>i.U OGfiNEIl LAW LffiRAHir Cornell University Library The original of this book is in the Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924061057745 HISTOEY OF TAXATION AND TAXES VOL. II. PKIKTED BY SPOTTISWOODE AND CO., KfiW-STBEET SQDAIIB LOKDON A HISTOEY OF TAXATION AND TAXES IN ENGLAND FROM THE EARLIEST TIMES TO THE YEAR 1885 BY STEPHEN DOWELL ASSISTANT SOLICITOB OF INIiANS REVENUE Vol. II. TAXATION, FKOM THE CIVIL WAR TO THE PRESENT BAY SECOND EDITION, REVISED AND ALTERED LONDON LONGMANS, GREEN, AND CO. AND NEW YORK : 15 EAST IS"- STREET 1888 A II rights reserved B 9/S^^ HISTOEY OF TAXATION. CONTENTS OP VOL. II. BOOK I. ^ COMMENCEMENT OF TAXATION IN THE MODERN FORM. 1642—1688, BOOK II. TAXATION ON THE INCREASE. 1688—1815. BOOK III. TAXATION IN THE ZENITH. 1815—1842. BOOK IV. THE REFORM OF TAXATION. 1842—1870, BOOK V. TAXATION DURING THE FIFTEEN YEARS, 1870—1885. APPENDICES. CONTENTS. BOOK I. COMMENCEMENT OF TAXATION IN THE MODERN FORM. 1642—1688. CHAPTER I. DURING THE TIMES OP THE COMMONWEALTH. PAGK Taxes on property. The old subsidy. The commonwealth assess- ments. The weekly meal tax. Taxes on articles of consump- tion. Continuance of the port duties, tunnage of wine and poundage of goods. Tax for the redemption of captives of the pirates of the Mediterranean. The excise or new impost. Its establishment. List of articles charged. Death of the lord protector. Return of Charles II 3 CHAPTER II. FROM THE RESTORATION TO THE REVOLUTION. 1660—1688. Settlement of the revenue after the Restoration. Grant of the old tunnage and poundage and the duties on woollen cloth. The Great Statute of Customs and the New Book of Rates. Abolition of the Court of Wards and Liveries, and Purveyance and Pre- emption. Proposals for a revenue in lieu of the feudal revenue. Grant of the hereditary excise. Grant of the temporary excise. The wine licenses. The revenue from demesne. Imposition of the hearth money. Additional duties on wine and beer. Taxonlaw proceedings. The Extraordinary Taxes for the War : 1. PoU Taxes ; 2. Subsidies (the last of the subsidies) ; 3. Assessments. Taxation of the clergy. The tax on bankers, personal estates, offices, and land and mines. Accession of James II. Levy of the customs without a grant. Grant of the customs for life. Special taxes on wine, on tobacco, on sugar, and on French linen, silk, and brandy. List of taxes, 1688 .... 15 via CONTENTS. BOOK II. TAXATION ON THE INCREASE. 1688—1815. CHAPTER I. FEOM THE EEVOLUTION TO THE COMMENCEMENT OF THE WAR OF THE SPANISH SUCCESSION, INCLUDING THE SETTLE- MENT OF IRELAND AND THE WAR WITH FRANCE. 1688—1702. PASE Produce of the chief branches of the revenue at the date of the Revolution, 1688. Repeal of the hearth-money. Settlement of the revenue. The special tax on sugar not continued. The Civil List of 600,000/. per annum. Civil List increased in 1698 to 700,000Z. Expenses of the Revolution, the settlement of Ireland, and the war with France. The poll and capitation taxes. Tax on hirths, deaths, marriages, and bachelors and widowers. The property or land tax. New taxes on houses and hawkers. The Excise. Additional duties on the brewery. Tax on the distillery. Tax on salt. Tax on sea coal. Tax on glass. It is repealed as a failure. Tax on tobacco-pipes. Tax on malt. Tax on leather. Decrease in the yield of the customs. The imposts of 1690 and 1692. The duties on tonnage of ship- ping. Additional duties on French wine and goods. The duty on whale fins. The new subsidy of 1698. Repeal of the ex- port duties on woollen manufactures in 1700. The stamp duties. Tax on hackney coaches and stage coaches. .Proposed tax on the Jews. Tax on the joint stock of the East India Company. RSsum^. List of taxes in 1702 37 CHAPTER II. THE WAR OF THE SPANISH SUCCESSION. 1702-1713. Death of WiUiam III. Godolphin appointed lord treasurer. The Civil List. Settlement of the revenue from the Crown lauds. War of the Spanish succession. Its cost. The land tax raised to 4«. The annual ' malt.' Grant of the one-third and the two- thirds subsidies of customs. The Methuen treaty and its pro- visions regarding the duties on wine. Transformation of the ministry. Fiscal arrangements with Scotland on the Union, 1707. Additional taxes on houses, beer, raisins, spices, and pepper. Extension of the warehousing system. New taxes on candles and leather. New tax on hops. New taxes on the CONTENTS. IX PAGE manufactures of soap, paper, paper-hauginga, printed silks, linens and calicoes, starch, and gilt and silver wire. Taxes on newspapers and advertisements. Additional, duties on tea, coftee, and drugs, List of taxes in force in Great Britain in 1714 64 CHAPTER III. from the peace of utrecht to the commencement of the war of the eight of search, including wal- pole's administration. 1713—1739. Death of Queen Anne, The last lord treasurer. Townshend and Walpole in office. Walpole's scheme for a sinking fund. Dis- missal of Townshend in 1717. Walpole resigns. The Stan^ hope administration. Sunderland prime minister, 1718. The war with Spain. Walpole and Townshend in office. Carteret secretary of state. Carteret sent to Ireland. Walpole in power. Reform of the tariff. The timber duties. Repeal of the duties on raw silk, drugs for dyeing, beaver skins as the material for hats, rags and old cordage for paper-making, whale-fins, oil, and blubber. Repeal of the additional duties on drugs. Settle- ment of the duty on pepper and spices, Repeal of the duties on all manufactures exported. The new book of rates. Ware- housing system for tea. Repeal of the tax on salt. The land tax at Is. Reimposition of the tax on salt. The excise Bill for wine and tobacco. Opposition to the Bill. It is withdrawn 82 CHAPTER IV. THE WAR WITH SPAIN (HIGHT OF SEARCH) AND THE WAR OF THE AUSTRIAN SUCCESSION. FALL OF WALPOLE. THE WIL- MINGTON, PELHAM, AND NEWCASTLE ADMINISTRATIONS. 1739—1756. Commencement of the war. Our fiscal position. Cost of the war. Land tax raised to 4«. Fall of Walpole. Pulteney and Car- teret in power. Repeal of the Act against spirituous liquors. The drinking fund. The Pelham administration. Defeat of Pelham on the sugar question. Fall of Carteret and formation of the Broad Bottom administration. Extension of the tax on salt. Additional tax on wine. Important reduction of the tax on tea. The Rebellion of '45. New tax on the manufacture of X CONTENTS. FASB glass. Pelham's new window tax. Tax on pleasure carriages. A fourth subsidy of customs granted in 1748. Speecli of Henry Fox on taxation. Peace of Aix-la-ChapeUe. Keduction of the land tax. Death of Felham. His character. A new period commences. Fox, Murray, and Pitt., The- Newcastle adminis- tration. Fox secretary of state. Pitt courts dismissal. Legge and Or. Grenyille resign. Lyttelton chancellor of the exchequer 106 CHAPTER V. THE SEVEN years' WAR. 1756-1763. Commencement of the war. Our fiscal position. Cost of the war. Lyttelton's new tax on the plate-chest. Addition for cards and dice. Proposed tax on bricks relinquished for a tax on publicans. Resignation of Fox and Newcastle. Pitt in power. The Devon- shire-Pitt administration. The Newcastle-Pitt administration. Additional taxes on deeds, newspapers, and advertisements. New tax on wine licenses. Increase in the taxes on houses and windows. New tax on offices. Our successes in America and India. The Great Year, 1769. Enormous expenditure. Legge's proposed tax on shops. Proposed tax on sugar. A general subsidy of customs imposed. Pitt's speech on excises. Enor- mous increase in the taxation of beer. Accession of George III. Bute secretary of state. Dismissal of Legge. Besignation of Pitt and Temple, and Newcastle. End of the reign of the Eevdlutionary families. The Bute administration. First-fruits of the peace. Dashwood's new taxes on wine, cider and perry. The Cider Act. Its unpopularity. Resignation of Bute. George Grenville as the ' Gentle Shepherd ' 127 CHAPTER VI. THE TAXATION OF AMERICA. The Grenville and the Grenville-Bedford administrations. Gren- ville's rigorous enforcement of the Navigation Act. He de- termines to tax the colonies in America. His plan. The port duties imposed in 1764. The Stamp Act of 1765. The Book- ingham administration. Repeal of the Cider Act and the Stamp Act for America. Chatham's Grafton administration. The mosaic ministry. Loss of the land tax resolution. Townshend's port duties for America. Death of Townshend. North chan- cellor of the exchequer. Resignation of Grafton. North prime minister and chancellor of the exchequer . . . . 144 CONTENTS. XI CHAPTER VII. THE WAR OF AMERICAN INDEPENDENCE. 1775—1783. Part I. PAGK 1. Repeal of Townshend's import duties in America, except the duty on tea. Destruction of the tea ships in Boston harbour. Revocation of the charter of Massachusetts. Commencement of the war. Our fiscal position in 1775. Cost of the war. North's first taxes for the war 1 CO Part II. Origin of the taxes suggested by North after 1776. Adam Smith's ' Wealth of Nations.' New taxes on men servants and property sold at auctions. Second addition for ' deeds.' New tax on in- habited houses. Increase for wine. New tax on travelling by post. General rise in the excise and port duties. Additional duties on malt, spirits, vdne, and salt in 1780. Annual license for sellers of tea. New tax on receipts for legacies. In 1781, 5 per cent, on the excise. Additional duties on tobacco and sugar. Burke's review of the taxes imposed by North. New taxes for 1782. On fire insurance, bills of exchange and notes. Other taxes. Addition for tobacco. Second addition for salt. Increase in the soap tax. 5 per cent, on the excise and port duties. North resigns. Rockingham's second administration. The Shelburne administration. The Coalition. Additional taxes for 1783. Augmentation of the stamp duties. The duty on bills and notes doubled. New tax on receipts. Malt duty com- positions abolished. New taxes on quack medicines and waggons and carts. Fox's India BUI. North and Fox resign. Pitt prime minister 166 CHAPTER VIII. THE TIMES OF WILLIAM PITT BEFORE THE GREAT WAR. 1784—1792. Pitt's first fiscal measures. The Commutation Tax. The Budget of 1784. New taxes on saddle and carriage horses, sportsmen, trade licenses, bricks, and hats. Additions for candles, paper, and printed calico. Failure of a proposal to tax coal at the pit and Xll CONTENTS, growers of hops. New tax on the manufacture of plate. New tax on race-horses. Sir R. Hill's suggestions for taxes. List of the new taxes of 1784. The group of assessed taxes. Taxes on shopkeepers. New taxes on women servants, and shops. New trade licenses on pawnbrokers, coachmakers, sellers of gloves, and attorneys. New taxes on perfumery and hair powder. The Eden treaty with France, The Consolidated Fund, The Sinking Fund, Repeal of the shop tax. The Newsmen's Bill. The Tobacco (Warehousing) Bill. Taxes for the Nootka Sound Armament. Repeal of taxes in 1792. The calm before the storm. State of England in 1792 183 CHAPTER IX, TAXATION DURING THE GREAT WAR. Part I. PROM THE COMMENCEMENT OF THE WAR TO THE PEACE OP AMIENS, 1793—1802, Commencement of the war. Cost of the war. First additional taxes. The additions to the assessed taxes and for the distillery, sugar, and foreign spirits made perpetual. Second addition for the distillery and foreign spirits. Additions for glass, bricks and tiles. New taxes on stone and slate. Repeal of the taxes on gloves and mittens and registration of births, &c. In 1795 additions for wine and tea. Third addition for spirits. New taxes on hair-powder and sea insurance. Additional duties on receipts and other stamp duties. In 1796 second 10 per cent on assessed taxes. New tax on agricultural horses. Additions on pleasure horses and tobacco. New tax on collateral successions to property. Tax on dogs. Additional duties on hats. Second addition for wine. In 1797 further additions for tea, sugar, spirits and bricks. Five per cent, on the port duties. Additional duties on auctions. Third 10 per cent, on assessed taxes. New tax on clocks and watches. Addition for stage- coach proprietors. Proposals to tax parcels by coach and pro- prietors of canals. In 1797 Pitt in difficulties. General rise in the stamp duties. The Triple Assessment for 1798. The duty on salt doubled. Third addition for tea. The convoy tax. New tax on armorial bearings. The land tax turned into a rent- charge. Failure of the Triple Assessment. The income tax imposed in 1799. In 1800, a fifth addition for spirits, and a fourth for tea. Pitt's last budget before leaving office. Fifth addition for tea. Additions for sugar, timber, raisins and pepper. The duties on paper doubled. Additional taxes on horses, sea insurance, bills of exchange and deeds , . . . . 208 CONTENTS. XlU Part II. FROM THE PEACE OP AMIENS TO WATERLOO.' 1802 — 1815. PAOE The peace of Amiens. Kepeal of the income tax. Enormous in- crease in the taxes on beer. Increase in the assessed taxes. New duty on exports and imports in lieu of the convoy tax. Recom- mencement of the war. The income tax re-imposed at 6 per cent. Additional 2s. on malt, and additions for wine, spirits, tea, sugar, the port duties generally, cotton, exports and imports, and tonnage. Addington's last budget. Increase in the stamp duties. Pitt returns to office. The income tax raised to 6-10 per cent. ; the salt duty, to 15«. Austerlitz. Death of Pitt. The administration of All the Talents. The stream from the ' Petty ' fountain. The income tax raised to 10 per cent. In- crease for tea, sugar, and tobacco. Another general rise in the port duties. Proposals for taxes on pig iron and private brew- ing. Another 10 per cent, on the assessed taxes. Death of Fox. The Portland administration. Spencer Perceval's con- solidations of the assessed taxes, the stamp duties, and the port duties. The Perceval administration. Assassination of Perceval. The Liverpool administration. Vansittart's first budget. In- crease for leather, glass, and tobacco, establishments, and agri- cultural horses. In 1813, further increase on tobacco. A general rise in the port duties. Attempt to tax cotton. The first peace of Paris, 1814. The last taxes for the Great War . . .229 BOOK III. TAXATION IN THE ZENITH. 1816--1842. CHAPTER I. TAXATION IN 1815. Population, national debt and revenue. Sources of revenue. 1. Direct taxes. 2. Taxes on articles of consumption. 3. Stamp duties. Summary. Sydney Smith on taxes due to wars. Por- trait of the ' truly free Englishman.' List of failures in taxes 249 XIV CONTENTS. CHAPTER II. FROM THE REPEAL OF THE INCOME TAX TO THE ABANDON- MENT OF THE SINKING FUND, 1816-29. Part I. THE LIVERPOOL ABMINISTEATIOH. VANSITTART, 1816-1822. PAGK Repeal of the income tax and the war malt duty in 1816. Addi- tional duty on soap. The Sinking Fund. Report of Castle- reagh's select committee on income and expenditure. The additional taxes of 1819. The deficits of 1820 and 1821. Repeal of the tax on agricultural horses, the additional duty on malt, half the duty on leather, the duty on salt, the tonnage on shipping, and the hearth and window taxes in Ireland. The ' Dead Weight ' annuities scheme 202 Part II. ROBINSON, HUSKISSON AND GOULBTTRN, 1822-1829. Peel, Canning, Robinson, and Huskisson join the administration. Reversal of the policy of the Sinking Fund. Repeal of half the window tax and taxes on establishments in Great Britain. Total repeal for establishments in Ireland. Reductions for spirits in Scotland and Ireland. Commencement of the reform of pur commercial taxation. Reductions for raw and thrown silk and wool. The exportation of sheep and wool allowed. The Union duties abolished. Reduction of duty for coal to London, Reduction for rum. Stamp duties on law proceedings abolished. Reduction of house and window duty for small houses. Other reductions for hemp, coffee, wine, spirits in Eng- land and other articles. Huskiaaon's tariff of 1825. Consoli- dation of the customs' laws. Robinson's review of the fiscal situation in 1826. Hume's counterstatement. Reduction of the duty on tobacco. Canning's administration. His death. The Wellington administration. Huskisson resigns. Further reduction of the Sinking Fund. Abandonment of the Sinking Fund. Principal taxes repealed, 1816-29 . . . , 272 CONTENTS. XV CHAPTER III. FROM THE ABANDONMENT OF THE SINKING FUND TO THE EE-IMPOSITION OF THE INCOME TAX, 1829-42. Part I. from; the abolition of the sinking fund to the KBPEAl OF THE HOUSE TAX, 1829-1834. TAGE Parnell's treatise on financial reform. Repeal of the tax on beer and the tax on leather. Reduction for sugar. The "Whig administraiion under earl Grey. Althorp's Budget in 1831. The proposed tax on transfers. Taxes on coals coastwise, printed goods and candles repealed. Expiration of the Methuen treaty. Wine duties equalised. Financial year changed. The Budget of 1833. Reductions of duty. Half the soap duty repealed. The ' malt tax repealers ' at work. Repeal of the tax on inhabited houses. Division on lord Chandos's motion for relief of the agricultural classes . . . . . . 288 Paet II. FEOM THE REPEAL OF THE HOUSE TAX TO THE EB-IMPOSIIION OF THE INCOME TAX. THE CHANCELLOR OF THE EXCHEQUER IN DIFFICULTIES. 1834—1842. Reconstruction of the ministry under Melbourne. Dismissal of Melbourne. Peel's four months' ministry. Burning of the Houses of Parliament. The old exchequer tallies. The second Melbourne administration. Spring Rice chancellor of the ex- chequer. Effect of the late inordinate repeal of taxes. Cheaper newspapers for the middle class. The chancellor of the ex- chequer in difficulties. The Bed-Chamber plot. Baring becomes chancellor of the exchequer. The percentages of 1840. Deficit for 1841. The timber and sugar duties. Defeat of the ministry. 'Fishing for a btidget' 307 VOL. II. XVI CPNTENTS. BOOK IV. THE MEFORM OF TAXATION. 1842-1870. CHAPTER I. FROM THE RE-IMPOSITION OF THE INCOME TAX TO THE OUT- BREAK OP THE WAR WITH RUSSIA. 1842—1854. Peel in power. His antecedents and position in the House. The political outlook, in 1841, hy Camphell. The Budget of 1842. Be-imposition of the income tax for four years. Revision of the tariff. Effect of the construction of railways on the revenue. The Budget of 1845. The income tax continued for three years more. Second revision of the tariff. Repeal of the taxes on glass and auctions. Repeal of the corn laws. Peel resigns office. Lord John Russell's first administration. The income tax continued for three years more. Sir Charles Wood's Bud- get of 1850. Repeal of the tax on bricks. Reductions in the stamp duties. House tax substituted for the window tax. Disraeli chancellor of the exchequer. The battle of the malt tax. Lord Derby resigns. Gladstone chancellor of the ex- chequer. The Budget of 1853. The income tax continued for seven years more. Succession duties on land. Third revision of the tariff. Repeal of the taxes on soap and advertisements. Revision of the taxes on establishments. Commencement of penny taxation. Taxes on insurance condemned . . . 319 CHAPTER II. THE SUSPENSION OF REFORM IN CONSEQUENCE OF THE WAR WITH RUSSIA. 1864—1860. Outbreak of the war. First taxes for the war. Palmerston in power. The Peelites resign office. Sir George Cornewall Lewis chancellor of the exchequer. War taxes for 1856. The treaty of Paris. Cost of the war. Remission of taxes. Repeal of the war ninepenoe of income tax. The BiU against conspiracy to murder. Defeat of Palmerston. Disraeli again chancellor of the exchequer. Abolition of the war sinking fund. Lord Pal- merston again in power. Gladstone again chancellor of the ex- chequer. Rise in the army and navy estimates. The Income tax raised from 5rf. to 9(?. 344, CONTENTS. xvii CHAPTER III. FROM 1860 TO 1870. COMPLETION OF REFORM IN THE PERIOD OF GREAT PROSPERITY. Increase in military and naval expenditure after the break-up of peace in Europe. The course of reform resumed. The Budget of 1 860. Income tax at lOd. The treaty with France. Fourth revision of the tariff. Reform of commercial taxation. Sum- mary. Proposed repeal of the duty on paper. The lords reject the BUI. The spirit duty raised to 10«. Curious over-estimate of revenue for 1860-61. Repealof the duty on paper. The last of , the taxes on manufactures. Reductions of income tax and tea duty in 1863. Prosperity by ' leaps and bounds.' Reductions in income tax and for fire insurance and sugar. Enormous sur- plus in 1865. Reductions in income tax and fire insurance. The tea duty reduced to 6d. Repeal in 1866 of the duties on timber and pepper. Defeat of the ministry. Disraeli again chancellor of the exchequer. Creation of new terminable annui- ties. The Abyssinian expedition. Disraeli prime minister. The first Gladstone administration. Lowe chancellor of the exchequer. The Budget of 1869. A windfall. The break-up of the assessed taxes. Repeal of the taxes on locomotion, ex- cept by railway. The income tax reduced to 4d. Half the sugar duties repealed. Consolidation of the stamp duties. The reform of taxation. Summary ...... 355 BOOK V. TAXATION DVmNG THE FIFTEEN YEARS, 1870-86. Rise of the civil government expenditure. Cost of the education department. The ordinary expenditure, 1871. The original Budget of 1871. Prosperous state of the revenue. Deficit due to high army estimates. Proposed new taxes : — 1. Probate and succession duties ; 2. Tax on matches ; 3. Income tax, increase by percentage. The proposals withdrawn. A budget of ' sweet simplicity.' The moral of the match tax. Lowe's great speech on the debt. The fiscal ' annus mirabilis,' 1872-73. A popular Budget. Sugar duties again reduced. Resignation of the ministry. Sir Stafibrd Northcote at the exchequer. The six XVlll CONTENTS. millions surplus. The basis of the estimates of revenue. Re- duction of the income tax. Repeal of the taxes on horses. Abolition of the sugar duties. Relief for local taxation. The new sinking fiind, 1875. Yield of the spirit duty at a stand- still. Rise in the income tax, 1876. The hundred and fifty pounders. Another rise in the income tax, 1878. Tobacco duties increased. Sequence of bad harvests. Disappointment on spirits and malt. The probate duty altered. Return of Gladstone to power. Tax on beer substituted for the malt tax. Alteration in the probate and legacy duties. Decline of yield from alcoholic liquors. Anxiety about the Navy. The Budget of 1885. An important question PAOB APPENDICES. I. Rbventte peom Soukceb other than Taxation. 1. Th33 Post Opeice; 2. Other Sofrobs . . . 432 II. The Natioital Expenbiiuke, 18rH anb 19th Obn- ITTEIEB 445 III. Cost of CoUiEction anb Management oi' Revenue . 529 IV. The Mobe in which Taxes are Granted . . . 530 ■ V. Cost of each War from 1688 to 1869 . , .534 VI. Amottni of Nationax Debt accrtted prom the bevbrai, Wars 535 VII. Abministbationb, 1702-1885 536 VIII. List op the Commonwealth Excise .... 640 IX. Scheme of the Tax on Bttrials, Births, and Marriages ANB the Tax on Bachelorb 643 X. Character of Sir R. Walpole by Lord Chesterfield 545 XI. State op the Customs Laws in 1784 .... 548 XII. Estimated AaoBEGATB Rebitction op Customs Duties BETWEEN 1835 AND 1853 651 XIII. The Gross Receipt of the Customs Revenue of the United Kingdom in each Year from 1835 to 1855 552 INDEX 553 BOOK I. COMMENCEMENT OP TAXATION IN THE MODEEN rOEM. 1642—1688. CHAPTEE I. DUEING THE TIMES OF THE COMMONWEALTH. CHAPTER II. FHOM THE EESTOEATION TO THE EEVOLUTION. 1660—1688. VOL. II. / CHAPTER I. DURING THE TIMES OF THE COMMONWEALTH. Taxes on property. The old subsidy. The commonwealth assessments. The weekly meal tax. Taxes on articles of consumption. Continu- ance of the port duties, tunnage of wine and poundage of goods. Tax for the redemption of captives of the pirates of the Mediterranean. The excise or new impost. Its establishment. List of articles charged. Death of the lord protector. Return of Charles II. After the commencement of the war between Charles I. and the parliament, the expenses of the contest were, at first, to a great extent, defrayed by- voluntary contributions made by the supporters of either side in money, jewels, and more particularly, plate, of which there was an enormous quantity in the country ; the nobles being profuse in their contribu- tions of plate for the service of the king at Oxford, while on the parliamentary side the subscriptions of silver offerings included even such, little personal articles as those that suggested the term, the ' Thimble and Bodkin ' army. But when the contest was pro- longed and they had ' coined pots and bowls and flagons, int' officers of horse and dragoons ; and into pikes and musqueteers, stamped beakers, cups, and porringers,' ^ to such an extent that most of the old • Butler, 'Hudibras.' b2 sessments. 4 HISTOEY OF TAXATION. English plate had passed into the melting-pot, both the king and the parliament were compelled to have recourse to more systematic methods of obtaining the means for continuing the struggle, and taxes were introduced into this country for which no precedents are to be found in our previous fiscal history. In the taxes imposed by the parliamentary ordi- nances we find the germs of our subsequent fiscal system. To take, first, the — DIRECT TAXES. The As- In the taxation of property, the parliament tried at first the old Tudor subsidy. But this, as a yearly or at the most a half-yearly tax, proved unsuited to their requirements, and in order to obtain the more rapid and continuous supply required for payment of the parliamentary forces, they adopted a system of MONTHLY ASSESSMENTS, as foUows : — ^Krst, a sura was fixed, according to the exigencies of the occasion, as the whole monthly assessment for England and Wales, or Scotland, or Ireland, as the case might be. The sum varied from 35,000Z. to 120,000^. It was partitioned between the several counties and towns named in the ordinance, on a calculation made by reference to the highest return ever made by the particular county or town for a subsidy, a method of valuation adopted in consequence of the diminution observable in some cases in the later returns, which showed that ' the zeal of the people had begun to fall off ; ' in other words, in order to avoid incorrect and fraudulent returns. Commissioners for the assess- THE COMMONWEALTH ASSESSMENTS. 5 ment were named in the ordinance. And for the due payment of the sum fixed as the contribution of a particular county or town, the county or town was held responsible. The assessment of the taxpayers and the collection of the tax was therefore left, as a matter of local detail, to the local authorities, under regulations for the purpose contained in the ordinance. The practice in the assessment of the taxpayers; under the commonwealth system was very different from that for the subsidies, which had been so loose that anything approaching to a system can hardly be said to have existed. The ' subsidy men ' had been put up or lowered in the subsidy books without any reasons that could be reduced to a rule. Their style of living was sometimes taken as evidence of means. It is in allusion to this that a character in an old play, speaking of the old time, says : ' I may tell you that he that had a cup of red wine to his oysters was hoisted in the Queen's subsidy book.' ^ And allowances of various descriptions had been made for which no statutory provision existed, more particularly for the expenses of position and for large families. Under the commonwealth the taxpayers were rated by the local authorities at what they were really worth ; the result being, not any increase in the amount to be paid to the treasury, for that was fixed, but the more equitable adjustment of the burden of the tax as regards the various taxpayers in every particular county or town. ' Lyly, ' Mother Bombie,' act ii. scene 5. 6 HISTORY OF TAXATION. The monthly assessments continued in use during the existence of the commonwealth. Weekly A tax curlouslv characteristic of Puritan times Meal Tax. deserves a passing notice : a weekly meal tax,* or necessary contribution from every person of the price of one meal a week, which he was obliged to retrench, was levied by the parliament during six years, and produced about 100,000Z. per annum.^ TAXES ON ARTICLES OF CONSUMPTION. ThePort ^g regards indirect taxation, the parliament, having the command of London and most of the large seaports, were able to adopt the system of duties at the ports on goods exported and imported. The customs and subsidy of wool, so fruitful of revenue in former times, were indeed abohshed, in con- sequence of the prohibition, in 1647, of the exporta- tion of wool; but they continued the tunnage for wine and poundage for goods, and estabhshed a new Book of Eates for the poundage. Originally imposed for a limited term only, the port duties were con- tinued, subsequently, by ordinances passed for the purpose, and eventually, in 1656, were estabhshed for England, Scotland and Ireland, and the islands thereto belonging ; not only for the ' necessary safe- guard of the seas, convoy of merchants' ships and goods and the security of trade,' as heretofore had been usual, but also because of ' the necessity of the commonwealth for money to carry on the afiairs ' 608,400^. for the six years in which it was collected. — Stevens, Hist, of Taxes, p. 290. THE TAX FOE MOORISH CAPTIVES. 7 thereof.* ^ No good purpose would be served by passing under review all the particulars of the tariflf of 1656 ; but we may note that the imposition of higher rates for the wines of Spain — canaries, mus- cadels, and alicants — than those of other countries marks the antagonism existing between the common- • wealth and that country,'-' and that our minerals come into notice in the additional duties imposed upon lead and tin on exportation and the special provisions made for securing the duties on seaborne coal, more particularly the great coal and small coal of Scotland. Lastly, an historical interest attaches to a small Tax for additional duty on all imported merchandise, con- captives, tinned ^ for the redemption of captives taken at sea by Turkish, Moorish, or other pirates. These pirates, famous as the cause of that ' damage to our shipping " and those ' atrocities in the capture and imprison- ment of our countrymen' that were considered to amount to ' a peril to the whole kingdom ' sufficient to justify the issue of the Ship Writs, had hitherto continued unabated ; but Eobert Blake, appointed a tax-commissioner for Somerset in the ordinance for the assessment in 1656, and therein described as ' one of our generals at sea,' had sailed, in the spring, under secret orders for operations very different from the taxation of the makers of broadcloth at Taunton 1 By Ord. Dec. 16, 1647, from Mar. 26, 1648, to Mar. 26, 1651. Continued, by Ord. Mar. 11, 1650, to Mar. 26, 1663; by Ord. Mar. 22, 1652, to Mar. 26, 1654 ; and by Ord. Mar. 20, 1663, to Mar. 26, 1658.— Scobell, Part i. 136, Part ii. 152, 232, 279, 385. ' The importation of French winea, silk, and wool was prohibited from 1649 to 1656, in retaliation for the exclusion of our woollen goods from France. = See 16 Car, I. c. 24. 8 HISTORY Of taxation, or Bridgewater. Before this, he had called to ac- count for acts of piracy the Bey of Tunis, and the Dey of Algiers, whose castles of Giletta and Porto Farino he had taken, destroying also the pirate fleet. The Dey of Tripoli had been reduced to terms, and henceforth English vessels sailing on the seas within the Pillars of Hercules experienced very dif- ferent treatment at the hands of the pirates of the Mediterranean. TheExoise In addition to the port duties, the parliament impo^st. introduced into our fiscal system inland duties im- posed upon a great variety of articles of consump- tion, payable on the sale of the articles. Taxes of this description had long existed in several con- tinental nations. To such taxes Michiel, the Venetian ambassador to the Court of queen Mary, refers, where, in his description of England, he mentions taxes im- posed on salt, wine, beer, flour, meal, cloth, and other necessaries of life, in all parts of Italy especially, and in Planders, and notes the absence of any such taxes in England as ' singular and wonderful.' But taxes of this kind had always been hateful to Enghshmen, who regarded them as a badge of slavery. In this view queen Elizabeth, when a project was mooted for the appointment of a surveyor of brewers in London, had been advised to refrain from taxing the national beverage, not only because ' it was doubtful whether she could, by her prerogative, grant a fee per barrel to be paid on beer,' but also because ' it was certain that, should she grant never so small a fee, the people would say their drink was " excised " as it was in THE COMMONWEALTH EXCISE. 9 Flanders, and would repine at it.' But the success of inland duties on articles of consumption — or excises as they were termed, from the excision of a part of the article taxed — in Holland, had brought pro- minently into notice the advantages of taxes of this description. There had been much talk of excises when Salisbury's project for new taxes in lieu of the feudal revenue, under the Great Contract, had been under consideration ; and, again, an excise had been among the. projects for recruiting the king's revenue the advisers of king Charles had in contemplation in the later part of the reign. The excise was now introduced into England, upon the Dutch model, by Pym, who has been termed ' the father of the excise.' This new system of taxation was established gradually. It originated in a resolution, passed on March 28, 1643, and carried into effect by an ordi- nance of the same date, which imposed upon a variety of articles of consumption, specified in a schedule, including ale and beer, cider and perry, strong waters and several other articles, an Excise or New Impost. Before the expiration of the year, additions were made to the list of articles subjected to excise. In January 1644, flesh, victuals, and salt ; and in July, alum, cop- peras, Monmouth caps, hats of aU sorts, hops, saffron, starch, all manner of sUks and stuffs, and several other ' commodities made or growing in England not for- merly charged with excise ' were added to the list.^ Originally imposed only for a limited term, the excise or new impost was subsequently continued, with ' Scobell, i. 49, 59, 60, 73. 10 HISTORY OF TAXATION. certain alterations, by ordinances^ passed for the pur- pose, and eventually, by an ordinance of August 28, 1647, was established for all the various articles pre- viously taxed, with the exception of flesh and salt of home production. Foreign salt, not made within the commonwealth, still continued subject to an excise of Id. the gallon.^ The administration of the excise was conducted; at a chief office established for the metropohs, by commissioners appointed by the parliament, with sub- offices and sub-commissioners for the other parts of England and Wales. A code of laws for seciiring the duties conferred on the commissioners and sub-com- missioners considerable powers, and in particular a power to hear and determine all questions of offences ; gave to the excise officers very full powers of inspection and survey, and for the seizure of forfeited articles ; and enforced the laws by numerous penalties. So that it formed, in the whole, a system which, well ad- ministered, was calculated to terrify only the evil-doei' and protect the fair trader, but which was pecuharly liable to misrepresentation and attack, on the ground of the apparent severity of its provisions, and as anta- gonistic in certain points to the principles of liberty so dear to Englishmen. Under an ordinance of Sep- ' An Ord. April, 1644, continues the excise for a year from Sept. 1], 1644. Another of 1644 mitigates the excise on strong water.'. Another of Dec. 6, 1644, continues the excise on flesh victuals and salt to Jan. 9, 1645. Another of Jan. 29, 1645, continues the ordinances of excise or new impost to Sept. 11, 1646. Another of Apr. 25, 1646, continues them to Sept. 26, 1648.— Scobell, i. 68, 74, 75, 98. •■' June 12, 1649.— ScoheU, ii. 44. ATTACK ON THE EXCISE OFFICE. 11 tember 20, 1649, the commissioners had power to let out to farm the excise upon all or any commodities.^ From the ingrained detestation of novelties which has ever characterised Englishmen, the opposition made in former times to the introduction into England of any new sort of tax, and the hatred of the people to taxes of this description, it was to be expected that the establishment of such a comprehensive system of taxation, having reference to articles of food and of daily necessity, and enforced by laws bristhng with pains and penalties, would not be effected in Eng- land without serious difficulty. The people not only ' repined ' at this excising of their food, but gave expression to their feelings of irritation in an attack on the excise office. And it is not an exaggeration of statement to say that the excise was estabhshed at the point of the sword. Subsequently, however, when the prime necessaries of life — flesh and salt — had been struck out of the hst ; when the duties had become blended with and formed part of the price of the articles taxed ; and when the people were accustomed to the tax, parhament found and acknowledged the excise to be ' the most equal and indifferent levy that could be laid on the people,' ^ and recorded that opinion in an ordinance of 1649. This opinion was repeated in an ordinance of the second parhament of the protectorate, in 1656. And at this date the parliament, with a view to discharge the existing mortgages on the produce of the excise, ' Scobell, ii. 130. ' See recital to Ord. Aug. 14, 1649.— Scobell, ii. 72. 12 HISTORY OF TAXATION. carry on the other urgent and pressing affairs of the commonwealth, and defray the charges of the naval forces thereof in the war with Spain and against the common enemy, reimposed the excise for England and Wales, Scotland, Ireland, and the islands thereunto belonging, with a schedule of rates and charges, and according to the Book of Values mentioned in the ordinance,^ as follows : — The list of articles charged was divided into two parts, of which one had relation to ' Foreign and Imported Goods ; ' the other, to ' Native or Inland Goods.' Foreign This list is printed in the Appendix. Under the goods. ^ ^ ^ ... head of Foreign goods are included : — ^wine, spirits and strong waters, beer, hops and vinegar ; salt and tobacco ; manufactured articles : woollen cloth and stuffs, dyed silk, silk lace, ribbons, gold and silver lace, and glass, earthen and stone wares ; raw materials for manufactures : silk, hemp, flax, tar, resin, pitch, wax, taUow and cable yarn ; and drugs. These are charged specifically. All other goods and merchandises were charged Is. per 20s. according to the value in the Book of Eates for Excise. This Book of Eates was contained in another ordinance of even date which gave the values of merchandise imported, according to which excise was to be paid by first buyer, in a list of articles amounting to several hundreds, ranging alphabetically from Agates to Wine-lees, which were used at this date for making spirits, and concluding with a sweep- ' Soobell, ii. 452-477. BOOK OF RATES FOE EXCISE. 13 iiig clause : All other goods imported, not therein mentioned, were to pay excise according to the true value, viz. Is. in every 20s. ' as they are valued to pay customs.' Under the head of Native goods we find : — spirits Native or strong waters, beer and hops, cider and perry, metheglin and mead ; salt ; the manufactures of soap, glass, starch, gold and silver wire, tin, bar-iron, ordnance and shot of cast iron and other articles made of cast iron ; copper and lead ; oils and safii-on. The special exemptions from the excise are : — salt expended upon the salting of any herrings, cod, Hng, pilchards or any other fish ; beer expended in taking the said fish; and imported bulhon, corn, victuals, arms, ammunition, and ordnance of brass or iron. Power was given to commissioners, as theretofore, to let out to farm the several branches of the excise ; and in 1657 an offer was made to give, for the farm of the excise and the port duties, no less than 1,100,000Z. per annum. This seems a large sum, but, on the other hand, according to a calculation made in the previous year, it was estimated that the revenue ought to amount, without any land tax, to 1,300,000/. per annum. Some revenue was derived, under the common- wealth, from licenses granted for the sale of wine. After the dissolution of the third parHament of the Protectorate, by the lord protector, in February, 1658, the intermittent fever from which he was suffering took a serious turn, ending in his death on September 3, the anniversary of the victory of Worcester. His son 14 HISTORY OF TAXATION. * 1659. Eichard was declared protector by the council. Parlia- ment met in January, but was dissolved in April. In May, ' the Eump,' that is to say, the remaining mem- bers of the Long Parliament, were restored by the army ; and eventually, after the entry of Monk with the northern army into London, they dissolved, after appointing a new Convention parliament to meet in April, 1660. This Convention invited the king to re- turn, and Charles 11. entered London on May 29, in the year described in the Statute Book as the twelfth of the reign. 15 CHAPTEE 11. FROM THE RESTOKATION TO THE REVOLUTION. 1660—1688. Settlement of the revenu6 after the Restoration. Grant of the old tun- nagfi and poundage and the duties on woollen cloth. The Great Statute of Customs and the New Book of Rates. Abolition of the Court of Wards and Liveries, and Purveyance and Preemption. Pro- posals for a revenue in lieu of the feudal revenue. Grant of the here- ditary excise. Grant of the temporary pxcise. The wine licenses. The revenue from demesne. Imposition of the hearth-money. Addi- tional duties on wine and beer. Tax on law proceedings. The Extraordinary Taxes for the War : 1. Poll taxes ; 2. Subsidies (the last of the subsidies) ; 3. Assessments. Taxation of the clergy. The tax on bankers, personal estates, offices, and land and mines. Acces- sion of James II. Levy of the customs without a grant. Grant of the customs for life. Special taxes on wine, on tobacco, on sugar, and on French linen, silk, and brandy. List of taxes, 1688. In the course of the debates in the house of commons, after the Restoration, in 1660, regarding the settle- ment of the revenue, it was admitted that 900,000/. which was considered to have been the amount of the revenue in the time of Charles 1., was inadequate to meet the oi'dinary expenses of the Crown ; and the amount of the future revenue of the_king was settled -at 1,200,000Z. per annum. Having fixed the amount of the revenue to be raised, the parliament, proceeding to the question of supply, granted towards raising the sum required, the following — Duties. on Wine. 16 HISTOKY OF TAXATION, TAXES ON ARTICLES OF CONSUMPTION. The Port rirst, the old port duties, for which the name of customs was retamed, including (1) tunnage on wine ; (2) poundage on goods imported and exported ; and (3) the ancient duty on wooUen cloth or the old drapery.^ The grant was embodied in an Act which con- tained a new Book, of Eatbs or Table of Duties and a code of customs law, and was, therefore, termed, in customs language, the Great Statute.^ Tunnage In this Act the wines imported are specified as follows : Gascoign and French ; muscadels, malmsey (from Crete) and other wines of the Levant ; sacks, canary, malaga, madeira, romney, hoUock, bastard, tent and alicant ; and Ehenish. For wine imported by Englishmen the tunnage was as follows : — £ g. d. Into London, and Levant wine imported into Bristol or Southampton 4 10 Into any other port, and wine, other than Levant wine, imported into Bristol or Southampton ' . . .300 and if brought thence to the port of London, the dif- ference in charge. Rhenish brought into any port, the awme, of 40 gallons 10 Additional tunnage, to be paid by the importer within nine months after importation for — Wine of France, Germany, Portugal, or Madeira . .£300 Every other sort of wine 4 ' The prohibition of the exportation of wool was continued under the restored monarchy. « 12 Car. II. c. 4. ' Southampton had always been the port of landing for Levant wines. Bristol was famous for its sherry, which was called, then as now, 'Bristol milk.' It is mentioned by Pepys in his Diary, and by Defoe, in his ' Tour through England.' THE GREAT STATUTE OF CUSTOMS, 1G60. 17 Merchant strangers paid on all sorts of wine a tunnage of 11. 10s. in addition to the ordinary rates, and also the ancient duty of. butlerage, viz : 2s. the tun. Native merchants were liable to prisage. Henceforth wines were free from the excise. 2. The poundage on goods was Is. in the £, Poundage on Goods. that is, at the rate of 5 per cent., on goods inwards and outwards,, according to their value, as ascer- tained by reference to the Book of Eates. Merchant strangers exporting native commodities paid an additional Is. in the £. 3. The duty on woollen cloth or the old drapery, The Duty charged at so much the piece, was calculated after the rate of two farthings and half a farthing for every pound weight, for Englishmen. Strangers paid a double rate, besides the old duty of Is. 2d. the piece. Though still termed the duty on the old drapery, it extended to the new sort of cloth termed Spanish cloth, otherwise narrow hst, and to every other sort of woollen cloth of the old or new drapery. The Book of Eates, as settled by the House, was subscribed by the hand of sir Harbottle Grimston, the Speaker ; and the grant of the port duties was to the king for life. As a second instalment towards raising the sum The Bx- required, Parliament eventually adopted certain par- Liquors, ticulars of the commonwealth excise, by granting to the king the duties termed the hereditary and the temporary excises. The first of these was granted in lieu of the revenue from the incidents of the feudal tenures : — VOL. II. c 18 HISTORY OF TAXATION. reliefs, primer-seizin, wardships, fines on alienation and other incidents, and purveyance and preemption. The reasons for the existence of the feudal incidents had long ceased to be ; and indeed the whole feudal system had long been practically obsolete. The strict enforcement of the incidents under Elizabeth had been the cause of serious complaints. So un- popular had they been found under the administra- tion of James I. that the difficulty of finding taxes in substitution for the feudal revenue had alone pre- vented the execution of Salisbury's plan for its total abolition in 1610.^ And in the reign of Charles, when lord Cottington, as chancellor of the exchequer and master of the wards, improved the revenue of the court of wards for the king, all the rich families of England, of noblemen and gentlemen, were ' exceed- ingly incensed by this husbandry, and even inde- voted,' as Clarendon terms it, ' to the Crown, looking upon what the law had intended for their protection and preservation to be now apphed to their destruc- tion.' ^ The Court of Wards and Liveries, in which this revenue was enforced, did not long survive the commencement of the civil war. It ceased to sit from February 24, 1645 ; and, eventually, wardship, livery, primer-seizin, ousterlemain — all the feudal incidents, and all tenures by homage, and aE fines, licenses, seizins, and pardons for alienation had been abolished, and all tenures in capite and by kniofht's service of the king or any other person and all ' ■ Clarendon, Hist. Reb., book ii. 102. ABOLITION OF THE FEUDAL REVENUE. 19 tenures in socage in chief, had been turned into free and common socage, that is, ordinary tenure.^ In the same manner, purveyance and preemption, royal prerogatives so unpopular that a volume might be filled with excerpta from county histories of com- plaints regarding these ' insupportable grievances to the people,' had as such also been abolished by the parliament. All the king's officers called purveyors, victuallers, buyers, takers or caters ; his commis- sioners by warrant and commission, who ' at will and pleasure had seized and taken the carts, waggons, carriages, and horses of the people for the removal of the king's household and for other purposes,' had ceased to be. And the people were secured against all ' seizures and takings of their hay, straw, oats, corn, cattle, victual, flesh, fish, food, timber and other chattels for provision of the king's household, at a price fixed at the pleasure of the king's officer,' or, as frequently happened, without any payment in return. These unpopular prerogatives it was clearly im- possible to revive. It was acknowledged also ' that the court of wards and liveries, and tenures by knight's service, and the consequents upon the same, had been found by experience more burdensome, grievous and prejudicial to the kingdom than they had been beneficial to the king,' '^ and that it was impolitic, if not impossible, to revive them. ' By cap. 7, which comes next to Humhle Advice and Petition, in Scobell, 6, see p. 378. » 12 0ar. IL c. 24, recital. c 2 20 HISTORY OF TAXATION, In these circumstances, it was arranged that the court and the resulting profits thereof and pur- veyance and preemption should, with the consent of the king, be formally and legally abolished, and that, in substitution for the revenue and advantage from these sources, 100,000?. a year should be settled on the crown. The next question was, as it had been in 1610, from whence this sum of money should be derived ? At first, it was proposed that the amount should be apportioned between and charged upon the vari- ous counties, as in effect a land-tax of that amount ; and a careful valuation of lands was made for the purpose by a committee consisting of the most con- siderable men of those times, who in their rating followed ' the rates observed in assessing the ship- money, as having been laid by persons who had no reason or interest to favour one county more than another.' ^ But objections were raised to this proposal. The tenures abolished affected, it was urged, only lands held in capite from the king ; while the arrangement proposed extended to all lands, irrespective of the tenure by which they were formerly held. Unfair as regards the owners of lands not formerly held in capite, it could not, on principle, be maintained. The next proposal made was that the 100,000/. should be charged by way of a rent-charge on such lands only as had been formerly subject to the tenures abohshed. This, as it was an equitable, appeared at > Davenant, Essay upon Ways and Means. Works, i. 37. GRANT OF THE HEREDITARY EXCISE. 21 first to be a feasible, plan. But, on further considera- tion, this mode of arrangement appeared also liable to objection. Many years had passed since the prac- tical abolition of the feudal tenures. The court of wards and liveries had practically ceased to exist in 1645. Under a law sanctioned by its existence, heirs had succeeded to lands as free from the burdens in question, and had held them as free for more than half an ordinary lifetime, and other lands had been put into settlement or had been mortgaged. But the case of purchasers was a stronger case, and could not be ignored. And these now demanded on what ground they who, under the sanction of laws then existing, had purchased their lands as free, could with any justice be required to compound for imaginary burdens. These practical difficulties of adjustment induced The Here- many members of parhament to incline to the con- cise. sideration of a third proposal based avowedly on grounds of expediency rather than of right, to the effect that, in substitution for the revenue and advan- tage from the sources which were now closed, the king should have, in lieu of the 100,000Z. a year, a revenue to be derived from a set of duties on beer and ale and other liquors, of half the amount of those chargeable under the commonwealth excise. The advantage to the king of this proposal was at once evident to the court party. The duties, in their immediate produce, would far exceed 100,000^., and the yield would increase day by day, in proportion to the increase in the consumption of the beverages' 22 HISTORY OF TAXATION. charged with duty. Accordingly they put such pres- sure on the house of commons that, in the result, this proposal for an excise was carried. The resohition of the House was carried into effect by an Act which remains outstanding on the statute book at the present day, and is known as the Act for the Hereditary Excise. This Act settled upon his majesty, his heirs, and successors, ' in full and complete recompense and satisfaction, as well for the profits of the Court of Wards and Liveries and the feudal tenures and incidents, as also for all manner of purveyance and preemption then taken away and abolished,' an hereditary excise, consisting of a set of duties on home-made, as opposed to im- ported beer and ale, cider and perry, metheglin or mead, vinegar beer, and strong water or aqua vitae, liquors which had been charged under the common- wealth excise ; on the new drinks — coffee, chocolate, sherbet, and tea, as then made and sold in the public- houses and coffee and chocolate-houses ; and on foreign or imported beer and ale, cider and perry, spirits and strong waters. The Tem- In addition to the hereditary excise, parliament Excise granted, after considerable debate, another set of duties, in respect of the same liquors, to the king for hfe. These duties, as distinguished from the here- ditary, were termed the temporary excise, and the Act for the temporary excise was, in effect, a duplicate of that for the hereditary excise.-' ' See 12 Car. II. c. 2-3, and compare ss. 14-37 inclusive, with ss. 28-47^ of c. 24, the Act granting the hereditary excise. THE TEMPORARY EXCISE. 23 Under both Acts, the terms of the charge were almost precisely similar to those for the common- wealth excise ; and the rates, almost in all cases half those payable under the commonwealth, were as follows : — N'ative orllnland Liquors. Beer and ale, strong, over 6s. the barrel . „ „ small, 6s. and under the barrel Cider and perry, the hogshead . Metheglin or mead, the gallon . Vinegar beer, the barrel .... Strong -water or aqua vitae, the gallon Foreign or Imported. Beer and ale, the baiTel .... Cider and perry, the tun .... Spirits made of wine or cider, the gallon . Strong water, perfectly made, „ New Duties. Coffee, the gallon 4 Chocolate, sherbet, and tea, the gallon . .08 This list, it will be observed, includes all the liquors charged under the commonwealth excise ex- cept wine, which was now charged with an additional port duty in lieu of the excise. The only item of importance in the list of foreign liquors was that relating to spirits made of wine, which included French brandy, a spirit for which the demand was increasing day by day. The duty on beer and ale was paid by common brewers weekly ; while inn-keepers, alehouse-keepers, victuallers, or other retailers of hqiiors charged with excise, paid on the liquors retailed by them, monthly,— -by reference to returns, which they were s. d. 1 3 3 1 3 Oi 6 1 3 6 2 4 24 mSTORY OF TAXATION. to make, of the liquors brewed, made or retailed, in the particular week or month. Importers of liquors paid the duties, on entries made by them, before the liquors were landed. The Crown also derived from the prerogative of granting Ucenses for the retail of wine an income of about 10,000^., which formed part of the hereditary revenue. THE DEMESNE. The royal demesne was not now of any great practical importance as a source of revenue. The ' 1,422 manors or lordships, besides lands and farms in Middlesex, Shropshire, and Eutland,' inscribed in Domesday Book as royal demesne, and the subsequent accretions by forfeitures, . escheats, &c., had at this date shrunk into a very moderate compass. It will be remembered that, originally, the ancient demesne, consisting of lands that had belonged to Edward the Confessor and were considered to have belonged to the Heptarchic kings, was regarded as in the nature of national property ; on which ground parUament, should the king, by grants of ancient demesne, impoverish himself to such an extent as to compel himself to resort to a request for a subsidy, might nuUify and cancel the immoderate grants. On the other hand, the demesne, not ancient, and all accretions to the king by escheat and forfeiture, were regarded as the property of the king, which he could alienate without any fear of the subsequent inter- ference of parliament. But, in practice, this distinction between the an- THE ROYAL DEMESNE, 1C60. 25^ cient and the other demesne was not strictly observed by our kings. King after king ahenated large por- tions of both kinds of demesne. On some occasions there were resumptions of portions of the alienated lands ;^ and after the wars of the Koses, the king still continued to be the owner of vast landed possessions. But a steady process of aKenation commenced in the reign of Henry VIII., whose hberahty and profusion were not exhausted in the dissipation of the treasure accumulated by his father, and the grants he made of the lands resumed from the monastic establishments. This king granted away large portions of the royal demesne, and the demesne was further diminished during the reign of his son by the enormous grants made to the friends of Somerset and Warwick. ' The inestimable wasting and consumption of the ancient revenues of the realm ' was noticed as ' manifestly apparent,' by the Commons on their first grant of a subsidy to queen Ehzabeth. Nevertheless the queen, whose aversion to frequent apphcations to parliament for subsidies is notorious, had recourse to sales of royal demesne for her necessary expenses, and from this source, also, rewarded many who had rendered faithful service to the crown. The profusion of James I. to his favourites and the sales by Charles I. in his attempts to obtain money without recourse to parhament, completed a process of reduction which at the date of the commencement of the civil war ' Of Resumptions. Davenant, Works, iii. 68. The subject of the alienations and resumptions of royal demesne received considerable atten- tion subsequently in the reign of "William III. It is now of no practical importance. 26 HISTORY OF TAXATION. had cut down the revenue from the demesne to 120,000/. And the remainder of the demesne was sold under the commonwealth. After the Kestoratipn, suggestions were made for the resumption of the demesne lands, but were met by the claims of boni fide purchasers and other possessors of lands formerly demesne who had strong pohtical claims on the king as promoters of his re- turn. Eventually, however, a considerable portion of the royal demesne was restored to the king ; but Charles, careless of money, with many just claimants on his generosity, and a meagrely provided exchequer, renewed the process of ahenation, and in 1663 had reduced the revenue from the demesne to about 100,000/. a year.i DIRECT TAXATION. THE HEAETH-MONET. The revenue from all the sources before mentioned proved insufficient to make up the amount settled as ' necessary to support the king's crown and dignity,' that is to say, 1,200,000/. ParUament, therefore, ' considering that nothing conduceth more to the peace and prosperity of a nation, and the protection of every single person therein, than that the public revenue thereof may be in some manner proportioned 10 the public charges and expenses,' in order to make up the required amount, granted to the king in 1662 a house tax extending to all houses except cottages. In form this tax was copied from a French original ; the charge was 2^. for every hearth or stove in every ■ Return Pub. Inc. and Exp. Part II. 43.S. GEANT OF THE HEARTH-MONEY, 1662. 27 dwelling-house,^ and therefore the tax was known as the hearth-money or chimney-money. Extremely unpopular and at first collected with difficulty,^ the tax proved subsequently, when farmed, productive of 170,0j00/. a year. Other New Taxes. The hearth-money proved to be an insufficient addition to the revenue, and, in the reign, addi- tional duties were imposed upon (1) wine ; (2) beer and the other excisable hqubrs ; and (3) proceedings in the law courts. 1. Wine, charged under the Great Statute of the customs with duties less than those which had been payable under the commonwealth excise, stood first in the Ust of liquors to be taxed ; but the excessive ta,xation to which it was now subjected was, in a great measure, due to our jealousy of France, French wines having obtained, since the Kestoration, the ascendancy in our market. In 1664, indeed, the in- tercourse between France and England had been materially advanced by Colbert's liberal tariff of that year ; but this tariff he was subsequently compelled, by pressure on the part of the French manufacturers, to alter, and by a new tariff, in 1667, foreign manu- factures were effectively excluded from France. This formed the first step in the long war of the tariffs war of the between France and England. We soon retaliated. In 1668, we raised a sum of 310,000^. by an imposi- tion on wine and other liquors. Two years later, special additional duties were imposed upon wine and > 13 & 14 Car. II. c. 10. = Davenant, Works, i. 208. 28 HISTORY OF TAXATION. vinegar on importation, for a term of eight years. ^ And in 1676, popular feeling on the subject ran so high that by the ' Act for raising money by a poll, and otherwise to enable his majesty to enter into an actual war with the French king,' we prohibited the importation of the wine, brandy and several of the principal manufactures of France.^ The prohibition was, it is true, of no long continuance ; but in the next year, the special duties on wine granted in 1670 were continued for a term of three years.^ 2. The additional excise on beer and other liquors, granted from June 24, 1671, for six years, was renewed for three years in 1676, the rates being 9d. for strong, and 3d. for small, beer, with other rates for the other exciseable liquors.* 3. The duties on proceedings at law, to be collected by the officers of court and paid over to the crown, were imposed in 1670, for a term of years to expire on May 1, 1680.^ In consequence of the disputes that arose between the king and his parliament, these three taxes were allowed to expire. ' 20 Car. II. c. 1 ; 22, c. 3. The Dutcli, whose manufactures were also excluded from France by the tariff of 1667, retaliated by the imposi- tion of high import duties upon Fi'ench manu&ctures and the exclusion of French wines and brandies ; and in 1672 the commercial warfare pro- duced open hostilities. The ultimate result of a war which, in consequence of a coalition against France, was prolonged for several years was, as re- gards the Dutch, an alteration in then- favour of the taritf of 1667 by the treaty of Nimeguen (Nymegen). » 29 & 30 Oar. II. c. 1. » 30 Car. II. c. 2. * 23 & 23 Oar. II. c. 5 ; 29, c. 2. = 22 & 23 Car. 11. c. 9. POLL TAXES. THE LAST 'SUBSIDY.' 29 TAXES GEAKTED FOR EXTEAOEDmAET PUEPOSES. For the purpose of disbanding the army ; for the Dutch war ; and for the preparations for war against France, and other extraordinary occasions of expense during the reign, recourse was had to various forms of direct taxes, viz. poll or capitation taxes ; the old Tudor subsidy ; and the commonwealth form of monthly assessment. The first poll, in 1660, produced 252,167/., a pou yield which would seem to be ridiculously small, did we not bear in mind that the assessment was of the loosest description. The Enghshman continued to be, practically, ' most master of his own valuation of any in Europe ' ; and no bad illustration of this po- sition of the Englishman is afforded in the action of Pepys, when in December of this year the collectors of the poll demanded from him 10s. for himself, and 2s. for his servant. He pays the 12s. ' without dis- pute,' and adds, in his Diary, ' I put by 10/. for them, but I think I am not bound to discover myself.' Another poll in 1666, for the purposes of the Dutch war, yielded about 500,000/. ; and a third, in 1677, for the preparations against France, imposed by the Act which prohibited th^ importation of French goods, about 150,000Z.i In 1663, four entire subsidies were granted by subsidies. the temporality ; and four subsidies granted by the clergy were confirmed by parliament in the ancient form.^ These subsidies produced only 282,000/. > Commons Journal, Tiii. 196 ; 18 Car. II. c. 1 ; 29 & 30, c. 1. ' 15 Oar. II. cc. 9, 10. 30 niSTOKY OF TAXATION, Estates of the value of from 3,000Z. to 4,000/. a year, paid, it was said, in some cases, not more than 161. It was now acknowledged that the subsidy was effete as a method of taxation, and it never again was used. Assess- The commonwealth form of assessment was used ments. on several occasions, and it was now settled that under this form of taxation the clergy should be combined with the temporalty. To this arrangement the clergy made no objection. Their privilege of granting sub- sidies in convocation had its disadvantages as well as its advantages. In former times, when their possessions were great, it had enabled them to stand in the posi- tion of purse-bearers to the king, and the church exercised towards the king a provident liberality, giving freely from a full purse in order to keep it. But the church had found it difficult to maintain the same liberality with diminished resources ; and more- over, had now no reason for any extraordinary generosity to the king. Under the commonwealth assessments, the property of the clergy had been assessed in common with the property of the laity, and the clergy found their proportion of payment less under that system than under the system of separate grants. They had no wish to return to the ancient system. Accordingly it was settled that the practice under the commonwealth assessments should be continued. And, inasmuch as taxation involves representation in parliament, henceforth the parochial clergy were allowed to vote at the election of mem- bers of parliament. Lastly, it may be interesting to note the grant, in END OF THE SEPARATE CLERICAL SUBSIDY. 31 1670, of a sum of 800,000^., to be levied in a special ' manner, which marks the increasing importance of the new order of bankers, and an inclination, on the part of the government, to select them as successors to the church in the office of purse-bearers to the king. This sum was to be levied as follows : By a rate of 15s. in every 100/. belonging to bankers, or lent to the king at above 6 per cent. ; 6s. in every lOOZ. on personal estates ; 2s. in the £ on the salaries of offices and places ; and Is. in the £ on lands and mines. Reign of James II. The legal grant of the port duties had deter- mined on the death of the king, but James IT., after his accession to the throne, before the assembling of parliament, under the advice of his council acting on the suggestion of lord chief justice Jeffi:eys and con- trary to the counsel of lord-keeper North, continued to levy and appropriate the duties under the pretext of a proclamation.^ Notwithstanding this arbitrary act, the parliament subsequently granted to the king for life the revenue enjoyed by his predecessor.^ The port duties and the excises on beer and ale, taken out of farm and placed under commissioners, the first in 1671 and the other in 1683, had both considerably increased in yield. Nevertheless, it was allowed that in the whole the revenue was insufficient to meet the expenses of the Crown. For this reason ^ See an interesting letter of Barillon to Louis XIV., giving an ac- count of a conversation with the king on the subject of the customs. Fox, James II., Appendix. See also Lives of the Norths, ii. 110, 2 1 Jac. II. c. 1. 32 fflSTORYOF TAXATION, ■ Special duties were again imposed upon wine, and two articles of peculiar importance in subsequent fiscal history were selected for special taxation. The duties now imposed, after considerable opposition by the merchants, sugar refiners, and tobacconists, upon TOBACCO AND SUGAK, Were the result of a suggestion of Dudley North, who had been, in the preceding reign, first, a commissioner of customs and, subsequently, a commissioner of the treasury, and who, having now returned to his former post at the customs, managed this afiair in the Commons for the lord treasurer Rochester. The three special taxes were as follows : — £ s. d. Wine (and vinegar), J French . . . .800 the tun : ( Spanish and other wine .12 Tobacco, the lb. j Plantation . . . .003 ( Spanish and other foreign .006 ' Plantation : Brown (Muscovado) .024 Fit for use . . .070 Sugar, the cwt. : 4 Foreign : Brown . . .048 "White . . . 11 8 Loaf . . . .18 The duties, which were in addition to the ordi- nary tunnage and poundage subsidy of 5 per cent, according to the value under the Great Statute of Customs, were to be paid by the ' consumptioner,' as the retailer was termed. The merchant, or importer, if a consumptioner, or shopkeeper dealing in the com- modities, paid the duty on the goods before they left TxVXES ON WINE, TOB.VCCO, AND SUGAR. 33 the custom-house or port where landed. In other cases, he was ,allowed to give security for, payment of the duty before delivery of the goods to a purchaser.^ Lastly, additional duties were imposed upon French and East India linen, several other manufac- tures of India, French wrought silks and stuffs, all other wrought silks, and brandy.^ No alteration was made in our system of direct taxation under James II. ; and, as the general result of the arrangements connected with the revenue made under the later Stuarts, we have : (1) the conti- nuation of the old system of port duties on merchan- dise imported and exported, with additional taxes on wine, sugar, tobacco, and French and India linens and silks, and brandy ; (2) the substitution, in lieu of the revenue from the feudal tenures, and in supplement to the revenue from demesne, of certain items of the commonwealth excise ; (3) the imposi- tion of the hearth-money ; and (4) the suppression of the old subsidy, in favour of the commonwealth rate or assessment, as a tax for extraordinary purposes. ' 1 Jao. II. c. 4. The duty on sugar was granted from June 24, 1685, to June 24, 1693, and was not renewed. The duty bn tohacco was con- tinued by suhsequent Acts, and was made perpetual by 9 Anne, c. 21. ^ These duties were granted from July 1685 to July 1690, when they expired. 1 Jac. II. c. 5. VOL. II. D 34 HISTORY OF TAXATION. THE PRINCIPAL TAXES IN FORCE IN 1688 AND THE YIELD. i; Direct Taxes. £ The hearth-money 200,000 r II. Taxes on Articles op Consumption. Port Duties on Exports and Imports. The old subsidy, 5 per cent, on the value of goods as rated in 1660; tunnage on wine; and the duty on woollen cloth . . . 577,000 ' Special duties grante'd in 1685 ; £ Wine and vinegar 173,000 Tobacco and sugar ..... 148,000 French and India linen, brandy, sUks, &c 94,000—415,000 ^ Inland Duties (^Excise). Hereditary and Temporary, on beer, spirits, cider, mead, vinegar, tea, coffee and chocolate 610,000 Wine licenses 10,000—620,000 • Average of 4 years, 1685-8. " Michaelmas, 1687, to Michaelmas, 1688. p-A - i' BOOK II. TAXA.TION ON THE INCREASE. 1688—1815. CHAPTER I. FROM THE REVOLUTION TO THE COMMENCEMENT OF THE WAR OF THE SPANISH SUCCESSION, INCLUDING THE SETTLEMENT OF IRELAND AND THE WAR WITH FRANCE. 1688—1702. CHAPTER n. THE WAR OF THE SPANISH SUCCESSION. 1702—1713. CHAPTER ni. ' FROM THE PEACE OF UTRECHT TO THE COMMENCEMENT OF THE WAR OF THE RIGHT OF SEARCH, INCLUDING WALPOLE'S ADMINISTRATION. CHAPTER IV. THE WAR WITH SPAIN (RIGHT OF SEARCH) AND THE WAR OP THE AUSTRIAN SUCCESSION. FALL OF WALPOLE. THE WILMINGTON, PELHAM, AND NEW- CASTLE ADMINISTRATIONS. 1739—1756. CHAPTER V. THE SEVEN YEARS' WAR. 1756—1763. CHAPTER VI. THE TAXATION OF AMERICA. CHAPTER VII. THE WAR OF AMERICAN INDEPENDENCE. CHAPTER VIII. THE TIMES OF WILLIAM PITT— BEFORE THE GREAT WAR. 1784—1792. CHAPTER IX. TAXATION DURING THE GREAT WAR. 1793-1815. IrVo 37 CHAPTER I. FEOM THE REVOLUTION TO THE COMMEKCEMENT OF THE WAE OF THE SPANISH SUCCESSION, INCLUDING THE SETTLEMENT OF IRELAND AND THE WAR WITH FRANCE. 1688—1702. Produce of the chief branches of the revenue at the date of the Eeyolu- tion, 1688. Repeal of the hearth-money. Settlement of the revenue. The special tax on sugar not continued. The Civil List of 600,000/. per annum. Civil List increased in 1698 to 700,000/. Expenses of the Revolution, the settleu'ent of Ireland, and the war with France. The poll and capitation taxes. Tax on births, deaths, marriages, and bachelors and widowers. The property or land tax. New taxes on houses and hawkers. The Excise. Additional duties on the brewery. Tax on the distillery. Tax on salt. Tax on sea coal. Tax on glass. It is repealed as a failure. Tax on tobacco-pipes. Tax on malt. Tax on leather. Decrease in the yield of the customs. The imposts of 1690 and 1692. The duties on tonnage of shipping. Additional duties on French wine and goods The duty on whale fins. The new subsidy of 1698. Repeal of the export duties on woollen manufactures in 1700, The stamp duties. Tax on hackney coaches and stage coaches. Proposed tax on the Jews. Tax on the joint stock of the East India Company. RfeumS. List of taxes in 1703. After the Eevolution, in the course of a debate on the subject of the revenue, February 27, 1689, the house of commons ordered a computation to be made of the produce of the chief branches of the revenue at this date. And in pursuance of the order, sir Robert Howard deUvered to the House, March 1, a 38 HISTORY OF TAXATION. return, showing the produce, clear of all charges of collection, to be approximately as stated at the end of the last chapter.^ The revenue from taxes was therefore between 1,800,000^. and 1,900,000/. Of this amount 200,000/. was given up almost immediately, when the hearth-money was repealed. This tax, copied from a Trench original, had not proved well adapted for Englishmen. The diaries of Evelyn and of Pepys, and numerous other historical records of the time, contain abundant evidence of its unpopularity. It was hated on account of its inci- dence on a poorer class of persons than had been usually taxed under the easy regime of the subsidies. The necessary visits of inspection of the ' chimney men,' as the collectors were termed, were deemed invasions of the home of the Englishman. And the farmers of the tax were rigorous and unrelenting in their proceedings. This popular detestation of the hearth-money is noticed by Pepys in his ' Diary ' as existing even before the tax was farmed : ' There is much clamour against the chimney-money,' he notes, in June 1662, ' and the people say they will not pay it without force.' It is expressed, in the usual exaggerated form, in ballads of that day : — The good old dames, whenever they The chimney-men espied, Unto their roofs they haste away, Their pots and pipkins hide. ' Commons Journals, vol. ii. Par. Hist. v. 160. THE 'HATED' HEARTH-MONEY. 39 TBere is not one old dame in ten, And search the nation through, But, if you talk of chimney-men, Will spare them a curse or two. And, again, the same sentiment is suggested in the climax to the following epitaph, on Eebecca Eogers of Folkestone who died August 22 1668, which is not perhaps so well known as, from its quotation by Macaulay, the foregoing ballad : — A house she hath, it's made of such good fashion, The tenant ne'er shall pay for reparation ; Nor will her landlord ever i-aise her rent, Or turn her out of doors for non-payment. From chimney-money, too, this cell is free, — To such a house who would not tenant be ? On the other hand, the hearth-money had many recommendations from a fiscal point of view. It produced over 170,000^. per annum ; was paid into the exchequer punctually, was certain in its yield, and afforded unexceptionable security for a pubhc loan. To these advantages alone can be ascribed its retention during the reigns of Charles II. and his successor. When revolutions are imminent, the party anxious for change rarely fail to endeavour to gain popularity by promises to remit taxes, leaving the manner and means of fulfilment as matters of detail for considera- tion at a future and more convenient season. WilHam of Orange and his supporters were pledged, in the usual manner, to some remission of taxation should their attempt prove successful; and the numerous petitions complaining of the hearth-money Wilham received, on his way from Torbay, where he landed, 40 IIISTOEY OF TAXATION. to London, induced tim to select that tax for re- duction, or, if necessary, for repeal. On his arrival, therefore, in London, he ordered the house of com- mons to report on the subject, and signified his willingness to agree to a regulation of the hearth- money, or wholly to take it away, as seemed most fit. The Commons reported that ' the said revenue cannot be so regulated but that it wUl occasion many difiiculties and questions, and that it is in itself not only a great oppression to the poorer sort, but a badge of slavery upon the whole people, exposing every man's house to be entered into and searched at pleasure by persons unknown to him.' This report settled the question. William at once consented to repeal the hearth-money.-^ ' The government came in upon a foot of liberty,' writes Hampden, ' and the reason that the chimney-money was taken off was this : that every man might have his house free.' ^ The repeal reduced the revenue from taxes to between 1,600,000Z. and 1,700,000^. The average naval and mihtary peace expenditure, 1685-7, inclusive, had been 1,101,839Z. per annum. Settlement of the Revenue. In the course of the debates in the house of com- mons regarding the settlement of the revenue, it was agreed that their majesties should have for the con- > 1 & 2 Will. & Mar. c. 10. Nevertheless, in Sept. 1690 hearth- money was imposed in Scotland, at the rate of 1*. 2rf. for every hearth. ' Considerations ahout Ways of raising Money, 1692. State Tracts, ii. 309, WILLIAM IIL^SETTLEMENT OF THE REVENUE. 41 stant necessary charge of supporting the crown in time of peace a revenue of 1,200,000^. per annum. ^ A part of this sum would be raised from the per- petual sources of revenue belonging to the crown, which were : — The hereditary excise granted in lieu of the feudal revenue ; several smaller branches of revenue, such as the first fruits and tenths, the wine licences, and the receipts from fines and forfeitures ; and the crown lands. But the produce of these smaller branches was insignificant, while of the crown lands, it was stated in debate that the ' revenue from that source was all gone ; it is alienated from the king, he can have nothing from his land, but from parliament.' The total income from all the perpetual sources of revenue would, therefore, go but a small way towards making up the 1,200,000^. The temporary excise and the port duties had determined when James II. ceased to be king. The ■excise was now granted to the new king and queen for their lives, and to the survivor for life,^ as it had been enjoyed by Charles 11. and James II., except the duties on the retail of drinks made from tea, cofiee, and chocolate, which had proved unfair in their incidence and expensive to collect, in consequence of the number of officers required for the purpose. In lieu" of these, special import duties were imposed upon the tea in the leaf, coffee-berries, and cocoa-nuts and chocolate, when imported.^ The annual import of ' Par. Hist. v. 193. ' 2 Will. & Mar. c. 3. Further continued by 1 Anne, st. 1, c. 7, and 1 Geo. I. St. 1, c. 1, perpetuated by 1 Geo. I. st. 2, c. 12, s. 8. » 1 Will. & Mar. sess. 2, c. 6. 42 HISTORY OF TAXATION. these articles was not at this date sufficient to pro- duce any considerable revenue, if all duty paid. But the duties now imposed were so excessive that no entries at all were made at the custom house, and a system of smuggling was started, which continued to exist for generations. It was- next arranged that the old subsidy of tunnage and poundage, and the duty on woollen cloth, under the Great Statute of 1660, should be granted to the king and queen, but the question arose, for how long they were to be granted ? This revenue was the mainspring of government. Without it the govern- ment of the country could not be carried on ; while the king, in possession of it, could govern without the assistance of parliament. The life grant to Charles II. had enabled the council to act without a parliament ; and the life grant to his successor had proved equally unfortunate in its results. After a very careful consideration of the sub- ject, the House in grand committee on the supply, March 27, mr. Hampden, chancellor of the exchequer, in the chair, came to the determination to grant, and did grant, the port duties to their majesties, not for life, but for a limited term of four years} Several members had pressed for a life grant, and many others had expressed much good feeling towards the king personally ; but it was ' taken for a general maxim, that the revenue for a certain and short term was the best security that the nation could have for frequent parhaments, and the question was settled on that ground.' This hmitation of the grant was not, of ' Par, Hist. v. 661, 2 Will. & Mar. c. 4. LIMITED GRANT OF THE PORT DUTIES. 43 course, pleasing to king William, who regarded it as evidence of a feeling of jealousy of himself ; but even- tually he accepted the gift, under the persuasion of bishop Burnet, who explained that the limitation of the grant was due to a jealousy of those who might succeed him, and that if he would accept the gift for a term of years and settle the precedent, he would be reckoned the ' Deliverer ' of succeeding ages, as well as the present.^ The principle of a short grant of some considerable branch of the revenue has since been enforced, with a brief interval, down to the present day, when the tea duty is granted annually. The special duties on wine and vinegar and tobacco were continued for a term ; but the special duty on sugar, which had proved detrimental to our refiners for the export trade, was allowed to expire^ in June 1693. Such were the main features in the settlement of the revenue on a footing of peace after the Eevolution, and the sources from which it was hoped that 1,200,000/. would be derived. Introduction of the Civil List. An alteration was now made in the appropriation of the revenue, by the introduction of what is termed the ' Civil List.' This term was used to designate the sources of revenue appropriated to produce a fund for the payment of the charges of the civil government, which consisted of the expenses of the royal household and of the civil list, more properly so termed. The ' Burnet. Own Time, iv. 76-7. » 2 Will. & Mar. c. 5. 44 niSTOKY OF TAXATION, civil list included the judges, the ambassadors, and other members of the civil service, and also the an- nuitants and pensioners of the crown, and gave a name to the whole fund, which continued to be ap- plied to the expenses of the royal household long after the civil list had ceased to be connected with them. The amount for the civil list was fixed in 1689 at 600,00OZ. per annum. The special sources appropri- ated for the purpose were the hereditary excise, the other hereditary revenues, and the ordinary excise. Subsequently, after the war with France, the amount of the civil" list was raised, in 1698, to 700,000Z.. in 'grate- ful acknowledgment for the great and successful un- dertakings and achievements whereby his majesty had been the happy instrument of securing to the nation and posterity the blessings enjoyed under his most auspicious government, in the free exercise of the true Christian religion, and also in our Hberties and pro- perties.' And in order to raise the additional amount, a NEW SUBSIDY OF TUNNAGB AM) POUNDAGE was granted to the king for hfe. Any overplus from the sources of revenue appropriated to the civil Ust, and the remainder of the revenue from taxes, was under the control and in the disposition of parliament.^ Taxes granted for Exteaoedinaey Purposes. The expenses incident to the Eevolution ; for the settlement of Ireland ; and for the war with Prance, rendered necessary, before the end of the century, a considerable increase in taxation. > 9 & 10 Will. III. c. 23. See also 12 & 13, c. 12. THE POLL TAXES OF WILLIAM IH. 45 The sources from which extraordinary revenue was derived to meet these expenses were various. On many occasions, poll taxes were imposed upon persons at different rates, according to their rank, condition of life, and other circumstances, with the following result in produce : — The first poll tax,' imposed in 1689, produced £288,000 A review of the first poll and an additional poll for 1690 The second poll tax, imposed in 1690 The first quarterly poll, imposed in 1692 A review of ditto for 1693 The second quarterly poll, imposed in 1694 The capitation tax, imposed in 1697 The third quarterly poll, imposed in 1698 23,000 240,000 579,000 6,000 486,000 613,000 321,000 The difference in the produce of the polls of dif- ferent years was due to the difference in the manner of charging the tax; but no poll or capitation pro- duced anything near what might have been reason- ably expected. Davenant, taking the returns for the old hearth-money as his guide, estimates the yield of the poll of 1692 as only half what the tax should have produced. The single advantage of a poll was the facility with which it could be assessed and collected as compared with an ordinary property tax, and the assessors and collectors paid more attention to rapidity of collection than to any correct and exhaustive as- sessment. It was notorious that all sorts of evasions prevailed. Since its introduction into England, on a French model, in 1380, when it had in no slight degree proved the cause of the peasant insurrection, this kind * Single poll, in one payment. 46 mSTOEY OF TAXATION. of tax had never been popular. It touched, as did the hearth-money, a poorer class of persons than those liable under the subsidies. It was levied with no zeal or affection by the country gentlemen, who considered it hard and oppressive, particularly to the poor. It was not a form of tax in favour with Dutch financiers. Unfair and unpopular, it eventually was dropped, as unsuited to England. The poU tax of 1698 was the last ; and henceforth this form of tax passed, together with the hearth-money, into the hst of taxes tried and never again to be imposed in England. ' What minister,' said Henry Fox in 1748, ' would presume again to suggest the hated hearth-money of the Stuarts, or the poll taxes of the reign of Wilham HE. ? ' ^ A peculiar tax, imposed in 1695, according to the rank and condition in hfe of persons, upon births, marriages, and burials, supplemented by an annual tax on bachelors- and widowers, was suggested by a tax in force in Holland, where every one contracting marriage was charged with a sum varying from three to thirty florins, according to the class in life to which he belonged, and the same sum before having a right to bury a dead person.^ It was secured by means of a register, which was required to be kept in every parish. Imposed for five years, from May 1, 1695, and prolonged to August 1, 1706, it was not subse- quently renewed. The yield during the first five years was 258,094^., that is to say, 51,618/. per annum; afterwards it was comparatively small. A scheme of ' Post, p. 123. ^ Over de Belastingen, Amsterdam, 1837, p. 152, quoted De Parieii, iii. 491. TAXES ON BIRTHS AND BACHELORS. 47 these taxes is given in the Appendix. It may be noted that the tax on marriages had the pernicious effect of increasing the number of marriages by irresponsible persons unfit for the solemnity. Settlement of the Property Tax. Every year during the war considerable sums were raised by means of a property tax. At first, in 1688, the old form of monthly assess- ment was used. Next, in 1689, a rate was tried, in respect of income, or assumed income, from personal property, taking lOOZ. of value as equivalent to an income of 6Z. ; income from ofiices and employments of profit (not naval or military) ; and the yearly value of houses, land, quarries, mines, iron and salt works, and profits from land. But the commissioners appointed by the crown were the persons who had been commis- sioners for. the assessment in the previous year, and, as may be imagined, the assessment was made, to con- siderable extent, on the old fines of the last year's assessment. In 1690 the form of tax employed was a twelvemonth's assessment of 137,641Z. 18s. 2d. per month : it produced 1,613,747^. ; and the same method was used in 1691, when a twelvemonth's assessment was granted, and produced 1,613,874Z. But the ' exorbitant inequality of the old propor- tions of charge, both between county and county, division and division, and parish and parish,' gave rise to serious and well-grounded complaints. Move- able property had slipped out of assessment, * neither money nor personal estate coming in to the aid,' and, in consequence of this, the pressure of the tax on the 48 HISTORY OF TAXATION. possessors of land was excessive, to the weakening and diminishing of their estates. As then assessed and levied, the assessment was — ' as impolitic and unrea- sonable a method of raising great sums of moiiey,' writes HaUfax, ' as ever was introduced in any nation.' ' The western and northern members of parlianaent, indeed, were strong supporters of a system under which the counties they represented were but lightly taxed. But the associated counties, who were highly rated, as strongly pressed for the reintroduction of a pound rate. In 1692, when there was another rate, of 4s. in the pound, an apprehension existed that a rate would be enforced, for the Lords annexed to the Tax Bill a clause to the effect that they should have power to settle the method of assessment for property belonging to peers. This, however, they were subsequently com- pelled to rehnquish, on the rejection by the Commons of the Bill and clause as a flagrant attempt upon their privileges. For this rate the assessors were not upon oath ; it produced about 1,922,000Z. In 1693 there was a rate of 4s., for which the assessors were upon oath ; but, as remarked by Davenant, ' in matters of revenue it has been always found that oaths are very little regarded ; ' ^ and the rate produced 10,000Z. less than the rate for 1692. Subsequently, year after year, a rate was granted, and year after year the produce of the rate declined, as loose assessment and fraudulent returns sapped the foundation of the tax. ' Halifax, Essay ; Somers, Tracts, iv. 63. ' Essay upon Ways and Means. Works, i. 63. SETTLEMENT OF THE PROPERTY TAX. 49 ■. At last the process of diminution was arrested by parliament, who, in 1697, abandoned the principle of' a rate hj fixing what a rate should produce. Is. in he pound was to produce 494,671^., or, in round num- bers, half a million ; and upon this footing a sum of 1,484,015^. was granted as and for a rate of 3«. in the pound. The sum was re -partitioned out, and charged in particular sums on the counties and towns specified in the Act ; and within every particular county and town, the sum charged was to be levied in the follow- ing manner : — First, by a rate of 3s. in the pound on an assumed income from goods, merchandise, and per- sonal property, calculating these at their value, and assuming every 100^. of value to represent an income of 6Z.,^ and income from offices and employments ; and the residue of the sum, by a pound rate on the annual value of houses, land and real property. Later on in the same year, 500,000^ was granted to be levied in the same manner, substituting Is. for 3s. in the pound. In 1698, when another sum of the same amount as that granted in 1697 was granted as for 3s. in the pound, parliament further partitioned the tax, by enacting that every district and division should bear the same proportion of the whole charge that it had borne under the assessment for 1692. Henceforth the assessment of 1692 was to determine the quota of the district towards making up the sum charged in the Act upon the particular county or town of which ' The legal rate of interest at the time. In 1714 it was reduced to 5 per cent, by 12 Anne, stat. 2, c. 16. VOL. 11. E 50 HISTORY OF TAXATION. it formed an integral part. The practice was con- tinued in 1699, when a nominal 3s. rate was granted. History repeats itself. As in 1334 the old system of grants of fractional parts of moveables, fifteenths and tenths, had been relinquished, and in lieu thereof a practice was adopted of granting a sum of money, to be partitioned out between the various counties and towns as for a fifteenth and tenth. As, when a rate was again adopted, in the 4s. on lands and 2*. 8d. on goods of the Subsidy system, again in course of time a subsidy became in practice to be in effect a demand of a certain sum in lieu of or as for a rate. So now after the Eevolution, when a rate had again been tried, it fell into the same groove as the subsidy and the fifteenth and tenth ; and, though stiH nominally a rate of Is. or 2s. or 3s. or 4s. in the pound, was, in effect, but a sum of about half a milHon, a million, a million and a half, or two millions, charged in specified amounts on particular counties and towns, and within those counties and towns portioned out between particular parishes or districts, according to the assessment of 1692. In the assessment of the various tax-payers, it happened that, as the tradesmen and others assessed in respect of their personalty died off, or departed from the particular district, the assessors charged their quota upon the land, adding it to the previous charge upon the landowners ; so that the tax, which was intended to rest in the first instance on goods and offices, the residue only being charged on the land — intended for a general tax on property, gradually 'THAT FAIR VIEGIN, PUBLIC CREDIT." 51 became, in effect, a tax on land, and a most unfair one, because originally, the division of the whole sum representing the rate was extremely unequal, and as the relative riches of the different counties and towns specifically charged altered, the unfairness increafsed. In 1700 a sum of 989,996^., granted asforarate of 2«. in the pound, produced 951,066^. ; and after this there were grants of one-third and two-thirds of a 3s. rate. In the whole the amount raised by means of assess- ments and rates from 1689 to 1700 was 19,174,059/. This system of a grant of a certain sum as for a rate of Is., 2s., 3s., or 4s. in the pound, for the par- ticular year, continued in force down to 1798, when Pitt, before the introduction of -his income tax, made the land tax at 4s. perpetual, in the form of a redeem- able rent charge on the various districts. Before proceeding to state the other direct taxes imposed in the reign that henceforth figure as per- manent items in the fiscal list, two abortive attempts at special taxation may be noticed: — 1. A project for raising 100,000Z., in 1689, by a tax on the Jews, failed in consequence of the representations made that such a tax would drive them from the country ; and 2. a tax on the joint stock of the East India Company, and on every share in the joint stock of the Eoyal African and the Hudson's Bay Companies, imposed in 1 692, continued in force for a year only.^ This tax had the effect of a caution to the public creditor. No one is more easily alarmed than the man about to lend » 4 & 5 Will. & Mar. c. 15, ss. 10-12. E 2 52 HISTORY OF TAX,VTION. his money. ' That fair virgin, PubHc Credit, has the most dehcate and susceptible constitution.'^ And after this shock to credit, it was found expedient, if not necessary, to introduce into our Loan Acts a proviso that government annuities should be clear of all taxes and duties whatsoever, a contract with the creditor which precluded parliament from imposing, in good faith, any special tax on this species of property. Tax on The hearth-monev was succeeded by a fixed tax Houses. •' •' of 2s. on HOUSES, imposed, in 1696, by Montague, with higher rates for houses having more than a stated number of windows.^ The local retail traders complained that this did not reach itinerant traders, and represented that they were at a disadvantage when compared with the hawkers. A tax was there- Hawkers, fore imposed upon ha weeks and pedlars in the form of a trade license, costing 4Z. or more, according to the number of beasts of burden used, which ' every trading person, going from town to town, or visiting other men's houses, with goods to sell,' was compelled to take out annually.^ A tax on the hackney coach business in the metropohs, imposed in 1694, was in effect but an ex- tension of the licensing system for hackney coachmen, introduced in the reign of Charles I. in consequence of the ' danger to passengers and delay to cart traffic caused in the streets and passages of old London and Westminster by the unnecessary multitude of coaches ' Addison: Spectator, 3. ' 7 il- 8 Will. III. c. 18. ' 8 ^t 9 Will. c. S3. TAX ON THE DISTILLERY. 53 used therein,' under which the hackney coachmen were limited in number, and were required to be licensed by the king's master of the horse. Every hackney coachman was - now required to take out a Hackney Hcense, for which he paid 61. and, subsequently, an annual rent of 4:1., the number of licenses being limited to 700. At the same time, a license costing 8/. was required for drivers of stage-coaches in Eng- land and Wales. This was intended to be annual, but, through a blunder in the Act, was made to en- dure for a single year. There was no provision for any renewal ; and, in the result, the tax on locomo- tion was limited to hackney coaches. Brewery, II. TAXES ON ARTICLES OF CONSUMPTIOJSr. In the Excise, considerable additions were made The to the tax on the brewery, which affected only beer brewed for sale. This caused a great diminution in the number of licensed victuallers, and a proportion- ate increase in private brewing, in consequence of which the yield of the old excise declined by about a quarter of a million. Therefore, in the result, the public got only 170,000^. per annum from the additions.^ An important alteration was now made in the The Dis- tillery method of taxing spirits. French brandy had been the spirit most generally consumed before the out- break of the war, when we first prohibited the im- portation of it, and next, curiously enough, imposed a heavy tax. on the prohibited spirit, for the purposes 1 Davenant. Ways and Means, Works, i. 26. 54 PlISTOKY OF TAXATION. of which it was subsequently necessary to revoke the prohibition. The high duties which came into force had the effect of diminishing the supply of brandy, and raising the price of the foreign spirit to an amount which placed it out of the reach of the lower classes. A home manufacture of spirits from malt and corn now commenced in earnest, favoured by the legislature as tending to promote agriculture, to which much attention was devoted at this date ; and this was taxed in a new form, viz., on the low wines, that is, the spirit produced by the first distillation at the DISTILLERY, in lieu of, as heretofore, an excise upon the spirits. The revenue from the distillery was, however, only in its commencement during the reign of William III. To the impression that prevailed in all quarters, during the first six years of the war, that the war would not be a long war, may be attributed the neglect to increase the area of our taxation. Hitherto, Davenant observes, in taxing the people we had gone chiefly on land and trade, which is about one-third of the strength of England ; that is to say, we had used only the property tax, which, as then consti- tuted, rested in effect mainly on the land, and port duties. The other two-thirds of the strength of England we let escape ; so that usurers, lawyers, tradesmen, and retailers, with all that troop that maintain themselves by our vice and luxury, and who make the easiest and most certain gain and profit in the commonwealth, contributed little to its supports All these, he observed, might, by excises, be brought TAXES ON SALT, COAL, AND MALT. 55 to bear their proportion of the eommon burden.^ But the re-imposition of excises was what, at this time, the government were most anxious to avoid, and proposals made in the House, in 1694, for taxes on candles, soap, and leather were rejected. An excise on salt was, however, reimposed in this year, Sait. and, in 1698, was enormously increased. The war was now resolving itself into a fiscal contest. ' Whenever this war ceases,' wrote Dave- nant, ' it will not be for want of mutual hatred in the opposite parties, nor for want of men to fight the quarrel, but that side must give out where money is first failing. If we in England can put our affairs into such a posture as to be able to hold out in our expense longer than France, we shall be in a condi- tion to give the peace ; but if otherwise, we must be contented to receive it.' ^ In 1695, a tax was again imposed upon sea-borne Coai. COAL. Already coal imported into London was liable to a duty imposed for the purpose of building those new churches in the Italian style which Wren had raised, in the metropolis, to stand in the place of old St. Paul's and the other churches destroyed in 1666 by the Great Fire. Of late years the consumption had increased threefold.^ Coal, then carried ex- clusively by sea, v,^as easily taxed. The duty now imposed touched all sea-borne coal coming from one part of the kingdom to another.* The new taxes on the distillery, salt and coal ' Davenant, Ways and Means, Works, i. 62. » AVays and Means, Works, i. 15. ' Itid. p. 46. * 6 & 7 WiU. III. C. 18 J see 9 & 10, c. 13 j 1 Anne, stat. 2, c. 4. 56 HISTORY OF TAXATION. henceforth figure as permanent items in the revenue list; but others imposed. upon glassmaking. stone bot- tles and tobacco pipes were subsequently abolished. Glass. The manufacture of glass had, since the exclusion, or practical exclusion, of French glass, been brought, in a short time, to great perfection. Protected from competition from abroad, the manufacture could, it was considered, bear a duty, which was now imposed upon all glass wares manufactured in Great Britain, with an equivalent tax upon stone and earthenware bottles as rival to glass.^ The tax on glass was not long-lived. Reduced by a moiety, in 1698, when the tax on stone and earthenware bottles was repealed as no longer, necessary, it survived until 1699, and was then abolished as vexatious and troublesome to levy, and collect, of small advantage to the crown, and cal- culated, if continued, to lessen the produce of the coal duty by much more than the revenue it would produce, hinder employment of great numbers of poor, and endanger the loss of so beneficial a manu- facture to this kingdom.^ The repeal was followed by a prodigious development of the trade. Tobacco- A tax ou the manufacture of tobacco pipes was ^'^^ ' not- more successful than the tax on glass wares, and after an existence of three years, 1696-99, was re- pealed as a failure.^ Malt. To the prolongation of the war was due the im- position, in 1697, of a second tax falling upon beer, in the form of a duty upon malt. Malt had been ' 6 & 7 Will. III. c. 18. ' 10 & 11 Will, III. c. 18. ' 7 & 8 Will. III. c. 31. WILLIAM. III. ADDITIONAL PORT DUTIES. 57 suggested by Davenant, who had been formerly a eominissioner of excise, in his essay on ' "Ways and Means,' published in 1695, as an article of general consumption which might conveniently be excised, and which he .calculated, if taxed at the rate of M. per bushel, would produe 525,000^. The yield of the duty now imposed, at the rate of 6d. and a fraction the bushel, was, for the first three years, on an aver- age, 330,000^. a year. The last important excise imposed during the Leather, period under consideration was a tax on leather, imposed in 1697, for three years.^ To pass on from inland duties to those on imported The Port articles. The revenue from port duties suffered se- verely in consequence of the war and the measures of protective policy taken against France. According to the protective or mercantile system of the day, trea- sure or money alone was regarded as wealth, to obtain which was the proper object of commerce ; and only a commerce where the value of the exports exceeded that of the imports was" considered advantageous. "We excluded therefore by direct prohibition, or by means of duties so excessive as to amount to a pro- hibition, French wine, brandy, salt, linen, silks and paper, on the ground that the importation of these commodities of the growth, produce and manufac- ture of France, tended to 'exhaust the treasure of the nation, lessen the value of native commodities and manufactures, greatly impoverish English arti- ficers and handicrafts, and cause great detriment to ■ 8 & 9 Will. III. c. 21. 58 HISTOEY OF TAXATION. the kingdom in general.' ^ In these circumstances it is not surprising that the yield of the port duties decreased by nearly one-half. As might be expected, in order to prop up the revenue from this source, additional duties were granted on several occasions. The principal were as follows : — 'The IMPOST of 1690,' viz. duties on East India and China goods and manufactures, wrought silks, raw silks, Hnen, timber imported from Europe, hops, pepper,* grocery wares, articles of wrought iron, and several other articles ; in short, upon a variety of articles included in the tariff. The ' IMPOST of 1692,' viz. 25 per cent, additional, upon all French goods,^ and lighter duties, seldom exceeding 5 per cent., upon several goods of other nations. In 1694, when the Spanish and Portuguese mer- chants successfully opposed a proposal for additional duties on wine, in lieu of the proposed duties, a special tax was imposed upon shipping, payable on the tonnage of all vessels importing merchandise into England and Wales, or carrying goods coastwise from one place to another ; ^ but this tax, which was granted for four years, was subsequently repealed from May 17, 1796. The new duty, viz. additional duties on tea, ' 1 & 2 "Will. & Mar. c. 34, continued for three years, 4 & 6, c. 25. * Except wine, brandy, salt, and vinegar, which were specially taxed. 4 & 6 Will. & Mar. c. 6. Wine, 8/. the tun. » Davenant, Ways and Means, Works, i. 32 ; 5 & 6 Will. III. c. 20 ; 7 & 8, c. 31. DUTIES ON CLOTH AND CORN REPEALED. 59 coffee, cocoa nuts, and spices. These duties, granted at first for three years, were subsequently revi^•ed and continued.^ The Pkencii duty, viz. further additional duties on French goods ; for wine, 251. the tun ; brandy, 30^. the tun for single proof, and 60^. for double proof; and 25 per cent, upon all other French goods, making, with the 25 per cent, under the impost of 1692, 50 per cent.^ A duty on whale-fins, imposed in 1698, in lieu of half the glass duties and the duties on stone and earthen bottles and tobacco pipes. This, notwith- standing the double duty on fins imported by foreigners, went far towards the ruin of the Green- land trade. Special duties were also charged upon Scotch hnens called ' twill ' and ' ticking,' on impor- tation into England.^ And lastly, the new subsidy of 1698, for the Civil The New . . Subsidy. List, viz. a second set of duties of tunnage on wine and poundage on goods similar to the old subsidy of 1660.* Any overplus from the subsidy was, as before stated, to be in the disposition of Parliament ; and subsequently in the reign, 3,700/. per week was appropriated to public uses out of the excess. But the history of the port duties during this ciothand . corn period is not wholly a history of increased taxation ; exempted. » 6 & 7 Will. III. c. 7; revived, 9 & 10, c. 14 ; continued by 12 & 13, e. 11, and subsequent Acts. » 7 & 8 Will. III. c. 20 ; made perpetual by 1 Geo. I. stat. 2, c. 12, s. 3. ' 9 & 10 Will. III. c. 45. Out whalebone imported (other than in fins only) was forfeited and double the value. 9 & 10 WiU. III. c. 23, 8. 12. * 9 & 10 WiU. III. c. 23. CO HISTORY OF TAXATION. for in 1700, the exportation of woollen manufactures, both old and new drapery, and of corn, grain, bread, biscuit and meal, was allowed duty free.'^ We now became for the time considerable ex- porters of corn. in. THE STAMP DUTIES. In this war stamp duties were first imposed in England in 1694, on the model of the tax in Holland, where it was obhgatory to use for legal documents paper stamped with the impression of the greater or the lesser seal of the states, according to the import- ance of the transactions. In that country the stamped paper was a government monopoly ; but under the system now estabhshed in England the use of govern- ment paper was not compulsory ; the required stamp or stamps might be obtained on presenting parchment or paper for stamping at the Stamp Ofiice. Six dif- ferent stamps were brought into use. One to desig- nate a payment of 40*. was required for royal grants of lands, presentations to ecclesiastical benefices, and certain instruments of that class, and one of the five smaller stamps of 5s., 2s. 6d., Is., Qd., and Id., for a multiplicity of other legal instruments particularly specified in the Act.^ The yield for the four years, 1694-8, had been estimated at 300,000Z. ; but proved to be less than 200,000Z., that is, not more than 50,000Z. a year. In 1698 additional duties were imposed, chiefly on instruments previously charged:^ The tax contained the gefms of the important taxes ' 11 & 12 Will. 111. c. 20. « 5 & 6 Will. & Mar. c. 21. » & 10 Will. Ill, c. 26. STAiMP TAX COPIED FROM HOLLAND. 