Sitting of 3 March 1848

MINUTES.
PUBLIC BILLS.—I° Diplomatic Relations, Court of Rome; Law of Entail (Scotland); Borough Police Superannuation Fund.
2° Leases of Mines (Ireland).
Reported.—Joint Stock Companies; Passengers.
PETITIONS PRESENTED. By several Hon. Members, from numerous Places, for and against the Jewish Disabilities Bill, and against the Roman Catholic Relief Bill.—By Mr. Mackinnon, from Southampton, and Mr. Thicknesse, from Lancashire, for a Repeal of the Duty on Attorneys' Certificates.—By Viscount Castlereagh, from Downshire, for Inquiry respecting the Excise Laws.—By Lord Courtenay, from Devonshire, for Inquiry respecting Malt.—By Mr. Alcock, and other Hon. Members, from several Places, against a Continuance of the Property Tax.—By Viscount Duncan, from Chipping Norton, and by Mr. Heald, from Lancashire, for a Repeat of the Window Tax.—By Mr. Bright, from Lancashire, for Placing the Beer Retailers on the same Footing as Licensed Victuallers.—By Mr. Adderley, from several Independent Orders of Odd Fellows, for an Extension of the Benefit Societies Act.—By Sir John Trollope, from Lincolnshire, in favour of the County Rates Bill.—By several Hon. Members, from numerous Places, against
162
the Diplomatic Relations with the Court of Rome Bill.—By Viscount Castlereagh, from Downshire, for Encouragement to Schools connected with the Church Education Society (Ireland).—By Mr. Wakley, from Cheltenham, for an Alteration of the Law in favour of the National Land Company.—By Mr. Sharman Crawford, from Northampton, and by Mr. Hudson, from York, for Retrenchment in the Naval and Military Expenditure.—By Mr. Hudson, from Yorkshire, against a Repeal of the Navigation Laws.—By Mr. Henry Stuart, from Bedford, for an Alteration of the Poor Law.—From Guardians of the Union of Athy, Kildare, for an Alteration of the Poor Law (Ireland),—By Mr. E. J. Stanley, from the Officers of several Workhouses, for a Superannuation Fund for Poor Law Officers.—By the Chancellor of the Exchequer, from Halifax, in favour of the Public Health Bill—By several Hon. Members, from various Places, for an Alteration of the Public Health Bill.—By Mr. A. Hastie, from Glasgow, and by Mr. Bright, from Somerset, for the Abolition of the Punishment of Death.—By Mr. Hindley, from several Places, for Referring War Disputes to Arbitration.

THE INCOME TAX.
The CHANCELLOR OF THE EXCHEQUERhaving moved the Order of the Day for going into Committee on Ways and Means,
MR. HORSMAN, pursuant to notice, rose to move as an Amendment—
"That, if the income-tax be continued, it is expedient to amend the Act, and not to impose the same charge on incomes arising from professional and precarious sources as on those derived from realised property."
Before they went into Committee it would be well for them to consider whether some measure might not be devised to remove some of the inequalities which rendered the pressure of the tax so severe and oppressive. The question now came before them in a new form. The tax had assumed a permanent rather than a temporary character; and it now became the duty of the House to endeavour to overcome those difficulties by which it was surrounded—difficulties which were very painfully felt by the community, but the remedy of which had been too long deferred. They were bound to set themselves to work in a business-like manner, and to see whether they could not manage to fashion the tax in such a manner as to make it assume a shape more acceptable to the country than that which it now presented. The inconveniences which were patiently borne in bygone times, when people thought there was a prospect of the tax being of only temporary duration, became positive grievances when they found that all the inequalities and injustice of the impost were to be saddled on them for life. He would not say anything of the income-tax, or the principle of it, beyond what was absolutely necessary to strengthen his position; but this proposition he would not hesitate to ad-

163
vance, that when the Government found themselves compelled to have recourse to a tax, in its character so very objectionable, it was the duty of the House to take care that it was not made more onerous and oppressive than in its nature it necessarily was, by defects in their legislation. Until a very late period, the infliction of a war-tax (for such the income-tax was) in a time of peace, would have been considered as unaccountable a proceeding as though a Minister had in time of actual war proposed to disband the army. In the year 1842, the right hon. Baronet, then at the head of the Ministry, established the innovation; but the proposal he then made was enforced by such cogent reasons, based on so pressing an emergency, and recommended by promises of such large advantages, that the right hon. Baronet carried the House and the country along with him in his project. The country cordially accepted the measure then proposed, and the singular and unexpected result was witnessed of a Minister proposing a tax in itself the most odious and unpopular of all taxes, and yet making it clear to the whole world that he had gained popularity by the proposal. But the measure of the right hon. Baronet at that time had two extenuating, or, to speak more correctly, two recommendatory features. In the first place, it was accompanied by a large remission of taxation. The imposition of one burden was made instrumental in remitting several others. The income-tax, which was imposed in 1842, and renewed in 1845, was, with some minor taxes that accompanied it, estimated to raise a revenue of 5,600,000 l.; but the taxes remitted from 1842 to 1845 inclusively amounted in the aggregate to something less than 7,000,000 l. a year; so that, looked on merely in a pecuniary point of view, the public were considerable gainers by the change. But even that consideration of advantage would not have reconciled the public to a tax so odious and inquisitorial, had it not been demanded as the means of trying a great fiscal experiment, and had not an assurance been given that it was proposed to the country merely for a limited period. Those were the two extenuating features; and the right hon. Baronet then at the head of the Ministry, in proposing the tax, distinctly admitted that it stood in need of some such recommendations. The period originally proposed for its duration had expired, and the House was now asked to renew it under very different circumstances, and for a
164
very different purpose. In the first place, the future proceeds of the tax, instead of going to the remission of other burdens, were to be applied to the current expenses of the country; and in the next place, instead of the tax being of limited duration, they were told that its infliction was to be perpetual. The right hon. Gentleman the Chancellor of the Exchequer—certainly not speaking entirely in his official capacity, but, nevertheless, disclosing the true state of his own convictions—had acknowledged that he expected the tax would be perpetual; and he even honestly admitted that had the 2 per cent additional been tacked on to it, as was contemplated a few evenings ago, he was not quite sure that we should ever get rid of it. In fact it was now pretty well understood in that House, and throughout the country generally, that the income-tax was to be bequeathed to posterity as a codicil to the national debt. The general feeling of the country was no doubt in favour of the principle of direct taxation; but then that feeling was accompanied by a conviction that such taxation ought to be made as equal, as even, and equitable in its pressure as possible. With the prospect, therefore, of a direct income-tax being now permanent, it became the duty of the Legislature to take care that if permanent it should not be defaced by permanent defects, but that it should be put in a business-like shape, so as to be made as acceptable to the country as such a tax could be. The table of that House might be covered with statements of cases where the infliction of the tax, with all the inequalities and oppressions which now distinguished it, was felt most painfully. He would not weary the House with going through them all, but would merely take three simple and familiar cases at three different periods of human life—cases such as must have presented themselves in great numbers to the observations of all hon. Members. In the first place, he would take the case of au annuitant. He would suppose him to be a retired public servant, a military or naval man, living on a yearly income—say on a retired pension. Let him be supposed to be 55 years of age, and to live on an income of 400 l. a year. The Ministerial proposition was, that that man should be taxed the same as a fundholder who drew his 400 l a year from the public funds. Were their positions the same? The annuitant had his income merely for life, and it was subject to various large deductions

165
for insurance and saving. The probable duration of his life was sixteen years, and his annuity of 400 l. a year, calculated by an insurance table, would be valued at 4,300 l. But the capital at the same rate of interest of the man who drew his 400 l. a year from the funds was 10,000 l. It was subject to no diminution, and no deduction whatever. If he died, his riches would survive him. How great was the difference! and yet in those two cases the proposal of the Ministry was, that both men being treated as though their fortunes were the same, and their faculty of payment the same, they should both be subjected to precisely the same tax. In the next case, let them take a man in the prime of life, suppose a professional man, a doctor of medicine. Let them suppose that he was forty-five years of age, in full practice, and making 5,000 l. a year. He would have to pay precisely the same sum as if he were a landed proprietor who drew 5,0001. a year from his rents. The difference between them was this. The 5,000 l. a year of the landed proprietor was a secure invariable income, above the vicissitudes of fortune. It was all income. The 5,0001. a year of the medical man was both income and capital. If he lived on his income, and spent the proceeds of his profession, his means would be exhausted; but if the landed proprietor were to spend in the year every farthing of the 5,000 l. which he derived from his rents, his means would not be at all diminished. He had it for his life. Twenty-five years was the average duration of the medical man's life; but let it be calculated that his practice would continue undiminished for fifteen years, and the calculation would be a liberal one. An annuity purchased at his time of life at the same rate of interest as in the first instance would be only worth 45,000 l.; but supposing him to be in full practice all that time, and every year to make 5,000 l., the aggregate amount of his receipts would be 75,000 l. If he were to spend one-third of it (which, considering the appearances which a medical man had to keep up, was a very small calculation) and to lay by two-thirds, the utmost that he could lay by for his family would be 50,000 l. The capital of the landed proprietor was 125,000 l. Now in the case of the professional man, they had an income which had no existence but what was created by daily exertions in the most dangerous of professions; an income which depended on the health of the recipient,
166
and ended with his life, and yet they taxed it in the same proportion as they taxed the revenues of that man whose income was secured for life, and perpetuated at death; an income which was inherited without any care, enjoyed without any risk, and which, at the recipient's exit from life, might be bequeathed without any diminution. The third illustration he would eite, was that of a younger man, who bad neither income nor capital that he could call his own; a young man just entering life, and but recently engaged in the duties of a profession from which he expected to obtain the means of livelihood. Many thousands of such men there were, young men of education and talent, who had to strain every nerve, to surrender all physical comforts-, and to sacrifice health itself, in order to eke out a scanty revenue, which was to be for some the very means of existence, and to others, men of greater ambition, the stepping-stone to ultimate advancement in an honourable profession. Now, in the cases of these men, the first fruits of their success—that success which had cost them weary days and sleepless nights—would be swallowed up by this odious tax of three per cent. It could not be said that the income of such men was taxed, for what was taken from them at the close of the year was perhaps the whole sum that remained to them over and above the whole proceeds of two years' exertions. In such cases the tax fell on a man's energies and abilities—the very things which of all others ought to be cherished, fostered, and protected by that House. Here at the very outset of life they put the young man, who as yet had not time or opportunity to win a position for himself, on the same footing in the scale of taxation with the richest noble in the land, ay, with the Sovereign on Her Throne, forgetting that a charge which only pruned the exuberance of a princely fortune, fell with a crushing force on that man whose precarious existence depended on his precarious health, rendered yet more precarious by daily exertion and midnight study. If there was any class in the community on whom that House ought to try to make taxation fall—he would not say lightly, but justly and humanely—it was the very class to whom he was now alluding, the class which comprised not only the professional beginners, but no inconsiderable proportion of our authors and artists—men whose income was the most precarious of all. There was no country

167
in the world where genius linked with poverty endured so much privation as in this. There was no country where it overcame such obstacles, and had to undergo such endurances. Some times, as in the case of the late Mr. Haydon, misery unseating reason led to a catastrophe which brought to light a painful history of suffering, which otherwise would never have been revealed. But the case of that unhappy artist was not solitary. It represented large classes in this country of gifted men who pined in secret, and perished without any body to tell their dismal tale. That such classes should exist, was most deplorable. That House was bound to take care not to aggravate their sufferings. They were bound to take care that their legislation was Dot hostile, oppressive, or unjust to those who were of all others the most helpless—those who, though the last to complain, had to endure more actual misery than any class in the community. It might be objected to the remarks he was now making, that it was easier to criticise than to improve. He acknowledged that it was so; and he was free to confess that a Member who took exception to the policy of a Government was bound to suggest, if possible, some course more advantageous than that to which he objected. He admitted that the Government had serious difficulties to contend with; but he did not think that those difficulties were insuperable. He was decidedly of opinion that it was possible to make the pressure of the tax more equal and more just than it was at present. He was prepared to show that they could at least produce something which might be made the basis of a better measure; a measure not perfect in itself, but capable of being worked into such a shape as would render the tax more acceptable to the country at large. When this question was discussed on the first occasion, the right hon. Baronet who introduced it did not attempt to justify its inequalities. Neither did he attempt to justify them on any subsequent occasion. There was no occasion on which he had even apologised for those inequalities, otherwise than on the ground of their being temporary. He stated his opinion that, if it were designed to be a permanent tax, the House ought not to be asked to pass it in its present shape. They had a right, therefore, to assume, that if it had fallen to the right hon. Baronet to propose it as a permanent measure, he would have accompanied it with some suggestion for amendment in its details. Now
168
that it was proposed to be perpetuated—[The CHANCELLOR of the EXCHEQUER; Renewed for three years]—he would take leave to ask what were the difficulties which Government found inseparable to removing the inequalities of which they complained? He was furnished with a precedent for the Motion he was now making, for he found that when the renewal of the tax was proposed in 1845, the hon. Member for Liskeard proposed a resolution which was in substance to the effect that Government were bound to propose the tax in a form in which its operation would be less unequal and inquisitorial than it then was. If that was true when there was a question of a renewal of the tax for three years, how much more so was it now that there was a prospect of its perpetuation? When first the tax was introduced, most of the leading Members spoke, and the noble Lord now at the head of the Government expressed himself with particular clearness and force. He used these words in 1842:—
"This inequality of its operation is not denied by any one, and indeed it would be impossible to deny it. It is obvious that if you take three or four persons having each 300 l. a year, the pressure of the tax may be most unequal. The first may derive his income from some permanent property; a second may be in the receipt of a terminable annuity; While the third may be a person engaged in some dangerous or Unhealthy profession—say, for instance, a surgeon in country practice, who lays by a small part of his income as a future provision for his family. In the case of such a man you are taxing capital as well as income. Another man may be engaged in a trade in which his profits are very uncertain—his gains may be inconsiderable one year, less in the next—and in another year he may even be liable to losses greater than his gains, making it impossible for him to lay anything by for his family. Must not the tax in such cases operate with very great inequality? Must it not appear very hard to take from a trader so circumstanced the same proportion of his trading profits as you take from one whose income is permanent and secure? Is the existence of this inequality denied? By no means."
In 1845, the noble Lord thus expressed himself:—
"I have always been of opinion that inequality, vexation, and fraud were inherent in such a tax. It is impossible to deny its inequality, for no man can say that it is equal; for a person who has an income derived from a landed estate, or from the funds, which he could leave to his children entire, is not in the same position as a person in a profession—a surgeon or an artist—whose bread depends upon his health and the vigour of his constitution, and who, by the loss of a limb or a defect of eyesight, may at any moment be deprived of the means of earning any income at all. No man can say that these two persons were

169
similarly situated. Neither can any person fairly deny that great vexation is inseparable from this tax. No one can deny that a person who is engaged in trade, and who must either submit to the payment demanded of him, or show all his accounts, and expose all the matters in which he is engaged to the persons appointed by the Government—no one can deny that such a person is not subject to very great vexation; and then, with regard to fraud and evasion, I believe no man who has been concerned in the collection of this tax will deny that his experience has shown that great frauds are practised under this tax—that the man of the most integrity and the most honour, and who gave his returns fairly, was subjected to the greatest imposition of the tax, while those who wished to evade the tax either found the means of doing so, or entangled themselves and the Government in the most expensive proceedings. Such being the faults of this tax, and having beard from the right hon. Gentleman on Friday night that they were faults inseparable from it, I might have well conceived that by different modifications, and by alterations with respect to uncertain incomes, and by changing particular provisions which bore hard upon particular classes, the tax might be made more equal and less vexatious. The right hon. Gentleman has now had three years to overlook and observe the working of this tax, and there can be no reason that I am aware of why he should not make it more equal and less vexatious if he chooses."
So much for the noble Lord's opinions as to the inequality of the tax. The noble Lord then went on to prophesy that the result of levying the tax in its then shape would be to excite great discontent, and to give rise to general outcry. That prophesy was in progress of accomplishment. The tax was every day becoming more unpopular; and if the feeling against it were to continue, no Minister would be able to perpetuate it. That was the opinion of the noble Lord, and he could quote a great many other opinions on the same subject. Perhaps one other was extremely important at this time, and he might be permitted to add it to that of the noble Lord which he had already stated. It might be considered that those views of the noble Lord were merely his own, and that when he came to the head of the Government he might not have the absolute power of carrying out those views, and that it was necessary he should take with him the concurrence of the Chancellor of the Exchequer. If on this question his right hon. Friend differed with the noble Lord, it might be to him a cause of embarrassment in deciding on the course he should take. But happily the noble Lord had a Colleague whose views were as enlightened as his own; and this was the language which was used by the right hon. Gentleman in 1845. He said that, with regard to the general
170
argument against the income-tax—its inequality, injustice, and vexation—no attempt had been made to answer it; and it was of its arbitrary, unjust, and unequal pressure on different incomes, that the country complained. Here again he would call attention to the danger which was foreseen and predicted by the Chancellor of the Exchequer. He said, although the income-tax might be passed by persons ignorant of the effect it produced when it existed before, yet his firm conviction was, that it would be impossible to maintain it; and would it not be a most mischievous course to place the credit of the country on a basis that could not be permanently maintained? He thought that those two speeches showed great sagacity and foresight. It was impossible for any one to deny, that within the last fortnight a great change had exhibited itself in the feelings and language of large parties in this country respecting this tax. In many districts it appeared to be the opinion of well-informed parties, that this tax was becoming so unpopular, that it was doubtful whether any future Chancellor of the Exchequer could trust to its being continued. The inequality and injustice of the tax was admitted; it was moreover stated, that it might lead to a condition of their finances which no one could contemplate without great apprehension and alarm. He should next come to the position in which they at present stood, and the duties they had to perform; and whatever difficulties might present themselves in their way, they should face them in a bold and statesmanlike manner; and although they might not be able to form a perfect measure, they should at least be determined to make it as perfect as they could by their industry, energy, and determination. He would not have felt himself justified in finding so much fault with what he thought had been a serious omission on the part of the Government, unless he had satisfied himself that the subject was not one girded with such difficulties as to make them altogether insurmountable. He held in his hand a return of the proceeds of the property-tax for the years 1843, 1844, and 1845; the year 1846 was in a later return, and if the House were kind enough to give him its attention for a few moments, he would endeavour to state to them why he was perfectly confident he could prove that they might remodel this Act in such a manner as to make it, compared with what it is now, a faultless mea-

