Series of tbe Xonoon School of 
 Economic* ano political Science 
 
 No. XXXIII 
 ENGLISH TAXATION 16401799
 
 ENGLISH TAXATION 
 
 1640-1799 
 
 AN ESSAY ON POLICY AND OPINION 
 
 BY 
 
 WILLIAM KENNEDY 
 
 LONDON 
 
 G. BELL & SONS LTD. 
 
 1913
 
 RY 
 
 UNivE3sm r or CALIFORNIA 
 
 SANTA BARBARA 
 
 PREFACE 
 
 THIS book is a result of an attempt made several years 
 ago to understand the grounds of English tax policy 
 since the re-imposition of the Income Tax and the 
 beginning of the reform of the tariff in 1842. That 
 attempt was made in the expectation that, if at all 
 successful, it would not only explain much that seems 
 fortuitous in our present tax system, but would also 
 throw light upon some important general questions 
 which theoretical works on taxation appeared to me to 
 treat superficially. The attempt was so far successful 
 that this expectation became a working hypothesis, but 
 so far unsuccessful that I was unable to understand with 
 any assurance certain aspects of the policy of the period 
 from the material which the period itself offered. This 
 was particularly true of policy regarding the taxation 
 of the wage-earning classes. In the hope that the 
 history of the preceding period would help to resolve 
 these doubts, I went back to the time of William Pitt. 
 The material turned out to be in many ways more 
 significant ; but I found myself still unable to interpret 
 it as a whole with any certainty. In effect the doubtful 
 aspects of the policy of Parliament were thrown into 
 stronger relief, but not explained. In this difficulty 
 I again went back to the period dealt with in this 
 book, in the history of which, I believe, are to be found 
 not only the main elements of the interpretation which 
 was lacking, but also much assistance towards a realiza- 
 tion of what is involved in the permanent general 
 question of the distribution of taxation. 
 
 I. have called the book an Essay with the intention
 
 vi PREFACE 
 
 of suggesting its relation to histories of taxation. It is 
 not a history of taxation in the sense in which Dowell's 
 work on the same period is a history of taxation. Dowell 
 gives in detail a record of the tax enactments, but 
 makes comparatively little attempt to bring out their 
 general tendency and almost none to explain it. The 
 present work is an essay upon the basis of Dowell's 
 record amplified on points, particularly as regards the 
 interregnum and the direct taxes of the seventeenth 
 century, on which Dowell is inadequate and attempts 
 to get at the policy embodied in the record, and the 
 opinions and motives, supporting and opposing, which 
 lay behind the policy. On the other hand, neither is 
 the book a history of taxation in the sense in which 
 such a work may, perhaps, some day be written ; it 
 can be, at best, but an essay towards such a history. 
 And this not merely because such a history would 
 necessarily deal directly with many questions which are 
 only touched on here by the way, but also because, 
 on those questions of the distribution of taxation and 
 the underlying political and social opinion with which 
 this book is chiefly concerned, such a history would 
 presuppose an assurance, demanding correlation of the 
 results of work on other fields of social history, which 
 at the present moment is unobtainable, and the lack of 
 which makes the conclusions of this study in a measure 
 provisional. 
 
 In issuing this essay, which from one point of view 
 is critical of the existing literature on the history of 
 taxation, I wish to acknowledge most fully my indebted- 
 ness to that literature, and particularly to two books. 
 The first is Stephen Dowell's History of Taxation and 
 Taxes, but for the existence of which it would have 
 been quite impossible to have attempted such a study 
 as the present. The second is Professor Seligman's 
 Incidence of Taxation (3rd edition), the historical 
 portions of which have been of constant service in 
 dealing with the pamphlet literature of this period.
 
 PREFACE vii 
 
 I desire also to acknowledge with gratitude the 
 help which I have obtained from fellow-students and 
 teachers in working on this subject from Professor 
 Smart, under whose guidance I first approached it ; 
 from Professor Cannan, who has at different times read 
 both the preliminary studies in which this book was 
 first sketched and the final manuscript, and to whom 
 I am indebted for many suggestions and much stimu- 
 lating criticism; from Mr. J. B. Black, Miss M. D. 
 Gordon and Mr. R. H. Tawney, with whom I have had 
 the advantage of discussion of particular points, and from 
 whom, along with Dr. Lilian Knowles, Mr. David Ogg, 
 Mr. W. R. Scott and Professor Unwin, I have received 
 much help regarding sources. I am also indebted to 
 Miss Olivia Powell for her generous assistance in the 
 labour of seeing the book through the press. 
 
 The historical research on which the essay is directly 
 based was carried out during my tenure in sessions 
 1910-11 and 1911-12 of the Shaw Research Student- 
 ship at the London School of Economics and Political 
 Science, and a course of lectures also based upon this 
 work was delivered there in Michaelmas term 1912. 
 
 W. KENNEDY.
 
 CONTENTS 
 
 PAGE 
 
 PREFACE ....... v 
 
 I. INTRODUCTION ...... i 
 
 II. THE INHERITANCE OF THE LONG PARLIAMENT . 8 
 
 III. 1640-1713 CUSTOMS AND DIRECT TAXES . . 23 
 
 IV. 1640-1713 EXCISE . . . . -Si 
 V. POLITICAL PHILOSOPHY AND THE TAXATION OF THE 
 
 POOR ...... 82 
 
 VI. THE EIGHTEENTH CENTURY WALPOLE . . 95 
 
 VII. WALPOLE TO ADAM SMITH OPINION . . . 113 
 
 VIII. 1776-1799 . . . . . - 151 
 
 IX. SOCIAL THEORY IN THE EIGHTEENTH CENTURY . 180 
 
 INDEX . . . . . . . .195 
 
 Note. A rough analysis of the contents of chapters will be found in the 
 
 page-headlines. 
 Where library press-marks are given in the footnotes, they refer 
 
 to those of the British Museum, unless otherwise stated. 
 , tif . With a few exceptions, quotations are given in modernized 
 
 spelling.
 
 I 
 
 INTRODUCTION 
 
 TAXATION has had the misfortune to be identified in 
 England with two great controversies in which very- 
 few of its own essential problems were involved. The 
 first and greater of these dealt with the question of the 
 authority by which taxes should be levied. This was 
 merely part of the wider constitutional question of the 
 body which should make law and control the adminis- 
 tration of government. In its main features, the question 
 was settled in the seventeenth century in favour of 
 Parliament and those who at different times came to 
 control Parliament ; but its settlement in no way decided 
 the question of the kind of taxation which this govern- 
 ing body should adopt. The second controversy was the 
 tariff struggle, of the second quarter of the nineteenth 
 century, over the use of Customs duties for protective 
 and preferential purposes. The struggle resulted in the 
 victory of the Free Trade doctrine that taxes should be 
 imposed only for revenue. It is true that certain minor 
 questions of the best form of Customs duties were also 
 involved, but it is obvious that the controversy touched 
 only a very small portion of the whole field of taxation. 
 
 Interest in these constitutional and tariff questions 
 has tended to the neglect of the essential problems in 
 taxation. Evidence of the neglect appears on all sides. 
 In spite of the fact that these problems are raised every 
 year in Parliament, nothing is more striking than the 
 absence there of anything that could be called a theory 
 of taxation. English text-book writers are useful on
 
 2 INTRODUCTION 
 
 questions of incidence and administration ; on questions 
 of distribution their discussions are, with few exceptions, 1 
 so little fundamental that they do not even recognize 
 that questions of political philosophy are involved. But 
 the most striking evidence is given by the two books 
 upon which we chiefly depend for our knowledge of the 
 history of English taxation Stephen Dowell's large 
 History (1884) and Mr. Sydney Buxton's study of the 
 period 1783 to i885. 2 Both are invaluable so far as 
 they go, but in regard to strictly tax questions they 
 give little more than an unilluminating record of the 
 facts of tax legislation. 3 They do not even indicate a 
 consciousness of what constitute the essential problems 
 involved in the material with which they deal. Professor 
 Seligman has more recently made valuable contributions 
 to the history in his survey of theories of incidence 4 
 and his history of the Income Tax, but these are both 
 sectional studies only, and the second and less sectional 
 avoids a discussion of the most important, if least obvious, 
 aspects of the period with which it deals (the nineteenth 
 century). 
 
 The relatively superficial character of our histories 
 of taxation 6 may indeed be considered the proximate 
 cause of the neglect of essential problems. For these 
 problems are difficult, and it is not at first obvious even 
 what they are ; and it is just in such a situation that 
 history can afford most help to present thought.* Over 
 centuries these problems have been considered many 
 
 1 The most prominent exception in England is Professor Edge- 
 worth, who bases his theory of distribution on Benthamite utili- 
 tarianism. See Economic Journal (1897), vii. 550 seq. 
 
 * Finance and Politics, 1783-1885, 2 vols., 1888. 
 
 8 This criticism is less fully applicable to Dowell's chapters on 
 the medieval period. 
 
 4 Shifting and Incidence of Taxation, 3rd edition, 1910 ; part i. 
 book i. 
 
 8 It is perhaps as well to say that local taxation or rating is not 
 in view in this essay. 
 
 6 Compare the comparative lack of suggestion to be obtained 
 from the history of problems which have been sharply denned and well 
 analysed in modern times, e.g. problems of incidence of taxation.
 
 SUBJECT OF ESSAY 3 
 
 times and by many men not, it is true, systematically 
 or as a whole, but one problem at one time and another 
 at another time ; and retraversing old practice and 
 opinion we have laid open to view the elements and 
 connections of many of them. Nor is the service which 
 history may in this way perform for the present, vitiated 
 by the fact that the situation in which the problems 
 arose was different in important respects in the past ; 
 for the service we ask of history is not to provide models 
 to copy in the present. History is the attempt to 
 understand the past and to bring out, inter alia, the 
 connection between the setting of a problem and its 
 contemporary solution ; and the more fully history 
 succeeds in this attempt, the more assistance does it 
 provide towards an understanding of the present, by 
 indicating not only that the setting in the present is 
 different as well as similar, but that it is similar and 
 different in particular and defined respects. 
 
 In this essay, then, an attempt will be made to 
 understand the way in which certain of the essential 
 problems in taxation were dealt with and thought about 
 in the seventeenth and eighteenth centuries in England. 
 There are, moreover, two additional reasons for thinking 
 that this subject is important in the present stage of 
 historical and financial investigation. On the tax side, 
 it is practically impossible to understand the history of 
 taxation and of related opinion in the nineteenth century 
 without grasping the outstanding features in the pre- 
 ceding century ; and this not merely on the general 
 ground that no period can be appreciated without 
 knowledge of its antecedents, but chiefly on the particular 
 ground that the nineteenth century (which may for our 
 purposes be taken to begin with the imposition of the 
 modern Income Tax in 1799) had a peculiar tendency 
 to shut its eyes to certain forms of question and to ignore 
 the motives and ideas which yet influenced its treatment 
 of them. On the historical side, the tax policy of the 
 period from the Civil War to the end of the eighteenth
 
 4 INTRODUCTION 
 
 century is an important aspect, which still awaits 
 interpretation, of the social and economic policy of the 
 then governing landed class ; and it is an aspect which 
 has the merit of forcing on the attention the wider 
 question, to which comparatively little has yet been 
 done, of the social attitude or what may be called the 
 practical political theories of that period. 
 
 The essential questions in taxation may be grouped 
 in three divisions, according as they treat of its purposes, 
 its distribution, and the methods of attaining, by actual 
 taxes, the purposes and distribution desired. The 
 purposes for which taxes may be imposed are many. 
 The provision of revenue to maintain certain common 
 services, whether national or of a more restricted 
 character, is a purpose of nearly all taxes and the sole 
 purpose of the majority ; the repression of consumption 
 (e.g. in spirit duties), the achievement of certain ends 
 of commercial policy (e.g. in Customs duties), or of 
 agricultural and land policy (e.g. in Australian land taxes), 
 are instances of other purposes for which, alone or along 
 with a revenue purpose, taxes may be levied. We shall, 
 therefore, consider the state of opinion in this period 
 on the question of the purposes of taxation, and shall 
 note to what extent purposes other than that of revenue 
 were embodied in actual taxes. But, while an attempt 
 will be made to estimate the relative importance of 
 these purposes and their influence upon other aspects 
 of tax doctrine, no detailed discussion of the grounds 
 on which they were based will be offered ; that would 
 involve, among other things, an appreciation of the 
 Mercantile System. The second group of questions 
 in the history of which our chief interest will lie deals 
 with the distribution of the total burden of taxation 
 among the members of the community. The problem 
 of distribution is the fundamental problem of taxation, 
 in the narrow sense of taxation for revenue ; it is neces- 
 sarily raised by it, and, speaking generally, it is not raised
 
 THE PROBLEMS OF TAXATION 5 
 
 by taxes of which revenue is not the only or a main 
 purpose. 1 It may be divided into two parts : first, should 
 every member of the community pay taxation a minor 
 form of which is the question, should the poor man 2 
 pay taxation ? and second, what is the criterion or 
 standard of distribution, according to which the burden 
 is to be distributed among those who, it is considered, 
 should pay taxation ? The third group of questions 
 deals with methods of attaining the kind of taxation 
 desired that is, with the devising of actual taxes and 
 of a taxing organization which will yield the necessary 
 amount of revenue, distribute the burden in a satisfactory 
 way and fulfil any other purposes intended. The many 
 difficult and technical questions here involved may be 
 roughly classified as follows : first, problems of incidence, 
 dealing with the question upon whom and in what 
 proportion different taxes will lay a burden ; second, 
 problems of collection, dealing with the relation between 
 the forms of taxes and the system of collection and 
 supervision, with a view to prevention of evasion, cheap- 
 ness of collection, and the like ; third, problems of the 
 incidental features of taxes, dealing with the minimization 
 of the e necessary evils ' which always attend taxation, 
 and which offend against opinions and prejudices on such 
 subjects as personal liberty and restraint of trade. With 
 the problem of incidence we shall be directly concerned 
 here ; it provides the minor premiss in the argument 
 that a particular tax or system of taxation is distributively 
 
 1 Thus, for instance, a spirit duty imposed solely to reduce con- 
 sumption (so far as consistent with the prevention of evasion) 
 would involve no problem of distribution in any but the formal sense 
 that it would be intended to make people pay in proportion to their 
 use of the dangerous commodity. On the other hand, the problem 
 of distribution might be considered in a Customs duty imposed solely 
 or chiefly for protection, in the real sense of taking into account, 
 in arranging the distribution of taxation as a whole, the burden 
 involved on the consumers of the protected commodity. The state- 
 ment in the text is, however, true for most cases and for this period. 
 
 1 Unless otherwise stated, ' poor man ' in this essay always means 
 the ordinary wage-earner, and never means pauper or destitute 
 person.
 
 6 INTRODUCTION 
 
 just. The other problems of method will be treated 
 more casually ; but it will be necessary to notice the 
 phases of them which were most prominent in this 
 period, both because the policy of the period would 
 otherwise be partly unintelligible, and because, as is less 
 obvious, the exigencies of these problems usually force 
 the taxing power to be content with taxes which fail 
 in a degree to achieve the purposes and distribution 
 which it would desire. 
 
 An illustration, in the form of a simple scheme of 
 taxation, will make this description of the essential 
 problems clearer ; and will at the same time afford a 
 useful background of comparison against which to throw 
 up the features of the tax systems of the seventeenth 
 and eighteenth centuries. The scheme which it is 
 most convenient to take corresponds closely to the 
 English tax system of the period 1860-1880, as it was 
 conceived, with varying precision, by the men of that 
 time. 1 The principles of this scheme were these : the 
 only purpose of a tax is to produce revenue ; every one, 
 including the poor man, should pay taxation ; taxation 
 should be distributed in direct proportion to incomes ; 
 the roughly satisfactory method of achieving this result 
 is by a compensatory system of taxes, each in itself 
 distributively unfair, but in such a way that the unfair- 
 nesses cancel one another on the one side the Income 
 Tax and certain minor taxes which fall only on the rich 
 and middle classes, and on the other Customs and 
 Excise duties upon a small number of imported and 
 native commodities of very general consumption, to which 
 a poor man pays more, proportionately to his income, 
 than richer people. This was not, in fact, a quite accurate 
 account of the tax system of that time, nor was it perhaps 
 ever so fully defined, but it was the account which was 
 dominant in a somewhat vague way. It is, moreover 
 
 1 If any one doubts this assertion, he may consider the scheme 
 given as an hypothetical one for purposes of illustration and com- 
 parison. It is impossible to adduce the proof here.
 
 TAX SYSTEM OF 1860-80 7 
 
 still sufficiently familiar even now, in spite of its present 
 inapplicability, and at the same time sufficiently com- 
 prehensive in its realization of the essential problems in 
 taxation, to entitle it to be treated as a useful position 
 from which to look either forward or backward. 
 
 But before we can go on to consider the way in 
 which the questions thus answered in the Gladstonian 
 epoch were dealt with between 1640 and 1799, it is 
 necessary to sketch in outline the kind of tax system 
 which the Long Parliament inherited.
 
 II 
 
 THE INHERITANCE OF THE LONG 
 PARLIAMENT 
 
 THE Civil War involved the final breakdown of a financia 
 system which had ruled in England for about three 
 centuries. 1 In contrast with modern times, its most 
 striking feature was lack of homogeneity. We now con- 
 sider the national expenditure as one whole, made up 
 of the cost of maintaining many different services ; and 
 the national revenue as provided almost exclusively by 
 a system of taxes of a proportionate aggregate yield. 
 But during these centuries, both revenue and expendi- 
 ture were in theory divided into three separate sections, 
 and the total revenue was not derived from a system 
 of taxes. 2 The first section comprised the proprietary 
 revenue from Crown lands and feudal rights, which 
 constituted a varying but large proportion of the total 
 revenue, 3 and was supposed to provide for the ordinary 
 internal administrative expenditure of the State. This 
 was not a tax revenue at all. The second section com- 
 
 1 For special sources of revenue in this period, such as benevolences 
 and monopolies, see Dowell i., books vi.-viii., and W. Hyde Price, 
 The English Patents of Monopoly. They are not discussed in this 
 outline sketch, partly because they were of minor financial import- 
 ance, but chiefly because they had no importance as a part of the 
 tradition which the Long Parliament inherited. 
 
 1 Fortescue, Governance of England, ed. Plummer, written 1471-6, 
 chaps, vi.-viii. 
 
 8 e.g. in 1610, 144,000 out of an estimated ordinary revenue 
 of 461,500, which included Customs revenue 247,800. Gardiner, 
 History of England, 1603-42, x. 222.
 
 FINANCIAL SYSTEM BEFORE 1640 9 
 
 prised the revenue from Customs duties, which was 
 supposed to provide for the ' keeping of the sea ' for 
 the protection of merchants and the defence of the 
 realm that is, for expenditure on the Navy. 1 These 
 duties, as we shall see, were not regarded as national 
 taxes. The third section comprised the revenue from 
 direct taxes, in the full modern sense of the word, 
 which were levied usually on a grant by Parliament for 
 special national purposes such as war. 
 
 This theory of a sectional financial system was in 
 some ways realized, in others repudiated in practice. 
 But, from the point of view of taxation, there was one 
 important respect in which it was not, and another in 
 which it was, carried out. In spite of the fact that 
 Customs duties were explicitly granted for the mainten- 
 ance of the Navy, there is no reason to suppose that the 
 revenue derived was ever so allocated 2 ; the Customs 
 were treated by the Crown in practice as providing a 
 portion of the ordinary yearly revenue, and the Navy 
 as one of the objects of ordinary expenditure. On the 
 other hand, direct taxes, since they were granted only 
 for short periods, were kept closely in touch with the 
 theory that they were levied to provide for special pur- 
 poses of more or less intermittent occurrence. The 
 result of these two circumstances was to produce an 
 attitude to tax problems very different, in superficial 
 ways, from that which is familiar nowadays. Tax 
 problems did not arise, properly speaking, in connection 
 with the ordinary yearly revenue of the State for 
 Crown lands yielded a property revenue and Customs 
 
 1 It is not clear whether the ancient, and in the seventeenth 
 century relatively unimportant, prerogative Customs duties were 
 supposed to have this destination. The doctrine applied directly 
 to the duties granted by Parliament, usually for the King's life, see 
 e.g. i Eliz. c. 20 (in Prothero, Select Documents, p. 26) and 16 Chas. 
 I. c. 8 ; also Rushworth, part iii. vol. i. pp. 21-2 for Pym's statement 
 of grievances. 
 
 2 Fortescue, p. 123, and Plummer's note, p. 232. Debates in 
 Parliament, 1610 (ed. Gardiner), Salisbury's account of the reasons 
 for increasing the duties in 1608, pp. 155-6. Prothero, p. 354, 
 Commission to levy impositions, 1608.
 
 io INHERITANCE OF LONG PARLIAMENT 
 
 were not considered as a national tax ; they were involved 
 only in direct taxes, and presented themselves in the 
 form how occasionally to raise revenue for national pur- 
 poses. But to-day almost the whole of the national 
 revenue is derived from taxes, and from taxes which are 
 levied every year. The second half of the seventeenth 
 century witnessed the transition from the first to the 
 second of these tax situations. 
 
 What kind of taxes, we must then ask, were Customs 
 duties considered to be, if they were not national taxes, 
 and in what way was taxation raised by the direct taxes ? 
 
 Customs duties were imposed on ' all manner of 
 goods and merchandise coming in and going out of the 
 realm,' and were always thought of as a special charge 
 imposed on imported and exported merchandise for the 
 special service required from the Crown of the protec- 
 tion of such merchandise. Modern Customs duties are 
 levied upon the citizen (through his consumption of 
 certain imported goods) as taxes for general national 
 purposes ; in the sixteenth century, Customs duties were 
 levied on those (whether Englishmen or foreigners) who 
 consumed the dutied goods, in theory as dues or fees for 
 a special service performed, no doubt by the Crown, for 
 their particular benefit. They were analogous to tolls on 
 roads. Traded merchandise, and not the country at 
 large, should pay for the protection of trade ; and 
 hence exports as well as imports paid duty. 
 
 The theory is fully illustrated by the records of the 
 controversy in the reign of James I. over the power of the 
 King to impose duties without consent of Parliament. 
 Both sides regarded the Customs in the way described. 
 Hakewill thought that ' because the common law ex- 
 pecteth that the King should protect merchants in 
 their trades ... it also giveth him out of merchandises 
 exported and imported some profit for the sustentation 
 of this public charge,' but this sustentation, he con- 
 tended, was a duty certain, not to be increased at the
 
 CUSTOMS PROTECTION OF TRADE n 
 
 King's will. 1 Baron Fleming, the chief of the Bench 
 which supported the Crown in Bates' case, explained the 
 reason for Customs duties in the same way, but argued 
 that in order to protect merchants and regulate trade, 
 the King necessarily had the right to alter the duties 
 when necessary. 2 
 
 It will be noticed that Customs are spoken of as paid 
 * out of merchandise,' and not by merchants. This 
 distinction was intentional, for it was well recognized 
 that, although advanced by merchants, the burden of 
 the duties really fell on the consumers of the com- 
 modities. The interests, that is to say, which ultimately 
 benefited by and paid for the special service of the 
 Crown, were the consumers, home and foreign, and not 
 the merchants. As John Hales 3 wrote in 1549, 'the 
 merchante, if he bie dear, he will sell deare agayne.' Out 
 of many illustrations of the doctrine in the first half of 
 the seventeenth century, this from Fleming's judgment 4 
 is perhaps the clearest : 
 
 ' It is well known that the end of every private 
 merchant is not the common good, but his own parti- 
 cular profit, which is only the means which induceth him 
 to trade and traffic. And the impost to him is nothing, 
 for he rateth his merchandise according to that. The 
 impost is imposed upon currants ; and he who will buy 
 them shall have them subject to that charge. . . .' 
 
 Fleming denied that the duties injured the merchant 
 
 1 See abbreviated speech in Prothero, pp. 343, 350. 
 
 2 Hubert Hall, Customs Revenue of England, i. 155, gives a useful 
 summary of this and other speeches. For another statement of the 
 theory on the Royalist side, see Sir John Davies, ' The Question con- 
 cerning impositions . . .' 1656 (written t. James I.), pp. 78-80. 
 
 3 A Discourse of the Commonweal of this Realm of England, ed. 
 Lamond, p. 33. 
 
 4 State Trials, ii. 390. See also Clark's judgment, ibid., ii. 
 386 ; Noy's view of incidence of Customs in 1629 (given in Gardiner, 
 op. cit. vii. 60) ; and the implication of the desire to exempt 
 necessaries in the interest of the poor. It should be pointed out 
 that the instances of the doctrine all refer to duties on imports ; 
 in the text I have generalised it to cover export duties also.
 
 12 INHERITANCE OF LONG PARLIAMENT 
 
 in any way, but the merchants were well able to assert 
 their interest on the point. They contended that 
 duties destroyed their trade or that the burden fell on 
 them. The truth contained in this contention, namely, 
 that duties restrict trade, was, however, a commonplace, 
 and was recognized to be quite consistent with the 
 doctrine that the consumer pays the duties. Thus in the 
 time of Henry VIII., the speakers in Starkey's Dialogue 1 
 agree that by reason of heavy Customs merchants ' have 
 less will to travail for the commodity of the rest of the 
 Commons. Wherefore we lack many things that we 
 might have or at least much better cheap than we have 
 commonly.' So in a speech 2 in 1610 the inconveniences 
 of recent impositions are summarized thus : ' How 
 hurtful they are to the merchants in impoverishing 
 them in their estates ; to the King in the decreasing his 
 revenues by decay of traffic ; and to the whole people 
 in making all commodities excessive dear, is confessed 
 by all and therefore need no debate.' 
 
 The result of this view of the Customs as dues or 
 tolls rather than taxes, was that the problem of distribu- 
 tion was not thought of as involved. The people who 
 paid the dues paid for special benefit received. Nor 
 was this result any the less definite because the theory 
 was not put into practice. It was, indeed, untrue to 
 the facts in a double way. On the one hand, the Customs 
 revenue was not allocated to the Navy, and the duties 
 were increased several times in the first forty years of 
 the seventeenth century simply to add to the general 
 
 1 Thomas Starkey, England in the Reign of King Henry the Eighth, 
 ed. Cowper, p. 141. 
 
 * State Trials, ii. 480 a speech in Parliament attributed by 
 Cobbett to Yelverton, but by Gardiner to Whitelocke (see op. cit. 
 ii. 77 n.). Cobbett's text gives increasing where decreasing is 
 obviously meant. See also Salisbury's speech in Debates in Parlia- 
 ment, 1610, p. 158. It will be obvious that in its main elements 
 the question of the incidence of Customs duties was understood in a 
 practical way. The precise modern explanation of the consistency 
 of the two points alluded to, viz., that for a time the merchant is 
 positively injured by a new duty, is not given, however ; nor have 
 I noticed a discussion of the various effects of protective duties.
 
 CUSTOMS-POLICY AS TO NECESSARIES 13 
 
 resources of the Crown * ; on the other, even in theory 
 the duties were levied to enable the Navy not only to 
 protect trade but also to defend the realm, that is, to 
 provide a general benefit. The protection of trade, 
 however, was the side emphasized, and the theory 
 retained influence well into the second half of the 
 century. 
 
 But while imposed for revenue in theory for the 
 protection of trade, in fact for general purposes the 
 Customs were also partly regulated by considerations of 
 an entirely different character. The records of the 
 impositions 2 indicate the general acceptance of two 
 principles to be observed. The first dealt with the 
 effect of import duties on the consumer, and laid it 
 down as a rule that the necessaries of the people should 
 be spared. Thus the instructions for the impositions 
 of 1608 3 gave special charge, in order to avoid incon- 
 venience or grievance to the people, ' to exempt and 
 forbear all such merchandises inwards as were either 
 requisite for the food and sustenance of our people (as 
 wheat, rye, barley, malt, oats, beans, peas, butter, 
 cheese, lings, codfish, colefish, herrings, sprots, haddocks, 
 newladfish, all sorts of salt and all sorts of fowls) 
 . . .' Salisbury, in his defence of these im- 
 positions, 4 was careful to point out that one of the 
 cautions adopted at a conference with merchants was 
 ' that no victual, nothing necessary to munition or 
 defence of the realm, should pay any impost inward ' ; 
 and Fleming, in Bates' case, 5 rebutted the argument 
 against the impost on currants, as articles of victual 
 
 1 e.g. 1635, Book of Rates, prefaced letter patent, p. 2 ; and 1608, 
 Impositions, Prothero, p. 354. The seventeenth-century Books of 
 Rates can be seen, in London, most conveniently at the Goldsmiths' 
 Library, South Kensington (Professor Foxwell's collection). 
 
 2 The policy of trie Long Parliament gives confirmation, see 
 Giles Greene, Declaration in Vindication of Parliament, . . . 1647, 
 E. 405 (8), pp. 4-5. 
 
 3 Letter patent to Salisbury, 28th July 1608, as set out in one 
 of 5th September 1610, prefaced to 1610 Book of Rates (513, a. 38). 
 Original abbreviated in Prothero, p. 354. 
 
 4 Debates in Parliament, 1610, p. 157. 6 State Trials, ii. 390-1.
 
 14 INHERITANCE OF LONG PARLIAMENT 
 
 and necessary food, by pointing out that on the contrary 
 they were * nice and delicate things,' no more necessary 
 than wine. In fact, of course, very few necessaries 
 other than salt and fish (which, though not exempted 
 completely, were rated very low to the old poundage 
 duty) can have been imported ; and there was a tend- 
 ency to regard imports in general as superfluities, and 
 necessaries as * that which ariseth from agriculture 
 and of the earth within this land.' It was, therefore, 
 * only a small number of delicate persons and those also 
 who are of most able and best estate ' who were thought 
 of as paying import duties. 1 
 
 This principle of the exemption of necessaries, 
 while not considered as a principle in the distribution 
 of a burden imposed by taxation, was nevertheless 
 adopted in order to exempt the poor, and obviously 
 bordered on a distributive meaning. 2 It was the doctrine 
 to which men appealed later, to condemn the taxation 
 of the poor man through Excise duties on necessaries. 
 
 The second regulating principle in Customs duties 
 was trade policy, dealing with their effect on the pro- 
 ducer. The idea that it is necessary, in the indus- 
 trial and social interest of the nation, to control the 
 course of foreign trade, was inbred in the sixteenth 
 and seventeenth centuries. 3 To encourage the im- 
 
 1 Ibid. Salt was rated at 8d. (white or Spanish) and 6d. (Bay or 
 French) per bushel, according to the Book of Rates of 1604 ; the 
 rates were not increased in 1610, but in 1635 they were raised 
 50 per cent., and in 1642 reduced to the old level. The real prices 
 were over is. 6d. in the east of England, and nearly 2S. 6d. in the 
 Midlands, so that the nominal 5 per cent, tax at 6d. and 8d. amounted 
 really only to i per cent, to 2 per cent. Rogers, Hist, of Agric., v. 
 430, 441. The position was similar as regards fish. 
 
 1 It might be stated as the importation of an idea of distribu- 
 tive burden into a scheme of benefit taxation. Cf. the principle in 
 railway rating of charging what the traffic will bear. 
 
 * e.g. Starkey's Dialogue, pp. 93-4 ; Hales' Commonweal, pp. 
 61-2, 65-6, 68 ; King James I., Basilikon Doron 1599 (Edinburgh), 
 p. 59 "Bacon, Essay on Seditions and Troubles (works, ed. Spedding, 
 vi. 410) ; Thomas Fuller, Holy and Profane State, 1642, book ii. 
 chap. 17. Cf. Bodin, Les six livres de la Republique (Engl. tr. 
 Knowles, 1606, pp. 662-3).
 
 CUSTOMS TRADE POLICY 15 
 
 port 1 and discourage the export of material which might 
 set the people on work, and to discourage the import of 
 foreign superfluities or competing manufactures, and en- 
 courage the export of our surplus products, were the most 
 important aspects of the doctrine. Such considerations 
 did in fact influence the rates of the Customs duties, as 
 is obvious from the Book of Rates of i6io, 2 but the 
 extent of the influence is very difficult to estimate. It 
 is scarcely doubtful, however, that the purpose of 
 influencing the course of trade was small relatively to 
 that of raising revenue. 3 
 
 The Customs were thus not merely regarded as the 
 charge for a special service or benefit, though that was 
 their primary aspect ; they were also an instrument of 
 trade policy. A suggestive analogy is found in special 
 Convoy duties imposed in 1798, when Customs had 
 long been looked upon as general taxes. In that year 
 an Act * was passed ' for the better protection of the 
 trade of this kingdom ' by the provision of convoys 
 during the continuance of the war, and for imposing 
 duties both on exports and imports 5 * in order to defray 
 the extraordinary expense arising from the protection 
 given.' It was natural, therefore, that the first in- 
 tention, as we learn from George Rose, 6 was to lay a 
 duty of 2^ per cent, on all imports and exports ; but 
 then trade considerations being raised, the uniform rate 
 was regulated by ideas of trade policy, and the duty 
 on exports to Europe, to take an instance, restricted to 
 -| per cent, to meet the danger of foreigners underselling 
 us there. The Stuart principle of exempting imported 
 
 1 e.g. cotton wool, cotton yarn, raw silk, and raw hemp (1610, 
 Book of Rates, preface pp. 3-4). 
 
 2 Ibid., passim. Also Debates in Parliament, 1610, p. 157. It 
 is possible that ideas of sumptuary policy may have also had some 
 slight influence on the duties, but the point is practically negligible. 
 
 3 The question is discussed below. 
 
 * 38 Geo. III. c. 76. 
 
 * Also on Ships. 
 
 ' The Parliamentary Register (Debrett), 68, 156 (i6th May 1798). 
 Rose was one of Pitt's secretaries at the Treasury,
 
 16 INHERITANCE OF LONG PARLIAMENT 
 
 necessaries did not, however, reappear in these Convoy 
 duties. 
 
 It was in the occasional direct taxes that the essential 
 problems of national taxation, in the strict sense, were 
 involved prior to the Civil War. These taxes were 
 imposed simply to raise revenue for general national 
 purposes, 1 and always defined a standard according to 
 which the burden was to be distributed among the 
 members of the community. To use a theoretical 
 term, they were ability or faculty taxes, which should 
 distribute a common burden according to some con- 
 ception of the ability of different individuals to bear 
 it, and in this light they were considered. 2 
 
 The recognized direct taxes of the early seventeenth 
 century were the Fifteenth and Tenth, and the Subsidy. 3 
 At that period they were both stereotyped taxes, assessed 
 in practice in very different ways from those laid down 
 in the authorizing statutes. No systematic study has 
 yet been made of the actual methods of assessment, 
 but fortunately the schemes of assessment intended to 
 be observed, which are easily found from the Acts, are 
 
 1 See the preambles to the Acts (e.g. i Eliz. c. 21 in Prpthero, 
 p. 27), and the recognition of the fact by Fortescue, chap. viii. (ed. 
 Plummer, p. 127) ; Latimer, First Sermon to King Edward VI. (Every- 
 man ed., p. 83) ; Thomas Becon, Catechism (ed. J. Ayre, p. 308-9). 
 
 * Debates in Elizabeth's Parliaments illustrate this, see Old 
 Parliamentary History, iv. 337, 444-6. See also Miss M. D. Gordon, 
 Collection of Ship Money (Trans, of Royal Hist. Socy., 1910, pp. 145- 
 9); Gibbon, The Order of Equalitie, 1604, 8226, c. 14, passim ; A Dis- 
 course Touching the Diminution of the Subsidy, t. James I., attributed 
 to Wm. Tooker, Dean of Lichfield (Harleian MS 188 (i.), p. 5). It 
 is worth while suggesting that the idea of ability is probably derived 
 from an organic functional view of society, regarding individuals 
 and classes on the analogy of organs of the human body (see chap. v.). 
 The Discourse says : ' The life of the subsidy consisteth in a certain 
 geometrical and proportional contribution, as of every member 
 and part in the body organical and natural, so in the body politic, 
 unto the head, and that according to the power and faculty, 
 strength and ability of every part and parcel thereof. . . .' 
 
 3 Benevolences and the ship money of Charles I. were not part 
 of the ' canon ' to a sufficient extent to demand discussions here. 
 For ship money, see Miss Gordon's article, which brings out clearly 
 the distributive policy.
 
 DIRECT TAXES-XV. AND X. 17 
 
 of much greater interest. It was only in the nineteenth 
 century that any continuous and fairly complete success 
 was attained in keeping actual taxes in touch with the 
 intention of the taxing power. In earlier times, what 
 happened was that a new direct tax was tolerably accu- 
 rately assessed at first, but then fell away and was 
 later stereotyped in some very deficient form ; until, 
 the yield becoming too small or the possibility of reform- 
 ing it too remote, a new attempt was made to get a 
 productive and equitable tax, which in its turn gradually 
 passed through the same stages. The result is that, in 
 order to understand the tradition of equitable taxation 
 which the Long Parliament inherited, it is more im- 
 portant to go back to the intention of the Acts at different 
 periods, than to the actual methods of levy in the early 
 seventeenth century. In this way we may obtain a 
 rough idea of the course of intended distribution over 
 the three preceding centuries, first as regards the standard 
 of distribution, and next as regards exemptions. 
 
 The tax which became stereotyped in 1334 as the 
 Fifteenth and Tenth developed during the thirteenth 
 century, and by the beginning of the fourteenth had 
 superseded earlier partial taxes. 1 It was a tax on the 
 moveable goods of all classes, 2 excepting certain personal 
 goods such as clothes and armour. 3 The owner of 
 land, the merchant and the poor man, all paid on the 
 same kind of assessment, as two Colchester schedules 
 which have been printed for 1295 and 1301 4 show. 
 Thus in 1295 Master Simon of Neylond (probably a 
 Churchman) paid on wheat, oats, oxen, ploughbeasts, 
 cows and sheep in his manor in Miland ; 5 a tanner on 
 
 1 Do well, i. 76, 95. The references here and elsewhere are to the 
 first edition of Dowell's History. 
 
 2 e.g. 1232, Grant of a Fortieth (Foedera, i. 207); 1297, Grant of 
 an Eighth and a Fifth (Parl. Rolls, i. 239); 1307, Twentieth and 
 Fifteenth (Parl. Rolls, i. 442) ; 1322, Tenth and Sixth (in Dowell, i. 
 259). 3 Dowell, i. 78. 
 
 4 Parl. Rolls, i. 228 seq., 243 seq., abbreviated in Dowell, i. 251 
 seq. 
 
 8 P. 236, of. 1301, p. 259 (Dominus Robertus, in manerio suo). 
 
 2
 
 1$ INHERITANCE OF LONG PARLIAMENT 
 
 (a) wheat, barley, oats, and pigs ; (b) tannery stuff and 
 implements, and (c) sundry household effects ; a poor 
 man (Hugo le potter) on a cow and a young ox. 
 
 After 1334, when the contribution of each district 
 was fixed at a definite sum, not much is known of the 
 actual method of assessment. It differed no doubt in 
 different places, and the tax is said to have become in 
 the end practically a local rate on fixed property. 1 In 
 any case it ceased to be assessed according to a national 
 standard, 2 and in the sixteenth century its yield was 
 wholly incommensurate with the wealth of the country. 
 
 An important change in the standard of distribution 
 characterized the next attempt at a satisfactory national 
 direct tax. Income was substituted for moveable 
 property as the standard in the case of the great mass 
 of the taxpayers landowners, yeomen (including copy- 
 holders), clergy, holders of offices, and wage-earners ; 
 moveable property (and that in the sense of net capital) 
 remained the standard for merchants, artisans, and 
 doubtless tenant-farmers. In the intervening special 
 land taxes s of the fifteenth century, it was the annual 
 value which was rated, and in 1488 4 an unsuccessful 
 attempt was made to impose a general tax of the kind 
 described above. Under Henry VIII. the attempt was 
 successful, and the Subsidy, as it was called, represents 
 the new scheme of distribution. 5 The rating provisions 
 
 1 Dowell, i. 97 ; Carman, History of Local Rates, 13-14 ; Prothero, 
 Introduction, p. Ixxxi. 
 
 1 Not without attempts to prevent this, e.g. 1463, Parl. Rolls, v. 
 
 497- 
 
 3 See Dowell, book v. chap. i. part iii., and book vi. chap. ii. 
 In some cases the annual value of offices was also taxed, e.g. 1435 
 and 1450 (pp. 124, 127). These taxes were granted on several 
 occasions in supplement of the Fifteenth and Tenth. 
 
 * Parl. Rolls, vi. 421 and Dowell, i. 169. 
 
 * Those rated on their lands included, besides copy holders, 
 holders-at-will in 1514(6 H. VIII. c. 26), 1523 (14 & 15 H. VIII. c. 16) 
 and 1540 (32 H. VIII. c. 50), but by the time of Elizabeth holders-at- 
 will were excluded (see i Eliz. c. 21, in Prothero, p. 30). A clergyman 
 (through the subsidy granted specially by the clergy) paid 45. per / 
 for every pound that he might yearly spend by reason of his spiritual 
 promotion, according to the assessment of such promotion made for
 
 THE SUBSIDY 19 
 
 varied considerably in the earlier Acts, but by the time 
 of Elizabeth they had become practically fixed, the rates 
 of a subsidy being 45. per of income for those rated 
 on income, and 2s. 8d. per of net capital for those 
 rated on moveables. 
 
 Moveables still continued to be the standard of 
 assessment for merchants and others, doubtless be- 
 cause there was no other way of testing their means ; 
 though why they should have been charged at the rate 
 just given is hard to understand. In practice, it is 
 said, personal property escaped for the most part. But 
 even as regards traders, it is clear that the idea of taxing 
 according to income was coming to be familiar in the 
 early seventeenth century. A project for raising money 
 in 1628 * suggested that every person lending money 
 at an interest of 10 per cent, should pay a tax of the 
 loth penny of the interest ; and in the 1635 edition of 
 Dalton's manual for Justices of the Peace, 2 the author 
 thought that in rating a man by his goods for the Poor, 
 1 it seemeth reasonable that such goods be rated after 
 the value of lands to be purchased, sc. one hundred 
 pounds in stock or goods to be rated after 5 or 6 per 
 annum in lands.' 
 
 Subsidy Rolls which have been printed for a Norfolk 
 
 the perpetual dime (32 H. VIII. c. 23, and cf. 5 Eliz. c. 29, in Prothero, 
 p. 54). Yearly wage-earners of 203. a year were taxed in 1514 at 
 6d. per ; in 1523, daily, weekly or yearly wage-earners of 2os. a year 
 were taxed 4d. a head ; in 1544 (37 H. VIII. c. 25, 5), yearly wage- 
 earners were taxed only if earning 405. (then at 2s. per ), and there- 
 after only king's servants earning ^5 a year were to pay (e.g. Prothero, 
 p. 30). The later subsidy Acts do not provide for taxing the net 
 yearly value of lands, but that the idea of real income in this sense 
 was familiar for tax purposes is clear from the Act of 1488 (Par I. 
 Rolls, vi. 421), which provides for deducting 'the rents, fees and 
 other services going out of the said lands,' etc. by the year, and 
 from the Act of 1534, which taxes the clear yearly value (26 H. VIII. 
 c. 19). Those taxed to moveables were charged on coin, plate, 
 merchandise, 'cornes and blades severed from the ground,' household 
 stuff, etc., plus debts due to them, less debts owing by them ; see 
 6 H. VIII. c. 26, 14 & 15 H. VIII. c. 16, and Prothero, p. 29. 
 
 'S.P.D. (1628), 126,47. 
 
 2 Michael Dalton, Country Justice, 1635, p. 136. See Cannan, 
 History of Local Rates, pp. 85-7.
 
 20 INHERITANCE OF LONG PARLIAMENT 
 
 Hundred * show that an attempt was made to carry out 
 the provisions of the earlier Acts, but already in the 
 time of Elizabeth the tax was so unequal and so much a 
 stereotyped assessment that it had very little connection 
 with the prescribed scheme of distribution. 2 The 
 standard which seems to have been in the minds of the 
 local assessors and commissioners, when they were 
 trying to distribute their quota fairly, was the undefined 
 and non-rigid one of general ability or means. There 
 is every reason to suppose that income would be the 
 chief element in this standard, but the expenses of 
 position and of large family were also taken into account. 3 
 In Gibbon's words, ' sessors ought to look into the 
 charge of a man's family before they can well tell how 
 to charge him by his ability. . . .' 
 
 Such was the tradition in 1640 in respect of the 
 standard of distribution. 4 On the question whether 
 every one should pay taxation, it was less definite. One 
 point, however, stands out clearly. There was no 
 tradition that either the rich or the landed nobility and 
 gentry should bear all taxation ; the small landholder 
 (and England was largely composed of such) was always 
 rated in the tax Acts, and in fact paid subsidy in the 
 seventeenth century. The important question is the 
 treatment of the labouring poor (with or without small 
 
 1 Walter Rye, Rough Materials for a History of the Hundred of 
 North Erpingham (Norfolk), part ii. 
 
 2 See Latimer, Sermons (Everyman ed. p. 261) ; Rye ; Gibbon ; 
 Discourse Touching the Diminution of the Subsidy ; Dowell. i. 196 seq. ; 
 Best's Farming Book (Surtees Society), pp. 85-91 ; Considerations 
 touching Trade with the Advance of the King's Revenue. . . 1641 
 [E. 148 (i)l, pp. 12-13 5 an d Old Parliamentary History, iv. 446. 
 
 3 Dowell, i. 199 ; Gibbon, pp. 23-4. 
 
 4 The account given here of the English direct taxes between 
 the fourteenth and seventeenth centuries differs somewhat from 
 that given by Professor Seligman (Essays in Taxation, $th ed. pp. 43-7, 
 and Income Tax, pp. 47-9). It appears to me that to describe the 
 Fifteenth and Tenth and the Subsidy as general property taxes, or 
 as a combination of produce and property taxes, is misleading, and 
 prevents Professor Seligman from realizing the significance of the 
 seventeenth century direct taxes, and the relation to them of Pitt's 
 Income Tax. See subsequent discussion.
 
 DIRECT TAXES POLICY REGARDING POOR 21 
 
 land-rights) who depended chiefly on wages. The 
 assessments of moveables in the thirteenth and fourteenth 
 centuries, although they fixed a limit of exemption, 
 made it so low as to bring in many and perhaps most 
 poor people. This is quite clear from the Colchester 
 assessments. The limit in the 1295 schedules was 75., 
 and people who were thus included had such moveables 
 as Walterus Ferthing, I cow, 55., and I young ox, 2s. ; 
 Walterus ate Noke, I cow, 55., and i qr. oats, 2s.; Johannes 
 Bungheye, tannery stuff, js. ; Willelmus Molendarius, 
 wheat, oats, and a pig, 73. 4d. The limit of exemption 
 varied, but in the fourteenth century, los. in counties 
 and 6s. in towns, boroughs and ancient demesne 1 was 
 about the average. It is easy to infer that only the 
 very poor would escape. How long poor people con- 
 tinued to pay Fifteenth and Tenth is uncertain, 2 but 
 a well-known instance of taxing them in the period 
 prior to the sixteenth century subsidy occurred in the 
 Poll Taxes imposed, on the plea of urgency, in 1377, 1379, 
 and I38o. 3 The first was a simple poll tax of is. on 
 every person over fourteen years, the second and third 
 were graduated, but included a poll tax for the poor, 
 of 4d. in 1379, and is. in 1380. When we turn to the 
 Subsidy, a dividing line must be drawn about the middle 
 of the sixteenth century. Prior to that date, persons 
 earning wages of 2os. a year and upwards were taxed 
 on several occasions. 4 Thus in 1523 5 any person over 
 1 6 taking daily, weekly, or yearly wages to the yearly 
 value of 2os. or above was to pay 4d. ; and it is clear 
 from the North Erpingham records, 6 that this pro- 
 vision was carried out, and that it affected large numbers 
 of labourers, whose wages were probably then well over 
 
 1 The limits in 1322 (see Dowell, i. 262) and 1332 (Parl. Rolls, ii.). 
 
 2 See 1463 grant (Parl. Rolls, v. 497) attempting to enforce a new 
 limit of exemption at IDS. yearly value of lands and 3, 6s. 8d. of 
 goods. 
 
 3 Dowell, i. 1 02 sea. * See note 5, p. 18. 
 8 14 & isH. VIII. c. 16. 
 
 6 Walter Rye, op. cit., see e.g. Beeston Parish, pp. 435-6.
 
 22 INHERITANCE OF LONG PARLIAMENT 
 
 that amount. 1 In 1544 the limit of exemption was 
 raised to 405. in yearly service, 2 which would still 
 include many labourers. But from 1552-53 wages 
 were explicitly exempted from subsidy. 3 Thereafter 
 it may be said that the poor were exempted, for in 
 addition to wage-earners, persons having land or offices 
 up to 2os. yearly value, moveables up to .3, or church 
 livings up to 6, 133. 4d. a year, were specially exempted 
 by the Acts, 4 and it is probable that the limit of exemp- 
 tion was much higher in practice. Apart from occasional 
 underhand attempts to include the poor, 6 the subsidy 
 became a tax on the middle sort and the gentry. 6 
 
 Over a course of centuries, therefore, there was no 
 uniform tradition regarding the taxation of the poor 
 man ; but for the century immediately preceding the 
 Long Parliament, the tradition was exemption. 7 
 
 1 See Cunningham, i. 534-5 (4th edition). 
 
 * See note 5 above, p. 18. 3 7 Ed. VI., c. 12. 
 
 * e.g. 1570, 13 Eliz. c. 27. The figures given do not all apply 
 from 1552, and the exemptions for the clergy are somewhat com- 
 plicated (see e.g. 18 Eliz. c. 22). 
 
 * e.g. Acts of the Privy Council, 26th July 1598, 28. 625-7. 
 
 6 Cf. ship-money instructions, Miss Gordon, loc. cit. p. 148. 
 
 7 This tradition is not substantially affected by the extent 
 to which the poor may be considered to have paid an unofficial tax 
 involved in the salt and soap monopolies of Charles I. See W. Hyde 
 Price, English Patents of Monopoly, pp. 112-28.
 
 Ill 
 
 1640-1713 CUSTOMS AND DIRECT TAXES 
 
 THE period between the meeting of the Long Parliament 
 and the Treaty of Utrecht is of great importance in 
 English financial history. It marks the transition 
 between two very different systems of finance, those of 
 the early seventeenth and of the eighteenth centuries, 
 and it is one of the few formative periods in English 
 tax policy and opinion. 
 
 The financial setting of the tax problems of the 
 time was the need for an enormously increased revenue. 
 The resources of the first Stuarts were absurdly inade- 
 quate for the heavy and continuous demands of the 
 Civil War and the Commonwealth ; and while financial 
 pressure between the Restoration and the Revolution was 
 less severe as well as less adequately met, from 1689 to 
 1713 the strain of the French wars led to an annual 
 budget which would have been inconceivable in 1640. 
 The total revenue and expenditure of Charles I. were 
 both under one million a year. 1 The total expenditure 
 after 1701 was never under five millions a year, and 
 in one year (1710-11) it was fifteen millions ; while the 
 total revenue fluctuated round five millions and a half, 2 
 and the accumulated debt amounted in 1713 to about 
 thirty-five millions. 3 
 
 The result was to break down the sectional form in 
 
 1 Gardiner, op. cit. viii. 81-2, x. 222 ; Miss Gordon, op. cit. ; Dowell, 
 ii. 17. 
 
 * Return of Public Income and Expenditure, 1869, i. 27-49. 
 3 Ibid. ii. 298. 
 
 23
 
 24 1640-1713 CUSTOMS AND DIRECT TAXES 
 
 which tax questions presented themselves in the centuries 
 preceding the Civil War. The Customs, which, although 
 treated by the King as part of the ordinary revenue, had 
 been considered by Parliament as set aside for the 
 support of the Navy, lost this destination, even in theory, 
 and the Navy came to be regarded as merely one of the 
 objects of national expenditure. Thus, for instance, 
 the constitutional proposals of I653 1 provided for a 
 constant yearly revenue to be raised by Customs and 
 other ways and means, for the maintenance of a standing 
 army, a navy and the ordinary administrative establish- 
 ments ; and the sum of ^1,200,000 voted to Charles II. 
 and William and Mary as ordinary annual supply was 
 provided in the first place by the Customs revenue. 2 
 But even the distinction of ordinary and extraordinary 
 revenue gradually disappeared in any but a formal sense. 
 Extraordinary supply, as we have seen, was occasional, 
 prior to the Civil War, and was provided by occasional 
 direct taxes. But during the Interregnum, the direct 
 tax became annual in face of increased annual expenditure, 
 indirect taxes in the form of Excise duties on commodities 
 were imposed for war-revenue, and in fact, though not 
 in the schemes of constitution-mongers, expenditure of 
 all kinds had to be treated as a whole, and a general 
 revenue provided to meet it. Between 1660 and 1689, 
 a return to the old distinction was attempted, and 
 occasional extraordinary revenue voted for special 
 occasions ; but temporary Customs 3 and Excise 4 duties 
 were imposed along with direct taxes to provide this 
 revenue, and in 1685 5 Customs duties on imports of wine, 
 
 1 Gardiner, Constitutional Documents of the Puritan Revolution, 
 ' The Instrument of Government/ 27, p. 414. 
 
 2 Dowell, ii. 17, 29, 42-4. Attempts during Charles II. 's time to 
 appropriate Customs revenue to the Navy had only a constitutional 
 meaning, as a device of Parliamentary control. See Anchitell Gray, 
 Debates of the House of Commons, iii. 317 (762. d. 3-12). 
 
 1 1668, ' An Act for raising 310,000 by an imposition on wines 
 and other liquors,' 19 & 20 Chas. II. c. 6 ; also 22 Chas. II. c. 3 and 
 30 Chas. II. c. 2. 
 
 * 1671, 22 & 23 Chas. II. c. 5, continued by 29 Chas. II. c. 2 till 
 1680. 8 i Jas. II. c. 3, c. 4, c. 5.
 
 FINANCIAL SYSTEM 25 
 
 sugar, tobacco, etc., were used alone for the purpose. 
 Under William III. the need for money was so great 
 that every source of revenue was strained and no distinc- 
 tion between ordinary and extraordinary possible. The 
 distinction came to mean nothing more than the difference 
 between the revenue sufficient for one year and the 
 increase required in the next, for which taxes had then 
 to be found. But not only did direct taxes thus cease 
 to be treated as simply occasional taxes for emergencies l ; 
 indirect taxes came to be regularly used to obtain the 
 annual increase of revenue. What was required, after 
 the adoption of Montague's scheme for borrowing for 
 the annual deficit, was only the interest of the new loan, 
 but it had to be provided by taxes imposed for a long 
 period so as to give proper security to the lenders. 2 
 Now when this system came into operation, the direct 
 tax was already at the highest rate considered feasible, 3 
 and produced a large revenue ; the tradition that 
 direct taxes should not be perpetual, both on financial 
 and constitutional grounds, would have prevented an 
 attempt to mortgage it to secure loans ; and, on the 
 other hand, duties on particular commodities or objects of 
 expenditure were financially well-suited for this purpose. 
 In this way financial need and the adoption of the 
 funding system broke down the old distinction of 
 ordinary and extraordinary revenue and the treatment 
 of direct taxes as occasional levies. But the same 
 causes had another important result in regard to the 
 future. They stereotyped the tax system, in some of its 
 main features, for the ensuing century. 4 A great mass 
 
 1 They did not completely lose this character. They were re- 
 duced at the close of one war and increased again at the beginning of 
 the next. But in the eighteenth century the real objection to the 
 Land Tax was not that it should be reserved for war, but that it was 
 in itself an inequitable tax. 
 
