T 
 
 Nfcfc'TS 
 
 =1 
 
 THE LIBRARY 
 
 OF 
 
 THE UNIVERSITY 
 
 OF CALIFORNIA 
 
 LOS ANGELES 
 
 SCHOOL OF LAW
 
 THE QUEEN'S TAXES. 
 
 Bi JOHN NOBLE.
 
 THE 
 
 aUEEN'S TAXES: 
 
 AN INQniRY INTO THE 
 
 AMOUNT, INCIDENCE, & ECONOMIC RESULTS, 
 
 OF THE 
 
 Cai'iitioiT 0f the ^^iiittir |litTgb0m, 
 
 DIRECT AND INDIRECT. 
 
 By JOHN NOBLE. 
 
 "The things to he aimed at are wisdom and moderation, not only in granting, 
 bat also in the method of raising the necessary supplies ; by contriving to do 
 both in such a manner as may be most uonducive to the national welfare, and 
 at the same time most consistent with economy and the liberty of the subject" — 
 Blackitone'i Commentaries. 
 
 LONDON : 
 LONGMANS, GREEN, READER, AND DYER. 
 
 1870.
 
 LONDON : 
 G. HILL, STEAM PRINTER, WESTMINSTER BRIDGE ROAD. 
 
 T 
 
 mo "
 
 PREFACE 
 
 There are few subjects of greater importance, as 
 affecting the well-being of the community, than 
 Taxation. The financial legislation of the last twenty- 
 seven years has mainly consisted in the removal of 
 injurious taxes. This beneficial process has vastly 
 simplified our Customs Tariff, diminished the inter- 
 ference of the Excise with manufacturing processes, 
 and afforded ample proof of the pernicious effects of 
 fiscal interference with trade. 
 
 The probability that the question of Taxation will 
 receive considerable attention, both in and out of 
 Parliament, during the next few years, renders it 
 desirable that the facts of the case should be placed 
 before the puljlic in a compact form. It is the aim 
 of this work to present a complete analysis of the 
 taxes levied for Imperial purposes, compiled from 
 tlie latest official documents, and dealing separately 
 with each impost in such a manner as to enable the 
 reader to form liis own conclusions, as to its merits or 
 demerits, from the most unquestionable evidence. 
 
 748914.
 
 riii Treface. 
 
 Tlie four cardinal maxims laid down by Adam 
 Smith, and generally concurred in by subsequent 
 economists, may be thus briefly summed up. 1. Each 
 subject should contribute according to his ability. 
 
 2. The time of payment, mode of payment, and 
 amount to be paid, ought to be clearly defined. 
 
 3. Every tax ought to be paid at a time convenient to 
 the taxpayer. 4. Every tax ought to be so contrived 
 as to take as little as possible from the pockets of the 
 people beyond the amount it brings into the treasury, 
 and should impose no injurious restrictions upon either 
 trade, industry, or production. An inquiry into any 
 system of taxation necessarily resolves itself into the 
 question as to how far these conditions are com- 
 plied with. An indispensable preliminary to such 
 inquiry is an accurate knowledge of facts, which it 
 has been the aim of the author of this volume to 
 collect from the various reports and returns through- 
 out which they are scattered,* and to present to his 
 readers in a compact and convenient form. 
 
 * The first Annual Eeport of the Commissioners of Inland Revenue being out 
 of print, a new and revised edition, comprising all that is worth preserving of 
 the succeeding annual reports, has been issued. For the references to the First 
 Inland Revenue Report, see the Report for the years 1856 to 1869, issued iu 
 2 vols.
 
 Preface. ix 
 
 All controversy upon Taxation appears to resolve 
 itself into a consideration of the alleged merits and 
 advantages of Direct and of Indirect Taxation. On the 
 side of the latter there is enlisted the powerful 
 influence of long prescription, supported by a 
 numerous section of economists, who hold, with IMr. 
 McCuLLOCH, that " moderate duties are innocuous 
 if not advantageous." The opponents of Customs and 
 Excise duties, on the contrary, allege that they are 
 uniformly prejudicial in their economic effects, and 
 extravagant in the cost of their collection. In support 
 of this opinion the high authority of the late Eichabd 
 CoBUEN may be quoted ; who, in 1859, declared that 
 " the man, or the body of men Avho should be able to 
 abolish Customs and Excise Duties, in this or any 
 other country, would be the greatest possible bene- 
 factors of that country." Between these opposing 
 schools, there is a third, which holds that indirect 
 taxation should be removed from all harmless articles 
 of consumption, but retained upon alcohol and tobacco 
 in order to place a check upon their excessive 
 consumption. 
 
 It is not the intention of this work to advocate 
 either of tlicse systems of Taxation, but to present
 
 X Freface. 
 
 a record of facts which will enable its readers to judge 
 for themselves as to the merits of the controversy. No 
 doubt the author's conclusions have been influenced 
 by the opinions he himself entertains. He trusts, 
 however, that his selection and arrangement of facts 
 will be found to have been carefully and impartially 
 conducted, and that the present volume will form a 
 useful manual on the important subject of National 
 Taxation.
 
 COIsTTEI^TTS 
 
 CHAPTER I.— Introduction. 
 
 PAGE. 
 
 Definition of Taxation— Causes of High Taxes — Objects of recent Fiscal 
 Legislation — Importance of luquii-y into Taxation — Intention of the 
 present Work — Principal Som-ces of Revenue — Analysis of Taxa- 
 tion showing the amount levied by each description of Impost 1 
 
 CHAPTER. II — Taxes on Articles of CoNsuiiPiioN. 
 Origin of Customs — Amount collected at diiFerent Periods — Origin of Excise 
 — Analysis of Duties of Customs and Excise, and other Taxes on Com- 
 modities 6 
 
 CHAPTER III.— Tobacco and Snuff. 
 
 Rates of Duty — Quantity taxed and Revenue therefrom — Rate of Taxation 
 on Tobacco, and on Cigars — High Duties and Smuggling — Consumption 
 per head at diflerent Periods — Smuggling in 1833 — Report of Com- 
 mittee upon Smuggling in 1844— -\lleged Decrease of the Practice — 
 Seizures reported — Increase of Smuggling in 1867 and 18(58 — Result 
 of Enquiries made by the Author at the Principal Seaports— Reasons 
 alleged for the Decrease in Smuggling since 1863 — Consumption of 
 Tobacco by the Working Classes — Reports of Commissioners as to 
 Adulteration 9 
 
 CHAPTER IV. — Spirits and Articles Containing Spirit. 
 
 Rates of Duty — Illicit Distillation — Consumption and average Rates of 
 
 Duty at various Periods — Efiect of increasing the Duties — Statistics 
 
 of Consumption not trustworthy owing to the Practice of Smuggliu" 
 
 — Convictions for Illicit Distillation — High Rates of Dutj- formerly 
 
 interfered with Manufactures in which Spirits were Employed 
 
 Difficulty obviated by the introduction of Methylated Spii-it — Con- 
 sumption and Rates of Duty on Foreign Spirits at various Periods — 
 Increased Consumption of duty-paid Foreign Sphits owing to 
 Equalization of Duty — Decrease in Home Made Spirits — Adultera- 
 tion fostered by Heavy Duties m 
 
 CHAPTER v.— Wine. 
 
 I'uttis ol Duly, (Quantity taxuil. aud Amount produced— Efl'ect of the 
 MfeUiueu Treaty iu t-upplautiug Frtutli \Viii(H — Rates of Duty at 
 various Puriodii — P^flect of reducing the Duties upon French Wines — 
 Statistics of Consumption of Freuch, Spaiii.-.h. and I'ortuguese Wines 
 at different Pf rioda— Fropo-cd Equalization of Duties 31
 
 xii Contents. 
 
