^^}<> •■vr fV"< [^:2=^^:' N.B. The Right of Translation is reserved. '^:.S/:^^ Lotidoii : A'. CUry, Son, and Taylor, Printers, Bread Street II ill. • • • • • • • • < • « • • •• < < * • « 0^ "?«i*- ^f TO MY CONSTITUENTS, WHOSE INTERESTS ARE LARGELY AFFECTED BY ITS SUBJECT, CO THIS WORK IS DEDICATED, LlJ (/i 2c AS A SINCERE, THOUGH IMPERFECT, EXPRESSION OF MY APPRECIATION OF THEIR B UNVARYING CONFIDENCE AND FRIENDSHIP. 12, Kensington Palace Gardens, Januan' 20, 1863. 424073 CONTENTS. Skction I. TAXATION: ITS lEVY. CHAPTER I. raoe Survey of the Subject i CHAPTER II. Customs' Duties 22 CHAPTER III. Property and Income Tax 68 CHAPTER IV. The Post Office 100 CHAPTER V. Excise Duties 123 ■A viii Contents. i CHAPTER VI. The Assessed Taxes 182 CHAPTER VII. • Stamp Duties i93 CHAPTER VIII. Crown Lands 200 CHAPTER IX. Collection of the Revenue 209 :»<»-@--^«v Contents. ix Section IT. TAXATION: ITS EXPENDITURE. CHAPTER I. Fage Gross Expenditure 239 CHAPTER n. The Army -45 CHAPTER III. The Navy 284 CHAPTER IV. Miscellaneous Expenditure 3'° CHAPTER V. The National Debt ' 364 CHAPTER VL The Civil List 374 CHAPTER VII. General Reflections 3^4 Index • 4°' SECTION I. -S>^-.S^'S>- TAX ATI O N ITS LEVY. TAXATION 0=^. CHAPTER I. SURVEY OF THE SUBJECT. HE levy and expenditure of the Chap. i. taxation of the nation involve Taxation. considerations affecting every suh- '^W^^d ject of the British crown. To con- sider our financial position at present, with a view to any improvements in future, it is neces- sary to review the past. The subject is one involvins: elements of Erreat importance, and it importance ^ ij X Qf ^Yic Oues- cannot be approached without solicitude. At the very outset we find food for reflection and investigation. What is the cause of the chronic dissatisfaction which prevails in this kingdom on the subject of Finance ? Why are the people continually engaged in a struggle E tion. 2 On Taxation. [Sec. i. Chap. I. against the pressure of taxation ? Why are Ministries in perpetual jeopardy in discussions on the Budget ? Are the principles of our taxation sound or imperfect ? Is our revenue raised from a willing or from a reluctant people ? Are our taxes equitable or unequally apportioned ? Is the burden of taxation light or grievous ? Is our expenditure well managed ? Is it kept within reasonable limits ? Does it admit of reduction consistently with the requirements of the nation and the proper protection of its interests ? These are only a few of the most prominent of the questions which suggest themselves when we come carefully to consider our national resources and their application. Spirit in Pcrliaps the main difficulty which has at- which it has Jiin -i j* e -y i. i been usually tended iinancial questions oi late years, has cLiscusscd arisen from the spirit in which they have been discussed. Rarely, indeed, do we find the sub- ject debated, as it should be, with freedom from party, and with sole reference to the best interests of the nation. As both the Parliament and the public are likely in future years to be called on to consider the subject still more at large, might we not advantageously recur to a consideration of the principles on which our taxation is based ? It cannot be possible that we have reached the limits of human discoverv to Sec. I.] Survey of the Subject. ; as to the best mode of dealing with the taxation Chap. i. of the people. There must be room for improve- ment; and it surely deserves the most earnest consideration in what way that improvement may be best eflPected. Por the purpose of this inquiry, it is necessary Topics pro- posed for to examine, in the first place, what we have considera- tion. done and what we have not done during the last twenty years, with a view to the improve- ment of our fiscal position. In one direction — the direction aimed at by Sir what we " nave done Robert Peel — ereat results have been achieved, improve Xax- =" ation. The trade of the country has been unshackled. Prior to 1842 the commerce of the nation was clogged and trammelled by a thousand dif- ferent duties, which, with few exceptions, have now been removed. In 1841 there were 1,162 The altera- tions in the different articles subject to taxation at our Cus- Customs' du- •^ _ ties, tom-houses, of which the greater portion were loaded with duties which, whilst they brought little revenue to the public treasury, opposed formidable obstacles to the extension of trade. In 1862 there were only 44 articles chargeable with customs duties. This s^reat result has been accom- phshed with- accomplislied without any diminution of the ^^i^ any re- ^ " duction of revenue of the department. In 1841, the customs' the revenue ■^ derived from duties on 1,162 articles amounted to 21,898,845^.; Customs. in 1862, the duties on the comparatively few B 2 4 On Taxation. [Sec. i. Chap. I. articles subjected to duty produced 24,036,000/. Throughout the period during which we have been making these important changes in our tariff, tlie customs revenue has been buoyant.* How this has By the extension of commerce which has fol- been effected. lowcd the remission of duties on articles of import and export, employment has been afforded to the industry of the country, and, conse- quently, the means of the people have been increased. The natural result has been the increased consum2)tion by the people of articles subject to taxation, which at once accounts for the increased and increasing amount of customs' duties. The result This has been the great result of the policy establishes the wisdom of free trade initiated by Sir E-obert Peel. The of a Free Trade policy, rcsult provcs the wisdom of that policy. The declared value of exports of British and Irish produce from the United Kingdom, which, in 1841, was only 51,545,116/. rose, under these commercial reforms, to 135,842,000/. in 1860. * The Customs' Commissioners in their First Report (1857) say: " Under the influence of the simplification of the tariff, the re- duction of duties, and the facilities afforded to merchants and shippers, the commerce of Great Britain has shown a marvellous increase, and the revenue a still more marvellous elasticity. The net aggregate of the reductions in the tariff amounts to above ten millions. Yet the customs' revenue has scarcely varied for the last twenty years — ranging steadily from twenty-two to twenty-three millions.' Sec. I.] Survey of the Subject. 5 A marvellous increase indeed ! An increase, Chap. i. however, of which it may be confidently pre- dicted, that it is only the first-frnits of a system as yet quite in its infancy. Great as is the Vast in- crease of augmented trade which these figures represent, it Trade which may be ex- is as nothing to what must be the exportation pected, under a Free Trade of this country, when other nations begin to system, appreciate the advantages resulting from the system we have adoj)ted, and come to act under the influence of our example. Between 1850 and 1860 our exports to Prance and Switzer- land doubled, rising from IS^cZ. per head of the population of those countries to 31|<:^. per head. This was anterior to the full operation of the treaty which is now working such beneficial effects on our trade with Erance. But there are other countries with Euro- pean nations, of Europe in which we yet have to establish a market for the products of our industry. Austria, for example, with nearly 38,000,000 popula- tion, takes less from us than a million of goods annually ; her whole trade with us amounting to less than Q^d. per head per annum of her population. The balance of our trade with Eussia is largely against us. We receive an- nually sixteen millions of her produce, and send her directly only five millions of ours ; although, no doubt, she receives an additional supply of our goods through Hamburgh and Holland. 0)2 Taxation. [Sec. I. Chap. I. and with the East. Circum- stances which will increase the Trade of Great Bri- tain. Spain, again, altliough lier imports from Great Britain have been increasing, and will increase, nnder our reduced wine duties and from other causes, yet clings to a tariff which is prohibitory of many British goods, and, consequently, trades with us to a far less extent than her population and resources would justify. Besides our European trade, we have all the countries of the East to develop. China takes our goods to the extent only of S^c?. per head of her population, and India only to the extent of \^ld. ; whilst we deal with the United States to the extent of 163f/. and with South America to that of 141M. per head per annum. Looking at such facts as these, can we doubt for a moment that the trade of Great Britain must increase under the system to which the policy of free trade has already given so great an impulse ? Who can question that as Bussia, Austria, Spain, and Italy become penetrated by railways, afford- ing facilities for the conveyance of their own productions to ports of shipment, and for the circulation of those of other countries through their territories, we shall have a trade with the people of all these nations millions in excess of the amount by which their commerce is at present represented ? It has been well said that there is nothing that Courts and Cabinets learn Sec. I.] Survey of the Subject. j so readily as lessons in taxation ; * and if that Chap. i. be so, wlio can doubt tbat so soon as the rulers of other nations recognise the advantage of the system under which the commercial prosj^erity of Great Britain is so rapidly rising, they will adopt our principles of trade, as they have adopted other principles of taxation, as a means of raising their exhausted or stagnant reve- nues. To India and to China we must, indeed, ourselves carry our own principles, adapting them to the one by improvements of her resources, and to the other by measures which will facilitate the internal intercourse which we are now endeavouring to open up. But when we om- trade look to the fact that our enterprise is doing a Australia trade with the two million people in Australia to with that to the extent of 21,500,000/. a year (12,000,000/. chlnl''"'^ imports and 9,500,000/. exports), w^ho can doubt that we shall speedily develop a trade with the 400 millions of people in China and the 220 millions of people in India, in greatly increased excess upon the exports which we are at present sending to those enormous populations, and which * Even the Court of Naples under the Bourbon family, sup- posed to be one of the most backward Courts in Europe, felt the influence of the example of Great Britain in regard to customs' duties. In the latter days of the life of King Ferdinand II., he applied himself to the question of taxation, and considerably modified the tariff of the Two Sicilies, with advantage both to the trade and the finances of his dominions. 8 On Taxation. [Sec. I. Chap. I. What we have not done to im- prove Taxa- tion. Modes in which the re- venue of a nation may be made suf- ficient for ex- penditure. amount, at present, to very little more than tlie sum total of our trade with Sydney andPort Phillip. To proceed, therefore, by every means in our power Avith the development of the system in- dicated by Sir Robert Peel, is our first duty and our first interest. We have done a great deal in that direction ; still more will be done by time, by the effect of our example, and by the energy which that example has awakened throughout the world. But beyond following up the principles of free trade, we have a great deal more to do in regard to taxation, which hitherto can scarcely be said to have been attempted. To illustrate this, we must consider what, during the last twenty years, has not been done. There are more ways than one in which the revenue of a nation may be made sufficient for its expenditure, and in which the pressure of taxation may be rendered less burdensome upon a people. It has been already shown that, in 184^2, Sir E-obert Peel, by remissions and reductions of customs' duties, opened up a system of free inter- course Avith foreign countries, which proved most beneficial to the trade of Great Britain, aflPorded employment to our population, increased their means, and consequently enabled them to sustain the customs' revenue by increased consumption of taxed commodities. Sir Robert Peel foresaw Sec. I.] Survey of the Subject. 9 what would be the effect of the measures he chap. i. initiated. He never doubted that the revenue woukl be maintained, and that the prosperity of the nation would be increased. But to meet a deficiency which had at the time been accumu- lating for several successive years, to provide for any temporary loss upon the revenue from customs, and, to use his own words, "in order " to lay the foundation for a better system of " taxation," Sir Eobert Peel, in 1842, imposed an income tax, intended for a temporary pur- pose only, and enacted for a period only of three years. Now, as before observed, there are various ways in which a revenue may be made sufficient for the wants of a nation : — The first is, by measures which can effect i. By im- sucli an improvement in the condition of the conditron of people as enables them to increase their con- sumption of taxed commodities. [This Sir Robert Peel effected.] A second is, by such improvements in taxation 2. By im- proved as to lighten its burden on the people ; and, as Taxation. Adam Smith enforced it, " to occasion the least possible loss of money and enjoyment to the contributors, and the least possible impediment to the progress of national industry and wealth." A third is, by retrenchment of expenditure. trenchment I o Gn Taxation. [Sec. i. Chap. I. Now, let us inquire what has been done during What has the last twenty years, under the two last heads, been done to improve tax- to adapt the principles of taxation to the im- ation or to retrench ex- proved Spirit of the as^e, and to confine the penditure ? expenditure of the nation within fair and reason- able limits ? Spirit in In the outset, the writer would desire to be which the inquiry is uudcrstood. He docs uot approacli these ques- approached. ^ ■*• tions in a niggardly spirit, or with any desire to recommend what has been termed a ' cheese- paring ' economy. Questions of revenue and taxation should be regarded in a large, liberal, and comprehensive spirit. When Sir Robert Peel came into power in 1841, he found the taxation of the country 48,000,000/. : it is now 72,000,000/. It would be wrong to contend that the taxation of the nation ought to be no larger in 1863 than it was in 1841. Looking at the increase in the population numerically, looking at our increased commerce, increased prosperity, increased wealth, we ought all to be ready to admit that the country is able to bear a larger proportion of national taxation than it bore twenty years ago. Neither is it desirable to ad- vocate reductions which will affect the salaries of that large class of persons who have embarked their talents in the service of the nation on the expectation that their employment will be per- Sec. I.] Survey of the Subject. 1 1 manent, and that they will not be thrown adrift chap. i. at any moment that a fit of economy may seize upon our Legislature. Great responsibilities devolve upon those who are large employers of talent, energy, and labour ; and those who employ such labour are highly culpable if they hastily and unwarrantably throw such persons on their own resources. The question, therefore, is to be approached in no narroAV or ungenerous spirit. It is to be looked at largely and liberally, and Avith a sole view to the best interests of our nation. In the first place, then, what has been done, what has been done to during the last twenty years, to improve our diminish the taxation so as to diminish its burden and make taxation? it productive of national advantage ? Where a nation is increasing in wealth, it necessarily follows that the pressure of taxation The burden . not dimi- ought to be felt by the taxpayers m a degree nished. diminishing with the increase of their prosperity. But, despite the remission of customs' duties, this has not been the case with us. On the con- trary, the taxation of the nation during the last twenty years must be admitted to have been re- garded as a greatly increased burden on those who pay the taxes. This does not arise so much from the increased amount of the taxation, as from the mode of its assessment, distribution, and 1 2 On Taxation. [Sec. i. Chap. I. collection. When Sir E^obert Peel was driven, The Income most Unwillingly, and in order to meet a tempo- Tax, rary exigency, to impose an income tax, he is said to have been engaged, night after night, in con- sultation with financiers, politicians, actuaries, arithmeticians, and accountants, endeavouring to devise a means of making that tax equal in its intended as Operation and acceptable in its character. He a temporary- tax, found the task too difficult for immediate adop- tion; and he, therefore, resolved that the tax must be only used as an expedient for a tempo- rary object, and must be remitted when that object was accomplished. The House of Commons and the nation accepted the income tax on those terms. It has been a costly tax, indeed, to the British people. It has been used by politicians of all parties as a means of defraying every sort has become of financial extravagaucc. Time after time it burthen, lias been re-imposed by different Chancellors of the Exchequer, under different excuses and with different designs, and it is now regarded and treated as if it were to be a permanent assess- and has been mcut on the nation. In its operation, it has extended, and raised, been extended to Ireland — it has been extended to small incomes — it has been raised exclusively for war purposes, only partially diminished when peace returned, and varied in its amount and in its period of collection to suit every sort Sec. I.] Survey of the Subject. 1 3 of momentary exigency. Yet no attempt has chap. i. been made to adapt it to the people — to make without being im- its burden less grievous — to make it a means proved. of developing national wealth, promoting in- dustry, or of cultivating frugal and prudential habits. No attempt has been made to improve its mode of collection, or to economize the cost. The tax has carried with it every sort of grievance, trouble, vexation, annoyance, heart- burning, and strife. Not the slightest attempt has been made to mitigate the evil. It has, indeed, become productive of no small amount of crime, for it has offered an overwhelming temptation to evasion, and to falsehood and even perjury in order to accomplish it. In short, it may be said to have injured the moral sense of the people, who view offences against the revenue lightly, and are even disposed to espouse the cause of those who defraud the State. Yet no attempt has been made to afford a remedy ; and, although it is well known that the assessment of this tax is most incomplete, and its collection attended with immense difficulty, yet it is allowed to be per- petuated upon us without any attempt to remedy its evils, much less to make its apportionment a fair assessment on the resources of the nation. H On 'Taxation. [Sec. I. Chap. I. The Na- tional Debt has been in- creased. despite the faUing in of the termin- able annui- ties, and our vastly in- creased means of paying our liabilities. Apart from persistence in the free-trade policy pursued by Sir E-obert Peel (wliicli policy, indeed, has itself been more than once in peril), it is a remarkable and, it must be added, a lamentable fact, that, during the last twenty years, the whole administration of our finance has been destitute of improvement. Vast as has been the increase of our wealth, it might have been supposed that w^e should have done something tow^ards the reduction of our debt; especially seeing that, in 1860, there fell in those termin- able annuities, which the people had so long looked to as affording an opportunity for at least commencing a reduction. But the terminable annuities have been absorbed in ex- penditure without any saving being effected to the country ; and, in fact, so far from our wealth having been employed to reduce debt, it has rather been employed to increase it; for it has been made to afford the means and the excuse for embarking the nation in expendi- ture which has added millions to the national debt since 184^2. A truly lamentable considera- tion this, when we calmly reflect upon it : that our increasing national wealth should actually have been used, not to decrease, but to add to the amount of our already enormous national deficiencies. Sec. I.] Survey of the Subject. 1 5 The facts, indeed, are even worse than this : Chap^ i. for not only have we increased onr national debt during a period of increasing prosperity, ^^^'^^^^^ but we have failed to make, at any period of meet the '' ^ exigencies that prosperity, the smallest foundation for the of the state, occurrence of emergencies. It has always been supposed that in times of peace and pros- perity, nations laid by sometliing for times of war and difficulty ; at any rate, history demonstrates that Avars have almost always been undertaken by nations at periods when they were rich and prosperous, and when it was imagined that the expenses of a war could be fairly defrayed out of the revenues and resources of the country. But not only have we failed to lay by, but our Avars have actually found us unprepared with the finances to meet them. AYhen the Russian war broke although the revenue ot out, the revenue of the nation liad risen from ^}^^ nation ' has largely 47,000,000^. in 1842, to nearly 54,500,000?. in increased. 1853 — an increase of seven millions and a half per annum. This addition to the revenue had been accruing from 1842 ; during eleven years of perfect peace. Yet of Sixty-seven millions of money which, during these eleven years, had thus been added to the national revenue, not one single farthing had been put by to meet an emergency ! 1 6 On Taxation. [Sec. i. Chap. I. Since Sir Robert Peel's resignation of office no The Admini- ncw principle has been developed in tlie admi- our Finan- nistration of the finances of the nation. One unimproved, would supposc, from the experience of the last twenty years, that the taxation of the greatest nation of the world was susceptible of no improve- ment, and that in the levy and expenditure of some 140 millions of money annually there was nothing to be learnt. Since 1842 all that has been done to meet a difficulty has been to in- crease the income tax : all that has been done with the revenue, when it has been increased, has been to find new objects on which to expend it. It is truly remarkable that, with the advance of science, with the development of commerce, with the accumulation of wealth, with the improve- ments in intercourse, with better principles of legislation, better laws, and more speedy and just administration of them, no single attempt should have been made at improved adminis- tration of finance. The State seems to have no idea but to spend as much as possible : it applies no new idea either to the best mode of saving, or to the best mode of raising the money to spend. Others who possess means try to make them reproductive. The State does no- thing to make either its revenue or its expen- diture reproductive. Its taxes are a dead weight, Sec. I.] Survey of the Subject. 17 and so are its disbursements. Of all the seventy Cmap. i. millions a year now collected and expended, it is difficult to find an item that can be shown to re- produce itself, except, it may be contended, in the order preserved amongst our population at home and the protection afforded to our property and interests abroad. Yet Sir Eobert Peel certainly did show us that a readjustment of taxation on sound principles might be made a means of adding to the national wealth and to the pros- perity of the people without any diminution of the national revenue. Is it impossible to apply « in other directions the lesson we derived from Sir Uobert Peel ? The expenditure of the country, which was. Our increas- ing Expendi- in round numbers, 50,000,000Z. in 1841, has ture. been increased to 70,000,000/. in 1862. If this rate of expenditure is to be maintained at anything like its present amount, it is quite obvious that some means must be taken to pro- vide an improved system of raising the required revenue. As the nation improves in informa- tion, it will require that progress should be made in the art of raising revenue and econo- mizing expenditure. Already the demand is energetically made that the practice of our Government should be inverted, and that we should regulate our expenditure by our income, c 1 8 On Taxation. [Sec. i. Chap. I. and not (as lias been our habit) force onr income to meet onr expenditure. As tlie income tax would never baye been submitted to but for tlie reductions in commercial taxation wliicb accom- panied it, so we may be certain it will never be possible to perpetuate it without some means are devised of removing its inequalities, making its assessment less obnoxious, and its pajnoient less burdensome. Is it to be But is our expenditure to be maintained at maintained? . its present rate ? It is a war expenditure. Its very advocates admit the fact, when they tell us that our increased expenditure is needed for the defence of the country : which means, at any Reasons rate, defensive war. Is this war-expenditure, War expen- tlicn, to bc maintained ? Is it not an error ditureintime , ,-, , n ; p i of Peace. to sujDposc that wc can best prepare tor war by maintaining a high rate of taxation in time of peace ? Surely the best preparation for war is economical expenditure. If a nation begins a war at a period when it has a moderate national expenditure, it is possible by taxation to raise the revenue requisite to meet the additional expenses of war. But if a nation begins a war when it has an expenditure only suited to a time of war, how is it to increase its taxation so as to meet the burdens of a war ? If we persist in maintaining a war establishment in time of Sec. I.] Survey of the Subject. 1 9 peace, in order to prepare for war, we shall find, Chap. i. wlien tlie war comes, that our preparations for war have ahsorbed and exhausted our resources, and left us nothing wherewith to meet the un- avoidably increased expenditure appertaining to a state of war. In such a case the only recourse is to loans — i.e., permanent burdens on the nation — involving new taxation to pay off the invariably accruing interest. But it is always to be borne in mind that permanent burdens on the nation involve taxes Avliich fall on its trade and industry, thereby jeopardizing the former and fettering the latter. Up to a certain point such taxes may be borne, but they may go too far, as the case of Holland has exemplified. And if this is so, what more seriously dan- Danger of weakening gerous to a nation in the event of a war, than the national ^ resources. having kept its expenditure at a maximum, and thereby sapped and weakened its resources in a time of peace ? The difficulty of raising taxation is the least peril in such event. The greater peril is that from the failure of resources, or the dissatisfaction of the nation, and their con- sequent refusal to vote the requisite supplies, the country may be driven to make peace at a time and under circumstances and conditions disadvantageous to its interests. A war expen- diture in a period of peace, therefore, is not c2 20 Oji Taxation. [Sec. L Chap. I. The whole question submitted for earnest considera- tion. merely disadvantageous to the nation at the time of peace, and calculated to injure it on the outbreak of a "vvar, but it is absolutely perilous in view of the circumstances under Avhich, after a war has been commenced, a j)eace can be concluded. Such, then, are the leading principles on which it is desired to come to the consideration, in detail, of our revenue and expenditure. The two main objections to the present financial condition of the country are : — ■ Eirst, as to the circumstances under which we raise Hevenue : whether it is levied in the manner most conducive to the interests of the nation and to the well-being and comfort of the people ? Second, as to the Expenditure : whether it is necessary, or whether it is not j^rodigal, perilous, and useless ? One thing is certain. Whatever may be the difficulties Avhich affect the financial posi- tion of the country, the only means to remove them is to look them fairly in the face, and to consider them in a calm and comprehensive spirit. What is most needed on this question is earnestness. The great financial interests of this kingdom, involving, as they do, the greatest com- mercial interests of the world, surely should not be dealt with as they are dealt with, in a mere Sec. I.] Survey of the Subject. party spirit, and as a means of sliuffling the chap, i g'OA^ernment of the country from the hands of one party into those of another. The speeches of rival Chancellors of the Exchequer, each imputing blame to the other, though they may excite the cheers of opposing parties within the House, and the temporary admiration of the unthinking out of doors, can scarcely he regarded as tending to a solution of the subject, by those who liaye at heart the true interests of the people. E-epr caches and invectives in no way tend to reductions of taxation. What the nation really wants, is the renewed application of a sound principle to its financial policy. 21 CHAPTER II. CUSTOM S' DUTIES. Chap. II. The recent remissions of Customs' duties at- tended with no loss of Revenue. The poHcy of remission justified by the result. It lias been already stated that the great re- missions made between 184!2 and 1862 in the duties levied by tlie Customs were attended with no loss to that branch of the revenue. The number of articles charged with duty at various periods in the interval is worthy notice. In 1841 there were charged with duty 1,163 articles. „ 1845 „ „ 1,052 „ „ 18.53 „ „ 466 „ „ 1859 „ „ 419 „ „ 1862 „ „ 44 „ The gross produce of the customs' duty was — In 1841 £21,898,845 „ 1851 22,373,662 „ 1861 23,516,821 „ 1862 24,036,000 These figures and the enormous increase of our trade certainly justify the policy which dealt with the customs duties upon the principle of remitting, as far as possible, every duty that offered an obstacle to the extension of the com- merce of the country. Sec. I.] Customs' Duties. 23 It is difficult to agree, tlierefore, witli tliose, chap. ii. amongst whom there are some of authority and Has the eminence, who appear to think that this principle " been car- has been carried too far. Mr. M'Culloch, in the re- cent Supplement to his "Commercial Dictionary," and in an elaborate article on Taxation, in the last edition of the " Encyclopaedia Britannica," Mr. m'CuI- loch has argued strongly agamst the recent Treaty with France, on the ground that it sacrificed revenue arising from duties levied upon certain articles which may fairly be considered articles of luxury. Lord Overstone, in a powerful speech and Lord Over- upon the same Treaty, delivered in the House of stone's views Lords, March 15, 18G0, carried the principle laid considered. down by Mr. M'Culloch still further, and argued in favour of "moderate customs' duties upon all articles of import, except upon those two great classes of articles — the raw materials of industry and the first articles of food." The fallacy into which these great authorities would appear to have fallen, is in regarding the ques- tion of customs' duties solely from a financial point of view, and not sufficiently considering those duties as they affect trade. Lord Over- stone certainly looked at the question solely with reference to taxation. " By means of customs' " duties," said the noble lord, " a considerable " revenue might be raised in a manner to which 24 On Taxation. [Sec. i. Chap. II. '• little serious objection could be made, and " tbe pressure of which would be scarcely per- " ceptible. Considering the heavy demands on " the Exchequer of the country, and the large " amount of revenue which it has now become " essential that we should raise, the proj)riety of " levying a moderate tax on all articles of foreign " import, with the exceptions I have stated, be- " comes a grave and important question." But surely is this a very clear view of the true Principle on interests of the nation ? If a customs' duty, which Cus- toms' duties however moderate, imposed for a financial obiect, should be ^ _ '' applied. prevents trade with a country which would other- wise receive your goods in exchange for its pro- ducts, it is surely better to remove the duty which imposes the obstacle to commercial inter- course, than for the sake of a small revenue to preclude the possibility of commercial exchange. Undoubtedly, where customs duties can be imposed for purposes of taxation, loithout in- jury to trade, it may be conceded that they are a desirable form of taxation. But, the first object of legislation in regard to customs' duties should be, not to tax all articles which do not come within the class of raw materials or food, but, on the contrary, to tax those articles alone which can be taxed without injuriously affecting our trade with other coimtries, and to Sec. I.J Customs' Duties. 25 Chap. II. tax siicli articles only to sucli an extent as will not injuriously affect their consumption by our own people. Upon the latter point Lord Over- stone will proloably admit that for purposes of revenue it is quite as possible to tax articles too high as to tax them too low, and that whilst you may check consumption by a high rate of duty, you may both increase the national revenue and the commerce of the country by a moderate rate of duty. The duties at present levied under the head of Duties at present customs accrue principallv from the followino; levied lie. & |jy the items : — Customs. customs' KE.VENUE. Sugar and Molasses Tea Tobacco and Snuli' Spirits (Rum, Brandy, and Geneva) Wine CoflFee Fruit (Currants, Raisins, &C.) . . 1860. £6,697,312 5,444,157 5,674,053 2,.531,482 1,174,105 445,999 336,946 1861. £6,442,954 5,521,320 5,604,032 2,641,257 1,219,533 442,253 318,668 Now, the general argument upon customs' duties may be exemplied by reference to two of these items. Tea may be instanced as an article on Avhich the rate of duty has been prejudicial to our commerce, and Tobacco as an article on which the rate of duty is prejudicial to our revenue. Probablv, of all the articles within the rans^e of our taxation, Tea demonstrates the most remark- 26 On taxation, [Sec. i. Chap. II. ably the superior advantage of low rates of duty. The duty on Our legislators have, nevertheless, always had an Tea. inclination to tax tea at the heaviest rates. Prior Its history, to 1746 the duty on tea was 4^. per lb., the revenue resulting from which was only about 150,000/. a year, and that declining. In 1746 the duty was reduced to Is. per lb. and 25 per cent, ad valorem, and the revenue immediately sprung up to nearly Increase of 250,000/. a year, and began rapidly to increase. consump- tion under low duties. tion under The cxact amouuts were as follow : TEAR. DUTY RECEIVED. 1743 £151,959 1744 147,065 1745 145,630 1746 (duty reduced) 243,309 1747 „ 257,937 1748 „ 303,545 TT. Unfortunately, oiu' rulers fancied that this duty admitted of increase, and the rates were again en- hanced ; the consequence, however, was to create a vast amount of smuggling and adulteration, and in 1784 it was found necessary again to re- duce the rate of duty. The immediate effect was to double the quantity of tea sold at the East India Company's sales, and at the same time greatly to diminish the quantity imported into the con- tinent of Europe, and which found its way to England in a contraband form. The quantity of tea sold under the different rates of duty is shown in the following account : — Sec. L] Customs' Duties. 27 Tea sold at East India Company's Sales. Chap. II. YEAR. 1781 1782 Li 00 I • • • • 1784 (duty reduced) 1785 „ 1786 1787 QUANTITY SOLD. 5,023,419 ft>. 6,283,664 „ 5,857,883 „ 10,148,257 „ 16,307,4.33 „ 15,093,952 ,, 16,692,426 „ Tea. In. 1795, and at subsequent periods during the war, the duty was again advanced ; and although the effect was to increase the amount of duty, which was swollen from 628,081/. to upwards of 3,000,000/., the increased duty checked the con- sumption of tea, which, in 1816, was only 20,000,000 lb., or an increase of little more than one-fifth on the consumption of thirty years previous. In 1833 the trade was opened, and in 1834 the tea duties underwent a large reduc- tion, and the imports immediately rose as follows : — YEAR. IMPORTED. DUTY. 1833 32,057,832 It) £3,444,102 1834 33,643,980 „ 3,589,361 1835 (duty reduced) 44,360,550 „ 3,832,427 1836 49,307,701 „ 4,674,535 But here the Government again tampered with Effect of ad- ditions to the the duty, raising it from a rate of Is. Gd. upon duty. the low-priced teas to 2s. Id. upon all sorts : that is to say, an increase of 7d. per lb. upon that very description of tea which entered into the most general consumption of the people. 28 On Taxation. [Sec. i. Chap. II. The result was immediately felt both on the Tea. importation and the duty : — YEAR. IMPORTED. DUTY. 1837 36,973,918 lb. . . ... £.3,323,840 1838 40,413,714 „...-.. 3,.362,035 1839 38,158,008 „ 3,658,803 In the next year the Government put an addi- tional five per cent, upon the tea duty, and the effect was again felt upon the market : — YEAR. IMPORTED. DUTY. 1840 28,021,882 ft £3,472,864 1841 30,787,796 „ 3,973,668 The con- The improved condition of the people, however, creases°with causcd by the mcasures of Sir Hobert Peel, and the improved . , i i i i? i o i. condition of the amount released irom payment oi customs le peop e. ^^i^^^jgg ^^^q-^ other articles, had an immediate effect in sending up the consumption of tea. The moment it could be obtained, every woman in the country added a spoonful of tea to her tea- pot. The rise in the importation of the com- modity, which was unaccompanied by any rise in the price of the article, will be seen from the following : — YEAR. IMPORTED. DUTY. 1842 40,742,128 ft £4,088,957 1843 46,612,737 „ 4,407,642 1844 53,147,078 „ 4,524,193 1851 71,466,421 „ 5,900,625 Effect of the In 1852, the tea duty underwent a small War duty the revenu from Tea. the revenue rcductiou, and in the year following the duty was put at \s. 6k/. The effect was to raise the Sec. I.] Customs' Duties. 29 importation in 185i to 85,792,032 lb. But this Chap. ii. did not last. In consequence of the Ptussian tea. war, the duty was raised to Is. 9d. in 185C, and thereupon the importation of 1857 decreased to 61,493,9891b. The war having ceased, the duty was reduced If/, and assessed at Is. 5(1. per lb. at Avhich it still remains ; but it will he seen that it has taken all the interval between 1857 and 1862 to bring back the importation and the duty to the amounts of 1851. YEAR. IMPORTED. DUTY. 1857 64,493,989 ft. £5,060,048 1858 75,432,535 „ 5,186,170 1859 75,077,452 „ 5,407,189 1860 88,946,636 „ 5,444,157 1861 96,577,SS2 „ 5,521,320 The fores^oinsr fioaires demonstrate, in the Result de- o ^ n J rived from first place, that tea is an article the consump- ^^^^^e facts. tion of which has, at all times, been greatly aflPected by the rate of duty ; and, in the second place, they show the general and increasing de- sire of the people to consume tea, as they have done in largely increased quantities, whenever their own means and the price of the article permitted. These considerations may satisfy us that, if the price of tea could be largely reduced, the consumption would increase in a proportionate ratio. What is the price of tea ? The largest The duty on Tea dispro- proiiortion of the price we pay for tea is the portionate to its C03t price. 30 On Taxation. [Sec. i. Chap. II. Is. hcl. duty. The cost in China of the ordinary Tea. sorts of tea in use in England, does not exceed 1\d. per lb. The average price of every sort of tea per lb. in bond in London does not exceed the present amount of duty, all payments of shipment, charges, and profits being included in this amount. The duty, therefore, is no less than 200 per cent, upon the prime cost of tea in China, and 100 per cent, upon the average price of the article in London. The duty, in fact, is higher at the present time than it was in the early part of the present century, when it was 96 per cent, ad valorem. Beneficial But the increased opportunity of consuming effects which would tca by the people of Great Britain is not the duction of main or material object to be obtained by a reduction of the present rate of duty on the article. By the last war with China and the treaty dictated to the Chinese by the Earl of Elgin, we opened the harbours and rivers of the Chinese Empire to British vessels and British manufactures. But it is of no use to open harbours and rivers to commerce, unless we are prepared to trade with the people ; and to trade with a people we must take for our goods the commodities they have to offer in exchange. Now, the great commodities of China — the only articles, in fact, for which we can trade with the Chinese the duty. Sec. I.] Customs' Duties. 31 upon a large scale — are tea and silk. The total chap. ii. yalue of our importations from China, in 1860, tea. was 9,323,764/. Of this gross amount The Yalue of the Tea was £6,601,894 „ Silk was 2,387,867 £8,989,761 leaving only 334,000/. for all the other articles imported. Now, there are facts which render it certain that our exports to China might be very largely extended, were we only in a position to take in large quantities what the Chinese have to offer us in return for our goods. Anterior to the treaty, our exports to China never amounted our Trade in value to 3,000,000/. a year, as the following table will show : — Value of British Exports to China. 1831 . £547,701 1841 862,570 1851 2,161,268 1856 2,216,123 1857 2,449,982 1858 2,876,447 The moment the treaty was concluded and its increase. the trade thrown open, the exports sprung as follows : — 1859 £4,457,573 1860 5,318,036 1861 4,848,124 The cause of this extraordinary rise is to Causes of the rise in our be found in the fact, that so long as our trade Export trade . to China. With China was limited to Canton, it was im- 32 On Taxation. [Sec. I. Chap. II. possible to find a market for more than a very Tea. limited amount of om' goods. Canton, was the port of China most distant from the seat of government and from the tea-growing districts — and consequently, it may be assumed, from the population and wealth of the empire. Now China possesses no beasts of burden; all the animals in that country are reared for food ; and. Difficulties consequently, the transport in the interior has attending transport to be Carried on upon men's backs, or by Canton. manual haulage along the canals. These means of transport are a monopoly of the Govern- ment, and the cost is excessively high. The cost of transport from Canton into the interior so greatly enhanced the cost of commodities, that their enhanced price prevented the possi- bility of making a market for them. In order, for example, to be consumed at Pekin, where the coldness of the climate rendered them most useful, our woollen goods had to be conveyed no less than 1,200 miles, over a range of mountains unpenetrated by the canal, and across which packages had to be carried on men's backs. As a necessary consequence, a very large j^i'opoi"- tion of our exports to China, prior to the treaty, never left the province in which Canton was situated. They would not bear the cost of transport. Sec. I.] Customs' Duties. 