The Sun.
London, England, 1864-04-08 00:00:00

£2,570,000. There are several minor subjects, which
have no great bearing on the revenue, but which I may as
well mention to the committee in the first instance, in
order to put them out of the way of the more material qua-
_

But now to refer to the plane which hive been proposed re-
specting the sugar duties. I know the committee has a
peculiar aversion to dealing with any question where three
courses are open to us—(laughter)—but this is a question
in which not three, but four, courses are before us.
(Renewed latighter.) The plans are these. One is to have
two rates of duty—one upon refined sugar, and the other
upon unrefined. But refined and unrefined are not the only
categories with which we have to deal ; because refined and
unrefined are both of them solid sugars. There is also that
which I may call liquid sugar, which comes under the class
of melado or molasses ; and there ate those who say let
us have one duty for refined, and another duty for unre-
fined solid sugar, and a third duty for liquid sugar. An-
other plan is to have one rate of duty only for refined and
unrefined, and another for liquid sugar. A third plan is to
have one rate of duty for solid and liquid sugars; and the
fourth is the system of classification, based upon an appro •
ximation to the value of the article. Now, it appears to me
that the advocates of a uniform duty have not a leg to
stand upon, and therefore I utterly reject the proposals
founded upon that view. In the same way I reject the dis-
tinction between solid and liquid sugars. In the contest
between the importer and the revenue it would be impos-
sible to maintain any such principle of distinction. The
question really is between uniform duties and classified
duties. Ido not contend that the present scale is a perfect
ono. Indeed, the select committee to which I have referred,
pointed out that it operated inequitably in two respects. In
the first place it is almost pi ohibitory as regards the lowest
descriptions of sugar ; and, in the second place, it operates
severely upon the higher descriptions of unrefined sugar
which come from the Mauritius and the East Indies. I put
aside all question of refining in bond, for that is not open to
us as a practical question. The proposition which I lay
down, and which I invite the committee to accept, is this,
that the form of our duty should be that which ehould least
interfere with the natural course of trade. I have no hesi-
tation in saying that I adopt the doctrine laid down by the
Manchester Chamber of Commerce, and which has been
accepted also by the Liverpool Chamber of Commerce I
received the other day an address from Manchester on the
subject of the sugar duties. The memorialists expressed
their opinion that the duty should be in proportion to the
amount of cryatalisablo sacccarine matter which the sugar
contained. (Hear, hear.) Now, let me try it by example.
And here I must use one of those outlandish barbarous
words, " jaggery," which means the lowest class of sugar
manufactured in the East Indies. Let us suppose 2 cwt. of
this sugar in the market in the East Indies, and that these
2 cwt. contain 50 per cent., not of saccharine matter,
because in saccharine matter it will not differ very much
from much better sugars, but of what is called " crys-
tallisable saccharine matter," as the Manchester Chamber
of Commerce has very properly described it, which can pro-
fitably be extracted by the refiner, 2 cwt of that class will
yield 1 cwt for duty. Ido not refer to the minor results of
refining, which would only complicate the case very much.
I take only the first process, that is, just as it comes from
the cane and undergoes the first process ; and the question
is, how are we to adjust our law in such a way that we
shall give no inducement to any man, by means of the duty,
to refine in England rather than in India, or in India rather
than in England ? That, I think, is a fair statement of the
ease. What will the Indian refiner do ? Let us suppose
we have an uniform duty. That is the way, we are told, to
do justice and avoid protection. Let us look at the operation.
The Indian refiner buys the 2 cwt and refines them. He
sends them to this country, and if the duty in this country
is :Os per cwt, he pays its for the introduction of his 100 lb
of refined sugar. What has the British refiner to do ? He
buys 2 cwt in India at the same rate as the Indian refiner;
he sends it at a greater expense to England—but that is his
affair, not ours; we must not undertake to reimburse him
for that—he brings it here to refine, and he pays 20s upoa
the 2 cwt : so that the English refiner pays a 20s duty to
get his sugar into the market, while the Indian gets it in for
10s. And yet we are told that is the way to do justice and
so avoid the stigma of protection. We have endeavoured to
consider the question entirely without prejudice, but there
is no doubt at all what the meaning of that operation
would be—that it would be simply equivalent to a bounty
of lOs on refining in ludic And this might happen : it
might be that in India, in consequence of the dearness of
skilled labour and the dearness of capital and machinery,
refining might cost 5s per cwt more than in England, and
still it might be worth while to get sugar refined in India
rather than to send it to be refined in England, because
of the lOs fine imposed by the fiscal laws here. That
is the nature of the view we take. We are not willing
to give any premium on the employment of labour and
capital in England as compared with India : but certainly
we are not willing to impose a penalty upon the employ-
ment of labour and capital in England, which is in our
view tho effect of the dun,. Wo have resolved to amend the
duty on the principle laid down in the memorial of the Man-
chester Chamber of Commerce. Now, I will explain my
proposals. The proem`, duty on sugars—rejecting for a
moment the cousideratisn of the semi-liquid classes, is dis-
tributed amongst four classes; refined 18s. 4d.; equal to
white clay, 16s. ; equal to brown clay, 13s. 10d. ; mueco
vado, or not equal to brown clay, 12s. Bd. I must mention
Dutch numbers—whichmay be speaking in a foreign tongue
to society in England, but which aro the only universal
language of the sugar trade of the entire world ; and if you
tell a man what a duty is in Dutch numbers, it is constru-
able in the tongue of every foreign country, and he knows
exactly upon what quality of sugar the duty will fall. The
refined sugar corresponds with the Dutch No. 20, which is
the highest of them. The 16s, duty, or equal to white clay,
corresponds with Dutch Nos. 15 to 18 ; the 13s. 10th duty
corresponds with Nos. 11 to 14 ; the 12e. 84 , or not equal
to brown clay, corresponds with Nos. from 7 to 10; and
nothing under 7 can possibly pay the duty which we now
impose. We have had to consider whether it is desirable
for us to alter essentially the dividing points between these
classes. There are four classes, and therefore three divid-
ing points. These dividing points do not rest upon any
abstract principle, but upon knowledge and experience, and
are well understood here and all over the world. Therefore,
we have thought it very undesirable to recast the duty in
foto, and to establish a complete'y new state of iistinction.