 2 Lodge, History of England, 1660-1702, p. 381 ; Cunningham 
 (1903), ii. 419 seq. ; and see e.g. 4 Will, and Mary, c. 3, and 8 & 9 Will, 
 c. 20. 3 Nominally at 45. per of income. 
 
 4 The stereotyped condition of the Land Tax during the eigh- 
 teenth century was due to other causes, discussed below.
 
 26 1 640-1 7 1 3 CUSTOMS 
 
 of indirect taxes which by 1713 were mortgaged for the 
 interest of the debt could not be repealed when peace 
 was concluded ; and the remaining taxes, including the 
 direct tax, were required to defray the annual expenditure 
 of the State other than the debt charge. 
 
 But within the changing form of the financial system 
 developments of much greater moment were taking 
 place in the taxes which had to be imposed to meet the 
 need for increased revenue. These developments are 
 sometimes regarded as summed up in the adoption of 
 Excise duties on necessaries. That was without doubt 
 their most important aspect, but they were in reality 
 much wider in scope, and it is impossible to understand 
 the state of opinion on tax questions in this period without 
 discussing them more generally. It will be convenient 
 to trace first the changes in policy and opinion regard- 
 ing the taxes which were taken over from the preced- 
 ing period, and then to deal with the new Excise 
 duties. 1 
 
 The first of these changes was the gradual disappear- 
 ance of the old attitude towards Customs duties, which 
 regarded them as a special charge on merchandise for 
 the protection of trade. The unreality of this theory 
 now became as apparent to Parliament as it had long 
 been to the Crown. Customs revenue, as we have 
 noticed, was treated simply as part of the general revenue 
 of the State, and the protection of trade was a subsidiary 
 service required of the Navy compared with its employ- 
 ment in the Dutch and French wars which stretched 
 across the period. The change in attitude was both 
 illustrated and furthered by alterations in the duties. 
 On the one hand, additional duties on imports were 
 imposed, avowedly for general revenue, and as taxes on 
 the consumer ; such were those of the Interregnum 
 
 1 Revenue obtained from more or less compulsory loans and 
 from special levies on Royalists during the Interregnum is of no 
 importance from the point of view of taxation, and will not be dealt 
 with.
 
 DISAPPEARANCE OF OLD THEORY 27 
 
 known as the Foreign Excise, 1 the impositions on 
 wine under Charles II., the special Customs of 1685, a 
 and the numerous additions made during the French 
 wars. 3 On the other hand, under the influence of 
 Mercantile ideas, duties on exports were gradually 
 reduced and repealed 4 a result quite inconsistent 
 with levying a charge on merchandise for its own 
 protection. 
 
 The traditional theory, however, did not disappear 
 at once, and traces are to be found all through this 
 period. The statutes of 1660 and i689, 5 continuing and 
 amending the ordinary duties, both set out the old 
 formula of guarding the seas against the disturbance 
 of trade and the invasion of the realm. Harrington, in 
 constructing his ideal commonwealth, without any dis- 
 cussion reserved the Customs revenue for the support of 
 the Navy 6 ; and Thomas Sheridan, 7 who wrote a 
 short treatise on the origin of law and institutions, 
 deduced Customs duties from the need for the protection 
 of trade by sea. But these were survivals of a past 
 state of opinion, as Petty's discussion of the question 
 in 1662 indicates. One paragraph of his Treatise of 
 Taxes and Contributions 8 is indexed thus : ' A con- 
 jecture that Customs at first were a kind of premium 
 of insurance against pirates.' But the ' natural reasons ' 
 
 1 See ordinances of 22nd July 1643, 8th September 1643 and 
 I7th March 1654, Firth and Rait, i. 202, 274, ii. 845. The technical 
 difference between Foreign Excise and Customs duties was that the 
 former was ordered to be levied on the first buyer from the importer. 
 In practice, however, this was usually ignored, see Trades Destruc- 
 tion . . . 1659, E. 984 (6), p. 6. 2 See notes 3 and 5 of p. 24. 
 
 3 e.g. 6 & 7 Will. III. c. 7. 4 See note 3 of p. 35. 
 
 6 12 Chas. II. c. 4 ; 2 Will, and Mary, c. 4. In 1689 the needs of 
 the French war and the reduction of Ireland are added to the guard- 
 ing of the sea as reasons for the grant. 
 
 Harrington, The Commonwealth of Oceana, 1656 (ed. 1887, Hy. 
 Morley, p. 277). 
 
 7 Thomas Sheridan, A Discourse on the Rise and Power of Parlia- 
 ments, of Laws . . . 1677, reprinted by Saxe Bannister in Some Revela- 
 tions in Irish History, 1870, p. 14. 
 
 8 In Economic Writings, ed. C. H. Hull, i. 54. Petty even sug- 
 gested that, as a reform, Customs should be reduced into the nature 
 of an insurance-premium, p. 57.
 
 28 1 640-1 7 1 3 CUSTOMS 
 
 why Customs duties should be paid did not seem to him 
 obvious, and he did not suggest that those of his own 
 time could properly be regarded as a charge for the 
 protection of trade. 
 
 Customs duties thus came gradually to be looked upon 
 as ordinary taxes levied upon the consumers of imported 
 commodities. 1 And parallel with this development 
 there grew up a view of the nature and effect of Customs 
 duties regarded simply as taxes on the subject. They 
 were looked upon as taxes on people's consumption of 
 luxuries or superfluities, and justified on this ground as 
 both expedient and equitable. Prior to the Civil War, 
 taxes had been levied according to some standard of 
 means the possession of income or property ; but a 
 new standard of taxation now appeared that of ex- 
 penditure or consumption and was embodied in the 
 new conception of Customs duties, as well as in the 
 Excise. Excise duties, moreover, were levied on English 
 commodities, and for the most part on necessaries ; 
 whereas Customs fell gradually more and more on 
 foreign imports, and for the most part on luxuries. 
 Customs, in consequence, came not only to be approved 
 as taxes on consumption, but came to be considered the 
 ideal form of taxation. This result, however, was only 
 fully reached in the eighteenth century, and it is the 
 process of change which is typical of the present period. 
 
 The new tax view of the Customs was clearly expressed 
 at first only in connection with special duties on particular 
 imports. The Foreign Excise or New Impost 2 of the 
 Long Parliament fell at first on such commodities as 
 wine, tobacco, spices and silks, and when extended to 
 imports in general, corn and victual were exempted. 
 Pym, it is reported, attempted to placate the opposition 
 which was aroused by his suggestion of a general Excise, 
 
 1 The process of change which led to this view of the Customs 
 may be said to have been formally completed by Walpole's repeal in 
 1721 of practically all the remaining duties on exports except those 
 on'raw materials, 8 Geo. I. c. 15. 
 
 * See note i,p. 27.
 
 CUSTOMS AS GENERAL TAXES 29 
 
 by proposing that it should be confined to superfluous 
 commodities imported into the kingdom. 1 The Foreign 
 Excise was justified as an equitable tax which would 
 compel Royalists and neutrals to contribute their 
 proportionable share to the cost of the war, 2 and later 
 it shared in the general approval of the Excise as the 
 most easy and equal levy. 3 Two pamphlets of the 
 Restoration time show the grounds on which it was 
 defended. The equitableness of the levy, according 
 to one, 4 consisted in its being laid chiefly on foreign 
 commodities of vast and profuse expense, such as wine, 
 silks and tobacco ; it had also the great incidental virtue 
 of allowing the subject to make his contribution gradu- 
 ally and insensibly at his own occasions. According to 
 another, 5 it fell on all sorts and ranks of people, it was 
 forced upon no man, " but every one is voluntary in it," 
 it was paid insensibly by the ultimate taxpayer, and it fell 
 in no wise on commodities of absolute necessity. There 
 can be no doubt, although records are scanty, 6 that the 
 special impositions of the succeeding forty years were 
 defended on the same grounds. The doctrine that 
 taxes should fall on superfluities rather than necessaries 
 was widely accepted. In the Parliament of i668, 7 for 
 instance, Sir John Cotton was for raising the supply 
 
 1 D'Ewes' Diary, 28th March 1643, m Harleian MSS. 164. f. 346. b. 
 
 2 See preamble of ordinances, e.g. 22nd July 1643. 
 
 3 e.g. ordinances of 28th August 1647 and 28th February 1655, 
 Firth and Rait, i. 1004, ii. 1035. 
 
 * Considerations touching the Excise of native and foreign com- 
 modities . . . ^undated c. 1661), 712. m. i (3), p. 2. 
 
 5 The Foreign Excise considered ... by W. S., 1663, 518. h. i (7), 
 
 p. 5 se( l- 
 
 8 About the most interesting of the impositions, those of 1685, I 
 can find only Roger North's brief record of the policy of his brother 
 Dudley who carried them through. He considered that tobacco and 
 sugar could bear small additions which would yield the required sum 
 and ' would scarce be any burden sensible to the people.' Lives of the 
 Norths (Bohn, ii. 210). The MS. records for 1685 deal with the short 
 and fruitless second session in November, and only show a con- 
 tinued approval of Customs duties as the best means of raising extra- 
 ordinary supply. Harleian MSS. 6801 (37), 7187 and 1236. 
 
 T J. Milward's Diary, 27th February 1668 (Add. MSS. 33413, 
 i. 63).
 
 30 1640-1713 CUSTOMS 
 
 by laying duties on the luxuries of eating and drinking, 
 on wine and excess of apparel ; in 1674, Carew Reynall 1 
 denned the best taxes as those which fell on the vices 
 of the people, including their consumption of foreign 
 needless commodities ; and in 1694 the House of 
 Commons agreed to a proposal to impose a wine duty 
 rather than a suggested leather tax, on the principle, 
 which it had embodied in a resolution, that it is better 
 to impose taxes which fall on superfluities rather than 
 necessaries, and on the rich rather than the common 
 people. 2 
 
 Special impositions for revenue could not, however, 
 be isolated from the mass of Customs duties. The 
 Foreign Excise became simply another set of general 
 import duties, 3 and after 1689 the general duties were 
 increased several times. Consequently we find the 
 doctrines just noticed beginning to be applied to the 
 whole of the Customs revenue. An able anonymous 
 pamphlet of 1690,* dealing with the question how best 
 to raise the necessary supply, argued in favour of Customs 
 duties and against Excise. It was a general rule ' that 
 taxes ought first rather to be laid upon luxury than 
 necessity ; and, secondly, rather on things of foreign 
 than domestic growth.' ' And since it is the happiness 
 of this island that all those wares which are imported 
 from abroad conduce only for our ease, not our support ; 
 and all our domestic commodities are necessary to our 
 being or well-being ; it follows that the two rules laid 
 down before do in this nation fall into one, and carry only 
 a double reason with them for one and the same action.' 
 
 1 The True English Interest . . . 1674, 291. d. 42, pp. 10, 69. Cf. 
 Taxes no Charge . . . 1690, in Harleian Miscellany, viii. 519-20. 
 
 2 Bonnet Reports, 23rd February, i6th and 2Oth March, in 
 Ranke, History of England (Engl. tr., vi. 243, 245). The proposal 
 vras not carried out, but the debate is none the less significant of the 
 principles which were in conflict. 
 
 3 e.g. Act of 26th June 1657, Firth and Rait, ii. 1186 seq. 
 
 4 A Letter from N. J. to E. T., Esq., his representative in Parlia- 
 ment, 1690, pp. 3-4 (Lincoln's Inn Library, Brydall Collection, 33, 
 f. 407).
 
 QUESTION OF DISTRIBUTION 31 
 
 But, while Customs duties came to be justified as 
 taxes on men's consumption of superfluities, it is easy to 
 exaggerate the extent to which this amounted to a dis- 
 tributive justification. In the first place, two entirely 
 non-distributive ideas were involved the gradual and 
 insensible payment which is a feature of most taxes on 
 commodities, and the avoidance of disturbance and 
 repression of home industry, secured by placing the 
 duties on imported goods. In the second place, one of 
 the doctrines of seventeenth-century trade policy was the 
 mischief of importing commodities merely for consump- 
 tion, and the principle that taxes should be on super- 
 fluities no doubt gained much of its support on this 
 ground. Similarly it found favour with advocates of a 
 sumptuary policy. 1 In the third place, regarded simply 
 as a doctrine of tax distribution, it included two ideas 
 which, although widely accepted, were not very fre- 
 quently insisted on, in reference to Customs, in this 
 period. The first was the doctrine, taken over from old 
 Customs policy, that the necessaries of the poor man 
 should be exempted from taxation ; the second was the 
 theory that a tax on articles of consumption (here super- 
 fluities) makes men pay roughly in proportion to their 
 ability, since they are their own assessors, and the richer 
 they are, the more they consume and therefore pay. 
 The significance of these theories will be discussed in 
 connection with the Excise. Here it is sufficient to 
 notice that the elimination of the question of taxing the 
 poor man tended to keep distributive questions rela- 
 tively in the background, so far as Customs duties were 
 concerned. 2 This effect was reinforced by the absence 
 of a traditional distributive attitude towards them, and 
 by the degree of attention which was given to their 
 manipulation for purposes of trade policy. 
 
 1 e.g. Petty, Treatise of Taxes and Contributions (Hull, i. 55, 6), 
 Reynall and 1690 Taxes no Charge. 
 
 2 The way in which distributive issues were sometimes ignored in 
 connection with Customs is very striking. Petty's discussion in his 
 Treatise (chap, vi.) is a good case.
 
 32 1640-1713 CUSTOMS 
 
 The result of these developments in opinion was to 
 mark out Customs duties as the first resort of Parlia- 
 ments hard pressed for additional revenue. So much 
 was this the case that at last only the grossest smuggling * 
 set limits to their increase. The total Customs revenue 
 increased from under ^400,000 a year in the time of 
 Charles I. 2 to about a million and a half in I7I3- 3 The 
 increase in rates was even greater. Portuguese wine, for 
 instance, paid a duty of .4, los. per tun in 1642, if im- 
 ported into London by an English merchant ; in 1713 
 it paid 28, I os., and the rise probably implied a real 
 ad valorem increase from roughly 15 per cent, to roughly 
 45 per cent, on the price to the consumer of large 
 quantities. 4 The duties on French wine were still 
 higher. The duty on Colonial tobacco increased from 
 id. per Ib. in 1660 to 6d. per Ib. in 1713, at which date 
 the ad valorem rate amounted, on retail prices, to about 
 25 per cent. 5 What the general ad valorem rate on 
 imports amounted to at the Peace of Utrecht could 
 only be discovered by an exhaustive and very difficult 
 inquiry, but the formal rate 6 for a great mass of 
 
 1 Dowell, ii. 97 ; Atton and Holland, The King's Customs, pp. 144, 
 148, 171, 172, 179 seq. ; Journals of the House of Commons, xvii. 368, 
 Report of a discussion between a Committee and the Tobacco mer- 
 chants in 1713 Smuggling in the eighteenth century is sometimes 
 regarded as a result of Mercantile policy. But it is clear that in the 
 case of great staples of the smuggling trade like wine, tea and 
 tobacco, the excessive rates of duty which made smuggling profitable 
 were motived as much by the purpose of obtaining revenue as by 
 that of trade policy. See Report o* 1733 in Reports of Committees of 
 the House of Commons, i. 610, etc., and Acts of 1745 and 1784 reducing 
 the duties on tea, 18 Geo. II. c. 26, and 24 Geo. III. c. 38. 
 
 " Gardiner, op. cit., x. 222. 
 
 3 Return of Public Income and Expenditure, 1869, i. 46-8. 
 
 4 Thorold Rogers, History of Agriculture and Prices, v. 448-9, 
 notes purchases of sack in 1624 at ^7 and in 1631 at 8 per hogshead 
 (J tun), and of red and white Lisbon in 1704 at 16 and iS per 
 hogshead (vii. 353), which are confirmed by Hervey's purchase in 
 1711 and 1714 of red port at 16 and 16, 55,, Diary of John Hervey, 
 First Earl of Bristol, pp. 172-3. 
 
 6 Thorold Rogers, vi. 447-8, vii. 372 seq., retail price c. is. 6d. to 
 2s. per Ib. of Virginia. 
 
 6 No general revision of the 1660 Book of Rates took place during 
 this period, in spite of much discussion. See Treasury Papers
 
 TRADE POLICY AND CUSTOMS DUTIES 33 
 
 goods had risen to 15 per cent., against 5 per cent, in 
 I660. 1 
 
 During this period a development of another kind 
 was also taking place in the Customs. We have seen 
 that trade policy, as well as revenue, was a purpose of 
 the duties in force prior to 1640. That purpose now 
 became steadily more important, and had a considerable 
 influence in moulding the kind and extent of the eigh- 
 teenth-century duties. 
 
 The connection between trade policy and Customs 
 duties at the beginning of this period is clearly set out 
 
 (Record Office), xx. 31 and xxvi. 20, Reports of the Commissioners 
 of Customs of 22nd November 1692 and 26th January 169^", and 
 a Representation to the King by the Commissioners of Trade of 
 2Oth November 1697 (copy in Harleian MSS., 1324, f. 37 seq.}. The 
 Book of Rates defines the prices to be assumed for different imports 
 (apart from a small number charged with specific duties), and the 
 duty in 1660 was 5 per cent, on these values (12 Chas. II. c. 4). In 
 1697 an additional 5 per cent, was added (8 & 9 Will. III. c. 24) and 
 another in 1703 and 1704 (2 & 3 Anne, c. 18, and 3 & 4 Anne, c. 3), 
 and by various Acts these additions were continued indefinitely. 
 Further, a very large number of imports paid further duties under 
 4 Will, and Mary, c. 5, and continuing Acts. 
 
 1 It may be useful to add a note of some sources for this question. 
 The actual duties can, of course, be discovered by a very laborious 
 search through the Statutes, and no other plan is available, so far as I 
 know, for those of any year between 1642 and 1714. Before that, 
 the duties can be discovered comparatively easily from the Books of 
 Rates of 1604, 1610, 1635 and 1642 (Goldsmith's Library). A com- 
 pendium of the duties was issued in 1714 by Wm. Edgar, Inspector- 
 General of the Ports in Scotland (Vectigalium Sy sterna, 1129. f. i 
 MS. copy, Harleian MSS., 4309), and simplifies the question for the 
 subsequent period. It was re-issued in 1718 and in 1724. Later 
 handbooks of the same kind are those of Henry Saxby, The British 
 Customs . . . digested, 1757 (517. e. 5), and Samuel Baldwin, A Survey 
 of the British Customs, 1770 (514. k. 18). For yields of duties, see 
 Add. MSS., 36,785 (note Davenant's caution) and the Inspector- 
 General's accounts of exports and imports, after the Revolution 
 (Record Office). For the prices of imported commodities, see Thorold 
 Rogers, History of Agriculture and Prices ; Jas. O. Halliwell, Some 
 account of a collection . . . illustrating the history of prices . . . 1650- 
 1750 (in Guildhall Library) ; Ordinances of the Interregnum and 
 John Hervey's Diary (1689-1740), for wine prices ; Broad Sheets of 
 25th March 1674 and 3rd January 1682, ' the prizes of merchandise 
 in London ' (at end of vol. cxii. of Burney collection of newspapers) 
 for a large number of imported goods ; John Houghton, A Collection 
 for the Improvement of Husbandry and Trade, 1692-1702 (a few im-
 
 34 1640-1713 CUSTOMS 
 
 in a pamphlet by Giles Greene, Chairman of the Long 
 Parliament's Committee on the Navy and Customs. 1 
 Greene's object was to vindicate the work of the Com- 
 mittee, and to explain inter alia the principles which 
 had guided it in framing the new Book of Rates of 1642 
 ' in relation to the support of the trade of the kingdom 
 on the one side, and the revenue of the kingdom for the 
 support of the Navy ... on the other side.' Exports 
 of domestic commodities were divided into those totally 
 to be prohibited, those of woollen manufacture which 
 were eased on account of the danger of competition, and 
 other staple commodities, such as tin and lead, not so 
 subject, which were raised. Imports were divided into 
 necessaries including victual and raw materials, which 
 were eased, and superfluities which might be spared and 
 were incentives to prodigality, which had their full load, 
 unless, being bulky, they were advantageous in the 
 employment of shipping and mariners. The influence 
 of trade policy upon the Customs in 1642 was thus 
 comparatively mild. 2 But it gradually became more 
 dominant through the stricter application of the same 
 ideas. John Gary z was typical of opinion at the end 
 of the seventeenth century in recommending, as means 
 to improve our manufactures, the repeal of all Customs 
 on manufactured exports and on imports of raw material, 
 the better enforcement of the prohibition of wool 
 exportation, and the discouragement of importation of 
 manufactured commodities. Indeed, so far as opinion 
 went, trade policy became for many people the chief 
 
 ports), and The Weekly Packet, 1712-14 (Goldsmith's Library). 
 Mr. W. R. Scott informs me that the Court Books of the East India 
 Company give full particulars of wholesale prices. It is to be wished 
 that a series of periodical broadsheets of prices could be discovered 
 for the seventeenth century. 
 
 1 Giles Greene, Declaration in Vindication of . . . Parliament 
 . . . 1647, E 405 (8) pp. 3-5. 
 
 2 This was typical also in the realm of opinion, see Petty, 
 Treatise, in Hull, i. 54-6. 
 
 3 John Gary (Bristol merchant), A n Essay on the state of England 
 in relation to its Trade, its Poor and its Taxes . . ., 1695, 1029, a. 
 5 (0. PP- 2 3-5, 37-
 
 INFLUENCE OF TRADE POLICY 35 
 
 consideration. A letter 1 of 1702, for instance, recom- 
 mended a review of the Book of Rates, ' respect being 
 had not so much what commodities will raise the greatest 
 revenue to the Crown, as what is the true interest of 
 the nation.' 
 
 The most striking effect of the influence of trade 
 policy was the gradual reduction and abolition of export 
 duties on manufactured goods, the relation of which to 
 the changing view of Customs duties has been already 
 noticed. The motive of the process was, of course, the 
 promotion of home industry and the maintenance of a 
 favourable balance of trade. 2 In 1656 it was applied 
 to agricultural products such as grains, meat and butter, 
 and to candles, beer, lead, etc. Portions of this policy 
 were adopted between the Restoration and the Revolu- 
 tion. Thereafter we come upon cases of total repeal of 
 export duties in 1691 those on beef, pork, butter, 
 cheese and candles (for the encouragement of the 
 breeding and feeding of cattle), in 1699 those on woollen 
 manufactures and on corn, bread, meal, etc., and in 
 1709 those on coal exported in British ships. Finally in 
 1721 Walpole made a wholesale repeal of the remaining 
 duties on exports other than raw material. 3 The result 
 of this process, from the point of view of the purposes 
 of Customs duties, was, by abolishing so many duties, 
 pro tanto to abolish the purpose of trade policy from 
 the Customs ; but at the same time it involved the 
 sacrifice of revenue on grounds of trade policy. 
 
 Two other cases in which the interest of revenue 
 was entirely sacrificed to that of trade policy were the 
 
 1 A Letter written to a member of Parliament relating to Trade, 
 by Mr. John Egleton, ist January 1702 (in Somers' Tracts, xi. 614). 
 
 * See, for instances, preambles of Acts of 1656, 1699 and 1721, 
 and the King's speech in 1721 (given in Coxe's Memoirs of Walpole, 
 i- 163). 
 
 3 Act of 1656, 27th November, in Firth and Rait, ii. 1043 seq. 
 1663, 15 Chas. II. c. 7 (grains) ; 1671, 22 & 23 Chas. II. c. 13 (beer) ; 
 1672, 25 Chas. II. c. 6 (repeal of alien duties) ; 1691, 3 Will, and Mary, 
 c. 8 ; 1699, ii Will. III. c. 20 ; 1709, 8 Anne, c. 14 ; 1721, 8 Geo. I. 
 c. 15.
 
 36 1 640-1 71 3 CUSTOMS 
 
 prohibition of the export of wool 1 and the prohibitions 
 at various times of trade with France (directly or by 
 means of prohibitory duties). 2 
 
 But in the case of the bulk of the import duties 
 trade policy co-operated with the need for revenue to 
 produce that condition of high rates which has been 
 noticed. Superfluous imports, such as tea, tobacco, 
 and wine, although they did not directly compete with 
 English industry, were regarded as competing indirectly, 
 in the sense that tea, for instance, tended to displace the 
 use of English-made beer. They diminished the pro- 
 portion of expenditure on English commodities and 
 influenced the balance of trade adversely. 3 Conse- 
 quently it was considered wise policy to discourage them, 
 and this could be done by the same means which raised 
 revenue on superfluous consumption. This policy, on 
 the other hand, was in some cases pushed so far that 
 revenue was again sacrificed. Thus in 1690 an additional 
 duty of 20 per cent, ad val. was placed on Indian textiles 
 to raise revenue for the war ; further duties were imposed 
 in 1699 ; but before they came into force an " Act for 
 the more effectual employing the poor by encouraging 
 the manufactures of this kingdom " was passed, pro- 
 hibiting their import for English consumption, on the 
 ground that they exhausted the treasure of the kingdom 
 and took away the labour of the people. 4 Indian 
 
 1 Ordinance of ipth January 1648 (Firth and Rait, i. 1059) ; 
 1660, 12 Chas. II. c. 32 ; 1662, 14 Chas. II. c. 18, etc. 
 
 2 e.g. ordinance of 28th August 1649 (Firth and Rait, ii. 239), 
 repealed 1657, ii. 1129 ; 1678, 29 & 30 Chas. II. c. i, 70; 1689, 
 I Will, and Mary, c. 34 ; 1696, 7 & 8 Will. III. c. 20 (additional 25 per 
 tun on French wine, etc.), and see L'Hermitage's ' Secret Despatches 
 to the Hague ' (transcripts, Add. MSS. 17,677, A-YY), February 
 1696, vol. QQ. p. 251. 
 
 3 See e.g. Samuel Fortrey, England's Interest and Improvement, 
 1663, T. 1816 (i), pp. 28-9 ; The Grand Concern of England explained, 
 1673 (Harl. Miscl. viii. 559) ; Preamble of i Will, and Mary, c. 34, 
 prohibiting trade with France ; Report of the Commissioners of 
 Trade and Plantations to the House of Commons in 1700, regarding 
 the woollen industry (copy in Sloane MSS. 2902) ; General Maxims 
 of Trade, 1713, T. 807 (2). 
 
 4 2 Will, and Mary, sess. 2, c. 4 ; 1 1 Will. III. c. 3 and c, 10.
 
 OPPOSITION 37 
 
 textiles competed directly with the English silk and 
 cotton manufactures and indirectly with linen and 
 woollen goods. Similarly French brandy, 1 when not 
 prohibited, was subjected, in the interest of the home 
 manufacture, to prohibitive duties which made the 
 commodity one of the staples of the smuggling trade. 2 
 
 Customs duties in the eighteenth century thus 
 became taxes almost entirely on imported commodities, 
 levied at high rates, regarded for the most part as 
 falling on superfluities, and imposed for two purposes, 
 both of which were important, revenue and trade 
 policy. This result, of course, was not attained without 
 opposition. .The increasing rates were condemned 
 throughout the period as restricting the merchant's 
 trade, locking up his capital merely in taxes, imposing 
 4 impossible oaths,' leading to frauds and smuggling, 
 decreasing instead of increasing the yield, and generally 
 injuring the welfare of the whole nation which was 
 dependent chiefly on the operations of that * best and 
 most profitable member of the commonwealth,' the 
 merchant. 3 But in spite of the considerable truth 
 contained in these arguments, they did not represent 
 the dominant ideas of the time, and had little influence 
 on policy. The seventeenth century was indeed very 
 critical of what it considered the mere interest of 
 
 1 7 & 8 Will. III. c. 20. 
 
 2 This sketch is very far from a complete account, even in outline, 
 of the relations between revenue and trade policy in the Customs 
 duties. It neglects, for instance, the whole question of colonial and 
 shipping policy. What I have attempted to do is merely to show the 
 kind of connection which some of the important duties illustrate. 
 
 3 Excise anatomized and Trade epitomized . . ., by Z. G., 1659, 
 E. 999 (i), and Trades Destruction is England's Ruin, or Excise 
 decried . . ., by W. C., 1659, E. 984 (6), dealing, inter alia, with the 
 Foreign Excise ; Andrew Marvell's Correspondence (brief reports 
 of Parliament to his constituents in Hull), in Works, ed. Grosart, 
 ii. 296-7 (i7th December 1669) ; Anchitell Gray, Debates, 6th March 
 1668 (i. 107); Charles Davenant, Essay upon Ways and Means . . ., 
 1695, PP- 2C ), 58-60 ; Abraham Hill, Considerations on Taxes, 1701 
 (Sloane MSS. 2902, f. 43) ; Jo. of H. of C., 1713, xvii. 368-70, on 
 tobacco duties. For the opposition to certain sides of trade policy, 
 see W. J. Ashley, The Tory Origin of Free Trade Policy, in Surveys 
 Historic and Economic.
 
 38 1640-1713 DIRECT TAXES 
 
 ' private merchants,' 1 and no doubt relished Petty's 
 quiet reflection on their assertiveness, that all men pay 
 Customs * though merchants chiefly talk of it.' a 
 
 The second great branch of the tax system of this 
 period was the development of the direct taxes which we 
 discussed in last chapter. As we saw, these were taxes 
 in the full sense of the word and raised the problem of 
 distribution in the most direct form. Not only so, but 
 they constituted the only properly tax source of revenue 
 before 1640. It was therefore natural that in this 
 period of great financial pressure attempts should be made 
 once more to achieve an equitable direct tax with a yield 
 proportionate to the real wealth of the country. The 
 attempts failed and the Land Tax of the eighteenth century 
 was their legacy ; but from the point of view of opinion 
 and policy on distribution they are none the less interesting 
 on that account. What we want chiefly to do is to under- 
 stand the distributive scheme which was intended to be 
 enforced, and at the same time to note in outline the 
 methods employed and the difficulties which they were 
 inadequate to overcome. 
 
 The period from the fourteenth to the sixteenth 
 century witnessed a development in the intended standard 
 of direct taxes from that of moveable property to that of 
 income for the majority of taxpayers and moveable pro- 
 perty for the remainder. The most important aspect of 
 the development of the seventeenth century was the adop- 
 tion of income as the standard for all who paid direct 
 taxes. The taxes by which it was attempted to get an 
 
 1 See, e.g., Shaftesbury's statement of the reasons for setting up 
 a Council of Trade, 1670 (in B. Martyn's Life, 10,816, f. 9, pp. 
 209-12, and quoted in Christie's Life, ii. app. i.). 
 
 2 Treatise of Taxes and Contributions, p. 95. It is unnecessary 
 to bring together the evidence for the acceptance of the ordinary 
 view of the incidence of Customs duties on the consumer. Reference 
 should be made to an able short pamphlet (undated, but prior to 
 1685), The Case of His Majesty's Sugar Plantations (in Somers' 
 Tracts, viii. 480), which argues partly against the ordinary view. 
 The question is similarly discussed in The Groans of the Plantations, 
 1689, 1391. d. 3.
 
 TAXATION OF INCOME 39 
 
 equitable direct assessment on means were, in intention, 
 income taxes. 
 
 The case of an emergency tax at the beginning of this 
 period will show how common the idea of taxation in 
 proportion to income had already become. In 1641 a 
 graduated Poll Tax 1 was imposed to raise means for 
 the speedy disbanding of the Army, and as the object 
 was speedy assessment, men were rated at fixed sums 
 according to their ranks, offices, and occupations a duke, 
 for instance, paying 100, and an esquire 10. But as 
 some could not be taxed even approximately fairly in 
 this way, general clauses were provided for taxing ac- 
 cording to their incomes those not rated specifically. 
 Thus it was provided that every person ' who can dispend 
 one hundred pounds per annum of his or her own, either 
 in lands, leases, money, stock, or otherwise,' should pay 
 .5, if .50 then ^2, and so on. A similar tax was imposed 
 in 1660, providing an income tax of 2 per cent., both above 
 and below jioo, on those not rated by rank or calling. 2 
 No provisions were, of course, made for getting returns 
 of income, but the clauses afford a conclusive test of what 
 constituted the standard which assessors were to have in 
 mind in considering a man's ability to pay. 
 
 It is the more important to notice this, because, in 
 the attempts of the Long Parliament to reform the 
 system of the direct tax, the actual standard of assessment 
 was left to the local assessors to decide. In the .400,000 
 assessments of 1642, and the Weekly Assessment of 1643,* 
 all Parliament did was to fix the sum which each district 
 was to pay, and the limits of exemption ; it was then left 
 to the localities ' to enquire of the substance after the 
 the usual manner ' of every inhabitant, and thence to 
 charge evey one his ' proportionable part and proportion ' 
 of the assessment. No relation therefore was defined 
 
 1 16 Chas. I. c. 9. 
 
 2 12 Chas. II. c. 9, and amending Act, 12 Chas. II. c. 28. 
 
 3 16 Chas. I. c. 32 ; ordinance of 24th February 1643 (Firth and 
 Rait, i. 85).
 
 40 1640-1713 DIRECT TAXES 
 
 between people of landed and personal estates ; but an 
 interesting provision enacting that the tenant of lands 
 let at an * easy rent ' should pay tax on the annual value 
 of his beneficial interest, shows what the ' usual manner ' 
 of taxation meant as regards lands. 1 The more lasting 
 Monthly Assessment which began in i645, 2 had the same 
 essential features, and its elaboration only brings out 
 more clearly the delegation to the local assessors of 
 principles of assessment. The rating committees had 
 power ' to assess and levy the several sums . . . upon 
 the lands, goods, annuities, rents, offices, or other estate, 
 real or personal, in such manner and form, and according 
 to the most equal and usual rates for levying of money 
 ... or by a certain rate upon the true yearly values of 
 lands, rents, annuities, offices and hereditaments, and 
 according to the true value of goods, chattels, debts, or 
 other estate real or personal . . . ' 
 
 This state of affairs continued till 1649. By an Act 
 of yth April of that year, imposing an assessment of 
 90,000 per month for six months, it was ordered 3 that 
 as regards the second half of the assessment, the fixed 
 contribution of each county was to be raised by an equal 
 pound rate upon all lands, goods, offices, etc., within it, 
 * wherein every twenty pounds in money stock or other 
 personal estate shall bear the like charge as shall be laid 
 upon every twenty shillings yearly rent or yearly value 
 of land.' Men of personal property, in other words, 
 were to be taxed on the same basis as landed men, and 
 to secure this their annual means, which in the case of 
 landed men were easily known from their rents, were 
 calculated at an assumed percentage (here 5 per cent.) 
 of the capital value of their stock. This system of 
 assessment was adopted again in 1650 and 1652. In 1653 
 the whole question was considered by a Grand Committee 
 
 1 e -S- X 3 f J6 Chas. I. c. 32. 
 
 2 Ordinance of 2ist February 1645 (Firth and Rait, i. 630). 
 The Monthly Assessment was not levied monthly. 
 
 3 Act of 7th April 1649, Firth and Rait, ii. 26, 54 ; 26th Novem- 
 ber 1650, ibid. p. 484 ; loth December 1652, p. 681.
 
 THE MONTHLY ASSESSMENT 41 
 
 of the Little Parliament, which reported on I4th 
 October 1 in favour of retaining the system of fixing 
 the total contribution of each county, but recommended 
 the principle of levying the fixed sums ' by a pound 
 rate upon estates real and personal ' within the county. 
 Th : resulting Act 2 permitted the local commis- 
 sioners, if necessary, to adopt the ordinary way of rating 
 for the first half of the assessment, but required that 
 the second half should be levied by a pound rate in 
 which, again, 20 of personalty was to be taxed equally 
 with .1 of rent. 
 
 But even the prescription of local income taxes in 
 this form was too much for the tax system of the time. 
 In February 1654 an ordinance 3 was issued waiving the 
 rating provisions of the Act as regards the second 
 half also, ' in case the way or manner of assessing the 
 said later three months' assessment by a pound rate in 
 such sort as is prescribed by the said Act shall prove 
 prejudicial and obstructive to the bringing in the said 
 . . . assessment ... by the time . . . limited,' and 
 authorizing the commissioners of the different districts 
 in such cases ' to proceed according to the most just and 
 equal way of rates held in such places.' The Monthly 
 Assessment continued to be levied regularly under the 
 Commonwealth, and at intervals thereafter till 1692 ; 
 rating was to be by a pound rate as formerly, but it was 
 always left to the local authorities to use ' the most just 
 and usual rates ' if they thought fit. 4 
 
 It is clear what kind of tax Parliament desired the 
 Monthly Assessment to be. But central control over 
 the local taxing authorities was so weak that it had to 
 permit concessions to practicability which left its view of 
 equitable distribution little more than a statement of 
 
 1 Jo. of H. of C. vii. 334. 
 
 2 Act of Little Parliament, 24th November 1653, E. 1062 (32), 
 pp. 331-2. 
 
 3 Ord. of i7th February 165! (Firth and Rait, ii. 842). The 
 marginal analysis is erroneous. 
 
 4 e.g. 16 & 17 Chas. II. c. i, 25, and 3 Will, and Mary, c. 5, 21.
 
 42 1640-1713 DIRECT TAXES 
 
 opinion. These concessions were two. First, to secure 
 that the State received a definite and not a steadily 
 declining revenue, the total contribution of each district 
 was fixed and had to be made up by the district at 
 whatever rate of tax it found necessary. It followed, 
 of course, that different parts of the country came to 
 pay very different rates of tax. This was well recognized, 1 
 and proposals were several times made before the Re- 
 volution to impose a true national pound rate, with 
 oaths and penalties. A debate on the subject in 1657 
 is fairly well reported. 2 The answer given was that 
 the revenue under such a scheme would come to 
 nothing ; ' instead of giving my Lord Protector a 
 substance, we shall be giving him a shadow.' Gentlemen 
 would labour to keep it down as much as they could. 
 The thing was impracticable. ' If you appoint strangers 
 to survey, I doubt you will raise greater disturbance than 
 ever was in England. If assessors are appointed to 
 assess their neighbours, there will be great partiality.' 
 The whole idea of strict assessment was resented by 
 some. * As to this plan of surveying and searching 
 into men's estates, it is that which your ancestors would 
 never endure. That the chief magistrates should know 
 men's estates was always avoided.' Sir Wm. Strickland 
 said that * the way that is propounded looks like a 
 Court project.' ' Our ancestors have always declined 
 such courses.' Parliament's view of the local taxing 
 Commissioners is also well illustrated by a dispute with 
 the Lords 3 in 1666, over a proposal by the latter to 
 make additions to those named by the Commons. The 
 Lower House refused on the ground that it was always 
 
 1 See next note ; also debate of i2th to i4th December 1670, 
 in A. Gray, Debates, i. 321 seq., sp. Sir Richard Temple and John 
 Swynfen ; and debates of 8th November 1675, iii. 427 (Boscawen). 
 
 2 Burton's Diary, ed. J. J. Rutt, i2th June 1657, ii. 229 seq. 
 Note that the rate proposed was again to charge 20 on goods as i 
 in lands (West). 
 
 3 Cobbett's Parliamentary History, iv. 354-5. Cf. L'Hermitage, 
 nth February 1698, on the same difficulty then, Transcripts, vol. 
 SS,p.
 
 SUBSIDY OF 1670-1 43 
 
 observed that ' the greater the number of commissioners, 
 the less money hath been raised ; for many commissioners 
 encumber one another and rather procure the ease of 
 themselves and their many friends than the advance of 
 the king's service and the public benefit.' The second 
 concession, as we have seen, was the permission granted 
 to the local authorities to settle the principles of assess- 
 ment to be applied in their respective districts. 
 
 The result was that the Monthly Assessment became 
 for the most part a stereotyped land tax, levied on an 
 old and not the real valuation of landed estates, and 
 omitting or grossly under-assessing men with personal 
 property or income from offices. 1 
 
 One attempt was made under Charles II. to break 
 this stereotyped system. It failed completely, but it 
 is of importance as again witnessing to opinion regarding 
 the distribution which ought to prevail. On 1 5th 
 December 1670, Marvel wrote to his constituents : ' I 
 suppose you have heard the vote of the Committee, that 
 the sum about and not exceeding .800,000 should be 
 raised by way of subsidy according to the present rent, 
 with respect also to money, goods and offices.' The 
 statute, 2 after providing a special tax on bankers, 
 imposed is. per on the clear yearly value of lands and 
 tenements, is. per on mortgages and rent charges on 
 land (to be levied at the source by allowing the land- 
 owner to deduct the tax in paying the interest, etc.), 6s. 
 per 100 on net personal estate, including stock on the 
 land, money and debts, and under deduction of debts 
 due by the taxpayer i.e. is. per on an assumed 
 income of 6 per jioo of capital and zs. per on the 
 income from public offices, calculated at f of the gross 
 
 1 See 9 of 14 Chas. II. c. 8 (a special tax on income from offices), 
 and 1 8 & 19 Chas. II. c. i and 29 & 30 Chas. II. c. i, imposing special 
 taxes on bankers, moneyed men, lawyers, men with offices, etc., 
 besides a graduated Poll Tax ; also recital in 22 & 23 Chas. II. c. 3. 
 
 8 22 & 23 Chas. II. c. 3 ; according to Dr. Shaw's table in 
 Introduction to Calendar of Treasury Books, 1669-72, i. x, the yield 
 was ^59,000 in 1670-1, and ^152,000 in 1671.
 
 44 1640-1713 DIRECT TAXES 
 
 receipt. Bankers and men in offices paid a heavier rate, 
 no doubt to make up for ordinary under-assessment. 1 
 
 But after the Revolution the stereotyped Monthly 
 Assessment was finally superseded by a new direct tax, 
 the General Aid of the time of William III. This tax, 
 in its essential features, was a revival of the subsidy of 
 1670-1. It gave up the system of fixing the contribu- 
 tion of each district, and imposed a pound rate over 
 England, at first of is., and in 1692 of 45. per of income. 2 
 To take the is. rate of 1689. All persons with property in 
 goods, merchandise, money, debts, etc., 3 were to pay 
 is. per ' according to the true yearly profit thereof,' 
 that is to say, the clause continues, ' for every hundred 
 pounds worth of such goods . . . the sum of six shillings 
 and so after that rate. . . .' The yearly profit was thus 
 assumed again to be 6 per cent, of the value of the 
 property, which was to be the net capital, debts owing 
 being deducted. Next, persons in offices, other than 
 naval and military, were to pay is. per of their salaries 
 or profits. 4 Thirdly, is. per was to be levied on the 
 true yearly value of all lands, tenements, tithes, mines, 
 etc., ' without any respect had to present rents ' or 
 former rates and taxes. Lastly, in order to tax the 
 landowner on his real net income, and to bring in the 
 moneyed man, rent charges and interest on mortgages 
 on land were to be taxed at is. per by deduction at 
 the source. 
 
 As things went in the seventeenth century, the Aids 
 were comparatively successful in yield. A is. Aid 
 raised nearly half a million, 6 and there is no doubt that 
 
 1 A debate on the subject is reported on i5th December in Gray, 
 i. 324-6, but it is not full enough to show clearly what chiefly in- 
 fluenced the decision. 
 
 1 e.g., 1689, i Will, and Mary, c. 20 ; 1692, 4 Will, and Mary, c. i. 
 
 3 Including stock upon lands and household stuff. 
 
 4 So called Poll Taxes of 1689 and 1690, also taxed professional 
 men, such as judges, advocates and doctors, on their annual gains ; 
 and servants (1689) at is. per on their wages if over 3 a year, and 
 6d. per if under, i Will, and Mary, c. 13, and 2 Will, and Mary, c. 2. 
 
 * Cobbett's Parliamentary History, v., app. xix.
 
 THE AIDS OF WILLIAM III. 45 
 
 in very many cases it was strictly assessed. But from 
 the beginning the old difficulties of assessment were 
 involved, with the result that personal property was 
 much under-assessed, and lands paid very different rates 
 in different districts. 1 Supplemental taxes, 2 which 
 went by the inaccurate name of Poll Taxes, were granted 
 almost yearly. The yield also began to decline. A 
 45. aid produced .1,922,712 in 1693, and .1,736,248 in 
 1696. In the winter of that year an elaborate attempt 
 was made to reach men's real ability more fully by a tax 
 which was a combination of the Aids and the supple- 
 mental Poll Taxes. 3 The rate on land and mortgages was 
 reduced from 43. to 33. in the . Regularly employed 
 servants, State pensioners, public officers and lawyers were 
 taxed at various rates per on their wages, pensions, 
 salaries, fees and profits. Moneyed men, wholesale 
 and retail traders, and farmers and graziers, were taxed, 
 under this classification, at various rates per jioo of 
 their money or debts, wares or stock, and great or small 
 cattle on the land. And, lastly, a simple Poll Tax was 
 imposed. But the yield did not improve, and in 1698 
 the system of a national pound rate was abandoned. 
 The quota of each district was fixed on the basis, 
 L'Hermitage reports, 4 of the returns of 1692; personal 
 estate was to pay 35. per of the true yearly value 
 calculated at 6 per cent, of the capital value, and public 
 officers 35. per on their salaries or profits ; and the 
 
 1 e.g. Autobiography of Sir John Bramston (Camden Socy.), pp. 
 372-3 ; Oldmixon's History of England, p. 1 1 ; A Proposal for an 
 Equal Land Tax, 1691 (Harl. Miscel. ii. 506 seq.} ; Davenant, Essay 
 upon Ways and Means, 1695, pp. 103-4, in ; L'Hermitage, i8th 
 December 1694, i5th December 1696, and nth February 1698 
 (Transcripts, vols. PP, p. 99, QQ, pp. 639-40, and SS, pp. 152-3); 
 [Defoe] An Essay upon Projects, 1697 (1029. b. 24), preface vii-xi. 
 
 * ' I propose a Poll Bill because of the great inequality of the 
 tax when it falls wholly upon the landed man,' Sir Ed. Seymour, nth 
 January 1692, in Gray, Debates, x. p. 227 ; also Proposal of 1691, pp. 
 511-2. 
 
 3 8 & 9 Will. III. c. 6. See L'Hermitage's reports of debates, 
 1 5th December and 26th January. 
 
 4 Transcripts, vol. SS, p. 752. b.
 
 4 6 1640-1713 DIRECT TAXES 
 
 balance of the sum fixed for each district was to be 
 raised by a pound rate on lands, tenements, tithes, 
 mines, mortgages, etc., within it. This was the form 
 of the famous Land Tax Act which remained substantially 
 unchanged for the next century. It marks the final 
 surrender of the seventeenth century attempt at an 
 equitably distributed direct tax, and merely secured to 
 the State so much revenue about half a million for 
 every nominal shilling of tax. All the defects of the 
 aids were stereotyped in its allocation among the dif- 
 ferent districts, and personal property more and more 
 escaped altogether. It became for the most part a mere 
 tax on land rent. 1 
 
 The substance of the story was briefly summed up 
 by Abraham Hill, one of the Commissioners of Trade 
 and Plantations, in a letter 2 of 1701, entitled 'Con- 
 siderations on Taxes.' The Government, he held, 
 should depend chiefly on Land Tax and Excise, but the 
 former ' should be a tax on every one in proportion to 
 his revenue,' 3 whereas in fact, ' besides the inequality 
 as it lies on some counties and afterward on some 
 hundreds, the profit arising from personal estates and 
 professions is rated so little that in London the landlords 
 of houses pay about seven times as much as the tenants, 
 though the latter acquire much the greater gains.' 
 
 The essential difference between the direct taxes of 
 this period and the Income Tax of the nineteenth 
 century is not one of intention but of execution. The 
 
 1 Dowell, ii. 53 ; Bourdin, Exposition of the Land Tax, 3rd ed., 
 by Shirley Bunbury, 1885, p. 10. A judgment of Lord Lough- 
 borough on a Land Tax case is quoted in note K. ' This Tax, 
 although commonly called a Land Tax, is not in its nature a charge 
 upon land. It is a charge upon the faculties of men, estimated 
 first according to their personal estate, secondly by the offices they 
 hold, and lastly by the land in their occupation. The land is but 
 the measure by which the faculties of the persons taxed are esti- 
 mated.' 
 
 2 Hill's papers, Shane MSS. 2902, f. 43-4. 
 
 3 Hill's attempt to explain the reason why revenue should be 
 the standard of taxation was ' because the richer receives most 
 benefit by protection from the government.'
 
 RELATION TO PITT'S INCOME TAX 47 
 
 former failed, while the latter succeeded, in devising 
 tolerably efficient methods of enforcing the provisions 
 of the Acts ; and a very careful study of this aspect of 
 the question will be found in Professor Seligman's history 
 of the Income Tax. 1 But Professor Seligman also regards 
 the taxes of the two periods as essentially different in 
 intention. The later he calls an income tax ; the 
 earlier, property taxes, or produce and property taxes, 
 meaning thereby, I take it, taxes on property and on 
 income from property. 2 I would suggest that this 
 exaggerates a real but relatively minor difference, and 
 gives a misleading idea of the relationship. 
 
 The above account does not leave it in question 
 that the intention of the seventeenth century Acts was 
 a tax on income ; the only question open is what sort 
 of income. Was it only property incomes which were 
 intended to be taxed ? It is clear that it was not. 
 Income from offices, the earned though tithe-found 
 income of clergy, and the endowed incomes of teachers 
 and the like were taxed regularly, and the earnings of 
 doctors, advocates, etc., and the wages of servants at 
 intervals. Nevertheless it is true that the income sub- 
 ject to direct taxation in the seventeenth century was 
 more predominantly property income than it was 
 in the nineteenth century. The income of the landed 
 gentry was, of course, taxed similarly in both periods ; 
 but while, in the nineteenth century, the incomes of 
 working landowners (yeomen, etc.), merchants, manu- 
 facturers and retailers were taxed according to direct 
 returns and as a whole, in the seventeenth these classes 
 were to pay only on the rental value of their holdings, 3 
 
 1 The Income Tax, 1911, pp. 80-2, and part i. book i. passim. 
 
 2 See note 44 of Chap. II. An interesting criticism on lines 
 similar to those developed here appeared in an anonymous review 
 of The Income Tax, in The Spectator of i6th September 1911, p. 421. 
 
 3 Working landowners were to pay on both the annual rental 
 value of their land, and on their stock in the Monthly Assessment 
 and the special subsidy of 1670-1 (and according to a Colchester 
 paper which I happen to have noticed Stowe MSS. 325, p. 142 seq., 
 sp. St. Martin's parish they did pay on both in 1644); but in the
 
 48 1640-1713 DIRECT TAXES 
 
 or on a percentage on their capital which was taken at 
 the rate of interest on loans. It was thus not their 
 total income, but that portion of it which might be 
 supposed to constitute their property income which 
 the Acts in effect ordered to be taxed. It does not 
 follow that this was clearly understood and intended 
 by Parliament ; x it is not improbable, for instance, 
 that 6 per cent, was taken as a rough and perhaps 
 minimum estimate, necessarily inaccurate in a multitude 
 of cases, of the true yearly profit which a merchant 
 earned with his stock. The use of an assumed rate is, 
 of course, of no significance in itself ; the same device 
 was repeated in the nineteenth century tax in estimating 
 the profits of the farmer at a proportion of the rent 
 he paid. So far as intention was concerned, therefore, 
 we may properly say that Pitt in 1799 applied the 
 standard of income more strictly than was the case in 
 the seventeenth century enactments ; 2 but it is 
 equally correct and important to say that taxation 
 according to income was a seventeenth century 
 conception. 
 
 The result of the development of the direct tax 
 during the seventeenth century was to fix in opinion 
 the doctrine of income as the standard of equitable 
 distribution. But this doctrine was accepted in a 
 general form only, and many of the finer problems within 
 the principle of income taxation were ignored. Should 
 the earned income pay at the same rate as the income 
 of the landed gentleman, and the small income at the 
 same rate as the large ? Attention was too fully 
 engrossed with the difficulty of getting in practice 
 any approach to equitable distribution to be able to 
 
 Aids, stock upon land was not to be taxed. This, no doubt, had the 
 further result of exempting tenant farmers ; but they were taxed 
 in the special Act of 1696-7, 8 & 9 Will. III. c. 6. 
 
 1 I am unaware of any direct evidence. 
 
 2 It must not be forgotten that in economic development and 
 differentiation, England advanced enormously between 1689 and 
 1799-
 
 DIRECT TAXATION OF THE POOR 49 
 
 spare such questions serious consideration. Evasion 
 was such a danger that even the proposal to exempt 
 the rental value of empty houses was frowned upon. 1 
 Simple proportionality to income 2 was consequently 
 the vague tradition which, in an undiscussed way, the 
 seventeenth century imposed on subsequent opinion. 
 On the other hand, an important theoretical qualifica- 
 tion of this principle was very generally admitted. This 
 was the repudiation of a rigid standard like income as 
 the complete test of a man's ability to pay taxation. 
 It was contended now, 3 as in the sixteenth century, 
 that allowances should be made for expenses of 
 family and port ; and it is probable that in the actual 
 assessment of taxes such considerations were taken 
 into account, 4 although to what extent it is impossible 
 to say. 
 
 Finally, to what extent did the direct taxes of 
 this period carry on the Elizabethan and Stuart tradi- 
 tion of exempting the poor man from taxation ? 
 In effect they departed from it, and returned for half 
 a century to the practice of the first half of the sixteenth 
 century ; for while the regular direct taxes exempted 
 
 1 Bonnet reports (in Ranke), I2th and igth January 1694, p. 
 232. To prevent former abuses, the Commissioners were to be put 
 on oath to make no allowances on any consideration whatever. 
 A discussion of the rate as between offices and lands in the special 
 subsidy of 1670-1 is reported in Gray, Debates, i. 326 (i5th December 
 1670). 
 
 2 Exceptions to this rule were very rare in the Statutes. Poll 
 Taxes sometimes included an income clause graduated up to a 
 low figure of income ; see 16 Chas. I. 9, 4 ; i Will, and Mary, c. 
 13, and 8 & 9 Will. III. c. 6. 
 
 3 A member argued on loth March 1668 that the Monthly Assess- 
 ment should be made like the subsidy, which was on ' the sparable 
 part of a man's estate, debts and charge of children considered ' 
 (Waller, in Gray, Debates, i. 109). On 2ist January 1671, Sir 
 Thomas Meres moved for a deduction of one-third part for men's 
 expenses, hospitality and debts, in levying the special subsidy (i. 
 362). See also Marcjuis of Halifax, An Essay upon Taxes . . ., 1693 
 (in Somers' Tracts, xi. 79-80). 
 
