if "it interfered, with constitutional rights, the sooner they were likely to get rid of it. He thought, therefore, that after a short experience, the injustice, the absurdity, and all the other faults of the Income-tax would operate as so many inducements to make it go to the place where all bad laws ultimately went. This was a measure that; should only be resorted to at a period of national conflict, when the enemies were at our gates, or what was much better—as the noble Duke well knew was the better way to carry on war—when we went to attack the enemy at his own gates. The noble Lord had made some allusions to the want of opposition to the tax, but he would tell the noble Lord that he might depend upon it that it was not quite so unpopular as it was likely to be when persons were called upon to pay it. Having excepted, as he had shown, a large portion of the population from the payment of the tax, it was supposed that a great deal of the opposition of the tax would be got rid of. It was asserted by persons connected with the Chartists out of doors, that the object of the Legislature should be to make the wealthy contribute in all cases to the exigencies of the States Now he recollected in the House of Commons, a few years ago, a gentleman well known, who was supposed to represent these extreme opinions—he meant the late Mr. Hunt. That gentleman said one sentence which completely dispelled this fallacy. He said, that to raise millions, you must, tax millions. The present bill, however, was to tax the few, and was to relieve the millions. His noble Friend opposite, who was a Member of Lord Grey's Government, must recollect the difficulties they bad to contend with at that period with respect to some direct taxes. The argument of the noble Duke went to the extent of saying, that if there was any surplus from this tax, it might be devoted to the removal of taxes which were unpopular. He would ask, whether public credit should be allowed to act on this point. He objected, above all, to the moral effect of this tax. If all other objections were obviated, the frauds and evasions which it gave rise to, must make it a most objectionable impost. It would operate as a bounty in many instances to the commission of frauds, and it would hold out a premium to men to act against their consciences. On this point, he would appeal to a work written by a valuable public servant, he meant the late Mr. Lowry, the former comptroller of the property-tax. That gentleman stated, that the frauds and evasions in that tax under the head of lands and houses, amounted to one-seventh. This was a most important item, for it was not possible to conceal either lands or houses, and the evasions there could, only take place on the value, and not on the substance. He now came to another description of property, he alluded to the public funds. They had the assistance of the Bank in getting their returns before it paid dividends, but still Mr. Lowry showed, that the evasions made amounted to from to 1 -5th. With respect to the class of profits and professions, he should like to know how they could get an accurate return of them. The deductions under this head must necessarily be enormous, and the gentleman he had alluded to put the evasions down as one half. By the return of the receipts under the property-tax, from 1803 to 1814, it appeared, that in the first year, the amount assessed was 75 3-5ths millions, and in the last year, 1814, not less than 132 millions. Fraud, to a great extent, was found in all these returns, and that showed their Lordships that the tax brought forward by her Majesty's Government as a means of preserving the credit of the country would do more to destroy the public character and the public faith than any other measure which could be suggested. When the property-tax was proposed, at a former period, there was a war and a depreciated currency, which gave some degree of prosperity to trade, but now this was not so, and such a tax would be doubly mischievous. It was said, that it was a tax which affected the holder of property, whether he remained in this country or went abroad; but what if he took his property with him? Did it not afford him a premium for doing that, and making the most he could of his wealth in another land. When the Income-tax was formerly imposed, there was a depreciating currency and war, which increased consumption, and produced prosperity in some degree; this was not now the case. They were driving at the opposite side of the wedge. Formerly, the capitalist could not escape the tax; now, he might go away and take his property with him. Formerly, there was no public credit in other countries, nor any manufacturing prosperity. It was not so now. If they took the manufacture of stockings, for instance, at Nottingham and its vicinity; that was a branch of manufacture in which foreign competition was great, and the stocking manufacturers of Saxony were running us very close. What would be the effect of this tax on the stocking manufacturer of