Consequently we adhere to these dividing points between
the different classes now established; but we meet the
grievance in the better class of refined sugars by diminish.
ing the interval of duty at the upper end of the scale ; and
we meet the grievance in the lower class by establishing a
new class, at a lower rate of duty than the rest, for the pur-
pose of making those sugars admissible which are now pro-
hibited, The drawbacks, of course, will have to be altered
in proportion to the duties; and I should say also, in regard
to a collateral point of some importance, that, to make
this change fair as regards the refiner, we shall pro-
rose to postpone the reduction of duty on foreign refined
sugar to four weeks from the present day, We hope,
if the committee shall be disposed to accede to our
proposal, and think it reasonable to proceed this day week
with the resolution relating to sugar, then on Saturday week
the new law will be in actual operation. I will now read
the new scale. Refined sugar, instead of 18s 4d, will no 12s
10d ; the second class, or equal to white clay, instead of 16s,
will be lls 8d ; the third, or equal to brown clay, instead
of 13s 101, will be 108 62 ; the fourth, not equal to brown
clay, instead of 12s 8d will be Os 4d , and a new ch ss of in-
ferior sugars, corresponding with Dutch numbers not rising
above No, 6, to be Ss 2d ; the duty on melado and molasses
will follow in proportion, the duty on the former for 6s 7d,
and on the latter 38 6d. The effect of this I will describe
as well as I can. The interval between brown clay and re-
fined, the chief subject of complaint, ie so great that it cer-
tainly does destroy and divert the natural course of trade.
It is now 1s 6d ; we reduce it to 2s 4d. The filth class pro-
vides for the lowest classes of auger. The smallest reduction
made is 3s 4d, the largest 5s 6d, the average is over 4s. The
effect of this change will be to place the sugar duty in this
country is—or more than ls—lower than it ever reached in
any former year. (Cheers.) We shall propose to make this
act permanent, and to leave the tea duty renewable from
year to year. I will show the committee what will be the
financial result of this plan. (Hear, hear.) The revenue
from sugar for the year 1861.5, as we estimate it, will be
£5,555,000. The reduction of the duty, as I have stated,
would cause a first loss of £1,719,000 ; but allowing for the
entry of sugars now practically excluded, and taking credit
for increase of consumption ainountiug to 6 per cent, which
I consider a very moderate estimate, £361,000 of that sum
would be recovered, and the loss to the revenue,in 12 months
would be £1,358,000. But allowing for the fraction of the
year that has already passed, the probable net loss will be
£1,330,000, and that at once, as the house will see, reduces
my surplus from £2,56'1),000, to £1,230,000. So much for the
sugar duties, upon which it has been necessary for me to
enter rather fully in order to make myself intelligible to the
house. I now come to a subject which it is impossible
for her Majesty's Government, whether their view of it
may be, to pass by without notice, under the circum-
stances of the day—l mean the demand which is made for
the reduction or repeal of the malt duty—because that is a
subject of great importance. (Hear, hear.) It involves a re-
venue of £6,000,000. A reduction of one-half would in the
first instance involve nearly twice as much as the large re-
duction I have just proposed for the sugar duties ; and I can
not disguise, and do not disguise, that is a question of great
political importance. A great victory has recently been won
in Hertfordshire. (Laughter.) A gentleman, highly compe-
tent not only to take his share in the business of this house,
but even to adorn this house, has, as I am informed, failed
to obtain a teat in Parliament because he was not ready to
accede to the demand for the repeal of the malt tax. (A
laugh ) The successful candidate saw no difficulty in his
way, and oe the list of his committee appeared a name most
justly respected in this house—the name of a person of great
political influence—the name of my right hon. friend the
member for Hertfordshire, and Secretary for the Colonies
in the late Administration. The question then is, has the
remission of the malt tax a claim upon our remaining sur-
plus? Is the house disposal to give that to the repeal of
the malt duties ? (No, no, and laughter.) It is commonly
said that .f we reduce the malt duty by one-half there will
be little of no loss, But practically ono half the malt duty
was takenoff when the beer duty was removed. Thirty-four
years havt elapsed since the beer duty was removed, but
although luring the last year the malt duty raised £700,000
more than in the year before, the malt duty has not yet
supplied tie loss of the beer duty. For in 1829 the joint
produce of the beer and malt duties was £7,286,006, while
last year the malt duties only produced 4091,000—the
average induce of the malt duties during the last few years
being 5i 'willow—whilst O'er 35 years havo elapsed from

tion as to how the surplus is to be dealt with. Perhaps the
committee may be surprised when I say it is intended to
submit to the Houses of Parliament a propoal for altering
the present duty upon corn. the duty on corn is at present
levied by tneasttre, while almost all transactions connected
with the foreign corn trade are carried on by weight. In
consequence of this discrepancy, and the inconvenience re-
sulting from it, the merehants connected with the corn trade
—I think 12 months ago—made representations to the Go-
vernment that the form of duty ought to be altered. We
propose accordingly to alter the duty from the uniform rate
of one shilling a quarter, to a uniform rate of threepence
per cwt. This change will take effect immediately on the
passing of the Act. It is also proposed to put some articles
of very small importance—such as lentils—which now pay
no duty, on the footing of corn. That has been done
at the request of the trade. But, sir, I ought to mention
that it has been proposed by many persons connected with
the trade to modify the duty in this wa3 —to lay a duty of
3d, per cwt. on wheat, and 2d. per cwt. on other kinds of
grain. And it is very justly said that that would be a more
fair arrangement in reference to the value of the article on
which the duty is imposed. Now, there are two reasons
which have withheld the Government from acceding to
that view of the case. One is that the change would entail
a considerable loss to the exchequer, which wo do not
think that, having a pressure of other claims, we are in a
condition to afford. The other objection is this, that it
would appear as if wo were deliberately setting about the
construction of a regular system of corn duties, and as if
we regarded that item as a permanent portion of
our finance. When the corn duty was imposed
in 1316, it was imposed under the idea of its
being a nominal source of revenue, It has, however, pro-
duced considerable revenue, with which it might be dif-
ficult to part. lam not prepared to say that it should be
parted with at the present moment ; but I confess that, on
the other hand, I should be reluctant to commit myself to
. . .