 4 Halifax, and Fabian Philipps, Restauranda, 1662, E. 1957 (8), 
 p. 4. Cf. Gray, Debates, i. 359-60 (Swynfen, 2Oth January, 1761).
 
 50 ^o-^S ^RECT TAXES 
 
 him, 1 the poor man was taxed by occasional Poll Taxes, 
 which, between the Revolution and the settlement of 
 the Land Tax, became fairly frequent. There was a 
 Poll Tax of 6d. per head in 1641, is. in 1660, 1666, 1678, 
 1689 and 1690, and 45. in 1691, 1694, 1697 (45. 4d.) and 
 1698 ; in addition servants paid is. per on their 
 wages in 1666 and 1678, is. per in 1689 if over .3, 
 and 6d. per if under, and at rates varying from is. id. 
 to 45. 4<i. per in 1697 on wages of over 4. a year. 2 
 The Poll Taxes exempted paupers and the children of 
 the labouring poor. 3 In the eighteenth century, the 
 direct taxation of the poor was discontinued. 4 
 
 But the direct taxes were the less important form 
 of the taxation of the poor in this period, and the 
 discussion of the question which took place had refer- 
 ence almost entirely to the more important form. 
 For opinion, therefore, we must wait on the history of 
 the Excise. 
 
 1 This is to some extent a deduction. The ^400,000 assessment 
 exempted servants under 10 a year wages, land up to i a year, 
 and personalty up to ^3, and the Weekly Assessment exempted all 
 servants ; but the Monthly Assessment made no provisions about 
 exemptions, doubtless leaving this with other questions of rating 
 to the usual custom of the district. The poor were therefore ex- 
 empted in all probability. The special subsidy of 1670-1, and the 
 Aids exempted lands up to i a year, and no doubt wages, by lack 
 of mention of them ; while the exemption of household stuff under 
 personalty would free the poor from assessment in that direction. 
 It should be noticed that Customs officers with salaries up to ^60 
 a year, and Excise officers up to 100 a year, were exempted from the 
 Aids, on the ground of poverty, by having their tax paid as a de- 
 partmental charge ; e.g. Treasury Papers, vii. 74 (1690), x. 39, and 
 xiii. 60 (1691) ; and iv. 10 (1689), xiv. 34 (1691), and xxxvii. 44 (1696). 
 The practice was continued in the eighteenth century as regards Land 
 Tax, e.g. xciv. 87 (1705). 
 
 2 i6Chas. I. c. 9 ; 12 Chas. II. c. 9; 18 & 19 Chas. II. c. i ; 29 & 30 
 Chas. II. c. i ; i Will, and Mary, c. 13 ; 2 Will, and Mary, c. 2 ; 3 Will, 
 and Mary, c. 6 ; 5 & 6 Will, and Mary, c. 14 ; 8 & 9 Will. III. c. 6 ; 
 9 Will. III. c. 38. 
 
 3 The exemption for children is complicated in form, but it 
 comes roughly to this ; see, e.g., i Will, and Mary, c. 13, 4. 
 
 * I do not include house taxes and the like in the term direct 
 tax.
 
 IV 
 
 1640-1713 EXCISE 
 
 IN the seventeenth century, discussion of the theory of 
 taxation centred chiefly round the question of Excise 
 duties. This was a natural result of the financial tradi- 
 tion of the time. Excise not only raised very funda- 
 mental problems, but its way of dealing with them 
 constituted an innovation on the opinion and practice 
 of centuries. Customs duties and direct taxes, although 
 undergoing important changes during this period, were 
 yet gradual developments of long established policy. 
 But the Excise was a new departure of the most striking 
 kind. Properly speaking, it had no antecedents in 
 England. Excise duties had, of course, been long known 
 from the practice of continental States, but they were 
 regarded with great antipathy as foreign oppressions, 
 from which we were happily free. 1 It was only 
 extreme financial pressure which induced Parliament 
 
 1 Dowell, ii. 8-9 ; Parl. Rolls, iii. 89-90, Suggestions by the 
 Lords for taxes in 1380 ; Fortescue, Governance of England, ed. 
 Plummer, pp. 132-3 ; Bodin (Eng. tr., 1606, p. 669; 1593, French 
 ed. p. 887) ; 1627-8, Gardiner, vi. 222, 225, 227; Hargrave MSS. 
 321, pp. 300-1 ; and Cobbett's Parliamentary History, ii. 416. It is 
 true that under certain industrial patents of monopoly, Charles I. 
 obtained a revenue which was in effect an Excise revenue (W. Hyde 
 Price, The English Patents of Monopoly, p. 42) ; but to regard these as 
 means by which ' the people became accustomed to Excise taxation ' 
 (pp. 131-2) seems to me to misunderstand the situation. In 1628, 
 Parliament denounced the Commission, which it suspected was set 
 up to discuss Excise duties ; in October 1642 it described the rumour 
 that such duties were under consideration as false and scandalous 
 (A Declaration of the Commons . . ., 8th October 1642, E. 121 (27), 
 and see E. 699 (17), The Judicial Arraignment . . ., 1653, and E. 
 813 (16), Prynne, A Declaration and Protestation, p. 8 seq.*) ; and the 
 history to which we proceed shows how little the way was prepared 
 
 5'
 
 52 1640-1713 EXCISE 
 
 to adopt and develop this third means of providing for 
 increasing expenditure ; and opposition to it was just 
 as determined in the time of William III. as during the 
 Civil War. Nevertheless, from the first, reasons were 
 not lacking to prove that Excise duties were equitable, 
 as well as easy and productive taxes ; and the joint in- 
 fluence of favourable opinion and the need for money 
 gradually made them one of the chief portions of the 
 English tax system. Before we attempt to analyse 
 opinion on the subject, let us sketch in outline the 
 more obvious aspects of this process as they appear in 
 the rather meagre Parliamentary records. 
 
 On 28th March 1643, about a month after the first 
 ordinance for a general Weekly Assessment had been 
 passed, Pym proposed ' another way for the speedie 
 raising of money,' by laying an Excise on commodities 
 bought and sold. 1 Two years earlier, as D'Ewes says, 
 such a motion would have been thought * to have 
 tended no less than to the ruin of the kingdom,' and it 
 met with strong opposition. Pym then 'thought to 
 have amended the matter somewhat by saying that he 
 only intended to have this Excise laid upon superfluous 
 commodities that were imported into the kingdom ' ; 
 but the * unjust, scandalous and destructive ' proposal 
 was apparently rejected. Nevertheless, the project was 
 ultimately accepted, and on 2 2nd July an ordinance 2 
 was issued, laying a tax on beer, ale, cider and perry, in 
 addition to duties on imports. The money was stated 
 to be raised for the better securing of trade, the main- 
 tenance of the forces, and the payment of the debts of 
 the Commonwealth ; and it was explained that, since the 
 malignants had evaded the levies already imposed, the 
 Lords and Commons held it fit to establish a constant 
 and equal way for the levying of moneys, ' whereby the 
 
 for Excise. Any connection between the monopolies and the Excise 
 could, indeed, only have prejudiced opinion still more against the 
 latter. 
 
 1 D'Ewes' Diary, Harleian MSS. 164, f. 346 b., and Gardiner. 
 
 * Ordinance of 22nd July 1643 (Firth and Rait, i. 202).
 
 PARLIAMENTARY HISTORY 53 
 
 said malignants and neutrals may be brought to and com- 
 pelled to pay their proportionable parts of the aforesaid 
 charge, and that the levies . . . may be borne with as 
 much indifference to the subject in general as may be.' 
 An amended ordinance was issued on 8th September, 1 
 which added soap, cloth and spirits. The duties on 
 beer were 2s. per barrel of strong beer (over 8s., later 
 6s., a barrel in price), and 6d. per barrel of small beer 
 (under 8s.), and were payable by the brewer, but were 
 to be allowed him in the price. 2 
 
 On 9th January 1644 the Excise was extended to 
 flesh and salt, 3 butchers' meat to pay is. per (on the 
 value of the animal alive), and salt d. per gallon, pay- 
 able by the maker. The money was for the Navy, and 
 the way of raising it described as * equal and indifferent,' 
 and * most easy to the well-affected subjects of this 
 kingdom.' We learn from news letters that a pro- 
 posal to include a duty on oatmeal was dropped, and that 
 a tax on poultry was restricted to rabbits and pigeons. 4 
 In July of the same year further articles were brought 
 in, including hats, starch and copper, 5 and in November 
 1645 a large number of additional duties was imposed. 6 
 
 We know almost nothing of the early reception of the 
 Excise by the public, but it is clear that by 1647 feeling 
 was strongly roused against it. On I5th February a 
 riot at Smithfield resulted from a refusal to pay duty upon 
 the purchase of an ox, 7 and on 22nd February, Parlia- 
 ment issued a Declaration concerning the Excise, 8 taking 
 notice of the tumults in different parts of the kingdom 
 
 1 Firth and Rait, i. 274. 
 
 2 Cf. Ordinances of i/th March 1654, and Act of 26th June 1657, 
 Firth and Rait, ii. 846, 1189. By an order of the General Quarter 
 Sessions of the City of London in 1655, the price of beer was fixed 
 at i os., 8s., 6s., and 45. per barrel for the four grades, from the best 
 to the smallest, 669, f. 19 (76). 
 
 3 Firth and Rait, i. 364. Salt used in the fishing trades was to 
 be exempt ; cp. Act of 1657, ii. 1 196. 
 
 4 The Perfect Diurnal, E. 252 (14), see ist and loth January, 
 p. 198. 
 
 5 Ordinance of 8th July 1644, Firth and Rait, i. 466. 
 Ordinance of 24th November 1645, ibid. i. 806. 
 
 7 Gardiner, iii. 216. 8 Firth and Rait, i. 916 seq.
 
 54 1640-1713 EXCISE 
 
 against its collection, and setting forth the grounds of 
 their policy and their intentions as regards the future. 
 Nothing, it was declared, could have drawn the Lords 
 and Commons to resolve upon this imposition but the 
 preservation of religion, law and liberty from utter ruin 
 and destruction ; it was the only means available to 
 draw in the malignants and neutrals to bear their pro- 
 portionable parts of the charge ; its continuance was 
 required to pay debt and permit the settlement of the 
 kingdom ; but when these objects were by God's mercy 
 accomplished, they would then make it appear how much 
 more ready they were to ease the people of this charge 
 than they had been willing at first to impose it. In 
 the meantime, in order to remedy grievances, they 
 prohibited a system, which seems to have grown up, of 
 compelling people to pay an assessment of the nature 
 of a poll tax for their home-brewed beer, and ordered 
 that poor people in receipt of alms should not be charged 
 for beer brewed and used in their own houses. 
 
 Discontent continued, however, and on nth June 
 it was ordered that the Excise of flesh and salt should 
 cease within a fortnight. 1 " A good piece of news," 
 was the brief comment of a news letter. 2 But this did 
 not bring satisfaction. The Army, in the Heads of 
 Proposals of ist August, 3 demanded that the Excise 
 should be taken off ' from such commodities whereon 
 the poor people of the land do ordinarily live,' and that 
 a certain time should be fixed within which it should 
 cease on other commodities also. Three weeks later, 
 Parliament replied with a second Declaration, 4 calling 
 to witness the repeal of the duties on flesh and salt as a 
 proof of their readiness to ease the people as far as 
 circumstances would allow, referring to the continued 
 opposition, and asserting that the Excise was ' the most 
 
 1 Ibid. iii. lii., and Ordinances of Excise, 506, c. 17 (i), p. 79. 
 1 The Perfect Weekly Account, E. 392 (28), see i2th June. 
 ' Gardiner, Constitutional Documents, p. 324. 
 * Ordinances of 28th August 1647, Firth and Rait, i. 1044.
 
 INTERREGNUM 55 
 
 easy and equal way ' of raising money, both in relation to 
 the people and to the public, and that they were resolved 
 * through all opposition whatever ' to insist upon its due 
 collection until it should be possible to do without it. 
 
 It is clear from an ordinance of July 1648 that obstruc- 
 tion continued, 1 but it must have been gradually worn 
 down by the determination of Parliament. In December 
 1649 tne Excise on salt was re-established 2 and a long- 
 continued 3 but unsuccessful 4 attempt was made to 
 devise a practicable system of levying the most vexatious 
 duty on home-brewed beer. No objection was made in 
 the Constitutional proposals of 1653 an( ^ l &57 to the 
 Excise, which was impliedly treated as a source of ordinary 
 revenue, 5 and in the ordinances 6 it was regularly 
 described as ' the most easy and indifferent levy that 
 can be laid upon the people.' 
 
 The Commonwealth thus depended on an annual 
 revenue from Excise duties, levied chiefly on beer 
 brewed for sale, but also at low rates on other necessaries 
 like salt and soap, as well as on luxuries such as spirits, 
 and industrial commodities like iron and lead. 
 
 Unfortunately we have no helpful records of the 
 debates 7 on the Restoration tax settlement. 8 The 
 
 1 nth July 1648, ibid. i. 1168. 
 
 8 Ordinance of 2ist December 1649, Ordinances of Excise, 
 pp. 133, 139-40. Note that the suspending ordinance of 26th 
 January 1650 (p. 144) did not apply to salt. 
 
 3 On this subject, see ordinances of 8th September 1643, 22nd 
 February 1647, I4th August 1649 ( 38), 28th March 1650 (and 
 rules of 3Oth April 1650), Frith and Raith ii. 227, 368 ; and for rules, 
 Ordinances, p. 149. 
 
 4 I2th December 1651, see 506, c. 17 (i), p. 173 beyond paging. 
 6 Gardiner, Constitutional Documents, pp. 414, 453. 
 
 ' e.g. 26th June 1657. 
 
 1 See Cobbett's Parliamentary History, iv. 118 seq., and Marvell's 
 Correspondence (ed. Grosart) for November to December 1660, 
 p. 37, etc. A MS. paper, Some Considerations about an Excise, 
 written by an M.P. since the Revolution (Harleian, 1243, f. 166 
 seq.\ asserts that the Excise was continued in 1660 through the 
 machinations of the Court and against the opinion of the wise men 
 of the Parliament. The paper is probably a draft of part of John 
 Hampden's Considerations of 1692 (State Tracts, 1705-6, ii. 314-5), 
 q.v. The assertion stands alone, so far as I know. 
 
 8 Dowell, ii. 17-29, gives a very good account.
 
 56 1640-1713 EXCISE 
 
 result, 1 however, was that the chief source of Excise 
 revenue, the duty on beer, was continued at the same 
 rates as before, 2 and the other duties, except that on 
 spirits, abolished. A new duty, called the Hearth Tax, 3 
 was added in 1662, by which. the occupier of every 
 dwelling-house was charged 2s. per hearth per annum. 
 Exemptions were provided which probably amounted 
 to the exemption of a large proportion of the labouring 
 poor. 4 The duties on beer and hearths thus constituted 
 a portion of the regular revenue of the second Stuarts. 
 An additional temporary duty on beer was also levied, 
 for extraordinary revenue, between 1671 and i68o. 5 
 In a debate on the subject in 1677, Williamson, Danby's 
 Secretary of State, said that ' when all things shall be 
 considered, there is nothing more easy for the people 
 
 1 12 Chas. II. c. 23 and 24. Tea, coffee, etc., were also included. 
 Strange as it may seem, they paid on the beverage by the gallon, 
 not on the dry commodity ; see 22 & 23 Chas. II. c. 5, and i Will, and 
 Mary, sess. 2, c. 6, by which Act of 1689 they were transferred to 
 the Customs. 
 
 2 One-half of the Excise was technically granted in lieu of the 
 Crown's rights to the revenue of the Court of Wards, to purveyance, 
 etc. (12 Chas. II. c. 24), and much misdirected indignation has been 
 expressed against the landed classes for the exchange (e.g. H. O. 
 Meredith, Economic History, p. 217, and Hammond, The Village 
 Labourer, p. 22). In reality the abolition of the feudal incidents and 
 the imposition of excises are two separate questions. As regards 
 the first, which really took place during the Interregnum, Dowell's 
 statement of the case seems to me difficult to controvert (ii. 20-23) ; 
 the second is part of the general question of the distribution of 
 taxation in this period, and it is impossible to discuss it by itself. 
 It should be remembered, too, that the question at issue was only 
 one of ; 1 00,000 a year. 
 
 3 14 Chas. II. c. 10, 15 Chas. II. c. 13, and 16 Chas. II. c. 3. The 
 Hearth Tax, as Petty properly treated it (Treatise, p. 94), was in its 
 nature an Excise duty on an object of expenditure or consumption, 
 although it differed from the usual Excise duties in being levied on 
 the ultimate tax-payer and in a lump sum. 
 
 4 The Act of 1662 provided for the exemption (i) of those who 
 were exempted, by reason of poverty or smallness of estate, from 
 Church and poor rates, and (2) of those occupying houses and land 
 not over 203. a year in value, provided they did not possess lands 
 or goods worth 10. The Act of 1664 provided that only people with 
 fewer than three hearths should be exempted. 
 
 22 & 23 Chas. II. c. 5, and 29 Chas. II. c. 2. The other usual 
 liquors were also included,
 
 EXTENSION AFTER 1689 57 
 
 than this of excise, though it is not without its troubles ' ; 
 but interest centred round its effect on land and on the 
 brewing trade. 1 
 
 With the Revolution, acute financial pressure re- 
 turned, and the Excise was rapidly increased and ex- 
 tended. By the end of our period the beer duty had 
 been increased from 2s. 6d. and 6d. per barrel (strong 
 and small beer) to 53. and is. 4d., 2 and beer was taxed 
 in addition through malt and hops ; while new duties 
 were in force on salt, candles, leather, soap and coal, on 
 windows, paper, spirits, etc. 3 all granted for long 
 periods as security for the interest of the debt. 
 
 During a part of this time we can follow the course 
 of Parliamentary debates in a general way from the 
 reports of Bonnet and L'Hermitage to the Court of 
 Brandenburg and the States General of the Netherlands 
 respectively. 4 Both reporters, however, had a marked 
 bias, and it is necessary to keep it in mind in reading 
 their accounts. They were the agents of governments 
 whose interest lay in having William well supplied with 
 funds for the war against France, and they were inclined 
 to consider proposed taxes simply from the standpoint 
 of productivity and financial convenience. 5 Their 
 
 1 Gray, Debates, I2th March 1677, iv. 225 seq., and cf. MS 
 report, fuller in some ways, in Add. MSS. 28,091, p. 41 seq. 
 
 * The Acts are complicated. I take it that the additions in 
 force in 1713 were 4 Will, and Mary, c. 3, pd. and 3d. ; 5 Will, and 
 Mary, c. 7, pd. and 3d. (contd. by 4 & 5 Anne, c. 18) ; 5 & 6 Will, and 
 Mary, c. 20, gd. and 3d. ; 8 Anne, c. 12, 3d. and id. During 1691 
 the rates were higher, and they fluctuated considerably during 
 William's time. 
 
 3 See Do well, ii. 84. 
 
 1 The Gray Debates are of little value after the Revolution. 
 The Bonnet reports I have used are the excerpts given by Ranke in 
 his History (Engl. tr. vi. 144, seq.\ which extend from 1690 to 1695, 
 and the much less interesting later reports by Bonnet and his brother 
 of which transcripts are in Add. MSS. 30,000 A-E (1696 onwards, 
 practically valueless after 1698). The L'Hermitage Secret De- 
 spatches are valuable from 1694 to 1698 ; transcripts are in Add. 
 MSS. 17,677, vols. OO-SS. 
 
 ' On 7th December 1694 Bonnet reports a grant of five millions 
 for supply for the war, and adds that nothing of much interest 
 need be expected during the remainder of the session, ' important
 
 58 1640-1713 EXCISE 
 
 familiarity with continental excises no doubt also made 
 them unsympathetic to opposition to Excise duties in 
 England. 1 
 
 Curiously enough, the period opens with the repeal 
 of a duty, the Hearth Tax of 1662, en the direct inter- 
 cession of the new King. 2 Parliament decided that the 
 popular grievances against it could not be removed by 
 regulation, and gave it up as ' in itself not only a great 
 oppression to the poorer sort, but a badge of slavery 
 upon the whole people, exposing every man's house to be 
 entered into and searched at pleasure by persons unknown 
 to him.' But at the same time the other Excise duties 
 in force were continued and temporary increases in rate 
 voted. 3 In the winter of 1690, many suggestions were 
 put forward for new taxes, including duties on windows 
 and an excise on victuals ; but the House rejected a tax 
 on corn and some other commodities, and decided on 
 another addition to the beer tax. 4 In 1691-92 the 
 same conditions were repeated. Bonnet reports on 
 1 3th November : ' Nothing would be more productive 
 or less oppressive to the people than a duty on the 
 consumption of victuals and especially of meat, and yet 
 nothing is so much opposed by the majority of members, 
 who fear either that if once established they would not 
 have the power to repeal it when they desired to do 
 
 peu de quelle maniere on levera cette somme pourveu qu'on la 
 fournisse effectivement,' pp. 253-4. 
 
 1 To understand these reports, it is also necessary to bear in 
 mind that Parliament was still without ministerial or Cabinet 
 direction in regard to proposals for taxes. Substantially the 
 King's ministers did no more than get Parliament to grant sums of 
 money desired ; they had little influence on the taxes by which 
 these sums would be raised, although their influence was increasing 
 in this period. The result was extraordinary vacillation and delay. 
 The system probably also gave undue weight to individual and 
 temporary feelings and interests. See Gray, Debates of Charles II. 's 
 time ; W. A. Shaw, Introduction to Calendar of Treasury Books, 
 1667-8, p. xxxix ; Bonnet, pp. 149, 150, 153, etc. ; 5. P. Dom., i6th 
 August 1692, Memorandum by Lord Rochester (Calendar, pp. 410-1). 
 
 1 i Will, and Mary, c. 10. 
 
 8 For the Acts here and below, see Dowell. 
 
 4 Bonnet, pp. 149, 151, 153 ; 2 Will, and Mary,.c. 10.
 
 PARLIAMENTARY STRUGGLE OF 1693-4 59 
 
 so, or that it would cause disturbances in places, as has 
 happened before.' Members would even prefer to 
 reimpose the Hearth Tax. 1 The beer Excise was alone 
 increased. Next year, duties were again suggested on 
 hearths, salt and candles, but without result ; ' as for a 
 general excise on victuals, the majority will not hear 
 of it.' 2 
 
 The critical struggle took place in the winter of 
 1 693-94.* As security for a loan, a salt tax was resolved 
 upon in December, in spite of the protests of those 
 who said, inter alia, that the liberty of the nation was 
 destroyed if the House would permit a tax on food. 
 Similar opposition was made to resolutions for leather 
 and soap taxes, and the final decision was delayed. At 
 last a day in March was fixed when all members were 
 ordered to attend so as the more solemnly to repre- 
 sent the nation, and resolve finally whether new Excise 
 duties were to be adopted. On the one side, Sir Edward 
 Seymour, a Tory member of the Council, made as 
 moving (pathetique) an appeal as he could against their 
 adoption ; and, on the other, Sir John Lowther, who had 
 been head of the Treasury in 1690, maintained the 
 view that no more efficacious means of raising money 
 was available. But, although the Court was for excises, 
 the question dragged on. Salt tax was accepted, but 
 when the leather and soap proposals came up the 
 opposition was united and prepared with equivalents 
 first a chimney tax and a poll tax, which were rejected, 
 and then an additional duty on wine, which was accepted 
 by the House, the principle having been previously 
 adopted that superfluities should be taxed rather than 
 necessaries and commodities which affected the rich 
 rather than the people. Soap and leather were finally 
 rejected, partly on the ground of injury to the woollen 
 industry and to cattle rearing. The proposed equivalent 
 
 1 Bonnet, pp. 165-6. 2 Ibid. p. 194. 
 
 3 Ibid. pp. 227-8, 240, 243, 245, 247, 248, and L'Hermitage, 
 vol. OO, pp. 180-1, 1946-195, 200, 210, 213, 214, 216.
 
 6o 1640-1713 EXCISE 
 
 was also changed, but necessaries were avoided. The 
 result, therefore, was a duty on salt of i|d. per gallon, 
 together with duties on legal deeds, hackney coaches 
 and ships. L'Hermitage considered that the real 
 motive of the opposition to excises was disaffection and 
 dislike of the war, and that its strength lay in the 
 prejudice that they would be injurious to liberty an 
 obviously one-sided explanation. 
 
 Next year the struggle over the leather tax was 
 renewed. 1 It was adopted by a majority of five votes, 
 shortly afterwards rejected, then again adopted and 
 again rejected. The Court was for it, but did not think 
 it worth while to waste the time necessary to force it 
 through. In its place a glass duty and a tax on births, 
 deaths and marriages were granted. Bonnet remarks 
 that the hatred of excises is made very obvious by the 
 resort to such an extraordinary means of supply. 
 
 So the fight went on, 2 some duties being dropped as 
 unsuccessful, some continued and increased, and others 
 added. In 1696 a window tax was imposed; malt, leather 
 and paper duties were in force for a few years from 1697 ; 
 in 1698 the coal tax was revived and the salt duty 
 increased; in 1701 the malt tax was revived, and between 
 1710 and 1712 candles, leather, paper, hops and soap 
 became permanent sources of Excise revenue. 
 
 Opinion regarding Excise duties may be divided into 
 
 1 Bonnet, pp. 265, 268, 272, and L'Hermitage, vol. PP, pp. n6b, 
 118, 123, 154, 166, 169, 186. 
 
 * The records are still interesting for sessions 1695-6, 1696-7 
 and 1697-8, but they do not add much that is new. The opposition 
 to Excises still continued to be vigorous. In the last-mentioned 
 session a proposal to revive the coal duty was carried. It was 
 objected that it involved administrative difficulties, that it was 
 oppressive to the poor, who paid as much as the rich and in whose 
 interest it had lately been abolished, and that it injured manu- 
 factures using coal. It was answered that all taxes are onerous, 
 financial needs required the new duty, and manufactures would not 
 suffer since the price of coal had fallen since the war. Bonnet 
 Transcripts, vol. B, pp. 90, no, and L'Hermitage, vol. SS, pp. 218-9 
 and 246.
 
 OPINION ADMINISTRATIVE QUESTIONS 61 
 
 two classes, according as it referred to their adminis- 
 trative features or their distributive effect. It is 
 with the second class that we are chiefly concerned, 
 but opinion on administrative questions had an equal 
 influence in determining policy. With this caution, 
 we may summarise it briefly. 
 
 The outstanding administrative advantage of Excise 
 duties, in the view of the seventeenth century, was 
 that they were * easy ' levies. 1 Like Customs duties, 
 they were directly imposed only on a comparatively 
 small number of producers or traders, they took the 
 form of any other expense of production, and were paid 
 by the real taxpayers, the great multitude of consumers, 
 gradually and insensibly, as part of the price of com- 
 modities. When once set going, therefore, they avoided 
 the widespread disturbance and vexation which a direct 
 tax always involves. Even a nation ' so zealous of 
 liberty ' as the Dutch adopted them. They respected 
 English ideas of freedom from interference. The flesh 
 Excise and the hearth tax failed in this respect, and we 
 have consequently the Smithfield Riot, followed by the 
 abolition of the former, in 1647, and the repeal of the 
 latter as a ' badge of slavery' in 1689. 
 
 The second advantage was that Excise duties were 
 comparatively ' sure ' levies. Because they were col- 
 lected from a small number of individuals, they could 
 be efficiently supervised, provided the rates were not 
 excessive, and the yield, instead of declining like that of 
 the Subsidy and the Aids, would probably increase with 
 time. The advantage became important from a new 
 point of view in William's reign, when a regular system 
 of funding began. Excise duties formed good security 
 for the interest of loans. 2 Hence the approval of 
 Bonnet and L'Hermitage. 
 
 1 The history just outlined supplies examples. See also The 
 Standard of Equality . . . 1647, par. 1 1 (in Harleian Miscl. ix. p. 115); 
 Harrington, Oceana, 1656 (Morley's ed. p. 273) ; Letter from a gentleman 
 . . . touching . . . Petty' s . . . Verbum Sapienti, 1691, 518. h. i (18), 
 p. 14. s Bonnet, p. 268; L'Hermitage, vol. PP, p. n6&.
 
 6z 1640-1713 EXCISE 
 
 Opponents of Excise duties, on the other hand, de- 
 nounced them as dangerous to constitutional liberty, an 
 invasion of personal liberty, and injurious to trade and 
 industry. Just because they were paid so insensibly, 
 they easily became perpetual, and so, it was feared, the 
 control of Parliament over taxation, and hence its 
 power as a whole, would be destroyed. 1 And even if 
 arbitrary government did not come to its own again in 
 this way, the same result might be achieved through the 
 influence of Excise officers, under the control of the 
 Crown, on elections. 2 But this constitutional objection, 
 though still capable of rousing strong feeling, was 
 essentially the relic of a past political problem, and 
 towards the close of this period tended to appear merely 
 factious. 3 The search and general control exercised 
 by Excise officers, sometimes no doubt oppressively, was 
 also resented as an invasion of the liberty of manufacturers 
 and traders. 4 Finally, numerous industrial objections 
 were urged. It was sometimes contended even that 
 the duties were really borne by the producers 5 (or in 
 the case of beer and malt, by the land), and more generally 
 that they restricted industry and employment, involved 
 disturbance and vexation, and affected home instead of 
 foreign commodities. 6 When not exaggerated, these 
 
 1 i2th March 1677, Gray, Debates, iv. 227-8 (Garroway), and 
 Add. MS. 28,091, p. 41 (Sir Thomas Meres); 2nd March 1694, 
 L'Hermitage, vol. OO, p. 1946-195 ; Halifax, An Essay upon Taxes, 
 1693 (Somers' Tracts, xi. 77). 
 
 * See recital in 3 Will, and Mary, c. i, n (1691), and cf. Letter 
 of 1691, pp. 14-5. 
 
 3 The Malt Tax in Anne's reign was granted yearly, along with 
 the Land Tax, as a sign of Parliamentary control of finance. 
 
 4 Second Remonstrance of James Ibeson . . . 1652, E. 678 (9) ; Wm. 
 Prynne, Declaration and Protestation . . . 1654, E. 813 (16) ; Excise 
 anatomised . . . 1659, E. 999 (i), 2, 5 8 ; A Letter from N. J. . . . 
 1690 (Lincoln's Inn Library, Brydall Coll. 33, f. 407), p. 3 ; John 
 Hampden, Some Considerations about the most proper way of raising 
 money in the present Conjuncture (State Tracts, 1705-6, ii. 309 seq.) ; 
 John Gary, An Essay on the State of England, 1695, p. 170 seq. 
 
 * Debates of i2th March 1677, and pamphlets of Hampden, 
 1692, p. 317, and Halifax, 1693, p. 76. 
 
 * Reasons against the Excise of native commodities other than Ale and 
 Beer, 1660 (Add. MSS. 33,051, f. 188, 3) ; Petition of Brewers, 1660
 
 DISTRIBUTION FAVOURABLE OPINION 63 
 
 objections were of the kind apt to be considered by 
 practical financiers as unfortunate but far from intolerable 
 incidents of this species of taxation. 
 
 Excise duties gained support on distributive grounds 
 from the development of favourable opinion on two 
 connected but more general questions. The first was 
 the question of the standard of distribution ; the second, 
 the question of the taxation of the poor. 
 
 Customs duties, when they came to be looked upon 
 as ordinary national taxes, and Excise duties which 
 were considered in this light from the beginning, were 
 alike in this, that they made men pay taxation not 
 according to an estimate of their income or means, 
 but according to their expenditure on certain com- 
 modities. What a man * can dispend ' was the intended 
 standard of the direct taxes ; what a man does spend 
 was the standard of commodity taxation. Now in 
 support of Excise duties it was commonly contended 
 in this period that expenditure is an equitable standard 
 of the distribution of taxation, and indeed that it is 
 strictly more equitable than that of means or income. 
 The argument, in effect, was that a man's total ex- 
 penditure is a good test of his ability ; taxation dis- 
 tributed on this basis would make him share equitably in 
 national charges according to his proportion. The idea 
 is put forward by Hobbes (1651), Petty (1662), Thomas 
 Sheridan (1677), and Abraham Hill (I7OI). 1 It tended 
 to be mixed up with the erroneous theory, which was 
 never accepted in an effective or influential way by 
 
 (S. P. Dora. Ch. II. vol. i. 146); Gray, Debates, i. 272 (Meres, 1670) ; 
 L'Hermitage, vol. OO, p. 210, and Bonnet, p. 243 (Soap and Leather, 
 1694); 1690, Letter, p. 3. The industrial objection to Excises, based 
 on the theory that they are shifted by the poor consumers in higher 
 wages, was only developing towards the end of this period and was 
 not yet influential, so far as I can judge. See note i, p. 80. 
 
 1 Hobbes, Leviathan, 1651, ed. Waller, p. 251 ; Petty, Treatise 
 of Taxes and Contributions, 1662 (ed. Hull, p. 91) ; Thomas Sheridan, 
 A Discourse on the rise and power of Parliaments . . . taxes, trade . . . 
 1677, reprinted by Saxe Bannister, pp. 172, 174; Abraham Hill, 
 Considerations on Taxes, 1701 (in Sloane MSS. 2902, f. 43-4).
 
 64 1640-1713 EXCISE 
 
 any one, that people ought to pay in proportion to the 
 benefit they derive from the State * ; but in reality it 
 remained an interpretation of the undefined idea that 
 people should pay according to their ability. It was 
 an interpretation, it must be noted, substantially the 
 same as that of means or income, for in a general way 
 the amount men spend varies with the amount of their 
 incomes ; and the easy acceptance of the idea of taxa- 
 tion according to expenditure was due, without doubt, 
 to its close relation to the traditional standard of income. 
 In some cases, of course, the two standards differ 
 considerably ; some men spend only a small part of their 
 incomes. It was from such cases that our theorists 
 attempted to prove the superiority of the standard of 
 expenditure. Petty put the case thus : ' It is generally 
 
 1 Insistence, in connection with tax-theory, on the benefit which 
 the individual derives from the State was a' feature of the view of 
 the State as simply a means of protecting people's rights. Its 
 real result was to support the theory, discussed below, that every- 
 one should pay taxation. The further attempted deduction that 
 people should pay taxation according to the amount of protection 
 they receive was impossible to work with, because the protection, 
 much more the general services, of the State do not come to individuals 
 in definable or divisible proportions at all. Attempts in the seven- 
 teenth and eighteenth century to proceed from such a theory to an 
 actual standard of distribution break down regularly ; and in the 
 result the standard adopted is based on ideas of ability, whether 
 avowed or not, and not on benefit. Hobbes, for instance, in trying 
 to define how much benefit men get by the sovereign power, says 
 that ' the benefit that each one receiveth thereby is the enjoyment 
 of life, which is equally dear to poor and rich ' ; but then, instead 
 of saying that all men should therefore pay the same amount of 
 taxation, he attempts inconsistently and unsuccessfully to introduce 
 qualifications which will lead to the conclusion which he really 
 wanted to establish, viz. that men should pay in proportion to 
 their expenditure. Petty says that men should pay according to the 
 interest they have in the public peace, and merely asserts that that 
 is according to their riches and estates. Walpole in 1732 (Cobbett's 
 Parliamentary History, viii. pp. 943-4) set out with the principle 
 that everyone should contribute his share in proportion to the 
 benefit he receives, but he justified his actual proposals on the 
 ground of taxation according to circumstances and condition in life. 
 Adam Smith's standard is ability ; he only attempts indecisively and 
 certainly unsatisfactorily to deduce taxation according to revenue 
 from a conception of society as made up of independent individuals 
 receiving protection from the State. See below.
 
 DISTRIBUTION AND EXPENDITURE 65 
 
 allowed by all that men should contribute to the public 
 charge but according to the share and interest they 
 have in the public peace ; that is, according to their 
 estates or riches ; now there are two sorts of riches, 
 one actual and the other potential. A man is actually 
 and truly rich according to what he eateth, drinketh, 
 weareth, or any other way really and actually enjoyeth ; 
 others are but potentially or imaginatively rich, who, 
 though they have power over much, make little use of 
 it ; these being rather stewards and exchangers for the 
 other sort, than owners for themselves.' Hence he 
 concluded ' every man ought to contribute according 
 to what he taketh to himself and actually enjoyeth.' So 
 Sheridan approved of taxation on general expenditure, 
 since ' no man pays but according to his enjoyment or 
 actual riches, of which none can be said to have more 
 than what he spends.' But it was just in this conten- 
 tion that these theorists failed to carry general opinion 
 with them. It was a standing objection to the system 
 of assessing men according to their apparent means, as 
 judged from their way of living, that the miser, or the 
 man who lived below his rank or means, thus evaded his 
 fair share of taxation ; * and in the eighteenth century, 
 when taxes on consumption were predominant, it was 
 often allowed, as an unfortunate but unavoidable quali- 
 fication of their equitable character, that the miser or 
 the parsimonious rich man who lived in a small way 
 paid less than his just proportion. 2 Taxation according 
 
 1 e.g. Gibbon, The Order of Equality, 1604. 8226. a. 14, p. 24 ; 
 Halifax, An Essay upon Taxes, 1693 (Sowers' Tracts, xi. 74-5). 
 
 8 e.g. Francis Hutcheson, A System of Moral Philosophy, 1755, 
 ii. 342 ; Fauquier, An Essay on ways and means . . . 1756, T. 1627 
 (3)> P- 39 Adam Smith, Wealth of Nations, Everyman ed., ii. 
 376-7. Cf. Letter of 1691, p. 14 ' Excise, you know, hath obtained 
 a current repute of perfect equality : Now though I by no means 
 admit of that ; not only niggards but all those whose condition 
 obliges them not to live honourably upon their demesnes, at pleasure 
 avoiding it ; yet I must allow, 't is, singly considered, perhaps the 
 most equal and innocent of any particular way of taxing commonly 
 proposed or discoursed of ; excepting imposts on some foreign hurtful 
 superfluities for the due regulating of trade.'
 
 66 1640-1713 EXCISE 
 
 to expenditure was, in fact, simply another roughly 
 satisfactory expression of taxation according to income. 
 
 The second and more important general character- 
 istic of the Excise duties of this period was that they 
 made the poor man regularly pay taxation. As con- 
 trasted with traditional tax policy, this was perhaps their 
 chief distinguishing feature ; and it was supported by 
 the most influential intellectual opinion of the time. 
 The argument, in brief, was that it is an obligation on 
 every citizen, rich and poor, to pay taxation. Imposi- 
 tions, said Hobbes, 1 are but the wages of them that hold 
 the public sword to defend private men in the exercise 
 of several trades and callings, and the poor man benefits 
 thereby, and owes a debt for the benefit just as much as 
 the rich man. All men, Petty held, should pay taxation, 
 according to their interest in the public peace ; and he 
 had no sympathy with what he believed to be one of the 
 causes of the ill-management of taxation in his time 2 
 ' a fallacious tenderness towards the poor (who now pay 
 scarce is. per head per annum towards all manner of 
 charges) interwoven with the cruelty of not providing 
 them work. . . . ' ' All subjects,' said Sheridan, 3 * as well 
 the meanest as the greatest, are alike concerned in the 
 common safety, and therefore should, according to their 
 respective interests of riches or enjoyments, bear the 
 charge in equal proportions.' Petty and Sheridan not 
 only approved of taxing the poor man, but, as we shall 
 see below, were careful to define precisely how he was 
 and was not to be made to pay his equitable share. But 
 the idea found its most complete expression and justi- 
 fication in Locke's political theory, from which it was a 
 direct deduction, that * everyone who enjoys his share 
 of the protection should pay out of his estate his propor- 
 tion for the maintenance of it.' * By the end of the 
 
 1 Leviathan, loc. cit. 
 
 2 Verbum Sapienti (written c. 1665), in Works, ed. Hull, i. 114, 
 and see p. 1 12. 3 Discourse, p. 146. 
 
 4 Two Treatises of Civil Government, ed. Hy. Morley, p. 266, et 
 passim.
 
 6 ALL MEN SHOULD PAY TAXATION ' 67 
 
 seventeenth century this may be said to have become a 
 commonplace. Even those who objected to the taxa- 
 tion of the poor were unable directly to controvert it ; 
 and an opponent of the Excise was familiar enough 
 with the argument to describe excise, 1 in the words 
 of its supporters, as a tax ' which makes the burden as 
 extensive and universal as the benefit that arises 
 from it.' 
 
 The acceptance in the sevententh century of the 
 doctrine that the poor man should pay taxation is one 
 of the landmarks in English political opinion, and we 
 shall make an attempt below to understand its signi- 
 ficance more fully. Meantime, we have to notice that 
 this doctrine was an essential element in the distributive 
 approval of Excise duties in this period. 
 
 But it did not necessarily follow that particular Excise 
 duties were equitable, because it was considered just to 
 impose taxation in proportion to expenditure, and to 
 make the poor man contribute. Excise duties fell not on 
 a man's total expenditure, but on his expenditure on the 
 particular commodities subject to duty ; and the poor 
 man was not only taxed by them, but taxed in a certain 
 proportion, relatively to other men, which might or 
 might not be equitable. What, then, was considered 
 to be the distributive justification of the actual Excise 
 duties in force ? 
 
 The justification was that a duty on a particular 
 object of expenditure, like taxation in proportion to 
 general expenditure, taxed different people, in a rough 
 but tolerably accurate way, according to their ability. 
 It made every one pay his proportionable share, measured 
 by the extent of his consumption. This was the mean- 
 ing of the declarations during the Interregnum that the 
 Excise was the ' most equal ' way of raising money. 
 Every one, including Royalists, paid their fair share of 
 
 1 Letter of 1690, p. 2 ; cf. A Proposal for an equal Land Tax, 
 1691 (Harl. Miscl. ii. 511-2).
 
 68 1640-1713 EXCISE 
 
 the charge. 1 At the Restoration it was argued, in con- 
 nection with a proposal to exchange the beer excise for 
 a malt tax, that the tax would thus be made more equal, 
 for while all users of publicly-brewed beer were equally 
 charged by the existing duties, home-brewing escaped. 2 
 In the time of William III., as a result, no doubt, of the 
 Parliamentary controversy, a more precise statement 
 of the contention appears in the pamphlet literature. 3 
 In 1695, various tax proposals, including one for an 
 excise on flesh and hides, were put forward in a pamphlet 
 entitled A Book of Funds by Thomas Houghton 4 ; he 
 contended that ' in these duties every person will be 
 taxed, and pay more or less according to the quantity 
 he or she useth ; if poor, they use little and therefore 
 pay the less ; if rich, they pay the more in proportion 
 to what their expense and consumptions are ; so that 
 nothing can be more equally laid and charged upon the 
 people than the taxes aforesaid.' 6 Davenant's Essay 
 of the same year was also in favour of Excises for the 
 war ; usurers, lawyers, tradesmen and retailers, who 
 usually paid very little taxation, would so be brought 
 ' to bear their proportions of the common burden,' and 
 'the disproportion between what the rich and what 
 the poor consume would make this fall easily upon the 
 poor and not very heavily upon the richer sort.' A 
 proposal next year for a malt tax 6 was similarly de- 
 fended ; it would ' affect every person though not 
 
 1 e.g. Ordinances of 22nd July 1643, 22nd February 1647, and 
 28th February 1655. 
 
 * The Representation of Francis Rockley, Esq. (Somers' Tracts, 
 vii. 508). 
 
 3 Vaguer statements of the equitableness of Excise duties appear, 
 e.g. in Letter of 1691, p. 14. 
 
 4 1138. a. 10 (p. 13, and see p. 20) ; cf. Broadsheet project (? 1696) 
 for Excise on butchers' meat and skins ' It will be most equal, for 
 tradesmen and foreigners will pay as much as gentlemen, proportion- 
 able to what they spend,' 816. m. 6 (47-8). 
 
 * Essay on ways and means of supplying the war, 1695, 1028. h. i 
 (i), pp. 120, 122, 123. 
 
 * A. Burnaby, An Essay upon the excising of malt . . . 1696. 
 T. 1814 (4), pp. u, 22-3.
 
 DISTRIBUTIVE EFFECT 69 
 
 with the like sum but proportioned to every person's 
 circumstances.' ' Men of great estates and figure are 
 for the most part attended with a family and a numerous 
 train of all kinds of servants proportionable ; men of 
 less figure with less, and so of the meanest person.' 
 Therefore, the writer held, every man would stand on 
 an equal foot with his neighbour, and he that consumed 
 little would have little to pay. A pamphleteer of 1713, 
 suggesting a duty on various kinds of cloth, 1 even went 
 so far as to show in detail that all would pay according 
 to their ability ; a gentleman of ^1000 a year, with 
 his family and establishment, would, he calculated, pay 
 .9, us. per annum; while a poor man, with his wife 
 and four small children, would only pay 35. or less. 
 
 This view of the distributive effect of Excise duties 
 on articles of ordinary consumption seems to us at the 
 present day strange and perhaps even insincere. It has 
 come to be accepted as almost axiomatic that such duties 
 lay a larger tax on the poor man, proportionately to his 
 income, than on the rich man ; for while it is true that 
 the rich man uses more of the articles and so pays more 
 tax, he does not use and pay more in proportion to his 
 larger income. But, in reality, that is not a quite 
 simple or obvious truth, and not more than two or three 
 men in the seventeenth and eighteenth centuries seem 
 to have realised it. Even Adam Smith, as we shall see, 
 failed to discover it. The distributive justification of 
 Excise duties given in this period was, therefore, although 
 incorrect, not so absurd as we might at first suppose. It 
 based itself upon the general fact that the richer man 
 normally used more of the taxed commodity than the 
 poorer, and then made the false, but not patently false, 
 assumption that he used proportionately more, relatively 
 to his means. 
 
 This becomes clearer when we consider the objections 
 made to the view that the Excise duties were equitable 
 
 1 Ephraim Parker, Proposals for a very easy tax . . , 1713, E. 
 1997 (i 3), PP- 6-7.
 
 70 1640-1713 EXCISE 
 
 between rich and poor. What we may call the official 
 opposition the opposition which objected to Excise 
 duties on necessaries altogether was unable to meet 
 the argument directly at all, just as it failed to meet the 
 argument that the poor should, as citizens, pay taxation. 1 
 Indeed, as we shall see, from its own point of view it was 
 almost uninterested in meeting it ; by implication it 
 said that this was not the way to approach the subject. 
 In any case, it did not meet it, and as a natural con- 
 sequence the argument became a common doctrine. 
 Direct criticism came chiefly from men who were in 
 different degrees favourable to Excise duties. The 
 commoner and not very important criticism was that 
 some particular duty, because of a special feature, was 
 unfair to the poor. Thus, for instance, it was argued 
 by some that the exemption of home-brewed beer 
 allowed the rich to escape the beer duty, since they were 
 the persons who brewed beer at home. 2 It is doubtful if 
 the facts supported this contention, 3 but in any case 
 it was admitted that the exemption of home-brewed 
 beer was a distributive anomaly only justified because 
 of administrative difficulties. Similarly it was argued 
 at a later time that the poor man used as much salt as 
 the rich ; 4 the fact was denied, but if such were the 
 case, it was admittedly unjust and did not invalidate 
 the argument for other Excise duties. The funda- 
 mental weakness of that argument to come to the 
 second and more important line of criticism was exposed 
 fully only by Sir William Petty. Petty was a man of 
 acute mind, and in 1662 he gave a very careful analysis 
 of the question. 5 But his very precision made him 
 
 1 The only exception was John Gary, who had a direct answer 
 to both arguments. But he was not typical. See below. 
 
 2 Sheridan, op. cit. p. 172, and Rockley, loc. cit. 
 
 3 e.g. exemption of people in receipt of alms from tax on home- 
 brewed beer, Ordinance of 22nd February 1647. 
 
 4 In 1732 debates see Chap. VI. 
 
 * Treatise of Taxes and Contributions, in Hull, i. 91-4. Petty was 
 a man of wide interests and of great practical as well as speculative 
 ability. He was physician to the Commonwealth army in Ireland,
 
 DISTRIBUTIVE EFFECT PETTY 71 
 
 difficult to follow, and it is not wonderful that his view 
 did not obtain general recognition. He set out with 
 the position, which we have already discussed, that 
 taxation in proportion to total expenditure is equitable. 
 But, taxation of all objects of expenditure being im- 
 practicable, it was necessary, if a tax on a particular 
 object of expenditure were to be equitable, that this 
 object should be ' nearest the common standard of all 
 expense.' A tax on such a commodity would be an 
 ' accumulative excise ' ; a man's total expenditure 
 would be accumulated upon and represented by this 
 one commodity ; and so this particular excise would fall 
 in proportion to total expenditure. But no ordinary 
 commodity that could be suggested would satisfy this 
 condition. ' Some propounded beer to be the only 
 exciseable commodity, supposing that in the proportion 
 that men drink they make all other expenses.' This, 
 Petty showed, was not the case. Apart from the fact 
 that some poor men drank twice as much strong beer 
 as gentlemen drank small, he pointed out that ' upon 
 the artisan's beer is accumulated only a little bread 
 and cheeze, leathern cloths, neck beef and inwards 
 twice a week, stale fish, old pease without butter, etc. ; 
 whereas on the other is accumulated as many more 
 things as nature and art can produce.' The same 
 criticism would apply to other commodities, salt, fuel, 
 bread, etc. Particular Excise duties, therefore, were 
 not distributively equitable, but imposed a heavier 
 proportionate tax on the poor man than on the rich. 
 It is possible that Thomas Sheridan 1 also realised this 
 position, but apart from him it only appears in one 
 
 made a survey of lands there which yielded him a large profit, be- 
 came himself a proprietor, and died in 1687 worth perhaps 1 00,000. 
 He was in touch with the political and philosophical ideas of his day. 
 In taxation he is the most important English writer before Adam 
 Smith, and taking into account the transitional character of his 
 period compared with Adam Smith's, he showed equal and in some 
 respects greater acuteness. See Hull's Introduction and Life by Fitz- 
 maurice. 
 
 1 Sheridan, op. cit. pp. 173-4.
 
 72 1640-1713 EXCISE 
 
 other writer, John Gary, 1 who disliked Excises and the 
 taxation of the poor as a whole. A general excise, 
 he said in 1695, makes the poor ' pay more than 
 the wealthiest of their neighbours, suitable to what 
 they have ; for though a rich man spends more in 
 excisable things than a poor man doth, yet it is not his 
 all, whereas the other's poverty gives him leave to lay 
 up nothing, but it is as much as he can do to provide 
 necessaries for his family, out of all which he pays his 
 proportion.' This was not such an accurate statement 
 as Petty's, but it contained the essential idea that the 
 poor man spent a larger proportion of his income on 
 ordinary excised commodities (beer, salt, leather, candles, 
 soap, coal) than the rich man did. 
 
 Of these unrepresentative condemnations of Excise 
 duties, Petty's was much the more important, both 
 because of his personal repute and because he wrote 
 at a time when opinion was less settled. Four causes 
 may be suggested for his failure to influence it on this 
 point. First, his position was not a simple or obvious 
 one, and his terminology accentuated rather than 
 reduced the resulting difficulty. Second, he did not 
 attempt to make a distributive use of the traditional 
 feeling against taxes on necessaries, 2 and, since he dis- 
 approved of the exemption of the poor from taxation, 
 he could not accept it in the ordinary form, which 
 amounted practically to a demand for such exemption. 3 
 Third, the condemnation was practically weakened, 
 though intellectually strengthened and completed, by 
 his approval of excises as part of a compensatory system 
 of taxation. 4 Fourth, Excise duties had none of the 
 gross and palpable injustice which was prevalent in 
 France, where the rich were in many cases exempted 
 from certain taxes ; excises at least made the rich man 
 pay more than the poor man. 
 
 1 An Essay on the state of England in relation to its Trade, its 
 Poor and its Taxes for carrying on the present war against France, 
 1695, 1029. a. 5 (i), p. 174 seq. 
 
 a Discussed below. 3 Ibid. * Ibid.
 
 NON-COMPENSATORY VIEW OF TAXATION 73 
 
 The approval of Excise duties in the seventeenth 
 century as distributively equitable is not more striking to 
 modern eyes than a second characteristic of distributive 
 opinion at that time. As we saw, in noticing the tax 
 system of the Gladstonian epoch, we do not now think 
 of each tax as equitable by itself, but of an equitable 
 compensatory system of taxation, in which the inequality 
 of one tax is balanced by that of another. But in the 
 seventeenth and eighteenth centuries, hardly anyone 
 realised such a conception. Each tax was looked at 
 by itself, and required to be equitable in itself. This 
 was both a cause and a consequence of the acceptance 
 of Excise duties as distributively just. The tradition 
 which the Long Parliament inherited was of a single 
 national tax, the direct tax, which necessarily had to 
 be made equitable in itself. Consequently when a new 
 species of tax, the Excise duty, was proposed, it was 
 inevitable that it also should be looked at alone, and 
 required to be also equitable in itself. There was, so 
 to say, no intellectual framework into which Excise 
 duties could be fitted and be at the same time recognised 
 as inequitable between rich and poor. And, on the 
 other hand, unusual insight being needed to discern that 
 such an inequality was fundamentally involved in Excise 
 duties, no insufficiency was generally discovered in the 
 tacitly accepted non-compensatory view of tax questions. 
 The result was the attempt throughout this period to 
 get an equitable direct tax on one plan, equitable 
 Excise duties on another and equitable Customs duties 
 on a third. Consequently, we may note in passing, 
 if we want to sit in judgment on the mere facts of Excise 
 policy in the seventeenth century, we must distinguish at 
 least three separate standards by which they may be 
 tried first, the standard which condemns any taxation 
 of the poor man ; second, the standard, common in the 
 seventeenth century, which requires that rich and poor 
 shall, in Excise duties, pay proportionately to income ; 
 and third, the standard, common in the later nineteenth
 
 74 1640-1713 EXCISE 
 
 century, requiring that rich and poor shall, in taxation 
 as a whole, pay proportionately to income. Sentence 
 would be very different in the three cases, and most 
 favourable in the third. 
 
 Again it is Petty who by contrast emphasises the 
 predominant attitude. Recognising that Excise duties 
 were inequitable in themselves, he also came to see that 
 they could be made part of an equitable system of 
 taxation. The essay known as Ferbum Sapienti, which 
 was probably written in 1665, but was not published till 
 I69I, 1 gives the outline of such a scheme. Petty 
 proposed in it to show the remedy for the disproportion 
 which defaced the taxes of the time, and which, he said, 
 was * the true and proper grievance of taxes.' What 
 was wanted was a tax in proportion to every man's 
 income ; it was to be obtained by imposing taxes on 
 the actual or assumed income received from property of 
 all kinds, and by adding a poll tax, or better a poll tax 
 and an excise, so as to get at the income of labouring 
 people. 2 The scheme is rough, for it does not go in 
 detail into the question of the Excise duty or duties to 
 be imposed ; but its central idea is clear and modern. 
 The poor were to pay by Excise and a poll tax, the rich 
 by direct taxes on income. 
 
