The Sun.
London, England, 1854-05-09 00:00:00

I bay' s altered the mode of i issuing deficiency bills. I have
done so by endeavouring 'co place it upon precisely the
garnet principle which is applied to the issue of money for
the 'public service. There are two questions—one of po-
licy, whether it is right that you should have in your cof-
fers at the end of each quarter a sum sufficient to meet
-the whole charge that is coming due, or whether you
should trust for a portion of it to the incoming revenue.
That is a great question of policy. Ido not judge it now.
On the present occasion, the question we have to consider
is simply this, whether, supposing you have not got in
your coffers a sum sufficient to meet all the charges at the
beginning of the quarter, you shall, upon the first day of
each quarter, create an unnecessary debt, in order to
create a needless credit to the abstract amount of those
charges, totally independent, not only of the improbabi-
lity, but of the impossibility, of their having to be met at
the commencement of the quarter. Now I believe that
the public has a scale of transactions so large that it is able
to close its accounts in a way that with a more limited
business could not be thought of for a moment. What
are deficiency bills? They are bills issued in amounts of
50,000/. each to the Bank, to be held by the Bank, and
Ton may issue any amount of them you please-5,000,000/•
in five weeks, if you like. If, however, you issue at full
beginning of each quarter deficiency bills to the
mount of the Consolidated Fund charges that are coming
due, you must have more than you will require
bec
the
those charges are never all made at the beginning f
quarter, and to the extent of your surplus deticiency bills
o
you will have created an unnecessary loan, upon whichsentshe
public must pay interest from the first. Comnrnst
au k
common reason, and common practice are all aga,inerke
wv,h
a system. (Hear.) I now speak of what has been
reference to the April dividends. With refetri!encTe,eteaseuthe
July dividends, that is a question which
do not think a very serious onee—whether law in Tjs
Awith the
present form, under the Loan Act, c
Deficiency Act—whether the law requiremsetubsatnoadhereto
the very mischievous, ex:pensive, and. mot. expensive,.
the delusive practice of making a large issue and creating
an immense 0/edit. I gen about to take the opinion
.of the'
law officers of the Cro-seu on that point. Unless their opi-
nion is favourable, I a'aall not think myself justified in in-
troducing that reformation, after having agreed to take
their opinion ;- but ray course will be to come to this house
and ask you to place the matter on a reasonable footing.
(Hear.) As to the April dividends, the act of 1844 did not
requite that pia ctice to be followed ; and after consulting
the legal advisers of the Crown, we had no doubt as to the,
law of the caee, so far as regards those dividends. Though
this matter is one of great importance, I am aware of the)
dryness of it. (Hoar.) I will not enter further into it. I
em greatly indebted to the committee for the patience
with which you have heard me, although there is much
more to say upon the subject; and if I do not say it, I
must only beg the committee to consider it is from no dis-
position on my part to reserve anything ; but t'ne clock ad-
monishes me that I have occupied a considerable time
already. and there is ranch yet that is before me. (Cheers.)
Assisted by the patience and indulgence of the committee,
I have now gone through those charges of mismanagement
with respect to the unfunded debt, of reckless disregard of
the warnings both of feet and of intelligent persons with
respect to the scheme for the conversion of the debt, and of
some mystical operation for the purpose of blinding the
public with respect to the mode of charging the deficiency
bills; and I venture to hope 1 have so far explained those
matters, and my conduct with respect to them, that Inlay
proceed at once, without prejudice or discredit in their
opinion, to explain the views which the Governme,nt enter-
tain with regard to the measures demanded by ;he exigen-
cies of the public service, (Loud. cheers.) The committee
will be kind enough to revert to the words with which I
opened my address. As they wal recollec e, I referred to
what took place on the 6th of '.search, an.a the temporary
provision then made for the purpose of meeting the ex-
penses that had been incurred by the Csovernment in send-
ing an expedition to the East. I pill not, sir, at this
period. travel again over the grounds which I then occu-
pied ; but I will take tb.at day as my starting point, and
proceed to explain our further views and proposals, only
reminding you of these facts; that there wes an excess on
the 6th of Karch on the estimates of 4, 307,010/. ; that in
that 4,307,0001. vas included a sum of 1,250,001. taken
for extraordinary expenses of the war; that the ordinary
revenue of the country was unequal, by a sum of 2,810,0001.
to meet the charges incurred by the estimates, and the sum
estimated for extraordinaries ; whereas, if there hint been
no increase in the estimates we should have had, in lieu of
that deficiency of 2,840,0001., a surplus of 1,666,0001.