any plan which appeared to assume that a duty of this kind
—not a heavy duty, but still more than a nominal one—is
to be regarded as permanently imposed upon the chief

article of subsistence. I propose to make a change in the
rate of the charge for the licences of dealers in tea in cer-
tain cases. It is well known that these licences, in some
cases, operate severely in the rural districts, where the deal-
ings of the shopkeepers in each particular branch of trade
are very small ; and they aro obliged to combine a great
number of branches in order to constitute a business that
will yield a competent and moderate return. At present no
person can sell a pound of tea without paying the sum of
Ils 6d for a licence. That sum of Ils 6d is reckoned to be
10 per cent. on the sale of from 30 to 35 pounds of tea in the
year. That tends to narrow the supply of this commodity,
especially to the rural population. It is not felt as a griev-
ance in the towns. I think it is good policy, even taking
no higher ground, in furtherance of the great change which
we adopted last year, to make a reduction upon that duty
with reference to the thinly populated districts. I therefore
propose in all houses under £lO a year rating, and not being
in a municipal or parliamentary borough, to reduce the duty
from Ils 6d to 2s 6d. That would cause a loss to the re-
venue of £lO,OOO. Two years ago we adopted useful regu-
lations with regard to hawkers. We legislated for hawkers
on foot and for hawkers having one horse. We reduced the
duty from XS to £4; but we forgot the case of the hawker
who had two horses. (Laughter.) The result is that at
the present moment a hawker who has two horses pays £1
on one, and £8 on the other. We propose to place both
horses on the same footing. (Renewed laughter.) We
propose the equalisation of the stamp duties which are now
payable upon admission to ecclesiastical benefices of small
value. At present there is a distinction in the rates of charge
in the case of rectories, vicarages, and perpetual curacies.
There is no ground for the distinction. We propose, there-
fore, to abolish it, and substitute for the scale now in force
—which would levy a payment of £7 upon presentation and
institution together to benefices of £3OO a year—a scale of
duties which will bring the charge to £5 in the case of bene-
fices under £3OO a year, and which would diminish as the
value of the living decreased ; so that a living of less annual
value than £5O would be altogether free from charge. Next,
air, I wihingly accede to the hon. member for Devizes the
proposal he has suggested', which proposal is founded on
good sense; it is, that the duty on proxies to vote at joint-
stock companies, which at present is 61, but which was
formerly 30s, shall bo reduced from 6d to ld. I pro-
pose certain reductions upon the duty on letters of
attorney for the receipt of dividends, aril I propose to
make a change in the stamp duties with regard to the sale
and transfer of the stock of foreign companies. I propose
to legalise the practice known as marine reinsurances upon
payment of Id stamp, as in the case of fire insurance. I
propose, under the same control of the magistrates,
to give to refreshment-houses and sellers at the bar the
benefit of occasional licence, as far as it is enjoyed by pub-
Hems. lam silent on the question of charities this year;
but I wish to remind the committee that there is no change
in our views, and certain directions have been given by the
Home Secretary for the purpose of collecting information,
which will be laid before Partiament, to enable it to form a
sound judgment when its attention will again be drawn to
the subject (Hear, hear.) Therefore, with the insigni-
!leant exception of £10,090, the surplus will stand nearly
at its original amount. Now as regards the disposal of the
actual surplus of £2,500,000. (Hear, hear.) This year has
brought forward a large number of formidable claimants ;
but I shall endeavour to deal fairly with such cases as can-
not be possibly passed over, With regard to the largest
portion I will not keep the committee in suspense. I don't
think, when the matter is considered apart from prejudice,
interest, promise, or pledge, there can be any doubt that
the first claim upon the surplus is the claim of sugar. I need
scarcely remind the committee of the enormous importance
of that article. I believe its importance, as regards the
comforts of the people, stands next to corn. The duty on
sugar was raised for the purposes of war, anti the principal
part of the impost was never removed, We now propose to
make a considerable reduction in the sugar duties. At
present sugars are 10s. above the price of 1863, and they
are 6s. above the price of 1861 and 1362. There is no com-
parison between the claims of tea and sugar. With regard
to tea, we are dependent upon one source of supply, and we
are the great consumers of the world, and exceed all other
consumers in a large degree , whereas, in the article of
sugar, our consumption is small with reference to the total
consumption of the world. Sugar is produced in a mul-
titude of countries and is sent into a multitude of markets;
and the consequence is that if it is diminished in price it
will have the effect of attracting it to the highest mar-
kets, and, therefore, mitigating whatever inconvenience
may be felt from a restricted consumption. The stock
offers by no means a satisfactory prospect. On the last
day of February, 1862, the stock of sugar was 707,000
cwts. ; on the last day of February, 1863, it was 238,000
c els. ; and in 1861 it was 227,000 cwts. But now
I approach the most formidable part of my task this even•
ing. I said I proposed to deal with the sugar duty, but how
is it to be dealt with? There arises a question which is
grave in two senses. The question whether sugar is to be
taxed with a uniform or a classified duty is one of great im-
portance to all who are interested in its cultivation ; but, on
the other hand, as regards details, it abounds in every ele-
ment of repulsiveness. The present diaesified duty upon
sugar is approved by some, while it is a scandal and offence
to many more. The system of a uniform duty became gra-
dually modified until the markets were opened to all the
sugars of the world; but we found we had to deal with
classes of sugar of which very little was previously known.