 But Petty stood alone. An echo may possibly be 
 detected in a pamphlet of i69i, 3 which suggested that 
 when a land tax was granted, a poll tax (or even a 
 general Excise) should go along with it, and in the 
 vague argument in favour of a malt tax in 1697 that 
 hitherto the taxes had fallen mostly on people of means. 4 
 
 1 It was known before that, however (see Hull's note). A pamphlet 
 of 1689, entitled A Discourse of the growth of England . . ., 
 712. m. i (13), p. 192, gives the substance of the scheme, in the form 
 of a letter dated 2/th January 1680. 
 
 * In Hull, i. 104, in, 112 et passim. 
 
 3 A Proposal for an equal Land-tax . . . 1691 (Harl. Miscl. ii. 511). 
 
 4 L'Hermitage, i2th March 1697, vol. RR, p. 244. A vague, 
 compensatory position is taken up in Short Reflections upon the 
 present state of affairs . . . 1691, T. 1707 (7), p. 18, which argues 
 that since for ten years before the Revolution no direct tax was in 
 force, there is now no ground for complaint at the Land Tax.
 
 OPTIONALITY 75 
 
 But the real point of such contentions was the desire 
 to enforce the doctrine that the poor should share the 
 burden of taxation ' that so,' as the pamphleteer said, 
 * the whole kingdom being concerned, every man in it 
 may contribute something ' and not the recognition 
 of equitable taxation of the poor by means of a com- 
 pensatory system. And it was easy for the capable 
 writer of another pamphlet of 1691 to set out to discuss 
 Excises with Petty's essay in his hand, and yet to miss 
 its whole point. 1 
 
 Excise duties were thus defended as equitable by 
 themselves, between rich and poor. One other ad- 
 vantage, of a quasi-distributive kind, was also claimed 
 for them. It was based on the supposed optional character 
 of duties on consumption, which, it was held, made such 
 taxes equitable, or at least had an influence in that 
 direction. The idea was put forward somewhat doubt- 
 fully at first, and it was not until the eighteenth century 
 that it blossomed out into one of the foremost tax 
 virtues. Petty in 1662 gave as one of the chief reasons 
 for Excise that it is ' scarce forced upon any and is very 
 light to those who please to be content with natural 
 necessaries.' Sheridan thought that a general Excise 
 put it into the power of every man to pay more or less 
 as he resolved to live loosely or thriftily. The Letter 
 of 1691 allowed that Excise had at first sight ' a notable 
 air and aspect of freedom, every one being indeed his 
 own assessor.' Davenant thought that Excise duties 
 must be very easy, since ' everyone, in a manner, taxes 
 himself, making consumption according to his will or 
 ability'; and the defender of a malt tax in 1696 said 
 that ' as it is in every person's power to charge himself 
 with this tax as it pleaseth himself, so it is undeniably 
 
 1 A Letter . . . touching Sir Wm. Petty's posthumous treatise 
 entitled ' Verbum Sapienti' 1691 , 5 1 8. h. i (i 8), passim, and sp. pp. 14-1 5. 
 It was, in fact, not until after the middle of the nineteenth century that 
 the conception of a compensatory system of taxation became general. 
 See Fawcett's preaching on the subject, Manual, 2nd ed. pp. 525-7.
 
 76 1640-1715 EXCISE 
 
 equal.' l The contention, however, was somewhat 
 thin as applied to Excise duties, which were imposed so 
 largely on necessaries ; it was more applicable to Customs 
 duties, and in the eighteenth century was chiefly con- 
 nected with them and with other taxes on luxuries. 
 Even the seventeenth century, however, was inclined 
 to rhapsodise about the freedom of the individual to 
 tax himself ; it was partly an aspect of the view that a 
 rigid standard of distribution is necessarily inequitable. 
 
 The one objection of a distributive kind which 
 opponents of Excise duties always urged against them 2 
 was that they were taxes on the necessaries of the poor. 
 As we have seen, the Army in 1647 demanded the 
 immediate removal of Excise duties on * such commo- 
 dities whereon the poor people of the land do ordinarily 
 live.' The soap makers of London petitioned in 1650 
 against the duty on their product, on this among other 
 grounds : ' soap is most necessary for all sorts of people 
 next to victuals, and must be used by the poorest people.' 3 
 Even those who supported the Excise were influenced 
 by the idea. The writer of The Standard of Equality 
 proposed in 1647 that, when peace was restored, i a 
 tender care be had of the fundamentals, as I may term 
 them, of man's life, namely, bread, flesh, salt, small 
 beer, etc. that in all matters of taxes the state lay 
 her finger on things necessary for men's sustenance and 
 her loins on such things as are merely superfluous. 
 Otherwise it would be lamentable that the poor labourer 
 who hath threshed all day for a livelihood should himself 
 
 1 Petty, i. 94; Sheridan, p. 172 ; Letter of 1691, p. 14 ; Davenant, 
 Essay, 1695, 1028. h. i (i), p. 124 ; Burnaby, T. 1814 (4), pp. 22-3. 
 
 z To be quite correct, it should be pointed out that the objection 
 was made against such Excise duties as fell on necessaries. Most, 
 however, did so, although a few, of which the spirit duty is important 
 and will be discussed later, did not. ' Necessaries ' was, of course, 
 not a sharply denned term. It stood broadly for the staples of the 
 poor man's subsistence. 
 
 3 669. f. 1 5 (62). See also Exclamatio pauperum . . . 1648, .452 
 (26).
 
 OPPOSITION TAXES ON NECESSARIES 77 
 
 be threshed at night with unconscionable payment for 
 things tending to the bare support of nature.' l The 
 Brewers Company of London petitioned against the 
 continuation of the beer Excise at the Restoration, on 
 two grounds : the burden on themselves and the fact 
 that ' being only upon victuals ' ' beer and ale, 
 next to bread, are the stay and staff of the poor ' it was 
 ' an imposition most unequal and unreasonable,' and fell 
 chiefly on poor people in and about London. 2 The 
 Parliamentary opposition, after the Revolution, urged 
 the same doctrine, and as we have seen got the House 
 of Commons to pass a resolution that taxes should be 
 imposed on superfluities rather than on necessaries. 
 Pamphlets illustrate it more fully. To the writer of the 
 Letter of 1690 an Excise on victuals was ' scandalous,' 
 as falling on the common indispensable necessaries of life. 3 
 Halifax 4 said that in granting taxes ' our ancestors have 
 observed these rules : First, they must not consist of 
 things of common necessity or livelihood, but rather 
 superfluity.' The author of a pamphlet entitled Taxes 
 no Charge held the Excise to be a most proper tax, 
 but laying it upon the food of the poor ' might be 
 thought a grievance' and was to be avoided. 5 Davenant 6 
 approved Excises, but thought that necessaries should 
 
 1 Harl. Miscl. ix. 116, par. 14. See also A Mite to the Treasury 
 . . ., by J. W., 1653 (in Goldsmith's Library). 'If excise may not 
 be removed, can it not be reduced and principally lean upon the 
 richest and most superfluous commodities, as silver, silks, wine, 
 tobacco, sauces, coaches, sedans, beavers, scarlets, fine cloths, etc,' 
 
 P- IS- 
 
 2 S. P. Dom., Chas. II., vol. i. 146, and see Minutes of a Committee 
 on Revenue, June-July 1661 (in Shaftesbury Papers, Bunde 34, 
 No. 20), rejecting the petition since it asked not for the improve- 
 ment of the tax, but for its abolition as oppressive. (Record Office.) 
 
 3 P. 3. See also Considerations . . . against passing the Bill for 
 laying a further duty on coals, 816. m. 12 (90). ' Coals is a thing of 
 so absolute necessity that it is impossible to preserve the poor from 
 perishing without having the same at a moderate price.' 
 
 * Op. cit. p. 74. 
 
 * Taxes no Charge . . . 1690 (Harl. Miscl. viii. 526). 
 
 * Essay upon Ways and Means, 1695, p. 123. In 1699, during 
 the peace, Davenant wrote against keeping on Excise duties, Balance 
 of Trade Essay, 1029. c. 4, pp. 41-9.
 
 78 1640-1713 EXCISE 
 
 be taxed low, and various projectors of taxes were careful 
 to provide for the exemption of the poor. 1 
 
 It is only in a limited sense that this doctrine can 
 be called distributive in character. In its strict form 
 it amounted practically to a demand for the complete 
 exemption of the poor from taxation ; and yet its 
 supporters had no direct answer to the theory that the 
 poor, as citizens, should pay taxation. Still less did 
 the doctrine say how taxation should be distributed, 
 or answer the contention that an Excise duty on an 
 article of ordinary consumption is in itself equitably 
 distributed between rich and poor. It was, in fact, 
 non-distributive in origin the application to tax 
 theory of a principle of Customs policy when Customs 
 were not yet looked upon in the light of general taxes. 
 To exempt necessaries was not so much a tax doctrine 
 as a doctrine of general social policy in the interest of 
 the poor. And so it remained in essence the assertion 
 against the theory of tax-paying citizenship of a not 
 well defined feeling that the poor man did not properly 
 fit into that conception of society. We may perhaps 
 call it a plea for compassion upon the poor man. In 
 the great debate on Excises which took place on 
 1 4th March i694, 2 Sir Edward Seymour, the spokesman 
 of the opposition, employed his time, as we learn from 
 the unsympathetic account of Bonnet, 'pour haranguer 
 le -plus pathetiquement qu'il put contre I 'introduction des 
 accises? As we shall see, the description was equally 
 applicable to opposition against taxes on necessaries in 
 the eighteenth century. 
 
 Now, a compassionate plea of this kind is necessarily 
 weak in some respects. Nobody knows precisely upon 
 what it is based or to what it may lead. It lacks an 
 intellectual defence. And this weakness was very 
 
 1 Proposal for a House Tax, in Harlcian MSS. 1243 f. 2146. 
 Edward Henning's Proposal (for a tax on beds, discussed fairly 
 fully), Bodleian Library, B, 8. 22 Jur. (No. 4). 
 
 1 Bonnet, p. 243.
 
 PLEA FOR COMPASSION ON POOR 79 
 
 pertinent in the seventeenth century ; for a much 
 better defined and defended doctrine was set up against 
 it. The result was that while it gave a basis for 
 opposing Excise duties, it did not give a basis for 
 answering the arguments by which Excise duties were 
 supported. In truth, it had such a basis up to a certain 
 point, but it was in the political philosophy of a by- 
 gone age ; while the basis of the supporters of Excises 
 was in the philosophy of their own time. This is an 
 aspect of the problem to which it is necessary now to 
 proceed. But in the meantime we may note one 
 exception to the prevailing indefiniteness of the plea 
 for the exemption of the necessaries of the poor. In 
 the late seventeenth century John Gary * not only 
 saw that Excises were distributively unfair to the poor, 
 but argued that in laying taxes the poor should bear 
 little or none of the burden l their province being 
 more properly to labour and fight than pay.' And 
 having thus given his answer though few, perhaps, 
 recognised it as such to the doctrine that it is an 
 obligation on the poor man to pay taxation, he went 
 on to point out political reasons which made it inex- 
 pedient to tax them. ' He that gets his money by 
 the sweat of his brows parts not from it without much 
 remorse and discontent, and when all is done, 'tis but 
 a little they pay ; therefore taxes that light heavy on 
 them (such as chimney-money and oftentimes a poll) 
 tend rather to unhinge than assist the government. . . .' 
 
 To sum up. Excise duties, mostly on necessaries, 
 were the third source to which resort was had, for the 
 first time, in this period, to meet increasing expenditure. 
 They were approved as being paid gradually, insensibly 
 
 1 An Essay on the state of England . . . 1695, PP- I 73 175-6". 
 Gary was a leading Bristol merchant. He became acquainted with 
 Locke in 1696 and met him frequently in London thereafter 
 (R. H. Fox Bourne, Life of John Locke, 1876, ii. 342-3). He was 
 interested in the founding and work of the Council of Trade. Add. 
 MS. 5540 is a volume of his letters and papers, bound in 1696.
 
 8o 1640-1713 EXCISE 
 
 and surely, as making the poor man contributary to the 
 cost of a benefit which he shared, as distributing the 
 burden of taxation equitably between rich and poor 
 on the basis of a rough test of ability approaching that 
 of expenditure or income, and as in a measure making 
 the individual his own assessor. They were looked 
 upon as equitable in themselves, and not as part of a 
 compensatory system of taxation. They were opposed 
 with great persistence on the grounds that it was 
 grievous to tax the necessaries of the poor, and that 
 Excises were destructive of personal or constitutional 
 liberty and injurious to industry. 1 
 
 1 In the course of the discussion of Customs, Land Tax and 
 Excise, we have, without paying specific attention to it, established 
 a proposition of some importance in the history of economic theories 
 of the incidence of taxes. The proposition is that the ordinary 
 doctrines, that Land Tax falls on the landlord and Customs and 
 Excise duties on the consumers, rich and poor, of the dutied com- 
 modities, were for practical purposes accepted universally in this 
 period, and that various, as we may call them, fancy doctrines 
 of incidence which were sometimes put forward had no practical 
 influence. This period, in other words, simply carried on the 
 traditional views of the incidence of taxes on commodities and of 
 the subsidy. At the same time, economic speculation was beginning 
 here and there to throw up new and strange theories, some of which 
 were put forward even by important men, and one of which 
 the doctrine that the poor man does not pay taxes on necessaries 
 but shifts them in higher wages came to have important practical 
 influence, both on general opinion and on policy, in the eighteenth 
 century. It must be observed that in many cases the authors 
 themselves repudiated their theories, by implication, in dealing 
 with tax policy. 
 
 It is sufficient to notice the various fancy theories in this period 
 briefly, as they are discussed at length, but from the point of view 
 rather of their meaning as economic theories than of their practical 
 influence, in Professor Seligman's Incidence of Taxation, 3rd ed. 
 pt. i. bk. i. chaps, i and 5. (i) Petty argued in 1662 (Hull, i. 39-40) 
 that a land tax resolved itself into an irregular excise upon con- 
 sumptions, except during the term of a long lease within which it was 
 imposed. In the Verbum Sapienti, however, he tacitly repudiated 
 the theory. (2) Several writers argued that an Excise on necessaries 
 does not really fall on the poor consumer, but is shifted by him 
 through an increase of wages. Mun asserts this (England's Treasure, 
 1664, written c. 1630, ed. Ashley, p. 85). It was elaborately argued 
 by Locke in 1691 (Considerations of the lowering of interest, in Works, 
 1823, v. 55-60), repeating a line of thought he had developed as early 
 as 1672 (Letter of John Strachey in Fox Bourne's Life,i. 312-3).
 
 INCIDENCE THEORY 81 
 
 His conclusion was that, along with all other taxes, it fell ultimately 
 on land. As Locke states it, the argument includes a piece of mere 
 faulty logic, but its essence is that the labourer lives on the margin 
 of subsistence and so cannot bear taxation and remain independent. 
 The merchant will not bear it, the labourer cannot, and therefore 
 the landlord must. From slightly different premises, the Letter 
 of 1690, Hampden (Some Considerations, 1692, State Tracts, ii. 
 317-8) and Halifax (1693, Somers' Tracts, xi. 76-7) also argued that 
 excises, which they opposed on many grounds, fall on land. Gary 
 (Essay, 1695, p. 143 seq.} and Davenant (Essay, 1699, pp. 44-6) 
 both agreed that high prices of necessaries a cause not identical, 
 we should say, with increased price due to a tax resulted in higher 
 wages ; but while Davenant regarded such a result as ' utterly 
 destructive to that principal part of England's wealth,' manufactures 
 and specially exporting manufactures, Gary held that our manu- 
 factures ' may be carried on to advantage without running down the 
 labour of the poor.' Davenant 's writings are full of indefiniteness 
 and often inconsistency on the subject of incidence ; and Gary does 
 not reconcile his view about prices and wages (if indeed he held it 
 to bear on taxes) with his view about the exemption of the poor from 
 taxation. (3) It was sometimes argued that all taxes fall on or 
 injure the poor, by reducing expenditure and so employment a 
 fallacy regarding the country as a whole, since taxes are expended, 
 but having a measure of local truth. Davenant, 1699 Essay, p. 44, 
 and The Humble Petition of the Common People of England, against 
 the LandTax(t.Will. III., Lincoln's Inn Library, Bryd all Coll., 33. f. i). 
 (4) It was suggested by John Houghton (Collection for improvement 
 of Husbandry and Trade, 522. m. n (2), under date i6th April 1698) 
 that a tax on necessaries should be imposed so as to make the 
 generality of the poor, who are ' very lazy and expensive,' work 
 harder and so make manufactures cheaper and more plentiful. 
 I do not think that this idea had any influence on taxation, but 
 cf. second half of eighteenth century below. It seems a strained 
 interpretation of Petty (Seligman, p. 49) to attribute Houghton's 
 policy to him (i. 274-5).
 
 POLITICAL PHILOSOPHY AND THE 
 TAXATION OF THE POOR 
 
 THE problem of the distribution of taxation in England 
 has always been one of distribution among individuals 
 of widely different economic and social status. It was 
 usual in the seventeenth century to divide men into 
 three grades or classes, known as the richer sort (chiefly 
 the governing landed class), the middle sort (including 
 yeomen and shopkeepers), and the poorer sort (wage- 
 earning labourers, artificers and tradesmen, with the 
 smallest yeomen and cottagers) ; and this division, 
 while not precise, was tolerably accurate at the time. 
 The first of these classes was a propertied aristocracy, 
 living on an income from land and freed from economic 
 activity ; the third was dependent wholly or chiefly 
 on the earnings of its labour. The contrast between 
 these two classes is the most striking fact of English 
 social history, and the largest question in taxation arose 
 out of this contrast. Should the members of all these 
 very different classes all pay taxes ? In England 
 (unlike France) this question was in practice considered 
 in the less general form, should the poor man (i.e. the 
 member of our third class) pay taxation ? 
 
 Before the meeting of the Long Parliament the 
 practice of taxation in relation to the poor had varied. 
 As we have seen, they were charged to the national 
 taxes on moveables of the thirteenth and fourteenth 
 centuries, and to the subsidy of the first half of the 
 
 8a
 
 THEORY THAT ALL SHOULD PAY TAXES 83 
 
 sixteenth century. But, on the other hand, from the 
 middle of the sixteenth century down to 1640, the 
 poor were very nearly exempt from taxation, both in 
 intention and practice. Policy therefore varied ; the 
 poor were sometimes made to bear a share of the burden 
 of taxation and sometimes were exempted. It is prob- 
 able also that there was no consistent opinion on the 
 problem involved ; certainly the literature of the first half 
 of the sixteenth century, which was much occupied 
 with the poor, does not give evidence of any doctrine 
 that the poor either should or should not pay taxes. 1 
 
 From the time of the Civil War onwards the poor 
 always paid taxation regularly in Excise duties and at 
 intervals during half a century in direct taxes and a 
 consistent and widely accepted opinion grew up that 
 the poor man ought to pay taxation. The practice of 
 this doctrine was vigorously opposed, but almost with- 
 out exception the opposition was unable to answer the 
 case for taxing the poor. Briefly, this case, as we have 
 seen, was that since every one shared in the common 
 benefits secured by the state, every one should share in 
 the cost involved in providing them. This idea was 
 the achievement, in the realm of tax theory, of the 
 Parliamentary and religious struggle of the seventeenth 
 century. 
 
 There is an apparent simplicity about the idea 
 which gives it support. But, in reality, it is less simple 
 than it seems. No doubt everyone shares in the benefits 
 secured by the state, and none the less because these 
 benefits, like those of sunlight, do not reach the individual 
 in separate measurable portions. There was no general 
 desire, either before or after 1640, to deny this portion 
 of the argument. But does it follow that therefore 
 everyone should contribute to the cost of maintaining 
 state services ? In reality that depends on the con- 
 ception of society and of the state which is accepted. 
 It did not follow on the basis of the English political 
 1 For references see note i, p. 85.
 
 84 POLITICAL PHILOSOPHY AND TAXATION 
 
 theory of the first half of the sixteenth century ; it did 
 follow, inevitably, on the basis of the political theory 
 of the seventeenth century, which attained its clearest 
 expression in Locke. The difference may be put in 
 a word. The sixteenth century theory conceived of 
 society as made up of individuals (and classes) who 
 ought to and did perform functions in their society; 
 the provisions of the means for certain services (i.e. 
 taxation) was one out of many functions ; and it might 
 or might not be the place of a particular class to perform 
 that particular function. The seventeenth century 
 theory, on the other hand, conceived of society as 
 made up of independent individuals, who did not 
 perform functions, but each of whom had rights which 
 only required to be recognised and protected ; the 
 state was an institution formed for this purpose, 
 personified in the Crown, it was the one member of 
 society which had a function to perform ; and conse- 
 quently every individual, receiving the benefit of this 
 unique service, was bound in fairness to others to share 
 in the cost of its provision. 
 
 Opinion on taxation in the seventeenth and eighteenth 
 centuries was dominated by the second of these political 
 philosophies which may be termed the * freeholder ' 
 view of society. But to understand it aright, we must 
 first try to sketch in outline the main features of the 
 earlier philosophy which it supplanted. That philosophy 
 accepted, as did Locke, the class organisation of society 
 which was the legacy of feudalism ; but, unlike him, it 
 tried to moralise it by identifying classes with functions. 
 It developed in the Middle Ages and was essentially 
 the work of the Church. It pictured society on the 
 analogy of the human body, recognised the necessity 
 for differences of classes as for differences of organs, 
 and preached their interdependence, and the duty or 
 function of each in the service of the whole society. 1 
 1 Giercke, Political Theories of the Middle Age, tr. Maitland, pp.
 
 XVI. CENTURY PHILOSOPHY 85 
 
 The social and economic disturbance of the first 
 half of the sixteenth century in England led to a vigorous 
 and detailed exposition of the view. 1 The keynote is 
 that every man has an office in the community. The 
 office of the commonalty is to labour for the sustaining 
 of the whole body ; that of the gentlemen of landed 
 estates to govern, help and defend the people " to 
 keep society in good order and civility," as Starkey says. 
 It is for this that they receive their rents and are main- 
 tained without labour by the labour of others. Their 
 rights, in other words, implied duties. The king, as 
 the head of the society, is in the same position, and his 
 duties are often set out at length. 
 
 This ethical and political philosophy both defended 
 and criticised the actual class organisation of society. 
 When the landed class was condemned as unproductive, 
 living like drones on the labour of others, 2 it pointed 
 out that while no one should be idle or unprofitable to 
 the state, economic labour was not the only form of 
 service which the state required, and that the gentry 
 performed the service of governing and defending it. 
 On the other hand, when the landed men made use of 
 their property rights to advantage themselves at the 
 expense of the poor (e.g. in some forms of enclosures) 
 it insisted that their rights were not given them for 
 
 7, 8, 22, 27, 28, 33, 34, and ix. ; Thomas Starkey, England in the 
 Reign of King Henry the Eighth (Dialogue), ed. Cowper, pp. 45-6, 48, 
 78. 
 
 1 Wm. Tyndale, The Obedience of a Christian Man, 1528 (ed. 
 Christian Classics Series, pp. 86, 124-6) ; Starkey, pp. 55,78, u.o-ii; 
 Select Works of Robert Crowley, E.E.T.S. (The Voice of the Last 
 Trumpet, 1550, passim, and sp. pp. 86, 90-2, and An Information and 
 petition against the oppressors of the poor Commons of this Realm, 
 pp. 157, 163) ; King Edward VI., A Discourse about the Reformation 
 of many abuses, c. 1550 (in Gilbert Burnet, History of the Reforma- 
 tion, v. 97-102) ; [John Hales], A Discourse of the Commonweal 
 of this Realm of England, ed. Lamond, pp. 14, 22. Also the less 
 definite Hugh Latimer, Sermons (Everyman ed. pp. 84, 185, 292-4) 
 and Thomas Becon, The Catechism (ed. Ayre, p. 302 seq.}. 
 
 2 Sir Thomas More, Utopia, c. 1515 (Scott Library ed., pp. 87, 113, 
 but cf. p. 127 for his use of idea of unproductive) ; and Starkey 's 
 discussion, pp. 77-8.
 
 86 POLITICAL PHILOSOPHY XVI. CENTURY 
 
 merely self-interested ends, but in order to enable them 
 to perform duties in society. They might not do as 
 they liked with their own. 1 
 
 The Church in the sixteenth century had thus a 
 generally accepted doctrine with which it could preach 
 to the powerful propertied aristocracy of that time, 
 and although the doctrine was not embodied in a precise 
 way in law or economic institution, it was not without 
 importance on that account. There are some kinds of 
 duties of which it is specially true that they cannot be 
 enforced fully or well by mere law or self-interest, but 
 must depend for their support largely on opinion or 
 doctrine ; such are the duties of a Church, or of a 
 governing body or class, or of a self-governing people. 
 The priests' office was one of rights (e.g. tithe) and duties ; 
 in conception it was and remained an office. The 
 landed man, in the doctrine we have been discussing, 
 also had an office with rights and duties ; but the 
 conception of office was to a large extent superseded 
 by the absolutely antagonistic one of mere rights. It 
 was one of the signs and forms of this change that the 
 Church in the eighteenth century preached very little 
 to the landed aristocracy of that time. 2 
 
 The weakness or limitation of this sixteenth century 
 functional view of society was that, like all political 
 philosophies, it was never made concrete enough 3 to 
 supply detailed rules of social and economic life. The 
 
 1 Starkey, pp. 77, 1 10-12 ; Crowley, The Way to Wealth, p. 139 seq. 
 and Information, p. 157, 163 ; and other works referred to. See 
 also A. F. Pollard, Factors in Modern History, p. 147 seq. Since this 
 chapter was written, I have read Mr. R. H. Tawney's recently pub- 
 lished book, The Agrarian Problem, in the Sixteenth Century, which 
 brings out, with a knowledge of the question to which I have no 
 claim, the place which this doctrine held in the opinion and policy 
 of the time, and throws many suggestive lights on the general 
 subject of this chapter. See sp. Introduction and pp. 188-191, 
 
 347-351- 
 
 * The Church never gave up the idea that every man has duties 
 towards his society, e.g. Swift, Sermons (in Prose Works, ed. Temple 
 Scott, iv. ii2 seq.}. 
 
 3 This is not the place to discuss the question to what extent 
 and in what way such concretization is possible.
 
 SOCIAL POLICY AND TAXATION 87 
 
 duties of defence and government which it laid on the 
 propertied classes were relatively ill-defined ; this, how- 
 ever, was the less important aspect of the limitation, 
 for these classes did govern the country in a very real 
 way for centuries, although a particular landed man 
 might take no part in the work. The more important 
 defect was the lack of a definition of the rights which 
 should belong to the governing class. In law their 
 rights consisted in various forms of property in land. 
 But the Church's political theory gave absolutely no 
 suggestion whether these rights were excessive, or liable 
 to dangerous abuse, or to excessive augmentation in 
 the future, or, on the other hand, were inadequate or 
 liable to future inadequacy. Consequently it could do 
 very little more than denounce change. To put the 
 matter briefly, the moralist did not know how to allow for 
 and control economic self-interest in a time when that 
 motive was increasing and destined to increase in power. 
 The ideas of function and duty were inadequate to 
 regulate the practical affairs of the world of economic 
 motive, and it was inevitable that that world should tend 
 to be viewed as being independent and self-contained, 
 and ideas of function dispensed with. Already an acute 
 man like John Hales was feeling in 1549 towards the 
 political theory of the economists, that, for getting 
 work or service performed, rewards to self-interest are 
 to be relied on, and for preventing injury and wrong 
 the penalties of punitive law. 1 
 
 Both the strength and the weakness of this functional 
 view of society are illustrated by its lack of a doctrine 
 on the question whether the poor should pay taxation. 
 The fundamental fact which it recognised was that the 
 poor did perform a function in the state that of pro- 
 viding for its sustenance. Consequently Locke's argu- 
 ment that, since the poor benefit by the State, they 
 should contribute towards its maintenance, could have 
 
 1 Discourse, pp. 50, 53, 54, 57-9, 121-2. See a most illuminating 
 appreciation of John Hales in Cunningham, i. 561 seq. (4th ed.).
 
 88 POLITICAL PHILOSOPHY XVII. CENTURY 
 
 no influence ; they contribute in labouring. It was 
 therefore left open to consider all kinds of circumstances 
 bearing on the * function ' of paying taxation. It 
 could be argued with John Cary that it is the business 
 of the poor to work and fight, but not to pay ; it could 
 be pointed out that it is difficult to tax the poor, and 
 that they feel the burden acutely. Or, on the other 
 hand, it might be argued that the poor should pay 
 taxation with other classes, and that in some or all 
 circumstances no other mode of taxation was possible. 
 
 In this lay the strength and truth of the functional 
 view, in its relation to taxation. Its weakness was that, 
 while providing an opening for considering the various 
 problems connected with the function of paying taxa- 
 tion, it did not in practice go on to consider them, and 
 consequently left no rule or even fruitful discussion on 
 the subject. 
 
 The transition from ideas of office and function in 
 the sixteenth century to the widespread acceptance of 
 the Lockean theory of society in the seventeenth and 
 eighteenth, may be attributed to two main causes. 1 
 The less apparent was the dominance, in the actual 
 legal and economic organisation of society, of ideas of 
 unrelated rights and the motive of self-interest. The 
 obvious fact was that the landed man had property and 
 that the merchant traded for his own advantage ; the 
 functions which they fulfilled or should have fulfilled 
 lay beneath the surface. Locke therefore, accepting the 
 obvious fact and treating it as the whole truth, naturally 
 appealed in his time, as the Roman Law had in earlier 
 centuries, to the motive of individual self-interest in 
 every man. The more apparent and better understood 
 cause of the transition was the struggle of the landed 
 and middle classes for freedom from the control of the 
 
 1 For the earlier history of the theory, see Giercke, op. cit. ; 
 Figgis, From Gerson to Grotius, sp. lecture vii. ; Camb. Mod. Hist. 
 iii. 747 seq. ; Vinogradofi, Roman Law in Medieval Europe, pp. 97-101 
 et passim.
 
 HISTORICAL DEVELOPMENT 89 
 
 Crown, primarily in religious matters and thence more 
 generally, and among other things, in taxation. 1 It was 
 one of the chief duties of the King, in sixteenth-century 
 theory, to provide for religion and to put down schism ; 
 but from the Reformation this duty came to clash with 
 the demand of considerable classes for changes in the 
 established forms or for freedom to exercise their religion 
 as they deemed proper. To enforce this demand, the 
 dominance of Parliament over the King was asserted, and 
 to justify it appeal was made to the indefeasible rights 
 of the individual and to the traditional English idea of 
 individual freedom. In the struggle the office of the 
 Crown was limited and the rights of the dominant classes 
 asserted. The state, instead of being conceived, as the 
 Crown was in the sixteenth century, as an instrument 
 for the general regulation and defence of the whole 
 community, came to be thought of rather as an instru- 
 ment for protecting the rights of the members ; and 
 their duty to the state came to be limited in theory to 
 the payment of their share of the cost of maintaining 
 this protecting instrument. 
 
 The political theory which came to power in this 
 way is sometimes called individualistic, sometimes a 
 theory of natural rights. Both epithets mark certain of 
 its characteristics. 2 It was individualistic in its concep- 
 tion of society as made up of independent individuals, 
 each essentially self-interested, and, as Blackstone 3 put 
 it, without any absolute duties. The individual's 
 duties were of a negative character ultimately the 
 
 1 Acton, Lectures on Modern History, chaps, xi.-xiii. For the history 
 of the doctrine by which this control was asserted, and for the transi- 
 tion generally, see Figgis, Theory of the Divine Right of Kings. For 
 democratic political doctrine, see Gooch, History of English Democratic 
 Ideas in the Seventeenth Century. 
 
 2 The analysis here is of Locke's Two Treatises of Government, 
 1689 (Book ii.). See Camb. Mod. Hist. vi. chap. 23 for the general 
 course of political theory. 
 
 3 Wm. Blackstone, Commentaries on the laws of England, 1765, 
 i, 119-121.
 
 90 POLITICAL PHILOSOPHY XVII. CENTURY 
 
 duty not to infringe the rights of others. It was also 
 a theory of natural rights in that it endowed the 
 independent individuals with rights (of life, liberty and 
 property) which it conceived as unrelated to duties, as 
 prior to the existence of the state, and as the end which 
 the state existed to secure and protect. 
 
 But both these descriptions tend to give an inaccurate 
 account of the conception of society which was involved. 
 It is both more accurate and more suggestive to term it 
 a ' freeholder ' view a conception of society as made 
 up of men who are freeholders. 1 To call it individualistic 
 tends to slur the fact that the individual was not simply 
 thought of as independent and self-sufficient there 
 was the qualification that he was dependent on his society 
 as a whole for the protection of his rights and that he 
 had at least negative duties, if no functions. To call 
 it a theory of natural rights tends to slur the fact that 
 while it accepted property rights of the nature and 
 extent of those of English law, it only managed to do so 
 by the most fantastic proof that these were derivatives 
 from original natural rights. 2 In fact, it simply accepted 
 the existing organisation of society, as the sixteenth- 
 century functional theory had, without any real ex- 
 planation or justification of it. 3 The whole concep- 
 tion, with these qualifications, is better expressed by 
 the term * society of freeholders.' Had England been 
 ruled by a merchant instead of a landed aristocracy, the 
 term would have been ' free merchant adventurers.' 4 
 
 This description has the merit of indicating at once 
 
 1 This description was suggested to me by a phrase in some 
 political history, which I cannot now locate, that the theory of the 
 divine right of kings was succeeded by the theory of the divine right 
 of freeholders. 
 
 * Locke, chap. v. and sp. 44-50. 
 
 3 Indeed, with less justification than the sixteenth century 
 theory, which explained rights as conditions of duties. 
 
 4 The Standard of Equality, 1647, par. 4 (Harl. Miscl. ix. 114). 
 ' Our state is no galley wherein any slaves are bound to row at the 
 oars, but it is a ship wherein all the passengers are free merchant 
 adventurers, though according to their different proportions/
 
 4 SOCIETY OF FREEHOLDERS' 91 
 
 the truth and falsity of the conception, regarded as 
 an account of English society. In its strict form, such 
 as is found in Locke, every Englishman was supposed 
 to be an individual of the freeholder type ; but in fact, 
 nothing was more untrue. English society was not 
 made up of similar individuals each with similar property 
 and other rights ; a large part of it consisted of people 
 whose property rights were very small or non-existent. 
 This inconsistency of theory and fact led to an in- 
 definiteness of feeling which appears in the seventeenth 
 but was more typical of the eighteenth century. The 
 freeholder view of taxation required that every one 
 should pay taxation ; but men often felt that in some 
 way the theory did not satisfy them when applied 
 in practice ; whence a sentimental and philanthropic 
 pity for the poor, 1 very different from the more robust 
 attitude of the sixteenth century moralist. Many other 
 results were also connected with this inconsistency; 
 as an instance take the laisser faire attitude dominant 
 long before the day of the Philosophic Radicals 
 which assumed both that cotton operatives were 
 independent individuals in the same essential conditions 
 as mill-owners, and that small yeomen and wage-earning 
 cottagers could be treated, in enclosing village lands, 
 in the same way as lords of manors. It would probably 
 not be incorrect to say that the whole range of social 
 opinion in the eighteenth century was warped by this 
 falsity in the Lockean conception of society. 
 
 On the other hand, the freeholder conception of 
 society might be taken to mean a society of independent 
 landed proprietors who did not labour, but were 
 maintained by the labour of a class, outside that 
 society, which cultivated their lands. So understood 
 it is possible to say that English society, in a narrow 
 sense, was one of freeholders ; for the propertied 
 landed class practically monopolised political power. 2 
 
 1 e.g. ibid. par. 14. 
 
 * Edward Porritt, The Ur.reformed House of Commons.
 
 92 POLITICAL PHILOSOPHY XVII. CENTURY 
 
 It was not in this sense, of course, that Locke or general 
 opinion justified the political system of the day ; but 
 neither was this idea of society either unfamiliar or 
 undefended. By far the most striking instance occurs 
 in the debates of the Council of the Parliamentary 
 Army in 1647. l Ireton was the spokesman of the 
 officers in their opposition to a proposal of the Levellers 
 for manhood suffrage. No person, he contended, had 
 a right to an interest or share in the disposing or 
 determining the affairs of the kingdom unless he had 
 a permanent fixed interest in it ; such were men of 
 landed estates and members of trading corporations ; 
 these were the freemen of the state ; other men, 
 tenants, tradesmen, labourers and people of personal 
 property, had no fixed interest in the country, nothing 
 more than the interest of breathing ; and no doubt, 
 like aliens settling in England, they were to be given 
 the right to live and work here, but also, like aliens, 
 they were to accept the laws which those who had 
 the real interest in the country thought proper to make. 
 No doubt, Ireton's was an extreme statement of an 
 attitude which in a milder form was concerned simply 
 to secure rights of property ; but it is obvious that, in 
 the comparative absence of a functional view of society, 
 there must have been a strong tendency to regard the 
 non - propertied classes as merely subordinate. Sir 
 Thomas Smith, in Elizabeth's reign, said of the labouring 
 sort, that no account is made of them, but only to be 
 ruled. 2 The author of The Standard of Equality 3 
 described the poor as ' necessitous persons, un- 
 interested in the state, as obliged thereto by no con- 
 siderable fortune.' And Harrington, whose Oceana 
 contains a scheme for limiting the size of estates in 
 land, 4 nevertheless divides the people into two classes 
 
 1 The Clarke Papers, ed. Firth, i. 299-333 anc ^ Ixvii. Se 1- 
 
 * De Republica Anglorum, bk. i. chap. 24 (ed. Alston, p. 46). 
 
 He adds, ' and yet they be not altogether neglected ' ; they form 
 
 juries, are made churchwardens, etc. 
 
 3 Par. 37. Ed. Hy. Morley, pp. 78, 104.
 
 INFLUENCE ON SOCIAL OPINION 93 
 
 first, freemen or citizens, and second, servants who are 
 neither freemen nor citizens, ( in regard of the nature 
 of servitude, which is inconsistent with freedom or 
 participation of government in a commonwealth.' * 
 
 From the point of view of the governing landed 
 class, this conception of society had two lamentable 
 weaknesses. In the first place, it ignored the funda- 
 mental fact about a propertied class, namely, that it is 
 maintained by the labour of others. Such a class might 
 be necessary, but nothing could be more injurious 
 than the failure to take account of the economic basis 
 on which it rested. As an extreme result we even find 
 the idea that the man of property is performing a 
 service by spending his income. 2 In the second place, 
 it required of them the fulfilment of no duties or 
 functions in their society ; it merely gave them rights, 
 and their rights, like those of other men, were their 
 own, to be enjoyed for their own particular advantage 
 or pleasure. 
 
 In fact, of course, the landed gentry did perform 
 very important functions in their society ; they 
 governed it both locally and nationally ; and it is 
 scarcely doubtful that they considered it their office 
 
 1 The political philosophy of the seventeenth century which 
 Locke represents is sometimes regarded as an assertion of the rights 
 and citizenship of the poor man. Three points need to be noticed 
 in regard to this statement. First, the strict form of the Locke 
 theory did not endow the poor man with human worth and citizen- 
 ship, in the ethical sense, more fully than the sixteenth century 
 functional theory, which made the poor man the equal of princes in 
 the sight of God. Second, the Locke theory in its practical form, as 
 accepted by the officers of the army or the statesmen of the Revolu- 
 tion, and as tacitly supported by Locke, did not give the poor man 
 citizenship in the political sense of a share in political control of the 
 state ; and it fostered a hard individualistic attitude to the poor, 
 alien to the spirit of the sixteenth century philosophy. Third, the 
 Locke theory in its strict form gave to future democratic speculation 
 (of the late eighteenth century), familiar with the philosophy of 
 individual rights, the opening to argue that the poor man should 
 have political power on Locke's principles. The truth hi the first 
 statement is thus not large. 
 
 * e.g. Lord Kames, Sketches of the History of Man, 1774, p. 464.
 
 94 POLITICAL PHILOSOPHY AND TAXATION 
 
 to do so. But it is equally unquestionable that the 
 political theory had great influence both on their 
 opinion and practice. 1 At best, it failed to give any 
 theoretical or systematised intellectual support for 
 their performance of functions ; if they did their duty, 
 it was without the support of the view of society 
 which dominated political thought. At worst, it made 
 of government itself a mere means to secure the legal 
 rights or the private advantage of their class. And if 
 doctrine was not to demand of them duties, what 
 was ? The controlling power of the sixteenth century 
 Crown had for most purposes been overthrown even 
 more completely than the functional philosophy of 
 that time. 
 
 This, then, was the political philosophy one of the 
 results of which was the tax doctrine of the seventeenth 
 century, that all men should pay taxation. We shall 
 also find that it dominated all thinking on fundamental 
 tax questions in the eighteenth century. 
 
 1 The influence of political theory on taxation in the seventeenth 
 century has already been noticed, and, as regards the eighteenth, 
 is discussed in the following chapters. On the general subject of 
 this paragraph not much has yet been written ; but see the very 
 suggestive sketches in Leslie Stephen, The English Utilitarians, 
 vol. i. chap, i., and Temperley, The Age of Wai pole and the Pelhams 
 (Camb. Mod. History, vi. chap. ii. pp. 76-89) ; also S. and B. Webb, 
 English Local Government, vol. i., The County, passim. The Village 
 Labourer, by J. L. and B. Hammond, throws new and vivid light 
 upon a most important side of the rule and social attitude of the 
 landed class, but it seems to me difficult to accept many of the 
 general descriptions of that attitude. An interesting discussion, 
 which also brings out the limitation of our knowledge, occurs in 
 J. H. Rose, William Pitt and the National Revival, pp. 13-15. See 
 chap. ix. below.
 
 VI 
 
 THE EIGHTEENTH CENTURY WALPOLE 
 
 THE seventeenth century was occupied in reshaping an 
 antiquated system of taxation in order to meet the 
 financial needs of the changing political situation ; and 
 in it policy and opinion developed fari passu. The 
 eighteenth century inherited a system of taxation which 
 for a long time was fairly satisfactory from the merely 
 financial point of view ; and the developments of policy 
 which were ultimately demanded by a succession of 
 wars were preceded and prepared by a great development 
 of opinion. The eighteenth century therefore divides 
 itself naturally into two parts first, a period ending in 
 1776 with the publication of Adam Smith's Wealth 
 of Nations, during which comparatively few changes 
 were made in a stereotyped tax system but during which 
 tax doctrine was gradually welded into something 
 approaching a new orthodox canon ; and second, a 
 period beginning in 1 776 with the finance of the American 
 War of Independence, during which a large increase in 
 taxation took place, culminating in the imposition of 
 the Income Tax in 1799, and in which attempts were 
 made to stand by the rules of this canon. In this and 
 the following chapter we shall deal with the first of 
 these periods. 
 
 In contrast with the seventeenth century, when 
 what was done was at least as important and significant 
 as what was thought and said on taxation, the interest 
 of the period between 1713 and 1776 lies almost entirely 
 in what was thought and said. This was due not only 
 
 95
 
 96 
 
 to the fact that comparatively little was done beyond 
 maintaining the taxes which the seventeenth century- 
 handed on, but also to the divergence which existed 
 between policy and opinion on some of the most im- 
 portant questions. Opinion had no doubt some effect 
 on policy, 1 but in the main it was critical of a system 
 whose real support lay in the difficulty and uncertainty 
 of change, and it must be treated chiefly for its own sake 
 and for the influence it exercised on subsequent opinion 
 and policy. 
 
 The facts of the legislation may therefore be summar- 
 ized briefly. 2 The stereotyped Land Tax was in force 
 during the whole period at rates which averaged prac- 
 tically 33. in the (nominal rating). Apart from an 
 unsuccessful attempt by Walpole to keep the rate down 
 to is., 3 it fluctuated between 2s. in peace and 45. in war. 
 As debt increased, however, it became more difficult to 
 reduce the tax at the conclusion of war, and it was not 
 for some years after the close of the Seven Years' War 
 that the 45. rate was lowered, and then only to 33. , 4 
 below which it never afterwards fell. On the other 
 hand, the Excise duties on salt, candles, leather, soap 
 and coal were also in force during the whole period and 
 were neither increased nor reduced in rates. An 
 exception of little financial but much doctrinal im- 
 portance was the disappearance of the Salt Tax during 
 two years between 1730 and 1732. Similarly the duties 
 on paper, printed calico and starch remained unchanged. 
 The only important reductions were reductions in 
 Customs duties 5 Walpole's repeal of duties on manu- 
 factured exports and his reduction of those on imports of 
 
 1 The two chief aspects of the influence of opinion on policy 
 during this period were the re-imposition of the Salt Tax in 1732 and 
 the use of superfluities as the chief source of additional revenue 
 during the War of the Austrian Succession and the Seven Years' 
 War. 
 
 1 For the chronological record, and for references to the Statutes, 
 see Dowell, ii. 85-1 59. 
 
 3 The rate was is. in 1732 and 1733. Se e below. 
 
 1767. ' Dowell, ii. 91-6, and 18 Geo. II. c. 26.
 
 SUMMARY OF TAX SYSTEM 97 
 
 raw material, together with some reduction of excessive 
 duties on East India goods, particularly of the duty on 
 tea in 1745 in order to lessen smuggling in that com- 
 modity. Such additions to taxation as were made to 
 provide for the interest of new war loans were of two 
 sorts. 1 The first affected for the most part only the 
 rich and middle classes ; such were (i) increased 
 duties on imports like wine, groceries, tobacco and sugar *; 
 (2) new taxes, levied directly on the owner, in respect 
 of pleasure carriages and plate 3 ; and (3) increased deed 
 stamps, increased duties on newspapers and advertise- 
 ments, and a tax on offices. 4 The second sort fell on 
 all classes (i) additions to the house and window tax 
 graduated against large houses, 5 and (2) additions to 
 the beer and malt duties. 6 Finally, a new species of 
 tax appeared in this period, a spirit duty aimed for a 
 time entirely, and later partly, at the restriction of 
 consumption. 7 
 
 Opinion in this period falls into two well-marked 
 groups. On the one side is the tax policy represented 
 by Walpole, which was the culmination of the dominant 
 doctrines of the seventeenth century ; on the other side 
 is the opposition which his policy encountered, and 
 
 1 This classification neglects a few minor taxes, including a glass 
 duty (1746) and licence duties (1757). 
 
 * Wine, 1745 and 1763 ; an additional 5 per cent, subsidy on 
 imports, 1748 ; groceries, tobacco, sugar, East India goods, etc., 
 additional 5 percent.. 1759. 
 
 3 1747, 1756. * 1757 and 1758. 
 
 5 1747, 20 Geo. II. c. 3 ; 1758, 31 Geo. II. c. 22 ; 1761, 2 Geo. III. 
 c. 8. The only increase affecting the poor was is. per dwelling house 
 per annum, added in 1758 to the old 2S. The window tax did not 
 begin until the house had ten windows, later eight (1761). The 
 exemption of cottages from the house tax affected only cottages 
 exempted by reason of poverty from poor and church rates (see also 
 7 & 8 WU1. III. c. 1 8, 28). 
 
 Malt, 1760, 6Jd. to 9jd. per bushel ; strong beer, 1761, 53. to 
 8s. per barrel. In 1763, cider was added to the liquor excise, against 
 much opposition on administrative grounds ; it was repealed in 
 1766. 
 
 7 1736, 9 Geo. II. c. 23 ; 1743, 16 Geo. II. c. 8 ; 1751, 24 Geo. II. 
 c. 40 ; 1753, 26 Geo. II. c. 13. See below.
 
 98 WALPOLE'S TAX POLICY 
 
 which defined the main lines on which opinion was 
 developing in the eighteenth century. The time of 
 Walpole marks the transition between seventeenth and 
 eighteenth century views of taxation. 
 
 The seventeenth century discussed four main ques- 
 tions direct taxation, taxes on necessaries, taxes on 
 luxuries, and taxes in relation to trade policy. It 
 approved a direct tax on income but failed to achieve 
 it, and instead handed on a Land Tax ; it approved 
 taxes on necessaries and obtained them in various 
 Excise duties ; it approved taxes on luxuries, which it 
 obtained chiefly in Customs duties ; and it approved 
 certain kinds of taxes on foreign trade, to which it was 
 occupied in making Customs duties conform. Walpole's 
 policy touched all these questions, and attempted, in 
 the tax situation of his day, to apply to them the essential 
 ideas which had motived seventeenth century policy. 
 In the first place, adopting the generally accepted 
 principles of Mercantile trade policy in relation to 
 Customs, he reduced import duties on raw material 
 and carried to completion the abolition of all duties on 
 the export of English manufactures. 1 In the second 
 place, he treated Customs duties on imported super- 
 fluities as an approved and permanent part of the 
 ordinary tax revenue ; he provided for the more efficient 
 administration of the tea and coffee duties in 1723, and 
 proposed but failed to carry similar improvements in 
 1733 as regards wine and tobacco 2 ; and he declared 
 in answer to opposition from the merchants that a tax 
 on a luxury so little essential to the support or real 
 comfort of human life as tobacco was the most obvious of 
 all forms of taxation. 3 In the third place, he regarded 
 an Excise on a necessary such as salt as an equitably 
 
 1 Dowell, ii. 92 sea. ; King's speech of 1721 (Coxe's Memoirs 
 of Walpole, i. 163) ; 8 Geo. I. c. 15. 
 
 1 Dowell, ii. 97 seq. ; Cobbett, Parl. Hist., viii. 1269 seq. 
 
 8 Cobbett, p. 1270; cf. [Walpole] Some General Considerations 
 concerning the Alteration and Improvement of Public Revenue, 1733, 
 T. 1744 (5), PP-
 
 1732 99 
 
 distributed tax, and in 1732 deliberately reimposed this 
 tax, which had been taken off in 1730, in order to enable 
 him to reduce the Land Tax. 1 Finally, basing himself 
 on the admitted injustice of the Land Tax in falling 
 entirely or almost entirely on one class, the landlords, 
 he proposed that it should be reduced and perhaps 
 abolished, and that the revenue so lost should be made 
 up by this Salt Tax and by the increased revenue to 
 be expected from changes in Customs administration. 
 In 1732 he carried the first part of this plan of com- 
 pensation and reduced the Land Tax to is. ; but such 
 an outcry was raised against the second part, known as 
 the Excise scheme of 1733, that he was forced to drop 
 it. The Land Tax plan, in consequence, also failed. 2 
 
 It is significant of the neglect into which the history 
 of the more fundamental aspects of taxation has fallen, 
 that while Walpole's dealings with the Customs are 
 well known to students, and while the spectacular history 
 of his Excise scheme is even famous, the other portion 
 of his policy, viz. the substitution of a Salt Tax for is. of 
 Land Tax in 1732, is almost universally ignored. 3 In 
 tax interest, nevertheless, it altogether dwarfs the other 
 portions of his policy. In his tariff policy, Walpole 
 merely adopted ideas about which there was practically 
 no dispute ; and in the Excise scheme he proposed a 
 sensible administrative reform which was merely dis- 
 torted, to a great extent by political partisanship, into an 
 attack on the liberties of the subject in general and of 
 the trading class in particular. But in 1732 there was 
 no distortion of the issue ; it raised all the most funda- 
 mental questions in taxation and was recognized on 
 both sides to do so ; and Walpole's policy was strenuously 
 opposed on the real merits so far as opinion at that time 
 
 1 Cobbett, pp. 943-5. 2 Dowell, loc. cit. 
 
 3 An exception is Brisco, The Economic Policy of Robert Walpole, 
 pp. 98-106, 120-5. I am n t in entire agreement with Mr. Brisco 
 on all points, but my account is written from a somewhat different 
 point of view.
 
 ioo WALPOLE 
 
 understood them. The issue, moreover, was a distributive 
 issue and little more ; it was not complicated, as tax 
 issues usually are, by the necessity to raise more money 
 in some way ; it was simply a question of deliberately 
 altering the existing distribution of taxation. In the 
 relatively full records of the policy of 1732 we obtain an 
 unrivalled view of the chief elements of distributive 
 opinion in the seventeenth and eighteenth centuries. 
 
 Added point was given to the episope of 1732 by 
 the fact that two years earlier Parliament employed 
 a surplus on the budget to repeal the Salt Tax as the 
 most suitable way of relieving the poor. The King's 
 speech of I3th January I73O 1 recommended 'giving 
 ease where the duties are most grievous,' and added 
 that the King looked ' with compassion upon the 
 hardships of the poor artificers and manufacturers.' 
 It appears z that in pursuance of this recommendation 
 it was first proposed in the Commons that the tax on 
 candles should be taken off. A counter - proposal, 
 however, was made to repeal the Salt Tax. The debate 
 accepted the standpoint of the King's speech that the 
 poor were objects of compassion, 3 and the question 
 was whether the users of salt or the users of candles 
 were * the greater objects of pity and compassion.' 
 It was pointed out that the Candle Tax was paid very 
 largely by people of condition as well as by poor 
 artificers ; and that its repeal would be little or no 
 relief to country people, * the poor labourer and the 
 
 1 Cobbett, p. 766. 
 
 * A report of the debate of 1730 was published in The Political 
 State of Great Britain for February 1732, vol. 43, pp. 163-7 (PP- 
 3400). It gives a close, possibly a full, report of the speech of the 
 proposer of Salt Tax rather than Candle Tax, and a summary of 
 the ensuing discussion. 
 
 3 That this standpoint was common after the Peace of Utrecht 
 is obvious from pamphlets. See The State and Condition of our Taxes 
 considered, or a Proposal for a Tax upon Funds . . . 1714, T. 1990 
 (20), p. 1 6 ; [A. Boyer] Animadversions and Observations . . . to 
 which is added a new Proposition to raise Money for the Use of the 
 Public, 1718, 8223. d. 22, p. 46; An Essay on Ways and Means . . , 
 1726, 8245 b. 37, p. 8.
 
 THE SALT TAX 101 
 
 poor farmer,' who scarcely used candles. Salt Tax, 
 on the other hand, was paid by the poor everywhere ; 
 it materially affected the price ; and whereas the 
 gentleman used far more candles than any farmer, the 
 poor husbandman, in salting his produce, used more 
 salt than the gentleman. On these grounds, and as a 
 benefit to the salt trade and to shipping, the House 
 decided in favour of repealing the Salt Tax. 
 