Nottingham? The effect would be, that be would carry his capital abroad, and establish manufactories there. It was assumed that the Income-tax was a good remedy for the existing deficiency, but he thought that so far from there being a surplus revenue derived from this source of taxation, he should be able to show that there would be an actual deficit. The budget imposed a Property-tax—it called Hercules forth to put his arm to the waggon, and did not get it out of the rut after all. Their Lordships knew that by the last estimates which had been laid before Parliament, the deficiency of the revenue was 3,000,000l, To meet this deficit there was the Income-tax, the new coal duty, and the new arrangements with regard to Ireland. He believed that from Irish spirits not one 6d. could be expected to be raised, The Government had proposed to take a duty of 4s. per ton upon coal exported, and this it was expected would produce200,000l. That calculation showed an expectation that there would be 1,000,000 tons of coal annually exported. The present amount of exports exceeded 1,500,000, and the amount was, therefore, expected to be reduced by one-third. The loss of freight and other expenses upon this reduced exportation would amount to 450,000l.; so that there would be a loss of revenue arising upon this sum, both in respect of the coal owner and the shipper, which would go far to show an absolute deficit on this item. Taking, therefore, the returns from Irish spirits and from coal as amounting to nothing, the account would then stand, that the sum which might be expected to be realised from the Income-tax was 3,700,000l., and from Irish stamp duties 160,000l., making a total of 3,860,000l. The amount of duties to be repealed was 1,210,000l., and deducting this from the net income, the result was only 2,650,000l. The deficit, however, was 3,000,000l., and thus there was an actual deficiency in the revenue raised by this extraordinary tax of 350,000l. With regard to the nature of the tax itself, he thought that the Government had acted rightly with a view to their own popularity, but looking at the interests of the country, to the protection of industry, he thought that the volunteer budget of the noble Earl (Earl Stanhope) who had suggested the re-imposition of assessed taxes, would have been more likely to produce satisfactory results. To what, he asked, was the state of the country to be attributed? The public revenue had increased, no doubt, but not in the proportion which the country had a right to expect. If any one looked to the question dispassionately and calmly, he might trace the distress of the country to two great causes. One was the disorganization of our foreign trade by reason of the state of America; and he believed that if they turned to their Customs' returns, they would find that the main deficiency was altogether connected with the produce of America; and he believed in his conscience that the whole of the difficulties which had proceeded from this source would have been averted, if means had been taken by which the raw agricultural produce of that country might have been received in payment. But beyond this was another infinitely greater cause of distress—the diminished power of consumption in the people of this country. Even if they gave up all other causes, they would have no difficulty in seeing that it was the diminished power of consuming exciseable commodities at home which had led to a great deal of the loss of income. There was a calculation published which had been made upon the authority of Mr. Lloyd, and which formed a part of the report of the commissioners on the hand-loom weavers, which showed the prices paid in 1835, 1839, 1840, and 1841, for wheat, oats, and barley. It was as follows:—
"1835— qrs. s. £
Wheat 12,000,000 at 40 24,000,000
Oats 3,000,000 at 22 3,300,000
Barley 9,000,000 at 30 13,500,000
"1839, 1840, 1841—
Wheat 12,000,000 at 58 40,800,000
Oats 3,000,000 at 25 3,750,000
Barley 9,000,000 at 37 16,650,000
Excess of cost £20,400,000."
What was the effect of drawing 20,000,000l. from other sources, and spending it in this article of consumption? It was to diminish the revenue and the trade of the country, and to cramp and fetter our manufactures. He would take also a comparison of the expenses of twelve families in Manchester between 1836 and 1841. The amount of income which they were compelled to pay in 1836 was 54 per cent., in 1841 it was 89 per cent.; and the result of this was, that they had less to lay out in exciseable articles. He would not further trouble their Lordships upon this subject, upon which their Lordships had already extended great indulgence to him. He would only end by saying, that he could assure the House that, in opposing this Income-tax, he had done so precisely upon the same principle on which he had opposed it when he had bad the honour of being a Minister himself, and on no other principle whatever. He should oppose it under all circumstances, as being an unwise, an unjust, and inefficient measure.