33 But now that the trade is opened, and that Chap. ii. we are permitted direct intercourse with Pekin, Great field for addi- Nankin, and the Tea districts, it follows, as a tionai Trade with China certainty, that we shall be able to find oppor- tunities of selling our cottons, woollens, linens, iron, hardwares, cutlery, &c. to great advan- tage to the teeming population of the Chinese empire. "We shall be able, that is to say, if we can take tea in return. The bulk of the trade of China is in British hands. The imports of the Empire from every other source than from Great Britain and British India, are compara- tively trifling. "VVe have no effectual foreign com- petition to apprehend. We have almost the entire market of this wealthy empire in our own hands, and we have only to develop it. Besides this, we are already the best customers of the Chinese. Comparatively small as is our con- sumption of tea, we consume as much as all the other European nations put together. As regards, therefore, both our import and our export trade with China, we are in a most advantageous position for the development of our trade. It is utterly impossible to say to what amount we may find a market for British manufactures amongst the 400 millions of people of China, if we only place ourselves in a position to deal with them. 34 On Taxation, [Sec. I. Chap. II. Our import trade into China must, liowever, if we are able be regulated by, and must depend solely on, tlie to take Tea in exchange export trade of that conntrv. The trade is a for our pro- " ducts. direct barter trade, and it is, therefore, only an increase of exports that can cause a corresponding increase in imports. Por some years past we have been receiving from China increasing quantities of silk. Silk, however, is a high-priced article. It can only be obtained in moderate quantities ; and its consumption can only extend in proportion with the growing luxury and wealth of nations. An increased demand for silk, from the very nature of the article, must be a slow operation; and, therefore, it is to tea alone that we can look as the article for which to barter our manufactures. There can be no question that China can supply tea to any extent. We do not know the quantity she grows, but we do know that our increased demand for tea has not had the effect of raising the price of the article at any of her ports of export ; and we have also every reason to believe that the cultivation of the plant in China may be indefinitely extended, if extension were required. We also know that our market here, even under the circumstances of a war with the producing country, has never been drained of tea — has never been, indeed, without a surplus stock to meet any extraordinary demand. Quantity of Tea which China can produce. Sec. I.] Customs'' Duties. 35 Would tlie demand arise if the price of tea chap. ii. could be reduced ? It was calculated some years Probable in- crease of the since that the consumption per head of tea in demand for Tea in Eng- the Isle of Man, where there is a duty of six- land if the price were re- pence per pound, was nearly double that of duced. Great Britain ; that in the Channel Islands, where there is no duty, the consumption was nearly four times that of Great Britain; and that in Australia, where they get their tea direct from China, and tax it only at the rate of three- pence per pound, the quantity consumed per head was five or six times the quantity con- sumed at home. But still stronger evidence is afforded by the circumstances of our own trade. We have seen that whenever the tea- duties have undergone reduction in this country, the con- sumption has increased beyond all proportion. We have seen that on the reduction from ^s. to 2s. in 1746, the quantity consumed increased in the first year from 620,000 lb. to 1,800,000 lb. ; that in 1781, when the duties were again re- duced, the consumption immediately rose from 5,857,000 lb. to 10,118,000 lb.; and that in 1835, the first Avhole year of the reduced duties, the consumption rose from 33,000,000 lb. to 44,000,000 lb. We have also seen how largely the consumption increased immediately the measures of Sir Bobert Peel gave employment to the popu- d2 36 On Taxation. [Sec. L Chap. II. Tea. Probable effect of a re- duced duty upon re- venue. lation. "We know, moreover, tliat tlie Tem- perance movement lias done mncli to augment tlie consumption of tea in all parts of tlie United Kingdom ; that the taste for tea has become general in these realms; that it has become an article of almost the first necessity to the poor ; and that the present retail price — not less, certainly, than 35. 6fZ. per pound, or seven times its first cost — must be very restrictive of its consumption amongst the bulk of our poj)ula- tion. Knowing these things, it is impossible to doubt that the consumption of tea would rise in proportion to a reduced price. Would the revenue suffer if the duty under- went a liberal reduction ? Admittedly, it is not desirable to peril the loss of five millions and a half of revenue. Eut it is a remarkable feature of this duty, that whilst the consumption of tea has been affected by every variation of taxation, the revenue has never suffered from any remission of duty. In 1833, under the high rates imposed during the war, the duty amounted to 3,4M,000?. In 1836, under the reduced ad valorem rates, it rose to 4,674,000/. Allien the duty was reduced 8^/. per pound in 1853 (from 2*. 1\d. to 1^. 6-Jcuments. Accordins: to the " Report of the Commissioners Limited rate ^ ^ at which the of Customs" of 1861, tobacco, of all the articles consumption of duty-paid of dailv use in this country, was that of which Tobacco in- the consumption increased the least. They state that the computed real value of our imports in 1860 rose from 179,000,000/. in the preceding to 210,618,000/. in that year ; and they give the following table, showing the rate at which the imports of the principal articles of daily con- sumption had increased : — Flour 53 per cent. Com 39 Currants 33 Spirits 11 Sugar (refined) 6 Tea 6 Cofiee 3 Tobacco (only) 1 The Commissioners, it must be said to their infractions of the Re- credit, have never hesitated to attribute this un- venue Laws. satisfactory state of things to the right cause. It was shown, before the Committee of 1811, that of the whole number of convictions for breaches of the revenue laws, five-sevenths were in, respect of tobacco. The smuggling of tobacco not only appears, in fact, to form a 42 On Taxation. [Sec. i. Chap. II. distinct brancli of trade, but to be an occasional Tobacco occupation of the great bulk of tbe seafaring aTomnion population in our seaports. Most of our mer- occupation , , . i p ,-, on our shores cliant seamcn are occasional, many oi tliem con- stant, smugglers. Every steamer between Great Eritain and the ports of tbe Continent is believed to bring over more or less tobacco, wliicli is landed without paying duty. Tbe tobacco is generally concealed amongst the coals or cargo ; but so ingenious are the contrivances resorted to, that even when they receive information respect- ing it, the Customs' officers have great difficulty in discovering the goods. On both shores of the Thames there are said to be innumerable receiving-houses for tobacco. The families of the sailors are often engaged in the trade. Boys and girls hang about the vessels, and rarely leave them without carrying parcels of tobacco. Many of the receiving-houses employ gangs of children for this object, and it is impossible to stop the system. One boy informed a Custom-house officer that he had run no less than sixty pounds of tobacco in one day from a vessel lying off the Custom-house. He was in the habit of going backwards and forwards to the ship, apparently on errands, and he entirely escaped the suspicions of the officer on board. Mr. Dean, the late estimable Chairman of the Sec. I.] Customs^ Duties. 43 Board of Customs, expressed his opinion that Chap. ii. it was quite impossible to check the smuggling impossi- of tobacco. The smuors^ler, he said, lauj^hs at checking this °° ^ illicit traffic. restrictions. He defies the revenue. The more checks you impose, the more documents you give him, the better he is armed in order to defraud, and even to defy suspicion. The em- ployment of "spies" and "informers" is the only effectual means of getting at illicit traffic ; but here you are giving a premium to vice, and an encouragement to the worst class of the com- munity. Besides, if the reward is high, you are only offering a premium for fraud. Mr. Dean expressed himself decidedly adverse to any aug- mentation of the rewards to informers, because " he had no doubt that many people had in- " formed against their own tobacco to get the " reward offered by the Customs." The expenses incurred in legal and other pro- Expense and result of ceedings connected with tobacco-smuggling are Government prosecutions. not deducible from the accounts of the Com- missioners of Customs. In 1843, the prosecu- tion expenses in the department of the Solicitor of the Customs were charged at 11,308?., and probably that amount has not diminished. The Solicitor to the Customs stated to the Committee that " juries were disinclined to award the high " penalties imposed by law on breaches of the 44 0;z Taxation, [Sec. I. Chap. II. " reyenue laws as recrarcis tobacco." The svm- patliy of tlie country, in fact, is with the smug- gler and against the revenue. Latest Re- port of the Commis- sioners of In theu' Keport of 1861, the Commissioners of Customs state that " the general tone of the Customs as " rcports from their officers as regards the state to Tobacco smuggling. " of Smuggling gives us no great increase or " decrease to report. Attempts are continually " made to run small quantities of tobacco from " vessels arriving from America, and the prac- " tice of subdividing the amount, when found, " amongst the crew, in order to bring it within " the limit from which a summary conviction " only can be obtained, and enable the offenders " to pay the fine and escape imprisonment, " appears to have been more resorted to. " The increase in the number of articles de- " livered free, and consequently on a very trifling " examination, does not appear (as far as we can "judge by the detections made) to have much " added to the attempts made to conceal duti- " able goods therein. One seizure of this kind " has, however, been made at Leith of 746 lb. " leaf tobacco concealed in bundles of willows. " The goods were consigned to a German Jew residing in Edinburgh, but, as he repudiated the same, there was not sufficient evidence to ' warrant proceedings being taken. a a Sec. I.] Customs'" Duties. 45 " There have been, in the course of last j^ear, chap. ii. ' several seizures made by the Coast-guard both illustrations of the cha- ' of tobacco and spirits, amonsist the laro^est of lacter and ' which we may mention a seizure of 700 lb. of illicit trade. ' manufactured tobacco found concealed under ' an old boat at Innishowen Head, within the ' port of Londonderry.* " A large seizure of 1,981 lb. of unmanufac- ' tured tobacco, a waggon, and two horses, was ' made by the Hants constabulary in June last. " The furnishing of deputations to the dock- ' yard police at Portsmouth continues, also, to ' be of advantage, as several seizures have been ' made from men landing from Her Majesty's ' ships, though none of them to any very con- ' siderable amount. '' We trust that some check has been put on ' the shipment of tobacco stalks from the Chan- ' nel Islands, intended to be run into England or ' Ireland, by the vigilance of the officers there, ' who have lately eflPected several large seizures. " On the 12th of last May, the cutter My was * seized in Portelet Bay, in the island of Jersey, ' when in the act of being loaded with 4,100 lb. ' of tobacco stalks. The owner escaped at the * In the preceding year the Commissioners reported an attempt, made at Galway, to smuggle "upwards of i,ooo lb. weight of " tobacco in tin cases, cleverly inserted in tierces of pickled pork ; " and also 1,300 lb. of snuff, distributed through ten casks of flour." 46 < On 'Taxation, [Sec. I. Chap. II. " time, but was subsequently arrested and con- '' victed. We have reason to believe tbat in tliis " instance the goods were intended to be landed " in tlie neiglibourbood of Dublin, as tlie Col- " lector of that port had received information of " an intended run, and the name given to him " was that of the person by whom the stalks " were being shijoped at Jersey." Considera- An apprehension of loss to the revenue has reduction of probably been the main cause which has deterred the rate of - n^ in i • i duty. successive (jrovernments irom apply mg sound principles of taxation to this article. Now, it is very diihcult to suppose that the tobacco duties form an exception to the rule, that when a duty is excessive, its reduction, so far from being neces- sarily followed by a loss of revenue, may, on the contrary, lead to an increase. It is to be observed, that tobacco is an article in very general use. It is altogether a foreign commodity ; its prime cost is small, and its price to the consumer may be made moderate, consistently with raising from it a considerable tax. To be productive, it appears to be only necessary that the duty should be fixed at such a rate as will render the trade of smuggling no longer profitable. It is said that tobacco cannot be introduced by the smuggler under from I5. 2(^. to Is. Qd. per lb., which would appear to fix the rate of duty at which Sec. I.] Customs' 'Duties. 47 the reyeiiiie would be most productive. This chap. ii. object should unquestionably be looked to in assessing the duty on the article ; for, admittedly, there is no other substantial ground for a reduc- tion of the duty on tobacco, than that the high rate is injurious to revenue. Considerable as is the quantity of tobacco con- Consump- tion of To- sumed in Great Britain, it is nothing compared bacco. mth the quantity used in Germany and in Holland, and by the people of other northern European nations. Por every 12 oz. of duty- paid tobacco consumed in England, the people of Belgium have been estimated to consume 22, the Germans 48, the Dutch 54, and the Ameri- cans 84. It is probable that the supposed con- sumption in this country is underrated; the additional quantity consumed being Tobacco never brought to duty. In consequence of the high rates of duty, Aduitera- tions of the many efforts are made at adulteration, which also article. have the effect of checking, in some degree, the importation of tobacco. Mr. Phillips, the chymist to the Board of Inland Bevenue, states in a Beport of the past year, that the manufacturers strive anxiously to increase the quantity of water introduced into cut tobacco, and that in some quarters it is believed that, in order to prevent the tobacco being spoiled by the presence of an 48 Chap. II, On Taxation. [Sec. I. Cigars and Snufif. undue proportion of water, recourse is had to some illicit substance possessing preservative properties. In Scotland and Ireland, cabbage leaves are used to adulterate roll tobacco ; and in Yorkshire last year, two manufacturers were convicted and subjected to heavy penalties for mixing rhubarb leaves with their tobacco. Manufactured tobacco, in the form of cigars and snuff, is subjected to a much higher rate of duty than unmanufactured tobacco. The duty is not less than Os. 5Jc/. per lb. on these articles; the value of which, however, is very various ; the cigars of different countries bearing commercial values varying from 7ff/. per lb., in the case of American cigars, to lis. Id. per lb. and upwards, in the case of real Havannahs. This very high rate of duty, as might have been expected, has quite checked consumption.* Por the last ten years our importation of manufactured tobacco has not increased — indeed in 1861 it was less than * Cigars are smuggled to an immense extent, and in every variety of form. With the last Report of the Inland Revenue Commis- sioners, a diagram was published which exhibited a curious illustra- tion of one of the many ingenious methods practised. A case of toys was imported containing eighteen separate boxes of toys arranged cross-wise. Each box was filled at the top with toys, but was divided in the middle by a partition, under which were con- cealed layers of cigars. The fraud could only be discovered by emptying the toys out of each box. Such, and so various and clever, are the modes of concealment in fancy boxes, manufactures of cotton, &c., that the utmost vigilance of the officers is quite insufficient to detect such attempts. Sec. I.] Customs' Duties. 49 in 1857j and in 1862 (judging from the returns Chap. ir. np to October) the quantity imported will be found to have undergone a very serious diminu- tion. In respect to cigars, the public are much imposed upon by the substitution of home-made articles of small value for hi2:h-class cii^ars of Havannah manufacture. In snufp the revenue Adultera- tions of and the public suffer mostly from adulterations : Snuff. water, alkaline salts, and lime are used to an extent not essential to the proper preparation of the article; and in some descriptions of snuff a large quantity of sand is introduced, under the plea that such sand was imported with the tobacco, and had paid the duty. These things show how difhcult it is to collect the revenue and prevent frauds in these articles ; and how much the fair trader and the public suffer from the excessive rates of duty. In Ireland, where high- dried snuffs are largely used, the manufacturers are said to have been very prone to adulteration; driven to it, no doubt, by the necessity of pre- paring a low-priced article for the great bulk of the poor population of the country. The latest adulterant employed in Ireland is the ground acorn cups of the valerian oak; which present exactly the same appearance to the eye as high- dried snuff, and cannot be detected except by che- mical tests and the aid of the microscopic. During E ^C On Taxation. [Sec. i. Chap. II. last year six manufacturers in Ireland were con- victed of adulterating their snuff with Valeria. The foregoing facts clearly show the necessity of putting the tobacco duties on a better footing. Pew would recommend this to be done rashly, hastily, or with danger to the revenue. "Were the duty reduced within proper limits, the revenue would, probably, gain and not lose by the large additional quantities brought to charge ; but it must also be admitted that our first duty, in this case, is to look to revenue, and that the reduction of the tobacco duties should be made with proj)er caution and at a favourable opportunity. The duties The Sugar duties, which return so large an amount as 6,500,000/. to the Customs' revenue, illustrate the willingness of the British public to submit to taxation, when it is reasonable in its application, and not unjustly or injuriously levied. The duty on sugar, which is not only an article of direct universal consumption, but ^vhich in a great variety of forms enters into and enhances the price of a large number of other articles, has for the last 80 years amounted to a serious impost on the taxpayer; but, although these duties have constantly been the subject of parlia- mentary discussion, the complaints respecting them have not emanated so much from the tax- Sec. I.] Customs^ Duties. c i payer, as from rival interests, who liave souglit chap. ii. to obtain some "benefit from the mode of assess- ment. Thus, in the early part of the present contests re- specting century, the great contest was not as to the their assess- inent ; amount of the tax, although it was unreason- ably high, but as to the differential duties between British Plantation and East India sugars, between the East and the former of which were taxed at the rate of West India interests : 27^. per cwt., whilst the latter were not ad- mitted under 37s. In 1836, the East India in- terest was able to throw off this extra burden, and the duties on sugars produced in the East and West Indies were equalized. At that period, however, a heavy differential duty was levied on all foreign sugar : which was taxed at the rate of 6Gs. per cwt., whilst East India and Colonial was taxed at only 25^. Sir Hobert Peel, in 1844, reduced the rate of duty upon "foreign sugars not produced by slave labour :" and then arose a struggle, which lasted between the West India for several years, upon a question which is still Colonists and the agitated by our West India colonists, who con- Foreigner. tend that, having emancipated theii' slaves, we ought to maintain high rates of duties against sugar produced by slave labour. The answer, however, to this argument is, that the self- inflicted punishment of ourselves would be pro- ductive of no benefit to the foreign slave. The E 2 52 Oil Taxation. [Sec. L. Chap. II. Differential duties in favour of Sugar pro- duced by Fi^ee Labour considered. The West India Colo- nists not really injured by free trade in Sugar. effect of a differential duty in favour of sugar produced by free labour, would not hasten slave emancipation in tlie Brazils, or in the colonies of Spain ; whilst it would be seriously detrimental to our trade with those countries, with which, indeed, our commerce was greatly crippled, until we consented to receive their productions. Be- sides, as we freely receive tobacco, cotton, rice, diamonds, and other productions of slave states, it is difficult to conceive why we should refuse to receive sugar. If the humanitarian part of the argument is abandoned, and if it is limited to the position that a differential sugar duty is only an act of justice to our own colonists, then the answer is, first, that we paid our colonists a direct pecuniary compensation for the emancipation of their slaves, and, second, that if they are unable to compete successfully with slave-producing countries in the growth and manufacture of the sugar-cane, they would do well to turn their soil and industry to some other production. The fact, however, is, that the West Indians have no good ground for the argument that they suffer by their produce being forced into compe- tition with that of slave countries. The quantity of British jjlantation sugar consumed in Great Britain has considerably increased from the time when the duties on colonial and foreign sugars Sec. I.] Customs' Duties. r -i were equalized; and the Yfest Indian planters chap. ii. have before them the example of the Mauritius, Avhich by means of an improved application of labour, improved machinery, the use of manures, &c., has wonderfully increased its production of sugar since our slave emancipation. Prom having been a colony of comparatively small account, the Mauritius has now become one of our most thriving colonial dependencies. The Greatly in- people, who have devoted themselves with great duction of^ , 1 J • 1 • 1 ji • Sugar in the energy to sugar planting, have raised their ex- Mauritius by portation of sugar to Great Britain from 500,000 cwt., at which it stood in 1840, to nearly 2,500,000 cwt., and they have besides made for themselves a great trade with Prance, and with Australia, and the Cape of Good Hope. Why the West Indian planters have not done the same, is a question of which we shall find the true answer in the very different spirit with which they adapted them- selves to their altered position after the emanci- pation of their working population. But, surely, they are not to ask us to pay for this by enforc- ing on ourselves a tax, equal to 8s. or lOs. a cwt. on sugar, which was about the difference in the price of the article before and after the duties were equalized.* * As the production of sugar in the East Indies and the Mauritius is largely increasing, and as we are now able to import sugar, 54 On 'Taxation. [Sec. i. Chap. II. Since 1854 tlie sus^ar duties liave been levied O" 8. d. IS 4 per cwt 16 5) 13 10 5> 12 8 11 10 4 » 5 )) Present on all descriptions of sugar, whencesoever im- assessment i • i i of the Sugar ported, accordmg to a scale, wliicli lias imposed duties varying rates according to the quality of the sugar. The rates at which these duties have been imposed have varied from time to time, according to the exigencies of the Exchequer. according to They are, at present — quality. On Refined Sugars or Candy . . . „ White Clayed, not refined . . „ Yellow Muscovado ,, ... ,, Brown Muscovado „ ... „ Cane Juice ,, ... „ Molasses „ ... The object of levying the duties at a rate increasing with the quality of the article, has been to " protect " our own sugar refiners. But Its doubtful this policy appears to be very doubtful. Wliilst policy. our sugar refiners may be benefited at home, the result must be to prevent improvement in the sugar manufacture in the colonies.* Great though of inferior qualities, from China, Java, and other free labour countries, it is probable that the difference in price would not be so great hereafter, were we to listen to the appeals of the West Indian interests, and impose a differential duty in their favour, and against the sugars of slave countries. But this would be only so much the worse. The rise in the price of sugar would be, probably, insufficient to satisfy their cravings, whilst our refusal to take the produce of the Brazils, &c. would cause to us a most serious loss by the diminution of our trade. * It may also have the effect of preventing any attempt on the part of our Colonists to refine their own sugars ; which, if they Sec. I.] Customs'' Duties. 55 complaints liave already readied tliis country Chap. ii. from the Mauritius, that this scale of duties is Sugar. prejudicial to the manufacture of good sugar, and obliges the exporters in that colony to send all their best sugars to France and Australia, and their worst to the markets of Great Britain. It is complained that the duty being dependent on the colour of sugar, " yellow, white, or brown," and left to the arbitration of a Custom-house officer, must lead to uncertainty, error, doubt, and con- tradiction. What is of one colour in cloudy The duty dependent weather, may be of another colour in sunshine ; on sunshine ^ . at the SO that, besides that opening to fraud which such Custom- house distinctions present, the importer can have no absolute certainty as to the rate at which he will be charged. There appears to be great force in these objections, and they seem to be supported by the fact, that the larger proportion of the sugar we import comes under the class of "Brown Muscovado," and consequently pays only the smallest duty assessed on sugar.* could effect it, would be useful to them in a variety of ways, especially in saving a large proportion of the cost of transit and freight. * The Commissioners of Customs state in their Reports that they have taken great pains to provide, at the Custom-house, a room for the examination of sugars, so peculiarly well lighted that there can be no error in taking the sugar duties, in consequence of dif- ference of colour arising from defects of the light in the apart- ment in which the examination is made. But it seems to me that Sugar duties. 56 On Taxation. [Sec. i. Chap. II. If we hare indirect taxation at all, sugar is General con- one of tliose articles on wliicli a duty may siderations respecting fairly be imposed. It can scarcely be called a necessity of liuman existence, altliough its very general use may be said to take it from out of tlie class of luxuries. It is one of the articles of wliicb we may use a greater or less quantity in proportion to our means. Tlie duty on it is capable of easy collection, as the importation is in large quantities from distant countries, and as the article is too bulky to admit of introduction by the smuggler. It does not interfere in any way with agriculture, trade, or manufacturing industry; for, although it has been said that sugar might be made, as in Trance, Belgium, and the north of Germany, from beet-root, I am inclined to think that with the limited acreage of Great Britain, and the increasing demand of our population for bread and meat, we do better to import our sugar from countries which enjoy the advantage of a tropical sunshine, than to the very necessity of making such special provision, proves the difficulty of levying the duty under this system. The Commissioners may provide the best lighted apartment in Thames-street, but they cannot provide, in this climate, against the effects of atmosphere. The sunshine of one day may be succeeded by the fog of the next, and may make all the difference in the appearance of the article to be valued. The very direction of the wind will occasion over or under value, as it does, or does not, drive the smoke of London towards the Custom-house. Sec. I.] Customs' Duties. ^j attempt tlie growth of a plant wliicli, at tlie best, Chap. ii. can only produce an inferior article.* It may admit of question, wlietlier the exist- The rates of duty on ing rates of duty upon sugar may not be higher Sugar. than is desirable either for the people or the revenue. It is unquestionable that the consump- tion of sugar varies greatly with its price, and it has been averred that the poor consume a larger proportionate quantity of sugar than the rich. This may, perhaps, in some degree, be accounted for by their use of inferior qualities of raw sugar, w^hich are more liable to adulteration than the refined lump sugar used by the higher and middling classes. If this is the case, it would follow that a reduction of duty would be succeeded by increased consumption; and that, if a distinction was not maintained ac- cording to quality, the more general use of a better quality of sugar would lead to an increased revenue in consequence of the dimi- nution of adulteration. These are considera- tions, however, which involve too many points * Very few attempts have been made to extract sugar from beet- root grown in this country ; but an attempt has been made on a large scale to distil a spirit from the root. The spirit extracted was chiefly used, I believe, by French polishers, and in kindred trades ; the refuse beet being converted into food for cattle. The works established for this object were near Farningham, in Kent. I am not prepared to say how far the operation was successful. 5 8 On Taxatio?2. [Sec. I. The duties on Wine. Evil effects of hostile tariffs on both France and England. Chap. II. of detail to come witliin the scope of tlie present argument. I can never feel too grateful that the favour of a great metropolitan constituency permitted me to take an active part in Parliament in aiding the treaty with Prance, which led to a revision of the Wine duties. On every ground of public policy it appears to me that this is one of the great events of our age. Por a century and a half. Prance and Pngland had been commercially opposed. It cannot l3e said that they had been commercial rivals, for their products were so dif- ferent that the one could scarcely interfere with the other. But their political jealousies and rivalries had operated upon their tariffs in such a manner as to cause each nation to exclude the other from its market. Every commercial and financial evil that can result from bad tariffs had been the consequence. Commerce suffered, the revenue suffered, the manufacturing and agri- cultural industry of either country suffered. The Prench could not consume our cottons, our woollens, our cutlery, or our coals : we could not consume in due proportion their wines, their silks, their dairy produce, or their finer articles of manufacture, such as gloves, artificial flowers, straw plait, and clocks and watches. Sec. I.] Custo?ns' Duties. 59 Now, it is said, in opposition to tlie Frcncli Chap. ii. Treaty, tliat all tlie articles we take from Erance Arguments against the are articles of luxury, which will bear a heavy Fi-cncii Treaty duty. The answer is, that the articles on which answered. our Customs' duties were entirely remitted (such as artificial flowers, toys, lace, &c.) produced very limited amounts to the revenue, although the duties on them obstructed interchange ; whilst the articles on which our duties were reduced (such as wine) were so highly taxed as to ob- struct both revenue and commerce. Take watches and clocks for example. They clocks and . Watches. have been specially pointed to as proper articles for duty. Our revenue from them amounted in 1859 to 25,193^., a sum paltry in itself, but yet operating largely to encourage smuggling as well as to preclude trade with a very large body of manufacturers in France, Germany, and Switzerland. What was the immediate effect of the repeal of the duty on these articles ? The number of clocks and watches imported in 1859 was 377,924 ; the number imported in 1860 was 497,362. The probabilities are that, prior to the repeal, as many loatclies were introduced in a contraband form : and that Avhilst the watch- makers did not benefit by the supposed pro- tection, the revenue suffered and illicit trade was encouraged. 6o On Taxation. [Sec. i. Chap. II. It may be said tliat watches are articles of "Articles of luxury. Por tlie sake of my constituents in Luxury." Clerkenwellj I, for one, am very glad that the working-man should he able to indulge in such ' articles of luxury.' I have known instances in which working-men have suffered by not being able to indulge in such ' articles of luxury.' More than one instance occurs to me, in which the inhabitants of a whole parish have been in- convenienced by the stoppage of a church clock, in consequence of some dispute concerning church-rates, when a timepiece or a watch, in the possession of the labouring man, would have prevented his being mulcted of no inconsiderable portion of his wages in consequence of his non- possession of what the opponents of the Prench Treaty call this ' article of luxury.' Besides, the possession of such an ' article of luxury ' is beneficial to trade. Once used, the article of luxury becomes an article of necessity ; and the watchmakers' trade will obviously improve with the increased use of clocks and watches. Effects of the To resumc : — Trance is a wine producing reduction of ;•;;!• the Wine couutry, and we can no more restrict our trade m wine with Erance without disadvantage to our- selves, than we can restrict our trade in tea with China without disadvantage to ourselves. We may rest perfectly satisfied that besides the advantage duties. Sec. I.] Customs' Duties. 6 1 to commerce, wliicli we have already largely Chap. ii. felt as an effect of the reduced duties, the Wine. increased consumption of French wines by our population will very speedily restore the revenue, which we may have temporarily sacrificed by the reduction of duty. In the very first years after the reduction of the wine-duties, the importation of Trench wine rose in the following propor- tions : — ■ Feench Wine importep. Year. Gallons. Value. 1S5S .... 623,041 .... £383,100 1859 .... 1,010,888 .... 559,304 1860 .... 2,445,157 .... 1,036,620 And the Commissioners of Customs tell us that the total consumption of wine "increased from 7,358,189 gallons in 1860, to 10,787,171 gallons in 1861, in consequence of the reduction of the " rates of duty." Under such circumstances, the speedy recovery of the revenue is not doubtful. It has been said with regard to the French The French -n 1 1 • 11 1 j.f>ji Treaty most Treaty, that the Trench obtained the best oi the largely bene- ficial to bargain, and that we sacrificed more than we British commerce. obtained in return. This is by no means esta- blished by the facts. Our exports to and imports from France in 1860 and 1861 respectively, were as follow : — a C( 62 Chap. II. On 'Taxation. [Sec. I. Observa- tions of the Commis- sioners of Customs on the French Treaty. Year. 1860 1861 Exports of British Goods to France. * Imports fi-om France. . . . £5,249,980 £13,917,808 , . . . 8,896,282 16,650,709 Increase £3,646,302 £2,732,901 The increase was, therefore, largely in our own favour, instead of heing in favour of the foreigner, as the party opposed to the Treaty would have had us believe it sure to prove. The Commissioners of Customs tell us in their last Heport that — " The export of woollens, linens, and of iron " and metal manufactures have increased 200 " per cent., and that of cotton goods, 250 per " cent. This vast advance appears the more " wonderful from the fact that, with the excep- " tion of iron, &c., the new French tarifp did " not come into operation till late in 1861 ; the " tariff for yarns and tissues of flax, hemp, and jute, only taking effect on the 1st June ' in that year, and that for chemical pro- ducts, and dye stuffs, for glass and crystal " ware, earthenware and pottery, all included in " the unenumerated articles, only on the 1st " November. The gro\^d:h, therefore, in the ex- " port of these articles can only be considered to " be as yet in its infancy, and we have no doubt cc ec * This does not inchide Colonial produce, &c. exported from Great Britain to France, the value of which exceeded 7,000,000/, in i860. cc (( a Sec. I.] Customs' Duties. 63 " that the effect of these last tariffs will be much chap. ii, " more prominently displayed in the course of The Treaty Avith France. " the year 1862. In the meantime it is already " clear that our accounts of exports would have been placed in a much more disadvantageous position but for the opportune development of our commerce with France, through the exten- " sive modifications in the Prencli tariff effected " by the Commercial Treaty." All honour, then, to Mr. Cobden and those Probable who acted with him bringing about these sequences of great commercial and international benefits. Treaty. The consequences, it may be hoped, will extend far into futurity. Nothing is so desirable for the happiness of the world, as intercourse, harmony, and amity between France and England. Of all the documents ever subscribed by sovereigns and diplomatists, there have been few to which the world may look with larger expectations of hopeful results than to this treaty of interchange and intercourse with Erance. And when we what we owe to the States- offer thanks for it to our own negotiators, let us men of France. not neglect to do justice to those who met us, on the part of France, with equal feelings of liberality, enlightenment, and goodwill. They had greater difficulties to contend with than many amongst us may imagine. England has adopted, has extended, and has felt the good effects of a "4 On Taxatio7i. [Sec. i. Chap^ii. system of free trade; but tlie bulk of thePrench with France P^^P^^ ^^^ still, from force of habit, Protectionists. Their eyes are only just opening to the national benefits which must result from good tariffs and the commercial interchanges which follow their adoption. It would not become me to say how much is due to the Emperor of the Prench, whose enlightened and advanced views are so often misrepresented and misunderstood; but I cannot resist in this place pointing out to the British nation how much they owe, not only to the wisdom of that Sovereign in initiating the treaty, but to the enlightened and liberal zeal of his ministers who advanced it, and especially to Monsieur Houher, the Prencli Minister of " Commerce, Agriculture, and Public Works," and Monsieur Pould, the Minister of Pinance, to whose co-operation with Mr. Cobden, England owes all the advantages which she is deriving, and which she will derive, from this great measure for furthering commercial intercourse. Having said so much upon the main principles and items of our Customs' duties, little space remains for the consideration of other details. It is necessary, however, to add a few observations respecting a class of duties now, happily, alto- gether repealed. I refer to duties upon exports. Sec. 1.] Customs' Duties. 65 whicli, under all circumstances, are, I believe, erro- chap. ii. neous in principle, and injurious in operation. A Duties upon great deal of bad political economy has recently been employed to show that there may be circum- stances under which duties on articles of exporta- tion operate advantageously to the exporting nation ; and the article of Coal has been especially referred to, to enforce the argument. It does Coai. not, however, admit of doubt that we have done right in removing our export duty upon coal, and that we should be very unwise to attempt to reimpose it. Prior to 1842, a duty was levied upon coal exported in foreign vessels. In that year. Sir Uobert Peel, with a view to raise revenue, imposed a duty on coal howsoever exported. After three years' trial, however, he abandoned the impost. It had had the effect, he said, of rapidly checking the foreign coal trade. The revenue raised under the duty was compara- tively insignificant ; and the tax had operated Disadvan- to reduce the profits of the British coal shipper, results of an and to lead to increasing activity in working mines for coal in foreign countries. Under this dutv, in fact, our trade in coal with Prance passed into other hands, and to a great extent we have never recovered it. Not only did Prance develope coal mines of her own, but she directed her energies to obtain supplies from other quar- 66 On Taxation. [Sec. I. Chap. II, Coal. General principle which ap- plies to Ex- port duties. ters, and especially to develope the vast coal- field of Belgium, situated on her frontier. The consequence was, that in 1858 the Erench con- sumption of coal was made up as follows : — Coal, the produce of France . . . . 7,340,000 tons. J' '> Belgium . . . 3,089,400 „ J) )) England . . . 1,146,800 „ 11 11 Prussia . . . 1,027,800 „ 11 11 Other Countries 3,400 „ Used by the Marine 165,000 „ 12,772,400 tons. Thus England, which can supply the largest quantity of coal, under the most facile circum- stances for exportation — and at the cheapest price — instead of regulating the Prench market, was reduced to the condition of affording Erance only one-twelfth part of the coal required for her consumption. The simple question which we should ask our- selves, in regard to an export duty upon coal as well as other articles, is this — " Can other nations supply themselves without resort to our market? " If they can, it is quite certain that they will do so, in the event of our raising the price of our supply either by an export duty, or in any other manner. In the case of Prance, it is quite certain that she can find coal, without resorting to the British coal-market ; and that, as Sir Bobert Peel very justly put it, the only result of Sec. I.] Customs' Duties. 