171
sure. They might make it a more equitable and acceptable Act than it was at present. The receipts in the year 1845, under the five schedules, amounted to the following sums:—under Schedule A the amount received was 2,528,721 l.; under Schedule B, 324,339 l; under Schedule C, 744,019 l.; under Schedule D, 1,678,595 l.; under Schedule E, 327,769 l.; that being a tax of 3 per cent on the profits of the country. The following were the profits taxed at 3 per cent under the separate schedules. The profits taxed under Schedule A, 86,698,100 l.; under Schedule B, 11,120,200 l.; under Schedule C, 25,509,200 l.; under Schedule D, 57,511,700 l.; under Schedule E, 11,237,800. So that the whole profits under those five schedules, in those five years, amounted to a sum of 192,117,000 l. in round numbers. Now, that being the whole profits, by which he meant the whole income of the country, they should consider if they could devise any mode of capitalising that income, or any approximation to it, which would help them to arrive at some conclusion as to the relative portion of tax which should be paid under the different schedules. He had endeavoured to arrive at some approximation to it in the following manner. Taking 4 per cent as the rate of interest at which he had made all the calculations, he took the income or profits under Schedule A at twenty-five years' purchase, and that would make the capital represented by that sum 2,167,452,500 l. Of course, he would take the income or profits under Schedule C at the same rate, namely, twenty-five years' purchase, and that would give 637,730,000 l. Now, the other three schedules might be open, of course, to some criticism and objection; but still he did not think he had come to a conclusion that was liable to much objection; and he might, perhaps, beg this favour of the House, that although the whole of the conclusions he had arrived at did not depend entirely upon the tables he was now quoting, he might ask them, until he got to the end of his calculation, to suspend their judgment upon it. Now, with respect to the three other schedules, B, D, and E, he had made his calculation in this manner. He would take them to be like life annuitants, and assume the average value of all lives above twenty-five to be, at 4 per cent, worth twelve years' purchase. If, then, they took the income under the three other schedules as life-
172
annuities, worth twelve years' purchase, they would come to the following results: Under Schedule B they would have a capital represented of 133,442,400 l.; under Schedule D, 690,140,400 l.; and under Schedule E, 134,853,600. So that, calculating the income upon permanent and realised property at twenty-five years' purchase, and calculating the income from precarious resources as life-annuities as worth twelve years' purchase at 4 per cent, they would arrive at this conclusion, that the whole capital of the country which fell under the income-tax, held in the hands of parties with more than 150 l. a year, would amount to 3,763,618,900 l. And if they tested that by other returns and calculations of the capital of the country, he did not believe they would find any reason to think that that conclusion was materially incorrect. The reason he had made that calculation was, that they might arrive at some sort of judgment as to the rate of tax they should propose on precarious and permanent incomes. By the present income-tax a sum of 5,600,000 l. being paid up on the capital which he had just stated, would make a payment of one farthing and a half on 1l. of capital. Now, a farthing and a half per 1l. of capital was thirty-seven farthings and a half, or ninepence and a fraction, of income, or 3l. 15 s. per 100 l., calculating always at 4 per cent. According to the calculation, if they took the relative value of permanent property and precarious property—the one being worth twenty-five years' purchase, the other an annuity at twelve years' purchase—the conclusion he arrived at, as bearing on their relative proportions, was this, that ninepence in the pound became the share to be charged on private property. Then, as to the other schedules, B, D, and E, one farthing and a half per pound at twelve years' purchase was 4½d. of income, or 1l. 17 s. 6d. per 100 l. Then let them compare those rates of charge with those paid under the present Act, and it would appear, as 9d. in Schedule A and C is to 7d., and 4½d. in Schedules B, D, and E is to 7d., so would the sums received under the old and new charge in each schedule be to one another. If they levied the tax under the new calculation, that would have been under Schedule A, instead of 2,528,721 l., a sum of 3,251,179 l.; under Schedules B, C, and D, there would also be a variation, but the final result would be, that by an adjustment of the tax in this manner they would arrive at an

173
amount of income not varying much from that paid under the tax in late years. In the year 1845, and in 1846, the sum paid was about 5,600,000 l.; and under this rate of charge the sum would be about 5,700,000 l. But he felt that rate would he extremely defective and liable to great objection, and could not be proposed, and ought not to be entertained; and for this very obvious reason, that with respect to the income under Schedule D it falls into the error into which the present Act fell—it makes the two sources of income under Schedule D—one arising from professions, and the other from trade and commerce in which capital is invested—liable to be taxed equally; and that could never be the intention of an Act which affected to remove this inequality. They must try to ascertain how far this part of Schedule D could be readjusted so as to make a difference between income derived entirely from a precarious source, and that in which capital is invested. The tax in Schedules A and C was all proceeding from realised capital. Then there was the income arising from professions—from labour, skill, and industry; and he might assume that the income arising from trade and manufactures was one-half labour and skill, and one-half capital invested. In this manner if they took twenty-five years' purchase for permanent property, and twelve years' purchase for professions, they would get a just and intermediate rate for trade and commerce of eighteen years' purchase. If they thus readjusted their tables, leaving Schedule B as it is at present, they would arrive at the following conclusion: Schedule A at 9d. would produce 3,251,179 l.; B, unchanged, 324,339 l.; C at 9d., 956,600 l.; D at 6d., as a mean, 1,440,933 l.; and E at 4½d., 210,710 l. They would by this scale, by increasing the higher tax to 9d., and altering the smaller one to 4½d. get a total 6,183,761 l.; and taking the present income at 5,600,000 l., that would give a surplus of 583,761 l. These were the two calculations he had made; but he could not expect the House to go along with him, for he felt it was impossible for him to make them sufficiently intelligible; and even if the subject itself was a simpler one, it would he impossible for him to state it as clearly as he could desire. However, there was part of the plan he thought he could make intelligible, and he begged the House would be kind enough for a moment to give him its attention. What he proposed to do was this. The great defect in the present
174
Act, according to his view of its inequality was, that under Schedule D they had two different kinds of income included, namely, the income arising from trade and commerce, and the income arising from professions in which capital was not invested. Now, they might make this change in the first place—they might keep the same number of schedules, but adjust them differently. Let them put the professions in Schedule E, which is also composed of precarious incomes, and leave Schedule D entirely to incomes arising from the profits of trade and business. If they did that, and made the scale of taxation on A and C lower than he had already named—if they merely raised the taxation in A and C 1d. per pound, so as to make it 8d. per pound—if they made the tax on professions 4d. per pound, and put an intermediate tax on trade and commerce of 6d. per pound, then they would arrive at results which they could easily compare with the results under the present table, and they would see that by a small increase of burden under Schedule A, they would give relief to all the other classes, and would be able to raise the tax without vexation and complaints, and still have the same amount of revenue as they had at that moment. He could assume, that under Schedule D, two-thirds of the present income were derived from trade and business, and one-third only from professions. Now, suppose under Schedule A they imposed 8d. in the pound, that is 3l. 6s. 8d. per 100 l., that would give them, under Schedule A, 2,894,000 l., instead of 2,528,721 l., the amount it produces at present; under B, they would have the same as now; under C, at 8d., 849,595 l., instead of 744,019 l., the amount at present: under D, imposing upon trade and commerce 6d. per pound instead of 7l., they would have an income of 959,000 l. instead of 1,678,595 l., which it produces at present; and under E, imposing 4d., instead of 7d., they would have an income of 235,796 l., instead of 327,769 l. as they now had. The result of these schedules, making the highest at 8d per pound, the lowest at 4d., and the intermediate one on trade and commerce at 6d., would give a total income of 5,581,000 l., whereas the calculated income of the present year, according to the budget of the present year, was 5,200,000 l. They would, therefore, according to the return already before them—have by a readjustment of the scale a surplus of 380,000 l. upon the estimated budget of the present

175
year. He was aware, that even the figures and calculations he had made out far himself, he had stated imperfectly and confusedly to the House; and he had avoided going unnecessarily into all the changes proposed. He was aware also that the plan which he had ventured to suggest might be liable to some objection; but in a few words he would show how obvious were the advantages of that plan. Every person admitted that nothing could be more unequal or objectionable than the present tax, which imposed a uniform rate of 7d. in the pound. Well, his proposal, founded on calculations that could be tested, and could not be disputed, showed the scales he proposed were just—that is to say, that the parties who would not pay the highest rate of taxation under the new scale, at least paid at present something more than they ought to pay by an accurate calculation. His proposal was that they should fix upon permanent income a tax of 8d. in the pound instead of 7d., which it now paid; upon trade and commerce 6d. in the pound instead of 7d. that it now paid; and on all professional incomes and precarious incomes that were terminable, and expired with the parties 4d. in the pound instead of 7d. By that means they would give relief to the classes who felt they were pressed upon by the operation of the present Act. This plan would only impose a burden upon property, namely, the additional penny on permanent income; but he thought that that would be cheaply purchased by the large amount of relief it would give, by the great satisfaction it would afford, by the ease with which the tax would be collected, and by its being felt through the country to be reasonable, just, and equitable. And though it might not in detail be a perfect system of taxation, yet he was sure its imperfection was nothing when compared to the defects and imperfections of the tax as now existing. He was quite sure the public at large could not expect anything like perfect legislation; but they of course expected that they would apply themselves to the subject in a business-like manner, and improve the tax to the utmost of their power; and at least they might show them that they could devise a tax which would be equal in its operation, and not so unsatisfactory as to be felt unjust in its results. In conclusion, the hon. Gentleman moved the Amendment.
MR. ELLICEfelt himself so peculiarly circumstanced with respect to the question before the House, that he took the oppor-
176
tunity of rising to speak on it immediately after his hon. Friend who had submitted this proposition as an Amendment to the Motion of the right hon. Gentleman the Chancellor of the Exchequer. His object was to explain the grounds on which he thought it was essential, under present circumstances, even against the opinions he had before stated in that House, to give his firm and decided support to Her Majesty's Government. He would not follow his hon. Friend into his detail with respect to the inequality of the tax, for no argument had been more strongly urged with regard to the anomalies and inequality of the tax than that which he had himself stated in the House. His opinion of the inequality of the tax had been in no respect changed by the experience they had had of its operation since it was imposed by the right hon. Baronet opposite; but still there were some peculiar circumstances of the country—some reason why he thought they should pause before they adopted any new experiments, or even went immediately into the consideration of them, which weighed with him very much more than any advantage he could see in following the calculations according to the present statement of the hon. Gentleman. When the right hon. Baronet opposite proposed this tax, he supported the proposition on two grounds; and in doing so he differed from his noble Friend now First Minister of the Crown, and many of his hon. Friends who acted with him on that occasion. He then supported it because he thought there was almost an impossibility of proposing any scheme of taxation to that House which could at that time have restored their finances to the condition in which every well-wisher of his country should desire to see them. He supported it, secondly, on the ground that it might enable them to make certain reforms in their fiscal arrangements, essential to relieve the industry of the country and give a new impetus to commerce. He must say, the results which he had anticipated when supporting the tax had been fully realised, by the effects it had produced both on the finances of the country, and by giving that relief to trade which had replenished their exchequer. [Ironical cheers.] He did not see why Gentlemen should make use of that derisive cheer; he did not shrink from expressing the opinions he had maintained in that House. The first duty they had to look to was to relieve their industry from those burdens

177
which weighed heavily on its springs, and seek to increase the productive power of the country, so as to add to its wealth. He saw now no reason to alter the opinions which had induced him to give his support to the measure of the right hon. Gentleman. Though he had thought it necessary to support the proposition of the right hon. Gentleman on the ground he had stated, still he admitted, with the hon. Gentleman who now made the proposition, that the old income-tax was most unequal in its operation; and he divided, he remembered, with the hon. Member for Bath, who made a proposition that industrial income should be taxed at one-half of the income arising from capital. He thought the time had very nearly come when it would he necessary for the House to review the whole system of taxation, for the purpose of determining what portion of that taxation should remain under the head of direct taxes, and what portion of the industry of the country could still bear taxation under the head of indirect taxation. He thought that some of the duties on consumption had been taken off without adequate consideration. The timber duties might be said to have produced considerable revenue; and though he was quite willing that what was called the inequality of the duties between colonial timber and foreign timber—he referred to the differential duties—should be got rid of, he thought they might have maintained an equal duty without interfering in any great degree with the commercial interests of the country. He was not disposed to think that in the present state of the finances of the country, and with the enormous debt that weighed upon them, they could entirely abandon the duty upon consumption as a source of income. He might say, with respect to the income-tax generally, that, although he might concur in many of the complaints made against it by his hon. Friend opposite, yet, on going into the various considerations that could be urged in favour of taxation from income as well as taxation on property, a great deal could be said on each side of the question. To some persons Providence had given property; to others, talents greater than those possessed by ordinary men. But he was not going to assert that that proved the right of taxing both equally. He was fully aware of the great opposition which the measure of the Government had experienced out of doors, and of the many public meetings at which it had been condemned. But he should like to know how many of the
178
persons who composed those public meetings were contributors to the income-tax. His hon. Friend suggested to him that they were very numerous. They might be; but he should like to know what was their proportion to the remainder of the assemblage. He was perfectly aware that petitions against the tax had been signed by persons who were not contributors to it, but who opposed it because they thought that Her Majesty's Government wanted money to squander it on things that were not necessary. Now, it was his duty in that House to show the people that the Government wanted it for no such purpose. If he thought he was giving his right hon. Friend one shilling more than the absolute necessities of the country required, much as he was attached to him, and to those who sat near him, they should not rely upon his vote. He denied that the income-tax was one that weighed directly upon the poorer classes of the country. He admitted that it was very true that the commercial interests of the country had never emerged from such a weight of misfortune and difficulty as that from which they had lately come forth. But whether they could get rid of the anomalies which surrounded the present tax or not, he thought that it was the least reprehensible and the most practicable mode of supplying the deficiency of the income. They must have recourse to direct taxation. If so, was it not much better, even with all the objections to the present tax, and with all the inconveniences to the people attendant upon it, not to disturb the order of things that existed? He did not mean to say, that when the tax was first proposed to the House and the public, that it was intended to be continued, or he would not have given it his support. But he was induced to support its continuance now, for the reason he had given, and for no other reason also, because Her Majesty's Government had already given way to the wishes of the country and the House by abandoning their original proposition. They had come down to the House and said that they bent and bowed to the wishes of the country, and they asked merely that the House would place the resources of the country in that state of security that would render it safe for them to undertake the management of affairs; and did his hon. Friend think that because the Government made one concession, he should drive them to make another? Let him only suppose the case of each hon. Member who had a peculiar objection urging his own particular

179
view, and that they were thereby to weaken the Government, would not his hon. Friend, he asked him, think such a course most injurious to the best interests of the country? He could not mistake the symptoms of the times. Since the financial plan of the Government had been submitted to the House by his noble Friend at the head of the Administration, great changes had taken place elsewhere. He was not going to allude to those changes for any political purpose. So far as he could understand the great revolution that had taken place in another country, the Provisional Government was conducted by honest and able men, who were acting for the good of their country, and maintaining peace and order. And he believed, from his own knowledge of some of those men, that however wild he might some time since have thought their aspirations, he believed them sincere and honest in their desire to secure peace throughout the world, and to restore order and tranquillity throughout Europe. But although he gave them full credit for such intentions, so far as regarded all events that might arise within their control, he asked was there nothing in the unsettled state of things which made it desirable that the policy of that House should be to place the defences of the country on safe grounds? They should remember that credit was easily affected by revolutions. He hoped no such thing might take place. He hoped no such danger might arise. But they should not shut their eyes to the possibility of such events happening as would make it necessary for them to place their credit at once upon the firmest possible foundation. He was afraid that the finances of all the countries of Europe had got into a worse condition than they need, from the conflict in warlike preparation which had been occasioned by jealousies between the nations. He regretted the existence of those jealousies. And so far as he thought it safe to effect economical reductions in expenses, where he thought it prudent and consistent with the interests of the nation, his hon. Friend behind him would find him with him, in the Committee they were about to refer the expenses to, in keeping a vigilant eye with a view, to the effecting of economical reductions. The Provisional Government of France had succeeded to a state of dilapidated revenue. He would not say of actually dilapidated revenue, because the revenue was equal to all demands that could be made upon it. But
180
the Government had succeeded to a state of things where credit had been stretched to the utmost, where it was most difficult to keep it up, and where the most patriotic Government would have the greatest difficulty in sustaining it. If, then, with such a condition of things, there were a probability of difficulties occurring abroad, was it not the more incumbent on them to be prepared? Questions had arisen regarding the enormous addition that had been made to the expenditure of the country since Earl Grey had been at the head of the Government. The country would no doubt require the Committee to examine into the causes which had led to that increase. But the greater part of the taxation was rendered necessary by the enormous debt which had been incurred by the country for the prosecution of former wars. For instance, if they looked to the years 1813 or 1814, they would find that with an income of from 27,000,000 l. to 30,000,000 l., they had an expenditure of 50,000,000 l. to 60,000,000 l. It was the interest of the debt, and the expenses that could not be avoided—it was the 32,000,000 l that bore upon the country, and the remaining 18,000,000 l. was not a very heavy expenditure for this country, the possessions of which reached from one side of the globe to the other. It would, however, be for his hon. Friend to look at the items with an economical and rigorous eye. But he thought it would be dangerous for the people out of doors to be allowed to suppose that the House was unwilling to vote the supply which was really necessary to meet the expenditure; and he, for one, would not flinch from bearing his share of the unpopularity attaching to the support of Her Majesty's Government under the present circumstances. It had been said, "Why not take the tax for one year, and let it be seen whether in the interim certain circumstances might not be found whereby its present anomalies might be obviated?" But he said that the best time for them to look into and revise their whole system of taxation was when the Treasury was placed in a condition beyond the fear of deficiency. The income-tax in its present shape was no greater burden to the country than it had been for the last six years; and the objection to its reimposition might be obviated by giving notice to the Government and the country that it was the intention of the House to review the whole system of taxation, with a view not only to the ar-