 PAGE. 
 
 CHAPTER VI.— SuGAE and 4.eticles of which Sugae is an Ingeedient. 
 
 Sugar largely consumed by the Working Classes — Effect of Protective 
 Duties formerly levied in favom- of Colonial Sugars — Rates of Duty, 
 Quantities taxed, and Revenue — Effect of Reduced Duties on Con- 
 sumption — Controversy between Grocers and Refiners respecting the 
 Duties — Alleged Effect of present Scale in diminishing Production- 
 Importation and Consumption at different Periods — Probable Effect 
 upon Trade of repealing the Duty — A Tax ui^on Raw Material of 
 certain Manufactures— Grape Sugar— Summai-y of Arguments against 
 the Sugar Duty '^1 
 
 CHAPTER VII.— Tea. 
 
 Consumption for a long time Stationary — Rates of Duty, 1801 to 18.53 — 
 The East India Company's Monopoly— Tables of Duty, Importation, 
 and Consumption 1852 to 1868— Tea a necessary to the Poor— Pressure 
 of the Duty on the Lower Class of Teas — Increased Trade with 
 China since the Duty was reduced — Increased Export Trade in Tea — 
 Results that would follow the Repeal of the Duty 50 
 
 !-- CHAPTER VIII.— Coffee and Chicoet. 
 
 Lesson of the Coffee Duty respecting the Effect of Taxation— Duties levied 
 on Coffee, 1801 to the present Time — Import, Consumption, and Export 
 of Foreign and Colonial Coffee, 1841 to 1868 — Average Consumption 
 per head during the present Centuiy — Histoi-y of the Adulteration 
 of Coffee with Chicory — Duties imposed upon Chicory in consequence 
 of the Loss to the Revenue — Effect upon Consumption of Chicory — 
 Sale of Colonial Coffee largely increased since Protective Duties were 
 abolished 55 
 
 CHAPTER IX.— MiNOE Articles. 
 
 Cocoa — Consumption — Rates of Duty — Dried Fruit — Rate of Duty, &c. — 
 Patent Medicines — The Government Stamp supposed by Ignorant 
 People to vouch the Merits of these Preparations — Playing Cards — 
 Gold and SUver Plate 64 
 
 CHAPTER X. — Malt and its Peoducts, with theie Substitutes. 
 
 Rates of Duty, 1697 to the Present Time — Effect of Tax upon Consumption 
 — Decrease of Malt in consequence of the rivahy of Tea and Coffee — 
 The Agricultural View of the Malt Tax — Report of the Committee of 
 1868 — Analysis of the Division Lists in the Committee — The Oificial 
 View of the Malt Tax — Lord John RusseU, C. P. Villiers, and Richard 
 Cobden on the Malt Tax- Cost to the Consumer of collecting the 
 Malt Tax — The Moral Argument— Adulteration — Amount of Duty in 
 1868-9— Foreign Malt— Consumption per Head from 1740— A Substi- 
 tute for the Malt Tax 68
 
 Contents. xiii 
 
 CHAPTER XI. — Licenses on^Trades and Professions. 
 
 Imposed in some instances for Protection of the Revenue — In others for 
 purposes of Police Regulation — Licenses Levied on Manufacturers — 
 Brewers' Licenses — Proceeds of Hop Duty, 1852-61, and of Brewers' 
 Licenses, 1852 to 1866, showing the Eti'ect of commuting the Hop 
 Duty into a License Tax — Proposal to increase Brewers' License as a 
 Substitute for the Malt Tax -Number of Maltsters and Duty collected' 
 — Licenses 'or Manufacturers of Tobacco, Distillers, Rectifiers, 
 Paper Makers, and Soap Makers — Beer, Spii'it, and Wine Dealers' 
 Licenses — Other Licenses 80 
 
 CHAPTER XII. — Probate, Legacy, anb Succession Duties. 
 
 History of the Probate Duties — Present Scale of Duties — Inequalities of 
 Pi'obate Duties — Levied on Personal Property only — Assessment of 
 Large Estates at Lower Rates than Small ones — Payment of Duty on 
 Full Value, including Debts — Increased cost of Letters of Administra- 
 tion — History of the Legacy Duty — Succession Duty — Rates of Luty 
 — Difference in the Mode of Assessing the Legacy and the Succession 
 Duties — Mr. Bright's Illustration of the Injustice of the Mode in which 
 the Succession Duty is levied- — Mr. Gladstone's Defence — Failure of , 
 the Succession Duty to realise the Estimated Amount— Opposition of 
 the Landowners to the Succession Duty^ — An Examination of the 
 Plea for Reduced Assessment on account of the alleged Pressure of 
 Local Rates — Proposed Assessment of Property held by Corporations 
 to an Analogous Tax— Alleged Objection that such Taxes are Paid out 
 of Capital 91 
 
 CHAPTER XIII.— Miscellaneous Stamp Duties. 
 
 Amount Collected under each Head — Changes in the Mode of Collection — 
 Litigation formerly caused by Complexity of the Stamp Duties — 
 Modificationssince 18-19 — Result of Reducing the Receipt Stamp Duty 
 to a Penny — Objections to the Stamp Duties on Sale and Transfer 
 of Propertj' — Mode in which such Taxes should be assessed — Miscel- 
 laneous Stamp Duties — Fees in Courts of Law Collected by Stamps — 
 Objection to Stamp Duty ou Marine Insurances — Stamp Duty on 
 Patents for Inventions Ill 
 
 CHAPTER XIV. — Taxes on Railways, Servants, Carriages, Horses, 
 Mules, Dogs, and Armorial Bearings. 
 
 Railway Passenger Duty — Taxes repealed in 1868— Prospect of repeal of 
 the Railway Passenger Tax — Assessed Tax on Dogs, changed to 
 License Duty in 1867 — Result of the Change — Present scale of Duties 
 levied upon Servants, Carriages, Horses, and Armorial Bearings — 
 Number of Acts levying Assessed Taxes, wholly or partially repealed 
 in 1868 — Exemption of Horses engaged in Agi-iculture — Objections to 
 these Taxes considered 118
 
 xiv Contents. 
 
 CHAPTER XV.— Inhabited House Duty. 
 
 History of the House Duty — Exemptions — Opinions of Mr. J. S. Mill 
 and Mr. McCuUoeh — House Tax partially a tax on Rent of Land — 
 Incidence of tlie Tax — Objections to the Tax considered 124 
 
 CHAPTER XVI.— The Land Tax. 
 
 Origin of the Land Tax — Abolition of Feudal Tenures and Imposition of 
 Excise Duties in lieu thereof under Charles II — This Transfer 
 accompanied by the introduction of a Standing Army — Conversion of 
 Landholders into Land Owners — Effects of the Change — Taxation in 
 the Reign of Charles II. and James II. — Dissatisfaction with the amount 
 of the burden thrown upon the People — Revision of the Land Tax in 
 the Reign of William and Mary — Assessment of theTax upon Real and 
 Personal Property — Mode in which Payment of the Tax hasbeen evaded 
 by means of subsequent Legislation — Non-assessment and Relief 
 of Personal Property from the Tax — Plan for redeeming the Land 
 Tax — Probable Result if the Land Tax had been maintained according 
 to the evident intention of the first Act passed in the Reign of WiUiam 
 and Mary 135 
 
 CHAPTER XVII.— Peopeety and Income Tax. 
 
