The Sun.
London, England, 1854-03-07 00:00:00

aolution that the expenses of the war shall be borne by ad-
ditions to taxes; but yet it is possible for us to do this—
to lay down a set rule upon the matter, and to determine
that so long as those burdens are compatible with the prin-
ciple, and so long as the supply necessary for the service of
the year can be raised within the year, for so long not to
resort to any loan. (Loud cheers,) I wish emphatically
to dwell upon this subiect, because we are only updn the
threshold of a war, and because I feel this, that if any
small amount of inconvenience were to induce us to deviate
from the course I have just presumed to state, we should
not be acting worthily of ourselves, and of our country.
Sir, the reasons against resorting to the money market—
the reasons against charging these expenses upon posterity,
are too many and too great to allow us to follow that
course. (Hear.) Ido not lay down laws for other coun-
tries. There is no country which has played so deeply at
dangerous game as England has done—(hear)—there
no country which has mortgaged the industry of future
'nerations to so fearful an amount. (Hear, hear.) If I
m told that there are conveniences, and no doubt there
are 500 conveniences, in havine. Three per Cent.. Stock,
into which men can buy and out which they can sell, I
grant there are such, bat I think you have ample scope for
all these conveniences as long as you have 750,000,000/. of
Consols. (Hear, hear.) Sir, as there are economical rea-
sons, so there are moral reasons, both of which, I trust,
will induce this country, and induce this house, as long as
it is possible to maintain the policy—the sound and honest
policy—of raising the supplies necessary for the expendi-
ture of the year. (Hear, hear.) It may be very well for
other States to act differently. It is not for us to lay down
rules for them. Take, for instance, the example of Arae-
ricr—America without debt—America with a standing
surplus—nothing could be more unusual—nothing could
be more intelligible than the way in which, when she
annexes portions of territory at the cost of a war, she
raises a loan to defray the expenses of that war, because,
according to every rational principle of calculation, she
knows what she has to deal with. She does not enter into
English politics and calculation. She reckons upon her
expenditure exceeding her means for two or threeyears,
lent*she knows that it will be overtaken by the standing
surplus of her income above her expenditure ; and, con-
sequently, she avoids, and very wisely avoids, disturbing
her system of taxation with reference to the cost of such
war. (Hear.) Take, for instance, oar great and powerful
neighbour, France. The debt of France, although it is
considerable, is not to be compared for a moment to the
debt of England. Indeed, lam sorry to say, such is our
834 pre-eminence in respect to public debt, that I believe
we far exceed, not only any one country, bat all the coun-
tries of the world pat together, in the amount of our debt.
(Hear, hear.) Any man who has had to do with the
administration of the finances of the country, must
feel how many there are—how many grievous bur-
dens you are compelled to keep upon the people,
because of the demands of the enormous, almost over-
powering maw of our debt—how many good works you are
obliged to defer—how you are obliged to narrow, and pare,
and cat dow the assistance you are desirous of offering to
civilised and honest pursuits, because of the immense and
crushing weight of this great, prominent, and standing
debt. (Hear, hear.) Sir, we should incur a great and
serious responsibility were we voluntarily to add to the
amount of that debt, and I am convinced that the com-
mittee is not prepared at the present time to make an ad-
dition to that burden, and I trust they will not be prepared
at any time to take a course so fatal to the interests of the
country, (Loud cheers.) Sir, the principle has been sup-
ported by political economists of the 'reatest reputation.
These are the words of Mr. Mill :—''lf capital taken in
loans is abstracteHrom funds either engaged in production
or destined to ha employed in it, their diversion from that
purpose is eluivalent to taking the amount from the wages
of the labouring claeses." And no doubt, without at all
endeavouring to entangle the house in abstract arguments
of political economy, there is much truth in the allega-
tions of those who say that if you raise war supplies by
new taxes, you make each man take his share for himself
out of his income from his expenditure ; but if, on the
contrary, you go into the marketfor a loan, you act directly
and to the fall extent upon that portion of capital which is
immediately available for the promotion of trade. In the
one ease, you got a large portion ef what you want out of
a man's comforts ; in the other case, you go directly to that
fountain-head where money is supplied, upon which in a
great degree the activity of trade and the cheapness of pro-
ductions must depend. But, sir, in a less scientific point
of view, I beg the committee to listen to what Mr.