181
rangement of that tax, but also the legacy duties and other imposts; that it was the intention of the House, at a proper time and fitting season, to take up the entire question and solve it for the benefit of the public. But let them have time to do so. It was not whilst the Treasury was dependent upon an annual vote from the country for the means of going on, that it should be done. By adopting his suggestion, they might restore the finances to the condition in which every hon. Member must desire to see them—placed above impeachment, and beyond the risk of injuring the national credit of the resources of the country.
MR. NEWDEGATEwas sure that the hon. Gentlemen who sat on the opposite side of the House were much indebted to the right hon. Gentleman the Member for Coventry for thus endeavouring to heal those difficulties which had prevailed among them., on the Government side of the House the hon. Gentlemen professing free-trade opinions were all discontented and dissatisfied. Why? They had had the commercial and financial measures of late years all their own way. They were discontented with the result, and so fell foul of the Government, whose only fault was, that they attempted to carry out the principles professed by the free-traders themselves, who now assailed them. But he could not agree with the hon. Member for Cockermouth, who seemed absolutely so enamoured of an income-tax, that he took it to his bosom and cherished it, in the hope that he should be able to remove its anomalies. His view of this question was, that this tax was proposed as a temporary tax—that it was one most obnoxious in character—and that nothing they could do with it could render it a just tax; and though he was willing to submit to its imposition for three years more, because he thought the circumstances of the country required it, yet he would do nothing whatever that should tend to give it the character of permanency. Now, with respect to the circumstances which had rendered the renewal of this tax necessary, he considered the country ought to know, that it was the new commercial system they had had of late years established that had now made its imposition a matter of necessity. When it was first imposed by the right hon. Baronet the Member for Tamworth, it was introduced as a temporary tax; and he would be bound that the far greater portion of those who then followed
182
the right hon. Baronet had not the slightest intention that this tax should become a permanent system. The right hon. Baronet, after he had once obtained the income-tax, proceeded gradually to remove the duties on which their revenue was formerly levied: he, in fact, caused the present deficiency, and now it appeared that the country was not so well pleased with the result. But the following figures would show that if hon. Gentlemen who sat on his (the Conservative) side of the House, felt it necessary to support this income-tax, it was only because they felt it necessary to submit to it as the inevitable and evil consequence of the financial policy adopted during the last few years:—

The revenue of 1847 was

£51,362,000

Deduct income and property-tax

5,450,000

Revenue from ordinary sources

£45,912,000

Revenue from ordinary sources, for the year 1841, before the income-tax was imposed

£47,917,000

Ditto, 1847

45,912,000

Minus

£2,005,000

Customs, Excise, and Taxes repealed or reduced between the years 1841 and 1848

£8,100,000

Income and property-tax, 1846–7

5,450,000

Minus

£2,650,000

Actual deficiency of income below expenditure

£2,955,683

Difference between Customs and Taxes repealed in six years compared against Income-tax

2,650,000

£305,683

Which was about equal to the falling-off in the ordinary revenue of last year (1846), including the whole income-tax below that of 1842, including a very small part of it. They had a Chinese war in 1841, and they had had a Kaffir war in 1847; so he thought that those who preferred direct taxation ought to be pleased. But they were told that the commercial classes were not in a state to bear the burden of this tax. How strange this must seem to those who had been taught by the free-traders to expect that the position of the commercial classes was to have so much improved under the recent system, that, according to the letter of the right hon. Baronet to the burghers of Elbing, it would

183
be just that they should bear the burden of the income-tax. But let them look at the condition to which they had come. Let the House consider the position of our trade in 1846, which, notwithstanding all that had been said, was no year of scarcity; for the value of the corn imported in the year 1841 was greater than the value of the corn imported in 1846 by no less than 1,000,000 l. The official value of exports was greater in 1846 than in 1841, by 31,000,000 l.; and the declared value of exports was greater in 1846 than in 1841 by 6,000,000 l. Now, the increase in official value was a test of quantity, for the official scale of prices had been fixed more than a century, and remained, therefore, a mere index of the quantity of goods exported, which, when compared with the real or declared value, showed that the exports, though they had increased in quantity, had decreased in value, in 1846, as compared with 1841, by 15 per cent. It might likewise be shown that they had decreased in value 17 per cent in 1847. They might call that a happy or a prosperous trade if they chose, because it was a great trade; but in his opinion it appeared more like what he had frequently heard it called by his hon. Friend the Member for Birmingham, "a trade that did not pay." But it was said that there had been a reduction on the articles imported to be used in manufactures; but that was only to the extent of three or four per cent upon the cost of the manufactured article; and they might fairly calculate that their extended trade of these five years had been, in reality, at a depreciation of 17 per cent on their profits. But how stood their imports, to foster which they had had this income-tax imposed upon them? Their imports, under the free-trade measures, had increased, in 1846, over those of 1841, by 18 per cent; whilst the exports had increased, in declared value, by only 12 per cent; showing a balance of trade against this country of six per cent. And let it be remembered, that by their monetary system, they had bound themselves under the penalty of a commercial crisis not to allow the balance of trade to be to any considerable extent, or for any lengthened period, against this country. They could not force their exports beyond a certain point, even at an enormous sacrifice of their value; and when he said this, let him remind the House, that, in the course of the past year, he moved for certain re-
184
turas connected with the tariffs of foreign countries. Now, these returns showed that though there had been some reductions of their tariffs made by foreign countries since 1844, in certain cases, yet that by far the greater part of them was upon articles that did not affect our commerce—and that in other instances foreign States had raised of late years the duties on our imports into foreign countries, and reduced them on their own exports to ours. The following statement would show how the case was as regarded Russia:—The alterations made in the Russian tariff may be brought under three heads—1. Articles which become subject to a high protective duty, instead of being entirely prohibited; 2. Articles on which the import duties were increased; and, 3. Those on which the duties were decreased. To the first class belong chiefly articles of art and luxury; such as chandeliers, watches, worked marble, &c.; they are seven in number, and but little affect English trade. The alteration was made in May, 1845. To the second class belong mineral alkalis, on which duty was raised from 1s. 6d. to 3s. 1d. per cwt. in June, 1846. To the third class belong ten articles of South American production, such as spices, coffee, dyewoods, indigo, &c.; also one article of black cloth, kerseymeres, earthenwares, and crushed lump sugar for local refiners only. The alteration was made in the course of 1846. These alterations affect but little our English manufactures, and refer chiefly to Russia's intercourse with South America and other countries. They form, besides, but a very insignificant proportion in the number of articles (more than 500) in the protective and prohibitive tariff of Russia. How little our manufactures have profited by the above alterations may be gathered from the following table of the exports of our manufactures to Russia in 1846 and 1847:—

Articles.

1846.

1847.

Cotton twist and yarn

12,110,118

lbs.

9,314,845

duty unalt.

Thread for sewing

16,493

7,309

duty unalt.

Plain calicoes

819,594

yds

741,327

Printed calicoes

192,131

84,267

Cambrics, muslins, lawns, and lenos

22,056

14,213

Heavy wools

2,148

847

With regard to the United States, too, how stood the question? There were, he believed, only five articles in their tariff on which the duty was reduced below 20 per cent; and only one of late years declared

185
free of duty, and that conveyed a high compliment to the hon. Member for Birmingham: it was the article he manufactured—"ship sheathing." The rest of the duties in the American tariff varied from 40 to 20 per cent ad valorem. He would refer to some of those which affected the produce and manufactures of this country:—

Ad valorem.

Cut glass

40 per cent.

Carpets

30 per cent.

Clocks

30 per cent.

Clothing, made up

30 per cent.

Iron—Bar, bolt, pig, rod, &c.

30 per cent.

Jewellery

30 per cent.

Manufactures, viz.—

Leather

30 per cent.

Wool

30 per cent.

Paper

30 per cent.

Wool unmanufactured

30 per cent.

Cotton manufactures

25 per cent.

Silk

25 per cent.

Worsted

25 per cent.

Yarn—Woollen and worsted

25 per cent.

Blankets

20 per cent.

Leather tanned, sole and upper

20 per cent.

Linen of all kinds

20 per cent.

Flax

20 per cent.

Paper hangings

20 per cent.

Steel unenumerated

20 per cent.

Velvet cotton

20 per cent.

Wheat

20 per cent.

—Flour

20 per cent.

Woollen listings

20 per cent.

Chronometers

10 per cent.

And now let him draw the attention of the House to the effect of the reduction of her import duties instituted by this country under the system of free trade, and to the cost of the revenue. What had been the result of their remission of the duties in regard to timber? On Crown fir timber from the Baltic ports the duty was reduced from 26 s. 3d. to 20 s. per load. Before the reduction of duty in 1846, the price, in bond, was per load 66 s. 3d., while in 1847 the average price was 75 s. The price has thus risen 13 per cent, and the duty reduced 24 per cent. And the same was the case with regard to spirits:—

SPIRITS (DUTY REDUCED ON THE 18th MARCH, 1846, FROM 22 s. 6d. TO 15 s.)

Entered for Home Consumption.

1846.

Gallons.

Duty Paid.

Loss of Revenue.

Brandy

1,514,893

£ 1,165,478

£568,085

Geneva

39,910

30,409

14,966

1847.

Brandy

1,537,762

1,153,164

576,660

Geneva

28,880

30,409

10,812

£1,170,523

186

AVERAGE PRICE OF BRANDYT IN BOND.

Per Gal.

Per Gal.

Per Gal.

1845,

4s.

3d.

1846

5s.

8½d.

1847,

5s.

11 d.

So that while we have reduced the duty by 33 per cent, foreigners have raised the price by nearly 40 per cent, and have thus pocketed the reduction. The same results were discernible with respect to other articles, on which the duty had been reduced. But there was another lamentable consequence attending the present state of affairs, and the adoption of direct taxation by the property and income-tax, in lieu of indirect taxation. There was throughout the country a serious dispute as to what part of the population should bear the burden of taxation; and this arose from their having abandoned the only system by which they could collect taxation without grievous annoyance to the community. What stronger illustration could they have of this fact, than was to be found in the circumstance of a Government coming down to Parliament and showing a deficiency which the country, on their statement of their mode of supplying it, refused to make good in the manner proposed? Had the Government lost the confidence of the country? He did not know that they had; but the fact was, that their form of taxation was so obnoxious that the people would not support the Government they were content to see in power, because they would not pay the taxation they imposed in the manner the Government proposed it should be levied. But what was it that was now proposed? The hon. Member for Cockermouth got up and said that this income-tax was a most charming system of taxation—that it was the basis of free trade, and the system on which, for the future, the country must rest its means of credit as well as of national defence; and that the House should at once embrace it as a permanent system? But against any such proposition he (Mr. Newdegate) would record his vote, and with the fullest conviction that, in doing so, he should be doing his duty to his constituents and the community at large. But, with reference to the proposition to make the income-tax upon land and real property heavier than it now was, let the House consider what were the burdens to which such property was subject already. A Committee of the House of Lords had inquired into this subject, and what was the report they had presented? The following was an extract:—

187
"The objects for which the above restrictions and taxes are imposed are all of a public nature, and interest alike the possessor of personal property and the landowner, who derives his whole income from realty. The prohibition to grow tobacco, and the restriction on the use of malt for agricultural purposes, are imposed for the protection of the revenue raised for the general purposes of the State. The stamp duties levied in connexion with real property are applied to the same objects; and the direct charges, which constitute the heaviest burdens on real property, supply the funds applicable to the internal purposes of the State. * * * The Committee observe that the annual amount of national income, as deducible from the income-tax of 1842, amounted to 244,760,580 l.; while the real property rated to the poor-rate, according to the returns made to Parliament in the same year, was 62,540,030 l.; thus a great portion of the administration of justice, of the maintenance of the fabric of the Church, and of the internal communications of the country, as well as the entire support of the poor, are all defrayed from taxation, from which nearly three-fourths of the national income are exempted. * * * The land-tax, highway, church, and poor rates, alone amounting to, 9,687,950 l., would thus be equivalent to an income-tax of above 15 per cent on the annual value of real property in England and Wales. If to the above sum of 9,687,950 l. is added the tithe-rent charge not merged in the land, that is, 4,500,000 l., making a total contribution annually levied on real property for the public service, under the five heads of tithes, land-tax, poor, highway, and church rates, equivalent to an income-tax of nearly 23 per cent on 62,540,030 l, the rateable value of the real property in England and Wales."
The annual value of real property as deducible from the income-tax, which is assessed on the rackrent, amounts to 85,802,735 l. in England and Wales; the land-tax, highway, church and poor-rates (including the county rate), would be equivalent to a tax of more than 11 per cent on this valuation; but it is to be remarked that mines, other than coal pits, manors, and fines, are included in this valuation which are exempt from the poor-rates. But he (Mr. Newdegate) had of late been continually told that all this distress which they saw around them was the result of a want of capital; the proposal to involve us in direct taxation was nothing more nor less than a proposal to cut off capital at its source, instead of levying taxation upon the consumption of articles of secondary necessity or luxury. He was again told that they should tax the fundholder—that they had thrown over all those antiquated notions of national good faith which once were the boast of this country, just as they had thrown over the considerations of good faith which should have maintained protection to agricultural and native in-
188
dustry, and to the interests of their West India possessions and other colonies; whilst the fundholder had, by their system of currency, gained some 30 per cent within the last few years; but suppose they had loaded the fundholder with additional direct taxation, which was tantamount to confiscation of so much of the interest due to him, were they not, by their proposition, again discouraging the investment of capital in this country? But much stress was laid on the fact that the income-tax was a great burden on the commercial classess. He was a commissioner of the property-tax, and had acted for some years; and he knew that that clause under the Act was in perpetual operation, by which the merchant, the banker, or the tradesman might plead losses in trade or show no profits, and so escape the tax; or plead the wear and tear of machinery, or the like, and so get the levy upon him reduced. Then there was an outcry about the exemption from the income and property-tax, supposed to exist in favour of the land. Did those who raised this outcry know that every landowner was assessed upon his gross rental—that no allowance was made for the expenses of the property, of repairs to farm-houses, or the like, which amounted one year with another to from 15 to 20 per cent on the rental; so that every landowner was taxed under the income-tax upon from 15 to 20 per cent more than he received. Take the case of the farmer. If he held land to the amount of 300 l. a year, he was taxed on one-half the rental. If the half of the rental was only 149 l. he escaped, unless he had coming in 2l. from any other source; and then, although his losses in the course of the year might amount to double the rent, he must pay the tax upon a sum equal to half the rent, and upon any property he had exclusive of that on his farm besides. Do not then talk of the exclusive exemptions enjoyed by the land. Then, again, there was another outcry against the window-tax; and here they had every shop window, every counting-house window, and every workshop window exempt. He knew it would be said that the farmer also was exempt; but that was not the case, except his rental was under 200 l. a year. He might be told that there were other exemptions; but he thought the only answer necessary would be to refer to the evidence taken before the Committee of the House of Lords on that subject. He wished briefly to allude to

189
the alleged relief from landed property, by the Poor Removal Act, and by taking the cost of county prosecutions out of the Consolidated Fund. No doubt those measures did afford a relief; but if any one would take the trouble to refer to the poor-rate assessment returns they would find that landed property was assessed to four-fifths of its value, and house only two-thirds; and if they carried the comparison further, they would also find that the land up to 1843, paid from 12 to 25 per cent more than house property on the assessment; and in the assessment too, there was the most ample allowance made for the different durability of the two properties. Therefore, if some relief was given by the Poor Removal Act and the diminution of the county rate, by throwing the cost of prosecutions on the Consolidated Fund, he did not believe it more than removed the difference between the amount paid by the two classes of property, independent of the allowance made in the assessment of their relative value for the difference of durability. There was one interest to which, before he concluded, he must, for a moment allude, and that was the interest which had been the most strenuous advocates of destroying the protection of the agriculturist, and was now the most clamorous, after having stripped him of his protection, to saddle him with direct taxation—he meant the cotton interest. In 1843, 1844, and 1845, the cotton trade, but, above all, the master manufacturers, enjoyed the most unexampled prosperity; on this point he took an authority which he thought would not be disputed, that of Messrs. Gibson and Ord, of Manchester. In their circular letter for 1847, these gentlemen gave a description of this trade. They said—
"The cotton district has, throughout the whole of the past year, experienced more or less of depression; it cannot, however, be characterised as one of disaster, for, whilst we have had an absence of the excessive profits of 1843, 1844, and 1845, the aggregate has yielded a fair remuneration to both spinner and manufacturer; and our operatives have enjoyed, until the past few weeks, uninterrupted employment, and at very full wages. The change produced in the past year did not arise from any falling-off in the home demand, or requirements of the foreign market; and, although in a measure induced by the disturbing causes before mentioned, is mainly owing to over-production, consequent on the great increase of mills and machinery called into existence by the prosperous course of manufacturing in the three years antecedent. During those years the supply was inadequate to the demand, but it has now become evident that such is no longer the
190
case; for, whilst we have had a home consumption we believe equal to any former year, and an export falling very little short, our market has laboured under increasing stocks, and but for the timely recourse to shorter hours during the past two months, the accumulation would have been such as to have pressed heavily on the market, and debarred the hope of anything approximating to remunerating prices being obtained."
Well might hon. Members connected with this trade groan—he felt for them. During these years, admitted to be a period of un-exampled prosperity, multitudes of mills were built, and machinery was vastly increased, whilst they were rampantly engaged in the anti-corn-law agitation; the market at length became glutted, and the goose which had laid the golden egg was killed. He would give the House some idea of the profits of this trade, which now so whiningly cried out to be relieved from taxation. It was not an uncommon thing, in 1845, for the cotton spinner to use 8,000 lbs. of cotton per week, and of this he would make an allowance of one-eighth—a most liberal deduction—for waste in making. The spinner, working up this quantity, would thus turn out of the best mule twist, No. 40, 7,000lbs.; on that an average profit of 2d. per pound clear was produced; and that, by a simple calculation, would show a profit of 583 l. a week, or 30,316 l. a year. Of course those who doubled the quantity doubled also that amount of profit. He held in his hand a letter from one who knew the trade as well as anybody. He had had some correspondence with the gentleman whom he had mentioned, and who was an eminent free-trader, in respect to the effects of free trade upon the supply of cotton from the United States. This gentleman wrote, on the 10th of February, 1847, as follows:—
"The enclosed table may interest you in many ways. There is nothing in it to alarm the farmer, but much to terrify the spinner. However, he has to thank his own cupidity. In September, 1845, best second mule twist, No. 40, was selling at 11½d. to 12 d. This was spun out of cotton which cost 4d. to 4½d., and left a clear profit of 3½d to 4d, for every pound of cotton spun, and some spinners used 200 bales of 400 lbs. each per week. The spinners thought they could not do too much of such a business, and multiplied machinery, built new mills, &c, until they killed the golden goose, and absolutely swamped the demand. At the same time they drove the price of cotton down so low that every where the planter reduced his cultivation. In Georgia, the planter did not receive 2 cents per lb. His cotton was selling in Savannah at 4, and as in Georgia the soil is indifferent, 1,500lbs. per hand (negro, who cost 500 dollars), he had

