The Sun.
London, England, 1859-07-19 00:00:00

forence to anything that may take place in future years ;
that we wish that Parliament when it meets again after the
recess should be in a condition to face as a whole the great
and seriotis question of revenue and expenditure that it
will then have to meet. (Hear, hear.) But if these conside-
rations be just, they form a most powerful argument against
meddling at the present moment with the indirect taxes of
the country—(cheers)—because you cannot touch one of
these indirect taxes, and especially you cannot touch the
taxes that are derived from tropical articles, without greatly
interfering with the course of trade. (Cheers.) You may
tax your malt,you may tax your home-made spirits ; you then
interfere with trade ; but you interfere with trade far more if
you touch sugar, or if you touch tea that has to be brought
from what I may call the extremities of the earth. (Hear.)
Ido not speak now of the interests of the consumer. I
speak simply at this moment of the interests of trade, and
I say it would be contrary to those wise and circumspect
rules which govern the proceedings of Parliament in regard
to its fiscal legislation if they were to permit themselves to
interfere with those great and capital trades of the country

for the purpose of supplyiag, what we must call a momentary
derangement. (Hear.) But there are other reasons which,
I confess, amount for me to a demonstration, and more
than a demonstration, upon this subject. I know not whe-
ther those deliverances within the last few weeks of spirits

from bond, in anticipation of what was shortly to take
place, of which I spoke, showed confidence or a want of
confidence, but at any rate I will proceed to lay as well as I
can an argument which appears to be conclusive before the
committee. When we deal with a question between direct
and indirect taxation, we deal to a certain extent—imper-

fectly and roughly no doubt the distinction is taken, but still
it is in fact and in substance a true distinction—we deal to