6t on deeds of conveyance, settlement, mortgage and lease, and probates of wills. Summary. Thus, in the reign of "William III., in consequence of the increase on the side of expenditure, due mainly to debt incurred during the war with France, the property or land tax, though still forming the sub- ject of an annual grant, settled into permanence as a tax to produce, in times of peace, a miUion of revenue, from a nominal ]fate of 2s. in the pound. In lieu of one kind of house tax, repealed, another was imposed, supplemented by a tax on itinerant traders, in the form of a license tax. The tax on hackney coaches in the metropolis was imposed, in extension of an existing system of Hcenses ; while that on stage carriages col- lapsed, in consequence of an error in the Act by which it was imposed. Under the head of excises or inland duties on articles of consumption, the national beverage was further taxed, not only directly by an increase for, the brewery, but also by means of a new tax on malt, at that date the principal ingredient in beer. In lieu of the excise on spirits when sold, the home manufacture of spirits, now rising into importance, was taxed in the distillery, by means of duties on the low wines or spirits of first extraction in the course of distillation, while brandy and other imported spirits were taxed by means of import duties. The national hatred of excises prevented the government from imposing several that were suggested — on candles, 62 HISTORY OF TAXATION. on soap, and on leather, when originally proposed, though subsequently a tax was imposed for three years. They were able, however, to tax salt and coal, and impose duties upon the manufactures of glass, stone and earthenware bottles and tobacco pipes, though only to be subsequently repealed as failures. In the port duties, the ' old subsidy ' of tunnage and poundage, and the special duties on wine and tobacco were continued ; but the special tax on sugar was allowed to lapse, and the duties on exported cloth and woollen goods were repealed. There were addeh the new subsidy of 1698, of 5 per cent., for the civil hst ; the impost of 1690, the additional impost of 1692 ; the new duty of 1695, on tea, coffee, cocoa- nuts, and spices ; and the special duties on whale fins and Scotch linen granted in 1698. French wine and brandy were additionally taxed ; and French goods, by means of two additions of 25, forming 50 per cent. The taxes in force in 1702 are stated on the opposite page. As regards the yield, the land tax at 2s. was, as will be remembered, another form of ex- pression for 1 million of revenue ; the other direct taxes gave about ;J of a million. The revenue from inland duties had varied considerably in different years. In 1700, over a million, it was, in 1702, nearly 1,400,000^. The yield of the port duties had decreased, in 1693, to 688,000^. ; but the effect of the additional duties was to raise it after the war to 1^ million. The stamp duties yielded about 94,000Z. LIST OF TAXES IN FORCE, 1702, 63 THE PRIlSrOIPAL TAXES IN FORCE IN 1702. I. Direct Taxes. The land tax ; now annual. On houses, 1696.> On trades : hackney coaches, 1694; hawkers, 1697. Burials, births and marriages, 1695. Bachelors, 1695. II. Taxes on Articles op Consumption. (a) Eatables : — Salt, 1694. Spices, 1695. (6) Drinks : — The brewery; Malt, 1697. "Wine. Tunnage and special duties. Spirits — (Distillery and imports). Tea, coffee and 1 The subsidies and the cocoa J new duty, 1695. (c) Tobacco : — The subsidies and special tax. (rf) Articles not eatables, drinks, or tobacco : — Timber (from Europe), 1690. Coals (sea-borne), 1695. Whale-fins, 1698, Imported and exported articles, generally, 2 subsidies of 5 per cent., viz., the old subsidy and the new subsidy of 1698, making 10 per cent. French goods, 50 per cent additional. East India and China goods, additional duties under the impost of 1690. III. The Stamp Duties, 1694. On various deeds and instruments. On law proceedings. ' The dates of the new taxes. 04 HISTORY OF TAXATION. CHAPTER 11. THE WAK OF THE SPANISH SUCCESSION. 1702-1713. Death of William III. Godolphin appointed lord treasurer. The Civil List. Settlement of the revenue from the Crown lands. War of the Spanish succession. Its cost. The land tax raised to 4s. The annual ' malt.' Grant of the one-third and the two-thirds subsidies of customs. The Methuen treaty and its provisions regarding the duties on wine. Transformation of the ministry. Fiscal arrange- ments with Scotland on the Union, 1707. Additional taxes on houses, beer, raisins, spices, and pepper. Extension of the warehous- ing system. New taxes on candles and leather. New tax on hops. New taxes on the manufactures of soap, paper, paper-hangings, printed silks, linens and calicoes, starch, and gilt and silver wire. Taxes on newspapers and advertisements. Additional duties on tea, cojBee, and drugs. List of taxes in force in Great Britain in 1714. When Louis XIV., entering the room at St. Germain in whicli the deposed king of England lay dying, September 12th, 1701, told him he might die at ease on the subject of the prince of "Wales, whom he would recognise as king of England, Scotland, and Ireland,* he, in effect, proclaimed a continuance of the war between France and England. After the death of James, and the recognition of the Pretender, by Louis XIV., our ambassador at once left Ver- sailles. The king of France now increased his forces, while, on the other hand, the Grand Alliance between the emperor, Holland and England against France and ' St. Simon,-M^raoireB, iii. cap. 18, p. 217. SETTLEMENT OF THE CROWN LANDS. 65 Spain was signed, and the necessary arrangements were made on our part for the recommencement of war. King William did not live to take a part in the war. After his death, March 8, 1702, Sidney, lord, and subsequently earl Godolphin, next to Halifax the most experienced financier of the age, was, on the advice of Marlborough, appointed lord treasurer, and he and Nottingham, the secretary of state for the southern department, became, with Marlborough, the leaders of a mixed administration in which the tory predominated over the whig element.^ The existing parliament determined by law six months after the death of the sovereign ; and the elections resulted in the return of an enormous majority in favour of the tories. A Civil List of 700,000Z. a year was granted to the queen, and, in provision for its maintenance, the ordinary excise on liquors, the new subsidy of 1698, and the land revenue of the crown. In the Act for the regulation of the Civil List an Tke T n Crown arrangement was made tor the luture management Lauds, of the demesne. The Act recited that formerly the necessary expenses of supporting the crown, or the greater part of them, had been defrayed by a land revenue, which in the course of time had, in conse- quence of the grants of demesne made by succes- sive sovereigns, been diminished to such an extent that at present it afforded very little towards the sup- port of the queen's government. But reversions and • Godolphin's eldest son had married a daughter of Marlborough. Sir Charles Hedges was the other secretary of state. VOL. ir. F 66 HISTORY OF TAXATION. remainders in tlie crown might fall in, and land might accrue by descent or escheat or otherwise ; and by securing these from alienation, the burden upon the estates of the subjects might be eased in all future provisions to be made for the expenses of the civil government. In this view, the Act prohibited any future alienation of any crown lands, by enacting that all grants of any of the lands of the crown for more than thirty-one years or three lives should be void.^ This legislative recognition of past transactions relating to demesne effectively secured the grantees of crown lands in their possession of them, and thus settled the long-mooted question regarding their position. In past years the question of the resump- tion of the alienated demesne lands had frequently been discussed both outside the house of commons and in the House. A notable battle on the subject had, occurred in 1700, when the opposition introduced a Bill for the appointment of a commission of inquiry limited to the grants made since the Eevolution, not indeed with any intention of an absolute resumption of the lands granted, which would have been as im- pohtic as unfair, but in the expectation that the measure would lead to a compromise. The Bill passed through the House. Then the whigs played their card, placing upon the table of the House another Bill by which it was proposed, in effect, to extend the inquiry to the grants made by the Stuart kings since the Eestoration. This Bill also passed, •and eventually both the Bills were laid aside. ' 1 Anne, Bt. 1, c. 7. GRANT OF THE PORT DUTIES. 67 As might be expected, a second battle took place in the new tory parliament. In December 1702, a proposition was made in the house of commons for the resumption of the crown lands granted away by the late king. Walpole moved an extension of the Bill to the grants of James II. His motion was nega- tived ; but in the result the BiU, though ordered to be introduced, never passed into law.'^ The result of this insecurity of position of the grantees of the crown lands had been to render such lands, on sale or settlement, worth less by several years' purchase than lands held under another title. The port duties, other than the subsidy of 1698, The Port ■"^ J ' Duties. viz., the old subsidy of 1660, the two imposts of 1690 and 1692, and the special taxes on wine, tobacco, whale fins and Scotch linen, were granted to the queen for a term, to expire in 1710 ; as also were the stamp duties granted in 1694 and the house tax. The duty on sea-borne coal was continued until 1708. It will simplify the narrative to state at once that these taxes were subsequently continued and even- tually made perpetual taxes, most of them in 1709 and 1710, that on coal at the reduced rate of 3s. 4c?. the ton for coals sold by weight.'-* The War of the Spanish Succession. The war in which we now engaged, in alhance with Holland and the emperor, to support the claim of the archduke Charles to succeed to the throne of ■ Commons Journals, vol. xiv. » See 6 Anne, c. 27 ; 6, c. 11 ; 8, c. 13, and 9, c. 21, s. 1 ; 8, c. 4, and 9, 0. 6, s. 8. F 2 68 HISTORY OF TAXATION. Spain, in exclusion of the house of Bourbon, under- taken mainly with a view to prevent the union of Prance and Spain under a Bourbon king, which would involve, it was considered, a command of the seas, was, therefore, usually known as the war of the Spanish Succession, but it was also termed queen Anne's, in contradistinction to king WUham's, war with France. The expenses of this war formed the second step in the increase of our national debt. The amount of the national debt of England was now about twelve millions and a half. Our fiscal position was as follows : — Expenditvre. £ Debt, annual charge . . . 1,220,000 Military and naval ' . . . 1,300,000 Civil List and Civil Government . 703,000 Revenue from Taxes. Land tax at 2s 1,000,000 Other taxes 3,250,000 The cost of the war was over fifty millions, of which twenty-one and a half were added to the national debt. The first steps in the increase of taxation for the purposes of the war were (1) to raise the rate of the land tax from 2s. to 4*., to produce an additional million, at which rate it was granted annually during the war, together with the tax on malt, mum (a thick sort of Brunswick beer),^ and cider and perry ; and (2) to grant another subsidy of port duties ; one-third ' Average, 1698-70. ' ' The clamorous crowd is hushed with mugs of mum, Till all, turned equal, send a general hum.' — Pope. THE METHUEN TREATY, 1703. 69 of a full subsidy in 1703, and two-thirds in 1704. The two grants formed a third subsidy of 5 per cent., or Is. in the £, on goods according to their value in the Book of Rates, but in customs' language they were still termed the one-thied subsidy and the two- thirds SUBSIDY.^ A treaty, negotiated in 1703 with Portugal, by mr. Methuen, had an important bearing upon the taxation of wine for a century and a quarter. To obtain the assent.of Portugal to the Grand Alliance, and thus to secure a basis for warlike operations in Spain, should the scene of the war be transferred to that country, had formed part of William's design for the prosecution of the war. Portugal joined the Alliance in 1703, and by the terms of the Methuen treaty we bound ourselves, in return for the obliga- tion imposed upon her to admit our wooUen manu- factures, to admit her wines at rates less by one-third than the rates for the wines of Prance. This secured to the Portuguese the results of their endeavours to improve their red wines, which they never had re- laxed since the time a market was first opened for them in England in consequence of the exclusion of Prench wines during the first war with Prance ; and henceforth, for generations, the wines of Portugal and Spain kept the ascendancy in the English market over the wines of France, which passed into the list of luxuries only within the reach of the rich. In 1704 new additional import duties were granted : — On tea. Is. the pound ; on coffee ; on ' 2 & 3 Anne, c. 9 ; 3 & 4, c. 5. 70 HISTORY OF TAXATION. spices, 5 per cent. ; and on drugs, except drugs used for dyeing, 10 per cent.^ But the yield of the port duties decreased considerably in consequence of the war, and in 1706 was less by some 300,000Z. than the yield for 1701. During the war, the lord treasurer and Marl- borough inclined more and more to the side of the whigs, as active partisans of the war ; and in 1706, after the victory of EamiUies, Marlborough had suf- ficient influence with the queen to induce her to appoint the earl of Sunderland, his son-in-law, who was a whig, secretary of state. The dismissal from office, in the spring of 1708, of Harley, the leader of the tory section of the cabinet,''' was followed by the retirement of Henry St. John, who was succeeded in the post of secretary at war by Eobert Walpole, then a rising young man of the whig party. A trans- formation was thus completed in the administration, which, originally tory, was now essentially whig. This administration lasted about two years. Fiscal Arrangements for Great Britain. The fiscal arrangements connected with the con- solidation of the kingdoms of England and Scotland May 1, under the Act of Union which created the kingdom of Great Britain, were mainly as follows : — The port and excise duties of England were to be payable throughout Great Britain ; but a special arrangement was made regarding the salt duties. The " .3 & 4 Anne, c. 4. " He -was succeeded in the post of secretary of state by the hon. Henry Boyle, chancellor of the exchequer. 1707. FIRST TAXES FOR GREAT BRITAIN, 71 quota for Scotland towards the land tax was settled at 48,000Z., as against two millions'^ for England, and so in proportion when any greater or less sum should be granted. The following duties then chargeable in England were not to be extended to Scotland : — The original stamp duties, which were payable up to August 1806, and the additional duties granted in 1698, which were perpetual. The taxes on houses and coal, which would determine in 1710 ; and the malt duty, which would determine on June 24, 1707.^ The alteration in the port duties for Scotland involved the abolition of the farm under which the duties in Scotland had been collected; and the farmers, now that their lease was about to expire, 'eased off' the duties and admitted an enormous quantity of foreign goods at moderate rates. In con- sequence of this, as soon as the restrictions on the introduction of goods from Scotland into England were removed, a flood of French wine and brandy was poured from North Britain into England. This gave rise to angry remonstrance on the part of the English traders ; and serious difficulties might have arisen in consequence, had not the house of commons wisely decided to treat the occurrence as whoUy exceptional — one that could not again take place. The old wooden tallies of the exchequer, so famous in future times as having provided the material for a bonfire of the houses of parliament in 1834, are stated to have been useful to us in smoothing over ' 1,997,763/. 8s. i^d. as for is. in the £. » 5 Anne, o. 8, Arts. VII.-XIII. 72 HISTOEY OF TAXATION. the difficulties attending the introduction into Scot- land of the EngKsh system of port duties and excise. Traditionally the Scotch may not be easy to amuse, but the importation of these extraordinary fiscal instruments was regarded as a joke of jokes, and removed all other feelings but those of astonishment and hilarity.^ Henceforth, the taxes granted by the Parliament of Great Britain have reference to the whole of the island. It may be well to state, at once, what occurred as regards the taxes excepted in the Act of Union. As regards the stamp duties, the advantage to Scotland was preserved subsequently in the various stamp Acts, until 1808, when, the term for which the original duties were granted having expired, the remainder of Scot- land's claim to exemption was commuted for an equiva- lent in the reduction of the duties on certain specified instruments relating to land in Scotland. The tax on coal after its expiration in September 1710, was con- tinued and extended to Great Britain, at the rates of 6s. the calder, for coal sold by that measure, and the reduced rate of 3s. Ad. the ton, if sold by weight. The malt duty was an annual tax ; and the under- standing, on the part of the Scotch, would appear to have been that the tax should not be extended to Scotland in the war, and, that after the war, it would be dropped. When, therefore, in 1713, the tax was re-granted for the year and extended to Scotland, serious difficulties arose in the Lords on the introduc- ' ' Burton, Hist, Queen AnBe, ii, 53, THE MALT TAX IN SCOTLAND. 73 tion of the tax Bill, and a motion made for the dis- solution of the Union was only rejected by a small majority. The collection of the tax in Scotland was always attended with difficulty; and the riots that occurred in Edinburgh, when the tax was commuted for a small duty on the barrel of ale, are historical as the cause of the interference of Walpole, who, taking the affairs of Scotland under his more immediate con- trol, abolished the office of secretary of state for Scotland. With the subject of the house tax we may re- sume the connection with the general narrative. The advantage to Scotland was preserved in 1709, when a tax was imposed upon houses in Great Britain having twenty or more windows, in addition, as regards England, to the 10s. already chargeable : the rates were — for houses with from 20 to 30 windows, 10s., and with 30 or more, 20s.^ And articles of consump- tion were further taxed as follows : beer was charged with an addition of Sd. for strong, and Id. for small, beer the barrel,''' with a corresponding increase in the duties on cider and perry, metheglin and mead, and vinegar and vinegar beer ; imported spirits were charged with additional duties ; raisins, with an additional 5s. the cwt. ; spices, viz., nutmegs, cinna- mon, cloves, and mace, with double the existing duty ; snuff, with an additional 35. the pound ; and pepper, with additional duties^ which raised the tax on this ' 8 Anne, c. 4, perpet. ; 3 Geo. I. c. 8, s. 17, and 5 Geo. I. c. 19, s. 1.- ' 8 Anne, c. 7. ' 8 Anne, c. 7, s. 7, for thirty-two years from February 1709, made perpetual by 6 Geo. I. c. 4, s. 1 ; but as to snufF, rep. by ] 2 Geo. I. c. 26,,b. 1. 74 HISTORY OF TAXATION. important article of consumption to an amount so excessive as to give rise to an extensive system of adulterating pepper, from whicli English stomachs suffered during many generations. A warehouse system was applied to this article similar to that introduced, in 1700, for the wrought silks of Persia, China and India, the use of which was prohibited at home, the object being to give additional security to the revenue and to reheve the export trade. Only half the duty was to be paid at once, on ware- housing the pepper in a warehouse approved by the customs. Subsequently, if the trader took the pepper out of warehouse for home consumption, the other half of the duty was to be paid. But on exportation of the pepper no further duty was payable. This formed the second step in the warehousing system. Taxes imposed upon our Manufactures: Candles, Leather, Soap, Paper, Printed Goods, and others. But some new general and productive tax was now necessary ; and the tax selected from many which had been suggested by Davenant and others, was one which, as imposed upon an article of general consumption, would probably prove productive of a considerable amount of revenue, viz., a tax on candle- making. The rates, 4c?. the pound for wax, and ^d. for tallow, candles, were raised in the next year to 2>d. and Id} Private candle-making for consumption at home was allowed on payment of a composition, at • 8 Anne, c. 9 ; 9, c. 6. TAXATION OF MANUFACTURES. 75 the rate of Is. per annum for every head of the family of the compounder. In 1710, a change was made in the administra- tion, Sunderland was dismissed in June, and the lord treasurer Godolphin, in August. The treasury was placed in commission, lord Powlett being first lord, but Harley, as a lord of the treasury and chan- cellor of the exchequer, virtually prime minister.^ In September the remaining ministers were dismissed, Henry St. John was appointed secretary of state, and the parhament was dissolved. After a turbulent election, the new parliament met on November 26. Some further addition to the revenue was required for the purposes of the war ; and now was imposed the second great tax on an article of general consumption due to the war of the Spanish Succession. A tax on LEATHER had been in force for three years from 1697 to 1700 ; and of late years this article of general use had frequently been suggested as a fitting subject for taxation should it be necessary to have recourse to some new and productive tax. The duty now im- posed. Id. the Ib.,^ was in the next year raised to l^d. In the same session a further tax was imposed, indirectly, upon the national beverage. The tax on the brewery, already excessive, could not be increased. Moreover, it did not touch private brewing. A revival of the commonwealth excise on hops would ' Harley, created earl of Oxford and Mortimer in April 1711, was in May appointed lord treasurer. ' y Anne, c. 11 ; 10, c, 26 ; made perpetual by 3 Geo. I. c 7. 76 HISTORY OF TAXATION, reach, in the same way as the malt tax, beer brewed by the private, as well as by the common, brewer. The tax now imposed was at the rate" of Id. the lb., charged, as under the commonwealth excise, upon . the grower.^ Thus was reached the ne plus ultra of excise security. Many excises had been imposed upon the first buyer of the article taxed ; many, upon the retailer ; some, upon the dealer as opposed to the retailer, and others, upon the manufacturer; but the taxes on hops and saffron were the only excises ever in this country charged upon the grower of the thing taxed ; as in other countries have been and still are charged taxes on apples, olives, chestnuts, tobacco, &c. The rate for hops was not increased for seventy years, until the war of American Independence. Taxes of minor importance were imposed upon cards and dice, almanacs and licenses to sell wine and beer;^ 1711-2. The absolute necessity of raising large supplies to carry on the war was acknowledged by the House in the next session, and we imposed several new taxes on important manufactures. Three were revivals of excises in the list of the commonwealth, on soap, starch, and gUt and silver wire ; the others touched the manufactures of paper and printed goods, which had risen to importance since the commonwealth. Under the commonwealth excise, the tax on soap had been charged at so much the barrel, to be paid by the maker ; that on gold and silver wire, at so much the ounce troy of silver or gold prepared for wire ; and ' 9 Anne, c. 12. ' 19 Anne, c. 23. TAXATION OF MANUFACTURES. 77 that on starch, at so much the cwt., to be paid by the first buyer. But all the new taxes were imposed on the manufacture of the article taxed. Soap, selected as an article frequently suggested as a convenient as well as productive subject for taxation, was taxed at the rate of Id. the lb. for all soap manufactured in Great Britain. Papee, a manufacture which had risen to import- ance in consequence of the exclusion of paper made in France and the assistance we derived from the French refugees after the revocation of the edict of Nantes, was charged, by the ream, at different rates according to the different kinds of paper made. Pasteboard, millboard, and scaleboard were included. And paper, printed, painted or stained to serve for hangings or other uses, was charged Is^. the square yard in addition to the ordinary duty. Printed goods, as they were termed, were taxed in respect of the printing, staining, painting or dyeing of silks, caHcQes, hnen and stuffs. The rates were — for silks 6d. the yard, allowing half a yard for breadth, and half that rate for silk handkerchiefs ; for calicoes Sd. a yard, allowing a yard for width ; and for linen and stuffs l^d. the yard. Calicoes, linens, and fustians dyed throughout of one colour only, and stuffs made entirely or the greater part of woollen, were exempted. The making of starch had increased pari passu with the increase in the use of linen since the Eestora- tion. A tax was now re-imposed upon this manufac- ture and upon that of gilt and silver wire. 78 HISTOEY OF TAXATION. The Tory LaLstlv, a tax was imposed upon newspapers. The stamp Act jr r ^ ^ licenser of the press had struck his last ' imprima- tur ' in 1695, and in the multitude of newspapers that had since come into existence the war of parties was waged with a virulence that called for some mitiga- tion. For pohtical and social, as well as for fiscal, reasons, a tax was now imposed upon newspapers and pamphlets, and, at the same time, a tax upon all ADVBETiSBMENTS inserted in newspapers and pam- phlets. This tax on the business of the press, col- lected by means of stamps, was known as the Tory Stamp Act. These imnortant additions to the duties on native goods and manufactures were supplemented by fur- ther new import duties : — On drugs, 20 per cent, according to value, an excessive addition subsequently repealed by Walpole ; on tea, 2s. ; and on coffee Is. the lb. A warehousing system was now introduced for tea and coffee similar to that for pepper intro- duced in 1709. It was, however, pej-missive, not obhgatory on the importer.^ The last additions to taxation in the reign, though made to come into force in August, 1714 — that is to say, more than a year after the peace of Utrecht — fall fairly within the scope of the present chapter. They touched several of the great manufactures recently subjected to an excise, viz., soap-making, the manu- facture of paper, the printing of silks, linens and ' See as to soap, paper, printed goods, newspapers and advertisements, 10 Anne, c. 19 ; leather, starch, gilt and silver wire, tea, coffee and drugs, c. 26. INEQUALITIES IN THE LAND TAX. 79 calicoes, and starch ; 6s. the chaldron was added for coals exported in foreign bottoms, and 3s. for coals exported in British bottoms ; while the stamp duties were increased under several heads, including an additional 6d. for deeds, under the comprehensive heading of 'deed, indenture, lease, and bond not otherwise specifically charged.' ^ After the war the rate of the land tax was reduced from 4s. to 2s. This continued to be the practically permanent rate in time of peace ; and as personal property had almost entirely slipped out of assess- ment, the tax was, in effect, what it was termed, the ' annual land tax.' Its gross unfairness as between different parts of the kingdom, different counties, and different districts was acknowledged ; but although an attempt was made, in this reign, to extend the basis of the tax and to introduce a new valuation, the landowners preferred the existing tax, with all its faults and inequalities, to a new, though probably more equal tax. The other taxes imposed in the war remained fixtures in our fiscal list. An addition had also been made to the tax on the business of hackney coaches in the metropohs ; a small tax had been imposed upon persons keeping hackney chairs ; and another, upon licensed keepers of alehouses, and sellers of wine licensed by the king's agents for the wine licenses, forming the commencement of a system of taxes for businesses, subsequently extended by North to vendors of tea, and by Pitt to a great variety of traders. » 12 Anne, c. 9. 80 HISTORY OF TAXATION. Establishment of the Protective System. In accordance with the mercantile or protective system then in vogue, most of our manufactures were now strictly protected against foreign competition, more particularly against the manufactures of France. In our dealings with that country the all-important ' balance of trade' was against us. Nothing was more dreaded by our manufacturers than the recovery by the French of their former superiority in our market, more particularly in the articles of the sSk, paper, glass, and what are termed the ' toy,' manufactures. The public feeling on this subject, quite as much as want of support from his colleagues, proved the cause of BoUngbroke's failure to pass through the house of commons the eighth and ninth articles of the treaty negotiated by him with France, upon which the whole treaty hinged. These articles would have put an end, practically, to that war of the tariffs between the two nations which our manufacturers desired to continue.^ ^ The outlines of the treaty were, however, by mutual and tacit consent, the general rules of our subsequent commerce with France. Chesterfield, Letters, No. 204. LIST OF TAXES IN FORCE, 1714. 81 THE PRINCIPAL TAXES IN FORCE IN 1714, I. Direct Taxes. The land tax, at 2s., annual. On houses and windows, increased, 1709. On trades : hackney coaches ; hawkers. II. Taxes on Aeticles of Consumption. (a) Eatables : — Salt. Spices, new additional duties 1704, and 1709 Pepper, new duties, 1709. Raisins, new duties, 1709. (6) Drinks : — The brewery, increased, 1709 ; malt, annual, a:id hops, 1710. Wine. Spirits, increased, 1709. Tea, coffee and cocoa, increased, 1704 and 1711 (c) Tobacco. (d) Articles not eatables, drinks, or tobacco : — Timber from Europe. Coals, sea-borne, 3s. id. the ton in lieu of 5s. Whale-fins. Drugs, increased in 1704 and 1711. Imported and exported articles, generally, increasetl, 1703-4. 3 subsidies, making 15 per cent. French goods, 50 per cent, additional. East India and China goods, the additional duties. (e) Manufactures, imposed 1709-11: — Candles. Starch. Leather. Gold and silver wire. Soap. Newspapers. Paper. Advertisements in newspapers. Printed goods. III. The Stamp Duties. On various deeds and instruments, increased. On law proceedings. The annual charge for the Debt was now (1715) 3,100,000?. (to include interest, management, and life and terminable an- nuities) ; the capital debt had risen to 37 millions. VOL. II. G 82 HISTORY OF TAXATION. CHAPTEE in. PROM THE PEACE OF UTRECHT TO THE COMMENCEMENT OP THE WAR OP THE RIGHT OP SEARCH, INCLUD- ING WALPOLE'S ADMINISTRATION. 1713—1739. Death of Queen Anrie. The last lord treasurer. Townshend and Wal- pole in office. Walpole's scheme for a sinking fund. Dismissal of Townshend in 1717. Walpole resigns. The Stanhope administration, Sunderland prime minister, 1718. The war with Spain. Walpole and Townshend in oiEce. Carteret secretary of state. Carteret sent to Ireland. Walpole in power. Reform of the tariflf. The timher duties. Repeal of the duties on raw silk, drugs for dyeing, heaver sHns as the material for hats, rags and old cordage for paper-making, whale-fins, oil, and hlubber. Repeal of the additional duties on drugs. Settle- ment of the duty on pepper and spices. Repeal of the duties on all manufactures exported. The new book of rates. Warehousing system for tea. Repeal of the tax on salt. The land tax at Is. Reimposi- tion of the tax on salt. The excise Bill for wine and tobacco. Op- position to the Bill. It is withdrawn. When the Queen's strength was failing, a few days before her death, the whig dukes of Argyll and Somerset attended a meeting of the privy council and, offering their assistance, suggested the advisabihty of recommending the Queen to appoint the duke of Shrewsbury to the post of lord treasurer.^ This the Queen did, August 1, 1714 ; and by Shrewsbury and the other lords justices appointed for the purpose, including Somerset and Argyll and the lords Cowper^ ' stanhope. Hist. Eng., i. 133. THE LAST LORD TREASURER. 83 Halifax, and Townshend,^ the government was car- ried on until the arrival of the king. But before this Bolingbroke had been dismissed. ' I see,' said he, ' that the tory party is gone.' In October the patent of the lord treasurer was revoked by the king ; and Charles, duke of Shrews- bury, the head of the illustrious house of Talbot — clarum et venerabile nomen — was the last of the lord treasurers. The office has since been executed by lords commissioners for the purpose, termed ' lords commissioners of the treasury,' comprising the first lord, always, after Walpole's long tenure of office, the prime minister, the chancellor of the exchequer or minister of finance, a post not unfrequently held by the first lord, and, at present, three junior lords. The new elections which foUoAved the determina- i7is. tion of the existing parliament by law six months after the demise of the sovereign, resulted in a con- siderable whig majority in the house of commons. The whig administration now formed included the veteran Halifax, raised to an earldom, as first lord of the treasury ; Townshend, as one secretary of state, and general James Stanhope, whose appointment was due mainly to Townshend and Walpole, as the other ;^ ' Charles, discount Townshend, son of sir Horatio Townshend, who had been rewarded with a peerage after the Restoration for his services to the Stuart family. Originally a tory, but afterwards by conviction a whig, he had acted with Somers and supported the whig pariy. * The earliest authentic record of a secretary of state is in the reign of Henry III., when John MaunseU is described as secretarius noster, A.D. 1253. Towards the close of the reign of Henry VIII. two secretaries were appointed. The Secretary of State's office was divided into the Southern and Northern departments. The Southern secretary had the management of home affairs and of the correspondence with Ireland, the 2 84 HISTORY OF TAXATION. Pulteney, as secretary at war, and Walpole, Towns- hend's brother-in-law, as paymaster of the forces. After the death of Halifax, in May, Townshend took the lead in the administration ; and in October, Walpole was appointed first lord of the treasury and chancellor of the exchequer, under Townshend. With this administration commenced a period of whig ascendancy which under Townshend, Walpole, the Pelhams and Pitt, had an almost uninterrupted dura- tion of nearly half a century. The expense incurred in the suppression of the attempt of the Pretender rendered necessary the grant of a 4s. land tax in 1716 ; but in 1717 the rate was lowered to 3s. When Walpole was first placed at the head of the treasury the national debt was about- thirty-seven milhons. The common interest of money had been reduced in 1714 to 5 per cent. ; but the interest on some of the debts ran as high as 8, and on none lower than 6 per cent. In March 1717 Walpole brought forward his famous plan for the reduction of the in- terest on the national debt, and for forming a sinking fund. But while these measures were yet under con- sideration in the house of commons a disruption of the administration was effected by the intrigues of Sunderland, who obtained first the removal of Towns- colonies, and the western states of Europe. The Northern secretary conducted only correspondence with the other European countries. Upon the union of England. and Scotland, a third secretary was added, for Scotch affairs, but this appointment was afterwards laid aside. Another third secretary, for the American or colonial department, created subse- quently in 1768, was abolished in 1782. WALPOLE'S SINKING FUND. 85 hend, from the post of secretary of state, to the lord-lieutenancy in Iceland, and subsequently, in April, 1717, his dismissal.' Upon this, Walpole resigned office ; and Methuen, who had succeeded Townshend as secretary of state, the duke of Devonshire, and Pulteney, all followed his example. In consequence of his resignation of office on this schism in the whig party, Walpole was compelled to leave his financial measures to be completed by his successor. ' I hope,' he said of the Bill he had intro- duced, 'it will not fare the worse for having two fathers, and that my successor will take care to bring it to perfection.' Stanhope, who now took the posts of first lord of the treasury and chancellor of the exchequer, and became prime minister in an adminis- tration in which Sunderland and Addison were secre- taries of state, carried through the measures prepared byWalpolefor the sinkingfund and the reduction of the interest on the national debt, but subsequently, find- ing his powers inadequate to the management of the finances of the country, retired from the treasury. Under a re-arrangement of the ministry, March 18, 1718, Sunderland became first lord and prime minis- I7i8. ter ; Aislabie, chancellor of the exchequer ; Stanhope, with an earldom, took Sunderland's post of secretary of state, and Craggs succeeded Addison. ' Sunderland, sent to Ireland as lord lieutenant, had resigned the post a few months after his appointment, in order to take that of lord privy^ seal, vacant by the death of the duke of Wharton. After the death of his wife, the second daughter of the duke of Marlborough, in 1716, he- obtained the king's permission to recruit his health abroad at Aix-la-, ChapeUe, whence, proceeding to Hanover, he gained over to his views Stanhope, the* secretary in attendance on the king. 86 HISTORY OF TAXATIOX. The war with Spain 1718-21 cost us about four millions and a half ; and during the war the land tax was granted annually at the rate of 3*. In June 1720, Townshend and Walpole again took office, as president of the council, and paymaster of the forces. On the death of Stanhope in the following February, Townshend succeded to the post of secre- •'•^^^' taiy of state, and as the accusations against Sunder- land in connection with the South Sea scheme were too strong to admit of his continuance in the post of first lord of the treasury, the administration was reconstructed under Walpole. Again first lord and chancellor of the exchequer, taking the seals of this post from the lord chief justice, into whose hands they had been given on the accusation of Aislabie of participation in the frauds connected with the South Sea scheme, of which he was subsequently convicted, he now estabhshed the firm as ' Walpole and Town- shend,' in lieu of ' Townshend and Walpole,' as it had been when the brothers-in-law were in office together in 1716. Mr. secretary Craggs died of small-pox on the day on which the report of the secret committee ua the South Sea scheme was brought up in the house of commons, and by the influence of Sunderland, John, the famous lord Carteret, then thirty-three years of age, who had entered pubhc life under his guidance and that of Stanhope, was appointed to the vacant post. Sunderland died in April 1722, and in 1724 the brothers-in-law managed to get rid of Carteret.^ He was removed to Ireland as lord- ' He was regarded by Walpole as a formidable rival, ai'd was ever at Walpole in power. 87 lieutenant. His post of secretary of state, with the southern department, was given to the duke of New- castle, Townshend's brother-in-law, whose family and enormous borough patronage made him a peculiarly desirable colleague to Walpole ; ^ and the duke's brother, Henry Pelham, the future prime minister, who had occupied a place at the treasury board, became secretary at war. Pulteney, taken into the ministry in 1723, had failed in intrigues for the post of secretary of state, and now set himself at the head of the oppo- sition, acting, as head of the whig patriot or whig out of place party, in conjunction with sir William Wyndham and the Hanover tories, and those who held ultra views and were influenced by Bolingbroke. TowQshend and Walpole, with the Pelhams and the Cavendishes, a family of which the head, the duke of Devonshire, president of the council, was ever a consistent supporter of Walpole, formed so powerful a combination, that when George H., on his accession to the throne, would willingly have ap- 1727. pointed sir Spencer Compton prime minister, Compton acknowledged himself unequal to a task which would have sent many powerful families into opposition; Walpole's assistance proved of great use to the king variance with Townsliend, with whom he came at last to an open rupture on a question of minor importance that arose at the court of France. ^ Thomas Pelham Holies, duke of Newcastle, had succeeded to the family peerage of Pelham at an early age, and having inherited a large portion of the property of his maternal uncle, John Holies, duke of Newcastle, had been created earl of Glare, and, in 1716, duke of New- castle, by George I. He had supported the first administration of Town- shend, but on the schism in the whig ministry, in 1717, had attached himself to Sunderland, by whose influence he was appointed lord cham- berlain. On the coalition in 1720, he again joined Townshend. 88 HISTORY OF TAXATION. in the preparation of his speeches and the other arrangements consequent upon the commencement of the new reign ; and this, and his hberal proposals with regard to the civil hst, and the influence the queen exerted in his fa,vour induced the king to retain him in the position of prime minister. This position he continued to hold until 1742 ; and the length of his administration and the power and influence he had in government estabhshed the post he held of first lord of the treasury as, in future, that of the prime minis- ter of the day. During this long administration Walpole effected many measures of great fiscal importance. In our times his name is perhaps best known in connection with the measure originated by him in the Townshend administration, relating to the Sinking Fund for the reduction of the national debt. This, however, was not a great success ; for the Sinking Fund was before long diverted from its original purpose, and eventually became the principal fund from which the charge for the pubHc expenditure was defrayed.^ The plan could only hold good while there existed an efiec- tive surplus of revenue over expenditure, and when expenditure increased, in heu of imposing additional taxes to feed the fund, it was, in effect, gradually abandoned. The amendment he effected in the tariff; his attempts to mitigate smuggling by means of the warehouse system ; and the measures involved ' In 1786, more than half of the total amount of interest on the Funded Debt ■was paid out of the Sinking Fund, and more than three- fifths of the Ways and Means applied towards the subsidy grants were also taken from this source. REFORM OF THE TARIFF. 89 in his attempt to reduce the land tax to the lowest possible rate, form the most interesting and perhaps the most important of his measures while in office. Reform of the Tariff. First as regards the tariif. ' He found our tariff the worst in the world, and left it the best,' writer his well-known biographer archdeacon Coxe. The principal amendments effected by Walpole in the tariff (to exclude his treatment of the items tea, coffee and cocoa-nuts, wine and tobacco, of which more is said hereafter) were carried out in the years from 1721-4. They affected timber from America; the silk, paper, and hat manufactures ; drugs used in dyeing ; whalebone in fins ; drugs ; pepper and spices ; the exportation of British goods and manu- factures ; arid all articles not rated to the customs in the Great Statute of 1660. We had for a long time suffered, in England, from the scarcity of timber, and required a considerable supply from abroad for the purposes of house-build- ing and ship-building. In America, we preserved in 1718. several of our colonies all white pine and timber of that kind fit for masts for the navy, by means of severe penalties on persons felling and destroying them, timber being one of the ' enumerated articles,' of colonial produce secured to us under the provi- sions of the Navigation Act ; but in consequence of the import duties, we derived but little timber from America, and were driven for our supply to the foreigner at his own price, which was excessive, par- 90 HISTORY OF TAXATION. ticularly in times of war. In the view that an abun- dant supply of wood, timber, lumber and hemp ^ from America might be secured if only due encouragement were given to the trader, Walpole repealed the duties on these articles when imported from our plantations, and extended the penalties for the protection of timber to Nova Scotia.^ 1721." The silk manufacture had attained a development that raised it to a place among the most considerable manufactures in the kingdom, more particularly at Spitalfields, where the refugees from the persecution that followed on the revocation of the Edict of Nantes had established their business. But the high duties on imported raw and thrown silk, without any allow- ance for drawback or return of duty on the export- ation of the manufactured articles, placed our manu- facturers at a disadvantage in competition with the foreigner, and prevented the development of a foreign trade. A drawback on exportation was now allowed, at stated rates, for ribbons, silk stockings, gloves, fringes, and laces, stitching or sewing silk, stuffs of silk and grogram yarn, and stuffs of silk and cotton and silk and worsted.^ Por the encouragement of our manufactures, the import duties on drugs, of which indigo was perhaps the most important, and all other articles used in dyeing, and those on old rags, as the best material for paper, and on ropes or junks or old fishing nets ' In 1703 Sweden raised the price of naval stores against us, and in 1704 we had granted a bounty on the importation of tar, pitch and resin, hemp and masts from America, 3 & 4 Anne, c. 10. 2 8 Geo. I. c. 12. . s 8 Geo. I. c. 15. REFOEM OF THE TARIFF. 91 fit only for the tnanufacttire of paper or pasteboard, were repealed, and those on beaver skins, then the ordinary material for the manufacture of hats, were considerably reduced. The duties on whale-fins, which had utterly ruined the Greenland fishery, were repealed as regards all whale fins, oil and blubber caught in the Greenland seas by the crew of a British ship and imported by a British subject; and this exemption from duty was subsequently extended to seal oil and seal skins and all fish or creatures taken in those seas, and, as extended, was applied to Davis's Straits and other parts of the seas adjoining thereto. The additional 20 per cent, on drugs, imposed in 1711, had proved prohibitory to the fair trader and had brought into existence a system of smuggling those articles. It was, therefore, repealed. The excessive duties on pepper and spices — mace, cloves, and nutmegs — articles of almost general con- sumption, were reduced. Under the Acts in force, these articles were charged with seven separate du- ties, according to their value in the Book of Eates, for the subsidies of 1660, 1698, 1703, and 1704, the new duty, the new additional duty, and the further new duty, and the proceeds of these different imposi- tions were, under appropriation clauses in the diffe- rent Acts, appropriated to paying off different loans. In lieu of this complicated system, the tax was im- posed in the form of a single duty according to weight, viz., on pepper id., mace ds., cloves 2s.,. and nutmegs Is. 6d. per lb. 92 HISTORY OF TAXATION. Duties on It will be remembered that the export duties on goods re woollcn manufactures, and corn, grain, biscuit, and ^^ ® ■ meal, under the ' outwards ' table of duties in the Great Statute, had been repealed in 1700. Walpole now extended the repeal so as to allow all goods and merchandise of the product or manufactures of Great Britain to be exported duty free. The only exceptions were certain minerals : — ^Alum, lead, lead ore, tin, copperas, litharge of lead and lapis calaminaris and coal ; the raw materials for the manufacture of leather, viz., leather tanned, skins Of all sorts, and glue ; wool cards and white woollen cloths ; the raw materials for the manufacture of hats — coney hair or wool, and hare's wool, hair of all sorts, and horses. New Book Lastly, a new Book of Rates, signed by sir Spencer Compton, as Speaker, was passed, relating to goods not specified in the original book of rates in the Great Statute, which had hitherto paid duty on the oath of the importer — a most unsatisfactory method of valuation.^ Such were the improvements effected by Walpole in our tariff; he might, with advantage to the officials 1 It may be interesting to mention one or two of the articles at this date ' usually imported ' which are not in the old book of rates of 1660 : — Babies, jointed, valued at 21. the dozen. Ooker nuts for cups, like the mazers of olden time. Corks, ready made, 1«. 8rf. the gross of twelve dozen. Mum. Brandy — of France, 30?. ; of Spain, Portugal or Italy, \bl. ; and of other countries, Wl. the tun ; geneva, lbs., rum, Is. 8d., citron water, \l., and usquebaugh, 10«., the gallon. Spruce beer. Sausages of Bolognia. Stockings of thread or cotton, \l. \5s. the dozen. Tea tables lackered and unlackered. Pyrmont water and other mineral or natural ■waters and Spaw water. See as to these alterations in the customs, 8 Geo. I. c. 15 ; 10, c. 16, and 11, c. 7. WAREHOUSE SYSTEM FOR TEA. 93 of the customs and the merchants, have extended his reforms to the laws of the customs ; for about this date, some Tables were prepared by C. Carkesse, secretary to the commissioners, comprising in one view ' the several duties upon each particular com- modity specified in the old book of rates or any other Act of Parliament, and the net duties payable thereon at importation,' which, so numerous were the enactments on the subject, occupied no less than 117 closely-printed pages.^ But the most important fiscal measures of Walpole had relation to tea, wine and tobacco, the salt tax, and the land tax. The land tax had been granted annually at the Land tax rate of Ss. from 1717 to 1721, but in 1722, Walpole "■* ^*" was able to reduce the rate to 2^. He then turned his attention to the means of improving the revenue by mitigating smuggling, which, created and fostered by the excessive duties imposed since the Eevolution, in the first war against France and the war of the Spanish Succession, had now grown into an extensive system. In these days we should reduce the exces- sive duties, secure from long experience that such a course would inevitably be followed by a decrease in smuggling and an increase in consumption sufficient to recoup the revenue. But in "Walpole's time the reduction of an excessive duty was an experiment ; and, as a practical man, he preferred to attempt to effect the object he had in view by applying to the articles smuggled the system of collection in force ' First report of the commissioners of customs. 94 HISTORY OF TAXATION. for inland duties, as affording, in his opinion, greater security to the revenue than the ordinary system of the customs. What article should he select for his first trial of the system ? The principal importation of wine and brandy from France was effected by the smuggler. Tobacco, now an article of almost universal con- sumption, formed another lucrative item in the smuggler's list. But the increasing demand for tea, the facility of smuggling a high-priced and dry article of this kind, and the excessive duties to which tea was subjected,^ in combination fostered such an ex- tensive system of smuggling as in effect to strangle the tax. The warehousing system introduced for tea and coffee in 1711 was not obhgatory : ^ the importer was not required to warehouse his tea and coffee, should he prefer to pay the duty down at once. Walpole now made warehousing compulsory, establishing warehouses for tea, coffee and cocoa nuts, in which these articles on importation were to be deposited after payment of a small duty, and from which they might be taken for exportation without any further payment. The full tax was chargeable only when they were taken out for home consumption. At the same time additional security for the revenue was gained by applying to the tea, coffee, and cocoa nuts ' In addition to the ordinary 5 per cent, subsidies on the value of 1660 and 1698, the one-third and two-thirds subsidies of Queen Anne's ■war, and the additional impost, the special taxes per lb. of Is. imposed in 1695, Is. imposed in 1704, and 2s. imposed in 1712. " 10 Anne, c. 26, s. 34. REPEAL OF THE SALT TAX. 95 a system of supervision and survey after the manner of the excise system. This measure of 1723 proved so successful that in seven years the revenue increased by 1 20,000^. The duties were still nominally duties of customs. The land tax continued to be granted annually at the rate of 2s. until 1727, when there was a 4^. rate for preparations for the approaching rupture with the emperor and Spain ; but in 1728 and 1729 the rate was 3s., and in 1730 Walpole was able to reduce it again to 2s. The prosperous state of the revenue now enabled him to repeal the tax on salt. Always unpopular, for many reasons, it was now abolished as having proved burdensome to the poor, injurious in its operation, as regards the dressing and curing of leather, the manufacture of glass bottles and others of our manufactures, and lastly, injurious to our fisheries, the nursery of our seamen^ and more particularly to the important herring fishery. Walpole's next step was the important experiment of the reduction of the rate, of the land tax. ' The landed men had long complained, that they had ever since the Eevolution borne the heat and burden of the day for the support of the Eevolution Government ; and as the great pressure of the last war had chiefly lain on them, the land having for many years been taxed to 4s. in the £, they now began to say that since the pubhc tranquiUity both at home and abroad was firmly and universally established, if ease was not at this time thought of for them, it was a declara- tion from the government that they were never to 96 HISTORY OF TAXATION. expect any ; and that 2s. in the £ on land was the least' that they or their posterity, in the most profound peace and fullest tranquilUty, were ever to hope to pay.' ^ Walpole now endeavoured to attach the landed gentry to the House of Hanover by an alleviation of this cause of constant complaints. The tax he ac- knowledged had ' continued so long and lain so heavy that many a landed gentleman in this kingdom had thereby been utterly ruined and undone.' In this view the rate was lowered in 1731, for the first time, to Is. By the reduction he gave up 500,000/. of revenue. The land tax was granted in 1732 again at Is. ; and in order to enable him to continue it at this low rate, he revived the tax on salt, notwithstanding the unequivocal manner in which it had been condemned so lately as in 1730. This tax produced only one- third of the half million produced by Is. on land ; it was therefore necessary to find some other fund to supply the other two-thirds. The Warehousing Bill for Wine and Tobacco. At this date the demand for French wine for the richer classes was supplied by the smuggler ; and at a very low estimate, more than half the French wine consumed in England was wine that had not paid any duty. The extent to which smuggUng was carried on in 1732 was revealed in the report of sir John Cope's committee of the house of commons. It appeared from the depositions on oath that, in the ' Lord Hervey, Memoirs, i. 160. THE FAMOUS EXCISE BILL, 97 space of two years, 4,7B8 hogsheads of wine had been run m Hampshire, Dorsetshire and Devonshire only ; but the system was managed with such art, or the connivance of the officers so effectually secured, that- only 2,808 hogsheads had been condemned within the period of nine years. On inquiry 30 officers had been dismissed, and informations had been entered against 400 persons, 38 were committed to gaol, 118 admitted to evidence, and 45 had compounded. The frauds committed in the smuggling of wine, brandy, tobacco and tea were described in the report, which, in the course of it, displayed scenes of dishonesty, perjury, informing, violence, and murder, which appeared beyond belief.^ For the purpose in hand, Walpole now introduced into the house of commons, in 1733, his famous Bill for warehousing wine and tobacco, by which, upon a plan similar to that which he had introduced, in 1723, for tea, with such success, he expected to be able to stop smuggling and effect an improvement in the revenue which would enable him to continue the land tax at the rate of Is. in the pound. The case against the land tax was clear. A more unequal and unfair tax never existed in this or any other country at any time. The round sum of about half a million, a million, a million and a half, or two millions, granted as for a nominal rate of 1*., 2s., 3s., or 4s. in the £, was partitioned out and charged upon the various counties and towns mentioned in ' Report of sir John Cope's committee regarding the frauds committed in the revenue, June 7, 1732. VOL. II. H 98 HISTOEY OF TAXATION. the annual Act, in specified sums, according to an assessment made as far back as 1692. The original assessment was far from fair, for party feeling ran high at the time, and this circumstance had affected the returns upon which the assessment was founded. Districts that favoured the new order of government had made high returns, while in those that did not favour the government the returns were proportion- ately low in amount. Thus it was that, roughly speaking, the north and the west of England were assessed at comparatively low figures as compared with the amount borne by the southern and eastern parts of the kingdom. But the unfairness of the tax as regards the dif- ferent counties and towns was as nothing when com- pared with its unfairness as regards the assessment of the property of the taxpayers in the several dis- tricts. The intention of the tax was to include all personal property as well as offices and real property, and the Act, in clear terms, placed personal property in the forefront of the charge. But the local assessors had failed in their duty, and, probably through difficulties connected with the renewal of assessments, had allowed personal property to slip altogether out of assessment, leaving offices,cand the land which parhament had charged only with the residue of the particular sums after deducting the receipts from offices and personal property, to bear the whole burden of the tax. The usurers, lawyers, tradesmen, and retailers contributed nothing to the tax. The amount borne by offices was comparatively UNFAIRNESS OF THE LAND TAX. 99 small, and Walpole was substantially correct when he said : ' No man contributes the least share to this tax but he that is possessed of a landed estate.' The king was eager for the success of the measure, for two reasons : first, because it was represented to him that he could not efiect a more beneficial measure than the reduction of the land tax, the most unequal tax then subsisting, and the source of con- tinual complaints ; that the reduction of this tax would render every landowfier and country gentle- man a zealous friend of the government, and that the proposed measure would be the glory of his reign ; and, secondly, because the measure would have the effect of increasing his income from the Civil List ; for one- sixth of the duties on tobacco and wine — the subsidy of 1698, formed part of the Civil List, and though, under the new management, this sixth was still to be payable at the Customs, it would be in- creased by the expected success of the measure in the reduction of smuggling. On the other hand, many of the landowners and country gentlemen who were thus to be benefited and concihated, now that they appeared to be about to obtain the object of their desires, began to re-con- sider and more perfectly reahse, their position. The tax at Is. did not entirely suit their views ; it was too near vanishing point. The tax might be aboHshed altogether, to be succeeded, as it most certainly would be on the outbreak of war or the occurrence of any occasion for special expense, by a new tax of the same description, based upon a new valuation or B 2 100 HISTORY OF TAXATION. assessment, under which the western and northern districts, which were comparatively lightly charged to the existing tax, would certainly have to pay a larger share, and the individual assessments might be considerably augmented. These considerations affected a considerable num- ber of the gentry and landowners, whUe the trader class in towns were, to a man, strong advocates for the continuance of the existing system, under which they were practically un^^axed. But the most ardent opponents of this and any measure of the minister's that might afford an oppor- tunity for attack, were those who hungered for place. Walpole had now held office for twelve years, and had lost many of his former supporters, some of whom were now in direct opposition. Townshend, disliking the ascendancy acquired by him, and never at one with Newcastle, had intrigued to obtain Newcastle's post for his friend Chesterfield,* and when, on the discovery of his plans, a rupture had ensued between himself and Walpole, had given up his post and gone into retirement at Eaynham ; and his successor, William Stanhope, recentiy rewarded for his services in negotiating the treaty of Seville with a peerage as earl of Harrington, was Newcastle's man, in the same sense that Chesterfield was Townshend's. Carteret, turned out of the lord- lieutenancy about the same time, was now in open opposition. Chesterfield, though he had received the lord steward's staff, generally held by a duke, in succession to Dorset, the ' PhUip Dormer Stanhope, 4th earl. AGITATION AGAINST THE BILL. 101 new lord-lieuteriant, remained a discontented man and no willing supporter of the government ; and his feelings were shared by many who yet had not gone so far as to range in opposition with Pulteney, Sandys, and the other discontented whigs. In short, Wal- pole's prolonged continuance in office had swelled the ranks of his opponents to formidable proportions. An agitation against, the Excise Bill was com- menced by all who desired the overthrow of Walpole — discontented whigs, discontented courtiers, tories, and Jacobites ; and unfortunately, he had given a handle to his opponents of which they were not slow to avail themselves. His measure, though in its pro- visions but a replica of the Bill for the warehousing of tea and coffee, differed from it on this point, that under the new arrangement the duties were termed duties of ' Excise.' This term proved fatal to the measure. The name of excise had always been detested in this country. It was a foreign system of taxation, and, after its first introduction in the times of the commonwealth, had been extended ta all sorts of articles necessary for food and clothing : beer, meat, salt, cloth, leather, and, in short, almost all the necessaries of life, had been included in the excise list. Traditions of oppressive taxes are written on columns of brass, and Englishmen continued to hate the very name of excise. At this date plans of taxation were freely ven- tilated, not only by men with a practical knowledge of the subject, but also in the school of pohtical projectors. Swift, a few years before this, had ridi- 102 HISTORY OF TAXATION. culed professors of this sort in the warm debate in the Academy of Projectors at Lagado, between twa professors about ' the most commodious and effectual ways and means of raising money without grieving the subjects.' ^ On one side ranged the advocates for a single direct tax on land : Locke was the principal exponent of the theory, which Voltaire ridiculed in ' L'Homme k quarante Ecus,' that all taxes eventually fall upon the land, and therefore the most effective and least expensive mode of taxation is a simple land tax. On the other side ranged the advocates for a system of indirect taxation, who regarded excises to be, as stated in the Parliamentary ordinance, ' the most easie and indifferent levy that could be laid on the people.' There had frequently been talk in England of a general excise — Ask you why Phryne the whole auction buys ? Phryne foresees a general excise — and Walpole's measures had undoubtedly tended in that direction. His opponents could point to his repeal of many of the duties of customs ; his arrange- ment regarding the duties on tea and coffee ; his known aversion to the existing land tax, and his revival of the duty on salt ; to which there was now to be added, they urged, a plan regarding the duties on tobacco and wine, in the preparation of which the cloak had been cast aside and the true tendency of the measure revealed. This measure was prepara- tory to a plan under which all the necessaries of life ' Gulliver's Travels, first published in 1726. 'THAT MONSTER, THE EXCISE!' 103 would , be taxed. This monster, the Excise, would begin with your tea and coffee and wine and tobacco— Grant these, and the glutton Will roar out for mutton, Your beef, bread, and bacon to boot. Your goose, pig, and pidlet He'll then suck down his gullet. While the labourer munches a root. Your cellars he'll range, Your pantry and grange. &c. &o. An army of excise officers would be put in occupa- tion of the country, and acts of parliament bristling all over with pains and penalties would place every Englishman at the mercy of the common informer, and render him, like the Frenchman, a slave. By means of such exaggerated statements as these, in articles in the ' Craftsman,' in pamphlets in every form, and in the newspapers of the day, the people were exhorted to defend their homes from ' that Monster the Excise.' Petitions against the Excise Bill were poured, in an abundant stream, into the house of commons. The soldiers were roused to indigna- tion by representations that the price of their tobacco would be raised ; and, in short, an agitation and resistance to his proposed plan was excited which amazed Walpole, who found himself surrounded, as it were, by furies : ' Quid iste fert tumultus ? Et quid omnium vultus in unum rae truces ? ' To a mob of excited opponents it was useless for him to say that the Bill was introduced simply to alter the manner of collecting the duties, and urge 104 HISTORY OF TAXATION. the unreasonableness of the existing clamour. He was answered by reference to the Bill itself, labelled with the hated name of Excise. After narrowly escaping violence at the hands of the anti-excise mob that filled the lobby of the House and the Court of Eequests,^ insulting those who had been for the excise, Walpole had to give in. ' This dance it will no further go,' he said to a select party of friends after supper the evening after the debate on the City petition, ' and to-morrow I intend to sound a retreat ; the turn my friends will take will be to declare they have not altered their opinion of the proposition, but that the clamour and the spirit that has been raised makes it necessary to give way, and that what they now do is not owning what they have done to be, wrong, but receding, for prudential reasons, from what they still think as right as ever.' ^ The withdrawal of the Excise Bill called forth as loud rejoicings as upon the most glorious national victory ever gained over our enemies in times of the. greatest danger. The name that had proved fatal to the measure continued long afterwards to be of evil omen in taxation, affording to Johnson the oppor- tunity for a definition of the word, in his dictionary in 1755, which amounted, in the opinion of the law officers of the crown, to a libel on the commissioners of excise, and proving the cause of difficulties to Bute, in 1763, in relation to the cider tax. So that, ' A large and very ancient hall in the palace of Westminster subse- quently appropriated to the house of lords, who sat there till the fire of 1884. ' Hervey, Memoirs, i. 198. 'THIS DANCE IT WILL NO FURTHER GO.' 105 in 1767, when there was again some talk of an excise, Chesterfield, who had reason to remember Walpole's Excise Bill, when his opposition to the measure cost him the white staff, writes to sir Thomas Eobinson : ' As for a general excise, it must change its name by act of parliament before it will go down with the people, who know names better than things ; ' and he adds : ' For aught I know, if an Act for a general excise were to be entitled " An Act for the better securing the liberty and property of his majesty's subjects, by repealing some of the most burdensome custom-house laws," it might be gladly received.' ■■■ ' Miscellaneous Works, vol. iv. p. 214. 106 HISTORY OF TAXATION. CHAPTER IV. THE WAR WITH SPAIN (EIGHT OF SEARCH) AND THE WAR OF THE AUSTRIAN SUCCESSION. FALL OF WAL- POLE. THE WILMINGTON, PELHAM, AND NEWCASTLE ADMINISTRATIONS. 1739—1756. Oommencement of the war. Our fiscal position. Cost of the war. Land tax raised to 4«. Fall of "Walpole. Pulteney and Carteret in power. Bepeal of the Act against spirituous liquors. The diinMng fund. The Pelham administration. Defeat of Pelham on the sugar question. Fall of Carteret and formation of the Broad Bottom administration. Extension of the tax on salt. Additional tax on wine. Important reduction of the tax on tea. The Eehellion of '46. New tax on the manufacture of glass. Pelham's new window tax. Tax on pleasure carriages. A fourth subsidy of customs granted in 1748. Speech of Henry Fox on taxation. Peace of Aix-la-Chapelle. Reduction of the land tax. Death of Pelham. His character. A new period com- mences. Fox, Murray, and Pitt. The Newcastle administration. Fox secretary of state. Pitt courts dismissal. Legge and G. Grenvilie resign. Lyttelton chancellor of the exchequer. The main object of Walpole's policy was to secure peace with France, and thus prevent any attempt by the Pretender to raise a rebellion in England against the House of Hanover, which without aid from France was impossible. This policy involved a continuance of peace with Spain, for from the existing connec- tion between Louis XV. and Philip V., war with Spain would probably lead to war with France ; and hitherto the common efforts of Walpole and de Fleury to avoid the outbreak of war had proved successful. JENKINS AND HIS EAR. 107 But during this peaceful period a storm had long been brewing between England and Spain, from com- mercial jealousy. The treaty of Utrecht contained provisions which had the effect So strictly to limit com- merce between our colonies in America and those of Spain as to amount to a prohibition. This interference with our trade formed the source of constant com- plaints, and our colonists spared no pains and lost no opportunity in their attempts to evade the provisions of the treaty. On the other hand, the Spaniards, in their anxiety to monopolise the commerce of their colonies, enforced their rights under the treaty with an un- sparing hand, and endeavoured to suppress the system of smugghng that prevailed, by a strict exercise of their right to search vessels on the high seas. Offenders caught in the act experienced, as may be imagined, rough treatment at the hands of the guarda-costas. Feehngs of resentment were provoked on both sides, which increased in intensity day by day. Eeports of indignities suffered by our seamen — ^real, exaggerated, and fictitious — reached this country in increasing num- bers. Many petitions on the subject were presented to parliament. And at last a particular instance of bar- barous treatment was produced at the bar of the house of commons, March 16, 1738, when the opposition got hold of Jenkins, a man who went about with an ear in his pocket, wrapt up in wool, which, according to his statement, had been cut off by the guarda-costas, who had made him their prisoner. Meanwhile, during Walpole's prolonged tenure of office, the appetite for place of those who were 108 HISTORY OF TAXATION. excluded had increased to a craving they were willing to go any length to satisfy. This had been evident in the proceedings consequent upon the introduction of the Excise Bill. Since then the Opposition had been gaining strength day by day ; and now the ' young patriots,' the ' boys,' as Walpole termed them, — ^Pitt, the GrenvUles and Lyttelton,^ and Pulteney, Sandys, Carteret, Argyll and the other discontented whigs, joined with the tories in taking up the cry for war, in opposition to the minister. Working on the ex- cited feelings of the people, and the mercantile and military instincts of the nation, they precipitated, not- withstanding the attempts of Walpole to avoid it, a crisis which, after all, could not, probably, have been long delayed. ' Sir Eobert Walpole was forced into the war by the people, who were inflamed to this measure by the most leading pohticians, by the first orators, and the greatest poets, of the time. For that war. Pope sung his dying notes. For that war, Johnson, in more ener- getic strains, employed the voice of his early genius. For that war, Glover distinguished himself in the way in which his muse was most natural and happy. The crowd readily followed the pohticians in the cry for a war which threatened Uttle bloodshed, and which promised victories that Avere attended with something more solid than glory. A war with Spain was a war of plunder.' ^ The bells were pealed in all the churches ' They were also termed the ' Nepotism,' their leaders being chiefly nephews and cousins of lord Cobhara, and ' Cobham's cubs.' ' Burke, Letters on a Regicide Peace. Works, v. 287. OUR FISCAL POSITION IN 1739. 109 •of London, when, amidst huzzas and acclamations on oot. 19, all sides, war was declared against Spain.^ The expenses of the war that thus commenced formed the next step in the increase of our national debt. In 1739, the amount of the national debt of Great Britain was about 46 millions,^ and our fiscal position, as follows : — Expenditure. £ Debt, annual charge . . . 2,000,000 Military and naval 3 . . . 1,850,000 Civil List and Civil Government . 950,000 Revenue from Taxes. Land tax at 2s. . . . . 1,000,000 Window tax and tax on pensions . 135,000 Customs 1,400,000 Excise 3,000,000 Stamps 150,000 5,685,000 The cost of the war of the Eight of Search, including the war with France about the Austrian succession which followed, was over 43 millions,* of which about 30 were added to the Debt, After the meeting of parliament in November, the land tax was raised, for 1-740, from a 2s. to a 4s. rate, which was considered to be the war maximum. Each additional shilling produced half a milhon of revenue, and the 4s. rate, producing in all two millions, con- tinued to be granted annually during the war. In 1741 the second parliament of George II. was dissolved. The elections did not prove favourable to ■ Coxes Walpole, iv. 112. ' Return Pub. Inc. and Expend., Part II., Appendix No. 12. s Average from 1736-38. « 43,665, 192^. 110 mSTORY OF TAXATION. Walpole; and after the meeting of the new parlia- ment, in December, he encountered a succession of defeats, which resulted in his retirement from office. He resigned, February 17, 1742, and passed into the house of lords as earl of Orford.^ 1742. Pulteney, leader of the opposition in the house of commons, now became the arbiter between the crown and the people. Negotiations were opened with him. For various reasons he declined the post of prime minister, but was instrumental in forming a motley ministry under the old earl of Wilmington, formerly sir Spencer Compton. This included Carteret and Newcastle as secretaries of state, Sandys, as chan- cellor of the exchequer, and Henry Pelham, as pay- master of the forces. Chesterfield, an outcast from office since his adverse vote on the Excise Bill, had expected the post of secretary of state ; but no place was found for him in the ministerial arrange- ments, and the Grenvilles, Lyttelton, and Pitt were excluded. Pulteney took only a seat in the cabinet, with a peerage, and lost aU influence when he became earl of Bath : ' The nation looked upon him as a de- serter ; and he shrunk into insignificancy and an earl- dom.' ^ ' Here we are, my lord,' said Orford to him, when they met for the first time in the house of lords, ' the two most insignificant fellows in England.' ' ' He was defeated on the question of the election of a chairman of committees, again on the question of the Westminster election, and lastly, on the question of the Chippenham election, which was allowed on both sides to be a decisive trial of strength. Election petitions at this date, tried by a committ«e of the whole House, were regarded as party questions. " Chesterfield. Characters. ' Dr. King's Anecdotes. THE 'DRINKING FUND.' Ill The sole fiscal measure of any importance effected by the Wilmington administration had relation to the tax on spirits. Jekyll's Act against spirituous hquors, generally known as the Gin Act, had proved a failure, in consequence of the stringency of its provisions. A new system was now adopted. The Act was repealed, and, in lieu of an attempt to prohibit the drinking of spirits, duties were imposed upon the manufacture,^ sufficient in amount to place spirits beyond the reach of the lower classes as an ordinary article of con- sumption. This measure effected an increase in the revenue very acceptable to the ministry of the day, and afforded an opportunity to Chesterfield to give them a nickname. Eesenting his exclusion from the arrangements of the new ministry, and having been a strenuous opponent in the house of lords of the repeal of the Gin Act, in allusion to the source from -which the ministry had enriched themselves, which he termed ' the drinking fund,' he dubbed them ' the drunken administration.'^ At the time of the death of Wilmington, in July 1743, Carteret was abroad with the king, having been with him at the battle of Dettingen ; and as his know- ledge of foreign languages and many other accom- plishments placed him high in royal favour, he now entertained, with Bath, hopes of obtaining a mono- poly of power. But during Wilmington's last iUness, Pelham had been persuaded by Walpole to apply, before the vacancy, for the post now vacant, and eventually the influence of Walpole prevailed to over- > 16 Geo; II. c. 8. ' This was, of course, a hit at Carteret, 112 HISTORY OF TAXATION, throw the plans of Carteret and Bath, and Pelham was appointed first lord of the treasury, and also chancellor of the exchequer, in the place of Samuel Sandys, who was raised to the house of peers, and made cofferer of the household. Sam in the sunshine buzzed a little, Then sank in power and rose in title. Will with a title out would set, But place nor power ne'er could get. So Will and Sam obscure remained, While John with universal odium reigned.* Imperious, impetuous, ever intent upon large schemes, careless, inexpert in details, a hard drinker, and of riotous spirits, John, lord Carteret, was to his colleagues certainly, if not odious, at least a source of constant annoyance. He treated Newcastle and Harrington, who was president of the council, with httle less than contempt ; by his superior wit and knowledge of the classics and civil law, completely cowed Hardwicke, the lord chancellor -^ and, pressing his own views of ambitious foreign policy, would have carried the government and the nation far beyond the original policy of the war of the Austrian Succession.^ Some idea of the embarrassment to his colleagues caused by Carteret may be formed from his action in a matter of revenue. We were threatened, in 1744, ' London Magazine for January. This was the monthly advocate of the country party. ' Fitzmaurice, Life of Shelburne, i. 86. ' This had been to prevent the dismemberment of the countries that passed to Maria Theresa under the Pragmatic Sanction — to prevent Prus- sia from retaining Silesia, which Frederick had seized, and Spain from taking the Milanese. As enlarged by Carteret, it extended to supporting a policy of aggrandisement of the empire, the object being to take Naples and Sicily from Spain, Elsass from Frauce, &c. &c. THE SUGAR QUESTION, DEFEA.T OF PELHAM. 113 ■witli foreign invasion in support of the title of the Pretender, and it was necessary to borrow largely for the expenses of the year. On February 13, a resolu- tion was passed in the Commons for an additional 25. Qd. the cwt. on sugar, which it was calculated would produce above 80,000/. a year, sufficient to serve as a fund to borrow 1,800,000/. at 3 per cent. . for the service of the current year. A project for an addition to the duty on sugar had been in agitation for some time before Pelham presided at the treasury, and it was clearly an excellent tax ; but Carteret and the prince of Wales, who was in opposition, saw in this question an opportunity for disappointing Pelham in his peculiar department, that of supply. A number of persons were interested, directly and indirectly, in sugar. On the report of the resolution, lord Limerick was put up to suggest, that it should be re- committed, and that in lieu of the addition for sugar, a duty of Id. the yard should be put upon foreign linens. This gained the Scotch members, who thought the duty would promote the manufacture of linen in Scotland. The influence of the prince and Carteret was exercised to keep members away from the House, and in the result the sugar and linen interests pre- vailed to carry lord Limerick's project, in a thin House, by 176 votes to 168.^ Pelham would not, ■however, accede to the proposed tax on linen off- hand, and eventually the surplus of the additional duties on spirits was carried to the use of the year.^ ' From the Par. Journal of the hon. Philip Yorke, Par. Hist. xiii. 652, " 17 Geo II. c. 17. VOL. 11. I 11.4 HISTOIiY OF TAXATION. This was the first defeat of a minister on a tax question since the Eevolution. Not long after the declaration of war against Prance, March 29, the brothers Newcastle and Pelham prevailed on the king to part with their ambitious colleague, who had recently succeeded, on the death of his mother, to the earldom of -Granville. In No- vember the seals were given back to Harrington ; and in December a union of parties was effected. This included Chesterfield — ^who was sent on his second embassy to the Hague, whence he subsequently went to Ireland as lord lieutenant, the duke of Bed- ford, Lyttelton with a seat at the treasury board, and George Grenville as a junior lord of the admiralty ; while Pitt had a promise of the post of secretary at war as soon as the king's antipathy to him could be overcome. Pormed on inclusive principles, and com- bining representatives of most of the great parties — Pelhams, Bedfords, and Grenyilles — this was known as the Broad Bottom administration'. Lord Orford, who had been summoned by the king to give his advice in the ministerial arrange- ments, returned to Houghton, and died there in the following March. ^ 1746. Poiled in his attempt to obtain additional revenue from sugar, Pelham, in 1745, turned his attention to other articles of consumption, and obtained an addi- tional milhon for the purposes of the year, at 3/. 10s. per cent., on the security of an extension of the salt duties for six years, and a million and a half on an ' For a Character of Walpole by Chesierfield, see Appendix. WAK — RIGHT OF SEARCH. NEW TAXES. 115 additional tunnage on wine and vinegar, of 8^. for French, and 4Z. for other wine and vinegar. He had proposed, as an alternative, additions for tobacco and spirituous hquors. On the other hand, a material reduction was made, in this year, in the tax on tea. The inland duty of 4*. the lb. was reduced to Is., with 25 per cent, on the price of tea sold by the East India Com- pany.^ This judicious measure had the best effect in decreasing ' the pernicious and illegal practices of unlawfully importing and clandestinely running and landing tea,' against which the measure was aimed. Pelham was able to effect it by drawing on the sink- ing fund. The expenses of this year and the next were in- April 30. creased by the rebellion in the north. As Walpole had always expected, war with France soon resulted in an attempt in favour of the pretender. After the defeat of the English and their allies at Fontenoy, the young pretender landed in Scotland ; was proclaimed at Edinburgh ; after the battle of Prestonpans, Sep- tember 21, marched into England and on to Derby, occasioning, December 5, the panic in London known as ' Black Friday ;' and was only finally defeated on the following April 16, at CuUoden. It was there- fore necessary to impose additional taxes in 1746, and accordingly the addition for spirits suggested in the past year as an alternative to the increase for wine was carried into effect. To this there could be no ' As to salt, see 18 Geo. II, c. 5, made perpetual bj' 26 Geo. II. c. 3 ■ wine, c. 9 ; tea, c. 26. I 2 116 HISTORY OF TAXATION. objection, but, unfortunately, Pelham, a disciple of Walpole in taxation and an admirer of excises, again subjected to an excise the manufactcee of glass.^ It is curious to observe, in the history of taxation in England in the last century, how frequently the rise to importance of a business or a manufacture is noted by an attempt on the part of the minister of finance to derive from its prosperity some additional revenue. As soon as it rises, in growth, to the level of his notice, so to put it, his fiscal hand is out- stretched towards it with a grasp of welcome, from his point of view : ' I rejoice to see you so prosper- ous, and — you shall be taxed.' Perhaps no more signal case of the evil influence of taxation in crushing a prosperous manufacture is recorded in our fiscal annals than that which occurs, at a future date, in regard to the useful and beautiful manufacture Pelham now thought fit to tax. Once before it had been taxed : the tax had been repealed as ruinous to the manufacture ; and the repeal had been followed by an incredible improvement in glass-making. The new tax touched green, that is bottle glass, as well as flint, crown, that is, window, and plate glass, and a monopoly was secured to the native manufacturers by the imposition of high duties on imported articles of glass. The increase in the price of glass bottles consequent upon the tax was such as to cause Chesterfield, when writing to mr. Prior in Ireland, to suggest that he should start a manufacture of them in that country, to which the tax did not extend.^ ' 19 Geo. II. c. 12. ' Letters to Fiiends. Letter 74, July 15, 1746. In Ireland the tax commenced only in 1797. PELHAM'S TAXES ON GLASS AND WINDOWS. 117 The new taxes for 1747 were direct taxes, as op- i747. posed to taxes on articles of consumption, and touched houses and carriages. Montague's house tax, the successor of the hearth- money repealed soon after the Eevolution, had, since its imposition in 1694, been increased by an addi- tional step to the charge, and was now payable at different rates for houses having 10, or from 10 to 20, or from 20 to 30, or 30 or more windows. Pelham carried the principle of a window tax to greater lengths ; changing the tax into a small fixed duty for all houses, combined with a window tax, charged in respect of the windows ; so that in the case of a house having 20 windows or more, Is. was charged for every window in the house.^ This practically new window tax was supple- mented by a tax on persons keeping pleasure car- EiAGES. At this date the finance ministers in this country, and many other countries in Europe, com- plained of the difficulty they found in reaching in taxa- tion that personal or moveable property which every- where was accumulating in larger masses year by year. In England the principle that personal pro- perty should bear its proportion in taxation with land, admitted for centuries, was every year enforced in, the plainest terms, by the Land Tax Act. Every year, towards raising the several sums of money charged by the Act, ' all and every person and persons, bodies politic and corporate, guilds and fra- ternities in Great Britain having any estate in ready money, or in any debts, or having any estate in ' 20 Geo. II. e. 3. 118 HISTORY OF TAXATION. goods, wares, merchandises, or other chattels or personal estate whatsoever,' were required to pay so much in the £ on the yearly value thereof, as ascer- tained under the provisions of the Act. So ran the Act ; but, in practice, personal property, which had long before this slipped out of assessment, continued to be free from the tax, which was collected solely from land. Pelham hoped by this new tax to reach persons living in a certain style, irrespective of the source of their income. He took a lesson from the old poll taxes, the last of which contained an item of charge relating to ' any person keeping a coach and horses ; ' and as coaches, in the sense of private carriages, were now plentiful, and to keep a coach had always been allowed to be. evidence of at the least easy cir- cumstances, he expected, in the selection of persons keeping coaches for special taxation, to impose a productive as well as a fair tax. This was the first tax aimed at property by taking an article of ex- penditure as prim& facie evidence of the possession of means. The duty was annual, and was charged upon the tax-payer by reference to the number of carriages he kept. Stage-coaches, post-chaises, and hackney 1748. carriages were exempted.^ The last increase in taxation due to the war of the Eight of Search consisted in ^ general rise in the duties on imported goods. Another subsidy, viz. 5 per cent., or Is. in th^ £, on the value of goods as rated in the book of rates in the Great Statute of 1660 and the additional book of 1724, was granted. ' 20 Geo. II, c. 10. THE FOUKTH 'SUBSIDY OF CUSTOMS.' 119 This fourth subsidy raised the duty to 20 per cent., in addition to which there were the imposts of 1690 and 1692 and the special duties charged upon a great variety of articles. It was granted in February 1748/ and as may be expected the Bill did not pass through the house of commons without meeting considerable opposition from many members. One of its most formidable opponents was alderman Beckford, who objected more particularly to the further taxation of sugar, in which he was interested ; while powerful support in debate was given to Pelham in an able speech by Henry Fox. A devoted adherent of Walpole, he had left the ministry on the fall of his friend and patron ; but subsequently, on Pelham's accession to power by the aid of Walpole, had accepted the post of a commis- sioner of the treasury. Appointed in 1746 secretary at war, he had so highly distinguished himself for skill and assiduity in business, and parliamentary abilities, that he was designated by the public voice as the person most likely to succeed Chesterfield, in February 1748, when, in consequence of his inability to work with Newcastle, he resigned the post of secretary of state he had held since November 1746. His experience at the treasury, and the attention he paid to fiscal questions, rendered him a high autho- rity on matters of taxation. Speech of Henry Fox on Taxation. In this speech he observed that, approving the maxim that, as a trading nation, we ought not to 1 21 Geo. II. c. 2. 120 HISTORY OF TAXATION. supply the public expense by taxes which affect our commerce or mamifactures, he wished it were possible to see every port in the kingdom made a free port ; that is to say, to have no customs or duties payable upon the importation or exportation of goods at any port in the kingdom. But was it possible ? Money must be had, some way or other, for supporting our government ; and no money could be had but by taxes of some kind or other. Those taxes must either be by way of land tax, poll tax, hearth-money, window tax, or taxes upon consumption ; and these last must be raised either by way of custom or excise. As to the land tax, the House knew how difficult it was to get the parhament so consent to it at the time of the Eevolution, and how many frauds were made use of for conceahng the true value of estates, though the country was then in so much danger, and the new government in such distress for money. They knew what heart- burnings were raised by the tax called hearth-money, in the reigns of Charles and James 11. They knew what discontents were raised in king Wilham's time by the poll tax. And they knew what a combustion was lately raised in the kingdom by an attempt (Walpole's excise scheme of 1733) to raise the duties on tobacco and wines by way of excise. Therefore, if money had been raised by taxes upon consumption, and those taxes levied by way of customs upon the importation of goods, it was not the fault of the government, but of the people, who would not submit to any other methods for raising SPEECH OF HENRY FOX ON TAXATION. 121 money. Thus in the years 1689 and 1690 it was with some difficulty that the people were prevailed on to agree to a land tax of one or two shillings in the £, because by the extraordinary and sudden success of the Eevolution the danger was removed from their own doors, though it was very certain that if the king of France had succeeded in all his then views, particularly that of getting his son, the Dau- phin, elected king of the Komans, he would have sent king James back upon us with such a force as we could not then have resisted. And it was certain that if king James had been then, with a formidable army of papists, in any part of England, there were few protestants in the kingdom who would not have cheerfully parted with 18s. in the £ to have got rid of such apparent danger. The insensibility of the people, and the danger of raising a general insurrection which from this insensi- bility the government had just reason to apprehend, had forced the government at that time and often since that time not only to run in debt, but to con- trive funds for that purpose by increasing the cus- toms or duties payable upon the goods and merchan- dise. Such djities, he would grant, affected in some measure our commerce and manufactures ; but as the duties paid upon importation were mostly drawn back upon re-exportation, he beheved there was no country in the world where their commerce and manufactures were less affected by their customs than in this ; and it must be allowed that since the Eevolution, and especially since the accession of the 122 HISTORY OF TAXATION. present royal family, both our commerce and manu- factures had been considerably eased by the laws made (in 1700 and in 1723) for freeing almost all sorts of goods from the payment of any duties upon exportation, except those sorts which we ought not to allow to be exported at all, or, at least, not with- out enhancing the price by a duty upon exportation. He next alluded to the maxim that, even in time of war, we ought to raise as much money within the year as should be necessary for answering the current service of the year, and allowed that this ought to be done, if it were possible. But it was often necessary for a government to run into debt for the following reason : all governments must have a regard not only to what the people are able to bear, but what they are willing to pay, and the manner in which they are willing to pay, without being provoked to a rebellion. This often made it necessary for a govern- ment to run in debt, as well as to raise money for the public service in the most improper manner, espe- cially when they are engaged in a war for preventing a remote danger. For as the people in general are not sensible of remote dangers, they are extremely unwilling to contribute a great deal out of their yearly income towards preventing such dangers. For if the government could, in the first war with France, have ventured to propose, and the people had cheerfully submitted to pay, a land tax of 4s. in the £ annually towards the public expense, and to have had their estates valued at the full and true value, it would neither have been necessary for our DEATH OF PELHAM. HIS CHARACTER. 123 government to have run in debt, nor to have loaded our commerce with duties payable upon importation. Because such a land tax would, he was convinced, have brought in at least four if not five millions ; and that, with the excises we had before or soon after submitted to, would have defrayed the whole yearly expense we were at, either in that or the following war — the war of the Spanish Succession. "We were now compelled to increase our customs as a security for new debt, because he believed no minister would dare to propose increasing either the land tax, the window tax, or the number of our excises. And as Httle would any minister dare to propose renewing either the poll tax or the tax called hearth-money.'- The hst was thus exhausted, and the chancellor of the exchequer was reduced to proposing an increase in the port duties. After the termination of the war, by the Peace oot. 7, 1748. of Aix-la-Chapelle, the rate of the land tax was reduced, in 1750, to 3s., and in 1753, to 2s. ; but the other taxes imposed in the war — on windows, carriages, glass, wine and spirits, and the fourth sub- sidy of 1748 — remained fixtures in our fiscal hst. Pelham survived the peace six years, and died rather suddenly, March 6, 1754, according to the new style.^ His character has been drawn by a master hand : ' Mr. Pelham had good sense, without either ' Prom the I^ondon Magazine, Par. Hist. xiv. 164-72. " Introduced into this country in 1751 by Chesterfield. Eleven days were suppressed between the 2nd and 14th Sept. 1752. The quarter days for revenue purposes became Jan. 6, April 5, July 6, and Oct. 10. 124 HISTORY OF TAXATION. shining parts or any degree of literature. He had by no means an elevated or enterprising genius, but had a more manly and steady resolution than his brother the duke of Newcastle. He had a gentleman-like frankness in his behaviour, and as great point of honour as a minister can have, especially a minister at the head of the Treasury, where numberless sturdy and insatiable beggars of condition apply, who cannot all be gratified, nor all with safety be refused. He was a very inelegant speaker in parliament, but spoke with a certain candour and openness that made him be well heard, and generally beheved. He wished well to the public, and managed the finances with great care and personal purity. He was par negotiis neque supra ; had many domestic virtues and no vices. If his place, and the power that accompanies it, made him some pubhc enemies, his behaviour in both se- cured him from personal and rancorous ones. Those who wished him ■^orst, only wished themselves in his place. Upon the whole, he was an honourable man, and a well-wishing minister.' ^ At this date, though still within the period of aristocratic ascendancy known as the reign of the Eevolution Families, we pass into a sub-period during which the maintenance of that ascendancy was due, in no small degree, to the personal popularity of Pitt, ' the Great Commoner.' Many leading men had passed out of the poHtical arena. Bohngbroke was no more. Bath had lost all power. Under a daily allowance of two bottles of Burgundy and the love of a life of ease, Granville had lost all ambition ; he had 1 Chesterfield. Characters. FOX, MUREAY AND i^'ITT. 125 reposed since 1751 in the easy berth of president of the council, which he continued to fill until his death in 1763. And Chesterfield, already head of a family with three earldoms,^ had refused a dukedom, and was not again to be tempted by office from literary pursuits, the building and adornment of his house in May Fair, and the enjoyment of a philoso- phical retirement. In the Commons three men stood prominent, Henry Fox, Murray and Pitt. At first Fox was to have succeeded Pelham, but in consequence of a diffi- culty about the disposal of the secret service money, the distribution of which Newcastle desired to re- tain in his own hands, the proposed arrangement collapsed. Murray was intent upon professional ad- vancement. Pitt, taken into the administration in 1 746,^ now held the post of paymaster of the forces ; but the king's dislike to him was such that no con- spicuous place in the ministry could be ofiered to him. An that Newcastle, who now succeeded his brother as first lord of the treasury and prime min- ister, could do was to make arrangements with all possible regard and attention to his connections and feelings. Sir Thomas Eobinson, who ' had not par- liamentary talents that could cause him jealousy,' was made secretary of state, and became leader of ' James Stanhope, the prime minister, created lord Stanhope and viscount Stanhope of Mahon, in July 1717, and earl Stanhope in 1718, and William Stanhope, created earl of Harrington, after negotiating the treaty of Seville, 1729 ; secretary of state, 1730-42, afterwards president of the council, and subsequently again secretary of state ' After the curious ministerial episode of that year, when the Pel- hams defeated the intrigues of Bath and Granville by a hasty resignation, followed by a return to office under conditions which enabled them to insist on the admission of Pitt to office. 126 HISTORY OF TAXATION. the Commons. His strong personal adherent, Henry Bilson Legge, was appointed chancellor of the ex- chequer, and minor posts were found for his brother- in-law, George Grenville, and his friend Lyttelton. But Pitt and Fox,, who retained their subordinate posts in the new administration, soon rendered the leadership of Eobinson such a farce that Newcastle found it necessary, in 1755, to strengthen the adminis- tration by inviting the co-operation of Fox in the cabinet. Accepting the oflfer. Fox parted from Pitt, and before the end of the year was raised to the post of secretary of state, and became leader of the house of commons, on the willing return of Eobinson to his old office of the Great Wardrobe, with a pension. In November Pitt practically invited dismissal by a severe denunciation of the new treaties with Hesse and Eussia ; ^ and Legge and George Grenville left office with him. But Lyttelton, who had now broken from Pitt and publicly complained of the treatment he received from him, was appointed to succeed Legge as chancellor of the exchequer, notwithstanding his want of any qualification for the post. ' Had they dragged Dr. Halley from his observatory to make him vice-chancellor, or Dr. Hales from his ventilation to act Bayes in " The Eehearsal," ' writes Horace Wal- pole, ' the choice would have been as judicious.' Thus stood the administration at the commence- ment of the Seven Years' War. ' Binding England in certain events to pay large sums for foreign soldiers for the defence of Hanover. 127 CHAPTER V. THE SEVEN YEAKS' WAE. 1766-33. Commencement of the war. Our fiscal position. Cost of the war. Lyt- telton's new tax on the plate-chest. Addition far cards and dice. Proposed tax on bricks relincLuished for a tax on publicans. Kesignaft. tion of Fox and Newcastle. Pitt in power. The Devonshire-Pitt adnrinistration. The Newcastle-Pitt administration. Additional taxes on deeds, newspapers, and advertisements. New tax on wine licenses. Increase in the taxes on houses and windows. New tax on ofRces. Our successes in America and India. The Great Year, 1759. Enormous expenditure. Legge's proposed tax on shops. Proposed tax on sugar. A general subsidy of customs imposed. Pitt's speech on excises. Enormous increase in the taxation of beer. Accession of George IIT. Bute secretary of state. Dismissal of Legge. Reagna- tion of Pitt and Temple, and Newcastle. End of the reign of the Revolutionary families. The But* administration. First-fruits of the peace. Dashwood's new taxes on winCj cider and perry. The Cider Act. Its unpopularity. Resignation of Bute. George Grenville as the ' Gentle Shepherd.' The peace of Aix-la-Chapelle was, in effect, but a truce. In North America, the Trench, by a hne of forts connecting Canada with Louisiana, threatened to sever our colonies from the western continent, and shut us in between the Atlantic and the AUeghanies. In India warlike operations continued between the English and French India Companies ; and Dupleix, threatening our settlements along the coast, declared his intention to establish a French empire in the East, ' " L'empire de la France est fonde," disait-il.' ^ Our • Guizpt, Hist, de France. 128 HISTOEY OF TAXATION. seamen, wherever our ships sailed, continued to annoy and harass the shipping of the French. At last, in March 1755, we made preparations for war ; and in July, war practically commenced. This war with France, from the connection it had with the fur trade of our colonists in North America, was sometimes termed the ' Catskin War ' — a question of ' dealing in a hundred or two of wild-cats' skins on the other side of the globe ; ' while Voltaire speaks of it as a war about ' some few acres of snow in the direction of Canada.' The origin of the war was not dramatic, but the results were of infinite importance to us. It formed part of the great contest sub- sequently known as the Seven Years' War. In 1755, the amount of the national debt of Great . Britain was about seventy-two millions and a half, and our fiscal position was, approximately, as follows : Expenditure. £ Debt, annual charge 2,600,000 Military and Naval » .... 2,000,000 Civil List and Civil Government . . 1,000,000 Revenue from, Taxes. Land tax at 2s 1,000,000 Window tax and tax on pensions . . 235,000 Customs 1,780,000 Excise 3,660,000 5,440,000 Stamps 137,000 ' Our financial position was excellent, for Pelham, following the precedent of Walpole, had been able, by a reduction of interest on the national debt, to effect an ultimate saving of 563,000/. a year, while public * Average, 1753-5. OUn FISCAL POSITION, 1?55. 129 credit had been strengthened by the formation of the stocks subsequently famous as the ' Consols ' (consoli- dated bank annuities) and the ' Eeduced 3 per Cents.' Our expenditure during the war, roughly stated in millions, was in the eight years, 1756-63 inclusive, as follows; viz. :— 13,16, 18, 20, 25, 29, 29, and 24 millions ; and of the eighty- two milhons the War cost us, about sixty were added to our national debt. As usual on the commencement of war, the rate 1756. of the land tax was raised, in 1756, from 2^., the rate since 1753, to 4s., to produce an additional million. But new taxes were wanted, and a variety of suggestions were made for the assistance of the new chancellor of the exchequer in his task of finding them : — Could not French servants be taxed ? or card tables, or the fashionable amusements of the day, or statues in gardens, at so much a head ? — for the lakes, groves, grottos and temples of that day were thick-set with heathen gods and goddesses — a fashion derived from France, where, as Montaigne observes, Louis XIV. had in his gardens as many statues as the inhabitants of many towns.^ When Lyttelton opened the plan of supplies and taxes — it was not yet termed opening the Budget — February 25, 1756, he suggested several new taxes. One, similar in principle to Pelham's tax on per- sons keeping carriages, was charged upon private • ' Here Amphitrit^ fails through myrtle bowers ; There gladiators fight or die in flowers ; Unwater'd see the drooping sea-horse mourn, And swallows roost in Nilus' dusty urn.' The Epistle on Taste appeared about a quarter of a century hero re this. VOL. II. K 130 mSTOEY OF TAXATION, individuals and corporations possessed of plate over a certain amount in value, taking the possession of plate as evidence of capability to pay a tax ; and this TAX ON THE PLATE CHEST, after encountering some opposition in the house of commons, more particu- larly from Legge and George Grenville, passed into law, A second proposal, to double the tax on cards and dice, was equally successful. This tax on gambling might have been trebled without any opposition, for the recent earthquake at Lisbon had created a feeling of awe similar to that occasioned only a few years before this by an earthquake in London, when after two shocks, it was reported that a hen at Edmonton had laid an egg inscribed ' Beware the third shock,' and a scare took place which carried, on the fatal day, half the inhabitants into the fields to avoid destruction in the overthrow of the wicked city.^ A proposal to tax bricks and tUes, Lyttelton faUed to pass. A tax on bricks, it was urged, would be partial in its incidence, because in many parts of the kingdom only stone was used for building, and unfair, as it would not touch the houses of the richer classes, which were principally built of stone. The argu- ments against the tax had begun to prevail, when it was suggested to him that the publicans were driving a roaring trade, and that a 1^. tax on their business licenses would produce considerably more than the proposed tax on bricks. This settled the question, > Reed's "Weekly Journal, April 7, 1750. SEVEN YEARS' WAB. SUGaESTIONS FOR TAXES. 131 and abandoning the brick tax, he adopted the sug- gestion for a TAX ON PUBLICANS. In the course of the debate on the plan of sup- phes, George Townshend suggested the advisabiUty of taxes on French servants and the exportation of horses. A number of French servants, he stated, were employed in English households as valets, cooks, and in other capacities ; while almost every officer in the French service had two English horses. In this year the linen trade was encouraged by the repeal of the duties on foreign raw linen yarn, the raw material of the manufacture, and an exten- sion of the bounty on the exportation of British and Irish linen.^ Before the end of the year there was a change of ministry. Our want of success at the outset of the war, the loss of Minorca, and Byng's conduct, May, 1756. surprised and enraged the nation. For some time our attention had been directed to preparations at Brest for an invasion, and never was the nation more impressed with the necessity of keeping the com- mand of the seas. When, therefore, the news came that the English admiral had failed to beat the enemy, and reports were circulated, for which Byng's love of dress and French fashions appeared to give ground, that he had either shown cowardice or had been bribed by the French, the fury of the people, against him in the first place and, in the second place, against the ministry for their failure to make proper » See as to plate, 29 Geo. II. c. 14; cards and dice, c. 13 ; alehouse licenses, c. 12 ; and linen yarn, c. 15. 