BOUGHT WITH THE INCOME 
 FROM THE 
 
 SAGE ENDOWMENT FUND 
 
 THE GIFT OF 
 
 Hettrg W. Sage 
 
 1891 
 
 ..h'JlMJA &.HiSLl...Sf.T.. 
 
Cornell University Library 
 HJ9426 .B3S 
 
 Local government and taxation 
 
 olin 
 
 3 1924 030 230 233 
 
 By the same Author, 
 
 NATIONAL INCOME OP THE UNITED KINGDOM, 
 3s. 6d Macmillan and Co. 
 
 TAXATION OP THE UNITED KINGDOM, 
 (Out of Print.) Macmillan and Co. 
 
 NATIONAL DEBTS, 4s. 6d, Second Edition. 
 i R. J. Bush. 
 
 ENGLISH PARTIES AND CONSERVATISM, 
 '^-''., i.,,,', 2s. M. R. J. Bush. '• V. ' *■ 
 
 THE POLITICAL PROGRESS OP THE WORKING 
 CLASSES, Second Edition, Is. R. J. Bush. 
 
 RESULTS OP THE GENERAL ELECTION OF 1868. 
 Second Edition, 2«. R. J. Bush. 
 
HI 
 
 -355 
 
Cornell University Library 
 HJ9426 .B3S 
 
 Local government and taxation : 
 
 
 olln 
 
 3 1924 030 230 233 
 
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 PRINTED IN U.S.A. 
 
The original of tiiis book is in 
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 There are no known copyright restrictions in 
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LOCAL GOYEENMElSrT 
 
 TAXATION, 
 
 MR. GOSCHEN'S EEPOET. 
 
 E. DUDLEY BAXTER, M.A. 
 
 " The Poor Bate ia worse than the Income Tax j for the Poor Bate 
 is a growing tax — increasing every year, secretly and silently j while an 
 Income Tax can only be increased by the consent of the Legislature 
 openly and publicly obtained." — Lobb Mbisouenb, July 21, 1834. 
 
 LONDON : 
 E. J. BUSH, 32, CHAFING CEOSS, 
 
 1874. 
 
CONTENTS. 
 
 Page 
 
 Pbeface .... .... .... .... .... .... 3 
 
 LOCAI/ GoTBENMrari AND TAXATION .... .... " .... .... 5 
 
 Lbtteb I.— Two Fallacies of Mr. Goachen .... .... .... 35 
 
 Lbtteb II. — The Increase of Rates .... .... .... .... 45 
 
 Lettbk III.— Mr. Goschen on Comparative Taxation .... .... 60 
 
 Letteb IV. — The Taxation of Eealty and Personalty .... .... '26 
 
 Letter V. — Hereditary or Prescriptive Burdens .... .... 87 
 
 Appendix— CDrrespondence with Mr. Goschen and Sir E. E. Torrens 95 
 
 Index .... .... .... .... .... .... .... 103 
 
PREFACE. 
 
 The following pages contain the substance of a 
 Speech on Local (xovernment and. Taxation de- 
 livered at the Social Science Congress at Norwich, 
 in September last; and four Letters respecting 
 Mr. Goschen's Report on the Increase of Local 
 Taxation, which were published between September 
 and January in several of the leading London daily 
 papers. Although the greatest publicity was given 
 to these letters by their appearing in so many 
 newspapers, no reply was made by Mr. Goschen or 
 his friends. It may, therefore, be fairly assumed 
 that the facts and figures which they contained 
 were in the main unassailable. A fifth letter is 
 added on the theory of Hereditary Burdens. 
 
 In speaking at the Congress I had the advan- 
 tage of referring to a Diagram of the progress of 
 the Eates during the last 120 years, a copy of 
 which wUl be found opposite the title page, and of 
 which the following explanations may be useful: — 
 
 The annual amounts shown by the different lines on the 
 Diagram are — 
 
 1. The total Eates. 
 
 2. The Poor Rate. 
 
 3. The portion of Poor Rate expended in Poor Relief. 
 
 4. The nominal Rateable Value on a scale of one-tenth. 
 
 A2 
 
4 
 
 The figures given at various pniuts of these lines are from 
 theOfficial Eetums, omitting five ciphers, so that 4,1 represents 
 £4,100,000. 
 
 The solid lines show that amomits are given almost con- 
 tinuously in the Eeturns. The dotted lines show the probable 
 yearly amounts between occasional Returns. It wiU be 
 observed that the solid lines begin from 1813 for the Poor 
 Eate and Poor Eelief ; from 1841 for the Eateable Value ; and 
 from 1853 for the total Eates. 
 
 The Eateable Value line, being on a scale of one-tenth, is 
 useful as being also the line of a Eate of 2s in the pound. It 
 is proved in Letter II. that, up to 1864, Eateable Value was 
 considerably below the real value of the property assessed, so 
 that up to that year this line is lower on the Diagram than the 
 real Eateable Value. 
 
 The points that are shown with especial 
 clearness by the Diagram are — 
 
 1. The great rise of the Eates above 2s. in the 
 pound of nominal Eateable Value during the Out- 
 door Eelief Period from 1782 to 1834. 
 
 2. Their sudden fall from 1834 to 1837 and 
 the fluctuations of the Poor Eate since that time. 
 
 3. The rapid rise of Eateable Value since 1862. 
 
 4. The gigantic increase of the total Eates 
 since the new Local Government Acts began to 
 come into operation about 1852. 
 
 It demonstrates in a remarkable manner the 
 growth of our Local Taxation. 
 
 Hampstead, February 23, 1874. 
 
LOCAL GOYERT^MENT 
 
 AlTD 
 
 TAXATION. 
 
 We are met to consider the present system of Their imsatis- 
 
 T1/-N Tm ••T-i'iii f^oto^'y state. 
 
 Local Government and Taxation m England and 
 .Wales. It is in a most unsatisfactory condition. 
 It has been ofl&ciaUy described by the Minister in 
 whose charge it was placed as " a chaos as regards 
 Authorities, a chaos as regards Eates, and a worse 
 chaos than all as regards Areas.'' Such a descripl- 
 tion is the best proof of the necessity for an im- 
 mediate reform. But public opinion goes further 
 than the Minister, and complains not only of the 
 chaos, but of the burden, and uses language with 
 which Mr. Goschen seems disinclined to agree, 
 resembling the wording of a celebrated motion 
 of a hundred years ago, "that the Eates have 
 increased, are increasing, and ought to be 
 diminished." To understand the chaos and in- 
 crease of burden, we must go back into the history 
 of our local institutions, and examine the manner 
 in which they grew into their present anomalous 
 shape. 
 
6 Local Government and Taxation. 
 
 Earliest poor From the sixteenth century to a very recent 
 period the principal unit of Local Government 
 and Taxation was the parish or township. The 
 vestry was its Parliament, and the overseers and 
 churchwardens its temporal and ecclesiastical 
 officers. The distressed poor were originally 
 maintained by ecclesiastical revenues and by 
 voluntary contributions collected and adminis- 
 tered by the Church, and by permission to beg 
 within their own parishes. After the suppression 
 of the religious houses, an Act was passed in 1536 
 introducing a system of compulsory charity, to 
 be collected by the churchwardens. . But as this 
 proved inadequate to cope with the terrible evil of 
 Poor law of mendicaucy, the Poor Law Act of Elizabeth was 
 ^^^^' passed in 1601, ordering rates to be made in 
 
 every parish for the support of the poor. The 
 relief was moderate in amount, and in case of 
 able-bodied men was only granted in return for 
 work, and not as a supplement for wages. It was 
 distributed by the overseers under the superin- 
 tendence of the justices. The total .amount was 
 comparatively small, being returned in a.d. 1700 
 at £700,000, and in 1750 at a very similar figure. 
 Outdoor reHef With the end of the American war in 1782 
 to 1834 came a disastrous change of system. The war led 
 to a rise of prices, and the rise of prices to a 
 necessity for a rise in wages. But instead of 
 
Local Government and Taxation. 7 
 
 leaving things to take their natural course, the 
 Grovernment and the country concurred in a very 
 mistaken policy, that of supplementing wages out 
 of Eates. An Act called " GUhert's Act " was 
 passed in 1782, authorising the adoption of outi 
 door relief, which was extended by later Acts in, 
 1795 and 1815. In consequence of this systeni 
 and the immense rise during the American and 
 French wars in the prices of corn and aU the 
 necessaries of life— corn going to 70s., 80s., 90s., 
 and even 112s. a quarter — the Poor Rate itf- 
 creased, quite out of proportion to the increase of 
 population, from £700,000 in 1750 to £2,000,000 in. 
 1785 ; then tq £4,000,000 in 1803, to £8,500,000 
 in 1814, and even to £9,300,000 in 1818, or more 
 than fourfold in thirty-three years. 
 
 With the decline of prices after the peace, the 
 Poor Eate decreased tiU it reached £6,800,000 in 
 1824. But then the pernicious effects of the 
 system became apparent in a wide-spread pauper- 
 ization of the labouring classes and the steady in- 
 crease of the Eates. The disease grew like a canker. 
 Measured by the price of corn and the numbers of 
 the population, the Eates became far heavier than 
 they had been during the worst periods of the 
 war. The practice of supplementing wages became 
 universal. Independent labourers could not get 
 work till the paupers were provided for. Instances 
 
8 Local Government and Taxation. 
 
 are given in official reports of labouring men who 
 had acquired property being unable to obtain em- 
 ployment till they had exhausted their means and 
 came upon the parish. One parish went out of 
 cultivation through the pressure of its burdens. 
 The Poor Eates, in numbers of southern parishes, 
 amounted to 30s. per head (more than four times 
 their present average), and in whole counties 
 averaged 15s. to 17s. per head of the population. 
 Habits of thrift and industry, and all feelings of 
 independence were destroyed in the labourers. 
 The bastardy laws rendered a family of illegitimate 
 children a valuable source of income from the Poor 
 Eates. Boys and girls married and went straight 
 into the poor-house. The paupers were maintained 
 in greater luxury than the poorer ratepayers. 
 There was no proper supervision of accounts, and 
 overseers made fortunes out of the distribution of 
 relief and from the supply of food and clothing to 
 the paupers. As a natural consequence, the rate- 
 payers were weighed down with the burden, and 
 the nation seemed approaching a period of social 
 disorganization and ruin. 
 
 Extracts from I extract a few instances from Eeports to the 
 reports. p^^j. j^g^^ Commissioners. A report in 1885 
 stated — 
 
 Eeport, 1835, " In Wiltshire the average cost per head is 16s. 7d., and 
 p. 169. 
 
Local Government and Taxation. 9 
 
 peculation and bad management show themselves ; -whilst in 
 Suffolk, where the Poor Rates are enormously heavy (in some 
 parishes 40s. per head, and in whole districts averaging near 
 30s. per head on the population), every species of trickery is 
 developed. In some of the hundreds the entire Poor Law 
 management is based in fraud, and supported by perjury and 
 deception." 
 
 From Oxfordsliire it was reported — 
 
 " In the parish of Eamsden the Poor Rate exceeded 25s. P. 182. 
 per cultivated acre ; at Aston and Cote it was 24s. per acre. 
 The parish of Northmoor had 360 inhabitants ; the average 
 expenditure was nearly £1,200 per annum. In the parish of 
 Sydenham Poor Rates absorbed £427 out of a rental of £645 
 of one property. The farmers said, ' We cannot afford to em- 
 ploy labourers ; all our means are eaten up and absorbed by 
 Poor Rate." 
 
 From Bedfordshire the return was — 
 
 " Pauperism had nearly crushed the tenantry and swamped Beport, 1836, 
 the landlord ; to such a state of things was this neighbour- P- ^92. 
 hood fast hastening." 
 
 In Westmoreland and Cumberland, two of the 
 northern and less-pauperized counties — 
 
 " Rents have been universally allowed, and the policy of Report, 1837, 
 payment of them pertinaciously upheld, and relief is conceded P- 31- 
 almost without inquiry." 
 
 In !N"orth "Wales the payment of rents out of p. 33. 
 rates was nearly universal. In many parishes it 
 extended to nearly all the married labourers. 
 
 In the report from Kent it was stated — 
 
 " In the district of Heme Bay the abuses of the old Poor Report, 1838, 
 
 p. 216. 
 
10 Local Government and Taxation. 
 
 Law had arrived at such a pitch, that it was threatened with 
 immediate ruiii. One farm of 1,000 acres would have been 
 thrown out of cultivation in another year ; the neighbouring 
 farmers were in an equally bad state ; and in fact all rent, 
 employment and wages were on the point of annihilation, when 
 the new Poor Law passed just in time to avert the consum- 
 mation of the evil." 
 
 Report, 1843. ^^- Twisleton's Eeport gives this general 
 character of the sjstem : — 
 
 " Subsequently to 1795, the English Poor Law respecting 
 able-bodied persons appears to have included aU the main 
 defects which it is desirable to avoid in a Poor Law for that 
 class. There was a vicious organization of the body, which 
 was to distribute relief ; the relief was distributed on a vicious 
 principle ; and the organization of the power of control was 
 likewise vicious. It required, perhaps, the combination of all 
 these defects to produce the mass of abuses which afterwards 
 came into existence." 
 
 ^ord Stronger than all was the speech of Lord- 
 
 Srougham. ° . 
 
 lansard, 3rd ChanccUor Brougham, introducing the Poor Law 
 ^enes, vol. 28, Amendment BUI on hehalf of the Whig Ministry, 
 into the House of Lords. 
 
 " Evils the extent of which no tongue can adequately 
 describe ; evils which bad laws, worse executed — which the 
 lawgiver, outstripped in his pernicious course by the adminis- 
 trators — have entailed upon the country, whidh bid fair to leave 
 nothing of the property of the coimtry that can be held safe, 
 ^^ . . and which has brought about a state of things in 
 ■Which we behold industry stripped of its rights, and the sons 
 (Of idleness, vice, and profligacy usurping its lawful place — 
 property and industry no longer safe — and the destruction of 
 /'all property as the issue of the system that stares us, and at 
 "no great distance, in the face.'' 
 
Local Government and taxation. 11 
 
 .Lord Althorp was not less emphatic as ^^^ ^°°^ 
 Ministerial leader of the House of Commons. See p. 37. 
 Such was the Poor Law from 1782 and 1796 to 
 1834, and the excessive and abnormal expenditure 
 and demoralisation that it produced. The Poor 
 Law Commissioners recommended, and Parliament 
 passed the lifew Poor Law Act in 1834, whic|i 
 abolished out-door relief to the able-bodied, in- 
 sisted on the workhouse test, and introduced a 
 thorough system of supervision and accounts. .The 
 Keform was so successful, that in three years the 
 Poor Eate dropped from £8,300,000 in 1834, to 
 £5,300,000 in 1837, or a saving of 36 per cent. 
 The following list shows some of the county 
 reductions. ' 
 
 Poor Bate per head of Population. Purdy on 
 
 English Poor 
 Bate, p. 307. 
 
 
 1834. 
 
 
 1837. 
 
 
 s. d. 
 
 
 s. d. 
 
 Sussex 
 
 18 1 
 
 to 
 
 8 7 
 
 Bedford 
 
 16 '4 
 
 11 
 
 8 
 
 Bucks 
 
 16 11 
 
 15 
 
 8 8 
 
 Northampton 
 
 15 8 
 
 15 
 
 8 3 
 
 Suffolk 
 
 16 7 
 
 fi 
 
 9 3 
 
 The average result for England and Wales was 
 a decline from 9s. Id. to 5s. 10c?. per head. So 
 enormous a reduction showed clearly that the 
 previous scale of expenditure had been a monstrous 
 oppression on the Ratepayer. 
 
12 LocqI Government and Taxation. 
 
 EiseinPoor Since 1837 the Poor Rates have ffradually. 
 
 Eate. . „ ^ o J 
 
 risen from £5,300,000 to £6,000,000 m 1 840 ; to 
 £7,000,000 in 1843; to £8,000,000 in 1856; to 
 £9,000,000 in 1863; to £10,000,000 in 1868; 
 and to £11,500,000 in 1872, exclusive of High- 
 way payments. 
 
 Diagram. ijijjg diagram prefixed to these pages shows the 
 
 variations that I have been describing; the low 
 level of Poor Eates in 1750 ; the rapid rise from 
 1782 to an extravagant height in 1813, and 
 again in 1817-18 ; the fall and then the subse- 
 quent rise to 1827 and 1834 ; the sudden drop 
 from 1864 to 1837, and the subsequent gradual 
 upward movement to the present time. 
 
 The line of rateable value, which is on a scale 
 corresponding to a rate at 2s. in the pound, shows 
 how immensely the actual rates rose above that 
 level from 1782 to 1834. 
 
 ^eriods^' If you will uow look back on that diagram over 
 
 the century and a half that we have traversed, 
 you will see that it is divided into four distinct 
 periods : — 
 
 1. The Old Poor Law Period, from the reign 
 
 of Elizabeth to 1782, when relief was 
 only given to the impotent, and the rates 
 were comparatively smaU. 
 
 2. The Out-door Relief Period, from 1782 to 
 
 1834, when the system of out-door relief 
 
Local Government and Taxation. 13 
 
 of the able-bodied and supplementing 
 wages, together with other great abuses, 
 raised the rates to an extravagant height. 
 