 Histoiy of the Tax from its Introduction in 1798 to the Termination of the 
 French War — Condition of Great Britain and Ireland when it was 
 renewed by Sir Robert Peel — Various Modifications of the Tax since 
 1842— Amount Collected under each Schedule — Inequality of the Tax 
 as respects Permanent and Precarious Incomes — Exemption of 
 Premiums on Life Policies, &c.^Evidence of Mr. Mill and other 
 Witnesses before Select Committee in 1852 as to Assessment of the 
 Tax : 148 
 
 CHAPTER XVIII. — Income Tax : Schedule A— Lands, Houses, &c. 
 
 This Schedule a Tax on Rent — Amount Collected under the following 
 Heads : Lands, Messuages, Manors, Fines — Assessment of Lands in 
 England and Wales at various Periods — Ditto in Scotland — Reasons 
 ■why the Increase is Larger in Scotland than in England and Wales — 
 Tax on Rent less Prejudicial to Landowners than Customs and Excise 
 — Assessment of Houses at different Periods — Increase in the 
 National Expenditure- — The alleged Burdens upon Land — Increased 
 Rental Created by the Common Industry of the Nation a Fair Subject 
 for Special Taxation — Local Burdens upon Land — Special Borrowing 
 Privileges enjoyed by Landowners 168 
 
 CHAPTER XIX. — Income Tax : Schedule B — Occupation of Land. 
 
 Assumed Estimate of Farmers' Profits — Special Advantage enjoyed by 
 Farmers over other Traders — Net Rental Assessed at various Periods — 
 Increased Profits of Farmers since 1842 , . 173
 
 Contents. xv 
 
 CH AFTER XX. — Income Tax : Schedule C- — Dividends from 
 Public Revenue. 
 
 A Tax on Dividends vii-tual Repudiation — Justified by Sii- Robert Peel 
 because the Fundholder was relieved by means of Income Tax from 
 other Taxes — The Fiscal Policy introduced in 1842 raised the Value 
 of the Funds — Taxation of Foreign Investors — Income Assessed at 
 various Periods — Taxation of Income from Foreign Funds 176 
 
 CHAPTER XXI.— Income Tax : Schedule D.— Profits of Trades, 
 Professions, and Employments. 
 
 Increased Assessment in the year 1866 owing to Transfer of Certain Under- 
 takings from Schedule A— Growth of Trading Profits 1814 to 1868— 
 Substitution of the Income Tax for Customs and Excise Duties pro- 
 ductive of great Advantage — Opposition to the Tax — Extent to which 
 the Tax is evaded by means of false Retm-ns — Number oi Persons 
 assessed at various Amounts — Instances of Evasion, and Mode 
 in which it has been justified by Delinquents — Voluntary Taxation 
 wrong in Principle — Eflfect of fraudulent retm-ns upon Commercial 
 Morality — Profits of Quarries, Mines, Iron Works, Fisheries, Railways, 
 Gas Works, <S:c — Assessment under each Head at difi"erent Periods . . 179 
 
 CHAPTER XXII.— Income Tax: Schedule E.— Public Offices 
 and Pensions. 
 
 Amount Assessed at difierent Periods — Certainty of Assessment compared 
 with that of Traders' Profits — Lai'ge Increase under this Schedule since 
 1842-43 196 
 
 CHAPTER XXIII.— Mode of Payment. 
 
 " The People must Pay and not Know " — Taxes concealed in Commodities 
 — Dr. Channing on Tariffs — Direct and Indirect Taxes — Convenience 
 as to Mode oi Payment may be neutralised by Cost of Collection — 
 Alterations in Payment of Land, House, Income, and Assessed Taxes 
 made in 1869 — Taxes repealed in 1869 198 
 
 CHAPTER XXIV.— Cost of Collection. 
 
 Cost of Collection more Important than Mode of Payment — Direct Taxes 
 involve no Increase beyond the Amount paid to the State — Cost of 
 Collecting Customs — Examination of Statements made by the Com- 
 issioners — Cost of Salaries, &c., including Coast Guard — Salaries, itc, 
 Inland Revenue — Increased Cost consequent upon Traders' Profits on 
 Duties advanced — Estimate of Produce Markets Review as to Tea and 
 Sugar — Mr. Fielden, Mr. Cayley, and Sir Fitzroy Kelly as to Malt — 
 Estimate of Mr. Dudley Baxter — Estimate of Mr. G. R. Porter — 
 Sugar — Reasons for believing Increased Cost of Customs and Excise 
 to be at least i;i(),000,onO 095
 
 xvi Contents. 
 
 CHAPTER XXV.— Concluding Observations. 
 
 Comparative Pressure of Taxation on Real Property, Personal Property, 
 Trade, and Consumption — Difficulty of ascertairing exact Comparative 
 Pressure of Taxes on Consumption— Pressure upon the Working 
 Classes — Opinion of Sir Robert Peel thereon— Effect of Taxes on Com- 
 modities upon Trade and Employment — Principles upon which a 
 Revision of Taxation should be Based 219 
 
 CHAPTER XXVI.— Supplementary :— The Budget of 1870. 
 
 The Reduction of the Sugar Duties and the Income Tax— Abolition of 
 sundry License Duties — Repeal of Stamp Duty on Hailstorm, Cattle, 
 Boiler, and Plate Glass Insurance — the Gun Tax — Revision of the 
 Stamp Duties — Reduction of Newspaper and Book Postage — Alteration 
 of the Railway Duty— The Brewers' Licences and the Malt Tax — 
 Mr. Lowe on the " Free Breakfast Table " and Direct Taxation 230
 
 THE QUEEN'S TAXES. 
 
 CHAPTER I. 
 
 INTRODUCTION. 
 
 Taxes are indispensable adjuncts of civilization. They 
 are the premium paid by every citizen to ensure the 
 protection of his person, the security of his property 
 and earnings, and such common advantages as are best 
 attained by the intervention of the Government. In 
 so far as taxes are necessary to secure these ends, they 
 exist on precisely the same footing as rent, premiums 
 of insurance, or any other payment for services ren- 
 dered. Unfortunately Governments have not been 
 content with the performance of these simple func- 
 tions, but have involved themselves in needless and 
 extravagant wars, mainly promoted in the interests of 
 ambitious rulers, which have vastly increased the 
 burdens imposed upon their subjects. In consequence 
 of the predominance of this policy during a long 
 ])eriod, the taxes now required from the inhabitants of 
 this country are largely in excess of the advantages 
 wliicli the existing government is able to render to its
 
 2 , The Queen's Taxes. 
 
 subjects. Hence has arisen that feeling of dissatisfac- 
 tion with the amount of taxation, which has become 
 an almost recognised privilege of the British subject. 
 If the revenue required to meet our expenditure had 
 been invariably levied on scientific principles, the ill 
 effects of its excessive amount would have been con- 
 siderably mitigated ; this, however, has not been the 
 case ; excessive taxation has been levied in the most 
 empirical m.anner, and the evils of undue expenditure 
 have been thereby aggravated. The financial legisla- 
 tion of the last twenty-seven years has been mainly 
 directed to the removal of these evils, and, as a natural 
 consequence, our fiscal system has, during that period, 
 been completely re\dsed. The present time is, there- 
 fore, opportune for a consideration of the existing 
 system of taxation in order that its weight and pressure 
 may be accurately estimated. The levy of taxation is 
 a most important branch of economic science, affecting 
 the well-being of all classes, — consumer, producer, land- 
 lord, capitalist, manufacturer, trader, and labourer. 
 Upon the mode in which the public burdens are 
 imposed depends not merely the prosperity, but the 
 very livelihood of large sections of the community. 
 In the following pages it is intended to review, in 
 detail, the fiscal system as it now exists, and to ascer- 
 tain, as far as possible, in the light of actual facts, the 
 effect of every impost tqoon the social and economic 
 condition of the people. The fiscal history of the 
 United Kingdom affords abundant material for the 
 task, which it has been the desire of the Author to 
 perform in an impartial spirit, in order that his readers
 
 The Queett's Taxes. 3 
 
 may be able to base their opinions upon facts, and not 
 upon mere theories, however plausible. It will be his 
 aim to throw some light upon the nature, incidence, 
 and effect of the various imposts levied in aid of the 
 Imperial revenue, which, being appropriated for the 
 service of the Crown as the executive power of the 
 commonwealth, are generally known as " the Queen's 
 Taxes." 
 