The Earl of Ripon

was very ready to do justice to the ability with which the noble Lord who had just sat down had stated his views of this measure, but he thought that, after all, the question in reality resolved itself into the very point on which it had been discussed on Friday night. The arguments of the noble Marquess, of the noble Earl (Earl Stanhope), and of the noble Lord who last spoke, all resolved themselves into this that there was not a case made out to furnish a ground for the imposition of this tax. It was not disputed that from the very nature of things a Property-tax must be liable to very grave objection; he had stated so the other evening. He had stated that it was only to be justified by the pressure of strong necessity, and he had then proceeded to show the grounds on which the affirmation of the existence of that necessity depended. He could not help thinking that his noble Friend had failed to show that no such necessity existed. The noble Lord had carefully and properly avoided volunteering a budget, though he had expressed an opinion in favour of that suggested by the noble Earl: but he could not help thinking that if the Government adopted that scheme they should be adopting a course liable in itself to very grave objections, and liable to this particular objection, that it would not effect the purpose which was to be had in view. What if Parliament should re-impose the house-tax, and the duty of 50 per cent, upon horses and carriages and servants, which had been taken off in 1823. If by such means they could be sure that they would derive the sum which they wanted, he must say that he thought that would be a preferable mode of taxation. But the amount which would be obtained, according to the calculations when these taxes were last paid, would not produce anything like the sum required. By the house-tax, as it stood in 1833, they would gain about 1,200,000l; and by the taxes on horses, carriages, and servants, which had been removed in 1823, they would not obtain more than 500,000l. or 600,000l., assuming that the re-imposition of a much larger amount of taxation in these items would not prevent the employment of horses, carriages, and servants to a considerable extent. But the force of this necessity had been contested by his noble Friend who had last spoken, and he had argued that if everything had been left alone, all would have come right, He did not, for his own part, doubt this for a moment; he did not at all despair of the powers of the country. But there was a deficiency now actually existing which must be met. Everybody repudiated the idea of borrowing money—of raising funds by way of loan, and there was no other alternative but that the Government must apply itself to find some source of Revenue from which they could derive sufficient to meet their necessities. A great part of the speech of his noble Friend had been in vindication, although such a vindication was quite uncalled for, of his own financial administration; and he had striven to show that no acts of his had called for this bill. He had alluded to the great addition to the debt of the country occasioned by the expenditure of 20,000,000l. in purchasing the freedom of slaves in the West Indies, and he had said that he had not attended sufficiently to the progress of the revenue. He certainly thought that he had given it full attention, and he had stated to the House that the deficiency was not, in fact, occasioned by the diminution of the revenue, because the revenue had increased, but by the great increase, within the last seven years, of the expenditure of the country, in respect of that portion of our expenditure over which Parliament exercised an annual control—he meant the naval and military service of the country. And he had shown that on this item alone the increase between the first year, where the gradually growing deficiency in the revenue had commenced, and the present year, had been no less than 3,500,000l. Why, if this were so, this did constitute a case, which in the first of these years no one had contemplated, but which had now assumed the character of a permanent deficit: and until they could show that the eases of deficit would be diminished, they could not calculate with any certainty upon the deficit itself being removed. If they re-imposed these taxes upon articles, and, upon the duties on Customs and Excise, they would, he thought, be overturning the great principle of commercial and fiscal relief, which had been the object of the Government during the last twenty years. That would not be a wise course to adopt: it would be much safer to view the inconvenience, the odium of this bill—of remedying the existing difficulties by the adoption of the means which were proposed by this measure than by all at once upsetting everything which they had been endeavouring to do for the purpose of relieving the spring of manufacturing prosperity. The prosperity of the revenue depended upon giving as much relief in that quarter as was possible. The noble Marquess had suggested that a new light seemed to have broken in upon the Government on this question; but he could only say, for his part, that he had always expressed and endeavoured to act upon a principle in favour of what was called free-trade; and though he was not prepared to give up the principle of free-trade-—and he knew no one who was prepared to give it up altogether—he had always thought it necessary to reduce the whole system of the fiscal duties of the country, for the purpose of bringing about a more active communication with other parts of the world. He did not believe that the commercial and mercantile world entertained an opinion adverse to the tariff. He had beard many persons say that they believed that it would be one of the most useful measures which could be devised, and he thought that the noble Marquess had treated the measure in a way which it did not deserve. When that measure came up from the other House of Parliament, he thought that he should be able to show that it rested upon a sound position, such as should regulate the commercial interests of the country.

Their Lordships divided on the question that the word "now" stand part of the motion:—Contents 99; Not-Contents 28: —Majority 71.