 3. The New Local Government Period, from 
 
 183d to 1862, when the work-house test 
 was insisted on and out-door relief 
 almost abolished, by which the rates were 
 reduced 40 per cent. 
 
 4. The Assessment Reform Period from 1862, 
 
 in which the reform of rating began, and 
 inequalities of rates and under assess- 
 ments were corrected. 
 
 II. 
 
 Hitherto I have principally described the rise ?^^'*'^*'°" '° 
 
 ■^ X i/ local goTom- 
 
 and fall of the Poor Rates ; but the two later ™™t. 
 periods were also remarkable for a great revolu- 
 tion in Local Government. With the Reform Bill 
 of 1832 the old order of things came to an end, 
 and a totally new regime began. The old paternal 
 Government of Squire and Overseer, administer- 
 ing the distribution of relief on benevolent but mis- 
 taken principles of political economy, without any 
 of the modern means of health and locomotion and 
 police, was terminated. In its place sprang up an 
 active system of Local Self-Government by repre- 
 sentative institutions, applying all the new ideas of 
 relief of the poor and the necessity of improved 
 
14 Local Government and Taxation. 
 
 roads and drainage and lighting and police, and 
 of education and sanitary reform. But according 
 to the usual habit of the j^nglo-Saxon mind, each 
 of these objects was pursued independently, by the 
 creation of a new jurisdiction and governing body, 
 regardless of all existing institutions. The spirit 
 of generalization and consolidation, so remarkable 
 in some of the Latin races, seems very deficient in 
 the English race. Foreign states adopt new con- 
 stitutions and forms of government one after 
 another, but one at a time ; in England we estab- 
 lish new Local Governments four or five simulta- 
 neously. Let me point out what these district 
 Grovernments were. 
 ^®**y '. . 1. The old Petty Sessional Division stiU sur- 
 sions. vived, but only for judicial purposes. 
 
 Poor Law 2. The New Poor Law of 1834 dealt with the 
 
 unions. 
 
 poor, dividing the country into Unions of parishes, 
 with Boards of Guardians elected by the rate- 
 payers upon a scale of multiple voting, with one 
 vote for every £50 rating up to six votes. 
 local 3. Local Lmprovements in lighting, watching, 
 
 improTement i t • i i 
 
 districts. drainage, &c., were dealt with by a series ot Acts, 
 authorizing the formation of towns and villages 
 into districts. 
 
 First came the Lighting and Watching Act of 
 1836, under which many districts were 
 formed. 
 
Local Government and Taxation. 15 
 
 Second. A number of independent Town Im- 
 provement Acts. 
 
 Third. The Public Health Act of 1848, under 
 which several districts were organized with 
 larger powers. 
 
 Fourth. The Local Government Act of 1858; 
 with still ampler powers, under which a 
 great number of districts are existing. 
 
 The two latter Acts provided consti- 
 tuencies of Ratepayers, with multiple 
 votes, something like those of the Poor 
 Law, but in each case with differences, 
 which would prevent amalgamation. 
 
 4. The Highways' were dealt with in 1862 and Highway dia- 
 
 ^ "^ . tricts. 
 
 1864, by Acts giving permis.sive power to the 
 Quarter Sessions to adopt their provisions and 
 create districts with Highway Boards. The dis- 
 tricts would not necessarily or usually coincide with 
 any existing territorial division, and their govern- 
 ing bodies and constituencies differed from all those 
 already in existence for other purposes. This Act 
 has been adopted over about half England, leaving 
 the highways of the other half subject to Petty 
 Sessional management. South Wales possesses 
 a Highway system and a Highway Act of its 
 own, 
 
 5. Education has been dealt with by the Edu- Education 
 cation Act authorising the formation of School 
 
16 Local Government and Taxation. 
 
 Boards iu towns and districts. This again has 
 been adopted by a certain number of isolated 
 districts. I pass over Burial Board districts as 
 almost too small for notice. 
 
 triotr^^'^''. 6. Sanitary Improvement was the last dealt 
 ■with by an Act of 1872, which introduces sanitary 
 districts nearly but not necessarily coincident with 
 unions. 
 
 Commissions 7. Commissious of Sewers still exist in some 
 low-lying districts, governed by Commissioners 
 appointed by the Crown. 
 
 Summary of Thus there are commonly the following simul- 
 
 simultaneous , ,..,.. 
 
 jurisdictions, taucous districts and jurisdictions : — 
 
 1 . Petty Sessional Divisions. 
 
 2. Poor Lawj Unions. 
 
 3. Boroughs or Local Government Districts. 
 
 4. Highway Boards. 
 Besides, in many cases, 
 
 5. School Boards and Districts. 
 
 6. Sanitary Districts. 
 
 7. Commissions of Sewers. 
 
 ISTor is the evU confined to multiplication of terri- 
 torial districts. Each of these districts (as a general 
 rule) carries with it 
 
 A separate governing body. 
 
 A separate constituency with different quali- 
 fications. 
 
 Separate officers. 
 
Local Government and Taxation. 17 
 
 A separate assessment of property. 
 
 Separate rates. 
 
 Separate areas. 
 There is a wonderful conflict of areas. For Areas. 
 instance, there is the Union area. But the Union 
 does not usually coincide either with the County 
 or the Boroughs. Out of 650 unions 200 are within 
 more than one county, and scarcely any coincide 
 with a horough. The Petty Sessional Division is 
 distinct from the Union, and the Highway district 
 is diflFerent from either. Even the Sanitary area, 
 the latest product of legislative wisdom, does not 
 exactly correspond with any other area ; so that 
 we have all the areas overlapping and interlacing 
 each other in every possible manner. 
 
 But simultaneously with the creation of the Assessment 
 
 . . reform period. 
 
 later local jurisdictions came the movement of 
 consolidation and equalisation in the Assessment 
 Reform Period, which dates from 1862. Previous 
 to that year the standard of Eateable 7alue had 
 been very much below the real net value of pro- 
 perty, and most unequal in different localities. It 
 varied from 10 and 15 per cent, to 30 and even 50 
 and 70 per cent, under the real value, so that the 
 nominal rateable value afforded no measure of the 
 property of the country. In some places the 
 assessment had not been altered since the begin- 
 ning of the century. The Union Assiessment Act 
 
18 Local Government and Taxation. 
 
 was passed in 1862 to remedy these evils. The 
 result was that in three years, from 1863 to 1866, 
 the total Eateable Yalue of England and Wales 
 went up from £76,000,000 to £90,000,000, and 
 has continued ever since to increase much more 
 rapidly than before the Act. It is important to 
 bear in mind this rise in the standard of value 
 when comparing the Rateable Value in any of the 
 later with the earlier years. Part of the large 
 increase is apparent and not real, and must be 
 allowed for in order to arrive at a just conclusion 
 about the comparative increase of Eates and 
 Property. 
 
 Eeai increase In the meantime we have the fact that the 
 Eates as weU as the Eateable Yalue have in- 
 creased enormously since 1837. The Poor Eate 
 alone increased from £5,300,000 in 1837 to 
 £10,400,000 in 1868, besides new Eates in the 
 towns amounting to more than £5,000,000, which, 
 with some other rural Eates, brought up the total of 
 that year to £16,223,000. The Eateable Value 
 had increased from £62,500,000 in 1841 (an 
 amount which was very much below the real 
 value) to £100,000,000 in 1868. Thus while the 
 total Eateable Value had apparently increased 
 more than 40 per cent., the total Eates had more 
 than doubled. Such an increase naturally caused 
 great discontent atiiong ratepayers, and led to an 
 agitation for Local Taxation Eeform. 
 
 of rates. 
 
Local Government and Taxation. 19 
 
 lit 
 
 As a preparation for legislation, Mr. Goschen Mr. aoschen's 
 published in 1870 his Eeport on the Increase of "^""^ " 
 Local Taxation, It contains in its appendixes a 
 great mass of statistics respecting English and 
 Continental Taxation, both Imperial and Local, 
 which will long be valuable for reference. Its 
 opening pages, present very able analysis and 
 summary of the different heads of urban and 
 rural, and new and, old rates, composing in 1868 
 a total of sixteen millions sterling of the Local 
 Rates of England and Wales. But when Mr. 
 Goschen comes to compare these Rates with the 
 Rates of former periods and with Foreign Taxa- 
 tion, he falls into an extraordinary series of 
 fallacies which lead him into very erroneous con- 
 clusions. 
 
 His first enquiry is whether the burden of Mistake as 
 
 . period of com- 
 
 Rates has increased in a greater degree than parison of old 
 the value of property. But he makes the mis- rates. 
 take of selecting as the period of comparison See Letter i., 
 
 1 T • PP- 35-38, and 
 
 the period of extravagant and abnormal xexpendi-ii., pp. 45-48. 
 ture of the old Poor Law from 1803 to 1834, 
 instead of the fair and normal period of the first 
 reformed Rates from 1837 to 1841. He says : — 
 " You landowners and householders have no right 
 
 B 2 
 
20 Local Government and Taxation. 
 
 to complain of the rates in 1870, because your 
 fathers, in the great French war and the days of 
 indiscriminate out-door relief, paid heavier rates 
 in the pound than you do now." But the argu- 
 ment is absurd. If a parish paid 30s- per bead 
 poor relief in 1834, through a system of waste- 
 fulness and malversation, instead of tbe present 
 average of 7s. per head, is tbat any reason for say- 
 ing to one of its ratepayers, "You have no rigbt 
 to complain of tbe poor rate until it exceeds 30s. 
 per bead ?" By this mistake about the period of 
 ' comparison Mr. Goschen comes to a mistaken con- 
 clusion, viz., tbat ihe present burdens on land 
 are not heavier than its old legitimate burdens. 
 The rates have But whcn the progress of rates is carefully 
 since 1837-41. lookcd iuto, the figurcs come out clear, tbat both 
 See Letter n., for land and bouses the burdens of rates bave 
 53-56.' ' increased materially, botb in total amount and in 
 tbe rates in tbe pound since tbe normal period of 
 fair comparison, viz., the first years after tbe reform 
 of 1834. 
 Mistake in Mr, Goschen has made another mistake in 
 
 overlooking in- 
 
 rise in Stan- ovcrlookiug altogether the rise m tbe standard of 
 able Value. Rateable Value since the Union Assessment Act of 
 See Letter II., 1862. He argucs that when the rates are no more 
 ^^' ' in tbe pound in 1868 than they were in 1825 or 
 
 1838, there has been no increase in tbe real burden. 
 
 But he forgets tbat tbe screwing up of tbe assess- 
 
Local Government and Taxation. 21 
 
 ment has made a great increase of the burden 
 with the same nominal rate, and so increases the 
 nominal increase of burden spoken of in the last 
 paragraph. 
 
 In marshalling the figures, and drawing: con- ^^''^ about 
 
 ° & ' & total taxation. 
 
 elusions about tbe total Imperial and Local Taxa- „ 
 
 tion of England and Wales, Mr. Goschen falls l^'*™ i"-> 
 
 ■ ° . pp. 60-62. 
 
 mto equally important errors. In one set of 
 tables he includes railways, canals, and similar 
 property under the head of Eeal Property, and 
 computes its Local Taxes. In another set of 
 tables he excludes railways, canals, and similar 
 property, from the head of Eeal Property, and 
 computes its Imperial Taxes. Then he joins 
 both tables together, and obtains a total of Impe- 
 rial and Local Taxes, which is not the total for 
 either definition of Eeal Property. Such faulty 
 statistics are useless for any accurate comparisons. - 
 After these errors of commission, comes a Failure to 
 
 p . . TT • J 1 1 1 , • compare taxa- 
 
 serious error or omission. Having told us what is tious of Eeai 
 the total taxation on Eeal Property, he' ought to property?" 
 have gone on and told us what is the taxation on See 
 Personal Property and incomes, for comparisonspp. 65, 66.' 
 with that on Eeal Property. But here he follows 
 the well-known example of witnesses who give 
 unwilling testimony. They commonly use, in dif- 
 ferent forms, one formula— that of non mi recordo. 
 Mr, Groschen's form is, "I cannot calculate." 
 
22 Local Government and Taxation. 
 
 When we come to an account likely to work out to 
 the advantage of the ratepayers, we find that, he 
 says, " I cannot calculate it," and gets out of the 
 difficulty by leaving it out altogether. But it is 
 not at all inlpracticahle to make the calculation, and 
 when made, the result comes out, that while Eeal 
 Their com- Property pays Local and Imperial Taxes amounting 
 
 parative taxa- j. ./ a. ./ j. -n j. 
 
 tion. to 12 per cent, on its income. Personal Property 
 
 tetter rv., ^ P^ys Only Imperial Taxes amounting to 5 per 
 
 pr 77 to 85. ggjj^ Qjj -^g income, and Personal or Industrial 
 
 incomes (paying Income Tax) pay only 3 per cent. 
 
 in addition to the general taxes on expenditure, 
 
 which are common to every kind of income. So 
 
 that Eeal Property, including railways, canals, &c., 
 
 pays a much heavier taxation than Personalty and 
 
 Personal Incomes. 
 
 Comparison Instead of such an investigation, Mr. Goschen 
 
 ■mth Foreign , . 
 
 taxation. goes iuto an elaborate comparisbn of the Kates 
 See and Taxes on Eeal Property in foreign countries 
 
 Letter in., if J Sj 
 
 pp. 66-?2. with those on Eeal Property in England and Wales. 
 He comes to the conclusion that Eeal Property in 
 England and Wales is not so heavily taxed as in 
 foreign countries ; but he arrives at the result in a 
 very erroneous way. He says English Eeal Pro- 
 perty pays 30 per cent, of English total taxation, 
 while Belgian Eeal Property pays 32 per cent, and 
 French Eeal Property nearly 29 per cent, of their 
 total taxation, and therefore that English Eeal 
 
Local Government and Taxation. 23 
 
 Property is less heavily taxed than Belgian, and 
 very little more heavily taxed than France. But 
 this is all wrong, and false in logic, because Mr. 
 Goschen does not inform us what proportion Real 
 Property forms of the total property in eacli of 
 these countries. If English Real Property is a 
 much smaller proportion of the total English pro- 
 perty than French Real Property of total French 
 property (as is really the case), equally burdened 
 Eliglish Real Property must of course pay a 
 smaller proportion of total Taxation ; and con- 
 versely English Real Property that pays an equal 
 proportion of total taxation must be more heavily 
 burdened than French Real Property. So that Mr. 
 Goschen's figures prove the exact converse of his 
 conclusion. ' 
 
 These are the principal conclusions of Mr. Result. 
 Goschen's Report, and their erroneousness makes 
 the whole report wrong and misleading for legisla- 
 tive purposes. I am astonished that so eminent a 
 statesman and financier as Mr. Goschen should 
 have fallen into such a series of errors. The real 
 facts are the reverse of what he has argued. Rates 
 have materially increased, even on land, since the 
 reform of the Poor Law ; the Taxation of Real 
 Property is much heavier than the taxation of 
 Personalty and Personal Incomes, and is heavier 
 than in foreign countries. There is every reason 
 
24 Local Government and Taxation. 
 
 to justify the popular discontent at the increased 
 burdeii of rates, and to inquire whether any relief 
 is possible. 
 
 IV. 
 
 Eemedies. What are the remedies for this unsatisfactory 
 
 state of things ? 
 Comparison of 'Yp'e shall see the true position of our Local 
 
 continental ^ 
 
 ^sterns. Government more clearly by comparing it with 
 the systems of other nations. The local divisions 
 of the chief Continental countries are on a regular 
 and symmetrical plan. In France, which may be 
 taken as the type, the Department is divided into 
 arrondissements, the arrondissement into cantons, 
 and the cantons into communes. The canton is 
 only a judicial division ; but the Department has its 
 Parliament, the Conseil-General, presided over by 
 the Pr^fet ; the arrondissement has' its ConseU 
 d'Arrondissement, presided over by the Sous 
 Pr^fet; and the commune its Conseil Municipal, 
 presided over by the Mayor. The Department, 
 which corresponds to our county or division of a 
 county, and the Commune, which corresponds to 
 our parish or township, are the principal units of 
 Local Government. France suffers by so much 
 being done through these Municipal Councils, 
 which are necessarily composed of an inferior class 
 of men. But there is no clashing of areas or taxa- 
 
Local Government and Taxation. 25 
 
 tion. Each forms part of a harmonious whole. 
 The Departmental Council fixes the Departmental 
 Taxes, which are divided between the Arrondisse- 
 ments, and by them ■subdivided among the Com- 
 munes. The Arrondissement settles any district 
 taxation and partition's it between the Communes. 
 The Commune votes its own taxes for municipal 
 objects, and collects them with the communal 
 share of the departmental and arrondissement 
 taxation. 
 