The Government asked, and the house agreed to grant,
half a year's double income tem, which was estimated to
produce 3,307,0)0/.; and hewing added that stun to the
amount of revenue estima,e,rel, it showed a total revenue of
56,656,0001. against Is total estimated expenditure of
66,189,0001., or a surplus of 467,0001. Since that time,
sir, no estimates haea been framed, and my colleagues as
well as naysel can. assure the house. that we have lest no
time either in framing those estimates, in endeavouring to
calculate the prr.bable scale of the war expenditure, or of
bringing those) estimates, when framed, under the conside-
ration of the.leouSe. They have been submitted on the
part of the naval department, the army, and the ordnance.
For the navy, Government asks for an additional vote of
4,550,00`J/., for its own charges and the services it performson, behalf f the other great departments. The charge for
t' Ae army is 300,0001. The charge for the ordnance is
'340,030/. The militia I estimated at 500,0001. Since then
it has been announced in this house that Government pro-
poses to take power, and to act on that power, of embody-
ing a pottiest of that militia, probably 15,000; men ; and
the expense of that operation gives an additional sure of
500,0001. of militia expenditure for the year, or a million
altogether, though adding only 500,0001. to the new or
supplemental estimates. Putting together the items of
4,550,0001. for the navy, 300,0001. for the army, 640,0001.
for the ordnance, and 500,0001. for the militia, we find a
total of 6,000,0001. to provide for. But, sir, in time of war,
in proportion to the increase of our known charges,we must
:also wake provision for. chergee unknown ; anti although
:1,2:413,0001. was sentient to take in the months of Mirth;
-.vase it was possible the expedition sent to the East might
return to our shores without having drawn the sword—now
it is different. Blood has been shed ; operations have been
performed ; and the only rational view is to presume we
must make provision for war expenditure for the year.
Therefore, besides all the services, which are estimated for
in strict Parliamentary phrase, I put 853,0001. to that
1,250,0001, and the total is 2,100,0001., for which we shall
probably ask for a vote of credit. The form of the vote is
not yet determined upon, and it may be convenient to wait
a little longer before determining it. I wish to be under-
stood to ask for not less than 2,100,000/., applicable to cir-
cumstances which may arise in the course of the war, at
the discretion of the Government. I beg the committee to
keep apart from the question we are now discussing an-
other question, and a very important question, namely,
whether funds in cash ought not to be placed at the com-
mand of Parliament, over and above the sums I have
seamed. That is altogether a distinct question, and one on
which I shall presently touch. lam now speaking of the
amount of votes we ask of Parliament, as at present ad-
-vised, and using the best information in our power, and
the result is, we ask the coeunittee to snake provision,
which I hope will be adequate for the expenses of the year
—a provision in addition to that already granted of
6,850,0001. The view taken by the Government, and the
conviction at which they have arrived, are that this sum of
6,850,000/. ought to be provided by an addition to the taxa-
tion of the country. They have thought it their duty care-
fully to consider what were the items upon which an in-
,crease of taxation might most justly and fairly be laid,
and, in the first instance, the mind of every man who hears
me will outrun the course of my observations with respect
to one great portion of those items. I may therefore do
best, first of all, to state that we propose to execute that
intention which we had formed contingently some time
ago, namely, that in case of the necessity of further de-
mands for means to meet the expenditure of the war, we
ought to look first to repeat on the income tax the opera-
tion which we have already applied to the first half-year's
payment. I sea the right hon. gentleman the member for
:Lincolnshire smiles, and it is impossible to have a better
omen of success than that very genial and cordial greeting.