67 our export duty was to force her to open coal chap. ii. mines for herself, and to develope those of other Export Duties. nations. If we desire to keep in our own hands the monopoly of the coal supply, and all the advan- tages which it involves in dealing with other nations, it is quite evident that our best policy is to sell cheap. If we refuse to sell, except on terms which amount practically to a prohibition, we drive purchasers to find other sources of supply, or to discover substitutes. All this operates unfavourably, not only on our own trade, but on all who are engaged in it. And hence it is more to our advantage to export our commodities Avithout levying duties on them, than to use such duties as a means of producing a revenue, the effect of which is to impede the commerce of the nation, and consequently to diminish the prosperity of the community. F 2 CHAPTER III. PROPERTY AND INCOME TAX. Chap. Ill, When, on the lltli March, 1842, Sh^ Eobert Sir Robert ^Gel proposecl a tax on Property and Income, he perty and proposccl it as a temporary measure, " for a time ' " to be limited," for the purpose " of remedying *' the mighty and growing evil of deficient re- " venue." He estimated that, at 7d. in the pound on incomes of 150/. and upwards, the tax would produce 3,771, OOOZ. a year. The tax has now lasted twenty years ; and, in 1861, at the rate of 9d. in the pound on incomes of 150Z. a year and upwards, and at 6d. in the pound on incomes between 100/. and 150/. a year, the amount of duty charged was 11,627,231Z. Since 1812, the total amount levied by this tax has exceeded One Hundred AND Sixty Millions of Money ! Now, it may be worth while to inquire into the operation and working of this tax. Pirst — as to the character of the impost. It as a Sec. I.] Property and Income Tax. 69 was never contemplated by Sir Kobert Peel that Chap. hi. this tax should last. He adopted the machinery adopted and schedules which were in existence when ex'^ediem^ the tax was repealed in 1816, avowing that he knew them to be crude, faulty, and replete ■with injustice ; but as the tax was to be of a temporary character, it was not worth while devisinar new machinerv for its collection. Throughout the debates upon the income-tax, Sir Robert Peel at no time defended or expressed approval of it as a means of permanent taxation. He declared that it was an " unpopular and ob- *' noxious tax ;" that "it was a tax that ought " to be reserved for time of war ;" that " nothing *' but a political necessity of magnitude and " emergency would justify its imposition;" that " it ought not to be imposed without being ac- *' companied by measures of simultaneous relief." He " did not deny that it was an inquisitorial tax." He " did not deny that it bore hardly on " incomes ; " he admitted that " it would fall with " peculiar severity on those Avho are determined " to act honestly ;" that '' a good deal of incon- " venience must arise from the inquiries that " must be instituted into properties ;" and " that *' inquisitorial scrutiny was inseparable from the " tax." Entertaining these sentiments respecting the impost, it is unquestionable that had he 70 On T^ ax at ion. [Sec. I. but used to supply perma- nent defi- ciencies. Chap. III. intended it to bear a permanent character, Sir E>obert Peel would have striven to find for it a basis consistent with the solid interests of the country — to remove its irregularities, and make it of popular application. Unfortunately tlie existence of the income-tax in a time of peace and j^rosperity has afforded a fatal facility to financiers of supplying deficiencies without the smallest effort to improve taxation. Let what might occur — a war with E^ussia — a mutiny in India — an expedition to China — " a " Kafiir war" — national defences — extravagant expenditure — all have been met by the simple expedient of adding to the income-tax. The tax, in its present form, is, in fact, the ready engine for a lavish expenditure. Erom 1842 up to 1852, although the income- tax was from time to time renewed, it was always renewed for limited periods, and at the same rate of ^d. in the pound. Prom 1853 to 1863 it has, however, been subjected to annual fluctuations. The first alteration Avas in 1853, when Mr. Glad- stone extended the tax, at the rate of 5c/. in the pound, to incomes of 100/. and less than 150/. a year ; a measure which, though right in princijile, has been objected to as of doubtful j)olicy and of doubtful advantage to the revenue. At the same time the tax was extended to Ireland. These Alterations made in this tax. Sec. I.] Property Mid Income Tax. 7^ various alterations, however, Avill be better ex- Chap. hi. bibitecl in a table : — Alterations. TEARS. INCOME-TAX ASSESSMENT. 1842—1852 Id. in tlie £ on Incomes of £150 and upwards (Great Britain). 1853 "id. in tlie £ on Incomes of £150 and upwards. bd. „ „ £100 to £150. Tax ex- tended to Ireland. 1854 The Tax doubled for War purposes : Is. 2d. and lOf^. 1855 Is. 4d in the £. and llhd. 1856 The same. 1857 Tax reduced to 7d. and 5d. from 5th April. 1858 AU Incomes from £100, 5d in the £. 1859 Tax raised to 9d. and 6id. in the £. 1860 lOfZ. in the £ on Incomes above £150, and 7d. on Incomes from £100 to £150, from 5tli April. 1861 9f/. and 6d. This will show that we have, year after year, been adjusting the income-tax according to our expenditure, instead of adapting our expenditure to our means. A worse system of finance it would be impossible to imagine. Mr. Gladstone, when he proposed the first Mr. Glad- alteration of this tax in 1853, based his proposal ations in on a comprehensive scheme, by which the tax was to be continued in existence for a period of seven years, and then, in 1860, to be absolutely and finally abolished. His plan was to take the tax at 7d. in the pound during the first year ; then to reduce it to 6d. for two years ; and then again to 5c/. in the pound until the expiration of the tax on the 5th April, 1860, when the falling in 72 On Taxation. [Sec. I. The Tax doubled for war pur- poses, 1854. Chap. III. of tlie long annuities, ceasing at that elate, would compensate for the loss of revenue incurred l^y the remission of the income-tax. This proposal was accepted hy Parliament, hut the nation never ohtained the advantage of it. On the hreaking out of the war in the year following, the tax was at once douhled for war purposes ; and during the two following years it was assessed at the highest point that the tax- payers probahly could hear. What must have been the effect of a tax of \\\d. in the pound upon those poor people whose incomes of a bare 100^. a year were now brought into assessment, I shudder to think of! I can well under- stand the complaint of the Commissioners of Inland Revenue in their second report, of the numerous claims (about 250,000 annually) that came before them for exemption from duty or repayment thereof, and " of the painful appeals " that are made to their compassion and for- ^' bearance." To call upon a man earning less than two pounds a week, and possibly having to maintain a wife and children, to pay a sum of nearly five pounds towards the income-tax, must, indeed, have been often harrowing even to the tax-collector. Sir G. c. Whilst the war with Russia lasted, the people tempt to of Great Britain bore the burden of this tax Sec. I.] Property and Income Tax. 73 with a fortitude beyond all sufficient praise. It Chap. hi. is to the shame of the Government of the day, continue the Tax at the and of their then Chancellor of the Exchequer War rate. (Sir G. C. Lewis), that the fact is recalled to mind that they claimed, on a miserable pre- text, to levy this war taxation for nearly two years after the war had terminated.* Happily the country refused to submit to this impo- Reductions, •^ ^ 1857-1858. sition, and from the 6th April, 1857, the rates of duty were reduced to the rates of 1853, ante- cedent to the war. In 1858, Mr. D' Israeli al- lowed the income-tax to fall to 5^/., as provided by the Act of 1853 ; but, in 1859, the present increase of Rates, 1859- Government again raised the duty in order to pro- 60-61. vide for an increased military expenditure, which has been maintained until the present time. Such is the history of Sir Uobert Peel's income-tax ; a tax certainly never intended to be continued in its present form ; never intended to be tampered with for purposes of revenue ; never intended to be applied to the struggling part of the community ; and, above all, never * The Income-tax on the War Assessment was enacted in 1854, to continue "during the present war, and until the 6th day of April " which shall first happen after the expiration of one year from the "ratification of a definitive treaty of peace." The war was brought to a close by a treaty signed on the 30th March, 1856, but the " exchange of the ratifications," having been postponed until the 27th April, 1856, it was sought to continue the war taxation until 5th April, 1858. 74 On Taxation. [Sec. i. Chap. III. intended to be made a means of effecting extra- vagant expenditure. Now let us inquire, Operation of In the second place, what has heen the the Tax. ^ operation of this tax ? rived fronfit Unlike the revenue derived from the customs and excise duties, the revenue derived from the income-tax has not risen in proportion to the increasing wealth of the community. The amounts received into the Exchequer from the income-tax in the different years between 1842 and 1852, were as follow : — From 1842 1842 £582,6.56 to 1852. 1843 5,4.36,365 1844 5,191,-597 1845 5,026,570 1846 5,395,391 1847 5,450,800 1848 5,347,365 1849 5,408,160 1850 5,383,037 1851 5,304,923 1852 5,-509,637 The interval between 1842 and 1852 was perhaps, on the whole, the most prosperous decennial period ever known in the history of the realm. The export trade of the United King- dom alone had increased from 52,000,000^. to 78,000,000/. Our railway system had made great progress ; land had considerably increased in value, and houses in number. There had been an immense addition to our manufacturing in- dustry ; an immense development of our mineral Sec. I.] Property and Income Tax. J^ wealth; the tonnage of our shipping had doubled; Chap. hi. our population had increased several millions, and in every element of material wealth they had exhibited marked prosperity ; and yet, through- out these years, we find the revenue derived from property and income all but stationary. What was the cause of this ? What could it be but the impossibility of assessing the tax ? From 1853 to 1862 the rates of duties were so From 1852 to 1862, various, and the accounts are so much varied by the extension of the tax to Ireland, and to smaller incomes, that it is impossible, without elaborate calculations, to show what the income-tax ought to have produced in contradistinction to what it did produce. But one fact is certain, that it almost always produced less than it was esti- mated to produce ; and it certainly always pro- duced less than it ought to have produced, looking to the value of the property and income of the country. According to the most recent returns, the whole assessed property and income of the United Kingdom is only about 300,000,000(?., Amount assessed to althousrh the cultivated land of the countrv alone the Tax. amounts to more than 35,000,000 acres, and al- though it is estimatedthat the property of the coun- try insurable against fire exceeds 2,000,000,000/. But mark the figures. The following official account of the Inland Eevenue Commissioners shows the amount of property and income 76 On Taxation. [Sec. I. Chap. III. charged under each schedule of the income-tax, ,860—61. for the years ending 5th April, 1860 and 1861 :— Trifling in- crease in the annual In- come brought to charge, contrasted with the in- crease of property as- sessed 1813— 14. SCHEDULES. AMOUNT ASSESSED. 1860. 1861. A. Lands and Hereditaments . B. Houses and Tenements . . C. Funds and Securities . . . D. Incomes from Trades, Profes- \ sions, &c \ E. Salaries, Pensions, &c. . . , £128,758,283 32,921,100 29,701,283 89,001,012 19,396,397 £131,680,497 33,128,296 27,480,840 89,605,522 19,450,712 £299,778,075 £301,345,867 The whole property and income of the country does not appear, from this return, to have risen during the year to the extent of even a million and a half upon three hundred millions ! * Who can fail to see that the whole estimate is falla- cious ? If proof of it is wanted, contrast this account with the account of assessments in 1813 and 1814, when the country, at the close of an ex- hausting war, was in a state of deep depression. Value of Property, &c. assessed to the Income Tax. SCHEDULES. 1813-14. 1814-15. A £56,701,923 36,336,883 30,000,000 36,080,167 11,380,748 £60,138,330 38,396,144 30,000,000 38,310,935 11,744,557 B C (estimated at) D E £170,499,721 £178,589,966 * The increase under Schedule A arises almost entirely " from the creation and progress of railway property," and the development of mines ; and it will be observed that the increase under that schedule is the only increase of any amount. Sec. I.] Property and Income Tax. JJ Here there was an increase on the year of Chap. hi. upwards of eight millions upon 170,000,000^. ; and it will be observed that the amount under two of the schedules, B and C, was absolutely larger in 1814 than in 1861 ! It was on the basis of this return, that Sir Hobert Peel estimated the probable values of property that would be as- sessed to the income-tax in 1842, and he actually at that time estimated higher amounts under those schedules than the assessment of 1862 ! But if the assessments under schedules A, Schedule d. B, and C, are inadequate, what shall we say of that under schedule D ? It is abundantly certain that schedule D, which includes all the profits of manufactures, trades, and professions, ought to yield as much as schedule A, if not more; and yet it yields less than two- thirds of the amount. But the fact is, that schedule D never has been, and never can be, assessed, and the Government know it. There are thousands upon thousands who ought to contribute, who escape this schedule altogether ; and there are comparatively few who pay upon the full amount of income to which they are liable. That this is so, is conclusively proved by the following return, which shows the num- ber of persons charged to the income-tax, under schedule D, for the year 1856. 78 0/z Taxation. [Sec. I. Chap. III. Taxation under Schedule D. NO. OP AMOUNT OP GLASSES. INCOME ON WHICH DUTY IS CHARGED. PERSONS IN EACH CLASS. TAX CHARGED ON EACH CLASS. £ £ Under £100 a year . . . 1,319,069 20,916 63,205 £100 and under £1.50 . . 11,761,920 118,793 634,632 1.50 , 200 . . 6,364,928 40,390 424,329 200 , , 300 . . 7,224,966 32,511 481,665 300 , 400 . . 4,772,654 14,948 318,177 400 , 500 . . 3,013,131 7,173 200,877 .500 COO . . 2,785,583 5,414 18.5,705 600 , 700 . . 1,899,610 3,061 126,641 700 , 800 . . 1,453,681 2,003 96,913 800 900 . . 1,. 393,991 1,703 92,933 900 , 1,000 . . 752,406 804 50,161 1,000 , , 2,000 . . 6,798,676 5,271 453,245 2,000 3,000 . . 3,488,180 1,.503 232,548 3,000 , 4,000 . . 2,576,320 781 171,749 4,000 5,000 . . 1,942,048 434 129,468 .5,000 , , 10,000 . . 5,251,125 701 350,074 10,000 , , 50,000 . . 8,213,-536 445 547,568 50,000 and upwards . . . 3,539,312 40 23,954 Total* 74,150,1.36 256,891 4,683,744 Dispropor- It will be Seen from this return tliat of 256,891 tionate num- ber of per- persons assessed under this schedule, no fewer sons as- sessed at the than 212,610 were charged upon incomes of less smaller and higher in- than 300/. a year ! According to this account, comes. less than 50,000 persons in the country derive * A more recent return, obtained by Mr. Moffatt, in 1861, distinguishes the number of persons assessed under Schedule D ill Ireland. The number is only 17,457, of which 14,218 are assessed at less than 300/., and 9,238, or more than half, at less than 150/. There are only 519 assessed at more than io,coo/. Sec. I.] Property and Income Tax. jg more than 300/. a year from all the commerce, Chap, hi, trade, and professional practice of the United Kingdom ! It would seem that only 3,904 people have more than 2,000/. a year from income ! London itself ought to supply fully that number who are reasonably supposed to have double the income. But the fact is, that almost every one who finds himself compelled to pay the tax, en- deavours to be assessed at the lowest scale of duty. AYe find from this return, that nearly 140,000 of these 256,000 tax-payers, or more than one-half, are rated, at the low rate of duty, for incomes under 150/. per annum. And this The present . Tax as it shows the dubious policy of the alteration of operates on Small the tax in 1853. Xot onlv is the hcl. in the incomes. pound on the small income a most oppressive tax upon the poor and honest man who works hard for his 100/. a year, but it opens the door to immense fraud on the part of those who have incomes of from 150/. to 300/. per annum (and even more), which they return at less than 150/., in order to get assessed at the diminished rate of duty. No one believes that of these 256,000 tax-payers, 140,000 are in possession of incomes of less than 150/. per annum, any more than we can believe that only 3,904 of the number earn more than 2,000/. per annum. But it would obviously be impossible for the authorities to liear appeals upon the subject of surcharges from this 8o On Taxation. [Sec. i. Chap. III. multitude of small payers, and they are therefore obliged to take their own account of their in- comes. It is only worth while to make sur- charges where the sum is large, or where the case is very flagrant, very generally known, and very easily established. The eva- That the Commissioners of Inland Revenue tised under are fully act][uainted with the difficulties to well known which they are exposed in the collection of this venue Com- tax, is obvious from the following statement, missioners. .,1.1,-^, , m then* last Keport : — " We think it our duty from time to time to " call attention to the deficient returns of profits " under Schedule D. We have already reported " one remarkable case of recent occurrence, *' where a trading firm having returned ' Nil ' as Cases in ii- " their profits for the year 1861-2, the Surveyor the evasions. " induced the District Commissioners to assess " them at 12,000/., and upon appeal, obtained a " close confirmation of his estimate, by proof " from their own books, that the correct charge " was rather more than 12,000/., as the average " of the three preceding years. The penalty of " treble duty was inflicted by the District Com- " missioners, and was paid. " To take another example from a different " part of the kingdom : — A. B. some years ago " returned 15,000/. as his assessable income, but " the amount was raised bv the Commissioners Sec. I.] Property and Income 'Tax. 8 1 "to 20,000^., on which he paid. The following Chap. hi. " year he made no return, and the assessment Evasions under *' of the Commissioners was again 20,000/. ; hut Schedule d. " the Surveyor charged him on 45,000/., the " duty on which was paid without appeal. " Again, the next year he made no return, and " again the charge was raised hy the Surveyor, " who assessed him on 60,000/., Avith the same " result as in the former instance. " 3,000/. appear to be a favourite amount " for assessments. We have before us two " cases in which that sum had been accepted for " years by the District Commissioners as the " chargeable income. In the one case, in which " the party was assessed on his own return, the " Surveyor raised the assessment to 8,000/., and " in the other to 10,000/., the duty being paid " in both without question. Prom the first " case, however, there has been additional profit " to the revenue, the party having made a '' return of upwards of 17,000/. for the folio w- " ing year. " In one place the assessment of a large " trading firm having been found greatly in- " adequate, inquiries were instituted as to the " charges under Schedule D in the same neigh- " bourhood, and the following were some of the " results : — G 82 Chap. III. Cases of Evasion reported by the Com- missioners. Conclusion- that if the Income-tax is to be made a permanent source of re- venue it must be re- modelled. On Taxation. [Sec. i. £ & 1. Returned 170 Charge fixed on appeal . . 350 2. Returned 400 Charged by Surveyor on . . 1,500 Paid without appeal. 3. No return, assessed at . 660 Charge fixed on appeal . . 1,250 4. No return, assessed at . 730 Charged by Siu-veyor on . . 1,000 Paid without appeal. 5. Returned 750 Charge fixed on appeal . . 1,600 6. Returned 800 Charge fixed on appeal . . 1,200 7. No return, assessed at . 800 Charged by Surveyor on . . 2,000 Paid without appeal. 8. No return, assessed at . 810 Charged by Sinveyor on . . 2,000 Paid without appeal. 9. Returned 1,000 Charged by Surveyor on . . 3,000 Paid without appeal. 10. No return, assessed at . 1,500 Charge fixed on appeal . . 2,250 11. Returned 1,943 Charge fixed on appeal . . 2,253 12. No return, assessed at . 2,000 Charged by Surveyor on . . 3,000 Paid without appeal. 13. Returned 2,200 Charge fixed on appeal . . 5,000 14. No return, assessed at . 4,500 Charged by Surveyor on . . 10,000 Paid without appeal. 15. Returned 6,000 Charged by Surveyor on . . 10,000 Paid without appeal. The result, then, to which we arrive is, that if the income-tax is to be treated hereafter as a source of permanent revenue, or even if it is to be imposed for a limited term of years, as in 1853, the tax must be put upon a footing which will permit of fair assessment, and which will make it properly productive to the revenue at a moderate rate of duty. If this cannot be done, the tax must be abandoned. It is too oppressive, too obnoxious, too unequal, too immoral in its character, to permit of its continuance. Oar Chancellors of the Exchequer will scarcely give up the income-tax without a struggle. Let us proceed to inquire tlien, why. Sec. I.] Property and Income Tax, 83 if they persist in the tax, they shoiikl not try Chap. hi. to imjirove it ? Admitting that a property and income tax might not form a proper and an advantageous source of revenue, it appears very remarkable, and a very great reflection on the Einanciers of our age, that no vigorous attempt has been made to put the tax upon some equitable basis. Mr. Mr. d'Is- raeli's views D'Israeli, so far back as 1851, said — on this point. " I am making no objection to a tax on property " and income ; what I am directing the attention " of the House to is this, that, if direct taxation " is to form a more considerable portion of our " financial system for the future, that direct " taxation should be founded on a tru^e principle , " and not upon a false one.^^* Although called a " Property and Income The present tax a tax on Tax," the present tax is, in reality, a tax on income only, income only. The assessment is not on capital in any form ; it is only on annual income de- rived from capital. Now, capital is of two sorts — productive and unproductive. But in- come arises only from the productive capital ; and, therefore, a tax upon income is a tax which relates only to that portion of the pro- * Mr. Gladstone, in 1858, also denounced the tax as open to great objections in its present form. " One is a moral objection," he said, " for I believe it does more than any other tax to demoralize and corrupt the people." G 2 84 On Taxation. [Sec. i. Chap. III. perty of the country which is actively employed. Now it has been admitted as a principle by political economists, that to tax only that portion of capital which is actively employed, is peculiarly unwise and unjust. It is unwise, because capital is the means of employing labour, and whatever tends to diminish its amount must tend at the same time to diminish which does the mcans of employment. It is unjust, because not affect un- productive the property which is unproductive requires as property. much protection by the State as the property which is productive, and the fundamental prin- ciple on which taxation is applied is to afford the State the opportunity of providing for the protection of property. Difference Take the case of two brothers, A and B, each ductive and of whom lias, Say 1,000/. a year more than he unprockic- tive property spcuds. A treats liis surplus 1,000/. a year as capital to be made reproductive. He invests it in a ship, a cotton mill, or a farm, or in some other business which produces income. B treats his surplus 1,000/. a year as capital to be laid by, and invests it in objects that minister to his own enjoyment, and that at a future period, when he may dispose of them, will bear an enhanced value. He invests it in purchasing in Italy works of art of the ancient masters — pictares and statuary, gems, antiques, or other Sec. I.) Property and hicome Tax, 85 articles of taste, or he lays it out at home in Chap. hi. adding to his park or pleasnre-gTOunds, his con- servatories, or flower-gardens; or in some other manner in which the expenditure does not afford him income, though it increases his enjoyment. Now, whilst the investments of A and B, drawn from the same source, are thus equal in amount, and both adapted for the gratification of the parties who invest their property, according to their respective tastes, yet it will he obvious that they are made with very different results. A's investment affords employment to a large amount of labour, and consequently ministers to the general good ; but B's investment entails upon him very little annual cost, and consequently ministers in a comparatively small degree to the public benefit ; except, it may be, in culti- vating taste. Both the investments need the Both require the protec- protection of the State, as well from the foreign tion of the otcltC. enemy as from the domestic spoiler ; but both investments are not equally taxed. The pro- perty laid out in objects which promote in- dustry, and which assist in preserving order by keeping our population free from idleness and crime, is taxed; whilst the property which is invested in unproductive objects of luxury and taste remains untaxed. Yet it would be wrong Both bear fruits in pro- to suppose that the untaxed portion of the pro- portion to 86 0)2 Taxation. [Sec. I. Chap. III. the increased wealth of the nation. But both are not subject to taxation ; though the taxed pro- perty perishes, whilst the untaxed is permanent. perty is not bearing fruits as well as the taxed portion. The ship in which A invested his 1,000/. brings him 10 per cent, per annum, on which he is charged annually to the income-tax ; the picture, or the park land which B purchased, is rapidly increasing in value, in consequence of the increasing wealth of the community, brought about by the enterprise and the use of the surplus capital invested by the A's of our nation. Yet A pays income-tax, and B pays none. Twenty years hence, A's ship or factory will have been worn out, and he will require to rebuild ; but B's picture or park will be worth three or four times the price B gave for it. And so whilst A, who has contributed to the prosperity of B, finds him- self deprived of the capital on the income derived from which he has been taxed for twenty years, B, who has never contributed to the prosperity of A, finds himself with three or four times his original capital, in regard to which he has never at any time contributed one stiver to the revenue of the State, which has protected him in its possession and enjoyment. Such is the difference between productive and unproductive property — and such are the anoma- lies of our existing system of taxation. It is most probable that it was the inten- tion of Sir Bobert Peel, had he continued in Sec. I.] Property and Income Tax. 87 office, and had lie found the tendency of the public chap, iil feeling incline towards direct taxation, to have adapted the tax which he imposed in 1842 to the national requirements upon the principle of an assessment on every description of property and income. In the event of such an assessment Results which would beinff adopted, it has been calculated by eminent follow a real Property actuaries that the tax, instead of being 9c/. and 6c/. Tax. in the pound, would be not above 2^. per cent. To avoid the high rate of duty now imposed on incomes, the income-holder, who can ill afford to make the payment, as a rule, and it may even be said almost invariably, understates his income. It is extremely doubtful if this would be the case were the tax a small one, the weight of which fell upon the rich possessors of large properties. By apportioning the tax so that each man should only be called upon to pay what he could well afford to pay, the temptation to evade payment would be removed. How willingly at the present moment do our population pay high rentals for houses and high wages to servants — give sumptuous entertainments to friends — contribute both to the general and local taxation in the form of house-tax, assessed taxes, and poor's rates — subscribe to charities — and expend money in almost every form, except in paying income-tax. Why is this ? Because the tax is felt to be an 88 On Taxatio?!. [Sec. I. Chap. III. unfair, an obnoxious, and a grievous tax ; and because it presses on the struggling man, who is compelled to maintain what are called " ap- pearances," in a far greater degree than it affects the wealthy man, the bulk of wliose property is scarcely affected by the charge. That, then, which is really needed to make this tax poj)nlar in its application to the people of Great Britain is its fair assessment, not merely on the income, but upon the property and wealth of the community. In May, 1851, Mr. Hume obtained the appoint- ment of a Committee of the House of Commons " to inquire into the best mode of assessing and " collecting the income and property tax, and to " consider whether any other system of levying " the same, so as to render the tax more equit- " able, could be adopted." The Committee was not formed without great difficulty ; but, ulti- mately, the following fifteen members Avere ap- pointed to serve on it : — Mr. Hume's Committee on the In- come-tax, A.D. 1 85 1. Mr. Hume {Chairman). The Chancellor of the Exchequer. Mr. Thomas Baring. Mb. Cobden. Mr. Disraeli. Mb. Horsman. Mr. Henley. Mr. Forbes Mackenzie. Mr. Newpegate. Mr. Ricardo. Mr. Roebuck. Colonel Romilly. Mr. Sotheron. Lord Harry Vane. Mr. Vesey. Mr. James Wilson. At a very early stage of their proceedings, the Sec. I.] Property and Income Tax. 89 Committee decided, by a majority of six to three, Chap. hi. that " it was not within their province to inquire •• into the justice of imposing an equal tax upon " permanent incomes derived from property and " other descriptions of income." They were unable, however, to stop the mass The Evi- dence. of evidence which did flow in from CA^ery quarter in illustration of the anomalies and injustice of the existing mode of assessment. These were freely admitted by the Government officials themselves. It was established that under Schedule A there was no uniformity of assessment in any part of the country ; that under Schedule B the system of assessing the farmer's income on the basis of the amount of his rental was a complete absurdity, inasmuch the rent had no proportion to the value of the produce; that under Schedule C the holders of stock in perpetuity were assessed at *ld. on everv 205. of interest, whilst the holders of terminable annuities were assessed both on the interest and on a portion of the capital, at a rate equal to 35f/. in the pound ; and that under Schedules D and E the tax Avas not only a tax on profits, but, to a large extent, a tax on a description of capital exposed to various risks and vicissitudes, and, to a still greater extent, a tax on industry and skill. But the Committee went much further than merely to take evidence as to 90 Chap. III. Evidence of the Ac- tuaries. Oji 'Taxation. [Sec. I. Mr. Hume's draft Report, the inequalities of the tax. They received from a body of actuaries, statists, and political economists, very valuable opinions as to the way in which the tax might be made more equitable. Amongst others they called before them Mr. J. H. Williams, Actuary of the English and Scottish Law Life Assurance Office; Mr. E. E. Scott, Manager and Actuary of the East of Scotland Office ; Mr. Samuel Brown, Actuary of the Mutual; Mr. Jellicoe, Actuary of the Eagle; Mr. Edmonds, Actuary of the Legal and General ; Mr. Hardy, Actuary of the London Assurance Corporation ; Mr. Neison ; Dr. Earr, &c. These eminent authorities were all agreed that the only fair way of assessing income w^as to capitalize it for the purposes of such assessment, and nearly all these witnesses proposed plans by which that object could be accomplished. The actuaries demonstrated that industrial incomes could be assessed with an approximation to accuracy suf- ficiently near for every practicable purpose ; and they proved that tables might be framed, of as easy application as the ordinary tables of interest, for the purpose of computing what was the amount at which every man might be assessed. This most important committee concluded its inquiries by reporting to the House the evidence it had taken, without expressing any opinion Sec. I.] Property and Incoffie Tax. 91 thereupon. Mr. Hume, however, has left on Chap. hi. record a di*aft report which was suhmitted to the Committee, and which admirably summed up the conclusions at which he had himself arrived upon the evidence. Mr. Hume's pecu- liarly clear mind was brought to the conclusion " that to be equitable, this tax should every " year be levied on the value or the propehty *' (labour and skill being the property of large " classes) of the country; and that each person " having more than a minimum amount of " income, should contribute in proportion to the recommend- ing a Pro- " share of that value in his possession. The perty Tax. " tax would thus become, in the strict sense of " the word, a Propekty Tax, and each person " would be taxed in proportion to his ability ; " which is measured more accurately and ex- '' pressed more clearly by the value of the pro- ^' perty in his possession, under the protection of *' the State, than by any other standard." Mr. Hume argued, with srreat force, that such Reasons in ^ ' ^ favour of this a tax on a man's property would be in every recommend- way more simple and more equitable than the taxes which are now assessed on the articles which his family requires or consumes : his expenditure on which bears no direct relation to the amount of his property under the 23ro- tection of the State. He was of opinion, and 92 On 'Taxation. [Sec. I. Chap. III. many have concurred with him, that the total property of each individual could be determined, with sufficient accuracy for all purposes of tax- ation, with less trouble, and less vexatious inquisition, than is now exercised in ascertaining all the items of that property — his income, house-rent, servants, carriages, horses, dogs, armorial bearings, and other items of service, down even to his hair-puff. The evidence given before the Committee established that in America this system of taxation was carried on without difficulty. The property of every person is as- sessed in that country with as little difficulty, and with as much exactitude, as we assess rentals for the purpose of the house tax. The objections Avhicli have been started to this system of taxation are three in number, and, re- garding the importance of the principle, they seem to be very insufficient in importance. The first is an objection on a general ground that the tendency of a tax on property would be to cause it to seek investment in some foreign country. To this it may be replied, first, that the income-tax, heavy as it has been in some years, has not driven persons to seek in- vestments in a foreign country ; and, second, that the great bulk of our property, — our land, mines, railways, canals, docks, warehouses, shops, Objections to a Pro- perty Tax answered. Objections of principle. Sec. I.] Property and Income Tax. 93 and dwellings, — are not removable. The next Chap. hi. objection is, that a tax on unproductive property would prevent its accumulation; — to which it would seem to be an obvious answer that the less capital that is rendered absolutely unproductive the better for the country. The third objection is objections one of detail, which rests chiefly on the authority of a late Chief Commissioner of Inland Revenue, who declared "that, although it was done in " America, he was decidedly of opinion that we " should not get the returns here." "The es- " tablishment necessary would be so great," &c. "No possible check could be introduced," &c. " It would, in my opinion, be quite im- " practicable," &c. "We could never trace the " property of each individual," &c. " Or test " its correctness," &c. " I apprehend it could never be done," &c. These strong expressions of doubt and difficultv it has been the fortune of most of us, in our experience, to have met with before, and to have found very easy of modifi- cation, when the appointment of an official depended upon his carrying into execution the system he condemned. Of all the various fabrics in which Gordian knots are accustomed to be tied, there is none that holds together so tenaciously, or yet that is so easily cut asunder, as — red tape. 94 On 'Taxation. [Sec. I. Chap. III. Mr. Hume's draft report concluded in words Mr. Hume's wliicli ouglit to live in our memories, though it conclusions. may be feared that they are almost forgotten : — " The income-tax, in its present inequality, cannot be made a permanent tax. The inquiry establishes the truth of the public judgment of its injustice. It at the same time leaves no doubt that a tax assessed on the value of all the property, and on the capitalized indus- trial incomes of the population, would be, in theory and in practice, more equitable than the present taxes. A tax exclusively on the rent of land, on the rent of houses, on wages, or any single class of property, as well as a general tax of all properties in no constant proportion to their value, depresses prices, and alters exchangeable values. It produces a depreciation of property, and is, in fact, as far as the inequality goes, a confiscation. A par- tial, an unequal, or an uncertain tax, unsettles the security of property and paralyses industry. If, under the pretence of convenience in collec- tion, or of difficulty in assessing the tax equit- ably, three per cent, is taken from the interest of capital in one form and fourteen per cent, from the interest of capital in another, and nothing at all from the interest of capital in a third form, it will diffuse a general sense of in- Sec. I.] Property and Income Tax. 95 " security in the minds of all persons possessing Chap. hi. " property, as no one can foresee how far a system " which violates the principle of equitable taxa- " tion may he carried. " The progress of financial, as well as other " branches of knoAvledge, has been great since " the income-tax was imposed by Mr. Pitt ; and " Parliament, in imposing taxes, is bound to " take this progress and the progress of public " opinion into account. Hence your Committee " consider that whatever may be thought of the " revival of the income-tax in all its old forms of " inequality and injustice in 1842, the time has " come, after the experience of ten years, for " making it more equitable. " That the assessment and levy of a just tax " on property is practicable, and that such an " approach to a direct assessment can be made " as would be more satisfactory to the country " than the present tax, your Committee unhesi- tatingly assert ; and no trouble or efforts to render the system of taxation equitable can be " too great for the sake of justice." These were the opinions put on record by Mr. Hume's Report with- Mr. Hume, and those who acted with him, more out result. than ten years since ; and yet, during that in- terval, although we have been exposed to the evil of a double income-tax, " no trouble has (C (C 96 On Taxation. [Sec. i. Chap. III. " been taken to render the system equitable for " the sake of justice." If anything was needed to establish the position assumed at the outset of this work, as to the little that had been done to make taxation equitable, since the death of Sir E-obert Peel, this fact might be pointed to as of itself a sufficient and a forcible confirmation of the view. Proposals for A variety of plans have, at different times, the better J 1 ' collection been proposed with a view to the modification, and assess- ment of the better assessment, and better collection of this Tax. tax. It is scarcely within the design of this work to enter into details ; but two proposals may be adverted to, which seem to contain the germ of modifications that might be considered with advantage. The one is to make the banking interest of the country agents for the collection of the property-tax, so that every man keeping an account at a bank might arrange his property- tax with his own banker, thereby avoiding any scrutiny into his affairs, except by parties to whom they are already known. This plan would afford the revenue very good security that the property thus assessed Avould not be under esti- mated ; for every man desires to appear as well off as possible to his own banker. The effect of this plan would not only, it is thought, be an avoidance of annoying official inquisition, Sec. I.] Property and Income Tax. 07 but would effect a saving in the cost and trouble Chap. hi. of collection, (of wliicli the Inland Revenue Com- missioners are always complaining,) and Avould secure a prompt payment of a tax which is now almost always in arrear. Another project, which Proposal to . „ J ii -J 1 associate the emanates irom a very great authority on such Tax with matters, is to popularise the tax by associating ranee. with it a svstem of life assurance. Under this project every taxpayer would receive from the State, in proportion to his contribution to the revenue, a certificate which would entitle him, at death, to have a sum of money deducted from the legacy or succession duty then payable on his property, or returnable to his widow and children in a more direct form. The calculations on which this plan proceed show that an im- mense profit would accrue to the State by the adoption of this principle; and knowing how successful, and how largely profitable, the opera- tions of life assurance associations have proved, there seems reason to imagine that this is an idea wliicli might be worked out with national advantage. The details of such a project are, of course, not within the present object; but should there be another parliamentary inquiry into the income-tax, it is to be hoped that they will be considered with attention. The inquiry by Mr. Hume's Committee, tainted 98 0;z Taxation. [Sec. i. Chap. III. throughout hy party objects, was nullified by the spirit of party which opposed the ado23tion of his report. Let us hope that the time is not far distant, when the efforts of the great economist of our age will bear fruit, and when every party in the State will be prepared to recognise that he did not live in vain. Lord jef- In coucludino? my observations on this branch frey's . opinion in of mv subjcct, I canuot rcsist the pleasure of favour of a J J ' 1 Property quoting a letter which embodies a strong con- 1 clX, firmation of the views herein expressed. In the correspondence of the late Lord Jeffrey, published by Lord Cockburn, there appears a communi- cation addressed to Mr. John Macpherson Mac- leod, formerly a member of the Council of Bengal, and now resident in London, which contains the following views upon a property -tax. They may be commended to the peculiar attention of the Whig party, of which Lord Jeffrey was for so many years a distinguished member : — "Edinburgh, \5th February, 1849. " My dear Macleod, " I conceive no tax on what you under- " stand by income can be otherwise than unjust " and unequal, and that it ought in all cases "to be laid substantially on property. I think "it a very reasonable proposition that men Sec. I.] Property and Income Tax. 99 should contribute for tlie support of the Govern- Chap^iii. ment which protects their interests, as nearly J-°^^ jef- as possible in proportion to the value of the o'^cI^JImj^ interests protected; and that in this, as in every other case, they should be required to pay only, as in vulgar phrase and fact they can afford to pay. Every one feels and acts upon this plain maxim in ordinary life. The man who has a fixed or perpetual income spends more of it than the man with one that is temporary or precarious, and thus pays a larger share of all taxes laid on consumption or ex- penditure. In the same way he is expected to pay, and does pay^ more in charity and volun- tary benefactions. Why, then, should he not pay his direct taxes in the same proportion ? and be required to relieve the necessities of the State as he feels it his duty to do those of the destitute ? and subscribe to the Exchequer in the same higher column which he occupies among the contributors to the infirmary or ra2r2:ed schools ? This is the view which common sense and common feeling impresses, I believe, on all men, out of which no logical refinements can ever drive them." cy^ H 2 CHAPTER IV. THE POST OFFICE. Advantages No One can be more fully sensible than I am of a low Rate of Postage, of the advantages Avhich have been conferred upon the nation by low rates of postage. The blessing has been felt by every class — indeed, it may be said almost by every individual in the community. The boon has been undoubtedly greatest to the commercial classes, who have taken advantage of the low rates of postage, to circulate information relating to trade to an extent scarcely anticipated even by Sir E-owland Hill himself. To the humbler classes of society the low rates of postage has also been a great blessing, by enabling them to correspond with distant friends without being subject to a pay- ment which fell too heavily upon their wages. To the rich, the reduction of the rate of postage has been, perhaps, less advantageous ; their cor- respondence, under the old postage system, having Sec. I.] The Post Office. loi been largely carried on without expense, under Chap, iv. the cover of franks, of which, in 1839, no less than 6,563,000 passed through the Post Of&ce. But to the revenue, the alteration has been detrimental ; for, whereas in 1838, the its effect on the revenue. last complete year of the old postal system, the net revenue derived from the Post Office was 1,659,510/., it sank in 1840, under the new postal system, to 500,789/. ; and, although more than twenty years have elapsed, it has not even yet recovered itself; having been, in 1861, only 1,525,311/. There are some who think that the Post The Post Office ought Office ought not to afford a revenue to the to be a source , of revenue State. But if the State thmks it desirable to to the state, conduct the postal business of the nation, why should it not derive a legitimate advantage from its conduct of that business ? It may, indeed, be a question whether the State ought to trade in the carriage of letters any more than in the carriage of passengers ; but if it does un- dertake the trade with a view to the advantage of the nation, it should, surely, derive from the business such a revenue as may be derived from it compatibly with a scale of charges which are not disadvantageous to the nation. If so, we must regret to find that the Post Office is not a better source of revenue, and that the State 102 On Taxation. [Sec. I. Chap. IV. has not derived an advantage, corresponding to that which commerce and the people have derived, from the increased facilities for postal correspondence. But its reve- That the rcvenuc from postage should have nue has not increased in suffered SO scriouslv, for SO loug a period as proportion to ^j j. the increase twenty ycars, is the more extraordinary, con- tercourse. sidcriug the immense development of postal intercourse. The number of letters delivered in the United Kingdom in 1839 was only 82,500,000 : whilst, in 1861, the number of letters and book- parcels delivered, may be taken, in round num- bers, at 600,000,000. It will be seen from the following table, adapted from the accounts in the last Eeport of the Postmaster-General, that the income from the Post Office has by no means increased, in proportion to the increase of the trade of the department : — YEAKS. 