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

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;in respect of the year in the first half-year. (Hear.) Sir,
what more than a moiety to the amount actually raised.
The proceeds of the tax ; as I have taken it, would amount
bthey ad dinadding effect
a moietyo f
to tlproposedtex addition thete(i7.3m e
.
income tax. As I have before stated, irrespective of any
change in the law, the income tax from April, 1854, to
April, 1855, would yield the sum of 6,275,0001. The moiety
of that sum of 6,275,0001. would be 3,137,500/. But, then,
in the case of the income tax, the expenses of coils pion vary
inversely as in the case of indirect taxes. In the case of the in-
come tax, if you increase the tax you diminish the percent-
age of the cost of collection. The sources of supply are not
dimished ; the assessments are the same; the taxpayers
aro the same. Some part of the expenses of raising the
tax being defrayed by percentage, there would be a certain
augmentation in those expenses; but, upon the whole, the
to 3,307,003/. If you add that sum to the 6,275,0001. which
1 I have already estimated as the proceeds of the tax under
: present mode, you will find that it gives for the whole pro-
w duce of the tax, from April, 1851, to April, 1855, the sum
, of 9,582,0001. Now, sir, it is a very simple matter to rectify
: the general balance of income and expenditure. As I
stated before, the income for the year 1851-55 I estimated
! at 53,349,003/. I now propose to augment that income by
• an addition to the income tax which will yield 3,307,0001.,
, so that the total income of the country, if it should please
1 the committee and the house to adopt that proposal, will
be 56,656,030/. The expenditure on the other hand, as
estimated, stands at 56,189,0031. So that there will be,
• by way of provision for the services of the year, a sum
amounting to the whole estimated expenditure, and like-
wise a small surplus of 467,0331. (Cheers.) Sir, I have
stated to the committee that the Government are not of
opinion that it would be compatible with their duty to
propose, under the present circumstances of the country, to
surrender or sensibly td imdair any branch of the revenue.
(Cheers.) There are various subjects that have been dis-
cussed, and in which portions of the public or the entire
public may feel a deep interest, and some of which it would
have been my pleasure and satisfaction to have submitted to
this committee, had the circumstances of the country per-
mitted me to takesuch acourse. But, as matters now stand,
we feel it our duty to hold by the revenue as it at present
exists. (Cheers.) Butthere is one change which is a mat-
ter of interest to the commercial community, and to which
it is right that I should advert, because it is a change which
while it may afford upon the whole, I trust not an incon-
siderable relief to those, or some of those, whom it affects,
yet it will not, I think, be attended with loss to the Ex-
chequer. Irefer to the case of stamps which are charge-
able upon bills of exchange. (Hear, hear.) I need not
detail to the committee the state of the law with regard to
that very important subject. It has been placed clearly
before the public in consequence of one or more cases which
have recently been brought before the courts. Suffice it to
say that it is most unsatisfactory, and demands the adop-
tion of some altered provision. At present, for whatever
reason, we have thought fit to charge bills of exchange
drawn at home with a stamp duty, and to exempt all bills
which are drawn abroad. Although they come into this
country—although they are negotiated in this country—
although they act as instruments of credit and circulate in
this country—yet they circulate free of stamp duty. This
is not the policy of all other States. France has applied—
and, so far as I can discern, has rationally applied—a uni-
form system of stamp to all bills of exchange, whether they
are home drawn or whether they are foreign drawn. But
this is not by any means an abstract question. As the
matter now stands, we have reason to believe that the law
is evaded, and that the Exchequer is defrauded by dishonest
persons, who, when drawing bills at home for purely do-
mestic purposes, take those bills abroad, and thereby escape
the stamp duty. (Hear, hear.) But the evil that is sus-
tained by the Exchequer is a very small part of the mis-
chief. The serious part of it is this—that those bills get
into circulation—that they are discounted by one person
and another, and thus pass from hand to hand. They come
into circulation with foreign gates and foreign places printed,
upon them, and get into thehands of persons who cannot pos-