132 HISTORY OF TAXATION. arrangements, became ungovernable. The ministry sacrificed Byng, but this did not save them. Fox got rid of the seals of secretary of state in October ; in the next month Newcastle resigned office ; and the ' tide in the affairs of men ' carried Pitt, now high in popular favour, to the post of secretary of state in a new administration, in which he was the most prominent member, though the duke of Devon- shire, who had lately succeeded to the title, was, as first lord of the treasury, nominally prime minister. Legge became chancellor of the exchequer in the place of Lyttelton, who received a peerage ; and the administration included earl Temple, Pitt's brother- in-law, Greorge Grenville, Charles Townshend, and the duke of Bedford. The new ministry, without credit at court, and without the great parliamentary influence of New- castle in the Commons, was not made to iast. The king could not endure Temple, and iis dislike for Pitt grew, after Pitt's conduct in relation to Byng,^ to aversion. Before leaving England to take the command of the army of observation, the duke of Cumberland, who did not care to be checked by an anti-Hanoverian ministry at home, prevailed on the king to dismiss, April 1757, first Temple and subse- quently Pitt, and Legge retired with Pitt. Gold boxes with the freedom of the city from the Common Council, and similar testimonials from many other quarters — ' It rains gold boxes,' writes Lady Hervey — evidenced the popularity of Pitt and his ' For whom he had endeavoured to obtain a pardon. POPULARITY OF PITT. 133 friend ; and after an ' inter-ministerium ' of three months, Newcastle, unable to form a government without Pitt, was compelled to coalesce with him in forming the Pitt -Newcastle administration, in which the duke, as first lord, was the nominal, but Pitt, holding the post of secretary of state, the real, head — ' Pitt doing everything and the duke giving every- thing.' Legge was again chancellor of the exchequer.^ Pitt thus returned to power upon a wave of popu- larity. The only unsuspected ' patriot ' champion of the people, his policy was a commercial and colonial policy, a policy of trade to be protected by a power- ful fleet ; at home, a mihtia for defence in lieu of any expensive standing army, and a democratic, in the sense of popular, as opposed to the pure whig or oligarchic, system of government. His foreign policy had been that of Chesterfield, a British as opposed to an electoral or Hanoverian policy, involving the dis- continuance of subsidies for foreign troops ; but this he was compelled, in the circumstances in which he was placed, to forego. And, regarding the peril of Hanover as a menace to England — in the view that the theatre of the contest with France lay in Ger- many, he threw himself, with characteristic vehemence, into the European war, on the side of Frederick of Prussia, our new ally, and supported, by English pay, ' Fox, whose ambition was now becoming' subservient to his avarice, was appointed paymaster of the forces, the lucrative post he desired ; and the administration included the duke of Devonshire, as lord chamberlain. Temple, George Granville, and Charles Townshend. Lord Anson returned to the admii-alty, and lord Holdernesse was replaced as the other secretary of state. 134 HISTORY OF TAXATION. an enormous army to assist him in his struggle against France and the Empress, defend Hanover, and secure to us, by victory in Europe, our possessions or acquisitions in North America. In this policy he was supported by the House : — No more they miake a fiddle-faddle About a Hessian horse or saddle. No more of continental measures ; No more of wasting British treasures. Ten millions, and a vote of credit, 'Tis right : he Can't be wrong who did it. 1757. In 1757 alderman Beckford, father of William Beckford of Fonthill celebrity, and one of the city ' patriots,' had proposed new taxes on tea and salt. But these were not accepted, and the new taxes for the year fell upon wine Ucenses, deeds and newspapers and advertisements. New licenses were required for, the retail of wine, costing from 21. to 61. The duty on deeds was raised, by an additional Is., to 2s. Qd. The increase in the trade in newspapers, consequent on demand for news of the war, was considered to justify an additional halfpenny stamp upon half sheets and whole sheets ; and the duty on advertisements in newspapers was doubled and extended to advertise- ments in periodicals and almanacs.^ 1758. In the next year there was an increase in the house and window tax, and a new tax upon income from offices. Under the Land Tax Act, offices were already charged at 4s. in the pound ; the ' new duty was at the rate of Is. for aU offices with a salary > 30 Geo. II. c. 19. NEW TAX ON OFFICES. 135 exceeding 100^. except naval and military offices.^ It included, therefore, the judges ; but this diminution in their emoluments was more than recouped to them in the next year, when, notwithstanding some opposition, a motion in the house of commons for an in- crease in their salaries was carried by a large majority .of votes ; so that the book of Judges was saved, as Charles Townshend put it, by the book of Numbers. Under the influence of that vigour and energy which Pitt infused into our administration,^ the nation soon emerged from the gulf of despondency into which they had been plunged by the events that occurred at the commencement of the war. In America, Wolfe's victory over Montcalm was followed by the capitulation of Quebec and the conquest of Canada. In India, CUve's victory of Plassey, and Coote's victory of Wandewash,^ entirely changed the aspect of affairs in that part of the world, and laid the foundation of a British empire in the East, in lieu of the Prench empire contemplated by Dupleix. In Europe, though in 1759 the fortunes of Frederick seemed at the lowest ebb, Ferdinand of Brunswick, with an army composed mainly of British soldiers, gained a decisive victory over the French forces under de Broglie at Minden. And, on the seas, our sailors, victorious in every encounter with the enemy, gained off Quiberon, at the mouth of the Vilaine, under admiral Hawke, in the fight the French term ' Housfis and windows and offices by 31 Geo. II. c. 22. * No man, said colonel Barr6, ever, after a conference with him, left His presence without an inspiration of courage. ' " June, 1757, and December 1759. \ 136 HISTORY OF TAXATION. 'La Journee de m. de Conflans,' a victory over the enemy in which culminated the glories of the Great Year, as Horace Walpole dates his letters — the year in which a new victory was to be expected in the jnorning with the rolls for breakfast. 1759. Events such as these leave their traces on the exchequer roll. Our expenditure was enormous. !For the purpose of meeting the interest of the loans • -necessary for the war, Legge attempted to introduce a tax on shops, urging that the trading community, who were benefited by the war, should share the expense it occasioned. The proposed tax was to be at the same rate on all shops, without reference to the amount of business carried on. It was, therefore, open to the objection that it would crush out of existence the smaller traders, and create an army of monopohsts who could certainly charge on the con- sumer double the amount they paid in tax ; and eventually he was persuaded to abandon it. Failing to carry the tax on shops, he proposed to increase the duty on sugar. But this was opposed by Beckford. His principal fortune lay in Jamaica, and therefore ' a tax on sugar touched his vitals.' ^ At first, with fifty other merchants, he apphed to Legge, requesting him to abstain from imposing the tax. Proving unsuccessful in that quarter, he appealed to Pitt, and had influence sufficient to persuade him to take up the case. Newcastle and Legge- were re- quired to alter their plan, and the proposed tax was shifted on to dry goods in general ; that is to say, in ^ Hor. Waipole, Mem. Geo. II., iii. 177. THE SEVEN YEARS' WAR— 'SUGAR, MR. SPEAKER.' 137 lieu of a special tax on sugar, a subsidy was substi- tuted, of Is. in th-e £, or 5 per cent., on tobacco, linen, sugar and other grocery, except currants, East India goods, except coffee and raw silks, brandy and other spirits, except colonial rum, and paper. This fifth subsidy raised the duty to 25 per cent, upon the value of most sorts of goods.^ As Pitt did not often, interfere in the details of taxation, his speech on this occasion is valuable, as a record of the views he entertained on that subject. It was the speech he commenced with the memorable ' Sugar, Mr. Speaker,' silencing the derisive cheers this opening word occasioned, by the repetition of the word with an energy of diction worthy of the ' ter- rible cornet of horse.' He is stated to have praised the principle of Walpole's Excise Bill, although at the time he had opposed the measure. He had changed, he acknowledged, his opinion on the subject, and was in favour of excises, as the best sort of taxes in the circumstances of that day ; and expressed an opinion in favour of an addition to the duty on hops, which would touch private brewing as well as beer brewed for sale. The House was not with him on that occa- sion, but the influence of his views is evident in the fiscal arrangements for 1760 and 1761. In the first of these years, on the opening of the izeo. ways and means, Legge proposed a considerable in- crease in the taxation of beer ; and though he was ' An inland additional duty was imposed upon all coffee sold and chocolate made or sold in Great Britain, viz., for coffee is. and for choco- late 9rf.the lb. 32 Geo. II. c. 10. 138 HISTORY OF TAXATION. opposed by George Grenville, who now for the first time openly showed his disagreement with Pitt, even- tually the malt duty was increased by 3d. the bushel/ for England, with an increase of l^d. for Scotland. 1761. In the next, no less than 3s. the barrel was added to "the tax on the brewery — for strong beer, raising the price per pot by Id. This enormous increase in the taxation of beer formed the principal addition to our taxes in the Seven Years' War. An increase for spirits, in 1762, had in view, not so much an addition to the revenue, as the prevention of the excessive consumption of spirits, by continuing the high price of such hquors ; while a license tax, imposed in 1758 on persons selHng gold and silver plate, was in commutation of Sunderland's tax on silver plate, which was repealed as a failure. The only other addition of importance was an increase in the house and window tax, effected in 1761.^ The pohtical education of George HI., who suc- ceeded his grandfather in the autumn of 1760, had been grounded upon the principles expressed by Bolingbroke in ' The Patriot King ' ; and, with a view to the abolition of the oligarchic system of govern- ment established by the Eevolution families, the earl of Bute, the friend of his mother, the Princess of Wales, and the practical director of his education, was, in the spring of the next year, appointed secre- tary of state in the place of lord Holdernesse, who resigned the post for that purpose. Legge, refusing to resign, was dismissed ; and in October, Pitt, unable ' Namely, from 6d. and a fraction to Q^d, '^ By 2 Geo. III. c. 8, but not to come into force until April 5, 1762. 'THE FIRST-FRUITS OF THE PEACE.' 139 .to carry in the cabinet his proposal for a declaration of war against Spain, in consequence of the reve- lation of the Bourbon family compact, resigned office, with Temple. The king's party improved their posi- tion day by day, and in May, 1762, the long period of nearly half a century of whig ascendancy — the reign of the Revolution families — came to a close with the resignation of office by Newcastle. Bute, with little or no experience of business generally, and in absolute ignorance of the details of the revenue, was appointed first lord of the treasury, Greorge Grenville succeeding him as secretary of state ;^ and sir Francis Dashwood, notorious for his eccentric revelries at Medmenham, a man of ability in some particulars, but to whom, in the words of a wit of the day, ' a sum of five figures was an impenetrable secret,' became chancellor of the exchequer. The expenses consequent on the Seven Years' War did not end with the peace of Paris, signed in Septem- ber, soon after the accession of Bute to office, and, as ' the first-fruits of the peace ' — so the opposition put it — Dashwood was obliged, in 1763, not only to continue the land tax at is. but also to propose additional taxes. Pitt and Legge had been able to impose their nos. additional taxes upon beer without any serious oppo- sition ; and on opening the Budget, as the annual statement of the plan of supplies and means by the chancellor of the exchequer was now termed,^ ' The earl of Egremont being the other secretary. " Hot. Walpole, Mem. Geo. III. i. 260. Budget is from the French bbugette, little bag, or pedlar's pack, in which the chancellor of the ex- chequer kept his papers. The French adopted the term about 1814. 140 HISTORY OF TAXATION. Dashwood proposed an addition for wine and vinegar, of the same amount as that made by Pelham in 1745, viz., 81. the tun on French, and 41. on other wine and vinegar, and a tax on the making of cider and perry. The cider To'the former of these there was no serious objec- tion, but the proposed tax on cider and perry was as unpopular a tax as any that could be devised. Cider and perry were at this date, as they have ever been in this country, local rather than national drinks. They formed the favourite, in many parts the exclusive, beverages of the inhabitants of the shires of Worcester, Gloucester, Hereford, Devon and Somerset, and part of Cornwall ; but were not articles of general consumption, beyond the limits of the ex- panse of country celebrated, half a century before this, by John Philips, the poet of cider, as ' the Cider-land.' In the Cider-land it was customary to make at home the cider and perry they consumed, and, as the ordi- nary tax on these liquors touched only liquor sold, the consumers had hitherto enjoyed immunity from taxation — ' their fruits without excise,' as Churchill states it. Tiese local drinks Dashwood now proposed to tax, and in order to secure the tax, to give to the excise officers extensive powers of inspection, enfor- cing a tax, partial and unfair in its incidence, by means of domiciliary visits that violated the most cherished feelings of hberty. The Cider Bill was strongly opposed in the Commons and in the Lords. In the Commons, Pitt attacked the measure as a dangerous precedent of admitting the officers of excise into private houses: DASH WOOD'S CIDER TAX. 141 'Every man's house is his castle,' he urged; and other members joined in opposing 'it, but eventually the Bill, supported by George Grenville and North, passed through the House. In the Lords, the prin- cipal opponent of the Bill was Hardwicke, who not only regarded it as an extension and application of the excise laws 'to improper subjects, but also urged that the tax was in effect an additional land tax on the cider counties ; and though Bute, who rarely spoke in parliament, supported the Bill, so strong was the feeling against the tax, that, on the proposal to commit the BUI, a division was taken in the house of lords, for the first time, upon a Money Bill.^ The passing of the Cider Act caused an agitation in the country similar to that which had occurred on the introduction, in 1733, of Walpole's Excise Bill. 'It had taken thirty years to open the eyes of mankind to the benefits of excise,' exclaims Horace Walpole, ' the only, at least the best, method of im- proving the revenue without imposing new burdens ; "but the unpopularity of this administration caused the old prejudices against excises to be industriously revived.' The disturbances caused by the Act drove Bute from office, or were assigned by him as the reason for his resignation, April 8, 1763 ; and in the Caricatures of the day of ' the Eoasted Exciseman, or Jack Boot's Exit,' the enraged mob are represented burning the effigy of a Scotchman suspended to a • Bute waa not an effective speaker, and on this occasion his speech was made in words of such solemn, slow, and measured monotony that Charles Townshend said it sounded like minute guns.— Par. Hist., xv. 1316. 142 HISTORY OF TAXATION. gallows, and a great worn boot lies in a fire into whicli a man is throwing an excised cider-barrel as fuel. In the debate on the Cider Bill, a point had been pressed by Grenville with almost petulant pertinacity. He had taken, in common with many other able men of the time, a very gloomy view of our fiscal position and the difficulties in opening new sources of revenue in this country, and now, speaking in answer to Pitt, he urged that the cider tax was unavoidable, because the government did not know where they could lay another tax to produce the money required : — ' The honourable member complains of the tax ; why does he not tell us where we can go, if not to this source ? Will the honourable member tell me where ? ' Pitt hummed the commencement of an old song, ' Gentle shepherd, tell me where.' This repartee upset Gren^ ville, took the fancy of the House, and caused the minister to be named ' the Gentle Shepherd.' ' There is use in recording the anecdote,' wrote Horace. Walpole many years afterwards ; ' the appellation of " the Gentle Shepherd " long stuck by Grenville ; he is mentioned by it in many of the writings on the Stamp Act, and in other pamphlets and pohtical prints of the day.' In short, the expression passed into a proverb : ' Do not put the " Gentle Shepherd " upon me for all these Wheres," writes Chesterfield, five years after this. There may be use in repeating the anecdote here, if only to serve to mark the point in the history of taxation in this country at which we were supposed to have arrived at the end of all ' GENTLE SHEPHERD, TELL ME WHERE.' 143 possible taxation at home, or, at any rate, so near the end that it was considered necessary to send the tax-gatherer to the colonies. That was where 'the Gentle Shepherd ' told us to go, and how he directed us thither and the result form the subject of the next chapter. 144 HISTORY OF TAXATION, CHAPTEE VI. THE TAXATION OF AMERICA. The Grenville and the Grenville-Bedford administrations. GrenviUe's rigorous enforcement of the Navigation Act. He determines to tax the colonies in America. His plan. The port duties imposed in 1764. The Stamp Act of 1765. The Rockingham administration. Re- peal of the Cider Act and the Stamp Act for America. Chatham's Grafton administration. The mosaic ministry. Loss of the land tax resolution. Townshend'a port duties for America. Death of Townshend. North chancellor of the exchequer. Resignation of Grafton. North prime minister and chancellor of the exchequer, 1763. On the resignation of Bute, by means of Ms in- fluence with the king, George Grenville was advanced to the leadership of the administration, holding with the post of first lord of the treasury, that of chancellor of the exchequer, from which the incompetent Dash- wood had been removed to the office of the great ward- robe, with a peerage as lord Le Despenser, The two secretaries of state, GrenviUe's brother-in-law, Egre- mont,'^ and Hahfax, formed with him the triumvirate, as they were termed, which, after a duration of three months, was broken up by the death of Egremont, an event that weakened the administration to such a 1764. degree that the king, on the recommendation of Bute, apphed to Pitt in an endeavour to induce him again > G. Grenville married Elizabeth, daughter of Sir W. Wyndham, and sister of the earls of Egremont and Thomond (Wyndham OBrien). GRENVILLE IN POWER. 145 to take office. Unable to see his way to the formation of an administration likely to last, without the assist- ance of Temple and the duke of Devonshire and a considerable admixture of the great whig family element, Pitt framed his list for a proposed adminis- tration too much in that view to suit the king, and the negotiation with him ended in failure. And almost immediately after this, the duke of Bedford, who had not, or was led to believe that he had not, been included in Pitt's proposed arrangements, joined Grenville with his whole party.' As thus strength- ened and re-formed the administration was known as the Grenville-Bedford administration. The character of Grenville has been drawn, and not unkindly, by a master hand. A legal education, which quickens and invigorates the understanding but is not apt to open and liberaHse the mind exactly in the same proportion, and a long course of official training, which gives knowledge that is valuable but fixes the mind upon form and precedent ; these, in combination, had led him to conceive that the flour- ishing trade of this country was greatly owing to law and institution and not quite so much to hberty, and to believe regulation to be commerce, and taxes to be revenue. Among regulations, that which stood first was his idol — the Act of Navigation. Already, when first lord of the admiralty in Bute's administration, impressed with the necessity of improving our revenue ' TaMng: the post of president of the council, so long held by Gran- ville, while the earl of Sandwich took the post of secretary of state, in succession to Egremont. Earl Granville died in January 1763. VOL. II. L 146 HISTOEY OF TAXATION. from duties on merchandise at the ports, he had pre- pared and presented to the lords of the treasury a strong memorial complaining of the growth of illicit commerce in America ; and now, in his anxiety to repress evasions of the navigation laws, he so much tightened the bonds of the Act of Navigation that the colonists found, under the construction and execu- tion so used, the Act no longer tying, but actually strangling them.^ But the new enumerations of commodities, and regulations in restraint of the trade of our colo- nies with those of France and Spain, introduced by Grenville, formed only preliminaries to an attempt to obtain revenue from America by means of taxation. Hitherto no taxes had been imposed in our colo- nies by the mother-country for the purpose of revenue. The duties imposed at the request of the colonies termed the plantation dues or duties, amounted merely to a regulation of trade. An attempt was indeed made to reckon the post-office as a precedent. ' Is not the post-office, which they have long received, a tax as well as a regulation ? ' was asked of Dr. Benjamin Franklin, in evidence before the committee on the Stamp Act, in 1765. But Franklin, who was deputy postmaster-general of North America, replied, ' No ; the money paid for the postage of a letter is not of the nature of a tax, it is merely a quantum meruit for a service done ; no person is compellable to pay the money if he does not choose to receive the service. A man may still, as before the Act, send his letter ' Burke, Speech on American Taxation, Works, iii, 197-9. VIEWS OF THE COLONISTS AS TO TAXATION. 147 by a servant, or a special messenger, or a friend, if he thinks it cheaper or safer.' ^ Suggestions for taxation had been made and plans had even been proposed, but up to this point in their history the colonies in America remained untaxed by Great Britain. The opinion on the subject of taxation prevalent in many of the colonies was as follows : — Founded by adventurers who possessed their lands under a title springing from the crown, originally royal colonies, they would have been not unwilling to concede the existence, in the crown, of a right to impose duties on merchandise at the ports, the right of imposts or im- positions ; but after the Eevolution, when the house of commons became the supreme or sole authority in all matters of taxation including impositions, their position was altered. As, on the one hand, no whig, like Grenville, would for a moment allow that the colonies could legally grant a revenue to the crown, so, on the other hand, the colonies had reason for refusing to admit the existence, in a representative assembly like the house of commons, of any power to tax those who were not present by their represen- tatives. The acknowledged advantages of the con- nection with the mother-country, and the goodwill towards her that prevailed, would induce them to consent to imposts that could be regarded as in regu- lation of trade ; but that parliament had a right to impose taxes, as opposed to duties on merchandise at the ports, they denied. ' I never heard,' said Benja- min Franklin, in his evidence, ' of any objection to the • Evidence of Dr. Benjamin Franklm, Par. Hist. xvi. 148. L 2 148 HISTORY OF TAXATION, right of laying duties to regulate commerce ; but a right to lay internal taxes was never supposed to be in parliament, as we are not represented there.' Such was the opinion on this subject in many of the colonies. During the Seven Years' "War, the resources of the colonies had developed with a rapidity hitherto unknown in the history of nations, and the assemblies of several of the states had been liberal in grants towards the expenses of the war. Their prosperity proved, it was considered, their ability to contri- bute to the imperial exchequer. Their dependence upon the mother-country and the advantages of the connection would secure, it was believed, the even- tual payment of taxes imposed by parliament for imperial purposes ; at any rate, under moderate pres- sure they would pay. Little attention appears to have been paid to the plea advanced by several of the colonies, that for the purpose of paying off debt contracted during the war they were at this time burdened with heavy additional taxes. Nor did the alteration in the relative position of the mother- country and the colonies consequent upon the con- quest of Canada receive the consideration it deserved. That conquest had been hailed with acclamation by persons of every class in England ; but, by removing from our colonies all fear of the house of Bourbon, it had left the mother-country, as de Choiseul had pointed out, the sole object of their jealousy. And now Grenville, impressed with the magnitude of our national debt and the weight of our taxes, and GRENVILLE'S STAMP ACT FOR AMERICA. 149 harassed by the difficulty in discovering new sources of revenue, in an evil hour determined to send the tax-gatherer to our colonies in America. His scheme consisted of two parts : a proposition for certain duties at the ports, such as we term cus- toms ; and an internal tax, by means of duties similar to those in this country termed stamp duties. The customs part of the scheme, consisting of duties on imported wine, coffee, sugar, indigo, silks, calicoes, linen, cambric and lawn, and coffee and pimento when exported to other places than Great Britain, passed into law in the same year. These the colonists were willing to allow as a regulation of commerce, and to this part of the scheme they made no serious opposition. But the terms of the recital to the taxing Ac engaged their serious attention. It ran that — ' it was expedient that new provisions and regulations should be established for improving the revenue of the king- dom ; that it was just and necessary that a revenue should be raised in his majesty's dominions in America for defraying the expenses of defending, protecting, and securing the same ; and that parliament was desirous to make some provision in the present session of parliament towards raising the said revenue in America.' And these expressions were considered, by the colonists, to imply an indefinite extension of imperial taxes in America, of which this Act imposing duties on merchandise at the ports was but a first instalment, and accordingly seemed to open out a vista of future taxation without an end, 150 HISTOKY OF TAXATION. The other part of Grenville's scheme, that relat- ing to stamp duties, was not carried out in 1764. A resolution for imposing the tax was introduced into the house of commons, and passed through com- mittee, but was subsequently withdrawn, on the understanding that the subject should be re-intro- duced in the following year. A Stamp Act for America was no new project. As far back as the times of Walpole a scheme for a stamp tax had been suggested to him by sir W. Keith, ex- deputy governor of Virginia; but that cautious and practical minister, who had recently been compelled to withdraw his Excise BUI, declined to entertain the project : ' I have old England set against me,' he said, ' and do you think I will have new England likewise ? ' The scheme introduced by Grenville appears to have been planned for Bute, when in office, by Jenkinson, his private secretary,^ who now, as secretary to the treasury, brought it before Grenville. Grenville warmly adopted the scheme, and early in the following session brought in a Bill for imposing stamp duties in America, which passed into law without encountering any serious opposition in either House. There was only one division on the subject during its passage though the Commons, the minority on that occasion numbering about 40, and no division in the Lords : ' There scarcely ever was less opposition to a Bill of consequence.' ^ ' Jeuliinson probably derived tbe suggestion from Henry McCulloh. Grenville Papers, ii. 374. ' Burke, Speeob on American taxation, Works, iii. 210. OPPOSITION TO STAMP ACT, 151 The Act imposed duties on a great variety of deeds, instruments and law proceedings, and also taxes which, nominally stamp duties, in imitation of the Enghsh tax list, in fact touched articles of every- day consumption, such as newspapers and pamphlets, and the advertisements contained therein. Cards and dice were taxed by the Act ; and an annual license tax was imposed upon the retailing of spirituous liquors and wines, which differed little, in substance, from the well-known taxes on trades and businesses then in forcein several of the colonies. The Act was to come into operation from the 1st day of November, 1765. Meanwhile, in America, the feehngs of indefinite alarm had greatly increased. Every possible argu- ment against the imposition of internal taxes in a country not represented in parliament had been col- lected and marshalled, and uniformity of action for protest, or, if necessary, for resistance, had been secured by intercommunications which had passed between the various states. In these circumstances, as might be expected, the news of the passing of the Stamp Act was received with unbounded indignation, and when the Act itself arrived, and from a perusal of its provisions appeared calculated to be attended with consequences ruinous to the trade and prosperity of the colonists, ' the conflagration blazed out at once in an universal disobedience and open resistance to the Act.' ^ ' Burke, Observations on a late Publication, The Present State of the Nation, Works, iii. 81. 152 HISTORY OF TAXATION. The peal of remonstrance which sounded across the Atlantic found an echo in this country ; for our merchants represented the eifects of the Act as equally disastrous to them, inasmuch as the Americans, then indebted to them in about four millions, refused to pay their debts or to renew tbeir orders while the Stamp Act continued in force. Moreover, the course of justice was suspended for want of stamped paper, so that their debts could not be recovered. 1765. The aspect of affairs in America, and the nume- rous petitions from thence to parliament, induced the house of commons to appoint a committee to inquire into the operation of the Stamp Act ; but before the committee had reported, Grenville was July, dismissed from office, having proved too ambitious and too self-willed to suit the views of the advisers of the king.^ The king now had recourse, through the duke of Cumberland, to Pitt and Temple, but, in consequence of the refusal of the latter to form part of an admin- istration which would not include his brother and be the Grenville family administration he desired, the negotiations resulted in failure. In this position of difficulty the duke entered into negotiations with the opposition, and eventually, under his mediation, an July 10. administration was formed, under the marquis of Rockingham, the leader of the whig party as lately re-formed upon a basis resembling that of the liberals ' To whom, moreover, he had rendered himself obnoxious by his action in excluding the name of the princess dowager from the Regency Bill, and his harsh proceedings in ejecting Stuart Mackenzie, Bute's brother, from the po.st of privy seal for Scotland. CIDER AND STAMP ACTS REPEALED. 153 of the present day,^ His administration included the duke of Grafton, and general Seymour Conway,"'^ as secretaries of state, Conway leading in the house of commons ; William Dowdeswell, a country gentle- man, originally a tory, as chancellor of the exchequer, and, in other posts, the veteran Newcastle, Charles Townshend,^ and lord John Cavendish. Burke, it may be unnecessary to add, acted as private secretary to Eockingham. The Bedford faction remained in opposition, with Pitt and the Grenvilles, and the tories, a name which, after having been in abeyance, had been revived in the latter years of George II., and was now applied with a modified meaning to 'Bute's men,' as they were sometimes termed, some of whom were old tories, or, indeed, generally to aU the supporters of court influence, ' the king's men.' The Eockingham administration repealed Dash- wood's cider tax, which, in addition to its unpopu- larity, had in its yield disappointed the expectations of its author, and also, notwithstanding the deter- mined opposition of Grenville and the Bedford party, the Stamp Act for America. The probable yield had been calculated at 60,000?., or, according to some, 100,000Z. a year. ' Charles Wentworth, marquis of Eockingham, was descended from a sister of the famous earl of Strafford and inheritor of his vast estates. The young duke of Portland, lord John Cavendish, the duke of Rich- mond, and sir George Savile, a collateral descendant of the marquis of Halifax, to whose estates his father had succeeded, were conspicuous members of the party. ' Brother of the earl of Hertford and step-father of the duchess of Richmond. ^ Grandson of Charles, viscount Townshend, Walpole's brother-in-law 154 HISTORY OF TAXATION. The actual yield for the six months the tax was iri force was 4,000/., which, trickling into the English treasury by driblets— 3,000/. in 1767, and 1,000Z. in 1768 — proved insufficient to pay the expenses attend- ing the execution of the A.ct, which amounted to 6*857/. Such was the result of what Burke termed the process of ' shearing the wolf.' Chesterfield prophesied for the Eockingham ministry no long life, without the assistance of Pitt : ' Here is a new pohtical arch built ; but of materials of so different a nature, and without a keystone, that it does not, in my opinion, indicate either strength or duration. It will certainly require repairs and a key- stone next winter, and the keystone wiU and must necessarily be mr. Pitt.' ^ His popularity remained unchanged. The people generally attributed the repeal of the Stamp Act to the violent attack he made on the Act in a speech in which he urged that England had no right to impose internal taxes in America. And if Conway, as leader of the house of commons, was huzzahed on passing through the court of requests after the repeal, ' it went further for Pitt,' whom the mob accompanied homewith 'lo Pitts ! ' as Horace Walpole terms their acclamations.^ Without the support of Pitt, Eockingham proved unequal to the task of carrying on the government, and in July, when the king again sent for Pitt, he retired, with Dowdeswell, lord John Cavendish and others of his friends. ' Chesterfield to his son. Letter 354, July 15, 1766. ' Walpole, Letters, iv. 482. RESULT OF 'SHEAKING THE WOLF.' 155 Pitt now formed an administration without Temple, who still insisted on a family arrangement, to include his brother, and utterly broke with him on learning his intention to provide for some of Bute's friends. ' You may strike up your sackbut, psaltery, and dulcimer,' writes Horace Walpole to George Montagu, ' for mr. Pitt comes in, and lord Temple does not. Can I send you a more welcome affirmative or nega- tive ? ' -^ In this administration, Pitt, merging his great name in the title of Chatham — ' becoming certainly earl of Chatham and no longer mr. Pitt in any respect whatever'^ — took the post of privy seal ; Grafton was retained as the figure-head first lord of the treasury; Conway continued in office, with the lead in the Commons ; William Petty, second earl of Shelburne, was appointed the other secretary of state, at the early age of 29 ; Charles Townshend was promoted to the post of chancellor of the exchequer ; and lord North, the eldest son of the earl of Guil- ford, with a colleague, succeeded him in the office of paymaster. The Grenvilles remained in opposition ; and the Bedford faction, who always acted together — ' were only to be had in the lump,' it was said — asked too much of Chatham, and therefore were not in- cluded in the ministerial arrangements. The composition of this administration — the May, 1767. famous ' tessellated pavement ' administration of Burke — is of importance from a fiscal point of view. Pormed of ' patriots and courtiers, king's friends and republicans, whigs and tories, treacherous friends » Walpole, Letters, v. 3. '' Chesterfield, Letters, No. 375. 156 HISTORY OF TAXATION. and open enemies,'^ it contained every element of confusion. Business was carried on in the most careless and slovenly way, and occasionally, in the. absence of Chatham in consequence of his frequent attacks of the gout, on principles directly contrary ^ to his. In consequence of the neglect of the minis- ters to make arrangements for an attendance in the house of commons sufficient to secure a majority when the annual vote of the land tax came on for discussion, a preconcerted attack of Grenville, Dowdeswell, and the Eockingham party proved suc- cessful, and, in lieu of a 4s. rate of land tax, only 3s. was granted. This was the first important question lost by the crown since the fall of Walpole, if we except the project for an additional tax on sugar introduced by Pelham, which was defeated by the treachery of Carteret. What was Charles Townshend to do in order to make up for the loss of half a million involved in the reduction of the rate of the land tax ? The ' darhng of the House, he never thought, did, or said anything but with a view to their desires, adapting himself to their disposition and adjusting himself before it as at a looking-glass.'^ To impose a new tax in Eng- land would be of all measures the most unpopular, while it did not escape his notice that a feeling had begun to prevail that the colonies had been let off ' Burka, Speech on American Taxatioo, Works, iii. 213. 'I am apt to think,' Chesterfield had written in June 1767, ' that it will be a moiaio minittry made up de pieces rapportSes from different countries.' Letter 376. ' Speech on American Taxation, "Works, iii. 216. TOWNSHEND'S port duties for AMERICA. 157 easily in the matter of the Stamp Act. No new Stamp Act could be passed ; but might not some additional revenue be derived from further duties on merchan- dise at the ports similar to those imposed by Grenville, in 1764, which had not met with any serious resist- ance ? Accordingly, Townshend proposed to a wilhng House the imposition of additional port duties in the . colonies in America. With this Import Duties Act for America, we arrive at the fringe of the episode of the war of American Independence, which forms the subject of the next chapter. The principal figure in the picture to be presented will be that of lord North, whose reign at the treasury, beginning in 1770, lasted until 1782. Before proceeding, it will be well to devote a page to a consideration of the state of parties and the circumstances in which he arrived at power and the ' king's party,' under him, became supreme. The first prints of the Act had only just reached the colonies, when the brilliant Charles Townshend died, of a putrid fever, at the early age of forty-four. sept. The chancellorship of the exchequer was now ofiered to North. By excellent temper, unwearied industry, business habits and general abihty, he had acquired a position which entitled him to the ojffer ; and though at first he declined the post, from distrust of his ability to meet George Grenville in disputes on finan- cial questions, ultimately he was induced to accept it. Not long after this, the Bedford faction, weary of their long exclusion from oflace, entered into negotia- tions with Grafton. Conway, to whom they objected, 158 HISTOEY OF TAXATION. as not sufficiently powerful to lead in the Commons, never had any great desire for office, and was anxious to return to his party, the Eockinghams. An arrange- ment was eventually made which enabled him to retire without loss of dignity, and placed two of the 1768. Bedford party in office. Before the end of the year Chatham, whose state of health continued to render him unfit for business, resigned office. His resigna- tion was soon followed by that of his friend and pro- teg^ Shelburne, between whom and the Bedford party no cordial agreement ever existed ; and the Grafton administration survived it a year and two months.^ On the resignation of Grafton, in January, 1770, North, appointed by the king first lord of the treasury, and holding also, according to precedent, the post of chancellor of the exchequer, began his administration. His position was, before long, secured by events which practically annihilated opposition. The opposition consisted mainly of the Wilkites, or city 'patriots,' Chatham and the GrenviUes, and the Eockingham whigs. In June, the strength of the city 'patriots' was shaken, by the death of Beckford, to such a degree that it seemed as if he, and not Wilkes, had been the firebrand of politics, for the flame went out entirely after his death.^ In the autumn, the link of connection between Chatham's ^ Grafton, never strongly attached to office, and ever, when difficul- ties arose, on the point of resignation, was completely upset when the post of lord chancellor in his administration, after the resignation of Camden and the unfortunate termination of Charles Yorke's ten days' tenure of office, literally ' went hegging.' The old duke of Newcastle had died in Novemher 1768. ' Walpole, Letters, v. 262. LORD NORTH IN POWER, 159 party and the rest of the opposition was severed by the death of the marquis of Granby. The death of George Grenville, in November, was followed early in 1771 by the retirement into the country of Temple, 1771. in consequence of a quarrel with his brother in-law. And when, soon afterwards, Shelburne, on the loss of his wife,'' left England for a time, Chatham, like Wid- drington in ' Chevy Chase,' was left almost alone to fight it out upon his stumps.^ In June, the earl of Suffolk, one of the Grenville party, became secretary of state, and the duke of Grafton joined the admin- istration.^ Eockingham and his party, wearied by continual defeats, now gave up active opposition, and even Junius, despairing of the cause in which he had engaged, considered it would be insanity any longer to persist in a regular attack. Thus the ' king's men,' as opposed to the aristocratic famihes, were at length supreme, after a contest of ten years. ' A daughter of earl Granville. ' "Walpole, Letters, v. 279. ' The duke of Bedford died, Jan. 14. 160 HISTOKY OF TAXATION. CHAPTER VII. THE WAR OF AMERICAN INDEPENDENCE. 1775—1783. PART I. ] . Repeal of TovTnshend's import duties in America, except tlie duty on tea. Destruction of the tea ships in Boston harbour. Reyocation of the charter of Massachusetts. Commencement of the war. Our fiscal position in 1775. Cost of the war. North's first taxes for the war. When, in 1766, the Eockingham administration re- pealed Granville's Stamp Act for America, they passed a declaratory Act, which asserted the right and au- thority of the parliament of Great Britain to make laws and statutes of sufficient force and validity to bind the colonies and people of America, subjects of the crown of Great Britain, in all cases whatsoever.-^ But this broad reservation or declaration of right did iiot affect the question of taxation from the point of view of the colonists, who continued to deny the exist- ence of any right in parliament to impose internal taxes in the colonies ; while the intimation of future taxation it seemed to convey, excited in their minds a determination to resist, if possible, any further im- positions, even in the nature of those duties on mer- chandise at the ports which they hitherto would have 1 6 Geo. III. cc. II & 12. THE TEA TAX FOR AMERICA. 161 allowed to pass as regulations of trade. Accordingly, though the articles charged by Townshend's Act of 1767 were principally articles of British manufacture imported from Great Britain into the colonies : glass of different sorts, red and white lead, painters' colours, paper of various sorts, pasteboard, millboard, and scaleboard, and tea,^ and the duties therefore such as the colonists had allowed, when imposed in 1764, to pass as regulations of trade, the answer to this demand for revenue now given by many of the colonies amounted in effect to a refusal to pay ; for they prohibited the importation of any of the articles in question or any other articles of British manufacture. The inconvenience and loss to our manufacturers from this prohibition was the main cause of the repeal of aU the duties on manufactured articles imposed by Townshend's Act, which was effected from December 1, 1770.2 But the duty on tea, though, at only Sd. the lb., it would produce, after deducting the necessary expenses of collection, an insignificant amount of revenue, was retained for political purposes and in order to support the preamble to the Taxing Act, which recited that ' it was expedient to raise a revenue in his majesty's dominions in America,' for the purposes stated in the Act. The question of the retention of the duty was carried in the cabinet by a single vote, the vote that de- cided the question being that of North, who originally had been an opponent of American taxation. He ' 7 Geo. III. c. 46. The expected yield was no more than .30,000/. ' 10 Geo. III. c. 17. VOL. 11. M 162 HISTORY OF TAXATION. acted, indeed, in accordance with the wishes of the king, but it is clear that he was also not a little influ- enced by symptoms of a relaxation of the prohibition of our manufactures in America, which produced an impression in his mind that the advantageous terms on which the colonists obtained their tea from us^ would prevail to prevent any continued resistance on their part to this insignificant duty on an article in great demand, which, except through us, it was difficult for them to procure. He did not sufficiently take into consideration the old Puritan stock from which so many of the colonists had sprung, and the possibihty that in the minds of the descendants of the Pilgrim Fathers there might exist a hatred of tyranny stronger than their desire for tea. The This figment of a tax, this peppercorn rent, lost us tea-sWps, our colonies in America. In December, 1773, an orga- nised party of men, in the disguise of Indians, boarded the tea ships in Boston harbour, threw the tea over- board, and sank the ships in the sea. These violent proceedings provoked the ministry, in vindication of the national honour, to close the port of Boston and revoke or alter the charter of Massachusetts. And the effective reply from America was the declaration of American Independence which, drafted by Jefferson, was ratified by twelve states on July 4, 1776. The expenses of the war of American Independence, including those of the war with Prance and the war with Spain, so as to cover the period from 1775 to ' A drawback of I2d. the lb., the whole duty, was allowed in England on all teas exported to America. OUR FISCAL POSITION IN 1776, 163 1782, form the third step in the increase of our national debt, and consequently the third step in the ascending scale of our revenue from taxation. In 1775, the amount of the national debt of Great Britain was about 126 milhons ; ^ and the principal items of our national expenditure, and the revenue from taxes were as follows ; Interest of debt •Army and navy '' Civil List, &c. Revenue from taxes £ 4,600,000 3,810,000 1,200,000 10,000,000 This, no doubt, is a considerable increase on the six millions and three quarters from taxes in 1755, before the Seven Years' War ; and complaints were heard from some quarters of the intolerable weight of taxation, and representations were made that the nation was crushed under the national debt. A more hopeful and sanguine estimate of our condition and resources was formed by those who pointed to the register of the West Eiding of Yorkshire to prove that our great national industry, the manufacture of cloth, was increasing, as regards both broad and nar- row pieces ; to the development of the manufacture of these goods at Halifax ; and of bays at Eochdale ; and to ' an infinite variety of admirable manufactures growing and extending every year among the spi- rited, inventive, and enterprising traders of Manches- ter.' Facilities of communication had increased in every direction. The improvement in our roads was ' Return Pub- Inc. and Expend., Part II., Appendix No. 12. » Average, 1773-5. Jt 2- 164 HISTORY OF TAXATION. remarkable. Brindley and the duke of Bridgewater had connected the coal-pits at Worsliey with their market at Manchester by means of the great ' naviga- tion ' known as the Bridgewater canal, and had thus started other adventurers to work in the same way. In Scotland, a vast addition to the mass of British trade had been made by the improvement of the country. The commerce of Glasgow, so fam.ous at this date for the ' tobacco, lords,' was enormous. Vast manufactures flourished at Paisley ; and ' iron-works of magnitude even in their cradle had been set up at Carron, which at the same time drew nothing from Shefiield, Birmingham, or Wolverhampton.' Briefly, new sources of industry were opening out, and we had commenced that course of mining and manufac- turing activity which,, with the aid of machinery, was to result in placing the nation first in the production of many of the most useful articles in the world. Agri- culture was improving day by day. And the nation was well able to bear the increased weight of taxa- tion. ' The national beverage was, no doubt, heavily taxed, but with regard to the revenue in the whole, Burke, in 1767, having before him the state of the revenues of many of the principal nations on the con- tinent, had stated that, on comparing them with ours, he was fairly warranted to assert that England was the most lightly taxed of any of the great states of Europe, that, if called upon, he would prove it be- yond possibihty of dispute, and that we had the best constituted and the best managed revenue that ever the world beheld.^ ' Observations on a Late Publication. Works, iii. 47. As regards •WAE OF AMERICAN INDEPENDENCE. 165 The cost of the war was 97,000,000Z.' The loans in the war amounted to 91 millions, but for this we funded capital to a larger amount ; and at the close of the war the national debt had increased to about 230,000,000/. North's first taxes for the war consisted in an in- crease in the rate of the land tax, from 3s. to 4s., to produce an additional half-million. Pelham's tax on private carriages, raised by an additional 1/. for four- wheeled carriages, was extended to stage caeriages, vehicles, which, in consequence of the improvement in our roads, had changed in form from the ' machines ' of former times to more nearly resemble private car- riages, and were used by a richer class of travellers than heretofore. The success of Legge's Is. stamp on ' deeds,' imposed in the Seven Years' War, induced him to repeat the process, and raise the duty to 3s. Qd^ And as the business of newspapers ever thrives in time of war, and newspapers were regarded by North, as they were subsequently by Pitt, as fairly taxable luxuries, he also copied Legge in imposing an addi- tional ^d. upon half-sheets and whole sheets. These additions, and an increase in the minor tax on cards and dice, were calculated to produce 730,000Z. Scotland, ' 1765 was the year more perhaps than any other definite date that can be named, when the first streaks of the Industrial Dawn were breaking into Day. Both in manufactures and in agriculture this was about the birthday of the new life in the West of Scotland.' Duke of Argyll, Hist. Scot. ii. 179. 1 From 1776 to 1785 — war expenditure continued to 1786 — 97,599,496;. 166 HISTORY OF TAXATION. PART II. Origin of the taxes sug-gested by Nortli after 1776. Adam Smith's ' Wealth of Nations.' New taxes on menservants and property sold at auctions. Second addition for ' deeds.' New tax on inhabited houses. Increase for wine. New tax on travelling by post. General rise in the excise and port duties. Additional duties on malt, spirits, wine, and salt in 1780. Annual license for sellers of tea. New tax on receipts for legacies. In 1781, 5 per cent, on the excise. Addi- tional duties on tobacco and sugar. Burke's review of the taxes im- posed by North. New taxes for 1782. On fire insurance, bills of ex- change and notes. Other taxes. Addition for tobacco. Second ad- dition tor salt. Increase in the soap tax. 5 per cent, on the excise and port duties. North resigns. Rockingham's second administra- tion. The Shelbume administration. The Coalition. Additional taxes for 1783. Augmentation of the stamp duties. The duty on bills and notes doubled. New tax on receipts. Malt duty composi- tions abolished. New taxes on quack medicines and waggons and carts. Fox's India Bill. North and Fox resign, Pitt prime minister. The second year of the war of American Indepen- dence forms a date of peculiar interest in the history of taxation in this country. Our chancellors of the exchequer had for years been at their wits' ends for new and productive taxes, and even the long experi- ence of Grenville could find no answer to the ' Gentle Shepherd, tell me where ' of Pitt. The land tax stood already at 4s., the acknowledged maximum rate. The recent disturbances due to the cider tax proved the aversion o^S^he people to the multiplication or in- crease of excises. And though, no doubt, we were lightly taxed as compared with Holland, with France, or with Spain, countries where the taxation was indeed overwhelming, heavy duties were already imposed upon many of the most important "articles of consump- ADAM SMITH. THE 'WEALTH OF NATIONS.' 167 tion — ^beer, wine, tea, sugar, salt, and tobacco — it is needless to run down the whole list. Almost all our most important manufactures were taxed. Despair of obtaining additional revenue at home had driven us to the unfortunate attempt to obtain revenue from our colonies in America. How, in these circum- stances, was North, whose well-known abilities were not of the inventive order, and whose acquaintance with the subject of taxation was not more intimate than that of his predecessors in ofl&ce, able to find the taxes necessary for this long and costly war ? An answer may be supplied by reference to the The * Wealth title-page of the first edition of Adam Smith's work of Na- on ' the causes of the increase in the wealth of na- tions,' subsequently famous throughout the world as ' The Wealth of Nations.' ^ In this work, first pub- lished in 1776, Adam Smith passed under review a great variety of taxes imposed in diiferent countries at different times, and more particularly the taxes of Holland, a country which has been termed ' la terre classique de la fiscaht^.' ^ With regard to Great Britain, he expressed an opinion that the revenue might be considerably augmented without increasing the burden of the greater part of the people, simply by a distribution of the weight of taxation so as to effect a more equal pressure upon the whole ; and he pointed out that this might be done by means of a more equal land tax ; a more equal tax on inhabited ' This work, founded on the doctrine of the Physiocrates, and ab- sorbing in itself almost all that was valuable in their teaching, the author had intended to dedicate to Quesnay, but he died, Dec. 15, 1774. * De Parieu, Traits des Impots. 168 HISTORY OF TAXATION. houses, calculated by reference to the rent or annual value of the house; and certain alterations in the existing system of customs and excise. As regards the customs. Foreign trade should be encouraged by a revision of the tariff. The necessaries of life — foreign corn, live cattle and salt provisions, and the raw materials for manufactures, should be admitted free, which would reduce their price in the home market, and consequently the price of labour, but without reducing in any respect its real recompense. The duties on all foreign manu- factures should be moderate, in lieu of the existing duties at rates practically prohibitory, which had been imposed for the purpose of securing monopohes. And the tariff might, with advantage to trade, and, in the opinion of many, without any diminution of revenue, be hmited to a few articles of most general use and consumption, such as : wine and brandies ; the productions of America and the West Indies — sugar, rum, tobacco, and cocoa-nuts ; some produc- tions of the East Indies and the East — tea, coffee, chinaware, spiceries of aU kinds, and several sorts of piece goods. A system of administration similar to that of the excise, so far as the different duties would admit, would, in his opinion, have the effect of in- creasing the difficulty of smugghng ; and a ware- house system might be introduced similar to the private warehouses and crown warehouses then in existence for rum, more particularly were the tariff limited to only a few sorts of commodities. As regards the excise. The duties on the four THE 'WEALTH OF NATIONS.' 169 great commodities he ranked as necessaries of life, viz., salt, leather, a necessary for shoes in this coun- try, soap, and candles, should, if it were necessary to retain such taxes, be considerably reduced ; and also the duties on coal. The great unfairness in the taxation of beer should be removed ; and in lieu of the different taxes to which, directly and indirectly, the national beverage was subject, he advocated an increase in the malt duty, to 18s. the quarter. Stamp duties were not a favourite kind of tax with Adam Smith, who was strongly in favour of proportion in taxation. He noticed that in Holland, where taxes on property transferred were propor- tioned to the value of the property, even as thus imposed they were unequal, in consequence of the difference in the frequency of the transfer of different . properties ; while as imposed in England, viz., when not proportioned to value, they were still more un- equal. Such were, briefly stated, the principal amend- 1777. ments in our fiscal system advocated by Adam Smith. To this work North had recourse for suggestions in taxation in 1777, when he was compelled to find an additional revenue of nearly a quarter of a million. He at once imposed two new taxes in imitation of Dutch taxes to which Adam Smith had directed attention : 1. An annual tax on estabhshments con- sisting of MEN SERVANTS, which would touch only the more opulent class in respect of subjects acknow- ledged to bear a direct relation to the luxuries of life, the amount to be paid depending upon the number of 170 HISTOKY OF TAXATION. the servants kept. Eesembling in character Pelham's tax for carriages, it now ranged as the second in the Hst of taxes on estabhshments ; for the other tax of the kind, Lyttelton's tax on the possession of silver plate, having proved ' very vexatious and troublesome in the levy and collection,' and of small advantage to the public, was repealed as a failure.^ 2. A tax on PEOPEBTY SOLD BY AUCTION, the rates being, for land and houses, Sd- in the pound on the value ; and for furniture, fixtures, plate, jewels, goods and chattels, 6d.^ The estimated produce of these taxes being 105,000Z. and 37,000Z. per annum. A second addition, of Is. Qd., raised the duty on deeds to 5s. ; and from an alteration of the duties on glass 45,000^. was expected. 1778. In 1778 taxes were imposed to yield 336,000^. The most important fulfilled the desire of Adam Smith for a more equal house tax. Imposed in re- spect of INHABITED HOUSES, as had been suggested in ' The Wealth of Nations,' not by reference to the hearths or the windows in the house, but upon the only true basis for such a tax, that of a rate, i.e. by reference to the annual value of the house,^ it was estimated to yield 264,000/. The war precluded any idea of a repeal of the window tax ; and the two taxes continued to be assessed and levied together for the next fifty-six years. ' 17 Geo. III. c, 39. The yield was only 18,000i » 17 Geo. III. c. 50. ' If 6/. and under 50^, per annum, 6d., and' for all houses above that value, la. in the pound. 18 Geo. III. c, 26. NOETH'S NEW TAX ON POSTING. 171 It was hoped that the remainder of the revenue required would be obtained from the wine-cask. In the war of the Austrian Succession, Pelham had im- posed an additional tunnage, of 81. on French, and 4^. on other wine. Another addition of the same amount had been made in 1763, by Dashwood. North now followed suit and imposed a third addition of the same amount. The new tax of the next and fourth year of the war, 1779, was certainly not copied from any in the i779. list of Holland, a country where the luxury of posting — ' quadrigis petimus bene vivere ' — never formed a prominent feature of existence. It was, in effect, an extension of the principle of taxing traveUing intro- duced by North for stage carriages, in the first year. His eye was still upon the road. Travelhng by post was then the usual method of locomotion among the higher classes ; and a tax was now imposed upon POSTING. But this tax and, indeed, almost all the taxes imposed since the commencement of the war — the increased land tax, stamp duties, and taxes on men servants, auctions and wine, all these, as restricted in their incidence to the richer classes, falling upon a limited number of persons, were inadequate to pro- duce the large sums required for the war. Com- pelled to have recourse to some productive source of revenue. North now proposed a general rise, 5 per Theim- cent., in the port duties and the excise duties, except 1779° those on beer, soap, candles and leather, and except 172 HISTORY OF TAXATION. the malt duty, which he increased by an additional 15 per cent.^ These would produce : — Posting .... £164,000 Customs and excise, 5 p.c. . 314,500 Considerable as had been the additions to our taxes made in the first four years of the war, they were surpassed by those of the next three years, 1780-2, to produce over 710,000/., 704,000Z., and 769,000Z. 1780. Those for 1780 fell more particularly upon alco- hohc drinks — beer, spirits and wine, and salt. In further taxing beer, regard was paid to the objections to the existing tax, as noticed in ' The Wealth of Nations,' that is to say, the unfairness of a tax that touched only beer brewed for sale. With a view to tax private brewing, additional duties were imposed upon malt, the material used in brewing, accompanied with a provision for an allowance to the brewers for sale, so that the pot of beer might, as North put it, ' reach the lip of the consumer un- taxed.' The increase for spirits affected the distUleiy and all imported spirits. Wine, indeed, was already heavily taxed, but North had discovered that, on the occasion of the last increase, in 1778, the merchants and retailers had raised the price by about four times the amount of the additional duty ! A further addition would not, as he was informed and believed, operate to Umit the consumption, while it could have no effect in increasing adulteration, which had already reached the utmost point possible. He therefore im- > 19 Geo. III. c. 25. NORTH'S PERCENTAGES, CUSTOMS AND EXCISE. 173 posed a fourth additional tunnage of 8/. upon French, and 4tl. upon other wines. The addition for salt was l^d. the gallon, or lOd. the bushel.^ The expected yield of these additions was : — From malt . £310,000 „ spirita . 160,000 From wine . £72,000 „ salt . 69,000 A new duty on the exportation of coals would produce 12,900^., and an additional 5 per cent., im- posed in respect of all the taxes of the year, and some minor taxes, about 68,000Z. In this year a step was taken in extension of the licensing system. Some revenue had for many years been derived from annual taxes on the business of hawkers, hackney coachmen, pubHcans, and dealers in gold and silver plate. A new license was now in- troduced, costing 5s,, which aU sellers of tea, coffee, and chocolate were required to take out annually.^ It was estimated to produce about 9,000Z. a year. North, and those who worked for him, still em- ployed in searching for suggestions for new taxes in that mine of information, ' The Wealth of Nations,' had now under consideration the imposition of a tax on the succession to property, to resemble the Dutch tax on collateral successions mentioned by Adam Smith, itself a copy of the ' vicesima hereditatum et lega- torum ' of Augustus. Unable as yet to mature a plan for such a tax in extenso, he was content to introduce the thin end of the wedge ; and, adopting the prin- ciple, imposed a stamp duty upon every receipt which ' See as to malt and spirits, 20 Geo. III. c. 36 ; wine, c. 39 ; salt, c. 34. ' 20 Geo. III. c. 35. 174 HISTORY OF TAXATION. should be given for any legacy or share of personal property in consequence of a death. This was to pro- duce 21,000/., and was supplemented by an addition to the tax on probates and administrations. 1781, The additional revenue for 1781 was derived from another additional 5 per cent, on the excise duties gene- rally, with exceptions in favour of the taxes falling on beer, which had been further taxed in the preceding year, and those on the three articles of general con- sumption, soap, candles and leather ; reductions to be made in the discounts allowed for customs duties ; an additional If a?, the pound on tobacco, raising the duty to 10-|c?. ; and an additional 4*. Sd. the cwt. on sugar.^ These would yield — Excise, additional 5 per cent. . . ^150,000 Customs, reduced discounts . . 167,000 Tobacco, \^d. additional . . . 61,000 Sugar, 4s. M. additional . . . 326,000 1782. On March 6, 1782, when North asked the House to permit him to postpone the discussion on taxation, Burke passed under review the taxes already imposed in the war. ' The blessed fruits of the noble- lord's administration were,' he said, ' an additional load of ten new taxes,' and, among others, he specified beer, wine, houses, coaches, post-chaises, post-horses, stamps, and servants ; and when a friend hinted that he had forgotten sugar, he added that, ' having lost St. Kitts, as in all human probability we should Barbadoes and Jamaica, it was not extraordinary he had forgotten that valuable article, as we should soon * See as to discounts, tobacco and sugar, 21 Geo. III. c. 16 : excLse duties, c, 17- TAX ON BILLS A.ND NOTES. 175 have no sugar to tax. He did not wonder that the noble lord was at a loss about new taxes. We were already taxed if we rode or if we walked ; if we kept at home or went abroad ; if we were masters or if we were servants ; if we drank wine or if we drank beer ; and, in short, we were taxed in every way possible.' But North, though in difficulties regarding new taxes, had not yet exhausted his list. The new taxes he proposed for 1782 were to fall upon property INSURED FROM LOSS BY FIRE ; BILLS OF EXCHANGE AND PROMISSORY NOTES, instruments of commerce which had hitherto been excepted from the operation of the stamp tax ; the carriage of goods by coach or carrier, river navigation or coastwise — land carriage and water carriage ; licenses for places of pubUc enter- tainment ; and a license for dealers in tea, with an addition to the duties on the retail licenses. Such were the new taxes. In addition to these, there was to be an increase for beer of a certain sort ; 4rf. the lb. additional for tobacco ; the duty on home- made rock salt was to be raised to 5s. the bushel ;^ and lastly the duty on soap, which had been exempted from the several rises in the excise duties, and, indeed, had not been increased since 1714, the year subse- quent to that in which the tax was imposed, was to be raised fcZ. the pound for hard, and ^d. the pound for soft, soap. The estimated yield of the new taxes would be, from — ' By l^d. the gallon, raising the duty to 7^d. the gallon. A new duty wa3 imposed on medicinal salts, which hitherto had not heen taxed, viz., Glauber or Epsom salts, and mineral alkali, or flui for glass. 176 HISTORY OF TAXATION. Fire Insurance 100,000 Bills and notes 50,000 Carriage of goods, land, 60,000Z. . , 1 nirg 000 „ „ water, 210,000Z. . - / ' Playhouses 30,000 Tea licenses 48,750 From additions to Existing Duties. Beer 42,000 Tobacco, id. additional 141,330 Salt 60,000 Soap 104,500 The taxes proposed were carried into effect, except that relating to the carriage of goods, and that The im- for plajhouses, which it was urged would ruin the 1782. theatres. And, in the event, another additional 5 per cent, was granted on the port duties and the excise duties, except those on beer and malt, soap, tallow candles, and leather.^ To the tax on property in- sured from fire risk, Fox had raised strong objections ; to which North returned the answer that objections to proposed taxes should be accompanied with counter suggestions of some other means of meeting the re- quirements of the state. And the addition to the tax on soap gave rise to considerable clamour outside the house of commons, and caused the minister to be caricatured as ' Old Soapsuds.' Having proposed these taxes, North added that he had yet in reserve a proposal to tax receipts and discharges for money, which he regarded with favour, ^ See as to fire insurance, 22 Geo. III. c. 48 ; bills and notes, c. 33 ; tobacco, c. 28 ; salt, c. 39 ; beer and soap, c. 68, and excise and customs generally, c. 6C, NORTH RESIGNS OFFICE. 177' but did not introduce on account of objections to the proposal raised in other quarters ; and lastly, a scheme, the nature of which he did not mention, to produce no less than an additional 800,000/. of revemie, which he considered perfectly practicable. The additional taxes were proposed on opening the second part of the budget, March 11. Meanwhile, public opinion regarding the war had undergone a change. The original popularity of the war had waned, as disaster had succeeded disaster ; and, as the difficulties of enforcing our views on the colonists evidently increased, a feeling began to spread that great concessions should be made to America. This change in pubHc opinion was reflected in the house of commons ; but the king continued obdurate, and endeavoured to weaken the opposition by at- tempts to remove its most powerful members to the ministry. Failing in this course, he was at last com- pelled to yield to the parliamentary majority; and North, who had long been wiUing to resign, and only retained his post in deference to the wishes of the king, anticipating, by a clever stroke, a motion of lord Surrey for the removal of the ministers, an- nounced his resignation, and went off from the March 20. House on a bitterly cold day — ' snow was falling, and the night was tremendous ' — ^in his coach, which was ready for him, taking with him a friend or two, and chuckling at the members whose coaches were not ordered : ' I have my carriage. You see, gentlemen, the advantage of being in the secret. Good night.' ^ 1 Russell, Mem, of 0. J. Fox, i. 296. VOL. II. N 178 HISTORY OF TAXATION, The king now sent for Shelburne and requested him to form a government, but was advised by him to have recourse to Eockingham, as leader of the principal section of the whigs and chief of the party. In Eockingham's second administration, formed partly of whigs and partly of ' king's men,' Shelburne took the HOME, and Charles James Fox — who since the severance of his connection with North in 1774 had been in opposition, and eventually, in 1779, had joined the Eockinghams — the foreign, department ; ^ while lord John Cavendish held the post of chancellor of the exchequer. Eockingham's health had for some time been on the dechne, and when he died, in July, the king announced his intention to promote Shelburne. This did not suit the views of the whigs, who desired the promotion of the duke of Portland, the acknow- ledged chief of the party. Moreover, Fox had reason, as he thought, to suspect that Shelburne, by under- hand dealings, had impeded the progress of his negotiations for peace at Paris. He therefore re- signed office, and lord John Cavendish with him. Portland followed, and Burke, Sheridan, and, with a few exceptions,''' the rest of the Eockingham party. ' According to tlie new division of the office of secretary of state, which was this : the home orriCB, formed out of the old Southern de- partment, retained the Irish and colonial husiness ; the foreign oppicb formed out of the old Northern department, comprised, in addition the correspondence with the western states of Europe, previously under the charge of the Southern secretary. The Home secretarj', as the successor of the Southern secretary, retained the seniority in rank. The third or American secretary was now abolished. ' The duke of Richmond, Conway, and lord Keppel. The duke con- THE SHELBUENE ADMINISTKATION. 179 Thus was effected the great schism which divided the whig party into Foxites and ' Lansdownians,' as they were termed when, in 1784, Shelburne was created marquis of Lansdowne. In the administration of his father's friend, young WilHam Pitt, now twenty-three years of age — he was born in the Great Year of victories — held the post of chancellor of the exchequer. But the administration was not long-lived. Shelburne had entered upon office without ascertaining what support he could rely on, or might have a reasonable prospect of 1783. receiving. A coalition was formed between Fox and North, who acted from a feeling of resentment at his proscription by Pitt and Shelburne ; and eventually the cabinet resigned, in consequence of a vote of cen- February, sure passed in the house of commons, on the motion of lord John Cavendish, regarding the preliminaries of peace. A long ' interministerium ' followed before the formation, in April, of the famous coalition ministry of North and Fox, under the leadership of Portland. Pitt, though requested to retain his post, refused to serve with North, and remained with his party in opposition, and lord John Cavendish again became chancellor of the exchequer. The additional taxes imposed by the Coalition had relation principally to the stamp duties. A general augmentation of the duties for most of the sidered himself to have the first claim to the post of prime minister, hut •was rejected by his friends on account of his extreme opinions on par- liamentary reform. Lewis's Administrations, p. 29 ; Russell, Mem. of C. J. Fox, i. 445. N 2 180 mSTOEY OF TAXATION. instruments previously taxed, was accompanied by the introduction of several new heads of charge. North's new tax for bills of exchange and notes was doubled, to produce an additional 100,000^. ; and a new tax of considerable importance was introduced into the stamp list, by the adoption of the suggestion made to him for a tax on receipts for money amount- ing to 21. or more. This would yield 250,000/. Other new taxes of the year had relation to the registry of burials, marriages and births ; quack medicines, subsequently changed into the tax on pro- prietary, or, as they are termed, ' patent ' medicines, which is still in existence ; and the stage coach business, for which the mileage, ^d., was doubled, to yield 25,000Z. A small duty on waggons and carts had in view the prevention of smugghng more than any increase in the revenue, and was, to a certain extent, a regis- tration tax. Lastly, the power of the excise commissioners to compound with private persons for the malt made on their premises, not for sale, but for their own use, was repealed.'^ The Coalition did not last out the year ; and the prints still to be seen in shop windows in London of that popular caricature of Sayer,^ of ' Carlo Khan's ' See as to stamps, 23 Geo. III. c. 68 ; bills and notes and receipts, c. 49 ; medicines, c. 62 ; stage carriages, c. 63 ; malt compositions, c. 64 ; ■waggons and carts, c. 66 ; and burials, marriages, and births, c. 67. ' Sayer was courting the favour of William Pitt, from whom he ob- tained subsequently the office of marshal of the court of exchequer, receiver of the sixpenny duties, and cursitor of the exchequer. THE COALITION TA.X ON EECEIPTS. 181 triumphal entry into Leadenhall Street,' which Fox acknowledged to have had an important bearing on the question, serve to remind us of that famous India Bill, which, drafted by Burke and introduced by Fox, passed the Commons, but was rejected by the Lords, Dec. 17. as calculated to increase overmuch, by patronage, the power of the ministry of the day, and proved the cause of the resignation by North and Fox of their offices as secretaries of state, and the downfall of the ministry. There was considerable difficulty in forming a new administration. All who had held office under the late government were unavoidably excluded ; so were Shelburne and his immediate friends. Pitt un- dertook the difficult task, and formed an administra- °6°- ^^^ tion in which he held, according to precedent, the post of chancellor of the exchequer as well as that of first lord of the treasury, his colleagues being princi- pally well-known members of the party termed the king's friends, or young aspirants to office wilhng to tread in their steps.^ Unable to transact business with the existing 1^84. house of commons, Pitt resolved to appeal to the country, and parliament was dissolved by the king, without an Appropriation Act. In the elections, the ^^'^- 2*- popular aversion to the coahtion of Fox and North, and the hatred of the India Bill, proved the cause of the loss of their seats to over 150 of ' Fox's martyrs,' * Pitt was the only memter of the cabinet not in the Lords. William Wyndham Granville, his cousin, subsequently so well known as lord Grenville, assisted him in the Commons, and held the post of one of the joint paymasters of the forces ; and Henry Dundas, Subsequently lurd Melville, was treasurer of the navy. 182 HISTORY OF TAXATION. as they were termed ^ ; and Pitt, having a consider- able majority in the Commons, was enabled to com- mence with confidence, in the parliament that met in May, the reforms he had in view. Before we proceed to trace Pitt's career at the exchequer, it may be useful to give a summary of the taxes imposed or increased by North and the coalition ministry. As the result of the war of American Independence, we have to add the follow- ing to our fiscal list : — I. DiEECT Taxes. Land tax Is. in the £ additional. Inhabited houses, 1778. Property sold at auctions, 1777. Men servants, 1777. Coaches, 1776. Legacy duty, 1780. Posting, 1779. Fire Insurance, 1782. Waggons and carts, 1783. II. Taxes on Akticles of Consumption. Additional Duties. Salt and sugar. Beer, malt, wine and spirits. Tobacco, additional 5frf. Manufactures : soap, glass, newspapers and advertisements. General percentages : port duties (customs), 10 per cent. ; ex- cise, with exceptions, 15 per cent. New Taxes. Patent medicines, 1783. Tea licenses, 1782. III. Stamp Duties. General increase, 1783. Deeds. Bills and notes, 1782; doubled, 1783. Receipts, 1783. Register of burials, marriages and births. Taxes Proposed hut not Passed. Carriage of goods (land and water), 1782. Playhouses, 1782. ' In allusion to the work of Dr. Fox, a book which was better known to the lovers of horrors of a former, than it is to those of the present, generation, 183 CHAPTEE Vni. THE TIMES OF WILLIAM PITT — BEFORE THE GREAT WAR. 1784-1792. Pitt's first fiscal measures. The Commutation Tax. The Budget of 1784. New taxes on saddle and carriage horses, sportsmen, trade licenses, hricks, and hats. Additions for candles, paper, and printed calico. Failure of a proposal to tax coal at the pit and growers of hops. New tax on the manufacture of plate. New tax on race-horses. Sir R. Hill's suggestions for taxes. List of the new taxes of 1784. The group of assessed taxes. Taxes on shopkeepers. New taxes on women servants, and shops. New trade licenses on pawnbrokers, coachmakers, sellers of gloves, and attorneys. New taxes on per- fumery and hair powder. The Eden treaty with France. The Con- solidated Fund. The Sinking Fund. Repeal of the shop tax. The Newsmen's Bill. The Tobacco (Warehousing) Bill. Taxes for the Nootka Sound Armament. Repeal of taxes in 1792. The calm before the storm. State of England in 1792, The fiscal career of Pitt divides itself into two parts, of wliicli the first belongs to the history of taxation before the war with revolutionary France. A disciple of Adam Smith, and assisted at the treasury by George Rose, the secretary, who had gained considerable experience in that position under North, many of his earlier proposals for taxes and the improvement of our fiscal system were derived from suggestions made or opinions expressed in ' The Wealth of Nations,' while others were revivals of projects pigeon-holed at the treasury, or in continua- tion of measures already in progress. 184 HISTOEY OF TAXATION. 1784. The first of the many considerable alterations in our system of taxation he was able to efiect in his first year of office, was a reduction of the duty on tea. This article of general consumption, in conse- quence of the excessive rates to which the duties had been raised, formed the subject of an extensive system of smugghng. The reduction effected by Pelham, in 1745, had resulted in the almost total abohtion of an extensive system of contraband trade. But, unfortu- nately, his policy had subsequently been reversed by his successors in office, and the duty had again been raised so high as to cause smuggling to be universal. Reverting to the policy of Pelham, Pitt reduced the existing rate of 119 per cent, to 12^ per cent, on the value of the tea ; and, in anticipation of a loss to the revenue from so great a reduction, imposed, in com- pensation, additional duties on the windows in houses. This alteration was made by an Act which did not pass through the House without encountering con- siderable opposition during several nights of debate, and which was famous, at the time, as the Commuta- tion AcT.^ The measure proved to be a master-stroke, and established for the young minister, at the commence- ment of his career, a reputation for fiscal ability, which had an important bearing upon his future success. The The budget included a number of suggestions for Budget, j^g^ taxes. In the first place, another tax was to be imposed by relation to the estabhshment kept by the taxpayer. The existing taxes of this description 1 24 Geo. III. c. 38. WILLIAM PITT— THE COMMUTATION TAX. 185 were : that in respect of men servants, introduced by North, in 1777, from a Dutch original, and Pelham's, for carriages, which was, in effect, a revival of one of the heads of charge in an old poll-tax Act. Pitt's tax was copied from a head of charge in the last poll-tax Act, having reference to horses kept for the mihtia, but was imposed in respect of horses kept for the saddle or for driving in carriages. A second new tax, on certificates of qualification Sporting. roE SPORTING, belonged to a class of taxes recom- mended by writers on taxation who advocated the application of an universal system of licenses as the best fiscal system, under which a license was to be required for almost every act in life — for drinking tea, for drinking beer, for riding a horse, &c., &c. At this date, the privilege of sporting was limited to persons possessed of land to a certain amount or hold- ing a certain rank or position, and therefore the new tax touched only persons of property. The amount of annual duty originally proposed was a guinea. The system of trade licenses already applied to Trade hawkers, hackney coachmen, dealers in gold and silver plate, dealers in and retailers of tea, and sellers of spirits, wine, and beer, was further ex- tended, and applied to all persons carrying on any trade or business subject to the excise, a list which included a large proportion of the principal manu- factures of the kingdom. Originally Pitt's intention appears to have been to tax the traders on the ad valorem principle, not generally, perhaps, but still to a considerable extent ; for he mentioned, in his speech 188 HISTORY OF TAXATION. on the budget, the taxation of a great many inter- mediate dealers in goods, according to the extent and profit of their businesses.^ But in the result, the only licenses charged with duties varying according to the quantity of the articles produced for sale, were those of the brewers and maltsters. The other licenses were charged at fixed amounts. Bricks Lyttcltou's projcct for a tax on beicks was revived, and, though rejected in 1756 for excellent reasons, which still existed, now passed into law, A new tax was imposed upon hats. Additions were made to the tax on candles, which had been spared all through North's fiscal career, and to the taxes on paper, and printed linen and caHco. Lastly, the petty customs on aliens' goods, the duty of 1 per cent, termed the Mediterranean duty, and aU other duties on aliens' goods, were repealed as now an unnecessary burden on commerce.^ Coals at Two taxes in the budget Pitt was compelled to the pit. abandon : a tax on coals at the pit, which he pro- posed in order to tax inland consumption at the same rate as sea-borne coal to London ; and a license duty for growers of hops. In lieu of these, he increased the payment required for the postage of letters ; raised the duty for quahfications for sporting from one guinea to two guineas, adding a supplementary tax of 10s. for certificates for gamekeepers ; and, notwithstanding the existence of the license duty on ' Pari. Deb., xiv. p. 102. See as to horses, 24 Geo. III. c. 31 ; sport- ing qualifications, e. 43 ; trade licenses, c. 4l. ^ See as to candles, 24 Geo. III. c. 11 ; paper, c. 18; printed cottons, e. 40; bricks, c. 84 ; hats, c. 51 ; customs, c. 10. WILLIAM PITT — THE BUDGET OF 1784. 187 the sellers of gold and silver plate, in commutation of Sunderland's tax on silver plate, imposed another tax on THE MANUFACTURE OF PLATE, of silver aS well Plate. as of gold. For the purposes of this tax, all plate was required to be marked, when assayed at the Assay Office, with, in addition to the ordinary assay marks to show the quahty and place and year of assay, the mark of the sovereign's head, in order to denote payment of the duty on the article assayed. The last new tax of the year was imposed upon eace- HORSES — all horses running in any race.^ A list of suggestions for taxation, drawn up for sir T-i- • 1 ■ 1 ■ T-»' 1 1 TT'Ti' 1 Richard ritt m this year by sir Eichard Mill, proves that, HiU's list, whatever might be the fertility of his own mind in the invention of new taxes, there were not wanting those who endeavoured to assist him by proposals of a very comprehensive character. Sir Eichard had very strong objections, in common with many other members of parHament, to the proposed tax on bricks ; and as, at this date, it was considered a settling reply to objection that it was unaccompanied by any counter-suggestions, he justified his opposition by producing a list of taxes he proposed as substitutes for the tax on bricks. The list comprised : — ^A double Sunday toll at all turnpikes; a tax per gross on corks ; taxes on powder, guns, and pistols ; on pins, needles, black pins, and fans ; on prints ; on printed music, message cards, visiting tickets, and wafers ; and on all places of public diversion, including play- houses, operas, masquerades, Eanelagh, Vauxhall, ' See as to plate 24 Geo. III. c. 53 ; racehorses, c. 31. 188 HISTORY OF TAXATION, Sadler's Wells, Astley's, Hughes', cum multis aliis, the duty to be collected by means of check tickets ; taxes on clocks and watches ; on all places for horse races ; on ropes, twine, and packthread, and an addition to the duties on magazines and news- papers.'^ The following lines on the new taxes of 1784, written at the time, may assist the memory in recall- ing the particulars of the budget of that year : — Should foreigners, staring at English taxation, Ask why we still reckon ourselves a free nation, "We'll tell them we pay for the light of the sun ; For a horse with a saddle, to trot or to run ; For writing our names ; for the flash of a gun ; For the flame of a candle to cheer the dark night ; For the hole in the house, if it let in the light ; For births, weddings, and deaths ; for our selling and buying — Though some think 'tis hard to pay threepence for dying; And some poor folks cry out, These are Pharaoh-like tricks, To take such unmerciful tale of our bricks. How great in financing our statesmen have been. From our ribbons, our shoes, and our hats may be seen. On this side and that, in the air, on the ground. By Act upon Act now so firmly we're bound, One would think there's not room one new impost to put. From the crown of the head to the sole of the foot ; Like Job, thus John Bull his condition deplores, Very patient, indeed, and all covered with sores. Formation of the group of '■Assessed Taxes' Some of the additions to our taxes made by Pitt in his first budget were subsequently allowed to be 1785. failures. But an unquestioned improvement in our fiscal administration was effected by him in the next year, when he reformed the administration of the ' Tarl. Hist, xxiv., p, 1233. THE GEOUP OF 'ASSESSED TAXES.' 189 taxes relating to establishments. Nothing could be more defective and inconvenient than the existing arrangements. The tax on carriages and the small tax on waggons, wains and carts, imposed by the Coalition, were under the management of the com- missioners of excise ; and so was the tax on men servants, which, originally under the management of the commissioners of taxes, had been transferred, in 1781, to the excise, ' for better management.' The new taxes on saddle and carriage horses and racehorses were under the management of the commissioners of stamps, and were therefore 'stamp' taxes, or, as they were termed, with others equally misplaced in the stamps list, ' unstamped duties of stamps.' The returns hitherto made of carriages and horses had been notoriously incorrect and insufficient. A third board, the ' commissioners for the affairs of taxes,' had the care and management of the two house taxes, viz. the window tax and North's tax on inhabited houses. It was clear that their officers must have an acquaintance with the circumstances of the taxpayer calculated to secure a better supervision of the taxes on his domestic establishment than could be expected from the officers of excise or the distributors of stamps. And, therefore, with a view to prevent the continuance of fraud and malpractices, and more effectually to secure the collection of the duties, Pitt placed all the before-mentioned taxes under the management of the board for taxes,^ in a group, comprising the taxes on houses, carriages, men servants, saddle and carriage horses and racehorses. • 25 Geo. III. c. 47. 190 HISTORY OF TAXATION, This group was subsequently known as ' the Assessed Taxes.' These assessed taxes hardly touched the shop- keepers, whom Pitt was anxious to include as con- tributories to taxation, considering that they had not hitherto borne any adequate part of the burden. In Holland, whence our tax on men servants was copied, women servants were included in the system of tax- ation in force, and had always beea subject to tax. A suggestion had been made in the House, in ±783, that they should also be included in taxation in this country ; but the proposal had proved extremely un- popular, and was a serious obstacle to sir Cecil Wray in his famous contest with Fox for the representation of Westminster, at the general election. Very dis- tasteful to the shopkeepers as had been the new Coalition tax on receipts, this proposal to tax the maids was more distasteful to them. The maidservant, with her broom of vengeance, had figured, in all the caricatures of the contest, as an important opponent to sir Cecil, and he had been greeted with a chorus of reproval For though he opposed the stamping of notes, 'Tis in order. to tax aU your petticoats. Women Pitt now renewed the proposal, and, in order to tax establishments of the shopkeeper class, added to the assessed taxes a new tax on women servants, profes- sedly copied from the Dutch original. As may easily be imagined, the new tax gave rise to a good deal of amusing comment within and outside the House, and more particularly to many jokes of a free description in the 'EoUiad.' For as, by his own party, servants. TAXES ON SHOPKEEPEES, 191 Pitt was extolled as an exception to the rule of in- temperance which governed the conduct of so many of the youth of the day *, so, on the other hand, no opportunity was neglected for a joke at the expense of the young man of whom it was said, Nulla Venus nullique animum flexere hymenaei. In the same view Pitt revived the project for a shops. tax on shops, and imposed a duty upon all shops, after the plan of the tax on inhabited houses, accord- ing to the rent paid by the shopkeeper for the shop. Annual trade licenses were required in the same year, for pawnbrokers in Great Britain, costing 101. in the metropolis, and 5Z. elsewhere ; for coachmakers, with a tax of 20s. for every four-wheeled, and 10s. for every two- wheeled carriage made by them ; for sellers of gloves akd mittens, with a tax on the articles sold by them ; and for attorneys, with a higher rate for practice in the metropolis than for practice in the provinces,^ and in 1786, for dealers in PERFUMERY, with a tax on all perfumes, tooth-powder, pomatum, and hair-powder sold by them.'-* The famous commercial treaty of 1786 with France, ^j^^ ^^^^ which on this side of the Channel we term Pitt's Treaty, treaty, but which our friends on the other side, by whom even now the name of Pitt is not considered auspicious, term the Eden treaty,^ from the name of ' See as to servants, 25 Geo. III. c. 43 ; shops, c. 30 ; pawnbrokers, c. 48 ; coaxjhmakers, c. 49 ; gloves and mittens, c. 55 ; attorneys, c. 80. " 26 Geo. III. c. 49. ' The negotiator on the side of France was M de Rayneval. Rougier, Liberty Commerciale. Smuggling in France, organised upon a system, afforded, in the smugglers' tariif, the basis of the treaty arrangements. 192 HISTORY OF TAXATION. the negotiator, put an end, for a time, to that war of the tariffs between this country and France which had now continued for more than a century, to the great prejudice of the interests of both nations. The protection to the native manufacturer against foreign rivals, which it was the object of a high tariff to secure, was no longer required for our manufacturers, who now stood in a very different position from that in which they stood at the date of the treaty of Utrecht, when the famous 8th and 9th clauses, sup- ported by Bolingbroke, had been rejected by the House in consequence of the opposition of the pro- tected traders and the whigs. In glass, in paper, in linen, in silk, as well as in wool, we now could hold our own against continental rivals. Cambric was the only material of which France had the monopoly. ' Is there anything in the eternal law of the universe,' asked Pitt, ' that keeps the two nations in perpetual antagonism ? ' In connection with this treaty, which met with considerable opposition from the brewers, the duties on French wines and brandy were con- siderably reduced . 1787. In 1787 Pitt was able to carry into effect a cojir- SOLIDATION OF THE ITOMEBOUS PORT DUTIES AND EXCISE DUTIES, a measure which had been strongly recom- mended by Adam Smith in the ' Wealth of Nations,' and for which a plan had been proposed to North by George Eose. The Act that consolidated the duties abolished the old system of separate accounts for all the separate items. Henceforth the produce of these duties, of several other taxes particularly mentioned, and of TREATY WITH FRANCE. THE SINKING FUND. 193 all future taxes not specially appropriated, was to be consoii- carried to one Consolidated Fund. ^ From this general Fund, reservoir was fed the Sinking Fund of the previous g^®^.,^ year, which Pitt had established for the eventual ^^'°^^- reduction of the national debt, grounded upon the report of a committee of the house of commons, that, having regard to the income and expenditure of the country, in time of peace, a surplus income of about a milUon might be expected. Meanwhile the tax on shops had formed the sub- ject of an annual attack by Fox, who urged tliat it was an unfair tax on a particular class, Pitt maintaining the contrary opinion, that the tax was recouped to the shopkeepers by their customers, who bore the burden. At last, in 1789, Pitt gave up the tax, and with it 56,000^. of revenue ; and the exchequer was recouped by an increase in the taxes on establishments of horses and four-wheeled carriages, and additions to the probate and legacy duties. The additions were calculated to produce, in probate duty, 18,000?., and in legacy duty, 5,000/. per annum ; but these taxes, as yet undeveloped, became of greater importance as subsequently altered by Pitt after the commencement of the war. Lastly, an additional ^d. was imposed upon newspapers, with Qd. additional on advertisements in newspapers and pamphlets, to produce 28,000/. and 9,000/. respectively. This addition was not made with- out serious opposition. But the debates on the question on the Newsmen's Petition, July 2, and on the News- men's Bill, July 3, possess, at the present day, only ' 27 Geo. III. c. 13, see as. 47, 62. VOL. IL 194 HISTORY OF TAXATION. such interest as may attach to the ventilation in former times of questions on which, in these days, there is no diiference of opinion. Pitt maintained his proposal as a suggestion for a tax on an acknowledged article of luxury, capable, in his opinion, of bearing a considerable tax.^ Walpole's scheme for warehousing tobacco, with- drawn in 1733 on account of the opposition excited by representations that it was in effect a step towards a general excise, was now re-introduced. In the debates on the Tobacco Bill, Pox and Sheridan reproduced all the old arguments against excises, and pointed to the failure of Walpole's Excise. Bill, and the repeal of Dashwood's cider tax. Pitt, however, carried his plan into law, and subsequently main- tained it. The tax was imposed partly as an import duty and partly as an excise duty. Tobacco, on importation, was to be warehoused, and was subjected to the excise system of survey and permit. By this means it was supposed the revenue authorities had the advantage of a double hold, which, it was hoped, would enable them to overcome, at any rate in a measure, the monstrous system of smuggling that existed.^ Taxes for the Nootha Sound Armament. 1790. In 1790, the prosperous state of the country, re- flected in the returns of revenue, enabled Pitt to announce, when he opened the budget, April 29, that he had no proposal for additional taxation to produce ' See as to shops, 29 Geo. III. c. 9 ; horses and- carnages, c. 49 ; pro- bate and legacy, c. 51 ; newspapers and advertisements, c. 50. ^ 29 Geo. III. c. 68. TAXES FOR THE NOOTKA SOUND ARMAMENT. 195 for consideration. But before the close of the year, circumstances occurred which rendered necessary a supplementary budget. In Vancouver's Island, one of the discoveries (1778) of the famous navigator captain Cook, our colonists, with a view to supply the Chinese market with furs, had formed, a few years before this date, a settlement at Nootka Sound. At this place the Spanish ships of war had, in assertion of the old claim of Spain to the western coast of America, seized two British vessels ; the contents of the vessels had been sold, and the officers and men had been sent as prisoners to a Spanish, fort. An arma- ment was at once prepared to exact reparation from Spain, and the first business of the new parliament, which met in November, was to make provision for the expenses of the preparations. The additional taxes proposed in this supplementary budget, for a term sufficient to defray the loan of the year, are interesting as the outcome of Pitt's matured experience. In selecting them he had regard to both direct and indirect taxation, with a view to combine, as far as possible, all classes in contribution. The direct taxes to be raised were those comprised in the group termed the Assessed Taxes, which, it will be borne in mind, touched householders and establishments. These, with the exception of the commutation tax, would be raised by 10 per cent. ; and an addition would be made to the cognate tax on sportsmen. The articles of consumption selected for increased taxation were spirits, sugar, and malt. The tax on the distillery, equal to 2s. 6d. the gallon on the spirits, 2 196 HISTOKY OF TAXATION. 1792. Bepeal of taxes. would be raised by an additional 5d. ;^ and there would be an equivalent rise for the colonial spirit, rum, and an addition for French and other brandy. 2*. 8d. additional, the cwt., for sugar, would raise the duty to 15s. The addition for malt would be M. the bushel, but this would be payable only for two years. The annual yield would be : — Assessed taxes, 10 per cent. Sporting, additional Spirits- Artieles of Comumpt -Distillery . Bum . Brandy, &c. Sugar Malt, in two years . £ 100,000 25,000 86,000Z. 67,000Z. 87,000?.— 240,000 . 241,000 , 122,000 Eventually aU the proposed taxes passed into law ; ^ though the proposal to raise the malt duty met with considerable opposition, and several taxes were suggested in lieu thereof, more particularly, on dogs, weights and measures, and cider. In the next year, however, Pitt was able to take off not only this temporary duty on malt, but also the tax on women servants, which, paid by the poorer class of housekeepers, was charged upon about 90,000 different families, and that on carts and waggons^ while other remissions had reference to what we may, for the moment, term the taxes on light in dwelling- houses. The reader may have been struck, when glancing down the lines, on a previous page, descrip- ' Id. on the wash, equal to 6d. on the spirits. » See as to spirits, SI Geo. III. c. 1 ; malt, c. 2 ; taxes, c. 6 ; sugar, c. 15; sporting certificates, c. 21. REPEAL OF TAXES IN 1702. 197 tive of the taxes of 1784, by three of them, which have a bearing upon this subject : — We'll tell them we pay for the light of the sun j For the flash of a candle to cheer the dark night ; For a hole in the house, if it let in the light. The duties on houses with less than seven windows, and the additional ^d the lb. on candles imposed in 1784, were now repealed. The repeal extended to between 300,000 and 400,000 houses, while the duty on candles pressed more, perhaps, than any other tax on consumption upon the poorer classes. The loss to the revenue would be 31,000^. from women ser- vants, 30,000/. from carts, 56,000Z. from houses, and 106,000/. from candles : a total remission of 223,000/., exclusive of malt.^ The Calm before the Storm. These measures for the relief of the poorer class of Ktt'» • splendid ' taxpayers were proposed in Pitt's speech on the con- speech, sideration of the pubhc revenue and expenditure, February 17, one of his finest speeches ; for Sheridan and Fox both acknowledged its ' splendour,' and the impression it made on the committee. In this he stated that ' unquestionably there never was a time in the history of this country when, from the situation of Europe, we might more reasonably expect fifteen years of peace.' Lord Grenville" had in the previous August expressed a similar opinion. Writing to his brother, • 32 Geo. III. CO. 2, 3, 4, 6, 7. Pari. Hist. xxii. 816 at seq. Pitt's Speeches, n. 24. ' He had been made a peer in NoTember 1790, and now held the foreign oiRce, to which he bad been transferred in May 1791. 198 HISTORY OF TAXATION. he said, — ' We shall now, I hope, for a very long time indeed enjoy this blessing (of peace) and cultivate a situation of prosperity unexampled in our history.' And such was the general opinion at the time ; for it was thought that the French had too much on their hands at home to allow them to interfere with affairs abroad. Pitt and his friends therefore looked for- ward with confidence to a long course of reductions of the national debt, abolitions of taxes, and the promotion of commerce and the general welfare of the kingdom. State of HJngland in 11^2. Never in her previous history had England pre- sented a picture of prosperity equal to that which ' had been the happy result of ten years of economy, of labour, of firmness, and of wisdom on the part of parhament in their endeavours to cultivate the arts of peace, to augment the revenue, and to ameliorate the condition of the people of the country ' ^ — ^her condition in 1792. The population was increasing in numbers day by day. Farming in all its branches ' was flourishing. The principal branches of our manufactures showed a continuous and steady im- provement. Facilities of communication multiplied themselves ; and fleets of vessels carried on an in- creasing import and export trade, protected by an adequate naval force under trustworthy commanders. Land. Xo go iuto particulars and take, first, the land. The agricultural interest derived increasing profit, in ' Pitt's speech in answer to Mr. Whitbread's observations, Apiil 5, 1802. Speeches, iv. 215. THE CALM BEFOEE THE STORM, 1792. 199 rent and produce, from a largely increased area of land under cultivation. Of the 37 millions of acres of land in England, about 18 millions had been, in 1685, moorland, forest, and fen. Three millions of these had been brought into cultivation before 1727 ; but since that time inclosure Acts had been passed year after year, in numbers — latterly, thirty- three Acts in 1789, twenty-five in 1790, forty in 1791, and about the same number in 1792. And of this in- creased area no small portion was now worked upon a regular system, that four-course system of turnips, barley, oats, and wheat, which lord Townshend had so carefully studied at Eaynham and mr. Coke at Holkham, in Norfolk — examples only of the many great landowners who devoted much labour to agri- cultural improvements, of which the results had been carefully recorded by Arthur Young in his ' Farmer's Tour ' and other ' Tours.' No country in the world produced sheep to equal our Southdowiis and Cots- wolds, or mr. Bakewell's long-wooUed Leicesters ; none, an ox to yield a broad sirloin equal to that of our Herefords, Devons, or shorthorns ; none, any horse to equal, for purposes of husbandry, the Suffolk punch, for purposes of heavy draught the London dray horse, in the hunting field the English hunter, or on the race-course the successors of Echpse and Diomed. Fortified by the estimate accepted by the author of the ' Wealth of Nations,' the calculations of Arthur Young, and the received opinion that a land tax of 4s. in the IZ. was equal to about 2s. of what would turds. 200 HISTORY OF TAXATION. be collected on the real rent of land, we may put the income from land in Great Britain at about 22,000,000/. for rent, and from 17,000,000/. to 18,000,000/. for the tenants' profits — at the least, a taxable income of 20,000,000/. and 5,000,000/. respectively. ManufKc- From the wool produced by our sheep, the number of which in England had been estimated, eighteen years before this, at from ten to twelve miUions, a manufacture was maintained that sup- ported over a million persons, and supplied the wants of our home population and an export trade of about three milhons a year.' But cotton had been substituted for wool in some important articles of dress, and the use of machinery, the spinning jenny of Hargreaves, the spinning frame of Arkwright, the mule jenny of Compton, and the power-loom of Cartwright had raised the manufacture of cotton articles from a manufacture for which, between 1776-85, on the average an annual import of 6,776,000 lbs. of cotton was required, to one for which, in 1792, 35,000,000 lbs. were imported. This enormous increase in the use of articles of Cotton had, indeed, caused a decrease in the linen manufacture of England. To the same cause was, no doubt, due in a measure a depression in the silk trade. But the unprosperous state of this trade was mainly due to the action of the manufacturers them- selves and the operation of the Spitalfields Act, passed at their instigation : a manufacture bolstered up with every sort of prohibition, and subjected to ' Campbell's Political Survey of Great Britain, ii. 168. STATE OF ENGLAND IN 1792. 201 that limitation of the minimum wages to be taken by workmen which had resulted in driving a con- siderable portion of the trade from Spitalfields to Macclesfield, Manchester, Norwich, Paisley and other places, was no fair gauge of the prosperity of the kingdom. A fairer index was presented in the condition of The the new industry which about thirty years before this had arisen in the district round Burslem in Staffordshire, termed ' the Potteries.' Here Wedg- wood had started a manufacture of useful porcelain, which provided employment for thousands of hands directly and, indirectly, for hundreds of thousands more, and supplied the people with cups and other articles of domestic use little inferior, in the china of which they were made, to the expensive articles for the rich which had been made previously at Bow, at Chelsea, at Derby, where Johnson, on his visit some twenty years before this, found the china as expen- sive as silver, or at the hard paste manufactories of Worcester and Bristol. A more important industry was daily making iron, progress in the development of the manufacture of articles of iron, which, retarded for ages in conse- quence of the scarcity of fuel for the furnaces for smelting iron, and estimated for England, in 1740, at only 17,350 tons, from fifty furnaces, where charcoal only was used, had received an impulse from the application of coke as a means for the smelting of iron, first at Tarbert in Stirlingshire, and later on, in 1774, at the Carron Works by Dr. Koebuck. In 202 HISTORY OF TAXATION. 