 It was typical of the absence of any definitely dis- 
 tributive principle in the opposition to taxes on 
 necessaries, that Walpole should have been prepared to 
 propose a re-imposition of the Salt Tax 1 in 1732 in 
 substitution of Land Tax, and to defend his proposal 
 as equitable between rich and poor. His defence 
 consisted in a restatement of a view of taxation with 
 which we are now familiar, but of which this is the 
 most complete expression which is preserved. 2 In the 
 first place, he contended that every one should pay 
 taxation since every one shared in the benefit of the 
 public service provided by the money raised. Con- 
 sequently the poor man should pay as well as the rich 
 man. As one of the pamphlets which supported 
 Walpole put it, * if he (the labourer) has no estate, 
 yet he owes the protection of his life and liberty to 
 the Government and should consequently contribute 
 his mite to its support.' z In the second place, Walpole 
 defined the standard according to which all men should 
 
 1 Mr. Brisco, pp. 99-100, has made an attempt to explain why 
 Walpole should have abolished the Salt Tax in 1730 and revived it in 
 1732. But we do not know that the abolition of 1730 was Walpole's 
 idea ; it is more probable, from the terms of the King's speech and 
 from the debates of 1730 and 1732, that he wished to abolish the 
 Candle Tax. 
 
 z Cobbett, pp. 943 seq. and 959 seq. Reports of these debates 
 are included in several collections, e.g. A Collection of the Parl. 
 Debates in England, 1688-1741 (pubd. 1741), x. 143-273. The 
 original report is in the Gentleman's Magazine, ii. 991 seq. I see no 
 reason to doubt their substantial accuracy. They are, of course, 
 not verbatim, except in one or two cases. Walpole's speeches as 
 given in Cobbett are revised from MS. notes discovered by Coxe. 
 
 3 The Case of the Salt Duty and the Land Tax offered to the Con- 
 sideration of Every Freeholder, 1732, 103. i. 21, p. 13.
 
 102 WALPOLE 
 
 pay as being in proportion to the benefit each receives 
 by reason of the tax. He did not, however, consider 
 how the benefit was distributed among different people, 
 and the actual standard he had in mind and by which 
 he expressly justified the Salt Tax was means or, more 
 vaguely, * circumstances and condition in life.' x He 
 was thinking of an ability standard, and it was not 
 necessary for his purpose to define it very exactly. 
 In the third place, coming to the problem of how to 
 get taxes conforming to these principles, he laid it 
 down as obvious that any tax which was to be just 
 must necessarily be general otherwise how make every 
 one contribute ? He simply accepted unthinkingly the 
 non-compensatory view of the seventeenth century 
 which regarded each tax by itself and required it to 
 be equitable in itself. It never occurred to him that 
 an equitable system of taxation might be devised in 
 which every tax would be distributively unfair. Taxa- 
 tion was for Walpole a mere aggregate of separate 
 taxes. Two consequences at once followed. Although 
 he was proposing to alter the distribution of taxation, 
 he did not first set out to consider how taxation as a 
 whole was distributed ; and the Land Tax, which fell 
 almost entirely on one class, was condemned as inequit- 
 able out of hand it was a partial and not a general 
 tax. 2 Finally, he contended, the Salt Tax was equitably 
 distributed and the substitution he proposed was 
 therefore the substitution of a just for an unjust tax. 
 * The duty upon salt is a tax that every man in the 
 nation contributes to according to his circumstances 
 and condition in life ; every subject contributes some- 
 thing ; if he be a poor man he contributes so small a 
 trifle it will hardly bear a name ; if he be rich he lives 
 more luxuriously and consequently contributes more ; 
 and if he be a man of a great estate, he keeps a great 
 number of servants and must therefore contribute a 
 great deal.' 3 Walpole reiterated this in a second 
 1 Cobbett, pp. 944, 968. * Pp. 944-5. " P. 944.
 
 THEORY OF TAXATION 103 
 
 speech, and summed up his proposal thus : * It is, I 
 may say, self-evident that it (the Salt Tax) is a more 
 just, a more equal and a better proportioned tax than 
 any that is raised or can be contrived to be raised upon 
 the people of this nation. The Land Tax, upon the 
 other hand, is the most unequal, the most grievous 
 and the most oppressive tax that ever was raised in 
 this country ; it is a tax which never ought to be raised 
 but in times of the most extreme necessity.' 1 
 
 Walpole's motion was carried in the House of 
 Commons by 225 to 187 on 7th February, 205 to 176 
 on loth, and 209 to 154 on 2nd March (second reading), 
 and in the House of Lords by 40 to 25 on 27th March. 2 
 He was ably supported by his brother Horatio, 3 by 
 the writers of two anonymous pamphlets 4 and by the 
 Duke of Newcastle, 5 all of whom presented the same 
 case. 
 
 In spite of the monstrous suggestion (as it seems to us) 
 that a Salt Tax makes rich and poor pay proportionately 
 to their means, there is no reason to suppose that Walpole 
 was dishonest in his presentation of his case, or that he 
 was merely juggling with ideas which did not set out 
 his real view of his policy. Any such suggestion is 
 quite inconsistent with his speeches and with the in- 
 ability of the opposition to meet them directly. It 
 receives colour, however, from a real inconsistency in 
 the views of Walpole and of the seventeenth century 
 which it is necessary to understand. While in 1732 he 
 argued that the tax on salt was equitable, in 1733 he 
 repudiated the suggestion that he had ever had any 
 intention of imposing an excise on food and all the 
 necessaries of life, and declared that taxes on luxuries 
 such as wine and tobacco were the ideal form of taxa- 
 
 1 Cobbett, pp. 968 and 969. * Pp. 987, 1025, 1056. 
 
 3 P. 950 seq. and p. 1048. 
 
 4 The Case of the Salt Duty, etc., 1732, and The Letter to a Free- 
 holder on the Late Reduction of the Land Tax to One Shilling in the Pound, 
 1732, 104. d. 9. 
 
 6 Cobbett, pp. 950, seq. and p. 1048.
 
 104 WALPOLE 
 
 tion. 1 Premising the fact that a similar repudiation 
 was clearly made in the debates of I732, 2 we have to 
 notice that the seventeenth century view of taxation 
 which was taken over by Walpole accepted as equitable 
 both taxes on necessaries and taxes on luxuries. Taxes 
 on necessaries were approved because they made every one 
 pay in proportion, as it was supposed, to his ability. 
 Taxes on luxuries were approved on various non-dis- 
 tributive grounds and to some extent on the distributive 
 ground that the use of the taxed luxury was a test of 
 his ability which the payer himself provided ; but the 
 real ground of distributive or quasi-distributive approval 
 was that they laid no or almost no burden on the poor 
 man. In other words, while in regard to taxes on 
 necessaries the taxation of the poor was defended, in 
 regard to taxes on luxuries men were quite willing to 
 accept the compassionate plea that the poor should be 
 exempted. There was in this a real if not a formal 
 inconsistency indicating a failure even on the part of 
 supporters of the taxation of the poor to reconcile 
 their theory and their sentiment, and it was one which 
 long subsisted ; but it does not imply any dishonest 
 combination of positions. It is altogether a mistake, 
 therefore, to suppose that when Walpole praised taxes 
 on luxuries in 1733 he was recanting what he said on 
 the Salt Tax in 1732.* 
 
 The opposition to Walpole's proposal was represented 
 chiefly by Walter Plumer, Wyndham, and Pulteney in 
 the Commons, and by Winchelsea, Bathurst, and Carteret 
 in the Lords. Many objections to the reimposition of 
 
 1 Cobbett, p. 1270, and [Walpole] Some General Considerations, 
 etc., 1733, pp. 6, 16-17. 
 
 z Cobbett, pp. 951, 960-1. 
 
 * Apart from the fact that he ignores the position set out here, 
 Mr. Brisco seems to take too cataclysmic a view of the change in 
 opinion on the subject of excises on necessaries (pp. 123-4). 
 Moreover, the change was not due to Walpole's position having 
 been answered, but to the insistence on different ideas which came 
 to have greater influence. See below.
 
 OPPOSITION COMPASSION ON POOR 105 
 
 the Salt Tax were urged, 1 but two stand out as important 
 elements of opinion and as general grounds of opposition 
 to excises on necessaries. The first was that the Salt 
 duty was grievous to the poor ; the second that it was 
 injurious to trade and manufactures. Both were used 
 by the same men, and it was chiefly the conjunction of 
 these two lines of opinion that determined the eighteenth 
 century view of tax questions. 
 
 The objection to the Salt Tax in the interest of the 
 poor was the plea for compassion which we have already 
 discussed in the seventeenth century and in 1730. 
 Plumer 2 described Walpole's proposal as one * to grind 
 the face of the poor in order to relieve a few of the 
 rich.' But Pulteney's speech best defined the point of 
 view. 3 He calculated that the duty would make a 
 poor man with a wife and family pay 45. 6d. a year (is. a 
 head). Then he appealed to the House : ( Such a 
 thing as a shilling or a crown may be looked upon as a 
 trifle by a gentleman of a large estate and easy circum- 
 stances, but a poor man feels sometimes severely the 
 want of a shilling. . . . Let us but imagine ourselves in 
 the condition of a poor labourer with a wife and three 
 children, almost the whole of the wife's time taken up 
 in looking after the children, and the husband working 
 for a shilling a day, and we shall easily see how hard it 
 is to make such a poor man pay a tax of four or five 
 shillings a year for the salt he must make use of for the 
 scanty support of himself and family.' ' How cruel,' 
 he repeated later, * is it to take four or five shillings a 
 
 1 Grounds of opposition in addition to those discussed at length 
 below are set out briefly in the Lords' Protest (Cobbett, pp. 1061-3). 
 They were : prelude to a general excise ; danger to constitutional 
 liberty ; unfavourable to development of land ; cost of collection ; 
 frauds ; no real relief to landlords, since tenant's cost of production 
 would be increased (e.g. Carteret, p. 1042) ; all taxes fall ultimately 
 on land, and so no real relief (discussed in next chapter) ; unfair 
 between England and Scotland. None of these contentions was of 
 much importance, and most of them were easily answered by Wai- 
 pole and his brother (pp. 950 seq., 959 seq.}. 
 
 2 Cobbett, p. 946. Also pp. 956, 1040, 1041. 
 8 Pp. 981-2, 987.
 
 io6 WALPOLE 
 
 year away from the support of such a poor family. ... I 
 hope every man that hears me will allow his pity and 
 compassion to exert itself to its utmost weight. I hope 
 every man will consider upon which side of the present 
 question are the cries of the poor and the wretched and 
 the blessings of those that are yet unborn.' 
 
 The answer of Walpole's side to this kind of argument 
 was that experience of the old Salt Tax proved that it 
 was not burdensome upon the people, 1 and indeed that 
 the duty would be paid by such a multitude ' that no 
 single man can any way feel what he pays thereto.' 2 
 But it was more to the point that whether the tax was 
 or was not burdensome to the poor did not answer 
 Walpole's contention that it was an equitable tax. It 
 is interesting to notice the extent to which the opposition 
 attempted to translate their feeling against taxes on the 
 poor into direct answers to Walpole's reasoning. To 
 the initial position that the poor man should pay taxation 
 with other men they were unable to find any reply. 
 They merely tried to ignore it. And the reason is well 
 illustrated by an exception to this attitude. Lord 
 Bathurst, who condemned the proposed tax as most 
 unjust and oppressive, was prepared to admit that every 
 one should pay according to the benefit he received. 3 
 But, he said, ' in all cases it is hard, it is cruel to tax the 
 poor journeymen and day labourers, because it is not 
 to be presumed that they can get anything more than 
 bare subsistence by their daily labour ; the profits that 
 may be made go all to the benefit of the master who 
 employs them. He it is that has the whole benefit of 
 their labour and therefore ought to pay the taxes.' 
 This was an attempt to rebut the Lockean conclusion, 
 not by denying that it follows that every one should pay 
 taxation because every one benefits, but by denying that 
 some benefit at all. It amounted practically to an 
 assertion that the poor man is a beast of burden and hence 
 cannot and should not pay taxation. But while, as we 
 1 Cobbett, pp. 950, 1048. 2 Pp. 950, 969. 3 Pp. 1050-1.
 
 COMMERCIAL OPPOSITION 107 
 
 shall see, this feeling had considerable influence in the 
 eighteenth century, it was both too clearly false and too 
 destructive of the current political theory of the govern- 
 ing class to find explicit acceptance in Parliament. To 
 Walpole's second position that a just tax must be a 
 general tax and equitable by itself, the opposition had 
 similarly no answer, except that a tax on luxuries, which 
 is not a general tax, is the best 1 ; and they admitted 
 the injustice of the Land Tax. 2 And to the third 
 position, that the Salt Tax falls on different men in 
 proportion to their ability, they failed to find any answer 
 which applied to taxes on necessaries generally, but spent 
 themselves in asserting that in the case of salt poor men 
 used more than rich, on account of the salted fish and 
 meat they were compelled to use. 3 This, of course, was 
 not admitted by Walpole's side and is improbable ; 
 but what the facts were it is impossible to know and 
 difficult to estimate. 4 Moreover, there was a tendency 
 to reduce even the contention that the Salt Tax was in 
 consequence grossly unfair, to a mere plea for compassion. 6 
 Opposition to excises on necessaries in the interest of 
 the poor thus remained in the eighteenth, as it had been 
 in the seventeenth century, an emotional rather than a 
 doctrinal opposition. It opposed a feeling to a political 
 theory, and it was so much under the influence of that 
 theory that it was unable to define the real point at 
 issue. 
 
 The second important ground of opposition to the 
 
 1 Plumer, p. 946. 
 
 2 E.g. [Pulteney] The Case of the Revival of the Salt Duty . . . 
 1732, 884, k. 1 6, pp. 6, 46-7. 
 
 * Wyndham, p. 1020; Carteret, p. 1042; Bathurst, p. 1051. 
 The argument was adduced late in the discussion, and we have no 
 direct criticism of it by Walpole or his brother. 
 
 * In 1756 Joseph Massie calculated that a gentleman of ^1000 
 a year paid 143. 2d., a farmer spending 100 a. year 6s. 8d., an agri- 
 cultural labourer earning 55. a week 33. 4d., and an artisan earning 
 from 73. 6d. to 128. a week 2S. 6d., to the salt tax in a year (Calcula- 
 tion of Taxes . . ., 8226, b. 15). 
 
 6 Wyndham, p. 1020.
 
 io8 WALPOLE 
 
 Salt Tax was as hard and abstractly theoretical as the 
 first was vague and compassionate. It was the doctrine 
 that trade and particularly export trade would be in- 
 jured by the tax, because wages would rise ; and it 
 was based on the theory that a tax on a necessary of life 
 is not really paid by the poor workman but by his em- 
 ployer, who has to raise wages. 1 Instead of imposing a 
 further tax on a necessary, all such taxes should on the 
 contrary be removed. The wages of the labouring 
 poor would thus be reduced without laying any hard- 
 ship on them, and this would ' not only be a great 
 ease to the landed man who employs them, but give new 
 life to our trade and encourage the exportation of our 
 manufactures on which it depends.' 2 
 
 Commercial ideas had always influenced Customs 
 duties, but now for the first time they emerge as a 
 powerful, if indirect, influence on opinion concerning 
 the central problems of the distribution of taxation. 
 They were powerful because they had the backing of 
 the trading class and because that class was vigorous in 
 its expression of them. This is clear in 1732 from the 
 speeches of its mouthpieces in Parliament. As we have 
 noticed, the opposition could not deny that the Land 
 Tax was unfair to the landed class and practically ex- 
 empted traders and moneyed men. In this new doctrine 
 these classes had their answer. They said in effect that 
 Walpole's proposal was the substitution for an unjust 
 tax on land of a ruinous tax on trade. But it was still 
 clearer in 1733, in the clamour over the Excise scheme, 
 which again seemed to them to be a sacrifice of the 
 trading classes (this time in the matter of their liberty) 
 for the benefit of the landed men. Apart from the 
 mere partisan standpoint of the Parliamentary opposition, 
 
 1 Cobbett ; Plumer, p. 947, Wyndham, p. 954-5, Pulteney, p. 
 982, Bathurst, p. 1051. The pamphlets of 1733 (for which see list 
 in Seligman, Incidence, Bibliography) make incidental reference to 
 the doctrine. See also Gentleman s Magazine, June 1732, ii. 813. 
 
 J [Pulteney] The Case of the Revival of the Salt Duty, 1732, p. 
 54-
 
 TAXES AND WAGES 109 
 
 this was the chief significance of the struggle of 1733. * 
 It was a fight between the landed and the trading classes, 
 in which circumstances enabled the latter to win. 
 Class feeling, too, was stirred on both sides. To one 
 writer the proposal appeared to amount to relieving 
 the wealthy useless part of society by burdening the 
 body of the people ' whose arts and labour alone support 
 the kingdom.' 2 
 
 The theory on which this commercial opposition 
 was based the theory, namely, that a tax on necessaries 
 raises wages is of no small importance in the history 
 of social opinion. It was taken over from occasional 
 speculation of the seventeenth century, 3 and was an 
 important influence down to the repeal of the Corn 
 Laws in 1846.* We shall have to deal with it in more 
 detail in the next chapter, but two important points about 
 it must be emphasized with reference to the debates of 
 1732. In the first place, it was wholly inconsistent 
 with the former ground on which the Salt Tax was 
 opposed namely, the grievousness of the burden to 
 the poor man. For it was now declared that not the 
 poor man but his employer really paid the tax. And 
 yet the same speakers in Parliament used both arguments 
 that the Salt Tax was cruel to the poor because they 
 paid it, and was injurious to trade because they did not 
 pay it. 5 This inconsistency runs right through the 
 eighteenth century, and marks an important cleavage 
 
 1 The third important issue was the fear of the landed men 
 who were assessed at low rates to Land Tax that after removal the 
 tax would be reformed and laid on real rents. See Dowell, ii. 102. 
 
 2 The Nature of the Present Excise . . ., 1733, 104. d. 19, p. 28-9. 
 Also A Letter of Advice to the Rev. Mr. Scurlock . . ., 1733, E. 2202 
 (5); Englishmen's Eyes Opened . . ., 1733, T. 1618 (4), p. 2; An 
 Argument against Excises . . ., by Caleb Danvers, 1733, 518. h. 8 (i), 
 pp. 12, 14, 71. 
 
 3 See note i , p. 80. 
 
 4 Any one who is interested both in economic ideas and in party 
 politics will find considerable interest in the part which this doctrine 
 played on both sides of the Corn Law controversy from the time 
 Cobden entered it till 1846. See chiefly Hansard's Debates. 
 
 1 See references to note i, p. 108,
 
 I io WALPOLE 
 
 of attitude towards the poor perhaps in a very rough 
 way the attitude of the landed and the commercial 
 classes l as well as a certain superficiality of thought 
 which was characteristic of that century. In the 
 second place, the view of the poor which was involved 
 or tended to be involved in this theory was significant. 
 The theory said that the poor man shifted a tax on 
 necessaries because, living normally at the margin of 
 subsistence, he could not pay it and be independent. 
 Lord Bathurst, for instance, declared that any scheme 
 for taxing the poor ' is not only cruel but it is impractic- 
 able, because if by such taxes we enhance the price of 
 the very necessaries of life, they cannot possibly subsist 
 upon the same wages they subsisted on formerly ; they 
 must starve or otherwise their wages must be raised, and 
 thus at last the master that employs them must pay 
 the taxes that are laid upon the poor he employs.' 2 
 Now impliedly this view of the poor approached very 
 near to that position which Bathurst, as we noticed 
 before, stated explicitly namely, that the poor man 
 received no benefit from the State. He tended to be 
 conceived as a different kind of being from the taxable 
 citizen of means, and much more like a beast of burden 
 or a mere factor of production. This was the second 
 indirect answer of the eighteenth century to the theory 
 that every man should pay taxation, and the real 
 nemesis of the * freeholder ' conception of English 
 society. The purpose and therefore the test of citizen- 
 ship was thought of as the enjoyment of rights ; but 
 compared with men of property the poor man seemed 
 to live rather for the benefit of others than for the 
 enjoyment of rights of his own. 
 
 1 It is, of course, impossible to attribute any doctrine to a class 
 as a whole. It will be clear from next chapter, however, that the 
 theory that wages rise with a tax on necessaries was widely held by 
 men who were interested in trading and later in economic questions. 
 The attribution of the compassionate dislike to taxes on the poor to 
 the landed class is suggested by the debates of William III., of 1730 
 and 1732, and specially by those of 1776-99, for which see Chap. VIII. 
 
 Cobbett, p. 1051,
 
 VIEWS OF TAXATION OF POOR m 
 
 It is important to notice that this view of the poor 
 and this theory of the incidence of taxes on necessaries, 
 while influential with one side, were explicitly repudiated 
 in 1732 by the other. For Walpole, the poor man was 
 a taxable citizen as much as any other, and along with 
 his brother he denied that taxes on necessaries raised 
 wages or injured trade. They pointed out very 
 properly that our trade never flourished more than 
 in the thirty-four years during the existence of the old 
 Salt Tax, and that wages did not diminish when it was 
 removed in I73O. 1 Later on we shall come upon 
 attempts to defend the theory more completely, but 
 there is no doubt that in origin and always in essence 
 it was a mere assumption or prejudice based on vague 
 ideas of a margin of subsistence and fostered by the gulf 
 between the life of the rich man and that of the labourer. 
 But it seemed too natural to many people at that time 
 for Walpole's criticism to overthrow it. 
 
 In 1732 the three ideas which had most influence 
 on eighteenth century views on taxation were all 
 represented. They were, first, that every one should 
 pay taxation, including the poor man ; second, that 
 the poor man should, if possible, be exempted from 
 taxation on compassionate grounds ; and third, that 
 the necessaries of his subsistence should be exempted 
 to prevent high wages and for the benefit of 
 trade. 
 
 The second and third of these ideas, although 
 inconsistent, both led to the condemnation of taxes 
 on necessaries, and this condemnation came gradually 
 to be almost universally accepted and constituted the 
 most important element of the eighteenth century 
 view of the ideal tax, the tax on luxuries. This result 
 was achieved, however, in spite of and not by over- 
 throwing the doctrine that every man should pay 
 taxation and that a just tax must be general. The new 
 1 Cobbett, pp. 950, 969.
 
 112 WALPOLE 
 
 theory was therefore not directly the result of a view 
 of distributive equity in taxation but rather of two 
 ideas of non-tax policy, compassion for the poor and 
 the advantage of low wages in the interest of 
 trade.
 
 THE mark of the tax literature of this period is the 
 influence of commercial interests and ideas. This 
 influence did not sum up the period ; it is clear, particu- 
 larly from the subsequent history, that it was matched 
 by an increase in the influence of compassionate or 
 philanthropic ideas, and it did not in any way explain, 
 for instance, the new policy regarding spirits. Never- 
 theless, this influence was the distinctive feature of 
 the period ; it was the new influence of the time, and 
 it affected doctrine on so many questions that it provides 
 a clue to the meaning of a great mass of discussion 
 which otherwise would seem both superficial and 
 vacillating. 
 
 By far the most important effect of this influence 
 was the condemnation of excises on necessaries on the 
 the ground that they raise wages and are prejudicial 
 to trade. Many striking statements of this doctrine 
 are to be found subsequent to the debates of 1732. 
 The burden of Jacob Vanderlint's long pamphlet of 
 1734 was the necessity for reducing the rates of labour 
 which depended on the price of victuals and drink, in 
 order to increase our foreign and domestic trade. 1 In 
 1737, Sir John Barnard, merchant and Lord Mayor of 
 the City of London, whose reputation for financial 
 capacity was second only to Walpole's, proposed in the 
 
 1 Jacob Vanderlint, Money answers all Things . . . 1734, 104. g. 10, 
 preface, pp. 6, 7, etc. 
 8
 
 House of Commons l that the savings which would 
 result from his scheme for the reduction of the interest 
 on the debt, should be employed to take off taxes on 
 necessaries, on the one ground of the ' increase or 
 rather the revival of our trade.' The power and 
 riches of a country, he held, depended on its ability to 
 sell its manufactures cheaper than its neighbours, which 
 in its turn depended on the price of labour (there being 
 little difference in the cost of material), which again 
 depended on the price of those provisions necessary 
 for the convenient support of the labourers. Hence 
 the necessity for abolishing taxes on necessaries. Only 
 a few speeches in the ensuing debate are reported, 
 but they all ignore the question of the poor paying 
 such taxes. It was a question of trade, not of the poor. 
 As one speaker 2 said, i in all countries where the poor 
 have any employment they are pretty near equally 
 poor ; they neither get nor expect more than a com- 
 fortable subsistence by their labour, and if you enhance 
 the means of that subsistence by taxes upon the 
 necessaries or conveniences of life, their master must 
 increase their wages.' The motion was defeated, 
 apparently on grounds of procedure, by 200 to 142. 
 In 1743, Sir Matthew Decker, a retired merchant, a 
 director of the East India Company and a member of 
 Parliament, published his well-known scheme for a 
 single tax on houses. 3 His aim was to prevent smuggling 
 and to free trade from the heavy load of duties which 
 burdened and endangered it ; and for the advantage 
 of trade he was careful to propose that the houses of 
 some half a million of the poorest people should be 
 exempted from his proposed taxes 4 * that thereby 
 
 1 Cobbett, Par/. Hist., x. 155 seq. For short biographies of 
 Barnard and those who follow, see Diet, of Nat. Biography. 
 
 a Cobbett, x. 173. 
 
 3 [Sir Matthew Decker] Serious Considerations . . . 1743, 1093. 
 d. 101. For the contemporary interest in the pamphlet see 
 Gentleman's Magazine, 13. 653
 
 1 TAXES ON NECESSARIES RAISE WAGES ' 115 
 
 their labour might become so much the cheaper, and 
 the goods which are the product of their labour might 
 by this means be sold at as low or even a lower rate 
 than can be afforded by other nations.' One of the 
 most absolute assertions of the doctrine was made by 
 Francis Fauquier, the son of a director of the Bank of 
 England, and himself a director of the South Sea Company, 
 and later Lieutenant-Governor of Virginia. In 1756 
 he published an essay on the best ways of raising money 
 for the war, 1 the whole burden of which was contained 
 in the preliminary maxim that ' the poor do not, never 
 have nor ever possibly can pay any tax whatever. A 
 man that has nothing can pay nothing. . . . He that 
 works for his living will and must live by his labour . . . 
 and equally so whether provisions are dear or cheap.' 
 Ultimately, therefore, it is the man of fortune who 
 pays all the taxes, and it is a matter of great indifference 
 by what particular taxes he is made to pay. Finally, 
 to end the list of illustrations, Malachy Postlethwayt, 
 as was natural, incorporated the doctrine in his Dictionary 
 of Trade and Commerce? Since * people without property 
 who work for their daily bread ' ' live but from hand 
 to mouth, whatever is laid on them they must therefore 
 shift off or they cannot subsist.' 
 
 Many other instances of this idea could be given, 3 
 
 1 F. F(auquier), An Essay on Ways and Means for Raising Money 
 for the Support of the Present War without Increasing the Public Debts, 
 1756, E. 2213 (3), pp. 16, 17, 18, 20, 22, postscript to 2nd ed., T. 1627 
 
 (3), P- 37-8- 
 
 * The Universal Dictionary of Trade and Commerce, vol. ii. 1755, 
 14,000, e. 47, p. 3. 
 
 3 See, e.g., Gentleman's Magazine, 1732, ii. 813 ; An Inquiry into 
 the Causes of the Increase and Miseries of the Poor of England, 1738, 
 1 04. n. 9, pp. i8,7g;An Essay on the Inequality of our Present Taxes . . . , 
 1746, 104, d. 8 (3), p. 78 ; [Josiah Tucker] A Brief Essay . . . (with) 
 an Appendix . . ., 1750, 104, h. 10, pp. 38-9, 46-7 Tucker was 
 rather indefinite on this question ; Debate on Linen duties, 1756, 
 Cobbett, Parl. Hist., 15, 674-5 (speech of Vyner) ; Thoughts on the 
 Pernicious Consequences of Borrowing Money . . ., 1756, 104, c. 46, 
 p. 12 ; Thoughts on the Causes and Consequences of the Present High 
 Price of Provisions, 1767, 1027, b. 16 (2), pp. 4-5 ; Lord Karaes, Sketches 
 of the History of Man, 1774 (722, k. 18), viii., Finances (pp. 465-6, 470,
 
 ii6 WALPOLE TO ADAM SMITH 
 
 and it may be noted in passing that it was involved in 
 the theory, to which occasional reference was made but 
 which had little importance in England, that all taxes 
 fall ultimately on the land. 1 But the best proof of its 
 influence was the controversy about it which took place 
 in the third quarter of the century. Up to about 1750 
 the doctrine that the poor man shifts a tax on necessaries 
 was put forward without any serious explanation or 
 understanding. It appeared self-evident. Vaguely, it 
 seemed that the labourer and artisan lived at a subsist- 
 ence minimum below which they could not or for some 
 reason would not go. 2 But this assumption was now 
 attacked in two forms. To take the shorter lived and 
 less important first, it was maintained that, far from 
 raising wages, a tax on necessaries really lowered them, 
 by stimulating the lazy, careless manufacturing class to 
 regular and strenuous exertion. It repudiated the 
 doctrine that the poor lived at a subsistence margin ; on 
 the contrary, wages were so high that they could afford 
 to be both idle and riotous in living ; and obviously, it 
 involved a low opinion of the labouring classes in manu- 
 factures for it was to experience of these classes that 
 appeal was made in proof. In 1750, Josiah Tucker, at 
 that time Rector in Bristol, brought out the standpoint 
 clearly without himself subscribing to it. 3 He explained 
 how a great manufacturer in the clothing way, carefully 
 attending to the facts, had observed * that in exceeding 
 
 478 of vol. i.) ; The Political Register (J. A. Almon), x. 161-5, 
 Letter to Lord North, The Absurdity, Impolicy and Inutility of 
 reducing the Taxes on Soap, Candles, etc. (1772). 
 
 1 See note 92 of Chap. IV. For the history of this theory in 
 England, see Seligman, Incidence, pp. 62-5, 101-9, 114-20. The 
 most interesting references to the doctrine are the refutations to it, 
 which usually admit the theory that taxes on necessaries raise 
 wages. See Gentleman's Magazine of 1732, ibid., 1738 Enquiry, 
 p. 78-9; Hume, Political Discourses, 1752, Essay on Taxes, at end ; 
 Arthur Young, Political Arithmetic, 1774, 288, c. 13, pp. 209-13, 
 and theories of Sir James Steuart and Adam Smith. 
 
 8 A different attempt to explain the idea was made by Barnard 
 in the debates of 1737. If the labourer did not get his convenient 
 support he would emigrate. Cobbett, x. 158. 
 
 8 1750, Brief Essay, p. 54.
 
 TAXES ON NECESSARIES LOWER WAGES 117 
 
 dear years when corn and provisions are at an extravagant 
 price, then the work is best and cheapest done ; but 
 that in cheap years the manufacturers are idle, wages 
 high and work ill done.' And ' therefore he inferred 
 that the high duties, taxes and excises upon the neces- 
 saries of life are so far from being a disadvantage to 
 trade, as things are circumstanced amongst us, that they 
 are eventually the chief support of it and ought to be 
 higher still in order to oblige the poor either to work or 
 starve.' Tucker was not prepared directly to deny 
 the facts stated, but as an humane and compassionate 
 man he disliked the deduction, which involved the 
 careful as well as the careless. Hume in his Essay on 
 Taxes (1752)' took up a similarly undogmatic position. 
 The chief exponent of the attitude, however, admitted 
 no doubts or qualifications. This was William Temple 
 of Trowb ridge, who discussed the subject in 1758 and 
 I765. 1 In his Considerations on Taxes as they are 
 supposed to affect the Price of Labour in our Manufactures 
 (1765), he laid it down, as a maxim proved by experience, 
 ' first, that mankind in general are naturally inclined to 
 ease and indolence, and that nothing but absolute neces- 
 sity will enforce labour and industry ; secondly, that 
 the poor in general work only for the bare necessaries 
 of life and for the means of a low debauch, which when 
 obtained they cease to labour till roused again by 
 necessity.' He denied that the desire for marriage 
 stimulated the young to energy and industry in order 
 to provide for it. Those, he said, ' who are concerned 
 in the manufactures of this kingdom know by experience 
 that the poor do not labour, upon an average, above 
 four days a week, unless provisions happen to be very 
 dear.' Consequently taxes on necessaries were not 
 only not to be condemned, they were necessary for 
 
 1 A Vindication of Commerce and the Arts . . ., 1758, 1029. e. 
 9(16), p. 36-7 ; Considerations on Taxes . . ., 176 5,2nd ed. corrected, 
 104, c. 64. His Essay on Trade and Commerce of 1770, 1139, i. 4, 
 expands the 1765 pamphlet, which it is explained went through 
 two editions quickly.
 
 n8 WALPOLE TO ADAM SMITH 
 
 trade and industry, and should be the last taxes to be 
 abolished. Nor were they unkind to the poor ; on the 
 contrary, they were really for their good. 1 
 
 But this attitude, while discussed somewhat widely, 
 does not appear to have been widely accepted or to have 
 had any permanent influence. It was probably based 
 on experience of particular industries in which abnor- 
 mally high wages were paid, 2 and it was overborne by 
 the complaints against dearness of provisions in the 
 sixties. Nathaniel Forster, 3 an Oxford Fellow and a 
 Rector in Essex, writing in 1767 on the causes of the 
 high prices, which he attributed partly to taxes, pro- 
 tested against Temple's doctrine as false and inhuman, 
 a proposal for oppression, coming generally from ' sus- 
 picious authorities,' and a * shelter for avarice and 
 rapacity in private life.' That a sudden rise of wages 
 might result in idleness and vice with a few worthless 
 fellows he did not deny ; * but the really industrious 
 would never be less so from any extraordinary encourage- 
 ment given to industry.' These false doctrines, he said, 
 * were to be heard thrown out in conversation, but he 
 had the most entire conviction that they had not the 
 minutest influence on the counsels and measures of 
 ministers.' Adam Smith dismissed the whole idea with- 
 out much consideration. 4 He said that high wages in 
 general encouraged the industry of the worker and that 
 the case of those who, when they had earned enough 
 in four days, idled the rest of the week, was not typical. 
 This objection to the condemnation of taxes on neces- 
 saries did not become part of the tradition of English 
 tax doctrine. 
 
 The more important and more moderate attack on 
 
 1 Pp. 6-7, 8-9, 12-13, 27, 51-2. 
 
 a The plausibility of generalising it further lay probably in the 
 outbreak of spirit-drinking which occurred in the second quarter of 
 the century ^discussed below. 
 
 3 [N. Forster] An Enquiry into the Causes of the present High Prices 
 of Provisions, T. 1466 (i), pp. 49, 56, 58, 59, 61, 63-4. 
 
 4 Wealth of Nations, ed. Cannan, i. 83-4 ; Everyman ed. i. 73-4.
 
 TAXES AND WAGES FACTS 119 
 
 the theory that a tax on necessaries raises wages consisted 
 in the appeal to experience as showing that wages did 
 not rise when prices were high or fall when they were 
 low. Walpole, as we have seen, pointed this out in 1732, 
 and it was admitted by Hume. 1 Temple, of course, 
 emphasised it strongly. 2 ' The nominal price of a 
 day's labour in money,' he said, ' hardly ever varies 
 with the price of provisions. Though from a bad harvest 
 wheat should advance two shillings a bushel, which 
 would affect the poor much more than all the taxes put 
 together, yet the price of a day's labour would remain 
 the same.' The origin of the fallacy, Temple thought, 
 was this : * Everyone clearly sees that if a populace 
 can live cheap they can afford to live cheap ; from 
 whence it is immediately concluded that they will do 
 so' a conclusion quite unwarranted and untrue. 
 Thomas Mortimer, who published in 1772 a large 
 Treatise on the Elements of Commerce, Politics and 
 Finances as a Supplement to the Education of British 
 Youth, also contended that experience showed that 
 wages do not rise or fall with prices, and that the poor 
 cannot thus be neglected in considering taxes on 
 necessaries. 3 
 
 Now, this criticism could not be ignored. Wages as 
 a matter of experience do not rise and fall with the 
 imposition or repeal of taxes on necessaries or with 
 changes in prices due to several causes 4 ; and we find 
 Sir James Steuart 5 and Adam Smith 6 admitting this. 
 
 1 Loc. cit. z 1765, Considerations, pp. 15,6. 
 
 3 The Elements of Commerce, Politics, and Finance . . ., 1772, 
 29, d. 1 3, pp. 451-2. 
 
 4 Changes in the value of money do, of course, affect wages as 
 well as prices, though more slowly and with greater friction. 
 
 5 An Inquiry into the Principles of Political Economy, 1767, 2 vols. 
 31. e. 5-6, ii. 505-7, 509. Steuart's theory of taxes and wages is 
 complicated and not influential enough to demand discussion in 
 detail here. For an account, see Seligman, Incidence, pp. 118-20. 
 His general position was that taxes on commodities really affected 
 only the idle and never the industrious (see pp. 488, 489, 493), but 
 he did not approve of the consequent condemnation of them (p. 505). 
 
 ' Wealth of Nations, ed. Cannan, i. 75-7 ; Everyman, ed. i. 65-7.
 
 120 WALPOLE TO ADAM SMITH 
 
 Nevertheless they continued to teach that a tax on wages 
 or on the necessaries of the labourer must raise wages, 
 but now on more carefully stated and more guarded 
 premises. Resort was had to a distinction between 
 the immediate and the medium or average effects of 
 a tax on necessaries, and between the momentary and the 
 average price of provisions. Temple was acquainted with 
 the line of thought in 1765 and was unable to answer 
 it, although he did not accept it. 1 A thorough inquiry, 
 it was thought, showed * that the standard of wages 
 is naturally fixed at the medium price of provisions. 
 There is a relation between these which gradually and 
 constantly takes place ; else why the present wages of 
 one shilling a day instead of one penny, which was the 
 case some centuries ago. Labour and wages must 
 bear such relation to one another in all wise nations that 
 the wages shall be sufficient to render the married state 
 so easy as to encourage the young of both sexes to 
 obey that first and great command, increase and 
 multiply.' But Adam Smith's was the most careful 
 and most influential statement of the revised version. 
 Briefly put, 2 he held, first, that the demand for labour 
 was independent of its supply, so that, the causes which 
 determine the extent of the demand remaining constant, 
 an increase in the number of labourers would necessarily 
 reduce the wage obtained by each, and vice versa ; and, 
 secondly, that the supply of labour always tended, 
 through changes in the amount of population, to adjust 
 itself to the demand for it existing in any period in such 
 a way that each labourer would get enough and just 
 enough to enable him to live, and with his fellows to 
 bring up a sufficient number of children to maintain 
 this adjustment. Stated still more crudely, Adam 
 Smith's position was this : regard the amount of the 
 subsistence for the labouring class as fixed : then they 
 will multiply up to that number which will be just 
 
 1 Op. cit. pp. 13-14. Temple's attempted answer is no answer. 
 * See book i. chap. viii. (sp. pp. 61, 63, 70-2, 76 Everyman ed.).
 
 TAXES AND WAGES ADAM SMITH 121 
 
 able to exist permanently upon that amount of sub- 
 sistence ; and this adjustment will be maintained not 
 through restriction of marriages so much as through 
 infant mortality increasing or decreasing according as 
 wages are low or high. And these forces will operate 
 although the demand for labour is not fixed ; the result 
 during a period of changing demand will merely be more 
 complex. Consequently, if the demand or subsistence 
 for the labouring class is artificially reduced by a tax 1 
 if, in other words, every labourer's real wages are thereby 
 reduced the result will simply be to lessen the supply 
 of labour and so to raise real wages again. Therefore 
 the employer will pay both the natural wage and the 
 tax the tax ultimately falling, as Adam Smith thought, 
 on the landlord as regards agricultural labourers, and 
 on the consumers of non-necessary commodities as 
 regards others. 
 
 The classical political economy thus took over from 
 the commercial ideas of the eighteenth century and 
 carried on for the instruction and employment of the 
 nineteenth, the doctrine that a tax on necessaries 
 raises wages. And it is noteworthy that the importance 
 of what it borrowed was much greater than that of the 
 explanation which it added. This is clear in many 
 ways in Adam Smith. His theory logically involved, 
 for instance, that a tax on necessaries would only be 
 shifted to wages after ten or fifteen years. But he did 
 not explicitly recognise this ; he always spoke most 
 dogmatically and unqualifiedly on the point ; and he 
 did not argue against taxes on necessaries on the ground 
 that they were grievous to the poor during that period. 2 
 Similarly, the most essential feature of Adam Smith's 
 
 1 Book v. chap. ii. part ii. art. 3 (ii. 346-7), and art. 4 (pp. 352-3). 
 
 2 Another minor logical weakness of Adam Smith's theory 
 was that, admitting as he did that taxes on luxuries used by the 
 poor only reduce their use of these and do not affect wages, he did 
 not see that a tax on necessaries might equally, so long as the poor 
 used any luxuries, simply also reduce their use of these and so not 
 affect wages.
 
 122 WALPOLE TO ADAM SMITH 
 
 attitude was the same as that of the less-guarded doctrine, 
 namely a conception, not fully explicit, of labouring 
 people as a class apart, not only living a different life, 
 but subject to different forces from people of means. 
 Finally, his theory was as a whole so complicated that 
 it is improbable that it increased the influence of the 
 doctrine to any extent in the eighteenth century. 
 What Adam Smith did was to give the sanction of a name 
 which had great weight with certain kinds of people to 
 a view which was already influential. 
 
 A new force was thus added to the opposition to 
 Excise duties on necessaries. The old compassionate 
 objection in the interest of the poor, which we have 
 noticed in 1730 and 1732, did not find much expression 
 in the controversial literature of this period, 1 but when 
 tax debates begin to be again serviceable in 1776, it is 
 clear that, far from having weakened, it had become 
 more dominant. Other distributive grounds of objec- 
 tion to taxes on necessaries do not appear to have 
 had any general influence. 2 The result was that 
 
 1 The increase in the malt tax in 1760 called forth a pamphlet 
 by J. Massie, Reasons . . . (8228, g. 31) in which he opposed it in 
 the interest of the poor. ' When I consider how much the common 
 working people of England have contributed by their industry and 
 courage to make this nation rich and happy, and how slender a 
 portion of these national benefits come to their share, I cannot 
 help being grieved at the thought of measures which will make 
 that small portion less,' p. 3. Massie denied that the tax would 
 increase the poor man's wages, but it is doubtful if he was always 
 consistent in this point. (See Ways and Means . . ., 1757, 104, c. 
 15, p. 2.) For his other pamphlets and life, see D.N.B. Thomas 
 Mortimer represents the same compassionate attitude : Elements, 
 1772, pp. 453, 459 ; and it is referred to in Lord North's speeches 
 of 1769 and 1775 (Cobbett, 1769, 16, p. 608, 1775, 18, p. 623, and Sir 
 Henry Cavendish's Debates, i. 388). 
 
 * Occasional assertions of the distributive unfairness of taxes 
 on necessaries are : Some Considerations upon Taxes . . . [1750 ?] 
 T. 13" (7), p. 9 (poorest pay more in proportion than the rich); Sir 
 John Nickolls (Dangeul), Remarks on the advantages and disad- 
 vantages of France and of Great Britain in regard to Commerce . . ., 
 1754, 1138. a. 5, p. 260-1 ('the poor and the rich pay the same 
 sum ') apparently appropriated by Postlethwayt (inconsistently) 
 in Great Britain's Tax System, 1757, p. 160. The doctrine that
 
 DIRECT ASSESSMENT OF MEANS 123 
 
 two negative and inconsistent principles the one of 
 commercial, the other of social policy joined together 
 to place the negative maxim that taxes should not be on 
 necessaries in the position of a first principle of tax 
 policy. The opposition view of Walpole's day had 
 become the orthodoxy of Lord North's. But the new 
 orthodoxy had not answered the old, it had merely 
 displaced it ; nor had it achieved the repeal, although it 
 had so far prevented much increase, of taxes on necessaries. 
 
 The first general characteristic of this period was 
 therefore the growth of opposition to taxes on necessaries. 
 The second was the development of opinion unfavourable 
 to direct assessment of means or income, and favourable 
 to the continuance of the distributively inequitable 
 Land Tax. In this result also, commercial ideas played 
 an important part. 
 
 The Land Tax was both so partial and as time passed 
 so much less productive than a real pound rate would 
 have been, 1 that proposals for a new direct assessment 
 
 necessaries should be exempted, in the form given to it by Montes- 
 quieu in 1748, was also occasionally cited in England. Referring 
 to an Athenian tax, Montesquieu wrote : ' La taxe etait juste, 
 quoiqu' elle ne fut point proportionelle ; si elle ne suivait pas la 
 proportion des biens, elle suivait la proportion des besoins. On 
 jugea que chacun avait un necessaire physique egal ; que ce neces- 
 saire physique ne devait point etre taxe ; que 1'utile venait ensuite, 
 et qu'il devait etre taxe mais moins que le superflu ; que la 
 grandeur de la taxe sur le superflu empechait le superflu.' De 
 L* Esprit des Lois, Livre xiii. 7. See N. Forster, op. cit. pp. 
 52-3, n. ; and Lord Kames, op. cit. pp. 458-9. Kames did not really 
 make the idea part of his view of the English tax system. It requires 
 some political theory such as Benthamite utilitarianism to give it a 
 basis. 
 
 1 Estimates about the middle of the century as to the average 
 real rate of the Land Tax are : An Essay on the inequality of our 
 present Taxes . . ., 1746, 104. d. 8 (3), pp. 9-11 Land Tax, supposed 
 to levy a fifth of the yearly value of lands, does not raise a tenth, 
 perhaps not a twelfth; Some considerations . . ., 1750 ? T. 13* (7), 
 p. 4 ' In many counties which are reported to be moderately 
 taxed, their land tax generally amounts to 2S. 8d. in the at a 45. 
 tax ' ; Nickolls (Dangeul), Remarks . . ., 1754, 1138. a. 5, p. 268 
 reassessment would double the yield ; Thoughts . . . with a pro- 
 posal for raising a supply for the current service . . ., 1756, 104.
 
 124 WALPOLE TO ADAM SMITH 
 
 were frequently made. 1 But such proposals had not 
 sufficient weight to overcome the pressure of opposing 
 interests. On the one hand, experience suggested that 
 a new attempt at an income tax would again fail to 
 reach men of personal estates, and would result merely 
 in a heavier burden on landed men ; and those landed 
 men who were rated very low in the Land Tax had no 
 wish to be brought up to the ordinary level. 8 On the 
 other hand, the interest of commercial and moneyed 
 men, who escaped so largely in the Land Tax, was 
 against any attempt at a general direct tax, and com- 
 mercial proposals for a new assessment were usually 
 directed towards reassessment within the landed class 
 alone. 3 
 
 But opposition to an income tax based on the 
 interest of classes was reinforced by the influence of 
 opinion which condemned such a tax, assuming it 
 could be achieved, as essentially objectionable. It is 
 important to realise clearly the character of the objec- 
 tions to which such controlling weight was given. 
 The principle that taxation should be distributed in 
 proportion to income was not repudiated ; on the 
 contrary, it was formally affirmed by the chief objector, 
 Adam Smith. 4 The grounds of condemnation were 
 
 c. 46, p. 6, equal Land Tax at 45. per would yield ^5, 000,000 
 (in place of ^2,000,000). Different places paid very different rates. 
 See Essay of 1746. 
 
 1 e.g. [Wm. Wood], A Letter to an M.P. . . ., 1717, 8132. a. 
 65, pp. 911, for reassessment on land only ; An Enquiry . . ., 1738, 
 104, n. 9, p. 75 ff., for an Income Tax ; Essay of 1746, p. 39, for a true 
 Income Tax with exemptions and abatements and allowances for 
 children ; Thoughts of 1756, p. 6 for equal tax on lands and funds 
 and debts, but not on traders ; Gentleman's Magazine, 1763, 33. 
 524-5, article on an Essay recommending inter alia an equal tax 
 on the general income of the kingdom ; Thomas Mortimer, Elements, 
 1772, 29. d. 13, for reassessment among landlords ; Whitbread's pro- 
 posal, 28th November 1777, for a new assessment for is. of land tax, 
 Cobbett, Parl. History, 19, 467-8. 
 
 1 See Dowall, ii. 102 ; Some Considerations (1750 ?), pp. 4-6, 8 ; 
 Gentleman's Magazine, 1766, 36, 522. 
 
 * e.g. Wood's Letter of 1717 and Thoughts of 1756. 
 
 4 His first canon of taxation.
 
 OPPOSITION TO INCOME TAX 125 
 
 non-distributive ; they were based chiefly on commercial 
 ideas, and were employed chiefly by the commercial 
 classes in their opposition to the Income Tax of the 
 Great War. 1 The first ground was that a direct tax 
 on means or income involved, in the striking phrase of 
 Adam Smith, 8 ' an inquisition more intolerable than 
 any tax.' Writing in the thirties, Adam Smith's 
 teacher, Hutcheson, had argued against this trading 
 prejudice. All the harm which periodical inquisition 
 would involve would be the detection of a few broken 
 merchants, which would prevent their opportunities of 
 defrauding their creditors. 3 But when Adam Smith 
 in his turn came to lecture, he reversed the teaching. 4 
 
 * It is easy,' he said, ' to lay a tax upon land, because 
 it is evident what quantity every one possesses, but it 
 is very difficult to lay a tax upon stock or money without 
 very arbitrary proceedings. It is a hardship upon a 
 man in trade to oblige him to show his books, which is 
 the only way in which we can know how much he is 
 worth. It is a breach of liberty and may be productive 
 of very bad consequences by ruining his credit ; the 
 circumstances of people in trade are at some times far 
 worse than at others.' This condemnation was repeated 
 even more sharply in the Wealth of Nations* and it 
 was adopted by Lord Kames as one of his rules to be 
 observed in taxing. 6 In practice such taxes were 
 
 * altogether arbitrary and uncertain.' The second 
 ground for condemning direct taxes on income was 
 that a tax on profits and interest on capital is either 
 illusory because shifted, or is so inimical to national 
 prosperity that it should not be tolerated. This idea 
 attained weight from the sanction of Sir James Steuart 
 
 1 See below for 1798-9, and Smart, Economic Annals, pp. 52-3, 
 466, 469-70 for 1802 and 1816. 
 
 2 Wealth of Nations, Everyman ed. ii. 349. 
 
 3 Francis Hutcheson, A System of Moral Philosophy, 1755, ii. 
 
 34i- 
 
 4 Adam Smith, Lectures on Justice Police Revenue and Arms, 
 ed. Cannan, 1896 (from notes of 1763), pp. 239-40. 
 
 ii. 349, 330. ' Sketches of the History of Man, 1774, i. 476.
 
 126 WALPOLE TO ADAM SMITH 
 
 and Adam Smith, but it was put forward much earlier. 
 It no doubt drew support from the success of the public 
 creditors in insisting on the exemption of the funds 
 from taxation, 1 and it was sometimes argued that it 
 was impossible to tax the interest of money, since the 
 rate of interest would merely rise in proportion to the 
 tax. 2 Steuart's objection was on the ground of 
 economic policy. 3 Merchants, he held, ' ought to be 
 allowed to accumulate riches as fast as they can ; 
 because they employ them for the advancement of 
 industry ; and every deduction from their profits is a 
 diminution upon that so useful fund.' Adam Smith 
 emphasised the same aspect of the objection, and by 
 his insistence on the dependence of industry on capital 
 an insistence which fitted in with the trader's con- 
 ception of himself as the chief source of national 
 prosperity gave it immense importance in the minds of 
 those whom he influenced. If the interest of money 
 were taxed, the capital might, and he suggested would, 
 be transferred abroad ; for although land is a subject 
 which cannot be removed, stock easily may, and ' the 
 proprietor of stock is properly a citizen of the world 
 and is not necessarily attached to any particular 
 country.' The resulting loss of capital would tend so 
 far to dry up every source of revenue both to the 
 sovereign and to the society for it is stock that main- 
 tains industry, cultivates land and employs labour. 
 The payment for risk and management apart from 
 interest on capital, Adam Smith regarded as untaxable. 4 
 The importance which was thus attached to certain 
 
 1 The State and Conditions of our Taxes considered, or a proposal 
 for a Tax upon Funds . . ., 1714, T. 1990 (20) ; Reasons for taxing 
 the Public Funds, 1716 (Somer's Tracts, xiii. 755); Considerations 
 on the necessity of taxing the annuities . . ., 1746, T. 1 143 (ip). 
 
 2 e.g. [Robert Nugent] Considerations upon a reduction of the 
 Land Tax, 1749, 104. d. 43, p. 25. For grounds on which the exemp- 
 tion of the Funds from taxation was defended, see e.g. Wood's Letter 
 of 1717, p. ii, seq., and A Serious Address to the Proprietors of the 
 Public Funds, 1744, 8225. b. 5. 
 
 3 Inquiry, ii. 499. 
 
 * Wealth of Nations, Everyman ed. ii. 329-3 1 .
 
 LAND TAX 127 
 
 administrative and economic effects of taxes not only 
 led to this condemnation of a tax which would be 
 equitable in distribution, but resulted in the approval 
 of the existing Land Tax, which was distributively 
 inequitable. The magnification of non-distributive 
 criteria into the supreme test of taxation appeared 
 most clearly in two pamphlets of 1749 an ^ I 75 I 
 attributed to Robert Nugent, which dealt with the 
 question of reducing the rate of the Land Tax after 
 the War of the Austrian Succession. 1 Nugent argued that 
 * as the benefit of taxes to the public results only from 
 the clear income, and the evil to individuals extends 
 not only to the gross produce but to every other 
 expense and loss incident and consequential ; that tax 
 is most beneficial to the public and least hurtful to the 
 subject which produces a large sum through a cheap 
 ollection and which is free from every other eventual 
 charge.' And as the Land Tax cost little to collect, 
 was certain, and did not injure trade like taxes on com- 
 modities, he opposed its reduction. Less extreme 
 statements of the same idea were frequent. 2 In his 
 lectures Adam Smith pointed out that the Land Tax, 
 although inequitable, had considerable merit it did 
 not involve any arbitrary proceedings or disclosures, 
 it was levied without much expense, and it did not 
 affect the price of commodities and so obstruct industry. 3 
 These advantages were insisted upon with still greater 
 emphasis in the Wealth of Nations*', the Land Tax 
 was perfectly agreeable to all the canons of taxation 
 except the first (which defined distributive equity). 
 Adam Smith also pointed out that a further advantage 
 of the tax was that, unlike a proper assessment on 
 
 1 Considerations of 1749, p. 7, and see Further Considerations, . . . 
 1751, 104. d. 42. 
 
 s e.g. Nicholls (Dangeul), op. cit. pp. 267-8 ; Postlethwayt, 
 Dictionary, ii. 11 seq., quoting Nugent; Steuart, Inquiry, ii. 561 ; 
 Kames, op. cit. i. 466 ; Mortimer, op. cit. p. 443. 
 
 3 Lectures, pp. 239, 240, 241. 
 
 * Wealth of Nations, Everyman ed., ii. 309-10.
 