In the year 1811 the consumption of sugar was 71bs. per
head of the population. In the year 1851 there was a
change consequent upon free trade, and the consumption
had risen to 26:lbs. per head. In the year 1861, after being
ten years under the operation of the classified system—but
when we had not the power to give the boon to the consu-
mer which was given in the ten years between 1841 and
1851—the consumption per head was 35i1bs. ; and in 1863
the consumption rose to 35:1bs. per head of the population.
Referring to the influence of authority, I may say that the
literature upon this question has been enormous. (Hear.)
Up to within the last fortnight, I believe I may conscien-
tiouely say that I kept myself on a level with the press of
the country. So far as the sugar duties are concerned in
the last fortnight, however, my efforts have been bafll.d.
(Renewed laughter.) But upon the subject of authority,
passing from the opinion of political economists, I may re-
mind the committee that a select committee was appointed
upon the motion of the member for the City of London, two
years ago, under the presidency of my right hon. friend the
Secretary for the Colonies, and that the report of that com-
mittee, after a most patient investigation was distinctly in
favour of the present system of classification. Nur is that all.
Last year we had what may be called an international dis-
cussion upon this subject. Representatives from the customs
departments of England, Franco, Belgium, and Holland,
met in Paris and discussed the subject; and not only did
the representative of England find no reason to recede from
the system of this country, but the representatives of France
and Holland came to the conclusion that they would do
well to abandon the system of an uniform duty. As far,
therefore as authority is concerned, we have ample in favour
of classification. But it is said classification means protec-
tion ; and there is another argument, drawn from the
analogy of the mode in which we have dealt with other
articles, No doubt Parliament did impose duties upon dif-
ferent descriptions of tea ; and it abandoned that system not
because it came to the conclusion that the principle was
false, but because we found from the nature of the commo-
dity that the arrangement was impracticable. And now is it
true that a system of uniformity is the system recognised
throughout our tariff? lam happy to say that our tariff
has now reached very moderate dimensions ; nevertheless
instances may be set forth, almost all of which are in favour
of classification. There are the wine duties for example.
Again, refer to the case of coffee. 'When coffee comes over
here in the raw state it pays 3d ; when roasted it pays 4d.
Cocoa, when it comes here as a pure raw material, you tax
d in the lb ; when it comes removed from the husk you tax
it id; and when it comes in the more advanced stage of
chocolate you tax it 2d in the lb. Take the case of corn.
The duty on corn is now is a quarter, but you are going to
make the tax 3d a cwt. Well, what is the duty upon flour,
which may be said to be corn refined ?—why, 41d per cwt.
Lastly, take the case of wood. Wood pays a duty of is a
load, but if sawn into deals it pays 2a. Therefore, so far as
the analogy of our tariff goes, it is in favour of classification•

THE SUM LONDON, FRIDAY EVENING, APRIL 8, 1864.

the time when practically half the malt duty was taken off,
there is still a gap of 11 millions not filled up. If then you
choose to take the step which you are asked to take, you
may tell your little children now growing up that the
longest lived amongst thet may witness the recovery of
the malt duty, but pray give tip any hope of seeing it
yourself, What, indeed, is the great grievance of the
growers of bark* in this country ? The grower of fine 1
barley, who possess a practical monopoly, has no grievance
at all. During the 25 years when the duty was levied by
the sliding scale, from 1827 to 1846, the averege price of
barley was 32s 6d per quarter ; for the 17 years since The
repeal of the sliding scale, it has been 435 Bid. But that
is not all, for while there bee keen a rise in the price of all
barleys, there has been a special and peculiar rise in the price
of the good barleys, and growers of which arc now so obstre-
perous for relief. But it is time, sir, that the question
should be looked at from another point of view. When the
member for Hertford proposes to sacrifice some millions on
account of the malt tax, let us consider how this bears upon
the interests of the three countries, England, Scotland, and
Ireland, and how the remission would be divided amongst
them. At present, if I take the revenue from spirits and
malt together, I find that England pays £10,218,000, or 103
a head ; Scotland, £3,620,000, or 22s a head ; and Ireland,
£2,653,000, or 10s a head. What would be the effect of
taking five millions or three millions off the malt tax ? It
would be a boon to England to bo made up by general taxes
on the three kingdoms. Scotland and Ireland would obtain
almost no part of the relief, but would be liable to pay their
fair share of any' augmented income tax or other tax which
might be imposed. (Cheers.) The malt duty paid in Eng-
land during the financial year just expired was £5,722,000 ;
in Scotland, £263,000 ; in Ireland, £306,000. (Hear.)