sibly know anything of their origin, and these persons, if
they have occasion to sue the acceptor of such bills, nd
that in law the security is good for nothing. It is impos-
sible to leave the law in such a state as that without seri-
ously impairing the tone of credit in the great mercantile
circles of the country. There is another reason why it
, is most desirable to alter this law, and that is the extreme
inequality and the extreme impolicy of the present stamp
duties on bills of exchange. The law is constructed upon
the principle of laying upon small bills of exchange an al-
most prohibitory amount of duty, whilst upon bills of
large amounts it lays a duty that is scarcely sensible at all ;
so that, while persons who deal with large sums of money
scarcely feel the bill stamp, the person who uses capital in
very small amounts is almost entirely precluded from the
use of this convenient machinery for credit. A bill of the
amount of less than 201.—a bill of between Si. and 201.—is
liable to pay a stamp duty of Is. 6d., and, supposing it to
be a bill for 121.103., and its duration to be for two months,
that amounts tothe rate of 12s. percent. for the two months,
or 31.125. 6d. per cent. per annum. The effect of the bill
stamp upon bills of that amount is about double the rate
of interest that a person must pay for the money. If he
pays at tile rate of 3'. 12s. 61. for the stamp, and 3 or 4
per cent. for the money, he is using money that costs him
6or 7 per cent. (Hear, hear.) As you move upwards the
burden becomes less, but it is a serious burden ; it is a
burden of more than 1 per cent. per annum until you pass
bills of 1001. each. That is hardly reconcileable with jus-
tice to those whose credit may be perfectly good, whose
business may be as sound as that of the wealthiest house
in London, and as prudently conducted as that of any
banker or capitalist in the country, yet who feel them-
selves precluded from availing themselves of those most
valuable resources. I propose, therefore, to adopt an ad
valorem scale in lieu of the present scale, at the rate of 3d.
for each 251. or Is. for each 1001. upon short bills, and 4d.
for 251., or is. 4d. for 1001. upon long bills. I propose to
carry that scale with varying intervals (the whole detail of
which will be laid before the committee in a short resolu-
tion in a few days) upwards to 5,0001. Ido not know that
it would be worth while to carry it further. I propose to
abolish altogether the distinction which now exists between
home drawn and foreign drawn bills, and to make them
bear precisely the same rate of stamp. I propose for the
convenience of the community—and a very great conveni-
ence I believe it will be—not to adopt the system which is
in force in some foreign countries of impressing stamps,
the effect of which is that the holder of the bill, before he
can use it, is obliged to carry it to a public office, where
he must have it stamped. Instead of taking him to the
public office, I propose to take the public office to him, by
permitting, and, indeed, requiring him to use that very
simpre invention of adhesive stamps which people will
keep by them, so that there will be no obstruction what-
ever to th 3 coarse of trade from the adoption of this sys-
tem. (Hear.) A very important point with regard to the
convenience of the large class whom this proposition will
affect is, that the time which is occupied in the prepara-
tion of the dies for these purposes is always considerable,
more especially as it is no; within the competence of the
revenue department, with whom the matter rests, to make
these diei until it can be done under full legal authority.
Every exertion will be made to expedite the process, but I
do not expect that the proposed change of the law with re-
spect to the stamps upon bills of exchange will take effect
until the sth of July of the present year. If it can be
effected at an earlier date, with such notice to the parties
as can make it convenient, it shall be ; but, as I am at
present advised, lam doubtful whether it can be accom-
plished previous to the date which I have mentioned. I
will just briefly state how this will affect this branch of
the revenue. The revenue for the year ending April 5,
1853, from stamps upon bills of exchange, was 555,0031.
As nearly as we can tell, the average rate of the present
duty, although it is most unequally disposed, is ls. 6d. per
cent. We propose to equalise it at the rate of ls. The
general effect of this change will be to lower the rate of
duty upon all bills of exchange for less than 100/., and to
raise it somewhat upon amounts above 1001. Estimating,
then, the future income at the rate of Is. instead of ls. 6d.