 In England the old Anglo-Saxon Local Govern- old EngUsh 
 
 _ _ . , local govern- 
 
 ment had a similar triple character. The County ment. 
 
 had its parliament — the Shire Meeting or County 
 Court, presided over by the Sheriff. The county 
 was divided into Hundreds or Wapentakes, which 
 had their monthly hundred meetings. The Hun- 
 dreds were divided into Townships or Parishes, with 
 their town meetings or vestries. But these pld '^'^''"S"^' 
 courts decreased in power, and the hundred meet- 
 ing fell altogether into disuse. The place of the 
 County Court was gradually taken by the magis- 
 trates at Quarter Sessions, who, in the sixteenth 
 century were, .by successive enactments, invested 
 with the power of levying rates for bridges and 
 - sewers, and in later years received authority to 
 impose portions of the present county rate, and to 
 exercise important judicial functions. The Poor 
 Rate grew up after 1601 and was imposed by the 
 
26 Local Government and 'Taxation. 
 
 officers of the Parislies, with a certain amount of 
 magisterial supervision. Thus the Quarter Sessions 
 and the Parish became the only units of Local 
 Government. The district area and authority 
 dropped out of use, until partially re-introduced 
 by the institution of unions of parishes in some' 
 localities in 1723 and 1782. 
 sveiopment But with the reform of Local Government in 
 
 district 
 
 stem after , and after 1834 came a great development of the 
 District system. It was found to work much better 
 than the parochial system, in consequence of its 
 greater consolidation and the better class of men 
 available for its management. Poor Law Unions, 
 Petty Sessional Divisions, Local Government Dis- 
 trictsj Highway Districts^ Police Districts, Educa- ' 
 tion Districts, and Sanitary Districts were insti- 
 tuted one after another, causing a needless exten- 
 sion of , the district principle by the multiplication 
 of district areas and authorities and taxes. This 
 is the evU under which English Local Government 
 labours. 
 smedyby The remedy is clear, if vested interests do not 
 
 lidation.' render it impracticable, viz., to consolidate all these 
 different kinds of districts into one kind of district, 
 which should be a subdivision of the county, and 
 itself be subdivided into parishes and townships. 
 Local Government would then be reduced into its 
 old triple and harmonious gradation of County, Dis- 
 
Local Government and Taxation. 27 
 
 trict, and Parish, areas and authorities, which the 
 experience of olden time in our own country, and 
 of tlie present time in Continental countries, shows 
 to he the most symmetrical and practical system of 
 management of local affairs. 
 
 The consolidated District should be the chief pi^*'^'^* 
 
 boards. 
 
 unit of Local Grovernment, and the District Board 
 should he the managing and taxing body in nearly 
 all local matters. It would attract a superior class 
 of representatives, and administer aflFairs in a much 
 more enlightened and economical manner than the 
 present multitude of district authorities. 
 
 But if vested interests, and the difiSculty of alter- if "o^^^oi^'i^- 
 
 , _ _ "^ tion impOB- 
 
 inff established boundaries, and changing the rates, ^ibie, parisii 
 
 ° 1 must be the 
 
 prevent such a consolidation, we shall be obliged unit. 
 to keep up the old conflicting and multiple Dis- 
 tricts and authorities, and to adopt Mr. Goschen's 
 plan of making the Parish the unit of local govern- 
 ment, as the commune is in France, creating a 
 Parochial Board in ,each parish, and entrusting it 
 with the duty of making a consolidated Eate for 
 the amounts asked by requisition from the county 
 and the various district authorities. But such a 
 system would be a perpetuation of that want of 
 simplicity and unity of Local Government in 
 England, which provokes the derision of Conti- 
 nental observers ; and it would have the great dis- 
 advantage of frittering away the energies of those 
 
28 Local Government and Taxation. 
 
 who are able to attend to local business, by the 
 multiplication of governing bodies ; and of dividing 
 Local Government among a multitude of insignifi- 
 cant men, instead of consolidating it in the hands 
 of the most capable. The country gentlemen of 
 England cannot surely be willing to' weaken them- 
 selves by its adoption. 
 EstabKsh "^^e ought to establish for each county or 
 
 three govern- ... 
 
 ing bodies, couuty division three units of authority : 
 
 1. A County Board, composed of Magistrates 
 and elected Eepresentatives, to control all purely 
 county matters, and with a certain power of laying 
 taxes for county and in aid of district purposes ; 
 but levying them through the District Boards. 
 
 2. District Boards, for the consolidated dis- 
 tricts (outside of boroughs) into which the county 
 should be divided ; the members of which should 
 be elected half by the owners and half by the 
 occupiers, each voting on their column of the 
 Rate Book with multiple votes up to six, as is 
 now the custom in almost all elections for Unions 
 and Districts ; these Boards to make a Consoli- 
 dated Eate for all county and district objects. 
 
 3. Vestries to continue for parishes, and for 
 purely local matters and expenditure. 
 
 Thus we should have a uniform and logical 
 system, with one set of constituencies, and govern- 
 ing bodies, and officials^ and assessment roll and 
 
Local Government and Taxation. 29 
 
 rates, and prevent a great waste of time, and 
 money, and efficiency. 
 
 V. 
 
 As regards Local Taxation, the'figures prove ^?<'ai t*^- 
 that since the reform that was completed in 1837 
 it has gradually but steadily increased, not only in 
 total amount, but also in the average rate in the 
 pound, both on land and houses. What would be 
 said if this were the case with any other kind of 
 income ? Suppose that in a similar period of 
 prosperity and general lightening of burdens, it 
 were found that trade incomes under Schedule D 
 were gradually encroached upon by taxes which 
 little by little increased, not only in aggregate 
 amount, but also in their percentage upon each 
 £100 of income ; suppose also that there was a 
 school of political economists ever watchful to 
 claim this advanced percentage as a permanent 
 burden ; woxdd there not be a great outcry against 
 the injustice of the continued increase, and a 
 clamour for relief ? But the injustice is the same 
 when the increase is on Eeal Property. 
 
 The cause of the increase is simple. The Cauae of in- 
 advance of civilization is constantly urging new 
 improvements for the welfare and health of the 
 population — police, drainage, better roads, educa- 
 
30 Local Government and Taxation. 
 
 tion, and the like. We provide them all at the sole 
 expense of Eeal Property, by levying fresh Rates. 
 One sort of property has to pay for the improve- 
 ment of every sort of property and the increased 
 comfort of the whole nation. Such a mode of 
 taxation is illogical as vrell as unjust. 
 pr™tm™ntB Some of the improvements scarcely affect Real 
 
 Eelrlro'™^ Property at all. Police is much more for the de- 
 perty. fence of persons and Personal Property than of Real 
 
 Property. Gaols are the same. Education is a 
 great advantage to persons and trade, hut benefits 
 Land and Houses in a very inferior degree. Luna- 
 tics have no connection with Real Property. These 
 and similar charges are wrongfully placed upon 
 Real Property, and ought to be shifted to Imperial 
 Taxation. They are at present almost entirely 
 under Imperial and not Local control, and ought 
 to be paid for by the controlling authority. The 
 House of Commons, by a great majority, in 1872, 
 resolved — 
 
 " That no legislation with reference to Local Taxation wUl 
 be satisfactory which does not provide, either in whole or in 
 part, for the relief of Oxjcupiers and Owners in Counties and 
 Boroughs from charges imposed on Katepayers for the ad- 
 ministration of Justice, Police, and Lunatics, the expenditure 
 for such piyposes beiag almost entirely independent of local 
 control." 
 
 The justice of such a relief is incontestable. 
 
Local Government and Taxation. 31 
 
 Anotlier class of charges are for local burdens other charges 
 
 benefiting all 
 
 that benefit Real Property, but also benefit otbertmds of pro- 
 property and persons. Why should Eeal Property 
 bear most of the expenditure ? Such is the main- 
 tenance of highways, which are in great part for 
 conveyance of personal property, and for personal 
 business, rather than of Eeal Property require- 
 ments. Such are sanitary improvements, which 
 benefit persons far more than Lands and Build- 
 ings. Such also is the relief of the poor, which 
 was an ancient obligation upon all kinds of pro- 
 perty, for the prevention of offences against 
 property generally. For all these burdens Eeal 
 Property is entitled to ask contribution from Per- 
 sonal Property. It is already given to a small 
 extent by the share of Rates that falls on occu- 
 piers. But as this share is only in proportion to 
 rent, which is seldom more than one-tenth of a 
 man's income, it is evident that the contribution 
 so given is very much smaller in proportion to 
 income than the contribution of the Eeal Property 
 itself. Contribution is made by special taxes on 
 personalty in foreign countries, such as France, 
 Belgium,, and Holland. It may be made in Eng- 
 land by the method proposed by Mr. Goschen, of 
 transferring to the local authorities part of the 
 Assessed taxes and House duty. 
 
 Another circumstance must, however, also be Difficulty in 
 
32 Local Government and Taxation. 
 
 altering long, taken iiito account — the long time that we have 
 
 eBtabhshed . 
 
 burdens. Deen accustomett to lay these burdens upon Eeal 
 Property, We cannot change a system and 
 suddenly shift a large amount of taxation, that has 
 been gradually imposed during a long series of 
 years, without occasioning a disturbance of the 
 relations between the two sorts of property, and 
 exciting discontent. IsTothing is so difficult to 
 transfer as a burden that has become habitual. 
 But a considerable portion of the Rates complained 
 of are for new purposes, and of recent imposition, 
 and ought to be prevented from becoming habitual. 
 The amount of relief, and the means by which it 
 can be given, will require the most careful adjust- 
 ment to avoid any imputation of hardship. 
 
 Importance of But the relief itself, if properly carried out, 
 will be felt as a great boon by all classes of the 
 community. Eates reach everybody, and everyone 
 is interested in their diminution. Their double 
 incidence, first on the Occupier and then on the 
 Owner, or first on the Owner and then on the 
 Occupier, makes them doubly oppressive. Their 
 inequality aggravates the hardship. They are 
 often highest in the poorest localities, and lowest 
 in the richest. They fall heaviest upon the de- 
 serving poor who are struggling to keep above 
 pauperism. They press with great severity on 
 working men who own and occupy their own 
 
Local Government and Taxation. 33 
 
 land or houses. Their reduction would be a more 
 universal benefit than the reduction or even aboli- 
 tion of the Income Tax. Their reform would be 
 as great an achievement for the Statesman and the 
 Party that carried it, as some of the greatest 
 reforms of Imperial Taxation. 
 
 The measures now suggested would simplify Conclusion. 
 and reorganize our Local Grovernment and Taxa- 
 tion upon the lines of our ancient local institutions. 
 
 They would reconstitute Local Grovernment 
 with its old divisions of County, District, and 
 Parish ; by the establishment of County Boards 
 combining the Magistrates and representatives of 
 the Eatepayers, and by District Boards consoli- 
 dating the present multifarious and conflicting 
 District areas. Boards, and Rates. 
 
 They would readjust Local Taxation by trans- 
 ferring to the Imperial Exchequer the burdens 
 which are most clearly of Imperial obligation and 
 under Imperial control ; and by contributing to 
 local purposes, on behalf of Personal property and 
 income, from some of the most localised personal 
 Taxes. 
 
 Thus we might convert the present chaos of 
 Local Authorities, and Areas, and Rates, into a 
 Idgical and well ordered system, and lighten the 
 burdens that now weigh so heavily upon the Eate- 
 payers of England. 
 
LETTERS 
 
 ON 
 
 MR. GOSCHEN'S EEPOET. 
 
 LETTER I. 
 
 TWO FALLACIES OF ME. GOSCHEN. 
 
 It is announced that the Government intend to 
 bring forward a great measure for the Reform of 
 Local Taxation, and that the next Session of 
 Parhament will he much occupied with its details. 
 It hecomes very important that the Report of Report, 
 Mr. Goschen, the official repertory of the statis- No. 4Vo, I'sro. 
 tics of the question, and the official summary of 
 the conclusions of the Poor Law Board and the 
 Government, should receive a careful and search- 
 ing examination before they are adopted as a 
 basis for legislation. Are those conclusions well- 
 grounded and sound ? Or are they erroneous and 
 fallacious ? 
 
 I. At the Social Science Congress, I challenged FaDaey of 
 
 ° comparing 
 
 as unsound and fallacious a very large and im- oU Poor Law 
 
 rates -vrith 
 
 portant portion of Mr. Goschen's argument, in present rates. 
 which through half his Report, and with the assist- 
 ance of a hundred statistical tables, he sets up the 
 rates of the old Poor Law period, from. 1803 to 
 
 o2 
 
36 Two Fallacies of Mr. GoRchen. 
 
 1834 — extravagantly high through war prices and 
 ruinous outdoor relief — as the proper measure of 
 the " hereditary burden " of the landowners, and 
 in which he selects the years 1814-15 and 1826-33 
 — the very culminations of war prices and of waste- 
 fulness and demoralization — as the years par ex- 
 cellence of fair comparison with our present 
 burdens ; never even mentioning the fact that 
 the Poor Law reform of 1834 cut off at once 
 £3,000,000 of that worse than useless expendi- 
 ture. Although nearly two months have passed, 
 neither Mr. Goschen nor his friends in any part 
 of the Press have attempted to reply to this 
 challenge, or have supported in any way the 
 groundwork and foundation of their arguments 
 and conclusions. 
 
 * Everyone acquainted with the history of the 
 English Poor Law knows that the poor rates of 
 the early portion of the present century were 
 abnormal and excessive ; during the years of the 
 French war, by the high prices of provisions and 
 the introduction of outdoor relief, which increased 
 the rates from £2,000,000 in 1785 to £9,000,000 in 
 1818; and afterwards by the wholesale pauperiza- 
 tion of the labouring classes through the spread of 
 the system of supplementary wages, which, in years 
 of reduced prices, again raised the poor rates towards 
 1834 to a level with the enormous war poor rates. 
 
Two Fallacies of Mr. Qoschen, 37 
 
 The year 1833 was one of the highest rated and 
 most expensive of the whole of that abnormal 
 series. Its misdeeds and wastefulness and ruinous 
 eflFects are fully described in the celebrated Report 
 in 1834 of the Poor Law Commissioners of In- 
 quiry, which led to the immediate enactment of 
 the new Poor Law. 
 
 Read their evidence of the state of things in 
 1833, describing the wholesale outdoor relief with- 
 out labour tests of able-bodied paupers ; the uni- 
 versal and pernicious system of allowances in sup- 
 plement of wages, the luxury in which paupers 
 were maintained in idleness in the poor-houses ; 
 the abuses of the Bastardy Laws ; the absence of 
 any proper system of accounts, and the plunder of 
 the rates by overseers ; and judge whether 1833 
 or 1 826, or any other year of that system, is a fair 
 year from which to deduce any conclusions about 
 the burden of rates. 
 
 Let Mr. Goschen look at the speech of Lord 
 Althorp, the Whig leader of the House of Com- 
 mons, introducing the new Poor Law Bill, when he 
 stated that "the effects of the Poor Laws were 
 injurious to the landed proprietors, injurious to the 
 farmers, and, above aU, injurious to the labouring 
 population," and that " the present administration 
 of the Poor Laws tends directly to the destruction 
 of all property in the country." 
 
38 Two Fallacies of Mr. Goschen. 
 
 Even a greater proof of the unfitness of 1833 
 and 1826 as years of comparison is found in the 
 sudden collapse of their vast expenditure under 
 the application of the new Poor Law. The Edin- 
 burgh Review of July, 1836, among many other 
 details, gives the reduction in the county of Surrey 
 of the number of able-bodied paupers from 6160 
 to 124, and of its expenditure by 45 per cent. And 
 the table in Mr. Goschen's own report shows the 
 still more gigantic result that the £8,606,000 poor 
 rates of 1833 had shrunk to £5,186,000 in 1838— a 
 reduction of no less than £3,420,000, or 40 per cent. 
 
 ISo statistician writing a paper to show the fair 
 average burden of poor rates would omit to point 
 out the exceptional character of the rates of 1833 
 and 1826, or would venture to hold them up as 
 a standard of comparison. And yet we find a 
 Minister of the Crown writing for Parliament and 
 the nation a Report of the most important character 
 to guide and determine future legislation, which 
 totally ignores this exceptional character, and 
 adopts and parades these years of excessive 
 expenditure as the standard and rule by which 
 to measure our present burdens and to crush our 
 present complaints. This great error pervades the 
 half of Mr. Goschen's report. In half its pages 
 and appendixes he is reiterating, in a hundred dif- 
 ferent sets of figures and tables, the comparison of 
 
Two Fallacies of Mr. Goschen. 39 
 
 the poor rates of 1803 and 1817, and 1826 and 
 1833, with the poor rates of the present day, and 
 proving them to be a " hereditary burden." This 
 invalidates his most important conclusions. The 
 true years of comparison are not 1803 to 1833, but 
 1837 to 1841 ; and the true figures of comparison 
 are not contained in Mr. Goschen's sentence, 
 " Between 1833 and 1868 the share of poor rates 
 borne, by land decreased from £5,435,000 to 
 £3,945,000 ;" but in the sentence as it ought to 
 have been written, " Between 1838 and 1868 the 
 share borne by land increased from £2,700,000 to 
 £3,945,000." 
 
 II. I now challenge a second important argu- PaUaoious 
 ment or theory of the Report, contained in pages transfer of 
 18 and 19 of the Blue Book, and section 8 of page land. 
 41, in which Mr. Goschen maintains that a portion 
 of the rates on land have been transferred to other 
 kinds of property, and that the hereditary land 
 burden has been proportionately lightened. This 
 theory has gained a greater prominence by having 
 been adopted and developed by able Liberal jour- 
 nals, and especially by the Economist, in an elabo- 
 rate article in April last, and by the Fall Mall 
 Gazette in a statistical summary on I^ovember 8. 
 But, with all respect for these eminent authorities, 
 I venture to assert that the theory is a delusion, 
 and that .there has been no such transfer of bur- 
 
40 Two Fallacies of Mr. Goschen. 
 
 dens from land to other property ; but that Mr, 
 Grosclien and the Economist and the Pall Mall 
 Gazette are the victims of a statistical fallacy. 
 