1839 1840 Average of 5 yefirs, 1811-45 1846-50 18.50-55 18.55-60 1861 LETTERS DE- LIVEREP. 82,471,000 168,768,000 227,777,000 327,003,000 410,166,000 522,898,000 593,240,000 NET REVENUE. £1,633,764 500,789 656,809 838,944 1,128,-502 1,335,136 1,52.5,311 Lookiiii? at the enormous increase of the number of letters, one is at first at a loss to Sec. I.] The Post Office. 103 account for the absence of a corresponding elas- chap. iv. ticity in the amount of the Post Office receipts ; especially as in those receipts there are included the profits derived from the issue of money orders, amounting to 128,000/. a-year, besides an item of 30,000/., which was charged to the State, in 1861, for extra ofiicial postage incurred in taking the census. In taking the present net revenue of the Post The Net Re- venue of Ofiice at even the insignificant amount of a 1,500,000/. subject to million and a half per annum, there is reason heavy de- ductions, to fear that we are putting the amount too high. Prom an account of the revenue and actual expenditure of the department, given at pp. 20 and 21, of the last Pteport of the Postmaster- General, it would seem that the actual expen- diture of 1861 ought to be taken at 3,154,527/., against a gross receipt of 3,530,557/.: leaving only 376,030/. to be properly carried to the revenue. In returning, therefore, 1,525,311/., as the net revenue of the Post Ofiice in 1861, the Post- master-General is under the necessity of ex- plaining " tliat the expenditure does not include for Packet Service and either the cost of the packet service, or that of stationery, stationery r' Now, it appears from the same report, that the "actual cost of mail packets" for the year 1861 was 949,228/., and that the actual cost of stationery was 27,897/. The Post I04. On Taxation. [Sec. I. Chap. IV. leaving the net revenue of the de- partment little more than half a million, whilst it ought largely to exceed the revenue of 1839- Office contends that these items,* or at least a part of them, ought to be debited to the Ad- miralty and to the Stationery- office respectively ; but, however that may be, the fact remains, that here are items approaching to nearly a million of money, expended for postal services, which are not included in the Post Office account of the "cost of management," and which, if deducted from the "gross revenue," leave, not a million and a half, but little more than half a million, to the credit of the year's trading of the depart- ment. Now, if this is so, and if the net revenue of the Post Office upon 600,000,000 of letters is actually less in 1862 than it was in 1839, when only 82,500,000 letters were posted, it is evident that there is something essentially wrong in the working of the department. Por a very short calculation will show that 600,000,000 of letters, at the minimum rate of \d. each, ought to produce 2,500,000^. a-year of gross revenue ; whilst 82,500,000 letters, at an average of (say) Qd. each, would produce only 2,062,500^. At the * The use of stationeiy by the Post Office appears to be enor- mous. This probably arises from the vast number of documents which the Post Office find it necessary to print in order to carry out the Money Order and Savings'-bank operations. Such an amount as 28,000/. per annum could scarcely be necessary in order to instruct the public how to put Queen's heads upon their letters. Sec. I.] The Post Office. 105 present time, therefore, the net revenue of this Chap. iv. department ought to be nearly half a million a-year in excess of what it was in 1839, instead of being more than 100,000/. a-year below it : and, indeed, when we come presently to examine the gross revenue, we shall find that the excess on that account actually is a full million more than it was under the old system. Sir Eobert Peel, when the uniform penny post- sir Robert ^ '' ^ Peel 5 views aofe rate was proposed to the House of Commons, on the Penny ^ i- ^ Postage. deprecated the proposition. He admitted that the then existing scale of postage was too high ; but he thought an uniform penny rate too low. The tendency of his mind appeared to have been favour- able to a rate varying from \d. to Zd. or 4c/. per letter, according to distance ; and certainly, however great the advantages resulting from a penny rate, it does appear an anomaly that a letter should be carried from London to Edin- burgh, or Galway, for the same sum for which it is carried from St. Martin' s-le-Grand to St. Martin' s-in-the-Fields. After the penny post- age system had been in operation some years, and when Sir Robert Peel, as first Minister of the Crown, had had full opportunity of forming a clearer estimate of its advantages and dis- advantages — he said, " I never doubted the social " and moral benefits of the reduction of the Post io6 On Taxation. [Sec. i. Chap. IV. " Office duties. I did not say but that tlie scale " of those duties might be too high, and might " admit of advantageous reductions ; yet I did " deprecate, in the state of our finances, the re- " duction of the Post Office rates to one penny. " I do believe that, if it was necessary, I could " show that, from the Post Office revenue, you " do not actually raise one farthing. And if you " add to the Post Office expenses the charge for " packet ships, the state of the accounts will " present a deficiency, instead of a revenue, " arising from this l)ranch of the public service. " But when I say so, I do not undervalue the " importance, in a moral and' social point of " view, of the late Post Office measure." Sir R. Peel's When wc scc that the same state of things anticipations confirmed, tlius described by Sir E-obert Peel in 1842 con- tinues in 1862 — that "if you add to the Post " Office expenses the charge for packet ships, &c., " the state of the accounts will present a defi- " ciency, instead of a revenue, arising from this " branch of the public service" — the matter be- comes still more serious ; and we may properly inquire why the "late Post Office measure " has not been as successful as regards receipt as it has been in the development of business. Cause of the The causc is undoubtedly to be found in the decline of the revenue fact that the Post Office has undertaken more Sec. I.] The Post Office. loj duties than it can advantageously perform. When Chap. iv. the rates of postage were reduced, the Post Office from the Post Office. was in possession of immense facilities for carrying on its business. The railway system was rapidly developing itself throughout the kingdom, and it is not too much to say that, without the facilities afforded by the railway system, the penny post- age plan never could have been carried into operation.* The Post Office found that the railways afforded the means of carrying letters at immensely increased speed, and in immensely in- creased quantities. They found also that, pro rata^ the cost of conveyance was diminished : for whilst one railway train can convey as many bags of letters as at least fifty of the old mail coaches, the payment to a railway company for a train is very little in excess of the payment to the contractor for each old mail coach ; so that in addition to increased speed, the Post Office acquired the opportunity of carrying vastly increased bulk, at very slightly increased cost. Possessed of these facilities, the Post Office commenced the development of the new system * Mr. Smiles's " Life of George Stephenson " contains, in an Appendix, an Address to the Institute of Civil Engineers, by the late Robert Stephenson, in which this fact is ably demonstrated. The Post Office authorities, in their Second Report, disputed Mr. Stephenson's positions, but he rejoined, and overturned them with such crushing force, that the Post Office thought it discreet to remain silent. io8 On Tax at 1071. [Sec. I. Chap. IV. The depart- ment has undertaken business be- yond its province. The "Money Order" system. The " Par- cel's Post." The " Post Office Savings' Banks.'' of postal communication, and began to occupy ground which can scarcely be considered within the bounds of their legitimate province. They first commenced the money order business, which trenched upon a branch (though, I readily admit, an insufficiently developed branch) of our com- mercial enterprise. They then extended their proper business of letter conveyance to the con- veyance of books, commencing an "inland book post," which, by degrees, became "a parcel's post," comprehending any sort of packet "not exceeding two feet in length, width, and depth, open at the ends or sides."* This was, unques- tionably, a direct interference with the carrying trade of the country, and a very flagrant employ- ment against the Railways themselves, of those facilities, which had given the Post Office the opportunity of carrying bulk at all. More recently, the department has opened " Post Office Savings' Banks," — a description of institu- * The following is one of the latest public notices issued by the Post Office. Instead of samples, we may anticipate that at no distant day the Post Office will convey the articles in bulk. "Pattern Post between this Country and France. — Samples of seeds, drugs, &c., which cannot be sent in open covers, must for the future be enclosed in bags made of linen, paper, or other material, tied at the neck with string. Closed transparent oiled-silk bags must no longer be used for this purpose, as the officers of the Post Office in France are all instructed to treat packets of this description as letters, upon the ground that they are hermetically closed, and cannot be examined. — By command of the Postmaster General, ROWLAND Hill, Sec." Sec. 1.] 'The Post OJice. 109 tion which does not in any way fall within the Chap. iv. proper business of a department organized for the conveyance and delivery of letters ; and which, upon the plea of the Post Office, that they have " a branch office in every town," might as well have been undertaken by the Apothecaries' Company, who have a member of their company in every town, and much more properly by the Inland E-evenue Department, which has an exciseman, or Custom-house officer, or stamp distributor, in almost every village of the kingdom. As Sir Eobert Peel said on the original change. The effect of these mea- "I do not underrate the advantages of these sures, measures." But although they have been under- taken to vamp up the Post Office receipts, I do very much question their expediency as regards the revenue. Let us see how the system operates. Every new branch of business which the Post Largely in- creased cost Office undertakes, increases its cost of manage- of manage- ment. ment. It is this ' cost of management ' that at present eats into the vitals of the Post Office revenue. Let us look at the ' cost of manage- ment ' in contrast with ' the gross revenue ' of the department. It will be seen, from the fol- lowing table, not only that the ' cost of manage- ment ' has doubled since 1840, but that the per- centage of increased cost, to gross revenue, is at the present time enormous. I lO On Taxation. [Sec. I. Chap. IV. Proportion of cost of manage- ment to Gross Revenue. Proportion to Net Revenue. YEARS. 1838 1839 1840 Average, 5 years, 1841-45 .... 1846-50 .... 1851-55 .... 1856-60 .... 1861 GROSS REVENUE. COST OF MAN- AGEMENT. £2,346,278 2,390,763 1,359,466 1,6.58,214 2,143,717 2,569,836 3,]35,.587 3,528,427 £686,768 756,999 858,677 1,001,405 1,304,772 1,441,334 1,800,451 2,003,116 Next let us see how this increased cost of management has operated upon the net re- venue of the Post Office. It will be seen from the following table, that the cost of manage- ment (without the million incurred for packet service and stationery) is one-fourth more than the net revenue ; or, if we add that million, is absolutely double the net revenue ! It will be observed, also, that whilst, since 1838, (the last complete year under the old system,) the net revenue from all sources has suffered diminu- tion, the cost of management has increased from 686,000/., to upwards of two millions ! YEARS. COST OF MANAGE- MENT. ANNUAL INCREASE. NET REVENUE ?ANNaAL INCREASE. £ & £ £ 1838. . . . 686,768 — 1,659,510 — 1839 . . 756,999 70,231 1,633,764 — 1840 . . 858,677 107,678 500,789 — Average, 5 years, 1841-45 1,001,405 152,728 656,809 156,020 184C-50 1,304,772 303,367 838,944 182,135 ->» 1851-55 1,441,334 136,562 1,128,502 289,558 1856-60 1,800,451 359,117 1,335,136 206,634 1861 . . 2,003,116 202,665 1,525,311 190,175 Sec. I.] The Post OJjce. 1 1 i These tables show that the increased cost of chap. iv. management is out of all proportion to the in- The in- creased cost creased net revenue, and that it is the increased of manage- ment more cost of management which keeps down the net than absorbs the mcreased earnings of the department. Eor, it will he revenue. observed, that whilst the net revenue was up- wards of 100,000/. less in 1861 than in 1838, the gross revenue was nearly 1,200,000Z. more in 1861 than in 1838. The whole difference, and more besides, was lost to the revenue in " cost of management." Now, of what is the cost of the Post Office Large Official Staff management composed ? The principal item, of the Post Office. more than one-half of the whole cost brought to charge, is for Salaries ; amounting, in 1861, to no less than 1,102,576/. The Post Office has an enormous " staff of officers," numbering no less than 25,473 ; of whom there are : — Postmasters 11,391 Clerks 1,630 Letter Carriers 12,152 25,173 The greatest complaints have been made of Miserable the way in which these 25,000 officials are paid, officers! ^^^ On an average they appear to receive no more than about forty guineas a-year a piece ; so that there certainly is no extravagance in the depart- ment in respect to rate of payment ! But the 112 On Taxation, [Sec. i. Chap. IV. question arises how it comes that such an Various euormous staff is needed ? In the streets of modes in which the London, and in many parts of the provinces, public are called on to pillar Ictter-boxcs have lately made their appear- facihtate ^ ^ ^ ... the service : ancc for the reception of letters. Facilities have also been afforded to the Postmasters by the construction of double, treble, and sometimes quadruple letter-boxes for the assortment of local, provincial, and foreign letters, newspapers, and book-parcels, late letters, &c., all of which the public are required to classify, address to postal districts, and otherwise distinguish for themselves, and place in separate boxes under fear of delay in their despatch. At our own houses we are each of us further required to provide boxes in which to receive our letters, so as to prevent the necessity of personal service without any by the postman. In every possible form and advan- tageous manner the public are required (and they willingly result either on the deli- consent) to imposc upon themselves additional very of letters or the troublc, iuconvenience, and anxiety, in order to revenue. facilitate the arrangements and convenience of the Post Office, and the sorting, classification, despatch, and delivery of letters ; and yet we find Sir Howland Hill's annual estimate for " cost of management," increasing out of all proportion to his " net revenue ; " which, in fact, j^roduces little or nothing to the nation. Sec. I.] T'he Post Office. 1 1 3 Now, why is tliis ? It is to be accounted Chap. iv. for by the Post Office having undertaken too The Army of Postmasters much. The 13,000 post-masters and clerks required for the Banking are requu'ed, at tlieu' 11,000 different receiving- business, houses, not so much for the collection of letters, which to a great extent can be ef- fected by the postmen from the letter-boxes, as for the banking business of the depart- ment — the despatch of money orders, and the management of Savings' Banks. And in the and the Legion of same way the legion of letter carriers is needed, Letter car- riers for the not so much as a light cavalry for the delivery Parcels busi- ness of the of letters, as for the heavy duty appertaining department. to the book post, the parcels' post, the sample post, the pattern post, and the other ramifica- tions of the carrying business, in which the Post Ofilce has chosen to enter into competition with the railways, " the parcels' delivery," and the country carriers. And what is the consequence of all this ? The conse- 11 quence in- It has been shown already that it is increased junoustothe expenditure and diminished revenue. But let us observe the consequences to the public. In the first place, the attempt to transact business foreign to its own proper duty, diminishes the ability of the Post Office to fulfil its own projDcr duty. Hence the complaints, which have recently "^ the irre- ■^ gularities been so rife, of delays and irregularities in the attending the 114 ^'^ Taxation. [Sec. i. Chap. IV. delivery of letters ;-~ hence the enormous and performance constantly increasing number of "lost letters of the postc' duties of th Post Office of the postal t i ,, )5 o o duties of the "returned letters, "dead letters, dtc, <&c., which the Post Office never deliver, and the hulk of which they immediately destroy. "We are all conscious of the diminished degree of care with which our letters are delivered : we are all in the habit, not only of losing our own, but of having thrust into our letter boxes the correspondence of other people. Why is all this ? Because the department undertakes more than it can ac- as well as in complish. It canuot employ more officers, revenue becausc it fecls tlic already overwhelming and increased disproportionate increase of its staff, and the nagement. impossibility of adding to their number, Avithout incurring a serious addition to the already ex- cessive " cost of management." Yet, it knows that its present staff is inadequate to the duty to be performed ; and it is obliged, in con- sequence, to throw upon the public the classifica- tion and assorting of their own letters ; thereby constantly puzzling the letter writer, but afford- ing a convenient excuse to the department in the event of complaint of non- delivery. The Post To the same cause, also, we may trace those Office frauds attributable frauds in the Post Office, which have been of to the same cause. such Constant occurrence as to have become quite a feature in the criminal calendar of the country. Sec. I.] ^he Post Office. 115 Inasmuch as the Post Office has undertaken Chap. iv. more than it can properly perform, it is com- pelled to economise its expenditure to the lowest possible rate, which it effects by keeping the Moral salaries of its staff at a minimum. But, as we all know, a minimum of pay involves too often a minimum of respectability and responsibility. It appears by the most recent Post Office and physical deficiencies report that they suffer in physical force also. No less than fifteen and a half per cent, of the of the Can- didates who candidates who present themselves for appoint- offer them- selves as Let- ment as letter-carriers are rejected by the medical ter carriers. officer as unfit for the increasingly onerous duties which devolve upon them.* The medical officer says, " The candidates who present themselves " are, as a whole, very much below the medium " of height, strength, and physique generally. " I should like to see the service more largely " recruited from a class of persons having a muscular development more like ordinary (( * It is amusing to observe the qualifications now required in a postman. His age, height, and weight are calculated — "the cir- cumference of his chest after expiration," its circumference "after inspiration ;" his "vital capacity ;" his "strength, as shown by the dynamometer." It is complained that " the weakest could lift but 165 lbs. ;" showing that it is no longer activity, but strength, that is required. A postman must be adapted to carry heavy loads for the purposes of the parcels post ; the activity he can exhibit in the delivery of light-weighted letters is not measured, and seems to be a matter of inferior consideration. I 2 ii6 On Taxation. [Sec. I. Chap. IV. " labourers." The Post Office, he adds, requires Conse- '' bodily power ^^ in the present race of postmen. qucnces of ^ this system. Their moral attributes are a matter of inferior consideration to the " muscular development," which enables them to get through an extra amount of labour. The consequence of this system is delinquency. The postman raises his rate of pay for himself by robbing the public. And the department makes the robbery of the public a means of additional taxation on them by levying an additional rate for the " re- gistration" of each letter, under the pretence of paying special attention to their delivery, although, as they take care to mention, " by Act " of Parliament, the Post Office is not respon- " sible for the safe delivery of a letter that is " registered." * * The Postmaster-General absolutely threatens the public, in his last Report, with petial consequences, if they do not resort to his Money-order Office, or the registration of their letters : — " I have thought it necessary to apply for authority to take fresh " measures to prevent the posting of unregistered letters containing " valuable enclosures. Beginning with the London Office, all un- " registered letters, which unquestionably contain coin, will be " selected from the mass, treated as registered letters, and subjected " to double registration. In France the posting of an unregistered " letter, containing money, or other valuable articles, is now treated " as z. penal offence j but I have much hope that the more moderate " measures we are about to try will be found sufficient." I hope so too ; I hope that no one in this age will be committed to Newgate, or the Penitentiary, for the terrible offence of sending a crooked sixpence, or a broken spoon, by post. The extension of Sec. I.] The Fast OJice, 1 1 7 The registration fee thus demanded for letters Chap. iv. of importance is another illustration of the posi- tion that the office has undertaken more than it can perform. The fact is, that in consequence The Regis- tration of of the immense mass of common circulars, and Letters. other printed matter, of various sorts, passed through the post, there has come to exist a feel- ing amongst the officials, that a letter is a matter ^ts effects. of little or no importance. Having 600,000,000 to deliver annually, a letter becomes, in their eyes, a value only proportioned to a one-six- hundred-millionth part of the correspondence of the nation. Yet, as we all must know and feel, amongst the mass of valueless papers we receive by post, there is very frequently some letter of the greatest consequence, not from the amount of coin in it, but from information it contains or arrangements it may indicate. The loss or delay of such a letter may be of the greatest injury to the party to whom it is addressed. Cases are on record in which valuable appointments have been lost by the non-delivery of such communi- cations. How does the Post Office treat the repre- sentations made to them upon such subjects ? such a punishment to "other valuable articles" would be likely to deprive Lombard Street of all its bankers, seeing that nearly 6,000 bankers' parcels, containing bills and notes, are said to have passed through the post, unregistered, in a single day. ii8 0;z taxation. Sec. I. Chap. IV. Eirst, by a printed circular, promising in- quiry; then by another, stating that they are unable to obtain information ; then, when fur- ther inquiry is made, and the gravity of the matter is pressed upon their attention, by as- suring the parties that they cannot possibly keep or register all the non-delivered letters of which they are unable to discover the writers ; that their very number renders it necessary to destroy them ; and that if the public want their letters taken care of, the proper course is to " register " them, at the cost of an extra Q>d. for each postage. Another mode this, it may be observed, of raising the postal rate, and another proof of the position, that the department undertakes to do too much work, and is, consequently, com- pelled to do it ill. Nor are these the only evils which follow the system under which the Post Office is now worked. The conveyance companies, the carriers, the bankers, and the other interests of the country with which the Post Office is inter- fering, work upon their own capital ; and, if they make losses, suffer out of their own pockets. But the Post Office is working with the national capital, and if a defalcation should occur, by Srslvings^ an abstraction, for example, of the savings' - tions. bank monev, the loss will have to be defraved Risk in- curred of Loss to the State, Sec. I.] T//(? Post Office. I 1 9 out of the capital of tlie State, if it is not thrown Chap. iv. upon the poor depositors themselves. And with respect to these savings '-banks, although they may be convenient to the public in a large number of instances, it is diihcult to discover the obiect of the Post Office in undertaking Objects '' aimed at by the responsibilities attending their management.* the Post If it is to bring revenue to the Post Office, then it may be thought that the department had better have applied itself to its own proper business, and have endeavoured to improve that, before it embarked in another and quite a foreign occu- pation. If the object is to obtain more dkect Government control over the monev of the small depositors throughout the country, then looking to past experience, and the losses which Chan- cellors of the Exchequer inflicted on the nation by tampering, some years since, with savings' - banks deposits, that object is one of very doubtful public policy. The desirability of establishing savings'-banks everywhere, the value of every measure w^hich tends to inculcate prudential habits amongst the people, are objects which we all appreciate ; but the department which regu- * The protest placed on the Journals of the House of Lords against the Post Office Savings'-Banks, by Lord Monteagle of Brandon, deserves perusal, on account of the sound views it embodies on this subject. I20 On Taxatioji. [Sec. i. Chap. IV. lates the postal intercourse of the country is by no means especially charged with the duty of making those provisions for old age, sickness, or death, which savings' -hanks, provident institu- tions, and assurance societies of every description might more properly undertake; and, if the Post Office authorities have a commercial and not a moral object in view in making every Post Office a bank of dej)osit, the design is not one to be encouraged ; and I am by no means confident that the result may not lead to confusion, and possibly to loss. The Post Every man actively engaged in business does Office should endeavour to well to extend, by every means within his develope its own busi- powcr, the sphere and range of his own peculiar ness. occupation; but he only runs the hazard of having to encounter unforeseen difficulties when he goes out of his way to engraft on his proper business a wholly different employment. Before the Post Office became traders as parcel carriers and money dealers they might with ad- vantage have endeavoured to extend their own peculiar occupation as deliverers of letters. The which is not pQ^,^ Office is not without competition in its free from the competition ^^^ busiucss. The Elcctric Teleo'raph Companies of the Tele- ox j. graph Com- ^^q-^ opportunities for the prompt and speedy conveyance of messages which, before the tele- graph was used, were committed to the Post. Sec. I.] T^he Post Office. 121 The facility, tlie despatcli, the security, and the Chap, iv. low tariff which the Telegrax^h Companies offer to the public, naturally attract to them much of the best class of the business of the Post Office. At the other end of the scale, most of the resi- dents in London are aware of the very large and increasing proportion of circulars which are now distributed by hand without ever seeing the in- side of a post-office. Nor is this distribution limited to private hands. The Post Office has almost altogether lost the control of the news- paper circulation, out of which it might have made a revenue. The offices of the several Court Guides in London have become centres for the delivery of circulars and cards ; the Commis- the Commis- sionaires offer a tariff for the delivery of circular letters in the metropolis at a rate per hundred far below the penny postage rate. As regards those circulars which would be subject to the higher rates of postage, and which require to be enclosed in an envelope, most senders avoid pay- ing the twopenny or fourpenny rate of postage, and resort to some other mode of distribution. Whilst the Post Office, in fact, has been competing with the railway companies and money dealers of the kingdom, its own proper trade has become seriously affected by the superior advantages and reduced rates of charge offered by competing 122 On Taxation. [Sec. i. Chap. IV. carriers. Sir Rowland Hill would have done well to have applied himself in the first instance to encounter this competition. Having the postal department, with all its vast facilities, as a com- plete monopoly at his sole command, there was nothing in the form of postal intercourse that he might not have attemj)ted to develop with advantage. But we must all feel that the revenue is needlessly sacrificed when extraneous duties are undertaken which involve competition with the puhlic, increase the costs of management, and operate injuriously upon the performance of those duties with which the department is specially charged. CHAPTER V. EXCISE DUTIES. It was a work worthy the best efforts of an chap. V. English statesman to effect the relief of our The old national trade and industry from the operation Duties. of the old excise duties. It was not so much the amount of those duties which injuriously affected us, although by increasing prices they, no doubt, limited the market for commodities, and thereby diminished the employment of capital and labour. The baneful effects of their Their bane- operation Avere most felt in their interference British trade . • 1 • -u and industry. With the tree course oi manuiacture, m which they tended to prevent activity, invention, and the application of new forms of machinery. They compelled every manufacturer to manage his trade, not according to the teachings of his own experience, but according to an Act of Par- liament, which imposed upon him restrictive regulations, and taught him nothing except how to pay a tax. The natural result was inferiority 124 On 'Taxation. [Sec. I. Chap. V. Sir Robert Peel's early views re- specting them. His repeal of the Glass duty. in tlie quality of the articles produced, which inferiority lost us no inconsiderable proportion of the market of the world. Sir Pbobert Peel from a very early period saw the baneful effect of these duties. As far back as 1833, he pronounced himself strongly in favour of a reduction of the duties on Soap ; and in May, 1836, he said, in a discussion on the Budget : — " I wish to reserve to myself the " opportunity of considering whether the total " abolition of all excise regulations with respect "to Glass might not lead to a great extension " of the manufacture of that useful article in " this country, and whether that might not lead *' to a new and abundant source of wealth, by " our becoming? manufacturers of an article " which is now chiefly made in other countries." The duty on Glass was the first excise duty which Sir Robert Peel repealed. The Act of Parliament which relieved this manufacture was passed in 1841, and the duty was remitted from the 5th April, 1845. The repeal of this duty has been attended with the most striking advan- tages. Possessed as we are, of the best mate- rials for the manufacture, the best workmen, and the best machinery, there is nothing that England cannot supply in the form of glass at the lowest price and of the best quality, now Sec. I.] Excise Duties. 125 that the trade is free. When the duty was taken Chap. v. off, the glass manufacture amongst us was quite at a low ebb.* The effect wrought in a few its effect. years after the repeal of the duty was remark- ably shown at the late International Exhibition, where the productions of the English in glass shone conspicuous above those of every country in the world ; glass and china being, in fact, the articles of all others in which our improvement had been greatest in the interval between the Great Exhibitions of 1851 and 1862.t I dwell upon this fact with the greater satis- character of the Excise faction, because the excise duty forinerly imposed duty on Glass. on glass appears to me to have afforded an illus- tration of the worst of all possible taxes imposed in the worst of all possible forms. * Mr. Poulett Thompson (afterwards Lord Sydenham) demon- strated to the House of Commons that, in 1830, Glass was in less common consumption in this country than in 1794. f It is worthy of remark, that if the excise duties on glass had not been repealed in 1845, the Crystal Palace of 1851 could scarcely have been constructed. Not only would its cost have been excessive, but it admits of doubt whether the glass manufacturers, surrounded as they were by restrictions of every sort upon their trade, would have been in a position to supply the quantity of glass required. It may further be observed, that Sir Joseph Paxton's beautiful design for the application of glass to a great work of construction undoubtedly gave that impulse to the glass trade which resulted in our great success as glass manufacturers between 1851 and 1862. The trade derived, from Sir Joseph Paxton's work, an incentive and encou- ragement to new combinations, which they were not slow to apply, as our railway stations and other large works successfully attest. 1 26 On Taxation. [Sec. i. Chap. V. Glass is an article easily shaped from the The value of worst materials into the most hrilliant desis^ns. Glass ^ ^ To its manufacture may, therefore, he equally applied the largest amount of ordinary labour and the greatest amount of human skill. The article itself ministers in every variety of form to the convenience of mankind. At once trans- parent and solid, it admits the light of heaven into our dwellings, whilst it excludes the cold and damp inseparable to our climate. Eor many domestic purposes it is the cleanest, the cheapest, and the most convenient form of utensil that can be employed. Por the purposes of science, its range of utility is unlimited. It can be adapted to both the purposes of the reilecting-glass and the quadrant, the telescope and the microscope, extending our range of vision, and opening to our contemplation nature in its minutest forms.* It admits of endless combinations of design and colour, and can be equally adapted for the roughest as for the finest purposes. To place restrictions upon the skill and industry of our * Such were the restrictions upon the manufacture of Glass under the Excise laws, that the glass used in the manufacture of optical instruments was obliged to be imported, notwithstanding a heavy rate of customs duty, because the regulations of the Excise precluded our own manufacturers from carrying on the processes necessary for imparting to glass the property upon which its excel- lence for optical purposes entirely depended. Sec. I.] Excise Duties. 127 population in the manufacture of such an article Chap. v. as this, was more than an injustice — it was an absolute cruelty. Not only do our windows attested by its general and our tables bespeak the advantages witli which use. the removal of these duties have surrounded us ; but the very pavements beneath our feet, and the very roofs above our heads, exhibit the various adaptations of glass to useful piu'poses, now that its free manufacture is permitted. This remission occurred scarcely eighteen years ago ; so that the art of glass-making may be said to be still quite in its infancy amongst us. As years progress, we shall, doulitless, find that glass is applied even to more general purposes than at present. The duty on Auctions was the next excise duty Repeal of the duty on repealed by Sir Hobert Peel. There was no good Auctions. reason why property sold by auction should be subjected to a duty, whilst property sold in any other way was not. The tax produced very little to the revenue, for it was universally evaded. In order to avoid payment of the duty, pro- perties were put up to auction, and their price fixed by the amount to which the biddings reached. They were then bought in, and sold, by private contract, to the highest bidder, thus escaping the payment of the auction duty, and showing how all classes are ready to combine to 128 On Taxation. [Sec. i. Chap. V. escape a tax which is considered an unjust in- fliction. Repeal of the In 1850, the duty upon Bricks was taken oflP. Brick duty. The duty not only had the bad effect of re- stricting improvements in the manufacture by limiting the form in which bricks should be made, but it increased the cost of construction, and thereby added permanently to the rent of houses. Up to 1833, the duty was extended to tiles and pipes, which prevented the improvement of land, by the amount it added to the cost of drainage pipes. Could we obtain a return of the number of acres of land which have been improved by drainage in Great Britain and Ireland since that tax was repealed, we should probably have some opportunity of judging of the extent of the loss sustained by the nation from a duty which com- pelled the farmer to leave large portions of his land in a state unfitted for tillage. The repeal of the brick duty has had a good effect upon works of Its effect on Construction. We may see in many of our churches and other public edifices, built since 1850, that bricks of a superior quality have been employed in a variety of combinations, so as to produce excellent effects. It is curious to con- trast the old brick house, built of the commonest and cheapest bricks under the duty, with the new brick edifice, built with glazed and variously Sec. I.] Excise Duties. 129 tinted bricks, since 1850.