The Sun.
London, England, 1860-02-22 00:00:00

Add to that the
,£1,400,000 malt credits to be taken in ad-

vance, and the £2,100,000 tea and sugar duties, it world
make a total equal to the deficit of £9,400,000.
The CHANCELLOR of the EXCHEQUER—How will
you get a surplus ?
Sir S. NORTHCOTE said he did not think that a large
surplus was required, and he believed that the natural rate
of progress in the revenue which had been maintained for
the last 10 years would have provided an ample surplus.
Ever since 1852, the income from revenue duties had shown
great elasticity. But what he was anxious to point out to
the. house was, that if the consumers were to be relieved

_
to the amount of £4,000,000, the price to be paid for that
relief was not only an additional ld. of income tax, but an
additional 3d., because he had shown that if the object was
merely to meet the deficit of £9,400,100, a 7d. income tax
would have been amply sufficient. (Hear, hear.) But if they
accepted the proposals of the Chancellor of the Exchequer,
though their revenue might increase in future years, it
would do solvery slowly, and in the meantime the country
would have to bear taxation of some kind or other to meet

the deficiency caused by the remissions proposed by the
budget. He believed that if the deficiency was met by the
continuance of the income tax, that next year they would
have not a 10d. but a ls. income tax, and perhaps more.
When people, therefore, out of doors, and hon. members in
that house, talked of getting the advantages of these re-
missions for a single penny of income tax, they were quite
in error. Next year the Government would not
be able to take up £1,400,000 of malt credits--
they would still have to pay the war taxes en
tea and sugar, and they would have nothing to
replace the absolute loss caused by the total abolition of
the paper duty. That loss was estimated byithe Chancellor
of the Exchequer at £1,000,000 for the present year, but
next year it would be £1,200,000. Looking :at the paper
duty from 1849 to 1858 he found that it had steadily in-
creased in amount. (Hear, hear.) In the ten years it had
increased from £BlO,OOO to £1,142,000, or more than 40 per
cent. He did not say that that was any reason for not
taking off the duty, or for maintaining a tax which pressed
upon a particular interest, but at the same time, when
people were talking so glibly about the remission of taxes,
and about tiding over the year, it was as well to look for-
ward and see in what position they would be placed next
year. He fully admitted the elasticity of the revenue, but
hew were they to maintain the revenue if they took away
those great elements, if they totally repealed those pros-
perous sources of income which were the basis of that elas-
ticity. He admitted that though the duties on bricks, on
soap, and upon glass had been totally abolished, the re-
venue from the Excise had increased from £15,000,000 to
£17,000,000, making an increase of £2,000,000, but the duty
on ardent spirits of itself had increased during the same
period £332,000, not because of increassd consumption, but
because the duties had been raised upon spirits in Ireland
and Scotland. Notwithstanding that increase, the people
had been in circumstances which enabled them to eonsume
the spirits at the higher rate, but there had been no great
increase. In 1839 the consumption was 22,962,000 gallons,
and in 1858 the consumption was 23,996,000 gallons.
(Hear, hear.) The effect of the financial course upon which
they were now being solicited to embark would not lead to