 Even on their own showing their figures are 
 inaccurate. As they are writing about contribu- 
 tions to Local Taxation, the proportions of the 
 different sorts of property must be measured by 
 rateable value (by which they are assessed) 
 and not by Income Tax valuation, in which the 
 mode of assessment on railways and other property 
 is essentially different. But in their comparisons 
 of land with houses and all other property, they 
 have adopted the percentages of the income tax 
 valuation, which represent the land as only 33 per 
 cent, of the total assessment, instead of the per- 
 centages of the poor rate valuation, which show it 
 to be for local taxation purposes nearly 38 per cent, 
 of the total assessment. They are therefore clearly 
 in error by. nearly 5 per cent., and this error they 
 have continued to the present time, notwithstand- 
 ing the publication long since of the correct figures. 
 
 But where Mr. Goschen and his friends have 
 made their enormous mistake is in their interpre- 
 tation of the table of percentages of the various 
 classes of property to the total value of real pro- 
 perty. I give this table in the corrected form from 
 the official figures of the poor rate valuation, point- 
 ing out also that it shows that land was the same 
 
Two Fallacies of Mr. Goschen. 41 
 
 percentage (69 per cent.) in 1826 in the poor rate 
 that it was in 1814, in the Income Tax Assess- 
 ment : — 
 
 1826. 1841. 1869-70. 
 
 Lands 
 
 69 
 
 52 
 
 37-8 
 
 Houses . . 
 
 . 26 
 
 37 
 
 52-7 
 
 Other property . . 
 
 5 
 
 11 
 
 9-5 
 
 Total .. 100 100 100 
 
 Seeing that the proportion which land hears to 
 the total assessment has diminished from 69 per 
 cent, in 1826 to nearly 38 per cent, in 1869, Mr. 
 Goschen and his expounders have jumped to the 
 conclusion that, making allowances only for the 
 increase of total rates, the actual hurden on land 
 has diminished and been transferred to other pro- 
 perty in the same proportion. Mr. Goschen states 
 this in rather hazy, but, I think, unmistakable 
 terms at page 19 of the Blue Book, and repeats in 
 general terms the assertion of transfer at page 41. 
 The Economist is much more decided, stating that 
 the relief of real property is shown by the table of 
 percentages (corresponding to the corrected table 
 above given), " so that land which was rated to bear 
 more than two-thirds of the local burdens now is 
 rated for one-thivd." The Fall Mall Gazette goes 
 into still greater detail, assuring us that " there is 
 a constant tendency in the land to support a 
 
42 Two Fallacies of Mr. Goschen. 
 
 diminisliing burden ; that between 1815 and 1846 
 the relative pressure was eased to the extent of 20 
 per cent., in 1863 the reduction was 10^ per cent, 
 more, and by 1871 a further reduction of 6 per 
 cent, was secured to the land," And it seems to 
 be growing into a settled article of the Liberal 
 creed (one of the sticks with which they delight to 
 beat the landowner) that there has been a con- 
 siderable bodily transfer of rates from land to other 
 and more popular property, to the unfair easement 
 of land and the disadvantage of other sorts of 
 property. 
 
 But the proposition is absurd. Lands are rated 
 . for the most part in rural Unions, quite separate 
 from the rapidly growing aggregations of other 
 property in the towns ; and from 1814 and 1826 
 down to the present time have borne their own 
 rates and provided for their own paupers quite 
 separate from the rates and paupers of the towns. 
 IsTo transfer of rates or burden has been possible 
 between them. There has been a small relief of 
 many parishes by railways running through them. 
 But otherwise the rurals and the town aggregations 
 have been shut up in separate cages, the bars of 
 which have rendered transfer physically impossible, 
 except only that in the neighbourhood of large 
 towns a certain proportion of agricultural land is 
 shut up in the same cage as the denser population. 
 
Two Fallacies of Mr. Goschen. 43 
 
 and has the increased harden of paying for part of 
 their paupers in addition to its own. 
 
 Mr. Groschen and his followers have overlooked 
 the fact that the great additional assessment and 
 additional poor rates of houses and other property, 
 forming the 31 per cent, of the total assessment 
 which that property has gained upon land, are a 
 totally new assessment and burden, which never 
 previously existed as an assessment, and never was 
 charged as a burden upon land. It is calculated 
 that since 1814 something like 1,500 millions ster- 
 ling has been spent in this country on new houses, 
 railways, manufactories, mines, and similar pro- 
 perty. This investment gives house room and em- 
 ployment to a vast additional population, with its 
 due proportion of paupers and poor rates. It adds 
 to the total poor rate expenditure, but it also adds 
 a proportionate amount of poor rates, quite inde- 
 pendent of and with no sort of transfer from the 
 rural districts and the land. 
 
 It is as if a new manufacturing county had 
 been reclaimed from the sea in Morecambe Bay or 
 the Wash and added to England and Wales, to he 
 a home for millions of fresh inhabitants ; or as if 
 a new quarter had been added to London with a 
 similar aggregate of new rateable property and 
 population. In either case some older portion of 
 England and Wales or London might, in conse- 
 
44 Two Fallacies of Mr. Goschen. 
 
 quence of the addition of tlie new property, form 
 38 per cent, of the new total, instead, of 69 per 
 cent, of the old total, without a single penny heing 
 transferred from the rating of the old property to 
 the rating of the new. 
 
 Just so it is with the Land assessment of Eng- 
 land and Wales. From the immense creation of 
 new huildings, railways, and mines, the Land forms 
 a smaller proportion of the new total than it did 
 of the old. But that is no proof of any transfer 
 of burden. I can prove from Mr. Goschen's own 
 figures that the land burden is not transferred, but 
 increasing. But I am astonished that such a faulty 
 argument should be used by logicians and disciples 
 of John Stuart Mill, and that Mr. Goschen and 
 eminent writers should gravely adduce the decrease 
 of the proportion of the land assessment to the 
 the total assessment, in a rapidly growing country, 
 as a proof of the transfer from land of any portion 
 of its old burden! It is the most charming non 
 sequitur — the most delightful fallacy — that ever 
 was broached in Blue Book bv a President of the 
 Poor Law Board. 
 
 Oct. 15 and Nov. 10, 1873. 
 
The Increase of Rates. 45 
 
 LETTER II. 
 
 THE INCREASE OF RATES. 
 
 In the portion of Mr. Goschen's Report called 
 Historical — on the lucus a non lucendo principle, I 
 suppose, since the history of the Eates is curiously 
 excluded, and naked dates and figures are alone 
 dealt with — Mr. Goschen inquires into the increase 
 or decrease of Eates and Eateable Yalue and Eates 
 in the pound, to ascertain the increase or decrease 
 of the " hereditary burden." I propose to point 
 out the principal errors of his inquiry, and to 
 state the calculations and conclusions that should 
 he substituted. 
 
 I. Eirst and foremost is Mr. Goschen's mistake fallacy as to 
 about the proper period of inquiry, caused by his burdens^ 
 fallacious use of the theory of "hereditary bur- 
 dens." That theory is derived from' Mr. Mill, and See Letter v., 
 is in itself a questionable doctrine, not accepted 
 unanimously by Political Economists. But it is 
 necessarily grounded on the assumption that the 
 prescriptive burdens, whose permanence it asserts, 
 are in themselves fair and reasonable. Neither 
 Mr. Mill nor any other good economist would 
 
46 The Increase of Rates. 
 
 dream of using it to sanction the burden of the 
 corvSe or any other of the prescriptive injustices of 
 pre-Revolutionary France ; nor could they apply it 
 to the burden of an extravagant and demoralising 
 expenditure, like that in wholesale outdoor relief; 
 or arising from abuses and dishonest expenditure, 
 &ucb as those of peculating overseers ; or an ex- 
 traordinary expenditure, like that of high prices 
 during war. Common sense forbids such a strain- 
 ing of the principle. Every rule of statistical 
 inquiry demands the exclusion of such exceptional 
 periods. But Mr, Groschen has chosen by prefer- 
 ence the exceptional old Poor Law period, and 
 has strained the "hereditary burden" theory to 
 cover everything. ISo matter how exceptionally 
 high the war prices from 1803 to 1815 ; no matter 
 how extravagant and demoralising the outdoor 
 relief of able-bodied paupers in 1826 ; no matter 
 how ruinous the abuses of 1833 — Mr. Goschen 
 elevates them all into " hereditary burdens," and 
 sets them up as standards for universal comparison. 
 Could there be a greater caricature of Mr. Mill's 
 doctrine, or a more serious perversion of the prin- 
 ciples of political economy 1 
 
 The .Economist pleads that a burden covering a 
 complete generation cannot be passed over as 
 exceptional, and that the landowners ought to be 
 reminded of its former existence. But does any 
 
The Increase of Rates. 
 
 47 
 
 length of time render unexceptionable a burden 
 
 like the old Poor Law, arising from wastefulness 
 
 and demoralisation, which is in its very nature 
 
 detrimental to society % And Mr. Goschen does 
 
 far more than "remind the landowners." The 
 
 years from 1803 to 1833 are the great argument 
 
 of his Eeport, the sword that he continually bran- Eeport, p. il. 
 
 dishes before the eyes of the ratepayers. Here is 
 
 his general summary of rates in the pound for 
 
 poor relief only : — 
 
 
 s. d. 
 
 1803 
 
 . .. 3 ^ 
 
 1813—15.. 
 
 .. 2 4A 
 
 1827 
 
 .. 2 5| 
 
 1841 
 
 . .. 1 H 
 
 1856 
 
 .. 1 8 
 
 1866 
 
 . .. 1 H 
 
 1868 
 
 .. 1 6 
 
 IsTot a word to point out that the first three rates 
 were abnormal, through war and a mistaken system 
 of relief, and that the last four are the normal and 
 legitimate rates, the result of a reformed adminis- 
 tration. AU are treated and argued upon as 
 equally legitimate and proper burdens. And they 
 are followed by summaries in which the relative 
 increases of property and rates are compared as 
 between 1815 and 1826 and 1833 on the one 
 hand, and 1868 on the other, to prove by aid of 
 
48 Ihe Increase of Rates. 
 
 the abnormal rates of the old Poor Law that the 
 annual value of rateable property has increased far 
 faster than its burdens ; and that, while the total 
 rates have greatly increased, the share borne by 
 land has materially diminished. So making it 
 appear that rateable property and land have been 
 lightened or relieved of a large portion of their 
 legitimate burdens ; at the same time totally 
 ignoring and suppressing the all-important fact 
 that the old Poor Law rates were monstrous and 
 excessive, and collapsed into very diflFerent figures 
 as soon as the new Poor Law reformed their abuses. 
 But such fallacies and misleading statements are 
 most unfair to the ratepayers and unworthy of a 
 Report to Parliament by a powerful Minister. 
 
 Observe the inferences to which they naturally 
 lead. The general public read them, and exclaim, 
 as I fear Mr. Goschen meant them to exclaim, 
 " What large reductions of taxation ! What right 
 have the owners and occupiers to ask for any 
 further remissions ?" The Radicals' read them 
 and exclaim — and were they not meant by 
 Mr. Goschen to exclaim ? — " What a shame that 
 the landowners have been let ofi" their proper taxa- 
 tion. Screw them up at once to their old rating." 
 But is this the way in which either Ratepayers or 
 Landowners ought to be held up to undeserved 
 odium ? 
 
The Increase of Rates. 49 
 
 II. The proper period for Mr. Goschen's in- Proper 
 quiry, in order to ascertain the fair " hereditary comparison. 
 burden," is the period of legitimate and normal 
 expenditure during the thirty-six years — more than 
 a whole generation — that have elapsed since the 
 carrying out of the great reform of the old Poor 
 Law abuses. During this period the facts of 
 rating have been. aU the other way. Since 1837, 
 the first year of the full efifect of the reform, the 
 poor rate, which includes nearly all the " unremu- 
 nerative " rates common to every kind of property, 
 has increased rapidly in total amount, and in a 
 much larger proportion than the rateable value. 
 This is evident from the official tables of annual 
 rates and of nominal rateable value. The fairest 
 mode of showing the increase is by a table of five- 
 year averages. Mr. Goschen adopts the plan of 
 averages, but takes them by too long periods of 
 ten years each, a method that fails to show the 
 rapid increases during the thirty-six years. The 
 subjoined table is made up from the official returns 
 of poor rates (omitting the portion appropriated 
 to highways) and the nominal rateable value is 
 calculated from the returned years, according to 
 the annual rate of increase : — 
 
 D 
 
50 
 
 The Increase oj Rates. 
 
 Nominal Increase of Rates since Pock Law Reform. 
 
 Years. 
 
 1837 to 1841 
 1842 to 1846 
 1847 to 1851 
 1852 to 1856 
 1857 to 1861 
 1862 to 1866 
 1867 to 1871 
 
 Increase in last t 
 5 years over > 
 first. J 
 
 Increase per cent. 
 
 Average 
 Poor Rates. 
 
 £ 
 5,700,000 
 P,SOO,000 
 7,300,000 
 7,200,000 
 8,000,000 
 8,800,000 
 10,545,000 
 
 Average 
 nominal Rate- 
 able Value. 
 £ 
 61,250,000 
 65,000,000 
 67,700,000 
 71,840,000 
 73,500,000 
 87,620,000 
 102,000,000 
 
 Average 
 
 nominal 
 
 rate in £. 
 
 s. d. 
 
 1 10^ 
 
 
 2 
 
 2 
 
 Of 
 
 £ £ s. d. 
 
 4,845,000 40,750,000 2i 
 
 85 
 
 66-5 
 
 11 
 
 Showing a substantial increase in tlie poor rate as 
 " compared with the nominal rateable value, and in 
 the percentage of the rate per pound. 
 Rise in IH. But this briugs us to another great mis- 
 
 ^teabWue. take of Mr. Goschen, which is an extraordinary- 
 one to be committed by the President of the Poor 
 Law Board. Throughout his inquiry Mr. Goschen 
 has argued upon Rateable Value as if it were in 
 every period the same proportion of the real value. 
 But rateable value is a different proportion at 
 different periods. The words represent a lower 
 standard, and have a different effect in the earlier 
 from the later years. The difference necessitates 
 
The Increase of Rates. 51 
 
 an important correction in the figures. It is a 
 difference officially described in well-known Poor 
 Law returns, and it ought to have been familiar to 
 Mr. Groschen, Yet not a word is written and no 
 single correction made in Mr. Goschen's Report in 
 consequence of its existence. 
 
 This difference arises from the practice of 
 under-rating or under valuation so prevalent in 
 the earlier half of the century, and described in 
 the official report of the Poor Law Commissioners 
 on Local Taxation in 1843. The Commissioners 
 say (pp. 50 to 53) that up to that time the assessed 
 value had always been considerably below the 
 legal standard of rateable value, and about the 
 middle of the last century was less than half the 
 true value; and that the practice gained ground 
 everywhere till 1815, from which time it remained 
 stationary till 1836. The motive of undervalua- 
 tion was to escape the parish contributions to the 
 county rate. The Parochial Assessments Act was 
 passed in August 1836 to remedy the evil, but up 
 to October 1842 had not come into operation in 
 11,190 parishes, which continued in their state 
 of excessive under-valuation, while in the 4,444 
 parishes which had been revalued, many of the most 
 scrupulous valuers admitted that, in order to avoid 
 dissatisfaction and appeals, they had kept their 
 valuations 10, 15, or 20 per cent, below the strict 
 
 d2 
 
52 
 
 Tke Increase of Rates. 
 
 estimate, while the less scrupulous had produced 
 valuations even more ohjectionable than before. 
 It is scarcely possible to avoid the conclusion, from 
 the account thus officially given, that the standard 
 of rateable value in 1837-41 (three years earlier 
 than even this stage of reform) must have been, 
 on the average of England and Wales, from 20 to 
 25 per cent, below the reformed and generally 
 correct standard of the present day. This conclu-. 
 sion is confirmed by the following table of increase 
 of rateable value compiled from Mr. Goschen's 
 returns, and which, notwithstanding the efforts 
 made after 1843 to remedy the abuse, shows by 
 the sudden increase which followed the Union 
 Assessment Act of 1862, the large under- valuation 
 which lasted till that year : — 
 
 Increasb of Nominal Rateable Value. 
 
 
 
 Increase per 
 
 Year. 
 
 Nominal Rateable Value. 
 
 cent, per 
 
 
 £ 
 
 annum. 
 
 1814 
 
 51,900,000 .. 
 
 — 
 
 1836 
 
 Parochial Assessment Act. 
 
 — 
 
 1841 
 
 62,540,000 .. 
 
 •76 
 
 1847 
 
 67,320,000 .. 
 
 1-2 
 
 1856 
 
 71,840,000 ^ . . 
 
 •7 
 
 1862 
 
 Union Assessment Act. 
 
 — 
 
 1863 
 
 76,357,000 .. 
 
 •9 
 
 1864 
 
 87,619,000 .. 
 
