XLI. 1842. CHAP. ment of a reflecting and retrospective posterity. Your conduct will be contrasted with that of your fathers, under difficulties infinitely less pressing than theirs; with that of your fathers at the Mutiny at the Nore, and who, with a rebellion in Ireland and disaster abroad, submitted, with buoyant vigour and universal applause, with the Funds as low as 52, to a property-tax of 10 per cent. My confident hope and belief is, that now, when I devolve the responsibility upon you, you will prove yourselves worthy of your mission as the representatives of a mighty people; that you will not tarnish the fame which it is your duty to cherish as the most glorious inheritance; and that you will not impair the character for fortitude and good faith, which, in proportion as the empire of opinion supersedes and predominates over the empire of physical force, constitutes for every people, but above all for the people of England, the main instrument by which a powerful people can repel hostile aggression and maintain extended empire. 45. "What, then, is to be done in this emergency, when Continued. remedies of no ordinary kind must be resorted to, if power is to be maintained or bankruptcy avoided? Indirect taxation has reached its limits, and can no longer be relied on. Last year the addition of 5 per cent on the Customs and Excise, instead of producing £5 per cent, as was expected, produced only 10s.; while the per-centage of 10 per cent on the assessed taxes produced considerably more than was expected. Are we, then, to go back to the old taxes? Shall we restore the postage duties? At present, the new packet-service being added, the Post-office produces no revenue at all, but is rather a charge; but the penny postage has not been long enough in operation to justify us in proposing an alteration upon it. Are the taxes to be restored upon wool, salt, and leather? That would be adding to the burdens of the already suffering portion of the community, to the relief of that which is in affluence; and in addi XLI. 1842. tion, many new contracts have been entered into upon CHAP. the faith of their abolition, and salt in particular has been applied to many new purposes. A nation's revenue may sometimes be in the end increased by reduced taxation; but, in the first instance, it is always followed by a great diminution, and a very long time is always required to restore the amount. This principle is illustrated by what has happened with respect to the reduced duties on wine, tobacco, sugar, coffee, hemp, rum, and other articles. A mere reduction of duties, therefore, will not present a resource to meet the present emergency; and my settled opinion, my deep conviction is, that it has become necessary to make a great appeal to the holders of property. 46. My plan is this: to levy an income-tax not exceeding 7d. in the pound, or about 3 per cent, on all incomes Continued. above £150, including all funded property, whether in the hands of natives or foreigners. I estimate the incomes of lands in Great Britain at £39,400,000; houses, £25,000,000; mines, railroads, &c., £8,400,000; in all, £72,800,000. The total produce of this tax, excluding Ireland, I estimate at £3,771,000. As Ireland is to be withdrawn from the tax, I propose to add 1s. a-gallon to the tax on spirits, the consumption of which is again increased from the decline of the influence of the temperance pledge. From this source I expect £250,000 a-year; and from the equalisation of the stamp duty in that country with that in England, £160,000 more. Four shillings a-ton is to be laid on exported coals, from which I expect £200,000; in all, £4,380,000, which will cause a considerable surplus after covering the whole deficiency for the year, which I estimate at £2,500,000. And then the question remains, In what way can this surplus be best applied to improve the resources or lighten the industry of the nation? This surplus I propose to apply in the reduction of the import duties in our commercial tariff. CHAP. XLI. 1842. 47. "The principle on which this reduction is founded is, wherever the duty is trifling, and it is practicable, to abolish it altogether; to reduce the duty on raw mateContinued. rials to 5 per cent, upon articles partially manufactured to 12 per cent, and even on articles entirely manufactured, to cause it not to exceed 20 per cent. On 750 articles of import there is to be an entire remission or abatement of duty; on 450 it is left untouched. The total loss of reduction on the whole would not exceed £270,000. On sugar no reduction of duty, I regret to say, is at present practicable; but on coffee a very great diminution is proposed, bringing down the duty to 8d. a-pound on foreign, and 4d. on British. On timber, regarding Canada as an integral part of the empire, and equally entitled to protection, it is proposed to make the duty merely nominal when it comes from British possessions, and 25s. a-load when from foreign states. The loss thence arising will be about £600,000 a-year.