191
little inducement to continue the culture of cotton. This year there is a large crop there; but it will turn out only comparatively so."
He had not made his calculations according to the statements in that letter, but at a lower computation of profit, that he might be on the safe side, though the trade circulars and prices current confirmed the statements of the letter he had read; but it would be admitted that, during the very year that the Anti-Corn-Law agitation was the hottest, these exorbitant profits were pocketed by the Leaguers. What was the case now that they had been successful in their agitation, and stripped the agriculturist of his protection? Why, they had fallen into distress in consequence of overproduction—a distress which he regretted very much. But it was a fact that those who were foremost in depriving the agriculturists of protection, were the first to prescribe that we should bear the burden which they were so anxious to pass from their own shoulders. He would, however, ask the House whether this injustice ought to be permitted? Ought they who had brought distress upon themselves by their cupidity during four years of unexampled prosperity, and during that period done everything in their power to depress the value of landed property, to be allowed to cast their burdens on the class they had injured, for the purpose of trying a foolish experiment? But they said their experiment of free trade had not a fair trial, because landed and agricultural property was not yet, according to the hon. Member for the West Riding, brought down to the point at which he considered free trade would be fairly tried, and that would not be until corn was at the nominal price of 40 s. per quarter. The experiment of the hon. Member would then, according to his own showing, reduce agricultural property in this country 20 per cent; and he supposed it was for the purpose of alleviating in some degree the disastrous effects of that experiment that the agriculturists were now to be saddled with direct taxation. If ever there was a time when it behoved the House to exercise the utmost caution, it was when such proposals as these Were submitted to it at such a period. He did think that the system of taxation in this country ought to be revised; but he trusted the House would not cringe to any mere popular movement. The Government, he could not but say, had made concessions which were scarcely consistent with its dignity; but
192
as they had given up the attempt to increase the amount and duration of the property and income-tax, he would vote for its limitation to three years in the present critical state of affairs?
MR. GOULBURNhad to apologise for rising at so early a period; but being most anxious to give his support to the proposition for the continuance of the income-tax for a limited period, deeming it essential to the maintenance of the, public credit and the best interests of the whole community, he wished to state the grounds upon which he came to that conclusion. In doing so, he should confine himself strictly to the proposition made by the hon. and learned Gentleman (Mr. Horsman); and he was sure his hon. Friend (Mr. Newdegate) would excuse him if he forbore entering upon the wide field which his hon. Friend had taken, seeing that the topics he had discussed applied rather to general questions of finance, than to the particular subject now under discussion. The arguments of the hon. and learned Gentleman mainly referred to the inequality with which, he alleged, the income-tax bore upon different classes. He did not mean to deny that the tax pressed unequally upon different classes to which it applied. Its operation in this respect had been admitted at the time it was introduced, and again when it was renewed. Indeed, if an income or property-tax was to be effective as a measure of revenue, he feared it would be found unequal in whatever shape it might be imposed. It was not, however, a just objection to this or to any other tax, to say that its pressure was unequal; and it was taking an extremely narrow view to apply to one particular tax an objection that equally applied to all taxes. Human ingenuity had never yet devised a tax that could press with equal severity upon all classes; and the only rational mode of dealing with taxation was to view the whole system together, to correct the inequalities of one tax by the countervailing inequalities of another; so that the balance of the whole system of taxation should press equally and justly upon all classes. Take the land-tax. If that tax stood alone, and they were discussing its merits, he should think no person could fail to point out how it was oppressive upon one class, as contradistinguished from another. Take the assessed taxes. Did they not press unequally, even in the hon. and learned Gentleman's favourite case of the physician as compared with

193
the nobleman? each paid the same tax for carriages, horses and servants, though to one they were absolute necessaries for the discharge of professional duties, to the other a mere convenience or luxury. The same was the case with the house-tax and with the window-tax. In these cases it had been said, indeed, that a man might divest himself of their payment by getting rid of his house, or shutting up one or two windows. But this in most cases was known to be impossible. He repeated, therefore, that it was by no means a conclusive argument against a particular tax to show its unequal operation when they were discussing the general revenue of the country. But, unequal as he admitted the income-tax to be, he did not admit it to the extent to which it had been described by particular parties who had felt themselves aggrieved. The hon. and learned Gentleman said, that as we stood at present, those who were ranked in Schedules A and C, being owners of what he called realised property (that is, assumed to be landed property or funded property) were paying in a comparatively small proportion with those who were ranked under Schedule D, as having incomes either of limited duration or of an uncertain class. On the first blush of the question there was something plausible in this argument; but the hon. and learned Gentleman ought to have considered that there were countervailing circumstances which tended to make up the inequality arising from the two sources of income. The hon. Gentleman referred to the two cases of a landed proprietor with an estate of 5,000 l. a year, and a physician with a professional income also of 5,000 l. a year. It was true, the landed proprietor derived his income from a fixed source; but, on the other hand, he had to pay large amounts for repairs, rates, and taxes, which were not chargeable upon the 5,000 l. enjoyed by the physician. Here, again, there was a tendency to correct inequalities. Moreover, the landed proprietor was charged with the tax upon his income in the first instance; and whatever happened afterwards the same assessment was enforced and must be paid; but if the physician found that instead of 5,000 l. he had only earned 4,000 l. in the year, he had only to go before the Commissioners, and he might obtain from them repayment of the tax which he had paid in respect of the amount overcharged. But he was prepared to defend the tax as it stood, even if he had not heard the speech of the hon.
194
and learned Gentleman; but that speech strongly confirmed his determination. The hon. and learned Gentleman knew Treasury affairs well, for he had been a Lord of the Treasury, and had studied them accurately; and knowing his great ability he must give him credit for having propounded that plan which he after full consideration deemed the best calculated to render the operation of the property-tax equal; but be believed that if the hon. Gentleman's plan were adopted, it would involve injustice and inequalities far beyond those with which the present tax was charged. The hon. and learned Gentleman's proposition amounted to this—that Schedules A and C should be charged a duty of 8d. in the pound; and Schedule D be divided into two parts, one applicable to professions, on which he would charge 4d., and the other to trades, on which he would charge 6d. in the pound. His first objection to the plan of the hon. Gentleman was, that it not only involved a total deviation from the principles which had actuated those who had ever proposed a tax of this kind to Parliament, but was utterly inconsistent with the obligations of the national faith. The hon. Gentleman proposed to impose upon money invested in the funds a charge of 8d. in the pound; whilst the charge upon money invested on any other security except land should be only 6d. in the pound, imposing therefore directly a charge of one-third more upon funded property than upon property of other descriptions. He need not remind the House that that was a direct violation of the assurance which Parliament gave to those who had lent their money to the Government—that assurance being that they should only be subjected to equal taxation with other portions of the country. Clearly, therefore, they had no more right to charge upon funded property a higher annual rate than upon property invested in any other securities—than they had at once to say to the funded proprietor, "You shall give up a portion of your property for the benefit of the public." [Mr. HORSMAN: You exempt incomes under 150 l.] Yes. But that exemption applied to property of every description, whether funded, landed, or other. This was, in point of fact, the very subject of contest in 1803, between Mr. Addington and Mr. Pitt. Mr. Addington proposed to withdraw the exemption which funded property had previously enjoyed; but Mr. Pitt in a few minutes destroyed every one of his arguments,

195
and the exemption was extended to all. The hon. Gentleman complained of the hardship which was inflicted on annuitants, and persons whose incomes were of limited duration, compared with that which was inflicted on those whose incomes were more durable. But the hon. Gentleman proposed upon Schedule A (that was, upon all income derived from landed property), to impose a charge of eightpence in the pound. Surely the hon. Gentleman must have a very incorrect idea of the nature of incomes derivable from land. There was scarcely any gentleman's estate that was not saddled with a jointure to the widow, with payments to the children, or with payments of the money which had been lent upon the security of the estate. The poor widow, therefore, with her limited income, and the child deriving scarcely sufficient for his education, were both to pay the augmented charge of 8d. in the pound. But those were not the only cases of hardship. Let them take the clergy. All the clergy who derived their income from tithes, or from the commutation of tithes, were charged under Schedule A, and on them also, as well as the widow and the infant, the aggravated tax of 8d. was to be imposed, in order to exempt bankers, merchants and others. The hon. Gentleman appeared again to have made an oversight with regard to Irish property. The hon. Gentleman proposed, under Schedule D, that the Irish proprietor living in England should pay only 4d. in the pound on his Irish property; but would that be just whilst the English proprietor residing in Yorkshire, with no larger an estate, was to be taxed at the rate of 8d. in the pound? Was that the way in which the hon. Gntleman proposed to regulate the inequality which at present existed? Did he think that that would be palatable? Why, the only hold that we had at all upon persons living here who had property in Ireland was by charging under Schedule D the income derived from estates situated in that country. The hon. Gentleman being a member of one of the learned professions, had, naturally enough, a great tenderness for professional gentlemen, and he instanced the case of the eminent physician; but would the hon. Gentleman allow him to suggest whether the large payments which were made to the physician and the lawyer were not made in some degree with reference to the limited period during which those profits were to be enjoyed? Did the hon. Gentleman believe when an
196
eminent lawyer could make before Committees of that House from 20,000 l. to 30,000 l. in one year, that those payments had not some reference to the uncertainty of their continuance, and that the lawyer was remunerated not simply for his services rendered, but something beyond that, in order that provision might be made for the future? He believed that that was the case with the liberal professions. The hon. Gentleman's proposal, therefore, with respect to these professional men, amounted to this, that he said to the public, already paying those gentlemen sums calculated to remunerate them for the short duration of the profits which they enjoyed, "You are to pay a larger income-tax because those gentlemen are to be exempted, on account of the uncertainty of their income, against which, however, you have already provided." The hon. Gentleman in his scheme placed offices also in the reduced scale. He admitted that nothing could be more uncertain than the tenure of office and the emolument derivable from it; but what would the House and the country have thought of the Prime Minister if in imposing a general income-tax upon the income of all individuals, he had said, "We admit the tax ought to be equal; but in the case of us, the Ministers of the Crown, we think we should only be charged at one-half the rate of others, because we derive our income from offices which we hold only for a short period?" He doubted whether the justice of this reasoning would have been readily admitted either by the House or by the country. Seeing then that the hon. Gentleman inflicted greater inequalities than existed at present, and, seeing that his proposition would operate unfairly upon some of the most helpless classes of the community, and subject them to an aggravated rate of duty, he must say that the proposition of the hon. Gentleman had only made him more in love with the old plan. What the Government wanted was an acquisition of income. That, he believed, could only be obtained by a tax imposed without those various limitations which each class was anxious to bring forward for its own relief. At any rate, he was certain they could not so modify the tax as to remove all possible inequalities, any more than they could effect the same object with other taxes; and further, that the inequalities which were susceptible of remedy could only be remedied by an in-creased and odious inquisition more dis-

197
tasteful, because affecting every class of the community. In paying this income-tax of five millions and a half, they should remember, above all, that the payment was confined to those who were in the enjoyment of incomes over a certain amount, whilst it relieved from the burden the poorer classes, who were entitled to all their sympathies and support.
MR. HORSMANexplained that the case of the Irish proprietors had not escaped his attention. His only reason for not alluding to it in his speech was, that he thought the present was not the time for entering into minute details.
MR. HUMEwas very sorry the debate had taken the turn it had done. They were wandering from the subject. He would not enter upon the subject of free trade; but he could assure the hon. Member for Warwickshire (Mr. Newdegate) that he was altogether mistaken as to the effect of the reduction of taxes by the right hon. Gentleman the Member for Tamworth. For ten years previous to 1842, the average revenue of the country was 51,000,00 l. In 1842, when the right hon. Baronet put on the income-tax, the revenue was raised by 5,500,000 l.; it was clear that the experiment of a reduction of the taxes in other respects was successful, because, had the 5,500,000 l. been struck off, still the revenue would have amounted to 52,000,000 l. But they had now to consider the proposition of the Government. They proposed that a tax of 5 per cent should be imposed on income and property for two years, and a tax of 3 per cent for three years beyond. When the proposition was made, he, without knowing the opinion of any man out of the House, ventured to say, that such a scale of taxation at this time could not by possibility be borne by the people. Was he wrong? The moment the statement of the Government reached the country, the whole community, as if by one consent, arose and testified their disapprobation of it. He would not waste one moment in saying, that the tax was unequal, because he had never heard any man contend that it was equal. But he deprecated the question being brought forward at this time, as the point which the House really had to decide was, whether there should be any income-tax at all. The present Motion precluded the House from coming to an opinion upon that question. He would, therefore, entreat the hon. Member (Mr. Horsman) to withdraw his Motion. He (Mr. Hume) was altogether
198
against either an income or a property-tax, and he would prove, that instead of an additional taxation being required, all that was necessary was a reduction of useless public establishments. There was no reason why the establishments which existed during the ten years from 1831 to 1841 should not be adequate to the public requirements for the next ten years, from 1848 to 1858. The revenue, without an income-tax, was for the former period 51,000,000 l.; and he knew of no reason why the same amount might not be realised without an income-tax for the next ten years. And as 51,000,000 l. supported the public establishments from 1831 to 1841, so that sum would equally well support the necessary establishments of the country from 1848 to 1858. Therefore, to grant this tax, was only granting to the Administration the means of wasting the public money, and of injuring the credit of the country. He wished to put an end to the notion that the income-tax was an impost which did not affect the lower classes of the community. There was nothing like having the authority of a nobleman in that House. He would quote one which had been repeatedly given. On the 23rd of March, 1842, Lord John Russell thus expressed himself, and he entirely concurred in the opinion:—
"I think (said the noble Lord) that the working classes will find, that if you diminish the means of employment, the means by which they live and earn good wages, you do as greatly injure those classes as if you imposed a direct tax upon them."
No tax could be levied which did not fall, directly or indirectly, upon the shopkeeper, the artisan, and the labourer. It was the extravagance of Ministers which rendered this system of taxation necessary. It was contended, he knew, that large military establishments were required for the safety of the country; but, in his opinion, it was of much greater importance to the peace and security of the State to have a population whose affections should ally them to the Crown, and whose minds should be satisfied that justice was done to them by the Government. This would give greater security and stability to the Throne, and tranquillity to the country, than the existence of 100,000 fighting men. What was the extent of the Army and Navy of this country at the present moment? There was an Army of 138,000 men, and a Navy of 40,000 men. For what useful purpose could such a force be maintained? What

199
had military establishments done for France? Would it not have been better for Louis Philippe and his Ministers if, instead of attempting to govern that country by exacting millions of money from the people to maintain large military establishments and to construct formidable fortifications, they had given to them those liberties which had been promised them, and had thereby secured their love, affection, and regard? Had the late King of the French done that, he would not now have been left without a friend to help or a heart to sympathise with him. The genius of this country was essentially civil, but Ministers were making it a military country. He called upon the House to retrace their steps, and dispense with the large array of soldiers, which was so incompatible with the social character of the British nation. The whole people—Whig, Tory, and Radical—were combined in opposition to the present tax; but it was not so much against a property-tax as it was against increased taxation in general. It was upon that ground that he submitted to the House that the time was come when Parliament and Government must meet the wishes of the country. If they lost the present opportunity, they might regret it. It behoved them to address themselves to the demands of the crisis in which they were placed. The Government must not be suffered to fancy that they might run on in their present course without check or control to prevent the mischief into which their hasty career would lead them. This was not a time when either Government or Parliament ought to trifle with the feelings of the people of this country. If, then, it could be satisfactorily proved, and the returns which had recently been laid before the House established the fact, that 7,000,000 l. of taxes had been added to the revenue within the last ten years unnecessarily—why, he begged to ask, should not those 7,000,000 l. of taxes be remitted? The House was now called upon to determine, first, whether they would give the Government an income-tax or not; and, next, if they agreed to give that tax, for what time it should be continued. He contended that such a tax was not necessary. Let them but give the Government time to revise the system of taxation, to reduce their establishments, to examine carefully the whole system of finance, and to place the colonial expenditure upon a proper footing, and then there would be no necessity for an income-tax. Why, if the estimates for
200
the Army, Navy, and Ordnance were carefully revised, he had no doubt they would be able to save 300,000 l. or 400,000 l. a year. He was willing to consent to the continuance of the income-tax for one year, but he would not have it retained beyond that time. He had no confidence in the protestations of any Ministers; for such was the corrupt state of that House—he begged pardon—such was the pressure upon Ministers, whether they were Whigs or Tories, that, although they might be anxious to act justly, they were unable. He had no doubt the Radicals would be just as bad if they were in power; for he had had some experience of Radical vestries, and he did not find that they were a bit better than Whigs or Tories. The fact was that on every man, from a king to a porter, there must be a bridle and a check. He considered that the Government, seeing what was the feeling of the country and of that House, ought to come forward and declare their determination to economise the expenditure. If Her Majesty's Government would do that, and if they then had to come to the House and say, "We cannot do without the income-tax, but we will endeavour to render it as just as possible in its operation," he would be most happy to give them his assistance in carrying out their plans. The right hon. Gentleman opposite (Mr. Goulburn) had stated that the salaries of the Members of the Government ought not to be reduced; but, rather than lay an additional tax upon the people of this country, he would call upon all public functionaries whose salaries were above a certain amount to give up 25 or 30 per cent of their incomes. If such a measure were adopted, they would take very good care to reduce the expenditure.
MR. GOULBURNobserved, that the hon. Member who had just sat down, had said that he had stated that the salaries of the Ministers of the Crown ought not to be reduced. Now, what he had said was, that if the proposition of the hon. Member for Cockermouth were adopted, a Minister would come down to the House to propose a tax of 4d. in the pound on his own salary, while he would propose a tax of 8d. in the pound on the incomes of many classes of the community; and he certainly did not think that such a measure would be satisfactory to the country.
The MARQUESS of GRANBY: The hon. Member who had just sat down had represented the present question to be in what manner the deficiency of three millions