* It proves that in chap. v. bricks as in glass — in the commonest as well as in the finest branches — a duty upon the manu- facture is restrictive of improvement, and of the application of art and science. In 1853 Mr. Gladstone conferred a great boon Repeal of the Soap upon the public, by taking off the Excise duty tax. upon Soap. The duty was a poA^ erful check to consumption, falling principally upon the poorer classes, who should have been the largest con- sumers. It was a restriction to cleanliness, and Evils of the Tax. consequently tended to promote disease. No wonder that fevers have abated, since air has been admitted to our dwellings by the repeal of the windoAV tax, light by the repeal of the glass * The effect of the brick duty upon construction is ver>' notice- able in the metropolis, where bricks have been generally em- ployed for ordinary building purposes. In some of the older streets, erected before a tax was levied upon bricks, we may see examples of brick-work exhibiting much design and taste. The houses erected at a later period, after the imposition of the tax, are entirely devoid of ornament, and present utterly unadorned and ugly fronts. Nash, during the Regency, endeavoured to effect an improvement on the metropolitan frontages by the use of stucco, as may be seen in Regent-street and the Regent's-park. Since the repeal of the brick duty, stuccoed fronts have been super- seded to a large extent by brick-work of a superior description, presenting many beautiful specimens of design. The new church in Margaret-street, Cavendish-square, and the new banking-house in Lombard-street, recently erected for Messrs. Robarts, Lubbock, and Co., are fine examples — the first of the useof variously coloured bricks, and the other of the employment of bricks of superior quality, in combination with stone. K 130 Chap. V. Soap Tax. On Taxatio?!. [Sec. I. Manner in which the revenue was defrauded under its operation. Mr. iM'Cul- loch's propo- sal to extend the duty to Ireland. Mr. Glad- stone's total repeal of it. duty, and cleanliness by the repeal of the Excise tax upon soap. As the soap duty did not extend to Ireland, the revenue was largely defrauded under the operation of this duty. Large quantities of soap were made in England and exported to Ireland. The exporter received from the Cus- toms the amount he had paid for duty, as a drawback at the port of exportation ; and he then, by means of the smuggler, re-intro- duced the soap from Ireland into England, without its being subjected to duty at all : so that the revenue was twice robbed — first, by the repayment of the duty; and secondly, by the introduction of the smuggled article. Mr. M'Culloch, to avoid this, proposed the extension of the duty to Ireland, where certainly the con- sumption of soap Avas rather needed to be in- creased than to be diminished. Happily, Mr. Gladstone, with better judgment, repealed the duty altogether; thus unfettering the manufac- ture, and leading to the employment of oils and other new materials in soap-making, which tend to cheapen the price, improve the quality, and increase the consumption. In all these respects the repeal of the duty has operated advanta- geously, but especially so in the improvement of the manufacture. AYe never, in these days, Sec. I.] Excise Duties. 131 see tlie wretclied compouucls tliat used to be sold Chap. v. under the name of " soft soap." The repeal of the Paper duty, and the long- Repeal of protracted contest which preceded it, is fresh in duty. public recollection. In a few years it will pro- bably be thought as remarkable that anybody could have opposed the repeal of the paper duty, as it is now thought extraordinary that any one could have objected to the repeal of the glass duty. The duty did not alone affect injurious influences of books and newspapers, though it has iisually the Tax. been discussed with reference to its influence upon their price. It affected paper-making in its application to a multitude of useful arts, and it operated unfavourably on a large num- ber of trades dependent upon the supply of paper.* Little more than a twelvemonth has elapsed * Our taxation has been full of anomalies ; but perhaps there was none more curious than this — that, whilst the duty upon paper was taken by weight, and whilst it therefore was the interest of the Government to encourage the use of the heaviest description of paper, the Post Office tax upon letters was also levied by weight, which was the greatest practical encouragement that could be offered to the use of the thinnest possible paper textures ! The consequence was to encourage the manufacture of the lightest possible papers. I have before me at this moment an envelope made by Mr. M'Corquodale, for one of our great railway companies, which, whilst it is firm, strong, and opaque, is so wonderfully light that I can only compare its consistency to that of gossamer. The postage-stamp attached to it nearly weighs as much as the envelope. K 2 132 Oj2 Taxation. [Sec. L Chap. V. Application of Paper to novel uses. " Paper collars." Paper napkins. Benefit to Trade re- sulting from the repeal of the Paper duty. since the repeal of this duty, and we are not yet, therefore, in a position to judge of its effects. In the course of a few years new paper-mills will spring up — improved machinery will he intro- duced — and we shall, no douht, find paper em- ployed in a variety of forms of which we have at present no conception. The recent attempt to introduce "paper collars and paper cuffs" — which were offered at a price not exceeding the cost of washing linen or cotton cuffs and collars — singular as the notion was, illustrates the various directions in which ingenuity is sure to endeavour to extend the trade. Papers, highly ornamented, are now offered hy some stationers as suhstitutes for dish-cloths; half a dozen dish papers costing less than the wash- ing a single napkin. It is scarcely necessary to say that, hefore the removal of the Excise duties, these papers could not have heen made. It was considered necessary, for the purposes of the revenue, to limit the paper-maker to the manufacture of paper in given forms ; and it was only hy a special and very recent regulation that they were even permitted to make an envelope at a paper-mill ! These indications afford assurance that the repeal of the paper duties will he sj)eedily fol- lowed hy an immense advance in the art of Sec. I.] Excise Duties. 133 paper-making and in the application of that ma- Chap. v. terial. To the trader the repeal must be a con- siderable boon. All our more delicate, and most of our coarser goods, require to be protected from the effects of climate, both here and abroad ; and the best, the most effectual, the cheapest, and the most convenient mode of protecting them is by- wrapping them in paper. But the Excise duty on paper, having been levied according to its weight, fell heaviest on the coarsest and thickest paper, and, consequently, added no inconsiderable item to the cost of packing goods for transit or for exportation. The public may not derive any great advantage from the repeal of the duty on the paper in which their tea, snuff, or sugar, is wrapped ; but the trader will certainly derive ad- vantage from being able to protect his articles at a less outlay. Great advantages ^ill also follow Benefit to from the reduction in the price of the heavy paste- turers. board and cards used in weaving and other manu- factures; and more general prosperity and employ- ment must result from the relief. In view of these and other considerations, it is painful as well as surprising to find Mr. M'Culloch, and some other professed friends of free-trade prin- ciples, inveighing against the repeal of the paper duty, as if some great wrong and injury had been effected by it. Eor my ovm. part, I regard the 134 O''^ Taxatio?!. [Sec. i. Chap. V. repeal of tlie paper duty as one of the most substantial benefits that has ever been offered to society ; as an advantage to manufacturej to trade, to commerce, to science, to literature, and to the arts ; as a means of extending know- ledge; and of introducing amongst us new ap- plications of one of the most valuable and useful commodities that it is possible to produce from raw materials of the commonest, coarsest, and cheajoest character. Repeal of the Hops is the latcst article on which the Excise Hops. duty has been remitted. According to the Com- missioners of Inland Revenue, it was the duty of all others the most easily collected, and in which frauds and evasions Avere most rare. There were, however, many objections to the tax, especially those arising from the form in which the duty was made payable by the hop-grower, and by the surveillance to which Probable his premises were subjected. It is probable effect of its remission. that the cultivation of hops in England will not be promoted by the repeal of this duty. Simultaneously with the repeal of the Excise duty, it became also necessary to reduce the Customs' duty on foreign hops, upon which the duty was reduced from 45^. to 155. per cwt. after the 1st January, 1862. This reduction of duty, and the facilities of communication afforded Sec. I.] Excise Duties. i^j^ by tlie railways and steam navigation, will admit Chap. v. foreign hops, the groAvth of Belgium and Bavaria, Extended use of into use in I^ritish breweries ; and although those Foreign Hops. hops are not produced at much less cost than our own, yet they are considered of a suj)erior quality, in consequence of the more favourable circumstances of climate, &c. under which they are grown. The consequence will probably be an extended use of foreign hoj^s, from which the public will derive an advantage in the improved quality of their beer. But the cultivation of hops in this country, which, from the variable- ness of our climate, has hitherto been the most speculative and hazardous of our agricultural operations, will probably not be extended, in con- sequence of the remission of the duty; and, in so far, the repeal of the Excise upon hops, in contradistinction to the repeal of all the other excise duties which have been removed, will confer no benefit. I have thus gone through the list of Excise General con- siderations. duties which have been removed during the last twenty years, not only because it fell within the object of this work to show what had been done towards improving our system of taxation, but because the Excise duties which have been re- moved illustrate very forcibly the evil results which attend duties so imposed as to affect 136 On Taxation. [Sec. i. Chap. V. industry and manufactures. I might have gone back to the days when there were Excise duties on printed cottons, Excise duties on salt, leather, candles, beer, and other articles, which were repealed before what may be considered the dawn of the era of free trade : — l)ut the duties which have more recently been removed suffi- ciently illustrate the argument. Arthur Young is quoted by Mr. M'Culloch as eulogizing Excise duties as "by much the fairest, the most equal, and the least burdensome of all taxes." The position may be questioned, and at any rate our experience has proved that Excise duties may be so applied as to be the most baneful and ob- noxious of all taxes. Certainly, nothing could have been more injurious to a manufacturing country than the application of the Excise re- strictions to the manufacture of glass, soap, and paper. Existing Ex- Leaving the past, I now come to the consider- cise Duties. ation of the Excise duties which, at present, constitute a source of revenue in this country. The principal items are as follow \- — ARTICLES SUBJECT TO AMOUNT OF DUTY, YEAR ENDINU EXCISE DUTY. 31ST MARCH, 1862. Spirits £9,972,927 Malt 6,176,686 Licences 1,642,886 Railways 368,483 Hackney and Stage Carnages 218,198 Sec. I.] Excise Duties. 1 37 It is admitted, I believe, on all hands, as well Chap. v. by the advocates of direct as of indirect taxation, The Duty on '^ , Spirits. that spirituous liquors are a proper subject for taxation. The only question, therefore, is as to extent and character of the duty which should be levied on them. /it is more than questionable whether an un- The con- / .... sumption of ^uly high rate of duty upon spirits is desirable Spirits not / _ . checked by / in order to check consumption. Experience has high rates of duty. certainly shown that the consumption of spirits is not reduced by high rates of duty. The Par- liament of England, in the reign of George II., set themselves to discourage and repress the vice of gin drinking, not only by imposing ex- orbitant duties on the article, and on all who sold it, but by prohibiting the sale of it in quantities of less than two gallons. History records that the only consequence was to drive the o'in trade into the hands of the lowest class of dealers, and to superadd to drunkenness a vast amount of crime. In Ireland and Scotland, at more recent periods, the effect of high rates of duty upon whiskey has not been to check, whiskey drinking, but only to promote illicit distillation. Within a (comparatively speaking) recent period, by far the larger quantity of spirits consumed in those countries was the produce of illicit stills; the exciseman was defied, and 138 Chap. V. On Taxatio?:. [Sec. I. Low rates of duty on Spirits not desirable. Proper prin- ciple on which to as- sess the Spirit duty. Recent work- ing of the duties. Parliamen- tary Com- mittee of 1821. the revenue rendered incapable of collection. Immoderate rates of duty on spirits, therefore, only occasion loss of revenue, illicit distillation, smuggling, adulteration, and crime. At the same time it does not appear to be desirable to put a low rate of duty uj)on spirits. The revenue is the object to be regarded in tax- ing spirits, and if the same amount of revenue can be obtained from a high rate of duty as from a low rate of duty — that is to say, from a smaller consumption — that result is to be desired. The object, therefore, in dealing Avith this duty should be to assess it at such a rate as the country will best bear, without encouraging attempts at evasion by the smuggler, the illicit distiller, or the retailer. In order to illustrate the working of these duties, it is necessary that we should shortly trace their recent history. The whole system, how- ever, was so anomalous and vicious in the early portion of the present century, that nothing is to be learnt from it prior to 1821. In that year a Parliamentary Committee Avas appointed to consider the subject of illicit dis- tillation in Scotland and Ireland, where the most stringent laws had been found wholly ineffectual to protect the revenue. The Committee reported in favour of a reduction of the spirit duties, and Sec. I.l Excise Duties. 139 accordingly the rate was reduced i]i 1823 from Qs. 2d. in Scotland, and 55. ^d. in Ireland, to 2^. 4Jr7, per gallon for both countries. The imme- diate effect was a very rapid increase of revenue consequent upon the disuse of contraband arti- cles. The reduction worked so well that in 1826 it was followed by a reduction of the rate of the spirit duty in England from lis. 8Jf/. to 7s. per gallon. The result was a surprising increase in the consumption of legally-made spirits. The quantity consumed in the United Kingdom in 1820 was 9,600,000 gallons; in 1826 it was 18,200,000 gallons. As illicit distillation abated, and as the con- sumption increased, the Government began to take advantage of favourable opportunities to put up the rate of duty in England and Scotland. The following tables will show the periods at which the changes were made, and their effects upon consumption and revenue : — Chap. V, Reduction of rates to check illicit distillation. Changes subsequently made in the rates of duty. England. 1826 . 1831. 1841. 1856, 1861, DUTY PER GALLON. s. d. 7 7 6 7 10 8 10 NO. OF GALLONS CHARGED. 7,407,204 7,434,047 8,166,985 9,343,-549 9,508,002 AMOUNT or DUTY RECEIVED. £2,592,521 2,787,767 3,198,735 3,737,419 4,469,740 140 Chap. V. YEAR. 0?2 T" ax at ion. [Sec. I. Scotland. 1824. 1S27. 1831. 1841. 1853. 1854. 1855. 1856. 1861. Dunr PER GALLON. S. 2 d. 43 2 3 3 4 10 4 8 8 5 8 to 6 7 10 S 10 NO. OF GALLONS CHARGED. 4,350,301 4,752,199 5,700,114 5,989,905 6,534,648 6,5.53,239 5,344,319 7,175,939 5,816,835 amount of duty recei\t;d. £524,758 673,228 950,114 1,098,149 1,433,400 1,806,934 1,839,636 2,870,375 2,750,781 Effect of the It will be Seen from this, that up to the most England and recent period, the increase of duty had no effect in diminishing the consumption in England, and a very trifling effect upon the revenue in Scot- land. The increased prosperity of both countries obviously enabled the population to bear the gradually increased taxation. In Ireland. In Ireland, however, the result was different. Ireland did not experience the same benefits that England and Scotland experienced, between 1841 and 1861, from imj)roved commerce ; and, from this and other causes presently to be no- ticed, the spirit duties in Ireland were sub- jected to different rates, and the revenue under- went different fluctuations. Sec. I.] Excise Duties. Ireland. 141 Chap. V. YEAR. DUTY PER GALLON. NO. OF GALLONS CHARGED. AMOnNT OF DUTY RECEIVED. 1824 182G 1830 1831 1835 1841 1844 1852 1854 1855 1856 1858 1861 S. d. 2 4a 2 10 3 3 4 2 4 2 8 }■) 3 4 6 6 2 8 10 6,690,315 6,834,867 9,004,539 8,710,672 11,381,223 6,485,443 6,451,137 8,208,256 8,440,734 6,228,856 6,781,068 6,101,376 4,822,987 £ 803,148 967,998 1,412,917 1,451,778 1,327,809 864,725 860,151 1,094,434 1,588,745 1,633,382 2,090,829 2,338,624 2,269,860 This table sliows that the consiimptioiij after Operation of the Tempe- rising largely upoii the reduction of the rate ranee move- ment in Ire- of duty in 1835, fell off nearly one-half in 1841. land on the Spirit duty. The cause of this sudden and very large decline was not the increase of fourj^ence in the rate of duty, hut the adoption of the temj^erance pledge, which began to be administered at that time by Pather Mathew, and which took so strong a hold of the impulsive people of the sister kingdom. Through all the years from 1811 to 1861, the consumption of spirits in Ireland has scarcely undergone any fluctuation that can be accounted for by alterations of duty. Under a Qs. 2d. duty in 1856, the consumption was 142 On 'Taxation. [Sec. I. Chap. V. greater than under a 2^. 8cZ. duty in 1844, although, in the meantime, the population of the country had greatly decreased. This shows, however, that the resources of those who re- mained had materially improved. Differential Tlirougliout the ycars between 1823 and 1856, rates existing until 1856. there had existed a glaring anomaly in our mode of assessing the spirit duties. They had been applied at different rates to each of the three portions of the kingdom : as the following table shows : — Rates of Duty per Gallon. YEAR. ENGLAND. SCOTLAND. IRELAND. 1820 1824 1826 1831 1836 1841 1854 ...... 1855 1856 1858 1861 S. d. 11 8i j> 7 7 6 3) 7 10 5) 8 j> 10 S. d. 6 2 2 4^- 2 10 3 4 3; 3 8 4 8 7 10 8 10 S. d. 5 7i 2 43 2 10 3 4 2 4 2 8 3 4 6 6 2 8 10 Effect of The consequence of this state of things had entiai duties, been the illicit introduction of spirits from the country in which the lower rates were imposed, into England, where the higher rates prevailed. Separated as England and Scotland are by only Sec. I.] Excise Duties. 14^ an imaginary line of boundary, tliis difference of Chap. v. duty was a source of constant trouLIe to the Spirit smug- gling "across revenue and to the public, and the cause of the border." very unpleasant restraints upon freedom of inter- course. It was therefore determined, in 1855, to Equalization of the duties. equalize the duties between Scotch and English spirits, which measure was accompanied by an increase in the Irish duties. So far as England and Scotland are concerned, Effect of the change in this change has been beneficial to the revenue England and Scotland. and to the public. It has avoided the cost of maintaining a most unnecessary preventive esta- blishment on the border; and it has relieved travellers coming from Scotland to England of an examination of goods — a most undesirable investigation to be applied to subjects of the same monarchy, in the same dominion. In Ireland the duties were brought up to an Effect in Ire- land. equal rate m 1858, and were increased in 1861 to the highest rate which has for many years been applied to that country. The result ap- The diminu- tion of con- pears to have been a considerable diminution in sumption the consumption of spirits, attended by a small diminution of revenue. The Commissioners of Inland Revenue assure us that this diminished consumption of duty-paid spirits is not to be attributed to any revival of the old system of illicit distillation. To what, then, is it to be 144 On Taxatiofj. [Sec. I. Chap. V, attributed to the altered habits of the people. General effect of the equalization of the Spirit duty. Increase of revenue. attributed ? I believe that it is entirely to be accounted for by the altered habits of the people of Ireland. The table already given shows that the consumption of spirits in Ireland has con- tinued to decrease ever since Eather Mathew's great social agitation. AYe know, on the other liandj that the consumption of tea in Ireland is largely on the increase, and it is only necessary to walk through the streets of Dublin to see how large has been the increase of the demand for beer. Upon the whole, then, and looking at all the circumstances of the country, the equalization of the spirit duties would not appear to have been, as regards Ireland, an unsuccessful opera- tion, though the consumption has considerably fallen, and the revenue has not been improved. As regards the whole kingdom, the result of the spirit duties, since the equalization, has been as follows : — Spirit Duties. year. gallons charged. amoijnt charged. 1858 23,198,984 £9,177,667 1859 24,985,192 10,000,754 1860 20,147,824 9,490,381 1861 19,945,840 9,972,927 Although, therefore, the consumption has de- clined under the advanced duty of ^s. per gallon, the revenue has increased, and is now very nearly equal to the amount at which it stood before the Sec. I.] Excise Duties. 1 45 increase of the duty. This result cannot be chap. v. considered unsatisfactory. A bold, though a most desirable step, was taken in equalizing the duties of England, Scotland, and Ireland, in 1858 ; a still bolder step was taken in 1860, in raising the amount of the duty no less than 2^. per gallon, in order to equalize the duties on all home and foreign spirits ; but guided by the principle that the spirit duties should be regu- lated by the condition of the nation, and that it is not desirable to reduce them below the amount at which smuggling, illicit manufacture, and adulteration can be avoided, the present state of these duties is not unsatisfactory; and it may be hoped that they will at least have a fair trial as they are now assessed. Of all the items of the British revenue, the The Malt Duty. Malt duty has been that which has involved the most complicated considerations. The malt duty has, at one time or another, been mixed up with the state of agriculture, the improvement of light soils, the ale and beer duty, the spirit duty, its complica- tions. the licensing system, the brewing interests, the public-house and beer-shop question, the wine duties, besides a host of other subjects to which the duty on malt has been supposed to have direct or indirect relation. The various interests which 1 46 On Taxation. [Sec. i. Chap. V. have been brought to bear upon the discussion of this question in Parliament, have consequently rendered a debate upon the malt duties so in- congruous, that it has often been by no means easy to comprehend the argument. Effect on the Durino; the lonff war with Erance, the dutv on Malt duties & o J of the tax on malt was charged at the rate of nearly 4^. 6cZ. Beer. ^ ^ '^ per bushel ; and there having been superadded to this a heavy duty of no less than 10s. per bushel upon beer, besides restraints of great severity on brewing, the consumption of malt, as of many other articles subjected to high taxation, was checked. But, although the whole of the ale and beer tax fell upon the ale and beer which was brewed for sale by public brewers, whilst none of it fell upon the beer brewed by private individuals for domestic consumption, yet it is quite certain that it was the ale and beer tax, and not the increased tax on malt, which checked the consumption during the war. This is proved by the fact, that when the war-rate of duty upon malt was reduced from 4s. 6fZ. to 2s. 7> >> >» »> 9i JJ 1 4i 1 7i 2 5 4 53 2 7 ,, ..... „ and 5 p3 )> 4 from Sth May 2 7 and 5 per cent. 3) 3> » l> J) » » >> >7 SJ )» 17 26,754,505 25,060,639 30,655,498 29,795,100 26,298,391 25,240,816 25,951,676 27,538,150 26,718,048 27,789,166 29,562,038 25,320,615 27,615,383 33,789,010 30,891,002 36,245,847 31,868,978 30,199,820 34,439,475 36,313,925 38,015,619 39,094,648 40,715,458 33,694,950 41,314,250 £691,577 650,932 795,352 772,109 681,740 654,430 1,007,851 1,070,125 1,817,556 2,142,950 3,555,906 5,657,228 3,560,693 4,364,413 4,189,592 4,915,842 5,219,403 6,039,942 6,143,628 5,314,465 5,155,868 5,302,211 5,522,033 4,569,584 5,603,244 (a) The duty on ale and beer was repealed in 1830. (6) Years of war and pressure, (c) Veiy uiferior barley harvest, (d) Very great barley harvests. It will be seen from this table that, in the year ending 31st March, 1862, we arrived at the largest consumption of malt ever brought to charge in this country. This was owing to several causes. The year 1860 had produced a bad harvest, resulting in a great deficiency of Sec. I.] Excise Duties. 153 barley fitted for malt. The stock, therefore, Chap. v. was low; and as the harvest of 1861 produced barley in great quantity and of very superior quality, the quantity of malt manufactured was largely in excess. But this was not all. Por several years the generally prosperous condition of the country had led to an increased consump- tion of malt liquors ; and the free importation of barley, and the improved quality of the malt made from superior sorts of grain, had enalDled the maltsters to meet the demands of the brewers at reduced prices. Besides this, the increase of the spirit duties, which operated most heavily in Ireland and Scotland, had induced an increased consumption of ale and a diminution of the con- sumption of spirits. In Ireland the increase increased was remarkable, proving that beer is gradually tion of Malt T 1 • 1 11 1 . /.in Ireland. superseding whiskey as the common liquor of the population — a result which every one must desire, who has at heart the improvement of the sister kingdom. Consumption op Malt in Ireland. TEAK. BUSHELS. DUTY. 1857 .... 1858 .... 1859 .... 1860 .... 1861 (a) . . . 1862 .... 1,691,1.57 1,834,717 2,161,520 2,249,026 2,119,108 2,513,760 £248,395 247,737 292,049 304,311 287,182 340,744 (a) Bad barley harvest. 154 On 'Taxation. [Sec. i. Chap. V. Such, then, beinf^ the facts with rei^ard to the How the malt tax, we have next to consider how the tax Malt tax may best be mav be bcst regulated for the interests of the refrulated. -o^ public and the revenue. Principles It would be extremely undesirable to place applicable to this tax. such a duty upon malt as would either lead to frauds upon the revenue, induce resort to spi- rituous liquors in preference to beer, operate in- juriously upon trade or agriculture, or impose a heavier duty upon the beverage of the labouring classes than they can well bear, or than they have been accustomed to. Character of The maltiuff busiucss beinff ffenerally in the the frauds in ^ b & J this business, hauds of a rcspcctable class of traders, the frauds have not been consideral}le. Those which have been discovered have not arisen from smuggling, or from causes referable to the amount of the duty. They have been frauds attempted by un- principled persons engaged in the trade, with the object of making malt cheaper, and of enabling themselves to undersell competitors. The most common form of fraud is that of compression of grain upon the couch ; and as this is a point which depends upon admeasurement and admits of difficulty, it has been the cause of considerable litigation. Improve- It is nccdless to refer here to the numberless meat in the administra- and vcry scvcrc restrictions which some years since were imposed by the Excise on malting Sec. I.] Excise Duties, 155 operations. No one under those operations knew chap. v. whether he complied with the law or whether tion of the Excise Law. he did not, and, consequently, the only way of escaping trouble was to be upon good terms with the exciseman. But all that has been altered. The trade has been put upon a better footing, and there are comparatively few maltsters at the present time who complain of the administration of the revenue laws, or who desire a remission of the duty. The fact is that the system, as it now exists, though it may be inquisitorial, is not penal ; and the maltsters who have embarked capital in the trade, do not desire the competi- tion which might follow in the event of the duty upon malt being altogether abandoned. It has been argued that a high duty upon Malt v. malt might force a resort to spirituous liquors instead of beer. That would be extremely un- desirable. There seems, however, to be little reason for imagining that the operation of the duty upon malt would have any such effect. As we have already seen, the duty upon spirits has, within the last few years, been very largely raised. It is noAv higher than it was ever known to be in Scotland and Ireland, and within lOcl. of its highest point in England, without inducing any increased attempt to defraud the revenue. Both in England and in Ireland, 156 On Taxation. [Sec. I. Chap. V. The taste for spirituous liquors on the dechne. The con- sumption of Beer in- creases, whilst that of Spirits de- creases. Would the public bene- fit by a re- duction of the Malt tax? the taste for spirituous liquors is on the decline. The Commissioners of Inland E-evenue, referring to the reduction of the duties on wine, record their opinion that " there is more reason to " apprehend that wine will be substituted for " spirits than for beer : " i.e. for the stronger, rather than for the lighter beverage. The con- sumption of beer has decidedly increased of late, whilst the consumption of spirits has only been maintained. We have no reason to think, there- fore, that any reduction of the duty upon malt is required, either for the purpose of checking fraud, or for that of checking the consumption of spirits. Lastly, is there any reason to suppose that the malt tax inflicts a burden on the labouring man ? The malt tax is, in reality, a tax of about a halfpenny upon a pot of moderately strong beer. That it is made the excuse for raising the price of beer most unnecessarily and most unduly, cannot be doubted ; and that under the pretext of " malt tax " we pay more than a halfpenny extra per pot for our beer may be entirely believed. But the question is, would there be any reduction effected in the price of our beer, supposing the malt tax was reduced ? There is too much reason to suppose there would be none. Within the last few years, since the repeal of the Corn-laws, Sec. I.] Excise Duties. 1 57 the price of beer has been raised most immo- Chap. v. derately and most imduly in this country. Con- sidering the diminished price of barley, the repeal of the hop duty, the increased consumption of beer, and the additional facilities which railways afford for carriage, the price of beer ought to have been lessened. But there is reason to fear, not only that we pay a higher price, but that, in consequence of the increase of the bottling system, we get, as a rule, less beer for our money at the present day than was ever l3efore known in this country. The measure diminishes whilst the price increases. No decent beer can now be obtained under 4cZ., Qd., 8d., and in some places even Is. per quart,* prices quite unknown to our forefathers. The conclusion is, then, that under the existing system of vending beer, which no doubt curtails competition, the people would gain nothing, whilst the revenue would lose much, by any abatement of the malt duty. On the other hand, would there be any increase Would Malt of revenue were that duty enhanced ? In other crease of words, would malt bear an increase of duty? Those who might propose such a duty would be exposed, no doubt, to a factious outcry that * At the Crystal Palace, as well as at some of the better class of dining-houses in London, they absolutely charge is. a pot for draught ale ! 158 On Taxation. [Sec. i. Chap. V. they were adding to a tax upon the national beverage. But upon whom would the tax fall ? Not upon the agriculturists — they have no fur- ther interest in the question : not upon the maltsters — the amount of the duty is of even less importance to them than the Excise restric- tions on their trade : not upon the public — they cannot be charged more highly than they are already charged for beer, for any higher charge would largely diminish the consumption and, con- On whom an scquentlv, the brewers' profits. On whom, then, increased ^ duty would would an increased duty fall ? It would fall upon the brewers ; and from all we hear and see, it does not admit of doubt that they can bear it. The brewers have in their own hands a monopoly not only of the supply, but of the vending of beer. By aid of the investment of a vast amount of capital in public-houses, and by means of the licensing system, the brewers have been able to keep the vend of beer in their own hands. They have amassed inordinate AYcalth by the operation of the system. They have raised the price of beer to the highest figure the public can bear, without affording the public the slightest share of any one of the advantages which they have themselves derived from the repeal of the Corn-laws, the remission of the hop duty, or the relaxation of the restrictions which were formerly Sec. I.] Excise Duties. 159 applied to the various branches of their business. Chap. v. If an increase of the malt tax would not be injiuious to agriculture or trade ; if it would not cause resort to spirit drinking instead of beer drinking ; if, whilst it added considerably to the revenue, it did not add to the price or diminish the quality of our beer, — if, in fact, it fell alone upon the present inordinate profits of the brewers, there are probably few amongst us who would not think that the malt tax might be gradually and discreetly increased. Such a measure might perhaps be made palat- Removal of restrictions able to both the maltster and the brewer by a on Trade. removal of existing restrictions upon the expor- tation of malt and beer. In consequence of an increased taste for beer upon the Continent,* there has been for some years past an increasing de- mand for both articles. Up to a recent period our Excise regulations operated as a serious restriction on the exportation of malt, which " could only be made for exportation under special regulations." These laws were modified in 1860 ; but the manufacture is still subject to restrictions. The same observation applies to the export of beer. In order to secure the drawback on the export of that article, all the beer exported * Recent visitors to Paris cannot have failed to remark the magnificent beer-halls which have sprung up in that capital. They rival those of Vienna, and far surpass any at Munich. i6o On Taxatmi. [Sec. i. Chap. V. is subjected to chemical test, " in order to decide "Chemical tlic proportion of the malt used in brewing." Tests" under the Excise. The number of these tests have necessarily in- creased with the increased export of beer, and the chemical analyst of the Inland E/Cvenue re- ported last year, that, in consequence, "at no " distant period the strength of his laboratory " would prove unequal to the duties it was re- " quired to discharge." The result of these analyses, however, show that, in 1860, the per- centage of the total number of barrels of beer submitted to analysis, and determined not to be entitled to the amount of drawback claimed, was represented by the figures 0'99, and the year previous was represented by the decimal 0*57.* Futility and It really seems to be a question whether, for such results, it is worth while subjecting the trade to any trouble at all. The cost even of the de- partment for examining the samples of export beer cannot be defrayed by the amount of draw- back represented to be saved. A system which dealt with the public on the first principle of our law, that " a man should be presumed to be inno- cent until found guilty," instead of treating him according to the rules of the old Excise-office, as a decided rogue until he was proved honest, examina- tions. * " By an Act of last session the number of rates of drawback, varying according to the strength of the beer, was increased from seven to eighteen." — Report of Commissioners of Inl. Re^. 1862. Sec. I.J Excise Duties. i6i would be an immense facility to trade, and miglit Chap. v. even reconcile the brewers to an addition to tbe malt duty, which would considerably assist the revenue of the State. An Excise charge of which we hear very little. The Rail- way Pas- but which produces a considerable amount to the senger ^ , Tax. revenue, is the railway duty. This tax was first imposed in 1832, when the stage carriage duty underwent revision. The duty at that time was charged at the rate of a halfpenny for every four passengers per mile. In 1842 it was assessed at 5 per cent, upon the amount received from all passengers; but in 1844, an Act having been passed requiring railway companies to run cheap trains for the benefit of the poorer classes, they were granted an exemption from duty for all passengers travelling at fares not exceeding one penny per mile. This duty does not extend to Ireland. Some years since, the Board of Inland Heve- Proposed ex- tension of nue, finding the great extent to which third-class this tax to third-class carriages and cheap trains were resorted to in passengers. the manufacturing districts and other parts of England, sought to apply this tax of 5 per cent, to passengers of every class. They were thwarted in the attempt ; but, for some time, they con- tinued to press the extension of the tax, which M 1 62 On Taxation. [Sec. i. Chap. V. would, 110 cloiiLt, liave largely added to the revenue. Erom this agitation, however, the Com- missioners have now desisted ; and, indeed, it is not easy to see on what principle Parliament could tax railway companies for passengers whom it insists on their carrying at a certain speed, and at a certain price per mile; or how the 5 per cent, tax could be applied to any one set of third-class passengers (those, for instance, by excursion trains), whilst it was not applied to another set (those who travel by the parlia- mentary trains). Character of Considered as a set-off to the loss which rail- this Tax. ways inflicted on the branch of the revenue which was derived from a duty on stage- carriages, this 5 per cent, tax upon passenger fares has not been objected to. But it is to be observed that this tax is false in its principle, and wrong in its application. It is false in principle, because anything that limits or ob- structs intercommunication, must be disadvan- tageous to a nation : it is wrong in its aj^plica- tion, because it is, in effect, a tax on the recei23ts of the railway companies, which are already subject to the property tax. In its present form, the railway duty is not likely to be the subject of conflict, for railway shareholders make this, Sec. I.] Excise Duties. 163 as, indeed, they have made far greater sacrifices Chap. v. to legislation, without much complaining. But, Apprehen- sion of its as the tax is a very easy one to levy, that which probable misuse. is to he feared is, that at a future day, some Chancellor of the Exchequer, in want of money, may he tempted to dip deeper into railway receipts. Now this would assuredly he resisted, and with great propriety : for in the event of an extension of the tax, whether in amount or application, the hurden would no longer he home hy railway shareholders themselves, hut would fall upon the traffic of the countr^^ In that case, all the coals which come hy railway, all the goods which are conveyed from the manufac- turing districts, whether for home consumption or for exportation, all the corn which comes to London out of Essex, Suffolk, and the other agricultural districts of the country, all the oxen which are sent up from Scotland, and all the sheep which come from the Southdowns, would he subjected to a tax upon their carriage. This would never he submitted to ; and, therefore, it is as well to caution financiers against the attempt, and to suggest to them to be content with the 5 per cent, tax on first and second-class railway passengers as it stands, which is, indeed, a very considerable soui'ce of income, and as the M 2 164 On Taxation, [Sec. I. Chap. V. following return will show, a rapidly increasing The rapidly increasing Railway duty, one. * Amoxtnt of Railway Duty Received. YEAR. ENGLAND. 1833 6,131 1837 16,339 1840 107,084 1843 149,370 1846 .... 1850 .... 1853 .... 1856 .... 1861 .... SCOTLAND. £ 553 . 5,343 . 8,996 201,286 11,081 229,750 21,246 274,511 21,901 306,345 27,718 342,145 30,032 contrasted with It is rather curious to contrast this rapid increase of revenue from railways with the con- tinuous decline in the amounts derived from the licence and mileage duties for stage-carriages. the rapidly declining Stage Car- riage duty. Stage Cakriages (Duty and Licences). YEAR. ENGLAND. £ SCOTLAND. £ 1833 426,979 31,049 1836 («) .... 488,983 35,468 1839 410,307 32,860 1843 (^') .... 221,493 21,840 1846 218,383 22,260 1850 196,062 15,185 1854 170,546 13,742 1856(c) .... 106,272 8,535 1861 116,313 9,244 (a) The highest amounts ever obtained, il) The licences were reduced in 1842 ftom £5 to £3 3s. (c) The mileage duty was reduced from \\d. to \d. in 1855. * The amount of the tax, however, is considerably more than the total amount paid to the railways by the Government for the conveyance of the mails ; so that that service may be said to be Sec. I.] Excise Duties. 165 More thaii half the total amount of receipts Chap. v. from this duty is derived from omnibuses and Taxes on Locomotion stage-carriages in London. There is another duty in London. on locomotion which applies exclusively to the metropolis, and in which, therefore, I feel more than ordinary interest. This is the duty The Hack- " ney-Carnage levied on hackney carriages, which produces a duty. sum of about 80,000/. a year to the revenue, but which seems to be raised at much disadvan- tage to the public. The hackney-carriage duty is as old as the time of Charles II., having been first imposed in 1662.* Eormerly there was a restriction as to the number of carriages to be licensed, so that the possession of a licence was regarded as a valuable privilege ; but since 1833 the number of licences has been um-e- stricted. In 1853 the hackney-carriasre duties Recent aiter- '^ ^ ations of this were altered under the Hackney Carriage Act. duty. The owner's licence was altered from 5/. for a licence for life, to a duty of 11. per annum ; and the rate of duty for plying was reduced from 10^. per week to 7^. per week, for those carriages performed by the railway companies for less than nothing. Yet the Post Office is perpetually complaining of the amount which it has to pay the railways for conveyance. As if conveyance was not the very first element of postal intercourse ! * It was, as I am told, originally imposed to provide for the better pavement of the streets in the metropolis. This accounts for the local application of the tax. It was first made an item of public revenue during the reign of King William III. 1 66 0;2 Taxation. [Sec. i. Chap. V. which plied every day, and Qs. per week for those not used on Sundays.