the production of a greater quantity of malt and hops, or
to a greater consumption of them. They would cripple
themeelves, therefore, in this expectation of a revenue
from malt, hops, and spirit, while the paper duties would
already have disappeared altogether. If they carried out
that line of policy, then, depending merely upon the elasticity
of the revenue, they would miserably fail in their calcula-
tions. So with respect to wines, the duty arising-from
which was to recover itself. It was quite an experiment,
however, whether those duties would recover themselves or
not, and at the best it would be a work of time. There was
an article in constant use among the lower classes of the
community for example—namely, tea, the reduction of the
duties upon which was begun in 1863, when it was reduced
from 2s. ld. to is. sd. per lb. That was a great reduction,
and the result was a greatly increased consumption.
But had the reduction brought the revenue from the tea
duties up to what it was before the reduction took place ?
At that time the revenue from tea amounted to £5,984,000,
but now it was under £5,500,000. Hon. gentlemen told
them the right hon. the Chanceilor of the Exchequer was
only treading in the steps of Sir R. Peel, and asked them to
look at the result. But the circumstances were very dife
ferent.- In 1842, when Sir-R. Peel began his reforms, the
system of indirect taxation had reached its limit, and Sir
R. Peel, therefore, said that more revenue must thence-
forth be derived from direct taxation. In doing so he broke
virgin soil, giving the people raw materials in abundance,
and the necessaries of life at a cheapened rate, covering the
revenue by an income tax, for which he had appealed to the
better classes of society, to enable him to set free the trade
of the country. Sir R. Peel succeeded, but the right hon.
gentleman had not the virgin soil to breakup. Undoubtedly
there was some to work upon, but not much more, and
whereas Sir R. Peel put on an income tax for three years,
the right hon. gentleman put it only for one
year, which would not cover his expenditure.
The advantages to be derived from this treaty
could not be deemed equal to those of free cotton,
cheap food and relief from many oppressive Excise
and Customs duties. He thought, therefore, they would
probably find themselves mistaken in the amount of good
which they contemplated from this treaty, but still that
consideration was perfectly insignificant In con9arison
with another grave objection to which the project was _
open. This system of direct taxation had now got into
such a state that it was absolutely necessary to reconsider
it, if they wished it to be any longer tolerated; yet the right
hon. gentleman was throwing away the opportunity of doing
what must inevitably be done next year. At the present
time it was impossible to defend that tax as now levied. In.
1860 it was somehow or other to cease, and after the exer-
tions which had been made to enable the house to keep its
word in this matter, they had a fair right to expect that
some effective step would be taken for that purpose. Next
year there would he an enormous deficit, and whatever might
have been the faults of other Governments her Majesty's
present Government at least had the credit of having pro-
posed the highest estimates.-- Under-the_axciting oratory_of
the hon. memberfor Birmingham, and in a reformed Plata.-
ment, they would find themselves obliged to have recourse
to some new mode of taxation. Direct taxation was by no
means in favour, and no member of that house had spoken-
in stronger language against the income-tax than the hon.
member for Birmingham. By depriving themselve; of
Customs and Excise duties they would really be burning
their ships. They would next be told that they must put a
tax upon realised property, or else reduce their establish-
ments. Either of those alternatives would please the hon.
member for Birmingham, and indeed, if the budget had
been prepared by him, he (Sir S. Northcote) should have re •
sisted it as a dangerous measure, but it would not have sur-
prised him. He was surprised, however, and greatly sur-
prised, that such a proposition should have proceeded from
her Majesty's Government. They were told, too, that this
was not all—that a commission was new sitting whichwould
probably recommend an expenditure of £10,000,000 or
£2o,ooo,ooo—for in these days a few millions more or less
were of no great consequence—for national defences. If
that were so, it was clear that the present resources of the
Government would be insufficient, and in that case he
should hope that the plan of the hon. member for Bir-
mingham, of making a tax of Bs. in the £lOO on realised
property would not be seriously entertained. By such
a scheme as was now proposed, however,' they ran the
risk of a tremendous diminution of the establishments of the
nation, or ele of the imposition of a tax on the holders of
property, from which the manufacturers and otherprodueers
would be exempt. The Economist—a paper for which he
had a great respect—admitted that the proposal had advan-
tages to offer, though they were to be attained at a great
price; but it went out of its way to taunt, unjustly as he
thought, the right hon. gentleman the member for Buck-
inghamshire with too great a disposition to tide over diffi-
culties. Surely the right hon. gentleman (the Chancellor
of the Exchequer) himself was equally liable to such a re-
proach, and he had rather disingenuously declared that he
had so far yielded to the suggestion of the Opposition.
ferWhileed
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it
would lead them into a dilemma so serious as there was no
previous example of within the memory of any of them.
(Cheers from the Opposition.)
Mr. AYRTON said he was glad the right hon. the
Chancellor of the Exchequer had arranged not to bring
forward the income tax until they had decided what they
proportion were to do with the various complicated matters which he
had placed before them for their consideration. He hoped
yeart he
tincome-taxdhHeypuAcßo:
could
w;oltDou InsadmTi
doobevNree
dc owemtxhhpeaertaespsre permanentexpressed
adjournmentp
should bear to theother taxation of the country.
ML
or; tthtehedehbatoust
would come to a decision on Thursday night.
The motion was then agreed to. .
The Consolidated Fund (4407,649) Bill was read a third
time and passed.
VALUATION OF RATEABLE PROPERTY
(IRELAND) BILL.
On the motion that this bill go into committee,
Mr. BLACKBURN moved as an amendment that this
helm should go into committee that day six months.'
Mr. LAING supported the motion for going into cora•
mittee, which was agreed to.
After a short discussion, the bill passed through com•
mittee.
j, The house adjourned at a quarter to one o'clock.
,o- oonpetthothrincanomd
income-tat

THE TREATY OF COMMERCE.
The Conservatives who voted with the Government on
Mr. Disraeli's motion were Alderman Copeland, Mr. J. M.
Gaskell, Mr. P. 3. Humberston, Mr. A. E. Lockhart, Mr.
T. Mainwaring, Mr. D. Pugh, Colonel Smyth, together
with two or three members described by " Docl" as Liberal
Conservatives. _ _ _

The following Liberals voted against the Government :
Mr. Ayrton, Mr. Bowyer, Mr. Bracklehurst, Mr. Greene,
Mr. M. Hassard, Mr. E. Horsman, Mr. E. MacEvoy, Mr.
J. E. Redmond, and Mr. M. Sullivan. With two mop.
tions the foregoing are Irish Catholics.

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