201
was to be made up. There were two means by which that deficiency might be made up—the one by reductions in the expenditure of the country, and the other by increased taxation. With respect to the first means, he thought that, after the statement which his right hon. Friend the Chancellor of the Exchequer had made, there was no immediate chance of any such reduction being carried out in the present year—for the right hon. Gentleman had stated, that whatever reduction he might think fit to recommend, it was impossible that they could tell upon the revenue of the forthcoming year. From this it was to be concluded that there was not any hope of immediate reduction in the national expenditure. But not only was there a deficiency of 3,000,000 l. in the revenue, but great offence had been given by the proposition of Her Majesty's Government, that there should be an actual increase in the expenditure of the country on account of the Army, Navy, and Ordnance Estimates. Great had been the eloquence expended in the denunciation of that increase. They had been told that the country, in the third year of free trade (notwithstanding the prediction of the hon. Gentleman, the Member for Glasgow, who prophesied, before the Import Duties Committee, that 100,000,000 l. per annum would be added to its resources by the introduction of that principle) was unable to bear any increase over the estimates of former years. They had been told—those who were opposed to increased expenditure—that foreign nations would take alarm, and that grounds for jealousy would be afforded them if the estimates were increased. Now, what was the excess proposed? Something under 500,000 l. If this excess were to alarm foreign nations—if it were to be an incubus in this country, which enjoyed the benefits of free trade, there must be some great delusion somewhere; and he, for one, could not conceive how, in so short a time after the influence of free trade, the country could be so impoverished as not to be able to support an increase in the estimates of 500,000 l. He must say that he thought the Government of the country should not have proposed that increase under the present circumstances of trade, unless they had felt that the security and safety of the country depended on the increase. And when he was asked whether he would take the opinion of Her Majesty's Government, or the opinion of the hon. Gentleman the
202
Member for the West Riding of Yorkshire, he must say that he was inclined to give credit to Her Majesty's Government rather than to the hon. Gentleman. The hon. Member for the West Riding had argued that foreign nations would maintain their armies if we increased our military expenditure; but that, on the other hand, there was no danger of foreign war if the principles of free trade were accepted, and free imports were the practice. Mr. Burke, in one of his letters, said, that a flatterer of Louis the Fourteenth told him that the marriage between a French prince and a daughter of Spain, was a stroke of policy that would secure peace—that the Pyrenees would no longer exist. It seemed, however, that the policy of this country was now to monopolise the trade of the whole world—that this country was to be the great emporium of nations—that a similar miraculous effect was to be produced—that, to use the same language of metaphor, the seas, which till now had separated nations, were no longer to flow; and that a marriage was to be established between us and other nations. He hoped that the peace which we had now enjoyed for more than thirty years might continue; and the declaration made the other night by the noble Lord at the head of the Government, that this country would not interfere with any government which a neighbouring nation might think proper to form, would, no doubt, go far to ensure that result. The way in which that announcement was received by the House, and the reflection which he was confident it would receive out of doors, left little doubt on his mind that there was no danger of that peace being disturbed. At the same time, he confessed he could not see that there was any reason to suppose that the very moderate, necessary, and just additions which the Government proposed to make to our expenditure, could excite the jealousy or alarm the fears of other nations. He thought that the moderation and justice of those nations would point out to them that a proper care of our own independence was no bad guarantee of our wish to preserve the independence of others. It seemed, however, that there was no mode of making the income and expenditure of the country equal but by imposing additional taxation; and then the question arose what would be the best mode of taxation we could have? He confessed that he did not feel himself much assisted in the consideration of this question by the variety

203
of proposals—of budgets, in fact, which had been brought under their consideration. The noble Lord at the head of the Government had observed that the vicissitudes of commerce had been great; he (the Marquess of Granby) must say that the financial proposal of the Government seemed to have been characterised by vicissitudes quite as great. The present proposition of the Government, however—their latest—was to renew the income-tax for three years. The first difficulty was to find what was the income you were to tax, and then there was the greater difficulty as to the principle on which you were to tax income derived from such various sources. The hon. Member for Cocker-mouth argued that by not imposing the same rate of tax on incomes derived from professions that you imposed upon pro-party, you would get rid of the unjust and partial character of the impost. He (the Marquess of Granby) thought, however, that by adopting this proposition the partiality of the case would be aggravated, and its injustice increased. It had been argued in favour of the tax, that it was to take the place of the assessed taxes, which were at present paid by those who were engaged in professions. If that were so, why should they be exempted from that general duty of the citizen which consisted in paying the State for the protection it afforded? The proposition ought to be fully carried out, and in that case these classes should not be taxed at all. But he wished to put the question in another light. Take the case of two professional men, each earning 1,000 l. a year. One of them was provident, and realised, in land or in the funds, 500 l. a year. The other spent his whole income. But you would make the former pay on his gross income, and again on the money he realised. Take, again, the case of property entailed on the male heir. Suppose a man to have five daughters, the property going, perhaps, to some distant relative whom he had never seen in his life. He wishes to settle an annuity on each daughter. Was it just to tax a man so situated to the full amount of the tax on his property, in which he had, in fact, only a life interest? Again, take two estates of 500 l a year each; in one, the rental arose from the natural fertility of the soil; in the other, it was only produced after the expenditure of great science, labour, and capital. Would it be just to tax both in the same proportion? If the principle of fairness and equality
204
were justly and strictly applied, he ventured to say that the income-tax would not produce enough to pay the expenses of the State. There was a passage written by Mr. M'Culloch on the income-tax, which he could not help thinking was peculiarly applicable to the operation of the tax as regarded both property and income. That gentleman said, that to levy a tax on all income, without regard to its origin, was subversive of all sound principle in taxation. Such a tax must either be rejected altogether, or only made use of when it was absolutely necessary that money should be had. He (the Marquess of Granby) repeated, that this tax was most odious and vicious in principle; it was a tax upon honesty, and a premium on fraud; it was one which would, on that account, be fatal to England, and one which, except as an expedient, could never be allowed in this country. It was with these views alone that he could bring himself to support the views of Her Majesty's Government. He was prepared to support it solely on account of the circumstances of the country, internal and external. He did so with the greatest reluctance; but at the same time he must be allowed to add, that it was not by the party with whom he had the honour to act that those follies and extravagances had been committed which had necessitated this tax. They had predicted at the time what would be the consequence of repealing 7,000,000 l. or 8,000,000 l. of taxation, and they had told the country that they would never get rid of the income-tax if ever it were put on. [The CHANCELLOR of the EXCHEQUER: The tax was first imposed by the Conservative party.] At all events, when the duties were taken off corn and timber, both Lord Stanley and Lord George Bentinck had said that the consequence would be, that direct taxation must be resorted to. When this tax was first imposed, the country was told, so great would be the saving from reduction of duties, that the tax would be made up in the low prices of articles of consumption. What had been the result of all these promises? Why, that there was a deficiency of 3,000,000 l. of revenue, and a proposal by the Government to extend this "temporary expedient" for five years, and to increase the amount for two years to 5 per cent. It was not until a letter appeared, which was addressed to an obscure German town, that it was made known that the original proposers of the tax intended to prolong it, and that the Legislature had been

205
induced to pass it as an experiment between direct and indirect taxation. The experiment had been a complete failure, and the reason was, that it was based on a wrong principle. The evils of the tax to the country had been real, while the benefits anticipated from it were unreal; for the effect of the free-trade measures, which were made the excuse for the tax, had been to bring the labour of foreigners to compete with that of our own overtaxed people—that was the real evil we had suffered. And the system had been unreal in its proposed benefits, because the reduction of prices had not penetrated to the lower depths of society, or extended to the mass of the labouring classes. He had already shown on a former occasion, by the contracts of the boards of guardians, that they paid the same price for sugar, and other articles, as before the reductions of duty. Take, too, the case of the hatter. ["Divide!"] What! was the argument to be all on one side? Would not hon. Gentlemen opposite hear what was to be advanced in reply to their theories? He could tell them that Protection was not dead—it was a living principle; and perhaps the very reason why hon. Gentlemen opposite were impatient was, that they felt how strong was the reaction against their legislation. He was referring to the case of the hatter, who was told that he could now get all the materials for his manufacture so much cheaper than before. But of what use was all this cheapness, if he was unable to offer anything in exchange? What had been the effect of the repeal of the corn law on prices? Why, in May, 1847, the price of wheat was 102 s. 6d. Under the last corn law the effect was very different. He would quote on this head the words of Lord Stanley, in May, 1846:—
"You aim, then, by a corn law at independence of foreign supply, accompanied and produced by such an encouragement to your home grower as shall guarantee him up to a certain point against foreign competition, and shall beyond that point protect the consumer against exorbitant and extravagantly high prices—protecting all parties against that which is most injurious to all, rapid and sudden fluctuations. Now, I say, that, beyond any law which has ever been in force in this or any other country, this law of 1842 has accomplished these its great and main objects. Since this passed, the fluctuation of price, which has taken place between 1844 and 1846, is only from 58 s. 4d. to 45 s. 2d.; the whole difference between the highest week and the lowest week in these two years was not a difference of 30 per cent."
The hon. Member for Nottingham (Mr. F.
206
O'Connor) had told them that the aristocracy and the agriculturists of this country were indebted deeply to the right hon. Baronet the Member for Tamworth for having repealed the corn laws. He could only say, that if they had been so indebted to the right hon. Baronet, it was at the expense of the country. ["Divide!"] Perhaps hon. Gentlemen opposite—some of them, at least—would be more disposed to listen when he said that he was about to allude to the subject of cotton. No doubt the distress the cotton-spinners had suffered lately was great, but it had arisen mainly from their own fault. What said the editor of that ably-conducted paper, the Economist?—
"When there is a scarcity of any commodity, the greatest misfortune which can happen to those interested in its abundance is, that, from any accidental or artificial cause, the price should be kept low. By such means scarcity can only he aggravated; while by a rise of price alone can it be eventually and more rapidly cured. During the autumn of last year the stock of cotton was extremely small, and the interests of those concerned pointed to the necessity of larger importations. The extreme pressure of that period, however, caused a further reduction of price, when the relative state of the supply and demand would otherwise have led to a considerable rise. The manufacturers in Lancashire, at the time, seemed to imagine that they had an interest in nothing being done to alleviate the pressure, because the first effect would have been to raise the price of cotton. But a rise of price in Liverpool was the first and only condition on which such an increased supply could be obtained as would secure a continuance of a moderate price in future. As it was, the price of cotton in Liverpool was forced lower for a time than in any other European market. The first effect was a considerable export to the Continent, so as further to reduce our stocks; the next effect has been a decreased import from America, which has aggravated and perpetuated the scarcity. This has acted in two ways. First, there is reason to believe that the low prices have induced the growers of cotton, in some of the States at least, to hold back a portion of the crop, so that the entire shipments are nearly 100,000 bales less than last year, while the crop is admitted to be larger; and next, it has led to a smaller portion of those shipments being sent to this market, and a larger portion direct to the Continent. By these two causes, not only now are the cotton dealers and brokers of Liverpool deprived of the intermediate trade of supplying the Continent to the same extent as last year, but the Lancashire spinners have a smaller stock from which to supply their wants; and Liverpool, which was the cheapest market three months ago, is becoming the dearest in Europe."
This was the legitimate consequence of pushing to extremes the doctrine of buying in the cheapest and selling in the dearest market. They were now suffering from a want of the raw material. It was said, however, that free trade had not a fair

207
trial. Thus it ever was with experimentalists. They now pointed to "to-morrow" for the realisation of their hopes. When, then, would it he admitted that these principles had been fairly tested? He knew that the hon. Member for the West Riding of Yorkshire had said that—be the circumstances of the country what they might—let whatever ruin follow from the free trade measures—he was determined that; no alteration should take place in the system. But he begged leave to tell that hon. Member, whom he regretted not now to see in his place, that when the time came—and he hoped, for the sake of the country, it would not be far distant—for the people of this country to consider the effects of free trade, they would apply their free and independent consideration to the question whether this legislation had been for the benefit of the country, and he (the Marquess of Granby) had no doubt whatever what would be their verdict.
The CHANCELLOR OF THE EXCHEQUER: I think, Sir, I shall best consult the wishes of the House by not attempting to follow some of those Gentlemen who have preceded me, into the various topics they have introduced into this debate, which not only have had no connexion with the resolutions which I shall have to submit to the Committee, but not even with the Motion of the hon. Member for Cockermouth. I shall decline too, and I hope the noble Lord will not accuse me of discourtesy to him—I shall decline following the noble Lord in a discussion upon cotton; and I shall not enter with the hon. Member for Montrose into the question of our establishments, which have existed for the last ten or fifteen years, or on the reductions which were effected after 1830. I must, however, before I approach the immediate subject of debate, express some little astonishment at the objections which my hon. Friend the Member for Cocker-mouth and the noble Lord have raised with respect to the manner of levying the income-tax. My hon. Friend seemed to impute to me that I had always advocated a change in the mode of imposing the income-tax. Sir, I never did anything of the kind. I opposed the income-tax on its first introduction, because I thought it unjust and inquisitorial; but I said, as distinctly as possible, and that ground I have ever held, that the tax, if we were to submit to it, must be imposed in the shape in which it now stands. I have always contended that if the tax was
208
to be maintained, it must be continued in its present shape. The noble Lord tells us that he and the party with whom he is connected, and especially Lord Stanley, warned us of the consequences of voting for the income-tax. Why, Sir, I voted against the income-tax, and the noble Lord voted for it, and Lord Stanley was a Minister in 1842 and 1845, the year the income-tax was proposed, and the year it was renewed; and on both those occasions that noble Lord was one of those responsible Ministers who at one time imposed and at the other renewed the income-tax. How then could Lord Stanley or the noble Lord warn us of the consequences of voting for the income-tax? I will not trouble the House by quoting at any length the words I used in 1845; but I warned the House of what the consequences would be of the policy then pursued. I then said—
"If the House were prepared to authorise the policy then recommended to them by the right hon. Gentleman the Member for Tamworth, they would find it impossible at the expiration of the three years to take off the income-tax."
I said so most distinctly. The noble Lord and hon. Gentlemen opposite, then supporters of the right hon. Gentleman, voted for the reimposition of the income-tax against the warning which we gave them; and it is rather hard for the noble Lord to turn round and tell us that he warned us against the imposition of the tax, and to reproach my noble Friend for now taking a step to which he was driven, not in consequence of any act of his own, but by the result of former financial measures—it is rather hard, I say, on the present Government, that when they have been compelled by actual necessity to propose a renewal of the income-tax, they should be reproached as being the authors of a tax against the imposition of which we voted in 1842, and against the possibility of taking which off I warned the House three years ago. Sir, I will not pursue this topic any farther. I think that the circumstances of the country are such as to justify us in proposing a renewal of the income-tax for a period of three years. I do not think it possible for us to propose it for a shorter time. We thought it necessary to make a proposal which would render the income equal to the expenditure; but the general expression of opinion in the House of Commons, backed by the country, decided that the additional taxation should not be imposed, which was necessary to place the expenditure on an equality

209
with the income in the year. We think that, in all probability, on an average of three years, the expenditure and income may be equalised; and we think, looking at the difficulties under which the country has had to labour during the last year, that it may be better, in present circumstances, not to press for additional taxation in this year, if we see a reasonable prospect of this result being attained by maintaining the present amount of taxation for a period of three years. I now turn to the reason of the hon. Gentleman for making his proposal to-night. I think the result of the discussion on the proposition of the hon. Gentleman must have convinced him that it is far better to take the tax in its present shape than to attempt—what I am sure would be an unavailing attempt—to make it more just and equitable. It is not a little remarkable, in the first place, that with the exception of the right bon. Gentleman opposite (Mr. Goulburn) who has, I think, completely demolished the plan of my hon. Friend (Mr. Horsman), no other individual has even referred to it in debate. As my hon. Friend the Member for Montrose has said, this Motion involves a most important question; but the question we have in the first place to decide is, whether an income-tax shall be adopted or not. It was very wisely and properly suggested by my hon. Friend—advice which, if the hon. Gentleman is disposed to listen to I should be inclined to press upon him—that he should withdraw his Motion, and let us come to some practical vote on the income-tax. That is the business-like way of going to work. We are now wasting time, and my hon. Friend the Member for Montrose has suggested that really the most practical course for us to take is that which I have indicated; and I think my hon. Friend the Member for Cockermouth must see that the sense of the House is in favour of that proposal. Sir, I am unwilling to follow my hon. Friend in his proposition. Indeed, I think the right hon. Gentleman has so completely disposed of it in detail that he has hardly left me a syllable to say on the subject. Into the topics which he has alluded to, I will not therefore enter. I will only say that I do believe with him that any attempt to make any one tax perfectly equal and perfectly just, would be an unavailing and a useless attempt. Taxes press unequally, after all, according to the circumstances of the persons who have to
210
pay them. Take any tax, and you will find it so. It will press unequally upon those who have families and those who have none. At the time the income-tax was first imposed, a provision was introduced to give some exemptions to persons who had large families; but the exemption was afterwards taken away, as it was found that it led to great fraud, and that it gave rise to similar claims for exemption, which ought in fairness to have been acceded to, but which could not be granted without rendering the Bill too complicated and unproductive. Mr. Pitt, and the right hon. Gentleman the Member for Tam-worth, when he renewed the income-tax, adopted what they believed to be upon the whole the most equitable plan. I do not think that either this or any other tax can be perfectly equitable; but the most equitable shape in which an income-tax can be levied, is a tax bearing on the income of every person, regardless of the sources from which that income is derived—regardless of the time during which it is to be enjoyed—and not considering property as distinguished from income. Mr. Pitt and the right hon. Gentleman maintained the principle—I believe a sound principle—that a tax imposed on or exacted from the income of a year, should be paid in that year for the protection which had been afforded to the person paying it. Now, I believe that any attempt to deviate from that rule will only lead to inextricable confusion; and even if we adopted the complicated plan of my hon. Friend, we should find it unjust after all, and without making the tax more just, we should add infinite vexation in the mode of levying it. The inequality and the inquisitorial nature of the tax is, no doubt, one great objection to it. By attempting to make the tax more equal and more suitable to the existing circumstances of the party taxed, you render it necessary to make a more rigid inquisition into their circumstances, and, therefore, the more burdensome and odious the tax will be. I find on referring to the debates which took place at the time Mr. Pitt imposed the tax, that almost all these questions were raised, and at that time disposed of. Mr. Pitt stated that there were differences arising out of the inherent nature of things. You could not place income derived from land in the same situation as income derived from trade or profession. No man complained of the inequality which existed between the man who derived an income of 500 l. a year from a landed