 . 14-7 
 
 1868 
 
 100,668,000 .. 
 
 3-7 
 
 1872 
 
 109,447,000 .. 
 
 2-2 
 
The Increase of Hates. 53 
 
 Here the animal increase, which grew larger 
 from 1841 to 1847, and then smaller, and again a 
 little larger from 1856 to 1863, makes a sudden 
 bound, on the appearance of the new valuations in 
 1864, of nearly 15 per cent, in a single year; then 
 makes an increase of 3^ per cent, for each of the 
 four next years, and lessens in the four last years 
 to a normal rate of 2 per cent, per annum ; — indi- 
 cating that in 1863 the nominal rateable value 
 was still more .than 16 per cent, below its present 
 standard. 
 
 Let us now apply these facts to correct the ^^^ increase 
 
 of poor rate. 
 
 figures of the table of rates and rateable value ; 
 and, in order to be quite within the mark, let us 
 estimate the rateable value of 1837-41 as only 15 
 per cent., instead of 20 or 25 per cent, below the 
 standard of rateable value- in 1867-71. We then 
 obtain the following table of the real increase of 
 rateable value and rates in the pound : — 
 
 Eateable Value Eate in £ 
 
 Years. 
 
 1837-41 . . 
 1867-71 . . 
 
 Average Poor 
 Eate. 
 £ 
 5,700,000 .. 
 10,545,000 .. 
 
 on Present on Present 
 Standard. Standard. 
 
 £ .0. d. 
 72,000,000 ..17 
 102,000,000 .. 2 Of 
 
 Increase . . 
 Increase ) 
 per cent. / 
 
 4,845,000 .. 
 85 
 
 30,000,000 .. 5| 
 41-5 . . 30 
 
 So that there is reason to 
 
 believe that, on the 
 
54 The Increase of Rates. 
 
 most moderate calculations, during the 35 years of 
 fair comparison between 1836 and 1871, while the 
 poor rate has increased 85 per cent., rateable pro- 
 perty has only increased 41^ per cent., or scarcely 
 half as rapidly, and the rate in the pound of real 
 value has increased 30 per cent. There has, there- 
 fore, been since 1836 a gradual, but large and 
 important, increase of the prescriptive or heredi- 
 tary burden of the poor rate on rateable property 
 generally. 
 Poor rates on jy gut it wiU probably be said by Mr. 
 
 kndftndon r J j 
 
 houses com- Goschcu, " Thcsc are figures for all rateable pro- 
 perty, and do not apply to land. Land is much 
 less heavily rated ;" and he will repeat the words 
 used in the conclusions of his report : " As regards 
 poor rate, the burden on lands in the country 
 generally has increased very slightly in amount, 
 and not at all as regards the rate in the pound." 
 I wonder why Mr. Groschen has never taken steps 
 to use the information at the command of the 
 Poor Law Board, and to ascertain from his own 
 returns, or from new returns, what are the amounts 
 of total poor rate and of poor rate in the pound 
 that are actually borne by land, and what by 
 houses and other property, to settle the question 
 whether land is very differently rated. The nearest 
 approaich is a return by Mr. Hibbert (Ho. 141, 
 1871) showing the poor rates in 1868-9 on 512 
 
The Increase of Rates. 55 
 
 rural unions to be 2s. Of d. in the pound, and those 
 in 155 town unions 2s. 6d. in the pound. It has 
 been elaborately argued by Mr. Goschen's friends 
 that this measures the difference of rates in the 
 pound between land and other property ; but their 
 reasoning is evidently erroneous, since the 512 
 rural unions contain about £20,000,000 rateable 
 value of houses and other property, which will re- 
 duce the town average of the rate in the pound on 
 houses. 
 
 There are means of confirming this by compa- 
 rison of Mr. Goschen's returns of rateable value 
 and poor rates levied for two different years, 1870 
 and 1868, in which the average poor rate for the 
 whole of England was almost exactly the same. I 
 have worked out the rate upon land from Eetum 
 417, 1871, which distinguishes the rateable value 
 of land, houses, and other property in every union 
 separately for 1869-70, and Eetum 421, 1869, 
 which gives the poor rate in the pound for every 
 union separately for 1867-8. This gives the 
 following calculation of total rates and rates in the 
 pound on land and on other property in 1869-70, 
 and of their percentages to the total amount : — 
 
Rateable 
 
 Poor Rate 
 
 Rate in 
 
 Value. 
 
 levied. 
 
 the£. 
 
 f 
 
 f 
 
 s. d. 
 
 39,800,000 . 
 
 . 4,150,000 1 
 36 per cent. J ' 
 
 . 2 1 
 
 38 per cent. . 
 
 
 65,070,000 . 
 
 . 7,343,000 1 
 
 . 2 3 
 
 62 per cent. . 
 
 64 per cent. J ' 
 
 
 104,870,000 . 
 
 . 11,573,000 . 
 
 ■ 2 2i 
 
 56 The Increase of Rates. 
 
 1869-70. 
 
 Land . . . . j 
 
 Houses and 
 other pro- < 
 perty 
 
 Total ..-. . 
 
 The above amounts of rateable value correct 
 some important errors of addition in Mr. Goscheu's 
 Return 417; and the amounts of poor rate levied 
 have been corrected for the small difference of 
 rates between 1868 and 1870, so that the result 
 may be in the main relied on. The table shows 
 the strongest probability that lands bear within 2d. 
 in the pound the same poor rate in the pound as 
 houses and other property. 
 Increase of The inferences are important. They show the 
 
 " extreme probability that the general conclusions of 
 the increase of rates proved in the last table but 
 one respecting all rateable property are true, with 
 a small deduction, for the rates on land separately, 
 and, therefore, that the poor rate in the pound has 
 materially increased upon land since 1836. The 
 total poor rates on land have still more largely in- 
 creased. 
 
The Increase of Rates. 57 
 
 £ 
 In 1837-41 they were 52 per cent., or 2,950,000 
 In 1869-70 they were . . . . 4,150,000 
 Increase in 34 years . . . . 1,200,000 
 
 Increase per cent. . . . . . . 40 
 
 To these have to be added the separately levied 
 highway rate, and the sanitary and educational 
 rates just commencing. The whole show a consi- 
 derable present as well as prospective augmenta- 
 tion of the burdens on land. 
 
 V. I recapitulate the conclusions : Conclusions. 
 
 1. That every principle of political economy, as 
 well as of sound logical and statistical inquiry, 
 forbids the course Mr. Goschen has taken of dedu- 
 cing the prescriptive or hereditary burdens on pro- 
 perty from periods of extraordinary and excep- 
 tional expenditure like the old Poor Law period 
 from 1782 to 1834. 
 
 2. That the fair and legitimate period for such 
 an inquiry is the period of 36 years, more than a 
 generation, since the new Poor Law Eeform was 
 carried into effect in 1836. 
 
 3. That during this period the total poor rate 
 (which represents the unremunerative local taxa- 
 tion) has increased on the total rateable property 
 more rapidly than the rateable value, and the 
 average poor rate in the pound has increased 
 also. 
 
 4. That the real increase of rate, in the pound 
 
58 The Increase of Rates, 
 
 is still more considerable, when we take into ac- 
 count the important rise during that period in the 
 standard of rateable value by the correction of the 
 old system of undervaluation. 
 
 5. That investigation of the best available 
 official data indicates that lands pay within 2d. in 
 the pound the same avefage poor rate as houses 
 and other property. 
 
 6. That the poor rates on land have during the 
 36 years increased largely in total amount and (in 
 common with other rateable property) in the rate 
 in the pound of real value. 
 
 7. That the other rates are increasing both on 
 lands and on houses and other property, 
 
 8. That thus it appears that during the last 36 
 years the burden of rates on land separately, and 
 also the burden on houses and other property, 
 have materially increased, and are still increasing, 
 both in total amount and on the average rate in 
 the pound of real value. 
 
 These conclusions are proved by chapter and 
 verse out of Mr. Goschen's own returns and the 
 official Poor Law Reports. They are diametrically 
 opposite to Mr. Groschen's conclusions on rating 
 questions, conclusions which are the main proposi- 
 tions of his Report, and if my conclusions are right 
 Mr. Goschen's Report is shattered and worthless, 
 I challenge Mr. Goschen and his friends to dis- 
 
The Increase of Bates. 69 
 
 prove tiiem or to alter in any material manner my 
 calculations. I have a strong conviction that they 
 will not succeed in doing so ; and that on this 
 important suhject of the increase of rates the 
 public will find, and Mr. Gladstone will find, that 
 the backbone of Mr, Goschen's report is broken. 
 November 29, 1873. 
 
60 Mr. Goschen on Comparative Taxation. 
 
 LETTER III. 
 
 ME. GOSCHEN ON COMPAEATITE TAXATION, 
 
 The most important portion of Mr. Goschen's 
 report is that wMcli treats of the total Taxation, 
 Imperial as well as Loeal, of Eeal Property as 
 compared with other property. In more than one 
 debate in the House of Commons, Mr. Grladstone 
 had announced the necessity of such an investiga- 
 tion before any step could he taken towards Local 
 Taxation Reform, and had warned the reformers 
 that they might find the special burdens of rate- 
 able property countgrbalanced by its exemptions. 
 How has Mr. Groschen worked out the suggestions 
 of his Chief 1 What counterbalances has he de- 
 monstrated, and what errors has he committed ? 
 Eeal property I. First we have to ascertain what property it 
 
 ■wrongly used . r. i i 
 
 intwodif- is of which we require to find the total taxation. 
 English law is so arbitrary in its definition of Real 
 Property and Personalty that those properties do 
 not correspond at aU accurately with the taxes 
 which are generally considered real property taxes 
 and personalty taxes. Land and houses pay real 
 property taxes when they are freehold or copyhold. 
 
Mr. Goschen on Comparative Taxation. 61 
 
 and both real and personal taxes when they are 
 leasehold or sold under a will. Railways, mines, 
 and other rated property pay both real and per- 
 sonal taxes. This liability to pay both kinds of 
 taxation is one of the greatest grievances of the 
 Local Taxation question, and one which an inquiry 
 like Mr. G-oschen's especially needs to examine 
 into. Hence Mr. Goschen's investigation ought 
 to have been respecting the total Taxation, real as 
 well as personal, of all Rateable Property. 
 
 Instead of this, Mr. Goschen has adopted a 
 principle which causes the greatest confusion. 
 Using the words "real property" instead of 
 " rateable property " as the subject of his inquiry, 
 he gives those words different meanings in Local 
 and in Imperial Taxation. In his long series of 
 Local Taxation tables " Real Property " means 
 Rateable Property, and includes Lands, Houses, 
 Railways, Mines, and other rated property. In 
 his equally long series of Imperial Taxation tables, 
 " Real Property " means only Lands and Houses. 
 In a third series of tables compounded of the 
 other two, and professing to give the " total taxa- 
 tion on real property," the meaning of the words 
 " real property " is different in different lines and 
 columns, and even in the same lines and columns, 
 of the same tables. In consequence, the so-caUed 
 " total taxation " is not the total taxation of 
 
62 Mr. Goschen on Comparative Taxation. 
 
 Highest 
 standard of 
 asBesBinent 
 wrongly 
 adopted. 
 
 the property included. As in the gross income 
 tax assessment lands and houses are valued at 
 £116,000,000 a year, and lands, houses, railways, 
 mines, and other rated property at £143,000,000, 
 the importance of the discrepancy between the 
 two series of figures is very evident, and the un- 
 statistical blunder into which Mr. Goschen has 
 fallen. • 
 
 II. But a second fallacy is committed, with the 
 same object of lowering the English rate in the 
 pound. There are in the English valuations three 
 standards of value in property assessments. First 
 and highest is the gross Income Tax assessment 
 which on real property is the extreme nominal 
 rack-rent without any deductions for outgoings — 
 a standard which every one knows from his own 
 house or land to be (as Mr. Gladstone himself said 
 in his Budget speech of 1852) fully 16 per cent, 
 above the real or net value. Secondly, there is 
 the net Income Tax assessment, in which some 
 abatements and excusals have been made, and 
 representing in its total, rather than in its details, 
 more nearly the true value of the total real pro- 
 perty. Thirdly, there is the rateable value to poor 
 rate, which in land and houses gives pretty accu- 
 rately the net value, but in railways, mines, 
 and other rated property a lower proportion. 
 The three annual values in 1868 for all rate- 
 
Mr. Goschen on Comparative Taxation. 63 
 
 able property were — gross Income Tax assess- 
 ment, £143j870,000 ; net Income Tax assessment, 
 £133,000,000; and rateable value, £100,600,000. 
 For lands and houses only these values were 
 respectively £116,000,000, £107,000,000, and 
 £90,000,000. Of these three values the net Income 
 Tax assessment is the fairest full value. But Mr. 
 Goschen, for obvious reasons of advantage to his 
 argument, chooses throughout his tables the ex- 
 treme and excessive gross Income Tax assessment, 
 and so erroneously represents the pressure of Eng- 
 hsh taxation as lighter than its real proportion. 
 
 III. A very signal instance of the erroneous Error in 
 
 _ff»j_i?j.i' ± J. ij 1 iT'ji calculation of 
 
 eftect ot this extreme standard, when coupled with Preneh 
 a serious mistake in the French standard also, '^^^''°°- 
 occurs at pages 39 and 170 of the Report and 
 Appendix, in the important comparison of English 
 and French taxation. In the table at page. 170 
 Mr. Goschen states the English real property at 
 the extreme total of £143,872,000, and its taxes 
 as £21,900,000, giving a rate in the pound of 
 3s. O^d, He states the French real property (on 
 the authority of D'Audiffret) as £160,000,000, 
 and its taxes as £23,528,000, giving a rate in the 
 pound of 2s. ll^rf., so demonstrating to his owij 
 satisfaction their practical equality, and obtaining 
 what appeared a weighty argument against British 
 grumbling. But unfortunately Mr. Goschen failed 
 
64 Mr. Goschen on Comparative Taxation. 
 
 in his perusal and extracts from the great French 
 statistician, De Parieu, to observe that the Co7i- 
 tribution Fonder valuation is only on lands and 
 houses, and that railways, canals, &c., are valued 
 only at the agricultural rentals of the land which 
 they occupy (De Parieu I., 236). Consequently 
 for this comparison we must take the English 
 valuation also for only lands and houses, which 
 on the net Income Tax assessment is £107,000,000 
 instead of £1 43,00 1),000 annual value. It stands 
 to reason that the immense landed property of 
 France, 130,000,000 acres and the houses and 
 other real property of 38,000,000 inhabitants must 
 in 1868 have been very much more valuable than 
 the 37,000,000 acres of England and Wales, and 
 the houses and other real property of 21,650,000 
 inhabitants. But the difference in the English 
 rate of taxation, by this correction of the valua- 
 tion of property to £107,000,000, is immense. It 
 makes the English . taxation in the pound on real 
 property 4s. Id. instead of 3s. 0\d. : against the 
 French 2s. ll^d. Even if, to avoid all possibility 
 of including too much English taxation in the 
 total, we omit the £1,500,000 of rates (9 J per cent.) 
 due to railways, mines, and other rated property, 
 the English taxation in the pound on lands and 
 houses only is 3s. lid., or 34 per cent, heavier 
 than the French. Here, then, is an error of Mr. 
 
Mr. Goschen on Comparative Taxation. 65 
 
 Goschen's of the most important character in the . 
 figures of the most important of his comparisons 
 of EngUsh and foreign taxations on real property ; 
 an error the discovery of which upsets altogether 
 the conclusion of their equal burdens, which was 
 one of the great results of his investigation. 
 
 IV. But what is Mr. Goschen's conclusion about '^bHutb to 
 
 ascertain 
 
 the relative burdens of English real and personal proportions of 
 
 taxes on realty 
 
 property ? He divides all the Imperial and Local and per- 
 Taxation into two categories (pages 32 and 121). 
 
 First, Taxes on real property, £21,900,000. 
 Their percentage on total taxation, 32'57. 
 
 Secondly, Taxesnotonrealproperty,£45,3i0,000. 
 Their percentage on total taxation, 67'43. 
 
 Further than this analysis Mr. Goschen declares 
 it impossible to go. He does not mean this to be 
 a comparison of the taxes on real and personal 
 income, although the words might bear that mean- 
 ing ; and he repudiated such a construction in 
 a subsequent speech. Such a comparison Mr. 
 Goschen considers impossible, because he can 
 neither estimate the amount of personal income 
 nor distinguish the taxes that fall on it. He gives 
 up all attempts to ascertain exemptions of real 
 property, and counterbalances on personal incomes, 
 and turns away to a comparison of percentages in 
 various years and countries, with which we will 
 deal immediately. But see what this abandonment 
 
 E 
 
66 Mr. Goschen on Comparative Taxation. 
 
 implies. Mr. Gosclien says, in effect : — " I confess 
 tliat I cannot prove anything about tlie compara- 
 tive taxation of Keal and Personal Income. I can- 
 not show that the special taxes on personalty are 
 equal to the burdens on real property. I have 
 collected every possible information and I have 
 had the aid of the ablest statisticians. But we 
 cannot prove it. No one can prove it." 
 