per cent., that) gives a revenue of 431,000/. But, no
doubt the effect of this law, as it will make the system ap-
plicable to small amounts of money to which it has hitherto
been almost entirely inapplicable, will be to bring a good
deal of capital into action in this form which has hitherto
lain dormant. I therefore anticipate a considerable addi-
tion to the revenue from the use of a larger number of
stamps upon bills of exchange for small amounts. From
that source I estimate an increase of 60,0001.; and I allow
also 50,0001. for the proceeds of the stamp upon foreign
bills of exchange. Those sums added together will give a
total revenue of 544,0001., which, with the trifling excep-
tion of 11,0001., will be equal to the revenue at present de-
rived from that source. (Hear.) Now, there is only one
other subject on which it is necessary for me to trouble
the committee, and it is ono which does not require me,
fortunately*, to trouble them at anylength. I shall lay upon
the table to-night a resolution having reference to the in-
come tax, and intended to give effect to the proposal which
I have stated ; but I have also given notice upon the votes
that I intended to ask the House of Commons to-night for
a vote of 1,750,0001. of Exchequer-bills. That vote will
require from me a few words of explanation. The com-
mittee are aware that the balances in the Exchequer are
low at the present moment. I must confess that Ido not
think that that is an unfortunate circumstance, taken in
conjunction with the occurrences that are going on and
the demands that are made upon us. (Hear.) lam afraid,
if there had been 4,000,0001. or 5,000,0001. in the Exche-
quer over and above what was required for the public ser-
vice, that there might have been a strong temptation to
say, "We will raise money by taxes for the war expendi-
ture when it is wanted ; but here are these balances lying
perfectly idle, let us apply them in the first place." Whe-
ther that temptation would have been a strong one or a
weak one, it has been removed (a laugh) • and at present
the balances are in such a condition thati although 'we
could have gone on perfectly well, supposing that no ex-
traordinary demands had been made upon us for military
expenditure, yet, in consequence of them, they would re-
quire somewhat to be replenished. I stated to the com-
mittee that I should ask for an addition to the income of
the country amply sufficient to cover the deficiency which
I have estimated; but I also stated that we should not
realise any part of that addition to the revenue until to-
wards Christmas, while, upon the other hand, a large por-
tion of the expenditure which we have to provide must
be met in the first or in the following quarter. I have,
therefore, thought it prudent, and I believe the committee
will have little doubt that it is prudent, to ask for power,
to be exercised in case of need, to make a moderate
issue of Exchequer bills. At the same time it is very im-
portant to remove all misapprehension upon this subject,
because there is a natural jealousy of additions to the
unfunded debt, and I must confess that, were it compa-
tible with other matters, I should have thought it a great
object of sound financial policy to have effected a reduc-
tion in that debt. (Hear, hear.) I am, therefore, parti-
cularly desirous that the committee should understand
when authority has been given for raising the 1,750,0001.
by Exchequer-bills, which I have now asked for, that it is
an authority which will only be exercised to such an extent
as may be found convenient to the public service. I do not
expect that it will be necessary to exercise it to the full
extent, though I think it probable that it will be neces-
sary to exercise it in part. But if it should be exercised
to the fullextent, and if every farthing which I am now
asking for authority to issue, should be issued in conse-
quence, I wish the committee to understand that the un-
funded debt, after the full exercise of that authority, will
only stand at the point at which it stood twelve months
ago. (Hear, hear.) At that period the unfunded debt
amounted in round numbers to 17,740,000'. At the present
moment it is in round numbers 16,000,000/e large pur-
chases of Exchequer-bills having been effected from va-
rious sources, chiefly by'the National Debt Commissioners,
during the last year, and the sum of 400,030/. having been
exchanged for permanent Exchequer-bonds. That being
so, I simply propose to take power to fill up the margin
which I have already created, and I will make, in no case,
any addition except perhaps to the extent of 10,0001. or
20,000/, to the amount of the unfunded debt, in conse-
quence of the measure which I now propose. I do not
think, air, that the committee have any reason to be dis-
satisfied with the state of the public credit, as indicated
by the condition of the unfunded debt. It is quite true
that it has been found necessary to make a great increase
in the rate of interest upon Exchequer-bills. (Hear.) The
rate of interest upon Exchequer-bills is at present two-
pence a-day, or in round numbers 3 per cent. per annum.
This time last year, or a little later than that, it was
only one penny a-day, or i per cent, per annum.