1788, eighty-five furnaces in England, Wales, and Scotland produced a quantity of iron calculated at about 68,300 tons, of which 55,200 were smelted with coke. And the result of a manufacture which continued to prosper was evident, not only in great works like the iron bridge over the Severn at Coal- brookdale, but at every fireside in the kingdom. Statistics were not in those days so abundant or so trustworthy as they are in our days, but particular information on the subject of the ironworks was obtained by Pitt before proposing the tax on coals he. was unable to pass. Coal. The rising importance of the coal trade could not be better testified than in this endeavour to get 150,000/. a year from our black diamond beds. Its development was only checked in a degree by tliat limitation of the output which existed by agreement between the coal-owners, and had the efiect of limit- ing the supply. But the coal pit was not our only source of wealth from mining. An abundance of rock salt was derived from the Cheshire salt mines, supplementing the produce of the salt springs in Stafibrdshire and Worcestershire, from whence came the principal part of the salt in general use in the kingdom ; while the increase in the produce of the Cornish tin mines from 2,876 tons in 1750 to 3,202 tons,'^ would probably have^been greater had not china in a great measure taken the place of pewter for many articles of household use. Roads and jf^ in former times, the country had been sadly » In 1793. STATE OF ENGLAND IN 1792. 203 wanting in good roads and other facilities for locomo- tion as compared with France, such was not the case in 1792. The royal mails established by Pitt, and a multitude of stage coaches — Highflyers, Comets, and Tantivys — rolled along English roads that might com- pare with any 'route du Eoi;' while, more slowly, the heavy goods and particularly the produce of the coal mines, passed along the new navigations, or canals : the duke of Bridgewater and Brindley's canal from Worsley to Manchester, the Stafford and Worcester, the Trent and Mersey or Grand Trunk canal, and many others recently made. Thirty canal and navi- gation Acts had been passed between 1789 and 1792,- and in this year the first sod had just been cut for the Grand Junction Canal. Our means of locomotion were now equal to those of France ; and if we could not produce in England anything to equal the tapes- try of the Gobelins or Beauvais, the porcelain of Sevres, the silks of Lyons, or glass or cambric to equal those of French manufacture, in useful manu- factures, as well as in agriculture, we now equalled if we did not surpass the French and every other nation. Such was the condition of England in 1792. In English industry. this manifest improvement of our affairs, parliament had their share, and Pitt, his share ; but the real source of prosperity was to be found in the develop- ment, and the application to manufactures, of that remarkable industry and energy in labour of which an observant writer remarked, a generation after this, that 'if the English were in a paradise of spontaneous 204 HISTORY OF TAXATION. productions, they would continue to dig and plough, though they were never a peach or a pine-apple the better for it ' — aided as they were by invention and machinery. For in a retrospect of these times the most remarkable feature in the picture presented to The steam ^s must ever be the Steam Engine of Watt. Some engine. " fifteen or sixteen years before this, not long after 1776. ■\Yatt had joined Boulton, at Soho, when orders were coming in freely for new engines, BosweU had visited the place. ' I sell here,' said ' the Iron Chieftain,' as Boswell terms Boulton, ' what all the world desires to have : Power.' They were then making engines more especially as water pumps for mines, in superses- sion of the Newcomen engines. But soon afterwards we find their engines used for mills — ' Mills are a great field,' said Boulton — to drive flour, cottoa and paper mills, roll and hammer iron, and work ma- chinery. They were introduced into Whitbread's brewery, where the king and queen came to see and 1791. admire the improvements. The year before that of our picture, the famous Albion Flour Mill, with its rotative engine, had been destroyed by an incen- diary ; but it had accomplished its object of advertise- ment : The steam engine was now firmly established, an iron arm of power which was to perform with ease a variety of works of labour in which hitherto the comparatively puny power of men and horses, or the inconstant wind and water, had been employed. Foreign If, after the contemplation of this prospect at home, we turn towards the sea and inquire about our trade, the number of vessels belonging to England in STATE OF ENGLAND IN 1792. 205 1792 was 10,633, with a tonnage of 1,186,611 tons, and 87,718 men ; and perhaps a fair idea of the ex- tent of our commerce may be formed from the careful estimate made by Pitt, eight years after this, that the amount of capital employed in foreign trade was 80 millions, of which 30 were employed in the export of the leading manufactures of England, We had also a peculiar source of profit in the in- The West come derived from estates in the West Indies, which may be put, deducting for exports and the charge of the cultivation of the estates, at four millions a year. In the West India islands we had a force of 6,886 officers and men for their protection. These formed part of an army, in number, officers and men, between TheAimy. 57,000 and 58,000 ; the remainder of whom were distributed as follows : — Great Britain . . 17,000 Ireland . . . 12,000 East Indies .... 10,000 Canada, No va Scotia, Bermuda 6,000 whUe more than 4,000 guarded the Eock at Gibraltar, where the garrison had been strengthened by the ad- vice of its gallant defender, the late lord Heathfield. Our navy, in consequence of the preparations The Navy, resulting from our disputes with Spain and, in support of Turkey, with Eussia, was now in a high state of efficiency. The expense had lately caused Pitt to suggest a diminution in the number of seamen ; but this suggestion was far from popular with the nation generally. The lesson of the late war, when we found ourselves opposed to, practically, the existing navies of Europe, was not forgotten ; and it was satis- factory to think that, should we again be placed in 206 HISTORY OF TAXATION. that position, the real effective force of our navy in respect of line-of- battle ships, when compared with the principal navies of Europe, was at this date : England, 115 ; France, 76 ; Spain, 43 ; and Holland, 20. The number of officers and men had varied in the years 1789-92 inclusive, being 20,000, 39,000, 34,000 and 17,361, but could easily be raised to 50,000 or 60,000. If old Rodney was soon to join Keppel, Hawke, Boscawen, and the others who had preceded him, we should still have with us many tried officers who knew how to ' break the line ' — some of them are better known to us by titles they subsequently gained in upholding our power at sea and protecting our commerce — Howe, the favourite 'Black Dick' of the sailors, the two Hoods, Hotham, Duncan, and Jervis, as admirals, and, not yet raised to the flag : Sidney Smith, John Duckworth, Hyde Parker the son, Cuth- bert CoUingwood, and Horatio Nelson. Summary of Expenditure and Revenue from Taxes. £ Interest on debt 9,300,000 Army and navy (average 1790-2) . 6,250,000 (^IVll iJLKU, OiU. ..... i.j^O\Jj\J\J\J Revenue from taxes . . . . 17,300,000 Approximate Yield of some of the P rincipal Taxes, 1792-3. I. Direct Taxes. Land tax ...... 2,000,000 Houses and establishments . 1,300,000 Property insured from fire . 185,000' Property sold at auction 75,000 Post horses, coaches, hackney coaches . 277,000 EXPENDITURE AND TAXATION, 1792. 207 II. Taxes on Aiiticles of Consumption. (a) Eatables : — Salt 377,232 Sugar 1,316,000 (6) Brinks:— £ Beer 2,224.000 1 Malt 1,203,000 > 3,578,000 Hops 151,000 J Wine 1,016,000 Spirits 1,532,000 Tea 650,000 (c) Tobacco 566,551 (d) Articles not Eatables, Drinks, or Tobaccc ) ; — ■ Coals exported and coastwise 700,000 Raw and thrown silk . . , . 300,000 Iron, bars 150,000 Hemp (rough) .... 103,000 Muslins 118,000 96,000 (e) Manufactures : — Candles 256,000 Leather 281,000 Soap 403,000 Printed goods 265,000 Newspapers .... 140,000 Glass 183,000 Bricks and tiles . 128,000 III. Stamp Duties. Bills and notes .... 156,000 Receipts ..... 48,000 Consolidated duties 748,000 Net receipt from the business of the Post Office 378,000 208 HISTORY OF TAXATION. CHAPTER IX. TAXATION DURIKG THE GREAT WAR. PAKT I. FROM THE COMMENCEMENT OF THE WAR TO THE PEACE OF AMIENS. 1793-1802. Commencement of tho war. Cost of the war. First additional taxes. The additions to the assessed taxes and for the distillery, sugar, and foreign spirits made perpetual. Second addition for the distillery and foreign spirits. Additions for glass, bricks and tiles. New taxes on stone and slate. Repeal of the taxes on gloves and mittens and re- gistration of births, &c. In 1795 additions for wine and tea. Third addition for spirits. New taxes on hair-powder and sea insurance. Additional duties on receipts and other stamp duties. In 1796 second 10 per cent, on assessed taxes. New tax on agricultural horses. Ad- ditions on pleasure horses and tobacco. New tax on collateral suc- cessions to property. Tax on dogs. Additional duties on hats. Second addition for wine. In 1797 further additions for tea, sugar, spirits and bricks. Five per cent, on the port duties. Additional duties on auctions. Third 10 per cent, on assessed taxes. New tax on clocks and watches. Addition for stage-coach proprietors. Proposals to tax parcels by coach and proprietors of canals. In 1797 Pitt in difficulties. General rise in the stamp duties. The Triple Assessment for 1798. The duty on salt doubled. Third ad- dition for tea. The convoy tax. New tax on armorial bearings. The land tax turned into a rent-charge. Failure of the Triple Assess- ment. The income tax imposed in 1799. In 1800, a fifth addition for spirits, and a fourth for tea. Pitt's last budget before leaving oifice. Fifth addition for tea. Additions for sugar, timber, raisins and pepper. The duties on paper doubled. Additional taxes on horses, sea insurance, bills of exchange and deeds. The feelings of sympathy with the French people in their struggle for freedom, excited in England by the French Eevolution of 1789, the greatest political event of modern times, were followed by feelings of amazement and horror, caused by the subsequent FIRST TAXES FOR THE GREAT WAR. 209 excesses of the revolutionists and the execution of the king, which made a deep impression upon people of all classes in this country. Chauvelin, the French ambassador, was at once dismissed, and it was obvious that hostilities would soon commence. On their side the republic had recalled their ambassador, and eventually in the declaration of war against England, February 1, 1793, began the war with revolutionary France which, with the subsequent war with Napoleon, is known as the Great War. In 1792 the amount of the national debt of Great Britain was about 237,400,000^.^ The Great War proved more costly to us than all 5!^^* °* '^ •' the war. our preceding wars taken together. The cost of the war of the Spanish Succession had been 50 milUons, and that of the war of the Eight of Search, 43. The Seven Years' War cost us 82, and the war of American Independence, 97. The cost of those wars, taken together, was, therefore, 272 millions. But the Great War cost us 831 millions. Of this sum about 622 millions were added to the national debt. Hitherto, on the commencement of a war, the i79s. first step in taxation had been to raise the rate of the land tax. But the rate was now 4.s., which had never been lowered since its imposition on the com- mencement of the war of American Independence This was considered to be the ' natural limit ' of the tax ; a 55. rate had never been contemplated by the boldest chancellor of the exchequer. As no additional revenue could be obtained from that source. Pitt's ' Return, Pub. Inc. and Expend. Partll., Appendix No. 12. VOL. II. P 210 HISTOEY OF TAXATION. first move was to render perpetual the additions on the assessed taxes and the distillery imposed, in 1791, for a limited term, towards the expenses of the Spanish armament ; by which means annuities were secured for raising a sum of 4,500,000^.^ In the next 1794. year, he pursued the same course of adherence to the principle of the increase in 1791, by perpetuating the additions for rum and foreign brandy, and sugar; and he now made a second addition for all spirits, home, colonial, and foreign.^ At the same time, taking advantage of that in- crease in house-building which ever attends an in- crease in riches among the well-to-do classes, he made additions to the taxes on the materials for house-building, viz., the duties on the manufacture of crown and plate glass, and the duty on bricks, which was raised by an additional 1*. 6d. the 1,000 for ordinary bricks, with other rates for tiles, while a new tax was imposed on the rival materials for build- ings, viz., slates, stone and marble, if carried coast- wise. The loss from the repeal of two minor taxes, viz., that on gloves and mittens imposed in 1785, which had proved a failure, and that on the registration of births, deaths and marriages, imposed by the Coali- tion in 1783, which was acknowledged to have an injurious operation as regards the morals of the people, was recouped to the revenue by an enormous » 83 Geo. III. c. 28. ° 6d. the gallon for home-made spirits, 8d. for rum, and lOd. for foreign brandy. 34 Geo. III. co. 2, 3 & 4. PITT SUPREME IN POWER. 211 tax upon the legal profession, of 100^. on indentures of clerkship for attorneys in the metropolis, and 50^. for country practitioners, and an increase in the duty on paper.^ Neither of these taxes passed into law without serious opposition from many quarters. But Pitt' was now supreme in power. Many of the whig party now voted on his side ; and in this year, that rupture of the whig connection which was the chief effect of the French Eevolution on English politics, and the consolidation of the new Tory party, as it was tern\ed, were complete. Several of the most eminent mem- bers of the whig party — the duke of Portland, earl Fitzwilliam, who had succeeded to the Eockingham estates, earl Spencer, William Windham and others, impressed with the enormities of the revolutionists, separated themselves from Fox, as Burke, by whose writings and action they were not a little influenced in taking this step, had separated himself from him in 1791 ; and some of them joined the ministry.^ In the next year Pitt was obhged to have re- i^^-^' course to the wine cask ; a considerable addition was made to the duty, which had been reduced for the purpose of the commercial treaty with France — viz., a tunnage of 30Z. for French, and 201. for other wines. A third addition, of the same amount as before, was ' See as to glass, 34 Geo. III. c. 27 ; bricks, c. 15 ; slate, &c., c. 51 ; gloves and mittens, and births, &c., cc. 10 & 11 ; attorneys and paper, cc. 14 & 20. ^ Portland taking the place of Dundas at the home office, in July, when the latter was appointed the new third secretai-y of state for war ; Fitzwilliam, the post of president of the council ; Spencer, eventually, the admiralty ; while Windham became secretary at war. p 2 212 HISTORY OF TAXATION. made to the duties on the distillery and imported spirits. The enormous increase in the consumption of duty-paid tea, consequent upon the reduction of the duty by the Cotumutation Act, showed that this article could now bear an additional tax; and 11. 10*. ■ per cent, was added to the duty, raising it to 20 per cent, on the price of tea. At the same time the duties on coffee and cocoa-nuts were also increased. Pitt had already imposed, in 1786, a tax upon hair-powder. The fashion of wearing wigs and HAiE-POWDEE still prevailed, and he now added a tax upon the wearers, to be paid by the head of the family, calculating the probable yield at no less than 200,000Z. This charge upon ' the curhng honors of the head,' at the rate of a guinea, touched ' pig-tails,' and was, therefore, termed by the opponents of the minister, who ceased to wear the article taxed, the 'guinea-pig' tax. A tax now imposed upon pkopeett insukeb AGAINST SEA KISK, proved Subsequently during the war, while insurances of ships could only be effected in this country, a most excellent contributory to the revenue. The receipt tax of the Coalition was considerably increased, and additional duties were imposed upon several heads in the stamp list, including probates and letters of administration, the instruments by means of a stamp on which, a tax on the estates of deceased persons was collected.^ • See as to wine, 35 Geo. III. c. 10; the distUlery, c. 11 ; foreign spirits, c. 12 ; tea, c. 13 ; hair-powder, c. 49 ; sea policies, c. 63; receipts, c. 55 ; stamps, c. 30. TAX ON COLLATERAL SUCCESSIONS. 213 The new taxes for 1796 included a second 10 1796. per cent, on the assessed taxes. The tax on pleasure horses was doubled. A new tax was imposed on horses used in industry, at the rate of 2s. a horse. The- duty on tobacco was increased by 4:d. the pound.^ The spigot of taxation was again driven into the wine- cask. The addition was of the same amount as that in the year previous ; and the expected suc(?ess of it is marked by the size of the bowl which, in the cari- cature of the day, Pitt and Dundas, as Bacchus and ' Silenus, are represented as having drawn from the wine-cask. An additional duty was imposed upon British-made wines, or ' sweets,' as they were termed, the consumption of which was at that day consider- able. The duty on hats was raised ; and there was a proposal for an increase in the duty on printed goods, linen and calico. But the taxation of the year is more particularly remarkable for the new tax on collateral successions. Pitt's main object in taxation at this date was to Succes- reach property, and one of his projects had in view a considerable increase of revenue from an important tax on successions, to produce 250,000/. per annum. North had under consideration, in the war of American Independence, the possibility of imposing a tax similar to the Dutch tax on collateral succes- sions, to which Adam Smith had directed attention in ' The Wealth of Nations,' but, unable to settle a plan for the purpose, had contented himself with imposing stamp duties upon any receipts given by legatees or ' See as tS^ taxes, 36 Geo. III. c. 14; tobacco, c.l3; hors6s,cc. 15, 16. 214 HISTORY OF TAXATION. successors for legacies or shares of personal estate. This tax, subsequently increased by raising the duties, was ineffective, because easily and generally evaded. The legatees and successors refrained from giving receipts, and executors and administrators did not demand them. Pitt now proposed to tax the property of deceased persons in the hands of their representa- tives, their executors or administrators, through whose hands personal property must, by law, pass before reaching the legatees and successors, and matured a plan for introducing into our fiscal system a tax on collateral successions more nearly resembling the Dutch tax, and the vicesima hereditatum et legatorum of Augustus, from which that tax had been copied. His plan, framed to include all collateral suc- cessions to landed, as weU as to personal or move- able, property, he originally intended to embody in a single Bill. Subsequently, altering his intention, he introduced into the House two Bills, one relating to the tax on collateral successions to personal pro- perty, the other, to successions to land. The first of these passed into law ;^ but the other, relating to land, having in a late stage passed by only the casting vote of the Speaker, was eventually withdrawn. And though subsequently on several occasions suggestions were made, in the house of commons and elsewhere, for the extension of the tax on successions to land, no serious attempt to remedy this inequality in taxation was made until the introduction of Gladstone's mea- sure, which became the ' Succession Duty Act, 1853.' > 86 Geo. III. c. 52, April 26, 1796. 'DOG' DENT. THE DOG TAX. 215 The loss consequent upon the withdrawal was esti- mated at 140,000Z. a year. The expected yield of the foregoing taxes was : — Assessed taxes, second 10 per cent. Pleasure horses, duties doubled Horses kept for industry, 2s. a horse Tobacco, id. additional . Collateral successions 140,000 116,000 100,000 170,000 250,000 An additional 180,000^. was expected from a reduc- tion of bounty for exported refined sugar. Pitt failed to obtain the assent of the House to the proposed increase for printed calicoes and linens, to produce 135,000Z. ; in consequence of which, later on in the year, he imposed a tax upon dogs. Such a tax had frequently been suggested, but more particularly in 1790, as preferable to the increase in the malt duty then made towards the expenses of the Spanish armament. The tax now imposed was the result of a suggestion of mr. Dent, or ' Dog ' Dent, as he was termed, the member for Berkshire, who had intro- duced a BiU embodying a proposal for a general tax on dogs, with a view to prevent the multiphcation of the animal. It was, however, charged only in respect of sporting dogs, or where more than one dog was kept.^ The additional taxes for 1797 were proposed by 1797. Pitt in December 1796. The amount to be raised was 2,110,000Z., which included 140,000Z., represent- ing the loss consequent upon the failure in the pre- ' See as to wine, 36 Geo. III. c. 123 ; dogs, 124; hats, 125. 216 HISTORY OF TAXATION. ceding year to carry the tax on collateral successions to land. The most equitable principle in raising so large a sum would be, he observed, to render the objects as diffuse as possible. In that view additions were made to existing taxes to produce the amounts following : — £ Assessed taxes, third 10 per cent. . . . 290,000 Auctions, 'i\d. in the £ for land, and 3c?. for furniture, goods, &c. ..... 40,000 Sugar, 2s. 6d. the cwt 280,000 Spirits, fourth increase, the same in amount as on previous occasions ' . . . . 510,000 Tea, second addition, 10 per cent. . . . 240,000 Bricks, second addition. Is. the thousand . 36,000 Port duties, 10 per cent, on the produce of hemp, iron, and brimstone, and 5 per cent. on the produce of all other goods, except wine and coals coastwise 153,000 A regulation of stamps ..... 30,000 The mileage for stage coaches was increased by an additional \d. The second addition for sugar Pitt proposed with regret, because it would faU, in some degree, upon the lower classes of the people ; and in the same view, the coarser sorts of tea under 2s. 6d. the lb. were, as forming the common beverage of the poorer classes, allowed to remain charged with 20 per cent. The considerable increase in revenue expected from the additional 10 per cent, on other sorts of tea was due to the successful operation of the commutation tax in breaking up the capital of the smuggler. A new tax, such as had been suggested by sir ' Accompanied with an increase in the duty on the licenses for Scotch distillers, which was to be raised from 18/. to three times that amount. PROPOSED TAX ON CANALS. 217 Eichard Hill in 1784, was imposed upon persons ciooksiiPd wearing watches or possessed of clocks, the expected yield being included under the head of assessed taxes, to which the new tax was an addendum. Two new taxes proposed on this occasion Pitt was unable to carry into effect : one, on parcels sent by coach ; and the other, on inland navigations, as canals were termed. In 1782, North had proposed to tax the carriage of goods by canal. Since that date numerous canal and navigation Acts had been passed ; in 1793, no less than twenty-eight, and in 1794-96, forty-one ; and the proposal now made was for a tax on the proprietors of all canals or naviga- tions paying over 5^. per cent. These taxes were estimated to produce respectively 60,000Z. and 120,000^.1 On the introduction of the last taxes suggested by April 26, 1797. Pitt before his famous Triple Assessment, he confessed himself a good deal at a loss, since there was no mode of taxation that he could propose which was not liable to objections of some kind. His desire was to make any new taxes fall as lightly as possible on the great sources of national prosperity and the lower orders of the people,^ and he selected as the least objectionable, the stamp duties, which, though they were then more than double what they were in the American war, had not undergone any considerable increase for some " See as to auctions, bricks, cocoa-nuts, spirits, and tea, 37 Geo. III. c. 14 ; sugar, brimstone, and the other port duties, c. 15 ; stills in Scot- land, c. 17 ; stage-coaches, c, 16 ; clocks and watches, c. 108 ; stamps c. 19 ; assessed taxes, c. 69. ^ Pitt's Speeches, iii. 125. 218 HISTOEY OF TAXATION. years. The stamp duties, he said, were a description of tax easily raised, widely diffused, which pressed little on any particular class, especially the lower orders of society, and produced a revenue safely and expeditiously collected at a small expense.^ These duties, therefore, he proposed to raise to almost double on most descriptions of instrviments, excepting only those that had been lately increased, the esti- mated addition to the revenue being 320,000Z. Part of this measure, consisting of a tax on what he termed private transfers, as opposed to the transfer of pro- perty at public auction, by means of a duty upon the deed of conveyance of the property according to an ad valorem scale, he was unable to pass. Instead of the proposed tax on transfers he imposed a new fixed duty of 10^. upon aU deeds, irrespective of length.^ Additional duties were also imposed in this year upon houses and servants, and 3s. additional upon agricultural and trade horses.^ The position of this country was now alarming. Ireland was in a state of semi-rebelhon. Hoche, with June 1797. his Ugton noire, was expected. Our fleet was in mutiny at the Nore. The funds had fallen to 48, and the difficulty of procuring money for the service of the country under the old system of loans, rendered the question of raising the supplies within the year one for very serious consideration. Already since the commencement of the war, the ' 87 Geo. III. c. 90. The rise in tlie stamp duties affected newspapers and almanacs and property insured against fire risk, » 37 Geo. III. 0. 111. ' See as to inhabited houses, 37 G€o. III. c. 105 ; horses, c. 106 ; servants, c. 108. THE STAMP DUTIES DOUBLED. 219 duties on several of the most important articles of consumption in our fiscal list had been considerably increased : on wine, twice ; on spirits, four times, to include the additional duties originally imposed for the Spanish armament ; on tea, from 12-10 per cent, for all sorts, to 20 per cem. for the coarser sorts, and 30 for other teas. Twice had the duty on sugar been raised, and twice the duty on bricks ; for tobacco, newspapers, advertisements, glass, paper, and hats there had been additions. The port duties generally had been increased by a percentage on the produce. The taxes termed the assessed taxes, three times raised in amount, included as new contributories persons wearing hair-powder, keeping dogs, wearing watches or using clocks. A tax had been imposed upon agricultural horses. The tax on stage-coaches had been increased ; and that on property sold by auction. Another new tax touched all property in- sured from sea risk. Collateral successions to per- sonal property had been specially taxed, while the landed interest had proved sufiiciently powerful to defeat the plan for a similar tax on landed property. The stamp duties generally had been almost doubled. The taxes on cotton-bleachers, shops, maid-ser- vants, gloves and mittens, and the registration of births, deaths and marriages, Pitt had been compelled to repeal. And he had been unable to obtain the assent of the House to proposals for new taxes on coals at the pit, printed goods according to price, the conveyance of parcels by coach, inland naviga- tion on canals, and private transfers of property. Four considerable taxes on articles of necessity, 2ii0 HISTORY OF TAXATION. soap, candles, leather, and salt, had remained un- touched, in accordance with the principle advocated by Adam Smith that, if retained, those taxes should be kept at the lowest possible rate. The tax on soap had received a considerable addition in North's last year of office. Pitt himself had repealed the addi- tional ^d. on candles he had been obliged to impose in his first year of office. The increased importance of leather for industrial purposes formed an additional argument against any augmentation of the tax on that article. And the tax on salt, always one of the most unpopular of taxes, had been thrice raised in amount for the war of American Independence. In these circumstances what was Pitt to do ? He was compelled to have recourse to the expedient of a general tax upon persons possessed of property. Since the commencement of the war he had used the group of taxes under the commissioners of taxes, consisting of the taxes on householders and on esta- blishments, as a quasi-property tax, raising them by 10 per cent, on three occasions, and had added to the group the taxes on dogs and clocks and watches. He now proposed to obtain the effect of a property tax by an increase in these taxes, and in his budget of November 4, 1797, introduced, with a speech which formed a splendid appeal to the patriotism of the nation, his scheme for the ' Triple Assessment for 1798.'! The distinctive feature of the Assessed Taxes was this, that the taxpayer was charged for the year by ' Passed Jan. 12, 1798. 38 Geo. HI. c. 16. THE TRIPLE ASSESSMENT FOR 1798. 221 reference to a return he was required to make of his maximuni estabhshment (that is to say, the greatest number of carriages, servants, horses, &c., kept by him at any time) in the previous year ; and he was charged, by reference to this return, according to an ascending scale, which had the effect of increasing the tax for every subject of duty in the larger esta- blishments. Pitt grounded the proposal he now made for ' a general tax on persons possessed of property, commensurate as far as practicable with their means,' on the basis of the taxes on houses and estabhshments as follows : — Taking the taxable establishments as shown by the returns for the year last past, so as to avoid any chance of fraud from insufficient returns, he divided the taxpayers into two classes : 1. Those keeping a taxable establishment of carriages, men servants, or carriage and saddle horses; and, 2. Those not keeping any such establishment, but taxpayers in respect of their dwelling-houses to the window tax and that on inhabited houses, or in respect of dogs, or clocks and watches. The taxpayers of the presumably richer class were charged by reference to the assessments for the pre- vious year as follows : — Number of times Under 25Z., a triple assessment . . 3 251. and under 301. 301. „ „ iOl. 40?. „ „ 501. 501. and upwards . the effect of this being that, although the tax was termed a 'Triple Assessment,' it ranged up to H H 222 HISTORY OF TAXATION. a quintuple assessment for persons charged to the assessed taxes of the previous year 501. or more ! The taxpayers of the second class were charged by a similar scale, which commenced with one-fourth where the assessment for last year was 1/. and up to 21. Prom 21. to SI. the charge was one-half ; and so on up to 251. , when the scale became the same as that for the class first mentioned. The Act for the Triple Assessment contained ela- borate rules and regulations to reduce the tax to an income-tax of 10 per cent, for incomes over 200/1., and to a sum not exceeding a certain proportion of the income, for incomes of 60Z., or from that to 200Z. ; and allowed an exemption for incomes less, in the whole, than 60^. While calling upon the richer classes for this un- usual efibrt — ' Yield thee, duke Smithson, and behold The assessment thou must pay ; Dogs, horses, -houses, coaches, clocks, And servants in array ' — he increased the taxes on articles of general con- sumption, imposing another 5 per cent, on the price of tea sold at 2s. 6f^. the pound or upwards, to raise the duty to 35 per cent., and doubling the duty on salt, raising it to 10s. the bushel, to the great astonishment (as represented in the caricatures of the day) of the Cook at finding ' Billy Pitt in her Salt Box!' The mercantile classes were further taxed by means of new duties imposed upon exports and imports, usually termed the Convoy Tax: — Every THE CONVOY TAX. 223 merchant vessel was required to sail with a convoy, viz., ' under the protection of such ship or ships as may be appointed for that purpose.' And in return for this protection to 'the increased and extensive commerce of these kingdoms ' certain duties to be paid in respect of goods exported and imported, and on the tonnage of ships outwards and inwards, were granted until the signing of the preliminary articles of peace. The convoy tax was expected to produce no less than 1,500,000Z. Lastly, another new tax touched all persons using or wearing any aemorial ensigns blazoned on the carriage, worn on the person, or used by means of the seals and signet ring of the taxpayer. The idea of selling the land tax had long been in contemplation. Pitt now rendered the tax perpetual, subject to redemption and purchase,^ and thus put it aside. Not far short of quarter of the charge was redeemed in 1798-9. The yield of the triple assessment was estimated by Pitt, ■ after the adoption of modifications which the measure underwent after it was first proposed, at 4,500,000Z. To anyone acquainted with the dif- ficulties that attend the assessment and collection of taxes, it will be obvious that the system of the as- sessed taxes was incapable of bearing such a strain as that now put upon it. But ' shameful evasion or .' rather scandalous frauds ' were the terms used by Pitt in reference to the means by which the efiects ' See as to salt, 38 Geo. Ill, cc. 43 & 89 ; tea, c. 42 ; the convoy tax c. 76 ; armorial bearings, e. 53 ; land tax, c. 60, passed June 21, 1798. 224 HISTORY OF TAXATION. of the measure were counteracted.^ The produce fell short of the expected yield ; but ' the meanness which shrunk from fair and equal contribution was compensated to the public by the voluntary exertions of patriotism ; ' for more than 2,000,000/. was sub- scribed under a provision in the Act enabling persons who were not charged up to a tenth of their income to pay additional contributions into the exchequer. Adhering to the principle of raising a con- siderable part of the supplies within the year, Pitt now acknowledged the necessity of requiring a more vigorous application of that principle, of obtaining a more specific statement of income, applying a more equal scale of contribution, and obtaining a more ex- tensive effect. For this purpose he proposed that ' the presumption founded upon the assessed taxes should be laid aside, and that a general tax should be im- posed upon all the leading branches of income.' According to his calculation, the whole sum of annual rental and profits, after making deductions upon a very liberal scale, amounted to 102,000,000/. under the following heads : — £ The land rental, after deducting one-fifth . 20,000,000 The tenants' rental of land, deducting two- thirds of the rack rent .... 6,000,000 The amount of tithes, deducting one-fifth . 4,000,000 The produce of mines, canal navigation, (fee. deducting one-fifth 3,000,000 The rental of houses, deducting one-fifth . 5,000,000 The profits of professions .... 2,000,000 The rental of Scotland, taking it at one-eighth of that of England 5,000,000 ' Pitt's Speeches, vol. iii. p. 372. IMPOSITION OF THE INCOME TAX. 226 The income of persons resident in Great Britain, drawn from possessions beyond the seas 5,000,000 The amount of the annuities from the public funds, after deducting one-fifth for exemp- tions and modifications .... 12,000,000 The profits on the capital employed in our foreign commerce 12,000,000 The profits on the capital employed in do- mestic trade, and the profits of skill and industry 28,000,000 In all ^102,000,000 Upon this sum a tax of 10 per cent, was likely to produce 10,000,000^. a year, and that was the sum which was likely to result from the measure he now introduced, and at which he assumed it. The income tax was introduced by Pitt in one of His grandest speeches ; and in the result, after con- siderable niodifications, was imposed as follows : — Upon absentees, that is, British subjects not resi- dent in Great Britain, in respect of all income arising from property in Great Britain ; and upon residents in Great Britain, in respect of all income arising from property in Great Britain or elsewhere, and all income from any profession, office, stipend, pension, employment, trade or vocation, A general statement of income was required from the tax- payers in a form given in the Act. An abatement of tax was allowed in respect of children, similar to that which had prevailed, in practice, under the old system of subsidies. And the administration- of the tax was copied from the Land Tax Act. The full charge, 10 per cent., applied only to incomes VOL. II. Q 226 HISTORY OF TAXATION. of 2OOZ5 and upwards. Between 200Z. and 60Z. of in- come there were various rates of charge ; and incomes under 60^. were not charged. The provisions necessary for the regulation of the system of direct taxation thus introduced were em- bodied in an Act containing 124 lengthy sections, with several schedules. Great care had been taken in drafting the Bill ; but the government, deeming it not improbable that the legislation on the subject might appear somewhat formidable, caused it to be abstracted and explained in 'A plain, shokt, and east DESCEIPTIOlir OF THE DIPFEEEXT CLAUSES OF THE ITf- COME TAX, so AS TO EEJSTDER IT FAMILIAE TO THE MEANEST CAPACiTr,' subsequently published. This forms the subject of one of Gillray's caricatures, where John Bull is represented at his studies, attended by his guardian angel, .with a harp in hand, who sings — Cease, rude Boreas, blustering railer ; Trust thy fortune's care to me. This tax Pitt estimated would produce no less than 7,500,000Z. a year. 318,000/. more was to be derived from a tax on small notes under 40s., to produce 42,000Z., and alterations in the bounty on sugar and the draw- back on coffee, on exportation. J800. A disappointment on the income tax of nearly a million and a half, compelled Pitt, in 1800, to make a fifth addition to the duty on spirits, raising it to 5*. 4(i. the gallon, which exceeded the rate chargeable at the end of the war of American Independence. The yield was now about a million a year. In the ' TRUST THY FORTUNE'S CARE TO ME.' 227 same year a fourth addition, of 5 per cent., on tea, except the coarser sorts, raised the duty to 40 per cent.^ In Pitt's last budget before leaving office, his isoi seventeenth, and the only one, as George Eose writes, to which there was no opposition, additions were made for articles of consumption to yield the amounts following : — Tea, fifth addition, 10 per cent, on the better £ sorts, raising the duty to 50 per cent.^ . 300,000 Sugar, timber, raisins, pepper, and exported lead, additional duties .... 359,000 Paper, existing rates doubled .... 135,000 It may be interesting to state, as regards tea, that the import, which before the Commutation Act had been about six millions of lbs., had now risen to twenty-two millions ; and as regards paper, that the yield had risen, in consequence of recent improvements in the manufacture, from 83,000/. for Great Britain in 1793, to 165,000/. for England alone in 1800. In direct taxes, an addition for horses included an addition in respect of agricultural horses as well as an addition in respect of saddle and carriage horses ; while an increase in the stamp duties affected bills of exchange, insurances of property from sea risk, and deeds.^ The budget was introduced while Addingtou was forming an administration ; for Pitt had felt himself 1 Spirits and tea, 40 Geo. III. c. 23. ^ Cheap teas were still charged only 20 per cent. ' See as to paper and tea, 41 Geo. III. c. 8 ; horses, c. 9 ; stamps, c. 10 ; timber, sugar, raisins and pepper, c. 28. ft 2 228 HISTORY OF TAXATION. compelled to resign office, in consequence of his inability to introduce a measure for the removal of the Catholic disabihties, which was in his opinion involved in the Act of Union by which the kingdoms of Great Britain and Ireland had been consolidated in the previous year. Granville, Dundas, Wyndham, and Spencer retired with him. 229 PART II. FROM THE PEACE OF AMIENS TO WATERLOO. 1802-1813, The peace of Amiens. Repeal of the income tax. Enormous increase in the taxes on heer. Increase in the assessed taxes. New duty on ex- ports and imports in lieu of the convoy tax. Kecommencement of the war. The income tax re-imposed at 5 per cent. Additional 2s. on malt, and additions for wine, spirits, tea, sugar, the port duties gen- erally, cotton, exports and imports, and tonnage. Addington'a last budget. Increase in the stamp duties. Pitt returns to office. The income tax raised to 6"10 per cent. ; the salt duty, to 15«. Austerlitz. Death of Pitt. The administration of All the Talents. The stream from the ' Petty ' fountain. The income tax raised to 10 per cent. Increase for tea, sugar, and tobacco. Another general rise in the port duties. Proposals for taxes on pig iron and private brewing. Another 10 per cent, on the assessed taxes. Death of Fox. The Portland administration. Spencer Perceval's consolidations of the assessed taxes, the stamp duties, and the port duties. The Perceval adminis- tration. Assassination of Perceval. The Liverpool administration. Vansittart's first budget. Increase for leather, glass, and tobacco, establishments, and agricultural horses. In 1813, further increase on tobacco. A general rise in the port duties. Attempt to tax cotton. The fii'st peace of Paris, 1814. The last taxes for the Great "War. In the new administration, which was announced in March, after the recovery of the king from his illness, Addington held the posts of first lord of the treasury and chancellor of the exchequer in succes- sion to Pitt.^ Pitt's right-hand man at the treasury, George Rose, now resigned the post of secretary he had held for seventeen years. His colleague, Long, ' The duke of Portland, taldng the post of president of the council, was succeeded at the home office by lord Pelham ; lord Hawkesbury, subsequently earl of Liverpool, succeeded lord QrenviQe at the foreign office ; and lord Hobart, Dundas, as the third secretary, for war and the colonies. The business of the colonies, which had been carried on at the home office, was in this year, 1801, transferred to the secretary for war. 230 HISTORY OF TAXATION. subsequently lord Farnborough, retired with him ; and they were succeeded by Hiley Addington, brother of the prime minister, and Vansittart. 1802. After the peace of Amiens, in May 1802, Adding- ton repealed the income tax, stating that he con- sidered it a tax to be reserved for war purposes. In order to partly fill the void in the exchequer caused by this repeal, which cost 5,600,000/., the taxes falhng upon beer were increased to produce an additional 2,000,000Z. ^ An augmentation of the assessed taxes would produce 1,000,000Z., and a new tax on imports and exports, in substitution for the convoy tax, another 1,000,000/.^ 1803. When the war recommenced, Addington re- imposed the income tax, but at only 5 per cent., estimated to yield 4,500,000Z. And, as the principal cause of the unpopularity of the tax had been the necessity of giving a general declaration of income from all sources, the tax was now split up and parcelled out in schedules, so as to form, as regards the returns required, so many separate taxes. Schedule A contained the tax on owners of land, including houses, in respect of the ownership ; schedule B, the tax on farmers in respect of land and houses attached to farms, and included the additional benefit to persons in occupation of lands of their own ; schedule C, the tax on dividends and annuities ' The duty for beer by 2s. the barrel, malt by 1«. OJrf. the bushel, and hops by Hd. and a fraction, to make it Sd. the pound. " See, as to window tax and inhabited houses, 42 Geo, III. c. 34 ; servants, carriages, horses and dogs, c. 37 ; income tax, c. 42 ; beer, malt and hops, c. 38 ; customs, c. 43, HEAVY TAXATION OF BEER. 231 from public revenue ; schedule D, the tax on income derived by residents in Great Britain from property or business abroad, and the tax on professions, trades, employments, or callings exercised in Great Britain ; while schedule E contained the charge on pubHc offices or employments of profit, including the army, navy, and civil service. Incomes under 60/. were exempted, and an abatement of tax was allowed for incomes between 60/. and 150/.^ At the same time temporary, or war duties were imposed of 18/. the tun upon French, and 12/. the tun upon other wine, and upon other articles of consumption, estimated to produce the following amounts : — ~ £ Malt, 2s. the bushel 2,700,000 Spirits, 50 per cent. * 1,500,000 Tea, 45 per cent, on all sorts * . . . 1,300,000 Sugar, 20 per cent., and 12^. 10s. per cent, on the port duties generally, except tea, wine, deals and fir timber .... 1,300,000 Cotton wool. Id. the lb 150,000 British goods exported to any part of Europe, 1 per cent, on value ; to any other part of the world 3 per cent 460,000 Additional tonnage on vessels, inwards and outwards'* 150,000 Addington's last budget, the budget of 1804, included another (the fifth) addition to the duty on » 43 Geo. III. c. 122. Aug. 11, 1803. " Raising the duty on home-made spirits, to 8s. and a fraction, with equivalent additions for rum and brandy. ' Raising the duty to 95 per cent, for all except the coarser sorts, and for these, to 65 per cent. * See as to malt, wine, spirits, and tea, 43 Geo. III. c. 81 ; sugar, cotton, customs, and tonnage duties, c. 70; taxes, c. 161. 232 HISTOKY OF TAXATION. 1804. -j^ijiQ . an additional 121. 10s. per cent, on the pro- duce of the duties on sugar, and another 121. 10s. per cent, on the produce of the port duties generally, except tea, wine, deals and fir timber, and cotton wool, but including coals carried coastwise. But his principal plan, -for increasing the taxes was one for a general consolidation of the stamp duties, involving the intro- duction of a tax- on transfers of property according to value, and estimated to yield 800,000^. This Pitt ■ subsequently took up, but was unable to carry through the House in its integrity.-^ The duties on malt, wine, spirits and tea, the two increases in the port duties of 12/. 10s. and 12Z. 10*., i.e. 251. per cent., the other port duties on sugar, cot- ton, &c., and the tonnage duties, granted in 1803 and 1804, were temporary duties granted either until the ratification of a definite treaty of peace or until 6 or 12 months after the peace. But these port duties, it may be well to add, though re-enacted in the tariff of 1809 as temporary duties, were, after the peace, made perpetual. The same course was taken as re- gards the other duties above mentioned, which were made perpetual, with the exception of the duty on malt. In May, Pitt was recalled to office by the general voice of the nation, who regarded the hand of Addington as too weak to hold the helm of state in perilous times ; but Grenville and his party, who had ' lU. 18«. 6d. the tun on French, and 71, 19s. the tun on otiher wine, by 44 Geo. III. c. 49 ; customs, c. 63 ; stamp consolidation, e. 98. Excise consolidation of the same year, c. 69. Taxes consolidation, c, ri, PITT'S LAST BUDGET. 233 gradually approached the whig party, now refused office unless Fox was admitted to the cabinet. The objection of the king to Fox prevented this arrange- ment, and therefore Pitt resumed office without the Grenvilles, and with a government upon a tory basis.^ ., ■ Pitt's last budget, for 1805, included additions to isos. the income tax, which he raised to -6^ per cent., the legacy duties, which he extended to direct successions, the duty on horses, and the auction duties ; additional duties on several articles in the tariff; a fourth rise pf 21. 10s. per cent, on the produce of the port duties generally ; and lastly, additions for bricks, glass, coffee, cider, vinegar, and salt. This tax, raised in 1798 to 105. the bushel, had been condemned by a committee of the house of" commons, but as a last resource Pitt was compelled to increase the rate to 15s.^ In the autumn, Napoleon, breaking up the camp at Boulogne, swept across France and over the Ehine at Strasburg, cut off Mack from the Austrian forces, shut him up in IJlm, and compelled him to surrender with 40,000 men. After his entry into Vienna, his generals obtained, by stratagem, the command of the bridge over the Danube, and passing on to Austerhtz, 1 Hawkesbury went from the foreign to the home oflBce, and was suc- ceeded in his previous post by lord Harrowby ; lord Camden took the secretaryship for war and the colonies ; and Melville, the admiralty. Oastlereagh became president of the board of control : and Canning, Sturges Bourne, Huskisson, and George Rose returned to office, holding subordinate posts. ' See as to income tax, 45 Geo. III. c. 15 ; horses, c. 13 ; salt, c. 14 ; legacies, c. 28 ; customs, c. 29 ; auctions, bricks, coffee, cider, glass, and vinegar, e. 30. 234 HISTOEY OF TAXATION. he totally defeated, December 2, the Austrian and Eussian armies in the battle known as that of ' the Three Emperors.' The victory of Austerlitz caused the death of Pitt. ' Koll up the map of Europe,' he said on receiving the news ; ' it wUl not be wanted Death of again for a Ions time.' And, worn out by hard work Pitt. ° . and anxiety, an old man at the age of 47, he died in January 1806, a victim of the war, 'killed by the enemy as much as Nelson,' writes Wilberforce in his Diary. After the death of Pitt, the plan of a strong ad- ministration on a broad basis he had so earnestly desired but had been prevented from carrying into effect in consequence of the aversion of the king to Fox, was adopted in the formation of the coalition ministry known as ' All the Talents,' and depicted as the ' Broad Bottoms,' in an age which delighted in vulgar caricature. In this administration lord Gren- ville was prime minister, and Fox took the foreign office, the post he thought would best suit his views ; lord Spencer, WilUam Wyndham, mr. Grey, subse- quently viscount Howick, and Sheridan were included ; and lord Henry Petty, subsequently lord Lansdowne, was chancellor of the exchequer. The continuance of war prevented the execution of the promises to reduce taxation that had been made by Fox and his party, and he and lord Henry soon appeared in the caricatures of the day as ' the new tax-gatherers,' with a copious stream of new taxes flowing from the ' Petty ' fountain. 1806. The new administration, adhering to Pitt's policy of raising by means of taxes as great as possible a part of THE STREAM FROM THE 'PETTY' FOUNTAIN. 235 the supplies necessary for the year, increased- the rate of the income tax to 10 per cent. This lord Henry- Petty termed the ' natural Umit of the tax,' and he stated his reason for raising the rate at once to the natural hmit in lieu of increasing it gradually, to be a desire to prevent the supposition that this tax was a fund to be drawn upon to an indefinite extent. At the same time, the exemption allowed for small incomes was reduced from 60Z. to 50Z. and limited to incomes derived from labour, viz., from professions, trades and offices, as Addington had originally proposed it should be, in 1804. As thus imposed, the tax produced, in 1806, about 12,800,000^. An additional million of revenue was raised by the increased taxation of articles of consumption : — ^This touched tea, sugar, tobacco, and the port duties generally. Hitherto, on several occasions when addi- tions had been made to the tax on tea, the cheaper teas, under 2*. &d. the lb., had not been charged. On these teas the duty stood at 56 per cent. ; that on the more expensive sorts, at 96. An addition to the former now raised the duty to 96 per cent, on the price for all teas. Sugar was charged with an addi- tional 15 per cent, on the produce of the duties ; and tobacco, with an additional 6^. the lb. On the pro- duce of the port duties generally, this, the fifth general rise in the war, was d>l. 6s. did. per cent. All articles charged ' inwards,' ' outwards,' or ' coastwise ' were in- cluded ; except cotton, tobacco, wine, deals, and fir timber from Norway/ ' There were also some fiscal alterations of minor importance, more particularly new duties on appraisements and on annual licenses for 236 mSTORY OF TAXATION. Two important proposals for new taxes — one, a project for a tax on pig iron ; the other, a suggestion for the imposition of the frequently contemplated tax on private brewing — encountered serious opposition in the House, and eventually were dropped, that on private brewing more particularly on the recommenda- tion of George Eose. In lieu of these, a fourth 10 per cent, additional was imposed upon the produce of the assessed taxes, coupled, however, with a provision for an allowance to be made to payers of assessed taxes having large families.^ In September 1806, Fox was laid by the side of Pitt in ' the Great Temple of Silence and Eeconci- liation' at Westminster. His death led to changes in, and eventually, in March 1807, to the resignation of, ' All the Talents,' the nearest approach to a whig ministry in power from 1783 to 1830. 1807. I^ the administration now formed under the duke of Portland, with Hawkesbury at the home, and Canning at the foreign, office, and Castlereagh as secretary for war and the colonies, Spencer Perceval, a younger son of the earl of Egmont, who held the post of chancellor of the exchequer, was selected to 1808. lead in the house of commons.^ He had been attorney- appraisers. See as to income tax, 46 Geo. III. c. 65 ; toloacco, c. 39 ; tea, c. 38 ; sugar and other port duties, c. 42 ; appraisements, c. 43. The duties on tobacco were war duties, to continue until twelve months after a definitive treaty of peace. The port duties, also war duties, were in- cluded in the consolidation in 1809. ' 46 Geo. III. c. 78, duties ; allowance, c. 84. ' In 1807, an additional duty of 2s. 6d. the gallon was imposed on foreign brandy as a temporary or war duty, until twelve months after a treaty of peace. 47 Geo. III. sess. 1, c. 27. SPENCER PERCEVAL'S 'CONSOLIDATIONS.' 237 general from 1802 to 1806 ; and the principal increase in taxation effected by him consisted in ' consolida- tions ' of duties as they were termed — a consolida- tion or new arrangement of the assessed taxes ; a consolidation of the stamp duties, involving the application of an ad valorem scale of charge to con- veyances, as suggested by Pitt, and an increase for bankers' notes and bankers' licenses ; and, in 1809, isoo. a consolidation of the port duties which, though simplified and consohdated in 1803,^ had since then, in consequence of grants of additional duties and new legislation on the subject, again become comphcated.^ From these the following amounts were expected : — £ Consolidation of assessed taxes . . . 125,000 „ stamp duties .... 200,000 „ port duties . '. . . 105,000 In 1809 a considerable increase was also made in the duties on spread window or broad glass'.^ In the autumn the Portland administration was broken up in consequence of the embarrassment caused to the duke by the difficulties between Canning and Castlereagh, which led to his resignation, though, in consequence of his declining health, this could not long have been deferred.^ The question now arose whether his successor should, be of the Lords, as 1 Taxes consolidation, 48 Geo. III. e. 65 ; stamps, c. 149 ; customs, 49 Geo. III. c. 98. By this Act the old duty of butlerage was to cease from July 5, 1809. See s. 36. In the Act the duties were arranged in two columns, the first containing the permanent duties, the other the temporary or war duties ; and it may be well at once to add that these war duties were, after the peace of Paris, continued and subsequently made perpetual. ''49 Geo. IIL c. 63. 3 The duke of Portland died on Oct. 29. 238 HISTORY OF TAXATION. desired by Spencer Perceval, or of the Commons, as desired by Canning with a view to his own elevation to the supreme post. The resignation of Canning, in October, after his duel with Castlereagh, solved this difficulty, and cleared the way for a rearrangement of the ministry. Something that seemed to be nego- tiation with lords Grenville and Grey took place ; but eventually Spencer Perceval became, in December, prime minister in an administration which was but the old Portland administration without its nominal head, and with the marquis Wellesley in Heu of Canning at the foreign office, to support his brother in the Peninsular war.^ Eventually Spencer Perceval continued to hold, with the post of first lord, that of chancellor of the exchequer. George Eose had dechned it on account of his advanced age. The following interesting note re- lating to suggestions for taxes is attached to a memor- andum of the state of the finances of the country made by him on receiving the ofier of the post.^ Mr. Perceval has seen a paper of Mr. Pitt's : — Husbandry horses . 150,000 Overstated Tobacco . 325,000 War tax, new Cotton, Id. per lb. . 230,000 do. Coals, Is. at the pit . 500,000 Tried and failed Candles . 200,000 Impracticable Hides . . 80,000 do. Private brewing . . 500,000 Unproductive Broadcloth . . 500,000 If from this list we omit the headings relating to 1 Mr. Richard Ryder was at the home office in the place of Hawkes- bury, who took the post vacated by Castlereagh. " Diary of the right hon. George Rose, ii. 416. PITT'S MEMORANDA FOR TAXES. 239 coals and candles, -whicli are marked ' tried and failed ' and ' impracticable,' and broadcloth, we have, in the remaining suggestions it cohtains, hints for the most important additions to taxation, under particular as opposed to general heads, proposed subsequently in the war. In the next year, however, the course of the im- isio-ii. position of new taxes was, by general consent, sus- pended. The effect of Napoleon's Continental System of blockade and our retaliatory Orders in Council had been to close most of the European ports and destroy commerce. There was a bad harvest ; and the price of wheat went up to II65. the quarter. Employment was sadly diminished ; and this year and the two subsequent years formed a time of much depression and misery. The sole addition to taxation in 1811 was an addition for spirits. Eum, the colonial spirit, was not touched ; but the duty on brandy and other foreign spirits was increased by 12-10 per cent., and that on the distillery, to an. enormous charge, equiva- lent to 10s. 2cZ. the imperial gallon. A proposal for a new tax on cotton from America, based upon a consideration of the enormous increase in the amount imported of late years, encountered such determined resistance from Peel and Baring. that it was withdrawn. It is interesting to conjecture that it may have been suggested to the mind of the min- ister by Pitt's memorandum ; but that he had other advisers is evident from the statement he made on the subject when proposing the repeal of Pitt's tax upon hats, in lieu of which the new tax on cotton was 240 HISTORY OP TAXATION. suggested. This tax was to be repealed as having proved impracticable and unproductive.-^ Pitt's tax on gloves and mittens had been given up for the same reason. Spencer Perceval now expressed a hope that 'when it should be generally known that the tiaxes on hats and gloves were given up as impracticable and unproductive, the intelligence would not be thrown away upon those gentlemen who, in their anxiety to assist the chancellor of the exchequer in discovering new objects of taxation, honoured him with their communications. There was not an article of dress — boots, shoes, leather breeches, &c. — not an article in a house — locks, keys, bells, &c. — which had not been frequently recommended, no doubt with the best of motives, as objects of taxation. If the fact of giving up this tax should have the effect of putting a stop to communications of that description it would save the treasury much inconvenience.'^ 1812. The Perceval administration, which had continued in power under the Eegent, had experienced rough handling in the Commons on the questions relating^ to the Convention of Cintra and the unfortunate Walcheren expedition, and required some addition of strength. In 1812, when the regent became, practi- cally, king, his former friends of the whig party had expectations of promotion ; but the offers which reached lords Grenville and Grey, through the duke of York, were not such as they could accept ; and now Wellesley, disappointed in the hope he had en- ' It produced atout 30,000^. ' Ann. Reg. 1811, pp. 65, 70. See as to spirits, 51 Geo. III. c. 50, and as to hats, c, 70. CURIOUS SUGGESTIONS FOR TAXES. 241 ..tertained that events would place him in the supreme post with his friend Canning in office, resigned the post subordinate to Spencer Perceval he disdained any longer to hold. Castlereagh, who succeeded .him, remained at the foreign office until his death in 1822. Spencer Perceval had only received his new lease of power from the regent a few months, and had .prepared a budget to meet the increased taxation necessary for the continuation of the war, with vigour, in Spain, when he was assassinated, in May. The cabinet, considering themselves unable to carry on the government under Hawkesbury, now earl of Liverpool, without some reinforcement, entered into negotiations with Wellesley. But Wellesley and Canning were inseparable ; and Canning, though reconciled to Castlereagh, was not, at the time, will- ing to accept office with him. In the result the administration was continued under Liverpool,^ with Castlereagh to lead in the Commons, and Vansittart as the new chancellor of the exchequer. Vansittart's first budget was, in effect, the budget of Spencer Perceval ; having only a short time to prepare a plan, he adopted, in the main, that of his predecessor in office. Its principal features consisted in an increase in the duties on leather, the manu- facture of which for home consumption and for ex- portation had considerably increased of late years ; an increase on glass; 2d. the pound additional . on * With earl Batlaurst as successor to him in the post of secretary for war and the colonies. Mr. Richard Ryder resigned the home office in favour of lord Sidmouth (Addington). VOL 11. K 242 HISTORY OF TAXATION. tobacco : and a repeal of the bounty on exported printed goods, which had grown from a small charge to a great amount, and was now unnecessary for the encouragement of the export trade. Among the proposals in Spencer Perceval's plan was one for a tax on private brewing establishments. This Vansittart did not adopt. In heu thereof he proposed additions for establishments consisting of male servants, carriages, horses and dogs, game certificates, and agricultural and trade horses. These would produce the amounts following : — £. Leather 325,000 Glass Tobacco, additional Id. . Printed goods, repeal of bounty Establishments, game and horses In all , 328,000 , 107,000 , 308,000 , 515,000 1,583,000 The budget proposals were approved by Huskis- son, who said he was decidedly of opinion that a more judicious selection of new taxes coull not have been made. But strong objections were raised, by Western, to the increase in the tax on agricultural horses ; while the additional tax on leather, opposed by Brougham, on the ground of his objection to the principle of the tax, after passing in the Commons, formed the subject of a division in the house of lords. Eventually all Vansittart's proposals were carried into efiect,^ with the exception of a proposed tax on property bought in at auctions, in substitution for ' See as to glass, leather, and tobacco, 52 Geo. III. c. 94 ; bounties, . 06 ; Bar van ts, carriages, horses, dogs, and game ceitificates, c. 93. VANSITTAKT'S FIRST BUDGET, 243 which, in 1813, another addition of 2d. the pound isis. was made to the duty on tobacco, to produce the same amount, viz., 100,000/1. But the special feature in the taxation of this year was another, the sixth, general rise in the port duties. The last considerable general increase had been made by Addington, in 1804 ; and in 1805 and 1806 there had been smaller increases. The addition now made, as a temporary or war tax, was no less than 25 per cent, on the produce of the duties. It afiected all articles subject to duty except tea, sugar, raw silk, wine and cotton wool, and was estimated to produce from 850,000Z. to 900,000^. Further duties ,were imposed upon French wines, and 66^. 13,s. 4d. per cent, additional upon all other French goods. A second proposal for a tax on cotton from America proved as unsuccessful as that of Spencer Perceval had proved in 1811, and was abandoned by Vansittart in consequence of the determined opposition of Baring and other influential members of the House. ^ In the next year Napoleon, who had been weak- isu. ened by losses in the campaign against Eussia which had practically destroyed the Great Army, proved unable to resist the advance of the Allies upon Paris, which they entered in March. His abdication, and retirement to Elba, were followed by the restoration of the monarchy and the peace of Paris ; and as the war with the United States, which had arisen in con- ' See as to customs, 53 Geo. III. c. 33 ; tobacco and French -wines, c. 34. e2 244 HISTORY OF TAXATIOX. sequence of our Orders in Council, was subsequently ended by the treaty of Ghent, there appeared to be a fair prospect of a cessation of the long drain upon our resources, which had continued almost without intermission since 1792. The temporary or war duties were indeed continued, but we repealed the special percentage on French goods imposed in the previous year, and no new taxes were imposed. 1815. The next year proved as expensive to us as any in the war. Questions that arose between the Allies, at the Congress of Vienna, seemed to Napoleon to afford a chance for a renewal of the contest with success ; and his escape from Elba, followed by the flight of Louis XVin. into Belgium, placed him in a position to continue the struggle through the famous ' Hundred Days,' which formed the closing scene in the Great War. The last taxes imposed in the Great War touched tobacco, so often before enlisted as an additional con- tributory ; a great variety of manufacturers, traders, dealers, and retailers of exciseable goods, known as ' excise traders,' and as such required, by the existing law, to take out annual licenses — brewers, maltsters, dealers in and retailers of excisable liquors of vari- ous sorts, manufacturers of tobacco, makers of soap, candles, glass, and so on ; and the following : — Legacies and successions to personal estate. Property insured from fire or sea risk. Stage coaches. Articles of Consumption. Gold and silver plate. Newspapers Advertisements in newspapers. Almanacs. LAST TAXES FOR THE GREAT WAR. 245 Instruments liable to Stamp Duties. Bills and notes. Law proceedings. Receipts. Deeds and instruments. The additions for tobacco and excise traders took effect from the 18th of February, and were expected to yield 600,000^. The other additional taxes of the year were estimated to yield, with an addition for the postage of letters, no less than 1,200,000^. ; but as they did not come into force until September, no additional profit was derived from the coaches that ' flashed along the highway ' the joyful tidings in June, or from the chronicles of 'public news, intelli- gence, or occurrences printed, dispersed and made public in Great Britain,' as newspapers were legally defined, which spread the welcome news of the final defeat of Napoleon on the plains of Waterloo.^ " See as to tobacco and excise licenses, 55 Geo. III. c. 30 ; stamps consolidatioD, including probate and legacy and property insured against fire or sea risk, c. 184 ; advertisements, almanacs, newspapers, plate, and stage-coaches, c. 186. BOOK III. TAXATION IN THE ZENITH, 1815-1842. CHAPTER I. TAXATION IN 1815. CHAPTER II. FBOM THE EEPEAL OF THE INCOME TAX TO THE ABANDONMENT OF THE SINKING FUND, 1816-29. CHAPTER III. FEOM THE ABANDONMENT OF THE SINKING FUND TO THE EEIMPOSITION OF THE IN"COME TAX, 1829-42. 249 CHAPTER I. TAXATION IN 1815. Population, national debt and revenue. Sources of revenue. 1. Direct taxes. 2. Taxes on articles of consumption. 3. Stamp duties. Summary. Sydney Smith on taxes due to wars. Portrait of the ' truly free Englishman.' List of Failures in taxes. In 1815, when taxation in this country reached the zenith at the conclusion of the great war with France, the population of the United Kingdom, if we allow rather more than eleven millions for England, two for Scotland, and six for Ireland, numbered between nineteen and twenty millions. The national debt amounted to about eight hundred and sixty millions, which, if we take the population at twenty millions, would be 43^. per head ; and the annual charge of the debt was about thirty-two milHons. Our revenue from taxes, raised in amount from 17 millions before the war to about 68 J millions for Great Britain, formed, together with 6|- millions from Ireland, a total of 74-| millions for the United King- dom. The revenue in Great Britain was derived from the following sources : — I. — Direct Taxes. 1. The old land tax, the ' annual land ' of former times, rendered perpetual by Pitt, now formed, in effect, an imperial rent-charge on the different districts 250 HISTORY OF TAXATION. charged in the Act of 1798, within which the tax was redeemable by the taxpayers. Originally the amount of the land tax had been about 2 millions ; the unre- deemed portion was about 1,196,000^. 2. The two taxes on houses — viz., the window tax and North's tax on inhabited houses, and the taxes on establishments, consisting of Pelham's tax on carriages, North's, on men servants, and Pitt's taxes on saddle and carriage horses, race-horses and dogs, and the cognate taxes for hair-powder and armorial bearings, formed a group of taxes on persons by re- ference to their expenditure. These had been raised by additional percentages on the whole group and additions to the particular taxes separately, to ex- cessive rates. The yield was about 6^ railhons. 3. The income tax, at 10 per cent., 2s. in the pound, produced for every penny 608,000^., or in the whole, 14,600,000^. 4. The taxes on property on its devolution on death — the probate and legacy duties, touched only personal property as opposed to land, Pitt having failed in his attempt to obtain the sanction of the legislature to an extension of the tax to successions to land. The yield was about 1,297,000L 5. The tax on property insured against risk from fire, originally imposed by North in the war of American Independence, and that on property insured against sea risk, imposed by Pitt in the late war, raised to very high rates, produced, the former more than 618,000Z., and the latter over 400,000/. ; HI all about. 918,000/. TAXATION IN 1815. 251 6. The tax on property sold at public auction, first imposed by North, produced about 284,000/. 7. Of the various taxes on persons providing the means of locomotion for the public — in the metropolis by hackney carriages, and in Great Britain in stage coaches or with post-horses, that on hackney coaches produced 29,000Z. ; the coach business, recently addi- tionally taxed by Vansittart, 223,608/. ; and post- horses, about 219,000/. ; giving a total from these taxes of about 471,608/, Two taxes, of Is. and 6d. in the £ on salaries and pensions, produced 25,844/. Many trades, businesses, and professions were liable to taxes imposed upon some act necessary before beginning to practise, or upon an annual license required for the trade, busi- ness, or profession. Thus, a doctor paid 25/. on his admission as a fellow of the college of physicians, and a barrister, 25/. on his admission to an inn of court, and 50/. on his call to the bar. Physicians and barristers were not required to take out any annual license ; but an attorney, in addition to 120/. on his articles of clerkship, and 25/. on his admission to practise, was also subjected to an annual license for the exercise of his profession, costing 12/., and a similar amount was required annually from every conveyancer or special pleader below the bar —a sum 21. in excess of the 10/, payable in 1804, which had proved sufficient to deter Campbell from com- mencing in that year the career which eventually placed him upon the woolsack. Annual licenses were also required^ for bankers who issued notes, 252 msTOEY OF taxation. chargeable with 30Z., and for pawnbrokers, ap- praisers, sellers of gold and silver plate, and hawkers and pedlars, the licenses involving payments varying in amount. The yield of these special taxes was not, however, in the whole, considerable; while the duties charged on a great variety of annual licenses for tra- ders in excisable commodities, such as dealers in and retailers of excisable liquors — beer, wine, sweets, and spirits, makers of candles, paper, soap, &c., &c., may be regarded as, in effect, additions to the duties on the articles excised. 8. The yield of the tonnage on shipping was : out- wards, 72,234^. ; inwards, 99,417^. Total, 171,651/. Such were the principal direct taxes. The yield, in the whole, is little less than 25^ millions. We derived that amount and half as much again, viz., 38 milhons, from — II. — Taxes on Articles of Consumption.^ Eatables. The principal taxes on eatables were those on salt, sugar, raisins, currants, pepper, and vinegar. Salt, The duty on salt, which Pitt had been compelled under pressure of the war to raise, first to 10s., and lastly to the excessive rate of 15s. the bushel, produced at that rate 1,616,124Z., and the import duties on the article, 547/.; forming a total of 1,616,671/. Sugar. The duties on sugar, raised by additions on several ' The amounts are taken from the Account of Public Income for the year ended January 5, 1816. Finance Reports, 1816. In the customs, Great Britain, the net produce is given. In the excise, England and Scotland, the gross receipt is given, leaa exports. In the branches of stamps and taxes, the gross receipt is given. TAXATION IN 1815, 253 occasions to 1^. 10s. the cwt., yielded, after deduct- ing drawbacks and bounties which amounted to 1,552,000/., 2,957,403/. Plum puddings and raisins for dessert were taxed to the amount of 127,000/. The favourite currant dumplings of the lower classes produced 280,000/. ; pepper, 87,000/. ; and vinegar, 47,589/. The principal taxes on articles of consumption in Drinks, the form of, or capable of producing, drinks were those on beer, wine, spirits, tea and coffee. The duty on beer, which, on the repeal of the income tax in 1802, had been raised by Addington to 10s. the barrel for strong beer, and 2s. the barrel for table beer, produced 3,330,044/.; the duty on malt, raised at the same time, from Is. O^d. the bushel to 2s. 5d., and, on the recommencement of the war, to 4s. 6d., produced 6,044,276/. ; and that on hops, 222,026/. If we add about 200,000/. as for the yield from licenses to brewers and maltsters, and for the sale of beer, the total produce of the taxes falling on beer may be taken at 9,800,000/. The smuggling of wine along the southern coast did not prevent the realisation of a considerable re- venue from the wine cask ; the duty on wine, with the duties on the licenses for the sale of wine, pro- duced 1,900,772/. The distillery — that is to say, gin, whisky, and British brandy — gave 3,459,088/. ; and foreign and colonial spirits, that is to say, brandy and rum, 2,917,818/. : a total produce of 6,376,906/. ; or if the revenue from licenses be added, about 6,700,000/. 254 HISTORY OF TAXATION. The total produce from alcoholic liquors, beer, wine, and spirits, was therefore, at this date, about 18,40O,OOOZ. Minor taxes on cider, perry, and ver- juice produced 19,291^. ; the tax on sweets and mead, 18,154^. Tea. The duty on tea, raised since the -commencement of the war, by successive additions, from 12-10 to 96 per cent, on all sorts of teas, produced 3,591, 350/., and the duty on coffee 276,700Z. Tobacco. Trom tobacco and snuff we derived 2,025,663/.^ Q(.}^g^ The taxes on articles of consumption not eatables, articles. (Jrinlis^ or tobacco, touched coal, a great variety of articles forming the raw materials for building houses, ship-building and other manufactures, and many of the most important of our manufactures, some of which again formed the raw material for building or for other trades. Coal. The duties on coal and culm, and slates and stones, carried coastways, produced 871,165/., and 44,632/. ; in all 915,797/. Timber. Thosc on timber of various sorts, and in various stages of manufacture, 1,802,000/., of which deal and deal ends contributed 735,000/., and fir timber 472,000/. Those on cotton wool, 760,000/. ; those on raw and thrown silk, 450,000/. ; those on hemp, 285,000/. ; while the duties on barilla produced 59,000/. ; on indigo, 86,000/, ; on pearl and potashes, 52,000/. ; on bar iron, 63,000/. ; and on skins and furs, 37,000/. ' This includes the yield of the customs and the excise consolidated duties, temporary war duties, and annual dutie.s. TAXATION IN 1815. 255 The taxes on manufactures which in their turn Manufac- form the raw material for other trades or for house- building, fell on leather, which, doubled by Vansittart in 1813, produced 698,342Z. ; soap, which produced 747,759Z. ; and bricks and tiles, which, raised in amount by three additions during the war, produced 269,121^, The tax so unfortunately re-imposed by Legge upon glass produced 424,787Z. The other taxes on manufactures originally imposed in the war of the Spanish Succession, at the same time as those on leather and soap, viz., those on candles, paper, printed goods, and newspapers, produced — from candles, 354,350^. ; printed goods, 388,076Z. ; paper, the manufacture of which had recently increased enormously, 476,019/.; newspapers, 383,000/.; and advertisements, 125,000Z. ; ^ gold and silver plate produced 82,15 U. ; and the minor taxes of this description, viz., those on starch, stone bottles, wire, medicines, and cards and dice, amounts compara- tively insignificant, but iii all, 132,116Z. ; forming a total for manufactures of 4,080,7 21Z. To enumerate the articles included in the tarifi" is impracticable. The duties had been raised, by ad- dition upon addition, to very high rates, and in many cases were practically prohibitory. The produce of several of the most important contributories has already been stated. The remaining items produced lesser amounts, decreasing to insignificance: piU-boxes yielded, in Scotland, 18*. lOc^. ; the gross produce of ' Gross receipt, deducting for exports. The deduction under this head for printed goods was 910,815/. ; for glass, 42S,.346/. 256 HISTORY OF TAXATION. the permanent duties on saltpetre was 2d., and that of the war duty, Id. ; but numbers tell, and the total yield of these items, amounting to several hundreds, was no less than 1,188,000Z. The duties ' outwards,' that is, on certain foreign goods exported, and alum, coals and culm, copperas, lead and tin, with the small percentage duty on British goods exported, produced 364,417Z. in. — Stamp Duties. The list of instruments liable to stamp duty, to be counted, as the tariff, by pages, extended to ' every species of written or printed document necessary for carrying on the business of mankind.'^ The duties were excessive in amount, unequal and arbitrary in the scales on which they were imposed, having, in general, the effect of taxing small transactions at a higher rate than large transactions. And the stamp laws, thick-set with anomalies, were so numerous, intricate, compHcated, and in many instances con- flicting, that penalties were incurred by the best- intentioned persons, and questions arose which puzzled the most acute intellects. North's duty on bills of exchange and promissory notes had been increased to produce 841,000^., or, including the composition for bankers' notes, 900,000/. The tax on receipts, originally imposed by the Coalition, which had also been increased several times, produced 210,000/. And the main body of the tax, increased by Pitt in 1797, by Addington's and Perceval's consolidations, and re- ' Chitty, Stamp Laws, TAXATION IN 1815, 257 centlyby Vansittart's consolidation, consisting of duties on conveyances, leases, bonds and mortgages, settle- ments of personal property and other instruments, and including the fruitful general charge on ' deeds not specifically charged ' now raised from the original Qd. to 1^. 156'., produced about 1,692,000/!. A summary of the foregoing may be given as follows : — ' I.— Direct Taxes. The land tax J The taxes on houses and establishments The income tax .... The tax on succession to property Property insured .... Property sold at auction Coaches, posting and hackney cabs Tonnage on shipping . £ 1,196,000 6,500,000 14,600,000 1,297,000 918,000 284,000 471,608 171,651 25,438,259 II. — Taxes on Articles of Consumption. (a) Eatables : — £ Salt 1,616,671 Sugar 2,957,403 Currants, raisins, pepper and vinegar 541,589 5,115,663 (6) Drinks : — Beer . Malt . Hops . Licenses Wine . (Spirits Tea . Coffee . (c) Tobacco VOL. II. 3,330,044 ^ 6,044,276 [ 222,026 r 200,000 J 9,796,346 1,900,772 6,700,000 3,591,350 276,700 22,265,168 2,025,663 258 HISTORY OF TAXATION. (d) Articles, not eatables, drinks, or tohaeco, viz., coals ana raio materials for ma/n/ufactures, buildings, ship-building, and other trades : — £ Coals and slate 915,797 Timber 1,802,000 Cottonwool 760,000 Eaw and thrown silk .... 450,000 Barilla, indigo, potashes, bar iron, and furs 297,000 Hemp 285,000 The duties outwards .... 364,417 Other customs duties .... 1,188,000 6,062,214' (e) Manufactures : — £ Leather Soap . Bricks and tiles Glass . Candles Paper Printed goods 698,342 747,759 269,121 424,787 354,350 476,019 388,076 Newspapers Advertisements Plate Minor taxes Total . £ 383,000 125,000 82,151 132,116 4,080,721 III. — Stamp Duties. Bills and notes . Receipts Other instruments £ 841,000 210,000 1,692,000 2,743,000 The totals of the Summary amount to 67,730,688^., and, if 63,289Z. be added for the taxes on salaries and pensions, cider, perry and verjuice, and sweets and mead, before mentioned, 67,793,977^. The dif- ference between this amount and the 68J millions, stated to be the Eevenue for Great Britain, is mainly due to the yield from the numerous trade licenses before mentioned, and that of some minor taxes, such SYDNEY SMITH AND THE TAX LIST, 259 as pamphlets, almanacs, racehorses, &c., not before mentioned.^ The revenue from taxes in Ireland in the same year, 1815, ended January 5, 1816, was in British currency as follows : — & Customs 2,356,544 Excise 2 3,298,309 Specially appropriated duties . . 43,209 Stamps 560,661 6,258,723 Such were the sources from which we derived our revenue from taxes at the end of the great war with France. Of the produce of all these taxes, 32,000,000/. a year went to pay the interest on the debt caused by the wars in which we had been engaged during the last 130 years. The details above given will enable the reader to follow what Sydney Smith wrote on the subject in an article in the ' Edinburgh Eeview ' in 1820. ' We can inform Brother Jonathan,' he writes, ' what are the inevitable consequences of being too fond of glory. Taxes upon every article which enters into the mouth or covers the back or is placed under the foot. Taxes upon everything which it is pleasant to see, hear, feel, smell, or taste. Taxes upon warmth, light, and locomotion. Taxes on. everything on earth or under the earth, on everything that comes from ' The total yield under the head of Excise Licenses alone is over 763,000/. This includes beer and spirit licenses, and as no account can be given of the produce of these licenses in this particular year, it is impossible to make the above statement absolutely complete. The margin for -the inevitable &c. has been reduced to the minimum. ' This includes quit-rents and other revenue under the management of the commissioners of excise, s ■>. 260 HISTOKY OF TAXATION. abroad or is grown at home. Taxes on the raw material, taxes on every fresh vahie that is added to it by the industry of man. Taxes on the sauce which pampers man's appetite, and the drug which restores him to health ; on the ermine which decorates the judge, and the rope which hangs the criminal ; on the poor man's salt and the rich man's spice ; on the brass nails of the coffin, and the ribbons of the bride ; at bed or board, couchant or levant, we must pay. The schoolboy whips his taxed top ; the beardless youth manages his taxed horse, with a taxed bridle, on a taxed road ; and the dying Enghshman, pouring his medicine, which has paid 7 per cent., into a spoon that has paid 15 per cent., flings himself back upon his chintz bed, which has paid 22 per cent., and expires in the arms of an apothecary who has paid a license of a hundred pounds for the privilege of putting him to death. His whole property is then immediately taxed from 2 to 10 per cent. Besides the probate, large fees are demanded for burying him in the chancel. His virtues are handed down to posterity on taxed marble, and he will then be gathered to his fathers to be taxed no more.' Previously in the article he had noticed the number of licenses required under the existino- system of taxation. ' A truly free Englishman,' he wrote, ' walks about covered with hcenses. It is impossible to convict him. He has paid a guinea for his powdered head, a guinea for the coat of arms upon his seals, a three-guinea license for the gun he carries upon his shoulder to shoot game, and is so LIST OF FAILUKES IN TAXES. 261 fortified with permits and official sanctions that the most eagle-eyed informer cannot obtain the most trifling advantage over him.'^ Comparing the burdens of the present generation with those of their grandfathers, the late lord Derby in a speech at Liverpool sums up : — ' "With every- thing taxed that could be taxed, and an income tax at 10 per cent., truly our grandfathers had some- thing about which to grumble.' As an addendum to the list of existing taxes in 1815, it may be interesting to have a list of taxes repealed, relinquished, or proposed and rejected, since the Ke volution, in a LIST OF SsciriA money, repealed . 1688 Poll Taxes, last in . . .1698 Taxes on Jews, proposed 1689 Stock of East Iiidia, Royal African and Hudson's Bay Companies . . 1692-3 Tobacco pipes, rep. . . 1699 Births, marriages and burials . . . 1695-1706 Bachelors and widowers 1695-1706 Possession of plate, rep. . 1777 Carriage of goods, prop. 1782 Playhouses, prop. . . . 1782 Cotton bleachers and printed goods, ad valo- rem 1784-5 Coals at tJiepit, prop. . 1784 1 Sydnfiy Smith, FAILURES. Growers of liops (license) prop Sluips, rep Women servants, rep. Waggons and carts, rep. . Gloves and mittens, rep. . Registration of births, deaths and marriages, rep Parcels by coach, prop. . Inland navigation, prop. Clocks and watches, rep. . Pig-iron, prop Private brewing, prop. , Hats, rep Cotton from America, prop. . . . 1811 & Property bought in at auctions, prop. , . . Works, ii. 112, 117. 1784 1789 1792 1792 1794 1794 1797 1797 1798 1806 1806 1811 1813 1812 262 HISTORY OF TAXATION. CHAPTER n. FKOM THE REPEAL OF THE INCOME TAX TO THE ABAN- DONMENT OF THE SINKING FUND, 1816-29. PART I. THE LIVERPOOL ADMINISTRATION. VANSITTART, 1816-22. Kbpeal of the income tax and the war malt duty in 1816. Addi- tional duty on soap. The Sinking Fuud. Report of Castlereagh's select committee on income and expenditure. The additional taxes of 1819. The deficits of 1820 and 1821. Repeal of the tax on agri- cultural horses, the additional duty on malt, half the duty on leather, the duty on salt, the tonnage on shipping, and the hearth and window taxes in Ireland. The ' Dead Weight ' annuities scheme. Income Qf all the burdens that one after another had been tax re- pealed, heaped upon the shoulders of the British taxpayer during the progress of the Great War, by far the most grievous was the income tax at 10 per cent. In 1802, after the peace of Amiens, when Pitt's income tax had been repealed by Addington, he had at the same time, in order to recoup the revenue to some extent, increased the taxes on beer and malt and the assessed taxes ; but this precedent Vansittart could not follow. Could he retain any part of the tax? That there would be considerable difficulty in reconciling the country to the continuance of any part of the income tax in time of peace was clear ; and yet without the tax it seemed impossible to keep up the necessary peace establishment.^ The govern- ment decided to propose, in lieu of a total repeal, ' Wellington to Castlereagh, Aug. 11, 1815. Despatches, xi. 112. 'IGNORANT IMPATIENCE OF TAXATION.' 263 a reduction of the tax by a moiety, to 5 per cent., to be accompanied by a repeal of the war malt, customs, and spirit duties, the window tax in Ire- land, and some other duties of minor importance. But the expectations of the people that, on the return of peace, the income tax would be wholly repealed, would not brook disappointment. An ill- timed observation of Castlereagh regarding ' ignor- ant impatience of taxation ' had the same effect, in irritating the minds of the people, as Walpole's observation about ' sturdy beggars ' at the time of his Excise Bill, and increased the opposition to the proposal to retain the tax at half rates. The total repeal of the tax formed the subject of innumerable petitions to the house of commons, a course in which Brougham, as an agitator, and the citizens of London as petitioners, took the lead. And, after prolonged debates in the House, the government reluctantly abandoned their original proposal, and instead of retaining the income tax at half rates, gave it up in toto. The tax produced 14,320,000^. Under this head, therefore, an amount of seven milhons of revenue more than had been intended was relinquished. But the ministry, notwithstanding the forced change in their plans, could not, in view of the agricultural distress that prevailed, retract their proposal for the reduction of the war malt duty.^ This involved a further loss to the revenue of 2,790,000^., and other 1 Duty under 53 Geo. III. c. 81 and Acts continuing the same allowed to expire July 6, 1816. Duty reduced in Ireland by 56 Geo. III. c. 59. 264 HISTOEY OF TAXATION. duties were repealed at the same time which pro- duced over a million.^ Thus, therefore, immediately after the war, at a single stroke, we struck out of the fiscal Hst taxes producing about eighteen milHons of revenue, and shattered our fiscal system to pieces. Vansittart endeavoured partly to fill the enor- mous void thus caused in the revenue by additions to the port duties and excise. Among these the most important was an addition to the duty on soap. This tax, one of the quartet which, as a rule, had been excepted from the general rises in the excise duties which had frequently been made, was acknow- ledged to press upon an article of necessity from which, except in cases of pecuHar urgency, no fur- ther contribution should be required. This view, enforced by Adam Smith in the ' Wealth of Nations,' had been accepted by North, who deferred until 1782, the seventh year of the war of American Independence, that increase in the tax he made in his last budget which caused him to figure as ' Old Soapsuds ' in the caricatures of the day. In the same view Pitt had, during his long career at the exchequer, abstained from making any addition to the tax even in the darkest hour of the Great "War. When, therefore, in a time of peace, Vansittart raised, as he now did, the duty on this article of necessity from 2^d. to 3d. the pound,^ to produce an ad- ditional 230,000/., a well-known print of the day expressed not merely the sentiments of ' Betty, the ' The war customs, spirils, &c. ^ 56 Geo. Ill, c. 44. THE SINKING FUND A DELUSION. 265 Washerwoman,' but the prevaihng or indeed the general feehng of astonishment : ' Lor ! Mr. Vansit- tart, who would ever have thought of seeing you in the washing-tub ? ' In 1818 a considerable improvement in the 18I8. general condition of the country was reflected, as it invariably is, in the returns of revenue, but there was a considerable agitation for the repeal of the taxes on salt, leather, and houses in Ireland. The dissolution of the parliament of 1812, in June, was followed by elections involving a gain to the oppo- sition of from fourteen to twenty-three seats. And the prosperity of the country continued through- out the summer and autumn, with a corresponding advantage to the revenue. In the next year a most unfortunate addition to isio. our taxes was made, substantially with a view to prop up the ' Sinking Fund ' system. At this date the sink- ing fund applicable to the reduction of the national debt was 15,000,000/. a year. That was the annual amount which, under the existing law, was to be re- ceived by the commissioners for the reduction of the debt ; and practically this had to be paid out of sur- plus revenue, if we had any surplus revenue, and, faihng a surplus, or so far as the surplus was insuflS- cient, by means of a loan. Originally created by Pitt, to strengthen public credit, when we had an available surplus amounting to 1,000,000Z., the fund had been maintained, underpropped and strengthened by him in the war, until it became a delusion and a snare when, in lieu of having annually money applicable to 266 HISTORY OF TAXATION. the redemption of debt, in fact we could not make both ends meet without borrowing largely year by year. To reverence for the memory of this illustrious man may be ascribed the measures taken by his former proteg^, Yansittart, in relation to this sacred Fund. A select committee of the House, appointed on the , motion of Castlereagh, February 8, consisting almost entirely of the members who had formed the Finance Committee of the lasl; parliament, made their report, and the chancellor of the exchequer read to the House, June 3, the resolutions he intended to bring forward as founded upon that report, which were, in effect, as follows : — Since the war we had repealed taxes yielding 18 millions and upwards. The consolidation of the revenues of Great Britain and Ireland had cost us about 1,900,000^.^ 13^ millions had to be raised by loan or other extraordinary resources for the year. And the Sinking Fund exceeded the sum necessary for the service of the year by 3,000,000^. To provide for the exigencies of the public ser- vice ; to make such progressive reduction of the national debt as might adequately support public credit ; and to afford the country a prospect of future relief from part of its present burdens, it was absolutely necessary that there should be a clear surplus of the revenue of the country beyond the • 66 Geo, III. c. 98. The consolidation was from January 17, 1817. The separate revenue from Ireland was only 4,500,000?., as against a charge for the funded and unfunded debt of 6,400,000/., including therein the sum of 2,400,000/. as the sinking fund applicable to the reduction of the debt. THE TAXES OF 1819. 267 expenditure of 5,000,000Z. ; and with a view to the attainment of this important object it was expedient now to increase the revenue by the imposition of taxes to the amount of S,000,OOOZ. per annum. The duties proposed were : — 1. A consolidation of customs, including 200,000Z. £ of increased duty on foreign wool . . 500,000 2. Malt . . . . . . . . 1,400,000 3. British spirits 500,000 4. Tobacco 500,000 5. Coffee and cocoa 130,000 6. Tea 130,000 7. Pepper 30,000 3,190,000 The resolutions were passed. The budget was introduced. The taxes were granted.^ Twelve mil- lions were taken as a loan from the sinking fund ; and there was a new loan of the same amount. The year, memorable as that of the unfortunate Peter- loo riot and the passing of The Six Acts, was one of continuous distress, and the revenue fell oflf pro- portionately. A deficit for 1820 was covered by means of a 1820-1. loan. Another loan covered another deficit for 1821. Moreover, the financial failure of the new taxes of 1819 was now evident ; it was clear that the addition for malt could not long be maintained, and on March 22, Western carried, in the Commons, a motion for the repeal, which had a practical result in the follow- ing year. ' See as to tea, raising the duties to 96 and 100 per cent, on the different sorts, coffee and cocoanuts, tohacco, pepper, malt, and spirits, 59 Geo. III. c. 63 ; customs consolidation, raising the duty on foreign wool, c. 52. 268 HISTORY OF TAXATION. Agricul- tural horses. 1822. Leather. Later on in the session, an important concession to the general desire for the repeal of a tax was wrung from the government. The tax on agricultural horses, imposed by Pitt in the third year of the Great War, had been raised during the war, in a time of great agricultural prosperity, by means of several additions, to a considerable tax. It now formed the subject of constant complaints. In principle as bad a tax as can be imagined, it was unfair in its incidence, as scarcely touching grass lands, some of the richest in the country. The agricultural committee then sitting had condemned the tax, it was known, but they had not yet reported. The government desired to defer action until after the report of the committee, but this was not to be. In June mr. Curwen, bringing forward a motion for the repeal of the tax, carried it by a ma- jority of twenty-eight votes ; the government yielded, and the tax was repealed,^ at a loss to the revenue of about 450,000Z. In the next year, 1,400,000Z. more was given up when the government, in accordance with the vote of the House in the previous session, repealed almost the whole of the addition .for malt imposed in 1819, retaining only 2d. of the duty. But this repeal, practically the result of the fierce contests on the subject followed by Western's victory of the preceding year, did not satisfy the universal desire for a considerable remission of taxation. There were other claimants for redress, to whom the ministry were now compelled to attend. A number of articles most necessary in every stage of the life of man were ' l&2Geo. IV.c. no. REPEAL OF THE SALT TAX. 269 affected by the tax an leather ; and no measure of Vansittart's had proved more unpopular than that im- position of the double duty in 1812, which had caused Moore to term him the ' devout man of leather.' The tax was now reduced by a moiety,^ at a cost to the revenue of about 300,000/. a year. And now at last the duty on salt was repealed The original excise on salt under the commonwealth had been one of the most unpopular of the excises, and as such was subsequently repealed, but only to be reimposed after the Eevolution, in the war mth France. This tax, also extremely unpopular, repealed by Walpole in 1730, was reimposed by him in 1732, in the hope of keeping the land tax at a low rate. Eaised by Pitt under the pressure of the Great War, in 1798, to 10s. the bushel, it was, in 1801, absolutely condemned in the report of a committee of the house of commons on the subject. The recommencement of the war had prevented the execution of this sen- tence, and in 1805 the duty was raised to 15s. In February a motion for the gradual repeal of the tax had been lost by only four votes, lfi9 voting against 165. The government now decided to take the course suggested, and, reducing the rate to 2s., imposed that rate only until 1825, when the tax was to determine. The immediate loss to the revciuie from the reduc- tion was about 1,400,000/. Another 150,000/. was given up by the repeal of the tonnage on shipping, and 240,000/ more by the repeal of the unpopular and detrimental hearth-money ' See as to malt, 3 Geo. IV. c. 18 ; leather, c. 83. 270 HISTORY OF TAXATION. and window tax in Ireland.^ The total of the re- missions for the year amounted to 3,500,000/. And how, it will be asked, was it possible to spare so large an amount? The answer is that, in this year, some assistance was derived from a reduction of interest on the navy debt and other 5 per cent stock, which Vansittart converted into 4 per cents., at a gain to the public of 1,200,000Z. per annum ; 10 per cent, was taken from the salaries of the civil servants of the crown towards payment of their superannuations ; and it was hoped that our expenditure would be lessened by no less than 2,100,000/. by means of the Dead Weight annuities scheme. This term, ' Dead Weight,' was used to designate . the annual charge for half-pay and pensions of the army and navy and civil retired allowances. The old ' Waterloo man ' of so many an English village, and old British tars who, as the song went, had ' seen a deal of sarvice, had sailed with noble Howe, and had fought with gallant Jervis,' had increased the item to considerable dimensions since the war. It amounted, in the whole, to 4,900,000/., and being for ' non- effective,' as opposed to active ' service,' was, there- fore, termed the ' Dead Weight.' The existing charge was estimated to cover a certain number of years. The plan was to extend it so as to cover, at a reduced rate, a longer period ; and the deferred annuities formed the subject of a loan. In short the scheme was an intricate contrivance for feeding the ' See as tosalt,3 Geo. IV. c. 82; tonnage on shipping, c. 48; hearths in Ireland, c. 54. THE 'DEAl!) WEIGHT' ANNUITIES. 271 Sinking Fund. Qn the strength of this, Vansittart was able to give up the malt duty before the scheme turned out the failure it subsequently proved to he} * Only about half a million of annuities were taken up, by the Bank. The Bank dead weight annuity fell in in 1867. 272 HISTORY OF TAXATION. PART II. ROBINSON, HUSKISSON AND GOULBUEN, 1S22-9. Peel, Canning, Robinson, and Huskisson join the administration. Re- versal of the policy of the Sinking' Fund. Repeal of half the window tax and taxes on establishments in Great Britain. Total repeal for establishments in Ireland. Reductions for spirits in Scotland and Ireland. Commencement of the reform of our commercial taxation. Reductions for raw and thrown silk and wool. The exportation of sheep and wool allowed. The Union duties abolished. Reduction of duty for coal to London. Reduction for rum. Stamp duties on law proceedings abolished. Reduction of house and window duty for small houses. Other reductions for hemp, coffee, wine, spirits in Eng- land and other, articles. Huskisson's tariff of 1825. Consolidation of the customs' laws. Robinson's review of the fiscal situation in 1826. Hume's counterstatement. Reduction of the duty on tobacco. Can- ning's administration. His death. The WeUington administration. Huskisson resigns. Further reduction of the Sinking Fund. Abandon- ment of the Sinking Fund. Principal taxes repealed, 1816-29. A TEANSFOEMATION of the Liverpool administration commenced in 1822, when the veteran Sidmouth, acknowledging, on the score of his advancing years, that the tempus abire had arrived, though still reluctant to resign the ' pleasing, anxious being ' of public life, at last screwed up his courage to resignation point, and left a vacancy at the home office which was soon filled with distinguished ability by Peel. Before this the Grenville party had joined the government. In August, when the unfortunate end of Londonderry created a vacancy at the foreign office, the king, per- suaded by Liverpool and the duke of Wellington of the necessity of placing Canning in office, appointed him to fill the vacant post ; and he now took the HUSKISSON AND ROBINSON. 273 lead in the house of Commons.^ A third alteration Sept.i822. was due in no small degree to the influence of Can- ning, exerted in favour of Frederick John Eobinson, a son of the second lord Grantham. He had been at the board of trade since 1818, and was now appointed chancellor of the exchequer in the place of Vansit- tart, who, an acknowledged failure in finance, was induced to take the sinecure chancellorship of the duchy of Lancaster, with a peerage as lord Bexley. The transformation was completed by the appoint- ment of Huskisson, who could no longer be excluded from office, to succeed Eobinson as the president of the board of trade.^ As thus transformed, the Liverpool administration certainly could no longer with reason be termed an administration of ' mediocrities.' The effect of this infusion of new blood into the ministry was soon evident in our fiscal as well as in our foreign affairs. While Canning was effecting the reform of our policy abroad, and cutting the nation away from, the bonds of the ' holy alhance,' Eobinson, in conjunction with Huskisson, commenced reforms at home which led eventually to the substitution of free trade in lieu of the protection of particular interests. In short, the accession of Huskisson to the board of trade marks a new era in fiscal history. As things then stood, the revenue could afford no 1823 ' Canning had re-entered the cabinet in 1816, as president of the board of control, but had resigned office in January 1821. " Wallace, who as vice-president had a certain kind of claim to the higher post which would have rendered it difficult for him to serve under Hupkisson, was appointed master of the mint. VOL. II. T 274 HISTORY OF TAXATION. assistance to commerce bound down by monopolies, •in consequence of the oppression to which she her- self was subjected by the incubus of the Sinking Fund. The pohcy of Vansittart, of borrowing with one hand to pay with the other, the policy of maintaining an enormous sinking fund for the payment of debt, by means of annual loans, had been strongly criticised by Huskisson in a memorandum on the subject of our financial situation he submitted to Liverpool in 1819, in which he had pointed out that the only source from which debt can be paid is the excess of annual revenue over expenditure. And the first fiscal step of the trans- formed administration, taken in the direction pointed out by Huskisson, consisted in the reversal of the policy of the sinking fund. From this source, while still leaving five millions for the reduction of debt, Eobinson obtained a surplus which enabled him, in his first budget, to repeal a moiety of the window tax, and the assessed taxes on establishuients consisting of carriages, men servants and horses, in Great Britain ; taxes all charged at the excessive rates to which they had been raised in the war.^ In Ireland, where the The as- hearth and window taxes had been repealed in the taxes re- preceding year, the similar taxes on establishments, if retained at half-rates, would probably not yield sufficient revenue to repay the cost and trouble of collection. They were therefore repealed, and also the tax on dogs,''' leaving Ireland free from taxes on establishments. The loss from the reduction of taxes in Great Britain was estimated at 2,500,000/., and ' 4 Geo. IV. c. 11. » 4 Geo. IV. c. 9. duced. REFORM OF COMMERCIAL TAXATION. 275 that from taxes repealed in Ireland, at about 100,000/. A reduction in the spirit duties in Scotland and Ireland, made in accordance with the recommendation of the commisioners of revenue inquiry, and in the hope of checking ilKcit distillation in those parts of the United Kingdom, where it was general,' was crowned with such signal success in the increase in the consumption of duty-paid spirits that, in lieu of the expected loss to the revenue, this measure was followed by an increase in the yield. Heform of Commercial Taxation commenced. ' Le ciel t'aidera,' might have been the motto of Eobinson. The suffering of 1820, 1821 and 1822 was followed by the prosperity of 1823, 1824 and 1825. In the first of these years much good had been done by the chancellor of the exchequer ; in the next, taking the surplus of the consolidated fund i82i. towards the supplies of the year, he was able to con- tinue his course in the reduction of taxation. He now commenced, with Huskisson, important reforms in our commercial taxation. ' Why not,' the chan- cellor of the exchequer urged in his budget speech', * emancipate the commerce of Great Britain ? Why not sever the cords that tie her down to the earth, and let her spring aloft to convey the produce of our industry to every quarter of the world ? What period could be more auspicious? Everything pros- pered with us. . . . It was the best opportunity which ' 4 Geo. IV. c. 94. 276 ■ HISTORY OF TAXATION, oould be desired to cut the bonds of ancient prejudice which shackled the nation's energies, and spring for- ward with a new start in the pursuit of national wealth.' ^ Silk. The first, and perhaps the most important reform had reference to the silk trade. Eobinson gave up a considerable amount of revenue, by a reduction of the duties on imported raw and thrown sUk ; while Huskisson was able to pass, in this and the next year, measures for repeahng — the prohibition of the impor- tation of foreign wrought silks ;^ the bounties on the exportation of silk manufactured articles ; ^ the Act known as the Spitalfields Act, and the other Acts 'that empowered the magistrates to regulate the wages of persons employed in the manufacture;* in short, effectually to revolutionise the trade and place it upon a more satisfactory basis than the artificial arrange- ments previously in force. Woollens. Another reform had reference to the woollen manufacture, which was assisted by a reduction of the duties on imported wool, which had been raised, unfortunately, in 1819, to excessive rates. The agri- cultural interest received a boon in the repeal of the long-standing prohibition of the exportation and carrying coastwise of sheep alive, sheep's wool or any manufacture thereof, and hare and cony wool and skins ; but a small export duty of Id. the lb. was imposed upon wool, and manufactures of wool put ' Ann. Reg. 1824, p. R7. " From March 25, 3834, they were admitted on payment of a duty of 30 per cent, on the value. ' 5 Geo. IV. c. 21. ♦ Ibid. c. 66. MANUFACTURES OF SILK AND WOOL. 277 together so as to be capable of reduction to, and use again as wool.