* On the whole, these reductions, with the necessary increase of expenditure, will swell the deficit to £3,700,000; but as the proposed new taxes will bring in £4,300,000, there will be a surplus of some half million to apply to the support of our distant wars. 48. "I have a sincere and cordial respect for the interests Concluded. which apprehend they will be affected by the reductions in the tariff; but communications with the principal parties likely to be affected by it have confirmed the Government in the opinion that these measures will be * The duties proposed to be lowered, which excited the greatest alarm, were those which related to live cattle, sheep and swine, salted and dried meats, and on butter, eggs, cheese, and lard, and the substitution of a moderate duty on these articles. The proposed duties were : XLI. 1842. attended by great public advantage to all classes, not CHAP. even excluding the agricultural, by the reduction which we propose to make in meat and cattle, and, above all, by removal of that complete prohibition which we found when we approached the subject. I know that many gentlemen who are strong advocates for free trade may consider that I have not gone far enough. I know that. I believe that in the general principle of free trade there is now no great difference of opinion, and that all agree in the general rule that we should buy in the cheapest market, and sell in the dearest.' (Loud cheers from the Opposition.) I have stated the reasons on more than one occasion why I think the case of corn and sugar is an exception to this rule. I know that I may be met by the complaints of the gentlemen opposite as to the limited. extent to which I have applied the principle to which I have adverted to these important articles. But I feel satisfied that it was inexpedient to apply such important changes as I have heard suggested to these important interests. I think it would be imprudent to increase the alarm which already prevails among these important classes. I think the Legislature has made as great a Parl. Deb. change as was prudent under the circumstances, and 464, 466, considering the existing relations between landlord and 710; Ann. tenant, and the large amount of capital at present applied 72, 84. to the cultivation of the soil." 1 1xi. 450, lxii. 444, Reg. 1842, sition and No debate followed on this speech in the first instance; 49. and the Opposition were so much impressed with the Reception of the plan by courage and grandeur of the change proposed, that for the Opposome days the demon of faction was almost laid asleep, the country. and it was thought the measure would pass unanimously. By degrees, however, they recovered from their consternation, and efforts were made to get up a popular agitation against the essential parts of the proposed measure. This was no difficult matter; for although every one, of course, except the farmers, cordially acquiesced in the reduction of duties proposed by the new commercial tariff, VOL. VII. D CHAP. yet the feeling was by no means so unanimous in favour XLI. of the proposed substitute of an income-tax. Great 1842. alarm also prevailed in the grazing districts, that the admission of foreign cattle and salted meat would prove fatal to that portion of British, and still more Irish agriculture. The proposal, too, of an income-tax, excited no small degree of alarm, especially among the middle and trading classes, who dreaded the absorption of their profits, and exposure of their affairs, especially in a time of European peace, when the necessity of so rigorous an expedient was by no means apparent. Accordingly, the Opposition saw that this was the tender point to which all their efforts should be directed, and the main struggle took place on Lord John Russell's amendment condemnatory of that tax, which came on on the 4th April, and lasted four nights. But it was favourably received in the 1 Ann. Reg. City, especially as indicating the resolution of the Government to uphold public credit, without having recourse to a loan, which was generally apprehended, and the Funds rose from 89 to 93 in consequence.1 1842, 376, 84, 86; Mart. ii. 538. 50. Argument income tax. Against the tax it was urged by Lord John Russell in the Commons, and Lord Brougham in the Lords: "A against the direct tax on income ought never to be resorted to unless in some great emergency of public affairs-when an extraordinary expenditure has become necessary for a time, or in some pressure upon the finances of the country, which can be sustained by no other means. Such a tax ought on no account to form part of the ordinary revenue of the State, but should cease with the necessity which could alone justify its adoption; inasmuch as, besides all the other objections to which it is liable, its inquisitorial character is such as must always render it odious, however trifling may be the amount abstracted. The facility with which it is collected offers a constant temptation to extravagance on the part of Government, removes the most important check upon expenditure, and dispenses |