211
estate or the funds, and the man with an income of 500 l. a year from his professional exertions or trade. If you take 15 l. a year from each by taxation, they are still left in precisely the same relative position. There is a dissimilarity in the nature of their circumstances, and you cannot remedy it by a different mode of imposing taxation. The right hon. Gentleman who spoke before me has referred to the argument respecting the fundholder. Mr. Pitt said it would be unjust to impose a different rate on income from the funds from that imposed upon income from other sources. He said it would be a breach of faith to the public creditor; and as the right hon. Gentleman (Mr. Goulburn) has stated, when Mr. Addington proposed to do so, Mr. Pitt came down to the House and entirely overturned Mr. Addington's proposition, on the ground of public faith. Well then, if that be so, there remains Schedule A only that you can touch. I should like to know if we can adopt the principle of imposing a higher rate of tax on Schedule A alone? It is not just, for Schedule A, in point of fact, always pays a higher rate than any other schedule, because the landowner is allowed no deductions whatever for repairs; and even if his land should be unoccupied, and he receives no rent at all, he has to pay just the same amount of tax. There is no deduction for the tenant being unable to pay his rent. The full amount of rent is charged to the tax whether the tenant pays that rent or not. Already, landed property does pay a higher rate than any other schedule; and it would be unjust to impose on Schedule A a still higher rate of taxation than on the others. The hon. Member for Montrose ridicules the notion that it is possible by different taxes to equalise the burdens of the country. I agree, however, with the right hon. Gentleman, that the way to equalise the burdens on different descriptions of property, is to impose a variety of taxes, and that we should only fail by attempting to equalise one single tax. It is absurd to confine our views to any single impost. Only look at the different way in which property is taxed. Landed property is rated to all the local taxation of the country, which is very heavy. Personal property escapes rating, but pays a duty on succession. Some descriptions of property pay in both ways. I do not say, therefore, that the pressure is equal, but I will say, that upon looking into the subject it will be found to
212
be a great deal more equal than some hon. Gentlemen are disposed to think. I am not at all prepared to maintain that there is no inequality whatsoever, nor do I wish to deny that such inequality ought to he corrected. I have frequently declared that no interest should have protection in order to give by law an enhanced value to its produce; and I am equally of opinion that no property ought to be privileged in point of taxation. All ought to bear an equal and fair share of contributions towards the expenses of the State; and I say that in order to attain that object you must not look to any one tax alone. I do not believe that there has ever been any single tax devised that bears equally on all; and to attempt to do that would be a vain and useless attempt. I do say, taking all the taxation, local and general, into consideration, that I believe that so far from there being a very unequal pressure of taxation, it bears much more equally and justly upon all descriptions of property, without any exception or privilege being conceded to any one, than many Gentlemen are apt to believe. I will not go further into this question; and I do hope and trust that the hon. Gentleman the Member for Cockermouth will see that the general wish of the House is that we should proceed to some definite vote, and that we should consider the main question whether we are or are not to have the income-tax continued. We propose, in our resolution, to continue it for a limited period; and at a subsequent period the question will arise, how long that limited time shall be. That will not arise in the resolution which we propose to submit in the Committee, at present. All we propose to submit to the Committee is a general resolution that the income-tax shall be continued for a limited period. I hope after the general disposition that the House has shown to take some step in the matter, the hon. Gentleman will withdraw his Motion, and let us make some progress towards doing that which ought to be brought to a conclusion at as early a period as possible.
MR. F. T. BARINGdid not agree with the hon. Member for Montrose, in considering the proposal of the hon. Member for Cockermouth a waste of time. He considered that it was necessary that, in some shape or other, they must have a vote for the five millions and a half; and he did not believe that they could under present circumstances, provide for it without an in-

213
come-tax of the nature proposed. As he understood the hon. Member for Cocker-mouth (Mr. Horsman), his object was, before the House went into Committee, to take the sense of the House as to whether they were prepared to levy the income-tax on a more just principle than they had hitherto done. In his proposal he (Mr. Baring) could fairly concur. The hon. Gentleman did not want to cut down the taxes if those taxes were necessary, but to give the same amount in a fairer manner. He would not be a party to get rid of the five millions; and if his hon. Friend's proposition should be rejected by the House, and no other means of adjusting the income-tax could be adopted, he then, consistently with everything he had already said, would be prepared to support the public credit by voting for an income-tax, bad as it might be, in its old shape. There was one thing worse than the worst taxation, and that was a large permanent deficiency in the public re venue. Under the circumstances, he thought that the hon. Gentleman had adopted the most practical mode of getting at the real opinions of the House. He had thought that the hon. Member for Montrose was too old a soldier not to know that when the Government got into Committee they would have every advantage. The first proposition would be Schedule A, to be fixed at 7d. in the pound. Would anybody propose to increase that amount without an assurance that an arrangement would be made reducing the taxation in the other schedules? Of course Schedule A would pass, and when that was done the Government would tell them, that having passed Schedule A at 7d., they could not reduce any other schedule without rendering the tax less efficient and less productive. The hon. Member for Montrose was ready to go into Committee, because he said he had a plan to reduce the expenditure by seven millions. Now the hon. Gentleman had made a declaration which he adopted. The hon. Gentleman had said, that he did not believe in the promises of public men; and he must say, that he did not place much reliance upon the hon. Gentleman's promise of reducing the expenditure. If the deficiency which existed could only be got rid of by a reduction of seven millions of expenditure, he was fearful that the deficiency must continue. It was not necessary for him to go into the inequality of the income-tax, even by those who proposed it. That was admitted by all. He was not anxious to raise anything like a
214
cry against the necessary taxation of the country. But he could not help repeating to the House that he looked with very great alarm at their placing so large an amount of the revenue of the country upon so unsure a foundation as the income-tax. That was one great ground why he opposed the tax when it was first brought forward, and he had never changed his opinion in that respect. He knew perfectly well that the tax which people had not got, always appeared the most agreeable; but practice showed that when they put the burden on their shoulders, it was found to have its inconveniences, its inequalities, and its imperfections. He had always said that the time would come when this income-tax would become so unpopular as to endanger the finances of the country. His right hon. Friend the Member for Coventry had expressed his desire to place the finances of the country upon a stable foundation. In that wish he concurred, and it was on that ground mainly that he should vote for the proposal of the hon. Member for Cocker-mouth. He believed that if they intended to continue this tax, it must be made more equal. He owned he looked with some discomfort at what had passed in that House that night, for he found that the leading men of the three different divisions of that House had all declared their opinions that if this tax was to be continued, it must be continued in its present form—that no amendment could be made in the tax. If that were so, then he warned his right hon. Friends that they were only postponing the difficulty, and that if they got the tax for three years in its present shape, the time would come when they would be obliged to make some change, and abandon the whole of the tax. If the House wished to continue the income-tax, they must endeavour, if not to make it perfect, at least to make it fairer in its operation. The right hon. Gentleman opposite had remarked, that in the plan proposed by his hon. Friend there were great anomalies. He had always doubted, and expressed his doubts, whether it was possible to make an income-tax fair—it was one of the great objections to the tax. But still, if continued, this difficulty must in some way be met. He admitted that the scheme was not perfect; but though it might appear very satisfactory for the moment to elicit a cheer by saying, "This is the very best plan that can be proposed by you, and yet mark what difficulties there are in it," yet he believed that straight-

215
forward common sense would not be satisfied with such a course. The common sense of the country would break through all small network. If the House intended to preserve the income-tax, though they could not make it perfect, they must endeavour to make it more fair; and his hon. Friend's proposal appeared to him to present the only principle on which they could attempt to do so. There must be a more perfect classification of the different kinds of income. They would always have anomalies and difficulties; but if they tried to make the tax equal, he believed they would be met by the country in the spirit in which they made the endeavour, and the tax would then create much less dissatisfaction than it did at present. There was but one argument used by the right hon. Gentleman the Member for the University of Cambridge (Mr. Goulburn) to which he attached any weight, though the views which that right hon. Gentleman expressed were always received by himself with the greatest respect. The right hon. Gentleman had said, that if they imposed upon incomes derived from professions a different charge from that they imposed upon incomes derived from the funds, they would break faith with the public creditor. Now, he had given to that subject the best attention that he could command; and if he had the slightest idea that the public creditor would be unfairly treated by such a proceeding, he would be the last man to support it; for the public faith was, after all, of more value than any detail in taxation. But he could not come to the same conclusion as the right hon. Gentleman. The question raised by Mr. Pitt was not of the same nature as this. It was the entire exemption of a certain class of incomes from certain taxation. That was not the question raised at present. It was not proposed to give particular incomes unfair exemptions, but to tax the incomes fairly, according to their value. He quite admitted that it would be perfectly unfair to tax the funds, and not tax other property as well. But he thought it was no breach of faith with the public creditor to look at the nature of incomes. Take, for example, the case of an annuity. He did not think it would be by any means a breach of public faith to deal with such an income in a manner different from that in which they dealt with permanent income derived from the funds. This injustice existed in the case of the fundholder as in other in-
216
comes. He considered it an injustice that in taxing the funds they took from those who held an annuity the same amount as from those who had permanent incomes. He did not say that this was a breach of faith, but he must say that it was a great injustice; and if any alteration in the other schedules did render it necessary to be more just with regard to the public fund-holder, he, for one, should look upon that rather as an advantage than as a disadvantage. He had promised the House that he would detain them but a very short time in stating the grounds on which he should proceed. He said again, that if the House decided that no Amendment should be adopted in the mode of adjusting the income-tax, he could not follow his hon. Friend the Member for Montrose in rejecting the tax itself. He believed it to be necessary to have that amount of money. He might deeply regret the decision of the House; but when it came to the question whether they should have the tax in its old shape or no tax at all, his choice was made. In that case he would be compelled by the most imperious sense of duty to support the tax, even with all its deformities.
MR. MUNTZwas exceedingly delighted at hearing the speech of the right hon. Gentleman who had just sat down. He had done great kindness to the House and the country. On the last occasion on which he had addressed the House on this subject, he had recommended the Government to consider whether they could not make the tax more palatable to the country. He was now satisfied that the argument of the right hon. Gentleman was founded in truth, and that even if Her Majesty's Government carried the measure, it would not be well received by the country. The Government might be able to bear up for a time against the unpopularity which would arise from this tax; but they would eventually experience all the discredit which they deserved for having proposed it in its present shape. It was imposssible that the Government could be aware of the extent to which the tax forced many persons to injure themselves. There were thousands in this country who were led to make returns beyond their incomes, on account of appearances; and he knew instances in which parties, after making such returns, had been surchanged, and had submitted in order to avoid an examination into the state of their affairs. They need not go into the country to find

217
how injuriously the system operated. It had been discovered that a property-tax commissioner in the city of London—he believed that he was one still—had been in a state of insolvency for some years, during the whole of which time the affairs of tradesmen in the city were submitted to his inspection. He had always been in favour of a tax upon property; and, if necessary, he would not object to pay four times the present amount. But he did not understand the distinction between paying upon capital and upon the interest of capital—the proportion was the same. To a great extent he concurred in the proposal of the hon. Gentleman (Mr. Horsman). He might differ from him as to the relative value of incomes derived from trades and from professions; but a distinction ought certainly to be made between real property and uncertain sources of income. The value of property employed in trade, or personalty, might be ascertained by means of an oath. He believed that Englishmen generally had too much regard for the sanctity of an oath to break it for a few pounds; and were the tax levied on equitable principles, he felt convinced that a larger amount would be obtained. So long, however, as the Government continued to make money dearer, there must be a reduction in the revenue. Though he agreed in the principle of the hon. Gentleman's Motion, he objected to it on the ground that it did not get rid of the unjust inquisition made into every man's affairs—an inquisition which ought indeed never to have been allowed in a country which enjoyed a free constitution. It was a question of expediency whether the House and the Government would not see how far they could beneficially alter the present system.
MR. WALTERrose at great disadvantage after three right hon. Gentlemen who had been Chancellors of the Exchequer. The right hon. Gentleman the Member for Portsmouth (Mr. P. Baring) who had taken a common-sense view of the question, which, after all, was the true one, had asserted a principle to which he gave his cordial assent. In the few observations he was about to address to the House, he should not enter on that wide field of discussion on which other hon. Gentlemen had expatiated on a former occasion, as well as on that evening. The question before the House was certainly not whether the repeal of the corn laws was the cause of the famine in the country, and of the
218
present embarrassment; or whether a paper currency was the great panacea for the evils of that nature; or whether the startling events in a neighbouring country, with which all Europe was ringing, were owing to social or to political causes; or whether in consequence of these events, this country was called upon to augment or to reduce its military establishments. This much, however, he was prepared to grant—that there was a deficiency to make up, by whatever means; and, with respect to the military and naval establishments of the country, whatever waste and extravagance there might have been in those departments, of which the House would soon have some further knowledge there could be no question that this was not exactly the time to move for a reduction of that expenditure. Having premised thus much, he thought he was entitled to the credit which he claimed for himself, of not being actuated by any motives of faction or obstructiveness, in giving his firm opposition on this occasion to a measure which he conceived to be at once unnecessary, impolitic, and unjust. He could assure the right hon. Gentleman the Chancellor of the Exchequer and his Colleagues, that it would have been far more agreeable to his feelings to have voted with them than against them. It was because he considered that the right hon. Gentleman had not only failed to make out a sufficient case for the continuance of this tax, but had in the course of his speech given many good reasons why it should not be continued, that he felt it his duty to be more consistent in his opposition to that tax than the right hon. Gentleman had been in his support of it. He certainly had hoped that the right hon. Gentleman would have availed himself of that respite which was mercifully granted the other evening, and which might well have been extended over a much longer period, to devise a more equitable method of assessing the present tax. If it were impossible, from want of time, to frame such measures, still the House was entitled to expect that he would have been prepared to propose that the tax should be continued for such a period only as would be sufficient to enable him to bring forward a measure for its more equitable assessment. The right hon. Gentleman had not done so; and much as he would have wished to have seen the right hon. Gentleman's parturient budget produce something like a paragon of finance, he confessed that he felt no

219
pleasure in seeing that so miserable an abortion should have appeared as the fruits of such tedious labour. In endeavouring to cajole the public into the belief that the tax was to be continued only for three years hon. Gentleman had fallen into the common mistake of measuring the evil of a given plan, not by its intrinsic injustice, but by its magnitude. It was a common excuse with Members of the frailer sex when they got into a scrape to meet the exposure by saying, "It is only a little one." The light hon. Gentleman seemed to have adopted a somewhat similar plea by way of, excusing his great financial faux pas. But the right hon. Gentleman had also fallen into an error, founded certainly on a knowledge of human nature, that an evil, however intolerable at first, might by dint of long usage become endurable. He appeared to have bethought himself of the words of the poet, who said—
"Vice is a monster of so hideous mien
As to be hated needs but to be seen;
But seen too oft, familiar with its face,
We first endure, then pity, then embrace;"—
and then to have taken it for granted, that, however odious and offensive the present tax might be, yet, like the vice of which the poet spoke, it would, by dint of long usage; and habit, become fascinating and agreeable. Why in time of peace have a war tax at all? When he came down to the House the other evening, he did think it just possible that the noble Lord at the head of the Government would have referred to events across the Channel, by way of assigning a reason for continuing the tax. He was rejoiced to see that the noble Lord not only thought it unnecessary to make any appeal to the House on this score, but that he very wisely abstained from any allusion to those events that could possibly be misconstrued into a wish to found his proposition on any secret misgivings, on the part of himself or his Colleagues, in regard to the designs of the dominant in France. He was not prepared to say that he thought an income-tax, levied as it was at present, was justifiable even as a war tax. He saw no reason why, in the event of an emergency, the tax which might be thought necessary to meet that emergency should not be imposed equally on all classes of the community. But it was monstrous that a tax, which, when first proposed only as a temporary expedient, was considered so harsh and unfair in its operation as to require
220
the excuse of being a war tax to justify it, should, now that it was decreed to be perpetual—for such was the intimation they had received—be thought to require no apology at all. Before proceeding further, he wished to guard himself against the supposition of being unfriendly to a system of direct taxation. He would have infinitely preferred—and he believed hon. Members would generally have preferred—having a system of direct taxation established in lieu of many of the indirect taxes to which the country was subject—such, for instance, as the window-tax and the assessed taxes. Many would gladly pay an additional sum in the shape of direct taxation, to get rid of the annoyance of being continually pestered by tax-gatherers who were eternally counting their windows, taking the dimensions of their carriage-wheels, measuring the height of horses, and performing those other disagreeable functions which were incident to that system of taxation. But, if they were to have a system of direct taxation recognised as part of the constitution of the country, they surely had a right to demand that it should be levied on fair principles. What were the principles laid down by Adam Smith with resspect to taxation generally? His first principle was, that taxation should be imposed in proportion to the ability of persons to bear it; but how, he would ask, was that ability to be measured, but by reference to the nature of the property which each person possessed? There had been a great confusion in the course of the present debate in consequence of hon. Members not drawing a distinction between the inequality of persons' private circumstances and the inequality of their property. It was utterly impossible for the Legislature to take cognizance of the inequality of the private circumstances of individuals; but it was not impossible for the Legislature to take cognizance of the inequality of the different natures of the property on which taxation was to be imposed. However hon. Members might differ with respect to the necessity of the income-tax, no one, when they came to analyse the question, ventured to assert that its operation was not unequal. No one could maintain so absurd a proposition as that an income which was worth only two years' purchase, was equal in value to an income that was worth thirty years' purchase. It had been said by the Chancellor of the Exchequer that any attempt to remove the inequality of the income-tax

221
would be impracticable; but when the right hon. Gentleman used the word "impracticable," he was much mistaken if the people of this country would not apply that term, not to the tax, but to the Minister. He would advert to one or two arguments which had been used as objections against any alteration of the system of the income-tax. It had been contended by many hon. Gentlemen on that (the Opposition) side of the House, that there would be great injustice in taxing gross rentals. He was anxious to meet the objections of hon. Gentlemen in order to attain anything like an approximation to a fair system of taxation; and he was fully prepared to admit that charges incident to landed property ought to be deducted from the taxable income. Another objection, similar to that raised the other evening in the discussion on the window-tax, was to the effect that, admitting the tax to be a bad tax, it could not be got rid of, because there was nothing to substitute for it. Now, he considered this a very unsound way of reasoning. When once they decided that a tax was bad, let them get rid of it, and then would be the time to consider the best mode of providing a substitute. He would only refer to one more argument, which appeared to him to be the strangest of all that had ever been urged in defence of a bad measure. It was said that the present Government reigned by sufferance, because, in the present position of parties, it was the only Government possible; and that, therefore, it was not desirable, by defeating their proposed renewal of the income-tax in its existing form, to compel them to a probable abandonment of office. Now, whatever might be the consequences of repealing this tax, he did call on all hon. Members in that House to do their duty fearlessly to their constituents and to the country, without reference to any result that might follow in respect to the Government; and they might rest assured, that if they acted in that independent and straightforward manner, they would have no reason to regret the course they had taken.
MR. ROBINSONwas understood to suggest that at any rate the proposed renewal of the income-tax should only he taken for one year; and he assured the noble Lord and the Government that if they persevered in demanding the tax as it stood for three years, they would be jeopardizing the popularity of a considerable number of the Members of that House,
222
who might be disposed to support the Government, and placing some of them in a very precarious position.
LORD J. RUSSELL: After the courteous manner in which the hon. Gentleman who spoke last has addressed the House and the Government, I think it incumbent on me to give some answer to his proposition, which is similar to one made by the hon. Member for Montrose. The hon. Member for Montrose, in noticing the diversity of opinions in this House, gave no very complimentary reason for our great variety of opinion. He told us that he had been in company with a dozen gentlemen who were political economists—that they differed extremely on the subject of taxation—and that if those gentlemen, who were accustomed to reason so much, differed so greatly on this subject, it was no wonder that we should differ. But, adverting to the proposal made by the hon. Member for Montrose, and which is now supported by the hon. Gentleman who last spoke, I do not think it is one to which the Government can give its concurrence. I beg for a few moments the attention of the House, while I state what I conceive to be our position and that of Parliament on this subject. In 1842 Parliament agreed to impose the income-tax; in the first place, to supply the deficiency of the revenue, and, in the next, to enable the experiment to be tried of diminishing or abolishing certain duties from articles of consumption, with a view to improve the revenue by giving a spring to industry and commerce. Opposed as I was to the income-tax, I must say that both objects were fulfilled. The deficiency in the revenue was supplied, and the revenue itself increased very greatly, in consequence partly of the spring given by the remission of taxation, and partly in consequence of the prosperous state of the country. The Government again proposed the continuance of the tax for three years, taking off another large portion of taxation on articles of consumption. I believe that the remissions altogether in those two years, and in the other years in the interval between them, amounted to not less than 7,000,000 l. Since that period we have not had the same prosperity. There have been adverse circumstances, totally independent of those changes in the duties of the Customs and Excise; and I think it is evident that that experiment, which the Government might hope to be successful in ordinary circumstances, or in circum