List of the CONTENTS.
DUKE. Jersey
Cambridge Eglintoun
Canterbury. Home
Armagh Haddington
Lord Chancellor. Galloway
DUKES. Dalhousie
Richmond Aberdeen
Buccleugh Dunmore
Wellington Aylesford
Buckingham Warwick
Cleveland. Delawarr
Salisbury Beverley
Abercorn Mansfield
Downshire Liverpool
Exeter Malmesbury
Londonderry Clanwilliam
Ailesbury Wicklow
EARLS. Lucan
Devon Bandon
Sandwich Rosslyn
Shaftesbury Powis
Charleville LORDS.
Manvers De Ros
Verulam Clinton
Brownlow Beaumont
St. German's Colville
Bradford Boston
Beauchamp Walsingham
Glengall Kenyon
Eldon Bayning
Somers Bolton
Stradbroke Northwick
Dunraven Blayney
Cawdor Carbery
Ripon Crofton
VISCOUNTS. Redesdale
Sydney Sandys
Hood Rivers
Midleton Prudhoe
Gage Colchester
Hawarden Ravensworth
Canning Delamere
Canterbury Forester
Lowther Bexley
BISHOPS, De Tabley
Lincoln Wharncliffe
Bangor Fitzgerald
Rochester Stuart de Rothesay
Llandaff Heytesbury
Chester Templemore
Gloucester Seaton
List of the NOT-CONTENTS.
Clanricarde Campbell
EARLS. Colborne
Cowper Camoys
Clarendon Cottenham
Gosford Carrington
Lovelace Denman
Morley Dunally
Radnor Kinnaird
Scarborough Lilford
Stanhope Monteagle
Zetland Mostyn
VISCOUNT. Stuart de Decies
Duncannon. Sudeley
BISHOP. Western
Norwich Wrottesley
Marquis of Huntley Lord Stanley of Alderley
Marquess of Bute Lord De Freyne
Marquess of Ely Duke of Hamilton
Earl of Kinnoul Lord Lovat
Earl Cornwallis Lord Sherborne
Earl of Mountcashell Lord Bateman
Earl of Clare Duke of Devonshire
Earl of Wilton Lord Foley
Earl of Clancarty Marquess of Headfort
Bishop of London Lord Dinorben
Lord Sondes Lord Hastings
Lord Braybrooke Earl Fitzhardinge
Lord Wynford Lord Talbot of Malahide
Lord de L'Isle Earl of Belfast

Bill read a third time and passed.

Their Lordships adjourned.

The following Protests mere entered.

DISSENTIENT—I. Because this bill, though entitled "Property-tax," is in truth a tax on income; and I consider any tax on income objectionable, as being—

1. Unjust, inasmuch as it taxes to the same amount equal yearly incomes of really unequal value.

2. Inquisitorial, and necessarily requiring for its due collection such scrutiny into the affairs of individuals as is abhorrent from the feelings of Englishmen in all cases, and in many, especially in those of persons concerned in trade, inconvenient, and highly injurious.

3. Demoralizing, because in divers cases it requires the oaths of parties to be made in direct opposition to their pecuniary interests, and holds out temptation to perjury and fraud.

4. Impolitic, as forcibly diverting a portion of the profits of trade from productive, to the support of unproductive labour; and

5. Because I believe that the allegation that a tax on income affects the rich only, and not the poor, is altogether erroneous; and that every tax falls, sooner or later, on the poorer classes of the people, and none more immediately than a direct tax imposed on the incomes of the employers of labour.

II. Because several of the provisions of this bill appear to me absurd and unnecessarily unjust and impolitic.

1. By this hill, while all the incomes enumerated in the schedules A, C, D, and E, though of greatly varying value, are assessed at 7d. in the pound, incomes arising from the occupation of lands are assessed in schedule B only at 3½d, and in some cases at 2½d., in the pound. The grounds of this distinction have not been explained; but the consequence must necessarily be, that it gives an undue advantage to capital employed in agricultural pursuits, and tends to raise to an unnatural level the rent paid for the occupation and use of land.

2. The profits of tenants, occupiers of land, are measured by the rent due to the respective landlords—a test, as it appears to me, assumed capriciously without any assignable reason, and the consequence of which must be, first— that a tenant, who pays a low and inadequate rent, will have the further benefit of being assessed at a low rent on his income, while the tenant oppressed by a high rent will have to bear the additional burden of a heavy tax; and secondly, that in cases where long leases of lands have been granted at low rents, in consideration of capital expended on permanent improvements, the landlord will be assessed on an income which he does not re- ceive, and the tenant deprived of the opportunity to replace his capital; the tendency of this provision is, to prevent the outlay of capital on permanent agricultural improvements.

3. Traders are required to return their incomes on the average of their profits for the three last years, so that the man whose business is declining, will have, in aggravation of his losses, to pay more than his due proportion of the tax; but he whose business is thriving will have the further advantage of paying less than his proper share.