* At the same time, the hackney carriages were placed under the direction of the police com- Hackney- missioners,who were empowered to license drivers, of 1853. to appoint a paid waterman at the stands, and to make regulations for the conduct of the trade. The fares were, at the same time, reduced from 8<:/. to Qd. per mile ; but a variety of restrictions and regulations as to the number of passengers to be conveyed, the number of children to be considered as "one adult," the convevance of luggage, &c. &c. deprived the public of much of the advantage they would otherwise have derived from the reduction ; and the Act was rendered still more difficult of interpretation from the complications arising out of different magisterial decisions — the bench at one police-court deciding for the cabmen, and at another police-court for the hirers, upon precisely the same state of facts. Its object Now, all this shows how little is gained by the and effect. revenue, or the public, by any measure which restricts and shackles trade. The Hackney Car- * The distinction thus made between six and seven day licences made it necessary to alter the appearance of the plates so as to indicate the character of the licence under which the cabs are plying. For this purpose the seven-day plates are numbered from I upwards, and the six-day plates from io,ooo upwards. And they are differently coloured. Sec. I.] Excise Duties. 1 67 riage Act of 1853 was designed with a view to chap. v. improve the character of the hackney carriages of London, and to make them more available for public purposes. It has entirely failed in those objects. The very first effect of its operation, was to drive out of the trade some of the largest cab -proprietors, who had no confidence in the new regulations, and who objected to being placed under the superintendence of the police. The trade, surrounded by cumbersome regula- tions, did not attract new capital. The carriages and horses were not improved, nor were the drivers, licensed by the police, men of better character. The revenue derived no advantage ; for although the amount of hackney-carriage duty in 1861 rose above the sum received from it in 1852, yet for several years after the passing of the Act of 1853, it was very considerably below the amount of 1852. It can hardly be said, therefore, that the public have benefited by this Act, whilst the trade to which it applies is constantly complaining of its operation. At the present time there is an agitation. Agitation for its alteration. amongst the parties interested in hackney car- riages, for an alteration of the Act of 1853, to be effected during the next Session of Parliament. It is much to be feared, however, that the objects sought by the trade are in the wrong direction, 1 68 On TaxatioJt, [Sec. i. Chap. V. and are not of such a nature as are likely to secure for them the sympathy either of Parlia- The restric- mcnt or of the public. If, instead of agitating tions on the trade should fop what would amount to an increase upon the be removed. fares, they applied themselves to obtain a removal of the restrictions on their trade, they would be much more likely to obtain their object.* There is no good reason why the London hackney- coach proprietor should be taxed, whilst the hackney-coach proprietors of Edinburgh, Dub- lin, Manchester, Leeds, Birmingham, Sheffield, Wolverhampton, and other large towns, are free from any duty for licence or for plying. In almost all the towns above mentioned, the cha- racter of the hackney carriages is very far superior indeed to those of London ; and in several of these towns (Dublin for example) the fares are cheaper, f The probabilities are. * Besides the duties paid . by proprietors and drivers, the cab business in the metropoHs suffers from another obstruction. Within the compass of the five-mile radius there are no less than 1 20 toll- bars, at which the public are naturally anxious to avoid payment. These toll-gates operate as a serious limitation to the hire of cabs. The Government ought to remove the bars. If they do not choose to take off the Hackney-carriage duties, they should at least apply the proceeds, as originally intended, to paving the streets, which would render toll-gates unnecessary. f Sixpence is the fare in Dublin for a drive to any part within the city ; and the carman is well satisfied with the payment. The public vehicles of Dublin, like many other things in Ireland, have recently been greatly iinproved. The " inside car " has almost Sec. I.] , Excise Duties. 169 tliat if tlie hackney-carriage trade of London Chap. v. were relieved of the excise duty (which is made payable in advance, is most strictly enforced, and the costs of collecting which are singularly heavy and oppressive), the trade would get into better hands, and superior vehicles and horses would be employed. A better cab and Good results which would horse would naturally be committed to the care f^iio^^ the removal of of a superior driver; and as superior drivers restrictions. came to be employed, the stringency of the police regulations must l^e relaxed. In the same event, it is probable that the public would not object to such an alteration in the arrangement as to fares, as would give the hackney-carriage owner a better return for his money than he can expect to obtain whilst the present badly-appointed vehicles are alone employed. The loss to the revenue of the amount derived from this duty would not be felt, whilst the relief to the trade and the advan- tage to the public would be very considerable. On every ground, therefore, the hackney-carriage trade should be advised to aim at objects which would improve their position by unshackling their trade, rather than at objects which would entirely disappeared, having given place to the London cab ; — the " outside car," a most convenient vehicle in fine weather, still re- maining in use. It may here be observed that the " Hansoms " in use at Birmingham and Wolverhampton are very superior vehicles, and are, generally, well horsed. 170 On Taxation. [Sec. I. Chap. V. merely place tliem in additional antagonism to tlieir customers — with whom they are already too much at war. Trade Li- The revenue received by the excise from Licences CENCES AND " Certifi- for the privilege of carryins: on a trade, has been GATES. 1 & J & gradually increasing with the increased trade of the country, and now amounts to nearly 1,500,000/. a year. The principal traders who are required to be licensed are auctioneers, brewers, publicans and beer-retailers, maltsters, paper- makers, soap-makers, distillers, spirit- dealers, postmasters, tea and coffee dealers, tobacco manu- facturers and dealers, and vinegar makers. More than half the amount received from licences is derived from the publicans alone, whose licences in 1860 brought 776,34^8/. to the revenue. The licence duties paid by the paper-makers, soap- makers, and vinegar dealers are merely remnants of the old system ; and as the Excise on those articles has been removed, these licence duties might be removed also, especially as their pro- duce is very trifling. Rates of duty The following tabular statement will exhibit, for Licences. better than they could otherwise be shown, the rates of duty levied in respect of licences : — Sec. I.] Excise Duties. r 00 _,^ ^-^ ^-^ ^ :S- '^ 00 05 (M CO ;£■ 05 ^ o CO o :o o fo CCI-- ■* t- r- ■* 15 g >O-*lOCDCOTtlf0p— iCOOfNCOOOCOl"^ t-- ^ (N t-. ^N co-*^ CO »o~ S ^ < ■ +:» +=» bCfcCfcO .S.5.S ? -3 i .s ^ -4-d bD .S P ;3 a3 oj 02-^ a ^^ 1 'S'5 "So So X a ■ • g r^ C? W .-^ >' ^^ ^ '-f ^^ -^ ai CD ^^ '-' *s 3 8 8 8'S 8« 8'3 ^^ 8 '3 p «• ^00^ ^ jr=.^ ^ «• ^ (M Ed |x H ^^• co'=+< 3 ■^ O ^■-h2 ^10 '^ +:j • ^-^ PC s- a Q. PC 0) III ::|Jii 4l-| Jill 2^ Mi §^ 53.2 rt a -^ c3 '5-1 »N -38 !« II a ^^ -fj >-. ^ r— !-< S a> ^ a rt -t^ o . a cj !>, a>_fl o ^ I— I _^ o ■5tH • o cs a ^ otM a o o-s ^H -U 'O 03 Tx) y, O) ' ' a a 03 +3 ^, -to >H ^ rt <_) MOO 53 S § fS o o p;^a3 -a -1-^ >i 2 § «^ ji CM I 11 lands, no but wastes ; and, m the hands 01 the State, they longer re- quired for are not likely to become anything better. It the growth r> 1 • 1 1 f> °^ timber, would be in every way for the interest both of these forests should not the State and of its subjects, that these posses- be preserved, sions should be disafforested. Woods and forests 2o6 On 'Taxation, [Sec. i. Chap. VIII. arc 110 longer wanted to supply timber for the royal navy. Our ships are now built of different materials, and, even if they were not, timber can be purchased cheaper than the Government can grow it ; and the Scotch fir and larch, which are the principal produce of the Crown properties, are not the woods most needed in our dockyards. Much of the land in these forests is well fitted for agriculture; other portions might be sold New Forest, for residential properties. The extensive waste called the New Porest, comprising no less than 66,000 acres of land, whereof 45,000 are without any timber, was cultivated in the time of the Conqueror; and this forest is now within such easy reach of the metropolis, and other large toAvns, that, if proper opportunity was afforded for its habitation, there can be no doubt that charming properties would be formed in the midst of the romantic scenery which it embraces. ■"^aicey Salccy Porcst, in Northamptonshire, was recom- mended to be sold long since, on account of its inland situation and its insignificant size. Chop- well Wood was an arable farm prior to 1813, and, instead of entailing a cost of 500^. a year, might be turned to equally good account again. High- Highmeadow AVoods, in Gloucestershire, pur- meadow Woods. chased in 1817 for no less than 154,000/., produce only a surplus of 310/. a year. Parts of this Sec. I.] Crown hands, 207 property might be let or sold for residential chap. viii. purposes. Recent experience of the Woods and Porests affords ample assurance that this policy would he advantageous to the revenue. Wychwood Eorest, Profitable . disafforest- in Oxfordsmre, which, prior to 1849j was a source ing Wych- wood of continuous annual expense to the Govern- ment, and of constant depredations and complaint in its neighbourhood, has been disafforested ; and the last report of the Commissioners states, that " the Crown is now in the possession of an estate " producing a rental of upwards of 5,000/. a year " from this property." Ilainault Forest, which and Hai- nault. at the time of Lord Duncan's inquiry produced an average net annual income of less than 500/. has been also disafforested; and the same re- port tells us that " the cost of reclaiming the " Crown lands was more than covered by the " sale of the timber and underwood which stood " upon it, and a rental of 4,200/. was obtained " from the property when let on lease for farming "purposes." Why should not the other royal forests and woods be turned to equally good account? The land of the country would be Advantages increased, agriculture extended, society improved, resSt from and the revenue benefited, by turning these tre'atmcnt wastes to profitable purposes. It is a crying forests. shame to the nation and a sin to society, that in 2o8 On Taxation. [Sec. i. Chap. VIII. the midst of this country and people, crippled as we are for want of sjDace, impoverished as many are for want of employment, and teeming as we are with an overcrowded population, the State should possess hundreds of thousands of acres of land, uncultivated, undrained, and, in general, nothing more than waste, only serving the purposes of haunts for beasts of the field and fowls of the air — contributing so little to the benefit of mankind — and entailing an annual charge upon the revenues of the nation, to be paid for out of the pockets of the taxpayers. CHAPTER IX. COLLECTION OF THE REVENUE. In the Parliamentary Session of 1848, Dr. (now chap^ix. Sir John) Bowrins: proposed a resolution that ^^'- ,^°^^"" '' o X X ring s reso- all moneys received by the different depart- lutionthat ^ favourite scheme of late with military men. " I would not say," he said, " that the garrison should be withdrawn from the Mauritius : the " Mauritius is very valuable to us : I do not think we ought to " desert it : nor do I think you ought to expend 250,000/. upon it. '' It should be defended by a fleet.^^ 274 Chap. II. Colonial Fortifica- tions Taxatioji : its Expenditure. [Sec. ii. a source of weakness to us from the constant loss of valuable lives. It is also most desirable, that economy should be enforced witli regard to the increase and ex- tension of fortifications abroad. We have seen already the greatly increased annual cost entailed on the nation by the increase of "works" at Giln'altar and Malta. Earl Grey, who speaks with the authority of a minister long charged with the administration of colonial ali^irs, tells us that he " entirely disapproves of the whole " policy of large expenditure upon colonial forti- " fications. The exjjcrience we have had of the " past, leads me to the conclusion that almost " the whole of the money we have spent upon " colonial fortifications has been so much abso- " lutely wasted, and that with respect to some " of these fortifications, erected at great expense, " the wisest thing we could do now would be " to blow them up again." Admiral Erskine, who has commanded on the North American station, as well as the Channel fleet, concurs in this opinion. " Three or four line-of-battle ships," he says, "would be a better defence of Bermuda than all its fortifications." The Duke of Newcastle goes a long way towards adopting the same view. He " is not in favour of an ex- tensive system of fortification for the Mauritius, j» (( (( (( SEC. II.] T^he Army. 275 and he " does not see the advantage of fortifi- chap. ii. cations on the Bahamas." Lord Herbert was " against Colonial fortifications altogether." It is the more important to dwell on this, because there is, or has recently been, before Parliament, a " Rough Estimate of the cost of completing " Rough Es- timate" for " works in progress, and of new works necessary " to place the under-mentioned foreign posses- sions in a reasonable state of defence (in addi- ' tion to the sums already voted), and of such occasional improvements as art and science may render necessary." The following are the items of this " Rough Estimate for Colonial Foktifications." contem- £ plated Gibraltar • 25,000 Colonial Malta 75,000 Fortresses. Corfu 75,000 Mauritius 250,000 Bermuda 150,000 Halifax 75,000 St. Helena 25,000 Cape of Good Hope 25,000 Trincomalee 36,000 Hong Kong, Bahamas, Falkland Islands, Jamaica, Antigua, Canada, &c 264,000 (Signed) J. F. Burgoyne, I.G.F. £1,000,000 If we would not embark in a most disastrous policy — if we would save millions annually to the nation in future years — ^we should unite in resisting this insidious attempt to fortify the whole 'World ! t2 276 Chap. II, A large military es- tablishment an excuse for war. The Camps at Chobham and Alder- shot. Their in- fluence on the Crimean War. General popularity Taxation: its 'Expenditure. [Sec. Ii. Considering our army expenditure as a whole, there can he little douht that there is ample room for revision and reduction. The military- estimates of this country ought to be based in time of peace on the principle simply of main- taining military efficiency. There should be no such thing as preparation for war, until the outbreak of war is obvious and inevitable. Preparation for war in time of peace implies a desire for war in time of peace; and when a nation fancies it is prepared for war, an excuse for it is sure to be at hand. After the death of the Duke of Wellington, the Nestor of our age, it was thought necessary by younger officers and less far-seeing politicians, to imitate the practice of continental military countries, and to form a " camp " at Chobham. The Chobham camp, intended as a summer ground for exercise, grew into a permanent camp at Aldershot ; — and worse than that, it brought upon us, there is little doubt, that thirst for active military service which led to the expedition to Varna, and then to the invasion of the Crimea and the leaguer of Sebastopol. Nothing is more to be deprecated than measures which excite the passions of the people. It has been well observed that, whatever may have been the feelings of the people of England at the close of Sec. II.] ^he Army. 277 a war, it lias rarely happened that the commence- Chap. ii. ment of a war has heen unpopular in England, of wars at ^ ^ ^ their out- At the commencement of the American War, so break. popular was it, that Mr. Burke, who had opposed with Ame- it in Parliament, was unwilling to face his con- stituents at Bristol, who were in a phrenzy of ex- citement in its favour, and who rejected him from their representation on account of his opposition to it. In 1793, Mr. Pox opposed the war with France, and moved a resolution in Parliament with France, against it, which only received the support of 46 memhers, whilst 278 voted in favour of the war. The Crimean War was certainly not unpopular in with Russia. this country when it was commenced; showing that even the long enjoyment of the hlessings of peace do not necessarily indispose us to the recur- rence of war. But the interests of England, ahove British in- terests in- that of every other country, require, as the first voived in the presei'vation duty of every Government, that it should en- of Peace. deavour to preserve peace. No nation has so much to lose by war. To foster military armaments, therefore, which have a tendency to create a taste and a desire for war, is more than an error of policy — it is absolutely unpatriotic. A minister who seeks to maintain a large standing army for the sake of patronage, popularity, and ^.clat, under some pretended pretext of great interests to be protected, forgets that it is to commerce 278 Taxation: its Expenditure, [Sec. 11. Chap. II. that England owes lier greatness, and that exten- sion of commerce is only compatible with peace. Large arma- It ouglit to be Considered whether the increase ments set an evil example of our military force and military establish- to Foreign States. ments, both at home and in the Colonies, does not afford a pretext, and even a reasonable excuse to foreign powers, for an increase of armaments also. If such is the case, we are setting an example to other powers which may be attended with most serious evils to the world. Nothing is more calculated to lead to war, than that any one nation should be in a perpetual posi- tion for aggression upon another. The very idea excites irritation. And, at the present time, it cannot be denied, that we are the parties who give ground for this irritation, and who appear, by the extension of our establishments, to be Our display perpetually threatening our neighbours. We not menace to only liavc a large military force of our own at home, but we have a Channel fleet in addi- tion. Such an organization seems to be more a menace to Prance than anything Prance presents as a menace to us. Except Prance, there is no other power on earth that we need fear. Austria is destitute of means ; with Prussia we are on terms of the closest connexion ; the power of Hussia was crippled in the Crimea, and her fleet sunk in the Black Sea; America has her own France Sec. ii.J T^he Army. 2^^ war to attend to at home, and even if slie Chap. ii. attacked us in Canada, Canada is quite able to give a very good account of any American fili- busterers. The increase of our military force, therefore, if it is said to be needed as a check, can only be needed as a check against France. But, whilst intended as a display of poAver against and a cause of apprehen- Erance, it is a cause of apprehension and of sion through- out Europe. armament to Europe ; for when we arm, France arms, and when Prance arms, all Europe arms. The conclusion of the war between France and Austria, in 1860, presented an opportunity which Opportunity ought not to have been lost sight of, for putting tion of ar- , 1 • 1 maments. an end to the fatal rivalry of armaments which now prevails. It is due to Mr. D'Israeli to mention, that he counselled at that time the employment of " a general influence in favour of reduction." "What," he asked, "is the use Mr. Dis- raeli's de- " of our diplomatic agencies — what avails our ciarationson this point. " cordial alliance — if we cannot come to some " sensible arrangement for the reduction of the " forces which are harassing France, and which " are embarrassing England ?" " What is there," he again inquired, in 1862, — " what is there in " the state of Europe at present that justifies, " that calls for, that even intimates a necessity " for extravagant and extraordinary armaments ?" This is an inquiry which we may hope to hear 2 8o Taxation: its Expenditure. [Sec. ii. Chap. II. repeated at a very early period. It will not be repeated in vain, if the people demand its repetition. But, as with other measures, the Government must be armed by publie opinion, before it undertakes a reduction of expenditure in a branch of the public service which peculiarly affects the aristocracy of the country. Large arma- There is vct another point of view in which ments in '' time of peace larije militarv establishments are very undesirable weaken the ° "^ "^ resources {j^ time of pcacc. As by a prodigal expenditure, the spirit of during sucli a period, you weaken the power of the nation to provide the increased taxation necessary at the outbreak of a war, so, in the same way, you exhaust the spirit of the people, which it is so necessary to arouse at the out- break of a war. When the Crimean War broke out, there was but little difficulty in recruiting the number of additional men then necessary for oar army ; but, within a year or two, it was not easy even to provide sufficient recruits to make up the deficiencies in our ranks of killed and wounded.* If you maintain a standing army at * It will be remembered that we were even obliged to have recourse to a German legion, which, after having been trained at Shorncliff, at very large cost, we were obliged to dispose of at a still greater expenditure, by sending them, on the termination of the War, as "military emigrants'' to the Cape of Good Hope, where, for some time, they were kept on full pay, to oppose the Kaffir chief, " Moshesh," who appears, however, never to have given them an opportunity of smelling gunpowder. Sec. II.] T'he Army. 281 its maximum in time of peace, the outbreak of Chap. ii. war will find you not only without means of adding to your army, but even of obtaining the number of men necessary to supply deficiencies. No inconsiderable confidence may be placed in Reliance which should the spii'it of the people of Great Britain. "When be placed on the spirit of a real exigency arises, they have always hitherto the nation. found men and money for all the purposes re- quired. But will this be the result if you are continually playing at soldiers, continually call- ing for supplies, continually building batteries and fortifications ? Are not these things calcu- lated to allay the spirit of the nation, so that, when a necessity arises, they may say that they have already sacrificed enough to efiiciency ?* As a means of preparation for war, nothing can be more perilous than a prodigal expenditure, and an excessive drain upon the nation, in a time of peace. * The falling off in the volunteer corps may be regarded as enforcing this position. We excited the ardent spirit of the country, a few years since, with very little occasion for it, and we see, as a consequence, a rapid diminution in the numbers who then enrolled themselves as volunteers. The reason of this is obvious. When the tocsin was sounded, the people answered to the call ; but when they found there was no cause for alarm, they began to feel it vexatious and troublesome to be distracted from their ordi- nary avocations in order to play at soldiers, and they therefore withdrew. No doubt, if needful occasion arose, they would come forward again ; but until that occasion occurs, let us beware of crying " Wolf." 282 Taxation: its Expenditure. [Sec. 11. Chap, II. In the face of commercial treaties, war bud- War Budgets gets are certainly anomalies. Let us hope that v. Commercial wc liavc sccn the last of War budgets in a time Treaties. of peace, and that all that is unnecessary in the expenditure for the Army will be speedily re- Our present trcuched. Lookiug at what that expenditure has ScienT'^^ been since 1857, the Army ought now to be in a state of great efficiency. The votes for mili- tary stores have been immense.* The Ordnance has been supplied with the largest guns and the most fashionable new projectiles ; siege trains have been provided, when there was nothing to be besieged ; the soldiers have been supplied with rifles of the most novel, and, therefore, it is to be presumed, of the most efficient construction ; camp equipages have been provided for men in barracks ; and ambulances plentifully supplied where there were no wounded to be carried. No- thing has been left undone, as the Inspector- General of Portifications puts it, " to meet such occasional improvements as art and science render * Even in the mode of presenting the Army Estimates for stores, &c., there is reason to think that material economies might be effected. The able officer who has succeeded to the duties of Sir Benjamin Hawes in the Under Secretaryship of State for the War Department, might apply himself with great advantage to the con- sideration of the departmental accounts. With the assistance of his staff, and the aid of competent accountants, I am satisfied, from practical knowledge, that he would soon find it in his power to effect very sensible savings of expenditure. Sec. II.] I^he Army. 283 necessary." There has been no parsimony, such chap. ii. as that of which the people were accused, in without ,.. „ , additional 1854, when, after an expenditure 01 several expenditure, hundreds of millions on the Army, they were told, by the authorities, that the disasters of the winter in the Crimea were not due to the bad administration of the Armv, but to the de- ficiency of the estimates from 1816 to 1853 ! There has certainly been nothing of that sort to complain of since, if there ever was before. Let the Armv, then, be content with what has been already done to put it in a condition of increased efficiency, and let us hear of no new demands, such as those for Colonial fortifications, involving increased expenditure for men, for stores, for ordnance, for transport, and for all that neces- sarilv results from increase of the number of our establishments, and the number of our soldiers required to defend them. CHAPTER III. THE NAVY. Chap. III. Priou to the war of 1793, the Navy of England The Navies cost about 2,000,000/. a year. On the outbreak of Europe, A.D. 1793. of war, we had to provide very largely for the protection of the commerce of the country. Prance, in 1793, had 80 efilcient ships of the line, and a large number capable of being made efficient. Holland had so large and so efficient a fleet, that she was able to cope with us; and to fight the battle of Camperdown. Spain had 76 ships of the line; and, although the navies of Eussia and the United States were, at that period, of no importance, England could scarcely be considered the mistress of the seas. Our navy estimates consequently rose, and, in 1801, the year preceding the battle of Trafalgar, they amounted to 11,921,000/., say 12,000,000/. Effects of the The battle of Trafalgar annihilated the fleets of battle of . p 1 Trafalgar. Eraucc and Spain. Erom that time forward England swept from the face of the ocean the ships of every enemy. At the end of the war. Sec. II.] The Navy. 285 it was calculated by one of our principal naval Chap. hi. officers, that we liad captured or destroyed 156 sail of the line, 382 large frigates, 662 corvettes, with smaller vessels, making a total of 2,506 vessels of war, belonging to other powers, taken and destroyed by the British navy. The conclusion of the war found us with a Naval ex- penditure : very high naval expenditure. It was, however, immediately put on a more moderate footing, and the reduction continued for a number of years, as the following statistics show : — TEAR. NAVAL EXPENDITURE. I815 tO 1 835. 1815 £16,073,870 1816 9,-516,325 1817 6,473,063 1820 6,387,799 1825 5,8-19,119 1830 5,309,606 1835 4,009,430 In the year 1839, a demand was made upon increased expenditure the country for an addition to the Navy estimates, to provide steam . on the ground that it was necessary to provide vessels. steam-vessels. The demand was so willingly complied with, that it was made an excuse for an annual addition to the votes. In the next twelve Expenditure, years the estimates rose as follows : — ,.r,.„ 1838 to 1853. YEAR. EXPENDITURE. -^ •'^ 1838 £4,520,428 1839 5,490,204 1842 6,640,163 1845 6,809,872 1849 6,942,397 1853 6,640,596 2 86 Taxation: its Expenditure. [Sec. ii. Chap. III. The expenditure may, therefore, be said to have been increased one-third — namely, from four millions and a half to about six millions and three quarters — between 1838 and 1853. Although, by a better system of administration, much of the money might, no doubt, have been saved, yet, having regard to all the circumstances of the period, the increase is, upon the whole, not much to be quarrelled with. Had our ex- penditure remained at between six and seven millions a year, we might have thought the Navy estimates within the means and resources Immoderate of the couutrv. But that estimate has most increase in 1 854-5- ■ immoderately increased. On the outbreak of the Crimean War, the Navy estimate was immediately doubled, and in the very next year, 1855, it was raised to a point exceeding that of the year in which we fought the battle of Trafalgar, and nearly equal to the highest amount at which it has stood at any period of British history : — 1854 £12,182,769 1855 19,014,708 1856 16,013,995 The 'China' In 1857 and 1858, although the Bussian war war. had terminated, excuses were made for very high Navy estimates, on the ground of the cost of the China and other expeditions. The amounts expended were : — 1857 £10,390,000 1858 10,029,047 Sec. II.] T^lie Navy. 287 Here we might reasonably have expected that chap. hi. the expenditure would have ended; but, on the contrary, in 1859, it was increased, and it has increased expenditure : continued ever since to be put on an estimate equal to twice the expenditure of 1853. lS5i) £11,072,243 1859-62. 1860 12,991,668 1861 12,608,042 1862 (estimate) 11,749,305 The Navy estimates require to be dealt with Principle . . which should on a dinerent principle from those of the Army, regulate the Navy In the Army we have seen that the number of estimates. soldiers employed governs the cost of the whole service. But the cost of the Navy is not so materially affected by the number of men en- gaged. The great outlay of the Navy is not on seamen. The great expenditure is upon the our Naval Naval establishments, the wages of artificers ments. employed in them — dockyard improvements and repairs, and Naval stores, &c. for the building of the fleet. Out of the 12,000,000/. expended on the Navy in 1861, the yards and the works carried on therein were estimated to cost 6,256,479/., or almost the moiety. It will not admit of doubt that the past expen- Their extra- vagance con- diture upon our JSavy, especially m our dock- demned by 111 o iT Admiralty yards, lias been one oi the grossest extravagance, authorities. So far back as 1848, Mr. (afterwards Sir Henry) Ward, who was at that time Secretary to the a ii 288 Taxation: its 'Expenditure. [Sec. ii. Chap. III. Admiralty, stated to a Committee of the House of Commons,* his firm belief " that there was no ^' department in which the want of a regular " system had been felt so much as in the Admi- " ralty ; one in which so many expensive altera- tions, particularly in naval construction^ had been created by the sudden changes of persons having the authority, and by the want of a " systematic application of certain principles." The whole system of the dockyards, in the con- struction of ships, has, for a long period of years, Pariiamen- |3een ouc of experiment. It is in evidence, in a tary reports -•- on the dock- yarietv of Parliamentary reports, that ships have yard system. '' e/ l ^ j. been lying on the stocks, partially l^uilt, pulled to pieces, their timber rehewn into other shapes or sold for waste; that hulls completed have been ^ condemned as not worth the cost of rigging ; that others rigged have been pronounced as not worth commissioning ; that new vessels commissioned have been brought home, condemned, and broken up ; that others have cost more in repairs and alterations than they cost in building even before they went to sea; that a number of vessels, after having been built, have been laid up in harbours and allowed to dry rot ; that others * It is a coincidence that Lord Seymour (now Duke of Somerset, and First Lord of the Admiralty), was chairman of the committee which received this evidence. sf.c. il] The Navy. 289 have been out down, built up again, and changed Ghap. hi. in form and character, more than once, before they were even sent to sea ; — that, in fact, there has been such reckless waste and such gross mis- management as would have made any mercantile company bankrupt ten times over. Although at the end of the French War we Treasure ex- had nearly a thousand ships, with dockyards in th^ Fleet" the highest state of efficiency, yet in the years of peace, between 1816 and 1854, we were called on to expend a sum largely exceeding a Hundred Millions of Money on the Fleet and its mainte- nance. This may be regarded as another forcible illustration of the impolicy of maintaining large establishments in time of peace ; for we now find ourselves only at the commencement of a new work of construction, rendered necessary by the substitution of iron for wood in ship-building. Of the thousand vessels, which we have now in our Navy, only a comparative few will be fitted for the purposes of future naval warfare. Com- petent judges have pronounced that, owing to the recent improvements in explosive shells and other combusti1)le missiles, and in the methods of projecting them, " wooden ships in future battles " would be nothing better than human slaughter- Our - ,,1 'Wooden " houses ; ' that '* they would be blown to lucifer Targets.' matches;" and that "any Government which u 290 Taxation: its Expenditure. [Sec. 11, Chap. III. Reconstruc- tion of our Navy, Our Dock- yards, " should send such vessels into action against an " iron-plated ship would deserve to be impeached." To crowd a thousand men into a wooden target, with thirty or forty tons of gunpowder at their feet, and expose them to a bombardment with detonating shells, would only be to expose them to inevitable destruction. We have, therefore, to apply ourselves to a reconstruction of our Navy upon new principles adapted to the present exigencies of naval warfare. This necessity brings us to a very important epoch in the history of the Navy. And, at the present time, we ought to be more than ever careful to guard against the errors of the past, as well as to adopt the most efficient system that can be devised for the future. We have to reconstruct our Navy. In the first place, let us look at the state of our dock- yards. Her Majesty's establishments at home and abroad consist of the following :— at home Naval Yards at Home. Deptford. Slieerness. Keyliam. Woolwich. Portsmouth. Pembroke. Chatham. Devonport* Deal. Victualling Establishments at Home. Royal Victoria, Deptford. Royal William, Plymouth. Royal Clarence, Gosport. Haulbowhne. and abroad. Naval Yards Abroad. Gibraltar. Bernmda. Cape of Good Hope. Malta. Antigua. Trincomalee. Halifax. Jamaica, Hong Kong. Sec. II. 1 The Navy. 29 I Chap. III. ViCTUALiiiNG Establishments Abroad. Malta. Ascension. Sydney. Haliftix. Sierra Leone. St. Helena. Jamaica. Cape of Good Hope. The cost of these establishments, tos:ether Their annual with the necessary medical hospitals, infirmaries, prisons, police, &c., attached to them, will be seen from the following abstract : — Her Majesty's Establishments, 1862. cost. ESTABLISHMENT. COST OF ESTABLISH- ME^'T. labourers' WAGES. NEW WORKS AND IMPROVE- MENTS. TOTAL. Naval Yards, &c. at ) home \ Ditto, abroad . . . £ 176,624 33,610 £ 1,147,678 66,801 £ 393,102 71,068 £ 1,717,404 171,479 Total . . 210,234 1,214,479 464,170 1,888,883 The dockyards, therefore, cost the country, for officers, labourers, and improvements, a sum approximating to Two Millions annually. This is exclusive, be it remembered, of the cost of stores, which exceed Three Millions more. The Two Millions merely represent the cost of the establishments, and of the labour provided in them. Now, what is all this for ? It is for timber These esta- . blishments ship-buildmg ; for the perpetuation of a system not adapted . . for Iron which it is admitted on all hands that we ship- building. must gradually abandon. Except one iron vessel, which has been ordered to lie constructed at u 2 292 Taxatmi : its Expe?iditure. [Sec. ii Chap. III. Cliatliam as an experiment, no iron steam-sliip lias been built, or is likely to be built, in our Naval dockyards. The dockyards are, in fact, not adapted for iron-ship building. They do not contain the necessary machinery, nor do they command the sort of labour that is required for the purpose.* Besides this, the largest of these establishments — those at Portsmouth and Devonport — are situated at the points most distant from the materials — iron and coal — which are required for iron ship-building; so that if iron- ships could be constructed at those places, their cost must be much larger than the cost of iron-vessels built where coal and iron can be more readily obtained without excessive cost of transport. Our Iron The irou vessels now in our Na\7 have, con- constnicted^ scqucntly, all been built by contract in the yards yards) of irou ship-buildcrs on the Tyne, the Mersey, the Thames, and the Clyde. A Commission The Dock- wliicli was appointed a few years since to inquire yard Com- missioners ; into our dockyards, entirely approved of this sys- tem of contracting for the iron hulls of vessels * Even in the construction of iron-plated wooden vessels, the yards labour under great disadvantages. It appears, from a recent account of Deptford Dockyard, published in one of our London daily papers, that the iron plates used in the construction of two vessels now building in that yard, have to be sent by lighters down to Woolwich to be punched. Sec. II.] The Navy. 293 and for their engines, at fixed prices. The Earl Chap, hi. of Gifford, who was Chairman of the Commission,* their ap- proval of condemned in his place in the House of Com- contract ship- mons, even the attempt of the Government to building. experimentalize npon iron ship-hnildim?. " At The Earl of ^ . . Gilford's Chatham," he said, " it would not only be speech. " necessary, with a view to the construction of " iron ships, to erect extensive buildings, to pur- " chase expensive machinery, largely to increase " the number of artizans in iron in the yard ; " but, in the absence of a slip sufliciently long, " it would even be necessary to occupy one of " the largest docks in the country, which ought " to be reserved for more legitimate purposes." " With the scores of great ship-building " firms all around our coast, who would be able *' and willing to undertake the contracts, he •'' thought it would be prudent of the Govern- " ment not to undertake the novel and expen- " sive system of iron ship-building, "t * As this is written, the news reaches me of the melancholy death of this estimable young nobleman, the termination of whose career at the prime of his life, and at a moment when he gave so much promise of being useful to his country, must be a subject of sincere regret. t The pretext assigned by the Comptroller of the Navy for com- mencing iron ship-building at Chatham was, that it was necessary that the dockyards should have within themselves the means of effecting the repairs of iron ships, and that it was desirable that Government should have the means of testing the price of iron ships built by contract. Lord Gifford very truly observed that the 294 Chap. III. Advantages of open competition in iron ship- building, in price, in improve- ments, in material, in workman- ship. in the cost of establish- ments, Taxation: its Expenditure. [Sec. ii. Every practical man will entirely concur in this view. Having regard to the interests of the nation, it is, ahove all things, desirahle that the Government should not commence iron ship- building in dockyards not adapted for the pur- pose. The best, and by far the cheapest mode of obtaining iron hulls, is to contract for their con- struction with builders of unquestioned reputa- tion, at fixed and certain prices. Competition would not only secure the lowest price, but, by admitting new designs and forms, would ensure improvements in construction which are not to be expected otherwise. Perfection of material and workmanship could be easily secured. As Lord Gilford observed, "if any fears were enter- *' tained on that head, there would be found to " be ample security in appointing a sufficient " number of salaried inspectors to superintend " the works in progress." If this system were adopted, the present costly establishments in our dockyards might be greatly and permanently reduced. Those yards would be used for the fitting and repairing of ships, but great reduc- appliances necessary for repairs existed at Keyham, Portsmouth, Sheerness, and Woolwich, and that the authorities ought to know the proper cost of a ship without building one, under the most disadvantageous circumstances, to test it. The real intention, how- ever, in constructing the Achilles at Chatham, was to convert that )ard into a dockyard for iron ship-building. Sec. II.] The Navy. 295 tions might be made in the expenditure of the chap. hi. establishments, and all the millions proposed to and of forti- fications to be sunk in fortifications for theu' protection protect them. mio'ht also be saved. At the present time, most of the 1,021 vessels which we have in our Navy are built of wood. A certain number of the best of these might. Our wooden vessels : — perhaps, be properly retained for special purposes; but the bulk of them ought to be sold out of the service. In time of war, no one would ever think of sending these wooden ships to sea again. They would be quite unable to cope with any iron vessel they might meet, and with the power- ful artillery which has recently been invented. Proposals have been made for the conversion of their pro- posed con- these vessels, and some of them have been armed version by iron plating. with iron plates. I have on previous occasions expressed my opinion that this arrangement will be found to be an error. Wooden vessels plated objections to this with iron are so shaken bv the action of a heavy arrange- " ment. sea, and by that of their own machinery, as speedily to become unseaworthy. A wooden frame only, in fact, weakens an iron plate. In course of time, the wooden frame shrinks or rots, or the bolts which fasten the iron plates to it loosen and fall out. Then the vessel requires Reasons for preferring reconstruction, and entails all those expenses lor iron ships. repairs which have proved so costly in our 296 Chap. III. The inevit- able decay, and cost of wooden vessels, renders it desirable to sell them. Vessels of War now needed. 