The income tax, as it stood under the law of 1853, was esti-
mated to yield 6,275,000/. The resolution adopted by this
committee in March, 1354, added to it 3,307,0001., making
a total of 9,532,0001. The second half-yearly payment of
income tax, which we propose to add to the first, will not
amount precisely to the same sum, because the first half-
:year includes a somewhat greater amount of arrears ; but
-we estimate it at 3,250,0001. to be added to the 9,532,0301.,
'raising the total produce of the income tax for the year
1851-55 to very nearly the sum of 13,000,0001.—that is to
say, to 12,832,0001. We propoie, then, to double the in-
come tax ; and I have described thus far the fulfilment of
our intentions, which the mind of almost every man had
probably anticipated would be the plan of the Government.
:But her Majesty's :Government are of opinion that it is
-their duty, having now entered into a war, to place the
finances of the country for that war-- so far as it is at their
command to do it—on a firm anal stable footing, by an
adherence to former precedent ; and although, so long as
we had the slightest hope, the faintest imagination, that
the expenditure would be temporary, we adopted the con-
stitutional principle of limiting our demands both to the
smallest sum and the shortest time, when we come to make
provision for war, Re think it our duty to ask you to en-
able us to make that provision as it has been made in for-
tiler times, when our forefathers were called on to struggle
for objects of national duty, national character, and na-
tional interests, and to pay augmented taxes which were
to subsist during the period of that war. We therefore
shall ask the committee to grant the augmentation of the
'Moult!, tax now proposed—that is, the augmentation from
7d. to lid. for the period of the war. (Hear, hear.) It is
sot necessary to request the committee to come to a deci-
sion on that
havesubject. According to precedent, in the reso-
lution, weonly to declare the principle of the in-
ueeeese, and thelimit of time, if at all, can be made on the
eettheequent introduction of the bill. In the bill, therefore,
we shall emplo
terms employee?' 0 the terms nearly corresponding with the
will be to place former occasions. The effect of these
services to be approved
the rate of Is. . fortl
the disposal of the Government, for
by Parliament, the income tax at
tailing the distinction oef the five-penny rate, which will
period of the war—of course re-
eenly be raised to 1 0
100/. to 150/, a year.(
(an persons having incomes from
in conformity, as far es we are able We shall also propose
orfato preserve that con.
fortuity, with the intimation st. year, that in the
event—of which God grant theenraeianlisaz realisation..
—in the event of
the termination of the war,
income tax of 1853, the augmented income of the
falling back on the precise terms of the incomeetax
shall cease'
a the ceto "1
justed in the measure of last year. . (gear)
tb tII4 The se at!:
wide° will see that this much is obvious that to be made by means of new taxes, after o a
plying the surplus of 1,660,0001., which remained over from
the former year, will equal about ten millions, and I e ,
stated to the committee our intentions about the income
tax, which brings US to this point—that we propose to
make provision from that source for about two-thirds of the
entire expenditure ; and then an ther most obvious ques.
tion arises as to further levies. (Hear.) That is a ques-
tion which, of course, we have been called on carefully to
consider. There are those who think of the income tax so
highly that they are willing to see it carried to a consider-
ably greater percentage than we propose, say, for instance,
to a percentage of 10 per cent., wefithtaoxuets.ent(eHrienagr.)on
Sir,the
question of other augmentations
the,Government, aware of the
value
the purposes of war, and having shown
ofththeemisneclvoems,eltathxinfkor,
not indisposed to avail themselves of it
s an
to
e instrument
push
the
for fulfilling that purpose, yet are not Incase
doctrine of the expediency of the income tax to
so extreme
a point. (Loud cheers.) We do not think it is just in
principle that the class or classes whose incomes range from
1001. to 150/. a year and upwards should bear the whole
expenditure of the war entered into for national purposes.
The income tax may fall very lightly on a gentleman of
great wealth, and it does fall lightly upon them. But we
cannot go into the general question of a graduated income
tax. The same disposition to keep the finances of the coun-
try apart, if we can keep it apart, from every dangerous
and dieorganising question which forbad us last year from
entering on the visionary and mischievous scheme of at-
tempting to apportion a tax to the value of different inte-
rests in England—that same principle forbids the attempt
to apportion a rate of tax to all the different and varying
classes of income as is partially done to these amounts; and
that being so, and looking to the bearing on men withlool.