Under these circrmstances, the Government, not insensible
to the evils of a system of excise as applied to any manufac-
ture, have come to the conclusion that they would betray
their duty to the country, under the circumstances in
which we stand, if they proposed to apply any part of the
surplus to the reduction of the malt tax. (Cheers.) Now,
there is another question which it is ray duty to bring to
the notice of the house—the income tax; fur this is a ques-
tion not only involving the largest amount of revenue on
which it is in the power of a Minister to address Par-
liament, but it is in other respects the most important,
because it is associated with the strength and security
of the country in times of emergency in a manner
which belongs to no other tax whatever, and in-
volves social relations touching the relations of class
to class, and their relative susceptibility to taxation, and
moral questions concerning the effect of certain schedules,
which are of a moment far transcending those which bear
on ordinary questions of taxation, It appears to me that
the country should be dealt with fairly and openly on the
subject of the income tax. Parliament should consider—
Will it maintain the income tax on its present level—abolish

it altogether—reduce it to a lower level—regard it as an in,
strument of ordinary finance—or, declining to employ it in
time of peace, reserve it for great national emergencies, ex
cept as a means of effecting further reforms in our fiscal
system ? These questions have never been decided by Par-
liameat. In 1842 the income tax was imposed t• facilitate
commercial reforms—in 1815 it was renewed with a view to
still further commercial reforms—in 1849 it was renewed on
the proposition of my right hon. friend the Secretary of State
for India, in a time of considerable apprehension, although
not of actual danger. In 1851 Parliament refused to renew
it, except after the appointment of a parliamentary commit-
tee. In 1853 it was renewed for the longest period for
which Parliament has ever granted it, but it was renewed
upon a statement of figures and calculations which appeared
to afford a reasonable promise of its extinction. in 1890 it
was renewed, and even raised, to meet the necessities of the
country, in connection with our establishments. and like-
wise with a view to carry still further the work of commer-
cial reform. Since 1860, Parliament has taken no distinctive
resolution on any question of policy connected with it. The
tax being now reduced to 7d. in the pound, we find our-
selves at the point where we were in 1812. These are
questions on which Narliament ought to have an opinion.
It is not desirable that they should be disposed of in the
dark, or that the income tax should be continually dealt
with simply by renewals from twelvemonth to twelvemonth,
founded perhaps on, and sufficiently justified by, the exi-
gencies of the moment, but having no reference to policy
announced to the country, and to a clear, distinct, and
decided opinion on the part of Parliament with respect to
the proper use of that great tax. There are, no doubt,
many arguments which tend very much in favour of the
permanent maintenance of the income tax, even as a matter
of ordinary revenue. Its efficiency is enormous. Ido not
know any other tax by which, in the same degree as by the
income tax, you get at the vast reserved capital of this
country. You get it by the income tax—a tax very rough
and unequal, subject to that mysterious process of almost
virtual self-assessment which refers it pretty nearAy to the
conscience of the taxpayer, in the great majority of cases, to
determine what precise payment shall be made. But still,
after all, they are got at by better means than by any other
engine of taxation. But there is, as the house is well aware,
much harshness in the mode in which the income tax ope-
rates upon the lower incomes which it affects. That opera-
tion has been much mitigated by the measure adopted last
year, There is no doubt that those who desire the perma-
nent maintenance of the income tax have reason to congra-
tulate themselves on the adoption of that measure, which
very greatly relieves the harshness of the tax in the lower
part of the region in which it acts. But it is still severe
upon persons dependent upon small fixed incomes—upon
what may be called the non-elastic incomes of the people.
It imposes undoubtedly a very great amount of trouble in
the assessment. It has often been my business in this house
to perform the invidious task of deprecating the complaints
of honourable members with respect to the vexatious annoy-
ance which it involves. That is not because Ido not sym •
pathise with those complaints, because 1 know how much
annoyance and trouble is inseparable from the ordinary
operations of the tax, especially at the triennial period,
when the assessments on certain portions of the community
in schedule A are to be renewed. The inquisition into pri-
vate affairs is a serious matter in connection with the in-
come tax. The use of a war tax in time of peace—of a por-
tion of your last resource—is a matter which, if for no other
reason, deserves the notice of the house. The opinion of
the inequality and injustice of the tax, of which the hon.
member for Buckingham (Mr. Hubbard) is the champion
in this house, though her Majesty's Government do not
accede to it, they cannot deny to be an opinio❑ which is
widely spread among a large class of people. (Hear, bear.)
There is no doubt that this a matter to be considered with
reference to any tax whatever. It is needless to enter into
the subject of fraud. It is said, and I am afraid it would be
difficult to deny, that the extent to which encouragement is
given to it is very great. But there is one operation of the
income tax which I cannot help—though it is matter only
of private opinion—frankly stating to the house. It is its
operation with regard to public economy. (Hear.) That is
a topic which I do not think has been fully, or indeed ever,
discussed before Parliament. Long experience in the office
I hold, necessitating my placing myself in conflict at all
times of day and night, and in all places and all circum-
stances with every sort of demand for increased public ex-
penditure, has brought me, after long observation, to the
conclusion, that it is the desire of the house to re-establish
in public ;administration those principles of reasonable
thrift—l do not speak of wholesale retrenchment, in which
I have little faith, but those principles of reasonable thrift
which directed the Government of this country from about
the period of the Duke of Wellington's Administration
down to the Russian war—if they are to be re-established
in administration, I greatly doubt whether it can bo done if
the income tax i 3 a permanent portion of the fiscal system
of this country, with a view to satisfy, not any particular
exigencies nor to work out great reforms, but with a view
to satisfy the ordinary every-day expenses of the country.