^ A third reform consisted in the abolition of the Union remainder of what were termed the Union duties. These duties, which obstructed the reciprocal inter- course of produce and manufactures between Great Britain and Ireland, had been partly repealed by an Act of the preceding year. Their total repeal was now effected at the desire of the Irish themselves, who had originally been fearful of the consequences of the repeaUng Act of 1823.^ Another important reduction of duty had reference Coai. to coals imported into London. Allusion is made to it in Canning's letter from a Cambridge tutor to his pupil: Yes, fallen on times of wickedness and woe, We have a Popish ministry, you know, Prepared to light, I horribly do conceive, New fires in Smithfield, with Dick Martin's leave. Canning for this with Kobinson conspires, The victim this provides, and this the fires, Already they with purpose ill concealed The tax on coals have partially repealed, While Huskisson, with competition keen. Can tell how many pecks will burn a dean.' For the relief of the "West India colonists, the duty Bum. on rum was considerably reduced. Lastly, the stamp duties on law proceedings were Law pro-' repealed. Against these duties it had frequently been urged in the house of commons that such a tax was an infraction of the clause in Magna Carta, ' nulli ' 5 Geo. IV. c. 47. ' 5 Geo. IV. c. 22 ; 4 Geo. IV. c. 26. The duties were imposed undey Article VI. of the Union Act. See 1 Geo. IV. c. 45. » Edinburgh Review, July 1858. 278 HISTORY OF TAXATION. vendemus rectum, aut justitiam.' Bentham, in his writings, had powerfully exposed the fallacy of the doctrine on which the existence of these duties had been supported in argument. They were acknow- ledged to be in effect (as Mill has remarked of them) a tax on redress, and therefore a premium on injury ; and they had been retained solely for purposes of revenue. . The proposal to repeal them, pressed by mr. John Smith, was accepted by the chancellor of the exchequer, though at an estimated loss not con- templated in his fiscal arrangements for the year.^ The remissions of taxation were estimated as foUows, for — Silk . . 460,000 The Union duties . 300,000 Wool . 350,000- Kum . 150,000 Coal . 200,000 Law proceedings . 200,000 Taken in the whole they amounted to 1,660,000/. ; but in the event the estimated loss to the revenue on rum was recouped by an increase in the import of this colonial spirit. On the other hand, it may be noted that the loss by the repeal of the stamp duties on law proceedings is stated in the inland revenue reports to have been 275,000/. 1825. The. year 1825 is one of importance in the annals of taxation. Under the arrangement effected in 1822, the remainder of the salt duties expired in this year, at a considerable loss to the revenue ; but Eobinson was able, nevertheless, to effect considerable reduc- tions in direct and in indirect taxation. While re- fusing to abolish the assessed taxes, he granted for the ' See as to law proceedings, 6 Geo. IV. c. 41 ; and ruin, c. 34. MEASURES AGAINST ILLICIT DISTILLATION. 279. poorer class of houses, viz., those under a rent of 10/., an exemption from the inhabited house duty ; and for houses with not more than seven windows, an exemp- tion from the window duty. These exemptions were supplemented by others of minor importance, re- lating to taxable establishments ; occasional waiters in taverns were no longer to be charged as servants, taxed carts and pony-carriages were exempted from duty, with other exemptions. Under the head of indirect taxes, the import duties on hemp were reduced by a moiety, there was a reduction for coffee and cocoa, which had, unfor- tunately, been taxed additionally in 1819, and in the excise on cider made for sale. With a view to increase the consumption of wine, which did not keep pace with the increase in the population, the duty was lowered to 6s. the gallon, for French wine, and 4s. for other wine.^ And with a view to suppress illicit distillation, and in accordance with the suggestions made in the report of lord Wallace's commission on this subject, the duty on the distillery in England was lowered to 7s. the gallon,^ and the method of charge in use in Scotland was applied to England. In addition to the foregoing, a considerable amount of revenue was given up by reductions of duty in- volved in the new tariff. The estimated loss, under the particular heads, would be as follows, for — £ £ Houses . 220,000 Coffee . 150,000 Servants , 50,000 Wine . 230,000 Hemp . 100,000 Port duties . 250,000 ' From 1] is, 5d. and 7s. 7d. 3 From lis. 8Jrf. 280 HISTORY OF TAXATION. In short, the loss (exclusive of that for spirits) amounted to over a million. The estimate for the loss on spirits, with a simul- taneous reduction for rum, was 750,000/. ; but, in the event, in two years the revenue was recouped, in conr sequence of the enormous increase in the consumption of duty-paid spirits that resulted from the reduction of the duty. It is, however, from administrative and legal points of view that this year is of special importance in revenue jhistory. A re-arrangement of taxes was effected by the transfer, from the excise branch to the customs branch of the revenue, of the taxes on wine, foreign spirits, coffee, cocoa-nuts, pepper and tobacco, which for a long time had been collected by the ex- cise, but henceforth range, whoUy, under the head of customs or port duties. A new spirits Act was passed. And the law relating to hcenses under the excise laws in the United Kingdom was consohdated. But the most important reform of the year was that of the laws relating to the customs, of which the Tariff Act formed a part. A multiplicity of enactments, many of them obsolete, were now repealed, and the laws on the subject were re-enacted as embodied in eleven Acts relating to the different subjects of the customs, and to matters of trade. ^ * See as to houses and windows, 6 Geo. IV. c. 7 ; wine, coffee, and Jiemp, c. 13 ; the new spirit Act, c. 80 ; excise licenses, c. 81 ; customs consolidation, cc. 105-16, c. Ill heing the Tariff Act. In this Act the duties on wine and spirits were imposed upon the imperial gallon under the Act for the unifoimity of measures of the previous year, 6 Geo. IV. c. 74, the commencement of which, at first for May 1, 1825, was subse- quently deferred until Jan. 1, 1826, by 6 Geo. TV. c. 12. HUSKISSON'S NEW TAEIPF. 281 For the consolidation of the laws of the customs the nation was indebted to mr. James Deacon Hume ; for the arrangement of the new tariff, to Huskisson ; and whoever may have leisure to devote to the perusal of a masterly statement on an intricate subject, will find himself repaid for his trouble in reading the speeches of this illustrious man relating to the tariff. They evidence an intimate acquaintance with the details of his subject, and an ability in treating it, not surpassed in any similar records. The commencement of 1826 was marked by a 1826. continuance of that depression in manufactures and commerce which had prevailed at the close of the preceding year. But, notwithstanding the gloom that spread over the manufacturing, the trading, and the monied interests, and the reduction of taxes effected in the previous year, the revenue, taken in the wholes maintained its position. The statistics of our fiscal position were now as follows : — Debt— annual charge . . * . 29,250,000 Military and naval expenditure (average) . 15,000,000 Civil list and civil government . . . 3,400,000 Collection and management of revenue . 3,438,000 Revenue from taxes ' .... 54,428,000 Revenue from post office .... 1,733,000 On opening the budget, March 13, Eobinson passed under review the principal alterations in taxa- tion effected since the war : how, immediately, in 1816, the income tax at 10 per cent, and the war malt duty of 25. the bushel had been repealed ; how, subsequently, > Year ending Jan. 5, 1826. 282 HISTOEY OF TAXATION. in 1819, it was considered necessary to reimpose an additional Is. 2d upon malt, but only to be repealed in 1822, with half the duty on leather ; the repeal of the duty on salt, in 1822-25, at the loss of over a million and a half to the revenue ; the reduc- tion of the window duty and the taxes on establish- ments, in 1823 ; and the late reductions of duty, in 1824 and 1825, for rum, the distillery, and wine. Pointing to the returns of revenue for the last three years, he showed that though the estimated amount of revenue was 155,440,500/., the actual receipts for the same period were 156,838,500/., that is to say, they exceeded the estimate by 1,398,000/. More than that which had been promised had been performed. Entering into statistics regarding the consumption of several articles in 1825 as compared with 1816, he stated that there was an increase as follows : on beer, 16^ per cent. ; candles, 36 ; paper, 55 ; tea, 20 ; leather, 29 ; malt, 50 ; British spirits, 63 ; sugar, 19; coiFee, 43 ; tobacco, 13 ; wine, 88 ; and wool, 44. The special faciUties a minister has for obtain- ing abundant information on points such as this, give weight to any statement he may make upon such a subject ; but it is interesting to compare with the , statement of the chancellor of the exchequer that made in the same session by mr. Joseph Hume. After introducing a multitude of resolutions in reference to the budget proposals, he affirmed, in one of the debates which ensued, the increase in consumption during the period referred to by the chancellor of the exchequer KEVIEW OF THE SITUATION, 1826. 283 to be, as regards some of the articles before mentioned as follows : on malt not 50 per cent., but on the con- trary a decrease ; wine, not 88 per cent, as stated, it had shared the fate of malt ; sugar, not 19, but 7-J ■per cent., as against an increase of 17 per cent, in the 'population during the last nine years ; tea, not 20, but only 12 per cent, in 4 years, as against an increase of 35 per cent, in consumers ; tobacco, in five years during which the population had, increased 17 per cent., a decrease of 8 per cent., as against the years 1810-14. The discrepancy in the statements is remarkable, but one point is clear in both : the consumption of tobacco had failed to increase in proportion to the increase in the population. A curious circumstance had happened as regards the duty on tobacco. In effecting the statutory re-arrangement of the duties in the previous year, the draughtsman of the Bill had, in error, allowed one-fourth of the duty to lapse in July. Unconsciously he had accomplished a master stroke ; for his reduction of the duty was followed by a decrease in smugghng so considerable as to induce Robinson to allow his surplus, estimated at about 700,000Z., to go to continue the reduction thus uncon- sciously effected.^ In February, 1827, lord Liverpool was seized i82r. with a fit, from which he never recovered sufficiently to be able to resign his office, and Canning received the ^ Viz. to 3s. the lb., Hansard, iv. p. 1321, and see 7 Geo. IV. c. 4&. In this year an Act was passed to consolidate the laws relating to the malt duty 7 & 8 Geo. IV. c. 62;. and a General Excise Regulatio Act, c. 53. 284 HISTORY OF TAXATION. king's command to form an administration. Peel could not join him, in consequence of the opposite views they took in regard to the Roman Catholic question, and therefore resigned his post at the home office. The duke of Wellington declined to hold office. Eobinson, anxious to escape from the labour of the Commons, took the colonial office, with a peerage as viscount Goderich, and undertook to lead in the Lords. His post of chancellor of the exchequer was offered by Canning to Palmerston. Previously, in 1809, Palmerston had received an offer of this post, which he declined on the score of youth. This second offer he accepted, but the king considered him too robust in business for the position, and eventually he retained his old post at the war office, and Canning became chancellor of the exchequer, as well as first lord of the treasury. Huskisson retained, in the ministry of his friend, the post of president of the board of trade, in order to support his measures while in that office. Already, when called on to form a government, seriously ill from the effects of a cold caught at the funeral of the duke of York, Canning, retiring, after the session, to the duke of Devonshire's villa at Chis- wick for rest, died there in August. His administra- tration, which the Lansdownians were eager to mould to whig, and the Wellingtonians to reduce to tory, soon fell to pieces in the hands of his successor, the amiable man, formerly ' Prosperity.' Robinson, whom, with our love of alliteration, we now termed ' Goody ' Goderich, who proved, as might have been expected, canning's death, the ' canningites; 285 too weak in hand to drive the unequal team now harnessed to the coach of state. The Canningites now consented to join the duke i828. of Wellington and Peel. In the duke's administration Peel held the post of secretary of state for the home office ; Huskisson was advanced to the colonies and became leader of the Commons ; Grant took Huskis- son's late post ; and Goulburn became chancellor of the exchequer. But, as lord Anglesey had prophesied, the duke soon tripped up the heels of the Canning- ites. He never was heartily at one with Huskisson ; and when, on a question regarding the transfer of the franchise of a small borough convicted of bribery, Huskisson, finding himself in opposition to the rest of the cabinet,^ in a huff precipitately sent in his resignation, the duke accepted it. This led eventually May 19. to the resignation of the other Canningites : Grant, Palmerston, Dudley and Lamb ; and the ministry was reconstituted upon a tory basis. The first budget of the Wellington administration July n. was without any feature of special interest as regards the increase or reduction of taxation. Goulburn formed a balance between revenue and expenditure by a further reduction of the sinking fund. The plan since 1823 had been to pay annually out of the con- solidated fund, that is to say, from revenue, 5,000,000Z. to the commissioners for the reduction of the na- tional debt, for the sinking fund. But, in March, the Finance Committee had -reported,^ advising that ^ Huskisson desired to give the seat to Manchester, while the cabinet desired to enlarge the constituency of the borough. » Special Eeport, March 10, 1828. 286 HISTORY OF TAXATION. a sinking fund not supported by a real surplus was a delusion ; that the fixed sinking fund should be abolished ; that, in estimating the supply and ways and means for the year, a surplus of not less than 3,000,000Z. should be provided ; and that the surplus revenue of the year should be appropriated annually to the reduction of debt. The substance of these recommendations was now carried into effect, to the extent of reducing the annual sum to be paid to the commissioners to such a sum as, with the interest of the capital stock in their names, would amount to 3,000,000^1 1829. In 1829 there was a reduction of the duty on silk. The silk trade, revolutionised in 1825, had been stimulated into unnatural activity ; and when in 1828 the demand, as usual in such cases, fell off and was followed by a stagnation in the trade, the silk-weavers ascribed their sufferings to the new commercial policy of Huskisson, and desired a strong protective duty. In lieu of increasing the duties, the government, acting on the advice of Vesey Fitzgerald, who had succeeded Grant as president of the board of trade, lowered them, with a view to the abolition of smug- gling. This course did not suit the views of the silk- weavers of Spitalfields and Coventry, and the measure was followed by serious riots at Macclesfield and con- siderable agitation at Bethnal Green. In the budget arrangements, Goulburn reserved a surplus of three milUons of clear honk fide revenue, the amount which, according to the recommendation 1 9 Geo. IV. c. 90. ABANDO^'MENT OF THE SINKING FUND. 287 of the Finance Committee, should always, in estimating supply and ways and means, be kept inviolate for the purpose of reducing the national debt. And, in the year, the recommendations of the Committee, on the subject of the sinking fund, were further carried into effect : — The capital stock and annuities for terms of years standing in the names of the commissioners for the reduction of the debt were cancelled, and the interest ceased to be a charge upon the consolidated fund. In lieu of the sum, not to exceed 3,000,000^., to be paid to the commissioners under the Act of the preceding year, the actual surplus revenue of the king- dom beyond the actual expenditure thereof, was to be paid to them, quarterly, for the reduction of debt. And, in future, stock transferred to the names of the commissioners was to be cancelled on the day of transfer.^ The following is a list of the principal taxes re- pealed, 1816-29, and their approximate yield : — Direct Taxes. £ Income tax 14,320,000 Houses and establishments . . 2,870,000 Agricultural horses 450,000 On Articles of Consumption. Eatables : salt 1,750,000 Drinks : war malt 2,790,000 Manufactures : leather (half) . . . 300,000 TariflF reform, 1825-6 .... 1,300,000 Stamps. On law proceedings 275,000 ' 10 Geo. IV. c. 27. This arrangement is. continued by the Excheiiui- and Audit Act, 1866, 29 & 30 Vict. c. 30. 288 HISTORY OF TAXATION, CHAPTER III. FKOM THE ABANDONMENT OF THE SINKING FUND TO THE EE-IMPOSITION OF THE INCOME TAX, 1829-42. PAET I. FEOM THE ABOLITION OF THE SINKING FUND TO THE KBPEAL OF THE HOUSE TAX, 1829-34. Parnell's treatise on financial reform. Repeal of the tax on beer and the tax on leather. Reduction for sugar. The Whig administration under earl Grey. Althorp'3 Budget in 18.31 . The proposed tax on trans- fers. Taxes on coals coastwise, printed goods and candles repealed. Expiration of the Methuen treaty. Wine duties equalised. Financial year changed. The Budget of 1833. Reductions of duty. Half the soap duty repealed. The 'malt tax repealers^' at work. Repeal of the tax on inhabited houses. Division on lord Ohandos's motion for relief of the agricultural classes. Parnell's Treatise on Financial Reform. In January, 1830, sir Henry Parnell, afterwards lord Congleton, embodied, in his Treatise on Financial Eeform, a clear statement of opinions he had formed on the subject in consequence of the deliberations of the Einance Committee of which he had been chair- man. The substance of his recommendations was as follows : — 1. All taxes on the raw material for any manufac- ture and on any material used for house-building and ship-building, including hemp, ashes and barilla, silk, hides, skins and leather, timber, and bricks and tiles, should be repealed ; and the taxes on coals, tallow PARNELL'S ' FINANCIAL REFORM.' 289 candles and soap, as taxes injurious to our manufac- tures. 2. Certain taxes which had the effect of checking the development of the manufactures taxed, in con- sequence of the necessary interference of the excise regulations with the course of trade, should also be repealed ; the most important being those on glass, paper, and printed goods. 3. The duties on spirits and tobacco should be reduced, in order to prevent smugghng. 4. In order to effect these salutary reforms, a tax should be imposed fairly upon property and income. Financial reform and the reduction of taxation isso. now became prominent questions. A compact body of members of the whig party, meeting in lord Al- thorp's rooms in the Albany, resolved to combine for action for the sole purpose of advocating these prin- ciples. And the niinistry, feeling that the general desire for the further remission of taxation must re- ceive consideration in their budget for 1830, with a view to afford the utmost relief in their power to the lower orders of the agricultural and manufacturing classes, made arrangements to repeal the taxes on leather and beer, and subsequently, in order to lower the price of sugar, reduced the duty on that article by 3s. the cwt. Against the tax on leather Adam Smith had urged, Tax on ° leather re- in the 'Wealth of Nations,' that inasmuch as leather is peaied. an article of prime necessity in this country, where all classes wear leather boots or shoes, it does not form a VOL. n. u on beer. 290 HISTORY OF TAXATION. fit subject for taxation. The double duty imposed by Vansittart in 1813 had been taken ofi" in 1822, but though the yield was now something under 400,000Z., all the vexatious regulations required for securing the duty continued in force. The repeal of this tax gave relief not only to the boot and shoe trade, but to the many iniportant manufactures in which leather forms the raw material : the manufactures of saddles, gloves, portmanteaus, chair-covers, bookbinding, and, as more important than all, the harness for horses and the strap of the mechanic. Concerning the advisa- bility of this repeal, there could be but one opinion, and that The tax on beer had long been allowed to be extremely unfair. Limited in its incidence to beer brewed for sale, it fell on the poorer classes, who necessarily derive their drink from day to day from the victualler. They paid to the last drop in the pot ; while the richer classes — noblemen, country gentle- men, clergy and farmers, and all such establishments as schools, colleges, (fee. ; in a word, aU the weU-to-dp classes^evaded the tax by brewing at home. The practice was universal ; and every kind of beer was brewed at home, not only such golden ale as sparkled in lord Yarborough's round glass goblets at Appul- dercombe, and the ale brewed at the birth of the heir, for his coming of age — When the huge ox shall yield the broad sirloin, The ale, no-w brewed, in floods of amber shine, but also the ale and small beer ordinarily consumed by the household servants and the field labourers employed on the home-farm. REPEAL OF THE TAX ON BEER. 291 Moreover, in consequence of the heavy taxation of beer brewed for sale the business of the common brewer had become almost a monopoly in the hands of a comparatively small number of brewers in large business, with the usual effects of a monopoly, which are to increase the price of the article monopolised and limit consumption. The returns for the duty showed, on an average for the twelve years, 1804-16, a consumption of beer brewed for sale not much in excess of the average consumption for the years 1708-20. The objections to the tax on the ground of its unfairness had been pressed by Adam Smith, who, in his ' Wealth of Nations,' recommended the introduc- tion of a composition for private brewing. But the practical difficulties in any reform in this direction proved insurmountable. During his long tenure of office, Pitt had frequently turned his mind to the subject, but never was able to form a satisfactory and feasible plan. His successor in the office of chancellor of the exchequer in 1806 introduced a proposal to tax private brewing, but was unable to carry it into effect. The people regarded the proposal as an attempt by Whitbread and his party to effect an entire monopoly of brewing in favour of the great brewers, and so strongly urged their opposition, that the pro- posal had to be abandoned, leaving the remembrance of this as one of the most unpopular of all that stream of new taxes which, in Gillray's page, flow in abundance from the ' Petty ' fountain of the Coalition ministry. Lastly, among the memoranda prepared by u2 292 HISTORY OF TAXATION. Spencer Perceval for the budget it was not destined he should live to introduce, was found a proposal to the same effect as that of lord Henry Petty. But though Vansittart, with short time to make up his budget, adopted in the main the plans of his prede- cessor, he dropped this suggestion, as Hkely to prove unpopular. Goulburn now announced the intention of the government to repeal the tax and aboHsh the mono- poly of sale enjoyed by the Hcensed victuallers, noticing, as additional arguments for the repeal, the liberation of the manufacturers from the numerous restrictions to which they were subjected under the existing law, which operated to enhance the price of beer, and the beneficial effects which would result from the abolition of the existing monopoly of the trade. This proposal was resisted by the brewers and publicans, was disliked by the landed interest, who would have preferred a repeal of the duty on malt, and was opposed by some members as a measure likely to convert England into one huge tippHng-house and spread throughout the country universal demo- ralisation. On the other hand, it had the approval of Althorp, Hume, and Huskisson ; and eventually was carried, as from October 10, 1830. And, though the establishment of free trade in beer in over 31,000 ' Tom and Jerry ' shops, as the new beerhouses and shops were termed, was not generally regarded with favour, the repeal of the tax was very popular. This sentiment is expressed in the words of a song which. THE 'TOM AND JEERY ' SHOPS. 293 in high favour at the time, continued to be sung when all remembrance of the beer duty had faded into the past, and the singer or any of the company would have found a difficulty in explaining the meaning of the refrain — Loudly sing, God save the King, For bating the tax on beer. The popularity of a measure is not, however, always a proof of its advisability ; and many persons who gave a careful consideration to our fiscal position in all its aspects, concurred in opinion that, in the cir- cumstances, to say the least, the amount of revenue, no less than 3,000,000^., involved in the repeal, might with advantage have been devoted to the abolition of taxes far more objectionable, and that, therefore, the measure was premature. Lastly, as regards the reduction for sugar, which Sugar. cost 450, 000^., it was urged that the reduction of the duties on this article and tea ought, certainly, to follow the repeal of the taxes on raw materials and manu- factures and the reduction of the duties on tobacco and spirits.^ But so far was this from the view of the government, that additional duties were imposed upon the distillery and rum, which produced in the following year, 1831, no less than 600,000Z. The Beer BiU did not bolster up the falhng administration. Weakened in popular estimation by the course they had taken on the OathoUc question, * Parnell, Fin. Ref. 4th edition, p. 55. See as to beer and cider, H Geo. IV. & 1 Will. IV. c. 51; leather, c. 16; sugar, the annual Act, c. 50; spirits, 6d. in England and 2d. in Scotland and Ireland, and 6d. on rum, CO. 48 & 49. 294 HISTORY OF TAXATION. they were unable to stand against the impulse of the feelings which had been aroused everywhere by those unconstitutionar ordinances of the French king, Charles X., which had cost him the throne. They now tottered towards their fall. Parnell had the honour of dealing the final stroke, unexpectedly, on November 6, when he defeated them by 19 votes on his motion to revise the civil hst for king William IV. In consequence of this vote the ministry resigned on the following morning. The old order was now about to change, giving place to new. ' Naught's permanent among the human race, except the whigs not getting into place,' Byron had written some years before this date, when the tories appeared to be in oflSce for ever. But, at lasc, this long period of exclusion came to an end on the formation of a whig administration under the veteran earl Grey, in consultation with lord Lansdowne, the lord Henry Petty of the coaUtion ministry of 1806, and lord Holland.^ Viscount Althorp, son of earl Spencer, at the particular request of his own and his father's friend, lord Grey, consented to take the post of chancellor of the exchequer with the lead in the Commons ; and at his request, Poulett Thomson, afterwards lord Sydenham, was appointed vice-presi- dent of the board of trade, the real business of which was judiciously left to him by lord Auckland, the president. Parnell was not included in the ministry ; for, though an acknowledged authority on matters of ' The administration included lords Melbourne, Palmerston, and Godericli, sir James Graham, Charles Grant, subsequently lord Glenelg, and, outside the cabinet, lord John Russell and mr. Stanley, afterward* the fourteenth earl of Derby. ALTHORP'S BUDGET, 183\ 295 taxation, he was not a powerful speaker. The only appointment offered to him he refused, as beneath his pretensions.^ Lord Althorp, in every respect a model English country gentleman, was, by nature and education, in ability and in attainments, inclined and adapted to the duties of a country magnate, rather than to undertake, without any previous official training, th^ arduous and special functions of a chancellor of the exchequer at a critical period. But, with considerable skill in figures, and actuated by a strong desire to effect reforms in taxation, he applied himself forthwith with great energy and unwearied industry to this task, which he considered his party, in a manner, pledged to under- take, but more particularly himself, as head of the small party banded together for the special purpose. Assisted by Parnell's observations in his work on Financial Eeform and by the advice of Poulett Thomson, who had a good deal to- do with the sug- gestions in the budget, he prepared his fiscal plans for the year with great care, and opened a comprehensive budget on February 11, 18S1. His budget was a forced budget, and embodied i83i. proposals for fiscal changes too considerable for exe- cution by any but a master hand. He proposed to repeal the taxes on the subjects stated below, pro- ducing the following amounts : Sea-borne coal and slate . Printed calicoes and cotton Tallow candles Glass Land sold by auction £ 830,000 500,000 470,000 600,000 60,000 ^ Subsectuently, in 1831, ke was appointed secretary at war. 296 HISTORY OF TAXATION. Of these taxes, that on tallow candles, although not particularly heavy, was extremely objectionable in principle, on account of its operation as a check upon industry, and moreover was attended with peculiar difficulties of administration, particularly as regards the penalties imposed upon persons making candles without a hcense and payment of duty ; while that on glass, reimposed, unfortunately,- by Pelham in 1745, had crushed the manufacture. In addition, there were to be reductions for newspapers and advertisements, to cost 100,000^., and for tobacco, half the duties, at a loss of 800,000/., in the hope of putting an end to smuggling. Only 200,000/. would, however, be given up, in the financial year, upon candles, but, with this allowance, the total loss in the year was estimated at over three millions. The impossibility of relinquishing so large an amount without some compensation to the revenue was obvious, and accordingly it was proposed to im- pose new taxes on — Transfers of property, real and personal, 10s. £ per lOOZ., to produce . Travellers by steamboat, to produce Raw cotton, imported „ Coal, exported „ 1,200,000 100,000 500,000 100,000 And additional duties on — Timber (Canadian), to produce . . . 600,000 Wine, to produce 240,000 In all 2,740,000- This ambitious budget split to pieces on the ques- tion of the imposition of the tax on transfers. The WRECK OF THE BUDGET. 297 proposed tax touched transfers in the Funds, and on that ground was opposed by Peel, Goulburn, and all the other authorities on the subject of finance in the House. Pointing to the provision against taxa- tion in the Loan Acts, they urged that the suggested tax was in violation of the plain terms of the contract made with the public creditor by the state. And Scarlett, the tory attorney-general, afterwards lord Abinger, went so far as to condemn the proposal as ' little less than a public fraud.' Althorp was obHged to rehnquish the proposed tax on transfers; that on passengers by steamboat, which, as a tax on the poorer class of travellers, encountered serious opposition from many quarters ; the proposed addition for Canadian timber, which was vehemently opposed by the protectionists as an injustice to Canada ; and that for wine, which was declared to be in violation of the provisions of the Methuen treaty. Compelled to recast his budget, Althorp was eventually obhged to limit his repeal of taxes to those on (1) sea-borne coals and slate, (2) printed cottons and hnen, and (3) candles. Subsequently, the famous Methuen treaty having The Me- . . thuen expired, Althorp was able to equalise the duties on Treaty ex- all sorts of wine, except Cape, at 5s. 6d. the gallon.^ The reduction of the duty on French wine in 1825 had had the effect of increasing the import to more than three times the previous amount, and had afforded an instance of that increase hy means af ' See as to printed goods, 1 Will. IV. c. 17 ; coals and substituted duties on exportation, slate, and new duty, on cotton, 1 & 2, c. 16 ; candles, c. 19 ; and wine, c. 30. 298 HISTORY OF TAXATION. reduction, which, as Pitt had noticed when speaking of the treaty with France, ' though a paradox, expe- - rience had now proved to be more than practicable.' On the present occasion, the reduction had httle, if any, effect in increasing the consumption : the im- port of Champagne, Burgundy, and Bordeaux wine, or as we term it ' claret,' was already sufficient to meet the limited demand of the richer classes ; the great class of consumers continued to prefer sherry and port — the wines of -Xeres and Oporto. Alteration of the Financial Year. 1832. Parliamentary reform now wholly engrossed public attention. The budget was postponed, and was not brought in until July ; and the only point of special importance in the fiscal arrangements of the year was the alteration made in the limits of the financial year. Originally, the Financial Year ran from Michaelmas to Michaelmas, that being the time for holding one ot the two full sessions of the old court of exchequer, when the sheriffs of counties and other accountable per- sons, having paid into the exchequer, at the Easter ses- sions, such instalment as was considered sufficient, paid in the balance of their receipts. Subsequently it was advanced a quarter, in 1800, when the Hmits were altered in accordance with a recommendation of the Finance Committee, who, observing that the pubhc accounts were made up, in different departments, to different days in the year, urged the propriety of uni- formity in the time for making them up, and suggested January 5 as a convenient limit, that being the day to which the annual accounts of the customs and those of THE FINANCIAL YEAR ALTERED. 299 the general commerce and navigation of the kingdom were made up.^ It was now advanced by lord Althorp another quarter, on the suggestion of the commission ' for examining into the method of keeping the public accounts,' of which Parnell was chairman. The commission observed that under the system then in existence of presenting the annual statement of the plan of supplies and means — or, as we term it, ' open- ing the budget,' in April, for a year which had com- menced in the past January, estimates were proposed for a certain amount of expenditure which had, in fact, already been incurred without the sanction of parliament. And they suggested the removal of this anomaly by the approximation of the hmits of the financial year to the ordinary budget time. Hence^ forth the year ran from April 5 to April 5. By means of the alteration Althorp was able to exclude an unfruitful quarter from the budget of the year. In the reformed Parliament, Althorp introduced, isss. April 19, a budget in which he proposed to devote, a considerable surplus he had to the reduction of taxes faUing on industry. But first it was necessary for him to give hi& reasons for leaving untouched the much denounced tax on malt ; which he did by pointing to the improved yield as an indication that the tax did not then press heavily on the article taxed, and might, therefore, be put aside for the present, on the ground that other taxes more urgently required reduction. Next, in order to explain the absence from his * Twenty-third report, June, 1798. 300 .HISTORY OF TAXATION. budget of a proposition to reduce the duty on news- papers, in repetition of his suggestion in 1831, he announced a change in his views regarding this tax : he regarded it as one to be repealed rather than reduced. But the repeal would cost not less than 440,000/., an amount which, in his opinion, it would be preferable to devote to the reduction of other taxes. Eventually, the following reductions and repeals of taxes were effected : — 1. A reduction for property insured from sea-risk. This tax, originally imposed in the Great "War pro- fessedly as a war tax, and subsequently raised to very high rates, had, during the war, when insurances could only be effected in England, proved very pro- ductive of revenue ; but after the war, when England ceased to have a monopoly of the business of insurance, the excessive rates had the effect of driving business from the country. A reduction of the duty seemed necessary, not only on the ground of good faith, but also on the ground of policy, with a view to bring back to the country business that had been driven away. 2. The agricultural interest received a boon in the form of a special exemption from duty of all separate policies insuring agricultural stock from risk of fire. 3. In the interest of the shopkeepers, the duties on windows and on inhabited houses were reduced for shops, and the duty on receipts for under 5/. was repealed. 4. The duty on the vehicles termed ' taxed carts ' was repealed. 5. Several classes of persons who under the pressure of the war had been fiscally enhsted as taxable ' servants,' were exempted DUTIES REDUCED ON SOAP. 301 from the list into which they had been forced : viz., shopmen, waxehousemen, storekeepers and porters ; commercial travellers and hawkers ; and bookkeepers, clerks, stewards, baihffs, managers and overseers.^ 6. A reduction of the duty on advertisements was a benefit to aU classes of persons. 7. The port duties on raw cotton imposed in 1831 as an equivalent for the tax on printed cottons then repealed, was abolished. Avowedly only a temporary tax, it had, moreover, brought in little more than half the estimated pro- duce. 8. The tax on tiles was repealed as pressing hard upon the manufacture ; and lastly, 9. in hopes of checking the illicit manufacture of soap, the duties were reduced by a moiety.^ Th6 yield was about 1,186,000Z., but due allowance was to be made for an increase in the manufacture as the result of lower- ing the duty. The loss under the principal heads was, approxi- mately : — Direct Taxes. £ Houses and windows, reduction for shops , . 224,000 Servants 59,000 Sea insurance 100,000 Articles of Gonswmption. Soap— half the duties - 300,000 Cotton, about 250,000 Advertisements 75,000 Tiles 37,000 So that the amount of revenue given up was over a million. ' Producing 45,000/., 4,500/., and 9,500/. ^ See as to houses and assessed taxes, 3 & 4 WUl. IV. c. 39 ; cotton wool, c. 10 ; tiles, c. 11 ; advertisements, sea insurance and receipts, c. 23; and soap, c. 16. In this year, the part of the old land tax that related 302 HISTORY OF TAXATION. The advocates for the repeal of the malt tax were not to be silenced by a mere statement that the im- provement in the yield of the tax justified its reten- tion at the existing rate. In the course of the session, sir William Ingilby brought forward in the house of commons a motion for the reduction of the duty from IZ. Os. Bd. to 10s. the quarter, and carried it by a majority against the government of 162 as against 152 votes. Placed by this vote in a position of consider- able difficulty, Althorp was compelled to meet this move of the malt tax repealers by taking advantage of a motion of sir John Key's to repeal the taxes on windows and inhabited houses. This motion stood^ for the 30th of April. On the 29th Althorp gave notice that he would move as an amendment to that motion, ' That a great deficiency of revenue would be occasioned by the reduction of the malt tax to lO*. per quarter and by the repeal of the taxes on houses and windows, which could only be suppHed by the substitution of a general tax upon property ; and that, as the effect of a step which would of necessity involve! that course would be to change the whole financial system of the country, it would at present be inex- pedient to adopt it.' For such a reconstruction of our fiscal system the country was not as yet prepared, nor indeed was Althorp the man to effect it. The amendment was carried by 355 to 157 votes. ^ to personal estates was also repealed, by c. 12. By the Act for the abolition of slavery in the oolonieB passed this session, c. 73, 20,000,000^. was granted in compensation to the owners of slaves. ' The ability shown by Spring Rice, alterwards lord Mqnteagle, in his speech in this debate marked him as the probable successor to the chan- cellor of the exchequer. REPEAL OF THE HOUSE TAX. 803 The course taken by AUhorp on this occasion i834. raised the hopes of the advocates for the repeal of the taxes on houses and establishments, and an agita- tion of unusual vehemence commenced which, in the result, induced the chancellor of the exchequer, to make the house taxes the principal subject of his consideration for the budget of 1834. But the question arose i^which of the two taxes on houses should be the first to go, the window tax or the tax on inhabited houses ? The first un- doubtedly was regarded by all authorities on ques- tions of taxation as the more objectionable of the two, for many reasons, but more particularly as arbitrary and unfair in principle and detestable in itg opera- tion in preventing improvements in the dwellings of the poorer classes, whose health and vigour were thus injuriously aflfected. But the other tax, on in- habited houses, thpugh imposed by North on the fair principle advocated in Adam Smith's ' Wealth of Nations,' that of a rate, was in practice far from fairly assessed. This fact pressed upon Althorp. He knew that the great houses, the Chatsworths, Blenheims, Longleats, Bowoods, Woburns, Belvoirs, Kabys, Stowes, and Hatfields^-the castles, halls, houses, and courts of the land, and indeed all the country houses of the richer class, were compara- tively lightly taxed as inhabited houses. It was assumed in assessment that the annual value to let of a large house was almost nothing, because, were the duke of Devonshire to endeavour to let Chatsworth, or the marquis of Bath, Longleat, the size of the 304 HISTORY OF TAXATION. house and the expense of living there reduced the prospect of obtaining a tenant to a minimum. All the large country houses were, accordingly, as a fact, taxed much more highly, relatively, to the window tax than to the tax on inhabited houses ; and on this ground, viz., that to repeal the window tax would benefit more particularly the richer classes, upon whose shoulders that tax rested, Althorp now selected the tax on inhabited houses for repeal. The loss to the revenue was 1,200,000Z. In the same year three taxes of minor importance, condemned by the commissioners of excise inquiry, were struck out of our tax list^: — 1. That on starch, one of the excises reimposed in queen Anne's war with France. In order to secure the tax it had been necessary to subject to statutory regulation every part of the process of manufacture down to the skimming of the water and the stirring of the fire ; and, as it did not extend to Ireland, it was exten- sively evaded by the introduction from thence of starch smuggled in the shape of flour. 2. That on the manufacture of stone bottles ; which yielded so small a sum, that it seemed absurd to continue the supervision of the business, and 3. That on the beverages termed British wines or made wines. These vina fictitia, made from fruit of various kinds and sugar — orange, currant, raspberry, and other wines, formerly favourites with the middle classes, had fallen in public estimation since the reduction of the duty on Cape wine in 1814. People preferred a ' See 4 & 5 Will. IV. c. 77. THE MALT-TAX KEPEALERS. 305 grape wine when they could get it at a moderate price. 4. The tax on almanacs was also repealed, and 5. there were some small assessed tax reductions. The loss to the revenue from the remissions, taking them in the order above given, was 91,000/., 3,200/., 2,900/., 25,000/., and 75,000/. Eeductions for cur- rants, raisins, oU and some other articles, and a repeal of the duty on coals exported in British vessels,^ were estimated, taken together, to cost 200,000/. A week after the budget, the marquis of Ohandos, afterwards the second duke of Buckingham, known as ' the Farmer's Friend,' and the other malt tax repealers again attacked the government, and old Cobbett toiled up from the country to town to give what proved to be his last vote, in the division on the motion of Chandos for the relief of the agri- cultural classes. The motion was lost by only four votes, 202 voting against 206. When, however, later in the session, Ingilby brought forward a motion for a repeal of the malt tax, suggesting in lieu of this tax, additional taxes on spirits and wine, taxes on beer and leather, and some novel and singular taxes, on the peerage, baronets and knights, and gambUng houses, his proposition failed to obtain the support of Peel, and his motion was lost by 170 votes to 271. It was now clear that something more solid than fanciful taxation would be required to meet any de- ficiency in the revenue to be caused by the abolition of existing taxes. For some years past those best ' 4 & 5 Will. IV. c. 89. As to assessed taxes, see c. 73 ; almanacs, c. 57. VOL II. X 306 mSTOEY OF TAXATION. competent to form an opinion on the subject had been inclined to think that nothing short of the reimposition of a general tax touching property or income would prove to be sufficient to meet exten- sive alterations of this kind. And Parnell, who had been able to study the subject with peculiar advan- tages, had formed, and had recorded in his Treatise on Financial Eeform, an opinion to that effect. The remissions of taxes since 1829 had settled the ques- tion. Commencing with the repeal of the taxes on beer and leather ; continued in the repeal of those on coal, printed goods and candles; including other items of importance ; and ending with the repeal of the inhabited house duty, those remissions amounted, in the whole, to considerably more than 7 millions,^ forming, with the 24 millions from remissions in the years 1816-29, a total of 31 millions lost to the revenue since the end of the war. & £. Beer. . 3,000,000 Printed goods . 500,000 Leather . . 400,000 Candles . 470,000 Sugar . 450,000 Soap (half) . 300,000 Coals 830,000 Houses . 1,200,000 307 PART II. FROM THE REPEAL OF THE HOUSE TAX TO THE RE-IMPOSITION OF THE INCOME TAX. THE CHANCELLOR OP THE EX- CHEQUER IN DIBFICULTIES. 1834-42- Reconstruction of tke ministry under Melbourne. Dismissal of Mel- bourne. Peel's four months' ministry. Burning of the Houses of Parliament. Tke old exchequer tallies. The second Melbourne ad- ministration. Spring Rice chancellor of the exchequer. Effect of the late inordinate repeal of taxes. Cheaper newspapers for the middle class. The chancellor of the exchequer ia difficulties. The Bed- chamber plot. Baring becomes chancellor of the exchequer. The percentages of 1840. Deficit for 1841. The timber and sugar duties. Defeat of the ministry. ' J'ishing for a budget.' Thus stood fiscal affairs when lord John Eussell nearly upset ' the Eeform Coach.' In consequence of the commission to inquire into the revenues of the Irish Church, Graham, Stanley, and Goderich, now earl of Eipon, resigned office. And, subsequently, when this resignation of the Canningites was followed by that of Althorp, who considered himself to be com^ mitted to a certain course in regard to the Irish Coercion Bill, of which he disapproved the clauses for the prohibition of public meetings, lord Grey at once announced in the Lords that the government was at an end. Melbourne, the secretary for the home department, was now sent for by the king, and desired to form, if possible, a coalition ministry of all the talents, inclusive of WeUington, Peel and Stanley. But the desired combination could not be effected, i 2 308 HISTORY OF TAXATION, and eventually the old government was reconstructed under Melbourne, Althorp returning to his post at the exchequer. Scarcely had this re-arrangement been completed, when the death of earl Spencer deprived the government of the assistance of Althorp in the Commons, and weakened them to such a de- gree that Melbourne thought it rig"ht to submit the circumstances of their situation to the king. This he did on November 13, and on the following morn- ing the king placed in his hands a letter of dismissal, and sent for the duke of Welhngton. The duke, conscious that the battle would be in the Commons, advised the king to recall Peel from Eome, where he was on a visit at the time, and place him at the head of a new ministry. Meanwhile, pending the return of Peel, the seals of the chan- cellor of the exchequer were entrusted, according to the precedents of 1721, 1757, 1767, and 1806, to the lord chief justice, and the duke himself held, for the piirposes of administration, the post of first lord of the treasury and that of secretary of state, in which capacity he transacted business for the home, the Dec. 10. foreign, and the colonial departments. Peel hurried back from Eome. An administration was formed in which he held the two posts of first lord and chan- celior of the exchequer, according to precedents that ranged from Stanhope to Canning. The new min- 1836. isters dissolved the parliament ; but the result of the elections was not sufficiently favourable to their party. Meanwhile an unexpected use had been made of THE BONFIRE OF THE TALLIES. 309 certain fiscal instruments of considerable importance in former times. The Tallies, by means of which business was transacted under the old exchequer system, sticks of willow wood, in length not exceed- ing five feet, and about an inch square, were of two kinds, and were used as receipts for money paid, or warrants for money to be paid : Tallies of Sol., short for ' solutum,' paid ; or Tallies of Pro, avail- able for the person named. On these sticks the amount was expressed in notches (a very usual form of account in former times, as the provincial cricketer is reminded, who still ' scores a notch '), and the date and name of the payer, or the payee, as the case might be, in writing. SpUt in half through the notches, the tally of sol. became ' receipt ' and ' counterfoil.' It will be in the recollection of the reader that after the union of England and Scotland, the intro- duction of exchequer tallies into the northern part of Great Britain was the cause of no little amaze- ment and amusement. But the hint was lost at the Treasury, and these antique fiscal instruments had continued in use until 1826. Since disused, they had remained stacked in safe keeping, bound together in bundles. The Spectator in his amusing vision of that fair virgin, Pubhc Credit, says the bundles are ' like Bath faggots/ They had been used as faggots. Early in the morning of October 16, London had been in consternation. The houses of parhament were on fire ; and when the stupid work of an attendant, who had used the heating apparatus to 310 HISTORY OF TAXATION. burn up the tallies, was complete, these buildings, dear to the nation from their association with many illustrious men, were no more. The calamity was not, however, without some attendant advantage, in the removal it effected of a house of assembly, which from the pictures we have of it, evidently was inade- quate to meet the requirements of the larger attend- ance of members usual in the reformed parliament as compared with former times. 1835. On the meeting of the new parliament in their temporary houses the ministers had to undergo a series of defeats. Defeated on the question of the speakership, on the address, on the question of the London University charter to enable them to confer degrees in arts and law, and more than once on the April 8. Irish Church question, Peel at last resigned, and Mel- bourne returned to power, with an administration which included lords John Eussell, Palmerston and Glenelg, Spring Eice taking the seals of the chan- cellor of the exchequer.^ - The inordinate repeal of taxes between 1830 and 1834 now began to have its effect. In 1835 there 1836. was no remission of taxes; but in 1836 Spring Eice was able to signahse his tenure of office at the ex- chequer by repeals and reductions of the duties on paper, at a loss of 400,000Z., and a reduction of the duty on newspapers to Id., which gave the news- paper, for the first time, to the middle classes.^ ' Poulett Thomson was replaced in the post he had held of president of the hoard of trade, and Parnell became paymaster-general and treasurer of the navy. » 6 & 7 AVill. IV. CO. 62, 76. NEWSPAPERS FOR THE MIDDLE CLASSES. 311 Ever since the imposition of the tax on newspapers by the last tory government of queen Anne, these necessary vehicles of intelligence had proved, in war times, when an increase in the business occurred, an inviting subject for further taxation. The newspaper bore on the face of it traces of the various wars in which we had been engaged, as a shield bears the dints of the conflicts in which it has been used — Legge's additional stamp in the Seven Years' "War, North's, of the war of American Independence, and a third, due to the great war with France. North and Pitt treated the newspaper as an article of luxury, to be taxed accordingly. But opinions had now altered. Althorp had only abstained from renewing, in 1833, the proposal to reduce the duty originally embodied in his budget of 1831, because he considered that the tax should be aboHshed. It now stood first in the whig list of taxes to be repealed. Some endeavours were indeed made to obtain, in heu of the proposed reduction in this tax, a repeal of the tax on soap. Let the people wash and be clean, it was urged ; it will do them more good than cheap newspapers to any amount ; but such arguments were not allowed to prevail, and the tax on inteUigence was reduced at a loss to the revenue of 300,000Z. The fiscal history of the next five years is the issz. history of a chancellor of the exchequer in difficulties. The expenses of the Canada business, the yearly in- creasing cost of the army and navy, which amounted to fifteen millions and a half in 1841, as against eleven millions and three quarters in 1835, the deficient 312 HISTORY OF TAXATION. harvests of 1838 and 1839, which followed the abun- dant harvests of from 1833-36, and the results of the over- trading of 1836 and 1837, which now began to be felt, all combined to produce this result. A series of deficits proved that our ministers had been too free in the reduction of taxation. For 1837-38 the deficit was about a miUion and a half ; for the next year nearly half a million ; for the next, nearly a million and a half; and for 1840-41, nearly a' mil- lion and three-quarters.-^ Meanwhile, though the result of the elections to the first parhament of the Queen had rehabilitated to a certain extent the tory, or as they now were some- times termed, the conservative party, the popularity of the young Queen carried the existing administra- tion through the session of 1838. But when, in 1839, the ministerial majority on their Bill to suspend, for five years, the constitution of Jamaica, was only 5 — 294 votes against 289, Melbourne resigned, and ad- vised the Queen to send for the duke of Wellington. 1839. The duke suggested that Peel should be asked to form an administration. May 8, but after the some- what ridiculous episode termed the Bedchamber Plot, the whig ministry returned to office, to totter on for another two years. At the close of the session Spring Eice, greater as a man of figures than as a man of finance, raised to the house of lords as lord Monteagle, was succeeded in office by Francis Thornhill Baring. The new chancellor of the exchequer, originally 1 We lost a million and a quarter of revenue by the penny postage of 1839j BARING'S PERCENTAGES OF 1840. 313 in the Grey administration a junior lord of the treasury, had, on the resignation of the Canningites, succeeded to the post of secretary of the treasury, vacant by the promotion of Spring Kice to the colo-' nial office. Though acknowledged as an authority in matters of finance, he had not that confidence of the landed interest which was necessary for any minis- ter who would attempt to reintroduce the income tax, had he been desirous so to do. His first attempt isio, to mend matters was the simple method so famihar to North, Addington and Vansittart. To meet a deficiency of 2,732,000Z. there would be a general rise, by percentages, in the port duties, the excise and the assessed taxes ; and such had been the suc- cess of the reduction of the duty on spirits in putting down illicit distillation, that it was considered that spirits would bear an additional Ad. the gallon, and that amount was imposed upon imported spirits and the distillery. These additions would produce : — £ Port duties and excise, 5 per cent. . . 1,426,000 Spirits, id. additional 485,000 Assessed taxes, 10 per cent 426,000 The remainder of the deficiency was covered by a vote of credit.^ The additional percentages of 1840 failed to pro- isii. duce the amounts that had been expected ; while under the head of spirits there was a decrease in the yield, due mainly to the prevalence of the principles of father Mathew in Ireland. In the next year there was ' As to customs, excise, spirits, and assessed taxes, see 3 & 4 Vict. c. 17. 314 HISTORY OF TAXATION, a deficiency, for 1841-2, calculated at little less than two millions and a half. Of this, a considerable part was referred to extraordinary expenses. It was ne- cessary, however, to provide an additional 1,700,000?. What should the chancellor of the exchequer do? Should he revive the tax on inhabited houses or any of the other taxes lately repealed ? should he impose a tax on the new inventions — steam, for in- stance, or gas ? He determined to reduce the pro- tective duties on timber and sugar, hoping to obtain by this means 600,000Z. and 700,000/., or, in all, 1,300,000Z. of additional revenue from increased con- sumption,^ and throwing out a bait for the manufac- turers, who were now pressing for the reduction of these taxes. After an eight days' debate, the ministry were defeated on the Sugar Duty BiU, but they still held on to office, for lord John EusseU had announced his plan for a fixed duty on wheat of 8s. the quarter, with proportionately reduced rates for rye, barley and oats, and the question of cheap bread appeared an advan- tageous question for the purposes of the hustings. In the House, so sudden a conversion of the ministers to an approach to free trade principles was considered only an additional reason for want of confidence in them. But a direct vote of want of confidence was required to move them. This was carried by a majority of one vote, 312 to 311, on the motion of Peel, on June 4, after which they dissolved the par- liament and appealed to the country. ' The lemaming 4O0,000A was expected from corn. 'FISHING FOR A BUDGET.' 315 The Fiscal Situation. Among the materials useful to the compilers of history in England, not the least useful are to be found among those caricatures which represent the particular subject of importance at the time. Their object is to ' catch the manners living as they rise ; ' and if not trustworthy guides in every colour of the picture pre- sented, they xj^j safely be taken as evidence of the fact they represent, and the importance allowed to it at the time. At this date the pencil of political satire, if that be not too strong a term for touches of amus- ing criticism, was in the hand of the late mr. Doyle ; and, in expression of the situation of fiscal affairs at which we have arrived, it would be difiicult to find anything more suitable than one of H. B.'s political sketches : 'An Unhappy Angler.'^ It was inspired by a passage in Peel's speech in this debate on the sugar duties, where he said of mr. Baring : ' It has been remarked that a good man struggling with adversity is a sight worthy of the gods. And certainly the right honourable gentleman, both with respect to the goodness of the man and the extent of his adversity, presents at the present moment that spectacle. Can there be a more lamentable picture than that of a chancellor of the exchequer seated on an empty chest, by the pool of bottomless deficiency, fishing for a budget f ' * ' Fishing for a Budget, in Tory waters,' No. 687. BOOK IV. THE EEFOEM OF TAXATION. 1842-70. CHAPTER I. FROM THE EEIMPOSITION OF THE INCOME TAX TO THE OUTBREAK OF THE WAR WITH RUSSIA, 1842-64. CHAPTER II. THE SUSPENSION OF REFORM IN CONSEQUENCE OF THE WAR WITH RUSSIA, 1854-60. CHAPTER III. FROM 1860 TO 1870. 319 CHAPTER I. FROM THE REIMPOSITIOU^ OF THE INCOME TAX TO THE OUTBREAK OP THE WAR WITH RUSSIA. 1842-54. Peel iu power. His antecedents and position in the House. The political outlook, in 1841, by Campbell. The Budget of 1842. Reimposition of the income tax for four years. Revision of the tariff. Effect of the construction of railways on the revenue. The Budget of 1845. The income tax continued for three years more. Second revision of the tariff. Repeal of the taxes on glass and auctions. Repeal of the com laws. Peel resigns oiBce. Lord John RuaseU's first administration. The income tax continued for three years more. Sir Charles Wood's Budget of 1850. Repeal of the tax on bricks. Reductions in the stamp duties. House tax substituted for the window tax. Disraeli chancellor of the exchequer. The battle of the malt tax. Lord Derby resigns. Gladstone chancellor of the exchequer. The Budget of 1853. The income tax continued for seven years more. Succes- sion duties on land. Third revision of the tariff. Repeal of the taxes on soap and advertisements. Revision of the taxes on establishments. Commencement of penny taxation. Taxes on insurance condemned. We have now arrived at a period of great importance i84i. and interest in our fiscal history. The whigs had held office, under Grey and Melbourne, with a short interruption, for ten years. They had repealed the old feudal game laws and reformed the laws relating to game. They had carried parHamentary reform. They had regulated the labour of children and young persons in mills and factories, to the great benefit of their health of body and mind. They had carried 320 HISTORY OF TAXATION. the Municipal Corporation Act in reform of our municipal corporations, and by the Tithe Commuta- tion Act had reformed the laws relating to the pay- ment of the clergy. But in fiscal affairs they had proved a failure. Althorp was not successful as a finance minister, and the laxity in the application of financial principles that had been allowed under Spring Eice had brought the whigs financially into bad odour with every one. A succession of deficits alarmed the nation, enforcing the necessity of a re- form in our fiscal system, and all eyes were turned towards Peel as the minister to accomplish it. Born in February 1788, Peel was now in his Sith year. The son of the Eobert Peel famous for his munificent subscription to Pitt's Voluntary Contribu- tion of 1798, he had all the advantages which in every station, but more particularly in a political station, attend the possession of riches. After a distinguished career at Harrow, and at Oxford, where he obtained a place in the first class in the two schools of classics and mathematics, he began his political career as member for Cashel in 1809, and his official career, in the following year, when he was appointed to the post of under-secretary of state for the colonies ; from which he was promoted, by Liverpool, in 1812, to that of secretary for Ireland. In 1817 he was returned a member for the university of Oxford. His next step on the ladder of promotion placed him in the high position of secretary of state for the home department, at the age of thirty-three, and he held this post from the time when Sidmouth re- THE POSITION OF PEEL, 1841. 321 tired in 1822, until the dissolution of the Liverpool administration in 1827. The reasons that prevented him joining Canning have been before stated ; ^ and the death of Canning left him facile princeps in the house of commons. In the Wellington administra- tion he had held, again, the post of secretary of state for the home department. Placed, by the advice of the duke of Wellington in the supreme post, after the dismissal of Melbourne by the king in 1834, he had held the post of chancellor of the exchequer with that of first lord of the treasury in a short adminis-^ tration from December 10 to April 8 following ; and when in 1839, on the resignation of the Melbourne ministry in consequence of their defeat on the Jamaica question, he had again receiyed the command of the Queen to form an administration, he had found him- self unable to do so in consequence of difficulties" about the ladies of the bedchamberw During the long period that had passed since he first entered the house of commons, his reputation for mastery of details, sound practical sense and judgment, artd financial abihty had continued to increase, and it was now such as indubitably to mark him as the man to set matters right. The result of the elections proved unfavourable to the ministry ; arid when, after the meeting of parlia- ment, amendments to the address were carried in both Houses, they resigned, and Peel received the com- mand of her Majesty to form a ministry. His second administration, formed in September, included sir ' Ante, p. 284. VOL. 11. T 822 nrsTORY of taxation. James Graham, lords Aberdeen, Stanley and Eipon, and the duke of Wellington. Mr. Goulburn was appointed chancellor of the exchequer, and William Ewart Gladstone, vice-president of the board of trade. The political outlook was not encouraging for the whigs. ' Perhaps you may have some curiosity to know how the party bears the change,' writes Campbell, the future lord chancellor, in September. ' Stunned, in a state of stupor, with a feeling quite unlike Milton's devils' (he might have said, at least, fallen angels), ' awakening in hell, who were animated by revenge and meditated schemes to get in. Peel *' bestrides the world like a colossus." and we are only '* looking out for dishonourable graves." At Brooks's, " Hope never comes, that comes to aU." " Lasciate ogni speranza voi ch' entrate." The universal opinion is that the game is irrevocably up, and that the tory party will be in power for fifty years to come. Most of our men are gone to Scotland to shoot, or are flying abroad. The few who remain in London say there is no' use in attending either House.' Thus wrote Campbell in 1841. 1842. Peel, having prepared' his proposals with great care and deliberation, himself opened the budget in 1842, in a speech acknowledged by everybody to be a masterpiece of financial statement.' It was a time of high prices for provisions. There was much sufier- ing among the poor. Manufactures languished. Em- ployment was dwindling day by day, and chartism was on the increase. ' Greville, Memoirs, ii. 87. OUR FISCAL POSITION, 1842. 323 Our fiscal position was as follows :— Interest of debt including management and terminable annuities Army and navy Civil list and civil government Collection of revenue Revenue from taxes . Surplus from post-office £ 29,500,000 14,750,000 4,700,000 2,767,000 50,250,000 300,000 As regards the amount under the head of interest interest of debt, when the terminable annuities ended there would be, pro tanto, a diminution of the annual charge. But this event was remote, and, on the other hand, allowance was due for contingencies. As recently as 1833, for the abolition of slavery, we had borrowed 20,000,000/. This might be treated as an fexceptional case ; but no such argument could be advanced in relation to the other large sums we had borrowed for expenses in Canada, China and India. As regards the other items of expenditure, since Army and 1834, when our national expenditure was the lowest ''^^' on record, it had been gradually increasing. The mihtary expenditure indeed stood at about" 8J millions, to exclude the special expenses relating to the insurrection in Canada, the war in Afghanistan, and the China (opium) war ; but in the naval expen- diture there had been a steady and considerable increase. It was now nearly 6-J millions as against 4f milhons for 1836. Nor was there any prospect of any diminution in the 14f millions under the com- bined heading. To preserve the integrity of the Ottoman empire and keep that feeble fabric from falling into pieces ; to place obstacles in the way of Y 2 324 msTOEY OF taxation, the wave of Eussian advance towards India ; to en- force for our merchants at the far end of the world access into the penetralia of the Celestial empire against the will of its rulers ; to suppress rebellions in remote colonies, while maintaining, at home, a force to represent strength suflScient to restrain from outbreak, disaffection in onCj and chartism in another, part of the kingdom, these were expensive proceed- ings. In short, if our affairs were to be carried on upon a scale of such worldwide operations, it was abundantly clear that our military and naval estab- lishments would not, in the future, meet the require- ments of our policy at a reduced cost, oivii The cost of the civil government was increasing, men™ and it was clear that it would continue to increase. The increase, in 1839, in the grant in aid of education and the formation of a department for education, was but the precursor of other measures which would be necessary to meet the requirements of a rapidly increasing population and modern civilisation. The reader is already acquainted with the position of the revenue ; and, as regards the profits of the Post business of the Post Office, the return under that head had been reduced to practically nothing, by the intro- duction of the penny postage system in 1839. In his budget arrangements Peel's distinct and defined object was ' to revive commerce and effect such an improvement in the manufacturing interests as would react on every other interest in the country ; ' and this he hoped to effect by means of commercial re- forms, and more particularly by a reform of the tariff. Office. REIMPOSITION OF THE INCOME TAX. 325 In order to enable him to do this with confidence income and satisfaction, he proposed, for a limited period of foxir years, an income tax of Id. in the pound, or nearly 3 per cent., on the model of the tax repealed in 1816, with the following exceptions : — 1. In lieu of the old exemption for incomes up to and including 50Z., with a graduated scale for industrial incomes between that and 150/., a total exemption was allowed for incomes of every descrip- tion not exceeding 150/. 2, The tax did not extend to Ireland, where the repeal of the assessed taxes in 1823 had abolished the machinery for the proper assessment and collection. In lieu of establishing a costly machinery for the short period of four years, the area of the tax was limited to Great Britain, and in Ireland an equivalent tax was imposed, in the form of an addition to the Irish stamp duties, which, pre- viously less than those for Great Britain, were raised to an equal charge, and an addition of Is. to the tax on the distillery. 3, In order to prevent the necessity of any disclosure of a man's circumstances to his neighbours the ordinary commissioners for the dis- trict, special commissioners, sworn to secrecy and acting as government officials, were appointed, to whom any taxpayer under Schedule D, the schedule relating to professions and trades, might, if so minded, make his return under seal, whereupon they would assess his profits for the purposes of the tax, and 4. Farmers were to be charged on a lower estimate of profit than heretofore ; their profits were assumed to be an amount equal to half the rent paid, in England, 326 HISTORY OF TAXATION. and one-third the rent paid, in Scotland, instead of three-fourths and one-half, as they had been under the previous income tax. The tax at Id. in the £, was estimated to yield 3,770,000^. Revision With this, as affording a fair ground to stand on, ofthe ° ^ tariff. Peel was able to resume the work begun by Hus- kisson and Eobinson, the process of the liberation of trade by the abohtion and reduction of the duties on the importation of raw materials and articles in various stages of manufacture. The customs tariff included about 1,200 articles ; reductions were to be made affecting 750 articles, on the following plan : — Where raw materials were retained in the tariff, the duties were to be low in amount, in some cases merely nominal. On all articles partially manufactured considerable reduc- tions were to be made. In all cases of manufactured articles, the duties were to be reduced to a point not exceeding 20 per cent.'^ The amount of estimated loss to the revenue was 1,200,000Z. 1843-44. After this extensive reform, it could not be ex- pected that the budget of 1843, which was opened by Goulburn,. May 8, would present any feature of special interest as regards reduction of taxation. But in 1844 the excise on vinegar was repealed, and re- missions of duty were granted for currants, coffee, certain sorts of glass, wool and marine insurances, involving in all about 400,000Z. The returns of the revenue for 1843-4 showed a considerable increase in the yield, and in 1845 trade • 5 & C Vict. c. 47. The Act for the Tariff of 1842, TWO REVISIONS OF THE TaRIFK 827 Steadily improved. The consols which, at the acces- sion of Peel to office, stood at 89, were now not far from par. Stagnation was at an end, for an outlet had been found for capital, which was now freely employed in the construction of railways all over the kingdom, and, to the advantage of the revenue, innumerable navvies were consuming spirits and beer in rivers, and tobacco in millions of pounds. Soon after the meeting of parliament at the com- i846. mencement of the year. Peel explained the financial plans of the government. About five millions of sur- plus revenue might be expected for the year 1844-45. For the next year, ending April 1846, a revenue of 51,100,000^. might be expected, which would include 2,600,000Z. of arrears of income tax, the proportion payable during that financial year. This would be sufficient for fiscal purposes without the imposition of any income tax. But in the year after, ending April, 1847, if no income tax were imposed, there might be a deficiency. He now advanced a step in his plans for fiscal reform, and asked the House to reimpose the income tax for three years after its expiration in 1847, ' in order to enable me,' he said, ' to make arrangements with regard to the general taxation of the country which will lay the foundation of great commercial prosperity, and materially add to the comforts even of those called on to contribute.' The House, acknowledging that the prosperity of the country was due in no small degree to the fiscal improvements efiected by their leader, and confident 328 HISTORY OF TAXATION. in his sagacity and ability, followed his advice, and thus enabled him to effect a further reform in the tariff, and commence a reform of other taxes. Second This second revision of the tariff involved the revision of the tariff, rcmoval of no less than 450 different items from the list, principally raw materials of manufactures : — raw silk and thrown silk, not dyed ; hemp, flax, and tow, beaver wool and cotton wool, hides, sMns and furs, bark, indigo, barilla, potashes, palm oil, train oil and ohve oil, unless imported in a ship of Naples, and furniture woods and other articles, some of them im- mediately, others at more deferred periods. And all duties on exported articles, including a duty on the exportation of coal imposed in 1842, were abolished.^ Glass. From the list of the excise, Peel selected for repeal the tax on glass. Twice in our history had a tax been imposed upon this beautiful and useful manufacture. The first tax, in the reign of William lU., proved ruinous to the manufacture, and on that ground was repealed. After which the manufacture immediately began to revive. In 1746, Legge reimposed a tax on glass. ' Itefum crudeUa retro fata vocant : ' this tax, increased, as it had been by Pitt and Vansittart, had again crushed the manufacture. It was now selected for repeal, by Peel, for the reasons stated in the report on the subject made by the commissioners of excise inquiry : ' No tax,' they reported, ' could com- bine more objections or be more at variance with aU sound principles of taxation.' It produced at this date about 600,000/. 1 8 & Vict. c. IL'. The Act for the Tariff of 1845. REPEAL OF THE TAX ON GLASS. 329 The other tax selected for repeal was that on pror Auctions. -perty sold at auction, imposed originally by North in the war of American Independence, a tax not only -bad in principle, but from the numerous exemptions with which it had become overgrown, partial and unjiist. The yield was about 300,000Z. In this year Peel decided to propose the repeal of Repeal of the corn laws. He had adopted, at an early period Laws. of his public life, without much serious reflection, the opinions generally prevalent at the time among men of all parties as to the justice and necessity of protection to domestic agriculture. They were the opinions of Parnell and Eicardo, lord Melbourne and lord John RusseU, as well as of the duke of Welling- ton, Canning and Huskisson. In 1841, he had come into office to maintain the principle of the corn law of 1815, for his motion of want of confidence had been aimed at lord John EusseU's proposal for a fixed duty ; and on that principle he had acted, having revised the jsliding scale and otherwise improved the system. But the potato famine in Ireland forced him to open the ports, in order to supply food to a starving people ; and the opening of the ports for Great Britain was but a corollary to that measure. Once open, the ports could never again be closed : ' The suspension of the existing corn law,' Graham, had written to Peel in October, ' on the avowed admission that its maintenance aggravates the evil of scarcity, and that its remission is the surest mode of restoring plenty, would render its re-enactment or future operation 'quite impracticable. 330 HISTORY OV TAXATION. Having determined in his mind the course he would pursue on the subject of the corn laws, Peel consulted the cabinet, and finding a want of unani- mity in the opinions of his colleagues, placed his re- signation in the hands of the Queen on December 5. But, in consequence of the inability of lord John Eussell to form a ministry,^ he returned to office on the 20th, though without his former colleague, Stanley. May 29, The budget of 1846, introduced by Goulburn, 1846. . ° . involved the repeal of the duties on corn from Feb- ruary 1, 1849, leaving only 1*, the quarter, as in effect a registration duty. Imported cattle, sheep and pigs, beef, bacon and pork, excepting hams, other meat, salted and fresh, horses, and thrown silk, dyed, were wholly exempted from duty ; and there were reduc- tions for brandy to 15s. the gaUon, timber, seeds, and nearly 100 other articles.^ Peel re- Shortly after this, lord George Bentinck and his office. followers, who desired to show the world that the tory party would not sanction the continuance in office of Peel, a renegade from the party on the question of the corn laws, on the second reading of the Irish Life Protection Bill, joining with the whigs, •the free traders, and the Irish catholic and liberal members, defeated the ministry by a majority of 73 votes on Thursday, June 25, the day on which the ' Lord John thought earl Grey I'homtae n^cessaire to lead in the Lords ; but Grey refused to act if Palmerston returned to the Foreign Office. - See, as to corn, 9 & 10 Vict. c. 22 ; the third reading of the Bill was carried by a majority of nearly 100 ; as to the pther duties of cus- toms, 0. 23. ' . , THE SMALL LOAF AND THE BIO LOAF. 331 Act for the repeal of the corn duty arrived in the House with the royal assent. When Peel resigned, he left office accompanied by a brilliant circle of followers, subsequently known as the ' Peelites.' ^ And the action of the tories in thus detaching themselves from him, on the ground of his conversion to the necessity of giving cheap food to the masses, placed that party in antagonism to the people and the spirit of the times, and was the main cause of their practical exclusion from office for the term of a generation, in lieu of the fifty years' tenure of power which Campbell had assigned to them in his prophecy of 1841. In lord John Russell's first administration, formed July 1, sir -Charles Wood, subsequently created vis- count Halifax, was chancellor of the exchequer. The failure of the potato crop in Ireland, and the high prices of provisions at home in consequence of • a deficient harvest, would have caused this year to be exceptionally unfavourable to the revenue, had it not been for the prosperity due to the construction of our railways, and' more particularly to the con- sumption of beer, spirits, tobacco, coffee, tea and sugar by the army of navvies now in occupation of the soil of England.^ Parliament met in January, in order to take i847. * The most conspicuous were Graliam, Aberdeen, Gladstone, Sidney- Herbert, subsequently lord Herbert of Lea, Cardwell, subsequently vis- count Cardwell, Goulburn, sir George Clerk, and the earl of Lincoln, subsequently the fifth duke of Newcastle. ' In 1846 and 1 846, 347 Acts of Parliament were passed, to authorise the construction of 7,654 miles of railway, at an estimated cost of over 190,000,000;. 332 HISTORY OF TAXATION. prompt measures for the relief of Ireland, and sir Charles Wood, on opening his budget, found himself compelled to borrow eight millions to meet the prob- able expenses of the famine. The parliament of 1 841 was dissolved in the autumn, and the new parliament met in November. 1848. As the fear of French invasion and the continu- ance of the Kaffir war were likely to prove sources of increasing expenditure, lord John Eussell, following the example of Peel, himself introduced the budget, in February. Making the continuance of the income tax a political and parliamentary measure, as well as a measure of finance, he proposed to continue the tax for five years at the following rates — 12<^., an increase of 5d. in the rate, for two years, and 7d. for the three subsequent years. But this proposal the government were obliged to abandon, and in the result the tax was renewed at the old rate of 7d. for three years, for Crreat Britain. The distress in Ireland formed a suf- ficient reason for not extending it to that country. 1850. Two taxes now stood before all others in the list of taxes to be repealed or reduced on the earliest opportunity : the window tax, long condemned by universal consent as a radically bad tax ; and the duty on tea, which was allowed to be excessive in amount. But sir Charles Wood had not, in 1850, a surplus at his disposal sufficient to enable him to deal with taxes so considerable in their yield, and therefore selected for repeal another tax which, under the circumstances of the times, was probably not less open to objection than the window tax. EEPEAL OF THE TAX ON BRICKS. 333 The tax on bricks, originally imposed by Pitt in 1784, though not perhaps so much open to objection as other taxes on manufactures on the mere ground of the adverse operation of the excise laws, had always been acknowledged to be partial in its operation as regards different parts of the country, in some parts of which there is, while in others there is not, any stone available for building purposes, and unfair, from its failure to touch the dwellings built by the richer class, usually of stone. But the gravest practical objection to the tax was its effect in increasing the price of the raw material for cottages, farm-buildings, warehouses, railway tunnels, and other constructions of that kind. In addition, sir Charles proposed considerable re- ductions in the stamp duties, which still stood at the high figures to which, by a long succession of addi- tions, ' regulations ' and ' consolidations,' so termed, they had been raised in the Great War. During the thirty-five years that had elapsed since the war, the duties had practically remained untouched. It was acknowledged that the laws relating to them were of great complexity, and in that view several attempts had been made to reform and simplify them. Under the Liverpool administration more than once was a scheme devised for alleviating the pressure of the duties and amending the law. Subsequently, Goul- burn had introduced a comprehensive scheme for consolidating the law. After this, Althorp appears to have, at one time, entertained a project for the improvement of the stamp laws, and lastly, in 1836, 334 HISTORY OF TAXATION. Spring Eice had introduced a Bill for that purpose, but so cumbersome in size that it failed to pass through the House. All these plans had failed. Not only was the subject regarded as one bristling with difficulties ; when a consolidation was mentioned, every opponent of the measure could point to the previous consolidations of Addington, of Spencer Perceval, and of Vansittart : ' Consohdate ! ' it was said ; ' you mean to raise them.' On this occasion sir Charles Wood, et dona ferens — even with 300,000^. a year to give, experienced no shght difficulty in passing a measure of simplification and reduction. The repeal of the duty on bricks cost about 450,000^. of revenue ; and eventually sir Charles was compelled to go further than he intended, and give up nearly half a milhon from stamp duties. Unwillingly indeed did the House consent to the postponement of the repeal of the window tax ; and later on in the session, the sanitary reformers, rallying to a vote on lord Duncan's motion to repeal the tax, obtained a practical victory in a division in which the government had a majority of only three votes. On the other band, motions made in the same session, for the repeal of the taxes on paper, advertisements, marine insurance and malt, proved unsuccessful. Death of On the 29th of June, the day after the Don Peel July' 2, Pacifico debate on the pohcy of the government towards Greece, in which he had spoken, Peel, on his way on horseback up Constitution Hill, was thrown from his horse, and the accident proved fatal. The death of Peel left Palmerston, Avho had HOUSE, SUBSTITUTED FOR WINDOW, TAX. 335 greatly increased his reputation and popularity by Ms speech in the late debate, as the most prominent figure in the House. In the following session the government were i85i. only able, after a strenuous effort, to defeat Disraeli's motion regarding the alleviation of agricultural dis- tress, really a protectionist resolution, by 1 4 votes ; and the smallness of this majority, their defeat, by 100 votes to 52, on Locke King's motion for leave to bring in a Bill to assimilate the county franchise to that for boroughs, through the result of what is termed a snap division, and the disapprobation with which their budget — renewing the income tax and substituting another house tax for the window duties — ^was received, induced lord John Eussell to resign. i"tb 21. But he returned to office, March 4, in consequence of the impossibility of any other arrangement at the time ; for the Peelites, whUe unable to join Stanley and the conservatives, who still pinned their faith to protection, could not coalesce with the whigs on ac- count of lord John Eussell's Ecclesiastical Titles Bill. The budget was re-introduced in April. Sir Charles Wood jadhered in the main to the proposals he had originally made ; and in the event the income tax was continued, but in consequence of a motion of mr. Hume, who desired an investigation of the inci- dence of the tax by a committee, only for a year, in lieu of the three years proposed by the government. The condemnation of the window tax pronounced effectively by the house of commons in the previous year was now carried into execution. Operating as a 336 HISTORY OF TAXATION. restriction on air and light in the houses of the poorer classes ; difficult to administer, in consequence of the disputes that arose regarding what was and what was not considered to be a ' window ' ; and unfair in principle, inasmuch as the number of windows has no necessary relation to the value of a house and cer- tainly is not a criterion of value equally applicable to houses in the country and houses in tow^ns, this ta:^ was to be repealed. But as the other claims for re- duction pressed upon the chancellor of the exchequer could not be disregarded, and the surplus at his command available for the reduction of taxation was limited in amount, he was unable to give up the tax without some partial substitute. Accordingly he revived the tax on inhabited houses, hurriedly, or rather, unadvisedly as it was now acknowledged, re- pealed by Althorp in 1834, placing it, however, upon a narrower basis, with certain alterations and im- provements which, in his opinion, freed the tax from objections which had been formerly urged against it, and treating the whole arrangement as, in sub- stance, a reform in the taxation of house property. By this measure about 1,130,000/. of revenue was given up. Another 176,000/. was devoted to a reduction of the duty on coiTee, foreign as well as colonial, to Zd. the pound, in order to avoid the adulteration of coffee with chicory ; and another 286,000Z. to the reduction, by a moiety, of the duties on foreign timber. In December, a misunderstanding which arose be- tween the prime minister and Palmerston regarding A CONTEST UPON FISCAL GROUND. 337 an official expression of his approval of Louis Napo- leon's coup d'etat, which, was considered to be in contravention of the instructions for the conduct of the secretary of foreign affairs laid down by the Queen in 1850, led to his dismissal from office. The administration, before it was thus weakened, had been gradually losing ground ever since the pis- aUer arrangement of the preceding year, when lord John had returned to office simply because, at the time, a stronger administration than his own could not be formed ;. and in February, Palmerston had the i852. opportunity of 'returning the compliment' to his late colleague. On a question relating to the mihtia, which lord John proposed to establish upon a local basis, he joined the Peehtes, and they outvoted the ministry by 186 votes to 125. Lord Stanley, who, in June, had succeeded to the earldom of Derby, now formed an administration in which Disraeh, who had succeeded to the leadership of the conservative party in the Commons on the death of lord George Bentinck in September 1848, held the post of chancellor of the exchequer. The field was now clear for a trial of strength between the conservative and liberal parties upon fiscal ground ; one side advancing, not indeed the banner of 'Protection,' but the banner of malt-tax repeal, and the other maintaining further reform in commercial taxation, and the abolition of the excises on manufactures, in a word, the pohcy of Peel. But the time for preparation of a budget was so brief, that the new chancellor of the exchequer, while VOL. II. z 338 ' HISTOKY OF TAXATIOIf. acknowledging the advisability of a general review of our whole system of taxation, stated, in his financial statement in April, that he was compelled to postpone his consideration of so wide a subject, and therefore simply proposed a continuance of the income tax for another year. In July, the new ministry dissolved the whig par- Hament of 1847 ; and, after the general election in the autumn, Disraeli brought forward in the new parliament, December 3, his scheme for the improve- ment of the taxes, which he introduced in a speech of great width of grasp and power. His plan was formed to hinge upon a proposal for the reduction of the duty on malt. This was the cardinal point ; but there were to be reductions also on hops and a gradual reduction of the duty on tea. This diminution of indirect taxes on articles of con- sumption was to be accompanied by an increase in direct taxation. The basis of the tax on inhabited houses was to be extended, so as to include all houses down to 10^. of value, on the ground that direct taxa- tion should be general, as well as indirect taxation. The income tax, to be renewed for three years, was to extend to income of a certain description in Ireland, viz., income derived from investments in the funds and salaries of offices. The basis of the tax was to be widened by narrowing the limit of exemption ; and industrial incomes were to be taxed at a reduced rate. The battle of the malt tax, for such it was, was bravely fought. The weak point for attack in the THE BATTLE OF THE MALT TAX. 339 budget scheme was the proposal to extend the basis of the tax on inhabited houses, in reversal of the policy of sir Charles Wood's measure of 1851 ; and in the event, the ministry were beaten, on this ground^ on the morning of December 15. Gladstone's speech on the budget proposals of the late ministry, had placed him in the foremost rank of English orators ; and in the coalition ministry of whigs and Peehtes, now formed under Aberdeen, he held the post of chancellor of the exchequer. His speech on opening the budget, April 18, 1853, Tr.e evidenced a commanding grasp of fiscal details of isss. which Pitt and Peel were the only examples among previous chancellors of the exchequer. Continuing the income tax for seven years, at Id. for the first two, Qd. for the next two, and bd. for the three re- maining years, he extended it to Ireland ; thus taxing equally aU parts of the United Kingdom. Extending the basis of the tax so as to include incomes between 150^. and lOOZ. a year, he brought within the charge fourteen milhons and a half of income hitherto un- taxed, taxing it, however, at the rate of only bd. in the pound for the seven years. Professional incomes, hitherto charged with reference to the last year's profits, were placed upon the same footing as trade incomes, charged on the average profit of the last three years ; and as the only feasible step in alleviation of the pressure of the tax on incomes of this sort and life incomes, an abatement was allowed in respect of premiums paid on life insurances, but not to exceed a sixth of the chargeable income. z 2 340 HISTORY OF TAXATION. Sncces- Xo meet the feelinff prevalent in the House that sion or duties. the operation of the tax was severe upon intelligence and skill as compared with property, the best, safest, and most effective plan would be to extend to landed property and personal property in settlement the tax on successions. It was plain that the question of the settlement of the legacy duty which had been raised by Pitt in 1796, when he was unable to carry the proposal for adjustment he brought forward, was one that could not long be withheld from the consideration of the House. The tax was not just as it stood. It favoured landed property and settled personalty. Gladstone now proposed that the immunity from taxation of landed property and settled personal pro- perty should no longer exist. The amount ultimately expected from this extension of tax was 2,000,000/. ; but the immediate produce, no more than 500,000/. From these sources and an increase for spirits in Ireland and Scotland, a step towards the equahsation of the rates of the spirit duties throughout the United Kingdom, Gladstone provided for himself, after the manner of Peel in 1 842, a firm ground on which to stand while making beneficial remissions of taxes. Revision Of thcsc the most important was involved in a tariff. third revision vof the tariff. The first revision by Peel, in 1842, had been effected at an estimated loss to the revenue of little short of a million and a quar- ter ; the second revision, in 1845, at an estimated cost of three millions and a half. This third revision was to cost more than a million and a quarter ; but this included a loss of 366,000/. on tea, the duty on which GLADSTONE'S SUCCESSION DUTIES. 341 was to be reduced, as Disraeli had proposed, by steps, the first of which, for the year ending April 5, 1854, was from 2s. 2\d. to Is. IM. the pound. In the excise list the tax on soap, the last of the Tax on four taxes which Adam Smith had condemned as peaied. taxes on prime necessaries of life in this country, was to be repealed ; as the tax on salt had been, in 1825, that on leather, in 1830, and that on candles, in 1831. Since the reduction of the duties by Althorp in 1833, the consumption of duty-paid soap, previously almost at a standstill in consequence of the excessive duties, had enormously increased. The repeal of the tax would further increase the consumption. Habits of cleanliness would be promoted, to the benefit of the health of the people. A useful manufacture would be liberated from the trammels of the excise. And all the smuggling from Ireland and fraud consequent upon the limitation of the tax to Great Britain, would be abolished. The yield was 1,126,000/. The duty on advertisements was to be reduced ; but eventually the House went further, and insisted upon a total repeal of this obnoxious tax. In addition, the taxes on establishments, comprised in the group termed the assessed taxes, were revised. They included men servants, carriages, horses, dogs, hair-powder and armorial ensigns, and the law on the subject was complicated and bewildering. This indeed, is not unusual in the fiscal laws of the United Kingdom, or those of other countries, Vol- taire, writing of taxing Acts in Trance, states that a perusal of the Act is frequently as great a tax as the 342 HISTORY OF TAXATION. payment of any the Act secures. It is a question of degree. But, embodied, as they were, in about seventy-two different Acts of parliament, passed at different times during a long period of years, and containing definitions of charge, exemptions from charge, limitations of exemptions, and exceptions from exemptions, with a multiplicity of provisos, rules, regulations and directions drafted by various, and some apparently not very skilful, hands, the enactments on the subject of the assessed taxes formed a farrago of legislation of which language cannot give any adequate idea. Gladstone now ap- plied the axe to this overgrowth of legislation, cut- ting away many exemptions, simphfying the law, and substituting for the existing obscure and complicated system comparatively simple regulations. Pitt's pro- gressive scales of duty, increasing the charge for every subject of duty according to the number kept, were abolished, and new duties were imposed upon the principle of a fixed payment for every subject com- prised in the establishment. The mileage duty on travelHng by post, which had become practically impossible to collect with any reasonable certainty, was converted into a license duty on the postmasters ; and the tax on the hackney car- riage business was reduced, in conjunction with a reduction in the fares. Penny Another alteration in an existing tax in the stamps list, amounted in effect to the introduction of a new principle in the taxation of multitudinous transac- tions. The ad valorem duties on receipts for money. TAX ON SOAP REPEALED. PENNY TAXATION. 343 originally imposed by the Coalition ministry in 1 783, had proved, from the number of stamps of different amounts, in the highest degree inconvenient to the public, and therefore were extensively evaded. Adopt- ing the principle of the penny postage, Gladstone now imposed a simple peijny duty upon all receipts for 21. or more, with permission to use an adhesive stamp. This principle of penny taxation was also extended to the documents termed scrip certificates, which were now for the first time charged with a duty. Two taxes unequivocally condemned by Gladstone, that on property insured from loss by fire, and that on property insured against sea risk, he was precluded from touching on this occasion, only on account of the insufficient means at his disposal.^ I Gladstone. Financial Statements, Statement of 1853, 344 HISTORY OF TAXA.TION. CHAPTER II. THE SUSPENSION OF EBFOBM IN CONSEQUENCE OF THE WAR WITH RUSSIA. 1854-60. . Outbreak of the war. First taxes for the war. Palmerston in power. The Peelites resign office. Sir George Cornewall Lewis chancellor of the exchequer. War taxes for 1855. The treaty of Paris. Cost of the war. Remission of taxes. Repeal of the war ninepence of income tax. The Bill against conspiracy to murder. Defeat of Palmerston. Disraeli again chancellor of the exchequer. Abolition of the war ranking fund. Lord Palmerston again in power. Gladstone again chancellor of the exchequer. Rise in the army and navy estimates. The income tax raised from 5d. to 9d. 1854. The calculations for the budget of 1853 were up- set, and tlie course laid down for the reduction of taxation was impeded, by the outbreak of the war with Eussia. This war forms an important stand- point in the fiscal history of the United Kingdom, as the beginning of a new state of things which involved an addition of about 10 milhons to our national expenditure. Peace in Europe, consequent, at first, upon abso- lute exhaustion of force in the Napoleonic wars, had been prolonged for more than the period of a genera- tion. Enthusiasts were induced to imagine that human nature in the West had undergone, by means of civilisation, a radical change. They hoped and THE WAR WITH RUSSIA. 345 expected that new facilities of intercommunication by means of railways and steamers, and the estimate of commercial advantages to be formed by the in- spection of each other's goods at exhibitions such as that in Hyde Park in 1851, would operate to induce nations, in future, to settle their differences by way of arbitrament, in lieu of the old method of the sword and bayonet. And, in this sense, a popular song of the time ran : — War in all men's eyes shall be A monster of iniquity, In the ' Good Time Coming.' While in the West this feehng was gaining ground among our commercial middle class— a class whose pohtical power had been greatly advanced by the Eeform Bill of 1832 — in the East, the affairs of the Turk, whom the emperor of Eussia termed ' the sick man,' fell into a state of decline that seemed to prog- nosticate the dissolution of the Ottoman empire. The emperor, in order to place himself in a position of advantage in that event, had endeavoured to obtain a rehgious footing, so to put it, in the sick man's cham- ber, by the enforcement of his reading of one of the articles of the' treaty of Kutchuck Kanardjii. Under this he claimed the right to regulate the welfare of a large portion of the subjects of the Sultan. A refusal to allow the claim was foUdwed, in due course, by counter-remonstrance in a warhke form. And, in the result, a superior fleet of the Eussians sank the Turkish fleet at Sinope. The news of the massacre at Sinope of 4,000 out of the 4,400 Turks in arms, aroused 346 HISTORY OF TAXATION, a feeling in this country whicli sent us, in a state of inadequate preparation, into war with Eussia, as allies of Napoleon III. Warned by the precedents of former times, Glad- stone determined to prevent, as far as he could, any aggravation of the national debt for the purposes of the war ; and in that view, ' on the threshold, as it were, of the war,' urged upon the House ' the impor- tance of resolving that, so far as might be possible, they would meet the expenses of the war out of taxa- tion.' As regards the taxes to be imposed, he declined to restore the tax on soap, or to arrest the fall of the duty on tea, which would be to retrace the steps taken in 1853, and, therefore, placed for the present the whole burden on the income tax, which he doubled, at first for half a year, and subsequently for the whole year, providing for its continuance at the increased rate of Is. 2d. until the end of the war. This, and additional duties on articles of consump- tion, would produce the amounts following : — Income tax, additional 7d. . Malt, raised from 2s. 6^d. to is. . Spirits, addition for Scotch and Irish Sugar, alteration in the duties In all £ 6,614,00b 2,450,000 450,000 700,000 10,214,000 Such was Gladstone's plan for war taxes in 1864. Before the next budget day, the seals of his office 1855. passed into other hands. In January the strong feel- ing aroused in the country by the breakdown of our army organisation in the disasters of the Crimea shook TAXES FOR THE WAR WITH RUSSIA, 347 lord Aberdeen and the secretary for tlie war office,^ the duke of Newcastle, out of the administration ; and Palmerston, when he succeeded Aberdeen as prime minister, acknowledged the necessity of yielding to the general feeling of the country upon the question of the Sebastopol committee, the question upon which the coahtion ministry had been defeated.^ But his colleagues, the Peehtes, Graham, Sidney Herbert, Gladstone, and Cardwell, could not, as they thought, ' consistently with their previous action, concur in giving way, and therefore resigned their posts. Sir George Cornewall Lewis, the new chancellor April 20. of the exchequer, on opening his budget, met a deficit of 23 millions, partly by means of a loan of 16 millions, partly, by the issue of 8 millions of exchequer bills, and partly by additional taxes, estimated to yield the amounts following : — £ Income tax, ^d. additional .... 2,000,000 Taxes on Articles of Consumption. Spirits, addition for Irish and Scotch ' . 1,000,000 Sugar, 3«. the cwt. additional . . . 1,200,000 Tea, 3d. the lb 750,000 CoflFee, Id. the lb 150,000 These would produce, in the current year, the four millions required ; but subsequently, when in full ^ This now comprised the offices, formerly distinct, of secretary at -war and secretary for war. The colonial office was made a single office in 1854. " On Roebuck's motion, by a majority of 157. Neither lord Derby nor lord John Russell, who had lately resigned because his views as to the necessity of the presence of the war minister in the Commons were not carried out, could form a government. ' This raised the rate for Scotch spirits to 7s. lOd., the rate for Eng- lish spirits, completing the assimilation of the duties in Great Britain, and that for Irish spirits to 6s. 348 HISTORY OF TAXATION. force, more than 5 millions, forniing, with the taxa- of 1854, over 15 millions additional for the purposes of the war. On the other hand, the question of the abolition of the tax on newspapers, which had been forced for consideration on the government by Milner Gibson's resolution in the previous year, was settled by the practical repeal of the tax from June 30. Subsequently, in August, an additional 2d. on spirits raised the duty to 8s. the gallon in Great Britain, and 6^. 2d. in Ireland. 1856. The treaty of Paris to end the war was signed on March 30 ; and the deficit for 1856 was met by means of a. loan. The cost of the war was, in round numbers, 70 millions, of which 34 were added to the debt. 1857. The country was now described by Gladstone as being, while perfectly reckless with regard to expendi- ture, jealous with regard to taxation;^ but Cornewall Lewis, on opening his budget in February, stated that it was his intention to hmit his operations in that year to the taxes imposed in the war. The war duty on malt had expired July 5, 1856. There was no reason to repeal the additional duties on spirits ; for by general consent it was allowed that, in peace as well as in war, this tax should be kept at the highest rate the article would bear without encouragement to illicit dis- tillation. The duties on tea and sugar he proposed to fix for three years, at decreasing rates, somewhat higher than those settled before the war, but some- ^ Gladstone, February 3, 1857. THE WAK NINEPENCE, INCOME TAX. 349 what lower than those maintained during the war. As regards the income tax, the addition to this tax, ' the war ninepence,' stood in a curious position. In terms it was granted 'until the 6th day of April which should happen after the expiration of one year from the ratification of a definite treaty of peace.' The treaty of Paris, signed on March 30, was not ratified until April 27. Meanwhile the fiscal year for the in- come tax had terminated on April 5. In the event that had happened, we were saddled, legally, with the war ninepence until April 5, 1858. There was, however, a strong feeling against this extension of the war tax, which was regarded as not in the inten- tion of parliament. To retain the ninepence would be what is termed ' sharp practice.' In deference to this feeling the rate was reduced at once to Id. Soon after this, the government, defeated on Cob- den's motion in condemnation of their approval of the violent measures resorted to at Canton in the affair of the ' Arrow,' decided to wind up rapidly the business of the session and appeal to the country. Disputed questions of taxation were postponed : the fiscal arrangements were limited to the year ; and parliament was dissolved on March 21. This appeal to the nation resulted in an increase in the number of Palmerston's supporters in the Commons ; and in the new parhament the original proposal of the chancellor of the exchequer to fix the rates of the duties on tea and on sugar for three years was revived and adopted. Parliament was summoned, early in December, to consider the requisite Bill of Indemnity to the govern- 350 HISTORY OF TAXATION. ment for the suspension of the Bank Eestriction Act,^ and the Bill was passed ; but, after the Christmas Feb. 1858. recess, the ministers were turned out of office on the question of Palmerston's BiU against conspiracy to murder.