a-year, and men with 1501. a-year, and men with 2001. a-
year, and men with 3001. a-year—upon many of those per-
sons with wives and families to support, and the character
and position of educated and refined men to sustain—we
cannot deny the severity of the burdens brought on them,
and that it is inconsistent with a sense of public duty that
they should be exclusive bearers of those burdens. (Hear.)
Neither are there any other direct taxes which the Go-
vernment are prepared at the present moment to augment
(Loud cheers.) So far as the assessed taxes are concerned
—if you call those direct taxes, which is very doubtful it
is obvious that we should entirely risk the new system of
the assessed taxes, which the committee will recollect was
entirely re-constructed by the measure of last year, if we
were to tamper with it at the present moment ; because
while in that year we reduced greatly the taxes payable,
we brought within its sweep persons and objects previously
exempt. We invited those persons to fix their establish-
ments between October, 1853, and April, 1854, according
to the taxes levied in 1854-55. It would be as if we had
drawn them into a trap, and as I said before,lwould endanger
the continuance of the measure if we increased the assessed
taxes under present circumstances. (Cheers.) Neither
are there any other direct taxes which we propose to in-
crease.
.bleb in briefly stating the consideration of the Go-
vernment are several indirect taxes to which I will
advert ;
pro-
poseve ~
rnme'n,7nte,.hlanwgiell. firNstotwa,keinthtohsee ofinrswthichwe do
place,
her
subject which prima facie may be said to be obvious, and
1 71'.ich forces itself_on the consideration of a minister of

co.nance, driven to his wit's end for means of enlarging the
resources of the country, and that is the alteration of the
rate of postage ; because an alteration of the rate of post-
age was attended by this consideration. Thejwhole increase
realised would give a net increase, while the expenditure
would probably be even diminished. Bat, sir, the Govern-
ment are not prepared to propose such as alteration. They
think that scheme has been admirably successful. (Hear.)
It has contributed, in a degree which hardly any one could
be sanguine enough to anticipate, to the comforts of the
people. It is a great civilising and humanising agent. Its
moral advantages are not less striking than its economical
recommendations, and I am bound to say in a fiscal view
it has answered every expectation that could be rationally
formed of it—(cheers)—for while in the year 1810 the net
proceeds of the postage revenue were 447.0001., in 1847 they
had risen to 845,01)1., and in 1853 they had risen to
1,1.04,0001. It may be recollected that in the year of the
Great Exhibition, the sudden addition to the postage of
Use country was so enormous that a re-action in the revenue
was expected in the next year ; but any one who leoksover
the annual lists can scarcely detect which was the year of the
GremS Exhibition,so rapid and so stea.dyhaslyeen the growth
of receipts under this most desirable and meet advantageous
system. The doubling of postage, unless applied to the
districts, would not bring in more than 600,0001. ; and if
extended to the districts, would not he more than 750,0001.;
and, even under present circumstances, the Government
are decidedly of opinion that it would. not be wise to effect
any change in respect to postage, except such changes as
would tend to extend and augment the accommodation
which it afforded. (Hear.) They have lately succeeded
in making one arrangenient which, indeed, renders any
interference with the law at this moment peculiarly un-
seasonable. A most valuable public servant, a man of me-
impeached honour, of great assiduity, and of excellent
abilities, was secretary to the rest-office at the time this
change was adopted. Ile has continued secretary until the
present tieoe, and he retires from office into another poet
in the public service with the full confidence and approba-
tion of all under whom he has served. But, without dis-
perezement to any one, it will be obvious to the committee
that there is a great advantage in placing the development
of the postage under the immediate care and superinten-
deuce of the gentleman who has the happiness of thinking
that he steads recorded before the world, and his name
will be handed down to posterity, us the author of that
' system. (Cheers.) Mr. Rowland Hill has within the
last few weeks assumed the office of secretary to the Post-
office, and if we have seen' that system extend and multi-
ply its benefits with great rapidity heretofore, yet from the
parental fondness awl great ability of that gentleman, we
are justified in anticipating for the future a still more rapid