a certain extent with a question between a rich man and a

poor man. (Hear.) Direct taxation falls upon the middle
and wealthy classes, but indirect taxation weighs with
much more serious pressure upon the poor and labouring
man. This was felt by Parliament at the commencement
of the Russian war, and in the effort which it made in suc-
cessive years to meet a large portion of the demands of that
war by means of new taxes it carefully observed the main-
tenance of a due relation between the amounts of direct and
indirect taxation. (Hear, hear.) And I think] without
going into minute particulars, I may that it was the deter-
mination of Parliament, as evinced by its acts, that of that
portion of the war expenditure which was to be drawn from
taxes, the greater part should be taken from direct taxes,
and the lesser part from indirect taxes. But now let us
see what has happened since the close of the war. The war
closed in the month of March, 1856, but the finance of the
year 1856-7, although it was a year of peace, was not,
and could not be, a finance of peace, because it was
a year of transition, and, in fact, a great part of it
was consumed in bringing home armaments from the
Crimea. That year, in fact, was a year of war more
than a year of peace so far as the expenditure
was concerned. But in 1867-8 began a finance of
peace, and a reduction to a peace establishment. My right
hon. friend the Secretary of State for the Home Depart-
ment found himself under the necessity, with reference to
the demands of that year, of keeping up a portion of war
taxation. Had war taxation been entirely removed on the
31st of March, 1857, the duty on sugar of the lowest class
would have gone down to 9s. 6d. per cwt., the duty on tea
would have gone down to ls. per lb., and the tax on
incomes would have gone down to sd. in the pound. My
right hon. friend, finding the necessity of a partial reten-
tion of war taxation in order to meet the scale of expendi-
ture which had been, or was to be sanctioned, maintained
that portion of taxation distributed between its two main
heads. He requested Parliament to continue a modified
part of the extra duties on tea and sugar ; but he likewise
retained 2d. in the pound on incomes, which would have
dropped if the act of 1853 had been suffered to take its full
effect. My right hon. friend obtained from Parliament the
continuance of those extra tea and sugar duties from April,
1857, to March, 1860, or a period of about three years, and
the result has been as follows :—We have kept at a certain
porton of war income tax, that is to say the imposition of
2d. in the pound which would have lapsed under the act of
1853, and which yielded two millions of money. But that
we kept up for one year only, from April, 1857, to March,
1858. (Hear, hear.) In the financial year 1858-59 the in-
come tax went down to the limit which was provided for
in the act of 1853, but the tea and sugar duties continued
at the limit at which they were fixed for a period of three
years by the act of 1857. The result is shortly this—if we
look at the three years 1857-60, during those three years
we shall have raised, of what must be regarded as tempo-
rary war taxation, two millions only from direct taxation in
the shape of income tax, and three millions a year from tea
and sugar, or nine millions of indirect taxation. (Hear,
hear.) If that be a true state of the account, and I
believe it cannot be impeached, then, I say, what-
ever may have been the anticipations of the pub-
lic out of doors, whatever the patience of the traders
or of the consumers, it would, in the view of the
Government, be a positive breach of duty, and an act of
gross injustice towards the consumers, if at this moment we
were to ask you to add one single shilling to the imposition
of indirect taxation. (Cheers.) But if it be not slaying the
slain to pursue this question further, I would likewise re-
mind the committee of the position in which we stand for
raising money at this moment by customs and excise duties.
Customs and excise duties are very convenient in one point
of view, viz., that you begin to get the duty the night you
make the financial statement, and if you mako the financial
statement just after the close of the financial year you get
12 months' duty for 12 months' taxes. But what is our case
now ? We might resort to the odious course of laying on
3d., 4d., or sd. a pound on tea, and 35., 45., or ss. per cwt.
on sugar, but we should not get 12 months' duty. Three
and a half months are irrecoverably gone and counted with
the past. One and a half months more have already been
forestalled by payments in anticipation. (Hear.) At this
moment the Exchequer of the country is richer than it
ought to be by upwards of a million of money in duties on
tea and sugar, which have been paid in advance, earlier than
they would have been paid in the natural and ordinary
course of trade, by parties whosupposed that it might be the
possible pleasure of Parliament to enact an increase of those
duties. That being so, we arrive at a point which can be
easily anticipated. (Laughter.) The divining faculty of an
intelligent audience altogether outruns either the power or
necessity of a setailed statement. It remains to consider
what we shall do with the income-tax. The income-tax, as
I conceive, was introduced into ourfiscal legislation for two
great purposes and at two different periods. The one was to
effect permanent and salutaryreforms in our commercial and
fiscal system, and the other was to meet in the manner the
most efficacious sudden public exigencies. I wish it had
been my fate to ask the committee to vote an augmentation
of the income tax for the former rather than for the latter
of these circumstances. I trust that the day niay yet come
when, if the income tax is to be continued, Parliament
will recollect that it derived no small sort of passport as a
peace tax to the public favour or public endurance for this,
that it was associated, as it has been, with other changes of
the law productive of the widest and most permanent social
benefits. (Cheers.) This other purpose, of meeting great
public exigencies and extraordinary demands on the public
purse—that is, demands extraordinary in amount yet strictly
referable to current wants—althoughit be not one so pleasant
to entertain, yet it is one equally legitimate, and I put it
broadly, that in a case like this, where, for the dignity,
honour, and safety of the country, we are called upon to
make great and rapid efforts in the augmentation and ex-
tension of our defences, the income -tax is beyond all others
the regular and legitimate resource to which to resort.
(Cheers.) Ido not know whether the committee would
like me to lay before them any facts with regard to the con-
dition of the income-tax, and the expectation the country
has entertained that it might he found practicable at a
period now approaching to part with it. (Hear.) Ido not
speak of the augmentation which I am about to propose, but
I speak of the income-tax with reference to its acquiring a
place of permanence in finance. In the year 1853 there was
an expectation that the revenue of this country would so
thrive under the system which had been in operation that
we should be able to dispense in seven years with the aid of
the income-tax as an ordinary tax for the purpose of na-
tional income ; and, so far as depends upon the revenue of
the country, and the simple consideration of the revenue,
hat expectation has been entirely fulfilled. If I go to the
expenditure of the country as it was in 1853, and if I compare
that expenditure with the present revenue, there is not an
expectation which was held out in 1853 (I do not speak of
details, but I speak of general results) which has not been
more than satisfied and fulfilled. (Cheers.) In 1853 the
revenue was £59,024,000, and the expenditure £55,769,000.
In the year 1859-60—taking, of course, the estimated
revenue—the revenue is £64,340,000, showing a growth of
£5,316,000 in revenue, which is a sum as large as an in
come-tax of sd. in the pound. (Hear.) But that is not all.
We must balance our revenue with expenditure. The ex-
penditure in 1853 was £35,769,000. The estimated expen-
diture of 1859-60 is £69,207,000 ; so that while our revenue
has been growing £5,316,000, our expenditure has grown
£13,438,000, and that is a very simple, transparent, and
conclusive explanation of the difficulties with regard to
parting with the income-tax. (Hear, hear.) When I say
that the revenue has increased to the extent of £5,316,000,
I would remind the committee that that is entirely inde-
pendent of the advantage next year from the falling in of
42,246,000 Lcng Annuities, which indeed increases the re-
venue up to £7,000,000, being enough, as I can show if we
go into details, to enable us to part both with the income-
tax of 56. in the pound, and likewise with the war duties on
tea and sugar if only our expenditure had not increased.
That is the simple case, which at a future time, if it is
thought right, I will display in more detail ; but I pledge
myself that, taking the revenue as it stands and is estimated
to be, there would not have been the slightest difficulty in
dispensing both the income-tax and the remaining war taxes
on tea and sugar, if it had not been that the exigencies of
the public service, as stated from time to time, have created
new calls, which of course mast be met by resorting- to cor-
responding taxation. (Hear.) £4,867,000 was the sum
which I ventured to state to the committee as the gross de-
ficiency which we shall have to meet. But there is a ques-
tion which I am about briefly to open, and a source from
which (without exposing ourselves to any objection which
applies to borrowing-, and without inconveniently interfer-
ing with the course of trade or private interest) we may
yet draw a limited sum in alleviation of the public burdens.
It is a source not altogether new to this house, because it
has been mentioned from time to time by Chancellors
of the Exchequer, and it has always been felt that the