(hear.) After stating that it may be said, " But why all
this talk about economy ? have you not stated the wealth
of the country, the growth of the revenue, the enormous
extension of our trade. ?" Yes, I have ; but I hold this
opinion as a matter of principle, that public economy re-
mains just as much a duty of this house as before its great
work of commercial legislation--before wo reaped the bene-
fit of railways—before the country had achieved the vast
material, and I hope likewise the great social and moral
progress, of which wo have had the happiness to be wit-
nesses. (Hear, hear.) lam afraid it must bo said of this
country, " You have had, you still have, and you always
will have, an enormous mass of pauperism." Wo have
840,000 dependent on the poor rates; but that does not in-
clude the numbers which aro relieved by private charity,
though not driven to the hard necessity of that last resort,
the poor law or the workhouse. That is a large mass of
pauperism; but think of the large number of poor who are
bordering on that region ; think of the multitudes of the
labouring classes who struggle manfully, bat who with
difficulty avoid it. I saw recently a clergyman of the East-
end of London, whe told me, "I have 13,000 people, of
whom 12,000 are for ever on the verge of destitution." I
read last week a letter from ono of the best known philan-
thropists of this country, in which he described the state of
the whole district at the East-end of London, where you
could not find a cab or an omnibus, where there was not
any street music, and not even a street beggar. What are
we to say of the peasantry of this country ? Happily, much
has been done in many places, where their wages have much
increased, but in many places they have not increased.
What are we to say of the duty of public economy when we
think of the population of Ireland ? Human life, in nine
cases out of ten, is a struggle for existence; and if the
means for carrying on that struggle are somewhat bettered,
yet the standard of wants has risen equally with the stan-
dard of means. In respect to public economy, we have,
independent of general arguments, that which we gave two
years ago upon the motion of my noble friend at the head of
the Government, in which he very wisely asserted the prin-
ciple that "this house, deeply impeessed with the necessity
of economy in every department of the State, but at the same
time mindful of its obligations to provide for the security of
the country at home and the protection of its interests
abroad, observes with satisfaction the decrease which bas
already been effected in national expenditure, and trusts that
such further diminution will be made therein as the state of
circumstances may permit," That is the relative situation
of the Government with respect to taxation. After all I
have said, I certainly am not one who ought to propose a
policy relating to the income tax reaching over a long
terns of years. I have been sufficiently warned of the
dangers of propositions of that kind. 'We ask the
house to adopt no general conclusion on the subject of

the income tax. We do not propose a plan to abolish it. spirits and free trade in cultiv *non, leaving it to the farmer
We do not propose that the committee should pledge it- to produce as he pleased barite: eor beet, or tob.acco.
self to its abolition as a policy. That which we do propose Mr. BENTINCK comp'air tee! of the tone in which the
is this—that we should adopt as a policy its reduction, as right hon. gentleman (Mr. Gh t
e) d stone) had spoken of pr)"
circumstances may permit al teetion. (Hear, hear, and la
,to that which was once its legal tectior. (Hear, hear, and lau _der.) He also contendel
minimum ; and that we should now proceed to take the first that there ought to be a r edu c don in the malt tax, and
of the two steps which would bring us to that legal mini- prophesied that the first strong Government which ca m°
mum. (Cheers.) The proposal is to take off one penny from into office would re- enact the dute on paper. (Laughter.)
the income tax. (Cheers.) But if we can reach the standard Mr. CAIRD remonstrated vie h the Chancellor of the
of 5d on the income tax, that would establish a position in Exchequer on his proposal to im Ise a duty on certain in. •
which Parliament would have it in its power to consider de- ferior descriptions of corn, which ?ere principally used in
liberately and reposecl what course it should pursue. feeding stock and the purposes ofetillation.
NOV, sir, we poto make a reduction in the tax to 6d. .a he CHANCEL Lad. of the 2 F.N. C HEQUER then rose
The ultimate loss would be £1,230,000, and the immediate to reply. He said his proposal vith respect to the descrip-
loss will be £860,900. The case of schedule B-1 may say of tion of corn referred to by the hon. member (Mr. Caird)
acotland and of Ireland—will be dealt with precisely in the was a matter on which all partiel I should be fully heard, and
manner it was dealt with by the act of 1853. £400,000 of that in passing the resolution st ith regard to it, thee` on!'
the loss will be postponed, and the surplus, which began at mittee would not be boun ta ay final jucigme nt, he
£2,570,000, will be reduced to £434,000. But there is yet admitting that he had reason to be dissatisfice 1 with the
another subject. In consequence of the indications—the general tone of the discuss
see th ion, he
fire would obssuranceereuee tha
at
he
formal indications—given by the ;louse, we have thought it should infinitely prefer toin duty and
our duty, limited as our means are, to consider whether we altogether than reduce it by so small a proportion as 6d:,
Sir
could submit a measure which would in,
iicate our desire to With regard to a stateme.at made by an hon. baronet
most with deference and respect the cons ictions that are J. Ferguson) respecting tile income tax, the right hon.
entertained by the House of Commons, even when we do gentleman reminded the coalmine() that last year, whenbe
not entirely and absolutely share them. I advea t, sir, to the submitted taxes of 7d and 9d, the figures he gavel the house
fire insurance duty. (, heers.) We do not think st.-e should were about £8,000,000. He now gave 7d, and his estimate
have been justified in entertaining a large propositime with was still £e,600.000, founded on ti to actual charges known
respect o fire insurance duties, to the displacement of oil,
from the general re-assessment whi ch had taken. place.