increase of income. (Cheers.) Much has been said out of
doors on the subject of reimposing the taxes remitted last
year. Ido rot know that it is necessary for me to refer to
that subject ; but if I do refer to it, I need not detain the
committee by discussing it. Government does not intend
to propose their reimposition. (Loud cheers.) It is dan-
gerous to indulge in abstract or even general declarations ;
but we entertain the hope that nothing but the last extre-
mity will ever induce the representatives of the people of
this country to replace anew the fetters of Excise restrie-
, thee in cases where they have been once removed. (Hear,
hear.) The emancipation of trade we are persuaded will
produce national benefits far outweighing the loss of
revenue, and we do not propose to interfere with the opera-
tion of measures which we are persuaded are so beneficial
, for the country. (Cheers.) Another case which I like-
wise refer to—because it was dealt with last year, and ne-
' cause it touches the objections of Excise—is the case of
the tea duty. We cannot, on the whole, think it corn-
patine with our duty to charge at the present moment
the scale of duties proposed on tea by the measure of las=t
year. (Hear.) The committee will recollect the heavy
duty payable on tea was not lowered by a single stroke,
but by a succession of falls, until it arrived at the level of
a shilling. To -alter a duty like that is interfering, no:,
with a particular rate, but with a complex process, awl
we ought especially to bear in mind the bearing of the: tea,
I duty in England on China. It is not like an article grown
for all the markets in the world. The tea of China is
grown for England. Ido not say that it goes nowhere
else. A considerable quantity goes to the United States,
a small portion to the Continent, but from one-half to is
third of all the tea exported from China is grown for and
exported to this market. (Hear.) The object of the mea-
sure of last year was to encourage measures which will
lead to an increase of the available quantity. Those mea-
sures necessarily extended over a aeries of years. Were
we to interfere for the sake of supplying wants, which I
trust may yet possibly be shortlived—were we to interfere
with them, we should run the risk of doing damage and
throwing back improvement, with respect to the increased.
supply of tea, which it would take many long years to re-
place. (Cheers.) Another subject may recur to your
, I minds, and that is the tobacco duty. With regard to the
. 1 tobacco duty, it is impossible for us wisely to propose any
change. The tobacco duty is a wonderful achievement.
We raise five millions upon an article with a rate of duty
of something like 1,200 per cent., and that revenue
is progressively improving from year to year. (Cheers.)
That is a wonderful state of things, and I think• it one of
those cases to which to apply the doctrine of let well alone.
(Hear.) Were we to tamper with it, Ido not think we
should get a very large sum. We might break down the
revenue altogether, and enable the smuggler to have the
tapper hand. The moral disadvantages of smuggling are
disadvantages not unworthy of consideration ; and, lastly,
if one moment could be more unfortunate than another
for the augmentation of the tobacco duty, this is the pre-
cise moment, when the First Lord of the Admiralty
tells us he has been obliged to withdraw the best of
the Coast Guard for the service of the Crown in the navy.
(Hear.) These are the principal subjects which have passed
under the review of the Government, but with respect
to which they have come to a negative conclusion, and by
the whispers and buzz around me I can readily perceive
the committee do not take quite so much interest in the
negative conclusion as in the positive conclusion. (Hear,
and cheers.) Very well, sir. I now come to the positive
conclusions. We have stated it is necessary to go to the
consumer, and, going to the consumer, to endeavour to do
that in a form which shall least interfere with trade, least
interfere with the innocent enjoyments of the people, least
interfere with consumption—which, in effect, shall cause
the smallest deduction from the comforts and advantages
enjoyed by the people as compared with the amount of re-
venue to be realised for the purpose of the State. (Hear.)
On the 6th of March I adverted to the effect of the mea-
sures of last year for the increase of taxation, and so far'
from receding I evinced a disposition to extend one still
further, and that was the augmentation of the duty on
spirits in Scotland and Ireland. In Scotland that augmen-
tation of duty was eminently agreeable. It was received
by the whole country, I may say, with the same genial
smile with which the hon. member for Lincoln should greet
my announcement of the double income tax. (Cheers.)