223
stances of prosperous trade, could not be expected to be successful when the circumstances were adverse, and many of the duties on articles of consumption fell off in a remarkable degree. Lately, in stating to this House the condition of the revenue, I noticed that in the articles of malt and spirits alone the falling-off, I think, was 1,300,000 l. Then the question is, whether the Government may not fairly make the proposition which we now make, that for another term of three years the income-tax should be continued? The hon. Member for Montrose says, that he cannot admit this proposition, because, by economy, the establishments might be so reduced as to enable the Government to spare the whole of the revenue to be derived from the income-tax. The hon. Gentleman the Member for Nottingham says, that he could not consent to or propose a reduction of the establishments of the country, but suggests that some other tax should take the place of this proposed income-tax. With respect to the first proposition of the hon. Member for Montrose, without adverting to any other circumstances than those which are obvious and known to all the world, I should say, that not having asked for a greater number of soldiers and seamen than was proposed and voted in 1845—a period of profound tranquillity—having only increased, and to no very large extent, the number of men belonging to the marines, the artillery, and the engineers, I do not think that it would be wise, in the present state of Europe, for the Government to undertake to make a large reduction in the establishments. I am glad that what I have just stated is received with such ready assent, because I hold that it is quite unnecessary for me to do more than refer to what any one may read in the newspapers every day—the state of the various countries on the Continent. But then the hon. Member for Nottingham says, "Let us have some other species of tax." Now, with respect to direct or indirect taxation, though I was of opinion in 1842 that it would have been better, by a modification and change in the timber and sugar duties and some others, to supply the deficiency; yet it is quite a different proposition to come down now to Parliament to ask for a great increase of the duties on articles of general consumption, the remission of which, by giving a spring to industry, has been a source of employment to thousands of the labouring population as well as of enjoy-
224
ment to the people at large. Therefore I should say that it would not be wise at this moment to propose to supply a revenue of 5,000,000 l. by the imposition of Customs and Excise duties in lieu of the income-tax. But it is said—and that is the proposition now before us—"Take your direct tax, but let it be more equal than it is at present—make an arrangement by which all sorts of property may be more fairly and justly assessed." I must say that it is a presumption against this proposition that this is a tax first proposed, and settled by Mr. Pitt; and, whatever Gentlemen may think of his opinions and conduct on various questions of foreign and constitutional policy, all must admit that he was one of the greatest financial statesmen this country ever produced. This proposition when made was encountered by the objections that are now brought against the present plan. Mr. Pitt, with reasons of great cogency, showed why, in his opinion, there should be no distinction between one kind of income and another, but that all incomes should pay in equal proportions of 3 or 5 per cent, as the case might be. I say, then, that this is a presumption against the proposition of the hon. Gentleman. All who have had to do with taxation, have followed in Mr. Pitt's footsteps in this respect, and come to the same conclusion at which he arrived. I may here, perhaps, be permitted to say, as the hon. Gentleman the Member for Cockermouth, who made the Motion, alluded more than once in the course of his speech to the objections urged by me, in 1842, against the inequality and injustice of the tax, that I thought the arguments of the right hon. Gentleman the First Minister of the Crown (Sir R. Peel) were conclusive against modification, and that the nature of those objections ought to induce the House to reject or accept the tax altogether, without attempting any alteration. In 1845, I was of opinion, while I still thought it objectionable, that the tax might be modified; but, I own that, after more consideration of the subject—for I can assure the hon. Member for Cockermouth that it is not since Monday last that my right hon. Friend the Chancellor of the Exchequer and myself have turned our attention to the subject; but the more I have conversed with him and my other Colleagues—the more I have endeavoured to sift the subject, the more impressed I have been with the impossibility of making the tax

225
more fair and equal by any modification we can propose. I do not mean to go into detail on the subject, for I think the right hon. Gentleman the Member for the University of Cambridge, in the early part of the evening, showed, by arguments to which no answer has been made, nor, as I think, can be made, that no such equality can be established in the matter. But I may state what I think is the general principle upon which this tax is founded, and the ground upon which I think the hon. Member would find himself defeated in attempting to make it more just. The State imposes the tax upon the ground of a party possessing a certain portion of income. Two persons, let us suppose, have an income of 500 l. each, upon which 3 per cent is charged. One of those may say, "I am in totally different circumstances from my neighbour. Mine is only a life-income—a precarious income." The State says, "We do not inquire into your circumstances—we do not pretend to ascertain what are the circumstances of each class of individuals. We only take your apparent confessed income, and deduct a certain portion from it. We find you with such an income, and we leave you with it—minus the deduction of a certain portion in name of income-tax." Well, let us take the other case. The hon. Member for Cockermouth says that we ought to take 8d. per pound from persons who derive their incomes from anything in the shape of land, and that we should take 6d. and 4d. from other persons. Well, this person may say, "In placing me on Schedule A, under your new plan, you are treating me unjustly. I formerly paid 7d. in the pound; you are now charging me 8d., which is at the rate of more than 8s. upon every 100 l. of income. Now, you are mistaken in your supposition, for though my income is derived from land, I have only a life-interest in it." Some proprietors might even say that their income did not go to their daughters, but was strictly entailed on heirs male, and that they had nothing but their savings from year to year to provide for all their children except the heir. In the same way, and still more strongly, there were cases of rent-charges and jointures derived from land, but of no more permanent nature than if they were derived from trade. All those persons might say, "It is very hard upon us to pay 8d. in the pound, while we see people with great riches, derived from established firms of great solidity, whose for-
226
tunes go to their sons after them, paying only 6d." Under the present system, as I have said, we are precluded from investigating into the peculiar circumstances of individuals. We do not ask the nature of their fortune—we do not attempt to examine into their affairs. But if you adopted the system proposed, you could no longer say so; because persons with life-incomes from land might say, "Nay, but you do attempt it. You have altered the tax, and have placed persons in trade and in professions in better situations than me. I showed you that my income is not more valuable nor more permanent than theirs, and you are bound to do me justice." You must be content to do one of two things. Either the injustice remains—and remains after an attempt and a profession that you are to do justice—or else it comes to this—the most difficult thing of all—that you attempt to trace the distinction further, and investigate the real value of all men's income. I say that it is far better to take the difficulty as it at present stands, than by attempting to remedy the injustice to fall into other cases still more unjust; while, at the same time, you are professing to do justice to such individuals. My hon. Friend the Member for Montrose found fault with the observations of the right hon. Gentleman the Member for Cambridge (Mr. Goulburn), because he said he could not deny that the tax was unequal, but that the inequality of one tax corrects the inequality of another. The hon. Member for Montrose at the same time that he found fault with this observation, gave a very happy illustration of its justice by referring to a chronometer, the expansion of whose wheel is sometimes too great and sometimes too little, but whose inequalities produce a proper mean, and make the machinery more perfect than it would otherwise be. Let us take the proposition now before us. Suppose that income from land was charged 8d. instead of 7d., I think that, upon a fair consideration of the question with respect to taxation, it will be found that there is much force in the objection that is often urged, that taxation presses unfairly upon persons having landed property. There are some cases, for instance, with respect to the conveyance of property in land, in which 12½ per cent is paid for stamps upon the conveyance. I think it hard, then, to impose higher taxes upon those who derive their income from land, without taking into considera-

227
tion the inequalities and hardships which press upon this particular class of property. Suppose we come to the question to which my hon. Friend the Member for Montrose alluded, namely, the general inequality of taxation. His proposition—which, I think, is hardly a reasonable one—is, that he is willing to give us the income-tax, bad as it is, and unequal as it is, for a single year, if the Government are prepared to apply themselves with due ability to remedy the inequalities by the commencement of next year. Why, Sir, the hon. Gentleman seems to think he is doing something handsome to us by saying that if we use every diligence he will—like the Committee of Privy Council to boys in village schools—give us as a reward the renewal of the tax for a year more. The reward, I think, is not such as ought to tempt us to adopt the proposal. That the revision of our taxation may be a most desirable object, neither I nor any other Member of the House will attempt to deny. With respect to the taxes derived from the Customs, the right hon. Gentleman opposite (Sir R. Peel), during his Administration, carried the revision to a considerable extent, and introduced some great improvements. With respect to the Excise and Stamps, I admit that there is great room for improvement still. But for Government to undertake the revision of the whole taxation of the country in a single year, and to put it upon a footing of equality, that would, I must say, be an imprudent engagement to make, and one which, for the sake of getting the tax for a single year, I cannot consent to. Whenever we are able, by a careful revision of any one tax, or of any number of taxes, to make a proposition to the House by which we think the taxation would be more equal, and press less hardly upon industry, I can assure the hon. Gentleman we shall be most happy to do so; but I think that no Government in the present state of affairs ought to accept of this tax for a single year with such a promise; and if they did so they would endanger the credit of the country, as well as their own characters. I again repeat that I should be happy to see any amendment of the taxation of the country, and should be happy to contribute to the amendment—which I may say my right hon. Friend the Chancellor of the Exchequer has never lost sight of; but the past year has been a year in which such extraordinary efforts have been required to meet the emergen-
228
cies of the moment—emergencies originating in a scarcity of food and commercial distress and panic—that I am not prepared now, nor should I be prepared in a week or a fortnight, to propose a scheme of taxation better than that which I now propose. I therefore, Sir, with some confidence—knowing the temper of this House on former occasions—ask you to renew this tax as it was proposed by Mr. Pitt and others in former times—I ask you to renew it for three years, being the same period for which the House has already twice consented to renew it. I ask this not for the purpose of fitting out new armaments, or for the purpose of adding greatly to our forces by sea or land, but for the purpose of maintaining the forces that we do possess; for the purpose also of maintaining the credit of the country, and of showing at this period of difficulty that, whatever Government may be in power, you are—without distinction of party—disposed to give such Government a fair and liberal support.
On the question that the words proposed to be left out stand part of the Question, the House divided:—Ayes 316; Noes 141: Majority 175.

List of the AYES.

Abdy, T. N.

Bruce, C. L. C.

Acland, Sir T. D.

Buck, L. W.

Adderley, C. B.

Buller, Sir J. Y.

Alexander, N.

Bunbury, E. H.

Anson, hon. Col.

Burghley, Lord

Anson, Visct.

Burke, Sir T. J.

Arbuthnott, hon. H.

Burrell, Sir C. M.

Archdall, Capt. M.

Butler, P. S.

Armstrong, Sir A.

Buxton, Sir E. N.

Arundel and Surrey, Earl of

Callaghan, D.

Cardwell, E.

Ashley, Lord

Carew, W. H. P.

Bagge, W.

Castlereagh, Visct.

Bailey, J. jun.

Cavendish, hon. C. C.

Baring, H. B.

Cavendish, W. G.

Baring, hon. W. B.

Cayley, E. S.

Bateson, T.

Chaplin, W. J.

Beckett, W.

Charteris, hon. F.

Bell, J.

Chichester, Lord J. L.

Bellew, R. M.

Childers, J. W.

Beresford, W.

Cholmeley, Sir M.

Berkeley, hon. Capt.

Christopher, R. A.

Blackall, S. W.

Christy, S.

Boldero, H. G.

Clements, hon. C. S.

Bolling, W.

Clerk, rt. hon. Sir G.

Bourke, R. S.

Clive, H. B.

Bowles, Adm.

Cobbold, J. C.

Boyle, hon. Col.

Cocks, T. S.

Brackley, Visct.

Coke, hon. E. K.

Bramston, T. W.

Cole, hon. H. A.

Brand, T.

Coles, H. B.

Bremridge, R.

Compton, H. C.

Brockman, E. D.

Conolly, Col.

Brooke, Lord

Corbally, M. E.

Brooke, Sir A. B.

Courtenay, Lord

229

Cowper, hon. W. F.

Herries, rt. hon. J. C.

Craig, W. G.

Hervey, Lord A.

Cripps, W.

Hildyard, R. C.

Cubitt, W.

Hildyard, T. B. T.

Currie, H.

Hodges, T. L.

Dalrymple, Capt.

Hodges, T. T.

Deedes, W.

Hogg, Sir J. W.

Deering, J.

Hood, Sir A.

Denison, W. J.

Hope, Sir J.

Devereux, J. T.

Hope, H. T.

Disraeli, B.

Hope, A.

Dodd, G.

Hornby, J.

Douro, Marq. of

Hotham, Lord

Drumlanrig, Visct.

Howard, hon. C. W. G.

Drummond, H.

Howard, hon. E. G. G.

Duckworth, Sir J. T. B.

Hudson, G.

Dundas, Adm.

Hughes, W. B.

Dundas, Sir D.

Ingestre, Visct.

Dundas, G.

Inglis, Sir R. H.

Dunne, F. P.

Ireland, T. J.

Du Pre, C. G.

Jermyn, Earl

Ebrington, Visct.

Jervis, Sir J.

Edwards, H.

Jervis, J.

Egerton, W. T.

Jolliffe, Sir W. G. H.

Ellice, rt. hon. E.

Jones, Sir W.

Elliott, hon. J. E.

Jones, Capt.

Emlyn, Visct.

Keogh, W.

Enfield, Visct.

Keppel, hon. G. T.

Estcourt, J. B. B.

Kildare, Marq, of

Farrer, J.

Labouchere, rt. hon. H.

Ferguson, Sir R. A.

Langston, J. H.

Ffolliot, J.

Lascelles, hon. E.

Filmore, Sir E.

Lascelles, hon. W. S.

Fitzpatrick, rt. hn. J. W.

Law, hon. C. E.

Fitzroy, hon. H.

Lemon, Sir C.

Foley, J. H. H.

Lewis, rt. hon. Sir T. F.

Forbes, W.

Lewis, G. C.

Fortescue, C.

Lincoln, Earl of

Fortescue, hon. J. W.

Lindsay, hon. Col.

Fox, R. M.

Littleton, hon. E. R.

Freestun, Col.

Loch, J.

Frewen, C. H.

Locke, J.

Fuller, A. E.

Lockhart, A. E.

Gaskell, J. M.

Lockhart, W.

Gibson, rt. hon. T. M.

Lygon, hon. Gen.

Gladstone, rt. hn. W. E.

Mackenzie, W. F.

Glyn, G. C.

Mackinnon, W. A.

Gordon, Adm.

Macnamara, Maj.

Gore, W. R. O.

M'Naghten, Sir E.

Goulburn, rt. hon. H.

M'Tavish, C. C.

Gower, hon. F. L.

Meagher, T.

Graham, rt. hon. Sir J.

Mahon, The O'Gorman

Granby, Marq. of

Mahon, Visct.

Greene, T.

Maitland, T.

Grenfell, C. P.

Manners, Lord C. S.

Grenfell, C. W.

Manners, Lord G.

Grey, rt. hon. Sir G.

March, Earl of

Grey, R. W.

Marshall, W.

Grosvenor, Lord R.

Martin, C. W.

Guest, Sir J.

Masterman, J.

Gwyn, H.

Matheson, A.

Haggitt, F. R.

Matheson, J.

Halford, Sir H.

Matheson, Col.

Harris, hon. Capt.

Maxwell, hon. J. P.

Hay, Lord J.

Melgund, Visct.

Hayes, Sir E.

Meux, Sir H.

Hayter, W. G.

Miles, P. W. S.

Headlam, T. E.

Miles, W.

Heald, J.

Milnes, R. M.

Heathcote, G. J.

Molesworth, Sir W.

Heathcote, Sir W.

Monsell, W.

Henley, J. W.

Moody, C. A.

Herbert, H. A.

Moore, G. H.

230

Morpeth, Visct.

Smith, rt. hon. R. V.

Mostyn, hon. E. M. L.

Smith, J. A.

Mulgrave, Earl of

Smith, M. T.

Mure, Col.

Smollett, A.

Neeld, J.

Somerville, rt. hn. Sir W.

Neeld, J.

Sotheron, T. H. S.

Newdegate, C. N.

Spearman, H. J.

Nugent, Sir P.

Stafford, A.

O'Brien, J.

Stanley, hon. E. J.

O'Brien, Sir L.

Stanley, E.

O'Brien, T.

Strutt, rt. hon. E.

Ossulston, Lord

Stuart, H.

Owen, Sir J.

Stuart, J.

Packe, C. W.

Sturt, H. G.

Paget, Lord A.

Sutton, J. H. M.

Paget, Lord C.

Talbot, J. H.

Paget, Lord G.

Taylor, T. E.

Palmer, R.

Tenison, E. K.

Palmerston, Visct.

Tennent, R. J.

Parker, J.

Thornhill, G.

Patten, J. W.

Tollemache, J.

Peel, rt. hon. Sir R.

Towneley, J.

Peel, Col.

Townley, R. G.

Philips, Sir G. R.

Townshend, Capt.

Pinney, W.

Traill, G.

Plumptre, J. P.

Trelawny, J. S.

Plowden, W. H. C.

Trevor, hon. G. R.

Powell, Col.

Trollope, Sir J.

Power, N.

Vane, Lord H.

Powlett, Lord W.

Verner, Sir W.

Price, Sir R.

Verney, Sir H.

Prime, R.

Vesey, hon. T.

Pugh, D.

Vyse, R. H R. H.

Rawdon, Col.

Waddington, D.

Renton, J. C.

Waddington, H. S.

Repton, G. W. J.

Walpole, S. H.

Reynolds, J.

Walsh, Sir J. B.

Rice, E. R.

Ward, H. G.

Rich, H.

Watkins, Col.

Richards, R.

Wellesley, Lord C.

Romilly, J.

West, F. R.

Rushout, Capt.

Whitmore, T. C.

Russell, Lord J.

Williamson, Sir H.

Russell, F. C. H.

Wilson, M.