 But such a confession is fatal to the great 
 Eadical doctrine of the heavier taxation of per- 
 sonalty. 
 FaUaoy as to V. The direct answer to Mr. Gladstone's ques- 
 offore?^™ tion having been given up as hopeless by Mr. 
 Goschen, what are the indirect answers by which 
 he arrives at his conclusions about the taxation of 
 Eeal Property ? The real question for discussion 
 is whether certain property in England bears more 
 than its proportionate share of the total taxation. 
 Suppose (as an illustration) that a similar question 
 arose in a particular parish, such as St. James's, 
 Piqcadilly, respecting a portion of rateable pro- 
 perty, such as Carlton House Terrace, the occu- 
 piers of which complained that they were assessed 
 upon too high a scale, and were paying 4s. 6d. in 
 the pound, against 3s. on all other property. It 
 would be no answer to their complaint to show that 
 they were paying the same proportion — say 5 per 
 cent. — of the total rates of the parish, as 30 years 
 
 taxation. 
 
Mr. Goschen on Comparative Taxation. 67 
 
 ago, unless we could also prove that their property 
 was the same proportion of the total property. If 
 not, they would say very justly that other property 
 had increased in a greater ratio, and that this pro- 
 portion was no longer the fair proportion for them 
 to pay. Still less would it be any answer to show 
 that similar rows of houses in other parishes were 
 paying 5 or 6 per cent, of the total rates of their 
 respective parishes unless we could prove the same 
 proportion of total property ; because the propor- 
 tionate values of the property assessed might be 
 widely different in each different parish. I^or would 
 it be any answer to show that in other parishes 
 such as Bethnal Green, rates were 6s. or 7s. in the 
 pound. Mr. Gladstone and the inhabitants of 
 Carlton House Terrace would say with perfect 
 justice: — "All these answers are fallacies. We 
 have nothing to do with other parishes and their 
 rates or percentages. We want simply to pay our 
 fair proportion, according to value, of the present 
 rates of the parish of St. James." 
 
 But the answers of Mr. Goschen about English 
 taxation are in effect these same three answers. 
 He gives us elaborate tables, which I shall pre- 
 sently quote, to show that English taxation on real 
 property was 26 per cent, of total taxation in 1826, 
 and 32 per cent, in 1868, but says nothing about 
 the proportions of real property income to total 
 
 E 2 
 
68 Mr. Goschen on Comparative Taxation. 
 
 income in those years. He gives us tables to show 
 that English real property pays nearly the same 
 proportion of total taxation — about 30 to 32 per 
 cent. — as French and Belgian real property ; hut 
 says nothing about the relative proportion of real 
 property to total income in England as compared 
 with France and Belgium. And he gives us tables 
 to show that the rate in the pound on real property 
 in England is lower than in Belgium and Holland, 
 and nearly the same as in France ; but "here, as 
 before shown, he is utterly wrong in his English 
 figures. But it is clear from the illustration above 
 given that all these comparisons, if carried no 
 further than Mr. Goschen carries them, prove 
 absolutely nothing. 
 
 Mr.GoBchen'a YI. But I go farther, and can prove that, 
 
 reai^prop^^y closcly looked into, these very tables tell against 
 
 the mosr Mr. Goschen's theory. 
 
 hoariiy taxed. ^ ^^ Goscheu states that the proportion of 
 the taxation on real property in England and 
 Wales to total taxation was — in 1826, 25-91 per 
 cent. ; in 1843, 27-16 per cent. ; in 1862, 31-35 
 per cent. ; and in 1869, 32-57 per cent. But this 
 shows an increase of 6'66 per cent, since 1826, 
 while the proportion of real property to total in- 
 come has diminished ; so that the proportion of 
 taxation on real property must have increased very 
 considerably. Mr. Goschen says the proportion 
 
Mr. Goschen on Comparative Taxation. 69 
 
 of taxation on land must have diminished, but he 
 does not prove it by any figures. We know the 
 proportion of land to total income has very much 
 decreased, through the increase of houses and 
 personal income, and therefore the proportion of 
 the taxation of land to total taxation ought also 
 to have diminished. But this does not in the 
 least prove that land bears now any less burden in 
 proportion to its relative value than it did in 1826. 
 Mr. Goschen's answer fails him as to land as well 
 as houses. 
 
 2. Mr. Goschen tells us that the percentages 
 of local taxation borne by real property in different 
 countries are — United Kingdom, 30"41 ; France, 
 28-87; Eussia, 17-28; Holland, 20-16; Belgium, 
 31-92; Austria, 27-93; so that real property pays 
 in the United Kingdom a larger proportion than 
 it pays elsewhere, except in Belgium. But let us 
 add to this table Mr. Goschen's own figures for the 
 actual country under investigation " England and 
 Wales 32-57 per cent.," and it is evident that, on 
 his own showing, English real property pays a 
 larger proportion than real property in any other 
 country. But, further, as English real property 
 produces a smaller share of English total income 
 than real property does of the total income of any 
 other country, it is clear that English real pro- 
 perty pays really a much larger share in proportion 
 
70 Mr. Goschen on Comparative Taxation. 
 
 to its relative value of the total taxation. For 
 example, if real property in England and Wales 
 produces one-seventh of the total income and pays 
 32 "57 per cent, of the total taxation, while real 
 property in France produces one-fifth of the total 
 income and pays 28'87 percent, of the total taxa- 
 tion, it is evident, by a simple arithmetical sum, 
 that English real property pays more in proportion 
 than the French in the ratio of 45"6 to 28 "87, or 
 more than half as much more ; so that Mr. 
 G-oschen's table tells entirely against his own view. 
 Instead of showing that English real property pays 
 very little more than real property in foreign 
 countries (all whose personal incomes are so much 
 smaller), it indicates that the English real pro- 
 perty must really pay something like a third or 
 a half, or even two-thirds more taxation in pro- 
 portion. 
 
 But, says Mr. Goschen, Land, at all events,' 
 pays a much less proportion in England than land 
 in other countries, because houses pay a much 
 larger proportion. Mr. Goschen falls into the 
 strange fallacy of assuming that land ought in 
 every country to pay the same proportion of local 
 taxation, no matter what its own proportion to 
 total income. Land in England produces a much 
 smaller proportion of the total income than in 
 France, probably in the proportion of one-twentieth 
 
Mr. Goschen on Comparative Taxation. 71 
 
 part in England to one-eighth in France. Of 
 course it is probable that the English one-twentieth 
 pays a smaller share of English taxation than the 
 French one-eighth does of the French taxation ; 
 but this does not show in any manner that the 
 Eiiglish land pays a less relative proportion of 
 taxation than French land. On the contrary, when 
 the figures are produced, we shall no doubt be able 
 to show, just as in the case of real property, that 
 English land pays much more taxation in propor- 
 tion to its real share than land in other countries. 
 Anyhow, Mr. Goschen's proof fails completely. 
 
 3. Mr. Groschen adds a table of rates in the 
 pound of taxation of real property in different 
 countries : — ^United Kingdom, 3s. .O^d. ; France, 
 2s. Hid.; Belgium, 3s. I^d. ; Holland, 4s. ^\d. ; 
 but I have previously shown that England and 
 Wales pay on land and houses (corresponding to 
 the real property of foreign countries) ■ 3s. lid. in 
 the pound, instead of Mr. G-oschen's 3s. O^d. ; so 
 that English real property is more severely taxed 
 than every other country except Holland, the most 
 heavily-taxed country in Europe. But the true 
 comparison is not with the most heavily-taxed, but 
 with the average-taxed country. The debt and 
 misfortunes of Holland, or the exceptional circum- 
 stances of Belgium, are no reasons for claiming to 
 fix a higher standard of taxation for England. 
 
72 Mr. Goschen on Com/parative Taxation. 
 
 The above figures show clearly that England pays 
 more than the average taxation upon her real pro- 
 perty. For land separately the rates in the pound 
 in foreign countries have not been worked out. 
 England is so much above the average in lands 
 and houses that Mr. Goschen has no right to 
 assert, without the most careful proof, that she is 
 below the average in land separately. He has pro- 
 duced no proof at all ; yet we find him asserting 
 (page 40) " that the position of lands in England 
 has been shown to be infinitely more favourable 
 than in either Belgium or France." The assertion 
 is utterly erroneous and unfounded. 
 
 I must also remark on the unfairness of his 
 parading in the same page (40) the percentages 
 of Imperial taxation alone, paid by land in Eng- 
 land and other countries. England, 5*28 per cent. ; 
 France, 18-43; Prussia, 11-39; Belgium, 20-72, 
 &c., and then drawing inferences (which are meant 
 to disparage land,) that land is not so available for 
 Imperial taxation in England as in those other 
 countries. English Local taxation is heavy on 
 land and Imperial taxation light, while tlie Conti- 
 nental system is exactly the reverse. IsTo compa- 
 rative international statement is fair to the land 
 which does not include both Local and Imperial 
 Taxation. 
 Conclusions. VII. The following are the conclusions of this 
 letter, and surely never, even in the palmy days of 
 
Mr. Goschen on Comparative Taxation. 73 
 
 protection (either English or American), was a 
 more serious list presented of errors and fallacies, 
 and proofs that prove the contrary, extracted from 
 a great Ministerial Eeport to Parliatnent : — 
 
 1. Instead of defining "Real Property" and 
 ascertaining its total taxation, Mr. Goschen has 
 adopted one meaning of the words in his Local 
 Taxation Tables and another meaning in his 
 Imperial Taxation Tables, and has confounded 
 both meanings together in his Total Taxation 
 Tables, though one meaning includes something 
 like £27,000,000 a year more than the other. 
 
 2. Mr. Goschen has committed the great error 
 and injustice to English taxpayers of adopting in 
 Ms Imperial and Tatal Taxation Tables the ex- 
 treme and excessive gross Income Tax valuation 
 for comparison with the usually low continental 
 valuations, instead of adopting the fairer but high 
 net Income Tax valuation. 
 
 3. He has made a very serious mistake about 
 the nature of the Contribution Foncier valuation 
 of French Eeal Property, which has led to his 
 errone'^usly calculating the corresponding English 
 Eeal Property rate in the pound at 3s. O^d. instead 
 of 3s. lid., so altering most materially the true 
 inferences of comparative weight of French and 
 English taxation on Eeal Property. 
 
 4. He declares himself unable to ascertain the 
 
74 Mr. GQschen on Comparative Taxation, 
 
 comparative weight of taxation on Real Property 
 and Personal Income in England and Wales. 
 
 5, Instead of the real answer to the question 
 of what are these comparative burdens, Mr. Goschen 
 endeavours by analogies drawn from percentages 
 of taxation on real property in different years 
 and countries to show that Eeal Property and 
 Land are not unduly taxed ; but his inference is 
 unfounded, because he omits the information in- 
 dispensable to support it, viz., the proportions of 
 such property to total income in those various 
 periods and countries. So far as this information 
 can be supplied, it shows that Mr. Goschen's 
 tables prove the exact opposite, viz., that English 
 Real Property is more heavily tax;ed, ' 
 
 6. He endeavours to show by comparison of 
 taxation in the pound in various countries that 
 English Real Property and Land are not so heavily 
 taxed as in some foreign countries ; but when the 
 above-mentioned mistake is corrected, his table 
 proves that Real Property in England is much 
 more heavily taxed than the average of foreign 
 countries, and than all foreign countries except 
 Holland. 
 
 Such are the conclusions to which I invite 
 public attention, and which I challenge Mr. Goschen 
 and his friends to disprove if they can. These con- 
 clusions show that the portions of Mr. Goschen's 
 
Mr. Goschen on CoThparative Taxation. 75 
 
 Eeport respecting the Total Taxation of Real Pro- 
 perty and its comparison with that of foreign 
 countries are as thoroughly fallacipus and mislead- 
 ing as the portions of his Eeport about the increase 
 of Eates were proved to be in a previous letter. 
 Undisproved, they must destroy all the credit and 
 authority of his Report. 
 
 Dec. 24, 1873. 
 
76 The Taxation of Realty and Personalty. 
 
 LETTER IV. 
 
 THE TAXATION OF KEALTY AND PERSONALTY. 
 
 Mr. aoBciien's The present position of Mr. G-oschen's Eeport on 
 undefended. Local Taxation is peculiar. It is a Eeport by 
 a Cabinet Minister, as the head of the Local 
 Government Department, presenting to Parliament 
 a large body of official statistics, and drawing 
 from them a series of very important proposi- 
 tions as a basis for legislation. For a long time 
 the formidable and complicated mass of tables, 
 rudis indigestaque moles, deterred all critics, and 
 Mr. Groschen retorted with some eflfect upon his 
 opponents in a late debate, that in the public press 
 no one had impugned his figures and conclusions. 
 But now they have been stoutly called in question, 
 and Mr. Goschen has not ventured to defend them. 
 Many of his principal facts and statements have 
 been shown to be inapplicable or erroneous, and 
 
 See Appendix, ]iis chief conclusions to be fallacious. To my 
 
 pp. 95-99; - . •' 
 
 earliest and least important letter Mr. Goschen 
 
 replied promptly. But when a long catalogue of 
 
 serious errors and fallacies were published, Mr. 
 
 Goschen took refuge in silence. ~Ho challenge 
 
 could induce him to defend his own propositions. 
 
The Taxation of Realty and Personalty. 77 
 
 His friends deserted him. The Economist, one of 
 whose able editors had supplied much of the 
 material of the report, fired off a couple of para- 
 graphs in answer to my earlier letters, and then 
 withdrew from the conflict. ISov did any official 
 champion come forward in defence of his chief. A 
 little bird tells me that in official circles the great 
 Eeport is condemned as "full of mistakes." The 
 Saturday Review describes it as "Mr. Goschen's 
 blundering statistics." So the virgin fortress of 
 Mr. Goschen's Report has fallen without a struggle. 
 
 But before concluding this one-sided contro- Kfiiatire 
 
 111 taxation 
 
 versy, I must say somethmg more about the prob- 
 lem pronounced by Mr. Goschen to be insoluble — 
 the relative Taxation of Real Property and Per- 
 sonalty. Mr. Goschen leaves the question in a 
 most unsatisfactory state. He gets no further 
 before giving it up than an estimate of the taxa- 
 tion primarily falling upon Real Property, and a 
 lump sum total of the remainder. He declines to 
 estimate the ultimate and real burden upon real 
 property, and never approaches either the primary 
 or the ultimate burdens' upon personalty or indus- 
 trial incomes. His calculations stop short at the 
 first and most elementary step, where they are of 
 no practical use. But is it impossible to solve a 
 question so important for the fair adjustment of 
 future taxation 1 The investigation is no doubt 
 
Imperial 
 taxation on 
 lands and 
 houses. 
 
 '78 The Taxation of Realty and Personalty. 
 
 difficult from the complication of many of the facts 
 and the uncertainty of some of the figures. But 
 approximate conclusions can be obtained, which 
 may be valuable guides for legislation. 
 
 1. As regards Imperial Taxation. Mr. Goschen 
 gives, at page 30 of his Report, the Imperial Taxa- 
 tion falling in 1868-69, upon lands and houses 
 (which he there calls " real property "), in England 
 and Wales : — 
 
 
 
 £ 
 
 Land tax 
 
 . . 
 
 . . 1,082,000 
 
 House tax 
 
 . . 
 
 .. 1,062,000 
 
 Income tax, 4d. 
 
 . . 
 
 . . 1,785,000 
 
 Succession duty- 
 
 . . 
 
 571,000 
 
 Stamps on deeds. 
 
 fths 
 
 . . 1,033,000 
 
 Probate duty, ,1-lOth 
 
 143,000 
 
 Total on land and houses . . 
 
 . . 5,677,000 
 
 This is nearly 5-3 percent, on their annual value of 
 107,000,000?., in Schedule A of the net Income Tax 
 assessment. I should be inclined to diminish the 
 amount of stamps,, and to increase the probate duty 
 for leaseholds and real property devised for sale, 
 as well as to add some legacy duty for these last 
 devises ; but the total is a fair estimate of the real 
 amount. For estimating the ultimate incidence, a 
 considerable portion of the house duty needs to be 
 deducted as being borne, where competition exists, 
 by the tenants. But on the other hand, allowance 
 
The Taxation of Realty and. Personalty. 79 
 
 must be made for the fact, that the succession and 
 legacy duties are paid only upon the net value of 
 the property after deduction of mortgages, and 
 must be reckoned at more than 1 per cent, instead 
 of their apparent amount of ^ per cent. The per- 
 centage of Imperial Taxation ultimately falling on 
 land and houses is, therefore, about 5 per cent, 
 
 2. The Imperial Taxes on Personalty, except On personalty 
 leaseholds, but including railways, canals, &c., are, 
 from the returns of the same year, 1868-69 : — 
 
 Probate duty (balance) 
 
 £ 
 
 . . 1,292,000 
 
 Legacy duty 
 
 .. 1,766,000 
 
 Stamps on deeds (balance) . . 
 
 344,000 
 
 Eailway duty 
 
 500,000 
 
 Income tax, 4d. in the pound 
 
 
 But as there is no official estimate of the amount 
 of personalty, the percentage of the total taxes 
 upon the total income must be calculated separately 
 for each tax. Thus income tax at 4(i. in the pound 
 was 1'66 per cent. Stamps, even if taken as a 
 larger amount than here set down, cannot exceed 
 f per cent. Eailway duty will be calculated 
 when we distinguish railway capital. The probate 
 and legacy duties require a longer explanation. 
 Prohate duty is shown by the official returns to be on 
 the average 2 per cent, upon the capital assessed, 
 and legacy duty to be on the average 2^ per cent. 
 