 The following is the gross receipt, and the net produce 
 deducting cba whacks, repayments on over entries, &c., 
 of each of the principal sources of the National 
 Revenue for the year ending March 31st, 1869 : — * 
 
 
 Gross Receipt. 
 
 
 Net Receipt.t 
 
 
 £ s. 
 
 d. 
 
 £ s. d. 
 
 Customs 
 
 ... 22,585,529 
 
 
 
 ... 22,422,472 5 11 
 
 Excise 
 
 .,. 21,084,365 8 
 
 8i 
 
 ... 20,475,740 7 4f 
 
 Stamps 
 
 ... 9,505,238 4 
 
 u 
 
 ... 9,241,450 11 6i 
 
 Taxes 
 
 ... 12,242,101 8 
 
 91- 
 
 ... 12,110,413 2 
 
 
 £65,417,234 1 
 
 7i 
 
 £64,250,076 5 
 
 Under one or other of the above heads is collected 
 every impost which comes strictly under the definition 
 of a tax levied for the service of the Government. 
 The remaining sources of Income were the revenue 
 from the Post Office, which is a payment for a service 
 
 * Parliamentary Paper " Taxes and Imposts " Session 18G9, No. 427. 
 
 t Financf; Accounts 18G8-9, pp 23-26. The net receipt includes several small 
 charges for special sei-vices, fees, fines, &c., not included in the paper from which 
 the fcroFS amount is taken, amounting to £184,729 7s. 8d.
 
 4 The Queen's Taxes. 
 
 performed by the Government rather than a tax, 
 £1,355,010138. 8cl.;* the Crown Lands, £M6,l74;i- and 
 miscellaneous receipts from various sources jiaid into 
 the Exchequer, £3,355,9914 The division of the 
 revenue derived from taxation into the four main 
 items of Customs, Excise, Stamps, and Taxes is to a 
 certain extent arbitrary ; many imposts are collected 
 by the officers of excise which are not duties levied 
 upon commodities ; while under the heads of Stamps 
 and Taxes are included the most varied sources of 
 revenue. It has been necessary, therefore, in order to 
 ascertain the exact proportion raised by each description 
 of tax to re-arrange the details collected under the 
 four main divisions of our Fiscal System. The result 
 is shown in the following table, which presents a sum- 
 mary of the revenue for the year 1868-9, arranged 
 according to the sources from which it was derived : — § 
 
 Duties on Articles of General Consumption : — 
 
 £t s. d. 
 
 Customs II 22,585,529 
 
 Excise 17,775,095 16 9 
 
 Stamps 142,863 3 If 
 
 Carried Forward 40,504,087 19 lOf 
 
 * This is net revenue the gross amount was £4,553,580 ISs. 2cl., the cost 
 of collection, or Post-office Service, being £3,198,564 4s. 6d. Parliamen.ary 
 Paper, Session 1869, No. 427. 
 
 \ This is the gross amount received, including £88,206, expenses of manage- 
 ment and sundry payments authorized by various Acts of Parliament out of 
 gross revenue before it is paid into the Exchecper. Finance Accounts, 1868-9, 
 p. 15. 
 
 \ Finance Accounts, 18G8-9, p. 8. 
 
 § Parliamentary Paper, " Taxes and Imposts," Session 1869, No. 427. 
 |! Includes Corn &c., £915,585 repealed in 1869.
 
 The Queeti's Taxes. 
 
 Brought Forward .. £40,504,087 19 10| 
 
 Licenses on Trades and Professions : — 
 
 ^ a. 
 Excise ... 1,979,729 18 
 
 d. 
 6i 
 
 
 
 Stamps ... 129,165 
 
 
 
 
 
 Taxes ... 17,746 6 
 
 
 
 
 
 
 
 2,126,641 4 
 
 ei 
 
 
 
 Probate, Legacy, and Succession dt 
 
 ities 
 
 4,513,697 14 
 
 8* 
 
 Stamps on Deeds, Bankers Notes, Bills, 
 
 
 
 Eeceipts, &c. 
 
 
 3,016,046 5 
 
 3f 
 
 Stamps on Law Proceedings ... 
 
 ... 
 
 308,192 5 
 
 4i 
 
 Marine and Fire Insurances* ... 
 
 
 1,156,006 14 
 
 3 
 
 Locomotion : — 
 
 
 
 
 £ s. 
 
 d. 
 
 
 
 Excise ... 791,536 16 
 
 9i 
 
 
 
 Taxes ... 844,474 14 
 
 1 
 
 
 
 
 
 1,636,011 10 
 
 lOi 
 
 
 
 Land Tax 
 
 ... 
 
 1,131,301 8 
 
 2 
 
 Tax on Offices and Pensions ... 
 
 
 19 16 
 
 
 
 Licenses (various) granted for periods 
 
 
 
 less than a year 
 
 ... 
 
 56,107 13 
 
 3f 
 
 Surcharges (various) 
 
 
 40,617 14 
 
 4 
 
 Licenses to kill Game ; Eace Horses, 
 
 
 
 and Dogs 
 
 
 510,716 12 
 
 
 
 Marriage Licenses 
 
 ... 
 
 3,899 
 
 
 
 Patents for Inventions... 
 
 . . . 
 
 119,380 1 
 
 10 
 
 Newspaper Stamps 
 
 ... 
 
 115,987 19 
 
 6 
 
 Inhabited House Tax ... 
 
 
 1,131,582 10 
 
 Of 
 
 Male Servants ... 
 
 
 233,654 5 
 
 
 
 Hair Powder and Armorial Bearings 
 
 
 69,820 16 
 
 1 
 
 Income Tax ... 
 
 
 8,743,462 10 
 
 5 
 
 
 65,417,234 1 
 
 7i 
 
 Post Office 
 
 £i 
 
 4,553,580 18 
 
 2 
 
 
 69,970,814 19 
 
 9i 
 
 Fire Insurance £1,070,010 Is. 7(1. repealed in lH(i!t.
 
 6 The Queen's Taxes. 
 
 CHAPTER II. 
 
 TAXES ON ARTICLES OF CONSUMPTION. 
 
 These imposts wliicli are levied mainly by means of 
 the Customs and Excise form the most important part 
 of the National Hevenue. The origin of Customs 
 Duties is somewhat obscure; there appears but little 
 doubt that in one form or another they have existed 
 from a remote period. It is only, however, in modern 
 times that any considerable revenue has been derived 
 from this source. It is probable that originally they 
 were merely small charges upon exports and imports 
 sufficient to defray the cost of maintaining the ports 
 and havens, and to provide for the expense of weighing 
 and measuring goods. The following table shows the 
 proceeds of this branch of the revenue at various 
 periods.* 
 
 1596 .... 50,000 
 
 1613 . - - - 148,075 
 
 1660 .... 421,582 
 
 1689 ... - 781,987 
 
 1712 .... 1,315,422 
 
 1792 ... - 4,407,000 
 
 1815 .... 11,360,000 
 
 1843 .... 22,647,200 
 
 1869 .... 22,422,472 
 
 * M'Culloch's British Empire, 3rcl edition 1847, vol. ii. p 394 ; First report 
 of Commissioners of Customs 1857, p 106; and Finance Accounts 1868-9, p. 15.
 