 128 WALPOLE TO ADAM SMITH 
 
 means, it was a fixed charge and put no discouragement 
 upon improvements an advantage which appealed 
 strongly to Arthur Young and made him oppose any 
 reassessment of the tax. 1 
 
 In fact, of course, the real justification for main- 
 taining the Land Tax in its stereotyped condition was 
 that by long continuance it had come to be a rent 
 charge rather than a tax. This was recognised by the 
 end of this period. A writer in the Gentleman's Magazine 
 in 1776* pointed out * that the one real objection to 
 reassessment was that many purchasers have given larger 
 sums for estates lowly assessed than they would have 
 given if the Land Tax had in general been more equal ' ; 
 and to meet it, he suggested that the reassessment should 
 be deferred to the commencement of the nineteenth 
 century and then repeated every twenty-five years. The 
 same answer was made next year to Whitbread's proposal 
 in the House of Commons for a new assessment, 3 and 
 in making the tax perpetual in 1798 (at the 45. rate 
 below which it did not fall after 1 776) Pitt contended that 
 it would be unjust to interfere with the tax, and that he 
 was merely proposing to recognise explicitly an already 
 accepted economic fact. 4 The abolition of the tax 
 would not only have been unfair as between different 
 landowners, but it would have amounted to a gift to 
 the landlord class at the expense of the rest of the 
 community. 
 
 1 Political Arithmetic, 1774 (288. c. 13), pp. 7-8 ; repeated in 
 part ii. 1779 (104. a. 81), pp. 11-12 ; and cf. Eden (afterwards Lord 
 Auckland), Four Letters to the Earl of Carlisle, 1779, E. 2098 (8), 
 pp. 89, 1 08. 
 
 1 46, 162. 
 
 3 Cobbett, Parl. Hist. 19, 467-8 (speech of Lord Ongley). For 
 other recognitions of this fact, see Eden, op. cit., p. 108, and John 
 Young (a Scotch pastor), Essays, E. 2076 (i), vii. on Taxations, p. 
 126. Sinclair, who opposed Pitt's bill of 1798, objected that there 
 was no foundation for the expectation, on which estates were said 
 to be valued, that Parliament would perpetuate the existing Land 
 Tax. History of the Public Revenue, part hi. 1790, p. 112. 
 
 4 Ibid., 33, 1363-5 ; see speech for opposition by Lord Sheffield, 
 . 1374. A division in Pitt's favour was 105 to 13.
 
 TAXES ON LUXURIES 129 
 
 The two primary elements of the eighteenth-century 
 theory of taxation were, therefore, negative maxims 
 defining what to avoid. On the one hand, avoid direct 
 assessment on means or income ; on the other, avoid 
 taxes on necessaries and the poor. The way was thus 
 cleared for the third and positive element of the theory 
 the approval of taxes on commodities other than 
 necessaries, and particularly on luxuries. In the seven- 
 teenth century such taxes were approved as one out of 
 several justifiable modes of taxation, but in this period 
 the disposition of opinion raised them to the position 
 of the one satisfactory kind of tax. 1 
 
 The great majority of the tax records of the time 
 testify to the general acceptance of this doctrine. 2 It 
 was so much part of the common stock of ideas that it 
 is with astonishment that the reader comes now and 
 then upon a proposal for some other tax than one on 
 luxuries or on non-necessary expenditure. The new 
 taxes which were in fact imposed in the period were, as 
 we have already noticed, predominantly of this type. 
 
 1 The Land Tax, although accepted, was yet considered radically 
 defective, as being partial, and would not have been imposed anew 
 in that form. 
 
 2 For Walpole's view, see above ; Gentleman's Magazine, 1732, 
 ii. 813 ; Thomas Downes, A Scheme plainly demonstrating how several 
 thousand pounds may be raised yearly to the Government . . ., 1732, 
 8227. aa. 47 ; Hutcheson, op. cit. ii. 340-1 ; An Essay on the 
 Causes of the decline of the Foreign Trade . . ., 1744, 8246. h. i, pp. 
 43 se 9-> 5 1 se< l- '> Cobbett, Parl. Hist. 1748, 14. 153 seq. ; [Josiah 
 Tucker], A Brief Essay . . . with an Appendix containing a plan 
 for raising one only Tax on the consumers of Luxuries, 1750, 2 ed., 
 104. h. 10, sp. p. 123 seq. and 145 seq. ; [Josiah Tucker], Elements of 
 Commerce and Theory of Taxes, 1755, 522. 1. 9, pp. 169-70 ; David 
 Hume, Essay on Taxes, 1752 ; Nickolls (Dangeul), Remarks . . ., 
 !754 PP- 2 55 se 1-> 269 ; Postlethwayt, Great Britain's True 
 System, 1757, p. 318 seq. ; Proposals for carrying on the War with 
 vigour, raising the Supplies within the Year . . ., 1757, 8132. c. 71, 
 pp. 1 1 seq. ; Thoughts . . . with a proposal for raising a Supply for 
 the Current Service . . ., 1756, 104. c. 46, pp. 6, 12, 18 (and cf. An 
 Essay on the inequality of our present Taxes, 1746, 104. d. 8 (3), p. 38) ; 
 Gentleman's Magazine, 1762, 32. 21 ; [N. Forster], An Enquiry . . ., 
 1767, p. 50-2 ; Mortimer, Elements of Commerce, Politics, and Finances, 
 1772, p. 459 seq. ; Kames, op. cit. i. 468 seq. ; Arthur Young, Political 
 Arithmetic, 1774, pp. 12-15, 2I 4> 263-4; Adam Smith, Wealth of 
 Nations, 1776, Everyman ed. ii. 376-81, 308. 
 
 9
 
 130 WALPOLE TO ADAM SMITH 
 
 The advantages which were considered to belong to 
 taxes on luxuries to take the more ideal form of the 
 satisfactory tax were four. The first and second were, 
 of course, the negative ones that direct assessment of 
 means was not involved, and that, necessaries being 
 avoided, the poor were not burdened, and cost of pro- 
 duction was not increased. The third in a peculiar 
 degree expressed the eighteenth-century point of view. 
 It was that, since no one was subjected to the tax unless 
 he chose to consume the luxury, the tax was voluntary 
 or optional ; the individual was his own assessor ; and 
 thereby taxation according to ability not ability 
 measured by some rigid and necessarily incomplete 
 standard, but by each man's knowledge of his own cir- 
 cumstances was achieved. Even Adam Smith was 
 impressed with this advantage of taxes on luxuries. 
 1 Every man's contribution is altogether voluntary, it 
 being altogether in his power either to consume or not 
 to consume the commodity taxed.' The author of a 
 scheme of 1744 considered that through his system of 
 taxes on the consumers of luxuries ' all persons tax them- 
 selves voluntarily, than which nothing can be easier or 
 more equal ' ; and Tucker held that no man could 
 complain of such taxes, ' as it would be his own voluntary 
 act and deed to rate himself in this or that class.' l 
 
 1 Brief Essay, 1750, p. 165. It may be remarked that the claim 
 that luxury taxes are optional was not pointless, although it was 
 exaggerated. It is sometimes contended that the very conception 
 of a tax implies compulsory levy and precludes option or voluntari- 
 ness. But this is not so. In fact, all taxes are optional or con- 
 ditional, but some, of which a tax on a luxury is one, are much more 
 optional or conditional than others. A Poll Tax is conditional on 
 residence within the county levying the tax a condition or option 
 not easily or lightly evadable ; an Income Tax on residence plus 
 the receipt of an income of a certain amount also a very onerous 
 option ; a tax on a necessary such as tea, on residence plus the use 
 of tea a fairly though less onerous option ; a tax on liqueur, on 
 residence plus the use of liqueur a not very onerous option. What 
 the eighteenth century rhapsodist did not always realise was that 
 you must have some constraint or onerousness in your option ; if you 
 merely say to people, we should like you to pay as much as you can 
 afford, you would get very little. The constraint involved in taxes 
 on luxuries was the dislike of foregoing the use of the taxed article.
 
 ADVANTAGES OF TAXES ON LUXURIES 131 
 
 That even taxation should be consistent, at its best, 
 with the principles of liberty was certainly very satis- 
 factory. The fourth advantage was that taxes on 
 luxuries acted in a general way as sumptuary laws to 
 restrain riotous living, 1 and, in the view of some writers, 
 could, by proper adjustment, be made effective to 
 combat particular evils. Josiah Tucker was specially 
 vigorous in proclaiming this policy, but in only one 
 actual tax, to be discussed below, did sumptuary policy 
 attain the level of a definite purpose of taxation. The 
 first and second of these advantages applied equally to 
 taxes on merely non-necessary commodities, the third 
 less fully, but the fourth hardly at all. 
 
 The most important luxury taxes were Customs 
 duties on imports, which were increased several times in 
 this period as the most suitable means of raising addi- 
 tional revenue. In 1748, for instance, Pelham required 
 to secure a loan of about six millions, and decided upon 
 an additional 5 per cent, poundage on imports. He 
 contended that it would be paid easily, would be 
 burdensome to none, and would no way affect the 
 poorer sort of our people. ' As in this nation we have 
 the good fortune to want nothing from abroad that is 
 absolutely necessary for the subsistence of the poor, 
 they cannot be in the least affected by this tax ' ; while 
 it would hardly be felt by the better sort of people. 2 
 
 Besides being for the most part taxes on luxuries, 
 Customs duties had the additional advantage, on which 
 much store was set by eighteenth-century writers, that, 
 like other taxes on commodities, they were paid by the 
 subject gradually and insensibly, being levied directly 
 only on a small number of merchants, and included in 
 the prices of commodities. This also seemed to favour 
 
 1 An Essay on Ways and Means . . . 1726, 8245. b. 37, pp. 9, 16 ; 
 Essay of 1744 ; Essay of 1746 ; Tucker, Brief Essay of 1750, pp. 127, 
 130, 134, 165 ; Elements of 1755, pp. 169, 170; Proposals of 1757, 
 p. 13 ; Gentleman's Magazine, 1762, 32, 21 ; Mortimer, Elements, 
 1772, pp. 459-60. 
 
 *Cobbett, 14, 153-
 
 132 WALPOLE TO ADAM SMITH 
 
 liberty. 1 But, not unnaturally, the advantage did not 
 appeal to the merchants, whose trade was restricted, 
 and their protests and proposals form a minor but 
 excellent illustration both of the assertiveness of the 
 commercial class, and of the eighteenth-century view 
 of taxation. Their general standpoint was put clearly 
 in 1717 by Wm. Wood, Secretary to the Customs. 2 
 The prosperity of the land and of the whole nation 
 depended on extensive foreign trade, and hence Customs 
 should be low, for the encouragement of the merchant, 
 * who deserves all favour as being the best and most 
 profitable member of the commonwealth.' The duties, 
 however, were high, no general reductions were made, 
 and Walpole, against bitter opposition from the com- 
 mercial classes in 1733, attempted to make the system 
 of collection more stringent. Proposals then began to 
 appear for the substitution of other taxes in place of 
 Customs. 3 The object of Decker's scheme of 1743, 
 and of another of 1744, was to take off Customs duties, 
 and so do away with smuggling, vexation and search, 
 and enable trade to be carried on with half the stock. 
 Far from heeding such counsel, however, Parliament 
 proceeded to increase the duties further. The answer 
 to the protest of the merchants, that the additional 
 poundage of 1748 would be the finishing blow to trade 
 and manufactures, was that, while it was no doubt 
 desirable to respect the maxim that as a trading nation 
 
 1 Hume, loc. cit. ; Blackstone, Commentaries, 1765, i. 306; 
 Kames, p. 469 ; A. Young, p. 14 ; A. Smith, Lectures, pp. 242-3 
 (' taxes upon consumption, therefore, which are paid by the mer- 
 chant, seem most to favour liberty and will always be favoured by 
 this government ') ; Wealth of Nations, ii. 377. Montesquieu had 
 put the point epigrammatically ; ' L'impot par tete est plus naturel a 
 la servitude ; 1'impot sur les marchandizes est plus naturel a la 
 liberte, parce qu'il se rapporte d'une manidre moins directe a la 
 personne.' Esprit des Lois, livre xin. 14. 
 
 *A Letter to a Member of Parliament . . ., 1717, 8132. a. 65, 
 pp. 19-20. 
 
 * An Enquiry into the causes of the Increase and Miseries of the 
 Poor of England, 1738, 104, n. 9, pp. 18, 77, 80 ; Decker, 1743, 
 pp. 12, 21 ; Essay of 1744 ; Horsley, Serious Considerations, 1744, 
 104. d. 8 (2) ; Essay of 1746, p. 38 ; Tucker, Brief Essay, 1750,
 
 CUSTOMS V. ASSESSED TAXES 133 
 
 ' we ought not to supply the public expense by taxes 
 which affect our commerce or manufactures,' in fact, 
 it was not possible, since the alternatives were still less 
 acceptable. 1 * That it will be a little inconvenient 
 to our merchant importers, that it will add a trifle to 
 the price of those goods that are re-exported to a foreign 
 market . . . ; that it will enhance a little the price 
 of such of our manufactures as are made up in whole or 
 in part of foreign materials are consequences, and bad 
 consequences too, which can neither be denied nor 
 prevented. But these consequences . . . are not near 
 so bad as those which would have necessarily ensued 
 from any other tax ' that could have been thought of. 
 
 But although Parliament was not impressed with the 
 supposed disastrous consequences of Customs duties, it 
 was prepared to listen when a new form of luxury tax 
 was propounded which would be free from the dis- 
 advantages of which the merchants complained. This 
 was a tax levied directly on the users of the luxurious 
 commodity. Proposals for such taxes were made in 
 1718, 1726, and 1732 2 ; a minor suggestion of Decker's 
 pamphlet of 1743 was that the tea duty should be 
 replaced by a sort of licence tax to be paid by every 
 family which drank tea 3 ; the Essay on the Causes of the 
 Decline of Foreign Trade of 1744, perhaps also written 
 by Decker, 4 elaborated the same idea in great detail ; 
 
 1 Cobbett, 14. 177, 180, 170, 181, speeches of Samuel Martin 
 Henry Fox and James West. 
 
 2 [Abel Boyer], Animadversions and Observations . . . (with) 
 a new proposition to raise money for the use of the public, 1718, 8223. 
 d. 22, p. 46 seq. ; An Essay on ways and means, 1726, 8245. b. 37 ; 
 Downes, Scheme, 1732. 
 
 3 P. 8. 
 
 4 For a discussion of the authorship and references to other 
 discussions, see Seligman, Incidence, p. 84, n. 4. It is perhaps 
 insufficiently noted that the difference between the proposals of 
 the pamphlets of 1743 and 1744 is precisely analogous to the differ- 
 ence between the two parts of the pamphlet of 1743 itself, which 
 puts forward, in front of the house tax scheme, a minor plan for 
 abolishing the tea duty by imposing a tax on the actual users of tea 
 analogous in idea to the more elaborate taxes of the 1744 pamphlet. 
 The argument drawn from the difference between the schemes 
 does not therefore seem of great weight.
 
 134 WALPOLE TO ADAM SMITH 
 
 and Tucker, Fauquier, 1 and Postlethwayt all approved 
 of taxes on the ultimate consumer rather than those 
 levied first on the trader. The Essay of 1 744, for instance, 
 proposed * that all persons using, wearing, or drinking 
 the following articles of luxury (coaches, plate, jewellery, 
 sedan-chairs, wine, spirits, tea, &c.), be obliged to take 
 out a licence yearly, paying each one subsidy for each 
 article, of three half-pence in the pound only on the 
 computed income they should have to support the 
 station in life they voluntarily place themselves in by 
 the article of luxury they use, wear or drink ' ; 2 thus a 
 person keeping two coaches and six for his own use 
 would be assumed to have an income of .8000, and be 
 charged .50 on that account. 
 
 For the scheme it was claimed, inter alia, that it 
 exempted the poor, was voluntary, equitable, useful 
 as a sumptuary law, and that its greatest advantage 
 was that it would enable all Customs duties to be taken 
 off, and that it had itself no ill effects on trade. 3 The 
 virtues of these taxes, however, were greatly exaggerated 
 by their advocates, who failed to see that they did not 
 get rid of, though they probably modified, the restric- 
 tion involved on trade, that they were difficult to 
 administer, and that they ran counter to the special 
 virtue of Customs duties gradual and imperceptible 
 payment by the ultimate tax-payer. It was on these 
 grounds, among others, that Adam Smith did not 
 make any great account of them. 4 At the same time, 
 they indicated some new sources of luxury taxation, 
 and Parliament from time to time had recourse to 
 some of them. Thus in 1747 a tax was imposed on 
 pleasure carriages, and in 1756 another on plate (which 
 however was repealed as a failure in 1758, and replaced 
 by a licence duty upon the manufacture 6 ), and in the 
 
 1 An Essay on Ways and Means . . . 1756, E. 2213 (3), p. 23 
 seq. 
 
 2 P. 44- 3 Pp. 51-3- 
 
 4 Wealth of Nations, ii. 357-9. '31 Geo. II. c. 32.
 
 NON-REVENUE PURPOSES TRADE POLICY 135 
 
 last quarter of the century a considerable number of 
 additions was made to the list. These taxes, along with 
 the earlier house and window tax, were grouped together 
 by Pitt as the Assessed taxes. 1 
 
 The fourth and last element of the tax doctrine of 
 this period was the acceptance of two other purposes, 
 besides that of the provision of revenue, as grounds for 
 the imposition of taxes. The one was the purpose of 
 trade policy in the Customs duties ; the other, the 
 purpose of sumptuary policy in the spirit duties. 
 
 Practically no change took place during this period 
 in the Customs policy which had taken shape in the 
 seventeenth century and to which Walpole had given 
 the finishing touches. There were prohibitions and 
 duties on the export of English raw materials, protective 
 duties on directly competing imports, and differential 
 duties and regulations in connection with shipping and 
 the Colonial trade. In these, revenue was subordinated 
 to considerations of trade policy. On the other hand, 
 there was the bulk of the duties on imported super- 
 fluities, which, besides discouraging imports which 
 would compete for English expenditure and worsen the 
 balance of trade, also produced a large revenue. The 
 pamphlet literature shows that the trade policy involved, 
 although it did not pass without criticism, was generally 
 accepted in its main features. The protests of the 
 merchants against high duties were not primarily 
 directed to questions of trade policy at all ; and although 
 Decker was inclined to generalise the disadvantages of 
 duties into the principle ' that all prohibitions are in 
 general hurtful,' yet he admitted that ' there may be 
 cases where necessity will call for them,' and that his 
 scheme was not without difficulties. * I see very clearly 
 that there must be some regulations upon some certain 
 species of goods which may be imported from abroad 
 and would interfere with our own manufactures ; as well 
 
 1 DoweU, ii. 187-8.
 
 136 WALPOLE TO ADAM SMITH 
 
 as upon others where regard must be had to treaties.' * 
 Joseph Massie, writing in 1757,* drew attention to this 
 difficulty, of which he believed few of those who ap- 
 proved Decker's scheme were aware. * The misfortune,' 
 he said, * is that none of these desirable things are to 
 be come at without repealing those laws which have 
 hitherto protected our trade and manufactures and made 
 us a wealthy and powerful people.' * The truth of the 
 matter is that an open trade would be the ruin of Great 
 Britain. Hutcheson 3 thought that import duties were 
 often necessary to encourage industry at home though 
 there were no public expenses, and Hume, 4 although 
 he repudiated the idea of a favourable balance of trade 
 and condemned trade policy which was based on national 
 jealousy, was careful to point out that all taxes upon 
 foreign commodities were not to be regarded as pre- 
 judicial or useless, ' but those only which are founded 
 on the jealousy above-mentioned.' ' A tax on German 
 linen encourages home manufactures and thereby multi- 
 plies our people and industry. A tax on brandy increases 
 the sale of rum and supports our southern colonies.' 
 On the eve of the publication of the Wealth of Nations, 
 Mortimer 6 and Kames 6 were still insisting in detail 
 on the principles of mercantile trade policy. And the 
 influence of Adam Smith's attack was limited during the 
 eighteenth century. 7 The main alteration in duties 
 connected with that influence, Pitt's commercial treaty 
 with France, 8 implied the abandonment of ideas of the 
 
 1 Op. cit. p. 22, and 104. d. 8 (i), p. 29. 
 
 2 The proposal commonly called Sir Matthew Decker's scheme for 
 one general tax upon houses laid open . . ., 1757, 104. d. 22, pp. 2, 3, 6. 
 
 3 Op. cit. ii. 341. * Essay on the Balance of Trade. 
 
 6 Op. cit. pp. 114-123. ' Op. cit. pp. 488-519. 
 
 7 On the question of Adam Smith's influence, see John Rae, 
 Life, pp. 60-1, 153-4, 284-94, 349-55, 383-^6. It lies outside my 
 purpose to investigate the question in detail, but a point for con- 
 sideration is whether Adam Smith had much influence on opinion 
 regarding protection of particular industries. 
 
 8 See Dowell, ii. 189-90; Hewins, English Trade and Finance, 
 pp. 145-155 ; and an excellent account in J. H. Rose, Wm. Pitt and 
 the National Revival, chap. xiv. The text is given in Cobbett, ParL
 
 SPIRIT POLICY 137 
 
 balance of trade, but on the English side, where there 
 was no real fear of the competition of French woollens 
 and cottons, it did not raise the most acute free trade 
 issues. 1 Indeed, in one aspect, very present in Pitt's 
 mind, the Treaty was an instance of trade policy the 
 purchase for our rapidly developing manufactures of 
 access to a good foreign market. And in the region of 
 opinion even one who was so much influenced by Adam 
 Smith as William Eden, the negotiator of the French 
 Treaty of 1786, declared in I779 2 ^at taxes should 
 not be imposed on exports * except in very few articles 
 when it may be found expedient to make a tax operate 
 in the nature of a prohibition or to favour some particular 
 manufacture.' 
 
 Over the greater portion of the seventeenth century 
 the important purpose of the taxes on spirits, which 
 were mostly imported, was simply to raise revenue. From 
 the time of the Civil War they paid both Customs and 
 Excise duties. But in the second half of the century 
 the question of home production was in considerable 
 evidence, and to encourage it stringent differential 
 duties were gradually imposed against the imported 
 commodity. 3 Under James II. it paid Excise of is. 4d. 
 
 Hist., 26. 233 seq. See Pitt's speech of i2th February 1787, ibid. 
 26. 381 seq. 
 
 1 Contrast the reception of the French treaty with that of 
 Pitt's Irish commercial proposals of 1785 (see J. H. Rose, op. cit. 
 pp. 246-66). Also note, e.g., North's alteration of the glass duties 
 in 1777 and his avowed principle of a high protective duty on the 
 manufactured import so as to preserve the home industry ; Cobbett, 
 Par/. Hist., 19. 245-6 ; and see G. B. Hertz, The Manchester Poli- 
 tician, 1750-1912, ii. and iii. 
 
 z Four Letters to the Earl of Carlisle, 1779, E. 2098 (8), pp. 88 seq. 
 and sp. pp. 91-2. Adam Smith's qualified approval of an export tax 
 on wool did not appear till the 3rd edition of the Wealth of Nations 
 in 1784, see ii. 142 seq. and sp. pp. 148, 149. Eden's Letters are said 
 to have had a great success (D.N.B.). The third contained a 
 resume of Adam Smith on taxation. 
 
 3 At the Restoration, home-made strong water or aqua vitae 
 paid 2d. per gallon, while foreign spirits made of wine or cider 
 paid 4d., and foreign strong waters perfectly made 8d. (Dowell, ii. 
 25), in addition to an import duty of 4 per hogshead. By an Act
 
 138 WALPOLE TO ADAM SMITH 
 
 per gallon on single and 2S. 8d. on double brandy (in 
 addition to Customs) as compared with 6d. per gallon 
 on the English article; from 1689 to 1693 importation 
 was prohibited 1 ; and by 1713 the Excise duties were 
 35. 8d. and 6s. 8d. on foreign as against 4d. to 8d. on 
 home spirits. 2 Under cover of this protective system, 
 attempts were further made for a time to secure that 
 the increasing home distillation should, ' for the advantage 
 of tillage,' make use of English grain. Thus in 1690 
 the Excise on malt-spirit was fixed at 3d. per gallon, 
 while spirit distilled from other English material was to 
 pay is. 2d. and from foreign material rod. per gallon. 3 
 But this policy restricted the success of the manufacture 
 and it was modified in 1699.* The general aim of the 
 policy, however, was realized to the full and the English 
 production is said to have nearly quadrupled between 
 1684 and I7I4- 6 Revenue and industrial development 
 were, therefore, the sole purposes of the spirit taxes of 
 the early eighteenth century. They were not intended 
 in any degree to restrict or prevent consumption, 
 although the desirability of adopting such a policy had 
 occasionally been urged. 8 
 
 of 1670, 22 Chas. II. c. 4, brandy was classed as the last mentioned, 
 i Jas. II. c. 5 increased the rates to those given in the text. 
 
 1 1 Will, and Mary, c. 34, 6 ; clause repealed by 5 Will, and 
 Mary, c. 2. 
 
 3 That is my calculation from the numerous Acts. Imports 
 paid Customs in addition. The rates varied considerably between 
 1693 and 1713. 
 
 3 2 Will, and Mary, sess. 2, c. 9. The figures given assume that 
 the duties of this Act are in addition to, not in place of, pre-existing 
 duties. 
 
 4 10 Will. III. c. 10 and note c. 4. Gary had foretold in 1691 
 that this would be the result, see ' Reasons for repealing the statute 
 for distilling on corn,' Add. MSS., 5540, f. 34. 
 
 6 Lecky, England in the Eighteenth Century, chap. iv. 
 
 See debates of ist March 1670 on a proposal to prohibit the 
 import of brandy, A. Gray, Debates, i. 215 seq. Sir Robert Howard 
 is reported thus : ' As for brandy, we have death along with it ; 
 it burns us up. Our hot waters are sent to the Indies, good ; and 
 suppose we have no brandy in the world, cannot we live without it ? ' 
 (p. 217). But the proposal was neither made nor discussed primarily 
 on sumptuary grounds. Sir John Knight said : ' If it destroys 
 men's bodies, then prohibit the use of it totally, both foreign and
 
 SUMPTUARY POLICY IN SPIRITS 139 
 
 But a terrible conclusion awaited the industrial 
 success and the neglect of warnings. Spirits became 
 very cheap and in the second quarter of the century 
 an appalling outbreak of spirit-drunkenness took place, 
 of which a graphic account will be found in Lecky. 1 
 * Drunk for a penny, dead drunk for two-pence,' is the 
 legend. A petition of the Justices of Middlesex declared 
 in I/36, 2 i that the drinking of Geneva and other dis- 
 tilled spirituous liquors had for some years past greatly 
 increased, especially among the people of inferior rank ; 
 (that it had) destroyed thousands of his Majesty's 
 subjects and rendered great numbers of others unfit for 
 useful labour and service, debauching at the same time 
 their morals and driving them into all manner of vice 
 and wickedness.' In that year Parliament took the 
 matter in hand and agreed to Sir Joseph Jekyll's re- 
 solutions, that the low price of spirituous liquors is 
 the principal inducement to the excessive and pernicious 
 use thereof, and that, to prevent this, duties should be 
 imposed. 3 The Act 4 imposed the prohib tive duties 
 of, first, .1 per gallon on retailed spirits, and second, 
 $o a year on the retailer i.e. duties on the sale to 
 poor people. The opposition to the Bill fully admitted 
 the evil and the need for some such remedy, but pro- 
 tested against a prohibitive duty, partly on the ground 
 of the vested interest of distillers and retailers, and 
 partly on the view that the moderate use of spirits was 
 not disadvantageous and should not be prohibited to 
 the poor if it was not prohibited to the rich. Pulteney's 
 suggestion was for a moderate duty sufficient to prevent 
 the inferior sort of people being able to make much 
 use of it. The reply of the supporters of the Bill was 
 
 home made.' In 1695, Davenant argued in favour of imposing a high 
 duty to suppress the consumption of spirits, which he said was a 
 growing vice among the common people. Characteristically he 
 pointed out that the loss of revenue would be recompensed by 
 increased revenue from wine and other liquors. An Essay on Ways 
 and Means . . . 1695, 1028. h. i (i), pp. 137-8. 
 
 1 Loc. cit. z Cobbett, Parl. Hist. g. 1032-3. 
 
 3 Ibid. p. 1033. 4 9 Geo. II. c. 23.
 
 140 WALPOLE TO ADAM SMITH 
 
 that the only way to prevent excess was to put the 
 liquor quite out of the people's reach. 1 Such is the 
 beginning of the modern English spirit duty. 
 
 As it turned out, Pulteney's plan would probably 
 have been more effectual. The attempt to crush out 
 the consumption failed completely, Jekyll's Act being 
 contravened wholesale. 2 It was repealed in 1743, and 
 moderate duties imposed, with the two objects, first, of 
 raising revenue, and second, of lessening the consumption 
 and getting the trade within the effective grip of excise 
 control. 3 The Bill was bitterly denounced in the 
 Lords as a mere means of raising money which would 
 do nothing to prevent or reduce drunkenness. Carteret 
 put the case for the Bill most clearly. It was in practice 
 impossible, he said, to stop the consumption entirely ; 
 all that could be done was to proceed by degrees to 
 restrict the excessive use of the liquor and at the same 
 time to raise revenue out of it ; they were bound to begin 
 with a low duty, otherwise the clandestine sale would 
 continue unchecked. 4 More careful provisions were 
 also enacted for the regulation of retailing. 
 
 The policy defined by Carteret was maintained 
 henceforth. 5 The regulations as to sale were improved 
 and extended, 6 and from time to time the duties were 
 increased, with the double object of raising money and 
 repressing consumption. 7 Pitt, for instance, in in- 
 creasing the spirit duties in I794, 8 declared that it 
 
 1 See debate of 8th March, Cobbett, 9. 1037 seq. 
 
 * Lecky, loc. cit. 3 16 Geo. II. c. 8. 
 
 4 Lords Debate, 22nd February 1743, Cobbett, 12. 1193 se ?- 
 
 8 For the literature of the subject, see Lecky, loc. cit., and note 
 also Josiah Tucker, An Impartial Inquiry . . . 175 1, 522. g. 4 (4). 
 
 Sp. by 26 Geo. II. c. 13. 
 
 7 1751, 24 Geo. II. c. 40 ; 1762, 2 Geo. III. c. 5 ; 1780, 20 Geo. 
 III. c. 35 ; 1790, 31 Geo. III. c. I ; 1795, 35 Geo. III. c. n, 12 ; 1797, 
 37 Geo. III. c. 14. Adam Smith noted that ' it has for some time 
 past been the policy of Great Britain to discourage the consumption 
 of spirituous liquors, on account of their supposed tendency to ruin 
 the nealth and corrupt the morals of the common people ' (Wealth 
 of Nations, Everyman ed. ii. 372). North's view of the duty in 
 1780 is a little doubtful according to Cobbett's brief report, 21. 166. 
 
 Ibid. 30, 1359-60; the wording of the Debrett report is 
 different, but the result is the same.
 
 ADAM SMITH ON TAXATION 141 
 
 was desirable that the duty should be as high as possible 
 without affording such advantage and temptation to 
 smuggling as might operate as a premium to the illicit 
 trader and tend materially to injure the revenue ; and in 
 I796, 1 in justification of another increase, he emphasized 
 the point more strongly : * the consumption is so per- 
 nicious that with respect to this article no man could 
 wish that there should be any limits to the duty, so far 
 as is consistent with the means of safely collecting it.' 
 The experience and discussion of the second quarter 
 of the century thus resulted in the embodiment of 
 a sumptuary purpose in the taxes on spirits. 
 
 A short discussion of Adam Smith's theory of taxation 
 will bring out the general features of the eighteenth 
 century doctrine which we have been considering, and 
 at the same time define the place which Adam Smith 
 holds in the development of English opinion on taxation. 
 It has sometimes been supposed that the publication 
 of the Wealth of Nations brought to the world a new 
 revelation of the principles of taxation, and that it 
 immediately affected the policy of the Chancellors of the 
 Exchequer. But this is a serious misconception ; the 
 only respect in which it bears some relation to the facts 
 is on the subject of trade policy in the Customs. Apart 
 from that, what Adam Smith did was to expand the 
 commercial view of tax questions which we have been 
 following, and to attempt to systematize and rationalize it 
 by bringing it into relation with the distributive theory 
 of the seventeenth century which Walpole expressed. 
 He gave a wider intellectual sanction to a set of opinions 
 already very influential. Apart from Pitt's commercial 
 treaty of 1786 and Peel's and Gladstone's reform of the 
 tariff between 1842 and 1860, no important change in 
 English tax policy is connected with Adam Smith's 
 influence ; on the contrary, all the large changes since his 
 day, such as the imposition of the Income Tax in 1799, 
 
 *lbid. $2, 1260,
 
 142 ADAM SMITH 
 
 have been made independently or in spite of the influence 
 of his ideas. 1 
 
 The most important characteristic of the eighteenth 
 century view of taxation was the excessive emphasis 
 which it laid on non-distributive criteria of a good tax' 
 system. It did not begin with the question how the 
 burden of the necessary supply should be distributed, 
 and thence proceed to the question of the best taxes 
 by which to attain this result ; it began rather by saying 
 that this sort of tax or that sort of tax must not be 
 employed, arrived, by a process of elimination as it were, 
 at some form of tax which on non-distributive grounds 
 was permissible, and then proceeded to consider its 
 distributive justification. This was also the most im- 
 portant characteristic of Adam Smith's view and the 
 somewhat veiled process of his thought. It is significant 
 that three out of the four famous canons should be 
 non-distributive ones. The dominant ideas in his 
 mind were three. First, direct assessment of means 
 and hence an Income Tax should not be adopted because 
 of the inquisition involved, specially on the commercial 
 classes, and because of the effect on capital. 2 Second, 
 taxes on necessaries (or on wages) are bad, because they 
 increase the price of labour. Third, hence taxation 
 should be raised upon non-necessary consump- 
 tion or expenditure. The only important difference 
 between the controlling ideas of Adam Smith's doctrine 
 and those of the general opinion of his time was that, 
 while the popular condemnation of taxes on necessaries 
 was based on the view that they involved a grievous 
 burden on the poor man as well as on the view that 
 
 1 Dowell (ii. 168-70) and Rac (Life of Adam Smith, pp. 294, 
 320-1) argue that North got the suggestion for taxes on men-ser- 
 vants, auctions and houses of 1777 and 1778 from the Wealth of 
 Nations. This is probably true in the narrow sense ; but such taxes 
 were on the lines of those generally approved independently of and 
 prior to Adam Smith. 
 
 * Because the stereotyped Land Tax did not involve these and 
 other non-distributive disadvantages he accepted it in spite of its 
 injustice.
 
 RELATION TO OPINION OF HIS TIME 143 
 
 they were not paid by the poor but raised wages, 
 Adam Smith condemned them (and so avoided incon- 
 sistency) merely on the second ground. 1 
 
 One result cf this over-emphasis was that distribu- 
 tive problems were glossed over in taxes on luxuries 
 or non-necessaries. On the one hand, the exemption 
 of the poor was impliedly accepted as desirable, but, 
 with rare exceptions, no direct repudiation was expressed 
 of the doctrine that every one is under an inherent 
 obligation to share the burden of taxation. On the 
 other hand, the distributive justification of these taxes 
 was rather a matter of faith than of demonstration, 
 and, as we have seen, much distributive virtue was 
 attributed to the primarily non-distributive character- 
 istic of optional or voluntary payment. 
 
 The contribution which Adam Smith, as a student 
 and a man of systematizing mind, made to the doctrines 
 of the time was to remove them out of this com- 
 paratively isolated condition and bring them into 
 relation with the theory of tax distribution. He 
 attempted to adapt the seventeenth century theory to 
 the new school of doctrine. As, however, he accepted 
 without criticism all the most important elements of 
 that theory, his structure lacked strict logical coherence 
 at parts. But in all probability this did not impair it 
 in the eyes of his contemporaries ; for them the essential 
 point was that the thinker sanctioned and supported 
 the standpoint with which they were familiar. 2 
 
 Adam Smith's theory of distribution has to be 
 gathered together from different parts of his sections 
 on taxes. It set out, however, simply enough, with 
 three general positions with which we are familiar. 
 First, every one should pay taxation ; second, distribu- 
 tion ought to be in proportion to income (revenue) ; 
 third, a tax to be just must be general it must fall on 
 
 1 The references for this paragraph are given in the earlier parts 
 of the chapter. 
 
 2 See e.g. Eden, Four Letters to the Earl of Carlisle t 1779, p. 88 seq.
 
 144 ADAM SMITH 
 
 all the three sorts of income, rent, profits and wages. 1 
 Adam Smith accepted the assumption of the seventeenth 
 and eighteenth century that taxation is made up of 
 non-compensatory taxes, and discussed each tax by 
 itself. At this point there entered the first extraneous 
 factor. A tax on all income is ruled out because taxes 
 on profits and wages are condemned on non-distribu- 
 tive grounds which have been discussed. 2 There is 
 therefore left the tax on expenditure or consumption. 
 * The State not knowing how to tax directly and pro- 
 portionately the revenue of its subjects, endeavours to 
 tax it indirectly by taxing their expense, which it is 
 supposed will in most cases be nearly in proportion 
 to their revenue.' 3 Here entered the second non- 
 distributive factor. Expenditure on necessaries must 
 not be taxed, since that would merely raise wages. 4 
 Hence we are reduced to taxes on non-necessary ex- 
 penditure (Adam Smith uses the term luxury instead 
 of non-necessary, but in the sense that 'consumable 
 commodities are either necessaries or luxuries.') 6 
 Next, it was not essential, he argued, that all non- 
 necessary expenditure should be taxed so as to give 
 equitable distribution according to expenditure or 
 income. 6 In particular, he held it unnecessary that 
 all imported luxuries should be taxed, and was in favour 
 of restricting Customs duties as well as Excise to * a 
 few articles only of the most general use and con- 
 sumption.' His idea was the somewhat vague one, 
 which ruled in the seventeenth century, and the fallacy 
 of which Petty had pointed out, that (to take the 
 instance given by the latter) * in the proportion that 
 men drink, they make all other expenses.' 7 Finally, 
 
 1 Wealth of Nations, ed. Cannan, ii. 310, Everyman ed. ii. 307. 
 [In the remaining notes to this chapter, I shall use the contractions 
 C. and E. for the Wealth of Nations in these editions.] 
 
 2 C. ii. 331-3, 351-4, 356-7 ; E. ii. 329-31, 346-49, 351. 
 
 3 C. ii. 354 ; E. ii. 351. * C. u. 354-5 ; E. ii. 351-3. 
 
 6 C. ii. 354 ; E. ii. 351-2. C. 11. 367 ; E. ii. 364 
 
 7 Ibid. Adam Smith's statement is : ' The revenue which is 
 levied by the duties of excise is supposed to fall as equally upon the
 
 THEORY OF TAXATION 145 
 
 by regarding beer as a luxury, and not, as was usual, as 
 a necessary, 1 he obtained a reconciliation between the 
 theory that all should pay taxation and the maxim 
 that taxes should not be on necesssaries. 
 
 The best illustration of Adam Smith's view of the 
 distributive justification of a tax system such as he 
 approved occurs in his section on Taxes on Consumable 
 Commodities. 2 ' The duties upon foreign luxuries 
 imported for home consumption, though they some- 
 times fall upon the poor, fall principally upon people 
 of middling or more than middling fortune. Such are, 
 for example, the duties upon foreign wines, upon coffee, 
 chocolate, tea, sugar, etc. The duties upon the cheaper 
 luxuries of home produce destined for home consump- 
 tion fall pretty equally upon people of all ranks in 
 proportion to their respective expense. The poor pay 
 the duties upon malt, hops, beer, and ale upon their 
 own consumption ; the rich upon both their own 
 consumption and that of their servants.' Such taxes 
 had, of course, disadvantages, and they offended against 
 the fourth canon, which required that the amount 
 received by the State from a tax should be as nearly 
 as possible equal to the amount paid, directly and 
 indirectly, by the subjects. 3 But the qualifications 
 which Adam Smith felt compelled to admit in regard to 
 their distributive equity were merely that they make 
 the parsimonious man contribute less and the profuse 
 
 contributors as that which is levied by the duties of customs ; and 
 the duties of excise are imposed upon a few articles only of the most 
 general use and consumption.' 
 
 1 C. ii. 355 ; E. ii. 352. Beer was in fact both a necessary and 
 a luxury to the poor. The Essay of 1746, e.g., proposed that, in 
 abolishing duties, those on beer, ale, cider, and spirituous liquors should 
 be retained ' as some restraint upon the idleness and luxury of our 
 meaner people ' (p. 38). For other notes on the luxuries of the poor, 
 see Proposals of 1757, p. 46, and Arthur Young, Political Arithmetic, 
 1774, p. 212. The point illustrates the difficulty of giving a de- 
 finition to ' necessary ' and ' luxury ' which will be both serviceable 
 and accurate. The usual eighteenth century assumption that the 
 poor did not pay taxes on luxuries was in some degree incorrect. 
 Cf. Massie, Calculation of Taxes, 1756, 8226. b. 15. 
 
 * C. ii. 370 ; E. ii. 367-8. 3 C. ii. 379-83 ; E. ii. 377-80. 
 
 10
 
 146 ADAM SMITH 
 
 man more than his proportion, and that the absentee 
 escapes altogether * ; and any inequality due to the 
 former of these difficulties he considered ' much more 
 than compensated by the very circumstance which 
 occasions that inequality the circumstance that every 
 man's contribution is altogether voluntary.' 2 And on 
 the whole * the inconveniences which are perhaps in 
 some degree inseparable from taxes upon consumable 
 commodities fall as light upon the people of Great 
 Britain as upon those of any other country of which the 
 government is nearly as expensive. Our state is not 
 perfect, and might be mended, but it is as good or 
 better than that of most of our neighbours.' 3 
 
 It is needless to discuss the steps of this theory in 
 detail, and more important to notice the character of 
 Adam Smith's influence upon the taxation of the poor 
 in the last quarter of the eighteenth century. In spite 
 of the fact that he favoured above all things taxes on 
 luxuries, and therefore might be supposed to have 
 made for easy taxation or exemption of the poor, his 
 influence did not in the circumstances of the time have 
 this character. In the first place, the time was one 
 of financial pressure, and by his condemnation of an 
 Income tax Adam Smith lent his weight against that 
 resource, and so made it more difficult to avoid taxes on 
 necessaries ; 4 and by his insistence on non-distributive 
 criteria, and by his lack of a compensatory view of 
 taxation, he gave no support to its continuance when 
 it had once been imposed. The debates of the year 
 l8i6 5 pass judgment on any claim of Adam Smith's to 
 
 1 C. ii. 378-9 ; E. ii. 376. a C. ii. 379 ; E. ii. 377. 
 
 3 C. ii. 383; E. ii. 381. 
 
 4 A point to be noticed in the problem of the influence on 
 Pitt of Lord Shelburne as against Adam Smith, is that in 1785 
 Shelburne pointed out to Pitt, in conversation of which a memor- 
 andum is extant, ' the impossibility of placing the finances of the 
 country on a really satisfactory basis in keeping with the newest 
 financial ideas without having recourse to an Income Tax.' Fitz- 
 maurice, Life of Shelburne, 1876, iii. 440-1. 
 
 * In very brief and incomplete outline, the situation in 1816
 
 INFLUENCE ON TAXATION OF POOR 147 
 
 greatness as a thinker on tax (as against tariff) questions. 
 In the second place, the controlling authority in tax 
 matters was dominated by the sentiment of landed men ; 
 and by condemning taxes on necessaries, not as against 
 the interest of the poor, but as disadvantageous to 
 industry, and as falling really on the middle class and 
 the rich, Adam Smith almost invited the House of 
 Commons, in so far as it understood him, to continue 
 and increase taxes on necessaries when money was scarce, 
 and certainly did not condemn them in the one way 
 which that House would have felt. In the third place, 
 he tacitly admitted that the proper subjects of taxation, 
 as he saw them, might easily be exhausted, a natural 
 result, though he did not see this, of over-emphasis on 
 non-distributive criteria of taxes, and when this hap- 
 pened, improper ones, he said, must, if necessary, be 
 adopted 1 a doctrine which North and Pitt were all 
 too prone to depend upon. And, not only did he 
 thus grant absolution in advance upon departure from 
 
 was as follows. At the conclusion of long and exhausting wars 
 which had piled up taxes on commodities, both necessaries and 
 luxuries, as well as on income, the Government desired to retain the 
 Income Tax for two years at the rate of is. per (as against 
 the war rate of 23.). The opposition, led by Brougham, denounced 
 the tax, specially on the score of inquisition, with the righteous 
 indignation which is apt to be felt by those who have the authority 
 of great names to support them. The sad thing was that the 
 supporters of the Government, even those like George Rose who felt 
 most clearly that the discontinuance of the Income Tax meant the 
 sacrifice of the interest of the poor, had no framework of ideas familiar 
 to their time with which they could effectively explain and defend 
 their position. In a scene of great excitement the Government was 
 defeated by 238 to 201. Not all the majority, however, felt com- 
 fortable about their votes two days later ; and the Government 
 decided to give up also the War Malt Tax, which fell chiefly on the 
 poor, although financially their action was difficult to defend. 
 For this reading it is only possible at present to refer to the debates 
 themselves (Hansard) ; see specially those of aoth February 1815 
 (read Vansittart, Baring and Rose), i2th February 1816, i3th Feb- 
 ruary (London petition), i8th March (read whole), 2Oth March (on 
 discontinuance of War Malt Tax and recriminations over vote of 
 1 8th read whole). See also Seligman, The Income Tax, pp. 106 
 114; Smart, Economic Annals, p. 462 seq. ; and Longman's Political 
 History of England, xi. (1801-1837), pp. 172- . 
 1 C. ii. 390 ; E. ii. 388.
 
 148 ADAM SMITH 
 
 the straight path of justifiable taxation, but instead of 
 indicating an Income tax as the most pardonable offence, 
 he definitely indicated taxes on necessaries. * Such 
 taxes, though they raise the price of subsistence and 
 consequently the wages of labour, yet they afford a 
 considerable revenue to government which it might 
 not be easy to find in any other way. There may 
 therefore be good reasons for continuing them ' * ; and 
 * the taxes upon the necessaries of life may be no im- 
 peachment of the wisdom of that republic (Holland) 
 which, in order to acquire and maintain its independency, 
 has, in spite of its great frugality, been involved in such 
 expensive wars as have obliged it to contract great 
 debts.' 2 The commercial tradition which Adam Smith 
 represented opposed both taxes on income and taxes on 
 necessaries, but of the two it disliked taxes on income 
 most. And finally, by his acceptance of the usual 
 idea that the rich man and the poor man pay to the tax 
 on beer roughly in proportion to their incomes, he lost 
 a great opportunity of advancing clearer thinking on 
 the question of the actual distributive result of taxes 
 on commodities. It is therefore not too much to say 
 that Adam Smith's influence in practice made for and 
 not against taxes to which the poor contributed. 
 
 We shall have occasion to discuss Adam Smith's ideas 
 again from another point of view, but we may conclude 
 this appreciation of what may be called his theory of 
 taxation in the narrower sense, by noticing two points 
 in it which have had a certain influence on opinion in 
 the last half century. 
 
 As we have seen, Adam Smith laid it down that the 
 standard of equitable distribution is proportionality to 
 income this was his interpretation of taxation accord- 
 ing to ability ; and there has been a certain tendency to 
 accept this interpretation as the result of deep insight 
 and mature consideration on his part. I am not con- 
 
 1 C. ii. 359 ; E. ii. 356. See note i above, p. 147.
 
 TAXATION ACCORDING TO INCOME 149 
 
 cerned here to discuss the principle itself, but it is of 
 some historical interest to notice that there is no reason 
 for trusting Adam Smith's conclusion on this ground. 
 Income as the rough standard of taxation was a seven- 
 teenth-century conception, as we have seen, and it was 
 frequently referred to in the eighteenth century before 
 Adam Smith. 1 It was a vague commonplace, and 
 that is its character in the Wealth of Nations also. Adam 
 Smith does not discuss, for instance, whether different 
 kinds of income should all pay the same rates ; there is 
 no reason to believe that he ever seriously considered 
 the kind of problems which came to the front with 
 the imposition of the Income Tax in I799- 2 And it 
 would have been astonishing if he had ; taxes on com- 
 modities were by themselves too inexact an instrument 
 to suggest the question or make its discussion useful. 
 His attempt to justify distribution according to income 
 was of little speculative value ; it was based on the 
 analogy, which is false in important respects, that * the 
 expense of government to the individuals of a great 
 nation is like the expense of management to the joint 
 tenants of a great estate.' 3 And indeed Adam Smith 
 did not always strictly adhere to his own standard. A 
 tax on house rent, which he approved, would in general, 
 he believed, fall heaviest on the rich ; but, he added, 4 
 * in this sort of inequality there would not, perhaps, 
 be anything very unreasonable. It is not very un- 
 reasonable that the rich should contribute to the public 
 expense, not only in proportion to their revenue, but 
 something more than in that proportion.' 
 
 1 e.g. Enquiry into causes of the increase . . . of poor, 1738, 
 104. n. 9, p. 82 proposal for single Income Tax : ' that the taxing 
 everyone according to his yearly income is the nearest rule that can 
 be gone by to measure his ability, I believe will be readily granted 
 by all ' ; Essay on the -inequality of our present taxes, 1746, 104 d. 8 (3) 
 proposal for single Income Tax with abatements and exemptions, 
 p. 38 seq. ; Gentleman's Magazine, 1763, 33. 524-5, proposal for 
 Income tax with taxes on luxuries. 
 
 2 See below. 3 C. ii. 313 ; E. ii. 307. 
 4 C. ii. 326-7 ; E. ii. 324.
 
 ISO ADAM SMITH TAXATION FOR REVENUE 
 
 The second point is that Adam Smith's systematisa- 
 tion of tax principles implied the idea that the only 
 purpose of taxation is to raise revenue for state services, 
 and his influence has been in the direction of supporting 
 the dogma that no other purposes should be involved 
 in taxes. This was, of course, a natural presumption 
 of the laisser faire attitude and the distrust of state 
 intervention to which Adam Smith inclined ; and it 
 gained support from the particular instance of Customs 
 duties, which, since he rejected the trade policy involved 
 in the duties of the time, he held should be imposed 
 simply for revenue. 1 But it was also the result of a 
 mistaken or inadequate systematisation. In a few minor 
 cases Adam Smith himself advocated the adoption of 
 extra-revenue purposes in taxes. Thus he suggested 
 that the Land Tax should as a matter of good agricultural 
 policy be so adjusted as to penalise leases which either 
 exacted a heavy initial payment in place of a larger 
 annual rent, or prescribed the mode of cultivation to be 
 followed ; 2 and he favoured a special tax, which was 
 certainly not mere ordinary taxation for revenue, to be 
 imposed on ground rents beyond the ordinary rent of 
 land. 3 But the inadequacy of systematisation was 
 much more serious in regard to the actual tax system of 
 Adam Smith's day, which included not only the purpose 
 of trade policy in the Customs, but also that of sumptuary 
 policy in the spirit duties. 4 
 
 1 C. ii. 367 ; E. ii. 364. 2 C. ii. 315-7 ; E. ii. 312-3. 
 
 3 C. ii. 328-9 ; E. ii. 326. 
 
 * Adam Smith was certainly prepared to accept the sumptuary 
 purpose of the spirit duties, though it is not clear what importance 
 he attributed to it ; C. ii. 374-5 ; E. ii. 372.
 
 VIII 
 
 1776-1799 
 
 THE essential differences between the period which we 
 have been discussing and that to which we proceed depend 
 on the simple fact that the former was a period of com- 
 paratively easy finance, while the latter was one of severe 
 financial pressure, in which great difficulty was found in 
 providing the necessary revenue for the American and 
 French wars. 1 In round figures, the national revenue 
 amounted in 1714 to five and a half millions and in 1776 
 to ten and a half millions, while the annual debt charge 
 had increased only from three millions to four and a half 
 millions. By 1799 the revenue had risen to thirty- two 
 millions and the annual debt charge to seventeen millions. 2 
 Had it not been that industry and agriculture were 
 advancing at an unprecedented rate, and that the yield 
 of the old taxes was automatically expanding, the 
 country could scarcely have supported the strain ; and, 
 as it was, enormous increases in taxation had to be 
 made. 
 
 The significance of this necessity from the point 
 of view of tax policy, was that it descended at a time 
 when men had come to a very general agreement about 
 
 1 The cause of the financial pressure of this period was, of course, 
 not merely the fact that expensive wars had to be provided for in it, 
 but also the fact that, as a result of the system of funding war 
 deficits, interest on the larger part of the cost of former wars had still 
 to be paid. It is to be remarked also that the finance of 1714-76 
 became less easy in the later years, and that the division at 1776 
 might, for purely financial purposes, be carried back perhaps to 1756. 
 
 * Retitrn of Public Income and Expenditure, 1869, i. 50-53, 174-7, 
 
 220-1.
 
 152 1776-1799 
 
 the proper way to raise money upon the subject for the 
 service of the state. There had come into existence a 
 revised and improved canon, in which it was possible 
 for an enlightened generation to take a comfortable 
 pride. But the canon had grown strong during a period 
 when no clamant need existed to test it ; it was not a 
 canon embodied in the system of taxation. The test 
 came in this period. Much money was needed. Here 
 was the opportunity to live up to the accepted principles. 
 The Chancellors of the Exchequer made the attempt ; 
 and they failed. Yet because the canon was influential, 
 and the test which it failed to meet one of mere practica- 
 bility, they did not cease to adhere to it. They did not 
 understand its weakness, and in contravening it they 
 merely appealed to necessity. When the proper subjects 
 of taxation are exhausted, it is necessary to resort to 
 improper ones. Therefore the distributive justice or 
 injustice of the ' improper ' taxes was not made a con- 
 trolling question. The gulf between opinion and policy 
 became wider. It was an opinion so superficial as this, 
 and a practice so demoralisingly inconsistent with 
 opinion, that the eighteenth century bequeathed to the 
 nineteenth. 
 
 The accepted doctrine was, of course, that taxes 
 should be imposed on luxuries, or at least on non-neces- 
 saries. Such taxes were voluntary and did not involve 
 direct assessment of means advantages which were so 
 much assumed as essential that it was only the challenge 
 of direct assessment in 1798 and 1799 that elicited much 
 direct reference to them. 1 More immediately present 
 to men's minds was the advantage that the necessaries 
 of the poor were thus exempted from taxation. The 
 most striking characteristic of opinion in this period 
 was the widespread acceptance of this principle that 
 taxes which affect the poor should, if possible, be avoided. 
 It was proclaimed again and again by North and Pitt ; 
 
 * See below, also the debates on the Legacy Duty Bills of 1796.
 