Rutherfurd, A.

Wood, rt. hon. Sir C.

Sadlier, J.

Worcester, Marq. of

Seymer, H. K.

Wortley, rt. hon. J. S.

Seymour, Sir H.

Wrightson, W. B.

Seymour, Lord

Wyvill, M.

Sheil, rt. hon. R. L.

TELLERS.

Shelburne, Earl of

Tufnell, H.

Slaney, R. A.

Hill, Lord M.

List of the NOES.

Adair, H. E.

Bouverie, hon, E. P.

Adair, R. A. S.

Bright, J.

Aglionby, H. A.

Brisco, M.

Alcock, T.

Brocklehurst, J.

Anderson, A.

Brotherton, J.

Baines, M. T.

Brown, H.

Barkly, H.

Brown, W. S.

Baring, rt. hon. F. T.

Busfeild, W.

Barnard, E. G.

Cabbell, B. B.

Benbow, J.

Carter, J. B.

Benett, J.

Cavendish, hon. G. H.

Bennet, P.

Clay, Sir W.

Berkeley, hon H. F.

Clifford, H. M.

Bernal, R.

Cobden, R.

Birch, Sir T. B.

Colebrooke, Sir T. E.

Blackstone, W. S.

Collins, W.

Blake, M. J.

Cowan, C.

Blewitt, R. J.

Crawford, W. S.

231

Dashwood, G. H.

Pattison, J.

Davie, Sir H. R. F.

Pearson, C.

D'Eyncourt, rt. hon. C.

Pechell, Capt.

Douglas, Sir C. E.

Pigott, F.

Duke, Sir J.

Pilkington, J.

Duncan, Visct.

Raphael, A.

Duncan, G.

Reid, Col.

Duncuft, J.

Rendlesham, Lord

Ellice, E.

Ricardo, O.

Evans, W.

Robartes, T. J. A.

Ewart, W.

Robinson, G. R.

Fagan, W.

Rufford, F.

Fergus, J.

St. George, C.

Ferguson, Col.

Salwey, Col.

Fitzwilliam, hon. G. W.

Sandars, G.

Fordyce, A. D.

Scholefield, W.

Forster, M.

Scrope, G. P.

Fox, W. J.

Seeley, C.

Gardner, R.

Sheridan, R. B.

Godson, R.

Sidney, Ald.

Gooch, E. S.

Simeon, J.

Greenall, G.

Smith, J. B.

Greene, J.

Spooner, R.

Hall, Sir B.

Stansfield, W. R. C.

Hardcastle, J. A.

Stanton, W. H.

Hastie, A.

Staunton, Sir G. T.

Heathcoat, J.

Strickland, Sir G.

Henry, A.

Stuart, Lord D.

Heywood, J.

Stuart, Lord J.

Hindley, C.

Talfourd, Serj.

Hollond, R.

Tancred, H. W.

Hume, J.

Thicknesse, R. A.

Humphery, Ald.

Thompson, Col.

Hutt, W.

Thompson, G.

Jackson, W.

Thornely, T.

Ker, R.

Turner, E.

Kershaw, J.

Turner, G. J.

King, hon. P. J. L.

Villiers, hon. C.

Lennard, T. B.

Vivian, J. E.

Long, W.

Wakley, T.

Lushington, C.

Walmsley, Sir J.

M'Gregor, J.

Walter, J.

Marshall, J. G.

Wawn, J. T.

Martin, J.

Westhead, J. P.

Mitchell, T. A.

Willcox, B. M.

Morris, D.

Williams, J.

Mowatt, F.

Willoughby, Sir H.

Muntz, G. F.

Wyld, J.

O'Brien, W. S.

Yorke, hon. E. T.

O'Connell, M. J.

Yorke, H. G. R.

O'Connor, F.

O'Flaherty, A.

TELLERS.

Osborne, R.

Horsman, E.

Palmer, R.

Bowring, Dr.

House went into Committee pro formâ, and resumed.
Committee to sit again. House adjourned.

MINUTES.
Took the Oaths.—The Earl of Ellesmere.
PUBLIC BILLS.—3a and passed:—Consolidated Fund.
PETITIONS PRESENTED. From Worcester, for, and from Billingshurst, against, the Removal of the Jewish Disabilities Bill.—From Worcester, for the Repeal of the Poor Removal Act, for a National Rate for the Relief of the Poor, and for Sanitary Reform.—From Dudley, against the Increase and Continuance of the Income Tax.

DIOCESAN SCHOOLS.
LORD LYTTELTONpresented a petition from the Worcester Diocesan Board of Education, praying for the adoption of measures to remedy certain objections to the management clauses required by the Committee of Privy Council to be inserted in the trust-deeds of schools receiving and from the Parliamentary grants. The petitioners stated, that a Minute had been adopted by the Committee of Council on the 28th of June, 1847, requiring that all schools receiving and from the Parliamentary grants should be managed by boards consisting partly of ex-officio Members, and partly of persons elected by the subscribers; and they complained that a compliance with this clause was rendered compulsory on all managers of Church schools, as a condition of their receiving any share of the amount at the disposal of the Committee of Council. The petitioners prayed their Lordships to adopt some measure to exempt the promoters of Church schools from this condition. This regulation had been adopted without previous notice; and he (Lord Lyttelton) wished to urge on the Government the propriety of postponing its operation until persons interested in the management of schools were fully aware that such a Minute was in existence. He might observe, that he was one of those who attached great importance to voluntary exertion on the part of the Church for the promotion of education, and he was most anxious that some arrangement should be come to between the members of the Church and the Government on the subject. Some recent circumstances had greatly shaken the confidence of the members of the Church in the Government; but he could only say, that he attached so much value to the co-ope-
154
ration of the Government with the Church on the question of education, that he was quite willing to shut his eyes to their conduct with reference to other matters.
The BISHOP of WORCESTERobserved, that it was required, by the rules of the Worcester Diocesan Board of Education, that no final decision should be come I to upon any matter of importance that might be discussed until the most distant members had had an opportunity of expressing their opinion on the question; but he believed that the noble Lord had given no notice of his intention to propose, at a meeting of the board, the petition he had just presented. He therefore conceived, that this petition should be regarded merely as a petition of the persons by whom it was signed, and not as the petition of the Diocesan Board of Education of Worcester. He must say, that he considered the clause to which the petitioners objected entirely harmless, for he thought nothing could be more reasonable than that those laymen who contributed to the establishment of schools should have a share in their management. The success of the important educational experiment which was now being tried, depended, in a great measure, upon the cordial co-operation of the Committee of the National Society and the Committee of the Privy Council; and he would deprecate most strongly anything that could disturb a good understanding between those bodies.
LORD LYTTELTONsaid, the petition he had presented was adopted at a regular meeting of the Worcester Diocesan Board of Education.
The MARQUESS of LANSDOWNEsaid, that so far from the Committee of Privy Council having originated any novelty in this matter, the novelty was on the part of those who made the objections. It must be perfectly obvious, that when the public money was advanced, it was necessary that due security should be taken for the proper application of it, otherwise the object for which these grants had been made would be rendered nugatory. The noble Marquess briefly went through the provisions of the management clauses complained of, and said that the appeal was to the bishop of the diocese, whose decision was final. The system adopted by the Committee of Privy Council was in conformity with the compact entered into with the National Schools Society; and the view which he took of the management clauses had been taken also by his prede-

155
cessors, Lord Wharncliffe and the Duke of Buccleuch. The late Archbishop of Canterbury had admitted the propriety of those clauses which the noble Lord now denounced as a mischievous innovation; and he (the Marquess of Lansdowne) had received from that most rev. Prelate, a few weeks prior to his death, a private letter expressing his entire satisfaction at the mode in which the education grant was administered, and the system of inspection established. It had been said that members of the Church of England would not co-operate with the Government in reference to this system of education; but he could mention that numbers of applications to the Government for and were made daily by members of the Church, who did not object to these clauses. He submitted that there was no foundation for making that a grievance.
The BISHOP of CHICHESTERsaid, that the clergy felt it their duty to co-operate with the Government to the utmost of their power in endeavouring to diffuse among all orders of the community the great blessings of education; and he could assure them that there was no desire whatever on the part of the clergy to exclude the lay subscribers from a due share in the management of schools, to which he considered they were justly entitled; but the feeling of dissatisfaction which had arisen proceeded from the compulsory enforcement of one of the clauses.
The EARL of ILCHESTERaddressed to their Lordships a few observations which were inaudible.
The BISHOP of OXFORDsaid, that he had urged the noble Lord not to bring forward the present petition, and he greatly regretted that the present discussion had arisen. But as it had taken place, he could not altogether refrain from making a few remarks. The noble Marquess had misapprehended, and, misapprehending, had mis-stated, the real matter to which their Lordships' attention was now required, and that in a very important particular. In the first place, the noble Marquess had stated that, judging from the number of applications made to the Committee of Council, he should say that no feeling of jealousy existed throughout the Church with regard to the management of the schools. Now, he enjoyed some opportunities of becoming acquainted with the feelings of the clergy, and he could undertake to say that there existed a very deep and wide-spread excitement amongst
156
them upon this subject, which, in his own diocese, had seriously impeded his endeavours to spread Church education; he maintained that there was a deep and injurious jealousy; and that jealousy arose from this cause, that the Dissenters were allowed to manage their own schools (receiving Government assistance) in such manner as they thought proper; while the managers of the Church of England schools were not allowed equal freedom and independence. This feeling had also been increased by a report that had got abroad, that an address from the noble Marquess had been very widely circulated, in which he had stated the fact of his having prevailed upon the clergy in his neighbourhood to dispense with the use of the Church Catechism in schools which had been created and were in a great degree supported by clergymen of the Church of England; and that this had been done for the purpose of facilitating the entrance into those schools of persons who were not in communion with the Church of England; thus the Dissenters would have schools exclusively their own, while schools professedly belonging to the Church of England would be as open to all sects and denominations as if they had been founded and were supported by persons professing no religion of any kind. It was most desirable to remove doubt and jealousy upon subjects of this nature; and he wished to do all in his power to remove any suspicion that might arise in any quarter; for suspicion, founded upon any rational basis, could not fail ultimately to have the effect of preventing the enlightenment of the people; under the influence of such suspicions all education would be withered. He thought that a certain power of interference should be allowed to the laity; and as there was no one who knew anything of the business of conducting those schools who must not be aware that differences amongst the managing parties would sometimes arise, he thought it desirable that in such cases there should be a reference to the bishop of the diocese, with a power of appeal to the archbishop of the province; but he regretted that no sufficient provision was made for the settlement of such differences. He had known the case of a school in which the Committee were farmers: they admitted that the schoolmaster was a very improper person; but they said, he had a family of nine children, that he was fit for nothing else but teaching, and that if he lost the school all his

157
children would become chargeable to the I parish. Now, he would ask their Lordships, were they prepared to leave education in such a state? At the same time, he was far from saying that the laity ought to have no share in the management: his views were quite opposed to any plan for excluding the laity, and most certainly there was no desire on the part of the Church to exclude the laity, for he thought that no scheme of education would be successful if they were excluded from its management. It was desirable that they should have a great deal of power in the management, subject to the visitation of the bishop of the diocese. He felt that the matter had not been stated to their Lordships quite in the way in which he wished it. He desired nothing more than that the laity should co-operate with the clergy; and, so far from wishing the laity to be excluded from the schools, he should object to their exclusion. The opinion of the great body of the clergy was this: let the Committee manage everything, religious or secular, provided, first, that the Committee was bonâ fide a Committee of lay Churchmen; and, secondly, that there should be an appeal. All the clergy required was, that there should be Church teaching and Church schools; and, so far from their objecting to promote sound religious education, they would do everything for that object but sacrifice the principles of duty and conscience. Their jealousy arose from the system of semi-responsibility and a fear of what might be introduced hereafter. He could not consent that schoolmasters whose object might be to subvert the teaching of the Church, should be irremovable by any power whatever. This would have a direct tendency to encourage Dissenting schools. It was an old principle of the Church that in England, where there was no public Minister of Instruction, and therefore no legal authority to entertain such questions, they should be referred to the bishop of the diocese, who was appointed by the Crown. He entreated the noble Marquess not to believe that there was no feeling abroad upon this subject; there was a very deep feeling, the neglect of which might impair confidence, and subvert a plan very dear to the noble Marquess, to provide a wiser and better training for the people of this land.
The BISHOP of ST. DAVID'Ssaid, he was upon many grounds glad that this subject had come before their Lordships. His reason for thinking the alarm
158
which was felt was not without apparent foundation, was derived from the official documents in the hands of their Lordships, which showed a want of connexion between the instructions and the provisions; for, instead of a simple recommendation, other words were employed, implying that not so large a measure of liberty was allowed. But, having said this, he felt that he had gone as far as he was entitled to do; and it was with great pain he had heard from his right rev. Friends that the suspicion and distrust they felt had extended to a very large body of the Church. But he thought no sufficient grounds had been stated by his right rev. Brother (the Bishop of Oxford) for such an amount of alarm.
LORD STANLEY: My Lords, I have very few observations to offer to your Lordships upon this question. In point of fact, the question immediately before us appears to be trifling; but the principle involved in the question is not of such an immaterial nature as the question itself. The question is not, whether certain regulations shall be laid down for the management of schools; nor yet, whether the present regulations are the best that could be established; but, whether there shall be, at the will and pleasure of an anomalous body, a departure from regulations once established, and the introduction of new regulations and new institutions, by which fresh applications for schools are impeded and discouraged? The noble Lord opposite says one main object of these regulations is, to secure that Church schools should be managed bonâ fide on Church principles; and to that, I apprehend, neither my noble Friend who presented the petition, nor the petitioners themselves, nor any Member of your Lordships' House, would think of objecting. But the question is, whether the substantial change which has lately been introduced, or at least which the late proceedings of the Privy Council have given cause to believe has been introduced, does, in fact, affect the management and control of the schools? and, if so, whether that alteration has been introduced with sufficient notice to the parties concerned? The noble Marquess stated that the conditions which are now propounded are nothing more than the conditions which are actually the terms of union proposed by the National Society for the establishment of all their schools; and the noble Marquess not only went through all these regulations, but he went into the

159
question which lies at the root of the present discussion—the introduction, as a sine qua non, of a hoard of management, consisting of laymen, as a condition on which these schools should receive and from the State. Now, these regulations of the National Society provide for every possible case that can arise, and the establishment of managers, be they lay or clerical, as they are required to be in constant communication with the clergyman of the parish. But there is nothing in the regulations of the National Society which insists, as a condition of receiving the Government grant, that there should be established a lay committee of proprietors to interfere in the management of the school. In some cases, no doubt, such a committee may be wise and beneficial; in other cases it may be in the highest degree prejudicial. With the proprietors of estates the clergy may have no difficulty in working; but I think it would not only be useless, but prejudicial, that there should be an associated body of farmers, who, because perhaps they have subscribed 10 s. each, yet have an influence in the management, and by a majority of voices may prevail over both the proprietors and the clergy. I do not, however, say that local boards of management may not be beneficial; but if you insist that no grant shall be given to a school which does not admit of lay interference by means of a committee, this is a regulation, as the petitioners contend, now introduced for the first time, and which is not only not required, but which is contrary to the practice of the National schools. I am quite sure all your Lordships will agree that it is desirable, in order to secure the object we all have in view, that the Government grant should only be made supplemental to local contributions; and I think it will not be denied that every new impediment which would check the flow of voluntary contributions is therefore to be avoided. And it ought to be remembered that you don't interfere with new restrictions upon other schools, but only with regard to Church schools. But, my Lords, it is not so much of the new impediments of which these petitioners complain, as the uncertainty and the entire absence of all security they have, that, after the promoters of a school have made every exertion—after they have matured their plans—after they have provided their contributions—after they have complied with all the conditions of the National Society—they may be suddenly told, "All your labour and expense is
160
to go for nothing, for we have made new regulations, which will render all your proceedings fruitless." Both laity and clergy complain of these sudden and annoying restrictions, which are imposed by an anomalous authority, and which are frequently intimated to the clergy, not by authority of the Board themselves, but in a letter from their Secretary; for, while I have the highest respect for the gentleman who fills that office, and I believe that he is actuated solely by a desire to diffuse the means of education, I must say that great inconvenience has arisen from the practice. I can state a case where application was made to the Board for assistance, where an answer was received from the Secretary, stating the conditions which were thought necessary for receiving, and where, on subsequent explanation and remonstrance, and on the question being raised if that letter conveyed the deliberate sense of the Board, the parties were privately told to make no use of the Secretary's letter, because it was not an official document. But the great inconvenience arose from the alterations made by the Board varying from time to time, and from time to time introducing alterations; and I must concur with the right rev. Prelate (the Bishop of Oxford), and the noble Lord (Lord Lyttelton), in thinking that a great advantage would be gained if more specific notice were given by the Board, that no new restriction would be put upon the efforts of any denomination, but rather that existing restrictions should, as far as possible, be relaxed. I cannot help thinking that the great and fundamental evil of the whole system is, that too much and too great latitude is given to the Board, constituted as it is of a Committee of Privy Council, and that the principles and rules on which they act are not sufficiently defined and laid down by law. This is the original vice of the system. I objected to that principle in 1835; and certainly everything that has occurred since tends more strongly to fix that objection upon my mind. In consequence of this system, the clergy and laity really hardly know what to expect; when they see one trifling change made after another they lose all that confidence in the Board, and in the management of the Board, which it is most desirable should be maintained. I do not regret that this discussion has been raised; and I hope its effect will be, that we shall hear from the noble Marquess that no rules shall be laid down with so much stringency as that they may not be relaxed in special

161
cases. I hope also the effect of this discussion will convince Her Majesty's Government of the inconvenience of any alteration in the rules; and that it will elicit from the noble Marquess a declaration of their determination to act upon the rules introduced in 1840, and that they have no desire to restrict closely, or to infringe largely, upon the liberty granted, on the one hand, to Dissenting schools, and on the other hand, to Church of England schools, of being managed on their respective principles, and in such a manner as the clergy and their friends may think most desirable.
The MARQUESS of LANSDOWNE: I have no reason to complain of the manner in which a right rev. Prelate adverted to an expression which fell from me in the course of the discussion with regard to the exclusion of the laity. I did not intend to use that expression in an offensive sense, but to point out that the effect of this application, if it were acceded to, would render the opinions of the clergy in all matters final and conclusive, and exclude the laity from everything but the power of subscribing. That is not the wish of the Committee of Privy Council, because we consider it essential to the cause of education amongst every denomination that there should be uniformity; but I do not know how that is to be obtained if the laity are to be practically, though unintentionally, excluded.
Petition read and ordered to he on the table.
House adjourned.