There is no fear in Scotland as regards the smuggler, and
, I beg the committee to recollect that the ultimate equali-
, satiou of the spirit duties, which may involve some re-
duction in England, and likewise some increase in Soot-
, land, is a great object of fiscal policy, irrespective of the
immediate needs of the Exchequer. That being so, we
propose to repeat the increase of ls. a eallen, and in place
of 4s. Bd., as the duty now stauds, it will stand, if the
committee approve the plan of the Government, at Sc. Bd.
per gallon. (Hear.) With respect to Ireland, the suc-
cess of the measure last year was most complete. There
there was apprehension of smuggling; but, so far from
calling smuggling into existence, or giving increased ac-
tivity to smuggling, by the augmentation of duty, that
augmentation of duty did not tnrow back the consump-
tion—did not prevent the increase of consumption. The
increased duty was Bd. a gallon, and I estimated the
amount of increased revenue at 198,0001., whereas it actu-
ally yielded 213,0001. (Cheers.) We propose to apply
the same modicum of increase of Bd. per gallon this
year as last, to the duty on spirits in Ireland. Allow-
ing'for the reduction of consumption, 250,000 gallons in
Ireland, and in Scotland 380,000 gallons, the result of these
measures will be a gain of 150,0001. to the Exchequer.
(Cheers.) In the statement of the 6th March, I adverted
to a subject—a very knotty and vexed one--Lwhieh .for a
long series of years has been among the standing problems
of Chancellors of the Exchequer and Secretaries of the
Treasury—namely, that which relates to the question of
refining sugar in bond. It is a matter very fall of difficul-
ties, and I gave a promise in the month of March that
after Easter the intentions of the Government on that
subject should be announced. The committee are aware of
the grievance. It is unnecessary to dwell upon it in detail.
It is a grievance which arises from equal duty and equal
drawback on many qualities of sugar, which are very une-
qual in their yield of refined sugar, and which, when the
drawback is received, are subject to very different fiscal
conditions. It is absolutely necessary to make some ar-
rangement. We might ask Parliament to enact that all
refining of sugar shall be in bond. But we are reluctant
to make a proposal, which will imply restriction and pre-
vent the expansion of industry and enterprise, by the ap-
r plication of fetters objectionable in character. It would
create, in fact, a new sort of excise. Another project is
to allow nothing but open refining. But here we do not
escape the difficulty with regard to refining for export,
, and we should likewise be withdrawing a privilege long ago
granted and enjoyed under the existing law. There is an-
other plan, allowing parties at their own option either to
refine in bond or to refine aduty paid article. The objec-
tion to that is, that it would cause very considerable loss
to the revenue. Upon the whole, therefore, the Govern-
ment have been brought to the conclusion, that the best
plan for them to adopt was a plan of qualification of
sugars,_ the introduction, that is to say, with reference to
equal to
all sugars, of the distinction of qualities which at present
applies to foreign sugars. The sugar which is of a quality
not
if of thebrown or white clayed is subject to a duty of
if
n▪ es.,under the quality of refined it pays lls. Bd., and,
quality?lilefrefined, it pays 13s. 4d. per cwt. ; but
foreign sugar, while
of brown clayed, it pays 12s. when under the quality
pays 13s. if under the quality of white
clayed, its, if under
refined, and 17s. 4d. if of the quality
of refined. Upon the
altered, and, as the sthl of July next the duty is to be
spective of origin, being aw now stands, all sugars, irre-
after the sth of Jull3 not equals to white clayed, would
per cwt. The grievance of thiebject to a duty of 1.05„
refiner would then come
fully into consideration, and we
there is much in that grievance, and
thatbound. to say that
met by some attempt at relief. The it ought to be 1
that the readjustment of the sugar dutieso committee will see
the Government, and at the same time it was forced upon
for us to make a sacrifice in the revenue. But if impossible
to lower the sugar duties upon a certain class, that
wemightwere
lead to a loss in the revenue, and we should be again driven
to raise the duties. In point of fact, in some way or other
the duty must be raised, and there is another considera-
tion which has induced the Government to make the pro-
posal—that this is an article on which we can ask for an
increase mostposal—
favourable to the Treasury without adding
to the price paid by the consumer. I mean the price ac-
tually paid by the consumer at tho present time, not the
price he would have to pay, supposing that the alterations