80 The Taxation of Realty and Personalty. 
 
 on the capital assessed, when bequeathed absolutely, 
 and on the value of the life interest when left 
 for life, the latter being equivalent to an average 
 of 1-66 per cent, on the capital. Settled per- 
 sonalty (of w^iich there is a great deal) pays no 
 probate duty ; and only succession duty, which is 
 on the average 2 per cent, on the life interest. 
 Property passing from husband to wife, or wife to 
 husband, pays neither legacy nor succession duty. 
 Hence, the average probate, legacy, and succes- 
 sion duties on personalty assessed at all these 
 different rates may be approximately taken. at 3^ 
 per cent. 
 
 But although these are theoretically taxes on 
 capital, it has been pointed out in recent discus- 
 sions that they must, in estimates of actual taxa- 
 tion, be treated as paid so much a year out of 
 income. The Inland Revenue considers that 
 property passes under these duties once in 30 
 years, so that we must ^consider the 3^ per cent. 
 as a tax on 30 years' income. Suppose an aggre- 
 gate 100,000^. of investments of all sorts of per- 
 sonalty, producing from high and low rates of 
 interest an average of 4^ per cent. The tax will 
 then be 3,500L on 30 times 4,500Z., or a tax of 
 2^ per cent, on the annual income. Hence the 
 ultimate Imperial Taxes on personalty other than 
 railways were— 
 
The Taxation of Realty and Personalty. 81 
 
 Probate, legacy, and succession duties 2-5 per cent. 
 
 Stamps 0-75 „ 
 
 Income tax at 4d. . . . . . . 1'66 ,, 
 
 Total taxes on personalty . . 5-0 „ 
 
 3. As railways, canals, &c., are subject to Ou raUways, 
 local taxes, whicli will have to be added, it is 
 necessary to estimate tbeir Imperial Taxation 
 separately from other personal property. Canals 
 
 and other rateable property pay the same as other 
 personalty, or 5 per cent. Eailways pay, in addi- 
 tion, the railway duty of 500,000Z. on 16,000,000/. 
 of net revenue, or 3 per cent., being a total of 
 8 per cent. 
 
 4. The Imperial Taxes on industrial incomes on industrial 
 that pay Income tax, are Income tax, and licenses, ™''°™^' 
 and stamps, amounting to about 1,100,000/. a year, 
 
 and may be taken as a total of 3 per cent. 
 
 5. The remaining Imperial Taxation for Eng- Eemamder 
 land and Wales is by subtraction from Mr. '^p'"^'*'"' 
 Goschen's table at p. 31 — 
 
 on 
 
 Customs and Excise. . 
 
 £ 
 
 .. 28,592,000 
 
 Stamps . . . . . . 
 
 600,000 
 
 Assessed taxes 
 
 . . 1,138,000 
 
 Net receipts from Post Office 
 
 958,000 
 
 31,288,000 
 
 These are almost entirely Taxes on Expendi- 
 
82 The Taxation of Realty and Persoimlty. 
 
 Summary of 
 
 imperial 
 
 taxation. 
 
 Local 
 taxation. 
 
 ture common to every class of income, whether 
 from realty, personalty, or industry. 
 
 6. The relative proportions of Imperial Taxa- 
 tion ultimately borne by the different kinds of 
 property and income appear, therefore, to be ap- 
 proximately as follows : — 
 
 Impekial Taxation. 
 
 . (Ultimately borne by) 
 
 Lands and houses . . . . . . 5 per cent. 
 
 Kailways . . . . . . . . 8 „ 
 
 Canals and other rateable property 5 „ 
 Personalty . . . . . . . . 5 ,, 
 
 Industrial incomes paying income 
 
 Xcl£ •• •« ■• •• O ^j 
 
 Besides the taxes on expenditure 
 common to all Incomes . . . . £31,288,000 
 
 7. As regards Local Taxation the division of 
 the Rates was approximately for 1868-69 : — 
 
 Lands and houses . . 
 Eailways,- canals, &c. 
 
 Total 
 
 f 
 15,000,000 
 1,500,000 
 
 16^500,000 
 
 Railways, canals, &c., were 9^ per cent, of the 
 rateable value. Their rates are altogether in- 
 cident on the properties, which are occupied as a 
 general rule by their owners. On the other hand, 
 the rates on lands and houses need division between 
 owners and occupiers. Mr. Goschen professes him- 
 self unable to do this. But in his exhaustive dis- 
 
The Taxation of Realty and Personalty. 83 
 
 cussion of the subject in the Draft Eeport of the 
 Committee on Local Taxation he admits that a con- 
 siderable proportion of the rates on land falls gene- 
 rally upon the owners and a less proportion of the 
 rates on houses. This accords very much with the 
 view held by the great majority of authorities on 
 the subject — ^viz., that for land the greater portion 
 of the rates falls on the owners and for houses upon 
 the occupiers. We cannot, therefore, be far wrong 
 in taking half the total rates on lands and houses, 
 or £7,500,000, as falling upon their owners, and the 
 other half upon the occupiers. Since the occupiers 
 are the whole population, including the owners 
 themselves, the occupiers' half must be considered 
 as general taxation common to all classes and 
 in the same category as the ToUs and Dues, 
 amounting to £4,360,000, of Local Taxation, and 
 the remaining £31,288,000 of Imperial Taxation. 
 It must also be remembered that although the total 
 rates on lands .are less in the pound than those 
 on houses, yet the proportion incident on the 
 owners is considerably larger for land than for 
 houses, so that the rate in the pound incident on 
 owners of land out of the owners of £7,500,000 is 
 as large, or probably larger, than that on the 
 owners of houses. We have, therefore, this table 
 of the incidence of rates : — 
 
 P 2 
 
84 The Taxation of Realty and Personalty. 
 
 Local Taxation. 
 (Ultimately borne by) 
 
 Lands and houses, £7,500,000 on £107,000,000 
 
 annual value, or . . . . . . . . 7 per cent. 
 
 Eailways, panals, &c,, £l,223,000on£27, 000,000 
 
 annual value, or .... . . . . 4 „ 
 
 Besides the remainder of Local Taxation, being 
 the occupiers' proportion of rates, and the 
 Tolls and Dues which fall on all classes of 
 incomes £12,000,000 
 
 Total imperial , 8. Putting these two tables together, we arrive 
 taxation. at the following approximate table of ultimate 
 incidence and burden :— 
 
 Total Imperial and Local Taxation. 
 (Ultimately paid by incomes from) 
 Lands and houses . . . . . . . . 12 per cent. 
 
 Eailways . . . . . . . . . . . . 12 „ 
 
 Canals and other rateable property . . . . 9 ■,, 
 
 . Personalty . . . . . . . . . . 5 „ 
 
 Industi'y (paying income tax) . . . . . . 3 „ 
 
 Besides Imperial^ and Local Taxation common 
 to all the classes of incomes. . . . , . £43,000,000 
 
 Thus out of the total Imperial and Lopal Taxa- 
 tion of England and Wales for 1868—69 (de- 
 tailed at page 121 of Mr. Goscben's report) of 
 £67,000,000, the special taxes on Eeal Pro- 
 perty, Personalty, and Industrial incomes absorb 
 £24,000,000, and the taxes on Expenditure and 
 Occupiers wMch remain, and are common to 
 
 « 
 
The Taxation of Realty and Personalty. 85 
 
 all classes of income and wages, amount to 
 £43,000,000. 
 
 And Eeal Property pays 12 per cent, of its 
 income, against Personalty paying 5 per cent, of 
 its income, and against Industry (subject to Income 
 tax) paying 3 per cent, of its income, in these 
 special taxes ; besides the sbare of each, according 
 to their expenditure, in the large balance forming 
 the taxes on expenditure and occupiers. 
 
 So that Real Property pays very much heavier 
 taxes than Personalty, and Personalty heavier 
 taxes than Industrial incomes. 
 
 Such is the answer to the question of their 
 relative taxation. It is an approximate answer, 
 and may be open to objections of detail, cutting 
 off ^ per cent, here and adding f per cent, there, 
 according to different estimates of particular items. 
 But in the main it shows correctly the general 
 division and result of English taxation. I chal- 
 lenge Mr. Goschen and his friends to go through 
 its calculations, and show, if they can, any error 
 materially affecting its conclusions. I ask Sir E. 
 Tbrrens to examine whether it does not afford an 
 answer to his speech at Cambridge, which stated 
 very ably the Liberal doctrine that probate and 
 legacy duty are a rough and ready counterpoise 
 and make-weight to the rates on realty. But this 
 is a mistalte, since in Imperial taxes alone Eeal 
 
86 The Taxation of Realty and Personalty. • 
 
 property is as heavily burdened as Personalty, and 
 bears tlie rates besides. 
 Principal Jn these letters I have controverted the three 
 
 conoluBione. i > -r. 
 
 main propositions of Mr. Goschen s Eeport. 
 
 The first was that Eates on Land have greatly 
 diminished since 1815 and 1830. I have shown 
 that the rates in the old Poor Law period were 
 excessive and abnormal, and that since the true 
 period of comparison, the new Poor Law of 1834, 
 these rates have steadily and considerably increased. 
 
 The second was Mr. Goschen's attempted proof 
 that the total taxation on Keal property and Land 
 was less heavy in England than in foreign countries. 
 I have ghown that this was an utter fallacy, and 
 that his own figures prove the exact reverse. 
 
 The third was Mr. Goschen's denial of the 
 possibility of ascertaining the relative taxation of 
 Eeal property and Personalty. I have shown that 
 it can be approximately ascertained, and that Real 
 property is taxed more than twice as heavily as 
 Personalty. 
 
 I leave Mr. Goschen's report to the judgment 
 of the country. 
 
 Jan. 17, 1874. 
 
Hereditary or Prescriptive Burdens. 87 
 
 LETTER V. 
 
 HEEEDITARY OR PRESCEIPTIVE BURDENS. 
 
 An objection has been made to the conclusions of ^^J®^*^"^*" 
 these letters respecting the taxation of Eeal and conclusions. 
 Personal Property, that demands consideration. 
 It is allowed that the figures of the taxation have 
 been fairly given, and that Real Property very 
 probably pays 12 per cent, of its income to the 
 taxgatherer, against Personalty paying 5, and In- 
 dustry 3 per cent. But it is denied that 'these ^^^^^^,^^^1,^^ 
 figures prove Eeal Property to be more heavily ™ -^pp™^^- ^ 
 taxed than Personalty or Industry, since "here- 
 ditary burdens" have to be allowed for. The 
 doctrine of Mr. Mill is well known that taxes of 
 old standing on Eeal Property ought to be re- 
 garded as no taxation at all, but as a share in the 
 property reserved by the State. According to 
 this theory the prescriptive taxes ought to be 
 deducted from the 12 per cent., and the remainder 
 considered as the only true taxation of Eeal 
 Property to be compared with that on Personalty 
 and Industry. 
 
 The grounds for this doctrine are stated by ^^^^^"^ °[^^ 
 
88 Hereditary or Prescriptive Burdens. 
 
 r^'^eTatT Political economists as follows: — When a tax is 
 imposed for a long time on any kind of property 
 it diminishes the selling value, and a p\irchaser does 
 his best to obtain the property for a price smaller 
 by the capitalised value of the tax. It is argued - 
 that he succeed^ in this endeavour, and gets his 
 purchase free of tax. The favourite example is 
 the Land Tax. Mr. MiU extends the principle to 
 Bates of long standing. By similar reasoning it 
 applies also to the House Tax, and the minimum 
 Income Tax. But the case of inherited property 
 has also , to be considered, in the ancestral estates 
 so common in England. Respecting them it is 
 argued that transmission according to the laws of 
 succession has the same effect as a purchase, and 
 vests the property in the successors, subject to the 
 prescriptive taxes as State rights. This clearly 
 includes the succession duty. Hence it is main- 
 tained that all the Eeal Property of England is, 
 either by purchase or descent, subject to the 
 permanent taxes as " hereditary or prescriptive , 
 burdens," and only the balance of their 12 per 
 cent, is properly taxation. 
 
 But also ap- But when a principle is adopted it ouffht to be 
 
 plicable to . .... 
 
 personal pro- Carried out to its legitimate conclusions, and not 
 
 ^^ ^' applied partially. The "hereditary burdens" of 
 
 Eeal Property, according to the theory, have just 
 
 been shown to be the prescriptive taxes of Land 
 
Hereditary or Prescriptive Burdens. 89 
 
 Tax, Rates of old standing, House Tax, minimum 
 Income Tax, and Succession Duty ; so that the 
 taxation of Real Property beyond these burdens 
 would be very light. But in the case of realised 
 Personalty the same principles must also be ap- 
 plied. Railway property, like land or houses, is 
 depreciated in value by the same taxes, and by the 
 additional burden of Railway Duty and of Probate 
 and Legacy Duties instead of Succession Duty. 
 Consols and mortgages or other securities are 
 depreciated in value by being sold or inherited 
 subject to Probate and Legacy Duties and mini- 
 mum Income Tax. Hence Realised Personalty, 
 just like Real Property, is subject to these pre- 
 scriptive Taxes as " hereditary burdens," and a 
 logical application of Mr. Mill's doctrine must 
 consider them as not taxation at all, but a share 
 in the Personalty reserved by the State. So that 
 the theory, if logically carried out, leaves only a 
 small portion of the 5 per cent, taxation of Per- 
 sonalty to be really taxation, for comparison with 
 that of Realty. 
 
 But as to Trade or Personal Incomes also, a Must also be 
 similar process must be gone through. Lvery kind i'luustriai 
 
 . Ill n, Tp incomes. 
 
 of mcome is less valuable on account oi taxes. It 
 a business is sold, it is sold on the net income ; if 
 inherited, it is inherited subject to prescriptive 
 taxes ; if newly made, its gains are earned subject 
 
90 Hereditary or Prescriptive Burdens. 
 
 to the obligation of paying the same taxes in re- 
 turn for the protection of the State. These taxes 
 are prescrijptive burdens on the income, and, on a 
 logical application of Mr. Mill's theory, are just as 
 much the prescriptive property of the State as 
 market dues are the prescriptive property of a 
 market-owning Corporation. 
 The theory Hence, logically and impartially carried out, 
 
 plied to au or Mr. MlU's theory of prescriptive burdens applies 
 
 none. 
 
 to every kind of property and income, and not to 
 Real property only. It cannot be applied to Real 
 property only and ignored as regards realized Per- 
 sonalty and personal incomes. It is false logic 
 and false calculation to deduct the prescriptive 
 taxes from the taxation of Real property, and not 
 also to deduct them from that of Personalty and 
 Industry. But if the doctrine is applied to every 
 kind of property and income, it may as well not be 
 applied at all ; for it will not prove the lighter 
 taxation of Real property asserted by my oppo- 
 nents. 
 PreeoriptiTe A good illustration of the value of Mr. MiU's 
 
 EvLce. theory may be found in Prench taxation. The 
 Real property of Prance has been heavily taxed 
 from time immemorial, and a pamphlet has lately 
 been written by one of the most eminent Prench 
 economists to show that its special burdens are 
 lighter now than at any fprmer period. Property 
 
Hereditary or Prescriptive Burdens. 91 
 
 has been bougM and descended for generations 
 subject to these prescriptive taxes. There cannot 
 be a clearer case for Mr. Mill's theory. There is 
 not a duke or a peasant in the country who has 
 not come completely within its operation. Accord- 
 ing to the theory, all these heavy taxes have long 
 since ceased to be taxes at all. Eemote ancestors 
 paid them, and not the present Frenchmen. But 
 is it so ? Will any French proprietor agree to such 
 a proposition ? Would the French peasants toler- 
 ate new taxes based upon this theory ? It would 
 cause a revolution. ]!»J"otwithstanding all his buying 
 or inheritance, the French peasant reaUy pays 
 heavy taxes, and bitterly feels them. Mr. Mill's 
 theory breaks down completely. 
 
 But the theory itself is in a great degree falla- J^^ ^'^^^ 
 cious. Taxes are in their nature distinct and tax is always 
 
 revocable. 
 
 different from Property. The State says to a tax- 
 payer, " So long as the Legislature continues the 
 obligation, you shall pay towards the public service 
 a certain portion of your property or income." 
 The State reserves the power to grant, and the 
 taxpayer the right to ask, relief from the tax 
 whenever it can be proved that the public service 
 or justice to the taxpayer no longer require it. A 
 tax is essentially revocable and relievable. There 
 is always a residuary estate vested in the taxpayer. 
 To claim this residue as the property of the State 
 is a violation of the conditions of its imposition. 
 
92 Hereditary or Prescriptive Burdens. 
 Taxesimposed Besides, taxes on property are imposed for an 
 
 to meet a gar- x j. ^ j. ^ 
 
 tiouiar Ua- exprcss purpose, and to meet a particular liability 
 on that property. They are the quota which the 
 property is to pay for the State's protection. It 
 would be a monstrous breach of faith for the State 
 to say " True, these payments were imposed as 
 taxes, but after a certain number of years I claim 
 them as property and assert the right to reassess 
 y»u." The. State has nothing to do with the 
 bargains of private owners, and no settlement of 
 prices between them can affect the basis on which 
 the taxes were imposed, or change their character 
 or nature. Still less can descent from- father to son 
 have that effect. Taxes remain taxes so long as 
 they are levied out of Property. The French 
 peasant, equally with the English land or house 
 owner, pays his prescriptive taxes as the full taxes 
 due in respect of his property for State guardian- 
 ship. To declare them State property and add 
 new ones he would feel to be gross injustice. 
 