M'Culloch says on this important subject in his work on
taxation. He discusses the immense waste that attends
upon all borrowed expenditure, and inquires into the best
mode of meeting that calamity. He says :—" There
are no means whatever by which the profusion and
waste occasioned by a war can be counteracted, except by
the industry and economy' of individuals ; and to make
these virtues be practised, individuals should be made
fully sensible of the influence of war expenditure over their
own private fortunes. The radical defect of the borrow-
ing system consists in its deceiving the public on this
point, and in its making no sudden encroachments on their
comforts. Its approaches are gradual and almost unper-
ceived. It requires only small immediate sacrifices, but it
never relinquishes what it has once gained, while the ne-
cessity for fresh sacrifices, arising from their own ambi-
tion, injustice, and folly, as well as from those of their
neighbours, continues as great as ever. Such a system is
essentially delusive and treacherous. It occasions the im-
position of tax after tax, hardly one of which is ever again
repealed, so that before the public are awaketted from
their trance, and made aware of their actual condition,
their property and industry are probably encumbered with
a much larger permanent interest on account of the inte-
rest of the public debt than would have been required had
they submitted to it at once, to defray the expenses of the
war." Sir, I confess that that reason is perfectly satisfac-
tory, and that, irrespective of other considerations, it is
perfectly true to say of the system of raising funds neces-
sary for wars by loans, that. It practises wholesale syste-
matic continued deception upon the people—(hear)—that
they don't really know what they are doing. (Haar.)
What is desirable is that they should know the price they
are called upon to pay for the benefits they expect, or the
sacrifices they think fit to make in order that that which
they do they may do on intelligent and reasonable grounds,
not deluding themselves at the cost of a charge on pos-
terity. (Cheers.) Sir, I do not hesitate to say that it
seems to me, that if the political reasons are strong for the
adoption of that policy, not less strong are the moral rea-
sons. (Hear.) The expenses of a war are the moral check
which it has pleased the Almighty to impose upon the am-
bition and the lust of conquest that are inherent in so many
nations. (Hear.) There is pomp and circumstance, there is
glory and excitement about war, which, notwithstanding
the miseries it entails, invests it with charms in the eyes of
the community, and tends to blind men to those evils to a
fearful and dangerous degree. The necessity of meeting
from year to year the expenditure which it entails is a sa-
lutary and a wholesome check, making them feel what they
are about, and making them measure the cost of the bene-
fit upon which they may calculate. It is by these means
that they may be led and brought to address themselves to
a war policy as rational and intelligent beings, and may be
induced to keep their eye well fixed both upon the neces-
sity of the war into which they enter and their desire to
realise the first and earliest prospects of an honourable
peace. (Cheers.) Well, sir, having stated under their
various heads what it is the Government cannot recom-
mend the committee to do, and what it is we feel convinced
the committee will not do, there cannot, I think, be much
doubt remaining on the mind of any man as to that—(hear,
and laughter)—as to that which the Government will pro-
pose, nor, I think, as to that to which the committee will
agree. Sir, when in the month of April last, in discussing
the subject of the income tax, I referred to th, immense
results which directly and indirectly it had achieved at
that time—to the immense direct addition which it made
to the resources of the exchequer, and to the indirect and
collateral effect which it seems to have had in invigorating
the whole of our financial system—and when I ventured to
state to the committee that this was the great engine
which you must look to use in the event of European ne-
cessities, I had not a shade of serious apprehension as to
the earliness of the period at which I was to call upon the
committee to give effect to those views. But it is true that
you have here a mighty engine—an engine which you may
use to an extent almost equal—l will not say almost equal,
but to an extent equal to a great part of what any war can
demand, and an engine which is well equal, and more than
equal to the issue to which we now propose toapply it. Sir,
the estimated receipts from the income tax at the present
rate for the next year I have taken at 6,275,000/. In that
sum is included a small amount of arrears, properly
belonging to the present year—perhaps from 100,0001. to
150,000/.—Jent which will not have been levied before the
sth of April, and which we hope to overtake in the next
year. The proposal which the Government will make has
in view the repairing the deficiency upon the income, as
compared with the expenditure, according to my estimate
amounting to 2,840,0001., and likewise of providing that
moderate margin which, upon the estimates, it is the wis-
dom as well as the pleasure of this house usually to provide.
