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

THE SUN, LONDON, TUESDAY EVEN IN ex, MARCH 7., 1884.

income tax, instead of interfering with the reductions
made upon important articles of consumption in the budget
of last year. (Hear, hear.)
Mr. HENLEY observed that when the late Sir R. Peel
took the management of the finances of the country into his
hands in 1811, if there was one point upon which he laid
greater stress than another it was that Government should
keep a balance in the Exchequer to render them not only
independent of circumstances, bat independent of the Bank
of Euglaud. (Cheers from the Opposition.) The effect of
recent non-compliance with that policy was shown in the pro -
position now made to indict a double tax upon the people
for half a year. Last year the right hon, gentleman (the
Chancellor of the Exchequer) complained of being so over-
whelmed by the money he had in the Exchequer that he
found it necessary to get rid of it by some extraordinary
means. It had been got rid of, and the consequence was a pro-
posal was now made to vote Exchequer-bills to the amount
of 1,750,0001. He (Mr. Henley) agreed with the late Sir
It. Peel in the necessity of keeping Government indepen-
dent of the Bank of England, and of always having an
available balancejin the Exchequer. With regard to the
general question before the house, the right hon. the
Chancellor of the Exchequer had laid down this proposi-
tion—that in'a time of war, the generation by whom it
was prosecuted should feel the pressure caused by it ; but
the right hon. gentleman had not altogether adhered to
that pioposition, inasmuch as he made the burden of car-
rying on the war fall upon a limited number of the people
of this kingdom. (Hear, hear.) By the propositions of
the right hon, gentleman, many of those who had been
most clamorous for war would not be the parties upon
whom the expense of prosecuting it would fall, and there-
fore the policy of the right hon. gentleman was entirely at
variance with the proposition he had endeavoured to lay
down. (Hear.)
Mr. GLYN observed that this country was about to en-
gage in a great, and perhaps a protracted contest, in which
the operation of the late Sir R. Peel's Banking Act of 1814
would be more felt than it had been hitherto. He con-
fessed for one that he did not look upon that act with
feelings of security, and he could not help thinking that
its restrictions upon the general commercial operations of
the country, accompanied as they would be by a continu-
ous strain upon the resources of the country, would be a
state of things that would be severely felt. He desired to
call the attention of the Chancellor of the Exchequer to
the fact that, by the act in question the issue of the coun-
try was placed at a particular amount. By the altera-
tions made in private banks a considerable reduction had
taken place in the amount of their fixed issues, and he
could not see why the Government should not avail itself
of the opportunity of replacing the 700,0001. in question.
by the machinery at its command, and by its connection
with the Bank of England.. (Hear, hear.)
Mr. VANCE was affaid the Chancellor of the Exchequer
fell upon a class of holders of -bills of exchange who ought
not to pay an increased rate of stamp duty. The drawer of
a bill of exchange generally derived the profit of the trans-
action, the parties among whom it circulated generally
having a small commission or some small interest in the
matter. Upon inland bills the drawer paid the stamp, and
the bill circulated freely without charge, except a small
charge upon transfer. But, suppose a bill from our North
American colonies came to an agent here to be placed to
the credit of a merchant, that merchant or agent who so
opened it was without reason forced to go to the Stamp-
office and get a stamp affixed to it, while the original
drawer was exempted from the taxation. He thought it
unfair to place the tax upon one class of holders only. He
also objected to the right hon.gentleman's ad vatoremduty
on bills of exchange. The drawer of a small bill usually
derived the profit of the transaction, but the broker who
drew a large bill of exchange, say for sugar, perhaps only
got per cent. commission. He thought the commercial
world would be dissatisfied that taxation should thus be
placed upon the transfer of commodities in the gross.