 THE ORTHODOX CANON 153 
 
 it was assumed by the great majority of pamphlets and 
 throughout the long debates on the Triple Assessment 
 and the Income Tax. So common was the assumption 
 that in most cases no trouble was taken to explain or 
 defend it. Thus Pitt proposed that the relief which it 
 was in his power to give in 1 792 ' should apply peculiarly 
 to that class to whom on every account it ought first 
 to be extended I mean the most necessitous and the 
 most industrious part of the community.' x But there 
 is a sufficient number of indications to show that the 
 grounds on which the principle was held were unchanged 
 they were, first, that taxes on necessaries (or on wages) 
 raised wages and were injurious to trade and industry ; 
 and second, that they were grievous to the poor, whose 
 lot was hard enough without the added burden of taxes. 
 It is clear that the trading objection to taxes on 
 necessaries, based on the theory that they were not 
 paid by the poor but were shifted to wages, had con- 
 siderable influence in this period. It was accepted 
 by Eden and other pamphleteers. 2 One of these, a 
 merchant of London who in 1784 proposed a single 
 
 1 Cobbett, Parl. Hist. 29. 828-9. For other instances of the 
 unexplained acceptance of the idea that the poor should be exempt, 
 see Pitt, 1784, 24. 1009-10; 1789, 28. 162; 1797, Debrett, Parl. 
 Register, 66. 276-7-8 ; Lushington, ibid., 544 ; Geo. Rose, A 
 Brief Examination into the Increase of the Revenue . . ., 1792 to 
 1799, 1799, B. 524 (7), pp. 31-2. 
 
 2 Eden, Four Letters, 1779, pp. 93-4; John Berkenhout, Lucu- 
 brations on Ways and Means humbly addressed to Lord North, 1780, 
 104, c. 13, p. 61 ' the moment the war is at an end, you will abolish 
 the taxes upon candles, soap and leather ; taxes which originated in 
 the false system of raising money on the necessaries of life ; taxes 
 which depress our manufacturies more than all the rest, parish taxes 
 excepted . . . ' ; Francis Dobbs, Thoughts on the Present Mode of 
 Taxation in Great Britain (dedicated to Pitt), 1784, 8225 b. 33, pp. 
 3-4, 8-9 ; successful competition with other nations ' is impossible 
 whilst the necessaries of life are higher here than in other countries 
 for according to the sum necessary to support the manufacturer, 
 so must be the price of his labour.' ' There is but one possible 
 remedy, and that is to take away every tax that in any shape touches 
 on the necessaries of life ' ; H. G. Macnab, Letters addressed to Wm. 
 Pitt (against the Coal tax), 1793, 8223. c. 54, pp. 54-5, 95, 96. 
 Sinclair discussed the theory in his History, but did not accept it, 
 part iii. 1790, p. 127.
 
 154 1776-1799 
 
 window tax which was to exempt poor cottagers (on 
 the model of Decker's House Tax), cynically pointed 
 out that this exemption, which he first of all described 
 as a * pleasing consideration,' was ' in reality only an 
 imaginary indulgence, as the wages of the poor must 
 always be regulated by the inconvenience to which 
 they are subject and the rate of their accommodations, 
 therefore every advantage they receive must centre 
 with their superiors.' 1 The theory was probably 
 common now, as before, among the very vocal com- 
 mercial and manufacturing classes ; and most significant 
 of all, it was put forward by North in his budget 
 speeches as one of the reasons for avoiding taxes on 
 necessaries. In I776 2 he laid it down that * taxes in 
 all countries where necessity did not compel should as 
 much as possible be laid on luxury and the elegant 
 conveniences of life, but much more where the strength 
 of a nation chiefly depended on its trade and commerce.' 
 In every operation such as the present, luxuries ought 
 to be taxed, both because the first weight ought to fall 
 on the rich and opulent, and because every tax which 
 might in its consequences tend to affect our manufac- 
 tures so as to enhance their value to foreign purchasers 
 
 1 Considerations . . . with a Plan for consolidating into One Rate 
 the Land and all other Taxes . . . By a merchant of London, 1784, 
 1 1 02, h. 1 1 (9), pp. 14-15. The only instance I have noticed in this 
 period of an attempt to reconcile the compassionate and trading 
 objections to taxes on necessaries occurs in Thoughts on Taxation, 
 1798, 1103, h. 52 (see pp. 20-3, 35-6). ' It is well known that a tax 
 on beer, salt, soap, leather, etc., and the high price of provisions must 
 add to the necessary expenses of the labourer, and that to enable 
 him to subsist some addition must be made to his wages . . . ' ; 
 but ' many are the victims that fall a prey to want and disease before 
 their wages are augmented in proportion to the increase of their 
 expenses ; so that, though the labouring part of the community 
 do not ultimately pay the tax when once it has found its proper 
 level, yet till that takes place they feel the burden of it more severely 
 than any description of men, as it must be defrayed out of the funds 
 necessary for then- immediate subsistence or the maintenance of 
 their families . . . ' p. 35-6. After the war, Brougham and the 
 economists of the Edinburgh Review took pains to elaborate this 
 position, see e.g. June 1818, 30. 86-7. 
 
 * Cobbett, 1 8. 1318 ; cf. 19. 243.
 
 OBJECTIONS TO TAXES ON NECESSARIES 155 
 
 ought, if possible, to be avoided.' But it is probable 
 that the compassionate objection to taxes on necessaries 
 in the interest of the poor was much more influential 
 in Parliament. It was to this feeling that Pitt seemed 
 always to appeal, and I have noticed no instance of his 
 use of the trading objection. So on the one occasion 
 during this period when serious opposition is recorded 
 against proposed taxes on necessaries (1790 9I), 1 the 
 ground alleged was the hardship to the poor, ' the 
 laborious peasant and industrious mechanic,' a class 
 of the community, one Peer affirmed, ' which more 
 than any other was entitled to the attention and pro- 
 tection of the House.' 2 At the one extreme was the 
 sentimental and philanthropic attitude of William 
 Drake, 3 who declared that ' when he saw beneath the 
 roof of penury a steady loyalty and a willingness to 
 obey our laws, he wished he was as rich as Croesus in 
 order to be the instrument of cherishing the distressed 
 and comforting the afflicted. He advised the Chancellor 
 of the Exchequer to abstain from his intended tax on 
 malt, and open a public subscription book for the poor, 
 desiring that he might be put down for 200 guineas.' 
 At the other extreme was the appeal of Lord Lough- 
 borough, 4 which might almost have been taken for a 
 demand for equitable distribution. He denied that 
 the burden involved on the poor would be light, and 
 pointed out that * the pressure of every burden was 
 felt in proportion to the weakness of him who bore it.' 
 1 Few of their Lordships, he was afraid, could form an 
 adequate idea of the effect of any additional duty on a 
 necessary of life to the poor.' The tax would amount to 
 55. a year on a poor man. ' What would their Lord- 
 
 1 The opposition was against the Malt Tax, and was partly in 
 protest against the heavy taxation of that product and of brewing ; 
 also against increasing the price of a liquor which was the great safe- 
 guard against the extended use of spirits. See i6th December 1790, 
 2Oth December, 2/th December (H. of L.); Cobbett, 28. 1014 seq., 
 1170 seq., 1195 seq. 
 
 1 Earl of Kinnoul, pp. 1 195-6. 
 
 3 P. 1172. * Pp. 1204-5.
 
 156 1776-1799 
 
 ships think of a capitation tax to that amount. . . ? 
 Would they not reprobate the idea as unjust, oppressive 
 and cruel ? ' It was natural, indeed, that it should 
 be the plea for compassion on the poor that should 
 influence Parliament in objecting to taxes on necessaries 
 for Parliament was dominated by the sentiment of 
 the landed class which instituted the Speenhamland 
 allowances in supplement of wages in 1795, and to 
 which neither Adam Smith's reasoning nor the interest 
 of the trader in low wages was likely to make much 
 appeal. 1 
 
 A large number of taxes was imposed or increased 
 in this period in accordance with the doctrine that 
 taxes should fall on luxuries. North regarded his 
 impositions on carriages, cards, dice and newspapers 
 in 1776 and male servants in 1777 2 in this light. 3 
 A carriage, ' though an object of convenience, was in 
 another light a luxury, because none kept them but 
 such as were really or nominally rich.' Of the same 
 type was Pitt's tax on pleasure horses in 1784. He 
 considered his addition of 1785 to the tax on male 
 servants as a tax falling chiefly on the opulent and 
 extravagant ; * and newspapers (the tax on which he 
 increased in 1789 and 1797) were, he said, * certainly 
 to be considered as articles of luxury ' and a fair object 
 of taxation. 6 Similarly both North and Pitt regarded 
 imports such as wine and tobacco as luxuries and as 
 such fit objects of taxation. North, for instance, 
 increasing the tax in 1781, said that * if he knew what 
 luxury was, tobacco came within that description ' 
 (although it was used chiefly by the common people). 6 
 
 1 See L. Stephen, Utilitarians, i. chaps, i.-iii., and Dicey, Law and 
 Opinion in England, pp. 101-2, 106-10, and Lecture V. passim. 
 
 * For short accounts of and references to the Statutes imposing 
 these and other taxes, see Dowell, ii, under years cited. 
 
 3 Cobbett, 18, 1318 seq., 19, 244. * Ibid., 25, 552-3. 
 
 6 Ibid., 33. 433-4, 28. 211. 
 
 Ibid., 21, 1370. Cf. Pitt on Tobacco, 1795, 32. 563.
 
 TAXES ON LUXURIES 157 
 
 Customs duties were increased many times. 1 Finally, 
 a number of taxes which, though not falling on luxuries, 
 had certain similar features, were accepted and justified 
 by a variant of this doctrine. Such were deed stamps 
 and legacy duties. They exempted the poor and were 
 regarded as evidence of the wealth and ability of the 
 person paying them. One of several increases in the 
 former was made by North in 1776. ' He thought 
 from the easy manner of collecting the stamp duties 
 and the benefits supposed to arise to the parties from 
 such transactions at the time, that deeds would bear 
 an additional stamp of is.' 2 In taxing bills of exchange 
 in 1782 he denied that there would be any hardship, 
 since the bill was an evidence of wealth. 3 So in 1795 
 Pitt justified an increase of the assessed taxes and the 
 imposition of small legacy duties, chiefly on the ground 
 that ' they attached to property, and would be felt 
 only by the higher and richer orders of the com- 
 munity.' 4 
 
 But such taxes were not nearly productive enough to 
 meet the needs of the time, and so a first departure had 
 to be made from the strictest form of the ideal tax. 
 
 1 The attitude towards Customs may be gathered from North's 
 speech of 1779. He proposed a surcharge on the net produce of 
 customs and excise, but made certain exemptions. ' The brewery 
 was exempted, because beer was a great article of consumption with 
 the lower orders of the people ; and if agreeable to the committee 
 he would exempt soap, candles and leather from the surcharge.' 
 Ibid., 20, 1 66. 
 
 2 Ibid., 1 8, 1319. 3 Ibid., 22, 1157. 
 
 4 Debrett, Parl. Register, 60, 599 (the volume numberings given 
 here are those of the backing of the B.M. copies, in 289 f.), and cf. 
 Cobbett, 32, 562. Pitt added : ' and it was with peculiar propriety 
 that in a war which had for its basis the security of property, those 
 persons who were happily possessed of wealth should peculiarly 
 contribute to its support.' There are very fairly reported debates 
 on the legacy duty bills which illustrate excellently eighteenth- 
 century views of taxation, but the subject (from the eighteenth- 
 century standpoint) is not important enough to justify the amount 
 of space they would demand. The proposed duty on succession 
 to landed property was rejected. See Debrett, 61. 347 seq., 362, 
 602, 643, and Lauderdale's protest, Cobbett, 32, 1 155
 
 5* 1776-1799 
 
 A series of taxes on objects of general use or expenditure 
 was imposed, which diffused the burden more widely 
 than taxes on luxuries, and yet in general exempted 
 the poor. Such, for instance, were the inhabited 
 house duty of 1778 (exempting houses up to .5 rental), 
 the receipt tax of 1783 (exempting receipts up to .2), 
 the calico tax and the increase in the graduated window 
 tax of 1784 (exempting houses under seven windows), 
 the taxes on maid-servants and shops of 1785 (shops 
 under ^4 rental exempted), and the tax of 1796 on horses 
 kept for industry. We have a brief summary of North's 
 speech on the inhabited house duty, which he justified 
 thus : * * It was necessary to provide a productive tax ; 
 it was difficult to fix on any that would not be in some 
 degree unequal ; (but) he wished to avoid burdening 
 the lower ranks ; it was not easy to come at the real 
 property of individuals ; but one ground of judging 
 of this, which prevailed in all nations, was by the expense 
 at which they lived ; and this, though it might not 
 answer in every single instance, was yet a very good 
 general rule.' Taxes on houses ' were proper and 
 eligible, as they were visible signs of ability to pay 
 them.' The other taxes of this class were defended 
 as equitable in the same way. Two of them, the receipt 
 tax and the shop tax, were attacked by the commercial 
 classes as being partial against them, and evoked much 
 discussion. The former, imposed by the coalition 
 government of North and Fox, was justified by Fox 
 as a tax in proportion to expenditure. ' There could 
 not be a better way of coming at the expenditure than 
 by taxing the receipts, or in fact taxing the payments 
 made.' It was natural to suppose that a man of 2000 
 a year would pay double what would be paid by a man 
 of j^iooo a year. In addition, it was not compulsory, 
 it was optional : * you were not compelled to take a 
 receipt.' 2 The opposition had no difficulty in showing 
 
 1 Cobbctt, 19, 872, omitting the connecting that's. 
 
 * Ibid., nth June 1783, 23. 1001. See also budget speech of
 
 TAXES ON NON-NECESSARIES 159 
 
 that the tax was unequal (accepting Fox's view of 
 its incidence), since the trader had more money trans- 
 actions than the propertied man of equal income ; 
 but what is of interest is rather the standard which 
 Fox desired to conform to. It was the same standard 
 which, Pitt contended, justified the shop tax. It 
 would really fall, he thought, on the customer, and so 
 roughly on general expenditure. The point at issue 
 between him and the opponents of the tax was simply 
 whether this view of the incidence of the tax was correct. 1 
 The distributive inequality of a tax on an object 
 of general use was not generally recognised. The 
 minor point alone was urged that the parsimonious 
 wealthy man escaped too lightly. 2 Apart from the 
 alleged inequalities of the receipt and shop taxes, the 
 only general objection made came from the commercial 
 classes, who protested against manufactures being made 
 subject to taxation. Their influence was very con- 
 iderable. They caused the defeat of Pitt's Irish policy 
 in I785, 3 they induced him to withdraw a proposed 
 extension of the coal tax in 1784,* and to repeal, against 
 his own judgment, the calico tax in 1785 and the shop 
 tax in 1789; and they opposed, but without success, 
 his adoption of Walpole's excise methods of collecting 
 the wine and tobacco duties. 6 A pamphlet on the calico 
 
 Lord John Cavendish, p. 933, speeches of Wray, Beaufoy and Pitt, 
 pp. 998, 1004, 1015, and Alderman Newnham's motion for repeal, 
 4th December 1783, 24. 97 seq. Pamphlets were numerous, e.g. 
 8228. ccc. 21, 712 f. I, and E. 2147 (2). 
 
 1 See debates of 1786 ibid., 25, 1165 seq. They were continued 
 yearly. See Pitt's speech in the last debate, 2nd April 1789, 27. 
 1343. Pitt was basing his case on Adam Smith (Wealth of Nations, 
 ed. Cannan, ii. 337). 
 
 2 Three Essays on Taxation of Income, 1799, B. 707 (6); cf. 
 Keith, An Impartial and Comprehensive View of the Present State of 
 Great Britain, 1797, B. 711 (i), p. 54. Keith also said that the poor 
 and the industrious man paid too high a share, but did not explain it. 
 
 3 See J. H. Rose, Wm. Pitt and Nat. Revival, chap. xi. 
 
 4 1784, Cobbett, 24. 1027-8, and 1215. 
 
 6 Wine, 5th May 1786, ibid., 25. 1434-9, and debates of 7th June 
 and 26th June (H. of L.) ; Tobacco, loth June 1789, 28. 157, 24th 
 June (p. 179), isth July (p. 231). Pitt gauged the changed state 
 of feeling since Walpole's day. ' So much were former prejudices
 
 i6o 1776-1799 
 
 tax * was indicative of their standpoint. It was en- 
 titled Manufacturers improper subjects of taxation, and 
 contended that, since Britain's hope of maintaining 
 her place among the nations depended on her manu- 
 factures, anything tending in any degree to enhance 
 prices or burden the merchant who exported them 
 was to be condemned. This was a quite partisan 
 contention, and both Fox, who advocated repeal, and 
 Pitt repudiated the doctrine that manufactures, as 
 manufactures, were improper objects of taxation. 2 
 Pitt, however, said that ' the opinions, however originat- 
 ing, however infused or however founded, of so large, 
 so useful and so respectable a body of men as the 
 cotton manufacturers, nay even their prejudices and 
 errors, were to him objects of such serious consideration 
 that he would not put his own sentiments in com- 
 petition with them when the point in question was 
 such as could with any safety be given up.' 3 
 
 But taxes on luxuries and on objects of general 
 expenditure were, taken together, also insufficient to 
 provide the required revenue, and so a second and 
 altogether more serious infringement had to be made of 
 the accepted ideal of the tax system. The old taxes on 
 necessaries (beer, salt, candles, leather, coal, soap) were 
 not only not repealed, but they were increased. The 
 malt tax was increased in 1779, 1780 and 1790 ; the salt 
 tax in 1780, 1782 and 1798 ; the soap tax in 1782, the 
 candle tax in 1784, and the tea and sugar duties several 
 times ; while, apart from Pitt's reduction of the tea duty in 
 
 against this mode dissipated that he did really expect on the present 
 occasion ... he should have but very few if any dissenting voices 
 against this proposal.' Fox repeated the old arguments. ' He 
 would never agree to any regulations which bartered away freedom 
 and the constitution for revenue.' The Cider Tax of 1763, repealed 
 1767, was opposed on the same kind of ground, but with more 
 reason. Ibid., 15, 1307 seq., and 16, 206-7. 
 
 1 B. 707 (i). The tax on printed goods was retained. 
 
 J Cobbett, April 20, 1785, 25. 478, 480, 483, 485, 490. 
 
 P. 483-
 
 NEW TAXES ON NECESSARIES 161 
 
 1784 to prevent smuggling, the only reductions were 
 those made by Pitt in 1792, when he took off the addi- 
 tions of 1784 and 1790 to the candle and malt taxes, 
 and completed the exemption of houses with less than 
 seven windows from the window tax. 1 The use of tea 
 and sugar, which are included in this list, was rapidly 
 extending among the poor in this period, and they 
 were gradually taking on the character of necessaries 
 in which they were usually regarded in the nineteenth 
 century. This was recognised in Parliament, and it 
 was admitted that in taxing them, taxes were being laid 
 on commodities which at least bordered on necessaries. 2 
 Beer, however, did not at this time cease to be looked 
 upon generally as a necessary. 
 
 The way in which North and Pitt introduced their 
 proposals for taxes on necessaries was very significant. 3 
 
 1 For all these, see Dowell, ii., under years. 
 
 1 The extending use of tea and sugar is illustrated by an attack 
 in 1777 on the growth of extravagance among the poor An Essay on 
 tea, sugar, white bread and butter, country ale-houses, strong beer and 
 Geneva, and other modern luxuries, \777, 8275. aaa. 10. J. H. Rose 
 (Wm. Pitt and Nat. Revival, p. 182, citing Farmer's Letters, 197) says : 
 'Arthur Young found that the use of tea had spread into the homes 
 of cottagers ; and he classed as extravagant those villages which owed 
 their refreshment to China, and commended the frugality of those 
 which adhered to home-brewed ale./ In 1795, Pitt increased the 
 tea duty as falling on a luxury and therefore a proper object of 
 taxation. Fox protested. ' With regard to the poor, he feared 
 that tea had of late years made a great part of their consumption ' 
 (Cobbett, 31. 1317-18). Debrett reports Fox as saying that 'teaand 
 sugar were now in such common use that he feared they were neces- 
 saries of life' (54. 316). Next year, Pitt admitted this tacitly. 
 On 7th December 1796 he proposed to increase the tea duty again ; 
 but exempted the coarser lands of tea as a common beverage of the 
 people, and with regret increased the Sugar Tax, which also affected 
 the people of the lower classes. Debrett, 63. 265-67. On the other 
 hand, Sinclair the historian regarded sugar as a most eligible subject 
 of taxation. ' It is a luxury of life that might undoubtedly be dis- 
 pensed with.' History of the Public Revenue, part iii. 1790, p. 186. 
 
 3 The reports of speeches in this period vary very much in 
 character. Only the most important speakers were reported at 
 length, and this was not always the case even with them. Also it is 
 probable that few of the speeches given at length were reported 
 verbatim. They were probably written up from very full notes of 
 the line of argument and of the significant words and phrases. 
 But granted that, I do not see any substantial reason for distrusting 
 
 Ii
 
 1 62 1776-1799 
 
 They did not assert that everyone should pay taxation 
 and that such taxes would fall equally as between rich 
 and poor ; neither, on the other hand, did they repudiate 
 these doctrines. Their attitude was one of distress and 
 apology. As Pitt said in 1784,* with reference to a 
 proposed tax on coal which was later withdrawn, * it 
 was painful to him to tax that without which we could 
 not subsist.' Similarly he was * seriously concerned ' 
 to have to tax candles, a necessary of life c as indispensable 
 with the poorest as with the richest family in the king- 
 dom.' z They excused themselves on the ground of 
 pressure for money and the paramount need for * pro- 
 ductive ' or ' substantial ' taxes. To quote Pitt again : 
 ' the truth was, that nothing but the urgency of the 
 present exigence should have driven him to this and 
 several other resources.' 3 And to be productive, 
 taxes must, they argued, touch the body of the people, 
 who are the great consumers 4 not considering such a 
 possibility as an Income Tax. And finally, they put in 
 a plea in mitigation, that the added burden would be a 
 very small one ' so trifling a burden,' North remarked 
 in reference to the salt tax of 1780, 'that no person, 
 however poor, would have cause to complain.' 6 Pitt's 
 answer to the opponents of the malt tax addition of 1790 
 was similar. He could not believe ' that so very small 
 an addition to the duties on malt already paid (about 
 a farthing a gallon on the better sort of beer) could be 
 attended with serious consequences to any description 
 of persons, rich or poor.' 6 
 
 The truth was, of course, that without being able 
 
 them ; and, particularly when employed as a whole, and not merely 
 for the expressions of a single speech, their testimony seems to me 
 conclusive. For practical purposes, it is inconceivable that the 
 reports with which I am concerned, viz. those of financial speeches, 
 were invented by reporters. See Tierney, 27th December 1798, 
 Cobbett, 34. 148. 
 
 1 Cobbett, 24. 1027. 2 Ibid. pp. 1028-29. 3 Ibid. 
 
 e.g. North, 1781, ibid. 21. 1363-64; Pitt, 1784, 24. 1026. 
 Cf. Fox, 1783, 23. 1002. 
 
 6 Ibid. 21. 168. * Ibid. 28. 1174-75.
 
 ATTITUDE TO TAXES ON POOR 163 
 
 to say that the poor man ought not to bear a share in 
 taxation, they desired for compassionate or trade reasons 
 to avoid taxes on his necessaries. And yet they did 
 not hold this opinion firmly enough to prevent its 
 contravention in practice. Two results of some im- 
 portance followed. First, taxes on necessaries ceased 
 to be put to any real test of distributive equity. They 
 were not imposed because the poor should pay taxation ; 
 on the contrary, they should not be imposed at all. The 
 question whether they laid an equitable share of the 
 burden on the poor, therefore, did not arise. Only 
 necessity justified taxes on necessaries they were 
 ' improper taxes.' Thus the condition of opinion con- 
 spired against any advance in the understanding of the 
 distributive effect of such taxes, or any recognition of 
 the necessity for a compensatory Income Tax or the 
 like, even on the theory that the poor should pay taxation 
 in proportion to income. Secondly, opinion on taxa- 
 tion necessarily lost in authority. Certain taxes ought 
 not to exist, but they did exist and grew heavier. The 
 doctrine that necessaries should not be taxed ceased 
 to be a rule to be followed it became a rule to be 
 followed when circumstances permitted ; and yet it 
 remained, as we have just observed, the only test to 
 which taxes on necessaries were subjected. * In instances 
 when the sums wanted will admit of it, the objects of 
 taxation should ever be property and the luxuries of 
 life,' said North. 1 Pitt expressed the same idea in 
 other words when he declared productiveness to be 
 the first consideration in imposing taxes. That apology 
 for a theory was even regarded by George Rose as worth 
 embroidering in his defence 2 of Pitt's financial policy 
 from 1792 to 1799 on this ground: ' It is a principle 
 of taxation, equally permanent and politic, to spare, as 
 far as is consistent with the productiveness of the taxes 
 to be imposed, the great body of the people, those 
 
 1 1777, ibid. 19. 243. 
 
 1 A Brief Examination . . ,, 1799, B. 524 (7), p. 31.
 
 164 1776-1799 
 
 inferior ranks from whose labour and industry the wealth 
 of the country is chiefly derived/ But its real meaning 
 was expressed more truly by the opposition leaders, whose 
 speeches bring out very clearly how general was the 
 attitude to taxation which North and Pitt represented. 
 Fox pledged himself to support Pitt on his proposed 
 taxes on necessaries of 1784. ' Indeed, so sensible was 
 he of the necessity of raising taxes that there were 
 hardly any taxes the rt. hon. gentleman could have 
 proposed that he should have thought himself, from 
 the situation he had held, entitled to oppose.' * So, 
 on another necessaries budget in 1790, Sheridan 2 said : 
 * As for the taxes proposed, the rt. hon. gentleman's 
 situation was at present so difficult that it was almost 
 unjustifiable to oppose any taxes.' 
 
 One other explanation requires to be added to make 
 the situation clear. The doctrine that taxes should not 
 fall on necessaries was not only not respected in fact, 
 but it was based on positions which did not have in them 
 the quality of coerciveness. This was obviously true 
 of the first ; for the objection to taxes on necessaries 
 on the ground that they raised wages and injured trade 
 was merely one out of several non-distributive objec- 
 tions to taxes, and it clashed, in particular, with objec- 
 tions to direct assessment. But it was also true of the 
 second. The desire to exempt the poor on compassionate 
 grounds was in a measure sentimental and superficial. 
 It is necessary to guard against exaggeration on this 
 point, for the sentiment did without doubt stimulate 
 the Chancellors of the Exchequer to a real attempt to 
 find taxes which did not fall on the poor those which 
 we have discussed, and the Triple Assessment and the 
 Income Tax to which we proceed, make this clear. But 
 while it is true that the desire influenced practice, it is 
 equally true that it did not control it ; no attempt was 
 made to live up to it completely, or indeed even to discuss 
 the means which would make that possible. This was 
 1 Cobbettj 24. 1032. * Ibid. 28. ion.
 
 ATTITUDE TO TAXES ON POOR 165 
 
 partly due to unwillingness to face direct taxation, 
 whether because of a real fear that it was impracticable 
 or on account of doctrinal prejudices or of mere self- 
 interest ; but it was also due partly to the fact that 
 compassion for the poor could not uproot from men's 
 minds the idea that after all it was just that the poor 
 man should pay taxation. That implication of the 
 freeholder view of society constituted the background 
 of opinion all through the eighteenth century, as a great 
 mass of evidence testifies ; x and it could not be over- 
 
 1 In addition to sections on Walpole and Adam Smith, see The 
 man' s mistaken who thinks the taxes so grievous . . ., 1755,8132.0.27, 
 p. 1 1-12. ' Is it not the duty of the meanest of His Majesty's subjects 
 to lend their utmost assistance in time of danger in common with 
 their masters . . . should our enemy prevail will not our manu- 
 factures be destroyed and our people made slaves to foreigners ? ' 
 Proposals of 1757, 8132. c. 71, p. 49, and cf. p. 12. 'Every person 
 ought to contribute somewhat towards the support of the govern- 
 ment by which he is protected ' referring to the poor man. 
 Blackstone, Commentaries, 1765, i. 117 seq. and 297. Reflections on 
 the present high price of provisions . . ., 1766, 8247. df. 37 (i), p. 22. 
 ' For as every man is bound to contribute to the public revenue in 
 proportion to the benefits he receives from the public protection, 
 so no man has a right to complain whilst particular care is taken in 
 the imposition of taxes that they are not unequally laid.' ' Every 
 one who desires to enjoy the sweets of society is ready to pay to- 
 ward the defence of himself and his fortune.' Thomas Mortimer, 
 Elements, 1772, p. 458. The people 'should remember that all the 
 subjects are bound in one common bond to support the civil govern- 
 ment under the protection of which they enjoy inestimable rights 
 and privileges ; and that it is the indispensable duty of every indi- 
 vidual to contribute in a due proportion to the national expenses ; 
 for, as an elegant Italian author observes, " Every individual in pay- 
 ing taxes deposits a part of his property in the public treasury in 
 order to preserve the remainder and to enjoy it securely." ' Kames, 
 Sketches, 1774, ii. 464 (viii. 2 at end). Thomas Percival, An 
 Inquiry into the principles and limits of taxation as a branch of moral 
 and political philosophy, 1785 (Memoirs of the Literary and Philo- 
 sophical Society of Manchester), T. 276 (6), passim. Sinclair, History, 
 part iii. 1790, p. 128, which brings together various feelings regard- 
 ing the taxation of the poor. Adam Ferguson, Principles of Moral 
 and Political Science, 1792, ii. 434. John Young, Essays, 1794, 
 E. 2076 ( i ), vii., on Taxations, p. 133. 'Nothing can be more reason- 
 able than that all who enjoy the protection of government should 
 contribute according to their ability for its support.' Burke, 
 Regicide Peace, 3rd Letter (ed. Payne, p. 208). ' None on account 
 of their dignity should be exempt ; none (preserving due pro- 
 portion) on account of the scantiness of their means. The moment
 
 i 66 1776-1799 
 
 thrown by, though it was not easy to reconcile with, 
 any mere plea for compassion. The two attitudes 
 moved on different planes the one was an appeal, true 
 or false, to justice to the essential conditions of life ; 
 the other was an appeal to sentiment, and was relatively 
 superficial. And therefore, although men avowed the 
 desire to exempt the poor, yet they regarded this not so 
 much as an act of justice as a concession to misfortune ; 
 and if they were unable always to grant the exemption, 
 the failure was ground for regret and distress or even 
 apology, but could not be regarded as an injustice. This 
 was the unconscious logic of the Parliamentary mind. 
 
 A change in the tone of oneof Pitt's budget speeches at 
 the very end of this period illustrates this, and shows how 
 close to the surface was the idea that everyone was under 
 an obligation to pay taxation. In a supplementary 
 budget of I798, 1 subsequent to the imposition of the 
 Triple Assessment, Pitt proposed inter alia to double the 
 salt tax (to yield half a million a year) ; and, besides 
 explaining that it would lay no larger a yearly sum 
 than half a crown on each labouring family, and referring 
 to the extraordinary exigencies of the times, he justified 
 his proposal by appealing to the common interest of the 
 whole nation in the war. ' I am still more confirmed in 
 the justice of this tax, and I am still more persuaded 
 that the very order of people I am speaking of will be 
 satisfied of that truth, when they are informed that 
 persons of the highest rank are not, either with respect 
 to their property, their liberty, or their happiness, so 
 interested in the preservation of this country and the 
 happy constitution under which they live as the lower 
 
 a man is exempted from the maintenance of the community, he is in 
 some degree separated from it. He loses his place as a citizen.' 
 Cf. also pp. 21920. 
 
 1 Par/. Register (Debrett), 68. 66-67, substituting or for and 
 before ' their happiness.' The report in Pitt's collected Speeches, iii. 
 293-95 is differently worded, but brings out, though not so clearly, 
 the same points. Pitt made the same point in 1805 on another 
 increase in the Salt Tax : see Cobbett, Parl. Debates, 4th March 
 1 805, iii. 697.
 
 INCOME TAX 167 
 
 and labouring classes of the community. If they want 
 to be convinced of this truth, let them look to the 
 situation of those countries which have been overrun 
 by the French.' He also pointed out that the poor had 
 been for the most part exempted from the taxes lately 
 imposed a rudimentary recognition of the compensatory 
 method of distributing taxation between rich and poor 
 which implied no real understanding of the distributive 
 character of taxes on necessaries. 1 
 
 It is from the basis of this state of opinion and policy 
 that we can alone understand the character of the 
 third and most striking departure which was made 
 from the eighteenth-century view of a good tax system. 
 The circumstance was again financial need. At the end 
 of 1797 Pitt came to the conclusion that the immense 
 yearly addition which was being made to the national 
 debt had become a menace to the credit of the State, 
 and decided to recommend Parliament to break with 
 the system of providing new taxes only for the interest 
 of the deficit. He proposed that a large portion of each 
 year's deficit should be provided within the year. Only 
 a direct assessment, however, could yield the desired 
 sums. Consequently, in 1798 a tax known as the 
 Triple Assessment was imposed, from which it was 
 estimated that four and a half millions a year would be 
 obtained. But this tax was widely evaded, and next 
 year it was replaced by an Income Tax of 2s. in the , 
 which was estimated to produce seven and a half millions 
 
 1 1 have only noticed one real recognition of the compensatory 
 idea in this period. Thomas Percival in his Inquiry, p. 23, said : 
 ' To apportion the taxes with all possible impartiality is essential to 
 their having the full force of moral obligation. Yet this is the most 
 arduous office of the financier; and when a kingdom is under the 
 pressure of accumulated debts, can perhaps be accomplished only by 
 such a modification of the whole system of revenue as shall com- 
 pensate the unavoidable excesses in some cases by equitable exemp- 
 tions in others.' But he did not develop it, nor did he realise the 
 distributive result of taxes on commodities in general use. Cf. 
 Keith, loc. cit.
 
 i68 1776-1799 
 
 a year, and which did produce about six millions. 1 The 
 nineteenth century may be said to have opened, so far 
 as matters of taxation are concerned, with Pitt's Income 
 Tax of 1 799 ; and if we properly grasp the state of opinion 
 in that year, we have not only understood the eighteenth- 
 century view of taxation, but we have obtained a clue 
 to the way in which tax questions were approached for 
 the ensuing fifty years. 
 
 The first point to be observed regarding the Income 
 Tax is that it contravened the doctrine that revenue 
 should be raised through taxes on expenditure, and 
 not by direct assessment of means. 2 It involved ' an 
 inquisition more intolerable than any tax,' 3 it would 
 lead to fraud, it was far from optional, 4 it fell on profits 
 and so diminished reproductive stock. 5 It was a ' forced 
 
 1 Altogether the best and fullest account of these taxes is given 
 in The Income Tax, 1911 (pp. 57-115), by Professor Seligman, who 
 for the first time has made use of the pamphlet literature of the 
 subject. As explained in Chap. III., I am unable to accept Professor 
 Seligman 's view of the relation of the Income Tax to the direct taxes 
 of the seventeenth century. See also Dowell, ii. 212-14, 215-16. 
 I hold myself relieved from going over the history in detail. 
 
 2 The best statement of the attitude outside of Parliament was 
 by Francis Newbery, a Commissioner of Taxes, Thoughts on 
 Taxation, 1799, T. 1647 (6), who considered optionality, particularly, 
 ' as of the very essence of taxation in a free country.' 'If ... one 
 of the first characteristics of a free constitution be security of person 
 and dominion of property, how can an impost which is inevitable and 
 compulsory, and which therefore militates against the dominion 
 of property, be consistent with freedom ? . . . How can freedom 
 exist when its characteristic quality is gone?' (pp. 9-11). Cf. in 
 Parliament, Tierney, 3ist December, 1798, Debrett, 69. 492-93. 
 For contemporary pamphlet discussion of the doctrine that taxes 
 should be on consumption, see e.g. Lauderdale, Plan for altering the 
 manner of collecting a large part of the public revenue, 1799, T .1649 (6), 
 pp. 12-14, and Three Essays on Taxation of Income, 1799, B. 707 (6), 
 p. 28 seq. 
 
 3 Parl. Register (Debrett), i4th December 1798, M. A. Taylor, 69. 
 247-48, Wm. Smith, 69. 263-64 (quoting Adam Smith), 3ist Decem- 
 ber, Nickolls, 69. 486. Cf. Petition from City of London, 22nd 
 March 1802, 79. 256-58. For a moderate statement of the com- 
 mercial view not pushed to the length of opposition to the bill 
 in the circumstances of the time (1798), see Baring, 69. 260-61. 
 
 4 e.g. Duke of Bedford, 8th January 1799, ibid. 69. 563. 
 
 * Hobhouse, 4th December 1798, 69. 128. ' It was a tax which 
 would strike with peculiar force at industry and the fruits of in- 
 dustry, while indolence was left untouched and encouraged . . .
 
 OPINION ON INCOME TAX 169 
 
 contribution.' It was to be regarded as a temporary- 
 sacrifice to meet a great emergency. 1 
 
 Nothing could show more clearly the dislike and 
 distrust of direct assessment than the first plan which 
 Pitt adopted for his emergency tax. The Triple 
 Assessment was a half-way house between taxes on 
 expenditure and a direct tax on income. It was an 
 attempt to raise a large sum by a single tax and yet 
 retain as much as possible the character of the accus- 
 tomed taxes of the time. Direct assessment of means 
 and inquisition were avoided 2 (except as regards claims 
 for exemption and abatement) by basing the contri- 
 bution of the tax-payer, not upon his income or property, 
 but upon his payment in a previous year to the assessed 
 
 The merchant is accustomed annually to convert a part of his 
 profits into capital. If the tax-gatherer calls for a portion of those 
 profits, he must devote less to the increase of his reproductive stock. 
 Thus the progress of our trade would be obstructed.' Quotes Sir 
 Jas. Steuart : ' As to the pure profits on trade,' ' although they 
 appear to be income yet I consider them rather as stock, and there- 
 fore they ought not to be taxed.' 
 
 1 Triple Assessment, Pitt, 24th November 1797, ibid. 66. 278 ; 
 Income Tax, 3rd December 1798, Pitt (less definite), Orations of 
 William Pitt, Everyman ed., p. 279; Repeal 1802, Addington, 
 5th April, Debrett, 416 (Cobbett, 36. 448). The fallacious argument 
 that by reducing the spending power of the rich the yield of the 
 taxes on expenditure would suffer and, employment being lessened, 
 the poor would be affected, was not of much importance. It had 
 been discussed and refuted in 1779, when Pulteney (Considerations 
 . . . on the means of raising the necessary supplies, T. 1118 (9)) 
 suggested raising the whole supply within the year by a tax of ij 
 per cent, on fortunes (capital). The objection was then made, by 
 Burke among others (Cobbett, 20. 168), but in his Budget speech 
 North, followed by Pulteney, pointed out the fallacy the tax 
 would be spent by the State. It reappeared, however, in 1797-99. 
 Lauderdale gave countenance to it (A Letter on the present measures 
 of Finance, 1798, T. 1649 (5), pp. 23, 36) ; Rose made careless and 
 inconsistent use of it (Brief Examination . . ., 1799, p. 33) ; the 
 Duke of Bedford put it forward as an objection to the Triple Assess- 
 ment, 5th January 1798, Debrett, 66. 655 ; and see Hobhouse, 4th 
 December 1798, 69. 127. Not much notice was taken of it. See 
 Pitt, I4th December, 1798, 69. 267, and Thoughts on Taxation, 1798, 
 1103. h. 52, p. 62. As noted before, the argument had a certain 
 local validity. 
 
 2 Purposely, of course; see Pitt, 24th November 1797, Debrett, 
 66. 274; i4th December, p. 456; and cf. e.g. Nickolls, 3rd January 
 1798, p. 526.
 
 170 1776-1799 
 
 taxes, i.e. upon his expenditure on servants, house rent, 
 carriages, and the like. But, on the other hand, the tax 
 was not optional ; for it was based on expenditure in 
 the past, which is as rigid and unalterable a standard as 
 it is possible to invent. It was, therefore, not left to 
 the tax-payer to reduce his contribution by reducing his 
 expenditure. 1 The Triple Assessment was an attempt, 
 and as it turned out an unsuccessful attempt, to get a tax 
 on income 2 (with exemption up to 60 and abatements) 
 but on the basis of past expenditure. 
 
 The Income Tax was not imposed, therefore, because 
 it was considered a better tax than those on expenditure, 
 or in order to remedy any inequality in the existing 
 distribution of taxation. On the contrary, it was 
 imposed in the face of severe condemnation of direct 
 assessment by the current doctrine of the age, which, 
 although not shared in its full extent by Pitt, 3 was so 
 general and powerful that the tax was repealed in 1802 
 and 1816 in spite of financial difficulties. 4 But, on the 
 other hand, it is equally important to notice that the 
 Income Tax was regarded as an emergency tax because 
 of this condemnation, and not because of its distributive 
 
 1 This was one of the chief grievances ; e.g. 4th December, 
 Nickolls, 66. 335 ; Plummer, p. 343 ' If a tax to be raised was 
 upon luxuries, an opportunity ought to be afforded to persons 
 to retrench those luxuries ' ; 4th January, Hobhouse the only 
 justifiable scheme of taxation is such a tax whether upon carriages, 
 horses, or any other article as will ' never interfere with . . . the 
 right of the individual to subject himself to that share of the burden 
 which in his own judgement his fortune and condition in life will 
 allow,' p. 558 ; Lords' Protest, Cobbett, 33. 1299, . 4, p. 1302. 
 
 s Pitt, 24th November, ibid. 66. 278 ; I4th December, Fox, 
 pp. 434-35; Pitt, p. 456. 
 
 3 Pitt was not given to expressing unnecessary judgments on 
 abstract questions, and it is not easy to know what exact view he 
 held of the place of an Income Tax in the hierarchy of taxes. But he 
 certainly dissented, along with not a few others, from the extreme 
 condemnation passed upon it by the commercial classes. See Pitt, 
 I4th December 1798, Debrett, 69. 269-71 ; Bishop of Landaff, 
 An address to the people of Great Britain, 1798, 8026. c. 50, p. 2; 
 Thoughts on Taxation, 1798, pp. 65-66. 
 
 * Seligman, op. cit. pp. 87-89, 106 seq., and see note 5, p. 
 146.
 
 INCOME TAX DISTRIBUTION 171 
 
 principles. These were widely accepted, and even if 
 they had been modified to meet the one objection 
 of any influence which was raised against them, the tax 
 would still have been condemned as permissible only 
 in the last resort. That is to say, distributively the 
 Income Tax was an expression and not a contravention 
 of the typical eighteenth-century view of the equitable 
 distribution of taxation. 
 
 The distributive characteristics of the Income Tax 
 (and of the intention of the Triple Assessment) were 
 three. 
 
 First, the poor that is, the great body of the people 
 were exempt. Only those with incomes of .60 a year 
 and upwards (the middle class and the rich) paid Income 
 Tax. No doubt, though it was never mentioned, one 
 of the reasons for the exemption was that it is extremely 
 difficult to levy a direct tax on the poor. But it is 
 important to notice that it was considered altogether 
 desirable and proper that the poor should be exempted. 
 No complaint was raised against their exemption ; on 
 the contrary, it was held up as one of the chief grounds 
 for accepting direct assessment. 1 The reason, of course, 
 was that exemption of the poor was an accepted maxim 
 of current opinion, and that in the Income Tax the 
 maxim did not conflict, as it did in taxes on expenditure, 
 with productiveness. 
 
 Second, it was not because the poor already paid 
 enough taxation otherwise that they were exempted from 
 the Income Tax. This is another way of saying that the 
 Income Tax was not imposed or considered as a com- 
 pensatory tax, or as part of a compensatory system of 
 taxation. It was looked at by itself, just as taxes were 
 looked at in the seventeenth century and by Walpole 
 and Adam Smith. Hence its repeal was demanded in 
 1816 with an easy conscience and with scorn for opposi- 
 
 1 Triple Assessment, Pitt, 24th November, Debrett, 66. 277-78, 
 4th December, p. 317. Cf. Lushington, 3rd January, p. 544, Lord 
 Grenville, 5th January, p. 643. Scarcely mentioned in Income Tax 
 debates. See G. Rose, op. cit. p. 32.
 
 172 177^-1799 
 
 tion, and opponents of repeal were so little able to 
 explain and justify their position. 1 If we ask ourselves 
 what answer we should make to-day to a proposal to 
 repeal the Income Tax, we can realise the most striking 
 change in opinion on taxation which took place during 
 the nineteenth century. 
 
 Third, the distributive standard adopted for the 
 Income Tax was proportionality to income, with certain 
 minor modifications. The act imposed a tax of 10 per 
 cent, on all income of whatever kind (from land, funds 
 and property of any kind, farming, trade, professions 
 and earnings) over .60 a year. In adopting this prin- 
 ciple Pitt simply took over and made precise the seven- 
 teenth- and eighteenth- century idea that distribution 
 should be proportionate to income. But although he 
 made it precise for the practical purpose in hand, he 
 did not make it precise as a matter of principle, either 
 in his own mind or in that of others. 2 It remained 
 essentially what it was in the eighteenth century a 
 somewhat vague idea which was probably sound but 
 was not clearly understood in all its bearings ; the more 
 elaborate consideration of the question, which was one 
 of the distinguishing marks of the nineteenth century, 
 was only beginning. It is not to be implied that Pitt 
 thought that the standard he adopted was inequitable 
 in particular respects ; on the contrary, he defended 
 it against proposed modifications ; 3 but neither he 
 nor his critics had an all-round view of the problems 
 involved. 
 
 The minor modifications, which were generally 
 accepted, 4 were : first, certain allowances to the tax- 
 payer in respect of his children a recognition, in the 
 spirit of the seventeenth and eighteenth centuries, that 
 ability cannot be measured only by some one circum- 
 stance, such as income ; and second, abatements to 
 
 1 See note 5 above, p. 146. 
 
 * See discussion of differentiation below. 8 Ibid. 
 
 4 On allowances for children, see interesting short debate on 
 22nd December 1798, Debrett, 69. 404 seq.
 
 INCOME TAX DIFFERENTIATION 173 
 
 tax-payers whose incomes ranged between .60 and 
 j2OO, the official view of which was not very clear. 1 
 The practical reason was, no doubt, (i) that if you 
 exempt an income of ^60 it is absurd to tax an income 
 of 65 at the full sum, and (2) that it was intended 
 in general to levy a tax on the full income. 
 
 The Income Tax, then, was a direct assessment on 
 means, regarded on that account as an emergency 
 expedient, imposing a tax which was not considered 
 as part of a compensatory system of taxation, falling 
 upon the wealthy and middle class, in proportion to 
 incomes, and exempting the poor. This was its signi- 
 ficance in relation to the eighteenth century, and the 
 major part of its meaning for the first half of the nine- 
 teenth century. But for the nineteenth century it 
 had an additional significance. It raised sharply certain 
 questions about proportionality to income as the standard 
 of distribution (the poor not being in question) which 
 were necessarily slurred over in the eighteenth century, 
 but constituted a considerable subject of debate in the 
 nineteenth. 
 
 We are not concerned here to discuss these nine- 
 teenth-century questions in detail, but it is necessary 
 to notice briefly how they were approached in 1798 
 and 1799. Two chief criticisms were then advanced 
 against the justice of taxation in proportion to income. 
 The first, which was supported by influential commercial 
 opinion, was that it was unfair to tax at the same rates 
 landed or funded income, life income, and professional 
 
 1 Rose (op. cit., pp. 32-33) described it as based on the ' principle 
 of proportioning public assessments to the ability of different 
 classes.' ' The small earnings of laborious industry are spared 
 altogether ; the progressive rise of the tax saves, in a proportional 
 degree, the moderate incomes of the classes of all the orders below 
 competency . . . .' Auckland (Debrett, 69. 547-48) explained the 
 intention as based on the exemption of incomes ' necessary to 
 actual subsistence,' whence incomes above that amount must be 
 abated to some extent till a point (necessarily arbitrary and dis- 
 putable) is reached at which the full rate can be applied,
 
 1776-1799 
 
 or commercial income. There should be differentiation 
 between settled, temporary and precarious incomes. 
 What modification of proportionality should therefore 
 be made was, however, not very clear to the critics. 
 In the debates on the Triple Assessment, we find chiefly 
 a general protest against crushing the middle class. 1 
 A typical statement of the case next year was Tierney's. 
 All income, he said, was not disposable property ; the 
 professional man or trader had to save from his income, 
 whereas the man of property had already the continuance 
 of his secured. 2 A less complacent form of the ob- 
 jection was that the bill taxed indolence and industry 
 equally. 3 * It is not asked whether one be not a farmer 
 who has earned it (500) by the sweat of his brow or 
 whether the other may not be a mere miscreant, who 
 loads the earth with an useless incumbrance.' The only 
 defined suggestion for a common denominator of 
 different sorts of income was the rather absurd one of 
 capitalising them. 4 This proposition derived from the 
 idea, loosely held and interpreted very differently by 
 different men, that taxation should be on property or 
 capital ; 5 which, as Pitt pointed out, involved the 
 
 1 e.g. 4th December, Debrett, 66. 335-36 (Nickolls), 7 th December, 
 p. 381 (Wilberforce). But cf. Fox, ibid. p. 622, and Lords' Protest, 
 Cobbett, 33. 1302, 4. 
 
 2 Debrett, 69. 492. 3 Ibid. p. 262, Wm. Smith. 
 
 4 Frend, Principles of Taxation, 1799, T. 1651 (3), pp. v.-xi. 
 5 seq. 
 
 8 It is as impossible to neglect as it is difficult shortly to explain 
 the numerous references at this time to the idea that taxation 
 should fall on property. The term was used vaguely and differently 
 by different people. In its broadest form, it meant little more 
 than that the poor should be exempt from taxation. Thus Auck- 
 land (5th January 1798, Debrett, 66. 653) and Pitt (p. 456) admitted 
 that there would be no objection to an equal contribution on the 
 whole of property ; and Pitt spoke of the Triple Assessment as a 
 surrender of part of our property as a salvage, and said that con- 
 sumption having failed it was necessary to resort to the ' general 
 taxation of property ' (Inc. Tax, 3rd December 1798, Orations, 
 Everyman ed. p. 279, and i4th December, Debrett, 69. 268). In 
 the same way, taxes on servants, houses, etc., were sometimes 
 spoken of as levied on a visible criterion of men's property ; and 
 Addington in reimposing the Income Tax in 1803 (changed in 
 administrative ways but not in its essential distributive principle),
 
 INCOME TAX DIFFERENTIATION 175 
 
 position that a landowner and a trader, each with 
 a capital of .15,000, should both pay the same tax 
 
 renamed it the Property Tax (see Seligman, op. cit., p. 89 seq.}. So 
 used the phrase did not mean (i) that the tax should fall on capital 
 value as against the annual income of property, or (2) that the 
 value of property owned was accepted as the just standard of 
 distribution. But, the notion being vague, it was possible to use 
 it to mean both these things. First, without distinguishing the 
 points at issue, Pulteney in 1779 proposed a contribution of i^ per 
 cent, of each man's fortune to raise the whole supply within the 
 year (Considerations, T. 1118 (9), p. 36) ; and in 1798 the Bishop of 
 Landaff approved what he called a tax of a tenth of ' every man's 
 whole property ' for a similar purpose (Address, p. i seq.}. Similar 
 expressions were used by the spokesmen of the commercial classes. 
 If taxes could not be on luxury they ought to be on property (Lush- 
 ington, 1 4th December 1797, 66. 418-19). Second, it was argued in 
 Parliament, e.g. by Col. Wood, Thurlow, and the Duke of Bedford 
 (Debrett, 4th December 1797, 66. 355-56, 5th January, p. 66 1 ; 69. 
 562 seq.), and in pamphlets by Lauderdale and Frend (op. cit.\ that 
 property (capital) was the equitable standard of distribution and 
 that income was not. Pitt answered these two lines of argument 
 thus : (i) He pointed out that the manufacturers, who had as great 
 an interest in the defensive contest as others, should not be ex- 
 empted, and that it was visionary and impracticable to think that 
 the burden could be laid on the rich alone, 7th December 1797, 66. 
 387 ; and (2) on the heels of his own declaration that it was necessary 
 to resort to the general taxation of property, he said (69. 268 seq.) 
 that ' in order to ascertain the capital of the country the only 
 proper criterion that offers itself is that of income,' and pointed 
 out that to tax equally a capital of 15,000 which yields the landlord 
 500 and the trader 2250 a year would be unjust (p. 272). It should 
 be noted that the idea that taxation should be on capital ran counter 
 to the economist's doctrine that it should not, and that the result 
 would be injurious to the commercial interest of the country see 
 e.g. 1796 debates on Legacy Duty bills, e.g. Grey, Debrett, 61. 363, 
 as well as note 5, p. 168. 
 
 The explanation of the use of the idea is perhaps threefold. 
 First, the ruling classes were people of landed property, whose 
 incomes were property incomes, and to whom, granting that the 
 poorer classes were exempt, it was easy to think carelessly of taxation 
 of income and of property as the same thing. The difference rose 
 sharply in considering the incomes of wealthy professional men 
 and traders, which were now being generally taxed directly for 
 the first time for a century. Second, the idea was a useful one 
 for the commercial classes to take up (see e.g. City of London 
 petition, 1802), in order to condemn the proposed and later the 
 existing tax. Third, it was possible to support the doctrine on the 
 ground of the benefit theory of taxation ; which was well known 
 although not effectively operative on men's thought. It was said 
 that each citizen should pay in proportion to the protection he 
 received from Government, which it was asserted was in proportion 
 to his property. So Thurlow and the Duke of Bedford (loc. cit.} .
 
 176 1776-1799 
 
 although their incomes were ^500 and 2250 respectively. 1 
 The whole discussion was indeed lacking in definiteness, 
 and much complicated by the eagerness of the com- 
 mercial classes to seize on any argument by which 
 the hated direct assessment could be vilified. Pitt 
 made a detailed reply on the subject on I4th December 
 1798, in which he declined to differentiate. 2 He did 
 not agree that there was any injustice as between the 
 property income and the annuity ; he was not clear 
 whether the demand for differentiation in favour of 
 earned incomes was just, and he did not think it ad- 
 ministratively practicable. We must, he said, take 
 the situation of men as we find them and make one 
 rule of privation apply equally to all income : ' whether 
 a man is in the habit of saving a portion of his income 
 or spending it all, he shall have one tenth less to save, 
 one tenth less to spend in the year.' 
 
 The second and much less representative criticism 
 was that it was unfair to tax the large and the small 
 income at the same rate. The tax should be graduated ; 
 the larger the income the larger the rate (not merely 
 the amount) of tax should be. What we may call 
 pseudo-graduation was a common technical device in 
 English taxation, designed to bring some standard 
 other than means or income into closer relation thereto. 
 Seventeenth-century Poll Taxes, the Window Tax and 
 the Triple Assessment were cases in point. The 
 
 the latter added that the heavier taxation of landowners was but 
 just, since they, being fixed in the soil, got most benefit from the 
 protection of the State, which, indeed, he implied, in no way helped 
 the man whose profits depended on his own exertions or expense. 
 A less general but commoner form of the argument was that it was 
 specially incumbent on property to contribute in a war chiefly 
 undertaken for the defence of property (e.g. Bowles, Two Letters, 
 1796, 102. g. 58, p. 32 ; Alderman Lushington, loc. cit.~). 
 