 Taxes not Again, it is not true in practice, as assumed in 
 
 fully deducted 
 
 on sales. theory, that a purchaser gets a full deduction for 
 the capitalised value of the taxes. The selling 
 price is determined by the supply and demand of 
 the moment, and is constantly higher or lower than 
 an actuary's calculation of the real value. Where 
 there is great competition for property, the pur- 
 chaser gets no deduction at all, but has to bear 
 
Hereditary or Prescriptive Burdens. 93 
 
 the full annual amount of the tax as completely 
 as the first taxed owner. This is very commonly 
 the case in sales of land, hoth in Continental 
 countries and in England, when the price goes up 
 to a large number of years' purchase. It follows 
 that on the average of purchases, only a portion 
 of the tax is compensated for by reduction -of 
 price, and that purchasers obtain only a mitigation 
 of their burden. 
 
 Lastly, there is a peculiar difficulty in making Rates too tm- 
 the theory attach to Eates. A prescriptive burden amount^nd 
 requires a tax of invariable amount and steady in ™'=i'^^^'=®- 
 its incidence. But Rates are particularly variable 
 in amount, and of uncertain incidence: Where 
 Eents are above rackrent they fall chiefly upon 
 the Owner ; where below rackrent, upon the 
 Occupier. The incidence may vary in the same 
 property from one year to another. How can we 
 fix a " prescriptive burden " on either class of 
 taxpayer ? 
 
 Such are some of the difficulties of Mr. Mill's Conclusion. 
 doctrine of hereditary or prescriptive burdens. It 
 is a theory that has exercised greai^ influence over 
 the public mind and forms the basis of many 
 political and economical treatises. It is one of 
 the corner stones of Mr. Goschen's principal con- 
 clusions. If true, it would make the most im- 
 portant differences, to the amount of millions 
 
94 Hereditary or P'rescriptive Burdens. 
 
 sterling, in tlie imposition and relief of taxation. 
 It is essential to discuss and understand its bear- 
 ings. But the discussion leads us to the following 
 conclusions : — 
 
 1.- Taxes on Property and Income do not by 
 any length of titne, or by any sales or devolutions 
 of the property or income, cease to be Taxation, 
 and becomes the reserved. property of the State. 
 
 They always, remain revocable taxes, paid in 
 return for State protection. 
 
 2. Purchasers of taxed Property or Income 
 of whatever kind, obtain usually a diminution of 
 the price on account of the tax, varying oh each 
 occasion of purchase, and giving on the average a 
 mitigation of the burden. 
 
 3. But this mitigation of burden occurs only 
 on sales, and is very unequal in amount and 
 partial in operation, so that it is not practically 
 felt by the Taxpayer, and cannot be practically 
 allowed for in estimates of Taxation. 
 
Appendix. 95 
 
 APPENDIX. 
 
 1. 
 
 The following correspondence took place respecting 
 two mistakes in Mr. Gosclien's Report, which I had 
 pointed ont in my speech at Norwich. A correspon- 
 dent of the "Times" had objected to my corrections, 
 but had been misled by a clerical error as to the year 
 iri question. The letter of Mr. Goschen shows that 
 both the Blue Book and reprint of his Report are in 
 error ia the pages named. The errors and coiTCctions 
 do not bbar sufficiently upon the argument of the 
 Report and my answer to need insertion ia the body of 
 this work, but they may be useful to those who refer 
 to the Report hereafter. 
 
 LOCAL TAXATION. 
 
 To the Editor of the " Times." 
 
 Sm, — Your correspondent " H.N." has been led astray 
 by a clerical error ia the short report of my speech at 
 Norwich, in which I spoke of the poor rate of 1838, not 
 1868, in the passage he has quoted. The context 
 makes this sufficiently apparent. 
 
 Mr. Goschen's mistake was a multiple one. First, 
 he assumed at page 20 of his Report, ia March, 1871, 
 
96 Appendix. 
 
 that the proportion of land to total rateable value was 
 the same as in the Income Tax — viz., 33 per cent. 
 Next, when Mr. Hibbert, in August, 1871, printed the 
 return 417, moved for by Mr. Goschen himself, of the 
 rateable value for the year ending Lady Day, 1870, 
 Mr. Goschen failed to observe that in that return lands 
 were 37"8 per cent, of the total rateable value, instead 
 of 33 per cen,t. ; and to correct his Report by the sub- 
 stitution of £3,945,000 as the corresponding proportion 
 of the total rates of £10,439,000, instead of his erroneous 
 figure £3,466,000. 
 
 But further, he added, a still more palpable mistake 
 by inserting in the same page £8,603,000 as the poor 
 rates of 1838, when his own table, at page 69 of the 
 same Eeport, gave the figure for that year as £5,186,389. 
 And, finally, Mr. Goschen republished his Report • in 
 November, 1872, with a preface which set forth that 
 "he had caused all the statements which are here 
 reprinted to be carefully revised," but without any 
 correction of these errors. So that both Report and 
 book print the following erroneous couplet : — 
 
 " Poor rates increased between 1838 and 1868, from 
 £8,607,000 to £10,439,000. The share borne by lands 
 decreased (between the same years) firom £5,435,000, 
 to £3,466,000." 
 
 Whereas they ought to have stood thus corrected : — 
 
 "Poor rates increased between 1838 and 1868 from 
 £5,186,000 to £10,439,000. The share borne by lands 
 increased (between the same years) from £2,700,000 to 
 £3,945,000." 
 
 A difference of result which makes a most wonderful 
 difference to the argument. 
 
Appendix. 97 
 
 I hope shortly to print the speech in question, with 
 additions pointing out not only this but several other 
 very important errors of omission and commission in 
 Mr. Goschen's report, a report which is drawn up with 
 such great ability, and which advocates such important 
 conclusions. 
 
 Yours faithfully, 
 
 R. Dudley Baxter. 
 ffampstead, October 7. 
 
 To the .Editor of the Times. 
 
 Sir, — With reference to Mr.Dudley Baxter's letter in 
 the Times of the 10th instant, wiU you aUow me to point 
 out that in the passage quoted from my report on Local 
 Taxation there is an obvious misprint, " 1838 " having 
 been printed, instead of " 1833 ?" The figures given are 
 the correct figures for 1833, as appears by the table to 
 which Mr. Baxter refers, and the words " looking further 
 back than 1861 to 1826-33," which introduce the com- 
 parative statement, make it clear at once, when com- 
 bined with an examination of the table, that 1838 had 
 been printed for 1833 by mistake. It can scarcely 
 cause surprise that in a volume containing so many 
 figures a printer's error may escape even a very careful 
 revision. 
 
 The year 1833 was selected for the comparison 
 because data existed for ascertaining the proportions in 
 that year of the poor rate borne by lands and other pro- 
 perty respectively. No such data existed for the year 
 1838. 
 
 As regards the proportions borne by lands and other 
 
 G 
 
98 Appendix. 
 
 property in 1368, I avowedly gave an estimate only, 
 and showed tlie process by which I arrived at the general 
 conclusion that " lands " bore 33"20 per cent, of the poor 
 rate in that year, and I pointedly added — 
 
 " Whether the proportion of 33*20 per cent, indicated 
 by the analogy of the Income Tax Returns be abso- 
 lutely correct or notj and whether the precise amount 
 of the total poor rate in 1868 borne by lands alone was 
 £3,466,000 or somewhat more or less, it is certain from 
 all the data which have been submitted that the progress 
 in the burdens on land for local purposes has not been, 
 as has been constantly asserted, greater than the in- 
 crease in their value, but, on the contrary, considerably 
 
 The ParUamentary Eeturn subsequently obtained 
 shows that the proportion for 1870 was 37'80, as com- 
 pared with my estimate of 33 -20. Substituting the 
 proportion of 37*80 for 33*20, the comparison will be as* 
 follows : — Poor rates increased between 1833 and 1868 
 from £8,607,000 to £10,439,000 ; the share borne by land 
 decreased between 1833 and 1868 from £5,435,000 to 
 £3,945,000. 
 
 Whether these figures bear out the general drift of 
 my argument I leave your readers to judge. 
 
 I have only to add that in re -publishing my report I 
 did not profess to avail myself of any new materials or 
 later returns, nor had 1 leisure to do so. The figures in 
 the statements reprinted were carefully revised, but, as 
 was stated in the preface, the corrections were mainly 
 clerical. 
 
 I have the honour to be your obedient servant, 
 Oct. 12. George J. Gosohbn. 
 
Appendix. 99 
 
 In reply, I wrote to the Times, that — 
 
 " This explanation by Mr. Gosohen, that he quoted 
 the poor rate, and meant to have quoted the year, of 
 1833, not 1838, for comparison with our present poor 
 rates, obliges me to point out that this correction lays 
 bare another and more important error in his report. 
 The year 1838 was a fair and proper year for com- 
 parison with a view to legislation, since it was an 
 early year of the reformed expenditure of the new 
 Poor Law. The year 1833, which was the last year of 
 the excessive and pauperizing expenditure of the old 
 Poor Law, is an unfair year to select for such a com- 
 parison ;" 
 
 and continued the letter with the second paragraph of 
 page 34 of this reprint. 
 
 n. 
 
 The following letter was addressed by Sir R. R. Terrene 
 to the Standard in answer to Letter IV. It will be 
 seen, that Sir R. Torrens' principal argument, expressed 
 in the last paragraph, is the doctrine of Mr. Mill respect- 
 ing Hereditary burdens, which I have answered in 
 Letter V. 
 
 If is not practicable to obtain any return of Fee - 
 simple property and its taxes, as distinguished from 
 Copyhold and Leasehold, nor would such a return be 
 of practical utihty. Fee-simple has for more than two 
 
100 Appendix. 
 
 centuries been dissociated from knight service, and is 
 on a par with other Rateable property. 
 
 TAXATION OF REALTY AND PERSONALTY. 
 
 To the Editor of the Standard. 
 
 Sir, — The very able letter of Mr. Dudley Baxter, which 
 appeared in your paper of the 19th, contains the follow- 
 ing paragraph : — " I ask Sir Robert Torrens to examine 
 whether it (his, Mr. B.'s argument upon the above 
 question) does not afford an answer to his speech at 
 Cambridge, which stated very ably the Liberal doctrine, 
 that probate and legacy duty afford a rough and 
 ready counterpoise and make-weight to the rates on 
 realty ; but this is a mistake, since in Imperial taxation 
 alone, real property is as heaAoly burdened as personalty, 
 and bears the rates besides." 
 
 Thus called upon, I trust you will afford me space 
 for a brief reply. 
 
 Assuming, as I do with perfect confidence, on the 
 authority of Mr. Baxter, the general accuracy of his 
 figures, my reply must, nevertheless, be in the negative, 
 and for the following reasons : — 
 
 Mr. Baxter's tables of comparison blend together 
 " realty " (that is fee simple estate) and " personalty," 
 which includes leasehold interests, and especially lease- 
 holds of house property, the burdens on which, whether 
 in the shape of Impeiial taxes or rates, are borne by all 
 classes, and, therefore, these tables can afford no answer 
 to the case put by me on the occasion referred to. My 
 argument was that, as upon transmission by will or 
 
Appendix. 101 
 
 upon intestacy a heavy tax in the form of probate, 
 legacy, or succession duty, was imposed upon per- 
 sonalty, from which fee simple is exempt (a fact dis- 
 tinctly recognised in Mr. Baxter's figures), this should 
 be borne in mind whenever the adjustment of local and 
 Imperial taxation is under consideration. 
 
 My remarks upon this question were necessarily very 
 brief, called forth by the argument of the member for 
 Dorsetshire, Mr. Sturt, at the Dorset agricultural dinner, 
 that " every man who had £1,000 per annum on loan in 
 the Funds was bound to pay his share towards the 
 maintenance of the poor of this country." 
 
 "Fee simple estate," wli ether acquired by purchase 
 or inheritance, has not come into the hands of the pre- 
 sent owners or those of their predecessors for many 
 generations free from obligations and public burdens ; 
 and if the owner of a " Knight's fee " is no longer called 
 upon to furnish man and horse, armed cap-a-pie, it is 
 because that obligation, like the tithe, has been com- 
 muted for a money payment ; and, as I recently heard 
 it remarked at the Devon agricultural dinner, by a 
 shrewd farmer, in reply to Sir Lawrence Palk, "these 
 rates do not belong to the landlord any more than the 
 tithe. They belong to the poor of the parish, and if 
 they be made a present to the landlord the amount we 
 now pay in the form of rates will be added on to the 
 rent. I do not see how our class any more than the 
 rest of the community are to be benefited by that. On 
 the contrary, the money would have to be raised by 
 Imperial taxes, to which we should be forced to contri- 
 bute like other people." 
 
102 Appendix. 
 
 If Mr. Dudley Baxter can so tabulate his figures as 
 to sliow that existing rates, exclusive of locally remune- 
 rating rates for roads, &c., constitute a charge upon the 
 value to which fee simple estate has attained at the 
 present day, exceeding that which the like burdens im- 
 posed upon fee simple estate — say a hundred years ago ; 
 and further, that the difference is not adequately coun- 
 terpoised by exemption from Imperial taxes on trans- 
 mission to which personalty is subject, then, but not till 
 then, will his figures furnish an answer to my speech at 
 Cambridge. 
 
 Faithfully yours. 
 
 Holm, Ashburton, Jan. 22. R. E. TORRENS. 
 
INDEX. 
 
 Page 
 
 Althorpe, Lord, Extract from Speech .... .... ,... .... 11 
 
 Areas of Local Government Districts .... .... .... 16, 17 
 
 Brougham, Lord, Extract from Speech .... .... .... 10 
 
 Comparative Taxation .... .... .... .... 21, 60, 75 
 
 Conclusions .... .... .... 33, 34, 57, 58, 73, 74, 86, 94 
 
 Fallacies of Mr. Gosohen ».... .... .... .... 35 to 44 
 
 France, Local Government of .... .... .... .... 24 
 
 French Taxation, Mr. Goschen's error as to .... .... 63 to 65 
 
 Goschen, Mr., Report of .... .... .... .... 19 to 24 
 
 Letter of (Appendix) .... .... .... .... .... 97 
 
 Hereditary or Prescriptive Burdens — 
 
 Mr. Goschen's exaggeration of Mill's theory .... 45 to 48 
 
 Unsoundness of Mr. Mill's theory .... .... 87 to 94 
 
 Industrial Incomes, Taxation of .... .... .... 81 to 85 
 
 Lands and Houses — 
 
 Comparative Rates on .... .... .... 54 to 56 
 
 Local Government — 
 
 Present character of .... .... .... .... .... 5 
 
 History of .... .... .... .... 13, 18, 25, 27 
 
 Plan for reform of .... .... .... .... .... 28 
 
 Local Taxation — 
 
 ^ Increase of .... .... .... .... .... .... 29 
 
 Analysis of .... .... .... .... .... 30, 31 
 
 Suggestions for reform of .... .... .... 32 to 34 
 
 Periods of Poor Law History .... .... .... 12, 13 
 
 Personalty, Taxation of .... .... .... .... 79, 80 
 
 Comparison with Realty .... .... .... 80 to 85 
 
 Personal Incomes, Taxation of .... .... .... 81 to 85 
 
 Poor Law Commissioners, Report of .... .... .... .... 37 
 
 Reports to .... .... .... .... .... 8 to 10 
 
 Poor Rates, History of .... .... .... 6 to 13, 36 to 38 
 
 Increase of .... .... .... .... 12, 18, 49, 50, 53 to 57 
 
 Rateable Value — 
 
 Increase of .... .... .... .... .... .... 18 
 
 Mr. Goschen's omission as to .... .... .... .... 20 
 
 Rise in Standard of .... .... .... .... 50 to 54 
 
104 Index. 
 
 Page 
 Bates — 
 
 Increase of .... .... .... .... 19, 20, 45 to 50, 56, 57 
 
 Railways, Canals, &c. — 
 
 Taxation of .... .... .... .... .... 81 to 85 
 
 Eeal Property — 
 
 Cemparison with Personalty Taxation .... .... 82 to 85 
 
 ComparatiTe Taxation of, Mr. Qoschen's errors as to 22, 60 to 75 
 
 Error in Mr. Goschen's definition of .... _.. 21, 60 to 62 
 
 Taxation of, in England .... .... .... 22, 64, 78 
 
 Mr. Goschen gives up ascertaining Local Taxation .... .... 65 
 
 Taxation in Foreign Countries .... .... 22, 23, 68 to 72 
 
 Torrens, Sir K. R., Letter of .... .... .... .... 100 
 
 Transfer of burdens from Land, Mr. Goschen's fallacy as to 39 to 44 
 
 Total Taxation .... ... .... .... 21, 82 to 84 
 
 HABBISON AND SONS, PKINTEBS, ST. MAETIM'S lAlfB, LONDON.