The Sun.
London, England, 1853-04-25 00:00:00

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[PRICE SD.

LETTER , THE CHANCELLOR OF THE
EXCHEQUER ON THE BUDGET.

The following important correspondence has been
placed in our handi for publication, and we give it with-
out a word of comment, as the plain and feasible argu-
ments of the. Chancellor, and the spirit of considerate
kindness which dictated his reply to the remonstrance of
the clerk, need no exposition and no eulogy :

Birmingham, April 20, 1853.
SIR,—I am a clerk whose salary is just above 100/. a
year, and will therefore come under the operation of
your measure of the income tax.
Now your proposition will come to this. I shall have
to pay 2/. Is. Bd. hard cash to the tax-gatherer ; and I
shall be glad if you will point out where I shall be re-
lieved—on house rent ?on clothes ?on meat ?on flour ?
on coals, which last during the past six months increased
75 per cent. ? on education of children ? on medical at-
tendance ? on borough or parochial rates ? Mark, sir,
these items, after all, are the great items in house-
keeping.
It has been said that our class will be more relieved
than others by the remission on 238 articles. But these,
if I rightly understand, will be only as a drop in the
bucket. The repeal of the corn laws was a bond fide re-
lief, for which all are most thankful. I hope, sir, you
will therefore pause before committing so great an injus-
tice.—l remain, your most obedient servant,
'Toms LLOYD PHELPS.

• Downing-street, April 21, 1853.
Sir,—The reasonable tone in which you write to com-
plain of the proposal to extend a modified rate of income
tax from incomes of 1501. downwards to those of 100/.,
leads me, though my time is very much occupied, to
address you an the subject.
You observe that you will have to pay 21. la. Bd. to
the tax collector, but will have nothing in return on the
most important items of expenditure.
Let us look into this matter more particularly.
' The tax collector, should Parliament adopt the propo-
sition of the Government, will about the month of
January next call upon you for the half-yearly payment
of 11. Os. 10d., which will be repeated in July, and this
for seven years ; when, unless Parliament, in considera-
tion of other public benefits or necessities not yet fore-
seen, should prolong the tax, it will drop altogether.
Is this a hardship ?
If you and your family do not form a strange excep-
tion to the general rule, you have since 1842 been de-
riving great additional command over articles of use and
subs'stence from the changes that have been brought
about in our fiscal system.
I think I do not overstate the actual savings upon
incomes of 100/. per annum, which have directly flowed
from legislation since 1842, if I put them at 51. per
annum.

In what manner has Parliament been enabled to give
you the benefit of these savings ?
By the imposition of an income tax at sevenpence in
the pound upon all incomes of 1501. and upwards.
Have the owners of these incomes who have borne the
exclusive burden derived from the accompanying changes
in legislation a greater proportional benefit than those
who own incomes of 100/. ?

On the contrary, it may be easily inferred from general
considerations, and it is most plain to me from carefully
collected facts, that the benefits of the income tax have
amounted to a much larger percentage on incomes below
1501. than on incomes above that sum. Ido not antici-
pate that you will doubt this.

The question then arises, if the income tax is again to
be imposed for a term of seven years on those who have
heretofore paid it, with a view to another great scheme
of remissions of indirect taxation for the benefit of the
entire community, but especially of the incomes below
1501., is it fair to those having 1501. and upwards, after
the class next beneath them in wealth have come into
actual possession of a great pecuniary advantage, free of
any cost whatever to themselves, that the higher in-
comes should again be required to bear not only the
main but the exclusive burden, in order again to confer
the main benefit on the lower?

Put yourself in my position. Suppose the Govern-
ment had not asked Parliament to go down, at fivepence,
to incomes of 1001. ; suppose I had now been replying
to some person with 1501., per annum who had been
complaining to me that I called upon him to pay a tax
in which you did not share, in order to bring about
benefits in which you were to have a greater share than
he—do you think I should have as good an answer to
make,to him as I can now make to you ?
But let us look more closely at your case. I observe,
first, that you are in enjoyment of certain money advan-
tages, which have been obtained for you at the cost of
others. But is not on that account that I would call
upon you to pay. Ido not scruple to say, that if you
have a family—and if you have not, your case must be
regarded as an exception to the common state of men in
society—you will realise savings from the changes we
have proposed to Parliament greater than the cost at
which we invite you to buy them.
You are asked to pay 21. ls. Bd. per annum for seven
years from Jan. next. You will thus pay within about
eight years from this time the sum of 141. lls. Bd. in
all. The present value •f this payment, distributed as
above, may be from 11/. to 121. What is it proposed
you should gain on articles of common consumption in
return for this 11/. to 121.