'Taxation: its Expenditure. [Sec. 1 1. wooden fleet. It is far better, and not more expensive, to build the vessel entirely of iron. The plates in that case being rivetted to each other, and to the framework, present a solidity which is not afforded by any wooden vessel plated over. If we retain these wooden ships, they will lie in our harbours and docks until they meet the usual fate of our men-of-war, and perish of the dry rot. They may even entail upon us no in- considerable outlay, not only for their safe cus- tody, but for fittings and repairs. On every ground, therefore, it seems better to get rid of them. We may rest satisfied that they will not be purchased for the naval services of other coun- tries, for the inefficiency of wooden shij^s is now universally acknowledged. They will, probably, be bought out of the Navy into our own mer- chant-service. Their engines might be taken out and used in another class of vessels. With regard to troop-ships and transports, Eng- land has her vast commercial marine to fall back upon, whenever occasion may require ; and it seems quite unnecessary that we should keep a number of vessels in our docks merely for the performance of such services. In reconstructing our Navy, that which it seems desirable principally to aim at, is the con- Sec. II.] T^he Navy. 297 struction of a few very large and powerful iron Chap. hi. vessels, of sufficient size to mount the largest guns in central batteries, and fitted to act as rams, by the aid of powerful steam machinery. They should have sufficient stowage of coal for long voyages, so as to be capable of being sent across the Atlantic under steam-power, and of being used for the defence of our Colonial jiosses- sions. Such vessels would be moveable fortresses. Peculiar advantages Having, close to our seaboard, the raw material, we possess for their con- in the iron necessary for building them, we j^os- struction, sess advantages over every other nation for their construction. Eor fitting them we have the best steam-engines, and for working them unlimited supplies of coal. If we will apply ourselves to the construction of such vessels for the purposes of our Navy, w^e shall soon be possessed of a Marine with which all the nations of the w orld together could never hope to vie. Iron ships require very little reparation. Re- reparation , fitting and repairs have been the great drain upon oiu' wooden vessels. This class of men-of- war, moreover, would require a far less number of men to work them than anv other sort of and vessel hitherto designed. Not only, therefore, Avould this plan save a very large proportion of the cost of our dockyards, but it would save a great part of the expense of manning our fleet, manning. 298 Chap. II: Our mari- time supre- macy pro- moted by iron ships. Taxation : its Expenditure. [Sec. ii. and many of the difficulties by which it is now attended.* The change which has characterized naval armaments is extremely favourable to the mari- time superiority of Great Britain. Eor the con- struction and working of wooden sailing ships, the raw material requisite had all to be im- ported. Timber and hemp, for cordage and sails, had chiefly to be obtained from the nations of the Baltic, or from the other side of the Atlantic Ocean. But for the construction and working of iron steam ships we have all the raw materials at home ; and we possess them in greater abun- dance and in superior quality to any other nation. The result is ah'eady shown in our mercantile marine, in which steamers are rapidly displacing wooden vessels. Between 1850 and 1860, the number of steamers belonging to the United Kingdom increased from 1,100 to 2,200, and their tonnage from 158,000 to no less than 454,000 tons. This progress has been more than * The right of impressing seamen in time of war still exists — having been, for the first time, recognised as a right by the very Act of Parliament which professed to limit, if not absolutely to abolish, it ! Whether any Government would ever dare to enforce this " prerogative of the Crown " is another question. The country, in all probability, would never allow it. But it may be hoped that the progress of skill, science, and machinery, by rendering a large supply of seamen unnecessary, will, practically, terminate a system which our Government appears to shrink as well from abolishing as from putting into practice. Sec. II.] The Navy. 299 equal to the aggregate progress of all tlie other Chap. hi. nations of the world within the same period ; and, indeed, a very large proportion of all the steam ships which navigate the waters of the glohe under the flags of other nations, owe their construction to British builders ; whilst a still larger number are indebted to us for their machinery, boilers, and even for their engineers. The preservation of the supremacy of our Our Naval Supremacy, Empire at sea may be considered essential to our consistent ^ with econo- national existence. The foreG^oins^ aro'ument micai expen- ° ^ ® diture. tends to show that the system best calculated to preserve it is consistent with the adoption of an economical expenditure upon the Navy. Let our Navy be maintained, as it should be, for the pm'poses of the defence of the nation — let us get rid of the multitude of establishments which now oppress, and which are the main som^ce of its cost — and the Navy Estimates may be reduced to the amount at which they stood in 1853, or to one-half of their present total. These opinions with regard to the past and These future management of our dockyards have the enforced by the support of all who have had opportunities of making themselves acquainted with the subject. In the year 1860, a Royal Commission was ap- Royal Com- missioners pointed, with very ample powers, to inquire into on Dock- the control and management of the dockyards. 300 Chap. III. Their Report, on manage- ment, on stores, on accounts, on labour, on prices, on possible retrench- ments. on conver- sion of ships, on iron ship- building. Memoran- dum of the Controller of the Navy. Taxation: its Expenditure . [Sec. ii. The Commissioners visited and inspected them, took evidence at each, and personally inquired into their system. They reported (1) " that the " control and management was inefficient ; (2) " that they had found general comj^laints as to " the mode in which the stores were supplied ; (3) " that the system of accounts was elabo- " rate and minute, hut not to be relied ujion for "any practical purpose" — "that the accounts " were useless for purposes of comparison, and " not to be relied upon as statements of facts ;" (4) " that the system of task or job labour, car- " ried on in the dockyards, was open to great " abuse, and was based upon schemes of prices, " consisting of 94,762 items, which could hardly " fail to lead to numerous errors in pricing the " work done ; " (5) " that large retrenchments " might be made in the expenditure without im- " pairing the efficiency of the yards;" and they finally reported, "that the policy of converting " a large number of sailing-vessels to screws "could only be justified by necessity;" and that " iron shipbuilding ought not to be carried " on in Her Majesty's dockyards under the " existing system." To the Report of this Com- mittee was appended a memorandum, signed by Admiral Spencer Eobinson, the Controller of the Navy, which, after very fully discussing every 5ec. II.] T^he Navy. 301 item of dockyard management, concluded by Chap. hi. stating that improvements were manifestly neces- sary to secure a more vigorous and economical administration of the naval yards. It cannot he otherwise than matter of regret This Report unproduc- that this important Report did not receive the tive of im- provement. attention it deserved. It was presented to the House of Commons in 1861, and it immediatelv led to the appointment of a Select Committee, to inquire into " the constitution of the Board of Admiralty," which carried its inquiries over the Parliamentary Session of that year, and con- cluded by reporting to the House the evidence which it had taken.* But the Beport of the Boyal Commission appears to have had no other effect. It in no way checked the abuses in the dockyards, or improved the administration of their internal management, or even of those ac- counts which were described to be " useless for " purposes of comparison, and not to be relied " upon as statements of facts." On the contrary, if we may judge by one occurrence, the system pursued in the dockyards, after the Beport of the * No other member having called attention to the most im- portant evidence taken by this Committee, I conceived it my duty, at the close of the Session of 1862, to bring it under public attention. The evidence taken was, almost exclusively, the evidence of former and present Lords of the Admiralty, and the effect of it was to show that the whole system of Admiralty administration required reformation. 302 Taxation: its ExpenrJiture. |Skc. ii. Chap, iit, Koyal Commission, was more gross tlian ever. In a previous chapter of this work, it has been mentioned that, in 1862, a Standing Committee of the House of Commons was appointed, under the title of " The Committee of Public Accounts." From the Report of that Committee, ordered to be printed by the House of Commons in July, 1862, it appeared that, in the early part of that year, there had been a dissension between the Lords of the Treasury and the Board of Admiralty, respect- ing the mode in which the latter rendered their accounts. One of the matters on which a corre- A vote of spondence arose between the departments had the House of ^ ^ Commons relation to the application of a sum of 250,000^., for Iron Ships voted by the House of Commons at the close of the Session of 1861, as a credit for the purpose of constructing iron ships. It appears that the Admiralty insisted upon taking this as a general vote for naval stores, which the Auditor of the Civil List very properly objected to. It then appropriated came out that the vote of credit for buildins^ iron by the Ad- ^ miraUy to ships had been absolutely appropriated to the Wooden purchase of timber for the construction of wooden vessels. ^ ships, although an express pledge had been given to Parliament by the Secretary of the Admiralty that no more wooden line-of-battle ships should be constructed ! The Committee examined the Pirst Lord of the Admiralty, and he defended the Sec. II.] The Navy. 303 application of this money. We had better have Chap. hi. his own words : — The First Lord's q. 1281. " In point of fact, did you not apply, fj^f^^^'^ JjJ^. " to the purchase of timber, the money which ^^°'^ °f ^^^ " was dedicated by Parliament to the bnilding of " iron ships ? — Yes ; I did that on my own re- " sponsibility. I considered it the right thing "to do ; Parliament was not sitting when I " bought the whole of that timber ; I may have " bought some whilst Parliament was sitting, " but most of the timber was bought, I may say, " after Parliament was prorogued. Q. 1282. " But the course was determined on '' whilst Parliament was sitting ?— Yes." whilst Par- liament was The course Avas determined on, therefore, not j^^ defanc'lfof only in breach of faith with Parliament, in defiance n^tfo^nf'^"^^ of its decision, and in open violation of the con- ditions on which the money was voted, but it was determined on at a time when Parliament might have been consulted. At that time another vote might have been asked for, but the Admiralty did not ask for it, because thev well knew that it would not have been granted for the object for which it was desired. Considering the circum- stances under which this appropriation was made, it is very much to be reprehended ; and although their observations on the matter are not severe, the Committee appeared to feel thai nothini ^? 304 Chap. III. The con- struction of Timber ves- sels per- sisted in, to employ the Dock- yards, in which Iron Ships cannot be constructed. Taxation : its Expenditure. [Sf.c. i i. so flagrant has of late years come before the public.* The pertinacity with A\liich our rulers insist upon building large timber vessels is the more extraordinary, as other nations have ceased to construct them. America, several years since, gave the preference to long, low, iron ships, capable of carrying the largest guns and of being driven at the utmost possible speed ; and we have seen the results of that policy in their recent naval actions. But, as the Eirst Lord of the Admiraltv admitted, the fact is that the con- struction of timber vessels is a necessity arising from the state of our dockyards. Possessing these large establishments, it is necessary to employ them, and as it is impossible to employ them in the construction of iron vessels, the Admiralty is forced to employ them to build timber ships. Thus the money of the nation is wasted in consequence of the maintenance of * In addition to every other consideration, this appropriation was in open defiance of a resolution of the House of Commons passed 30th March, 1849, when the House resolved, "That when " a certain amount of expenditure for a particular service has been " determined upon by Parliament, it is the bounden duty of the " department which has that service under its charge and control, " to take care that the expenditure does not exceed the amount " placed at its disposal for that purpose." In the present case, not only was the amount voted for timber exceeded, but a sum of money voted for another purpose was applied to liquidate the excess. Sec. II.] The Navy, 305 establishments, which any prudent manufacturer Chap. iit. would get rid of as fast as possible, when he found that the article they produced was no longer needed, and that they did not contain the machinery and labour necessary for the exe- cution of the improved article required. It is only necessary to examine the detailed Savings *" ^ which might estimates for the dockyards to see how laro?e are ^e effected " '-^ in our Dock- the savings which might be effected in these y^^^^^. establishments. More than thirty years have elapsed since Mr. (afterwards Sir John) Barrow, sir j. Bar- row's evi- the Secretary of the Admiralty, proposed an dence on alteration of the entire system, which has never been effected. He observed, of the establish- ments in these yards, " there is not a single trade " carried on in a Dockvard that has not a master superintendent. There is a * master smith,' a ' master bricklayer,' a ' master sailmaker,' a ' master rigger,' a ' master ropemaker,' a master painter,' and others. They have each " 250Z. a year, and many of them have not more " than four or five men under their superinten- *' dence. And another evil is, that they not only " have large salaries, but become all of them " entitled to large superannuations." The same system continues to the present time. At some Dispropor- tion between of the yards the disproportion between the sala- 'Salaries' and ' W^ages.' ries, &c. of the officers on the establishment, a (< <£ ii i 2o6 'Taxation: its 'Expenditure. [Sfx. ii Chap. Ill and the wages paid to artizans — that is to say, the disproportion of the unproductive to the productive labour — is quite remarkable. YARDS. SALARIES AND ALLOWANCES TO OPFICERH. WAGES TO LABOURERS. Deptford "Woolwich Chatham Sheerness Portsmouth Devonport Pembrolve Deal £ 9,929 18,890 19,272 16,861 26,245 28,762 10,793 312 £ 38,796 75,825 100,314 69,778 155,703 147,157 53,279 591 It is quite certain that there are no private establishments at home, or public establishments abroad, in which the relative cost of superintend- ence and of labour bear anything like these pro- portions. Hence it comes that vessels built in our naval yards are so much more costly than those constructed by contractors. With regard to our Navy generally, there can be no doubt that for a number of years past it has been maintained at a far higher cost, and to a much greater extent, than necessity required. the cause of This lias been occasioned by an absurd rivalrv our large " naval arma- between Eraucc and England, and bv the "panics' ' ment. ' ^ which have from time to time been created in the minds of our people. Whenever we liave heard that France launched a line of battle ship, Our Rivalry with France Sec. ii.J 'The Navy. 307 we have thouglit it necessary to lay the keels of Chap. hi. half a dozen ; and so we have gone on building and repairing, at enormous cost, until we find ourselves with a vast fleet of useless, wooden line-of-battle ships, the greater part of them either rotting in our naval yards, or entailing heavy charges for maintenance. Might it not is reduction impossible ? be possible, for the future, to adopt a more prudent system ? Is there any real necessity for the perpetuation of such enormous naval armaments as those we have possessed from 1816 to the present time ? At a moment when we are entering on the reconstruction of our fleet, might we not come to some understanding with Erance, our only rival, as to the number of vessels of war which each country should possess ? As far back as 1841, this policy was advocated Sir r. Peel's view. bv Sir Hobert Peel : — "Is not the time come," he said, "when the " powerful countries of Europe should reduce those armaments which they have so sedulously raised ? Is not the time come when they should " be prepared to declare that there is no use " in such overgrown establishments ? What " is the advantage of one great Power greatly " increasing its army and navy : does it not see " that other Powers will follow its example ? " The consequence must be that no increase of X 2 (C (( 308 Taxation: its Expenditure. [Sec, 11. Chap. III. " relative strength will accrue to any one Power, C( but tliat there must be an universal consump- " tion of the resources of every country in " military preparations. They are, in fact, de- *' priving peace of half its advantages, and anti- *' cipating the energies of war whenever they may " be required." . . " The true interest of Europe " is to come to some common accord, so as to " enable every country to reduce those arma- " ments which belong to a state of war rather " than of peace." Applicability Circumstanccs appeal strongly to us in the of these sug- gestions to present day in favour of measures of wise and present cir- cumstances, safe economy. In consequence of the deplorable events in America, a large portion of our popu- lation is exposed to an ordeal of great suffering, and the rest of the community is called on to make great sacrifices on their behalf. Cannot our fiscal burdens be alleviated by a diplomatic arrangement which would save us a large portion of the expense with which we are threatened in the re-construction of our Navy ? There are the best reasons for believing that Erance would embrace the proposition with the utmost eager- ness ; for she also requires relief from financial pressure, caused by the rival armaments. An arrangement such as that proposed by Su' K-obert Peel would in no way derogate from our national Sec. II.] The Navy. 309 honour or from our maritime superiority, whilst, Chap, hi, to use the words of that statesman, " Peace " would no longer be deprived of half its ad- " vantages, and the energies which should be " treasured up for war would no further be " anticipated." CHAPTER IV. MISCELLANEOUS EXPENDITURE. Chap. IV. The Miscellaneous Estimates, as presented to The Mis- the House of Commons, are divided into classes. cellaneous . i . -, -r Estimates. Tlic classcs liavc Varied m nnmoer. Last year they consisted of the following : — Their classi- fication. Their increase. CLASS. OBJECT. EXPENDITURE. I. . Works and Buildings .... £ 695,215 1,473,625 2,763,308 1,410,114 937,400 338,896 229,739 IL . III. . IV. . V. . VL . VII. . Pnhlifi Dfiiiartmftnts .... Law and Justice Education, Science, and Art . Colonial and Consular Services. Superannuation Allowances, &c. Special and Temporary Objects £7,848,297 Throughout the present century these Miscel- laneous Estimates have heen increasing; hut at no period have they increased so largely as during the last ten years. Sec. u.) Miscellatieous Expenditure. 311 Miscellaneous Expenditure. Chap. IV. DECIMAL PERIODS. AVERAGE EXPENDITURE. 1798 to 1807 £1,800,012 1808 to 1817 2,162,777 ]8J8to]827 2,115,288 1828 to 1837 2,2G9,6G8 1838 to 1847 3,016,343 1848 to 1857 4,650,850 1858 5,647,243 1859 6,143,504 1861 7,848,069 1862 7,848,297 It is sought to be shown that this very large The cause of this increase, and rapid increase of expenditure has occurred in consequence of the transfer to the Miscella- neous Estimates of items of expenditure which formerly fell on the Consolidated Eund, or on the revenue in its progress to the Exchequer. But althouo'li there have been some additions of this sort, yet the great ]3uLk: of the addition to the mis- cellaneous expenditure has arisen from absence absence of economy, of economy in dealing with votes which might and general prodigahty. fairly be reduced, and great prodigality in adding to others which required moderate increase. The present classification of these Estimates Comparative ■"■ view of the was first adopted by the directions of Sir increase. George Clerk, who was Eirst Secretary to the Treasury during Sir Eobert Peel's administra- tion, in 1843. It may be desirable, with a view to elucidate their growth, to show the items under each head in that year and since : — 312 Chap. IV. 1843 to • 1863. T" ax at ion : its Expenditure. [Sec. 11. Committee on this Ex- penditure, 1848. Sir F. T. Baring's view. CLASS. 1843. 1848. 1853. 18.58. 1862-3. £ £, £ £ £ £ No. 1 . . . . 316,271 462,676 744,938 694,802 695,215 No. 2 776,852 1,031,941 993,804 1,2.35,9.82 1,473,625 No. 3 834,821 1,042,727 1,381,428 1,404,489 2,763,308 No. 4 219,867 397,520 598,410 1,125,627 1,410,114 No. 5 406,836 426,367 347,321 368,762 937,400 No. 6 187,319 176,258 209,875 2.39,614 338,896 No. 7 89,866 146,084 324,195 478,017 229,739 Coutingencies 110,000 100,000 100,000 100,000 — £2,941,832 £3,783,578 £4,699,971 £5,647,243 £7,848,297 In consequence of the increase of these Esti- mates in 1848, a Committee of the House of Commons was appointed to inquire into them. At that time, it will be observed that the total amount had increased, comparatively speaking, very slightly ; yet the Committee of 1848 thought the amount charged for many items very ex- cessive, and recommended a more economical expenditure and a better supervision of these votes. Sir P. T. Baring, M.P., who has filled various oifices under different Governments, ex- pressed his opinion to this Committee, that " the " Treasury ought to be constantly employed in " revising this expenditure." " These revisions," he said, " have been periodical ; in my opinion " they ought to be continuous." That this revision has not been continuous, the votes proposed to Parliament will show. Sec. II. J Miscellaneous Expenditure. 313 Chap. IV. Class I. JPuhlie Buildmgs, Royal Falaces. class i. The votes on this account have increased from Public 462,000/. in 1848, to 695,000/. in 1862. Buildings. The votes in 1847-48, included 241,711^. for special services, of which 150,000/. was for the new Houses of Parliament, and 50,000/. for Buckingham Palace. Tlie actual increase, there- increase of expenditure fore, upon this vote may he taken at 474,000/. ! Excepting the new Foreign Office in Downing without any correspond- Street, for which 15,000/. only has heen voted, ing new works. there is really nothing to account for this increased outlay, but a general increase of expenditure on all the estimates, and an entire absence of eco- nomy. Harbour works, at Holyhead, Portpatrick, and Kingstown, together with harbours of refuge, presented formidable items in the votes of 1862, as they did in those of 1848, and every intermediate year ; and the maintenance of the new Houses of Parliament costs us also more than 30,000/. per annum. But it is not easy to account, by any new works, for the great addition to expenditure which is presented under this head. There seems to be nothing to show for the money. 85,000/. a year is now expended on the Parks ; but it may be doubted if the parks are in better condition, 3^4 Taxation: its Expenaiture. [sec. ii. Chap. IV. at the present time, than they were in 1848.* Indeed, of all the vast expenditure that has been incurred under this head between 1848 and 1862, it is difficult to point to anything that we can show for the money, except the new Westminster Bridge and its approaches. With respect to the " harbours of refuge," on which vast sums of money have been expended since 1848, the country has been made aware, in the interval, of the meaning of those works, at Alderney, Portland, Dover, and elsewhere, which were commenced under that designation. The amount which has been expended upon these works since 1845, appears, by a recent Admiralty paper, to have been upwards of 4,000,000/. : — The " Har- bours of Refuge." Their cost. Harbours of Refuge. WORKS. ORIGINAL ESTIMATE. EXPENDITURE 1845 TO 1860. Channel Islands Dover Harwich Portland Holyhead £ 620,000 2,500,000 50,000 500,000 808,063 £ 1,102,000 414,000 132,000 878,000 1,192,000 Add Expenditure in 1861 and 1862 . . . £3,718,000 350,000 £4,068,000 * It is fair to observe with respect to the Parks, that there is every year greatly increased difficulty in maintaining them ; and that this is scarcely sufficiently taken inio account by those who Sec. II.] Miscellaneous Expejiditure. 3^5 Of the works in the Channel Islands, those chap. iv. at Aldernev alone have been so largely ex- The works *' ^ ' at Alderney, tended that, in 1860, tliey were estimated to cost 2,000,000^. ; and it is the almost universal opinion of practical men, that they can never he finished within that estimate. If they ever are done they would he utterly useless for the mercantile marine (which would avoid the island), and as a protection for our Navy (which could he shelled from outside the breakwater). There were at jersey, some works commenced at St. Catherine's Bay, in Jersey, which have, happily, been stopped. A large sum of money was expended upon them before it was discovered that they would be useless in conse- quence of the depth of water in the bay being insufficient, and the set of the tides rendering any approach to it particularly dangerous. One of the Lords of the Admiralty informed a Com- mittee of the House of Commons, in 1860, that, although a pier had been constructed at St. Catherine's Bay, which would afford shelter either on one side or the other, "it was so dangerous complain of their condition. Formerly the Parks were at the very verge of the metropolis, and were only resorted to largely on Sundays and holidays. But as London has extended itself, the Parks have become situate in the centre of large masses of popu- lation, and are used as thoroughfares by annually increasing crowds of people. Even the walks in Kensington Gardens, which twenty years ago were retired and comparatively little frequented, are now n\uch used as public thoroughfares. 3i6 Taxation: its Expenditure. [Sec. ii. Chap. IV. " that even the oyster vessels do not use the bay " at all." The works, in fact, which have been executed at this place, at a cost of 300,000^., are so much money thrown away. at Dover, The unexecuted works at Dover are in water of such great depth that it seems scarcely possible they ever can be executed, and they may be con- sidered virtually abandoned. The expenditure has afforded a useful pier for the mail packets, and there it had better be terminated, without at Harwich, further expenditure. The works at Harwich seem to have done nothing for that port, which, in the very improbable event of attack, would be best defended by ships of war. The lesson The casc of the so-called harboiu's of refuge these works should teach should be a lesson to us for the future. A great us . deal of money has been uselessly expended on very ill-conceived plans. The nation has been led into an expenditure for objects which it never contemplated when the works were proposed. Had these votes appeared in the Navy Estimates as votes for fortifications, they would probably have occasioned more discussion than they origi- nally excited. It must be acknowledged that the expenditure was a false pretence when it was pro- posed to vote it in the civil service estimates as for "harbours of refuge" — for which purpose it has been since admitted by members of the Sec. II.] Miscellaneous Expenditure. 317 Government that the principal works never were Chap. iv. designed. The works at Holyhead, which have entailed The works '^ ^ ^ at Holyhead. such large and increasing charges, Avere originally estimated to cost about 800,000/. This was in 1855. In 1856, 390,000/. was added to the esti- Their mate, for " extensive works required to shelter the extension. " roadstead, and recommended by the Admiralty." In the next year, 1857, 105,000/. was " recom- " mended by the Admiralty for an improved " landing place, and a further extension of the " northern breakwater." In 1858, the Admiralty " approved a plan of the engineer for the con- " struction of the Eastern Breakwater Packet " Piers," the cost of which was then estimated at 445,000/. Then, " for reasons specified by " Mr. Hawkshaw, 171,937/. was added to this " estimate," making an aggregate to the present time (they may well say, to the present time ! ) of 1,920,000/. (say Two Millions), of which 1,233,000/. has been voted. This is a sample of the way in which estimates The real cause of the of this sort are annually swollen, "lor reasons "extension." specified by the engineers." But the explana- tions afforded with the estimates do not tell the whole truth with regard to the expenditure at Holyhead. The real fact is, that the works were commenced on faulty principles. The break- 3i8 'Taxation : its Expenditure. [Sec. ii. Chap. IV. Present condition and future prospect of these works. Report of the Commit- tee of 1848 as to the Public water, as first designed, took a wrong direction, and so much contracted the anchorage space within the bay, that it became necessary to alter the character of the works. There have been constant contentions respecting the works at this harbour between the Admiralty and other departments. Even now, it can scarcely be said to be settled what is to be done, or where the expenditure is to end. There is no control over the application of the annual grants ; they are applied to whatever works the engineers think proper. Sometimes we find an eastern breakwater about to be constructed, at another time, improvement of the existing packet piers, instead of the eastern breakwater; in fact, although Parliament grants 100,000/. a year towards this object, and is told that that vote must be repeated for six or seven years longer, yet nobody can venture to say what is proposed to be done with the money, or what will be the effect of these works when they are finished. At the present time, there are many old sailors at Holyhead who think the anchorage in no way improved by the works, and that it would have been better had they never been commenced. " Of all the departments of the public service," reported the Committee of 1848, "the department " of Works requires the most economical superin- Sec. II.] Miscellaneous Expenditure. o\g *' tenclence. The expenses of all the public offices chap. iv. " and public grounds are entrusted to it, and it Works de- partment. *' has to exercise a discretion upon the appli- " cation of all public functionaries, and to decide " upon matters of reference from architects and " artists. It should, therefore, be subject to the " closest supervision of Parliament and the special " control of the Treasury." It may be reason- ably inferred, from the increase of expenditure, that this recommendation has met with small attention. Class II. — Salaries and Exjwnses of Fublic class ii. Departments. The expenditure under this head comprehends Salaries ot public de- the payments made in the offices of the two partments. Houses of Parliament, the Treasury, Home, Foreign, and Colonial Offices, and other public departments ;* together with the cost of printing, stationery, postage, and the secret service money. This expenditure has risen from 1,031,000/. in Comparative 1848, to 1,473,000/. in 1862 ; — increase of ex- fnTs^s'and penditure, 442,000/. But of this increase it is right to observe that a large proportion, perhaps one-half, arises from charges transferred to the Miscellaneous Estimates from the Consolidated • Not, it may be observed, of rt'//the public departments. 320 Chap. IV. Difficulty of instituting an accurate comparison explained. Expenses o principal offices. Taxation: its Expenditj^re. [Sec.ii. Puncl, and from amounts at one time cliarged upon gross revenue. Contrasting the expenditure of the principal Government offices at the present time with that of 1848, there is reason to think that most of these estahlishments have been kept within limits. It is not easy to institute an accurate comparison between the amounts voted at the present time and those voted some years ago, because, prior to 1850, fees, which were received by several of the departments, went to the liquidation of their expenditure, which fees have since been paid into the Consolidated Pund. The following, however, presents a comparative view of the expenses ol the principal offices now and in 1848 : — Salaries, &c. DEPARTMENT. 1848. 1862. Tre.isurv £ 57,700 18,700 72,500 27,461 2!),966 £ 52,363 25,856 64,319 30,748 19,800 Home Office Foreign Office Colonial Office Paymaster- General Other items. On the other hand, there are some items in this class which have very rapidly and seriously increased. In 1836, a Committee " on the House of Commons officers " recommended large reduc- tions in the stafp and expenses of the two Houses of Parliament. The Miscellaneous Estimates' Sec. II.] Miscellaneous Expenditure. 021 Committee of 1848 also recommended that " the chap. iv. " accounts of the House of Lords should be sub- " mitted to searchinc^ revision ; " and that con- Expenses of ~ ' the Houses siderable reductions should be made in the ?^ ^^^: liament. staff and salaries of the House of Commons. These recommendations have not been attended to ; and the charge which the public has to bear in respect of these offices is increasing. A portion of this increase is, no doubt, due to the increased business of Parliament, espe- cially in the Committees, and some portion also to the additional cost of the maintenance of the new houses. But, with every allowance, there can be no question that the expenses of the Houses of Parliament are very largely in excess of the amount at which the business of Parliament might be conducted. The amount of charge last year was nearly 70,000/., with- out the salaries of the Speaker or Sergeant- at-Arms, which are charged upon the Consoli- dated Pund, and without j)rinting and stationery, which was included in another vote, and which amounted to 69,000/. And it is to be observed that this expenditure of nearly 140,000/. a year by no means represents the whole cost of conducting the business of Parliament, for the officers of the House of Lords do not pay the fees received in that House to the Consolidated 322 Taxation: its ^Expenditure. [Sec. ii. Chap. IV. Eund, but clioose to pay their own salaries and expenses out of tliem, receiving from the House of Commons such sum only as is required to defray the balance. The Poor The cxpcnscs of the Poor LaAv Board also Law Board. show a very heavy mcrease. Observe the figures in the following table : — 1845 £52,770 1846 120,700 1847 182,200 Poor Law Commission Expenses. 1853 £221,361 18G0 223,669 1862 226,723 The increase of cost in this department is the less to be justified because the pauperism of the country has not increased. In 1849, the number of paupers in receipt of relief in England and Wales was 935,000, in 1862 it was 932,400. In Scotland the number has diminished within the same period from 82,300 to 78,400, and in Ire- land from 620,000 to 59,500. Printing and Qf ^ ^j^g expenditure in tliis class, the greatest increase has, however, been in that for printing and stationery. It has risen as follows : — Cost op Printing and Stationery for Public Departments. 1838 £206,946 1843 237,483 1848 302,362 1860 £337,111 1861 416,218 1862 342,649 A rise from an average of 248,000^. to an average of 865,000^. a year ! There can be no doubt that there is great waste in the printing both for the Sec. II.] MiscelUmeoiis Expenditure. 323 Houses of Parliament and the public depart- Chap. iv. ments. Not only is much of the work paid for at excessive rates, but there is a vast amount of unnecessary printing executed. This has long been a subject of complaint ; and, in 1848, Sir Charles Trevelyan, as Secretary to sir charies Trevelyan's the Treasury, gave important evidence to the Evidence on this expendi- House of Commons, shoTvdng the great difficulty ture. the Treasury had, in restraining, in any way, the cost of printing, and the pains they had taken to impress on the heads of different departments the necessity of economy, which they appeared very loth to practise. The Treasury, amongst other things, produced to the Committee "aThe^moun- mountain of papers," of which they had refused paper" to authorize the printing. " AYill you explain what that mountain of papers is ? " asked the Committee. '' That," replied a Treasury officer, " is the evidence taken by the Post Office in an "inquiry into the case of Kobert Grapes, a in "the case " dismissed letter carrier. The Treasury objected Grapes." " to printing such a mass of papers ; and the " evidence, extending to 2,160 folio pages, has " been deposited in the Journal Office for pur- " poses of reference. The whole of this evidence " was copied in the office of the Post Office " solicitor. It relates to an individual case, of " no public interest whatever, but it would all t2 324 Chap. IV. Taxation : its Expenditure. [Sec. ii. ^" often articles of necessity, 60. Assessed Taxes, Financial review of the, 182 ci seq. ; principle of this system of taxation, 182 ; re- cent reduction of rates, 183 ; number of articles assessed, and the result to the revenue, 184; E E 404 Index. the dog-tax, ib. ; house-tax, 185, 186; land-tax, 188 et seq., 191 {see Land - tax) ; poundage on, 225 ; cost of collecting, 226 ; saving that might be effected, 228. Assessments on property and in- come-tax in 1813-15 and 1860-61, 76 ; inadequateness of, yj ; pro- posals for a better system of, 96. Attorneys, duty on their certificates, 177. Auctions, repeal of the duty on, 127. Audit Office, 393 ; small utility of the department, 394. Australia, her exports and imports contrasted with those of India and China, 7 ; Earl Grey's de- cision as to her supporting the troops necessary for defence, 270, 271. Austria, smallness of our exports to, 5. B. Bankers' notes, stamp duties on, 194. Banking busmess, an army of post- masters required for the, 113. Beer, tax on, its operation on the malt duties, 146 ; result of the remission of the tax on, in 1830, ib. ; its advantages, 147 ;/. Beer-shops, licences to, opposed by the clergy and magistrates, 175 ; obstructions offered to, 176. Beet-root, few attempts to extract sugar from, in this country, 57 ; a spirit used by French polishers distilled from, ib. n. Bere Forest, receipts and expendi- ture of, 204. Bills of exchange, stamp duties on, 1 9 «. Brewing, nothing to prevent it in the operation of the malt-tax, 149- Bricks, repeal of duty on, and its beneficial effects on construc- tion, 128, 129 Ct7l. British North America, right of, to maintain her own military, 271. Budget, discussions on the, 2, CABBAGE-leaves, used to adulterate rolled tobacco, 48. Camps at Chobham and Aldershot, 276 ; their influence in the Cri- mean war, ib. Canada, capable of maintaining herself against invasion, 271 ; her ardour when the Trent affair took place, 271 etn. Canton, trade of China formerly confined to, 32 ; difficulties at- tending transport from, ib. Cards for play, duties on, 181 ; cards and dice, duties on, 194. Carriages, duties assessed on, 184. Certificates, duties on, 170 {see Trade Licences). Charities, national, cost of, 359, 361. Charity, one-twentieth part of our population dependent on, 396. Chemical tests for ascertaining the proportion of malt used in brew- ing, 160 ; futility and cost of such examinations, ib. China, increase of trade to be ex- pected under our free-trade sys- tem, 6, 7 ; cost of tea in, 30, 31 ; our trade with, 31 ; impolicy of our heavy duties, ib. ; exports to, ib. ; difficulties of transport in, 32 ; great field for the addition of trade with, 33 ; bulk of her trade in British hands, ib. ; our exports and imports, 34 ; quantity of tea which she can produce, ib. ; war with, 286. Chopwell Woods, receipts and ex- penditure of, 204, 205. Cigars subjected to a higher rate of duty than unmanufactured to- bacco, 48 ; the duty on, a great check on consumption, ib. ; smuggled to an immense extent, ib. ft. Civil List, 374 ; grants to the Crown economical and well ap- plied, 374 ; history of the, 374 — 376 ; amount of, settled by Par- liament, 376 ; the present one, 377 ; pensions, ib. ; savings effected during the present reign, 378 ; the Sovereign's administra- tion of these funds, ib. ; contrast Index. 405 between past and present expen- diture, 379 ; annuities to mem- bers of the Royal Family, 380 ; the pension list, ib. ; the salaries attached to the great officers of state, 381 ; the duchies of Lan- caster and Cornwall, ib. Clerks connected with the Post Office, number of, iii; their miserable pay, ib. ; their numbers excessive, r 12. Clocks, duties on, 59 ; benefits arising from their reduction, ib. Coal, export duties on, 65 ; French consumption of, in 1858,66 ; our best policy to sell cheap, 67. Coast guard, cost of the, 214. Cobden, Mr., the honour due to him for his management of the French treaty, 63. Coffee, Customs' revenue arising from, 25. Collection of the property and in- come tax, proposals for a better system, 96. Collectors of revenue deduct their own stipends, 226. Colonial, consular, and foreign ser- vices, cost of, 310, 357. Colonial fortifications, 274 ; esti- mated expenses, 275. Colonies, number of troops in the, 263 ; and the cost, 264 ; number of troops required for the, 252 ; report of the Committee of 1861 on the military expenditure of the, 252 ; cost of our military esta- blishments, and the number of troops employed, 268, 269 ; re- payments made by the, ib. ; they ought to pay for their own de- fence, 270 ; absence of leading principles as regards military expenditure, 389. Commerce, injurious effects of a high rate of duty illustrated in tea, 38 ; extensively promoted by the French treaty, 59 et seq. {see Trade). Commissionaires, offer a tariff for the delivery of circular letters far below the penny postage rate, 121. Commissions for collection of re- venue, 225. Committals of prisoners too fre- E quent, especially by country ma- gistrates, 350, 351 et n. Convicts, cost of, 343 ; their prisons, 344, 346 ; transportation of, 345, 347, 349, 350; tickets of leave, 348; absence of leading principles with regard to, 388 ; their condition in Australia, 388, 389 ;/. Cornwall, revenues of the duchy, 381-383. Court-guides, offices of the, centres for the delivery of circulars, 121. Crime in England, extent of, 344 ; best mode of checking, 353. Crimean war, 276, 277. Criminal law, a mass of confusion, 352 ;/. Crown lands, expenditure and man- agement of the, 200, 212 ; their great extent and value, 201 ; the rent-roll, ib. ; increase of the gross revenue not accompanied by a corresponding increase of net revenue, 202 ; cost of managing, 203 ; the "woods and forests," 203 — 7 ; IS'ew Forest, Salcey Forest, «S:c. 206 ; Disafforesting of Wychwood and Hainault, 207 ; expense of collecting the receipts, 234. Customs' Duties, alterations in the, 3 ; reductions accomplished without any reduction of revenue, 3, 4 ; the result proves the wisdom of free trade, 4 ; the first report of the commissioners under the new tarift", 4 71. ; general review of, 22 et seq. ; the recent remis- sions of, attended with no loss of revenue, 22 ; the policy of re- mitting them justified by the result, ib. ; Mr. Mc CuUoch's op- position to the late remission of, 23 ; principles on which they should be applied, 24 ; revenue arising froin, in i860, 1861, 25 ; duties at present levied on tea, 26 et seq. ; great field for ad- ditional trade with China, 33 ; probable effect of reduced tea- duty on revenue, 36 {see Tea) ; duty on tobacco, 38 ; disadvan- tages of a high rate on articles of consumption, 39 ; on cigars and snuffs, 48 {see ToBACCO) ; on sugar, 50 ; rates of duty on sugar, E 2 4o6 Index, ^1 (see Sugar); duties on wine, 58 ; advantages of the French treaty, 59, 61 — 64 ; on clocks and watches, ib.