 The Queen'' s Taxes. 7 
 
 Excise Duties were first levied in the year 1643 by 
 a Parliamentary ordinance, which imposed dnties on 
 ale, beer, cider, and perry, and on the makers and 
 vendors thereof. The E/oyaKsts soon after followed 
 the example of the Parliament, bnt the unpopularity 
 of these imposts was so great that both parties pledged 
 themselves to their abolition at the close of the war. 
 In a few years, however, custom had rendered them less 
 intolerable ; they were increased, and declared by 
 Parliament, in 1649, to be " the most easy and indif- 
 ferent levy that could be laid upon the people." Prom 
 that period they have been continued and have long 
 formed an important branch of the public revenue. 
 The duties imposed upon patent medicines, playing 
 cards, and gold and silver plate, are levied by means of 
 stamps. All these taxes are indirect, being paid in 
 the fii'st instance by the manufacturer or importer, 
 who recovers the amount advanced for duty, with his 
 profit thereon, from the retailer, and ultimately from 
 the customer. The following are the amounts received 
 from these imposts in the year 1868-9, omitting shil- 
 lings and pence :— * 
 
 £ 
 
 Tobacco and SnuflF :— Customs 6,542,461 
 
 Spirits and Articles containing Spirit : — 
 
 £ 
 
 Customs 4,333,952 
 
 Excii^e 10,965,195 
 
 15,299,147 
 Wine: -Customs 1,523,529 
 
 Carried forward ... 23,365,137 
 
 Parliamentary Paper Taxes and Imposts Session, 1809, No. 127.
 
 8 Tlie Queen's Taxes. 
 
 Brought forward ... 23,365,137 
 
 Sugar and Articles of which Sugar is 
 an ingredient : — 
 
 Customs 5,743,434 
 
 Excise 7J,817 
 
 5,815,251 
 
 Tea:— Customs 2,597,980 
 
 Coffee:— do. 357,037 
 
 Chicory :— Customs 104,041 
 
 Excise 14,358 
 
 118,399 
 
 Cocoa: — Customs .. ... ... ... ... 27,381 
 
 Dried Fruit : — Customs 
 
 Currants 268,724 
 
 Eigs, Plums, and Prunes ... 32,994 
 
 Eaiains 129,483 
 
 Malt and its Products with their Sub- 
 stitutes: — Customs ... ... 4,907 
 
 Excise 6,724,323 
 
 431,201 
 
 6,729,230 
 
 Patent Medicines : — Stamps 66,860 
 
 Playing Cards : — 
 
 Customs... ... ... ... ... 338 
 
 Stamps 10,324 
 
 Gold and Silver Plate : — 
 
 Customs ... ... ... ... 3,683 
 
 Stamps 65,678 
 
 10,662 
 
 69,361 
 
 Corn Meal, «fcc. : — Customs 915,585 
 
 Total 40,504,084* 
 
 The total, inclndinc; shillings and pence, is £40,50d,087 10s. lOjcl.
 
 The Queeit's Taxes. 
 
 CHAPTER III. 
 
 TOBACCO AND SNUFF. 
 
 This extensively used and much abused article 
 affords an example of a very high rate of taxation, 
 producing a large amount of revenue. The following 
 are the rates of duty, the quantities taxed, and 
 amoimt of Revenue for the year 1668-69. * 
 
 Qnantities Sum 
 
 Taxed. Produced. 
 
 TTnmanufactured,containing ^ Ih 4^ 
 
 10 lbs. or more of moisture 
 
 in every luO lbs 3 It'o per lb I 40,197,539 6,327,091 
 
 „ containing less than 10 
 
 lbs. per 100 lbs 3 6,,/ 
 
 Manufactured:— Segara ... 5 „ 817,916 204,448 
 
 „ Cavendish or Negrohead, 
 
 of Foreign Manufacture... 4 6 „ 17,043 3,835 
 
 Manufactured in Bond in 
 
 the United Kingdom ... 4 „ 13,752 2,751 
 
 Snuff containing more than 
 
 ISlbs.of moisture per lOOlbs 3 9 „ ) 381 80 
 
 " Not containing more than C 10,114 Admitted 
 
 13 lbs. per 100 lbs. ... 4 6 „ ^ duty free. 
 
 Other Manufactured tobacco 4 0,, 21,288 4,259 
 
 Total 41,078,033 6,542,461t 
 
 • Parliamentary Paper, " Taxes and Imposts," Session 1869, No. 427. 
 t The total is given in the Parliamentary Paper as £6,542,461 ; an error of £3 
 having evidently occurred in the detailw.
 
 10 The Queen's Taxes. 
 
 This tax has long been regarded with complacency 
 by Chancellors of the Exchequer, on account of its 
 large yield to the revenue, the ease with which it is 
 collected, and the nature of the article taxed. There 
 are, however, particulars connected with this duty which 
 call for special comment. Eoremost is the different 
 rate at which the duty is levied upon the poor man's 
 tobacco and the rich man's cigar. According 
 to the annual statement of trade and navigation 
 for 1868,* the average price in bond in that 
 year was about 7^d. ; it appears therefore that 
 the tax upon unmanufactured tobacco is five 
 times the value of the article. If a rich man 
 purchase a pound of cigars worth say 20s., the duty he 
 pays is only os., or 25 per cent., while the working 
 man pays 500 per cent, upon his pipe of shag. 
 
 In the year ending 31st Dec. 1868, 40,067,329 lbs. 
 of unmanufactured tobacco were entered for home 
 consumption. Of this quantity 27,532,491 was from 
 the United States, and, at the average prices fixed 
 in the annual statement, was worth £856,000, while the 
 duty amounted to £4,333,648, or more than five times 
 the value of the tobacco. In the same year 433,159 
 lbs. of cificars from Cuba, valued in bond at £259,895, 
 were entered for home consumption, the duty paid on 
 which was £108, 288. f If the tax on the cigars from 
 
 * Annual statement of Trade and Navigation of the United Kingdom with 
 Foreign Countries and British Possessions in the year 1868. Printed hy Eyre 
 and Spottiswoode for Her Majesty's Stationery Office, p 20. 
 
 t Same, pp 106-7.
 
 The Queen^s Taxes. 11 
 
 Cuba had been assessed at the same rate as that upon 
 the tobacco from the United States, it would have 
 yielded more than £1,300,000 to the revenue. 
 
 The high rate of duty levied upon tobacco has 
 frequently been objected to on the ground that it 
 affords encouragement to the practice of smuggling. 
 There can be no doubt that exorbitant duties alone 
 render this practice profitable ; one successful venture 
 will reimbm'se the smuggler for several losses. A 
 retmm made to the House of Commons for the three 
 years 1843-4-5 showed that 3,011 persons had been con- 
 victed during that period. It is, however, impossible 
 to obtain statistics of the number of successful ventures. 
 The Customs Eeports of recent years do not disclose 
 any extensive seizures, but they appear to admit the 
 fact that smuggling is a constant practice on board all 
 steamers arri^dng from foreign countries. The Board 
 of Trade retiu^ns show an increased consumption of 
 tobacco, but it is tolerably certain that they do not 
 show the actual quantity consumed at any period. 
 The following table gives the consumption per head of 
 the United Kingdom at several different periods in the 
 present century.* 
 
 oz. oz. 
 