I propose, sir, on the part of her Majesty's Government,
that wd should increase the income-tax by one-half, and
should levy the whole addition for and in respect of the
first moiety of the year—in other words, that we should
double the income-tax for half a year. (Sensation.) Now,
sir, it may be thought that our more obvious course of
proceeding would have been to raise the rate of income-
tax by a smaller amount for the whole year. Bat I have
stated to the committee that in the circumstances in which
we now stand it is impossible for us to form a reasonable
estimate of what will be the total cost of the warlike ope-
rations, upon the scale on which they are now contemplated,
in case of their being prolonged throughout the year. I
wish the committee distinctly to understand that we can-
not guarantee that the funds for which we now ask will
suffice to carry on the active operations of war during
twelve months, and, therefore, not being able to look for-
ward to so long a period, we have thought it best to pro-
Pose that the addition which it is now intended to make to
the charge should be an addition to be levied off the income
of the country, in respect only of the first portion of the
yeas. The effect of that scheme will be as follows :—ln
the first place, that it is the only measure by which it will
be In our power to raise the whole addition within the
Year. The committee will please to bear in mind that the
levying of direct taxation is always six or nine months in
n'ear of the period to which the tax applies. When you
enact an increased duty upon spirits, from the moment
you have voted the duty the taz takes effect, and
PerhaP4 with'
she
en a week or a fortnight, or a few weeks at
any rate
enactproceeds are in the Exchequer. But
-when you
crease begins to
the
en increase of the income-tax, that in-
chargeable for a period, which period
in-
commences en the 6th of April, and there cannot be any
money leviquaedrtuenrderthe authority of such a vote of yours
until the
of January. It
is betweenth the 10th of October and the sth
first moiety
only by laying the increase of
the tax upon the
levy it within the
urat ra'netY of the year that we can pos-
siblyyear. But, sir, that is not the only
reason. I have stated to
have
umthat we think it our duty to
levy upon the space I
ttnetioned, and to leave the
question unprejudiced as to urther augmentation of
taxes, in case the war expenditurenow should. unhappily re-
quire it. If, therefore, I were propose to double
the income tax for the whole year—tor'°r
sethE) rate(i of in-
come tax for the whole ear must necessarilyaone o f
two things, either of which would be highly objectionable.l?
If the Government asked you to give us a very
crease of the income tax for the whole year, therZwearEgoull.
on the other
ask for a legal authority to levy an amount of money which
it is possible we may never require. But if,
hand, we ask you to levy the income tax for the whole
year, but to give us an amount only sufficient to cover the
present deficiency, then we should be in the difficulty that
we might very probably be compelled to come to you again,
and ask you again to alter the vote of the income tax in
respect of the first moiety of the year, which you have
already altered once. Therefore, sir, the course which I
recommend is much the simplest course ; it is a course
which will give the fullest effect to the principle of levying
the tax within the year, and will at the same time most
fully preserve the control of the House of Commons, that
the proposal which I make should take the form which I
have given it, namely, the form of doubling the income tax
for the half-year. The form of the enactment would be very
simple—that the rate of income tax (I am not using the
the technical language of the resolution), that the rate of in-
'come tax granted by the authority of the act of last session
shall be raised from 7d. to 100. in the pound, and that the
whole of the moiety so addea to the tax shall be so leviable