 A few suggestions were made that the standard of distribution 
 should not be expenditure or capital or income, but some combina- 
 tion of these. See Hobhouse, 4th December 1798, 69. 127-28, and 
 Sinclair, i4th December, p. 233. 
 
 1 Pitt, i4th December 1698, Debrett, p. 272. 
 
 1 Ibid. p. 274.
 
 INCOME TAX GRADUATION 
 
 abatements in the Income Tax between .60 and 200 
 were another form of pseudo-graduation ; and it was 
 on this analogy that the favourite argument for real 
 graduation was based. 1 What reason was there, it 
 was argued, for stopping the grading at ^200 ? In the 
 vagueness of opinion regarding the abatements, the 
 point was of some debating force ; z but the real answer, 
 of course, was that whatever the abatements meant, 
 they did not mean the progressive cutting down of 
 incomes. A better form of the argument was Gilbert 
 Wakefield's. He pointed out 3 that the poor man's 
 income is spent chiefly on necessaries, and that as the 
 income increases it is spent more and more on luxuries ; 
 and, he argued, it is only just to take from luxurious 
 more than from necessary income. It is noteworthy 
 that John Ranby, who replied to Wakefield's pamphlet 
 and was far from an extremist in temperament, agreed 
 with Wakefield on this point. 4 But whatever the 
 value of the argument, it did not justify graduation 
 in the sense in which it came to interest the later 
 nineteenth century ; for the special feature of the 
 Death duties is that the rate increases sharply within 
 the range of quite luxurious incomes. In fact, there 
 is every reason to suppose that the demand for gradua- 
 tion at the end of the eighteenth century was only 
 half serious, outside the circle of a few extreme types 
 of mind. 5 Graduation in the modern and important 
 sense is not merely a theory of ability to pay taxation, 
 but a criticism of the social system of inheritance of 
 property, and such criticism was quite untypical, 
 though not unknown, in England at that time. 6 One 
 
 1 3ist December 1798, Nickolls, Debrett, 69. 486 ; 8th January, 
 Lord Holland, p. 536; Thoughts on Taxation, 1798, 1103. h. 52, p. 64; 
 Frend, op. cit. pp. iii.-iv. 
 
 2 See Auckland, Debrett, 69. 547. 
 
 3 A reply to some parts of the Bishop of Landaff's address . . ., 
 1798, 1389. d. 57, pp. 14-15. See D.N.B. 
 
 * John Ranby, An Examination of Mr. Wakefield's reply . . ., 
 1798, 1 102. i. 59, p. 19. 
 
 e.g. Paine, Rights of Man, part ii. chap. v. See next chapter. 
 
 12
 
 178 
 
 of the advocates of graduation regarded it as inevitable 
 that Pitt should not have adopted it ; for if he had, 
 ' the rich must have driven him headlong from his 
 station.' * Auckland and Rose simply said that it 
 would be revolutionary, a plan for equalising fortunes, 
 contrary to the rights of property.* 
 
 The theoretical interest in these debates on the 
 principle of taxation according to income is therefore 
 subsidiary. The more precise consideration of the 
 question was only beginning. But this fact constitutes 
 their historical interest on one side : it illustrates the 
 character of the seventeenth- and eighteenth-century 
 idea that taxation should be in proportion to income 
 or revenue. On another side, their significance from 
 the historical point of view consists in this, that they 
 mark a further step in the growing influence of the 
 commercial classes on tax questions. We have already 
 seen that their influence helped powerfully to mould 
 the eighteenth-century view of a good system of taxa- 
 tion. But during that century, they escaped their fair 
 share of taxation, and now, with a tolerably effective 
 direct tax, their influence was for the first time brought 
 to bear on the abstract question of distributive equity. 
 The result was to emphasise the problem of distribution 
 as between the wealthy and the middle classes which 
 became one of the distinctive tax problems of the 
 nineteenth century. The distinctive problem of the 
 seventeenth and eighteenth centuries was that of 
 distribution between rich and poor, and the Income 
 Tax to some extent diverted attention from that 
 problem to the other which interested the middle class 
 more directly. 
 
 The nineteenth century opens, therefore, on the one 
 hand, with (i) an Income Tax which was considered 
 in its main features distributively just and yet as a 
 
 1 Frend, of>. cit. p. iv. 
 
 1 Auckland, loc. cit. ; Rose, op. cit. p. 33.
 
 TAX LEGACY OF XVIII. CENTURY 179 
 
 mere temporary expedient for an emergency, (2) much 
 less temporary but still * improper ' taxes on necessaries 
 which contravened the maxim that the poor should 
 be exempt and whose distributive effect was on that 
 account very little considered, and (3) taxes on luxuries 
 and objects of expenditure other than necessaries, 
 which alone were approved as exempting the poor, 
 distributively equitable and administratively tolerable ; 
 and on the other hand, with (i) the doctrine that every- 
 one should pay taxation, overruled, as regards the poor, 
 on compassionate or trading grounds, (2) the rough 
 principle that taxation should be distributed in propor- 
 tion to income, (3) the theory that this was achieved by 
 the third species of taxes just mentioned, and without 
 the conception of a compensatory system of taxation. 
 In addition, it took over Customs duties arranged for 
 purposes of trade policy and spirit duties designed to 
 check consumption as well as to raise revenue.
 
 IX 
 
 SOCIAL THEORY IN THE EIGHTEENTH 
 CENTURY 
 
 THE tax opinion of the eighteenth century contained, 
 in addition to relatively technical doctrines, three more 
 fundamental and characteristic elements all connected 
 with the problem whether the poor man should pay 
 taxation. The first was the theory that everyone, 
 including the poor, should pay taxation as a matter of 
 inherent political obligation ; the second, that the 
 poor should be exempted on grounds of compassion ; 
 the third, that taxes on the poor are not really paid 
 by them but increase the price of labour. During the 
 last two chapters we have been interested chiefly in 
 the influence of these ideas on concrete tax opinion 
 and policy ; but we shall realise their significance more 
 fully if we attempt, in continuation of Chapter V., to 
 bring out their relation to the political philosophy by 
 which they were all dominated and conditioned. 
 
 The social attitude of the eighteenth century was 
 not based only on one political theory, but it was 
 nevertheless based predominantly on one political 
 theory. This was the ' freeholder,' non-functional 
 conception of society. Men entered into society in order 
 to secure themselves in the rights which individually 
 belonged to them ; the state existed to provide this 
 security ; the rights to be secured were theoretically 
 4 natural ' rights, in practice conceived as the more 
 
 180
 
 FREEHOLDER VIEW OF SOCIETY 181 
 
 general and characteristic rights guaranteed by English 
 law ; and all men having rights to be protected, which, 
 though different in extent, were essentially similar in kind, 
 every man was a free man and a citizen. The basis of 
 political obligation was that the state was necessary to, 
 and in effect did, protect men's rights. Men were born 
 not to functions or service but to rights or enjoyments. 
 They were born freeholders or free merchant adventurers. 
 The more abstract political speculation of the 
 century illustrates very clearly the predominance of this 
 conception of society. On the one hand, it was put 
 forward in the strict Lockean form by writers like Black- 
 stone, Kames * and Thomas Percival of Manchester. 2 
 Blackstone, for instance, who began to lecture on English 
 law in Oxford in 1753, and the first volume of whose 
 Commentaries was published in 1765, explained in his 
 introductory sketches on the basis of law and govern- 
 ment 3 that the individual possessed some ' absolute ' 
 rights chiefly those of personal security, personal 
 liberty and private property which appertained to 
 him merely as an individual, independently of his member- 
 ship of society ; but that no absolute duties pertained 
 to the individual (at least such as law could explain or 
 enforce) all duties were relative only ; and that, * the 
 principal aim of society is to protect individuals in the 
 enjoyment of those absolute rights which were vested 
 in them by the immutable laws of nature.' Blackstone's 
 essential justification for the existence of a propertied 
 aristocracy, had he thought it necessary to discuss such 
 a question, would therefore have been that they had 
 natural or absolute rights to property like other people, 
 and not that they governed England or did anything 
 in particular for any one or anything but themselves. 4 
 
 1 For Blackstone and Kames, see references below. 
 
 2 Thomas Percival, op. cit. 1785, pp. 2-3, and Appendix, T. 189 
 (2), note A on property. 
 
 3 Commentaries, vol. i., 1765, pp. 47-48, 118-21, 134-36. 
 
 4 At the same time Blackstone was, of course, far from thinking 
 that the landed gentry fulfilled no functions. See pp. 7-12,
 
 1 82 SOCIAL THEORY IN XVIII. CENTURY 
 
 On the other hand, the freeholder conception was 
 equally involved in the speculation of those who, prior 
 to Bentham, 1 attempted to add to or substitute for 
 Locke's theory a vague utilitarian explanation of rights, 
 such as that the right of private property is beneficial 
 to society. This was the position of the philosophers 
 Hutcheson, 2 Hume 3 and Paley, 4 the economists Adam 
 Smith and Sir James Steuart, and the Whig lawyer Sir 
 James Mackintosh. 5 These thinkers had no idea of a 
 connection between rights and functions. Adam Smith, 
 for instance, discussed at one point the causes of the 
 subordination of classes in society, 6 and all he saw was, 
 first, that birth and fortune seemed to be the two 
 circumstances which principally set one man over another, 
 and, second, that the reason for subordination seemed to 
 lie in the need for the defence of great private properties. 
 The sixteenth century theorist would have said that 
 subordination and great properties existed so that the 
 subordinate classes might be well and justly governed. 
 And finally the freeholder conception dominated the 
 feeling of those who were led, by the implications which 
 the French Revolution emphasised in Lockean ideas, to 
 repudiate the doctrine of natural rights, and with Burke 
 
 1 Bentham's importance was for the nineteenth century, al- 
 though his ideas were worked out in the eighteenth and on the 
 basis of its speculation ; and it would be misleading either to treat 
 him briefly as an abstract and uninfluential thinker of the eighteenth 
 century or as the inspiration of a powerful school of political opinion 
 which had then no existence. It is therefore more convenient to 
 neglect him here. It may be noted, however, without going into 
 the question, that Bentham did not get rid of the implications of the 
 freeholder theory of society nor give any place to ideas of function. 
 See Hal6vy, Radicalisme Philosophique, vol. i., La jeunesse de 
 Bentham. 
 
 *A System of Moral Philosophy, 1755, i. 253, 285, 293, 309, 
 317-22,327,352-3. 
 
 3 Treatise of Human Nature, 1738, book iii. part ii. 1-3. 
 
 4 The Principles of Moral and Political Philosophy, 1786, book iii. 
 chaps, i. ii. and iv. 
 
 ' A Discourse on the study of the law of nature and nations, 1799 
 (Introductory Lecture to Law Course), 518. k. 23 (i), pp. 38-42. 
 
 Wealth of Nations, ed. Cannan, ii. 202-5, Everyman ed., ii. 
 199-202.
 
 RESULT ON TAX OPINION 183 
 
 to canonise the actual property and other rights which 
 tradition had sanctified in England. 1 Even Burke, in 
 spite of his splendid inconsistencies, did not succeed 
 in any direct way in embodying ideas of function in 
 his defence of the English social order. He made men 
 feel the complex and organic and traditional character 
 of a real society, but he advanced very little in com- 
 prehension of the structure of his organism. 2 
 
 Now it followed directly on this conception of 
 society as held together by the protection of individual 
 rights, that all men, rich and poor, should pay taxation 
 that is, share in the cost of the protecting organisation. 
 The logical alternative, as Burke said, 3 was loss of 
 citizenship. ' The moment a man is exempted from the 
 maintenance of the community, he is in some sort 
 separated from it. He loses the place of a citizen.' 
 This was the doctrine which, as we have seen, underlay 
 even the sentiment in favour of exempting the poor 
 from taxation ; and we can also realise how essential it 
 was in the thought of the century from the answer 
 which Lord Kames, one of the judges of the Supreme 
 Court in Scotland, attempted to give to an attack 
 made upon it from the standpoint of functional ideas. 
 Kames 4 argued in the usual way that ' as every member 
 of the body politic is under protection of the government, 
 every one of them . . . ought to pay for being pro- 
 tected.' But this proposition, he continued, was con- 
 troverted by the author of Uami des hommes (Mirabeau), 
 who maintained ' that the food and raiment furnished 
 to the society by husbandmen and manufacturers are 
 all that these good people are bound to contribute ; 
 and supposing them bound to contribute more (i.e. to 
 
 1 See e.g. Wm. Vincent, Dean of Westminster, Sermons, 1817, 
 i. 263 seq. (xiii., 'That property is sacred,' 1798). 
 
 2 See e.g. Reflections on the French Revolution, ed. Payne, pp. 
 58-62, 69-73, 111-14- 
 
 8 Regicide Peace, ed. Payne, Third Letter, p. 208. 
 4 Sketches of the History of Man, 1774, viii., Finances, ii. at end 
 (722. k. 1 8, p. 464),
 
 1 84 SOCIAL THEORY IN XVIII. CENTURY 
 
 pay taxation) it is not till others have done as much for 
 the public.' Kames' real answer was that the question 
 whether men performed services for their society had 
 nothing to do with their paying taxation they ought 
 to pay in virtue of the protection they receive. But 
 he also tried to meet Mirabeau on his own ground ; 
 and the result affords a good illustration of the un- 
 familiarity of functional ideas. On Mirabeau's argu- 
 ment, he pointed out, lawyers and physicians ought to 
 be exempted as much as husbandmen, and especially 
 those who earn the largest sums, because they are 
 supposed to do most good. And, he added, ( the 
 luxurious proprietor of a great estate has a still better 
 title to be exempted than the husbandman, because he 
 is a great benefactor to the public by giving bread to a 
 variety of industrious people.' Mirabeau was suggesting 
 in effect that the wealthy non - labouring classes did 
 nothing ; Kames answered by saying that they spent 
 their incomes. But, as we have said, Kames' view of 
 society was not a functional one which demanded 
 public service of the individual, and it was not really 
 on that basis that he justified the taxation of the poor 
 man. 
 
 It is significant that the two typical criticisms of this 
 view of society, which were made in the eighteenth 
 century, were scarcely realised to be criticisms of the 
 political theory itself and did not result in overthrowing 
 it. They merely raised the doubt whether the poor 
 man could, in fact, be regarded as properly within the 
 circle of freeholder citizens. The first criticism was 
 expressed, in relation to taxation, in the compassionate 
 desire to exempt the poor man in spite of the principle 
 that every one should pay taxation a desire which we 
 have seen was very influential in Parliament in the last 
 quarter of the century. It stood for the feeling that 
 rich and poor were not taxable citizens of the same 
 uniform kind. The poor did not simply have in smaller
 
 COMPASSION FOR THE POOR 185 
 
 quantity the same rights as those enjoyed by the rich ; 
 the non-labouring propertied class was very conscious 
 of the difference between its own life and that of the 
 labourer. But this recognition did not lead to a re- 
 examination of the basis of class distinctions. The 
 ' rights ' conception of society barred the way. The 
 difference between rich and poor was no one's fault ; the 
 nature of things had worked out so ; and to attempt 
 to alter it would be to tamper with rights which con- 
 stituted the basis of society. 1 The result, so far as the 
 freeholder theory had influence on men's thought, 
 was first, that class differences were accepted, on the 
 basis of a theory which had no place for them, as funda- 
 mental and in the nature of things, and yet without 
 any justification or explanation why this should be so ; 
 and second, that the propertied classes, judging life from 
 the standpoint of rights enjoyed and taking their own 
 ample means and freedom from labour as a standard, 
 often felt that the poor were objects of pity and com- 
 passion because they had to toil and because their 
 means were scanty. This result was attested by Burke 
 and condemned with passionate contempt in a memor- 
 able passage. 2 * The vigorous and labouring class of 
 life,' he wrote in 1797, ' has lately got from the ban ton 
 of the humanity of this day the name of the " labouring 
 poor." ' Hitherto,' he continued, ' the name of 
 Poor (in the sense in which it is used to excite com- 
 passion) has not been used for those who can but for those 
 who cannot labour . . . ; but when we affect to pity as 
 poor those who must labour or the world cannot exist, 
 we are trifling with the condition of mankind. It is 
 the common doom of man that he must eat his bread 
 by the sweat of his brow, that is by the sweat of his 
 body or the sweat of his mind. I do not call a healthy 
 young man, cheerful in his mind and vigorous in his 
 
 1 See e.g. Vincent, op. cti., Sermon xvi., 1792, 'That there must 
 always be a class of poor ' ; and cf . Paley, loc. cit. 
 3 Regicide Peace, pp. 219-30,
 
 1 86 SOCIAL THEORY IN XVIII. CENTURY 
 
 arms I cannot call such a man poor ; I cannot pity 
 my kind as a kind, merely because they are men.' This 
 was a fine protest against the sentimentalism which 
 pretended to judge the essential conditions of life from 
 the standpoint of a favoured minority ; its weakness 
 was that Burke did not clearly realise that the ultimate 
 object of his condemnation was the view of society which 
 regarded the minority not as a class which possessed rights 
 as a condition of its performance of functions, but 
 merely as individuals specially favoured by fortune. 
 
 The second criticism of the freeholder conception 
 of society and of the theory that every one should pay 
 taxation was expressed indirectly and by implication 
 in the commercial and economic doctrine, that the 
 poor man cannot be taxed, 1 and more widely in the new 
 political economy of the second half of the century. 
 Economic speculation made it very clear that society 
 was not made up of independent freeholders in any 
 sense. It emphasised the direct economic dependence 
 of men on one another, and showed that the great mass 
 of men worked and produced not for themselves but 
 for others. But two circumstances prevented this 
 line of thought from having its full effect on political 
 theory. The one was the weakness of the economic 
 speculation in its own field ; the other was the influence 
 on the minds of the economists of the Lockean philosophy. 
 Thus, in regard to the propertied classes, the economists 
 saw clearly enough that their wealth and income de- 
 pended on their ownership of property, and not on their 
 own labour or service, and they therefore treated them 
 as rendering no labour or service, or, in the phrase of Sir 
 James Steuart, as * idle rich consumers.' 2 They consumed 
 
 1 As we have seen, the doctrine was not always held in this 
 extreme form. But it often was ; and pushed to its logical conclusion 
 and from the point of view of its human and political significance, 
 this is what was involved in the theory that a tax on wages or on 
 necessaries raises wages. See discussions and references in Chaps. 
 VI.-VIII. 
 
 a Inquiry, book v. chaps, ii.-iv. passim ; e.g. ii. 494. The 
 landlords were the chief ' idle rich consumers ' for the economists,
 
 ATTITUDE OF CLASSICAL ECONOMISTS 187 
 
 and did not produce. It was, of course, of importance 
 to emphasise the fact that the propertied man may 
 consume without producing, but it was an extremely- 
 narrow view of life to assume that men do not produce 
 because they do not get paid for their work. Yet this 
 was the tacit assumption which the classical political 
 economy made regarding the English governing class. 
 It did not include its work any more than it included 
 the work of women not employed in industry, in what 
 it chose quite arbitrarily to call ' economic ' goods ; and, 
 as a practical consequence, it ignored such work. Indeed, 
 taking over and expanding the Lockean basis of self- 
 interest as the motive of social organisation, it had no 
 proper place for service which had no direct motive of 
 individual advantage to him who performed it. The 
 propertied class was treated, therefore, simply as possessed 
 of rights, the exact nature and value of which the 
 economist discussed at length. But not only so. It 
 did not occur to him to question the justification for 
 such rights. He treated it as natural that some men 
 should possess them ; his study assumed such rights 
 as data. Consequently, on this side the new political 
 economy made no breach in the freeholder, non-functional 
 view of society. On the contrary, it fortified it by 
 embodying it as an assumption of a new and very vital 
 field of inquiry. In regard to the labouring classes, its 
 relation to the freeholder theory was equally important, 
 
 and it is not necessary for the purpose of this chapter to discuss their 
 view of the owners of stock or capital. It may be noted that the 
 commercial classes were apt to look on the landed class as merely 
 spenders of wealth. See e.g. The Nature of the present excise . . . , 
 1733, 104. d. 19 (' Such as live upon the fat of the land, and contribute 
 in no degree to the service of the public, but, on the contrary, by 
 their luxury and exorbitant consumption of foreign commodities 
 confound our trade and turn the balance of it against us ' p. 28), 
 and cf. [Nugent] Considerations upon a reduction of the Land Tax, 
 1749, 104. d. 43 (' Landed men are, by themselves, of advantage 
 to the public only in what they spend ; traders are of advantage by 
 what they spend and by what they gain ; and the gains of trade 
 exceed the expenses of the trader. A rise of rents can only be 
 through an increase of employment . . . ' p. 20).
 
 1 88 SOCIAL THEORY IN XVIII. CENTURY 
 
 but less defined. The fact about the labouring classes 
 which it emphasised was that they were a factor of 
 production. This alone made it difficult to fit them 
 into the conception of a society of freeholders ; and 
 the economists made it more difficult still by treating 
 these classes also as motived simply by self-interest i.e. 
 as working simply to advantage themselves, and not at 
 all with the desire to perform service which also advan- 
 taged others and yet as necessarily obtaining in general 
 only a bare subsistence. This conclusion was again 
 due to faulty analysis in the directly economic sphere, 
 but its result in relation to political theory was more 
 significant. The idea that the test of citizenship is 
 the enjoyment of rights was not given up, but society 
 was conceived as divided into classes, one of which had 
 so little in the way of enjoyment of rights, and was 
 so essentially a means or instrument to the advantage 
 of the other classes, that its position, if it were to be 
 described in the terms of the freeholder political 
 theory, could only be said to be outwith the pale of 
 citizenship. In taxation, the result was the idea that, 
 broadly speaking, the poor are not taxable citizens. 
 
 No political theory could have such widespread 
 influence on social opinion as the freeholder theory 
 had in the eighteenth century, except by representing 
 some real and important aspect of the state of contem- 
 porary society. And the freeholder theory did repre- 
 sent such an aspect namely, the fact that the rights 
 which the governing class in particular possessed were 
 rights attaching not to an office but to ownership of 
 property. They received incomes whether or not they 
 performed services in return. But the theory also 
 misrepresented the state of society, for it treated this 
 legal meaning of the right of property as its whole 
 significance. The theory ignored the fact that the 
 governing class did perform services in society, and that it 
 was not composed merely of * idle rich consumers,'
 
 FUNCTIONAL VIEW OF SOCIETY 189 
 
 This other aspect of English society was represented 
 by the second but much less important political theory 
 which influenced the social attitude of the eighteenth 
 century. It was a theory of class duty and of the 
 mutual dependence of classes, and was expressed in 
 general terms by all kinds of men, 1 but was voiced chiefly 
 by the Church, which at all times, though to what 
 extent I am unable to say, insisted on a functional theory 
 which treated rights not as their own justification but 
 as the conditions of duties. Three instances may be 
 taken which stretch across the eighteenth century. 
 Swift's teaching, in a sermon on mutual subjection, 2 
 was that every man, in the station appointed to him 
 by God, was obliged to act toward the good of the whole 
 community. ' He who doth not perform that part 
 assigned him toward advancing the benefit of the whole, 
 in proportion to his opportunities and abilities, is not 
 only a useless but a very mischievous member of the 
 public ; because he taketh his share of the profit and 
 yet leaves his share of the burden to be borne by others 
 
 1 e.g. An Enquiry into the causes of the encrease and miseries of the 
 poor of England, 1738, 104. n. 9, chap, iii., on great men's leaving 
 their country estates ; A view of the internal policy of Great Britain, 
 part ii., 1764, 1250. a. 44, chap, on landed gentry and nobility, 
 p. 219 seq. (' This rank of independent men, whose duty it is to 
 think for and direct the busy and laborious below them, who in 
 return labour and toil for their ease and accommodation, should 
 be careful to preserve among them the science of arms and war/ etc.) ; 
 C. Varlo, Schemes, 1775, 112. d. 19, Preface, p. iii.; John Young, 
 Essays, 1794, .2076(1), pp. 13, 15, 3 5, and cf. pp. 86-87 (Young, who 
 was an able thinker of conservative cast of mind, illustrated the 
 difficulty of the time in giving functional ideas scope against ideas 
 of rights, specially rights of property. He realised clearly that 
 government was a special and difficult business, for which the 
 ordinary worker, although power and authority (he held) ultimately 
 resided with him, was little fitted, and that the landed class per- 
 formed this business ; and yet he described equal representation 
 as unjust on the ground that as the owners of the largest rights the 
 landed men should in reason have the largest say in settling the laws, 
 which would affect their rights more than those of others) ; John 
 Ranby, An Examination of Mr. Wakefield's reply to the Bishop of 
 Landaff, 1798, 1102. i. 59, justification of system of hereditary power 
 and honours, pp. 55-56; Stanhope, Life of Pitt, iii. 166, Pitt's 
 view of the landed class. 
 
 1 Prose Works, ed. Temple Scott, iv. 1 12-14, 1 16-17.
 
 1 9 o SOCIAL THEORY IN XVIII. CENTURY 
 
 . . .' The wise man should assist with his counsels, 
 the great with his protection, the rich with his bounty 
 and the poor man with his labour. Even princes 
 depend for every necessary of life upon the meanest of 
 their people, and are but the greatest servants of their 
 countries. The prince cannot say to the merchant, 
 I have no need of thee ; nor the merchant to the labourer, 
 I have no need of thee. The poor are generally more 
 necessary members of the commonwealth than the 
 rich, * which clearly shows that God never intended 
 such possessions for the sake and service of those to 
 whom He lends them, but because He hath assigned 
 every man his particular station to be useful in life. . . .' 
 In a more theoretical form the same idea was embodied 
 in Dean Tucker's Treatise concerning Civil Government 
 (1781), in which, in opposition to Locke, he defends the 
 need for and explains the natural origin of rank and 
 station in society on the ground of mutual dependence 
 and the need and ability for the performance of different 
 functions. 1 On the same lines, Thomas Gisborne, a 
 clergyman-squire and well-known preacher of evan- 
 gelical sympathies, published in 1794 An Enquiry into 
 the duties of men in the higher and middle classes of society 
 in Great Britain, resulting from their respective stations, 
 professions and employment, in which he set out in great 
 detail what he conceived these duties to be. 2 Among 
 chapters on the duties of peers, members of the House 
 of Commons, naval and military officers, justices of the 
 peace and other classes less definitely of the propertied 
 order, there is one on the duties of private gentlemen ' who 
 follow no profession and live upon the annual incomes 
 of their estates ' : first, as landowners to encourage 
 a race of honest, skilful and industrious tenants, to see 
 to the full cultivation of the ground and the maintenance 
 of their estates in good condition ; second, as invested 
 with various offices and trusts of a public nature ; and 
 
 1 Treatise, 1781, 522. g. 6 (3), pp. 3-4, 137 seq. 
 * 8406. gg. 9. See Diet. Nat. Biog.
 
 REVOLUTIONARY CRITICISM 191 
 
 third, as bound to the performance of numerous private 
 and domestic duties. 
 
 As a protest against a mere ' rights ' view of society 
 this teaching was of great value ; it humanised class 
 relationships and differences. But its limitations were 
 equally important. It was substantially an attempt, as 
 we said of the sixteenth-century theory, to moralise 
 the status quo without understanding it at all fully 
 or applying strict standards of criticism to it. Gisborne 
 did not inquire, for instance, whether the duties which 
 he required of the private gentleman who lived on the 
 income of his estate were in any way commensurate 
 with his wealth or his ability to perform services. In 
 other words, while he related the rights of the governing 
 class to duties, he did not study or criticise the relation 
 or ask whether the rights were an adequate or excessive 
 provision for the duties performed. This, of course, 
 was a very complex and difficult, as well as fundamental, 
 question, and it is not strange that Gisborne did not 
 tackle it. But the result was greatly to qualify the 
 force of the teaching and to make it easy to treat the 
 sharply defined legal rights as in practice unrelated 
 to the loosely defined moral duties, and as justified, 
 on the lines of the freeholder theory, simply as rights. 
 This was no doubt one of the reasons why the non- 
 functional view of society was so much more influential 
 on the political and social thought with which we have 
 been concerned. 
 
 One other but still less influential qualification to 
 the predominance of the freeholder theory remains 
 to be noticed. It consisted of a critical or revolutionary 
 application of ideas of function to the existing English 
 system and appeared in the last quarter of the eighteenth 
 century both before and after the French Revolution. 
 Briefly, like Mirabeau, it demanded of the landed classes 
 what function they fulfilled in the scheme of things ; 
 and it answered that they performed none, that landlords
 
 192 SOCIAL THEORY IN XVIII. CENTURY 
 
 were sinecurists, ' an unessential class,' mere consumers 
 of rent, drones. 
 
 Men of very different types and with very different 
 plans took up this position. Wm. Ogilvie, Professor of 
 Humanity (formerly of Philosophy) at Aberdeen Univer- 
 sity, published in 1781 an Essay on the right of property 
 in land, 1 in which he advocated the breaking up of large 
 properties into small farms for peasant proprietors. 
 He contended that this was justified on grounds both 
 of natural right and public advantage ; and in a section 
 on * the abuses and pernicious effects of that exorbitant 
 right of property in land which the municipal laws of 
 Europe have established ' he pointed out that the income 
 of landlords came to them and increased without effort 
 of theirs, and described it as a tax on the cultivators of 
 the soil, the salary of sinecure offices. 2 He contrasted 
 their position with that of the clergy, whose tithe was 
 often complained of : 3 * If considered as the reward 
 of duties to be performed to the public, the incomes 
 of the clergy, after admitting all that spleen has advanced 
 against that order of men, must appear by far better 
 earned. How slight indeed, in themselves, and how 
 negligently performed are those duties which the state 
 seems to expect at the hands of landholders in return 
 for their affluence.' In spite of all this, however, the 
 landlords were to keep the rents (thereafter fixed) of 
 their divided-up estates, 4 and continue, apparently, to 
 be mere sinecurists ; moreover, in a very conciliatory 
 preface addressed to English landholders, Ogilvie sug- 
 gested that England stood least, if at all, in need of the 
 application of his ideas. 
 
 A more interesting advocate of functional ideas, 
 from the standpoint of taxation, was John Gray, a 
 political writer only known, apparently, by his pamphlet 
 of I785, 6 entitled A Plan for finally settling the Govern- 
 
 1 1027. c. 4. Pp. 44-45,47. 
 
 8 P. 46. Pp. 145-46. 
 
 * 8145. c. 38 (London, 1785).
 
 CRITICISM OF LANDED CLASS 19$ 
 
 ment of Ireland upon constitutional principles. He 
 dealt with the problem how to provide Ireland's share 
 of the cost of defensive services under a scheme of 
 constitutional connexion with England, and devoted 
 himself to contending that it should be raised on the 
 landlords alone. The argument, which he applied 
 equally to England, was that there are three essential 
 or necessary services the provision of food, of clothing 
 and housing, and of defence ; and that the landlords, 
 who under feudal conditions had performed the third 
 of these services, had gradually freed themselves from 
 it, and from an essential had degenerated into an * un- 
 essential ' class, a class of mere idlers maintained by the 
 labour of others. But it was a first principle that every 
 one should contribute his proportionable share to the 
 public prosperity ; no man should be maintained by the 
 sweat of the brow of another without rendering some 
 equivalent. Make the landlords, then, give up at least 
 some portion of the tax they levied on society to pay 
 for the defensive service which they had shirked ; and 
 adopt some system to prevent the needless augmenta- 
 tion of unessential classes, of whom the landlords were 
 the chief but not the sole instance. 1 Sinclair, the 
 historian, discussed Gray's pamphlet in 1790 more 
 sympathetically than might have been expected. 2 He 
 allowed it had much plausibility and admitted at least 
 that ' nothing would be more politic than to instil 
 it into our possesoors of land that they are the natural 
 defenders of the country at home . . . and that if they 
 become languid and effeminate and abandon the posts 
 which it is their duty to maintain they will be an un- 
 necessary and useless class, and ought alone to defray those 
 public charges which their own deficiency may occasion.' 
 Better known are the views of the post-Revolution 
 writers like Paine, Godwin and Gilbert Wakefield. 
 
 1 Gray included artists, clergy, lawyers, etc., among the un- 
 essential classes, which, however, he did not desire totally to suppress ; 
 
 PP- 15,77- 
 
 1 History of the public revenue, part iii., 1790, p. 114-15. 
 
 '3
 
 1 9 4 SOCIAL THEORY IN XVIII. CENTURY 
 
 Paine regarded the aristocracy as mere consumers of 
 rent, drones, who governed the country in their own 
 selfish interest, and suggested a plan for preventing the 
 accumulation of property through succession by primo- 
 geniture, and proposed a graduated tax on income, 
 which arrived at 203. per at the twenty-third thousand. 1 
 Godwin's communistic Enquiry concerning political 
 justice (1793), passed the same judgment on the wealthy 
 classes, and Wakefield, 2 in the bitterness of a fine if 
 hypersensitive soul, likened the governing propertied 
 class to the master of the Ass in the Fable which refused 
 to fly with him from the enemy ' for what is it to me 
 who my master is. since I shall but carry my panniers 
 as usual ? ' 
 
 All these writers pointed out very justly that the 
 governing class was maintained by the labour of others, 
 and demanded in effect what function it fulfilled in 
 return. But when they asserted that it performed no 
 function, they were flying in the face of obvious facts. 
 It was a real and important question whether the 
 functions were well performed or were an adequate 
 return, but to contend that the English landed class of 
 the eighteenth century made no return was absurd. This 
 view was analogous to the narrow view of life which 
 regarded economic production, as ordinarily defined, as 
 the only kind of service or function required by men in 
 society. These writers, indeed, took the same view 
 of the facts of social life as the economists ; it was on 
 the ethics that they differed. The economists saw no 
 objection to ' idle rich consumers ' ; these critics, like 
 their successors in the nineteenth century, saw every 
 objection. On the facts, moreover, they were both in 
 error to a large but undefined extent. To such a degree 
 did the freeholder theory of rights blind men both to 
 the needs and to the facts of national life. 
 
 1 Rights of Man, part ii., 8006. bbb. 23, pp. 29, 83, 86, 111-12. 
 1 A Reply to some parts of the Bishop of Landaff's address, 1798, 
 1389. d. 57, p. 37.
 
 INDEX 
 
 Note. For taxes on particular commodities or objects of expenditure, see 
 under Assessed Taxes, Customs, Excise, Stamp Duties, Necessaries, 
 Luxuries. 
 
 Administrative questions. See Col- 
 lection. 
 
 Aids, General, of William III. See 
 Direct Taxes. 
 
 Assessed Taxes, 97, 133, 156-8, 169. 
 
 Assessments. See Direct Taxes. 
 
 Auckland, Lord. See William Eden. 
 
 Barnard, Sir John, 113. 
 Bates' case, n, 13. 
 Bathurst, Lord, 106, no. 
 Beer, 145. See Excise. 
 Benefit theory of taxation, 63-4. 
 Benevolences, 8, n. i. 
 Bentham, 182. 
 Blackstone, Wm., 181. 
 Bonnet, F., 57 seq. 
 Book of Rates. See Customs. 
 Brisco, on Walpole, 99, 101, 104. 
 Burke, 183. 
 
 Capital. See Direct Taxes. 
 
 Carteret, Lord, 104, 140. 
 
 Cary, John, 34, 72, 79, 88. 
 
 Church, The, teaching on class 
 relations, 84 seq., 189 seq. 
 
 Clarke Papers, 92. 
 
 Class relations. See Poor, Landed 
 Class, Political Philosophy. 
 
 Classical political economy, rela- 
 tion to commercial ideas on 
 wages and poor, 121 ; connec- 
 tion with freeholder political 
 theory, 186 seq. 
 
 Collection and administration, 
 classification of problems, 5 ; 
 Customs, 29, 31, 131, 145, 159, 
 161 ; Direct Taxes, 41-3, 45-6, 
 124, 125, 127, 146 ; Excise, 
 58, 61, 62, 145, 147. 
 
 Commercial ideas and interests : 
 influence in i8th century, 108, 
 109, in seq., 124, 126, 132, 
 
 195 
 
 153. 159-60, 173 seq., 178, 
 187 ; relation to classical 
 political economy, 121. 
 
 Commercial Treaty with France, 
 1786, 136. 
 
 Compassionate ideas. See Poor, 
 Excise, Necessaries. 
 
 Compensatory view of taxation, 
 6; absence in i7th and i8th 
 centuries, Excise, 73, Wal- 
 pole, 102, 107, Adam Smith, 
 144, later, 163, 167, 171 ; 
 exceptions, 74, 167. 
 
 Constitutional struggle, effect on 
 tax theory, I ; connection 
 with dislike of Excise, 62 ; 
 relation to freeholder theory 
 and theory that all should 
 pay taxation, 88-89. 
 
 Cotton, Sir John, 29. 
 
 Customs 
 
 Before 1640, special charge theory, 
 9 seq ; unreality of, 12 ; disap- 
 pearance, 24, 26 seq. 
 As general taxes, 28, 37, 98, 131, 
 
 144. X 45- 
 
 Duties, 32, 36, 96, 156-7. 
 
 Export customs, 10, 27, 35 seq. 
 
 Incidence and effects. See In- 
 cidence. 
 
 Distributive question, 12, 14, 31, 
 
 M5- 
 
 Necessaries, policy as to, 13, 31. 
 Trade policy, before 1640, 14; 
 
 after, 31, 33 seq. ; Walpole. 
 
 98 ; 1 8th century, 135-7 > 
 
 Adam Smith, 141 ; in spirit 
 
 duties, 137-8. 
 Opposition to Customs policy, 
 
 37, 132, 150. 
 Impositions, 13, 26. 
 Book of Rates, 13, n. i, 15, 34. 
 Convoy duties, 1798, 15.
 
 196 
 
 INDEX 
 
 Davenant, 68, 75, 77. 
 
 Debt, national. See Financial 
 
 System. 
 Decker, Sir Matthew, 114, 132, 133, 
 
 135- 
 Differentiation in Income taxation, 
 
 173 seq. 
 Direct Taxes 
 
 Character before 1640, 9-10, 
 16 seq. 
 
 Actual methods of assessment 
 uncertain, 16, 41 seq. 
 
 XV. and X. ; on moveables, 17; 
 exemptions, 21. 
 
 Subsidy, on income and move- 
 ables, 1 8 ; allowances, 20 ; ex- 
 emptions, 21. 
 
 Poll Taxes, 39, 45, 50. 
 
 Assessment of 400,000, 1642, 39. 
 
 Weekly Assessment, 39. 
 
 Monthly Assessment, 40 seq. 
 
 Subsidy of 1670-1, 43. 
 
 General Aid of William III., 44. 
 
 Tax of 1697, 45- 
 
 Land Tax, 45, 96 ; i8th century 
 views and policy, 99, 102, 123, 
 124, 127, 128. 
 
 1640-1698, income the intended 
 standard of distribution, 38 
 and passim ; view of Abraham 
 Hill, 46 ; relation to Pitt's 
 Income Tax, 46 seq. 
 
 Exemptions, 49. 
 
 Triple assessment, 167, 169. 
 
 Income Tax, opposition to, in 
 i8th century, 124, 141, 144, 
 146, 148, 165, 1 68 ; Adam 
 Smith's relation to, 149 ; Act 
 of 1799, 167 ; opinion, 168 seq. ; 
 Repeal, 146, n. 5, 170, 171-2. 
 Distribution 
 
 Treatment bytheoreticalwriters,2. 
 
 Classification of problems, 4. 
 
 Standards, Expenditure, 28, 31, 
 63 seq., 144, 168-170 ; Income, 
 38, 48, 124, 143, 148, 170-2, 
 173 ; Property, 174, n. 5 ; 
 allowances for children, ex- 
 penses, etc., 49, 172 ; differ- 
 entiation, 174; graduation, 176. 
 
 Distributive effect of duty on a 
 necessary, etc., 31, 67 seq. ; 
 Salt Tax, 101-2 ; A. Smith, 
 144, 148 ; later, 159 ; case of 
 miser and parsimonious man, 
 
 65. 145. 159- 
 
 Opposition to taxes on necessaries 
 of poor, 76 seq. ; in what sense 
 
 distributive, 78 ; relation to 
 
 political philosophy, 79, 184 ; 
 
 Salt Tax, 1732, 100 seq.; later 
 
 1 8th century, 161 seq. 
 Relation to political philosophy 
 
 83 seq., 87, 94, 180 seq. 
 1 8th century way of approaching 
 
 distributive problems, 142, 146, 
 
 163. 
 
 Adam Smith on, 143 seq., 146 seq. 
 Policy, 1776-99, 156 seq. 
 Policy in Income Tax, 170 seq. 
 Non-compensatory view of. See 
 
 Compensatory. 
 See Customs, Direct Taxes, Excise, 
 
 Land Tax. 
 Do well, Stephen. See History of 
 
 Taxation. 
 Drake, Wm., 155. 
 
 Eden, Wm., Lord Auckland, 137, 
 
 J 53. I 73. I 75. J 78. 
 Employment effect of taxes. Sea 
 
 Wages. 
 Enclosures, relation of political 
 
 theory to, 91. 
 Essay on the Causes of the Decline of 
 
 Foreign Trade, 1744, 133, 134. 
 Excise 
 
 Opinion, 1640-3, 51 ; relation to 
 monopolies, 51. 
 
 Duties, 53, 54, 55, 56, 57, 60, 96, 
 i 60 i. 
 
 History, 1643-1713, 52 seq. ; 
 struggle of 1647, 53 ; abolition 
 of Court of Wards, 56, n. 2 ; 
 struggle of time of William III., 
 57 seq. 
 
 Administrative opinion, 61. 
 
 Distributive opinion, favourable 
 expenditure as standard, 63 ; 
 all should pay taxation, 66 ; 
 justification of a particular 
 duty, 67 seq. ; Petty's refuta- 
 tion, 70 ; non-compensatory 
 view of taxes, 73. 
 
 Distributive opinion, opposing 
 tax on necessaries bad, 76 ; 
 compassion on poor, 78 ; re- 
 lation to political philosophy, 
 79 ; J. Cary, 79. 
 
 Summary, 1 7th century, 79. 
 
 Salt Tax debates, 1730-2, 101 seq. 
 
 Commercial opposition in i8th 
 century, raises wages, 113 
 seq. 
 
 Approval of, as stimulating 
 poor to labour, 116.
 
 INDEX 
 
 Excise Late i8th century, policj 
 
 and opinion, 152 seq., 160 seq 
 Excise Scheme, 1733, 98-99, 109. 
 Exemptions. See Poor, Customs 
 
 Excise, Direct Taxes, Assessec 
 
 Taxes. 
 Expenditure as standard of dis 
 
 tribution. See Distribution. 
 Exports. See Customs. 
 
 Fauquier, Francis, 115, 134. 
 Fifteenth and Tenth. See Direct 
 
 Taxes. 
 Financial System, before 1640 
 
 sectional, 8 ; transition, 23 seq. 
 
 32 ; 1 8th century, 95-96, 151 
 
 167. 
 
 Fleming, Baron, n, 13. 
 Foreign Excise, 27. See Customs. 
 Forster, Nathaniel, 118. 
 Fox, C. J., 158, 1 60, 164. 
 Free Trade, connection with tax 
 
 theory, I. See Customs, Trade 
 
 Policy. 
 Freeholder theory of society. See 
 
 Political Philosophy. 
 French Revolution, relation to 
 
 English political thought, 182, 
 
 191. 
 Functional view of society. See 
 
 Political Philosophy. 
 
 Gisborne, Thomas, 190, 191. 
 Godwin, William, 194. 
 Graduation, 176 seq. 
 Gray, John, 192-3. 
 Greene, Giles, 34. 
 
 Hales, John, 14, 87. 
 
 Halifax, Marquis of, 77. 
 
 Harrington, 92. 
 
 Hearth Tax, 56, 58. 
 
 Hill, Abraham, 46, 63. 
 
 History of taxation, character of 
 existing, preface, 2 ; value 
 of, 2-3 ; difficulty of, in igth 
 century, preface, 3. 
 
 Hobbes, Thomas, 63, 66. 
 
 Houghton, Thos., 68. 
 
 House and window taxes, 57, 60, 
 
 97. r 35, 142. J 49, 158. 
 Hume, David, 117, 119, 136, 182. 
 Hutcheson, Francis, 125, 136, 182. 
 
 Imports. See Customs. 
 Incidence, 5 ; of taxes on necessaries, 
 
 6 ; of Customs, 11-22, 38, n. 2 ; 
 
 opinion in i7th and i8th 
 
 centuries, 80, n. i, 108-111, 
 113-122, 153-4, 169. n. i. 
 
 Income. See Distribution. 
 
 Income Tax. See Direct Taxes. 
 
 Individualism, 89. See Political 
 Theory. 
 
 Ireton, 92. 
 
 Jekyll, Sir Joseph, 139. 
 
 Kames, Henry Home, Lord, 125, 
 136, 181, 183. 
 
 Laisser faire relation to political 
 philosophy, 91 ; relation to 
 taxation for revenue, 150. 
 
 Landed class : Its tax policy, 4. 
 
 See Poor, Excise, etc. 
 Conception of, in i6th century 
 political philosophy, 85 seq. ; 
 defence of, 85 ; criticism of, 
 86. 
 
 In 1 7th century political philo- 
 sophy, 90 seq., 93 ; i8th 
 century, 181, 183-4, J 86-7, 
 190 ; influence of, on, 94, 
 184-5. 
 Revolutionary criticism of, 85, 
 
 191 seq. 
 See Political Philosophy. 
 
 Land Tax. See Direct Taxes. 
 
 Lecky on spirits, 139. 
 
 ^'Hermitage, 57 seq. 
 
 Locke, John, theory of incidence, 
 80, n. i ; political philosophy, 
 see under. 
 
 iQughborough, Lord, 155. 
 
 -owther, Sir John, 59. 
 '.uxuries, taxes on, 13, 28, 52, 98, 
 156 ; opinion in i8th century, 
 129 seq., 145, 152, 161. 
 
 ' Manufactures improper subjects 
 
 of taxation," 160. 
 Massie, J., 136. 
 Mercantile System. See Customs, 
 
 Trades Policy. 
 Merchants, 14, 37-38, 126, and see 
 
 Commercial ideas. 
 Vlirabeau, 183. 
 Monopolies, 8, n. i, 22, 51. 
 VIontesquieu, 123, n. 
 donthly Assessment. See Direct 
 
 Taxes, 
 lortimer, Thos., 119, 136. 
 
 Natural rights, 89. See Political 
 Philosophy.
 
 198 
 
 INDEX 
 
 Necessaries, taxes on, policy in 
 Customs, 13, 28, 30, 31, 34 ; 
 Excise, 52, 54, 55, 76 ; i8th 
 century, 113 seq., 122, 129, 
 144, 145, 147, 148, 152 seq., 
 160-7. 
 
 Non-necessaries, 129 seq., 144-5, 
 158. 
 
 North, Lord, 154, 156, 158, 161 seq. 
 
 North, Sir Dudley, 29, n. 6. 
 
 Nugent, Robert, 127. 
 
 Ogilvie, Wm., 192. 
 
 Opinion, relation to policy, chaps. 
 
 III.-V. passim, 95, 96, 101 
 
 seq., 152 seq. 
 Optionality in taxation, 29, 75, 
 
 130, 146, 158, 1 68, 170. 
 
 Paine, Thomas, 177, 194. 
 
 Paley, Wm., 182. 
 
 Parliamentary debates, 15, 28, 29, 
 42, 52 seq., 55, 56, 57 seq., 
 100 seq., 114, 132, 146, n. 5 
 (1816), chap. VIII. passim ; re- 
 porting of, loi, n. 2, 161, n. 3. 
 
 Percival, Thomas (of Manchester), 
 167, n. i, 181. 
 
 Petty, Sir William, 27, 63, 64, 66, 
 70, 72, 74, 75. 
 
 Pitt, William, on Land Tax, 128 ; 
 French treaty, 136 ; spirits 
 policy, 140-1, general policy, 
 !53. I 55. I 5. I00 161 seq. 
 
 Plumer, Walter, 105. 
 
 Political Philosophy 
 
 Theory that all are bound to 
 
 pay taxation, relation to, 83. 
 Functional theory, i6th century, 
 relation to history and facts, 
 84 seq. ; moralization of class 
 relationships, 85 ; importance 
 of doctrine, 86 ; limitations, 86 ; 
 relation to social policy and 
 economic self-interest, 86 ; re- 
 lation to tax doctrine, 87; i8th 
 century, Mirabeau, 183-4 > 
 English ideas, 189 seq. ; rela- 
 tion to facts, 189 ; criticism of, 
 191 ; revolutionary use of, 
 191 seq. 
 
 Freeholder theory of I7th cen- 
 tury, causes of dominance, 
 88 ; individualism and natural 
 rights, 8990 ; relation to 
 facts, 90, 182, 188, 194 ; view 
 of poor in Army debates of 
 1647, etc., 92 ; later, 184-5, 
 
 187-8, and chap. IX. passim 
 influence on landed class, 93 ; 
 view of, 181 ; in i8th century, 
 1 80 seq. ; connection with 
 classical economics, 186, 194 ; 
 relation to tax doctrine, 84, 
 94, loi, 106, no, 143, 165, 
 166, 183, 187-8, and chap. IX. 
 Passim. 
 
 Revolutionary political theory, 
 
 191 seq. 
 
 Poll Tax. See Direct Taxes. 
 Poor, the 
 
 Use of word, 5, n. 2. 
 
 As regards Taxes, Customs, 13, 
 28, 31, 34; XV. and X., 20; 
 Subsidy, 21 ; tradition in 1640, 
 22 ; Direct Taxes, 1640-98, 
 49 ; Excises on necessaries, 
 52, 54, 55 ; summary, I4th 
 to 1 7th century, 82 ; i8th 
 century, 96-97, 156, 160, chap. 
 VIII. passim ; Income Tax, 171. 
 
 Theory that poor must pay 
 taxation, 66, 101, 143, 165-6, 
 181, 183. 
 
 Distributive effect of tax on 
 necessaries, 67 seq., 102, 107, 
 144, 148. 
 
 Opposition to taxes on necessaries 
 in interest of poor, 76, 78 seq. ; 
 relation to political philosophy, 
 79, 184 seq., ; J. Gary, 79 ; 
 i8th century, 105, 122, 155, 
 162 seq., 164 ; opposition in 
 interest of trade, 108, 113 seq., 
 153, 164, 186 seq. 
 
 Approval of taxes on poor to 
 stimulate to labour, 116-8. 
 
 Salt Tax, 1730-2, 100 seq. 
 
 Influence of Adam Smith on 
 taxation of, 146 seq. 
 
 Parliamentary opinion 1776-99, 
 161 seq.. 
 
 Views of poor, i6th century 
 political philosophy, 85 seq. ; 
 1 7th century, 91 seq., 93, n. i ; 
 1 8th century, 105, 106, no, 
 116, 117, 120, 122, 182, 185, 
 187-8, 190. 
 
 Taxation regarding poor, con- 
 trast of 1 8th and igth centuries, 
 178. 
 
 Postlethwayt, Malachy, 115, 134. 
 Price, W. Hyde. See Monopolies. 
 Problems of taxation, classifica- 
 tion, 4 ; view of 186080, 6 ; 
 how approached before 1640, 9.
 
 INDEX 
 
 199 
 
 Property, taxation on, 157, 174, n. 5. 
 
 See Luxuries, Landed class, 
 
 Distribution. 
 Pulteney, 105, 139. 
 Purposes of taxation, 4, 16, 135, 
 150. See Custom (trade policy) 
 
 and Sumptuary policy. 
 Pym, 52. 
 
 Ranby, John, 177. 
 
 Restoration tax settlement, 55-56. 
 
 Revenue, taxation for, see Pur- 
 poses of taxation. Taxation 
 according to, see Distribu- 
 tion. 
 
 Revenue and Expenditure. See 
 Financial System. 
 
 Reynall, Carew, 30. 
 
 Rights, 89, 185, 191. See Political 
 Philosophy. 
 
 Rose, Geo., 15, 163, 178. 
 
 Salisbury (Cecil), 13. 
 Salt Tax, 1730-2, 99 seq. 
 Self-interest as motive of society, 
 
 87, 88, 187, 188. 
 Seligman, Professor, view of direct 
 
 taxes, 20, n. 4, 47. 
 Seymour, Sir Ed., 59, 78. 
 Shelburne, Lord, 146, n. 4. 
 Sheridan, Richard Brinsley, 164. 
 Sheridan, Thomas, 27, 63, 65, 66, 
 
 7i, 75- 
 
 Sinclair, Sir John, 193 and notes. 
 
 Smith, Adam, on view that taxes 
 stimulate to labour, 1 1 8 ; on 
 theory that taxes on necessaries 
 raise wages, 119, 120, 121; 
 on Income Tax, 124-6 ; on 
 Land Tax, 127 ; on Luxury 
 Taxes, 130, 134; on Customs, 
 136 ; his theory of taxation, 
 141 seq. ; relation to opinion 
 of his time, 141 ; influence on 
 taxation of poor, 146 ; pro- 
 portional taxation, 148 ; pur- 
 poses of taxation, 150 ; his 
 political philosophy and view 
 of classes, 182, 186 seq. 
 
 Smuggling. See Collection (Customs). 
 
 Spirit duties, 137, 141. 
 
 Stamp duties, 97, 157, 158. 
 
 Standard of Equality, The, 76, 92. 
 
 Starkey, Thomas, 85. 
 
 Steuart, Sir James, 119, 125, 182, 
 
 1 86. 
 
 Subsidy. See Direct Taxes. 
 Sumptuary ideas and policy, 31, 
 
 131, 138-41, 150. 
 Superfluities. See Luxuries. 
 Swift, Jonathan, 189. 
 
 Temple, Wm. (of Trowbridge), 
 
 117, 119, 120. 
 Tierney, 174. 
 
 Trade policy. See Customs. 
 Triple Assessment. See Direct 
 
 Taxes. 
 Tucker, Josiah, 116, 130, 131, 134, 
 
 190. 
 
 Vanderlint, Jacob, 113. 
 Voluntariness, See Optionality. 
 
 Wages, theory that tax on necessaries 
 raises wages, 108, 113 seq., 
 144, 153 seq. ; theory that 
 tax on rich reduces employ- 
 ment, 81, 169, n. i. 
 
 Wages-fund theory, 120. 
 
 Wakefield, Gilbert, 177, 194. 
 
 Walpole, policy in taxation, 97 
 seq., Salt Tax policy and 
 theory of taxation, 99 seq. ; 
 inconsistency, 103 ; opposition 
 to, 105 seq. ; reply to theory 
 that tax on necessaries raises 
 wages, in. 
 
 Weekly Assessment. See Direct 
 
 TcLXCS 
 
 Whitbread, 128. 
 
 Window Tax. See House and 
 
 window taxes. 
 Wood, Wm., 132. 
 
 Young, Arthur, 128.
 
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 MORRISON & GIBB LIMITED 
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