\ articles of luxury, 60 ; report of the commissioners of, on the French treaty, 62, 63 ; on exports of coal, 65, 66 ; general principle which applies to export duties, 66 ; cost of collecting the, 212 et seq. ; question whether they are adapted to our improved commercial code, 216 ; the present system inconsistent with free trade, 217 ; the practice of, in- consistent with principles, 217 ; mode of collecting tea, sugar, and wine, 218, 219 ; custom-house es- tablishments where there are no customs' duties to collect, 219 ; and where the cost of collection exceeds the sums collected, 220 ; statistics required by the Board of Trade, ib. ; necessity of sim- plification, 221; improvements on the old system, 223 ; proposal to consolidate them with the Excise, 231 ; cumbersome forms in pay- ing, 391 ; want of simplification in, 392. Dock orders, stamps on, 179. Dockyards, parliamentary reports on the system of, 288 ; at home and abroad, 290 ; their cost, 291 ; not adapted for iron ship-building, 291 ; report of the commissioners on the, 292, 293 ; Earl of Gifford's speech on, 293 ; report of the Royal Commissioners, 299, 300 ; memorandum of the controller of the navy, 300 ; report of the com- missioners unproductive of im- provement, 301 ; savings which might be eftected in, 305 ; dis- proportion between salaries and wages, 305, 306. Dogs, duties assessed on, 184. Dover, cost of the public works at, 316. Drafts, stamp duties on, 194. Drawbacks, allowances for, 224. Drivers of hackney and stage car- riages, excise duties on, 177. Duncan, Lord, his committee on the land revenues of the Crown, 200. Duties i^see Customs' Duties). D. " Dead letters," number of, never delivered by the Post Office, 114. Dean Forest, receipts and expendi- ture of, 204. Debt {see National Debt). Deeds, stamp duties on, 198. Deeds and instruments, stamp du- ties on, 194. Delamere Forest, receipts and ex- penditure of, 204. Delivery notes, stamps on, 1 79. Differential duties between English plantation and East India sugars, 51 ; between the West India colo- nies and the foreigner, ib. ; in favour of sugar produced by free labour considered, 52 ; on spirits, effect of, 142. Discounts, allowances of, 224. D' Israeli's views of the property and income tax, 83 ; his proposal for repealing half the malt-tax, 151. East, increase of trade to be expected under our free-trade system, 6. East India sugars, contest respect- ing the duties on, 51. Education, public, expenditure on, 310, ii\et seq. Educational establishments for the army, cost of, 261. Emigration Board, cost of the, 358. England, nothing more desirable to, than amity with France, 63; duties on spirits in, 139 ; consumption of malt in, 1703 — 1862, 152. England and Ireland, state of, in 1831 and 1863, 251. Envelopes manufactured by Mr. Mc Corquodale, 131 11. Epping Forest, receipts and expen- diture of, 204. Europe, state of, in 1831, contrasted with that of 1863, 250. Excise, proposal to consolidate it with the customs, 231. Excise Duties, general review of. Ifidex. 407 123 et seq. ; their baneful effects on British trade and industry, 123 ; Sir Robert Peel's views re- specting them, 124 ; his repeal of the glass duty and its effect, 124, 125 ; its value attested by general use, 126, 127 {see Glass); repeal of the auction duty, 127 ; of the brick duty, 128, 129; of the soap- tax, 129 {see Soap) ; of the paper duty, 131 ; and benefits resulting from, 132, 133 {see Paper) ; of the hop duty, 134; and extended use of foreign hops, 134, 135 {see Hops) ; evils of the old excise duties, 136; existing duties, //;. ; duty on spirits, 137 ; consump- tion of spirits not checked by high rates of duty, ib. ; illicit dis- tillation, 139 ; differential rates existing until 1856, 142 ; spirit smuggling "across the border," 143 ; equalization of the duties, 143 ; increase of revenue from, 144 {see Spirits) ; the malt duty and its complications, 145 ; malt consumed in England under dif- ferent rates of duty, 152 ; frauds connected with the malt duty, 1 54 {see Malt) ; improvement in the administration of the Excise law, 154, 155 ; malt v. spirits, 155 ; taste for spirituous liquors on the decline, 156; consumption of beer increases, whilst that of spirit de- creases, ib. ; on removal of restric- tions on ti'ade, 1 59 ; tax on railway passengers, and its character, 162 {see Railways) ; taxes on loco- motion in London, 165 ; the hack- ney carriage duty, ib. ; on restric- tions of the trade, 168 {see Hack- ney Carriages) ; trade licences and certificates, and rates of duty for, 170, 171, 177, 178 (j^^ Trade Licences) ; licensing of public- houses, 173 ; restrictions on the number of public-houses not con- ducive to temperance, 174 ; beer- shop licences, 175 {see Public- houses) ; newspaper stamps, 178 ; recent additions to the stamp duties, 179; stamps on delivery notes, dock orders, &c. ib. ; duties on dice and playing cards, 180, 181 ; general cost of collecting 212, 229; reduction of, not fol- lowed by reduction in cost of management, 229, 230. Expenditure of, the revenue, re- duction of, by retrenchment, 9. 10; its vast mcrease, 17 : war expen- diture, 18 ; considerations on, 20; general re\"iew of, 239 et seq. ; increase of, consequent on the war with France, 240 ; reduc- tion on peace in 1802, //a; rapid increase on the renewal of war, ib. ; enormous expenditure be- tween 1793 and 18 16, 241 ; re- ductions between 181 5 and 1840, ib. ; expenditure between 1840 and 1854, ib. ; during the Crimean war, 242 ; from 1857 — 1862, ib. ; cost of the Crimean war, 243 ; large rate now maintained, ib. ; cost of the army, 245 et seq. ; our present preparations sufficient without any addition to, 282, 283 ; cost of the navy from 181 5 to 1862, 285 — 7 ; miscellaneous esti- mates not classified under their respective heads, 310 et seq. {see Miscellaneous Expenditure); the national debt, &c. 364 et seq. Exports, extraordinary increase of, under the late commercial re- forms, 4 ; vast increase of trade arising from, 5 ; extended to the various countries of Europe and the East, 5, 6 ; their extent to Australia, 7 ; to China, 31 ; duties on, 65 ; their disadvantageous results, ib. ; general principles which applies to, 66. Factories for the army, cost of, 261. Felony, a vast number of offences improperly treated as such, 352. Finance, our system of. destitute of improvement during the last twenty years, 14 ; the national debt increased, and nothing saved to meet the financial exigencies of the State, 1 5 ; administration of our financial affairs unimproved, 16 ; our knowledge of, has rapidly 4o8 Index. progressed since Mr. Pitt's time, 95 ; not mere arithmetic, but a great policy, 384. Financial position of the countrj', I ; its importance, ib. ; spirit in which the question has been dis- cussed, 2 ; general considerations on the, 3 ef scq. {see Taxation) ; main objections to, 20 ; the re- newed application of a sound principle required, 21. Financial Reform Association of Liverpool, their objections to as- sessed taxes, 182 ;/. Fire insurance duty, 194 — 198. Fleet, treasure expended on the, 289. Forests {sec Woods and Forests). Fortifications in the colonies, 274 ; estimated expenses, 275 ; absurd system of voting money for, 385, 386. France, beneficial effects of the last commercial treaty with, 5 ; McCulloch's arguments against the treaty with, 23 ; Lord Over- stone's objections, ?b. ; evil efTects of her hostile tariffs, 58 ; British commercial treaty with, 59 ; du- ties on clocks and watches of, ib. ; her articles of luxury, 60 ; effects of the reduction of duties on French wines, ib. ; importa- tions of French wines after the reduction of duties, 61 ; her late commercial treaty most largely beneficial to British commerce, ib. ; observations of the Commis- sioners of Customs on the French Treaty, 62, and its probable fu- ture consequences, 63 ; nothing more desirable than intercourse and amity between her and Eng- land, ib. ; what we owe to the Emperor and the statesmen of, ib. ; her difficulties, 64 ; late war with, 277 ; our naval rivalry with, the cause of our large armaments, 306. Franks, number of letters which, in 1839, passed under cover of the Post Office, loi. Frauds in the Post Office, 1 14 ; arising from the soap duties, 138 ; connected with the malt-tax, 154. Free labour, differential duties re- specting sugar produced by, 52 ; greatly increased production of sugar in the Mauritius by, 53. Free-trade policy, the Customs' Commissioners' favourable report on, 5 ti. ; wisdom of, established by results, 4 ; vast extent of trade which may be expected from, 5 et seq. ; modes by which it may render the revenue of a nation sufficient for expenditure, 8. Free trade in sugar. West India colonies not really injured by, 52. French Treaty {see France). Fruit,Customs' revenue arising from, Funds and securities, amount of property-tax on, 76. G. German legion, our employment of a, 280;;. Gifford, Earl of, his speech on iron ship-building, 293 ; his death, ib. n. Gladstone, Rt.Hon.W. E. his altera- tion in the income-tax, 71, 72 ; his views of the property and income tax, 83 ti. ; his repeal of the soap- tax, 130. Glass, repeal of the duty on, 124; iminense benefits resulting from that measure, 125 et n. ; value and beauty of, 1 26 ; its general utility, 126, 127. Grapes, Robert, case of, 323. Grey, Earl, his principle of military colonial expenditure, 270, 271, V3, 274- Gunpowder, enormous expenditure of, 260. H. Hackney and stage carriages, ex- cise duties on, 136, 165, 177 ; re- cent alterations of duty, 65 ; Act of 1853, 166 ; its object and effect, ib. ; agitation for altering the Act of 1853, 167 ; on removal of re- strictions on the trade, 168, 169. Hainault Forest, profitable dis- afforesting of, 207. Index. 409 Hair-powder, duty on, 183 n. 184. ''Harbours of Refuge," 314; their cost, ib. Harwich, cost of the public works at, 316. Hawkers, excise duties on, 177. Hazleborough Wood, receipts and expenditure of, 204. Highmeadow Woods, receipts and expenditure of, 204 ; small pro- duce of, 206. Holyhead, cost of the public works at, 317 ; their present condition and future prospects, 3 1 8. Hops, repeal of the duty on, 134 ; probable effects of their remis- sion, ib. ; use of foreign hops, 135. Horse-dealers, duties assessed on, 184. Horses, duties assessed on, 184. Hospitals of Dublin, cost of, 362. House-tax, 185 ; an excellent sub- stitute for a window-tax, //;. ; should be kept on a moderate scale, ib. ; the old tax remitted in 1834, 186 ; principles of the, ib. n. ; the present tax, 187 ; Mr. D' Israeli's proposal to double it, ib. ; produce of the, from 1852 to 1 86 1, ib. Houses and tenements, amount of property-tax on, 76. Houses of Parliament, expenses of the, 320. Hume, Mr., his committee on the income-tax, 88 ; evidence on, 89 {see Income-tax) ; his draft re- port, 91 ; recommends a property tax, ib. ; summary of his general conclusions, 94 ; his report with- out result, 95 ; the inquiry of his committee tainted by party ob- jects, 97, 98. I. Illicit distillation, reduction of rates for checking, 139. Imports from Australia, 7 ; of tea, 27 — 29. Income-holder, almost invariably understates his income, 87. Income-tax imposed by Sir R. Peel, 9 ; his inquiries and consultations respecting, 12 ; intended as a temporary measure, but made per- manent, ib. ; extended to Ireland, ib. ; increased without being im- proved, 12, 13 ; its irregularities and evils, 13 ; Mr. Hume's com- mittee on, 88 ; evidence on the, 89 ; its inequalities, ib. ; evidence of the actuaries, 90 ; the draft report, 91 ; a property-tax recom- mended in lieu of, 91 ; and ob- jections, ib. 92, 93 ; Mr. Hume's report on, without result, 95 ; cost of collecting, 212 ; poundage on, 225 ; expense of collecting the, 232 ; opinion of the Inland Re- venue Commissioners on collec- tion of the, 233 {see Property and Income Tax). India, increase of trade to be ex- pected under our free-trade sys- tem, 6, 7. Industry of the population, occupa- tion for the, 533. Inland Revenue, report of the Com- missioners on Schedule D of the income-tax, 80 — 82 ; cost of col- lecting the, 224, 225 ; drawbacks and discounts, 224 ; immense number of forms, and their cost, 238 ;/. Invasion — is a standing army neces- sary to repel it ? 255. Ionian Isles, military expenses of the, 265 — 267 ; our protectorate, 266 ; the commercial and politi- cal evils thenee resulting, 266, 267 ; historical notices of the, 266, 267 n. ; their fortifications not defensible, 267 ; their abandon- ment desirable, 267, et n. Ireland, income-tax extended to, 12 ; adulteration of snuff in, 49, 50 ; duties on spirits in, 141 ; consumption of malt in 1857 — 1 862, 1 53 ; expenses of the govern- mental establishments of, 326, 327 ; the past and future of, 328 ; progressive improvement in her trade, 329 ; diminution of pauper- ism in, 329;/. ; armed constabu- lary force in, 339,341//.; improved condition of, 340 ; cost of crimi- nal prosecutions, 341 ; diminu- tion of crime, ib. ; aggregate of Irish law charges, 342. Iron steamships, our dockyards not adapted for building them, 291, 4IO Index. 300 ; have all been constructed in private yards, 292 ; the Dock- yard Commissioners' approval of contract ship-building, 292, 293 ; Earl of Gifford's speech on the building of, 293 ; advantages of open competition, 294 ; reasons for their preference, 295 ; our maritime supremacy promoted by, 298 ; vote of the House of Commons for, 302 ; the vote of the Commons set at defiance by the Admiralty, 302, 303, 304 ;/, J- Jeffrey, Lord, his opinion in fa- vour of a property-tax, and his letter to Mr. Macleod, of St. Kilda, 98, 99. Jersey, cost of the public works at, 315- Justice {see Law and Justice). K. Kaffraria, the colonists ought to maintain their own military, 272 etn. L. Labourers employed for the army, cost of, 261. Lancaster and Cornwall, revenues of the Duchies of, 381 — 383. Land revenues of the Crown, Lord Duncan's committee on the, 200 {sse Crown Lands). Land tax, history of the, 188 et seq. ; its origin, ib. n. ; made per- petual by Mr. Pitt, 189; inter- pretation put upon the redemp- tion act, and its consequent fail- ure, 190, 191 ; land practically unassessed to the national taxa- tion, 191 ; its partiality and in- justice, 192 ; cost of its collection, 226 ; saving that might be effected, 229. Lands and hereditaments, amount of property-tax on, 76. Law and chancery fund, stamp du- ties on, 194. Law and justice, cost of, 310, 330 et seq. Law charges in Ireland, aggregate of, 342. Legacy and succession duty, 194; distinguished from the probate, ib. ; history of the, 195 ; Mr. Pitt's measures regarding the, ib. ; Mr. Gladstone's extension of the, and its effects, 196, 197. Letters, advantages of a low rate of postage for, 100 ; its effects on the revenue, loi ; number of which, in 1839, passed through the Post Office under franks, ib. ; the State ought to derive an ade- quate revenue from, loi ; number delivered in 1839 and 1861, 102 ; number delivered from 1839 to 1 86 1, with the net revenue thence derived, 102 ; the enormous in- crease of, 102, 103 ; expenses attending, 103, 104; number of "lost," -'returned," or "dead," which the Post Office never de- liver, 114; registration of, 116, 117; delivered by the Commis- sionaires, &c., 121. Letter-carriers, number of, con- nected with the Post Office, 1 1 1 ; their miserable pay, ib. ; their numbers excessive, 112, 113 ; a legion required for the parcels business of the department, 113 ; moral and physical qualification required for, 115^/ ;/. Lewis, Sir G. C, his attempt to continue the income-tax at the war rate, 72, 73. Licences, excess of duties on, 136 ; stamp duties on, 194 {see Trade Licences). Licensing system, 174. Life assurance, proposal for asso- ciating the property and income tax with, 97. Locomotion, taxes on, in London, 165. " Lost letters," number of, never de- livered by the Post Office, 1 14. M. MACLEOD, Mr. J. M., Lord Jeffrey's letter to, in favour of a property- tax, 98. Index. 411 McCulloch's arguments against the French commercial treaty, 23 ; his proposal to extend the soap duties to Ireland, 130 ; his oppo- sition to the repeal of the paper duty, 133- . Magistrates, their committals too frequent, 350, 351 ; their treat- ment of petty charges, 352. Malt, excise duty on, 136, 145 ; its complications, 145 ; effect of the beer-tax on, 146 ; agitations against the tax in 1834, 147 ; how far the repeal of the duty would have affected agriculture, 147 ; result of the agitation of 1834, 148 ; opposition to the tax as a tax upon the poor, ib. ; effects of the remission of the tax upon the working-classes, 149 ; the duty on, does not affect the consump- tion, 151 ; consumption of, under different rates of duty, 152 ; causes of the large consumption, . ib. ; increased consumption of, in Ire- land, 153 ; principles applicable to, 154; frauds in the business, ib. ; remarks on the reduction of duty, 156; on its increase, 157, 158 ; removal of restrictions on the trade, 159 ; subject to chemi- cal test under the excise, 160. Malting of barley, 149 et n. Manufacturing establishments for the army, cost of, 261. Marine insurances, stamp duties on, 194, 198. Mauritius, its increased production of sugar by free labour, 53 ; inde- fensible state of the, 273 ; Lord Herbert's opinion on its defences, ib. Military establishments not to be influenced by speculative appre- hensions, 249 {see Army) ; their expenditure in the colonies, 252, 268 ; our military expenditure, 257 ; for educating young officers, 261 ; an excuse for war, 276 j set an example to foreign states, 278 ; our display of force a menace to France, 278 ; and a cause of ap- prehension through Europe, 279 ; present opportunity for a reduc- tion of, ///. ; on a large scale they weaken the resources and exhaust the spirit of the people, 280. Military expenditure in the colonies, 389 ; absence of principle with regard to, ib. ; armaments and disarmaments, 390. Military garrisons, &c. abroad, ex- cessive cost of, 264, 265 ; in the Ionian Isles, 265 — 7. Miscellaneous Expenditure, 310 ct seq. ; classification of the different estimates, and their ge- neral expenses, 310 — 312 ; public works, buildings, and royal Palaces, 310, 313 et seq. ; salaries and expenses of public depart- ments, 310, 319 ; law and justice, 310, 330; education, science, and art, 310, 354; colonial, consular, and foreign services, 310, 357 ; Superannuation and retired al- lowances, charities, &c. 310, 359. Molasses, customs' revenue arising from, 25. " Money order" system established by the Post Office, 108. Muscovado, brown, large quantity imported, 55. N. Naples, modification of her com- mercial tariff, 7 n. Nation, reliance to be placed on the spirit of the, 281. National Debt, increase of the, despite the falling in of the term- inable annuities, 14; nothing saved to meet the exigences of the state, 15 ; general review of the, 364 et seq. ; to be less regarded as a burden than as a national re- flection, 364, 365 ; contrast be- tween the lavish way in which the debt was contracted and the small effort made to redeem it, 365 ; causes which may have prevented efforts at redemption, 366 ; rea- sons for our not being able to reduce it, 366 — 8 ; what would be its effect in case of a war, 369 ; disadvantages at which the debt would place us in raising money or in making war, 369, 370 ; de- sirability of reducing the debt, \ 412 Index. 371 ; modes of accomplishing it, 372. National resources, danger of weak- ening the, 19. Navy, review of its general expen- diture, 284 et scq. ; the navies of Europe, A.D. 1793, 284 ; its expen- diture from 1 815 to 1862, 285 — • 287 ; principle which should regu- late the estimates, 287 ; our naval establishments and their extrava- gance, ib. ; the dockyard system, 288 ; treasure expended on the fleet, 289 ; our wooden targets, ib.; reconstruction of the, 290 ; our dockyards at home and abroad, ib. ; our iron steamships, 292 ; iron ship-building, 294 ; our wood- en vessels, 225 ; ships of war now needed, 296 ; our maritime supre- macy promoted by iron ships, 298 ; our naval supremacy essen- tial to our national existence, 299 ; report of Royal Commissioners on dockyards, 299, 300 ; vote of the House of Commons for iron ships, 302 ; construction of timber vessels persisted in, 304 ; our naval rivalry with France, 306 ; is reduction possible ? 307 ; views of Sir R. Peel, 307, 308. New Forest, receipts and expendi- ture of, 204 ; its early cultivation and present advantages, 206. New Zealand, the colonists ought to maintain their own military, 272. Newspapers, stamp duties on, 178, 194 ; almost entirely abolished, 178. O. Officers, staff of, at the Post Office, III; their miserable pay, ib. Ordnance, cost of, 261. Overstone, Lord, his opposition to the commercial treaty of France, 23- P. Packet service of the Post Office, its expenditure, 103. Paper, repeal of the duty on, 131 ; injurious operations of the tax, ih. ; manufacture of heavy and light paper, ib et n. ; its appli- cation to novel uses — collars, napkins, &c. 132 ; benefit to trade, manufactures, commerce, literature, and the acts resulting from the repeal of the tax, 132 — 134- " Parcels Post," established by the Post Office, 108 ; legions of letter- carriers for the, 113. Parkhurst Forest, receipts and ex- penditure of, 204. Parliament, its control over public expenditure decreasing, 385. Patent medicines, excise duties on, 177 ; stamp duties on, 194. Patents for invention, stamp duties on, 194. Patronage, Government system of, 360. Pattern post, between England and France, established by the Post Office, 108 n. Pauperism, frightful extent of in England, 396. Peace, British interests involved in the preservation of, 277. Peel, Sir R.,beneficial results of his free-trade policy, 8, 9 ; income- tax imposed by, 9, 12 ; state of the revenue under, 10 ; his pro- perty and income tax first adopted as a temporary expedient, 68, 69 ; declared by him to be an ob- noxious tax, 69 ; his views on the penny postage, 105 ; his anticipa- tions confirmed, 106; his early views respecting the old excise duties, 124; his repeal of the glass duty, ib. ; his denunciation of standing armies, 257 ct 11. Pekin, difficulty attending transport of goods to, 32. Penny postage, great advantages of the, 100 ; Sir R. Peel's views on the, 105. Pension list, cost of the, 380. Pensions, income-tax on, 76 ; cost of, 359 ; on the civil list, 2)11 • Plans, loss which arises from their not being well considered, 387. Plate, gold and silver, stamp duties on, 194. Police, cost of the, 331 ; its advan- tages and disadvantages, 332 ct scq. ; principal employments of Index, 413 the, 334 — 336; misuse of the, 335, 336, 338 ; extension of the system, 337 ; " pohce govern- ment," 338 ; complaints of the magistracy, ib. ; the system sup- ported by the Home Office, ib. ; perilous to the liberty of the sub- ject, 339 ; the constabulary force in Ireland, 339, 341 n. Poor, condition of our, 395 ; dwell- ings of the, 397. Poor-law Board, expenses of the, 322. Post Office, general financial re- view of the, 100 ct scq. ; its revenue not increased in propor- tion to its postal intercourse, 102 ; number of letters delivered, and their net revenue from 1839 — 1861, 102 ; last report of the Post- master-General, 102, 103 ; its revenue subject to heavy deduc- tions, 103, 104 ; Sir Robert Peel's views on the penny postage, 105, 106 ; his anticipations confirmed, 106 ; decline of revenue and its causes, 106, 107 ; immense facili- ties afforded by railway transit, 107 ci ft.; the "money order" system, 108 ; the "parcels post," ib. ; " Savings Bank " of the, 108, 109 ; effect of these measures, 109 ; cost of management largely increased, 109 ; proportion of cost of management to gross revenue, no; proportion to net revenue, ib. ; increased cost of manage- ment more than absorbs the increased revenue, i i i ; large official staff and their miserable pay, ib. ; various modes in which the public are called on to facili- tate the service without any ad- vantageous result, 112; an army of postmasters required for the banking business, and the num- ber of letter-carriers for the par- cels business, 113 ; the conse- quence injurious to the public, 113, 114; the frauds attributable to the same cause, 114; moral and physical deficiencies of the candidates who offer themselves as letter-carriers, 115; conse- quences of the system, 116; the registration of letters and its effect, 117; risk of loss to the State, 118; objects aimed at, 119; not free from the competition of the tele- graph companies, the Commis- sionaires, &c. 120, 121 : enormous expenditure of the, 234. Postage, advantages of a low rate of, 100; its effect on revenue, loi. Postages of public departments, expenses of the, 325, 326. Postmasters, numbers of connected with the Post Office, 1 1 1 ; their miserable pay, ib. ; their numbers excessive, 112, 113 ; the army of, required for the banking business, 113; irregularities thence arising, 114. Postmen {see Letter-carriers). Poundage on assessed taxes and income-tax, 225. Principles, absence of, as shown in the treatment of our convicts, 388 ; and in colonial military expenditure, 389 ; are required in dealing with taxation, 395. Printing and stationer}', expenses of, 322 ; Sir C. Trevelyan's evi- dence on, 323 ; the " mountain of paper," ib. ; difficulties of control- ling the expenses, 324. , Prisons and convicts, cost of, 343 et scq. Probate duty, 194. Probate court fees, 194. Productive and unproductive pro- perty, difference between, 86. Professions, &c. income-tax on, 76. Property and lNCOMETAX,review of the, 68 ; operation and work- ing of the, 68 — 74 ; first adopted as a temporary expedient, 69 ; but used to supply permanent deficiencies, 70; alterations made in the tax from 1842 to 1861, 70, 71 et scq.; Mr. Gladstone's al- terations in the, 1853, 71 ; doubled for war purposes in 1854, 72 ; Sir G. C. Lewis's attempt to continue the tax at the war rate, 73 ; re- ductions in 1857 — 58,z'(^.; increase of rates in 1859 — 60 — 61, 73; revenue derived from it between 1842 and 1852, 74 ; between 1852 and 1862, 75 ; amount of property assessed to the, ib. ; official ac- count of the Inland Revenue / 414 Index. Commissioners, under the differ- ent schedules, 75, 76 ; trifling in- crease in the annual income, con- trasted with the increase of pro- perty assessed in 1813 — 14, 76 ; taxation under schedule D, 78 (see Schedule D) ; disproportion- ate number of persons assessed at the smaller and higher in- comes, ib. ; the present tax as it operates on small incomes, 79 ; evasions under schedule D, 80, 81 ; cases of evasion reported by the Commissioners, 82 ; if made a permanent source of revenue, it must be remodelled, ib. ; Mr. D'lsraeli's and Mr. Gladstone's views, 83 ; a tax on income only, 83, 84 ; difference between pro- ductive and unproductive pro- perty, 84, 85 ; both bear propor- tionate fruits, 85, 86 ; results which would follow a real pro- perty-tax, 87 ; Mr. Hume's com- mittee on, 88 ; and the evidence adduced, 89 ; proposals for its better collection and assessment; 96, 97 ; proposal for associating the tax with life insurances, 97 ; Lord Jeffrey's opinion of a pro- perty-tax, and his letter to Mr. M'Leod, 98. Public accounts. House of Com- mons' Committee of, 235. Public departments, salaries and expenses of, 310, 319 et scq. ; postages of, 325 ; of Ireland, 326 ; loss arising from want of system in, 390. Public-houses, causes for resorting thereto, 1 50 ; trade licences to, 173 ; restrictions upon the num- ber creates a monopoly, ib, ; and does not conduce to temperance, 174; beer-shops, 175; unsound- ness of the existing system, 176. Public Offices, in Downing Street, their extravagant cost, 379 ;/. Public works and buildings, cost of, 310, 313 et seg.; "Harbours of Refuge," 314; works at Alderney, Jersey, Dover, Harwich, and Holyhead, 315 — 317 ; the lesson thence derived, 316 ; and report of the Committee of 1848, 318. R. Railway passenger-tax, 161 ; its proposed extension to third-class passengers, ib.; its character, 162 ; its probable misuse, 163 ; its rapid increase, 164; amount of duty received, 1833 — 1861, ib. ; contrasted with the rapidly de- clining stage-carriage duty, //;. Railways, the immense facilities afforded by, in the transit of let- ters, 107 et H. ; excise duties on, 136. Receipts, stamp duties on, 194; revenue derived from, 199. Redemption Act, interpretation put upon the, 190; its consequent failure, 191. Redemption of the national debt ; small efforts made towards the, 2,6$ ; causes which may have pre- vented it, 366. Reduction, difficulties attending, 247, 248. Reflections on the general prin- ciples of national taxation and expenditure, 384 et seg. Registration of letters, 116, 117; made compulsory, //;. ;/. Rent-roll of the Crown lands, 201, 202. Retired allowances, cost of, 559. Retrenchment, one mode of re- ducing expenditure, 9. " Returned lctters,"number of, never delivered by the Post Office, 1 14. Revenue of the nation, modes in which it may be made sufficient for expenditure, 89 ; its present increase, 10 ; its great increase during the Russian war, 15 ; its present large increase, 17 ; gene- ral considerations on the, 20 ; the recent remissions of customs' duties not attended with loss, 22 ; justified by the result, ib. ; pro- bable effect of a reduced tea duty on, 36 ; effect of a low rate of postage on the, loi ; the Post Office ought to be a source of, to the State, loi ; has not increased in proportion to the increase of postal intercourse, 102 ; amount of, derived from the delivery of Inaex. 415 letters, from 1839 to 1861, ib. ; the net revenue of the Post Office subject to heavy deductions, leaving little more than half a million sterling, 103, 104 ; cause of its decline, as derived from the Post Office, 107 ct seq. ; in- creased cost of Post Office man- agement more than absorbs the increased revenue, 1 1 1 {see POST Office) ; on collection of the, 210 ; confused state of the de- partmental accounts and their cost, 210 — 213 ; expense of col- lecting the customs, 213, 214 ; complex character of the official accounts, 213 ; expenses of the coast guard, 214 ; number of du- ties collected, 214, 215 ; collec- tion of tea and sugar duties, 218 ; wine duties, 219 ; extraneous duties of the department affect- ing the cost of collection, 222 ; the inland re\'enue, 224 ; draw- backs and discounts, ib. ; salaries and commissions, 225 ; pound- age on assessed taxes and in- come-tax, ib. ; stamps, 226 ; as- sessed taxes, 228 ; land-tax, ib. ; excise, 229 ; income-tax, 232 ; Post Office and Crown lands, 234; the House of Commons' committee of public accounts, 235 {see Expenditure of [the). Revenue laws, infractions of the, 41. Rhubarb-leaves, used to adulterate tobacco, 48. Royal family, annuities to the members of the, 380. Royal residences, judicious expen- diture on the, 79 ; in comparison with previous extravagance, 379. Russia, balance of our trade with, largely against us, 5 ; war witli, 277. S. Salaries, (S:c., income-tax on, 76 ; at the Post Office, in ; for col- lection of revenue, 225 ; increase of, in the secretary's office of stamps and taxes, 230 ;/. ; of public departments, 310, 319 et seq. ; in Ireland, 326. Salcey Forest, receipts and expen- diture of, 204 ; its insignificant size, 206. Savings' bank, established by the Post Office, 108; risk of loss to the State incurred by the, 118; Lord Monteagle's protest against the, 119//. Schedules of the property and in- come tax, the various assess- ments under, 76 ; taxation under Schedule D, 78 ; disproportionate number of persons assessed at the smaller and higher incomes, 78, 79 ; evasions practised under, 80 ; report of the Commissioners of Inland Revenue on the false returns, 80 — 82. Science, public expenditure on the promotion of, 310, 354, 355; schools of, 356, Scotland, duties on spirits in, 140. Servants, duty assessed on, 184. Services, colonial, consular, and foreign, 310, 357 ; charges there- by incurred, 357. Shipbuilding {see Iron Steamships and Wooden Vessels). Ships of war now needed, 296 ; our peculiar advantages in construct- ing, repairing, and manning them, 297 {see Iron Steam- ships). Slave-labour, sugar produced by, 51, 52. Smuggling, encouraged by high du- ties on tobacco, 40 ; of tobacco a common occupation on our shores and rivers, 42 ; impossibility of checking, 43 ; expense and result of Government prosecutions, ib. ; latest report of the Commis- sioners of Customs on, 44 ; cha- racter and extent of, 45. Smuggling of spirits " across the border," 143. Snuff, customs revenue arising from, 25 ; high rate of duty on, 48 ; adulterations of, 49. Soap, repeal of duty on, 129; evils of the tax, ib. ; frauds thence arising, 130 ; McCulloch's pro- posal to extend the duty to Ire- land, ib. ; Mr. Gladstone's total repeal of it, ib. South America, extent of our trade with, 6. 4i6 Index. Sovereign, gratitude due to her, for judicious and economical admi- nistration of the Civil List, 378, 379- Spirits, customs' revenue arising from, 25 ; excise duties on, 136, 137 ; consumption of, not checked by high rates of duty, 137 ; low rates not desirable, 138 ; recent working of the duties, ib. ; par- liamentary committee of 1821, 138 ; reduction of rates to check illicit distillation, 139 ; changes subsequently made, 139 — 141 ; in England, 139 ; in Scot- land, 140 ; in Ireland, 141 ; opera- tion of the temperance move- ment on the spirit duty, ib. ; dif- ferential duties on, in England, Scotland, and Ireland, 142; smug- gling " across the border," 143 ; equalization of the duties, ib. ; effect of the change in England, Scotland, and Ireland, 143, 144; diminution of consumption attri- buted to the altered habits of the people, ib. ; increase of re- venue arising from, 144 ; high rate of duties on, 155 ; its con- sumption decreases in compari- son with the consumption of beer, 156. Staff of the army, 258 ; in England, Ireland, and the colonies, 259 ; its cost, 260 ; its increase after the Crimean war, ib. 11. Stage carriages, duty and licences, 1833 — 1861, 164 ; excise duties on the drivers, 177. Stamps, excise duties on, 178, 179 ; on delivery notes, dock orders, &c. 179; history of the stamp duties, 193 et seq. ; recent revi- sion of the, 194 ; the present amount, and the items from which they are derived, ib. ; legacy and succession duty, 194 ; duty on fire, 198 ; on maritime insurances, ib. ; on deeds, ib. ; receipt stamps, 199 ; cost of collecting, 212, 226, 227 ; how the poundage might be saved, 225, 226 ; the distributors, and the character of their poundage, in the larger towns of England, 227. Standing army — is it necessary to repel invasion ? 255 ; evils attend- ing its maintenance, 256 ; Sir R. Peel's opinion on, 257. State, great officers of, salaries of the, 381. Stationery, Post Office expenditure on, 103, 104; the enormous quan- tity consumed, 104 u. Steamships {sct^ Iron Steamships). Succession duty {see Legacy Duty.) Sugar, customs' revenue arising from, 25, 50 ; contests respecting the assessment between different interests, 51 ; differential duties in favour of, produced by free labour, 52 ; West India colonies not really injured by free trading, ib. ; greatly increased production of, in the Mauritius by free labour, 53 ; present assessment of the duties on, according to the quality, 54 ; its doubtful policy, ib. ; the duty dependent on sunshine at the Custom-house, 55 ; a room provided for the examination of, tb. n. ; general consideration re- specting the duties on, 56 ; the rates of duty on, 57. Superannuation allowances of clerks and others, 262, 310, 359 ct seq. ; in the War department, 262 ; should be provided for by a per-centage on salaries, 360 ; general principle on which Par- liament should deal with them, Switzerland, our increasing exports to, 5. Tariffs, hostile, evil effects of, on France and England, 58. Taxation, general survey of, i et seq. ; its importance, ib. ; spirit in which it has usually been dis- cussed, 2 ; the various topics therewith connected, 3 ; what has been done to improve it, ib. ; al- terations in the customs' duties and their favourable results, 3, 4 ; advantages of free-trade policy as applied to, 5 ei seq. ; what we have not done for its improve- ment, 8 ; modes of, in which the revenue may be made sufficient Index. 417 for expenditure, ib. ; improved system of, conducive to the im- provement of the people, 9 ; spirit in which the subject is ap- proached, 10 ; what has been done to diminish the burden, 1 1 ; burden of, not diminished, ib. ; in- come-tax extended and raised without being improved, 12, 13 ; the National Debt increased, and nothing saved to meet the exi- gences of the state, 14, 15 ; the revenue of the nation largely in- creased, 15 ; the administration of our financial affairs unim- proved, 16 ; our increasing ex- penditure, 1 7 ; reasons against war expenditure in peace, 18 ; clanger of weakening the national resources in attempting its re- duction, 19 ; general considera- tions on, 20 ; customs' duties and results of their reduction on taxa- tion, 22 et seq. {see CUSTOMS) ; property and income tax, 69 et seq. {see Property-tax) ; the Post Office, 100 et seq. {see POST Office) ; excise duties, 123 et seq. {see Excise Duties) ; as- sessed taxes, 1 82 et seq. {see As- sessed Taxes) ; stamp duties, 193 et seq. {sec STAMP Duties) ; Crown Lands, 200 et seq. {see Crown Lands) ; cost of collect- ing the revenue, 209 et seq. {see Revenue) ; general expenditure of, 239 et seq. {see EXPENDITURE, Army, Navy, &c.) ; the National Debt, 365 ; the Civil List, 376 ; genera Ireflections on, 384 et seq.; principles required in dealing with, 395. Taxed property perishes, while the untaxed is permanent, 86. Tea, revenue arising from, 25, 26 ; beneficial results of reduced du- ties on, 26, 27 ; increased con- sumption under low duties, 26 ; sold at East India Company's sales in different years, 27 ; effect of additions to the duty, 27, 28 ; consumption of, increases with the improved condition of the people, 28 ; amounts imported in various years and the duty de- rived therefrom, 27 — 29 ; results thence derived, 29 ; the duty on tea disproportionate to its cost price, 29 ; its cost in China and in England, 30 ; beneficial effects which would follow the reduction of the duty, zb. ; our chief trade with China, 32, 33 ; difficulties attending its transport, 32 ; quan- tity which China can produce, 34; probable increase in the de- mand for, in England, if the price were reduced, 35 ; probable effect of reduced duty on revenue, 36 ; various prices of, according to the reduced duties, 36, 37 ; poHcy of an ad valorem, duty on, 37. Telegraph companies in competi- tion with the Post Office, 120; the facilities, dispatch, and low tariff of the, 121. Temperance movement in Ireland, its operation on the spirit duty, 141. Terminable annuities, falling in of the, 14. Tickets of leave to convicts, 348. Tobacco, customs revenue arising from, 25, 38 ; a fair subject of high taxation, 38 ; disadvantages of high rates of duty, 39 ; limited rate at which the consumption of duty-paid tobacco increases, 41 ; infraction of the revenue laws with regard to, ib. ; smuggling of, a common occupation on our shores and rivers, 42 ; report of the commissioners on smuggling, 44 ; consideration as to the re- duction of duty on, 46 ; extensive consumption of, 47 ; adulterations of the article, ib. ; rate of duty on when manufactured into cigars and snuff, 48 {see SnufQ ; neces- sity of putting the duties on a better footing, 50. Trade, balance of, with Russia largely against us, 5 ; with the East and South America, 6 ; cir- cumstances which will increase the trade of Great Britain, 6 ; with China, 31 ; confined to Can- ton, 32 ; removal of restrictions on, 1 59 ; statistics required by the Board of, 220 ; uncertainty of their statistical returns, 220, 221 ;/. {see Free Trade). 4i8 Index. Trade licences, duties on, 170, 171 ; principal trades requiring them, 170, 171 ; anomalies in, 172 ; re- consideration of the system, 172 ; to public-houses, 173, I74 ; granted to attorneys, drivers, hawkers, 177; to patent medicine vendors, 1 78. Trades and professions, income-tax on, 76. Trafalgar, effects of the battle of,4b2. Transportation of convicts, 345, 347, 349> 350- U. United States, extent of our trade with, 6. Universities, public grants to, 356. V. Valeria used for adulteration of snuff, 49, 50. Volunteer corps, spirit evinced by their formation, 256;/. Volunteer corps, falling off in spirit, 281 ;/. W. War, preparations for excite war or involve useless expenditure, 255 ; military establishments an excuse for, 276 ; with America, France, and Russia, 277 {see Army, and Military Esta- blishments). War budgets v. commercial trea- ties, 262. War department, cost of the, 262. War expenditure, reasons against, in time of peace, 18 ; impossi- bility of a taxation equal to, 362. Warlike stores,enormous cost of,26o. Watches, duties on, 59 ; benefits arising from their reduction, ib. Wealth of the nation, the property and income tax both bear fruits according to its increase, 86. West India colonists, their contests respecting the differential duties on sugar, 51 ; not really injured by free trade in sugar, 52 ; un- reasonableness of their claims, 53, 54 n. West India sugar, contest respect- ing the duties on, 51. West Indies, ought to maintain their own military, 273. Westminster Hall, employment of police at, 335. Windsor Forest, receipts and ex- penditure of, 204. Wine, customs revenue arising ' from, 25, 58 ; the late revision ' of, one of the great events of our age, 58 ; effects of the re- duction of duties on, 60 ; im- portations of, from France since the reduction of the duties, 61 ; the French treaty respecting, most largely beneficial to British commerce, zb. "■ Wooden targets " of England, 289. Wooden vessels of our navy, 295 ; objections to their conversion by iron plating, t'b. ; their inevitable decay and cost, 296 ; sums appro- priated to the building of which were intended for iron ships, 302 ; their construction persisted in, 304. " Woods and forests," produce no- thing to the revenue, 203 ; receipts and expenditure of the different estates, 204 ; their unproductive character, /b. ; Chopwell Woods, 205 ; New Forest, Salcey Forest, and Highmeadow Woods, 206 ; Wychwood Forest, 207 ; Hainault Forest, /b. ; advantages which might result from them, 207, 208. Woolmer Forest, receipts and ex- penditure of, 204. Wychwood Forest, profitable dis- afforesting of, 207. UNIVERSITY of CALIFORNIA AT ' LOS ANGELES LIBRARY u UNIVERSITY OF CALIFORNIA, LOS ANGELES THE UNIVERSITY LIBRARY This book is DUE on the last date stamped below BECD IDUip tUSi FEBl JV)N1 71978 Form L-0 2.-3m-2,'43C5205> on. tJNiVERSITY of TALIFOR^^ I r»Q AMn^TT TTSL UC SOUTHERN REGIONAL LIBRARY FACILITY AA 000 564146 9 m^.