 1801 1605 1854 16.10 
 
 1811 18-44. 1861 16-20 
 
 1821 11-77 1867 16-35 
 
 1831 12-85 1868 16-35 
 1841 13-36 
 
 • Porter's Progress of tho Nation, new edition, 1847, p. 575 ; Statistical 
 Abstract, 18G9, pp. 42, 43.
 
 12 The Queen'' s Taxes. 
 
 It must not be forgotten that these figures merely 
 include duty-paid tobacco. If the supposition of the 
 Customs authorities, that smuggling has greatly de- 
 creased, be correct, the increase in consumption since 
 1841 is much less than it appears to be from these 
 returns. 
 
 The following extract from the Edinburgh Review 
 for July 1833, shows the extent to which the practice 
 of smuggling had, at that time, been developed by 
 excessive rates of duty : 
 
 " The total quantity of tobacco entered for home consumption in 
 Great Britain and Ireland during the three years ending with 1797, 
 was 53,208,504 lbs. ; being at the rate of 17,736,168 lbs. a year. 
 The population of the United Kingdom has more than doubled since 
 1797, and yet only 20,313,618 lbs. were entered for home consump- 
 tion in 1832 ; being 15,000,000 lbs. under what it ought to have 
 been, had the consumption increased proportionally to the increase 
 of population. And that it has done so we have not the slightest 
 doubt ; but instead of being wholly supplied, as in 1797, by the free 
 trader, oppressive duties have thrown nearly half the trade of the 
 empire into the hands of the smuggler. The duty in 1797 was 
 Is. 7d. per lb. in Great Britain, and 8d. in Ireland ; and had it 
 been gradually raised in the latter to Is. 6d. and continued in both 
 countries at that amount, there is every reason to think it would 
 have been more productive than the present duty of 3s. In 1797, 
 no fewer than 8,4l!5,555 lbs. were entered for home consumption in 
 Ireland, whereas, notwithstanding the population has nearly trebled 
 in the interval, only 4,344,764 lbs. were entered in 1832. And yet 
 all those best acquainted with Ireland affirm that the Irish smoke, 
 chew, and snuff, quite as much as ever. The anomaly, however, is 
 apparent only. Their respect for the revenue laws is not such as to 
 make them pay the licensed dealer 3s. 6d. for an article which the 
 smuggler is pressing upon them at 2s. If, as one might be half 
 inclined to suspect, the present exorbitant duty was intended to 
 stimulate the energies and to reward the enterprise of the smuggler,
 
 The Queen's Taxes. 13 
 
 it has had the most perfect success ; but, as a fiscal measure, its 
 failure has been signal and complete. 'According,' said Mr. Poulett 
 Thomson in his able speech on the 30th of March, 1830, * to all 
 accounts laid before the House on this subject, smuggling in this 
 article in England, Ireland, and Scotland, is carried on to the 
 greatest possible extent. I have the fact upon the best authority, 
 that numbers of vessels are constantly leaving the ports of Flushing, 
 Ostend, &c., carrying contraband tobacco to this country ; it is a 
 fact, which vras established in evidence before a Committee of this 
 House, that seventy cargoes of tobacco, containing 3,644,000 lbs., 
 were smuggled in one year on the coast of Ireland, from the port of 
 W.-xterford to the Giant's Causeway alone. In Scotland smuggling 
 is also carried on to a great extent. The only mode of resisting this 
 system of smuggling consists in fairly reducing the duty upon the 
 article. I believe, that were the duty upon it reduced to Is. or 
 Is. 6d. per lb. the public would be greatly served, and smuggling 
 put down.' 
 
 " The statements of Sir Henry Parnell as to the smuggling of 
 tobacco are exactly similar. It may, therefore, be fairly concluded, 
 that, at the present moment, half the tobacco consumed in Ireland, 
 and from a -fourth to a third part of that consumed in Britain, is 
 supplied by the smuggler. And, despite of coast-guards, preventive 
 services, penalties, confiscations, and all the miserable machinery of 
 oppressive taxes, it will continue to be so supplied till 50 per cent, 
 be taken from the duty," 
 
 In 1844 a Select Committee of the House of Com- 
 mons, appointed to consider the state of the tobacco 
 trade, especially in relation to this practice, reported in 
 favour of a " reduction of the high duties as the best 
 means of putting down smuggling." This Committee 
 referred in their report to the opinion of the Commis- 
 sioners of Excise Inquiry in 1833-4, who recommended 
 as a remedy for the evil, the diminishing the temptation, 
 and added " the nature of this temptation is at 
 once apparent from the fact that £100 expended at
 
 14 The Queen's Taxes. 
 
 flushing in buying tobacco may be followed by the 
 receipt of £1,000 if the tobacco can be landed 
 safely in this country." Among tbe witnesses examined 
 in 1844 was Mr. Ayre, clerk to the magistrates at Hull, 
 wl^o stated his belief, as the result of eight years official 
 experience, that the proportion of detections, compared 
 with successful ventures, was one in fifteen. 
 
 It appears from the report of the Commissioners of 
 Customs for the year 1 861 * to be their opinion that the 
 practice was, at that time, almost annihilated. They 
 say that no organised system then existed for smug- 
 gling on a large scale. In subsequent reports they 
 give particulars of numerous seizures, principally, 
 however, of small quantities, concealed in steam boats 
 by the crews. In 1 867 t they report an increase of 
 smuggling, mainly in that direction. In the report for 
 1868 J the Commissioners state that fewer cases appear 
 to have been attempted or discovered in London than 
 in the preceding year, but that there appeared to have 
 been a decided increase at the outports, and that this 
 increase was not in cases which are decided summarily 
 by the magistrates, but in that more important class 
 which are referred to a higher tribunal. The number 
 of cases, including both tobacco and spirits, brought 
 under the notice of the authorities in London in 1868 
 was about 195 as against 350 in 1867, showing a 
 decrease of 155 cases. In the outports the number of 
 
 * Sixth Report of the Commissioners of Her Majesty's Customs, 1862, p. 26. 
 t Twelfth Report of the Commissioners of Customs, 1868, pp. 64-65. 
 \ Thirteenth Report of Commissioners of Customs, 1869, pp. 57-59.
 
 The Queen's Taxes. 15 
 
 seizures, exceeding 10 lbs. in the case of tobacco and 
 2 gallons in the case of spirits, were 169 in 1868 as 
 against 113 in 1867, an increase of 56. In minor 
 cases there was a decrease of 4, the number being 814 
 in 1867, and 810 in 1868. Several cases are reported 
 which show the difficulty of preventing smuggKng in 
 the case of an article like tobacco, which can be so 
 easily concealed in packages of free goods. In one 
 instance 600 lbs. of tobacco were found concealed in 
 six bales of hops, entered as free goods. In another, 
 65 lbs. were concealed in a cask of potatoes, whilst 
 4 lbs. of Cavendish were found ingeniously concealed 
 inside two loaves of baked German bread. It was also 
 made apparent that the sailors in the Royal Navy 
 require watching as well as those in the Merchant 
 Service, 97 lbs. having been seized on board H.M. 
 ship Speedy, 19 lbs. on board H.M. troop ship Croco- 
 dile, and 36 bales on board H.M. ship Serapis. The 
 method generally employed in the present day is 
 the concealment of tobacco in packages of duty-paid 
 articles, very ingenious devices being employed for 
 that purpose.* 
 
 The result of enquiries made by the author at 
 the principal ports where tobacco is imported fully 
 confirms the statements of the Commissioners. The 
 decrease of the contraband trade is generally attributed 
 to the reduction of duty on manufactured tobacco 
 which took place in 1863, and to the high rate of duty 
 now levied upon Cavendish in the United States, which 
 
 • Sixth Customs Report, 18G2, p. 27 and App., O.
 