^ This Bill, introduced into the Commons after Orsini's attempt on the life of the emperor of the French, with a view to remedy a defect in our law, was rejected on the second reading,^ not from any want of sympathy with the emperor, or from any sympathy with Orsini in his dastardly attempt, but in conse- quence of the feeling aroused by the publication, in the official columns of the ' Moniteur,' of certain con- gratulatory addresses of French colonels to the em- peror. The colonels had stigmatised England as 'the protector and accomplice of sanguinary anarchists,' and had offered their services to ' get at these men, even in the recesses of their den.' This accusation was felt to be unjust, and the threat intolerable. 'Let them come,' said mr. Eoebuck in answer — ' let them come ; be it ours to see that none of them return ! ' Not even Palmerston's popularity could save from condemnation a measure that had the appearance of a concession to threats from France ; and as the general feeling of the country concurred with the majority of the House, the ministers resigned. ' After the prorogation of parliament, August 28, the failure of several joint-stock banks and commercial £rms, consequent upon the bank failures in America, caused a commercial panic ; and in order to allay the prevalent alarm, the ministers thought it necessary to take this step. ^ To make conspiracy to murder a felony instead of misdemeanour. = By 234 votes to 215. EQUALISATION OF THE SPIUIT DUTIES. 351 Lord Derby now formed his second administration, with Disraeli as chancellor of the exchequer. The deficit for 1858-9 amounted to nearly four millions. Of this, three millions and a half were due to the war sinking fund, and the question presented itself whether this obligation to redeem debt was to be maintained at the expense of an addition to the income tax ? The answer of Disraeli was in accord- ance with opinions he had previously expressed. An advocate of the policy of the gradual extinction of the tax, he declined to take a step in the contrary direction. He therefore now repealed the Act for the war sinking fund, and re-borrowed the amount in exchequer bonds. An additional half-milUon, to be raised by an increase in the spirit duties in Ireland to 8s. the gallon, forming the final step in the pro- cess of the equalisation of the duties throughout the United Kingdom, cleared off the deficit. And a sur- plus was provided by means of a new penny duty on cheques drawn on bankers, estimated to yield the large sum of 300,000^. Ko very long term of office could be expected for March the Derby administration, who had come into power under peculiar circumstances, and notoriously were in a minority in the house of commons. After a defeat of 330 votes to 297, on lord John Eussell's amendment to their Eeform Bill, they dissolved the parliament and appealed to the country. The general election excited but httle interest, for the attention of the public was fixed upon the battlefields in Italy, and the news of what the French colonels were doing 352 HISTORY OF TAXATION. at Magenta and Solferino absorbed their thoughts. The ministry gained, indeed, some few seats, but met the new parhament without any accession of strength sufficient to enable them to resist their opponents, who, putting forward the young marquis of Harting- ton as a representative of the whig party, carried a motion, made by him, of want of confidence in the ministry, by a majority of 13 votes. The difficulty of a choice between lord Palmerston and lord John Kussell induced the Queen to send for lord GranviUe, the leader of the whig party in the house of lords ; but as lord John Eussell declined to take office under him, while willing to serve under June 18. Palmerston, the latter again became prime minister. In a strong government, formed of whigs and Peelites, Gladstone was again chancellor of the exchequer, On opening his budget on July 18, he estimated the revenue? for 1859-60 at 64,340,000/. and the ex- penditure at 69,207,000/., showing a probable deficit of 4,867,000/. This was the result, mainly, of con- siderable additions to the army and navy estimates ; for our eyes were still upon the French colonels, and it was the year in which our great poet wrote, — Let your reforms for a moment go ; Look at your butts and take your aims. Better a rotten borough or sOj Than a rotten fleet or a city in flames ! And while our ' riflemen form'd,' we were also hard at work in reforming and strengthening our navy, army and militia. This deficit Gladstone met, partly by a reduc- tion of the credit allowed to maltsters, and partly by PREPARATIONS AGAINST FRANCE. 353 increased taxation. Considering that it would be un- desirable to augment the duty on malt, that spirits would not at the time bear any higher rate of duty, and that tea and sugar still remained subject to part of the war taxation, while the war portion of the income tax had been struck off, he ' arrived at a point which could easily be anticipated. The divine faculty of an intelligent audience altogether outruns,' he said, ' either the power or necessity of a detailed statement. It remains to be considered what we shall do with the income tax.' And he proposed to raise the rate from 6d. to 9d.,^ to produce an addi- tional 4,340,000/., forming, with the 780,000/. from the malt credit taken up, a total of 5,120,000/., which would leave a surplus of about a quarter of a million. Before proceeding to the next chapter, it may be well to place before the reader in the form of a sum- mary — the amount of revenue given up by the repeal or reduction of taxes since 1842 ; the amount of ad- ditional taxation imposed ; and the additional revenue derived from the increased productiveness of our principal taxes. It should be borne in mind that the yield of many contributories when expunged from the tax list had increased since 1842 ; and that, on the other hand, the yield of others still in the list had increased notwithstanding reductions of duty. ' The distinction between incomes of 1501. and more, and incomes under 1501., originally allowed with a 7d. rate, but subsequently dropped when the rate fell to 5rf , was re-introduced. VOL. n. A A 354 HISTOKY OF TAXATION. SuMMAEY OP Principal Alterations in Taxation, 1842-60. Taxes Repealed or Reduced. Direct Taxes : — £ Property sold at auction * • 300,000 Substitution of house tax for window tax 1,100,000 On Articles of Consumption : — Imported Articles — £ Ist revision of the tariff . 1,200,000 2nd „ „ . . 3,500,000 3rd „ „ . . 1,250,000 Remissions, 1846 750,000 Timber, 1851, reduction . 286,000- -6,986,000 Manufactures : — Glass 600,000 Bricks ..... 450,000 Soap ..... 1,126,000 Newspapers .... 450,000 Advertisements 180,000- -2,806,000 Stamp duties — Eevisionin 1850 • 500,000 Total .... 11,692,000 Taxes Imposed. Direct Taxes :— Income tax at 9(? , 10,000,000 Successions to land and settled money . . 601,000 On Articles of Consumption : — Spirits, additional duties, the yield incluc led below. Total 10,601,000 Rise in Yield, uwler — Direct Taxes : — Probate and legacy duty ..... Articles of Consumption — £ Malt 1,200,000 593,000 Spirits (home) Sugar . Tea . Tobacco Paper . Total 4,500,000 1,200,000 1,250,000 1,600,000 770,000- -10,520,000 11,113,000 355 CHAPTER III. FROM 1860 TO 1870. COMPLETION OF REFORM IN THE PERIOD OF GREAT PROSPERITY. Increase in military and naval expenditure after the break-up of peace in Europe. The course of reform resumed. The Budget of 1860. Income tax at lOd. The treaty with France. Fourth revision of the tariff. Reform of commercial taxation. Summary. Proposed repeal of the duty on paper. The lords reject the Bill. The spirit duty raised to lOg. Curious over-estimate of revenue for 1860-1. Eepealofthe duty on paper. The last of the taxes on manufactures. Reductions of income tax and tea duty in 1863. Prosperity by ' leaps and bounds. Reductions in income tax and for fire insurance and sugar. Enor- mous surplus in 1865. Reductions in income tax and fire insurance. The tea duty reduced to 6d. Repeal in 1866 of the duties on timber and pepper. Defeat of the ministry. Disraeli again chancellor of the exchequer. Creation of new terminable annuities. The Abyssinian expedition. Disraeli prime minister. The first Gladstone adminis- tration. Lowe chancellor of the exchequer. The Budget of 1869. A windfall. The break-up of the assessed taxes. Repeal of the taxes on locomotion, except by railway. The income tax reduced to 4d. Half the sugar duties repealed. Consolidation of the stamp duties. The reform of taxation. Summary. As has been before remarked, at the commencement of the last chapter, an all-important alteration in our fiscal position resulted from the Crimean war in this, — that, roughly speaking, the break-up of peace in Europe saddled us with an additional 10,000,000?. per annum under the head of miUtary and naval expenditure. It cost us ten millions a year more to live as part of that armed camp into which the Western world had resolved its system. In these A A 2 356 HISTORY OF TAXATION. circumstances it is both creditable to- the nation and significative of its resources that it was willing and able to resume the course of reform in taxation. I860. The year 1860 was one of peculiar fiscal import- tance. Long annuities fell in, to the amount of 2,146,000/., making a difference of that amount in the return of the annual charge for the national debt. The duties on sugar and on tea, producing 12 millions a year, determined on March 31 ; and the income tax, producing, at the 9^. rate, another nine or ten millions, on April f» ; while by the Cobden treaty of commerce with the French imperial government, recently concluded, the government stood pledged to propose to the House remissions and reductions of duties on French wines, brandies and manufactures, involving nearly a milhon and three-quarters of revenue. An early summons brought parliament to West- minster in order to consider the fiscal situation ; and the first question put to the House, in committee of ways and means, February 10, by Gladstone, after he had traced the history of the commercial reforms effected of late years, was this — ^whether ' we ought upon this occasion to say our necessities are too great, our means too small, to enable us to effect any commercial reforms.' The answer, as far as the go- vernment were concerned, was given without hesita- tion : it was, in their opinion, the duty of parHament to make some onward steps in that career of com- mercial improvement which perhaps more than any other cause had contributed to confirm the prosperity FOURTH REVISION OF THE TARIFF. 367 of the country and the security of its institutions, under the auspices of the sovereign beneath whose rule it was our happiness to live. This bold policy, to advance notwithstanding ob- stacles, is rarely proposed in vain to Englishmen when they -have full confidence in their leader ; and if well- considered plans and a lucid statement of them can raise or can secure confidence, they were not wanting on this occasion. Standing on the same kind of platform that Peel had secured for himself in 1842, an income tax of IQd., a rise of Id. in the rate as compared with that for the previous year,^ — from this firm standpoint Gladstone commenced his operations. The most important was the fourth and final re- vision of the tariff. As regards articles touched by the commercial treaty with France, viz. on wine and brandy, and manufactured goods — for wine, the duty was reduced from 5s. IQd. the gallon to Ss. ; and for brandy, from lbs. the gallon to 8s. 6d., as equiva- lent to the rate for home spirits, while the duties on manufactured goods were wholly repealed, the prin- cipal items being — silk manufactures, and gloves ; the others, artificial flowers, watches, certain oils, musical instruments, leather, china, glass, and others yielding only small amounts. In addition to this treatment of articles touched by the treaty, the duties on timber, the principal ' Farmers' profits were to be charged at 5d. in the pound in England, that is to say, on half the rent paid, and in Scotland and Ireland at S^d., that is, on one-third of the rent. 358 HISTORY OF TAXATION. differential duties still remaining in our tariff, were reduced for foreign timber, from 7s. Qd. and 15s. to the rates for colonial timber, viz. Is. and 2s. the load, and for all furniture or hard woods to Is. the ton, Eeductions of duty were allowed for currants, raisins and figs, and hops, in connection with a reduction of the inland duties on hops. And butter, cheese, eggs, oranges and lemons, nuts, nutmegs, paper, in connec- tion with the proposed abolition of the inland duty on the manufacture, liquorice, dates, and some minor articles were to be exempted from the revenue hst. The relief to the consumer from the reductions in connection with the treaty with France would be about a million and three-quarters ; but the loss to the revenue in the year would be under 1,200,000/. The following were given as the items of loss, after allowing for increased consumption :— Wine £ . 515,000 £ Gloves . . . 48,000 Brandy . 225,000 Other articles . . 114,000 Silk manufticturea . 270,000 In all . . 1,172,000 The loss from other rer aissions and repeals would be: — £ £ On timber . . 400,000 Eggs .... 23,000 Other remissions . 250,000 Oranges and lemons . 32,000 Butter . 95,000 Tallow . . . 67,000 Cheese . 44,000 Other repeals . . 104,000 In all 1,035,000/., though probably the loss would be reduced by an increase in consumption. This measure, taken in the whole, formed a fourth revision of our tariff, and was practically the final REFORM OF COMMERCIAL TAXATION. 359 step in the reform of one of the most comprehensive and comphcated lists of prohibitions and commer- cial restrictions, in the form of frontier or port duties, that ever hindered the development of the trade and manufactures of a nation. Reform of our Commercial Taxation. Summary. Every step in this reform of our commercial taxa- tion had proved a fiscal success. Let us turn back through the records of the customs to 1835. More than ten years before this, Eobinson and Huskisson had commenced, indeed, the reform of our commercial taxation, in the removal of restrictions and the reduc- tion of the duties on several articles ; but the customs records are not complete for our present purpose, until they include the taxes on wine, foreign spirits, coffee, cocoa nuts, pepper, tobacco and snuff and tea, which were formerly excise duties, and the last of which, that on tea, was not transferred to the customs until 1834, when the monopoly of the East India Company ceased. And again, if we take the year 1835, we shall exclude from consideration Althorp's taxes on cotton and coal, which, imposed, in 1831, only for temporary purposes, were subsequently re- pealed, the first mentioned in 1833, and the other in 1834. To commence with 1835. The gross yield of the port duties is returned, in hundreds of thousands, as 23,100,000/. ;^ and six years after this, in 1841, including Baring's 5 per cent, additional, it stands as ' See Appendix No. 13. 360 HISTORY OF TAXATION. 23,800,000/. In 1842, Peel's first revision of the tariff, when he considerably reduced the duties on a number of raw materials and articles partially manufactured, was estimated to cost the revenue 1,200,000/. In 1844, the duties on wool were re- pealed, and reductions were made for several articles. In the next year, on the second revision of the tariff, about 450 articles were removed from the Hst, in- cluding many materials for manufactures — raw silk, hemp, flax and tow, barilla and cotton wool — and oil ; and all the export duties were repealed, including the duty on coal imposed in 1842 ; and this sweeping measure of reform was estimated to cost the revenue no less than 3,500,000/. Next in 1846, cattle, sheep, and pigs, meat salted and fresh, and thrown silk were exempted, and there were reductions for timber and seeds. Then came Gladstone's first, the third, re- vision of the tariff, in 1853. A multitude of unpro- ductive items and, as far as possible, all articles of manufacture except finished articles were now struck out ; many differential duties were aboHshed by low- ering the duty on the foreign article to the level of the colonial article ; and many duties on articles that form the comforts of the mass of the people were reduced, more particularly the duty on tea. And this revision was to cost over 1,250,000/. In all, the estimated loss to the revenue from these and other reductions and repeals of duties from 1834 to 1854, in excess of a large allowance for an esti- mated gain by the imposition or augmentation of duties, figures in the customs returns at no less than REFORM OF COMMERCIAL TAXATION. 361 9,250, OOOZ. But such was the prosperity of the country, in a time of peace, in consequence of the development of the new railways, and also, un- doubtedly, to a great degree in consequence of the introduction of so many improvements in our com- mercial taxation, that the gross income from the port duties in 1855-6 was about 300,000Z. more than that for 1835. During twenty years the yield had scarcely varied.^ This last revision completed the reduction of the number of the articles in the tariff from 1,200 in 1842, to 48, the principal contributories being (1) Five articles yielding from one to six millions : sugar, tobacco, spirits, wine, and tea ; (2) four articles yielding from 200,000/. to one million : coffee, corn, currants, and timber ; and (3) six articles yielding from 20,000/. to 200,000/. : chicory, figs and fig-cake, hops, pepper, raisins, and rice. Twenty-nine articles, though yielding revenue, were only retained on special grounds ; five on account of countervailing duties of excise on domestic articles, and twenty- four on account of their resemblance to some one or other of the fifteen principal contributories to the revenue.^ In addition to this revision of the tariff, Gladstone Paper T duty. proposed to repeal the duty on paper. It was some- Proposed what invidious, he urged, to maintain this the only tax on an important manufacture stiU in our fiscal list, when every other duty of the same class had been ' ' First report of the commissioners of customs, 1857 ; and see Appendices, Nos. 12, 13. 2 See the Tariff Act of 1860, 23 & 24 Viot. c. 110. 362 HISTORY OF TAXATION. abolished. The law was rapidly becoming incapable of being administered without public scandal and discredit, such were the difficulties raised as to what was paper and what was not paper — as to what were sheets of fibrous substance and what were not. The repeal would promote a difiused demand for labour, and, in particular, a demand for rural labour. The enormous variety of purposes to which paper might, in one form or another, be applied, suggested that the trade was capable of an unbounded expansion. Arti- ficial limbs, telescopes, boots and shoes, peaks of caps, panels of coaches, portmanteaus, teapots, and — who would have thought it? — tobacco-pipes could be made, and were made, of paper. Fifteen reasons for the abolition of the tax, embodied in short proposi- tions, had been submitted to him by the agitators for the repeal, and the board of inland revenue, while dechning to express an opinion upon two of the pro- positions, as in the nature of general propositions of poUtical economy, concurred in opinion with the agitators as to all the other thirteen. This tax, already condemned by the House in 1858, was to be repealed ; and the loss to the revenue would be about a million in the year.^ The Bill in which this proposal was embodied en- countered considerable opposition in its various stages in the House. The papermakers put their case with remarkable ability and force ; urging, as a ground for protection against foreign competition, the peculiar position of the manufacture ; for the best sort of ' Gladstone. Financial Statements, p, 101. TFIE LORDS AKD THE 'PAPER BILL.' 363 paper could only be made from rags, of which the supply was limited, inasmuch as foreign nations placed the export of rags under a practical prohibition. At the same time, an uneasy feehng prevailed in many quarters that we had been extravagant in the repeal of taxes which could not be reimposed. In these circumstances the Bill passed by majorities which, decreasing at every stage, formed a ground for pro- longed opposition to the ^measure when taken to the Lords. Here it was opposed, not only for the rea- sons urged against it in the Commons, but also as an inopportune repeal of a tax easy to collect and little complained against, unwarranted by the state of our finances ; and in the event, a vote upon a motion of lord Monteagle proved fatal to the Bill. Before the close of the session, an additional 26'. SpWt ' . duty, 10s. on the distUlery, for the purposes of the war with China, raised the duty to 10s. the gallon ; while in the Tariflf Act the duties on foreign spirits and rum were raised to 10s. 6d. for brandy and geneva, and 10s. 2d. for rum, amounts equivalent to 10s. for home spirits.^ The yield of the tax on paper was about 1,350,000Z. ; i86i. and one of the grounds for the action of the Lords in mate of refusing their assent to the repeal of the tax had been ' the belief that so large a sum could not be spared, Curiously enough the most remarkable point in the budget of 1861 was the deficiency announced to have occurred in the estimated revenue of the past year. Bad seasons, that is, bad harvests, cause bad budgets ; and ' 23 & 24 Vict. c. ] 10, the Tariff Apt of 1860, and c. 129. 364 HISTORY OF TAXATION. bad budgets, in that sense, are usually due to bad harvests : at any rate, the main cause of a difference of revenue in adjacent years is the harvest. Uncon- sciously the chancellor of the exchequer had specu- lated on the season. The considerable increase of revenue for the year 1859-60 had been due mainly to an excellent harvest. The produce of the customs had risen to nearly 24^ millions ; that of the excise to over 20|- miUions. Upon the basis of this extra- ordinary yield the revenue estimate for 1860-1 had been formed. But a bad harvest followed, and, in the result, the customs produced 125,000^., and the excise 1,926,000^., less than the estimated yield. The details of the disappointment under the head of excise were as follows : estimate, 21,361,000^. ; actual receipt, 19,434,000^. ; loss upon hops, 300,000^. ; upon malt, 800,000Z. ; and upon spirits, 910,000^. The chancel- lor of the exchequer had accepted the estimates of the responsible permanent heads of the revenue de- partments, who, unfortunately, had taken the yield of the revenue in a period of cheap corn as the basis of their estimate of the revenue in a year which might be, as it proved to be, a period of dear corn. The warning was not lost on Gladstone, though it wiU be found subsequently that a similar disappointment happened in 1867-8. The expenses of the war with China were now at an end. There was a surplus of estimated revenue over expenditure, for 1861-2, of nearly two millions ; and as the government could not reasonably expect to be allowed to keep in hand so large a balance, the 'THE ATTRACTIVE SISTERS.' 365 chancellor of the exchequer announced that there would be a remission of taxation. Four subjects would occur to the mind of every one as having claims to consideration — tea, sugar, the income tax, and paper. As regards tea and sugar, the duties on those articles did not, at that time, pre- sent a case attended with such great difficulty as to give them an urgent, imperative, and paramount claim upon the attention of parhament. As regards the income tax and the duties on paper, if, as it had been contended in some quarters, the tenth penny on the income tax must be regarded to have been imposed in order to bring about the repeal of the duties on paper, and the two subjects were thus connected — ' here,' said Gladstone, ' we are faced at once by the old controversy between direct and indirect taxation. I take some credit to myself,' he added, ' for never having entered, in this House, into any disquisition upon such a subject. I have always thought it idle for a person holding the position of finance minister to trouble himself with what to him is necessarily an abstract question, namely the ques- tion between direct and indirect taxation, each con- sidered upon its own merits I never can think of direct and indirect taxation except as I should think of two attractive sisters who have been intro- duced into the gay world of London, each with an ample fortune, both having the same parentage (for the parents of both I believe to be Necessity and Invention), differing only as sisters may differ, as when one is of lighter and another of darker complexion, or 366 HISTORY OF TAXATION. where there is some agreeable variety of manner, the one being more free and open, and the other some- what more shy, retiring, and insinuating. I cannot conceive any reason why there should be unfriendly rivalry between the admirers of these two damsels : and I frankly, own, whether it be due to a low sense of moral obHgation or not, that, as chancellor of the exchequer, if not as a member of this House, I have always thought it not only allowable, but even an act of duty, to pay my addresses to them both. I am, therefore, as between direct and indirect taxation, perfectly impartial.' A penny off the income tax, reducing the rate to 9d., would entail a loss, for the three-quarters of a year of the tax included in the fiscal year, of about 850,000/., every penny yielding The Paper at this date about 1,100,000Z. The duties on paper would be repealed from October 1, so that the loss in the year would be only 690,000.^ The total remissions for the year would leave a moderate surplus, of 408,000/., which Gladstone appealed to the House to allow him to retain.^ On the repeal of the duties on paper — for on this occasion the proposition for the repeal, embodied in the Budget Bill,^ passed in the Lords — our tax list was, at last, clear of all detrimental taxes on manu- factures. Soap, candles, printed cottons, leather, starch, the beautiful manufacture of glass, and bricks ' 16,000A under the head of customs. ' Financial Statemerits. Statement of 1861, April 15, p. 187. ' The House of Lords cannot alter, though they may reject, a money Bill. TAX ON PAPEK REPEALED. o67 — all these had been struck out, one after the other, in the order indicated : and now the sponge had made a final sweep, and the slate was cleared of every item of the evil score. Supplementary grants made for various purposes, but more particularly the grant for sending the guards to Canada, after the seizure of the Confederate com- missioners on board our West India mail steamer, the ' Trent ; ' a considerable excess in the sum we were called on to pay, in connection with the repeal of the duties on paper, for drawbacks on stocks of paper in hand, over and above what had been conjectured ; and a disappointment in the expected indemnity from China — these, taken together, caused for 1861-2 a deficiency of about 1,440,000Z. The revenue, in the whole, had exceeded the estimate ; but on hops there had been a loss of 100,000^. Many campaigns for the repeal of the duty on 1862. hops had been led against successive chancellors of the exchequer, by mr. Dodson, the member for East Sussex, subsequently lord Monk Bretton. Notoriously the tax fostered speculation and gambling in hops, and it was allowed to be open to serious objection, though, in the opinion of the chancellor of the ex- chequer, 'the case against the duties was much exaggerated by those who pleaded the cause of the hop-growers.' No means were at hand to enable him to repeal a tax which produced about 300,000/. a year, though the yield varied considerably in difierent years. He would therefore commute the duty for an increase in the duties on licenses for brewers. ' Aut 368 HISTORY OF TAXATION. Caesar, aut nihil; it was a case either of commutation or of standing as we are.' At the same time, a small license tax was pro- posed for private brewing, in houses of 201. or higher annual value ; but this proposition did not eventually become law. In the budget speech, Gladstone thought it neces- sary to refer to ' an impression gone abroad in some quarters that the government had been guUty of a very unwise and excessive squandering of the pubhc revenue by the repealing of taxes ; that a great number of taxes had been repealed, to an amount much exceeding those which had been imposed, and that this was the cause which had made us so poor at the present moment.' There could be no greater mistake. Since 1859 there had been imposed taxes as follows : — TieM £ Income tax, 3d 3,300,000 Spirits, additional duties . . . 1,400,000 Minor duties 650,000 Forming a total of . . . . 5,350,000 On the other side repeals might be taken as follows : — £ Port duties 2,840,000 Paper, hops, and minor articles of excise and assessed taxes .... 1,460,000 Forming a total of . . . 4,300,000 ' I do not,' he added, ' at this moment defend the policy which has been pursued ; my object is only to state the facts.' ^ ' Financial Statements. Statement of 1862, April 3, pp. 321-2. TEA DUTY REDUCED TO Is. 369 As might be ex:pected from such a statement, ises. the surplus for 1863-4, which was considerable, was devoted to the reduction of taxes. It was now recognised as a governing principle in finance, that taxes should be regarded as forming a system, and that, when any considerable increase was required, or any considerable reduction became pos- sible,- ' we should have a mixed and joint regard for the two great descriptions of taxation — ' the attractive sisters ' of the preceding Budget^the direct and the indirect. In this view Gladstone reduced, at the same time, the income tax from 9cZ. to Id., at an estimated loss within the year of a million and a half, and the duty on tea to Is., at the loss of 1,300,000^. This reduction for tea, he stated, was allowed to be, as far as we could see into the future, a final measure.^ In revival of the old practice of granting some important branch of the revenue only from year to year, the tax on tea was henceforth to be an annual tax. At this point in our history the revenue developed 1864. in a marvellous manner. Notwithstanding the reduc- tion for tea, one of the most important contributories in the customs list, the yield of the port duties for 1864 was only 800,000/. less than the yield for 1863 ; and, taken on the whole, the revenue was increasing, from its inherent vigour, at a rate exceeding a million a year. In consequence of a barley harvest of un- paralleled excellency, the receipt from malt exceeded any known before, and showed an increase upon that ' Financial Statements. Statement of 1863, April 16, p. '6%A. A proposal that clubs should pay the same rate of duty as the occupiers of hotels was not eventually carried into eflFect. VOL. II. B B 370 HISTORY OF TAXATION, for the previous year of 710,000/. Again, there was a surplus available for the reduction of taxes, in amount over 2^ millions. On the ground that a reduction of the duty on malt would be a boon almost exclusively to England, and that if the Englishman was to have his beer cheapened, the Irish and the Scotch had an equal right to cheaper whisky, Gladstone declined to touch that duty. He divided the surplus between direct and indirect taxes as follows : A penny off the income tax would reduce the rate to Qd., at the cost of over 800,000/., and there would be a reduction, by a moiety, of the tax on insurances of stock in trade from fire risk, leaving alone, for the present, the duty as far as it affected the insurance of houses ; this would cost 192,000/. more, making a loss of nearly a million on direct taxation* The indirect tax to be reduced was that on sugar, an article which, in ' its importance to the comforts of the people, might be said to be next to corn.' The existing duty was a classified duty. The question whether there should be, in heu of this, a uniform duty was a very difiicult question, and it could not well be said that the classified duty was condemned by experience, nor was it condemned by authority. Adhering to the dividing points in the existing system, Gladstone reduced the rates, and added a fourth class for inferior sugars, chargeable with only 8s. 2d. the cwt. The cost of the reductions would be 1 ,300,000/. 1866; Tijg budget of 1865, introduced in a parliament in the sixth year of its duration, was framed, as might TEA UUTY REDUCED TO Qd. 371 be expected, upon popular lines. The magnitude of the expected surplus wiU long be remembered from a popular caricature of the time, which serves also to note the persistence of the agricultural interest in their demand for the repeal of the malt tax. The malt tax repealer is represented as standing, hat in hand, before the chancellor of the exchequer, and says, ' You don't happen to have six or seven millions about you, sir ? ' The chancellor answers, ' Yes, I do ; and I mean to keep them about me ! ' The arrangement of the Is. duty on tea was final only in a fiscal sense, that is to say, as far as could be foreseen at the time. The duty was now further reduced, and Gladstone was able to go to the country with a larger packet of tea to be obtained under a 6d. duty in one hand, and 2^. taken off the income tax, reducing the rate to 4:d., in the other, besides an extension of the reduction of the previous year in the tax on insurance from fire, to insurances of houses. The relief by these reductions — on tea, 2,300,000Z. ; income tax, 2,600,000Z. ; and fire insurance, 520,000/., was, in all, 5,420,000/., of which 3,778,000/. would fall in the year. ' I think, Mr. Bull,' says the chan- cellor of the exchequer in another caricature of the day, ' we may now reckon on your support.' In the picture a large bag of money is marked to show the amount of the estimated surplus, 4,000,000/. This anticipation was not falsified in the result of the elections that followed on the dissolution of tlie parhament of 1859, in July. The success of the financial and commercial policy of the government B B 2 372 HISTORY OF TAXATION. had great weight with the country ; and in the changes and chances of the elections, the Uberal party lost 33 seats and gained 57, representing 48 votes on a division. The chancellor of the exchequer, indeed, lost his seat for the university of Oxford ; but was returned by the electors of the southern division of Lancashire for that division, while his rejection at Oxford was regarded with approval by the advanced liberals, who now looked upon him as their future poHtical leader. On the death of lord Palmerston in October, at the age of 86, his veteran colleague, earl, formerly lord John, Eussell, then in his 74th year, became prime minister. The leadership in the Commons now devolved upon Gladstone. 1866. On opening the budget, he announced a surplus sufficient to enable him to repeal the duty. Is. the load, on timber, and that on pepper, which continued to foster the adulteration of that useful article of food ; to equalise the duty on wine in bottles with that on wine in the wood, and reduce the mile- age on stage carriages and the duty on post- masters. The loss to the revenue would be : — £ From wine . . . 58,000 „ stage carriages &c. 85,000 From timber . . 307,000 „ pepper . . 112,000 Thus, in all, over half a million of revenue was given up. At this date the Liberal majority in the Com- mons was reckoned at between 60 and 70 ; but sub- sequently, the secession of the ' Adullamites,' led by THE TAX ON TIMBER BEPEALED. 373 Lowe, proved fatal to the ministry on the question of reform. In June they resigned office in consequence of their defeat, by 11 votes, on lord Dunkellin'a amendment to the Eeform Bill, making rating, in lieu of rental,, the basis of the borough franchise. Lord Derby, after an unsuccessful attempt to construct a ministry on an enlarged basis including within it some of the ' AduUamites,' was compelled to form one out of purely conservative elements, and Disraeli returned to the exchequer. The fiscal horizon was dark with clouds. The speculative mania and inflated commercial transac- tions of 1865 had been followed in 1866 by the inevi- table reaction. A severe financial crisis, remembered more particularly in connection with the failure of the great discounting house of Overend and Gurney,^ had resulted in widespread distress and commercial embarrassment. Our famous shorthorns, and Devons, and Herefords, and all the other herds of cattle in which our farmers take so much pride, were deci- mated by the plague. In Ireland, the Irish-American soldiers and others, forming what was termed, from an old Celtic and mysterious word, the ' Fenian ' association, had raised an insurrection. In England, the reform question still continued to agitate the minds of men. A deficient harvest completed the darkness of the picture. Notwithstanding this combination of circumstances i867. inimical to revenue, such was the vital power of the ' May 10. The failure of this house caused a greater shock to credit than probahly any other bankruptcy that has ever occurred. May IJ ■was termed, from the oommercial panic, ' Black Friday.' 374 HISTORY or taxation, t April 4. nation that Disraeli was able, on opening the bud- get, to announce the unexpected news that the actual revenue for 1866-7 had exceeded the esti- mate of 67 millions by nearly 2^ millions. For the coming year, there was an estimated surplus of 1,206,000/. *♦ Of this amount, 750,000/. would be devoted to the reduction of the national debt. The policy of terminable annuities had been recognised and acted on for the last half-century. The falling in of Van- sittart's ' dead weight ' annuity of 585,000/. made it imperative on the government to consider whether they should pursue that policy ; and, answering the question in the affirmative, he proposed to create an- nuities terminating on AprU 5, 1885, to the amount of 1,776,000/., in cancellation of 24 millions of debt. The total charge on the year 1867-8, from the con- version would be, as before stated, 750,000/., which would reduce the surplus to 456,000/. Of this, 2 L0,000/. would be devoted to a reduction of the duty on marine insurance, leaving untouched a surplus of 246,000/. And what, it will be asked, was done as regards the malt tax ? The answer is that the malt tax repealers obtained, on the motion of colonel Barttelot, the appointment of a select committee to inquire into the operation of the tax, more particularly as regards its effects on the proper rotation of crops and the price of beer, and as to the fitness of malt for feeding cattle. Parliament met in the autumn, in order to make THE MALT TAX. SELECT COMMITTEE. 375 provision for the expenses of the Abyssinian expedi- tion against king Theodore, to rescue the British prisoners.^ A vote of credit of two millions was passed, and an additional penny on the income tax of the current year was imposed. This was done, at the suggestion, in the absence of the chancellor of the exchequer from illness, of Ward Hunt, the secretary to the treasury, who, when, in the following February, lord Derby, then in his 69th year, retired from public life and Disraeh succeeded him as prime minister, was appointed chancellor of the exchequer. The actual income for the year 1867-8 showed a ises. deficit on the estimate of 370,000Z. ; and the budget for 1868 involved an increase of twopence in the rate of the income tax, raising it to 6d., to meet the expenses of the Abyssinian war, or, as was urged on the other side, to meet a permanent increase in ex- penditure. In November, the ministry, who had been defeated during the session by Gladstone, who carried the Irish Church Suspensory Bill against them by considerable majorities, dissolved the parHament of 1865, and appealed to the country. The result of the appeal was not favourable to the conservatives, and Disraeli, without waiting for another adverse vote in parhament, resigned office in December. The whigs now returned to power under Gladstone, with Bruce, Clarendon, Granville, and Cardwell, as secretaries of state for the home, the foreign, the colonial, and the war departments, and Lowe, as chancellor of the exchequer. ' The expense of the expedition was 8,600,000/- «576 HISTORY OF TAXATION. 1869. Lowe's first budget, of 1869, surprised even per- sons accustomed to sensational budgets : — By means of a change in the manner of collecting the income tax and the assessed taxes, which, by the acceleration of payment, increased the revenue for the year, he made for himself a surplus of 3,350,000/. ; and ' what,' said he, ' shall I do with this windfall ? ' He disposed of it in the repeal of the taxes on imported corn, fire insurance and locomotion, a re- vision of the taxes on establishments — the assessed taxes, and a reduction of Id. in the income tax. Duty on "Yhe yield of the Is. duty, or registration fee, re- oorn re- _ •' j ^ o ' pealed. tained for imported corn on the repeal of the corn laws, had increased from 561,000Z. in 1849 to 900,000/. But ' the tax combined in itself all possible objections to a tax, and prevented the country becoming the great entrepOt of corn.' For these reasons it would be repealed. Tax on The tax upon property insured from fire had fire insur- ance, long been condemned. The repeal would cost over a million of revenue. Taxes on Four taxes were comprised under the head of looomo- ^ tion- taxes on locomotion. Of the quartet, the most ancient tax was the tax on hackney coaches in the metropoHs, first imposed in the reign of William m. The second had originated in posting times, when North imposed upon posting — then a means of loco- motion used almost exclusively by the rich — a tax for the purposes of the war of American Indepen- dence ; to which he added subsequently, the third of these taxes, viz. a tax upon travelUng by stage- BREAK-UP OF THE ASSESSED TAXES. 377 coach. Another tax of this description, attempted by Pitt, when he endeavoured to tax locomotion by way of navigations, as canals were then termed, ended in failure ; and no better success had attended Althorp's project, in 1831, for a tax on travellers by steamboat : but he was more fortunate in another proposal, which he subsequently introduced, for a tax on passengers by railway, which formed the fourth in the list of taxes of this description. ' A tax on the means of locomotion,' Lowe said, ' is as bad a tax as any that can be devised.' And in that view, he proposed to make a clean sweep of these taxes. In the event, however, though the other proposals of the Budget were carried into effect, the proposed exemption relating to railway travelling fell through or rather was revoked, in consequence of the refusal of the railway companies to accede to the terms upon which the offer of exemption was made. The loss to the revenue from the repeal of the three other taxes was 303,000^.1 The taxes comprised in this group were those on T^e as- carriages, servants, horses, hair-powder, and armorial Taxes. ensigns ; for racehorses had been removed from this system of taxation in 1856, certificates for sporting, in 1860, and dogs, in 1867. On the revision of these taxes in 1853, by Gladstone, the old system of returns and the old method of assessment and collection had been retained. The taxpayer made a return of his maximum establishment — that is, the greatest number ' Hackney carriages, 106,000/. ; coaches, 49,000Z. ; post horses, 148,000i. 378 HISTORY OF TAXATION. of carriages and other taxable subjects kept by him at any one time in the previous year, and on that return he was assessed for the current year. No eye perceives the growth or the decay; To-day we look as we did yesterday. In this view the tax assessor and collector, act of parliament in hand, insisted on the charge this year by reference to the phaeton, men servants and horses of last year's estabhshment. So that the fourth instalment of the duty for, say 1865, might be pay- able in 1866 — the fiscal year running from April to April — not /or, but by reference to, an estabhshment kept but rehnquished in May or June, 1864. This curious system had frequently formed the subject of complaint in times gone by ; more particularly, as may be expected, in the year of Pitt's Triple Assess- ment. The ' retort courteous ' in the ' Morning Post ' to Canning's well-known ' Friend of Humanity and the Needy Knifegrinder ' in the ' Anti-Jacobin,' illustrates the point in question. The speakers, H and C, are the Householder and the Collector of assessed taxes : — 3. — Take my last payment. There's your two pounds twelve Shillings and sixpence. G. — Gentle Householder, much are you mistaken, Order, Eeligion, Constitution, Laws, and National Freedom all demand from you a Triple assessment. H. — Triple assessment ! What, besides the old tax t G. — Certainly. Come, deposit. I'm waiting. H. — Wait and be d d ! what is it you are after ? G. — Ten pounds eleven. ESTABLISHMENT LICENSES. 379 H. — Ten pounds eleven ! Have I not informed thee Gig I have none ? I've sent it to the hammer. Pay for a gig when I've not had it ! C. — But you Had one at faster. H. — Easter is past and gone. I'll never pay thee, &c. &c. The collector is therefore compelled to have re- course to what he terms ' a writ of distringer.' This cause of complaint, therefore, stiU remained, and the injustice of the system became more promi- nent in times when the circumstances of individuals altered more rapidly than theretofore. As regards the collection of these taxes, this was still in the hands of the local collectors ; and com- plaints were made that many of them, in their proceedings, seemed to be more intent upon the ad- vertisement of goods in which they dealt, than the collection of taxes, for which they left notes of demand that passed unnoticed into the waste paper basket, in consequence of their being mistaken for ordinary ' puffs ' of tradesmen's goods. The old assessed tax system was now abolished by Lowe. The antiquated tax on persons wearing hair-powder was repealed ; and the taxes on esta- blishments of carriages, men servants, horses and armorial bearings, with alterations of charge which amounted in effect to a reconstruction of every par- ticular tax, were reimposed as hcense taxes, a change already effected as regards the tax on dogs. Hence- forth, the taxpayer was required to take out, in January, licenses for his existing establishment, and, subsequently, should he increase his estabhshment, additional licenses to cover the increase. 380 HISTORY OF TAXATION. The penny taken off the income tax reduced the rate from M. to bd., and, as the yield of a penny at this date was not far short of a million and a half, this amount may be taken to represent the eventual loss of revenue. Three millions and a half of revenue were thus given up in 1869. And at this point, standing as we did in respect of taxes after Lowe's budget of 1869, we ought, in the opinion of many who had carefully considered our fiscal position, to have stayed our hand, leaving untouched the remaining branches of the pa- goda tree. It is all very well to quote the legend of the golden bough, or the oak on darkly wooded Algidus, which — Per damna, per caedes, ab ipso Ducit opes animumque feiro. No doubt a good deal of judicious pruning had been accomplished ; but to go further would be to commence the work of destruction. Who could complain of the existing taxes ? Was ever, in the history of the world, a large revenue so easily raised ? And would it not be well to allow some- thing to be done towards the reduction of the eight hundred or so of millions still scored up as our national debt? But the evil desire for immediate fruition which characterised the times would not per- mit the chancellor af the exchequer to keep a large surplus. ' Give ! give ! ' was the cry of a people who had become accustomed, in a time of advance in the national prosperity by leaps and bounds, to expect a benefaction on budget-day as regularly as a postman expects a Ohristmas-box. STAMP LAWS CONSOLIDATED. 381 In the circumstances, it would hardly be human 1870. to expect a chancellor of the exchequer with a surplus on budget-day to be the first to cry, ' Hold, enough ! ' and accordingly, in 1870, Lowe continued the course of reduction of taxes by taking another penny off the income tax, and repealing half the duties on sugar. These remissions and a number of minor benefactions cost in all about four millions, the loss on sugar being put at 2f millions. Later on in the year, a general consolidation of the stamp duties on instruments and the law on the subject was effected, though there was considerable difficulty in getting the Bill through the House. This accomplishment of a project which had been started over and over again to simplify the — Law, grown a forest, where perplex The mazes and the brambles vex ; And if we miss our path and err, We grievous penalties incur, but which, in consequence of the difficulties it in- volved, had never yet succeeded, was facilitated by reductions of duty made under several heads, .and more particularly a reduction under the comprehen- sive head of 'Deed not otherwise specially charged.' This duty, from the mustard-seed of 6d. in the original Stamp Act, had expanded into a tax of 11. ^ 5s. It was now reduced to 10*. The break-up of the old assessed taxes, the repeal of the taxes on locomotion, and the consolidation of the stamp laws completed the reform of our taxation, already so far advanced by the revision of the tariff. ta.xes. 382 HISTORY OF TAXATION. the aboKtion of the taxes on manufactures, the repeal and readjustment of several direct taxes, and the re- introduction of the income tax, by means of which these reforms had been effected. The Reform of Taxation, 1842-70. Summary. To sum up, briefly, the particulars of this reform, taking the taxes repealed or re-constituted under the leading headings of taxation to which they belong. They were repealed or reconstituted as opportunity offered ; and it is not necessary to ' stand upon the order of their going.' Direct Under the head of direct taxes, the income tax, originally imposed by Peel at the rate of 7(i. in the £, now, 1869-70, stood at the rate of hd. The taxes on houses had been reconstructed by the imposition of the inhabited house duty in lieu of the detrimental tax on windows ; and those on estabhshments had been revised twice, and eventually reimposed upon improved principles. The unfairness of the taxes on property on a devolution in consequence of death had, to a certain extent, been remedied by the exten- sion of the tax to successions to landed property and settled money. But the succession duty had not realised anything near the amount originally ex- pected. Reform was still required in the probate duty : ' we are obliged at present to postpone it,' Gladstone had said in 1853, ' but we hope that, in a future and early year, it will come under considera- tion.' And the whole system of taxation under this head, including probate, legacy, and succession duties, REFOKM OF TAXATION. SUMMARY. 383 stood in need of careful re-arrangement upon a settled plan, which would remove the anomalies and injustice involved in the existing taxes. Briefly, these taxes were still pigeon-holed for revision. Lastly, the taxes on property insured from fire risk, property sold at auctions, and locomotion by means of coaches, post- horses and hackney cabs, had been removed from the fiscal list. Under the head of taxes on articles of consump- Taxes on tion, to take eatables first : as salt had previously tion. to this been removed from the list, so now had imported corn, cattle, meat, fruit and pepper been removed. Free trade in sugar had been established by the equahsation of the duties on foreign and colonial sugar, and the duties had been revised, classified and, lastly, reduced. Passing to drinks, and taking tea first, as in inti- Drinks, mate connection with sugar — for the tea caddy and the sugar-bowl are usually found on the same table — tea was now taxed at the rate of 6d., instead of more than 2*., the lb. The beer-drinkers, having received in 1830 a benefaction of 3 millions, had hitherto failed to influence the legislature to repeal or reduce the duty on malt ; but the duty on hops had been ex- changed for a tax less objectionable in principle. There had been reductions of the excessive taxes on wine and imported brandy ; but under the head of home spirits, the charge had been raised to the highest duty that could be imposed without risk from ilhcit distillation, with universal approval, and with a benefit to the revenue of more than 5 millions a year. 384 HISTORY OF TAXATION. Tobacco. For tobacco, the duties had been equalised by Peel and reconstructed by Gladstone ; and the result had been beneficial not only to smokers, but also to. the revenue, by nearly three millions a year, other As regards articles not eatables or drinks : coal, timber, cotton, silk, barilla, indigo, potashes, bar iron, hemp, furs and silk manufactures formed the principal items in a catalogue of considerably over a thousand imported articles, being raw materials, articles partly manufactured or manufactured articles, which for- merly figured in the tarifi", but had now been erased by Peel and Gladstone in the course of that reform of our commercial taxation, that revision of the tariff which had, before this period, been commenced by Eobinson and Huskisson. Manufac- Lookiug at homc, our manufactures had been liberated from the trammels of the excise. As leather, candles and printed goods had been exempted from the operations of the tax-gatherer before this period, so, during the period, had glass, bricks, soap, newspapers, advertisements and paper-making been exempted. They had been cast into the limbo of departed evil taxes where are to be found a nmnber of minor taxes of various sorts also summarily dis- missed — on starch, tiles, stone bottles, cider and perry, sweets and British wines, soda and potash water, vinegar and dice — some within, and some previously to, the period under review. The following figures represent the approximate amounts of revenue . given up by the repeal of the most important of the taxes before mentioned, and LIST OF TAXES REPEALED. 385 the reduction of the duty on tea to 6d ; the increase in the yield of the principal taxes remaining in our fiscal list ; and the yield of the principal new taxes. 1. Loss fkom: the Repeal oe Eedtjciion- op Taxes. Direct Taxes. House, in place of window, tax . Fire insurance, 1864-5, 1869, rep. Marine insurance, red. 1867 Auctions, 1845, rep. Coaching, &c. 1866, 1869, rep. Taxes on Articles of Gonsumption. Imported Articles, generally : 1st revision of the tariff, 1842 . 1,200,000 2nd „ „ „ 1S45 . 3,500,000 Remissions, 1846 . . . 750,000 3rd revision of the tariff, 1853 . 1,250,000 4th „ „ „ 1860 . 2,250,000- Particular Articles : — Tea, 1857, 1863, 1865, red. . Timber, 1851, 1860, 1866, rep, Corn, 1869, rep. . Pepper, 1866, rep. Manufactures, repealed : — Glass, 1845 . Bricks, 1850 Soap, 1853 . Newspapers, 1855 Advertisements, 1853 . Paper, 1861 Stamp duties — ^Revision, 1850 Total . 2. Inceease in the Yield op Taxes, 1,100,000 1„700,000 210,000 300,000 380,000— 3,690,000 8,950,000 1,200,000 1,000,000 900,000 100,000— 3,200,000 600,000 450,000 1,100,000 450,000 180,000 1,300,000— 4,080,000 . 500,000 . 20,420,000 Taxes 1842 1860 ■ 1869 Increase Probate and legacy Malt . Spirits (home) Do. (foreign) . Sugar . Tobacco Stamps 2,200,000 4,800,000 6,000,000 4,900,000 3,700,000 (1849) 3,600,000 2,900,000 6,000,000 10,000,000 . 2,400,000 6,100,000 5,500,000 3,800,000 6,700,000 10,600,000 4,200,000 5,600,000 §,600,000 3,100,000 1,600,000 1,900,000 5,600,000 700,000 2,900,000 600,000 VOL. n. c c 386 HISTORY OF TAXATION. 3. YiELB OF New Taxes. Tax 1842 1860 1869 Increase Income tax at 5d. producing nearly IJ million per penny Successions, 1853 . , £ 564,000 £ 732,000 £ 7,500,000 732 ,000 Lastly, if the reader be not wearied by figures, attention may be directed to the following schedule or table comparative of our position, in certain respects, in the years 1825, 1850 and 1870. It is given in confirmation of the evidence of prosperity afibrded in the increased yield of our taxes, and needs no further comment. 1825 1850 1870 Consumption of — , Beer, barrels . Spirits (home), gallons , Spirits (foreign), gallons Tobacco, ibs. Tea, lbs. Sugar, cwts. . 8,000,000' 19,000,000 1,250,000 16,750,000 29,700,000 3,000,000 15,250,000 23,750,000 2,260,000 27,500,000 51,100,000 6,000,000- 25,750.000 23,000;000 8,500,000 41,500,000 117,600,000 13,750,000 Imports (ofScial value) . Exports 37,500,000 59,000,000 105,760,000 190,000,000 (real value) 303,250,000 244,000,000 Shipping — Liwai'da, tons Outward*, tons 3,000,000 2,600,000 7,000,000 7,500,000 18,000,000 18,500,000 Population , 22,000,000 27,000,000 31,000,000 Bate of taxation per head £ s. d. 2 9 3 £ s. d. 1 19 3 £ s. d. 1 18 6J Yielii of Id. of income tax . — 867,000 1,500,000 ' Eng-land only, 1825. BOOK V. TAXATION DUEING THE FIFTEEN YEARS, J870-85 oca 389 TAXATION DURING THE FIFTEEN YEARS, 1870-85. llise of the civil government expenditure. Cost of the education depart- ment. The ordinary expenditure, 1871. The original Budget of 1871. Prosperous state of the revenue. Deficit due to high army- estimates. Proposed new taxes : — 1. Probate and succession duties ; 2. Tax on matches ; 3. Income tax, increase hy percentage. The proposals withdrawn. A budget of ' sweet simplicity.' The moral of the match tax. Lowe's great speech on the debt. The fiscal ' annua mirabilis,' 1872-3. A popular Budget. Sugar duties again reduced. Resignation of the ministry. Sir Stafford Northcote at the exchequer. The six millions surplus. The basis of the estimates of revenue. Reduction of the income tax. Repeal of the taxes on horses. Aboli- tion of the sugar duties. Relief for local taxation. The new sinking fund, 1875. Yield of the spirit duty at a standstill. Rise in the income tax, 1876, The hundred and fifty pounders. Another rise in the income tax, 1878. Tobacco duties increased. Sequence of bad harvests. Disappointment on spirits and malt. The probate duty altered. Return of Gladstone to power. Tax on beer substituted for the malt tax. Alteration in the probate and legacy duties. Decline of yield from alcoholic liquors. Anxiety about the Navy. The Budget of 1885. An important question. Before we proceed in the course of inquiry as to i87i. the alterations effected in taxation in the fifteen years 1870-85, it will be well to state at once that a new feature will present itself in the growth in import- ance of the expenditure under the head of the civil government. This comprehensive heading includes Law, Justice, Prisons, Police, Education with Science and Art, the poor law board with sanitary officers, and charity and other commissions, as well as the older civil departments — the home, foreign and colo- nial offices, board of trade &c. ; and the principal cause 390 HISTORY OF TAXATION. of this rising importance will be the increase in the expense under the subheads of Prisons, Justice, and Education, the rise under the last-mentioned subhead alone being 3,250,000/., in consequence of the Elemen- tary Education Act of 1870 and the subsequent Acts on the subject. This increase in the expenditure on home arrangements forms the peculiar feature of the period on which we are about to enter, in the same sense that the rise of 10 millions in the expenditure on the army and navy consequent upon the break-up of peace in Europe, forms the peculiar feature, as regards expenditure, of the period of the reform of taxes from 1842-70. In the whole it will be found to be about 8-^ milUons. The ordinary expenditure of the nation under the heads below given, had risen, at the date from which we start, to about the following level : — Annual charge for debt Army and navy .... Justice, police, and education ' . Civil list and civil government, excluding the foregoing heads Collection and management of revenue Total £ 26,500,000 26,000,000 6,000,000 4,500,000 2,500,000 65,500,000 Revenue from taxation .... 64,000,000 Profits of the business of the post oflEice . 1,500,000 1871. The stupendous events that happened in Europe in 1870 did not retard the rapid return to prosperity of affairs in the United Kingdom. Our commercial transactions, resting on the broad basis of business connections with all parts of the world, were not ' lucluding science and art. ELASTICITY OF THE REVENUE. 391 injuriously affected by local disturbance, even of the grave character involved in the war between France and Germany. Never did the finances of the country give stronger evidence of vitality, soundness, and elasticity than was produced when Lowe, on opening the budget of 1871, showed the yield of the revenue April 20. for the past year to have exceeded the estimate by two millions and a quarter ; the principal additional contributories having been the articles of general consumption, tea, malt, and spirits : tea to the amount of 592,000^. ; malt, 431,000Z. ; and spirits, under the head of the distillery, 481,000Z., and foreign spirits, 233,000/.— in all, 714,000/. ; so that the total under the three heads was 1,737,000Z. These circumstances warranted a high estimate of the revenue for the coming year, though not one upon the basis of last year's receipt, which was un- precedented. But, on the other hand, the expenditure would amount to a high figure, due mainly to an increase of over three millions, to include the payment for the abolition of purchase, on the army estimates for the year. There would therefore be a deficit ; and the amount was 2,713,000/. Declining to increase the national debt by a loan for the purposes of the year, and assuming that the House would not assist him in doing away with many exemptions from taxation,^ the repeal of which would raise a considerable sum, Lowe now brought forward the following plan for additional taxes : — ' Such as the income tax on dividends belonging to foreigners residing abroad, 70,000^. ; charitable and collegiate funds, 60,000Z., &c. 392 . HISTORY OF TAXATION. 1. The taxes falling on property on its devolu- tion in consequence of a death, which were, it will be remembered, pigeon-iioled for revision, would be extended and raised as follows : The probate and administration duties would be extended, by legal machinery, so as to apply to and include all property subject to legacy duty — that is to say, foreign pro- perty which, as not within the range of the jurisdiction of the courts of probate, never fell within the scope of a tax imposed by reference to instruments emanating from such courts. Secondly, the legacy and succes- sion duties would be increased by raising the rates : sons and daughters, and hneal descendants, would be required to pay at the rate of 2, instead of only 1, per cent. ; brothers and sisters 3^, instead of only 3, per cent. ; other relations at the increased rates of 5 and 6 per cent. ; and no difference was to be made between realty and personalty, land and moveable property.^ The proposed increase in these taxes would produce, eventually, 1,020,000/. 2. A new tax would be imposed, copied from an American tax, * invented by that acute nation just at the end of the war,' on the manufacture of matches ; and, to his astonishment when he was in- formed of it, was estimated to produce no less than 550,000/. This sum, added to 300,000/. the amount expected, in the fiscal year, from the taxes on pro- perty on a death, gave a 'total of 850,000/. ; but at least 2,800,000/. was required in order to provide only a modest surplus. ' The siiccesaion duty, estimated, in 1863, to produce two millions, had produced but 753,000/. THE .UNFORTUNATE MATCH TAX. 393 3. The remaining 1,950,000/. would be raised by means of an addition to the income tax. At this date, the yield of every Id. in the tax had increased, from 700,000/. in 1842, to over a million and a half. Only about two millions was wanted. What was to be done ? Precluded, in consequence of the alteration in the manner of collecting the tax made in 1869, when the collection was rendered annual instead of half- yearly — precluded, now that half-years in income tax were abolished, from following the precedents of former years, when an additional penny had been imposed for half a year, he proposed to effect the object he had in view by means which involved a change in the mode of assessing the tax. In lieu of a rate of so many pennies in the £, there would be a percentage. 6,100,000/. was the amount produced by the existing 4 In the year, 1,500,000^. = The Sinking Fund Act, 1876. 38 & 39 Vict. c. 45. STANDSTILL OF YIELD FROM SPIRITS. 405 of spirits, divided itself so as to spread through several other channels. The immediate result of a rapid and considerable increase in the wages of labour in this country has ever been an excessive indulgence in drink, and more particularly in spirituous liquors. With equal certainty a period of indulgence of this kind is followed by an adjustment of expenditure ; for of saving there is little thought — and female in- fluence prevails to divert a fair portion of the increased income of the wage-winner, to whom the first-fruits of success have not been denied, from extravagance to domestic purposes, in increase of the comforts of the house and the family — more meat, bacon, butter, tea and sugar, and boots and clothing. Henceforth those devil's leaps, the jumps in the yield of the spirit duty, of 800,000/. in 1872, of 1,500,000/. in 1873, and of 900,000/. in 1874, were a remembrance of the past, but no precedent for the future ; though in tea, as in sugar, had it continued in our fiscal hst, and in tobacco, we might still expect an increasing yield. Accordingly, when the actual yield of the revenue i876. for 1875-6 was declared, it appeared that of the million and a half by which it had exceeded the estiinated yield, no less than 850,000/, was returned under the head of customs, which contains the items tea and tobacco ; while under the head of excise, of which the most important item is spirits, there was a deficiency of 114,000/, In 1876, in consequence of the increase under the plan of the new sinking fund and an increase, under the heads of army and navy, to 27 miUions, and civil 406 HISTORY OF TAXATION. government, including law, justice and education, to 13 millions, there was a deficit of 774,000Z. Sir Stafford Nortlicote declined to interfere with the new sinking fund, and reimposed the penny taken off the income tax in 1874, raising the rate to Sd. But while raising the rate, he narrowed the basis of the tax by- allowing, under the Bd. rate, a total exemption for incomes under 150Z., similar to that under Peel's Act of 1842, when the tax was at 7d., which had subse- quently been cut down, by Gladstone, in 1853, when the rate was reduced prospectively to 5d., to 100/. of income ; and he extended the limit of chargeable incomes entitled to an allowance on assessment from 800/. to 400/., and the amount of allowance from 80/. to 120Z. In allusion to the extension of the limit of exemption, the prime minister and the chancellor of the exchequer were caricatured as two anglers fishing out of the same punt, and one of them says : ' Aha ! dear boy, that's the sort of bait to catch the hundred and fifty pounders. What sport we shall have ! ' 1877-8. This prospect of sport was darkened in the events that occurred. An uneventful, or as the chancellor of the exchequer put it, a ready-made Budget in 1877 marked the point at which our advance in prosperity by leaps and bounds came to a standstill. A bad harvest supervened. The estimates for the next year showed an increase of expenditure of about two mil- lions, of which, part occurred under the head of army and navy, and 834,000/. under the head of civil ad- ministration, including an increase in the education vote and a new head of expenditure for the cost of prisons lately transferred to the state. THE HUNDEED AND FIFTY FOUNDERS! 407 Sir Stafford Northcote was now obliged to impose 1878-9. an additional 2d. of income tax, raising the rate to bd. The rate now stood at the same figure as the rate for 1869—70 ; and to compare the fiscal list of the two years, the contributories missing in that for 1878-9 were sugar, which produced about six millions, horses, producing about 400,000/., and half the duty on cofiee. Bearing in mind the now accepted rule that taxes are to be considered in the whole as forming a system, and that, in raising or in lowering taxes, a joint re- gard should be paid to direct and indirect taxation, it was to be expected that an increase would be made, simultaneously with this increase in the income tax, under some head of indirect taxes. The head selected was tobacco, and the amount of the increase, 4-d. the lb. An increase in the tax on dogs, from 5s. to 7*. &d., accompanied as it was by an exemption from tax for sheep dogs, had little effect on the yield. ParHament was now in the sixth year of its exist- I8r9~80. ence, a time when the party who 'are in, and the party who are ont of, power begin to make arrangements preparatory to the ordeal of the hustings, and in plan and promise rarely fail to bear in mind Burke's maxim, that ' to tax and to be loved is not given to man.' It is known how telling at a general election is a good budget for the ' ins,' and how useful a bad budget to the ' outs.' The importance of a sixth-year budget is acknowledged, for it may be, and usually is, the last before the dissolution. The returns of the produce of the revenue pub- lished in the morning papers, in accordance with 408 HISTORY OF TAXATION. the practice established by lord Sherbrooke in 1870, afford, when compared with the votes of the estimates in the House, an easy means of forming a tolerably accurate forecast of the budget arrangements, and from the knowledge thus acquired of the fiscal posi- tion, as we approached the budget day of 1879, a chill seemed to pervade the atmosphere for the tory party, while the whigs exulted in the thought that not only would it be impossible to take off taxes, but that some additional taxation would be required : ' They will never,' it was said, ' be able to manage without another additional \d. of income tax.' But the government did manage without the penny. A high estimate of revenue was taken, and the only increase in taxation was an additional im- port duty, of 2d. the lb., for cigars and manufactured cocoa. ' Never shall I forget,' said an eye-witness, ' the looks of disappointment to be seen on glancing along the line of occupants of the front bench on the other side of the House.' As before observed, the ministry had adopted, since their advent to power, the principle of taking into consideration, in framing the yearly estimates, the full expected increase of revenue ; and in lieu of the decrease of debt by the amount of under-estimate for the year which would result from the adoption of less sanguine estimates, had established a new sinking fund. In principle, a word cannot be said against the practice of a full estimate ; in practice, it is not free from danger. For who can be sure of the TOO SANGUINE AN ESTIMATE. 409 sun in England ? A bad season, a deficient harvest, may fail to float the chancellor of the exchequer up to the mark of his high estimate, and, landed at a lower level, there he stands, looking, to say the least, like one of those who ' listen with creduhty to the • whispers of Fancy and pursue with eagerness the phantoms of Hope.' ^ And so it was on this occasion. The assumption of the advisers of the chancellor of the exchequer that, after two very bad harvests, nature would come to the rescue and the sun again appear, was not unnatural ; nor was it unreasonable ; but it was falsified in the event, for the harvest of 1879 proved to be one of the worst on record. The ac- cumulated pressure told heavily upon the consuming power of the country and the revenue ; and when, after lord Beaconsfield's resolution to dissolve, the budget was opened, March 11, the chancellor of the isso. exchequer had no very grateful task to perform. The disappointment in the revenue for the year which would close at the end of the month would prove to be no less than two millions. There would be a falling off from the expected yield from spirits of nearly a million and a half, and under the head of malt a similar disappointment, of nearly a million, to be attributed partly to the failure and lateness of the barley harvest in the previous year. On the other hand, there would be an increase in the yield of the probate and legacy duties, which fall upon property as opposed to expenditure, amounting to 1 ' Who expect that the deficiencies of the present day will be sup- plied by the morrow.' 410 HISTORY OF TAXATION. 460,000/. ; while under the heads of tea and coffee, which as necessaries, rather than luxuries, are not so immediately affected by narrowed means as spirits, no decrease would appear. 1880-1. The estimated revenue for 1880-1, with an in- come tax at 6(£.j was in excess of the amount of the estimated expenditure by 74,0001; and in addition to this, 7O0,O00Z. was expected from an alteration to be made in the probate duties, giving, in all, a surplus of 774,000/. The surplus was devoted to an arrangement for payment of a portion of the war expenditure for the Eastern Question and the war in South Africa. The expenditure had been about 12|- millions, divided be- tween the two equally ; and of this over 8 millions had been raised by borrowing. Of this 8 millions, 6 were to be paid off by means of terminable annuities, at the rate of 1,400,000/. a year. But the additional charge would be only 800,000/. per annum, for 625,000/. would be taken from the new sinking fund towards payment of the annuities. This immolation of their offspring, the new sinking fund, enabled the government to make some provision for the payment of the late war expenditure, without any additional taxes. The alteration in the probate duties involved the abolition of an existing distincticm in the taxation of the property of persons who died leaving, and persons who died not leaving, a will, which, based upon no principle, had, b}' universal consent, been condemned. But the principle of a scale of charge had been EFFECT OF THREE BAD HARVESTS. 411 retained, and the effect of the new scale was — not to involve the reader in a web of technicalities — to in- crease certain anomaUes in the taxation of various kinds of property on a death. This gave Gladstone, ■with his special knowledge of the subject, an oppor- tunity of attack, of which he availed himself to the fullest extent in the Midlothian campaign. And though his audience may have failed to grasp in every detail the picture of injustice he presented, the general impression conveyed to their minds was in corroboration of the opinion that he was rightly regarded as the chief of finance or, so to put it, the Jove of the Fiscal Eegions — none greater than he, none equal, none in a second class, to him. In short, attention was, by this means, fixed upon his superior importance, from a point of view whence regarded it was incontestable. He soon had the opportunity to prove it. With no reason on the part of the nation for any railing accusation against the government, with perhaps nothing more against them than weariness of wet weather and a vague desire that some change of cir- cumstances in general migj;it result from a change of administration, lord Beaconsfield returned from the scene of the elections an example of the adage : 'Donee eris felix,' — unlucky in three wet seasons, and unlucky at the polls. He resigned ofiice before the meeting of the new parliament ; and Gladstone returned to power, holding, again, the two posts of first lord and chancellor of the exchequer. A supplementary budget was necessary ; for the 412 HISTORY OF TAXATION. small estimated surplus for the year 1880-1 had been converted, by 200,000/. of supplementary esti- mates which had become necessary, into a deficit of 16,000/. A proposal had been made by the French government for a reduction of the duties on wine in connection with the new tariff arrangements under consideration in the chamber of deputies, which, should the House think fit to give the government power to make the reduction, would result in a loss increasing the deficit to 249,000/. And an astounding deficiency, as yet unexplained, had occurred in the revenue from India, in connection with which some claim might arise. In the whole, the additional revenue required was from 700,000/. to 800,000/. Part of this was supphed in the performance of a welcome duty. The decrease in the number of beerhouses since the passing of the Beerhouse Act, 1869, which abolished the old 'Tom and Jerry ' shops, and the operation of ' the Licensing Act, 1872,' had increased public-houses in number, and the value of public-house property ; and the people's old friend, ' Madame Geneva,' was now in- stalled in palatial edifices which formed a new archi- tectural feature in many of our largest towns. Point- ing to the growth in size and value of the gin-palaces of the day, the committee of the house of lords on intemperance had, in their report, recommended that an increase should be made in the price of the annual revenue licenses for public-houses. This recommen- dation was now carried into effect ; and, from a general revision of the duties on licenses for the sale of drink, A MASTER-STKOKE IN TAXATION. 413 involving a considerable increase for public-houses, over 300,000/. of the required 700,000Z. or 800,000/. would be gained in the year. The remainder was obtained from a master-stroke in taxation. An alteration would be made in the taxation of beer, long desired. To secure this benefit an additional Id. of income tax would be imposed for the year ; and, after satisfying the requirements of the alteration, there would remain out of the produce of the additional Id. between 300,000/. and 400,000/. to form the surplus required. A tax on the drinkers of beer may be levied in a variety of ways : by means of a tax on the materials for brewing ; a tax on the beer ; a tax on the sale of beer, &c. &c. Different methods have been in force in different countries, at different times ; but in this country, formerly, aU were in force at the same time : — a tax on beer, and a tax on malt, and a tax on hops, and a tax on maltsters' Hcenses, and a tax on brewers' licenses, besides taxes upon the various licenses re- quired for dealing in or retailing beer. The tax on beer had been repealed by the Welhngton administra- tion in 1830, and that on hops had been commuted by Gladstone in 1862, for an addition to the tax on brewers' hcenses. The existing taxes were, therefore, those on malt, with a supplementary tax on sugar used in brewing, maltsters' hcenses, brewers' hcenses, and the various licenses for the sale of beer. As regards the tax on malt, a large volume might, without difficulty, be formed of mere abstracts or brief notices of the various motions for the reduction 414 HISTORY OF TAXATION. or repeal of the tax made in the house of commons, the debates thereon, and the pamphlets published, and articles in reviews and newspapers written, on the subject. The arguments against the tax resolved themselves into a statement that it was unfair, as pressing severely on light land suitable for barley, and impolitic, as a tax on the raw material of a manufacture. The arguments for retaining the tax were derived from the necessity for a tax on beer, to correspond with the taxes on spirits, which form the national drink of Scotland and Ireland ; the imprac- ticability of giving up a tax so productive of revenue ; and the impossibility, as shown by experience, of fairly levying a duty on beer in any other manner. It was acknowledged that a commutation of the tax was most desirable ; but difficulties in relation to private brewing and fairly taxing all sorts of beer, seemed to present an insuperable obstacle to the realisation of the plan. Three bad years had reduced the farmer to an im- poverished condition ; and on introducing the sup- plementary budget, June 10,- the chancellor of the exchequer acknowledged that ' the farmer had the strongest possible claim upon any government at the time, and that as we had exposed him to all the dis- advantages of equal legislation, he should have all .its advantages.' In that view he approached the subject of the farmers' grievance — the malt tax — ' a grievance with which our contemporaries have been familiar from childhood upwards.' 1. To abolish the tax, as had been suggested by BEER, SUBSTITUTED FOR MALT, TAX. 415 some persons, at a loss to the revenue of about eight milUons, and leave the beer-drinker untaxed while a revenue of many millions was collected from alcoholic drinks in the form of spirits and wine — to tax the national drink of Scotland and Ireland and allow that of England to be entirely free from taxation, was entirely impracticable, and could not be proposed by any responsible government to the House. 2. To re- duce the tax, as had been suggested by lord Chandos in 1833, and again in 1852 by the first Derby adminis- tration, would be a most unsatisfactory mode of pro- ceeding, which, while deranging our finances, would give only very partial rehef. It was difficult to say how much of the reduction would reach the con- sumer; while all the main objections to the tax would continue to exist. 3. The .third method of dealing with the tax was to substitute for it a duty on beer. A remarkable diminution in the number of persons who brew for consumption at home amounted almost to the annihilation of the difficulty in relation to private brewing. The practice, if not dying a natural death, at any rate was shrinking -within limits so I modest and so narrow, that it could no longer be re- garded as an obstacle to prevent the government from going forward to efiect an important change on other grounds beneficial to the country ; and private brewers [ would be taxed by relation to the materials used in brewing, which would secure substantial justice as to the tax to be paid by them. The other difficulty had also been removed : the brewer for sale, allowed to use in brewing any materials he might think fit to 416 HISTORY OF TAXATION, choose, would be taxed by testing the strength and saccharine quahties of the liquor at a particular stage, the most convenient for himself and the revenue officers. This method would secure the fair taxation of beer of various sorts and strengths. As regards the amount of the duty to be imposed, a fair equivalent for the rehef to be given by the re- peal of the taxes on malt and sugar used in brewing and on brewers' and maltsters' licenses would be 6s. Sd. the barrel, a quarter of malt being estimated to produce four average barrels, the turn of the scale in calculating the equivalent being slightly in favour of the revenue. The new tax was, therefore, origi- nally estimated to yield 350,000^. additional revenue ; but, subsequently, in consequence of an alteration in the scheme, this was given up, and the yield of the tax was taken at 8,500,000^. The expenses of the alteration, including the return of duty to be allowed to the maltsters for their stock in hand, additional cost of supervision and other expenses, would be 1,100,000^. The revenue from taxation in the fiscal year 1880-1 produced 378,000^. in excess of the estimate ; 1881. and the additional Id. of income tax added to cover the change in the taxation of beer carried out in the previous year, was taken ofi" in 1881, notwithstand- ing a high estimate for military and naval expenses, and for civil expenditure, which now amounted to 16 millions. A most opportune addition to the revenue, derived from an adjustment of the sur-tax on foreign spirits and rum, assisted the chancellor of the ex- chequer in the business to the amount of no less than REFORM OF THE PROBATE DUTY. 417 180,000/. ; and 390,000/. was expected from an altera- tion to be made in the probate and legacy duties. This consisted in the abolition of the obnoxious scale for the probate duties, which were reimposed, as nearly as possible, in the form of an exact percent- age. The tax, previously charged upon the gross estate, with power to obtain a return of duty for debts, was now charged, originally, upon the net estate after a deduction of the debts. And a fusion of this tax with the legacy and succession duty was effected as regards property passing to direct lineal relations, who were henceforth to be cleared from both taxes by the payment of 3 per cent. ; an altera- tion of considerable advantage to the tax-payer as well as the revenue, in the abolition it effected of re- versionary claims for duty which occasioned infinite ■ trouble and annoyance. It affected nearly seven- twelfths of the property upon which legacy duty was payable, that being the proportion that came under the one per cent. duty. The next year was not remarkable for any altera- 1882-3. tion in our tax system.^ An additional l^d. on the income tax was granted to defray the expenditure for the expedition to Egypt, in pursuance of a vote of credit of 2,300,000/. passed in July ; and this was taken off in 1883 by mr. Ohilders, who had been isss-i. ' A. duty was imposed upon articles manufactured in imitation of coffee ; but no addition was made, as had been proposed in the budget scheme, to the tax on carriag'es (viz., 1/. Is. for four-wheeled, and 6s. for two- wheeled carriages) the. chancellor of the exchequer announcing that the state of the revenue would enable him to make the grant proposed for certain purposes in connection with the highways, without any such addition. VOI, II. E E 418 HISTORY OF TAXATION. appointed chancellor of the exchequer on the previous December 16. Alcoholic The depression in the yield of the revenue from liquors. , i • r alcohohc liquors was now assuming a chronic lorm, and threatened seriously to affect our fiscal prospects. The revenue from this source, amounting to no less than, in round numbers, 30 millions, figures as the most remarkable feature in our system of taxation ; and therefore any influence that may operate upon it in the whole, forms as serious a subject for the con- sideration of our finance ministers as any that can be suggested. The depression affected to a greater or less degree every item in the list. Home-made spirits — gin, whisky, and British brandy ; imported spirits — cognac (brandy) and rum ; wine, and beer, all told the same tale — that, in power, this revenue had decreased, was decreasing, and, probably, would continue to decrease. Spirits. As regards home-made spirits, looking back to the year 1860, when the duty was raised to 10s. the gallon for the China war, the effect of that increase in the tax had been to lower the consumption per head of the population, from the figure of 0-854 gallons, to an average of 0"663 gallons for the next four years. Eising, in a prosperous time, to 0'711 gallons in 1870, it stood, subsequently, for the five years 1874-8, at what Horace Walpole might have termed ' the highest spirit mark,' an average of 0'912 gallons. Descending thence, it now had reached 0-808 gallons, by a gentle descent indeed, but along an inclined plane, for there was no prospect of return ALCOHOLIC LIQUORS, DECREASING YIELD. 419 High wages no longer supplied the means for indul- gence ; and, in the opinion of competent authorities/ improved habits in the people, and the influence of temperance principles, had operated to turn the foot- steps of many a spirit-drinker from the doors of the gin-palace to those of some one of the numerous cofiee-taverns lately established, there to drink, if not coffee, one or another of the many temperance drinks of which the manufacture had lately enor- mously increased. As regards foreign spirits, if the same influences were less powerful in their operation upon this head of revenue, the ravages of the vine-disease in France had, by diminishing the import of brandy, aided in the work of deterioration of the revenue. As regards wine, although the import of wine wine, from France had been influenced, to what may have appeared, to persons ignorant of the arts of the wine trade — uninitiated in the Mysteries of Bacchus — a curiously slight degree, by those ravages of the phylloxera which were stated to have lessened the produce of French vineyards by half, it was clear the demand for wine had diminished : the farmer class had put up the sherry decanter, and the mercantile and trading classes entertained less freely, and, when out for a holiday, contented themselves with seltzer water, soda water, ginger beer, or some other form of the effervescing drinks in vogue, in lieu of the wine of more prosperous times than these. ' See the reports of the commissioners of inland revenue and of customs. E K -2 420 HISTORY OF TAXATION. Beer. j^g regards beer, the consumption, whicli stood, on the average of the five years 1866-70, at the figure of 1 -581 bushels of malt, had, after a period of un- usual expansion, 1871-9, receded, for 1880, to 1-428 ; and, measuring by barrels after the alteration of the taxation of beer in 1880, it had decreased from 0-783 barrels in 1882, to 0-754 barrels in 1883 ; and this was considered to be due to the same influences that affected the revenue from spirits. Looking at the revenue in the whole, the most that coiild be hoped for in the immediate future would be that it would not henceforth considerably decrease. Notwithstanding these adverse circumstances, the chancellor of the exchequer had, in 1883, a surplus sufficient to enable him to abolish the railway pas- senger duty on all fares of Id. the mile and under, and to reduce the duty for fares over that figure on urban traffic, which would cost 135,000^. in the year, and eventually 400,000/. ; while a sum of 176,000/. would be set aside to meet the views of the House as to the introduction of 6d. telegrams.^ 1884-5. In the next year a small surplus was formed with- out any addition to taxation, but in December an additional Id. of income tax was granted for the expenses of the expedition against the Mahdi. This ' A proposal relating to the warehousing of silver plate, dutyfree, so as to admit of a delay in the payment of duty until the plate should he taken out for sale, intended as an arrangement preliminary to the abolition of the tax, was subsequently dropped, in consequence of representations made by the manufacturers that such a system would, in practice, prove detrimental to their trade. A new license for sporting, costing 11., and available for a fortnight's shooting, had little, if any, effect on the revenue from licenses for sporting. ANXIETY ABOUT THE NAVY. 421 proved to be insufficient. for the purpose, and in April four millions and a half were required for ' remaining charges in the Soudan and Upper Egypt.' At this date, a feeling of anxiety, long existing in the public mind, as to the state of our preparation at sea in case of a war, had been intensified by the prospect of immediate war with Eussia and the attitude of the French Eepublic in regard to affairs in the East. It was urged on all sides that the de- fences of our coaling stations should be strengthened, and our navy placed in thorough war-trim, regard- less of any necessary expense. In these circumstances, when Gladstone, in a speech ranking with his finest speeches and recalling those of Chatham, appealing to the patriotism of the House, requested a vote of credit for 11 millions — to include the 4^ millions and 6-| millions more ' for special naval and military pre- parations,' though but 2^ millions were devoted to the navy, their maxima cura, the nation wilhngly deferred all questions regarding the policy of the government, and were enthusiastic in their approval of the action of the House, who voted the 11 millions without a division. This 11 millions, added to an estimated deficiency of 3|- millions, and 200,000Z. of supplementary esti- mates, formed a total deficiency of 15,000,000/. Treating the Budget as substantially a war The budget, the ministry wisely determined to inter- of isss. cept, for the year, the action of what is termed the Sinking Fund. To do otherwise would be, as the prime minister subsequently put it, ' a pedantic 422 HISTORY OF TAXATION. construction of the principle of Pay Your Way.'^ By taking, for the service of the year, the portion of the • terminable annuities — 4^ millions — that repre- sented repayment of debt, the deficiency would be reduced to 10-^ millions. . To find this amount was, in the circumstances, no easy task ; but the chancellor of the exchequer applied himself to the business, on budget day, with his usual ability and considerable bonhomie, making the best of a bad situation. First, should any new taxes be imposed ? A great fertility of invention had been displayed in suggestions that had been made to him by a number of volunteer financiers who had come to his assist- ance with suggestions that cats, soda water, bicycles, advertisements, and even names, should be taxed ; that a duty should be reimposed upon sugar ; that the duty on tea should be increased ; and that coal from the pit, gas. petroleum, and other oils were fit subjects for taxation.''' None of these suggestions suited his wants, and no new tax would be imposed. ' Speech, June 9. ' Such suggestionsare not peculiar to the United EjDgdoin. 'Enl87;l, quand je suis arriv^ pour la premiere foia au minist&re des finances,' said M. Leon Say, Decemher 10, 1881, ' on Stait encore poss^d^ de ce que j'appellerai la fievre de fiscalitfi. A I'assemblfie nationale c'^tait ime vraie maladie ; il n'y avait pas de jour ou quelqu'un de nos coUegues n'eut la pretention d'avoir invents eon petit inip6t; on venait me trouver en disant qu'on avait dScouvert le moyen de faire rentrer des millions par an : imp6t sur la photographie, sur les chapeaux, sur les pianos, et toute soite de choses I II y avait une Emulation qui poussait tout le monde a des eicfes de flscalitiS.' Volunteer Financiers were not favourites with Peel, who, in his Budget speech in 1842, remarked : ' They think that their inventive genius is on a level with that of Archimedes, when they discover a pianoforte, an umbrella, or some such article not yet made the THE BUDGET OF 1885. 423 This resolve of the chancellor of the exchequer narrowed the field of search to existing sources of supply, exclusive of tea, as already mentioned, the tax on which, already imposed at a high percentage in respect to the cheaper sorts, it was clearly not advisable to increase so near election time. Mr. Childers's plan was as follows : — The income tax was to be imposed at 8d., £ being 3i. over the 5d. which was now al- lowed to be the normal or peace rate, and the Sd. would produce .... 5,400,000 Other taxes would produce : — Succession duty, (1) Equalisation of duty for real and personal property . . . 200,000 Succession duty, (2) Composition for the pro- perty of corporations .... 150,000 Spirits, 2s. the gallon additional . . . 900,000 Beer, Is. the barrel additional . . . 750,000 Stamp duties, securities to bearer . 100,000 Deducting the total, 7,500,000^., there would remain a deficiency of 2,812,000^., which would be borrowed temporarily on the unfunded debt, to be paid off, it was contemplated, next year — to be met out of the sinking fund of 1886-7. Although objections were raised to the item in this programme relating to the proposed increase in the succession duties (1) on the ground that it was inopportune, in view of the decision of the House that the question of local taxation should have subject of taxation ; and immediately suggest the scheme to the chan- cellor of the exchequer, accompanied by a modest claim for a large per- centage of the amount received in consideration of the novelty of the thought, and the certain success of its operation.' 424 HISTORY OF TAXATION. precedence of this question, the attack of the opposi- tion upon the budget ran mainly on the lines of the spirit and beer duties, which it was urged it would be inequitable to increase without a corresponding ad- dition for wine. An amendment vital to the budget was proposed. The ministers accepted the challenge ; and, in the result, on the morning of the 9th of June, the government were, contrary to general expecta- tion, somehow or other, defeated.^ In the administration formed by lord Salisbury, sir Michael Hicks-Beach held office as chancellor of the exchequer and led in the Commons, in succession to sir Stafford Northcote, who accepted a peerage as earl of Iddesleigh ; and eventually, in a supplemen- tary budget, disclaiming — with the limited time at his disposal, and in the circumstances in which he was placed — all designs of any ambitious financial scheme ; without time for the investigation necessary for new projects of taxation ; acknowledging the impractica- bility, on the ground of the unpopularity of the in- crease, of any endeavour on the part of a government in a minority in the House to raise the duty on tea ; and unable to find in our fiscal list any other head of duty which in such times of depression it was wise to increase, he adopted the suggestions of his predecessor in ofiice as regards the income tax, the tax in composition for succession duty on the pro- perty of corporations, and that on securities to bearer, discarding those relating to the now condemned spirit, beer, and succession duties, and supplemented ' By 12 votes : 264 to 252. AN IMPORTANT QUESTION. 425 this necessarily one-sided budget by a proposal to take the whole of the sinking fund, including not only the portion of the annuities representing capital but also the amount available, undet- the sinking fund Act of 1875, for the payment of debt, and borrow 4 millions on exchequer bills and bonds to meet the rest of the deficit. These interesting transactions bring this narrative to its close. They raised an important question (not, in all probability, for the last time raised) regarding the expansive power of our existing fiscal system — whether it is such as to prove sufiicient to meet the requirements of the nation from time to time? Whether, by the abolition of the duty on sugar, we may have, as predicted by lord Sherbrooke, ' struck at the power of the country to meet the exigencies which a great nation like this is continually subject to,' and by ' removing a mainstay of the system, have permanently injured it ? ' or, whether, in times of depression, with, as again may be, a revenue from alcoholic liquors languishing, or on the decline, a source of additional revenue can be found under the existing heads of taxation, to use, in conjunction with the income tax, when a general effort is demanded and all classes of taxpayers should set the shoulder to the wheel — according to hopes expressed when we repealed the duty, with a light heart, in a time of unusual prosperity, with a revenue from alcoholic liquors in the full flow of an advancing tide, the year of the six millions surplus, 1874 ? 426 HISTORY OF TAXATION. Tfee Expenditure and the Eevenue feom Taxation awd sovie other Sources in 1884-5 as compared with 1880-1. EXPENDITURE. 1. Debt 2. Civiii List and Annuities to Eoyal Family . 3. Akmy and Navy 4. Justice, Police, and Pbisons 5. Education, Science, and Abt 6. OiHEB Civil Govebnment 7. Collection or Taxes Total Expenditure . 1880-1 1884-5 £ £ 28,170,000 28,300,000 668,000 665,000 25,280,000 30,325,000 5,900,000 7,000,000 4,300,000 5,170,000 5,579,000 6,256,000 2,765,000 2,660,000 Figs, 18,789,000 8,600,000 1,400,000 1,864,000 4,000,000 200,000 129,000 4,329,000 8,880,000 517,000 202,000 III. Stamp Duties. 1. Deeds and Insteuments .... 2,175,000 2. Bills of Exohanob and Notes . . . 868,000 8. Beceipt and otheb Id. Stamps . . . 877,000 Total Stamp Duties .... 3,920,000 Total Eevenue from Taxes .... 71,128,000 Net Eeoeipts from Business of the Post Office 3,239,000 Crown Lands and other sources, (see p. 441) 3,024,000 72,562,000 80,276,000 REVENUE FROM TAXATION. I. DiEEOT Taxes. 1. Income Tax, net produce .... 10,776,000 11,922,000 2. Inhabited Houses, Great Britain only . . 1,690,000 1,855,000 3. Eemnant or Land Tax, Great Britain only . 1,050,000 1,044,000 4. Successions 6,656,000 7,720,000 5. Caebiaqes, Seevants, etc., Great Britain only 1,345,000 1,391,000 6. Eailways. Great Britain only .... 748,000 392,000 7. Other Dikect Taxes 462,000 490,0 00 Total Direct Taxes 22,727,000 24,814,000 II. Taxes on Articles or Consumption. 1. Alcoholic Liquoes : — (a) Spirits .... (6) Beer .... (c) Wine .... {d) Licenses for sale, &c. Total Alcoholic Liquors . 2. NON-ALOOHOLIO LiQUOES : — (a) Tea (6) Cofiee .... (c) Chicory and Cocoa . Total Non-alcoholic Liquors 3. Tobacco and Licenses Deied Fruits : Cueeants, Eaisins, Plums 4. Manufactures .... Total Taxes on Articles of Consumption 44,481,000 Direct Taxes and Taxes on Articles of Con- sumption 67,208,000 18,299,000 8,500,000 1,233,000 1,864,000 30,553,000 29,896,000 4,795,000 205,000 134,000 5,134,000 9,862,000 546,000 248,000 45,186,000 70,000,000 1,825,000 833,000 943,000 3.601,000 73,601,000 2,932,000 3,007,000 SYNOPSIS OF TAXES, 427 REVENUE FKOM TAXATION. FURTHER DETAILS. I. DIRECT TAXES. Cakeiages, Servants, etc. (Great Britain) : — 1881 £ Carriages 543,000 Male servants 137,000 Armorial ensigns 79,000 Dogs 350,000 Sporting licenses (XJ.K.) 161,000 Guns (U.K.) 75,000 1,345,000 6. Other Dieect Taxes: — 1. Solicitors .... 2. Bankers 3. Auctioneers, Appraisers, and House Agents 4. Vendors of plate . 5. Pawnbrokers 6. Hawkers \ 7. Eefreshment houses Licenses Marine Insurance 332,000 130,000 462,000 188S £ 562,000 138,909 78,470 335,526 192,345 83,767 1,391,017 104,000 111,000 37,000 37,000 81,000 80,000 43,000 48,000 33,000 35,000 25,000 27,000 9,000 6,725 344,725 145,000 489,725 II. TAXES ON AETICLES OF CONSUMPTION. 1. Alcoholic Liqtjoes (a) Spirits: — Home-made. The Distillery / Bum Foreign Brandy . , Geneva, &c. £ £ 14,393,000 13,987,000 2,357,000 1,520,000 1,691,000 2,084,000 348,000 708,000 18,789,000 18,299,000 III. STAMP DUTIES. Bills of Exchange and Notes : — Bills of exchange, &o Bankers' notes and composition for bankers' bills and notes 740,000 128,000 868,000 705,000 128,000 833,000 APPENDICES. VOL. II. J, J, APPENDICES. No. I. REVENUE FROM SOURCES OTHER THAK TAXATION. 1. THE POST OFFICE ; 2. OTHER SOURCES. No. II. THE NATIONAL EXPENDITURE, 18th AND 19th CENTURIES. No. III. COST OP COLLECTION AND MANAGEMENT OF REVENUE. No. IV. THE MODE IN WHICH TAXES ARE GRANTED. No. V. COST OF EACH WAR FROM 1688 TO 1869. No. VI. AMOUNT OF NATIONAL DEBT ACCRUED FROM THE SEVERAL WARS. No. VIL ADMINISTRATIONS, 1702-1885. No. VIII. LIST OF THE COMMONWEALTH EXCISE. No. IX. SCHEME OP THE TAX ON BURIALS, BIRTHS, AND MARRIAGES, AND THE TAX ON BACHELORS. »o. X. CHARACTER OF SIR R. WALPOLE BY LORD CHBSTERFIEIiD. No. XI. STATE OF THE CUSTOMS LAWS IN 1784. No. XII. ESTIMATED AGGREGATE REDUCTION OP CUSTOMS DUTIES BETWEEN 1835 AND 1853. No. XIII. THE GROSS RECEIPTS OF THE CUSTOMS REVENUE OF THE UNITED KINGDOM IN EACH YEAR, 1835-55. APPENDIX No. I. EEVENUE FROM SOURCES OTHER THAN TAXATION. 1. The Post Office. THE NET KECEIPT FEOM THE BUSINESS OF THE POST OFFICE. 2,932,200Z. The business of the post office includes not only the conveyance of the letter bags or mails, as they were early termed from the French 'malles,' to different places within the United Kingdom, but also the trans- mission of letters to foreign parts by means of the vessels which carry the packets of letters, and, therefore, are called ' packet boats,' and the telegraph service. The excess of receipts over expenditure from the business is available to the state as so much income towards payment of the expenses of government, in alleviation of the burden of taxation. The first estabhshment of posts — posita, posta — or stations for the formation of a line of intercommunica- tion for the rapid conveyance of messages from place to place, dates, in England, from 1482, when Edward IV. established relays of couriers to carry despatches to his brother Gloucester in the expedition to Scotland. This is regarded as the origin of the postal system in this country, in the same sense that the posts set up for public despatches and persons travelling by royal authority by Louis XI., five years before this, are ORIGIN OF THE POST OFFICE, 433 regarded as the first attempt at a postal system in France. So far as we have any information from existing records, Brian Tuke was the first person appointed Master of the Posts. He held the ofiice in 1516. Subsequently, in 1545, William Paget, one of king Henry VIH.'s chief secretaries of state, and John Mason, Esqre., had a grant of the office, then termed that of ' Master of the Messengers, Eunners or Posts,' as well within the kingdom of England as parts beyond the seas. The grant was for their lives and the life of the survivor. The expense of the conveyance of letters was repaid to them by the crown ; and the .annual wage or fee of office was 66^. 13s. Ad. Existing patents — litterae patentes — prove a succession of life grants of the office to others, in the reigns of Elizabeth, James I. and Charles I., at the same fee ^ ; but no general system for the conveyance of letters with any regularity to all parts of England, Scotland and Ireland, existed before the estabhshment of a post office for the weekly conveyance of letters to all parts, under the commonwealth, in 1649. This system of a central administration was settled upon a more definite footing by the Protector in 1657 ; and, after the restoration of the monarchy, the estab- lishment was adopted and confirmed by the legislature. ' The well ordering of the post offices which had been, theretofore, erected for carrying and re-carrying of letters by posts to and from all parts and places within ' Report of the secret committee of the house of commons appointed to inquire into the state of the law in respect to the detaining and opening of letters at the general post office. July 2, 1844. 434 RECEIPT FROM POST OFFICE. England, Scotland and Ireland, and several parts beyond the seas,' was recognised as 'a matter of general concernment, and of great advantage, as well for the preservation of trade and commerce as other- wise ' ; and the system of one general post office, with fixed fares for the conveyance of letters, was adopted, ' to the end that the same might be managed so that speedy and safe despatches might be had.' Under the Act for the post office, the king had power to grant the office of post-master general and the business of the post office to whom he would, for life, or any term not exceeding twenty-one years, under such conditions and such yearly rent as he might think fit ^ ; and three years after this, the rent, which was then 21,000Z. a year, was settled on the king's brother, the duke of York, in tail ; but, on his accession to the throne, was declared to be vested in the king and his successors as part of the hereditary revenue.^ In Scotland the business was, at this date, a losing concern. So much so that, in 1698, the grantee of the king, though receiving, besides the postage, a subven- tion of BOOL a year for keeping up the post, was com- pelled to abandon the business as a failure. After the legislative union, 1707, of England and Scotland, and the establishment at great charges of packet boats between England and the West Indies, and also on the mainland in North America, the post office was, in 1710, remodelled, and a general letter office and post office for Great Britain and Ireland, North America and the West Indies, was estabhshed ' 12 Car. II, c. .%, s. ,16. - 15 Car. II. c. 14 ; 1 Jac, II. c, 12, . THE KING'S POSTMASTER GENERAL. 435 in London under her Majesty's Post-Master General, with chief offices at Edinburgh, Dublin, New York, and other convenient places in the colonies in America, and the Leeward Islands.^ At this date we were hard pressed for funds to meet the expenses of the war with France — the war of the Spanish Succession — and, on the ground that ' the rates of postage might in many parts, with little burden to the subject, be increased and other new rates granted, which additional and new rates might in some measure enable her Majesty to carry on and finish the present war,' were the collection and payment, of them pro- perly secured — on this ground, the legislature, while strengthening the monopoly of the post-master general by land and by sea, rendering penal the conveyance of packets of letters or the mails in any passage boats other than the ' packet boats,' as well as the conveyance of letters by land in coaches and other vehicles, im- posed the additional and new postage rates, appro- priated a certain amount from the receipts to secure a loan for the purposes of the war, and termed the receipts, revenue from ' duties.' And here it may be noted that this statutory appli- cation of the term ' duty ' to payments for the postage of letters has a special interest in the use which was made of it, at a subsequent date, in an attempt to reckon the revenue from this source as a precedent for the imposition of taxes in the colonies. This happened on the examination of Benjamin Franklin, in evidence before the committee on the Stamp Act for America, , 1 9 Anne c. 10._ 436 RECEIPT FROM POST OFFICE. in 1765. Appointed in 1753, deputy post-master for the colonies in America, he had soon changed the business of the post office in the colonies from a losing concern to a paying one, and he continued to hold the post until his dismissal in 1774, as the result of the rejection of the Massachusetts petition. He was now asked the question : ' Is not the post office, which they have long received, a tax as well as a regulation?' To this he answered : ' No ; the money paid for the postage of a letter is not in the nature of a tax, it is merely a quantum meruit (or payment in return) for a service done.' To return, the net receipt had been, in 1710, when the rates were augmented, 62,0OOZ. Eaised, in conse- quence of that increase, by an amount from 25,000?. - to 30,000/. a year, it reached for the first time, in 1727, the sum of 100,OOOZ. Subsequently, after a period of about 85 years, during which it remained stationary at from 9O,000Z. to 100,OOOZ. per annum, it increased to 122,000/. for 1764, the year after the treaty of Paris which ended the Seven Years' War. By the treaty, our conquests in America, including Canada, were reserved to us, and we obtained cer- tain advantages in the West Indies. ' The increase of trade and commerce and the vast accession of territory we had gained ' since the settlement of the rates in 1710, had ' opened several new communications.' To meet these altered circumstances the rates on letters to America were, in 1765, revised and in some cases reduced, and several new rates were granted.