1 I have before me the household expenditure of a clerk
in a country town with a wife and five children, and
with an income of 1001. per annum.
I find that in 1852 his tea cost him 31. 18s. But the
changes proposed to take effect within the next three
years will reduce the price of tea by 30 per cent. Thus
then he will gain three-tenths of 785., or 11. 3s. 6d. per
annum on his tea.

I find that his soap cost him in the same year 265.
From the sth of next July, if the changes proposed by
the Government are adopted, the duty of lid. per lb. on
soap will be repealed. I may take this duty at 40 per
cent, on the price. But the repeal of the duty will
lead to such improvements in the trade that I un-
derstand there will be a fui Lher saving on the
short price of 30 per cent. I will, however, take
the whole reduction of price no higher than 50 per
cent., and this perhaps not until after a couple of
years, when the trade shall have had time to expand in
its state of freedom. The clerk, whose income is before
me, will for the same quantity of soap then pay 13s. only
instead of 265. He will have saved U. 3s. 6d. on his
tea, and 13s. on his soap, together 11. 16s. 6d. This
annuity is perpetual ; it is for himself, and for his chil-
dren after him ; he will have bought it for a sum equal
to between 11/. and 121. Do you think lie could buy
a perpetual annuity—and I call it so, because it is strictly
true that money saved is money gained— of 11. 16s. 6d.
for 11/. or 121. down ? No, nor for double nor treble
that money. _ _ _

I have certainly here the case of a man with a family
larger than the average. But pray observe also that he
is, therefore, poorer than the average of those who have
1001. per annum, and thus his ease shows how our pro-
posals will operate on the most needy among those whom
they affect.
I have, however, another case before me, of a country
tradesman with 1201. per annum, having a wife, but no
children ; and in this instance the figures would not be
very materially different.
I might, however, have pushed my case much further.
I might have taken credit for savings that a large por-
tion of the population will realise from the reductions of
duty on butter, cheese, and a multitude of other commo-
dities, as also from reductions on stamps and other arti-
cles. But I will not enter into them.

I wish, however, to point out that these reductions
operate in many ways not at first sight perceptible. A
printed calico which cost 225. 6d. in 1330, including a
duty of ss. Bid., may now, when the duty is off, be had
for less than 11s. Again, I think you are mistaken in sup-
posing that the tax on soap does not enter into the cost of
clothing. It is an important ingredient in the manufac-
ture of printed calicoes, woollens, and worsteds. In
some of these cases only half drawback is allowed ; in
all of them a worse and dearer article is used than would
be employed if soap were free, and the cost of the cloth-
ing on our backs is enhanced in proportion.
Again, you say education is not cheapened. I beg
your pardon. We shall propose this year an addition to
the vote of 100,0001. Every farthing of that money will
go to cheapen and to improve the education of the chil-
dren of persons with incomes less than 1501. per annum.
You say medical attendance is not cheapened. Surely,
medical attendance has, since 1842, been virtually and
really cheapened to you, if medical men (as has been the
case) have been called upon, without any increase of
their fees, to pay income tax, in order to reduce the
price of articles of which persons of 1001. a year are,
relatively to income, larger consumers than they them-
selves are who have paid the tax.
You may, perhaps, say all this tells in favour of carry-
ing the tax below 100/. I need not now enter upon
that question ; the labouring class, properly so cahli.ed,
presents a case to be considered apart ; but I t ink
there is no essential distinction, speaking generally, be-
tween incomes of 1501. and incomes of 1001., which
should exclude the latter from a moderate share of this
tax ; and I further think I have shown that the strictest
considerations of justice not only warrant, but even
may seem to require, the proposal which the Govern-
ment has made. At any rate, lam certain of this, that
had you been my constituent, and had a dissolution of
Parliament been impending, I never should have pre-
sented myself to you with greater confidence, to render
an account of my trust, and to ask for its renewal, than
on the day after I had stated to Parliament the pro-
posals which her Majesty's advisers have laid before it.
I remain, sir, your obedient servant,
Moru. J.
are Lloydat liberty W. E. GLADSTONE.
You
make any use of this letter you
b Phelps,
to
may think fit ; although the figures I have used in it
may have been somewhat roughly stated.—Birmingham
Journal.

THE PITMEN AND THE WAGES QUESTION.—The
miners of the North Eastern district of Northumber-
land met at Horton, near Blyth, on Saturday, to con-
sider the necessity of asking for an advance of wages,
and to adopt certain resolutions to secure a better pro-
tection of their health and lives. Resolutions were
adopted, and no doubt in the present brisk state of the
coal trade any reasonable demands made by the men
will be acceeded to.

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