 16 The Queen's Taxes. 
 
 has made that article as dear there as here, and thus 
 stopped much of the smuggling which formerly pre- 
 vailed. It is still helieved that leaf tobacco is smuggled 
 to a considerable extent in Ireland, but that in other 
 respects the practice is pretty well confined to small 
 quantities from the Continent. 
 
 Two large seizures were reported to the Com- 
 missioners from the north of Ireland in 1868 ; 13 bales 
 containing 630 lbs. of unmanufactured tobacco at 
 Londonderry, and 948 lbs., with two horses and two 
 carts, at Tralee. In England the principal seizures 
 reported were one of 94 lbs., one of 46 lbs., and one of 
 136 lbs., in London ; 141 lbs. at West Hartlepool ; 
 161 lbs. at Grimsby ; and 188 lbs. at Liverpool. 
 
 It was stated before a Parliamentary Committee in 
 1844 that nine-tenths of the tobacco imported into 
 this country was consumed by the working classes. 
 Mr. Dudley Baxter, in his recent work on Taxation, 
 states, as the result of extensive enquiries, that three- 
 fourths of the working men consume tobacco. It 
 must, therefore, be evident that the tax upon that 
 commodity is paid to a large extent by the working 
 men. Opinions vary as to the propriety or necessity 
 of the tax. Some defend it as a restraint upon the 
 consumption of a pernicious indulgence, others as an 
 impost upon a luxury which those who use it can 
 afford to pay. If tobacco be a pernicious indulgence, 
 it is hard to see how the State can with propriety 
 derive any revenue from such a source. If, on the 
 other hand, it is considered a luxury, the question 
 naturally arises as to the policy of placing so heavy a
 
 The Queen'' s Taxes. 17 
 
 tax upon tlie luxury of working men, while the many 
 and varied enjoyments of the rich are untaxed. It 
 certainly cannot be said with any show of accuracy 
 that an operative, mechanic, or labourer, who con- 
 sumes tobacco, is " an untaxed working man." 
 
 Another evil which is an invariable attendant of 
 high duties is the encouragement they afford to 
 adulteration. In the last report of the Inland Revenue 
 Commissioners, the Principal of the Laboratory ex- 
 presses his opinion that this offence has become com- 
 paratively rare, but at the same time he states that the 
 practice is kept in check by the frequent inspection of 
 the premises of "those manufacturers who would be 
 disposed to meet fair competition in trade by fraudulent 
 means." It appears, therefore, that tobacco manufac- 
 turers carry on their business under strict siu'veillance. 
 
 The number of samples analysed in the year ending 
 31st March 1867* was 206, of which 73 contained 
 illicit ingredients — 63 contained liquorice, 11 fermen- 
 table sugar, and 4 illicit vegetable matter including 
 rhubarb, cabbage, and exhausted tea leaves. Among 
 other adulterations wore caramel, oxide of iron and 
 textile fabric. In the year ending 31st March 1868, f 
 135 samples were analysed, of which 96 were 
 adulterated, the ingredients employed being liquorice, 
 sugar, salt, aniseed, starch, brown paper, and sand. 
 
 Eleventh Inland Revenue Report App., p xvii. 
 t Twelfth Inland Revenue Report App., p xv. 
 
 C
 
 18 
 
 The Queen^s Taxes. 
 
 CHAPTEE IV. 
 
 SPIRITS AND ARTICLES CONTAINING SPIRIT. 
 
 Under this liead is collected nearly one-fourth of 
 the entire taxation of the United Kingdom. The 
 following are the present rates of duty, and the quan- 
 tities taxed and gross produce in 1868-9 : — * 
 
 Customs : — 
 
 Eum aud Spirits, of and 
 
 from British Possessions 
 
 in America, Mauritius, 
 
 and tlie East Indies 
 Hum, Foreign, from the 
 
 country of its production ... 
 "not from the country of ... 
 
 its production " 
 Brandy 
 Geneva 
 Other sorts 
 Eum, Shrub, Cordials, &c., 
 
 from British Possessions in 
 
 America, Mauritius, and the 
 
 East Indies 
 Other sorts 
 
 Duty. 
 
 Per Proof 
 
 Gallon. 
 
 s. d. 
 
 10 2 
 
 10 2 
 
 10 
 10 
 10 
 
 10 
 
 Quantities 
 
 Taxed. 
 
 Proof Gallons. 
 
 8,817,884. 
 
 54,772 
 
 2,390 
 
 3,347,563 
 
 134,877 
 
 1,007,088 
 
 Total 
 Gross 
 Produce. 
 £ 
 1,940,113 
 
 27,843 
 
 1,245 
 
 1,743,522 
 
 70,253 
 
 524,527 
 
 10 
 14 
 
 Chloroform 
 
 Collodion 
 
 Ether 
 
 Naphtha or Methylic Alcohol 
 
 (purified) 
 Varnish containing Alcohol ... 
 Excise : — 
 Home Made Spirits ... 
 
 per lb. 
 
 3 
 
 Per Gallon. 
 
 24 
 
 25 
 
 1,403 
 36,090 
 
 lbs. 
 
 921 
 
 Gallons. 
 
 22 
 
 55 
 
 713 
 25,300 
 
 138 
 
 26 
 69 
 
 10 
 12 
 
 338 
 
 203 
 
 10 21,930,393 10,965,195 
 
 Total £15,299,147 
 
 ParliamcUtary Paper, Session 18'i!i, No. 4'27.
 
 The Queen's Taxes. 19 
 
 The price of Runi in bond, as quoted in the Annual 
 Statement for 1868, * varies from Is. 9d. to 2s. 8 Jd. per 
 proof gallon ; the average price of Prench Brandy is 
 6s. 6d. and of Brandy from Hamburg, Holland, and other 
 parts, 3s. 3d. per gallon. There are no similar retm'ns 
 published as to British spirits ; it may, however, be fairly 
 assumed that Gin is about the same value as Bum, and 
 that Wliiskey varies considerably according to quality. 
 
 There is little doubt that the high rate of duty 
 imposed upon spirits is productive of the usual 
 evils which attend excessive imposts — adulteration, 
 smuggling, and illicit distillation. The problem which 
 successive Chancellors of the Exchequer have endea- 
 voured to solve, in the case of the spirit duties, has 
 been how to raise the largest revenue from the smallest 
 area of consumption without fostering the three evils 
 above-named. 
 
 A Table, published by the Inland Bevenue Commis- 
 sioners,! shows that in 1811, ^vith a duty of 2s. 6jd. 
 per gallon, in Ireland 6,378,179 gallons were charged 
 wdth duty; in 1822, the duty having been raised to 
 5s. 7Jd., only 2,910,183 were charged. The duty was 
 subsequently reduced to 2s. Id., and the quantity 
 charged gradually increased till, in 1838, it reached 
 12,296,312 gallons. It is impossible to arrive at 
 a perfectly accurate estimate of consumption of 
 spuits at different periods, owing to the disturbing 
 
 * Annual Statement, 1868, pp. 101, 162. 
 \ First Inland Revenue Report, 1857, App., p. 43.
 
 20 The Queen's Taxes. 
 
 elements of illicit distillation and of smuggling. The 
 following table gives the consumption of duty-paid 
 spirits in the United Kingdom for the years named. * 
 
 Year. 
 
 Total Consumption. 
 Gallons. 
 