^ In this > 5 Geo. III. c. 25. MR. PALMER. THE ROYAL 'MAIL.' 437 year the net receipt was 165,000^, For the next 10 years it averaged from 150,000/. to 160,OO0Z. ; and after a decline in the war with America, again reached 165,0OOZ. in 1783. The prosperity of the post office dates from the next year, 1784. Hitherto the mails had been carried from post to post by post-boys on horseback, and now the superior rapidity of conveyance afforded by mr. Palmer's new ' coach diligences,' from the French coche and diligence, threatened the monopoly of the post office, which the penalties for the conveyance of letters by coaches proved inadequate to secure in the face of the great advantages of more rapid means of communication. Pitt availed himself of the oppor- tunity to improve our postal system, and, adopting, in supersession of the post-boys, mr. Palmer's diligences as the means for carrying the mails, thus established the ' Eoyal Mail,' a means of conveyance, for celerity and punctuality, hitherto unequalled in the history of locomotion. In this year a separate establishment was created for Ireland,^ the receipt from which was between 12,0O0Z. and 14,000Z. a year for several years, but subsequently had increased by about half as much again, in 1801, when the establishments were re-united. Simultaneously with the important improvement in the means of conveyance of the letters effected by Pitt, the rates of postage were considerably increased.^ The net receipt now rose apace, reaching 304,000/. in 1785 and 409,000/. in 1793 before the Great War. In 1799 1 24 Geo. III. Sess. I. c. 6. " 24 Geo. IIL c. 37. 438 RECEIPT FROM POST OFFICE. it was 7O4,00OZ. ; and, increasing steadily after 1805, was in 1815, the last year of the war, 1,635,000^. The expense of the establishment at this date was 689,611^., of which 552,780^. was for the post office, and the remaining 136,831/., for the packet service. An increase in the rates made in the last year of the war kept up the net receipt to about a million and a half An important change was made in the means of convejdng the post in the fourth decade of the century, when those brilliant phenomena, as the royal mails were considered to be when ' flashing along the high- way the heart-shaking news of Trafalgar ' and Waterloo, suffered a total and a permanent eclipse. Modern invention now added the coaching system to the list of things that have been ; the guard with his blunderbuss was gathered to his predecessors the post-boys and their predecessors the running posts ; and ' the Mail ' was superseded by ' the Eail.' In 1838, by an Act of the first year of her present Majesty, power was given to the post-master general to require the companies of proprietors to convey the mails, at a reasonable remune- ration,^ along the new iron railroads of Stephenson and liis colleagues, in lieu of the old coach roads. At this date the profits of the business stood at about a million and a half,^ which had been about the average for the last twenty years. This million and a half formed an important item in our fiscal accounts, 1 1 & 2 Viot. c. 98, s. 6. ^ 1,556,522/., deducting 120,000/. for the cost of the packet service which was transferred to the navy estimates in 1837 ; cost of post office, 000,756/. ROWLAND HILL. THE PENNT POST. 439 and could ill be spared ; for, in consequence of the loss of three millions a year from, the repeal of the tax on beer in 1830, and three millions more from the repeal of the tax on inhabited houses and other taxes by Althorp, bad harvests, slackness of business, and hard times generally, there had been deficits in the revenue for several consecutive years, while no pro- spect of any immediate improvement in the yield could be discovered in the fiscal horizon, where all was darkness. In these circiimstances, Peel, ever intent upon the maintenance of public credit, felt himself constrained to oppose the introduction of Eowland Hill's plan of a penny prepaid postage upon the self collecting prin- ciple of the stamp revenue, though not denying that 'great social and commercial advantage would arise from the change, independent of financial considera- tions,' and that, ' whenever commercial intercourse is facihtated, the result must be the general benefit of the country.'^ But the excessive rates of postage had created a popular feeling on the subject which pre- vailed to override all fiscal considerations, and Eowland Hill's plan was adopted and carried into efiect.^ The immediate result of the introduction of the penny prepaid postage was to reduce the profits of the business to about a quarter of a million. A book post was added to the business in 1846 ; and in 1857-8 the net receipt was no more than 247,958Z. In 1862-3, however, it had risen to 737,174^. ; ' 1 Speech, July 12, 1839. = 3 & 4 Vict. c. 96. '' Deducting 844,06U. for the packet service. 440 RECEIPT FROM POST OFFICE. and in 1 864-5 was considerably over a million. The increase in the business had been enormous ; and in 1868, the number of letters conveyed was 808 millions, as against 76 milHons in 1839. The Telegraph Act of this year, which enabled the post -master general to acquire and maintain the electric telegraphs, gave the post office a monopoly of the busi- ness, based upon ' the great advantage it would be to the state, as well as to merchants and traders and to the public generally, if a cheaper, more widely extended, and more expeditious system of telegraphy were esta- blished in the United Kingdom.' ^ The payments by the public for business done in the transmission of tele- graphic messages — or ' telegrams,' as Englishmen, who love their words short, were, after some learned dis- cussion on the subject, allowed to term them — were to be made, as the payments for the postage of letters are made, by means of stamps, and form part of the post-office revenue. The net receipt from the post office for 1868-9 was nearly a million and a half'' ; in 1875-6 it had risen to over two millions and a half ^ ; and in 1880-1 reached the large sum of three and a quarter millions,* a high rate of productiveness which it was allowed to retain for 1881-2 and 1882-3, for which years the net receipt was at about the same figure. Public opinion now insisted upon the introduction of Qd. telegrams, and, in consequence of this, the net receipt for 1884-5 was only 2,932,200^.^ 1 31 & 82 Vict. c. 110. '' l,404,478i. ' 2,534,306^. * 8,239,109?. ' Public Expeuditure. Charges on Taxes. Retiu-n, August 10, 1885. COST OF THE TELEGEAPHS. 44 i I^OTE. The cost of the telegraphs was over ten and a half millions. The cost of management of the whole of the post- office business was, in 1868-9, in round thousands : — £ £ Post office .... 2,370,000 Packet service .... 1,030,000 3,400,000 In 1880-1 :— £ £ Post office .... 3,500,000 Telegraphs 1,250,000 Packet service .... 750,000 5,500,000 In 1884-5 :— Post office, &c 7,238,000 2. Revenue from Other Sources. HECEIPTS FROM CERTAIN SOURCES OTHER THAN TAXATION AND THE BUSINESS OF THE POST OFFICE. £ 1, Revenue from the Crown lands (net) . . . 380,000 2, Small branches of hereditary revenue . . . 119,000 3, Eeoeipts from fines and fees in Civil departments, 1 i gi 3 i oo see post, p. 528 J ' ' 4, Receipts in Revenue departments : — Customs £54,097 Inland Revenue .... 29,245 83,342 5, Receipts in Post Office department . . . 265,547 6, Bank of England, profits of issue .... 153,000 7, Post Office Savings Banks, surplus interest from securities 93,000 Total £ 2,627,011 . Total, including Crown lands £3,007,01 1 442 RECEIPT FROM POST OFFICE. The list includes every head of importance in the ' Miscellaneous ' revenue, as it is termed. In explana- tion of some of the items it may be added : With re- ference to 1, Eevenue from the Crown lands, that this item has. of late years, decreased in consequence of the prevailing agricultural depression. That a large portion of the amount under the head 2, ' Small branches of hereditary revenue ' is derived from the balance of an account termed ' the Crown's Nominee Account,' which consists of money and property received under administrations granted to the treasury solicitor of the personal estate of intestates or under forfeitures. The details of 3, 'Eeceipts from fines and fees in Civil -departments ' are given, subsequently, in Appendix II. 4, ' Eeceipts in Eevenue departments ' include, under the head of customs, an item of ;i.9,247Z. for money received from the board of trade in reimbursement of charges incurred under the Merchant Shipping Act, and 13,614Z. for 'receipts from merchants, etc. for special attendance of officers ; ' while under the head of inland revenue the aniount received is almost entirely for fines, seizures, and penalties. Of 5, ' Eeceipts in, the Post Office department ' 255,257Z. is for charges of management of the post office savings banks. 6, The payment from the Bank consists of the whole statutory . allowance out of their profits of issue. This annual payment varies according to the ' circulation ' of the Bank from their ' Issue department.' Formerly (up to 1861) it used to be deducted from their allowance for the management of the national debt.^ 1 3 & 4 Will. IV. c. 98 ; 7 & 8 Vict. c. 32, s. 8 ; 24 & 25 Vict. c. 3, relating to Bank of England Payments. APPENDIX No. II. THE NATIONAL EXPENDITUEE, 18th AND 19th CENTUEIES. CHAPTER I. THE EXPENDITURE GENERALLY. CHAPTER II. THE NATIONAL DEBT. CHAPTER III. THE ARMY AND NAVY. CHAPTER IV. 1. THE DIGNITY AND STATE OF THE CROWN, AND 2. THE CIVIL GOVERNMENT. APPENDIX 11. 445 APPENDIX No. II. THE NATIONAL EXPENDITURE. 18TH AND 19TH CENTURIES. CHAPTEE I. THE EXPENDITURE GENERALLY. In the following General Tabular Statement of Ex- penditure and Eevenue the expenditure is ranged under p. 449. the three heads of — 1. Interest on the National Debt; 2. Expenditure for the Army and Navy (Peace Esta- blishment) ; and 3. Expenditure for the Civil List and the Civil Government. In explanation of the figures given under the last of these heads, viz. Civil list and Civil Government, a few words are necessary. They include the expenditure Under three headings of ' Courts of Justice ' ; ' Annuities and Pensions' granted by parliament: — to the royal family, and to others ; and ' Salaries and Allowances,' which, as the expenditure to which they relate does not come within the annual parliamentary votes, but is charged on the consolidated fund, or national revenue, are to be found in the Eevenue Eeturns under the VOL. II. G G 446 THE NATIONAL EXPENDITURE, heading of * Charges on the Consolidated Fund.' In the subsequent particular tabular statement placed at the head of Chapter IV., part 2, relating to the Civil p. 512. Government, the expenditure under the before-men- tioned heading, ' Courts of Justice,' is included under 1. Justice, Police and Prisons, but no part of that under the • headings ' Annuities and Pensions ' and ' Salaries and Allowances ' is included for the years 1825; 1853, and 1868-9. For 1884-5 the account has been made complete, reddendo singula singulis.^ This explanation is given in order to account for the difference that will be found between the figures given under ' Civil List and Civil Government ' in the general tabular statement, and the sum of the figures under Pp. the particular heads ' Civil List ' and ' Civil Govern- ment.' The difference is about 431,000/. in 1825; 620,000/. in 1853 ; and 450,000/. in 1868-9. Part of this is due to expenditure under ' Annuities to the p. 611. Eoyal Family ; ' which, in this work, has been made a separate head of expenditure ; the rest is due to ex- penditure under the headings in the Eevenue Eeturns, ' Annuities and Pensions ' to others, and ' Salaries ' To attempt to do this all througli would be a difficult task. The heading ' Annuities and Pensions ' comprises, in addition to an- nuities to the royal family, pensions — for naval and military services; political and civil services ; judicial services (the retiring pensions of the judges and the late chairmen of quarter sessions in Ireland) ; and diplo- matic services ; hereditary pensions ; and miscellaneous pensions. The heading ' Salaeibs and Allowances ' comprises a variety of subjects ; the most important are : — the salary of the lord lieutenant in Ireland ; the grant to Queen's colleges in Ireland ; augmentation of stipetids to Scotch clergy ; salaries of the ecclesiastical establishment in the West Indies ; and the salaries of the Speaker, the controller and auditor general, and the assistant controller and auditor. THE EXPENDITURE GENERALLY. 447 and Allowances,' as above mentioned. It may be added that the item in the Kevenue Eeturns relating to the Civil Service Expenditure headed ' Miscellaneous, Special and Temporary,' is left out of the general as well as the particular tabular statement. On reference to the figures given in this General Tabular Statement, it will be observed that the increase under the first of the three heads under Expenditure, viz. that of ' Interest of Debt,' is the main cause of increase in the general expenditure from the commencement of the eighteenth century to the peace after Waterloo. This was due to debt incurred for war. ' Alas,' writes Sydney Smith, after the peace, ' we have been at war thirty-five minutes out of every hour since the peace of Utrecht.' The cost of the wars in which we engaged and the amount added by them to the national debt is given in the Statement, The average cost of each year of war was as follows :— In the war from 1688-1697, 3,627,000/.; in the war from 1702-13, 4|- millions; in the war of the Eight of Search, 4,865,000Z. ; in the Seven Years' war, 10 J millions ; in the war of American Independence, 9f millions ; and, for every year of the long war against Eevolutionary France and Napoleon, 1793-1815, 36 millions.^ Then follows a period of peace in Europe conse- quent upon exhaustion of strength and resources in the Napoleonic wars, which lasts for thirty-seven years, until the outbreak of the war with Eussia in 1853. Erom this point the expenditure under the second ' An amount of Ij million in excess of the average cost of each year of the Crimean war, which was 34J millions. 6 G 2 448 THE NATIONAL EXPENDITURE, of the three heads, viz. that of ' Army and Navy,' shows a rapid increase. Our military fiasco in the Crimea, the warhke propensities of Napoleon III., and the warlike alacrity of France under the empire, aroused sentiments which found expression in a considerable augmentation of our forces ; and the expense of this and, more particularly, the cost of improved artillery and ships, raised the expenditure under this head from a level of about 15-^ millions to a level of about 25-6 millions. Lastly, the expenditure under the third head, which includes the Civil Government, swells apace. The principal cause of this is to be found in the transfer made of expenses connected with the county courts, police, and prisons to the State account, and new expenses incurred for the advancement of Elementary Education. The receipts from taxation are given in the fifth column of the General Tabular Statement; and the sixth shows the net receipt from the business of the post office : these two forming, with about 400,000?. a year, of late years, from the crown lands, and revenue from certain other sources of which the most important p. 441. are stated in Appendix I. (2), the incomeof the United Kingdom. The population is given in the seventh column. GENERAL TABULAR STATEMENT. 449 EXPBNDITUEB EETENtTB Date Interest of Debt Army and Navy Civil List and Civil Government ' Taxes Post Office Popu- lation 1688-97 1702 1702-14 1739 1739-48 1755 1756-63 1775 1776-85 1792 1793-1816 1825 1825-53 1841 1853 1854-6 1868-9 1884-5 "War, in Ireland and against France, costs 32 millions. 1-2 1-3 0-700 4-25 1 -080 I — War, Spanish Succession, costs 50 millions, and adds 21^ millions to debt. 2-0 I 1-8 I 0-938 II 5-75 1 -095 | — War, Right of Search and Austrian Succession, costs over 43 millions, and adds 30 millions to debt. 2-6 2-0 0-958 6-751 -099 War, Seven Years, cost over 82 millions, and adds nearly 60 millions to debt. 4-6 I 3-8 I 1-206 II 10-0 | -176 | — War, American Independence, costs over 97 millions, and adds 117 millions stock to debt. 1-228 11 17-3 I -378 | — 9-3 6 25 War, -with France and Napoleon, costs 831 mil- lions, adds 622 millions to debt. 29-0 I 15-0 I 3-327 || 54-4 | 1-733 1 22^ Peace in Europe. Lowest expenditure in 1834. 29-5 I 14-7 I' 4-7 (j 50-0 | -300 | — 27-7 I 15-6 I 6-340 || 55-0 | -250 | 27^ War in Crimea, costs nearly 70 millions,. 39 raised by creation of debt. Warlike preparations after the break-up of peace in Europe. Law Courts. Police. 26-7 I 26-0 I 10-509 || 64-2 | 1-4 | 30^ Elementary Education. County Police. 28-3 ■ 26-7 19-006 | 77-0 2-9 35 Great Britain only down to 1792, inclusive. 460 THE NATIONAL EXPENDITURE. CHAPTEE II. THE NATIONAL DEBT. 28^ millions a year. The ' Funds ' is the term at present in use to designate the capital of the national debt ; and we speak of the interest as the 'Dividends.' Originally, the 'fund' meant the security for a loan,^ but subsequently it came thus to be applied to the thing secured. The ' dividend ' is, strictly speaking, the share of the annuity created by the legislature when the annuities represented by the ' Funds,' as we now use the term, were made payable half-yearly. It is now used to mean, in a general sense, interest of money in the Funds. The real bargain bet\^^n the state and the creditors is this : the creditor has a perpetual annuity secured upon the national income and payable half-yearly, which the state has power to redeem at lOOZ. for every Zl. of annuity, the present interest of the debt being at the rate of 3/. per cent. The annuities are trans- ferable at the Bank of England, and are represented, in the money market, by capital sums which vary in value according to the circumstances of the time. At present, no safer or more convenient investment ' Thus the Act of 8 & Will. III., c. 20, recites that advances had been made ' upon certain aids, revenues or funds ' thereinafter mentioned. ORIGIN OF THE NATIONAL DEBT. 451 exists than that of ' money in the Funds,' ' the sweet simplicity of the 3 per cents.' But, if the pubhc credi- tor now ' dwells in a fortress of security,' the position, in former times, of those who advanced money for the use of the crown was that of the man who ' built his house upon the sand.' The methods employed by the kings of England for obtaining loans from their subjects in former times were many and various ; but they had this in common that the lender of the money always lost the interest, and, very often, the capital. This circumstance was noticed in the Privy Seals, issued by James I., in July 1604, as security for the monies advanced to him, in which it is admitted, in terms, that ' the omission in former times to repay some loans, in regard of violent necessities,' might ' make a doubtful- nesse how the promise for repayment of whatsoever this Privie Seal of ours shall assure you,' might be kept. But the old system, which was one of extortion, more or less thinly veiled, was, eventually, suppressed by the Petition of Eight (March 1628), and no man thereafter was to be ' compelled to make or yield any gift, loan or benevolence, without common consent by act of parhament.' Adequate security to the public creditor was afforded, under the commonwealth, by means of mort- gages on the produce of the excise ; and it was mainly with a view to discharge these mortgages that the tax was reimposed in the comprehensive form established under the Protectorate in 1656. After the restoration of the monarchy the system of loans in anticipation of revenue was continued ; but 452 THE NATIONAL EXPENDITURE. the most Mstorically famous loan of the reign was tlae unfortunate Bankers' Debt. This debt, originally 1,328,526/., carrying interest. at 6 per cent., though secured by letters patent of the king on the hereditary excise, remained unprovided for after the shutting up of the excheiquer in 1672. Subsequently, it formed the subject of a protracted law suit, in which judgment was given against the crown, and eventually was settled by parliament, in 1699, at half rates. Meanwhile, in 1685, a sum of 84,000Z. had been borrowed by James II. in anticipation of the produce of the new duties on imported linen granted in that year ; and this sum and the Bankers' debt, wliich was subsequently made redeemable and settled at 664,263/., formed the national debt in 1688. In the following tabular statement the amount, at the dates specified, of the capital debt, funded and unfunded, is given in the second column ; the third column gives the total annual charge for the interest of the debt, funded and unfunded, including the expenses of management and the amount payable in the form of life and terminable annuities. The statement relates to Great Britain only down to the year 1793 ; after which it includes the debt for Ireland. The fourth column contains notes of the cause of the increase or decrease of the debt. TABULAR STATEMENT OF THE DEBT. 453 The National Debt, 1694-1885. Date Capital Annual charge Cause of increase or decrease 1694 6,734,000 818,000 Revolution expenses, Ire- land, War with France. 1697 Montague's General Fund or Mortgage. 1702 12,750,000 1,200,000 War -with France. 1715 37,000,000 3,100,000 War. Spanish Succession, 1702-13. 1717 The Aggregate Fund, Walpole's General Fund, and the Sinking Fund. 1727 52,500,000 2,360,000 War with Spain, 1718- 21. Interest reduced, 1717, 1727. 1739 46,400,000 2,000,000 The Sinking Fund. 1749 77,000,000 3,200,000 War. Eightof Search and Austrian Succession, 1739-48. 1755 72,500,000 2,650,000 - Interest reduced, 1750. 1775 126,000,000 4,650,000 Seven Years' war, 1756- 1787 Pitt's Sinking Fund and the Consolidated Fund. 1793' 239,000,000 9,400,000 War. American Inde- pendence, 1776-85. 1816 846,000,000 32,100,000 War with France and Napoleon, 1793-1816. 1829 Abolition of the Sinking Fund. 1829 71)6,000,000 29,060,000 Interest reduced, 1822, 1824. 1853-4 769,000,000 27,700,000 Ditto, 1830, 1844, 1854. 1856-7 808,000,000 28,550,000 War, Crimean, 1854-6. 1868-9 749,314,000 26,691,000 1884-5 654,000,000 28,296,000 Increased 'annual charge,' 1875. Term. Annui- ties, 1883. ' Great Britain and Ireland. 454 THE NATIONAL EXPENDITURE. Formation of the Bank of England. Commencement of Funding Debt. The increase in the amount of the debt between 1688 and 1694 was mainly due to loans necessary for the expenses incident to the Eevolution and the war with Louis XIV. Of the 6f millions representing capital, only 1,200,000/., which was advanced in this year by the Baj^k of England on their incorporation, was funded, at 8 per cent., that is to say, a perpetual annuity at this rate was secured to the Bank redeem- able by the government of the day ; the remainder was unfunded debt. In addition to this there existed debt in the form of annuities to the amount of 313,000/. Montague's General Fund or Mortgage. The plan of raising loans was by means of talUes ^ of loan charged on and in anticipation of the produce of taxes either already granted, or granted for so many years and specially appropriated as a fund or security for the repayment of the capital and interest of the loan ; and public credit was vastly strengthened when, in 1697, Charles Montague, who had been chancellor of the exchequer since 1694, on the discovery that the creditors had, in several instances, inadequate security in consequence of the shortcoming in yield of several of these taxes, and that, therefore, their tallies had fallen to a discount, further secured them, by means of the General Fund or Mortgage, which, combining several of the loans, extended several of these taxes and con- ' The tallies were sticks notched to show the sum represented. THE DEBT. COMMENCEMENT OF FUNDING. 455 solidated them so as to form a general fund or security for all the loans.^ The plan of securing a loan by means of the grant of a tax specially appropriated to the purpose for a number of years sufficient to produce the sum required to pay off capital and interest, continued in use for some time subsequently. When a further loan was required, the same tax could be and was, usually, granted for an extended term to secure the new loan. Lastly it came to be granted in perpetuity. That is the history of most of the taxes imposed in this country for some years after the Eevolution. The New East India and South Sea Companies. As the Bank of England had been formed, in 1694, upon the basis of a loan to the state, so, four years later, in 1698, the Kew East India Company was formed for raising a loan of 2,000,000^., as well as for settling the trade to the East Indies, This loan, also funded at 8 per cent., formed, with the debt to the Bank, 3,200,000/. of funded debt, out of a total capital debt of 12f millions in 1702. In consequence of the feeling that prevailed regard- ing the insecurity of the government, the loans effected in the reign of William had all been expensive proceed- ings. None were effected at less than 6 per cent., besides various advantages to the lenders in the form of life annuities or annuities for terms of years. The loans in the reign of queen Anne, for the war of the Spanish Succession, which added 21^ millions to the debt, were also obtained on expensive terms, but publie credit was ' 8 & 9 Will. III. c. 20. 456 THE NATIONAL EXPENDITUKE. considerably strengthened by the formation, in 1711, of the third great company which in these times was created for fiscal purposes. This company, Harley's South Sea Company, incor- porated in September in that year, was composed of holders of unsecured debt incurred in the war to the amount of about QJ millions,^ who now obtained a grant of certain privileges of trading to the South Seas, and, agreeing to have their debts converted into stock with accompanying annuities at 6 per cent, ob- tained the security of an extension of several taxes, ' that a good, sure and lasting fund might be settled and established for paying the annuities.' Formation of the Aggregate Fund and Walpole's General Fund with the Sinking Fund. Reduction of Interest in 1717. In 1715, after the peace of Utrecht, when Walpole was first placed at the head of the treasury, holding the posts of first lord and chancellor of the exchequer in the administration of his brother-in-law, lord Towns- hend, the capital of the debt amounted to 37 millions, of which 29-|- were funded debt. The interest on some of the debts ran as high as 8, and on none was lower than 6 per cent., and the total annual charge was 3,10O,000Z. The rate of common interest for money had been reduced, in 1714, from 6 to 5 per cent. ;^ and public credit had been strengthened by the exten- sion of several taxes which, before only temporary ' Increased to 10 millions, 1714. Tlie interest on their debt was reduced, in 1716, from 6 to 5 per cent. ' 12 Anne, Stat. 2, c. 16. 'THE YOUNG MAN WITH THE SPONGE.' 457 taxes, were now granted in perpetuity and formed, with other taxes, into a general fund or security termed the Aggeegatb Fund.^ Walpole was, therefore, able, after the defeat of the pretender, to take measures for the reduction of the interest on the debt, and for repay- ment of the principal. Addison, in his ' Dream,' ^ had represented the Pretender as a young man with a sword in the right hand which he brandished at the Act of Settlement, and (' so a citizen who stood near him whispered in his ear ') a sponge in his left hand ; and no doubt he was correctly represented as an object of terror to ' the fair virgin, Public Credit;' but after 1716, this risk of the use of the sponge, to wipe out the national debt, was over. The Bank, whose debt, raised by advances subsequent to its incorporation, now amounted to nearly 3J mil- lions, and the other creditor companies, were willing to accept a reduced interest on their debts upon the terms offered, and Walpole, having secured their co- operation, moved his resolutions on the subject in the house of commons on March 23, 17l7. The disruption of the administration through the intrigues of Sunderland prevented him from car.rying his plans into effect ; but he left his Bill to his successor in office saying : — ' I hope it will not fare the worse for having two fathers.' Walpole's measures passed into law with Stanhope in office ; and by means of one of them, consisting of a reduction of interest on the debt, from 6 to 5 per cent., a saving of 324,456Z. a year was effected. 1 1 Geo. L, Stat. 2, c. 12. » Spectator, No. 3. 458 THE NATIONAL EXPENDITURE. The other measure consisted of a general system for the reduction of the principal of the debt. The produce of a number of taxes was formed into a single fund termed the General Fund ; and the surplus of the produce, after payment of the charges thereon, was to be appropriated to the payment of the principal and interest of debts incurred before December 25, 1716, and declared by parliament to be national debts. The surplus thus devoted to the abolition of debt was termed the Sinking Fund ; ^ but it may be as well to state, at once, that this Sinking Fund was before long diverted from its original purpose, and, eventually, became the principal fund from which the charge for the public expenditure was defrayed. In 1720, by the Act which formed the prelude to that scene of excitement, trickery, confusion and dis- may, known as ' the South Sea Bubble,' the South Sea Company, in consideration of an enormous payment, were empowered to consolidate the several floating debts by allowing the creditors to subscribe them into South Sea stock ; and provision was made for the con- version of the irredeemable terminable annuities (long and short), which formed part of the national debt, into redeemable perpetual annuities. In the result 14 millions of stock were created from redeemable debts and 12 millions from irredeemable annuities, in all, 26 millions, with an annual charge of 1,264,000Z. ; forming a capital debt to the South Sea Company of 37,800,000^., with l,85O,000Z. of annual charge. ' 3 Geo. I. c. 9. WALPOLE>S SINKING FUND. 459 Reduction of Interest by Walpole in 1727. The total capital of the unredeemed debt was now, in 1721, 54 millions, of which 49f were funded debt, and the annual charge was 2,852,000/. ; but, in 1727, Walpole, who was again in office, was able to reduce _ the rate of interest from 5 to 4 per cent, at a saving of 340,000/. a year. In 1736 the Craftsman says, 'The vast load of debt under which the nation groans is the source of all these calamities and gloomy prospects of which we have so much reason to complain.' But the real griev- ance was the amount of taxes to be paid for interest ; and, on this ground, in 1738, the Sinking Fund was practically abandoned.^ At that date about 16 millions had been applied from the fund to the payment of principal of debt, but the total of the debt, which had been increased by the expenses of the short war with Spain, 1718-21, was still as high as 46 millions. The cost of the war of the Eight of Search includ- ing the war with France about the Austrian Succession which followed, 1739-48, was over 43 millions, and, of this, 30 millions were added to the debt. We now abandoned the system of borrowing money in termin- able annuities — Hfe annuities or long annuities or ton- tines, that is to say, an annuity with the benefit of survivorship,"'^ finding, by experience, that the sub- scribers to a loan, who generally have in view the sale ' Return Pub. Inc. and Expend. II., p. 281. » From Tonti, a _NeapolitRn, who first proposed this form of loan in 1653. 460 THE NATIONAL EXPENDITURE. of the allotted stock as soon as possible, invariably prefer a perpetual annuity redeemable by parliament to an irredeemable annuity for a long term of years of about an equal amount, in consequence of the steadi- ness in value which makes it the more convenient transferable stock. The war of the Austrian Succession ended with the peace of Aix-la-Chapelle, towards the close of 1748 ; and in 1749 the total debt of Great Britain was as follows : — Capital :— £ £ Funded . . . . 71,000,000 Unfunded 6,000,000 -77,000,000 Interest, annuities, &c. : — Funded, inclading management 2,747,000 Unfunded 233,000 Annuities 208,000 -3,188,000 From 1750 to 1775. 'Reduction of Interest by Pelham. Pelham, now at the head of a strong administration, formed upon a broad basis inclusive of members of all parties, and, therefore, termed the Broad Bottom ad- ministration, held the two posts of first lord of the treasury and chancellor of the exchequer, as they had been held by Stanhope and by Walpole when prime ministers with seats in the house of commons. Nothing, it was allowed, could ' so effectually contribute to make the trade of the kingdom flourish and render his Majesty's reign glorious to posterity, as the lessening of the public debts and incumbrances, consistent whh justice and ■REDUCTION OF INTEREST BY PELHAM. 461 faith ; ' and in that view a third reduction of the interest on the debt was effected, in the following manner : — The 4 per cent, debt, or ' capital attended with annuities or interest at the rate of 4 per cent, per annum redeemable by parliament,' was as follows : — £ To Bank of England • 8,500,000 „ East India Company 3,200,000 „ South Sea Company ^ 27,250,000 „ Proprietors of annuities payable at Bank . 18,500,000 „ „ „ „ „ „ exchequer 312,000 forming a total of nearly 57,800,000/. This debt was now to be subscribed into annuities of S^ per cent., to continue at that rate of interest until December 25, 1757, after which the interest was to be reduced to 3 per cent.^ The saving effected by this reduction was 563,000Z. per annum. Creation of the ' Consols ' and ' Reduced 3 per Cents.' Shortly after this, two important consolidations of stock were effected. The first had relation to several 3 per cent, debts which were secured upon several different funds consisting of taxes appropriated to the purpose. These various funds were, in 1752, added to the Aggregate Fund from which the Sinking Fund was fed, and the annuities were ' consolidated into one joint stock of annuities ' and charged upon the Sinking Fund. 1 When the interest on the Bank debt was lowered, in 1717, 2 millions of exchequer bUls were funded at 5 per cent. ; the debt had been further increased by 4 millions of South Sea stock purchased by the Bank, in 1722, at 5 per cent. In 1794: when the Bank annuities were reduced to 4 per cent., the amount of the debt to the Bank was 7,776,0001. * 41 millions had been paid off between 1728-33, principally out of the Sinking Fund, and 2 millions more, in 1737. 3 23 Geo. II. c. 1. VOL. II, H U 462 THE NATIONAL EXPENDITURE. The annuities thus dealt with, representing capital to Dividend, an amount, in round numbers, of 9,000,000^., were made payable in half-yearly dividends, on January 5 and July 5, days whieh represented Christmas day and Midsummer day, under the rearrangement of the calendar which Chesterfield had been so instrumental in effecting in 1751. The other consolidation had relation to the annuities at 3^ per cent, subscribed under the Act of 1750. These, formed into a single joint stock of annuities, were also charged upon the Sinking Fund, or surplus arising from the Aggregate Fund, to which the several funds on which they had previously been secured were now added, and were made payable in half-yearly dividends, on April 5 and October 10, which represented the old Lady day and Michaelmas. Eepresenting capi- tal to the amount, in round numbers, of 17,500,000/., they were, as before stated, to be reduced after De- cember 25, 1757, to 3 per cents.^ Such was the origin of the famous stocks so largely increased by additions under the provisions of loan and" funding Acts in after years : — the 3 per cent, con- solidated annuities or, shortly, the ' Consols ' and the ' EeDUCED 3 PER CENTS.' Four years after this, we commenced the war known as the Seven Years' War; and our debt, which had decreased to 72-|- millions for 1755, the year before the war, had been considerably increased by loans before 1761, when the particulars of the capital were as follows : — ' 25 Geo, II. €. 27. THE 'CONSOLS' AND ' EEDtJCED 3 PER CENTS.' 463 3 per cents. : — £ Bank of Bngknd 11,600,000 East India Company 4,200 000 South Sea Company 27,100,000 Consols and Reduced 40,300,000 3i per cents., part redeemable in 1771; 4^ millions to be reduced to 3 per cents, in 1782 6,000,000 4 per cents., to be reduced to 3 per cent, in 1781 8,240,000 forming a total of about 97-J millions. The total of the loans in the war was 53 millions, and the amount of capital funded, 54i millions ; and in 1775, the year before the outbreak of the war with America, the debt of Great Britain was as follows : — Capital : — Funded Unfunded .... £ £ . 123,000,000 . 3,000,000 1 0^ c\r\f\ f\r\f\ Interest, annuities, &c. : — Funded, including management Unfunded .... Annuities . . 3,970,000 220,000 460,000 4.650.000 The War of American Independence. The war of American Independence was still more costly to us, the loans in the war amounting to 91 millions. Moreover for this 91 millions cash we funded capital to the amount of 115 millions. This excess in the capital funded when compared with the amount of the loans was due to an alteration, in 1781, in the practice of raising loans by the creation of funded debt. Hitherto the rule, with some few exceptions, had been not to assign to the public creditor stock exceeding in amount the sum advanced by him to the government. H H 2 464 THE NATIONAL EXPENDITURE. The interest upon the loan of the year was regulated by reference to the state of the money market ; and annuities for terms of years or for Uves were granted as bonuses on many of the loans, or advantages con- nected with lotteries, the bonuses to the fortunate tickets frequently amounting to a considerable sum ; but, as a rule, no addition was made to capital stock. This practice had been followed by North, and in 1780, for the loan of 12 milUons, 4 per cents, at par were given with 1^. 16s. 3c?. long annuity. In 1781, how- ever, he was compelled by the taste of the public for loans at a low rate of interest, to depart from the ordinary practice and negotiate the loan of 12 millions in that year by assigning to the public creditor 18 millions of 3 per cent, stock and 3 millions of 4 per cent, stock. Hardly any act of his caused more severe remarks in the House and outside the House, than the negotiation of this loan. All sorts of advantages, it was said, had been given to partisans of the govern- ment. It is questionable, however, whether at the time so large a sum could have been obtained, at once, on better terms ; and, in the event, to cover the four loans in 1781-4 inclusive, amounting to 43^ millions, capital stock was created to the amount of 65^ millions. From 1785 to 1793. Cv.ation of the Sinking Fund and the Consolidated Fund. After the war, steps were taken by Pitt for the reduction of the debt. In 1786, having formed a committee of the house of commons to inquire into the ordinary income and expenditure of the country. THE DEBT. PITT'S SINKING FUND. 465 upon their report that, in time of peace, a surplus of about a million might be expected, he settled and proposed a new scheme which he recommended to the House as ' the establishment upon a spirited and per- manent plan of the means of relieving the nation from all incumbrances ' ; and the plan was as follows : — A set of trustees, being personages of the highest position, were to be appointed Commissioneks foe the BEDUCTION OF THE IfATIONAL DEBT. To them 1,000,000^. was to be paid annually out of the national income ; and Jbr them any existing life or terminable annuities which expired were thenceforth to be renewed in the form of permanent annuities. With the money from these som'ces the commissioners were to purchase stock which was to be transferred into their names ; and the divi- dends which they would thenceforth receive from this source were to be invested, as the rest of their income, in further purchases of stock. This process was to be continued until the time when the income of the com- missioners from all sotirces should amount to 4 millions, when the dividends on the stock purchased were to cease and the stock was to be cancelled, and any life and terminable annuities should from their expiration cease.^ This scheme for a Sinking Fund passed into law, and in 1792 and 1793, Pitt was able to reinforce the fund by — an additional 200,000^. a year, to be paid from the national income ; ^ a further sum, to be paid to the ^ This provision was repealed, in 1802, by the Sinking Fund. Act, 42 Geo. in. c. 71. " This amount was appropriated to the Sinking Fund by annual grants until 1802, when it was made a permanent charge out of tho Consolidated Fund. 466 THE NATIONAL EXPENDITUEE. commissioners annually, equal in amount to any saving which might be effected by the reduction of interest on the national debt ; ' and a provision which proved, in the events that happened, to be of the highest import- ance, viz. that the income of the commissioners should be increased by 1 per cent., to be paid to them, upon all new loans for public purposes.^ This Sinking Fund was fed from a general reservoir, fomaed by Pitt for the reception of the produce of all the peiTnanent taxes from which the national income is derived, and termed the Con'solidated Fund. About 10 millions of 3 per cent, stock, carrying dividends to the amount of 300,000/. a year, had been purchased by these commissioners for the reduction of the national debt, before the outbreak of the war with Eevolutionary France ; and this was the only change in the funded debt effected between 1786 and 1793. The particulars of the capital debt now stood as follows : — 3 per cents. ; — Bank of England East India Company. South Sea Company . Consols and Reduced 4 per cents. . 5 per cents.' . £ 11,600,000 4,200,000 22,500,000 139,000,000 32,750,000 18,000,000 In this year the debt to the East India company was consolidated with the 3 per cents, reduced, and the consolidation was to be taken as a redemption of ' This proiaion was repealed in 1802. ^ 26 Geo. III. c. 31 ; 32 Geo. III. co. 12, 55. ' Formed by funding unfunded debt, in 1785 and 1786. 'THE CONSOLIDATED FUND.' 467 the debt as between the company and the public.^ And, as the magnitude attained by the Consols, Ee- duced, and 4 per cent. Stocks has dwarfed into com- parative insignificance the debts to the Bank and the South Sea company, it will be well to take the oppor- tunity of clearing these from the score as particular items. Their future history is stated as briefly as possible in the note below ;2 and henceforth they are included in the general heading of capital debt. The total of the items before stated is about 228 millions, which, with about 9 millions of unfunded debt, formed the debt for Great Britain in 1793. The debt of Ireland (funded and unfunded) amounted to 2J mil- lions ; and the total unredeemed debt of Great Britain and Ireland was as follows : — Capital :— £ £ Funded .... 229,000,000 Unfunded . . . 10,000,000 239,000,000 Interest, annuities, &c. : — Funded, including management 7,700,000 Unfunded .... 400,000 Annuities . . . 1,300,000 9,400,000 ' 33 Geo. III. c. 47. ' The future history of the debt to the Bank, hriefly stated, is that, increased to nearly 15 milJions in the first decade of the nineteenth cen- tury, it was subsequently reduced to 11 millions, its subsisting amount at the present day. Of the debt to the South Sea company, 15 millions were purchased on account of the Sinking Fund between 1786 and 1830, and subsequently cancelled ; the remainder, reduced by the operation of the new Sinking Fund to 8,890,000/., was, in 1853, commuted or dis- charged under an arrangement effected by Mr. Gladstone. 7^ millions were paid off; and more than 1^ millions, funded in 103,000i 3J per cents, and 1,188,000/. 2^ per cents. Loan con- tractors. 468 THE NATIONAL EXPENDITUUE, From 1793 to 1816. In the Great War, which lasted, with a short in- terval of peace, until 1816, we received, in cash, 498 millions from loans. But this sum by no means repre- sents the amount of debt we incurred. Pitt managed his loan transactions through loan contractors, and not, as had formerly been the practice, by means of open subscriptions at the Bank for persons accepting the terms proposed by government ; and, as the loan con- tractors advised him, or he was otherwise induced to believe, that the public preferred to lend money in a low priced stock, borrowed all his loans in nominal capital, fixing the funds in which the loan should be made, giving public notice for tenders, and assigning the loan to the person or persons proposing the lowest terms. Of this system of dealing with loan contractors, intermediaries who have to make the business profit- able to themselves, but who, on the other hand, have special facilities for money transactions, and borrowing in nominal stock, which may have been at the time a necessary system, we have only here to record the re- sults : for the loan of 7-^ millions, in 1796, 145^. 3 per cents, and 5s. &d. long annuity were given ; in 1797, 175Z, 3 per cents., 20^. 4 per cents., and 6s. long an- nuity, for the loan of 14-^ millions ; and, in 1798, no less than 200/. 3 per cents, and 4s. lid. long annuity, for the loan of 17 millions. The funds had now reached the lowest point of depression recorded in their history. On September 20, 1797, on the receipt of news from Prance that negotiations for peace with the Eepublic THE FUNDS AT d7. 469 had failed, tHe price of 3 per cents, went down to 47fths. - . Under the combined operation of Pitt's plan for the Eevivai of redemption of the land tax by the purchase of stock, and the imposition of the income tax, the national credit revived ; but, notwithstanding this improvement in our financial position, in the result, for the 498 millions we received in cash for' loans in the war, we had to create debt in the form of stock to the amount of 773 millions, with annuities or dividends amounting to 24 1 millions and special annuities to the amount of 879,000Z. Add to this that we funded, that is to say, converted into stock, unfunded debt to the amount of 86 milhons, creating capital stock to the amount of 108 millions, and we have a total of 881 millions, with annuities or dividends to the amount of 29^ millions and terminable annuities to the amount of 884,000^. This amount should not, however, be scored up as all unredeemed debt. During the whole of this borrow- ing period, the Sinking Fund continued in operation, absorbing about one-third of the whole amount raised in loans, with this result that as the annual charge for Loans for interest on the total of the loans amounted to bl. 3s. 9rf. ingPund. per cent., while the interest on the debt purchased by the commissioners amounted to 4Z. 16s. %d. per cent., the difference of interest, equal to 7s. Id., or more than l^rd per cent., on a total of 192 millions, amounting to 889,668/. per annum, represents the additional charge to the public due to the effect of the Sinking Fund operations up to 1817. 470 THE NATIONAL EXPENDITURE. The total unredeemed debt for the United Kingdom stood in 1816,^ as follows: — Capital :— & & Funded 796,000,000 Unfunded 50,000,000 846,000,000 Interest, annuities, &c. : — Funded, including management . 28,000,000 Unfunded 2,200,000 Annuities 1,900,000 32,100,000 From 1816 to 1829. Abandonment of the old Sinking Fund. Twelve years passed before we worked ourselves free from the oppression of the incubus of the Sinking Fund. Notwithstanding a resolution passed by the house of commons in June 1819 that, in order to provide for the exigencies of the pubhc service and at the same time make such progressive reduction of the national debt as might adequately support pubhc credit, it was necessary that there should be ' a clear surplus income of the country over the expenditure, of not less than 5 millions a year ' ; and notwithstanding the effect given to this resolution by the imposition of taxes for the purpose, the Sinking Fund, which now absorbed 15 millions a year, was allowed to continue. Eventually, however, a practice of easing off the weight of it, by borrowing from the commissioners a part, more or less, towards the expenses of the year, commenced and sub- sequently became customary, until it was discontinued ' Year ended January 5, 1817. THE SINKING FUND ABANDONED. 471 in 1822 upon- the recommendation of the. Committee of Public Accounts.'^ This committee reported that steps should be 'taken to reduce the amount of the nominal Sinking Fund, and accordingly a considerable portion of the redeemed capital stock of funded debt in the names of the commissioners for the reduction of the debt was cancelled in this year,^ and the remainder in 1823. A new plan was now started : 5 millions a year was to be set apart out of the Consolidated fund and issued quarterly for the Sinking Fund ; and this plan prevailed until 1828, when the Finance Committee of that year recommended that, every year, in estimat- ing the supply and ways and means the necessity of a surplus of not less than 3,000,000^. should be kept in view ; but they were careful to add that in case the eventual annual surplus should not amount to 3 millions, the deficiency ought not to be supplied by borrowing. After this it is not surprising to find lord Congleton urging, on behalf of the taxpayers, the claim for reduc- tion of some of the vexatious and pernicious taxes with which the nation was then oppressed, as superior to that of the Sinking Fund. And eventually, in 1829, we abandoned this complicated device for persuading people that they can pay off their debt by any other means than that of providing a large excess of revenue over expenditure.^ Before parting with the Sinking Fund, if we sum Cost of the « 1 . 1 n 1 Sinking up the expense to us of this plan tor the payment Fund. of debt which amused and deluded our ancestors, we I Report 31 July, 1822. ' 3 Geo. IV. cc. 68, 89, 68. ' 9 Geo. IV. c. 90 : 10 Geo. IV. c. 27. 472 THE NATIONAL EXPENDITURE. find that, in increased annual charge of our funded debt, the Sinking Fund cost us 1,627,765^. Henceforth, we contented ourselves with a very simple arrangement, by which the ' actual surplus revenue of the United Kingdom beyond the actual annual expenditure' is devoted to the payment of debt. Under this arrangement, which continues in operation at the present day, every quarter, the sur- plus revenue for the year up to that quarter is ascer- tained by the treasury, and is paid over to the national debt commissioners to be by them applied towards the reduction of the debt.^ To resume. Between 1816 and 1830 funded debt was created for loans, principally on account of the Sinking Fund, to the amount of 141 millions ; but, on the other hand, we redeemed 173 millions, 160 by means of the Sinking Fund, so that the total was decreased by about 32 millions. Reduction of Interest. In the same period the annual charge upon the debt was reduced by more than \\ million by conver- sions of stock. In the war, we had funded, in 5 per cent, stock, a considerable amount of unfunded navy debt, the loyalty loan of 18 millions in 1797, part of the loans in 1814 and 1815, and other sums amounting altogether to no inconsiderable portion of the funded debt. Where are those martyr'd saints the 5 per cents ? » 10 Geo. IV. c. 27 ; Exchequer and Audit Act, 186(>— 29 & 30 Vict. c. 39. ' THOSE MAETYR'D SAINTS, THE 5 PER CENTS.' 473 wrote Byron in 1823. The answer' is that to the 5 per cents. Yansittart had apphed, in the previous year, the principle of the reductions of interest effected in 1717, 1727, and 1750. Converted, in 1822, to 4 per cents., they were now represented by 157 millions of new stock at that reduced rate, the gain to the pubhc being 1,200,000/. a year. The poet did not live to assist memory by a chronicle in song of a similar reduction effected by Eobinson in 1824 as regards the old 4 per cents., which were con- verted into 76 millions of stock at the reduced rate of 3-J per cent., at a further saving to the public of 381,242/. a year. In 1829 ^ the unredeemed debt stood as fol- lows: — Capital :— i, £ Funded 771,000,000 Unfunded 25,000,000 796,000,000 Interest, &c. : — Funded, and management , . 25,600,000 Unfunded 780,000 Annuities 2,680,000 29,060,000 From 1829 to 1869. Between 1829 and 1869 we created funded debt for loans and by funding exchequer bills to the amount of 90 millions, including 20 millions for the slave compensation loans of 1835 and 1836 ; 9 for the loan slave for the Irish famine in 1847 ; 1\ for the deficiency of ^°''"'' * Year ended January 5, 1830. 474 THE NATIONAL EXPENDITURE. revenue in 1848 ; and 43 for the war with Eussia. On the other hand, we redeemed 121 millions, so that the total funded debt was decreased by about 31 millions. In the same period the annual charge on the funded debt was reduced by 2 millions, the result of further conversions of stock : — (1) In 1830, the 4 per cents, representative of the ' martyr'd saints ' of 1822, were exchanged for new stock, and henceforth were re- presented by 150 millions of 3^ per cents., irredeem- able for ten years,^ the saving to the public being 750,000/. a year. (2) In 1844, this 3i stock, then 157 millions, and all the other unredeemed 3^ per cents., viz., those formed in 1824, now 67 millions, those formed in 1818, now 9 millions, and 14 millions of old 3^ per cent, stock and debentures, were reduced to 3^ per cents, for ten years. (3) On October 1 854, these 31 per cents, became 248,000,000/. of New 3 PER CENTS. The saving to the public from the conver- sions of stock in 1844 and 1854, was 621,500/. and 618,500/., or, in all, 1,240,000/. a year. We have now before us the three great stocks which represent, practically, the capital of the national debt ; and in 1863 they were, in amount, as follows : — £ Consols 395,000,000 New 3 per cents 220,000,000 3 per cents. Keduced 106,000,000 Let us now place side by side the totals of the un- redeemed debt in 1816 and 1869 : — ' 11 Geo. IV. c. 13. THE SLAVE LOANS. WAE WITH RUSSIA. 475 Capital:— 1816 igeg Funded .... J796,000,000 . 16740,000,000 Unfunded . . . 50,000,000 9,000,00 J846,000,000 £749,000,000 Interest, &c. : — Funded and management £28,000,000 . £22,500,000 Unfunded . . . 2,200,000 . 200,000 Annuities . . . _ 1,900,000 . 4,000,000 £32,100,000 £26,700,000 This shows, in the 53 years, a reduction, eiFected in the total of the capital debt, amounting to 97 millions. The increase under the head of annuities should be noted as of special importance. The policy of the reduction of debt by means of terminable an- nuities in the nature of a sinking fund had prevailed for more than half a century, and had recently been acted upon by the late earl of Beaconsfield, who, in 1867, on the expiration of the Dead Weight Annuity,^ had created annuities terminating in 1885 to the amount of If millions, in cancellation of 24 millions of debt.^ From 1869 to 1885. The nation had now entered upon that memorable period in which our advance in prosperity was ' by leaps and bounds.' The yield of the revenue fre- quently exceeded the cautious estimates upon which the chancellor of the exchequer had been advised to base his budget. Under the provisions of the law, ' The Dead Weight Annuity was the outcome of an intricate plan of Mr. Vsmsittart's, in 1822, for extending the annual charge for what is termed 'non-effective service' — half-pay, pensions, &c., an item which had increased to considerahle dimensions since the war, so as to cover, at a reduced rate, a longer period of years than that which the existing charge was estimated to cover. « 30 ^ 31 Vict. c. 26. 476 THE NATIONAL EXPENDITURE. every quarter, the overflow for the year reckoned 'up to that quarter, was caught and conveyed into the hand^s of the National Debt commissioners, to be applied by them to the cancellation of debt, and in the whole the surpluses thus' applied amounted to a considerable sum. But our attention had been and still was mainly de- voted to the reduction of taxation ; and in the seven years, 1864-70, inclusive, we gave up over 11 millions of revenue from taxes repealed or reduced, on fire in- surance, sugar, tea, timber, pepper, marine insurance and corn, including Id. of income tax, the rate for which was increased by the additional 2d. of 1870 to 6d., as against 7d., the rate for 1863. In short, no distinct effort was made, in this period of remarkable prosperity., to ej^ect any such substantial reduction of the debt as, in the circumstances, might have been expected. This ' evidence of a feeling that seemed to be gain- ing ground that all we had to do was to make things easy for the present and disregard alike those that came before and those who were to come after us,' gave occasion for a trenchant attack upon ' English luxury as it is now called in France ' made by the present viscount Sherbrooke in his famous speech on the National Debt, which was subsequently published with the pregnant motto — ' Cur, improbe, cara^ Non aliquid patriae tanto metiris acervo.' But the evidence produced in this speech of ' such prosperity in a nation as the world never saw,' failed to convince the nation of the advisability of a large and immediate reduction of debt. On the contrary, it THE DEBT. LOWE ON ' LUXURY.' 477 was considered to prove that we could easily continue to bear a weight of from 600 to 700 millions. Statesmen on both, sides of the House took a iQore careful and a less light-hearted view of the burden of our liabilities ; and in 1875 a further provision for the gradual extinction of debt was made by the late earl of Iddesleigh, then sir Stafford Northcote, as follows : — The annual charge for interest and annuities on the debt, which was then 27|- millions, would be raised — in 1875-6 to £27,400,000, „ 1876-7 „ 27,700,000, „ 1877-8 „ 28,000,000, which thenceforth was to be considered to be the ' annual charge ' on the debt. The extent to which this ' annual charge ' was nominal or merely statutory, formed a New Sinking Fond, or sum applicable, in the same way as the old Sinking Fund, to payment of debt.^ The annual charge reached its full dimension of 28 millions ; and in 1880 the new sinking fund, which was then 625,000Z., was taken for five years in part payment of the warlike expenditure relating to the Eastern question. A third sinking fund was created, under the National Debt Act, 1881 ^-^applicable to certain per- petual annuities to be created, under the Act, in lieu of exchequer bonds to the amount of 7f miUions. The policy of terminable annuities was continued by the National Debt Act, 1883. Annuities to the amount of over 5 millions would expire in 1885.^ ' Sinking Fund Act, 1876—38 & 39 Vict. c. 45. 2 44 & 45 Vict. c. 66. s Viz. : for fortifications, 588,G00A ; localisation of military forces, VOL. II. I I 478 THE NATIONAL EXPENDITURE. Certain of these annuities were now extended, so as to form 684,000^. of annuities expiring in 1903. Power was gLven to the treasury to create, in three sets, 3,600,O00Z. of terminable annuities in cancellation of stock of the trustee savings banks and post office 'savings banks, and also to convert 40 millions of chan- cery suitors' stock into terminable annuities, And^ under the Act, annuities were accordingly created amounting in the whole to close upon 7 milUons.^ The Act directed that a table should be prepared to show the amount of capital to be paid off in every year by the agency of the savings banks and chancery annuities. A similar calculation was easily made as regards the renewed annuities. Under proper regula- tion all the annuities, being payable to public depart- ments, could be withheld without injury or inconveni- ence to individuals, and witht)ut damage to the fund on account of which they are held.^ Therefore, the Sinking Fund they established was still available upon urgent occasion, such as war or warlike preparations, for application towards the payment of the additional expenditure of the year. In this view, mr. Childers proposed in his budget arrangements for 1885-6, to apply, towards meeting the deficiency of the year, the portion of the annuities 378,000^. ; in lieu of savings banks' stock, 3,617,000/. ; and portion of annuities under the National Debt Act, 1880, 650,000;. See 46 & 47 Vict. 0. 54, £ £ ' Savings Banks Annuities . . 3,600,000 Chancery Annuities . . , 2,665,835 Renewed Annuities , . . 684,022 6,949,857 " Treasury Minute. Sinking Fund Suspension, May 11, 1885, THE TERMINABLE ANNUITIES. 479 that represented repayment of capital, the amount of which was ascertained to be, for the year, 4,672,978/. ; and, eventually, after the change of government, sir Michael Hicks-Beach, his successor in office, adopting, in its fullest extent, the principle of the proposal, sus- pended for the same purpose also the new Sinking Fund under the Act of 1875.^ Amount of the National Debt m 1885. Funded Debt * ' . £640,000,000 Unfunded 14,000,000 Total . 654,000,000 Value in stock at par of terminable annuities 86,115,000 £740,115,000 Particulars of the Capital of the Funded Debt. March 31, 1885, 3 per cents. : — Consols £330,292,000 Eeduced 77,680,000 New ^ 180,458,000 Bank of England .....' 11,015,000 „ Ireland ...... 2,630,000 3| per cents 225,000 2f per cents 4,647,000 2^ per cents. : — Annuities 2 . ., . . . . . 32,810,000 Exchequer jbonds 3 418,000 £640,175,000* * The Sinking Fund from terminable annuities was not touched for the purposes of the budget of 1886 ; but sir William Vemon Harcourt took, towards the expenses of the year, the new Sinking Fund, then 613,000/., and the Sinking Fund under the Act of 1881, then 206,000/., forming a total of 818,000/. 2 Created under the Act of 1884, 47 & 48 Vict. c. 23. s 16 & 17 Vict. c. 23. * With the hundreds, 640,181,896/. Finance Accounts, 1884-5. I i2 480 THE NATIONAL EXPENDITURE. Arrangements existing in 1885 for paying off Debt by MEANS OF Sinking Funds — a term meaning annual SUM applicable to that purpose. 1. The old Sinking Fund, viz. the surplus of income over expenditure. 2. The New Sinking Fund, in the form of an addition to the ' annual charge ' on the debt. 3. The Sinking Fund from terminable annuities, viz. the amount of capital paid off by their agency. 4. The Sinking Fund under the Act of 1881. Terminable and other Annuities in 1885. Terminable Annuities : — Savings Banks (Trustee and Post Office) £ expiring in 1888 . . 1,200,000 , „ „ 1892 . . 400,000 „ „ 1893 . . 800,000 „ „ 1898 . . 1,200,000 " " ~ ' 3,600,000 Chancery suitors', expiring in 1903 . . 2,665,000 Renewed annuities, Savings Banks (Trustee and Post Office), expiring in 1903 . . 684,000 Government life annuities ' . . . 1,054,000 £8,003,000 Annual CHutrge for Management. Ahout 200,000j. The debt, funded and unfunded, is managed by tbe Bank, wbo receive, in respect of the funded debt, 180,000Z. per annum and, in addition, 150/. for every million over 600 millions. The amount for this pur- pose is arrived at by adding to the uniedeemed debt a ' Under the Government Annuities Acts, 1829 to 1882, viz. 10 Geo. IV. c. 24 ; 8 & 4 WiU. III. c. 14 ; 16 & 17 Vict. c. 45 ; 27 and 28 Vict. c. 43 ; 46 & 46 Vict. c. 51. THE NATIONAL DEBT, 1885. 481 nominal amount to represent capital debt converted into existing terminable annuities. This amount is arrived at by a statutory valuation of the annuities. In respect of the unfunded debt — exchequer bills, bonds, and treasury bills, the Bank receive at the rate of 1001. per million. The Bank of Ireland receive, for unredeemed debt, 13,099Z. a year.^ 1 Bank of England Payments Act, 24 & 25 Vict. c. S ; and 28 & 29 Vict. c. 16. 482 THE NATIONAL EXPENDITURE. CHAPTEE ni. THE ARMY AND NAVY. {Peace Establishment.) ■26| millions. The following tabular statement gives, approximately, the average annual peace establishment at specified dates from 1685 to 1885, of the spending services, as they are termed, viz. the army and navy services, including the old ordnance, which formed a separate service until 1854.^ Be/ore the Great War with France. Date s, Date £ 1685-7 1,100,000 1753-5 2,000,000 1698- 1700 1,300,000 1773-5 3,810,000 1715 -17 1,720,000 1790-2' 6,250,000 « 1736-8 1,850,000 / After the Great Wa/r, 1816- 53. Date Arlny Navy Army and Navy 1825- 52 8| 6i 15tol6milL 1851-2 & 3 15i After the War with Ribssia. Date Army ^<^^y^7..f Date Army T(r„^„Anny and ^»^y Navy 1859-73 15 10| 25 to 26 1880-1 14i 101 24^ 1875-68 IH lOf 25^ 1881-2 14f „ 25 1876-7 JJ 11 25| 1882-3 15i „ 251 1877-8 14i lOf 25 1883-4 15f 10^ 261 1878-9 Uf 25^ 1884-5 16 lOf 26| 1879-80 15 lOJ- 25i ' Heturn Pub. Inc. and Expend. II. 707, and Knance Accounts. ' Expenditure abnormally high in consequence of preparations against Spain and Bussia. ' From 1875 the figures are taken from the Return of Public Income AEMY AND NAVY. 483 I, THE ARMY. 16 millions. Under the feudal or military system that prevailed in England in former times, although the expenses of war fell, in the main, upon the military tenants of the crown, the burghers or bourgeoisie were hable ' to a tallage or tax, even to the tenth part of their goods, for the expenses incurred in an expedition. For this they usually compounded with the king's officers before the expedition ; and, eventually, they bore their part of the burden of war under the various systems of tax- ation for war that were used during the Plantagenet, Tudor and Stuart periods. The armed force that existed contemporaneously with the military system and is represented . in our times by the militia, renovated by Henry II.'s Assize of Arms, and further required to keep arms ready for service by Edward I.'s Statute of Winchester, was limited, in its sphere of action, to the county. And when, after the rebellion, in Norfolk, against inclosures and, in the West, against the new service book, in the reign of Edward VI., lords lieutenant were appointed by royal commission in the various counties, this force continued to be under their command, as representa- and Expenditure from 1875-6 to 1884^5, March 22, 1886;, and the amounts under the head of Army include the Indian Home charges, allowing a deduction for the contributions from the Indian revenues, and deductions for contributiona from colonial governments, and for the amount received by sales of old stores, an item which before June 1881 was included in the returns under the head of Miscellaneous Receipts, but sijice then has been taken in reduction of expenditure. 484 THE NATIONAL EXPENDITURE. tives of the king, down to the time when the question of commissions of array caused the final rupture be- tween Charles I. and the parliament. The 'New Model' army of the commonwealth, which was upon the plan of Cromwell's Ironsides, may be regarded as the first standing army kept in this coimtry. Originally the force was to a considerable degree self-maintaining ; subsequently, taxes for its sup- port were levied in the form of a tenth on the lands of the cavaliers. After the restoration of the monarchy, the army was disbanded, except General Monk's regiment, the ' Coldstream,' which, retained in the king's service as a regiment of guards, formed, with another regiment out of troops brought from Dunkirk, the nucleus of our future army. A contest now commenced between the king and the parHament regarding the establishment of a stand- ing army in time of peace. In France the work of Eichelieu and his successor Mazarin had resulted in absolutism, established for the king principally by means of a large standing army. The splendour of the court of Versailles, the brilliancy of the reign of Louis XIV., and his despotism, so flattering to the pride of kings, had their influence on Charles 11. ; and, in all things an imitator of the Great Monarch, he specially desired to keep on foot a con- siderable body of troops. 'The king,' Pepys is in- formed in 1667, ' is now raising a landed army, which the parliament and the kingdom wiU never bear. The design is, and the duke of York is hot for it, to have THE AEMY. THE! 'NEW MODEL.' 485 a land army and so to make the government like' that of France.' The English people, on the other hand, regarded the.mihtia and the train bands as sufficient safeguards of the kingdom, and detested the very name of a stand- ing army, considering such a force to be a foreign innovation and its existence a badge of slavery ; vyhile the Commons had what in our days we term ' a most wholesome horror' of standing armies, remembering the use to which soldiers had been put in the case of colonel Pride's purge, and on other occasions, more particularly, the memorable occasion when Cromwell, pointing to the Mace on the table of the House, had added, ' Take away that bauble.' Without money there could be no army, that was clear. The king had of his own little to spare for the purpose. And the Commons guarded their grants from misapplication by introducing a principle which thence- forth became an undisputed principle recognised by frequent and at length by constant practice : that the application of supplies granted by parliament is to be strictly limited to the particular objects for which the supplies are granted. In the same view, on every occasion when it was necessary to raise additional troops, as for instance, after the panic caiised in 1667 by the Dutch in theMedway; for the second Dutch war in 1673 ; and, more especially, when a large force was suddenly raised, in 1677-8, ' ostensibly for war with France, the Commons regarded the new levies with jealousy and, when the peril was past, were clamorous for their abo'it'o.i. But notwith- 486 THE NATIONAL EXPENDITURE. standing the general feeling against a standing army, king Charles was able to keep on foot about 5,000 regular troops as guards and for garrisons. The On the other hand, the militia was now recon- MiUtia. structed ^ and declared to be wholly in the king's hands and not in the hands of parliament. The force was to be mustered and arrayed by lords lieutenant commis- sioned by the king. In case of insurrection, rebellion or invasion, the militia of any particular county might be sent out into other counties ; but the force was not to be available for service out of the kingdom. The men, horse and foot, were to be provided by persons having a certain specified amount of income or property, who were compelled to find a horse, horseman and arms, or a foot soldier and arms, one or more, according to their fortune, and pay a daily wage of 2s. for man and horse, and Is. for foot soldier, when out for exer- cise or muster, and a month's pay when called out in case of insurrection, rebellion or invasion. The remain- ing expenses, including the cost of ammimition, were to be defrayed by a rate on the county. The disposition evidenced by James 11. to keep a considerable army, the increase made by him in the number of his troops, his appointments of Eoman Catholic officers to commands, and the camp he established at Hounslow for the purpose of overawing the capital, confirmed the apprehensions of the people, increased their disUke to soldiers, and led, after the revolution in the monarchy, to the formal declaration, in the Bill of Eights, that ' the raising or keeping a » 13 & 14 Oar. II. c. 3. STANDING ARMY. THE BILL OF RIGHTS. 487 standing army within the kingdom in time of peace, un- less it be with consent of parliament, is against law.' Any infringement of the law was rendered prac- tically impossible by the retention, in the hands of parliament, of the power of the purse, and by the necessity of martial law for the management of soldiers. The king could not levy any tax or impost; and parliament, by granting certain of the taxes for a Limited limited time only, secured this question of payment, taxes." The king could not punish soldiers or sailors by martial law, except in violation of the provisions of the Petition of Eight ; and parliament, by limiting the coacession of the power of courts martial to the term of a year, secured this question of management. The first Act for the pimishment of mutiny and Annual desertion was passed in consequence of the mutiny, Act.'"^ in 1689, of a regiment at Ipswich, and the march of the mutineers northwards to Scotland. It was limited, carefully, in its duration, to the term of a year ; and henceforth an annual Act was passed embodying the assent of parliament to the keeping of a certain number of soldiers for the year, and imposing penalties for false musters, while it sanctioned the articles of war and courts martial necessary for the punishment of mutiny and desertion. After the peace of Eyswick, in 1697, the question of a standing army was again raised. All the arguments for and against standing armies were stated and ex- amined, by Somers, in his famous 'Balancing Letter,' and the question was fully discussed in the House. The king, in view of the state of affairs on the continent, 488 THE NATIONAL EXPENDITURE. was extremely reluctant to break up his well-seasoned forces ; and it was admitted in many quarters, that in modern warfare the superiority of regular, to half- trained troops was incontestable. But the detestation of standing armies prevailed in parliament to effect a reduction of the forces to the number kept in the time of Charles 11. for guards and garrisons ; and WiUiam had even to part with his famous Dutch guards. A garrison was necessary for Gibraltar, which be- came ours in 1704; and another for Minorca, which was taken for us in 1708 ; and the number of the forces for guards and garrisons, augmented in the reign of George I. by 4,000 men, stood in the last estimate of the reign at 18,226.^ In the pacific times of Walpole the number of troops kept was about 17,000, to include the garrisons' of Gibraltar and Minorca, but independent of the Irish establishment. The Commons continued to show an extreme jealousy of any increase in the number of soldiers ; and in the annual Mutiny Act the chief ground for the existence of the army was carefully stated to be the preservaHon of the balance of power in Europe. It was not merely a party question : in 1741, we find Pelham joining with Pulteney in opposition to the erec- Barracks. tion of barracks^— without which it was, of course, ne- cessary, at the end of a war, at once to reduce the number of the forces — on the ground that the separa- tion thus effected between the soldiers and the people ' After 1721, the numl)ei' for the year is stated in the annual Mutiny Act. THE ARMY. CHATHAM'S MILITIA. 489 was unconstitutional. And Chatham, our great ' war ' minister, was notoriously adverse to any permanent increase in the standing army. In this view, when in power ii;i 1757, after the panic of the expected French invasion, regarding ' a well ordered and well discipUned militia to be essential to the safety, peace and pro- sperity of the kingdom,' he effected a reorganisation of this national force. A certain number of men to be raised in every county was settled by act of parHament, amounting in all to a force of 28,840 men for England and 1,820 for "Wales. They were to be chosen by ballot from those between 18 and 50 years of age. And, in the event of rebellion or invasion, power was given to the king to call out and embody this militia, and place them under the command of general officers. In which case they were to receive the same pay as his Majesty's forces and were to be subject to the articles of war.-^ The charges for pay and clothing of the disem- bodied militia were to be paid by the receiver general of land tax of the county, out of the gross revenue from the land tax.^ Chatham's militia was not, however, a success. The ignorance or inactivity of the lords lieutenant and deputy-lieutenants, and grants of commissions to con- temptible persons as officers, threw a ridicule upon the establishment, and rendered gentlemen of worth, spirit and capacity unwilling to offer their services.' 1 30 Geo. II. c. 26. ^ This practice was continued up to 1830, when the practice of calling out the militia annually was discontinued. = Smollett, V. 37, Ann. 1759. 490 THE NATIONAL EXPENDITURE. From 1766^9,- the average annual expenditure on the army, including the land service of ordnance, was 1,800,000/. ; ^ and in 1775, the year before the outbreak of the war with America, the forces consisted of 70 regiments of 474 men.^ After the war the peace establishment was settled, m 1783, at 68 regiments ; and in 1786 it was estimated that two millions per annum would be sufficient for the permanent peace establishment of the future. The actual average cost from 1786-91 was 1,928,000/. ; while the charge for the ordnance, including sea service, was 487,000/. The establishment, increased by 3,000 men, first voted in 1787-8, consisted, in 1790, of 77 regiments of 466 men, when that debate in the house of commons on the subject of the army estimates took place which Rupture isfamous as the occasion of the rupture between Fox n fit WP6T1 Fox and and Burke, who condemned the action of the French army in their assumption of citizenship and their de- sertion of their king.* At this date the expenditure was for ^ Ordinary services 1,517,616 Extraordinary '356,458 1,874,074 Ordnance 457,000 And the finance committee of 1791 estimated the future peace establishment at 1,748,000/. for the army, and 375,000/. for the ordnance, including sea service. The number of all ranks in the army, including the ^ Report of Finance Committee of 17S6. ' Mr. Marsham's speech on the establishment question in 1790. ' Par. Hist, xxviii. p. 370. THE ARMY IN 1792. 491 Irisll establisliment, and the distribution of the forces were, in 1792, the year before that of the outbreak of the Great War, as follows : — • Officers and Men. Great Britain . . . i . . . 17,007 Ireland 11,901 East Indies 10,700 Canada, Nova Scotia and Bermuda . . . 6,061 Gibraltar! 4^221 "West India Islands 6,886 New South Wales 475 57,251 In 1802, when the war recommenced after the 1802. brief inter^i'al of quiet that followed after the peace of Amiens, the force of the militia was raised to 39,964 men for England, and 3,004 for Wales, and the ballot was hmited to men between the ages of 18 and 45. Scotland was to provide 8,000 men. The Irish militia, augmented in numbers, were now allowed to be em- ployed in Great Britain.^ And in 1814, the last com- I814, plete year of war, we had 30,000 cavalry, 203,000 infantry, 30,000 foreign corps, and an embodied militia of 82,000 ; in all, 345,000 men. After the Great War, 1816-53. In 1817 theforce, diminished by 221,000, consisted of 17,000 cavalry and 105,000 infantry. The joay of the rank and file of the army had been exactly doubled since 1792 ; and the votes for the army amounted to 7 millions. In 1828, after 12 years of peace, the number of all ' The garrison at Gibraltar had been increased by the advice of the gallant veteran, lord Heathfield. » 42 Geo. III. e. 90; 42 Geo. III. c. 91 ;.44 Geo. III. c. 33. 492 THE NATIONAL EXPENDITURE. ranks was 116,738 and they were distributed as follows,: — Great Britain 29,616 Ireland 23,969 Colonies 37,037 East Indies 26,116 • At this date the expenditure was about 8 millions, viz. 5 millions for the effective service, and 3 mil- lions for non-efiective service ; and for the ordnance, the effective expenditure was 1,400,000/., and the non- effective, 365,000/. The increase in the establishment, which was almost exactly double the establishment in 1792, was accounted for principally by the number of ' troops necessary for our foreign possessions; in short, our colonies were the main source of the great expense incurred in the army. The number of rank and file voted in 1830, viz. 95,000, reduced, under the Wellington administration, by 7,000 men, was augmented, by about the same number, under the Grey administration, in consequence of the revolutions that had occurred in France, Belgium and Poland, and the disturbed state of some of the counties in England. 1832-52. Pqj. t^g Qgxt 20 years the expenditure on the army, militia, commissariat and ordnance services averaged from 8^ to 8f millions. It reached the lowest point, of 7-^ millions, in 1834 and 1835, and was unusually high in the years 1846-8,, inclusive, in consequence of the fear of Erench invasion and the existence of Chartism. In 1858 the number of men voted was 102,283. THE AEMY. INCREASE SINCE 1853. '493 After the War with Russia. Our fiasco in the Crimea in consequence of inade- quate preparations for so serious an undertaking as a contest with the vast military power of Eussia at that distance from home — this total breakdown of our military arrangements, caused grave anxiety in the public mind. It 'was apparent that our state of pre- paration was not up to the requirement of the times. ^ The feeling of alarm that prevailed, intensified, in 1858, by the attitude of the French colonels, found expression in the creation of our Eifie Volunteer force ; and while the French were renewing, at Magenta and Solferino, the traditions of Napoleonic victories, con- siderable additions were made to our army and navy estimates. In 1857-8 the strength of the army was 126,796. At last, at Sadowa, in the victory of the Prussian July, 1 Sflfi needle gun over the less serviceable weapon of the Austrians, a lesson was taught which no nation in Europe could misunderstand or afford to neglect : — to adopt, as soon as it is discovered, every modern im- provement in the art of war. The muzzle-loading rifle of the Crimea is as obsolete as the ' Brown Bess ' of the Peninsular war, the musquefr of the musqueteer of the Stuart militia, the matchlock of Armada times, or the hag-buts, the demi-hakes, and the ' hand guns ready furnished with quarrels, gunpowder, fire and touch,' of an earlier date. ' A new secretary of state was appointed for the war department in June 1854 ; and in 1865 the ordnance was consolidated with the war department. VOL. II. K K 494 THE NATIONAL EXPENDITURE. In these circumstances our military expenditure increased from a level of about 8|- to 8f millions to a level of about 15 millions, and has now, 1884-5, reached 16 millions. '^ ir. THE NAVY. lOf millions. Our ascendancy at sea as a naval power commenced under the commonwealth. Upon the decadence of Spain, Holland had risen to the position of the first naval power in the world. She had also acquired its principal carrying trade, Amsterdam being at the time the chief entrep6t of commerce. This was sufficient to account for the feelings of mutual jealousy and hatred that prevailed between the two nations. A paper war had long been carried on upon the question of the close or open sea. The states general were inimical to the commonwealth. And the parliament played a card that was certain to prove popular with the nation, when, in 1651, by the famous Act of Navigation, which prohibited the importation of goods in any but English bottoms or those of the country of origin of the mer- chandise, they endeavoured to put an end to the ascen- dancy of the Dutch in the carrying trade. War soon followed. In 1652 a refusal on the part of one of their captains to salute our flag formed the commencement of a period of naval contests, in which, though at one time Van Tromp swept the channel with a broom at his masthead, we, after much gallant fighting on both sides, proved victorious. ' In 1886 the land forces voted for the year ending' March 31, 1887, were not to exceed 1.51,8e7 of all ranks. THE NAVY. CROMWELL'S ADMIRALS. 495 Away from home quarters, Cromwell's admirals Penn and Venables, though unsuccessful against San Domingo, took for us in May, 1655, Jamaica from the Spaniards. In the Mediterranean, Blake ^ destroyed the Moorish pirates, those 'thieves, robbers, and pirates of the sea,' who in the time of Charles had captured oiu: ships and men in the channel, molested our merchants, and ' grieved the kingdom ' to such an extent as to constitute a peril to the kingdom sufficient to form the ground for the ship writs. And lastly, in 1656 we conquered and destroyed the Spanish fleet in the harbour of Santa Cruz. Our successes against the Dutch, the Turkish pirates and the Spaniards fairly acquired for us the proud position which Waller notes irf his Panegyric on the Protector : — The sea's our own ; and now all nations greet, Witli bending sails, each vessel of our fleet ; Your power extends as far as winds can blow Or swelling sails upon the globe may go. A period of decline in naval power under Charles II. was due, in no small degree, to the liberal views of this king in personal expenditure, which rendered the nation unwilling to grant money that might be misappHed by the profligate advisers of the king. In consequence of the deficient state of our naval preparations, the victories against the Dutch celebrated in such glowing terms in the ' Annus Mirabilis,' were followed, in the next year, 1667, by a spectacle of a different kind — for Dry den ' Every admiral of note of this time seems to have been, like the Mordanto of Swift, lord Peterborough — ' a land commander and a tar ' — prince Eupert, colonels Robert Blake and Rainsborough, general Monk. K ic 2 496 THE NATIONAL EXPENDITURE. would not have made his ' Angels draw back the curtain of the skies ' ' to see this fleet upon the water move,' when de Euyter, having broken the chain at Chatham, was burning our ships in the Medway. ' The alarme was so greate,' writes Evelyn, ' that it put both country and citty into a paniq, feare and conster- nation such as I hope I shall never see more.' Nor Avere we, subsequently, more fortunate against the French fleet, when, in June 1690, our fleet in combina- tion with that of the Dutch was defeated under lord Torrington, off Beachy Head, and Teignmouth was burnt by the French in the galleys brought from the Mediterranean. But the sad remembrance to us of these disgraceful scenes was lightened and our supre- macy at sea effectually re-established, in 1692, when Eussell at the same time removed for us all fear of in- vasion, and darkened for Louis XIV. the prospect he cherished of French pre-eminence on the seas, by the victory over the gallant Tourville off La Hogue. Before the end of the century the king was able to state iri his speech to parliament that the navy was nearly double what he found it at his accession. And at the death of Wilham it had increased from 173 ships, the number at his accession, with a tonnage of 101,892, to 272 ships with a tonnage of 159,020. Of these, 130 were reckoned as ships of the line, and that continued to be about the average number down to the middle of the century. In the great storm, of November 27, 1703, the storm of Addison's famous simile in ' the Campaign ' Such as of late o'er pale Britannia passed, THE DUTCH IN THE MEDWAY. 497 rear-admiral Beaumont, who was then engaged in observation of the Dunkirk squadron, went down in the flag ship, and thirteen ships of the line were lost. The loss was before long repaired ; and in the next year we gained a footing on the coast of the Mediterra- nean in the taking of Gibraltar by admiral Eooke. Four years after this, general Stanhope took Minorca, from the port of which, port Mahon, he subsequently derived his title when as prime minister he left the Commons for the Lords ; and these conquests were pre- 1713. served to us by the treaty of Utrecht. In the war with Spain that began in 1 739, we increased considerably the size of the ships ordered to be built ; and at the outbreak of the war with France, in 1756, the miraber of English ships of the line was given as 142 ; but part of this was, in fact, what is termed a 'paper' fleet, consisting of hulks, prison ships, church ships, and others unfit for war ; and of the 93 ships commissioned at the beginning of the war, 24 were 50-gun ships, which were no longer regarded as fit for a place in line of battle. The war began with that unfortunate failure of Byng to relieve Minorca which cost him his life at the hands of his indignant and infuriated countrymen. But the sacrifice of this admiral by the ministry to the ungovernable fury of the people, had not that efiect upon our other admirals which Voltaire suggests in his sneer : ' pour encourager les autres.' ^ In March 1758, admiral Osborne cruising off Cartagena was victorious ^ ' Bans ce pays-ci il est bon de tuer de temps en temps un amiral pour encourager les autres.' — Candide, cap. xxiii. 498 THE NATIONAL EXPENDITURE. over the Frencli fleet under the marquis du Queene. In April, sir E. Hawke drove a French fleet ashore in the Basque roads and destroyed such of their ships as were unable to escape up the Charente. In the next 1759. year, admiral Boscawen defeated admiral de la Clue off Lagos; and subsequently Hawke gained a signal victory over monsieur de Conflans in Quiberon bay. In short, in the war, we swept the French from off the seas. At the same time, by the conquest of Canada and our victories in India, we commenced the foundation of the far extending system which we now term ' Greater Britain.' The number of vessels in the navy in 1762 is stated to have been 433, with a tonnage of 343,000 ; and for 1766-9, the average annual expenditure, including ordnance for sea service, was 1,660,218/.^ 1773-83. The loss of our colonies in America in the war of American Independence, afforded, in the evidence it appeared to be of our decline in power, an opportunity for attack which was not neglected by France or Spain ; and in 3.779, when Spain declared war against us, the French and Spanish fleets under comte d'Orvilliers outnumbered our fleet. Gibraltar was now subjected to a long and harassing siege ; and in the next year, when war was declared against Holland, we found oui'selves in opposition to a combination of the exist- ing navies of Europe. The Spaniards now retook Minorca. But Eodney's victories re-established our affairs. When, foiling the plan to take Jamaica, he had gained, by breaking the enemy's line — the well- ^ Eeport of Finance Committee of 1786. THE NAVY. RODNEY'S VICTORIES. 499 known SueKirXovs of the Peloponnesian war — the victory in the hard-fought battle against comte de Grasse's fleet, April 12, 1782, and had taken the admiral's flag ship, the ' Ville de Paris,' he was able to write to his wife : ' It is odd, but, within two little years, I have taken two Spanish, one French and one Dutch admiral.' ^ This victory amply atoned for our ill success on many occasions in the war, and our supremacy at sea was now re-established. The expenses of the later years of the war were beyond all precedent. In 1780 the expenditure for the navy alone, independent of the ordnance for sea service, was over 6,300,000Z. In 1781, it was 6-1 millions; in ]782inoless than 10,806,000^.; and in this year, the number of men voted, seamen and marines, was 100,000.2 The enormous increase in the expenditure for the services in the war led to the appointment, in 1782, of a Finance Committee of the house of commons to inquire into this expenditure during the six preceding years. In their report they took an estimate of what in their opinion should be regarded as the expense of the average peace establishment for the naval service, including ordnance for sea service, for the seven years 1775-1782. This they put at 1,660,000^. per annum.^ In 1786 the probable annual cost of the permanent 1 stanhope, Hist. Eng. viii. 260. * In 1783 the number was: — Seamen 84,709 Marines . . ... 25,291 Total . . 110,000 ' This estimate is substantially confirmed by the report of the Finance Committee of 178(). 1793. 500 THE NATIONAL EXPENDITURE. peace establishment of the future was reckoned at an average of 1,800,000/., but this proved below the mark ; for the actual expenditure on the navy alone, was on the average from 1786-1791, 2,254,000Z.,i the cost of the ordnance for sea service being inciiided under the general head of ordnance, which averaged 487,000/.^ In 1791 another careful estimate of the probable future expenditure placed it at a lower figure. But all calculations of the kind were upset by the outbreak of the Great War with Eevolutionary France. At this date the really effective force of the navies of Europe, in respect of line of battle ships is stated to have been approximately : England, 115 ; France, 76 ; Spain, 43 ; Holland, 20 ; Portugal and Naples, 10 ; Baltic Powers, 50. In the war, which lasted, with a brief interval of peace, for -23 years, lord Howe's victory over the French on ' the glorious first of June,' 1794, was suc- ceeded by that of Jervis and Nelson over the French and Spaniards off Cape St. Vincent, February, 1797 ; the practical destruction by Duncan of the Dutch fleet under de Winter off Camperdown, in October in the same year ; Nelson's victory ot the-Nile, August 1, 1798 ; his destruction of the Danish fleet at Copenhagen in 1801 ; and the crowning victory of the naval war, over the French and Spanish fleets, on October 21, 1805, off Cape Trafalgar. " Details in 1790 :— £ 20,000 seamen 1,040,000 Ordinaiy 703,276 Extraordinary 490,-360 2,233,636 Report of Finance Committee of 1791. THE NAVY. IN THE GREAT WAR. 501 In the result, when Napoleon, after Waterloo, un able, at Eochefort, to avoid our cruisers, surrendered himself to captain Maitland of the ' Bellerophon,' 2506 sail of vessels of war had been captured or destroyed by the British fleet in the war ; of which 156 were sail of the line ; 382, large frigates ; and 662, corvettes.^ Such was the state of the existing navies of other After the nations, and such was the exhaustion of the French isie-as. ' finances, that our command of the seas was now secure. But the dangerous period of trial through which we had passed and the lesson of the ' strip of silver sea ' formed, for the future, a warning, even to Finance Com- mittees. Eeporting upon the expenditure for the army and navy on a peace establishment, the Finance Com- mittee of 1817, while, acting in the spirit that had prompted the House to reject Pitt's fortification scheme in 1786 and had inspired Campbell's — Britannia needs no bulwarks, No towera along the steep, they recommended the suspension of the works of fortification along the coast, expressed a strong opinion in favour of the maintenance of a powerful fleet. ' No ill-judged temporary economy,' they added in their 8th Eeport, ' should be allowed to interfere with the support of such a maritime force as might be deemed necessary in time of peace, or with the preparation of its adequate augmentation in the event of war.' The number of men voted in the years 1810-12 had been : seamen, 113,600, and marines, 31,400 ; forming a total of 145,000. In 1818-19 inclusive, the numbers were reduced to: seamen, 14,000; ' Evidence of sir T. B. Martin before Committee of Finance, 502 THE NATIONAL EXPENDITURE. marines, 6,000 ; forming a total of 20,000 men. We now broke up many of our old ships, but still main- tained a powerful fleet ; and our peace establisliraent may be said to have settled at an average expenditure of little Jess than 6 millions. In 1828 the number of ships was as follows : — Building ...... 41 In ordinary ...... 151 In commission . . . . .182 "374 Of these 94 were ships of the line. The expenditure was : — Effective expenditure . . . 4,576,000 Non-effective . . . . 1,577,000 Total . 6,153,000 In 1830, the number of seamen was 29,000, At this date lord Congleton,^ considering the expendi- ture on the navy to be excessive for the nation, having regard to the existing state of its relations to other naval nations, was an advocate for considerable reduc- tions ; but, before many years had passed, the whole aspect of the question had changed. Already in- vention had produced the first little steamer, of the ' Comet ' year ; and the ' Enterprise ' had made her 1826 passage round the cape of Good Hope to India. In 1837, the Peninsular Company were to contract to carry the mails in steamers ; and about five years after this, when our ships of war had reached perfection as abso- lute as that of our royal ' mails ' on land, both were to perish under the influence of the steam engine. ' Sir Henry Parnell, afterwards lord Oongleton, was chairman of the Finance Uommittee appointed in 1828. THE NAVY. INTEODUCTION OF STEAM. 603 In the fifth decade of the century ' steam ' began to supersede 'sail ' for ships of war. We were soon to be no longer an ' anemocracy,' as Sydney Smith put it, ' a people who put their trust in hurricanes and are governed by the wind,' but were to pass from the government of liex jEolus to that of King Coal. The original paddle wheels were soon superseded by the ' screw,' which enabled the ship-builder to place the motive power of the ship in comparative security below the water line ; and the conversion of ships of war into screw steamers was far advanced before the outbreak of the war with Eussia in 1853.^ In this war, our experience with the Baltic fleet Thenar proved the day of sailing vessels to be past, and those Eissia. that accompanied the fleet were sent back as i;seless, if not impediments to evolutions. We learned also another lesson. The destruction of the Turkish fleet at Sinope, in 1853, and the failure of our fleet before Sebastopol in October, 1854, when those 'terrible shells ' from the forts did such execution, brought to the fore the question of armour for the protection of ships. Our armaments were no longer able to ' thun- derstrike the walls of rock-built cities' as of yore. Happily, modem improvements in machinery now had ' ' In the year 1848,' writes a friend of great experience in naval matters, ' I served in the " Blenheim," the first of the converted " Line of Battle " ships ; I am not quite sure that " La Hogue " was not converted before her, but certainly the " Blenheim " was the first screw Line of Battle ship commissioned for sea service. We cruised for three months on the coast of Ireland during the Smith O'Brien riots. In 1856, at the end of the Russian War, all the Line of Battle ships reviewed at Spithead were screw ships except the " Rodney " and " London," which had only half their guns in, and would have been used as Depot ships for the Gun-boats in the Baltic, if the war had continued.' 504 THE NATIONAL EXPENDITURE. rendered practicable the manufacture of iron plates ; and in 1859 we commenced our first iron-plated vessel. The ' Warrior ' was launched in December, 1860 ; and lord Congleton himself, had he been^ alive, would have whistled down the wind all hope of any future reduction in our naval expenditure when, bear- ing in mind the cost of an old first-rater to have been Cost of the about 1,000^. a gun, he would have learned that the cost of this new monster of the deep was no less than 359,O00Z. ^ The new armoured leviathans were not to sport themselves for long on the waters with impunity. Tlie art of destruction improved apace. Heavier guns, improved kinds of powder, and superior projectiles were invented to pierce the iron coating and back of teak. Then, the thickness of the iron was increased ; and, on the other hand, the size and penetration of the guns. The body of the ship was placed under water, leaving only the turret above with its guns. We reverted to the embolos of the Naumachia, and re-in- troduced the under-water beak of fighting shipg, in the ' Eam,' which some authorities regard as the ship of the future. Then came the torpedo and torpedo-boats, and torpedo nets and torpedo gear, engines became more and more powerful, and steel superseded iron, every im- provement in defence or offence entailing an enormous expenditure and practically superseding pre-existing armaments, the ' Inflexible ' with her turrets having as effectually rendered obsolete the ' Minotaur ' and ships of her class, as these ironclads superseded Napier's Baltic fleet or the fleet of lord Lyons before Sebastopol, ieoncladS. the torpedo. 505 or as these ia their time had superseded the old ' Victory ' and Nelson's other ships of the line.^ In these circumstances our expenditure on the navy has been, since the break up of the European peace, at the rate of about 10-| millions a year, an amount which certainly does not, on paper, appear excessive, "when wo bear in mind the necessary expense of adopt- ing every improvement in ships and armour that can be devised, and that the cost of ships has gone up, from the 359,000^. for the ' Warrior,' through that of ships of the broadside system of mounted guns, such as the ' Minotaur ' ; the ' belt and battery ' system of 1863-7, of which the ' Bellerophon ' and ' Hercules ' are ex- amples ; those of the breast-work and monitor type, such as the ' Devastation ' of 1869 ; the ' Inflexible ' of 1874 and the other turret ships ; and the Barbette ships — with guns high en barbette — of the ' Admiral ' class, of 1880, to the million a-piece which we are told will be the price of our latest war monsters the ' Nile ' Cost of the ^ ' Trafal- and ' Trafalgar.' ^ gar.' i ' Unfortunately, we do not arrive at a state of finality. Now (October, 1887), we have just succeeded in buildinpf first-class Armoured Cruisers with a speed of 19 knots, and, before they are commissioned, one of our Builders has, by improving on the length and lines of these vessels, built a craft of the same class for the Spanish Government, steaming 22 knots. And so it goes on ; vessels are almost obsolete before they are commis- sioned, and more money must be spent, unless we would allow other nations to go ahead of ua, and thus risk the loss of our position as Mistress of the Sea. ' In 1886, 61,000 men and boys were voted for the sea and coast- guard services of the year ending March 31, 1887, including 12,900 marines. 506 THE NATIONAL EXPENDITURE. CHAPTEE IV. 1. THE DIGNITY AND STATE OP THE CROWN, AND 2. THE CIVIL GOVERNMENT. The expenditure under these heads for 1884-5 was as follows : — £ £ Dignity and State of the Crown 409,000 Annuities to Royal Family 156,000 Civil Government :^ 1. Justice, Police, and Prisons 7,006,000 2. Education, t-'cience and Art 5,170,000 3. Other Departments, salaries and expenses .... 2,500,000 4. Diplomatic and Consular services 696,000 5. Buildings, Parks, and Works . 1,869,000 6. Non-eiFective and Charitable 1,200,000 18,441,000 From this total of 18|- millions there should be deducted, if we wish to ascertain the charge on tax- ation involved in the expenditure for the civil govern- ment, an amount, received for fees and other payments, which may be put at about 2 milhons.^ Deducting this amount, the total cost is about 16^ millions. I. The Dignity and State op the Crown. The expenditure under this head does not form the subject of an annual grant, but is the result of an arrangement made, according to precedent, at the commencement of a reign, when the sovereign sur- ' See post, p. 628. THE CROWN. THE CIVIL LIST. 507 renders certain hereditary revenues, and receives, in compensation, a grant of what we term a ' Civil List ' charged upon the Consolidated Fund, in other words, the permanent revenue of the kingdom. The civil list, when first granted to William III., comprised not only the personal expenses of the king and the expenses of the royal household, but also the ' Civil List ' more properly so termed, which included the salaries of the judges, the ambassadors, and other members of the civil service, and annuitants and pensioners of the crown. The amount, originally fixed at 600,000^., was in- creased, in 1698, to 7OO,OO0Z. ; and in 1702 this amount was granted for the civil list of Queen Anne. A similar amount was granted for the civil list of George I. ; but subsequent grants, made to discharge debts which had accrued, raised the average expenditure under this head, during the reign of twelve and a half years, to 805,000^. The liberal proposals of Walpole regarding the civil list to be secured to George 11. resulted in a grant of 800,000^. for this purpose ; and the same amount was granted to George III. on his accession to the throne. At this date the method of securing to the king a i76o. revenue for the civil list was, with his consent, altered, and the king no longer received an income from particular sources, but, surrendering the hereditary revenues, which were carried to the Fund termed ' the Aggregate Fund,' received a grant of a siun of 800,000/. per annum secured on that Fund. This amount was 508 THE NATIONAL EXPENDITURE. ' found to be inadequate to, and insufficient for, the purposes for which it was granted,' and, in 1777, the commons, ' with hearts full of the warmest duty and gratitude for the inestimable blessings which the sub- jects enjoyed under his majesty's most auspicious government," increased the amount to 900,000/. The administration of the expenditure under the civil list was notoriously careless ; and in February, 1780, Burke, in his great speech on Economical Eeform, proposed a plan to improve it, which was carried into execution, to a certain extent, subsequently, when the whig administration (Eockingham) came into power, in which he held the office of paymaster- general. A limit was now fixed for the amount of pensions to be granted,^ and the expenditure was classified. This classification, and the estimate of- the expenditure in 1786, were as follows^ : — e 1. Pensions and allowances to the royal family . 203,500 .2. Salaries of lord chancellor, judges, and speaker 32,955 3. Salaries of foreign ministers resident at foreign courts 70,852'' 4. Tradesmen's bills of his majesty's household . 147,200 5. Menial servants 90,966 6. Pensions 118,189 7. Other salaries payable out of the civil list . 81,440 8. Salaries and pensions of commissioners of treasury, &e 13,822 Occasional payments 138,476 897,400 Unappropriated 2,600 900,000 1 17 Geo. III. c. 21. 2 22 Geo. III. c. 82. ' Return presented to the house of commons, July 6. ■• Including 7,285^. for consuls. THE CROWN. THE CIVIL LIST. 509 In the next year, the grants for the civil list were charged on Pitt's Consolidated Fund,^ to which were carried the receipts from the hereditary reve- nues as well as the produce of most of the existing taxes. The 900,000/. thus secured for the civil hst proved to be insufficient for the necessary expenditure under this head ; and, before the end of the reign, not only had the List been cleared^ of charges amounting to over 250,000/., but also grants in aid had been necessary, which raised the annual average from grants, in the reign, to 956,000/. The civil hst for Ireland formed a separate item, of 225,000/. Irish, or 207,692/. British, currency; and in addition to the grants, the produce of certain casual revenues at the disposal of the crown— droits of the admiralty and droits of the crown, &c. — amount- ing on an average to 211,758/., was applied to ex- penditure under this head. So that the total of the civil list funds was on an average, in the reign, 1,384,450/. On the accession of George IV. to the throne, in 1820, the clear yearly sum of 1,057,000/., formed by the addition of 850,000/. for England, to 207,000/. for Ireland, was granted for the civil hst. No allowance was made, in the List, for any annuities to members of the royal family ; and the expenditure was classified as follows : — » By 27 Geo. III. c. 13. ' 66 Geo. III. c. 46. The Act for the better regulation of the Civil List. VOL. II. L L 510 THE NATIONAL EXPENDITUEE. £■ 1. His Majesty's privy purse .... 60,000 2. Salaries of lord chancellor, judges, and speaker 32,955 3. Salaries and pensions of ambassadors and mini- sters, and salaries of consuls . . . 226,950 4. Expenses of the household, including depart- ment of surveyor-general of works . . 209,000 5. Salaries of the household .... 140,700 6. Pensions, limited by 22 Geo. II. c. 82 . . 95,000 7. Salaries to certain officers of state and other allowances ...... 41,300 8. Salaries of commissioners of treasury and chancellor of the exchequer ... 1 3,822 Occasional payments ..... 26,000 845,727 Unappropriated ...... 4,273 • 850,000 Od the accession of William IV. to the throne, in 1830, the expenses hitherto included in the civil list which have no immediate connection with the dignity and state of the crown and the personal comfort of the sovereign, were, on the recommendation of a select committee of the house of commons, excluded from the List. The effect of this exclusion was to bring under the control of parliament* the expenditure imder classes 2, 3, 7. and 8 in the List for 1820, viz. salaries of lord chancellor, judges and speaker ; salaries and pensions of ambassadors and ministers abroad and salaries of consuls ; salaries to certain officers of state ; salaries of commissioners of the treasury and chancellor of the exchequer, and certain other items of expenditure. The amount of 510,000/. was granted for the expen- diture on the dignity and state of the crown and the personal comfort of the sovereign, classified as follows : — ANNUITIES TO ROYAL FAMILY. 511 1. 2. 3. 4. 5. Their Majesties' privy purse . Salaries of the household Expenses of the household Special and secret service Pensions ..... £ . 110,000 . 130,300 . 171,500 . 23,200 . 75,000 Total . . 510,000 The term civil list was retained as a convenient short term to designate this expenditure, though the civil list, properly so termed, no longer was included therein. On the accession of her Majesty to the throne, in 1837, the item of 75,000Z., for pensions, was omitted, and the amount for the civil list was fixed at 385,000/., under the following classification of the expenditure:- — £ 1 . Her Majesty's privy purse .... 2. Salaries of the household and retired allowances 3. Expenses of the household .... 