In
of the proposals which have made; nor are we prepared tta reply to the remarks of an hon. gent leman respecting
accede—and I trust the committee will not ask us to accede L'istillation, he was prepared to show, with regard to Ireland'
—to any such proposal. How does the case of the fire in- the,' illicit distillation had not resulted from augmentation
surance stand ? The amount ait is 1,700,000, and it of the spirit duty. As to the paper duty', since le
spoke he
increases at the rate of about £50,000 a year. Now, here had had th e opportunity of seeing, in a paper Laid on the
again we are met with this difficulty. There is the greatest table of the imuee, that the export duty on raga would be
possible difference of opinion with respect to what I may removed by th a French Governmeat. (Hear, helm) Pl°
call the self• recovering power of the fire insurance duty in right hon. genti,,man concluded by moving that ,the chew..
the event of a reduction. I must say, for my own part, man report progriess.
that lam not very sanguine, at least as regards the The motion was agreed to, and the house resumed.
greater part of that duty, Upon examining the duty, JAPAN.
it will be obvious to the committee that it divides On the motion for going into committee of supply on the
itself into two portions. One portion of it, the army estimates,
larger portion, is a tax upon property; the remaining and Colonel SYKES inquired whether provision had been
smaller portion is a tax upon industry and trade. Two made in the Estimate a for the charge of certain troops
thirds of it may be said to be is vied on buildings and furni- transferred from the Indian establishment for service to
tare—that is a tax upon property ; one-third, as nearly as China or Japan, accompanying the inquiry by a rather long
it is possible to make a conjectural estitelate, is levied upon disquisition upon transactions in Japan.
what may be called stock-in-trade: Now, rely hon. friend Mr. H. BERKELEY called attention to the inferior
the member for Bradford, in connection with an important armament of the Volunteer Artillery Force, and asked
deputation from the Chamber of Commerce of that town, whether any steps had been taken or were likely Boor.
expressed publicly to me a short time ago a strong opts ion to be taken, to arm the Volunteer Artillery in the Bain°
that, as regards stock-in-trade, so far as his observed°.
a manner as the Royal Artillery.
went, with reference to those branches of commerce with Mr. H. VERNEY moved a resolution, that it is ex-
went, that the recommendations contained in the report
which he is connected, a reduction of the fire insurance duty pa
would be followed by a rapid recovery. Undoubtedly Igo of ill:3 committee on the proper weans for the instruction
thus far with him, I admit it to be a general rule that and enenloyment of soldiers and their children in trades,
taxes upon trade, industry, and labour, when they are re- and of ehe Under-Secretary of State in a letter to the
duced, recover rapidly; but taxes laid upon property, when Quartermee'ter-General, dated May 23, 1862, be carried
they are reduced, recover slowly. We have se ..n that in the into effect, svtth due regard to the duties and discipline of
case of the assessed taxes and in other instances ; the solu- the army.
tion of which is, that taxes upon property, are in the main The Marquis mt. HARTINGTON, in his reply to Colonel
paid by the rich. They do not feel seriously or sensibly for Sykes, said he was labouring under some misapprehension
the most part the burden of those taxes, and when removed on the subject of his question, respecting which he gave as
' their proceedings are not materially affected. New, sir, explanation. In answer ,to Mr. Berkeley he oastobserved
general tbat
we have felt that if this question is in dispute as to the self- the Volunteer Artillery we,-e not intended to ly
recovering power of the fire insurance duty, it would be very in the field, but were raised almost exclusively
was necessary tto serve es
desirable to endeavour to arrive at some solution of it by the garrison artillery, and they ha
all thato
Sir
trial of an experiment, and therefore the proposal we make teach gun drill. In regard to ths
resolution moved by
to Parliament is to reduce the duty from 3s to is 6d, so far H. Verney, he explained the intentions of the
militatY
as stock• in-trade is concerned. (Hear, hear.) We shall authorities on the subject.
then see what the energy of commerce will effect with re- Sir H. VERNEY withdrew his moaion.
spect to this particular portion. We have felt that there is The remaining orders of the day were then proceeded
something invidious in the present position of the duty on with, when certain bills were forwarded, and the house ed•
farm stock with reference to stock-in-trade. They are really journed at 20 minutes to 12 o'clock.
essentially the same thing, and they ought to have been
traced in the same manner. We do not propose to impose a
duty upon farm stock. I think that exemption was unfairly
granted when the duty on the stock-in-trade was retained.
(Hear, hear.) At the same time, we aro not prepared to
propose that tho duty should be reimp sed, but we are glad
to mitigate the inequality of the reduction of one-half.
Of course this will not take effect uutii the Act passes.
We propose it should take effect from the Ist of
July, and it will be necessary to introduce a provision
with respect to the return of duty upon altered policies
which would, of coarse, be at the lower rate. The finan-
cial result will be this. The proceeds of the fire insurance
duty upon stock-in-trade is £566,000. The first loss by
reduction will be £283,000 ; but, es it will only operate for
nine months, the loss will be £213,000. I allow for an in-
crease of 10 per cent,, which would be £21,000 ; net loss
for 1861-5, £192,000. Now the committee will see that I
have got to the full end of my tether. (A laugh.) The
surplus, before deductions, was £2,570,000. The proposed
changes, and the relief by them, are as follows. The relief
would be : On sugar, £1,719,000 ; on income-tax £300,000 ;
on fire insurance, £213,000 ; and on tea licences, £15,000 ;
making a total of £2,747,000. There will be a farther loss
in 1865 6 on sugar of £28,000 ; on income-tax of £133,000 ;
on fire insurances of £70,000; making a total of £531,000.