4. In this bill I find no provisions by which a man who is possessed of property, and who is also engaged in trade, may deduct the losses (if any should occur) accruing in the one case from the income arising in the other; so that he may be, in the balance of the whole, a loser, and yet he called upon to pay a tax on income, though he has none.

5. By the third rule of the first case of the rules for ascertaining the duties contained in the schedule (D), it is expressly enacted that, "in estimating the balance of profits and gains chargeable under schedule (D), or for the purpose of assessing the duty thereon," no allowance or deduction shall be made for, inter alia, any "sum employed, or intended to be employed, as capital in such trade, manufacture, adventure, or concern," or "for any capital employed in improvement of premises occupied for the purposes of such trade," &c. Thus the provisions of this act are directly calculated, and seem studiously drawn up, to prevent any increase of trade or manufacture, either by extending the operations of the one, or by improvement in machinery and mode of carrying on the other.

6. This being a tax upon income, and not upon the public debt, I hold it to be equally unjust and impolitic to withhold from foreigners such portions of the interest of that debt as is due to them by this country, and for the full payment of which the faith of Parliament is pledged. In the case of British subjects the Legislature has the power to tax their incomes, from whatever source arising, and thus when those incomes are derived in the whole or in part from the interest of the public debt, it has a right to claim a portion of that interest. But to withhold from foreigners, whose incomes are beyond the control of the British Legislature, a portion of the interest due for money actually lent by them to this country on the faith of Parliament, appears to me an act of sheer dishonesty. The impolicy of such a proceeding appears to me equally great whether I consider the alarm which it may cause in the mind of the foreign fund- holder, lest on some future occasion of pres sing difficulty the whole may be confiscated, or view the proceeding as an example to other Governments for dealing with, and appropriating to themselves, funds belonging to British subjects in their hands.

III. Because I fear the financial difficulties to meet which it is alleged that the tax is imposed, will be aggravated by it. The difficulties arising, as I believe mainly, if not wholly, from the depressed state of commerce and manufactures, which has now prevailed for more than four years, it seems to follow, as a matter of course, that the best remedy would be to remove the burdens which press most severely upon them; Experience shows that the taking off of taxes does not of necessity diminish the revenue by the amount of the duties repealed. And there are many taxes which weigh very heavily on the springs of industry, more especially the duty on the importation of corn. Much, therefore, might, I think, be done by relaxation of taxation; much also by modification of certain differential duties on foreign and colonial produce, which, while they impose heavy duties on the consumer, in no degree benefit the public revenue. But the withering influence of this tax must increase the depression of all the industrious classes, and aggravate the difficulties of the country.

IV. Because I see reason to apprehend that the object proposed to be effected by this bill will not be obtained. The imposition of the Income-tax is justified on the ground of the necessity of raising, with certainty, within the year, a sum of money sufficient to make good the existing deficiency of the revenue. This tax may yield the estimated sum, but it can hardly be expected that there will not be a compensating, and probably nearly equal, falling off in some other quarter, so that, on the whole, the proposed advantage will not be gained.

V. Because this tax, by aggravating the distress, will increase the causes of the necessity now urged for its imposition, and its continuance and re-enactment at the time it is now destined to expire will thus be rendered still more necessary. Cause and effect will reciprocally act on each other, and all hope of being rid of this impost, and of seeing the restoration of commercial prosperity, will be lost, and the first fatal step will have been taken towards permanently undermining the resources and destroying the wealth and power of the country.


And for all the reasons, except that which relates to foreigners holding stock.


Protest against the Third Reading of the Income-tax Bill.


  1. 1. Because an Income-tax is justly odious from its inquisitorial nature, as well as from the inequality of its pressure, and ought not to be imposed except in a case of great emergency, such as does not at present exist.
  2. 344
  3. 2. Because an Income-tax may occasion a very considerable curtailment of private expenditure, and may thus extend and aggravate the present distress, which has arisen from an insufficient employment and remuneration of labour.
  4. 3. Because an Income-tax ought to be reserved as a resource for war when the expenditure is unavoidably such as could not be otherwise defrayed.
  5. 4. Because an Income-tax, when imposed in order to supply a deficiency in the revenue, and not to meet the exigencies of an expensive war, must convey to foreign powers a very unfavourable and injurious impression with respect to the sources of this country.
  6. 5. Because an Income-tax is not required by the deficiency of the revenue, for which a provision might have been made by imposing again some of those taxes, the repeal of which had occasioned that deficiency, but had not afforded the relief that was expected.