Mr. MALINS concurred with the Chancellor of the Ex-
chequer in thinking that the wise and prudent course would
be to pay our way as we went, rather than raise money on
loans wherewith to carry on the war. The Chancellor of
the Exchequer proposed to raise the income tax from 7d.
to 10 Ad. for a year, of which amount he proposed to raise
7d. in the first half-year, and 3id. in the second
half:year. Now, he should concur in the policy
of this course, if it affected himself alone, or persons
who were ready to meet that increased payment. But,
when the right hon. gentleman considered, the difficulty
that many persons had to meet direct taxation, and how
abhorrent the sight of the taxgatherer was to those who
had not ready money, he • thought they would complain
that they should be called upon to pay the whole increase
in the first half-year. Why should not the Chancellor of
the Exchequer divide the payment into two equal sums,
and levy 54d. in the first half year, and 54d. in the second
half-year. (Hear.) It would make the burden much easier
to those who paid income tax, and it would make no ,
difference to the Government, because they were obliged
to borrow the money, -and rather than distress those upon
whom the burden would be thrown, it would be wiser to
relieve them in the manner he had pointed out. (Hear.)
The Government bad only to take power to raise more Ex-
chequer bills, and they would thereby very much lighten
the burden upon the tax-payers. The Government would
do well to consider, now that we were upon the eve of a
great war, whether a great war could be carried on with a
restricted currency. (Hear.) The Chancellor of the Ex-
chequer must remember what took place in October, '47,
when wide-spread bankruptcy and financial ruin were only
averted by the repeal of the act of 1844. Hon. members
on his (the Opposition) side were prepared to give that
support which the Government required for carrying on
the war, upon condition that the war should be prosecuted
with vigour, since that was the only means by which it
could be speedily brought to a close. (Hear.)
Mr. W. BROWN was of opinion that Sir It. Peel's act
of 1814 was a serious loss and inconvenience to the country.
When the Government determined to give a large discre-
tionary power to the Bank of England in October, 1847,
many houses were upon the verge of bankruptcy, and trade
was paralysed. The 7,000,0001. or 8,000,0001. then locked
up in the Bank or-England on deposit might as well have
been thrown into circulation. If war broke out it would
be necessary to take off those fetters from trade. He must
express his dislike and disapprobation or a bill so injurious
to the best interest of the country as that of 1314 had
been. (Hear.)
Mr. HAMILTON gathered from the papers that there
had been some departure from the usual practice with re-
gard to the purchase of Exchequer bills on account of
savings banks. It appeared that for more than a year pre-
viouste the sth of May, 1853, purchases of Exchequer bills
had been made by the Commissioner for the Reduction of
the National Debt, and no purchases had been made of
stock. Now, the practice had been when the Commis-
sioners for the Reduction of the National Debt made pur-
chases of Exchequer bills, for them to be cancelled, and a
certain amount of stock to be created. He wished to ask
whether those Exchequer bills had been cancelled, and
were now in the hands of the commissioner, and if that
had led to an increase in the national debt ?

The CHANCELLOR of the EXCHEQUER—The hon.
member for Lambeth had referred to a promise that ho
(the Chancellor of the Exchequer) was said to have
made last session, that he would apply the succession-tax
to tithes, and the probate duty to land. Now he was not
conscious of having given such a promise. The Government
had come to the conclusion that the old succession-tax was
still applicable to tithes. The amount was not very large,
and it would be better to introduce this subject when he
brought in a bill, which he intended to do this session, for
applying the succession-tax to corporations. With respect
also to applying the probate duty to land, he was not con-
scious of having given a pledge on this subject either. He
was quite satisfied with the changes made last year, which
he was convinced were beneficial. (Hear.) The state of
the finances did not allow him to operate upon the probate
duty at all, but, if he had operated upon it, he had not
been authorised by the Government to give, nor had he
ever given any pledge to apply the probate duty to land.