The financial loss on which I must reckon in the present
year, namely, 1864-5, would be, on sugar, £1,330,000; on
incomeetax, £800,000; on fire insurances, £192,000; and
on tea licences, £19,000; making a total loss of £2,332,000.
The relief from taxes in this year will Le greatly augmented
by the enactments of last year. The relief from taxation
which would operate this year is made of £2,747,000, which
we now invite you to adept,and of £998,.000 handed over to
us from the remissions of 1863, making in all a total relief
for 1861-5 of £3,645,000. The loss by the changes I have
proposed being £2,332,000, the surplus, after these deduc-
tions, is £238,000. (Hear, hear.) It has grown "fine by
degrees and beautifully less," and I am sure I need not say
to the committee that that is not a surplus upon which we
could possibly contemplate making any further operations.
(Hear, hear.) The plan of the changes we have proposed, we
have proposed in the discharge of our responsibility, and not
at all as being of opinion that they ought to be or can be com-
pared in point of magnitude as regards the remissions with
some former periods ; but they are, as we think, contributions
towards the accomplishment of the great purposes which
Parliament hes taken in hand ; and taken as the proposals
of a particular year, they may, perhaps, be just like
the stone that is cast by the passing traveller upon
the heap. Each separate contribution is small, but the
general result is that a heap of them arises, which becomes
enough to commemorate some signal action or the death of
a great man. It is in that sense we submit them to Par-
liament. We believe them to be good. We trust they will
meet with your acceptance, and that you will concede them
to be a pledge on our part of out earnest desire to co• operate
with the Legislature in carrying yet further forwards those
purposes the partial accomplishment of which has already
done so much for the strength and security of England—
tor the comfort and happiness of the people—for the honour
of the age in which we live—and for the hopes that we en-
tertain on behalf of the times that are yet to come. (Loud
cheers ) The right hon. gentleman whose statement occu-
pied precisely three hours is its delivery, then placed in the
chairman's hands the resolution for the alteration of the
duty on corn.
Mr. C RA.W FORD thought the statement which had just
been made would give general satisfaction to the country.
The sugar duties were not levied in a satisfactory manner,
and he should be prepared to move a mode for the settle •
went of those duties, which would be at variance with the
proposition submitted.
Mr. CAVE said, with reference to the licences upon beer
houses, he hoped the Chancellor of the Exchequer would
give some other defsniiien of those who were to be excluded
from the benefit of the change proposed.
Mr. HUBBARD expressed his regret at what had been
announced respecting fire insurances.
Sir J. FE RGUSSON having offered a few observations
upon the surplus,
Mr. WHITE said he shared the satisfaction of the house
with the Chancellor of the Exchequer's statement, The
results of free trade policy ware certainly marvellous. He
deprecated and deplored, however, the reduction upon the
income tax, seeing that a much more advantageous policy
could be pursued by lessening the cost of those articles
which were so largely consumed by the working classes.
Mr. DUNLOP thought twat, upon consideration, the
member for the City of London would scarcely bring in any
measure at variance with what had been stated by the
Chancellor of the Exchequer respecting the sugar duties.
Mr. WHITESIDE criticised the policy which had been
pursued by the Chancedor of the Exchequer concerning
the spirit duties. The increase in the rate of duty had pro-
duced the reverse of a good effect. It had caused an increase
in adulteration. He understood from an eminent distiller
that, though pure spirits were sent out by the distillers, a
great deal of it was adulterated before being sold in conse-
quence of the high duties. In the first place it was watered,
then treacle was added, and it was strengthened by vitriol.
This dangerous and unpleasant compound was called Glad-
stone's Cordial. (Laughter.) In the course of further re-
marks upon the ill effects of the increase of the duty upon
spirits the hon. member said he believed there never was a
time when the illicit distillation of spirits was so rife in Ire-
land as at the present time; and it was a very remarkable
fact that wherever there was an illicit still there was Rib,
bonism. (Hear, hear.) He thought the right hon. gentle-
man should act up to his policy, and restore the duties to
what they were in 1858.
Mr. MERRITT intimated that, notwithstanding what
had fallen from the Chancellor of the Exchequer in regard
to malt, he should persevere with the motion of which ho
had given notice on that subject.
Mr. KINNAIRD regretted any trader should be speci-
ally oppressed by taxation, but in the case of spirits there
were high moral considerations why the duty should not be
reduced.
Lord C. HAMILTON, on the other hand, urged that a
high duty led to illicit distillation, and observed that, for
himself, he should have been rejoiced if any reduction
could have been made in that branch of the revenue.
Mr. NORRIS suggested further and more equitable alte-
ration in the beer licences, and that the gigantic joint stock
companies which were eery day springing into existence
might be made to contribute to the exigencies of the State.
In regard to the importation of rags, the Chancellor of the
Exchequer was wrong in supposing that the quantity re-
presented by the Board of Trade returns as having been im-
ported within the last 18 months were for the purpose of
paper manufacture. The fact was that the cloth manufac-
turers of Yorkshire and Lancashire were so pressed for ma-
terial that they now imported the refuse woollen cloths of
the Continent, and rewrought them into new material.
Mr. M.`)IA.HON advoceted, reduction, in the duty on