4. Royal bounty alms and special services . 5. Pensions, to be granted to the extent of 1,200Z. a year ....... 6. Unappropriated 385,000 Pensions granted under the Civil List Act, 1 Vict. c. 2, limited to 1,200/. a year, increased the amount to 409,000/. in 1884-5. Annuities to the Eoyal Family. These annuities, for which no allowance is now made in the arrangement for the civil list, are granted, for hfe, by parhament, and are charged upon the con- solidated fund, or national revenue. The amount of the annuities granted to members of the royal family was for 1880-1, 161,000/. ; and for 1884-5, 156,000/. L L 2 , 60,000 131,260 172,500 13,200 8,040 512 THE NATIQNAL EXPENDITURE. II. The Civil Government. 18^ millions. The following tabular statement shows the increase of expenditure for the various departments of civil government in the sixty years last past. No deduction is made for any receipts. Departments 1825" 1863' 1868-9 1880-1 1884-5 1. Justice, Police, and £ £ £ £ £ Prisons . •217 2.220 4-650 6-600 7-006 2. Education . •112 •560 1-380 4-300 5-170 3. Other departments. Salariesand expenses •563 1-064 1-587 2-250 2-500 4. Diplomatic, Colonial, and Consular Services •388'^ •489 •703 -629 -696 5. Buildings, Parks and Works . •390 •782 •953 1-470 1-869 6. Non-effective and Charitable •168 •208 •402 1-230 1-200 1^838 5-323 9-675 16-479 18-441 1. Justice, Police, and Prisons. 7 millions. The , expenditure relating to justice, police, and prisons forms the most costly item of the civil govern- ment. Including the salaries and pensions of the judges, formerly in the civil list, and other items which, in the Finance Accounts, are to be found under the ' Ended Jai^uacy 5, 1826 ; 1854. ' Diplomatic service included in the Civil List. JUSTICE, POLICE, AND PRISONS. 513 head of ' charges on the consolidated fund,' it amounts to more than 7 miUions, as follows : — £ {a) CourtB of justice 1,882,486 {b) Police 3,151,885 (c) Prisons 1,553,844 (d) Law charges and prosecutions . 418,154 Total .... 7,006,369 Under 'Courts of Justice ' are included the follow- W Courts 01 Justice. ing: — (1) The Supreme Courts of Judicature, in England and Ireland, the expenditure, including salaries and pensionsof judges, amounting to 622,059/., for England, and 308,114Z.,' for Ireland. (2) The County Courts in England and Ireland, for which, with salaries of judges and chairmen of quarter sessions, and pensions, the expenditure amounted to 651,016/. (3) The Courts of law and justice in Scot- . land, which cost, with salaries of judges, sheriffs, and sheriffs' substitute, and pensions, 164,218/. The addi- tion, to the foregoing items, of a sum of 59,188/., for compensations to officers of courts, brings the amount of expenditure to 1,804,595/. ; and in order to com- plete the total there should be inserted 64,313/. for registries of deeds, &c., and 13,578/. for the expenses of the office of wreck commissioner, which raise the amount to the sum before stated, viz. 1,882,486/. This does not include a sum of about 67,000/. for pen- sions, mentioned subsequently under the head of Non- effective Services. Of this, by far the greater portion is a comparativdy recent item in the public expenditure under the head of ' This includes the court of bankruptcy and the land commisMon. 514 THE NATIONAL EXPENDITURE. Civil Services, to which the expenses of the superior courts of law in the kingdom, now included in the supreme court of judicature, were first transferred, from the consolidated fund or from fee funds, formed from the fees of the suitors, in or after 1854 ; while the expenses of the new county courts, established in 1846, with jurisdiction for the recovery of small debts, were first classed under this head of expenditure in 1858. Against this expenditure, there should be placed, in calculating the charge on taxation under this head, receipts to the amount of about a million from fines and fees collected in the various courts and registries, by means of stamps or otherwise, of which the prin- cipal items are stated below.^ Police. Under ' police ' are included the expenditure relat- ing to the Metropolitan Police, London and Dublin, the County and Borough police in Great Britain, and the Irish Constabulary. The metropolitan police force, the institution of which, in 1828,^ was mainly due to the exertions of the Home minister of the day whose name is still recalled to mind by those familiar terms ' Bobbie ' and ' Peeler,' the ' new police ' which, in Greville's memoirs, we find active, in February 1830, at the fire of the Opera House, first figures in this vote in 1854. The expenditure amounted, in 1869-70, to 211,000Z. It- is ' Court of Judicature (E. and I.) £ Fee stamps and other fees 464,000 Courts of law and justice. S 27,000 491,000 County Courts (E. and I.), fines and fee stamps . 429,000 Registries 54,122 ^ JOfteo. IV. c. 44. THE 'PEELEE.' IRISH CONSTABULARY. 515 by way of subvention, and includes the salaries of the commissioners and receiver, and a contribution calcu- lated by reference to the assessed rental. The rental was estimated at a mean sum of 32,432,400/., for 1885, and the rate was id. in the £. If we include the cost of courts and salaries of magistrates, taken from the charges on the consoUdated fund, and 12,000Z. for special police, the total expenditure was, in 1884-5, 592,398/. The expenditure for the county and borough police (Great Britain), a force which was first made compulsory in 1856, is also by way of subvention — to defray cer- tain charges, principally pay and clothing of constables. First placed in the Civil Service vote in 1857, it amounted, in 1869-70, to 282,000Z., and is now, 1884-5, 973,298/. ; an increase due, in the main, to the additional grant in aid first made in 1874. In Ireland, the expenditure for the metropolitan police amounted, including the police courts, to 146,094/. ; and that famous force, the Irish constabu- lary, which was first transferred to this head from the consolidated fund in 1854, cost, in 1869-70, 905,000/., and now costs 1,440,095/. The total charge for police is, therefore, 3,151,885/. Under this head also certain deductions should be made, in, estimating the charge on taxation, for receipts and repayments, amounting in the whole to 188,000/.^ 1 Constabulary (I.) repayments for extra force in £ counties, &c 117,000 Dublin police courts — fines, police tax, &c. . 51,000 Police courts (London), fines and fees and fee stamps 20,000 188,000 •516 THE NATIONAL EXPENDITURE. (.c)Prison6. fhe expenditure on prisons includes that for ordi- nary, as opposed to convict, Prisons ; Convict Prisons ; Criminal Lunatic Asylums ; Eeformatory Schools ; and Industrial Schools. The ordinary prisons include the common gaol of the county, so termed in contradistinction to the gaols of lords and others having gaols of franchise — ' seigneurs et autres q'ont gaoles,' ^ which, belonging to the king, was under the control of the sheriff ; the eld borough, town and liberty gaols ; and also the various houses of correction. These houses of correction began to be established, in the eighth decade of the sixteenth century,^ as workrhouses for rogues, vagabonds and sturdy beggars, upon the plan of the Bridewell founded in London in the time of Edward VI. ; and many of them were of private foundation. Subsequently, in 1609, the esta- blishment of one or more of such houses was rendered obligatory in every county,^ and women who had bastards chargeable on the parish were ordered to be committed to them for punii^hment, and there to be set to work ; but they were still distinct from the gaols, and were under the control of the justices of the peace. Subsequently, a gradual approximation of them in use to gaols, ended in the practical abolition of the distinction between the two classes by the Prisons Act, 1865.* This Act placed gaols, houses of correction, bride- wells, the London house of correction, and peniten- ' 4 Hen. IV. c. 10, a.b. 1403. ■ 18 Eliz. c. 3. ■■' 7 Jac. I. u. 4. ■< 28 & 29 Vict. c. 12(), s. 4. PKISONS TRANSFERRED TO HOME OFFICE. 517 tiaries, a later development of the prison system, imder .a single head of ' prisons ' ; and in 1877, these prisons, in all 113 county, borough, and liberty prisons, were transferred to the control of the Home Office.^ This was done both with a view to secure uniformity of administration and uniformity in punishment, which had varied to such an extent as to lead to nice calculations in the criminal mind as to the selection of a field for operations,^ and also with a view to the alleviation of the pressure of local taxation, and economy, to be effected by the suppression of unnecessary prisons. The cost of these prisons, in England, Scotland, and Ireland, was, in 1884-5, 736,796Z. The convict prisons^ — that is to say, places for the confinement of male ofienders under sentence ' to be Isept in penal servitude,' a sentence which was sub- stituted for that of ' transportation beyond the seas,' in 1857, by an act which finally abolished the sentence of transportation^ — cost, in England and the colonies, 405,109Z. The principal are Portland, where the magnificent breakwater and fortifications have been mainly executed by the labour of convicts ; Portsmouth and Chatham, where they have been engaged in enlarging the docks ; Dartmoor, Parkhurst, Woking invalid prison, Pentonville, and Millbank. The cost of the criminal lunatic asylums at Broad- moor and Dundrum was 35,338/. Eeformatory schools are the outcome of endeavours 1 40 & 41 Vict. c. 21, England. ^ See Sir E. F. du Cane, Punishment and Prevention of Crime. Eng- lish Citizen Series. ■ ' 13 & 14 Vict. C.-S9 ; 20 & 21 Vict. c. 3. 518 THE NATIONAL EXPENDITURE. to lessen the numbers of the criminal class by the reformation of young offenders. Of these, Parkhurst, in the Isle of Wight, was the first. Established, in 1838, by the Parkhurst Act, as a prison for young offenders sentenced to transportation or imprisonment, this institution was subsequently superseded by other institutions founded under the Eeformatory and Indus- trial Schools Act, 1854, and was closed, in 1864. The present reformatory schools are regulated by a consoli- dating act of 1866, which repealed the provisions of the act of 1854. They cost in England, and Scotland, in 1884-5, 85,000/. Industrial schools, though ranging under the head of prisons in the public accounts, being, as they are, not schools for the punishment of convicted offenders, but schools of instruction for juvenile vagrants and others ordered by the justices to be sent to the schools as preventive or training institutions, would seem to come more appropriately under the head of education. The cost of these schools in Great Britain was 180,000/. ; and the expense of the whole depart- ment, reformatory schools and industrial schools, in- cluding inspection, was 279,657Z. ; forming, with 96,944/. for -Ireland, a total of 376,601/. The total expenditure under the head of prisons, if we include industrial schools, is, therefore, 1,553,844/. This does not include a sum of about 43,000/. for pensions. Under this head a deduction should be made, in calculating the charge on taxation, for receipts from productive labour in the prison department and in EnUCATION. ^19 convict prisons, the sale of discontinued prisons, &c., viz. 136,000Z. ; compulsory contributions of parents, .&c., under orders of the justices, to expenses of re- formatory schools and industrial schools, 25,000^. ; and other items, which form a total of about 170,000^. In explanation of the increase in the expenditure under this head : — the increase for 1853-4, as compared with 1825, was materially owing to the discontinuance of transportation beyond the seas. This ceased, as regards New South Wales, in 1840, and, as regards Van Diemen's Land, having been suspended during 1847-8, ceased altogether in 1852, by which time the 'Australian League,' of colonies pledged to oppose the importation of convicts into Australia, had been formed, and the discovery of gold had rendered the transportation no longer of any penal efficacy. The increase for 1880-1, as compared with 1868-9, is due to the additional charge for the prisons transferred to the state in 1877. A charge of 418,154^. for Law Charges and (d) Law Criminal Prosecutions ^ raises the total under the head andProse- of 'justice, police, and prisons,' to 7,006,369^. |^mmion. 2. Education, Science, and Art. 5 millions. Next in importance to the expenditure for justice, Education. police, and prisons, ranks that for education, science, and art. The expenditure for elementary education, of late growth in our fiscal accounts, commenced with a small ' Subject to a deduction of 3,013/. 520 THE NATIONAL EXPENDITURE. parliamentary grant in aid, first made in 1832, and subsequently continued annually. This was adminis- tered by the treasury until 1839, when it was in- creased in amount, and an education department was, in effect, created by an order in council, in the form of a committee of the privy council on education, with an official staff, termed the Committee of Council on Education. Henceforth, the grant rapidly increased in amount. In 1846 the department, by minute, introduced a more thorough system of inspection than hitherto had prevailed, and effected a most impcjrtant improvement in the class of teachers, by the substitu- tion, in lieu of the old monitorial system, of a plan, copied from the Dutch schools, of pupil teachers with stipends, regularly apprenticed to the teachers and eligible, subsequently, for scholarships at the training colleges. The creation of a parliamentary representative of the department in 1856, in the form of a vice- president of the committee, with a salary of 2,000/. a year,^ to be responsible to the House for the applica- tion of the grant, marks the growing importance of the subject. The appointment, in 1858, of a commission of castle's inquiry ; the reduction of the minutes of the depart- eion. ment into the form of a code, by lord Sherbrooke, the vice-president, in 1860 ; the report of the commission ; and the revision of the code, July, 1861, with a view to render the distribution of the grant more simple, general and effective for its purpose ; were followed by a more strict administration of the grant under the MO & 20 Vict. c. 116. Duke of New- ELEMENTARY EDUCATION ACT. 521 provisions of this Eevised Code. The main feature of the eode consisted in payment by results, and the effect was to diminish, for several years, the amount of the grant, until, under the combined operation of a more liberal scale, under a minute of February 20,, 1867, and increased energy, due to the daily growing importance of the question of national education, the process was reversed from diminution to increase, so that, in 1869-70, the amoimt for Great Britain and Ireland had risen to nearly a million and a. quarter.^ But, though ' the schoolmaster was abroad,' our shortcomings in the provision of the means of education, for a population with whom, in a time of unrestricted competition and rapid intercommunication — Of free trade and railways — intelligence and knowledge daily grew in importance in the struggle for life, were now generally acknowledged. Education in England, when compared with the standard of education in America, or that of many European countries whose workmen compete with ours, fell far below the mark ; and, if a million and a half of children were on the books . of inspected schools, at least as many, it was estimated, did not attend any efficient school. In these circum- stances, in recognition of the importance of an increase in our means of national education, was passed Mr. Forster's Elementary Education Act of 1870. To the expense involved in the application of this Act and the subsequent Acts of 1876 and 1880,^ > G. B. 840,711 Z. ; I. 374,680Z. ; U. K. 1,215,.S9U. * 33 & 34 Vict. c. 75 ; 39 ,v ^ e0'*J>>Oe0O5 «5;Dr-iOt^ o O "* o ■^ «fl •>*00-*»O CDCD>0(»CC)<0 T).> .\#«nnn r\ »>, WO-^eoiMt^ -wj^icgiNOs CD 00 so O ■* 00 OS M CD Army, ( he war. » 1 •-■•"•■I ••••• CD 03 ^ •*a 00 Ph P% ^s ^ .1 . . ^ . . . • . 3jl rt -oS^^ 1 § . CD 1 1 ccess 66 mtin leon. • . . . 00 'S «> 3 t^ S o 1— I •§ .§ !Er-i " Ph o E-i . . .g5|^ . . > 00 00 CO le, &c. . ) and of Austri ture continued War expendit ry France and f Credit :t mied till 1856 ^ ^ p t-H P3 nnual Pea ose services 1 o of Credit of Credit • 1 W Pb o 1 the total amount of average w. rom the total expenditure for th War in Ireland and against Franc War of Spanish Succession War with Spain . War with Spain (Eight of Search Seven Years' War. War expendi War of American Independence. The Great War with Eevolutiona diture continued to 1817 Insurrection in Canada. Votes o First China War Kaffir War. Total Votes of Credi Eussian War. Expenditure conti 0) -s > 1 — 1 I 1 o m an Expedition, Total Votes Zealand War. Total Votes isinian Expedition , deducting Services f S 05 .C VO ^ t-C0rH00e0>Or-l COMMCO ■.. H IKirHC^rilCCOOOO -^TtHltSiO t^ i-H t> >o 00 1 "§ % 1 1 1 1 1 1 f^ 1 1 1 1 1 1 1 1 00IM00O5CDCD 1 00O00-*COOCD-*CO 1 P ooOr-(coioj>co eo-*tifflco>ococo CDl>t~X>t~»>05 00000000 00 00 00 00 » .-1 APPENDIX VI. 635 o 1—1 P Ph Ph M 03 EH O Q P o o I o (n izi o >0 00 .-H o to IM >o (?q OS J> o o >o r- oj o t^ o o^ rH. U3 «^ •% «\ #t n n (M M CO M »« a> M ^ SM 00 t^ eo 00 00 1> >0 Tjt i-H ■* 1^ — 1 (N IN >0 i-H o rH I-l >o I— 1 France . . g . :S ■ • • '^ ■iH ^ U S-l S-l <'^ 1^ ^ Bj c3 oj cs ca > cd 1 ^^^ s ^ • • rS i—t r\ «\ ♦t o o Q « wx ■* •x O) (D >> 03 o 03 O -P p^ p-H ^ ' r K •x T3 a fH -tj -p H < ^ 00 ■* oi ■* to • CO OJ .-H Tfl (© 00 i-H p— 1 ■ix> l^ *^ *- t~ 00 00 1— 1 1— 1 I-l — I rH I-H 1— t 536 HISTORY OF TAXATION. hH »o > oo 00 I-H o 1 (M o 1> rH X r/T h-t Iz; ft H tzi a m p-t g p-i o o o O T3 CM d ^ CO S -e 00 • ^ CO I I> CO 1-1 i~ ■3- .S S 02 Wo .-H O « ft S 03 03 pqp^tz; O ^ ,-H « eo r- ,-( «5 ^ ^ o ^00 H o o pj^ tH KB 1:^ 00 1—1 t- "l^ t^ 1> t^ rP 03 CM CO CM eo APPENDIX VJI. 537 eo <» 1 to V3 763 ca, 1765 tax rep. 1766 • t4H (M O •43 75. War of dence, 1776- 1 84. Sinking "reaty Com. French Rev. ranee, 1793- isment, 1798. Marengo, i-H 1 g w " CJ •> CO wQ ^H QU g fl § 1 ts o cs a 1 1 S3 02 00 1-H 1 ■IH M cd I-H K <=5 o CO OM^i-? •^ o • . . .^ ^ • rCi nd • (U « -§ ^1 ^ '3 60 tio o • '^ a 33 ■- fl a • Soao^ aj te te CQ 03 ^^ 1^1^ CD 5 > 6 WW «.|ld 1— ) o o l-j ^■i .-a o o WW iKCiJ^'w 1 ■73 Jl 1 Ph 1 00 • -d M . CO g o I-H o O •1- 03 03 s 1 a s 1 OS -0 ■ O 3-53 1i > 1 •Ifl e3 -1 13 j3 1 • -e 53 o eS a b o '^ 13 tJ ^^ 'ii b t; >^ t»5 1-5 b .^^H- O 1 ' ^^ (S to eo (N CO >0 CO d oi CO >0 lO CO CO 50 «o j> 00 j; CO •^ t- l> t~ t^ J?- J> t- t~ 1^ " l-H .-H I— 1 f-H r-H I-H I-H 1— 1 I-H 538 HISTOEY OF TAXATION. -S ■to o o t— I CM 00 .-1 o CO 00 rH iu cLeo o CO S -2 H 00 03 »"* 1 , 1802 14 ca, 18 815 1816. OS << 1 ■ dutie ment, 834 1 e of Amiens erlitz, 1805 ., 1806, Oct. Luddites, 1811 War with Ameri Peace of Paris, 1 Income tax rep. ■^00 ■ and leather rmed Parlia: 36 tax rep. 1 Peac Aust Jena £ 0) Beer Eefo Houi g . . . • • • a a Z ce S. Perceval ansittart F.J.Eobinsi 1—1 o I-H "S s -3 ddington 'itt H. Petty > c6 CO i bo-S oulburn . Althorp Althorp . Peel K H ^^-H a s^ i 30 O-^-^M CQ 1-1 121 o W>3 W o , o 6h^ W^^S I-H S p < • • • • 812) . 822 . idel823 • g -. 1- s - .5 'S "a - •a < Addington Pitt . Grenville and Fox 'AH the Talents' Portland . Canning For. Sec. Perceval (May 11, Liverpool . Canning For. Sec. Huskisson Bd. of T Wellington Grey Melbourne Peel(l) . ^50 r-t ^ w to O -sti o (N ,-1 1-1 CO IM Ol 1-1 ^ (M OS cj 1^ 00 O -^ o o o o O .-1 - i0 >0 tD to to " 00 00 00 00 00 00 00 00 s ^ "-r^g 1^ s^-s --^e^rr^ g .-. g b 03 ^ p03^ 03a3c8p«--ir-; •jHr-H ^ 30 I^ 2 1 3M (M 03 Ph P ■^ o "o *^ 00 oc 00 00 00 540 HISTORY OF TAXATION. APPENDIX No. VIII. LIST OF THE COMMONWEALTH EXCISE. Foreign and Imported Goods. Tobacco not of the English plantations, per lb. . „ of the English plantations, per lb. To be paid by the first buyer from the mer- chant or importer. Wine, not Spanish, per tun .... „ Spanish, per tun ..... Vinegar, per tun ...... Spirits made of any wine or cider, per gallon Strong waters, perfectly made, per gallon . Beer and Ale imported into England and Wales, per barrel ....... Soap, soft or hard, per cwt. . . . ■ . Hops, per cwt. . . . . . . " . Woollen cloth, per yard measure Stuffs or other woollen manufacturCj per yard measure ....... Dyed silk, per 20s. value ..... Silk lace and ribbands and gold and silver lace and ribbands, per 20s. value . . .030 Drugs, glass or glasses, earthen and stone wares, per 208. value '2 Raw silk, rough hemp, undressed flax and tow, tar, rosin, pitch, wax, tallow, cable, cable yarn, and all manner of cordage, per 20s. value 6 Foreign salt, per gallon . . . . .001^ All other goods and merchandises (except bullion, corn, victuals, arms, ammunition, and ord- nance of brass or iron) according to the value in the Book of Eates for Excise, per SOs. .010 £ $. d. \ 1 6 9 2 4 1 5 6 10 5 1 5 APPENDIX viir. 541 Native ok Inland Goods. 2 6 6 2 Beer or ale, above 6s, the barrel, brewed by the common brewer, or by any other person who sells or taps out beer or ale publicly or privately, to be paid by the brewer or such other person, per barrel .... Beer or ale of 6s. the barrel or under Hops, English, the cwt., to be paid by the planter SafiFron, English, for every 20s. value, to be paid by the planter 10 Tin, for every 20s. value, to be paid by the first buyer or exporter 10 Iron, English, which is past the forge and is wrought into bars, for every cwt., to be paid by the maker . . . . . .006 All pots, backs for chimneys, plates, weights, anvils, and all other commodities of cast-iron (except ordnance and shot), for every cwt., to be paid by the maker or caster . . .003 Ordnance and shot of cast-iron, per cwt., to be paid by the maker 3 Aqua vitse, or strong waters, made or distilled within the commonwealth, whether of foreign or domestic spirits or materials, per gallon, to be paid by the first maker or seller thereof respectively . . . . . .002 Soap, per barrel, made within the commonw:ealth, of what sort soever, to be paid by the maker, and so proportionately for hard soap or soft Roap ........ Silver and gold wire, for every ounce troy of silver, or gold prepared, melted down or dis- grossed for wire, to be paid at the bar where the same is disgrossed . . • .00 VOL. 11. N N 4 542 HISTORY OF TAXATION. £ I. d. Copper, for every pound avoirdupois of any copper or any other metal, prepared, made fit, or dis- grossed, to be paid at the bar where the same is disgrossed . . . . . .002 Oil, for all linseed, whale, blubber, rape, and pilchard oil, and all other oils made within the commonwealth, per tun, to be paid by the maker . . . . . . .060 Lead, for every fother containing 20 cwt., to be paid by the maker or smelter . . .068 Cider and perry, made and sold by retail, whether it be by the first maker or any buyer or re- eeiver thereof from the first maker, per hogs- head 2 6 Metheglin or mead, and such like drinks, sold out by retail, to be paid by the maker, per gallon 1 Starch, per cwt., to be paid by the first buyer .010 GlasB, all sorts of glass or glasses, upon every 20s. value thereof, to be paid by the maker . 1 ~ Salt, made within the commonwealth, and ship- ped or conveyed by water, to be paid by the first buyer, at the place of landing or unload- ing thereof, per gallon . . . .000^ All other salt, not shipped or conveyed by water, to be paid by the first buyer, upon the first delivery, per gallon . . . . .000^ Upon all salt-upon-salt that is made of salt, within the commonwealth, to be paid by the maker thereof, per gallon . . . . OJ * ' Scobell, Acts and Ordinances, ii. 452-477. APPENDIX IX. 543 M o M I— I p 1^ o 03 g 00 8 I ' ■1 ■a CO CD 50 (N CO CD » 0l0r-li0 OO ^lO-^COININrHrHIN CO 1 1 |3 ■OOOOQOOO O OOO OO OO « IN IN IN 00 IN IN IN I^ IN IN IN ffq IN 5H r-1 .,lO O >0 OT IN r-l rH —1 rH r-l r-l rH OO =8 IN IN rH rH rH § ca 1 1 ■OOOOO OOOOOOOO OO •J IN IN !N IN IN IN IN (N IN IN IN IN IN IN rH r-l O 13 O t~ lO lO lO rH rH rH rH rH OO ■WM in IN rH rH CO •3 1 II ll ■aO O O 00 O OO O O O O O OO « tK Tti 1* O ■>*'*■* Til -*•>*■* ■* ■* ■* ,10 OeOIN-HrHrHrHrHrHrH OO •San IN — rH rH 1 rrt ■aooooo O OOO OOO OO ••■^ ■^ ^ "^ "^ ■^ ■^ ^ "^ ^ "^ ^ ""^ '^ ,0 »0 O t^ iO UD lO rH rH rH-rH rH OO =*C0 IN IN rH rH 14 S 8 ■SOOOOOOOOOOOO OO <« tJi tJi ^5* ^4^ ^^ '^^ '^' ^^ '^^ '^r ^' ^^ ^f ^^ „0 OO >C O «5 O O >0 lO rH IC rHO »«10THMIN!NrHrHINr- ....... 4 1 n A Duke or Archbishop A Marquis .... An Earl . . ~ . A Viscount .... A Baron and Bishop . A Baronet or Knight of the Bath A Knight Bachelor, or Dean . The King's Serjeant at Law Other Serjeants at Law . An Esquire .... A Gentieman .... Doctors of Divinity, Law, or Physic Persons of 601. per annum or 6001 personal estate Persons not otherwise charged . N M" 2 544 HISTORY OF TAXATION. 2. The Tax on Bachelora. Degrees, Titles, &'o. A Duke, &c, A Marquis . An Earl . A Viscount A Baron . A Baronet and Knight of the Bath A Knight Bachelor . The King's Serjeant at Law Other Serjeants at Law . Esquires Gentlemen .... Doctors of Divinity, Law, or Physic Persons of 50^. per annum or 600i personal estate Persons not otherwise charged The party bimseU £, I. d. 12 11 iO 1 7 11 6 6 5 10 S 16 2 11 5 10 3 16 16 6 16 6 1 The eldest son The younger sou >. d. 11 6 1 8 6 16 6 6 6 6 6 6 6 3 6 1 £ 6 6 3 3 3 1 t. d. 5 1 16 7 8 1 6 6 6 6 6 6 6 3 6 1 APPENDIX X. 545 APPENDIX No. X. CHARACTER OF SIR ROBERT WALPOLB, BY LORD CHESIERFIELD. I MUCH question whether an impartial character of sir Eobert Walpole will or can be transmitted to posterity; for he governed this kingdom so long that the various passions of mankind mingled, and in a manner in- corporated themselves, with everything that was said or written concerning him. Never was man more flattered, nor more abused ; and his long power was probably the chief cause of both. I was much ac- quainted with him, both in his public and his private life. I mean to do impartial justice to his character ; and therefore my picture of him will, perhaps, be more like him than it will be like any of the other pictures drawn of him. In private life he was good-natured, cheerful, social ; inelegant in his manners, loose in his morals. He had a coarse, strong wit, which he was too free of for a man in his station, as it is always inconsistent with dignity. He was very able as a minister, but without a certain elevation of mind necessary for great good or great mischief. Profuse and appetent, his ambition was subservient to his desire of making a great fortune. He had more of the Mazarin than of the Kichelieu. He would do mean things for profit, and never thought of doing great ones for glory. 546 HISTORY OF TAXATION. He was both the best parliament-man, and the ablest manager of parliament, that I believe ever lived. An artful rather than an eloquent speaker ; he saw, as bj intuition, the disposition of the House, and pressed or receded accordingly. So clear in stating the most intricate matters, especially in the finances, that, whilst he was speaking, the most ignorant thought that they understood what they really did not. Money, not prero. ative, was the chief engine of his administration ; and he employed it with a success which in a manner disgraced humanity. He was not, it is true, the in- ventor of that shameful method of governing which had been gaining ground insensibly ever since Charles II., but with uncommon skill and unboimded profusion he brought it to that perfection which at this time dis- honours and distresses this country, and which (if not checked, and God knows how it can be now checked) must ruin it. Besides this powerful engine of government, he had a most extraordinary talent of persuading and working men up to his purpose. A hearty kind of frankness, which sometimes seemed impudence, made people think that he let them into his secrets, whilst the impoliteness of his manners seemed to attest his sincerity. When he found anybody proof against pecuniary temptations, which, alas ! was but seldom, he had recourse to a still worse art ; for he laughed at and ridiculed all notions of public virtue, and the love of one's country, calling them ' the chimerical school-boy flights of classical learning ; ' declaring himself at the same time, ' No saint, no Spartan, no APPENDIX X. 547 reformer.' He would frequently ask young fellows, at their first appearance in the world, while their honest hearts were yet untainted, ' Well, are you to be an old Eoman ? a patriot ? You will soon come off of that, and grow wiser.' And thus he was more dangerous to the morals than to the liberties of his country, to which I am persuaded he meant no ill in his heart. He was the easy and profuse dupe of women, and in some instances indecently so. He was excessively open to flattery, even of the grossest kind, and from the coarsest bunglers of that vile profession; which engaged him to pass most of his leisure and jovial hours with people whose blasted characters reflected upon his own. He was loved by many, but respected by none ; his familiar and illiberal mirth and raillery leaving him no dignity. He was not vindictive, but on the contrary very placable to those who had injured him the most. His good-humour, good-nature, and beneficence, in the several relations of father, husband, master, and friend, gained him the warmest affections of all within that circle. His name will not be recorded in history among the ' best men ' or the ' best ministers ; ' but much less ought it to be ranked among the worst. 548 HISTORY OF TAXATION. APPENDIX No. XI. STATE OF THE CUSTOMS LAWS IN 1784. The following is an extract from the first Eeport of the commissioners of customs. After a brief history of the customs laws, and a statement that the whole number of Acts relating to the customs passed previous to the accession of George III. was 800, to which were added in the first fifty-three years of his reign 1,300 more — some of which were obsolete, but which formed a difficult question for merchants and officers of customs, the commissioners add, with regard to the state of things to remedy which Pitt introduced, in 1787, his customs consolidation Act, based upon 3,000 resolutions of the house of commons : — ' The first important attempt to consolidate the customs laws was made in the 12th year of Charles 11., ■when the Act called the " Book of Eates " was passed. An additional " Book " was issued in the second year of George I. ; but as new duties came to be added and old ones to be modified, fresh complications were introduced into the statutes, till the whole system grew into a bewildering and appalling chaos, of which the following specimen may give us some adequate idea : — APPENDIX XI. 549 Example op an inward Duty paid Entry in 1784. 20 Eeams French Royal Paper for the new Duties. 10 Keam Atlas Fine. 10 Ream Super Royal Fine. Gross Money Nett Money as computed on as entered the Bills ' in Cash Book £ 1. d. £ .. rf. Old Subsidy .... 20 1 New Subsidy 20 1 ^ Subsidy . 1 Sul)sidy . Subsidy, 1747 6 13 4 6 8 13 6. 8 13 4 20 10 Subsidy, 17.59 20 10 Impost, 1692 100 5 French Duty 100 5 Duty on Soap, Paper, &c. 280 14 Additional Duty, do. . 140 7 Duty on Paper, 1784 140 7 0,0 2 3 860 Impost, 1779 .... 43 2 3 Impost, 1782 .... 43 946 47 6. ; Explanation op the Process op Computation. This article is rated at £1 the Ream; the amount, 20 Ream, is £20. By what Act granted 12 Chas. II. cap. 4 . 9 & 10 W. III. cap. 23 2 & 3 Ann. cap. 9 . 3 & 4 Ann. cap. 5 21 Geo. II. cap. 2 . 32 Geo. II. cap. 10 . 4 Wm. & Mary, cap. 6 7&8Wm.III.-cap.20 ' It was the practice times their amount in the The Branches to which it is liable are ^ part of New Subsidy The old Subsidy, which is 5 per cent, on the rate . New Subsidy, which is 5 per cent, on the rate ^ Subsidy, f Subsidy, „ f parts of do. Subsidy, 1747 „ 5 per cent. on the rate Subsidy, 1759,, do. Impost, 1692 „ 25 per cent. as -French goods, do. French duty „ do. £ 1 1 6 8 13 4 at this time to compute the duties at twenty iirst instance. 550 HISTORY OF TAXATION. Explanation of the Peocess op Computation — continued. By what Act granted 10 Auu. cap, 19 12 Ann. st. 2, cap. 9 24 Geo. HI. cap. 18 , 19 Geo. III. cap. 25 . 22 Geo. HI. cap. 66 , The Branches to which it is liable ore Duty on soap, paper, &c. This duty is a specific sum per ream, according to the particular sort or quality of the Koyal paper, independent of the former duties, which were relative to the general term of Koyal only, viz. : 10 Ream At- las Fine at £16 per Ream . £8 10 Ream Su- per Royal Fine at £12 6 Additional duty on soap, paper, &o. is J the pre- ceding one . Duty on paper, 1784, is constructed on similar principles with the two former duties, viz. : 10 Ream At- las at £10 per Ream £5 10 Ream Royal at £4 do . .2 Impost, 1779, being 5 per cent, on the total amount of all the before-men- tioned duties Impost, 1782, being 5 per cent, on the total amount of all other duties ex- cept the impost, 1779 . Total nett Duty . £ t. d. 14 7 7 2 3 2 3 47 6 APPENDIX Xn. 551 APPENDIX No. XII. Statement showing the estimated aggbegate Reduction of Customs Duties between 1835 and 1853.' ^ Tears Estimated Loss by the Repeal or Eedno- tion of Duties Estimated Gain by the Imposition or Augmentation of Duties £ £ 1835 .... 31,877 75 1836 . 143,116 797 1837 . 234 — 1838 , 289 — 1839 . 4,950 — 1840 . . 1,060,226 1841 . 27,170 — 1842 . 1,498,944 160,822 1843 . 171,021 — 1844 . 286,431 — 1845 . 3,603,561 — 1846 . 735,228 2,000 1847 . 344,886 — 1848 . 585,968 — 1849 . 388,798 — 1850 . 334,151 — 1851 . 801,064 — 1852 . 95,928 — 1853 . 1,499,474 16,383 Excess in the amount 10,563,590 1,240,303 of Duties repealed or reduced beyond that of those imposed or 9,31^ 1,287 augmented, from 18.35 to 1853, both • inclusive. . ■' ' First Eeport of the Commissioners of Customs, 1857. 552 HISTORY OF TAXATION. APPENDIX No. XIII. The Gross Receipt op the Customs Eevenue op the UuiTEp Kingdom in each year peom 1835 to 1855. Tears Gross Receipt Tears Gross Receipt 1835 . 23,148,899 1847 . 21,824,010 1836 . 23,959,037 1848 . 22,785,942 1837 . 22,907,616 1849 . 22,483,956 1838 . 23,210,881 1850 . 22,194,142 1839 . 23,508,681 1851 . 22,373,662 1840 . 23,657,943 1852 . 22,312,514 1841 . 23,821,486 1853 . 22,737,284 1842 . 22,771,315 Year end( 3d 31st 1843 . 22,850,169 March . 1844 . 24,277,477 1855 . 22,245,118 1845 . 22,007,578 1856 . 23,481,818 1846 . 22,611,708 INDEX TO VOLUMES I. AND II. [Note. — For references to Volume I., the page only is stated.'] ABB ABBEYS, &c., granted to Henry VIII., 135-140 Aberdeen coalition ministry, ii. 339 Abyssinian expedition, the, ii. 375 Acts for tbe Tudor subsidies,. 151 Act for the hereditary excise, ii. 22. See Excise Act of Navigation, rigorously enforced by GrenviUe, ii. 146 Act of Union, the fiscal arrangements ■with Scotland under, ii. 72, 73 Act against spirituous liquors, Je- kyll's, repealed, ii. Ill Addington, Henry, see Sidmouth Addison, secretary of state, ii. 85 ; retires, ib. Administrations, table of, ii. Appen- dix VII. 536-539 Advertisement duty, imposed, ii. 78 ; doubled, 134 ; increased, 193 ; re- duced, 301 ; repealed, 341 African Company, the, attempt to tax stock of, ii. 51 Agricultural stock insurances, ex- empted from duty, ii. 300 Aids under the feudal system, 21 Aids, payment of, by towns, 49, 50. See Tallage Aislabie, John, chancellor of the ex- AME chequer, ii. 85 ; his share in South Sea Scheme, 86 Aix-la-ChapeUe, Peace of, ii. 123, 127 Alabama indemnity,, the, ii. 399 Ale, goes out of fashion, 183. See Beer Alien priories, resumption of their lands, 107 Aliens, poll tax on, renewed in 1449, 116; poll tax on, granted for life to Henry VI., 118, 126; double rate of taxation on, 126, 142, 152, 153 Alliance, the Grand, ii. 64, 69 Almanacs, tax on, ii. 76 ; repealed, 305 Althorp, see Spencer Amerciaments, exacted by William the Conqueror, 26 American colonies, Grenville's scheme for their taxation, ii. 146-150 ; their resistance to the Stamp Act, 151 ; new taxation of, by Charles Townshend, 157 ; repeal of Towns- hend's import duties in, 161 ; their Declaration of Independence, ]6i ; war of, with England, 157, 160- 182 554 INDEX TO VOLUMES I. AND II. AMI Amiable grant, demanded in lfi28, 133 Amiens, Peace of, ii. 230 Ancient Customs, the, 76--80. See Customs Andover exempted from tax, 112 Anglo-Saxon taxation, 8, 9 Anne, queen, ii, ; grant of civil list to, 65 ; grant of port dues for a term, 67 ; war of Spanish, succes- sion, 67 ; Walpole in office, 70 Annual grant, of the land tax and malt duty, ii. 68 ; of the tea duty, ii. 347 Annuities brought into charge in 1435, 113 ; terminable, fall in, ii. 356 ; fresh creation of, in 1867, 374; in 1881, 410; granted to the Eoyal Family, 606-511; Government, to be free of all taxes and duties, 52 Annus mirabilis, the fiscal, ii. 399 Aqua vitae, Drake's monopoly of, 205 Aquitaine, lost to England, 102 Archers, grant of tax for, to Edward IV., 123; to Henry VII., 127, 128 Armada, the Spanish, taxes for de- fence against, 148 ; fleet against, principally composed of merchant vessels, 212 Armorial bearings, taxed, ii. 223, 377 Army, ii. ; cost of abolition of pur- chase in, 391 ; table of cost of, 482 ; its history, 483, et seq. ; feeling against a standing army, 485 ; army of Charles II. and the Bill of Eights, ib., 487 ; permitted by Mutiny Act, 487 ; army of George I., 488 ; militia, 486, 489 ; after the great war, 491 ; since the Crimean War, 493 ; the vol- unteers, ib. Art, Science and, ii. 623 Assay Office, the, ii. 187 Assessed taxes, the, ii. ; organised by Pitt, 188, 189; additional duly on, 196, 210, 213, 216 ; triple as- sessment of Pitt in 1798, 220; further increase of, 230, 236; their consolidation by Spencer Per- ceval, 237 ; repeal of, in Ireland, 274 ; rise in, 313 ; revised, 341 ; their break up, 377 Assessments for carucage, 35 ; for scutage, 44 ; of taxes on move- ables, 70-74; taxation of the clergy by, ii. 32 ; of the Tudor subsidies, 151-158 (see Subsidies and Taxation); under the Com- monwealth, 4, 5, 6, 30, 36 ; for the Poll tax, 29 ; under William III., 47-51 Assessors for taxes on moveables, 71 ; for the Tudor subsidies, their appointment, 163 Assize of arms, under Henry II., 60 Asylums, grant in aid of, ii. 528 Attorneys, taxed, ii. 191, 211 Auction duties, ii. 170; increased, 216 ; yield from, 251 ; proposed repeal of, 295 ; repealed, 328 Audley, lord, defeat of Cornish re- bellion under, 129 Austrian Succession War, ii. 109, 171 Auxilium burgi, 50 Azincourt, battle of, grant of taxes after, 107, 173 BACHELORS and widowers, tax on, ii. 46, 644 Bacon, his observation on taxes, 158 ; his speech against the Bill for the abolition of monopolies, 207 Bank of England, ii. ; the, founded, 454; the debt to, 464, 467 m.; its charge for management of the National Debt, 480, 481 INDEX TO VOLUMES I. AND II. 555 BAN Bankers, taxed, ii. 31, 237, 261 Barbary pirates, ravages of, recited in the ship writs, 214 Baring, Francis, afterwards lord Northhrook, chancellor of the ex- chequer, ii. 312 Bamet, battle of, 121 Baronetage, sale of, by James I., 209 Barons of the exchequer, 27 Barons, northern, their refusal to pay scutage, 42 ; taxation of their moveables by John, 62 Barons, tax on creation of, 209 Basset, Philip, justiciar, 29 n. Bates, refuses to pay impost on cur- rants, 186 ; decision against, i6. Bath, "William Pulteney, earl of, ii. ; secretary at war, 84 ; resigns, 85 ; joins the opposition, 87, 101, 108 ; refuses office, 110 ; raised to the peerage, ib. ; his meeting with Walpole in the House of Lords, ib. ; his hopes of power overthrown byPelham's appointment, 111 ; his decline in power, 124, 125 Beaconsfield, Benjamin Disraeli, earl of, ii. ; chancellor of the exchequer, 327; proposes the reduction of malt duty, 328; again chancellor of the exchequer, 351 ; sinking fund repealed by, ih. ; chancellor of the exchequer, 373 ; his budget of 1867, 374 ; prime minister, 375 ; resigns, ib. ; his second ad- ministration, 401 ; resigns, 411 ' Bearers ' to subsidy men, 165 Beaver skins, duty on, reduced by * Walpole, ii. 91 Becket, Thomas, archbishop and chancellor, 40 Beckford, alderman, ii. ; opposes new customs, 119; taxes proposed by, 134 ; opposes Legge, 136 ; his death, 158 Bed-chamber plot, the, ii. 312 Bedford, John, duke of, ii.; ap- BOB pointed lord-lieutenant of Ireland, 114; becomes president of the council, 145 ; his death, 159 n. Beer, duties on, ii. 8, 23, 24, 27, 28, 34, 63, 56 ; additional duty on, 72, 75, 76 ; great increase of taxation on, 138, 166, 172, 230, 242 ; Adam Smith on the taxation of, 172 ; yield of the tax, 263 ; repeal of the tax, 290, 412 ; consumption of, in 1825, 386 ; tax re-imposed on, 416; reduced consumption of, in 1883, 420 Benevolences, demanded by Edward IV., 196 ; Act against, 176, 192, 199, 203; under Henry VII. and Henry VIII., 200, 201 (and n.) ; under Elizabeth, 202; under James I., 203 ; under Charles I., ib. Berwick on Tweed, exempted from taxation, 153 Best's Farming Book, extracts of rates from, 166, 161, 220 nn. Bexley, see Vansittart Bills of exchange, tax on, ii. 175 ; additional duties on, 180, 227 Births, deaths, and marriages, tax on, ii. 46, 180, 210, and Appendix IX., 543 Black death, the, 99 Blake, admiral, a tax commissioner, ii. 7 ; frees the Mediterranean from pirates, 8 Boadicea, her protest against taxes, 4 Bolingbroke, Henry St. John, vis- count, ii. 70, 76, 80 Book of Rates, for the poundage queen Mary's, 179 ; queen Eliza- beth's, 181; James I.'s, 186; Charles I.'s, 193 ; under the com- monwealth, ii. 6, 12; in 1660, 16, 17 ; additional, under "Walpole, ii. 92 Bordeaux, recovery and loss of, by England, 118 Borough, its origin, 5 556 INDEX TO VOLUMES I. AND II. Boa Boston, tea riota in, ii. 163 ; its port closed, ib. Bosworth, battle of, 176 Bottles, tax on, ii. 66 ; repealed, 304 Boulogne, cost of taking in 1544, 140, 201 ; sold to France, 145, n. Brandy (French), ii. ; increased con- sumption of, in England, 23; Dutch exclusion of, 28, n. ; its taxation, 27, 33 ; importation of, prohibited, 53 ; its Scotch impor- tation into England, 71 ; duty on, reduced, 192 ; addition to duty on, French and English, 196 ; additions to duty on, made per- petual, 210 ; further taxation of, 239, 243 ; duty on, reduced, 356 Brass, use of, in 14th century, 233 Breaut^, Falkes de, his fall, 37 Brest, expedition of, invasion from, ii. 131 Bretagne, scutage of, 66 Bretigni, peace of, 89 Brewers' licenses, produce of duty on, ii. 253 ; in place of duty on hops, 367; readjusted in 1875, 404; repeal of the tax, 412- 416 Brewing, private, proposed tax on, ii. 236,242, 291, .368 Bricks, ii. ; proposed taxation of, 130, 186 ; additional duty on, 210, 210, 233 ; repeal of the tax, 334 Britain, no trace of taxes in, before the Roman occupation, 3 ; Roman taxes in, 3, 4; Roman troops withdrawn from, 5 j abolition of Roman law in, ih, British wines, tax on, abolished, ii. 304 Broad Bottom Administration, ii. 114 Buckingham, subsidies granted to, in 1628, for his expedition to Rochelle, 160 CAN Budget, opening the, first use of the term, ii. 139 Buildings, public, ii. 626 Burh, see Borough Burke, Edmund, ii. 154; quoted, 155, 166, 164, 174 Bute, John, Earl of, secretary of state, ii. 138; first lord of the treasury, 139 ; supports the Cider Bill, 141 ; resigns, ib. ; carica- tured, ib. Butlerage, its origin, 79 ; in queen Elizabeth's Book of Rates, 183; temp. Charles II., ii. 17 ; abolition of, 237 Byng, Admiral, ii. 131 CADE, his rebellion, 117 Calais, lost to the English, 144; duties lost with, ii., 179 ; fortified by Henry VIII., 134; arrange- ment regarding the possession of, in 1559, 146 Calendar, the, reformed by Chester- field, ii. 123 n. Calicoes and cottons, tax on, repealed, ii. 295, 297 Cambric, French monopoly of, ii. 192 Cambridge university, exempted from taxation, 163 Campbell, John, lord, on political affairs in 1841, ii. 322 Canada, conquest of, ii. 135, 148 Canals, traffic increased by means of, ii. 164, 202 ; proposed taxation of 217 Candle tax, ii. 72, 74, 186; Adam Smith on, 160; reduced, 197; repealed, 296, 297, 341 ; estimate of its yield, 255 Canning, George,ii. foreign secretary, 236; his duel with Castlereagh, 238 ; resigns, ib. ; takes ofBce, 272 ; his administration in 1827, 284; his death, ib. INDEX TO VOLUMES I. AND II. 557 CAN Oanningites, the, ii. 285 Cape wine, reduction of duty on, ii, 297 Capitatio humana, see Poll Tax Captives of pirates, tax for, ii. 7 Card tax, 209 n.; ii. 76, 130, 151, 165 Carkesse, C, his tables of the Cus- toms duties, ii. 93 Carriage tax, ii., imposed by Pelham, 117, 118, 123, 189; extended by North, 165; comprised in the assessed taxes, 189; increased, 191 ; changed to a license tax, 377 Cartae baronum, use of the term, 44 Carteret, see Granville Carucage, taken by Richard I., 35 ; how assessed, ib.; and collected, ■ 36; under John and Henry III., ib. ; its disuse, 37 Carucate, the, 35 n. Oastlereagh, Eobert, viscount (mar- quis of Londonderry), ii. ; presi- dent of the board of control, 233 ; secretary for the colonies, 236; out of oifice, 238; bis duel with Canning, ib. ; secretary for foreign affairs, 241 ; leader of the House of Commons, ib. ; death of, in 1822, 272 Catherine Howard, grant to Henry VIII. on his marriage with, 139 ' Catskin war,' the, origin of the name,"ii. 128 Cavendish, lord John, ii. ; commis- sioner of the treasury, 153 ; goes out of office, 154 ; chancellor of the exchequer, 178 ; resigns, *. ; again in office, 179 Cecil, Robert, see Salisbury Chambers, Robert, raises the ques- tion of ship money, 219 Chancellor, the king's, 27 Chancellor of the exchequer, first appointed, 29; oath of, 30; list VOL. II. CHA of the chancellors. Appendix VII., ii. 636-639 Chancery, roll of the, 29 Chandos, the marquis of, his motion in 1834 for relief of agricultural classes, ii. 305 Charles I., his accession, 191 ; levy of tunnage and poundage under, ib.; Petition of Bight, 192, 193; continued levy of tunnage and poundage under, 193 ; subsidies granted to, 194 ; poll tax under, ib. ; ship writs under, 210-233 ; Short and Long Parliaments under, 193, 221 ; act against ship money passed under, 221 ; mono- polies under, 208 — II., ii. ; his restoration, 14 ; port dues granted to, for life, 17 ; demesne restored to, 26 ; his ex- travagance, ib. — the Bold, of Burgundy, league of Edward IV. with, 121 — v., emperor, grants Malta to the Hospitallers, 137 — v., of France, summons the Black Prince for the taxation of Aqui- taine, 89 — X, of France, his illegal ordi- nances and deposition, ii. 294 Charter, the Great, signed by John, 42 ; clause against delaying justice, 25 ; clause against scutage, 42 ; tallage not touched by, 57 ; ancient rights of London guaran- teed by, ib ; confirms and limits the customs, 76 Chatham, Earl of (William Pitt), ii. ; heads the opposition against Walpole, 108 ; excluded from office, 110 ; disliked by George II., 125 ; in the Pelham ministry, ib. ; dismissed, 126 ; becomes secretary of state, 132 ; dismissed, ib. ; his popularity, ib., 133 ; coalition with Newcastle, ib. ; his policy as to O 558 INDEX TO VOLUMES I. AND 11. CHA Hanover and our North American possessions, 133, 134; his vigor- ous administration, l35 ; his speech on excises, 137 ; resigns, 188, 139 ; opposes the cider bill, 140, 141 ; called on by George III. to take office, 144 ; his failure, 145 ; his speech against the Stamp Act, 164 1 again summoned % the king, 155 ; forms a new adminLs- tration, ib. ; created Earl of Ghat- ham, ib. ; his illness, 156, 158 ; resigns, ib. Chatillon, Talbot killed at, 118 Chaucer, Geofirey, controller of the customs, 171 Cheques, duty on, ii 361 Chester^ not included in the taxation of parishes in 1371, 90 Chesterfield, Philip Dormer Stan- hope, fourth earl, ii.; lord steward, 100 ; excluded from office, 110 ; speech on the Gin Act, 111 ; lord lieutenant of Ireland, 114 ; his second embassy to Holland, ib. ; resigns post of secretary of state, 119; calendar altered by, 123; retires from political life, 125; his prophecy regarding the Rock- ingham administration, 154; his characters of Pelham, 124 ; and of Walpole, Appendix X., 545 Chichele, Henry, archbishop, 107 Cbilders, H. C. E., chancellor of the exchequer, ii. 417, 418 Chimney money, gee Hearth Christ Church, Oxford, founded by Wolsey, 136 Cider, taxed, ii. 23, 73, 233 Cider Act, Dashwood's, its unpopu- larity, ii. 141, 142 ; repealed, ii. 153 Cigar duty, ii. 408 Cintra, Convention of, ii. 240 Cities and towns, shires incorporate, list of, 120 n. CLO Civil List, the, ii. ; origin of, 43 ; its amount, 44 ; (1) the Crown, its state and dignity ; granted to' William III., 507 ; to Anne, 65, 507 ; to George II., ib., and to George III. by grant secured on the aggregate fund, ib. ; improved by Burke,- 1780, 508; of George IV., 509, 510 ; of William IV., 610 ; of queen Victoria, 611 Civil government: (i) Justice, Courts of, 512 ; Police, 514 ; Prisons, 616 (ii.) Education, 519 et seq. ; ■ Science and Art, 522 . ; secretary of state and leader of the house of commons, ib. ; reragns office, 132 ; paymaster of the forces, 133 — Charles James, ii. ; secretary of state, 178; his differences with Shelburne, S>. ; resigns, ib. ; his coalition with North, 179 ; his India Bill, 181 ; resigns, ib. ; secre- tary for foreign affairs, 234 ; his death, 236 Foxites, the, ii. 179 Fox's 'martyrs,' at the elections in 1784, ii. 181 France, wars of Edward I. with, 78 ; of Edward III. 85 ; hundred years' war with, 85-119; war of Edward IV. with, 122, 125; ex- peditions of Henry VIII, to, 129, 140 ; peace concluded with by Elizabeth, 146 — ii..; her commercial warfare with England and with Holland^ 28, 80; Grand Alliance against, 64 ; her wars with England, 115, 127, 208 ; her commercial treaty with England, 856, 358 Franklin, Dr. Benjamin, ii. ; ques- tioned by the Committee on the Stamp Act, 146 ; his opinion on the taxation of the colonies, 147 French brandy, see Brandy; wine, see "Wine ; goods, importation pro- hibited, ii. 7 ; heavily taxed, 27 ; 50 per cent, additional on, in 1692, 1696, 58, 59 INDEX TO VOLUMES I. AND II. 565 FEE French language, used by the chan- cellor in the parliament of 1377, 91 — revolution, the, English feeling . at, ii. 208 Fumage, hearth tax, 9; levied in Aquitaine by the Black Prince, 102 Fund, General, the, see General Fund Funds, the, lowest price of, ever leached, ii, 469 GABELLE du sel, one cause of the Jacquerie in France, 101, 102 Game laws, repeal of, ii. 319 General Fund, the, ii. ; cf 1697, 454 ; of 1716, 458 'Gentle Shepherd, the,' ii. 142 George II., his accession, ii. 87 — III., his accession, ii. 138 Gerefa, reeve of "the hundred, 7 ; of the town, ib. Gin Act, the, its failure and repeal, ii. Ill Gladstone, W. E., ii. ; vice-presi- dent of the board of trade, 322 ; chancellor of the exchequer, 339 ; his budget for 1853, 339-343 ; re- signs, 347 ; chancellor of the ex- chequer, 352 ; his budgets of 1859- 1866, 352-372 ; leads in the com- mons, 372 ; his first administra- tion, 375 ; holds the exchequer seals, 400 ; resigns, 401 ; second administration, 411 Glass-making, monopoly of, granted by Elizabeth, 204'; by James, 208 Glass tax, ii. 56; repealed in 1699, ib. ; reimposed by Pelham, 116; alteration in, 170 ; increased, 210, 233, 237, 242 ; its proposed repeal, 288 ; repealed, 328 Glenelg, Charles Grant, lord, ii. i president of the board of trade, 285 ; resigns, ib. ; takes oiBce with Melbourne, 310 GBE Gloucester, county of, its low assess- ment, 156, 157 Glove tax, ii. 191 ; repealed, 210 Goderich, viscount, see Ripon Godolphin, Sidney, lord, afterwards earl, ii. ; appointed lord treasurer, 65, 70 ; dismissed, 75 Goulburn, H., ii. ; chancellor of the exchequer, 285; reduces the sinking fund, ib. ; opposes the pro- posed tax on transfers, 297 ; chan- cellor of the exchequer, 322 ; his budget for 1843, 326; for 1846, 330 Grafton, the duke of, ii. ; secre- tary of state, 153 ; first lord of the treasury, 155; his administration and resignation, 158 Grand Alliance, the, ii. 64 ; joined by Portugal, 69 Grant, Charles, see Glenelg Granville, John, earl Carteret, ii. ; secretary of state, 86 ; his'rivalry with Walpole and Townshend, 87 ; goes to Ireland as lord lieutenant, ib. ; joins the opposi- tion, 100, 114 ; again secretary of state, 110 ; his character, 112 ; his foreign policy, 112 n. ; his in- trigues, 113 ; his fall, 114 ; his death, 146 n. Great Contract, the, ii. ; Cecil's plan for, 9 — statute of custonls, the, ii. 16, 42 — Charter, see Charter — Yarmouth, exempted from taxa- tion in 1449, 115 — war, the, with France, ii. 208 Grenville, George, ii. ; his ap- pointment to the Admiralty, 114 ; treasurer of the navy, 126 ; dis- missed, ib. ; differs from Pitt, 138 ; secretary of state, 139 ; supports the Cider Bill, 141 ; his reply to Pitt, 142; his nickname of the 566 INDEX TO VOLUMES I. AND II. ORE ' Gentle Shepherd,' ib, ; prime mini- Bter, 144; Bedford comhinea with, 145 ; his character as drawn by Burke, ib. ; his rigorous enforce- ment of the Navigation Act, 146 ; attempts to tax America, 149; carries the Stamp Act, 150; his conduct in the Regency Bill, 152 ; dismissed, ib. ; Ms death, 159 Grenville, William Wyndham, lord, ii. ; paymaster of the forces, 181 ; home, and afterwards foreign, secretary, 197 n. ; prime minister, 234 Gresham's Bourse, 157 Grey, sir Charles, afterwards vis- count Howick and earl, ii. ; first lord of the admiralty, 234 ; his administration, 294 Grimston, sir Harhottle, speaker, subsoribea the Book of Rates, ii. 17 Groats, tallage of, 92 Guilford, see North 'Guinea-pig' tax, the, ii. 212 Guise, due de, takes Calais, 144, 179 HACKNEY chaw tax, ii. 79 Hackney coach tax, ii. 52, 01, 79,- 118, 186, 342, 376 HackweU, mr., his protest against monopolies, 206 Hair powder, taxed, ii. 212, 377 Halfpenny, made a circular coin in 1278, 229 n. Halifax, Charles Montagu, earl of, ii. ; first lord of the treasury, 83 ; his death, 84 Hampden, John, raises the question ofship money, 220; decision against him, *. 240 Hampden, Richard, on the hearth tax, ii. 40 Harley, Robert, ii. 70, 75 Harley's South Sea Company, ii. 456 HEN Harrington, William Stanhope, first earl of, ii. ; secretary of state, 100, 114; president of the council, 112; again secretary of state, 114 Harthacnut, his levy of danegeld by force, 9 Harvest, its influence on the budget, ii. 364, 411 Hat tax, ii. 186 ; increased, 213 ; re- pealed, 240 Hawkers, ii. ; taxed, 52, 61, 186, 252 Hawkesbury, see Liverpool Hawkins, sir John, brings tobacco into England, 184 Hearth tax, ii. 27, 38; yield in 1689, 34; repealed, 38, 40, 52. See Fumage Henry I., fixes the rent of rural te- nants, 14 — II., reorganises the court of ex- chequer, 27 ; his dominions, 38 ; marries Eleanor of Aquitaine, ib. ; his claim to the county of Tou^ louse, 39 ; his levies of scutage, 40, 41 ; his assize of arms, 60 ; taxa- tion under, for the second crusade, 60,61 — III., scutage under, 43 ; con- fusion of the exchequer records under, 46 ; carucage under, 43 ; tallage under, 52 ; taxation of the Jews under, 32 ; taxation of move- ables under, 62, 68 — IV., cbrrupt collectors of the cudtoms under, 172 — v., life grant of subsidies to, 107, 173; releases the grant of 1431, 110 ; his LUness and death, 107 — VI., grants of the subsidies to, 120; life grant to, 118, 126, 175 — VII., life grant of customs sub- sidies to, 177 ; grant of duty on malmsey to, 178 ; grant of archers INDEX TO VOLUMES I. AND II. 567 HEN to, 127, 128 ; benevolences de- manded by, 200, 201 Henry VIII., court of wards and liveries created by, 18, 137 ; life grant of subsidies to, 177 j yield of the customs revenues under, 178 ; poll tax under, 129 ; grants to, 130, 140; dissolution of tlie lesser monasteries and nunneries under, 135; dissolution of tbe great monasteries and abbeys under, 136 ; houses and lands granted to, ib. ; lands of the hospitallers granted to, 137 ; new courts for the king's revenue established under, ib. ; the province of Canterbury makes a grant to, 138; marries Catherine Howard, 139 ; his expedition to France, 139, 201 ; debt left by, 141 ; benevolences demanded by, 132, 200, 201 n. ; squanders the royal demesne, u. 25 Hervey, lord, on the land tax, ii. 95, 96 Hexham, battle of, 175 Hicks-Beach, sir M., chancellor of the exchequer, ii. 424 Hidage, 8. See Danegeld Hide, the, 35 n. High collector for the Tudor subsi- dies, his office, 154 Hill, sir Biichard, taxes suggested by, ii. 187 Hill, Kowland, penny post, ii. 439 Holland, ii. ; success of excises in, 8 ; war of, with France, 28 n,, 65, 80 ; stamp duties in, 60 Home office, the, ii. 178, 524 Honors, tariff of, 188, 209 Honour, use of the word, 122 n. Hops, ii. ; tax on, 75, 76, 84 ; ad- ditional duty proposed by Pitt, 137 ; increased tax on, 185, 230 ; yield of the tax, 257 ; its reduc- tion, 358 ; commutation of the tax for additional duties on brewers' licences, 367 HUN Horses, ii. ; saddle and carriage, tax on, 185, 186, 187, 188, 193, 213,227; agricultural, additional tax on, 213, 218, 227 ; additional duty on, proposed by Vansittart, 242; complaints against, 268; re- peal of the tax, ib., 377, 403 Hospitallers, the, poll tax on, 94; order of, its history, 136; lands of, granted to Henry VIII., 137, 138 Hospitals, ii. ; grant in aid of, 528, 377 House tax, before the Restoration, 108 House tax, ii. ; 27, 52, 61, 63, 73, 81 ; not chargeable in Scot- land, 73 ; combined with the win- dow tax by Pelham, 117; new tax on houses and windows in 1757, 134 ; small houses exempted, 197 ; new taxes on inhabited houses in 1778, 170, 250 ; comprised in Pitt's assessed taxes, 190, 218; partially repealed, 279, 300 ; agi- tation for the repeal of, 303; re- pealed, 304 ; revived, 336 Howick, gee Grey Hubert de Burgh, justiciar, his fall, 29 Hudson's Bay Companies, attempt to tax stock, ii. 51 Huguenots, manufacturers of silks at Spitalfields, 90 Hume, James Deacon, his consolida- tion of the customs laws in 1825, 281 Hume, Joseph, ii. ; his resolutions on taxation in 1826, 282 ; income tax granted only for a year in consequence of his motion in 1851, 335 Hundred, its origin, 6; its officers, 7. See Gerefa Hundred years' war, the, 85 Hunt, G. Ward, chancellor of the exchequer, ii. 375 568 INDEX TO VOLUMES I. AND II. HUN Huntingdon, revolts against the eah- sidy of 1526, 201 Huskisson, ii. ; president of the board of trade, 273, 284; secre- tary for the colonies and leader of the house of commons, 285 ; resigns, ib. lOENI, revolt of the, taxes a probable cause of, 4 Idiot, see Natural fool 'Impatience of taxation,' ignorant, ii. 263 Imports, table of, in 1570, 181 Imposts, their nature, 212; under Mary and Elizabeth, ib. 213 ; on tobacco and currants, 213, 215; levied by James I., 183; question against, raised by the commons in 1610, 188; question against, in 1625, 191 ; not touched by the Petition of Eight, 222 ; of excise duties in 1 843, ii. 9 ; of customs, .5 per cent, in 1779, 171; in 1782, 176 Income tax, graduated, before the Restoration, 112, 116 Income tax, ii. ; imposed by Pitt, 221, 222, 224 ; repealed and re- imposed by Addington, 230; raised by Pitt, 233 ; raised by GrenviUe and Fox, 235; its total repeal in 1816, 263 ; reimposition of, by Peel, in 1842, 325 ; continued for three years, 327 ; continued in 1848, 3.32 ; in 1851, 335 ; in 1853, 339 ; doubled by Gladstone, 346 ; increased in 1855, 347; reduced, 349 ; its abolition advocated by Disraeli, 351 ; increased by Glad- stone, 353, 357; a penny reduction on, 366 ; further reduction in 1863, 369; reduced to a 6d. rate, 370; additional Id. on, in 1867, 375; additional 2d. on, 375; re- duced by Lowe, 376 ; its further JAM reduction, 381 1 raised by Lowe 394 ; reduced to 4rf. rate in 1872, 398 ; reduced to Sd. 400 ; reduced to 2d., 403 ; raised, 406, 407, 413, 417; raised in 1884,420 ; in 1885, 42.3, 424 India Bill, the, ii. 181 Indirect taxes, see Taxes ; yield from, in 1815, ii. 258; lord Sherbrooke on, 396 ; Gladstone on, 365 Industrial schools, ii. 618 Ingilby, William, ii. ; his motion for the reduction of the malt tax, 302 ; for its total repeal, 305 Inhabitant householders, tax on, in parishes, 108 Inns, patents for, 208 Insurances, ii. ; tax on, (i) Fire, 175, 227, 244, 300, 370 ; repealed, 376 ; (ii) Sea Risk, 212, 227, 244, 300; reduced, 328; (i) and (ii) yield in 1815, 250 Ireland, ii. ; hearth and window taxes in, repeal, 270; tax on establishments repealed in, 274, 325; equivalent to income tax established in, 325 ; potato failure in, 331 Irish Church Bill, ii. 375 Irish Education Bill, ii. 898 Irish Life Protection Bill, the, ii. 330 Iron, patent for smelting, 244; pig iron, proposed tax on, ii. 236 Ironwork, increase of, ii. 201 Itinerant justices, assessment of tal- lages by, 50 JACQUERIE, cause of the revolt, 101, 102 Jamaica Bill, the, ii. 312, 321 James I., life grant of the subsidies to, 182; impost on tobacco under, 184 ; his Counterblaste against To- bacco, tfi. ; new Book of Rates under, 186 ; new impositions un- INDEX TO VOLUMES I. AND 11. 569 JAM der, 187 ; remonstrance of the commons to, 188 ; grants to, 182, 183 ; beneyolences demanded by, 202, 203 ; debate against mono- polies under, 208; statute against , monopolies under, ib. ; revenue derived from sale of honors under, 209 ; decrease of the royal demesne under, ii. 25 James II., ii. ; his illegal levy of the customs, 31 ; parliamentary life grant of the customs to, ib. ; direct taxation unaltered under, 33 ; his death, 64 Jekyll, his act against spirituous liquors repealed, ii. Ill Jenkins' ear, story of, ii. 107 Jevons, on the match tax, ii. 395 Jews, their settlement in England, 31 ; exactions of the king from the, ib. ; exchequer of the, 32 ; expelled by Edward I. 33 ; popularity of expulsion, 69 ; expulsion necessi- tated severe taxation, ib. ; taxation of, 210; their proposed taxation under William III., ii. 51 John, levies of scutage under, 41, 42 ; refused payment of scutage by the barons, 42 ; signs thelGreat Charter, ib. ; carucage taken by, 36 ; tallage under, 51; tax on moveables ex- acted from the barons by, 62 ; his treatment of the Jews, 31, 32 Jury, inquest by, 60, 63 ; assessment of taxes by, ib. 65 ; system of, applied for the assessment of the fifteenth of 1225, 63-65; and of 1283,69 Justice, expenditure on, see Civil Government Justiciar, his office, 27, 32 KENT, its prote,st against illegal taxation in 1526,201 Knight's fee, service for, 20; com- XEA muted, 38 ; scutage on, 40, 48 ; its disuse, 48; tax on, 108 Knight's service, 20 ; commuted, 38 LANCASTER, earl of, his execu- tion, 48, 81 Land, general Survey of, ordered by the Conqueror, 13, 19 ; taxation of, under carucage, 35-37 ; taxes on, in 1404 and 1411, 106 ; further taxes on, 108, 116, 152 Land tax, ii. ; the, its origin, 50, 51 ; under William IlL 50-63 ; raised for the war of the Spanish succession, 68 ; for Scotland, 71 ; reduced, 79 ; its character, ib. ; re- duced by Walpole, 93, 95 ; com- plaints against, 96; its unfair assessment, 97 ; Walpole's scheme for its reduction, 99; raised in 1739, 109; its reduction in 1748, 123; raised in 1756, 129, 209; raised by North, 165, 209 ; becomes a rent-charge under Pitt, 51, 223, 249 Land Tax Act, the,ii. 117, 225 Lansdowne, William Petty, first marquis of (Shelhume), ii. ; ap- pointed secretary of state, 155 ; out of office, 158 ; summoned by George III. 178 ; his administra- tion and resignation, 178 ; created marquis, 179 Lansdowne, Henry Petty, second marquis of, ii. ; chancellor of ex- chequer, 234, 292 Lathes, subdivisions of Kent, 6 Latimer, bishop, his complaint of the increase in the prices of merchan- dise, 179 Law proceedings, tax on, ii. 27, 28. See Civil Government Lead, duty on, ii. 7, 92, 227 Leather, ii. ; the tax, 57, 75, 174 ; Adam Smith on,I69, 289; increased, 570 INDEX TO VOLUMES I. AND II. LEG 5241 ; opposition to the additional duty, 242, 288 ; partially repealed, 269 ; its repeal, 290 Legacy duties, ii. ; imposed byNorth, 173, 174; increased, 193, 233, 234; yield from, 250; question on, raised, 340 ; proposed increase of rates on, by Lowe, 392 ; alter- ation in 417. See also Succession Legge, hon. Henry Bileon, ii. ; be- comes chancellor of the exchequer, 126; resigns with Pitt, ib. ; again chancellor, ib. 133 ; taxes proposed by, 136, 137 ; dismissed, 138 Letters, additional postage on inl815, ii. 245 Lewis, sir G. Comewall, ii. ; chan- cellor of the exchequer, 347 Licence taxes, ii. 130, 131, 138, 173, 175, 185, 191, 261, 253, 260, 379 Lincoln, parliament of, in 1301, 74 ; city of, its exemption from taxa- tion, 112,115 Linen, ii. ; duties on, 33 ; on Scotch, 59 ; made perpetual, 67 ; import duties on foreign linen, 113 ; duties on the raw material repealed, 131 ; decrease in the manufacture of, 200 Liquors, ii. ; duties on, 21-23, 27 ; excise on, 28, 34, 72. 8ee Excise Liverpool, lord Hawkesbury, after- wards earl of, ii. ; secretary for foreign affairs, 229 ; home secre- tary, 233, 236 ; secretary for war and the colonies, 238 ; prime minister, 241 ; his administration, 262 ; his illness, 283 Loan Acts, provision in against tax- ing government annuities, ii. 62 — contractors, ii. 468 Loans, forced, abolished, 203 Local taxation, grant in relief of, ii. 403 Local government board, the, ii. 523 MAN Locke, his theory of taxation, ii. 102 Locomotion, ii. ; taxes on, 251 ; repealed, 376, 377 Lords, attempt of the, on taxing pri- vileges of commons, ii. 48 Lords lieutenant of counties, their origin, 143 Lotteries and annuities, ii. 464 Lowe, Hobert, see Sherhrooke LuUi, Eaymond, the nobles of Ray- mond, 163 Lunatic (criminal) asylums, ii. 516 Lyttelton, George, lord, ii. 114, 126 ; chancellor of the exchequer, 126 ; his new taxes, 130, 131 ; raised to the peerage, 132 MAGNA CARTA, see Charter Maid servants, ii. ; tax on, 190 ; repealed, 196 Maletoute, mala-tolta, of wool, 78 ; its revival, 165, 166 Malmsey, special duty on, 177, 178 Malt, ii. ; tax on, 56, 64, 72, 73, 74 ; increased, 138, 172 ; compo- sitions repealed, 180; its further increase, 195, 196, 231, 267 ; re- peal of the additional war duty, 263, 268; why not reduced by Althorp, 299 ; Ingilby's motion for its reduction, 302, 305 ; its reduc- tion proposed by Disraeli, 338 ; raised by Gladstone, 346 ; in- creased receipt from, in 1864, 369, 370; committee of inquiry on, appointed, 374 ; large yield in 1872-3, 3j9 ; repealed, 413, 416 Malta, settlement of the Hospitallers in, 137 Mansfield, William Murray, earl of, ii. 125 Manufactures, English, ii. ; the tax- ation of, in 1709-1711, 75, 81 ; ex- port duties on, repealed by Wal- pole, 92 ; prosperity of,_in 1792, INDEX TO VOLUMES I. ANT) II. 571 MAB 200 ; yield from taxes on, in 1792, 207 ; and in 1815, 255, 268 ; de- pression in 1825-6, 281; raw materials of, exempted from duty, 328; manufactures freed, 366, 367, 384, 385 Marble, taxed, ii. 210 Marine insurance, ii. ; duty on, 212, 227, 244, 300; condemned by Gladstone, 353 Maritigium, the, 21 Marlborough, John Churchill, duke of, ii. 65, 7* Marriage, of wards, regulations on imder the feudal system, 22 ; tax on, ii. 46, 210, 543 Mary, queen, grant of subsidies to, 143, 144; imposts under, 179; court of augmentations annexed to the exchequer under, 137 ; sub- sidy of 1533 released by, 143 ; grants to, in 1655 and 1557, 144 Match tax, proposed by Lowe, ii. 392, 394 Maunsell, John, first chancellor of the exchequer, 29 — Sir Robert, his monopoly of glass- making, 208 Meal tax, the, ii. 394 Medicines, patent, duties on, ii. 180 Mediterranean duty, the,repealed,186 Melbourne, WOliam Lamb, viscount, ii. ; resigns, 286 ; secretary for the home office, 294 ; prime min- ister, 307 ; dismissed, 308 ; his return to power, 310 ; resigns, 312 Men servants, tax on, see Esta- blishments Mercantile, or protective, system, in 56,80 Methuen treaty, the, in 1703, ii. 69 ; expires in 1831, 297 Mexico, conquest of, increase in prices after, 178 Michiel, Venetian ambassador, his report of the customs revenue in MUS England, 180 ; his surprise at the absence of inland duties in Eng- land, ii. 8 Middlesex, Lionel Oranfield, earl of, surveyor general of the customs, 189, 190 Mildmay, sir Walter, chancellor of the exchequer, quoted, 144 n., 146, 181 Militia, the, ii. 486 Minorca, loss of, ii. 131 Mittens, tax • on, ii. 191 ; repealed, 210 Monasteries, their dissolution under Henry VIII., 134-136 ; lands of, granted to the king, 136 Monopolies, royal prerogative of, 204, 205 ; debate on, 206, 206 ; under Elizabeth, 206; under James I., 208 ; under Charles I., ib. ; question of, raiised in 1.621, ib.; statute against, ih.; exceptions made, ib. ; Culpepper's observations on mono- polists, ib. Montagu, Charles, chancellor of the exchequer, forms the General Fund in 1697, 454 Monteagle, Thomas Spring Bice, lord ii. ; becomes secretary for the colonies, 302 ; chancellor of the exchequer, 310 ; reduces the news- paper duty, ib., 311 ; raised to the peerage, 312 Mortmain, the law of, attempts to evade, 112 Morton's 'fork' or 'crutch,' his in- structions for the levy of the bene- volence of 1491, 200 Moveables, taxation of, 47, 59-74, 124, 162, 229 Mulberry trees, sent to Devonshire for silkworms, 187 n. Mum, tax on, ii. 68 Municipal Corporations Act, the, ii. 320 Museum, the British, ii. 522 572 INDEX TO VOLUMES I. AND H. NAT NATIONAL DEBT, ii.; the state of, in 1702, 68 ; in ] 714, 81 n., 84 ; its amount in 1739, 109, 469 ; in 1749, 460 ; in 1755, 128 ; in 1775, 163, 463 ; in 1783, 165 ; in 1792, 209 ; in 1799, 466; in 1816, 219 ; Lowe's speech on, 395 ; its amount in 1875, 404; in 1876, 406; amount of, from 1694 to 1886, 453 ; its origin and history, Appen- dix II., 450 ; Pitt's scheme for re- duction of, 464, 465 ; further re- ductions of interest on, 472, 473 ; table of amount accrued from cer- tain wars. Appendix VI., 535 National Gallery, ii. 522 Natural fool, lands of, 23 Navigation Act, the, ii. 89, 145 Nary, the, its origin and growth, 212, 213; ii., great increase under William III., 496 ; its state in 1762, 498 ; state and cost of, in 1782, 499 ; in the great war, 499, 500 ; during the Crimean war, 503, 504; present state and cost of, 505 Newcastle, Thomas Pelham Holies, duke of, ii. ; secretary of state, 87, 110, 114 ; becomes flrst lord of the treasury, 125 ; his negotiation with Fox, ib. ; resigns, 132 ; rein- stated in oj&ce, 133 ; his coalition with Pitt, ib. ; his resignation in 1762, 139 Newcastle - upon - Tyne, exempted from taxation, 153 ' New customs, the,' 79, 90. See Customs New East India Company, ii. 455 ' New Impost, the,' see Excise Newspaper tax, ii. 78, 184, 165, 193, 256, 296, 300, 310, 311 ; repealed, 348 Nicolas, pope, the taxation of, in 1291, 105,133 Nimeguon, the treaty of, ii. 28 n. OFF Nootka Sound, settlement at,ii. 194 ; Spanish seizure of ships at, 196 Norfolk, rebellion in, 143 North, sir Dudley, special duties on sugar and tobacco proposed by, ii. 32 North, lord, afterwards earl of Guilford, ii. ; paymaster of the forces, 165; chancellor of the exchequer, 157 ; prime minister, 168; gives the casting vote for the retention of the tea duty in American colonies, 1 61 ; his taxes for the war with America, 166- 176 ; origin of the taxes suggested by, 166; his loan of 1781, 464; his resignation, 177 ; his coalition with Fox, 179; resigns, 181; soap tax, increased by, in 1782, 176; summary of his taxes, 182 Northbrook, see Baring Northcote, sir Stafford, afterwards lord Iddesleigh, chancellor of the exchequer, ii. 401 Northumberland, its exemption from taxation. 111, 128, 144, 153 — the fourth earl of, assists in the levy of the tax of 1488, 129 ; and is killed, 86. Noy, William, 212; appointed at- torney-general, ih. ; his soap pro- ject, 208 ; devises the ship-writs, 213; mention of, by Clarendon and Selden, 216 n. ODO, bishop of Bayeux, first lord treasurer, 28 Offices, holders of, charged for in- come tax, 113 — new tax on, in 1758, ii. 134, 135 — public, the, cost of, ii. 52'?, 524, See Civil Government INDEX TO VOLUMES I. AND H. 573 OED Ordinances for assessment of taxes on moveables, 70, 74, 237 Orford, earl of, see Walpole Oxford, petitions made by the uni- versity against taxation, 115 ; its exemption, 153 Oxfordshire, assessment of ship- money opposed in, 218 PALACES, the royal, ii. 626 Palfrey, or lady's horse, 67 n. Palmerston, viscount, ii. ; secre- tary of war, 271 ; exchequer seals offered to, 284 ; resigns, 285 ; foreign secretary, 294, 310; re- signs, 337 ; home secretary in 1853, ib. ; prime minister, 347 ; resigns, 350 ; his second adminis- tration, 352 ; his death, 372 Paper making, its beginning in England, 204 ; monopoly of, ib. — tax, ii. 77; increased, 211, 227 ; its yield, 255 ; reduced, 310 ; bill for its repeal rejected, 362, 363 ; its repeal, 366 Parcels by coach, proposed tax on, ii. 217 Paris, peace of, ii. 139 — treaty of, ii. 348 Parishes, tax on, miscalculation of, 00 Parks, public, the, ii. 626 Parliament, of 1301 (Lincoln) 74 ; of 1332, 87; of 1371, 89; the 'good,' 91; the 'bad,' 92; of 1380, 97; the 'unlearned,' 106; of 1432, 110; of 1439, petitions for redress, 114; of 1450, passes act for resumption of grants of demesne, 116 ; of 1484, act against benevolences passed by, 199 ; of 1472, grants a subsidy to Edward IV., 121, 126 ; of 1478, summoned for trial of duke of Clarence, 125; of 1482, 126; of VOL. II. PEE 1523, Wolsey's demand of a grant for the king, 131 ; subsidy granted by, 131 ; the ' seven years',' 133 ; abolishes firstfruits and tenths to the pope, ib. ; of 1548, subsidy on sheep and wool granted to Ed- ward VI. by, 142 ; of 1592, illi- beraUty of the commons, 149 ; of 1625, limited grant of the cus- toms subsidies rejected by the lords, 191; dissolved, 192; of 1626, committee of grievances, ib. ; dissolved, ib. ; of 1628, Petition of Right, 192, 393, 20 i, 211; the ' addled,' 202 ; the ' short,' 1640, 193,221; the 'long,'i5. Parnell, sir Henry, afterwards lord Congieton, ii. ; his treatise on ■financial reform, 288, 294 ; refuses office, 295 ; secretary at war, ib. n. ; paymaster - general and treasurer of the navy, 310; his policy as to the sinking fund, 471 Patent medicines, tax on, ii. 180 Patriots, the young, ii. 108 Pauper lunatics, grant in aid of, ii. 528 Paving rates, beginning of, 1 26 n. Pawnbrokers, taxed, ii. 191 Peasant insurrection, the, its causes and result, 99-102 Pedlars, taxed, ii. 52 Peel, sir Robert, ii. ; secretary for the home office, 270 ; declines office, 284 ; takes office under Wel- lingtxDn, 285 ; opposes the proposed tax on transfers, 297 ; his first ad- ministration, 308; resigns, 310; his political career, 320; sum- moned by the queen, 321 ; his budget for 1842, 322 ; income tax reimposed by, 325, 327 ; his reform of the tariff, 326, 328 ; glass and auctions duties repealed by, 328 ; proposes the repeal of the corn laws, 329 ; resigns and returns to P P 574 INDEX TO VOLUMES I. AND II. office, 330; resigns, 25. ; hia death, 334; our fiscal Bystem rehabilitated hj, 402 Peelites, the, ii. 322, 331, 335 Peerages, tax on creation of, 209 Pelham, Hemy, ii. ; secretary at war, 87 ; paymaster of the forces, 110; becomes first lord of the treasury, 112; intrigues of Carteret against, 113 ; reduces the interest on the national debt, 460 ; failure of his proposed tax on sugar, 113 ; his extension of the tax on salt, 114; additional tax on spirits efiected by, 115 ; his window tax, 117 ; his carriage tax, ib. ; sup- ported by Fox 121 ; his death, 123; character of, by Chesterfield, 124 Penny post established, ii. 439 — taxation, introduced by Gladstone, ii. 342 Pensions, use of the word, 122 n. ; civil, ii. 527 Pepper, ii, ; duty on, 73 ; ware- housing system applied to, 74 ; fresh settlement of the duty on, 89, 91 ; additional duty on, 253, 267, 359 ; made a customs duty, 280 ; repeal of the duty, 372 Perceval, Spencer, ii. ; chancellor of the exchequer, 236; his con- solidation of the assessed taxes and stamp duties, ib. ; prime mi- nister, 238; continues chancellor, 239 ; hat tax repealed by, 840 ; his administration, ib. ; assassi- nated, 241 Perfumery, taxed, ii. 191 Perry, duty on, ii. 23 ; increased, 73 ; further taxation of, 140 Pestilence of 1361, 100 Peter pence, abolition of, 133 Petition of Right, 160, 203, 211 Petty, lord Henry, see Lansdowne ' Petty fountain,' stream from the, ii. 235 POE Pig iron, proposed tax on, ii. 236 ' Pilgrimage of Grace,' the, 135 Pipe Rolls, the, 29. See Exchequer Pirates, tax for captives of, 8 Pitt, William, see Chatham — — the younger, ii ; becomes chancellor of the exchequer, 179 resigns, ib. ; prime minister, 181 his measures of taxation, 182-188 his Commutation Act, 184 ; his reforms in 1785, 187 ; further taxes imposed by, 188; his commercial treaty with France, 191 ; passes Walpole's Excise Bill for Tobacco, 194; his budget of 1792, 196; new and additional taxes imposed by, 210-217; stamp duties raised by, 218 ; his triple assessment for 1798, 220 ; resigns, 227, 228 ; re- called to ofiice, 232 ; his budget for 1805, 233; his death, 234; soap not taxed by, 264 Plantation duties, the, ii. 146 Plate, gold and silver, taxes on, ii. 130, 138, 169, 185, 262 Poitiers, battle of, 100 Police, expenditure on, etc., fee Civil Government Poll taxes, capitatio humana, levied in Britain, 4; of 1377, 91; of 1379, 93-96 ; classification of the taxpayers, 94, 96; of 1380, 97, 98 ; peasant insurrection against, 101, 102 ; on aliens, 115, 118, 126, 142, 152 ; for life to Henry VI., 126; of 1513, 129, 130; under Charles I., 161 ; of 1660, 1666, 1677, ii. 29 ; under William HI., 45 ; unpopularity and disuse of, 46 Ports, duties at the, 75-82 ; 183- 195 ; approximate yield, 1590- 1635, 195. See Customs. Portland, WiUiam Henry Cavendidi, duke of, ii. ; secretary of state for home department, 211 ; presi- INDEX TO VOLUxMES I. AND U. 575 POS dent of the council, 229 ; prime minister, 236 ; his resignation and death, 237 Post office, the, ii. ; Appendix 1. 432 ; its origin and husiness, ib. ; cen- tralised hy Oromwell and Oharles II., ib. ; remodelled in 1710, 434 ; the postmaster general, 435 ; pay- ments not taxation, 146, 436 ; re- ceipts from 1710-1783, 436; Pitt establishes the royal mail, 437 ; railways, 438 ; revenue from, in 1838, 438 ; Bowland Hill's penny post, 439 ; government monopoly in telegraphs, 440; cost of, 441, 442 Post travelling, taxed, ii. 171, 180, 216, 219, 251, 342, 376 Postage, increased by Pitt, ii, 186 ; additional, 245, 325 Potosi, discovery of its mines, 178 Pouldavie, monopoly for, 205 Poundage on goods, 79 ; under Ed- ward ni., 165, 168; under Richard II., 172; under Henry IV , ib. ; under Henry VI., 173, 174, 175; system of, under Ed- ward IV., 175; grants of, to the Tudor sovereigns, 178, 181; rate of, under James I., 182 ; levied by Charles I., 192, 193 ; remon- strance against, ib, ; under the Commonwealth, ii. 6; under the Great Statute of 1660, 17 ; re- venue from, 34 ; grant to William III. for four years, 42 ; and for life, 44 Poverty, exemptions from taxation for, 68, 71 Pre-emption, royal prerogative, 17 ; abolished, ii. 19, 20 Prerogatives of the Ijing, 16, 17, 204 Preston Pans, battle of, ii. 115 Pretender, the Old, expenses of sup- pression of his attempt, ii. 84 RAL Pretender, the Young, his attempt in 1745 defeated, ii. 115 Primer seisin, its origin, 21 Printed goods, ii. ; tax on, 77, 243, 245 ; repealed, 297 Prisage, royal prerogative, 17; its abuse under Edward I., 79, 80, 81 ; commuted, ib. ; native mer- chants still liable to, in 1660, ii. 17 Prisons, expenditure on, ii. 516 Privy council office, ii. 524 Probate duty, ii. ; its origin, 61 ; increased, 174, 193, 212; yield from, 250 ; extended by Lowe, 392 ; alteration in, 410, 411, 417. See also Succession Professions, taxes on, in 1815, ii. 251 Property or Land tax, ii. 4, 5 ; its settlement, 47; changed from a rate to a definite amount, 47-61 ; be- comes a land tax only, 15, 118, 223 Protection of trade, ii. 80 Public offices, their cost, &c., ii. 523, 524. See Civil Government Publicans, taxed by Lytielton, ii, 130, 131 Pulteney, see Bath Purveyance, royal prerogative, 10; abolished, ii. 19, 20 Pym, introduces excise, 9 QUACK medicines, tax on, ii. 180 Quebec, taken by the English, ii. 135 Quiberon, victory off, ii. 135 RACE horses, see Horses Rags, duty on, repealed, ii. 90 Railways, effect of construction of, on revenue, ii. 331 ; the passenger duty on, reduced, 420 Raisins, duty on, ii. 72, 252, 358 Raleigh, sir Walter, his protest pp2 576 INDEX TO VOLUMES I. AND II. RAL Rf^ainst unfair assessment, 150, 167 ; mention of, ib., 206 ; pro- motes the use of tobacco, 184 Ralph de Leycestre, mentioned as chancellor of the exchequer, 29 Ramillies, tattle of, ii. 70 Rapes, subdivisions of Sussex, 6 Rates, Book of, see Book of Rates Receipt of exchequer, the, 27 Receipts, ii. ; tax on, 180 ; in- creased, 213; its yield, 258; re- duced, 300 ; penny duty on, 843 Reciprocity with Portugal, ii. 69 Reduced 3 per cents, created, ii. 462 Reform Bilk, ii. 345, 351, 373 Reformatories, ii. 517, 618 Registration of births, deaths, and marriages, ii. ; tax on, 46 ; re- pealed, 210 Relief, its amount, fixed by the Con- queror, 23 ; its later commutation, ib. Rent, "first taken in money, 14, 15 Rent-seek, and rent-charge, owners of, taxed, 109 ; meanings of, ib., n. Revenue, of the king, derived from the demesne, 13 ; from the feudal incidents and casualties, 18-24 ; from fines, 26 ; from extortions, ib. ; various sources of, 163. And see Demesne — ii. ; its settlement after the Restoration, 15-24 : from the de- mesne, 25, 20 ; produce of the chief branches of, in 1688, 34, 38 ; settlement in 1689,40 ; its amount in 1756, 128, 129 ; in 1792, 200 ; increased in 1806, 235 ; its amount in 1815, 249 ; decrease in, 263, 266, 275 ; decreased by the re- mission of taxes in 1822, 268 ; summary of, from 1842-1860,353, 354 ; increase of, 358, 360, 369 ; basis of its estimate, 402 ; its re- turns in 1 875-6, 404, 405 ; returns BIP published annually, 407, 408 ; its returns in 1879, 407 ; estimate of, for 1880-1, 410 ; for 1881-2, 416, 417 ; synopsis of its sources, 426, 427 ; lis sources, other than taxa- tion, Appendix 1., from the Post Office, 432-441 ; from other sources, 441, 442 ; its cost of col- lection and management, Appendix III., 629 ; gross revenue from cus- toms from 1885-1856, Appendix XIII., 552 Revolts, caused by taxes: — against Danegeld collected by the house- carles, in Worcestershire, 9 ; the peasant insurrection, 99-102; in Yorkshire and Durham against the ' new found subsidy ' in 1488, 129 ; theCornish,againstthe tax for Scot- land, in 1497, 129; apprehended in Kent, Suffolk, and Huntingdon, in 1628, against illegal levy, 132, 201 Rhodes, held by the Hospitallers, 136 Rice, Thomas Spring, see Monteagle Richard I., levies of scutage under, 41 ; aid, for ransom of, 62 ; caru- cage, levied by, 35; tallage under, 61 — II. (of Bordeaux) opens the par- liament of 1877, 91 ; his succes- sion, 92 ; tunnage and poundage under, 172 ; life grant of subsidies to, ib. — in., life grant of the customs sub- sidies to, 176 ; act against benevo- lences under, ib., 199 Right of search, war of the, with Spain, ii. 106,109,118 Ripen, Frederick John Robinson (Goderich), earl of, ii. ; chancel- lor of the exchequer, 273; his reforms, 274-278 ; colonial secre- tary, 284 ; raised to the peerage, ib. ; colonial secretary in lord INDEX TO VOLUMES I. AND II. •577 Grey's administration, 294 ; lord privy seal, 307 Roads, improvement of, ii. 202 Robinson, see Ripon — , sir Thomas, afterwards lord Gran- tham, ii. ; secretary of state and leader of the house of commons, 125 ; receives a pension, ib. Rochelle, expedition to, 160 ' Rockingham, Charles Wentwortli, marquis of, ii. ; his administra- tion, 152, 153 ; his political career, ib. ; dismissed, 155 ; his second administration and death, 178 Romans, the, their taxes in Britain, 3, 5 ; withdrawal of their troops from Britain, 5 Rose, George, ii. 182, 192, 217, 229, 236, 238 Roses, wars of the, 119; effect of, on the people, 200 Royal mails, established by Pitt, ii. 203, 487 Rum, ii. ; duty on, 196, 210 ; re- duced, 277 ; decrease in revenue from, 418 Rump, the, its restoration and dis- solution, ii. 14 Runcinus, or servant's horse, 67 n. Russell, lord John, afterwards earl, ii. ; paymaster of the forces, 294; home Secretary, 310; his first administration, 331-337 ; his resignation and return to office, 335 ; his resignation, 347 ; secre- tary for foreign affairs, 352 ; his second administration, 372 SACK, comes into fashion, 184 Sailcloth, manufacture of, 205 St. John, see Bolingbroke Saladin tithe, in 1188, the first tax on moveables, 59 ; provisions of the ordinance, 61, Appendix I., 227 sou Salisbury, Robert Cecil, earl of, pro- test against the ilUberality of the commons, 149; his speech on mo- nopolies, 207 ; his plan of the Great Contract, 187 ; his arrange- ment regarding impositions under James I., 189 ; dies, ib, — - marquis of, prime minister, ii. 424 Salt, tax on, see Gabelle ; monopoly ■ on, 206 Salt, ii. ; foreign, excise duty on, 10, 12, 55 ; repealed, 95 ; reim- posed by Walpole, 96 ; duties in- creased by Pelham, 114; Adam Smith on, 169 ; increased by North, 173, 175 ; mining trade in, 202 ; duty on, increased by Pitt, 222, 233, 252; its total repeal, 260; history of the tax, ib. Salting fish, monopoly for, 204 Sandys, Samuel, ii.; chancellor of the exchequer, 110 ; raised to the peerage, 1 1 2 Saye and Sele, lord, the king's trea- surer, seized and beheaded by Cade, 117; lord, resists the ship money, 220 Schedules of assessment for the taxes on moveables, 72, 232 Schism in the whig party, ii. ; in 1717, 85; in 1782, Fuxites and Lansdownians, 179 Science and Art, 522. See Civil Government Seirgerefa, see Sheriff Scotland, ii. ; differences in taxa- tion of, 71, 72 ; malt tax riots in, 73 ; secretary of state for, 84 n. Scrip certificates taxed, ii. 34.'} Scriptura, tax on cattle in Britain, 4 Scutage, tax on the knight's fee as commutation of service, 40, 41; levied for Toulouse, 40 ; for Ire- land, 41 ; under Richard I., ib. ; under John, ib. ; payment for, of Normandy, refused by the barons, 578 INDEX TO VOLUMKS I. AND II. SEA 43 ; regulated by the Great Char- ter, ib.; repealed in 1217, 43; under Henry III., ib. ; how as- sessed, 44-46; under Edward I., 46 ; its cessation, 47, 48 Seal oil and seal skins, duties on, re- pealed, ii. 91 Searcher, the, office of, 171 Secretary of State, ii. ; history of the office, 83 n., 86 ; new division of the office into the home office, and the foreign office, 178 ; a third secretary for war and the colonies in 1801, 211, 229 n. ; the colonies made a single office in 1854, and a fourth secretary for the war office appointed, 347, 493 Servants, see Establishments ; Men Servants, Maid Servants Seven years' war, the, ii. 127_; its cost, 129, 209 Sheep, tax on, under Edward VI., 142; repealed, ib. Shelburne, see Lansdowne Sherbrooke, Robert Lowe, viscount, ii. ; chancellor of the exchequer, 375; his budget for 1869, 876- 381 ; taxes proposed by, in 1871, 391-393 ; unpopularity of his bud- get, 393, 394 ; his speech on the national debt, 395 Sheriff, his position in the shire, and relation to the king, 7; his duties, 15, 36, 117 ; his exactions, ib. ; his exclusion from the towns, 16 ; includes the danegeld in the ferm of the county, 24 ; responsi- ble for the collection of tallage, 60 ; collects scutage, 47 ; tax on moveables assessed by, 66, 67 ; collects the land taxes, 109 ; and ship-money, 217 Shipgeld, levied on the shires, 7, 214, 215 Ship-money, see Ship writs Ship writs uuder Charles I., 160, SIN 210-233 ; framed by Noy, 215 ; former use of, 213 ; first issue of, in 1634, 215; amount raised by, ib. ; second issue of, in 1635,216; opposition to the levy, 217 ; loan of ships enforced, if money not forthcoming, ib. ; opinion of the judges on, 218 ; third and fourth issue of, 219; Hampden's case, 220 ; fifth and sixth issue of, ib. ; Act against, 221-223 ; particulars of the second issue of, for Dorset, 241 ; list of the assessment of ships to the several counties, 221, 243 Shipping, ii. ; tax on tonnage of, 58 ; additional duty on, 231 ; yield from, 252; repeal, 269. Shire, its origin, 6 ; forms the unit of rating, 8 ; its officers, ib. ; shipgeld levied on, ib. ; its assessment, 15 ; shires incorporate, 120 n. Shearing or underpropping Act, 201 Shops, ii.; tax on, proposed by Legge, 136 ; itsfeUure, ib. ; revived by Pitt, 190, 191 ; repealed, 193 Shrewsbury, Charles, duke of, the last lord treasurer, ii. 82, 83 Sidmouth, Henry Addington, vis- count, ii. ; first lord of the treasury and chancellor of the exchequer, 229; income tax re- pealed and re-imposed by, 230 ; dismissed, 232 ; home secretary, 241 ji. ; resigns, 272 Silk, ii. ; duties on, 33, 77, 78, 80, 90 ; trade, depression in, 200 ; re- duction of the duties, 276, 378, 286 ; repealed, 328 Sinking Fund, the, ii. ; Walpole's scheme for, 84, 85, 88, 466-458 ; Pitts, 193, 405 ; its amount in 1819, 265 ; reversal of the policy of, 274; its reduction by Goulburn, 285; given up, 287, 470; new formation of, 404; encroached upon INDEX TO VOLUMES I. AND II. 579 SIS 410, 425; the present arrange- ment, 472 ; a third, created, 477 ' Sisters, the attractive,' ii. 365 Slate tax, ii. 210 ; repealed, ii. 297 Slavery, cost of abolition, ii. 302 Smith, Adam, ii. ; his -' "Wealth of Nations,' published in 1776, 166- 168 ; a guide to North in taxation, 168, 169, 171, 173 ; Pitt, his dis- ciple, 183, 213 ; the tax on leather condemned by, 289 — , Sydney, on taxes, ii. 259-261 — , Sir Thomas, called on to refund the profits of the customs revenue, 181 Smoke farthings, 9 Smuggling, prohibited under Eliza- beth, 179, 180, ii. 42; Walpoles plan for its reduction, 93 ; great extent of, in 1732, 96, 97 ; ware- housing bill brought in to counteract, 97 ; reduced, 115 ; in- crease in, 184 ; warehousing sys- tem a means of reducing, 194, 216 ; decrease in, 289, 341 Snufi^, ii. ; duty on, 73 ; yield from, 254 Soap, Noy's project for monopoly of, 208 ; ii. excise duty on, 13, 62 ; tax, 76, 77 ; increased by North, 175 ; increased by Vansittart, 264 ; its reduction, 301 ; repealed, 341 Somerset, protector, 141 ; his fall and execution, 143 South Sea bubble, ii. 458 — companies, ii. 465, 456, 467 n. — scheme, the, ii. 80 Spain, ii. ; her war with England, 12, 64-80 ; of 1718, cost of, 86 ; commercial livalry of, with Eng- land, 107 ; war of, with England, 108, 109 Spanish succession, war of the, ii. 64, 80 ; its cost, ii. 209 Spencer, John Charles, earl (Althorp) ii.. ; chancellor of the exchequer. STA 294, 295 ; his resignation, 307 ; and return to office, 308 ; not successful as a financier, 320 Spices, ii. ; duty on, 70, 73 ; fresh settlement of the duty, 91 Spielman, Sir John, knighted by Elizabeth, 206 ; his monopoly of paper-making, ib. Spirits, ii. ; excise duty on, 23, 33, 54, 63, 81 I fresh duties on. 111, 115, 123, 138, 195, 196, 210, 216, 231, 267 ; yield from, 253 ; reduc- tion of the duties in Scotland and Ireland, 340, 347, 848, 351 ; ad- ditional 2s. for the China war, 363 ; English consumption of, in 1825, 386 ; home-made, yield of, in 1872-3, 399 ; yield ceases to rise, 404; depression in the revenue from, 418, 419 Spirituous liquors, Jekyll's Act against, repealed, ii. Ill Spitallields, silk manufacture at, ii. 90, 276 Sportsmen, taxed, ii. 185, 186,196,4'.'0 Spurs, battle of the, 129 Stage coach tax, ii. 53, 165, 180, 215, 216, 251 Stamp Act, ii. ; account of the, 150; resistance to, in America, 161 ; repealed, 153 ; Chatham speaks against, 154 Stamp duties, the, ii. ; 60, 62, 63, 67, 71, 70 ; yield from, in 1755, 128 ; proposed imposition of, in America, 151 ; small yield from, in America, 153 ; American duties repealed, ib. ; increased by North, 165; increased by Pitt, 180, 212, 216,218; consolidated by Perce- val, 236 ; excessive and unequal, 256; yield of, in 1815, ib. ; in- creased, ib. ; repeal of, on law proceedings, 278 ; reduced, 334, 342, 381 ; on securities to bearer, 423, 424 580 INDEX TO VOLUMES I. AND II. STA Stanhope, general James, afterwards earl, ii. ; secretary of . state, 83; prime minister, 85 ; resigns, ib. ; secretary of state, ib. ; raised to the peerage, ib., 125 w. ; his death, 86 Stanley, see Derby Starch tax, ii. 9, 76, 77, 79; abo- lished, 304 Statutes : — Magna Carta, against scutage, 42 ; against excessive tolls, 76. — Confirmatio Cartarum, the maletoute suppressed by, 78 ; establishes the ancient customs, ib. — T)e tallagio non concedendo, articles incorrectly termed a sta- tute, 57 — against benevolences, 192, 199, 203 ; against monopolies, 208.— The Petition of Eight, 160, 203, 211.— The act against ship- money, 221 Steam engine, the, of Watts, ii. 204 Stephen, danegeld becomes annual under, 34 ; promises the abolition of the tax, ib. Stone, taxed, ii. 210 Stone bottles, ii. ; first tax on, abolished, 56 ; duty on whale fins substituted for, 59 ; second tax repealed, 304 Strafibrd, Thomas Wentworth, earl of, bill of attainder against, 221 Stuarts,the,direct taxation under,159 ' Sturdy beggars,' ii. 263 Sturgeon, the king's right to, 23 Subsidies: on land and goods in 1472, 121-125 ; the ' new found subsidy ' of 1488, 129 ; of Qd. in the pound in 1,614, ISO; of 1523, 132 ; of 4«. in the pound on eccle- siastical benefices in 1540, 138 ; of 1644, 1.39; on sheep and wool in 1548, 142; of 1553, 143 — 'the Tudor,' form of Acts for, 151-158; their assessment, 156- 158; under the Stuarts, 159; SUN tried under the Commonwealth, ii. 5 ; tried after the Eestoration, 29 ; the last, 30 — of customs, ii. ; 'the old subsidy ' (5 per cent.) of 1660, 17; the 'new subsidy' of 1698, 44; the one third and two thirds subsi- dies of 1703 and 1704, 69; the fourth subsidy granted in 1748, 118, 123; the fifth in 1759, 137. And see Customs Subsidymen, their bearers, 155 Succession duties, ii. ; on property, 213,214; on land, 340; increased, 392 ; probate duty fused with, 417 ; on the property of corporar tions, 423, 424; the Succession Duties Act, 214 Sufiblk, revolt in, against the illegal subsidy of 1526, 132, 201 Sugar, its introduction into England, 164 — taxation of, ii. ; rate of, under the Great Statute, 32 ; special duty on, under James II., ib. 33 ; expiration of the special duty on, 43, 62 ; defeat of Pelham's tax on, 113, 114; increased duty on, pro- posed by Legge, 136; additional duty on, imposed by North, 174 ; increased duty on, 106, 210, 216, 226, 227, 231 ; yield from, 253 ; increased duty, 347 ; decreasing rates for three years, 349 ; reduced duty on, 370, 381, 400; total repeal of the duty on, 403 ' Sugar, Mr. Speaker,' ii. 137 SuUy, his measures of taxation copied under James I., 188 n., 209 Sunderland, Charles Spencer, earl of, ii. ; appointed secretary of state, 70 ; dismissed, 75 ; his in- trigues, 86 ; secretary of state, ib. ; first lord of the treasury, ib. ; his share in the South Sea transactions, 86 ; his death, ih. INDEX TO VOLUMES I, AND 11. 581 SUE - Surplus, large, in 1865, ii. 349 ; in ■ 1874,401,425 Survey, Domesday, 13 ; Wolaey's, of 1522, 132 Surveyor of tlie searcher of the cus- , toms,. 174 Sweden, war of tariffs with, as to naval stores, ii. 90 n. Swift on projects for taxes, ii.101,102 Sydenham, Thomas Poulett Thom- son, lord, ii. ; vice-president of the board of trade, 294 ; presi" dent, 310 TALBOT, death of, at Ohatillon, 118 Tallage, its nature, 9 ; how collected, 60 ; imposed under Henry II., 51; under Richard I. and John, 51 ; not touched by the Great Charter, ib. ; under Henry III., 52 ; liability of citizens of London to, 62, 54 ; later use and disuse of, 65-68, 69 — of groats, 92 Tallies of the exchequer, ii. 72, 309, 464 Tariff, ii. ; the Book of Rates of 1656, 6 ; ,.of 1660, 16 ; Walpole's addi- tional — the new Book of Rates of 1724, 92; Pitt's of 1787, 192; Spencer Perceval's, of 1809, 237 ; Vansittart's in 1819, 267 ; Huskis- son's of 1825, 278, 279 — reform of, ii. ; first revision, by Peel in 1842, 324-326 ; second, by Peel in 1845, 326 ; third, by Glad- stone in 1663, 340; fourth, by Gladstonein 1860,367 of honors, the so-called, 209 Tariffs, war of, origin of, 178 Taxation, under the Romans in Bri- tain, 3-5 ; imposed by the witena- gemot, 8; of land on the knight's fee, 40, 48, see Scutage ; of royal demesne, 51, 52; of moveables, TAX 47, 59-74, 124; on agricultural lands, see Oarucage ; assessment and collection of, 35-37 ; of wool, 77, 78, 81, 97 ; of the Jews, 32, 33, 69 ; system of, becomes gradu- ally fixed, 98, 121 ; on parishes in 1371, 90; direct, 85-162 ; on sheep and wool in 1548, 142 ; on wine, 168 ; on tobacco and currants, 184, 185 ; on sea-coal, 206 ; under the Stuarts, 159 Taxation from the Commonwealth, ii.; of property, 4 ; system of assess- ment and payment, 6 ; indirect, 6 ; of articles of consumption (1643), 8, 9, 252-256; increase of, after 1688, 85 ; extraordinary taxes, 29, 44, 240, 249 ; direct, 26, 33, 46, 61, 81 ; reforms in, under Wal- pole, 88-96 ; speech of Henry Fox on, 119-123; of America, 146, 161 ; summary of, in 1815, 257 ; Adam Smith on, 168; Sydney Smith on, 259, 261 ; summary of, in 1860, 354; great repeal of taxes, 300 ; direct and indirect compared, 365, 366; summary of reform, 1842-1870, 382; synopsis of re- venue and expenditure, 1881-5, 426, 427 Taxed carts, repeal of the duty, ii. 279, 300 Taxes, of 1159, scutage of Toulouse, 40 ; of 1172, scutage of Ireland, 41 ; of 1186, scutage of Galloway, ib. ; of 1168, a tallage, 51 ; of 1173, a tallage, ib. ; of 1188, Sala- din tithe, 59-61; of 1189 and 1196, scutages of Wales and Nor- mandy, 41 ; of 1199, scutage of Normandy, ib. ; of 1221, scutage of Biham, 43 ; of 1231, scutage of Bretagne, ib. ; of 1242, scutage of Gascony, ib. ; of 1253, scutage of Gasconv, 46 ; of 1277, scutage, ib. ; of 1285, 47 ; of 1290-97, ib.; 582 INDEX TO VOLUMES I. AND II. TAX of 1322, ib., 48 ; of 1227, a tallage, 52 ; of 1234, ib. ; of 1304, 66 ; of 1312, 57 ; of 1193, a fourth, 62 ; of 1201, a fortieth, 62 ; of 1232, ib, ; of 1203, a seventh, ib. ; of 1207. a thirteenth, ib. ; of 1226, a fifteenth, 63 ; of 1232, a fortieth, 62, 66, 67 ; of 1237, a thirtieth, 67, 68 ; of 1269, a twentieth, 68 ; of 1275, a fifteenth, ib. ; of 1277, a twentieth, 69 ; of 1283, a thir- tieth, ib. ; of 1290, tenth and fifteenth, 69 ; of 1294, tenth and sixth, 65, 70 i of 1295, eleventh and seventh, ib. 74 ; of 1296, twelfth and eighth, ib. ; of 1297, eighth and fifth, ib. ; of 1301, general fifteenth, 74; of 1302, fifteenth, ib.; of 1306, thirtieth and twentieth, ib. ; of 1307, twen- tieth and fifteenth, ib. ; of 1309 general twentj'-fifth, ib. ; of 1313, fifteenth, ib.; of 1315, fifteenth from demesne, tfi. ; of 1318, twelfth from demesne, ib. ; of 1322, tenth and sixth, ib. ; of 1327, general twentieth, ib. ; of 1332, fifteenth and tenth, ib. ; of 1334, fifteenth and tenth, ib. ; of 1336, fifteenth and tenth, 89 ; of 1337, fifteenths and tenths, ib. ; of 1344, fifteenths and tenths, ib. ; of 1346, ib. ; of 1348, ib. ; of 1352, ib. ; of 1357, fifteenth and tenth, ib. ; of 1372, fifteenth and tenth, 90 ; of 1373, fifteenths and tenths, 91 ; of 1377, poll tax, 91 ; of 1379, poll tax, 92 ; of 1380, poll tax, 97, 99 ; of 1382, fifteenth and tenth, 104 ; of 1383, fifteenth and tenth, 105 ; of 1384, half a fifteenth and tenth, and two fifteenths and tenths, ib. ; of 1389 to 1399, fif- teenths and tenths, ib. ; of 1404, new land tax, 106 ; of 1411, land tax, ^lA. ; of 1415, fifteenth and TEN tenth, 107; of 1428, house tax and tax on fee, 107, 108 ; of 1431, 108; of 1435, 110-113; of 1449, 115 ; of 1450, 116 ; of 1463, 118 ; of 1463, 120 ; of 1472, for archers, 121 ; of 1482, 126 ; of 1488, for ax- chers, 127, 128 ; of 1513, poll tax, 129 ; of 1514, 130 ; of 1623, 132 ; of 1634, 133 ; of 1540, 138 ; of 1544, 139 ; of 1548, on sheep and wool, 142; of 1563, 143 ; of 1558, 144; of 1562, 146; of 1670, ib.; of 1592, 149 ; of 1597, 150 ; of 1605, 169 ; of 1610, a. ; of 1620 and 1623, ib. ; of 1628, ib. ; of 1640 and 1641, 161 ; of 1641, poll tax, ib. Taxes, the new for 1784, lines on, ii.- 188 ; the mode in which they are granted, 530-533 Tea, ii. ; duty on, 41 ; increased, 67, 78 ; permissive and ohligatory warehousing system applied to, 78, 94 ; reduced duty, 115 ; imposition of duty resisted in America, 162 ; annual license for sellers of, in- troduced hy North, 173 ; duty on, reduced by Pitt, 212, 216, 222, 227, 231 ; yield from the duty, 253; increased duty, 267, 347; reduced duty, 349, 369, 371 ; in- creased consumption of, 402, 404 Telegraphs, ii. ; government mo- nopoly of, 440; cost of, 441, 442 Temperance drinks, ii. 419 Templars, order of, dissolved, 137 Temple, Richard, earl, ii. ; first lord of the admiralty, 132 ; George II. 's dislike to, ib ; dis- missed by the king, ib. ; in office again, 133 ; resigns with Pitt, 139 ; refuses office, 152 ; retires, 159 Tenth and sixth of 1222, the form of ordinance for, 237 INDEX TO VOLUMES I. AND II. 583 TEN Tenths, see Fifteenths and tenths, and Taxes Tesselated pavement administration, ii. 155 Tewkesbury, battle of, 121 Thimble and Bodkin army, the origin of the name, ii. 3 Thirtieths, see Taxes Thomson, Thomas Poulett, see Sydenham Tiles, proposed taxation of, by Lyt- telton, ii. 130 ; additional duty on, 210; repealed, 301 Timber, its scarcity in England, ii. 89 ; duty on, repealed by Wal- pole, 90; new tax on, 232, 254, 255 ; Canadian, additional duty on, 297 ; foreign, reduced duty on, 358 ; repeal of the Is. duty on, 372 Tin, duty on, ii. 13, 92 Tithe Commutation Act, the, ii. 320 Tobacco, brought into England, 184 ; impost on, ib. ; failure of the crop in England, 185 — , ii. ; rate of taxation on, under the Great Statute, 32 ; special duty on, under James II., ib., 34 ; duty on, 63, 75 ; made perpetual, 67 ; Walpole's Bill for warehousing, 100-103 ; additional duty on, 113 ; Walpole's scheme passed by Pitt, 193 ; additional duties on, 213, 235, 242, 243 ; yield from the duty on, 263 ; additional duties on, 267 ; transferred from excise to customs, 280 ; duty on, reduced, 283 ; con- sumption of, in 1825, 386 ; in- crease in the duty on, 407 Tobacco-pipes, tax on, its failure, ii. 56 Tory, revival of the name, ii. 153 Tory Stamp Act, the, ii. 78 Toulouse, Henry II.'s' claim to, 39 ; scutage of, 40 Towns, on royal demesne, 16 ; rights TUN of the sheriiT over, ib. ; exclusion of the sheriff from, ib. ; allowance in taxation for decayed. 111, 118 Townshend, Charles, viscount, ii. ; appointed secretary of state, 83 ; dismissed from office, 85 ; returns to office, 87 ; his breach with Wal- pole, 100 ; retires, ib. — , Charles, Right Hon., ii. ; in office, 133; in the Rockingham admiuistration, 153 ; chancellor of the exchequer, 155 ; his Import Duties Act for America, 157; his death, tS. — , George, ii. ; taxes suggested by, 131 Township, its origin, 5 ; its officers, 7 Trade, of England, first in hands of foreigners, 75; depression in, ii. 281, 322; improvement in, 326, 327 — board of, ii. 523 Trades, taxes on, ii, 251, 252 Transfers, proposed tax on, ii. 296 Treasure trove, king's right to, 23 Treasurer, lord, his office, 27, 28, 29 ; Odo of Kent, the fir.it, 28 Langton, 57 ; Brantingham, 90 le Scrope, ib. ; Saye and Sele, 117; Winchester, 143; Dorset, 189 Salisbury (Robert Cecil), ib. Rochester, ii, 32 ; Godolphin, 65 Oxford (Harley), 75 ; Shrewsbury the last, 83 Treasury, put into commission, ii. 75, 83'; office, 524 Treaty (Eden), commercial, ii. 101 ; Cobden's, 356 Triennial Act, 221 Triple assessment, ii. 220 ' Triumvirate,' the — GrenviUe, Egremont and Halifax, 1763, ii. 144 Tungerefa, his office, 7 Tunnage on wine, under Edward III,, 165, 171 ; under Henry VI., 584 INDEX TO VOLUMES I. ANP II. TUN Edward IV., and Richard III., 176, 176 ; under James I., 182 ; levied by Charles I., 192 ; remon- strance against, ib. And see "Wine Tiinscipes, or townships, 5 Turkish pirates, tax for captives of, ii. 7 Twentieth, see Taxes Tyler, Wat, the, rebellion of, 102 UNION duties, repealed, ii. 277 Uses, conveyance of land to, 112 Utrecht, Treaty of, ii. 78, 107 VANSITTART, Nicholas, after- wards lord Bexley, ii. ; chancel- lor of the exchequer, 241 ; adopts Perceval's budget, ib. ; his pro- posed repeal of taxes, 263 ; raises the customs and excise duties, 264; soap tax raised by, ib. ; his flseal policy criticised by Husbisson, 274 ; woollen duties raised by, 276 Venetians, originators of the protect- ive system, 178 Villeinage dies out, 103 Vinegar, ii. ; excise duty on, 12, 32, 73 ; Pelham's additional tax on, 115 ; increased by Dashwood, 140 ; increased by Pitt, 233; repeal of the duty on, 326 yirgate, the, 35 n. Voltaire, ridicules Locke's theory of taxation, ii. 102; on the seven years' war, 128 ^ Volunteers, the rifle, ii. 498 WAIFS, king's right to, 23 Walcheren expedition, the, ii. 240 Walpole, sir Bobert, afterwards eail of Orford, ii. ; secretary at war, 70 ; first lord of the treasury, 83, 84 ; his scheme for a sinking fund, ib., 466, 457 ; resigns his office, 85 ; becomes paymaster of the forces, 80; chancellor of the exchequer and prime minister, ib. ; ' Walpole and Townshend,' ib. ; his rivalry with Carteret, 86 n. ; his admin- istration, 87; his reform of the tariff, 89-93 ; his system of com- pulsory warehousing, 94 ; salt tax repealed by, 95 ; re-imposes the salt tax, 96 ^ his Excise Bill for wine and tobacco, 101 ; his breach with Townshend, 100 ; opposition to his bill, 101 -104 ; outcry against him, 104 ; his foreign policy, 106, 107; resigns, 110; raised to the peerage, ib. ; his jest to Pulteney, ib. ; his advice to Pelham, 111 ; his death, 114 ; Stamp Act sug- gested to, 150 ; character of, by Chesterfield, Appendix X., 545 Wapentakes, subdivisions of the coimty, 6 War of the tariffs between England and France, begins 1667, ii. 27 ; 58, 59, 69, 80 ; with Sweden, 90 Wardrobe, accounts of the, 30 Wards and liveries, court of, esta- blished by Henry VIIL, 137; abolished, ii. 18 Wardship, under the feudal system, 21, 22 ; abolished, ii. 18 Warehousing system, the, ii. ; for India silks, in 1700, 74; for pepper, 1709, ib. ; for tea and coffee (optional) in 1711, 78 ; made compulsory in 1723, 04 ; for wine and tobacco, Walpole's ' ex- cise scheme,' in 1738, is introduced and fails, 97 et seq. ; but subse- quently is passed by Pitt, in 1789, 194 Wars, civil, funds for, ii. 3 War with Spain, ii. 12 ; (Anne) 68, 209, 449 — of Right of Seai-ch, ii. 106, 118, 209 ; its cost, 109, 449, 534 — with France, ii. 114, 192, 634 — Seven Years,' ii. 127 ; its cost, INDEX TO VOLUMES I. AND II. 585 WAR 129, 209, 449, 53 1; taxation for, 138, 139 Wars, the Great, ii. 208 ; coat of, 209, 449, 534 ; taxation for, 219 War of American Independence, ii. 157, 160-182 ; cost of, 165, 209, 449, 534 ; change of feeling as to, 177 — Crimean, ii. 344; cost of, 348, 449, 534 — Austrian Succession, its cost, ii. 109, 449, 534 — Abyssinian, ii. 375 ; its cost, ib. n., 534 — Mahdi, against the, ii. 420, 421 — cost of the several, from 1688 to 1869, Appendix V., ii. 534; the amount of national debt accrued from. Appendix VII., 535 Warrant of the customs, 171 Warwick, defeated and killed at Barnet, 121 Watches, taxed, ii. 217, 367 Watt's steam engine, ii. 204 Wealth of nations, see Smith, Adam Wedgwood china, ii. 201 Weekly meal tax, ii. 6 Wellington, duke of, ii. ; refuses oflBice, 284; his administration, 285-294 ; his short administration in 1834, 308 ; secretary for foreign affairs, ib. Wentworth, sir P., sheriff of Ox- fordshire, ordered to assess for the ship money, 218 West Indies, profit from, 1792, ii. 205 Western, his motion for repeal of additional malt duty carried in 1821, ii. 267 Westmoreland, its exemption from taxation, 111, 128, 144, 153 Whales, king's right to, 23 ; fins of, duty on, ii. 59, 67 ; respealed, 91 Wheat, variations in price of, 234 n. Whig party, schism in, ii. 85 WIN Wilkitea, ii. 168 William the Conqueror, feudal sys- tem introduced by, 18, 19 ; his confiscation of I'lnds after battle of Senlac, ib. ; amerciaments ex- acted by, 26 ; danegeld revived by, 9, 34; court of exchequer established by, 27 — Rufus, feudal system finally es- tablished under, 19 — III., ii. ; abolishes the hearth tax, 40 ; life grant of the excise to, 41 ; limited grant of customs to, 42, 43 ; introduction of the civil list under, 43; poll taxes under, 45 ; tax on births, deaths, and marriages, bachelors and widowers under, 46; settlement of the property tax under, (vol. i. 88, and) 47-50; tax on houses, hawkers, and hackney coaches, under, 52 ; additions to the excise under, 55-57 ; decrease of the customs revenue during war with France, 57 ; additional duties im- posed under, 58, 59 ; stamp duties under, 60 ; proposed tax on the Jews under, 51 ; summary of taxation under, 61-63 ; his death, 64 Wilmington, Spencer Compton, afterwards earl of, ii ; desig- nated as prime minister, 87 ; yields to Walpole, ib. ; speaker, 92 ; first lord of the treasury, 110 ; his death, 111 Winchester, council of, 90 — marquis of, lord treasurer, 1551- 1572, 143, 144 Window tax, ii. ; imposed by Pelham, 117 ; increased, 134 ; assessed vrith the house tax, 170 ; comprised in Pitt's assessed taxes, 190; increased rate of, 250; its partial repeal, 274 ; reduced, 300 ; question as to its repeal, 302, 303 ; 586 INDEX TO VOLUMES I. AND II. WIN t motion for its repeal, 335; re- pealed, 336 Wine, impost on, 108; increased consumption of, 184 ; its assess- ment in the borough of Colchester, 235; tunnage of, ii. 7, 16, 42; Spanish, high charge on, under the Commonwealth, 7 ; licenses, 13, 24, 76; duties on, 23, 27, 82, 54, 69 ; French, its importa- tion excluded, 7 «., 28 ; taxed, 32, 58, 69, 192, 231, 243; smuggling of, 96; Portuguese and Spanish, increajsed importation of, ib. ; additional duty on, 115 ; Walpole's excise bill for, 101 ; additiona duty on, 140, 170, 171, 211, 213, 231 ; yield from the duty, 263 ; duties equalised in 1831, 297; and in 1866, 372. And see British Wines Wire, gold and silver, tax on, ii. 76 Wire-drawing by machinery, esta- blished in England, 206 Witenagemot, taxation imposed by, 7 Wolsey, Cardinal, his survey in 1522, 130, 132 YOU Women servants, tax imposed on, by Pitt,ii. 190; repealed, 196 Wood, sir Charles, chancellor of the exchequer, ii. 331^337 Wool, custom imposed on, 77 ; seized by Edward I., ib. ; maletoute of, 78 ; taxation of, SI ; under Ed- ward III., 97, 164-171 ; revenue from export of, ceases, ii. 6, 16 n. Woollen cloth", see Cloth Worcester, Harthacnut's house-carles kiUed at, 9 ; spoliation of, i6. Works, Public, ii. 526. See Civil Government (v) Wykeham, William of, chancellor,' resigns, 90 Wyndham, William, ii. 238, 240 YARMOUTH, Great, exempted from taxation, 116 Year, the financial, ii. 298 Yorkshire, revolt in, against the tax of 1488, 129 Young, Arthur, his ' Farmer's Tour,' ii. 199 rUINTUD ET BPOTl'lSWOCDE AND CO., NKW-STRKEI eQOARE LONDON