The right hon. member for Oxfordshire (Mr. Henley) said
that he (the Chancellor of the Exchequer) appeared to have
held opinions contrary to those of Sir R. Peel with respect
to the state of the public finances. But Sir R. Peel stated
that doctrine at a time when the deficiency bills had run
up to between 8,000,000/ and 9,000,0001. But when they
had not reached an inconvenient height, and were only
2,000,0001. or 3,000,0001., the circumstances were very.
different. With respect to trade and circulation and pub-
lic economy, the really wise course with regard to public
balances and deficiency bills was a middle course. It would
not be wise to go on increasing deficiency bills to an inde-
finite amount, or to such an amount as 8,000,0001. or
900001., but, as long as they did not exceed 2,000,0001.
or 3,000,000/. no inconvenience was caused. Hon. mem-
bers were mi;talcon if they supposed that a high state of
public credit was indicated by the balances in question.
They had something to do with it, but the true test was
the state of the income and expenditure. Let there be a
surplus of income over expenditure, and he would answer
for it the state of public credit would not be bad. If the
present state of public credit were tested by the price of
stocks, it could not be considered otherwise than satisfac-
tory that our Three per Cents. were at 91 when we seemed
about to enter upon a European war. (Hoar, hear.) The
hon. member for Kendal (Mr. Glyn) had alluded to
the decrease of their issues by private banks, and the ex-
tinotion of a portion of their circulation. Other members
had entered upon a larger field, and appeared to threaten
the house with a discussion of the act of 1844. Now, it
was rather early to begin such a discussion when the exi-
gencies of war had not yet commenced. The Emperor of
Russia had already set hon. gentlemen and example of re-
moving the fetters off the currency—(a laugh)—but he
trusted the Government of this country would not man-
age matters exactly in that way. (Hear, hear.) With
regard to the issues of private banks, hon , gentlemen
should remember that Government could not move in
that matter without the concurrence of the Bank of Eng-
land, and that the Government had not been in a position
since their private issues had been extended to make it for
the interest of that corporation to give that concurrence.
But circumstances might arise which would ere long make
the proposition of the hon. gentleman (Mr. Glyn) a most
useful measure. He was not disposed to differ from the
hon. member for Dublin (Mr. Vance) in what he said re,
lative to foreign bills of exchange, but when the hon.
gentleman saw his resolution upon the table, which he
hoped would be in the course of two or three days, he
would find that it was not obnoxious to the objections he
had urged. He could assure the hon. and learned mem-
ber for Wallingford. (Mr. Malins) that it was not owing to
the low state of the public balances that the Government
proposed to levy the addition to the income tax in the first
half year. The state of the public balances had never
entered his mind in making that arrangement. The rea-
son why the Government asked for that increase in the first
half-year was, that they might be able to make provision
for the probable expenditure. The Government could not
tell what the expenditure of the year would be, but he had
stated to the house that if warlike operation were pro-
longed during the whole of the year, they must come again
to Parliament for supplies. The Government were now
making provision for the first six months of the year, and
they therefore proposed to make provision to raise the
money for those six months. That was the principle upon
which they were acting, and it had nothing to do with the
state of the public balances. If be understood the hon.
member for Dublin University (Mr. Hamilton) aright
he had inquired whether the forms prescribed by the act
of Parliament had been gone through with regard to Ex-
chequer bills, and whether the stock had been created
which by law ought to be created. Undoubtedly the
whole of the proceedings in question were of a formal cha-
racter, under the charge of the National Debt office, which
took effect invariably by an absolute provision of law. The
power given to the Chancellor of the Exchequer was this
—that he might, if he pleased, apply the money in his
hands to the reduction either of the funded on the unfunded
debt. If he determined to reduce the unfunded debt, the
Commissioners of the National Debt purchased the Ex-
chequer-bills, which they hold until they ran out, and the
law provided that they should then be exchanged for per-
manent securities. The hon. gentleman ( Sir Willoughby)
asked whether the Government had not thereby added to
the national debt? [Sir 11. WILLOUGHBY.—The funded
debt.] Tho hon. gentleman was quite as competent to
answer that question as himself. The Commissioners for
the Reduction of the National Debt stood in this predica-
ment—that while they were the debtors of the trustees of
savings-banks, they were the creditors of the nation. The
commissioners had large sums of coney which they had
to dispose of in bac:103110;AI. Wkon as anolat of stock