 Average 
 Duty. 
 
 Consumption 
 per head. 
 Gallons. 
 
 1802 
 
 15,596,370 
 
 6s. Id. 
 
 •98 
 
 1821 
 
 13,160,288 
 
 10s. 4d. 
 
 •63 
 
 ISll 
 
 24,106,407 
 
 6s. 2d. 
 
 •90 
 
 1859 
 
 28,661,674 
 
 8s. 4d. 
 
 •80 
 
 ]S68 
 
 29,740,314 
 
 10s. Id. 
 
 •98 
 
 It appears from these figures that the quantity con- 
 sumed per head is the same now as it was in 1802. 
 We have still, however, to deal with that further un- 
 known quantity, which has paid tribute to neither 
 Customs nor Excise. The Commissioners of Inland 
 Revenue state, in their Eirst Annual Report (1857), t 
 that in the year 1820 illicit distillation had become so 
 prevalent in Scotland a.nd Ireland, that more than half 
 the spirits actually consumed were supplied by the 
 smuggler. An Act was passed in 1 823, which reduced 
 the duty from 6s. 2d. in Scotland, and 5s. 7d. in Ire- 
 land, to 2s. 4f d. per imperial gallon for both countries ; 
 and new regulations were introduced which combined 
 additional security to the Revenue, witli the relief of 
 the distiller from many trammels under which he had 
 previously conducted his oj^erations. In 1825 similar 
 regulations were established in England, and the 
 English duty was reduced from lis. 8Jd. to 7s. per 
 
 Parliamentary Paper, Spirits and Malt, No. 466, Session 1868, Statistical 
 Abstract, 16th No., pp. 41 & 99. 
 
 I First Inland Revenue llcport, pp. 3-6.
 
 The Queen's Taxes. 21 
 
 gallon. In consequence of these changes the quantity 
 of duty-paid spirits entered as retained for home con- 
 sumption was increased from 9,600,000 gallons in 1820, 
 to 18,200,000 gallons in 1820. In the same Report it 
 is said that illicit distillation had always been, more 
 or less, carried on in the large towns of England ; and 
 the Commissioners fm'ther remark that as illicit spmts 
 can he sold with a fair profit at 5s. or 5s. 6d. per 
 gallon, w^hile the duty on legally made spirits is 8s. 
 (it is now 10s.) per gallon, it cannot be expected that 
 the practice will be easily or entirely suppressed. 
 
 In that portion of the Pirst Annual Ueport, which 
 deals specially with the year 1857, the Commissioners 
 say that in England illicit distillation was then kept 
 Avithin such bounds as not to affect prices in the 
 regular market; that in Scotland it might be said 
 scarcely to exist ; but that in Ireland the practice still 
 prevailed to a considerable extent. In the year 1857 
 the duty was 8s. per gallon in England and Scotland, 
 and 6s. 2d. in Ireland ; in 1858 the duty on Irish 
 spirits was adyanced to the same rate as on those 
 manufactured in Great Britain, and, in 1860, the duty 
 on all home-made spirits was increased to 10s. per 
 gallon. This measure was followed by a marked 
 diminution in consumption, w^hich the Commissioners 
 of the revenue, however, do not attribute to the increase 
 of illicit distillation. In his budget speech of 1863 
 Mr. Gladstone expressed his conviction, which he 
 alleged was based on conclusive evidence, that there 
 never liad been a period, in recent times, when there 
 had been so little of this practice as during the three
 
 Scotland. 
 
 Ireland. 
 
 9 
 
 3,452 
 
 11 
 
 3,557 
 
 9 
 
 2,306 
 
 11 
 
 1,601 
 
 22 The Queen's Taxes. 
 
 previous years. The following table gives the latest 
 returns of the number of convictions.* 
 
 Year ending 3l8t March. England. 
 
 1865 38 
 
 1866 41 
 
 1867 17 
 
 1868 27 
 
 Commenting upon the decrease in the number of 
 convictions in Ireland the Commissioners say, " it is 
 probable that the continued high price of barley and 
 oats has had the greatest influence in bringing about 
 this most satisfactory result." 
 
 If it be true, as alleged by the Commissioners of 
 Inland Revenue, that illicit distillation, even in Ireland, 
 has been greatly diminished, it is obvious that the 
 returns of consumption previously quoted are not to 
 be relied upon, and that the quantity used has been 
 materially reduced -since the commencement of the 
 century. Mr. Dudley Baxter, however, in his recent 
 work on taxation gives expression to his fear that the 
 actual consumption in Ireland is not, as shown by the 
 returns, less than one gallon, but at least a gallon and 
 a half per head. The table on the following page of the 
 quantity of home-made spirits, and the amount of 
 duty, charged in each country shows the result of 
 successive alterations of duty : — f 
 
 * Tenth Inland Revenue Eeport, p. 10 ; Twelfth ditto, p. 7. 
 
 t Spirits and Malt Retm-n, Session 1868, No, 466, for the years 1852-56. 
 For the remaining years :— Inland Revenue Reports, 1858, App., p. viii. ; i860, 
 App., p. viii. ; 1862, App., p. viii. ; 1861, App., p. viii. ; 1865, App., p. viii. ; 
 1867, App., p. ix. ; 1868, App., p. ix.
 
 Tlie Queen's Taxes. 
 
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 III
 
 24 The Queen's Taxes. 
 
 The high rate of the duties on spirits levied in this 
 country was for a considerable period found to be not 
 only a hindrance to scientific research, but a serious 
 interference with trade, by compelling our manu- 
 facturers to resort to cheaper and inferior substitutes, 
 which injured the character of their goods, and, in 
 some instances, made it doubtful whether they could 
 much longer compete with those of the Continent, 
 where the duty on spirit is inconsiderable. In the 
 year 1853 an artificial substitute for Sperm Oil was 
 invented, in the manufacture of which the patentee 
 was allowed to use spirit free of duty, the Commis- 
 sioners having found, after a careful examination, 
 that the spirit was not merely rendered unfit for 
 drinking, but that it could not by any process be 
 restored to its original purity. This led to further 
 inquiries by Professors Graham, Hofmann, and Red- 
 wood, and to the preparation of methylated spirit, 
 which, under certain restrictions, is permitted to be 
 sold, free of duty, for manufacturing pm-poses. The 
 Commissioners assert that this measure has not merely 
 proved a direct encouragement to scientific research 
 and manufactm-ing industry, but has also materially 
 lessened the demoralizing practice of illicit distillation . 
 It is tolerably certain that but for this relaxation it 
 would have been impossible to maintain the spirit 
 duties at their present high rate.-'- 
 
 The revenue derived from the consumption of foreign 
 spirits amounted, in 1800, to £1,382,718, the rate of 
 
 * First Inland Revenue Report, 1857, pp. 6, 7, 8.
 
 The Queen's Taxes. 25 
 
 duty being lis. Id. per imperial gallon. In 1841, the 
 rate haying been advanced to £1 2s. lOd. per gallon, 
 the revenne amounted to no more than £1,354,079. 
 The sum which it should have yielded, in 1841, accord- 
 ing to the increased rate aiid the additional population, 
 was £3,840,279, being £2,465,767, or 179 per cent, in 
 excess of the amount really collected. The follomng 
 table shows the effect of excessive duties upon the 
 consumption of legally imported spirits. Owing to 
 the high price of corn in 1801 and 1811, distillation 
 was prohibited in this country. The consumption of 
 both British and foreign spirits was, therefore, ex- 
 cej)tional, and the years 1S02 and 1812 have been 
 taken for comparison.* 
 
 Duty on foreign spirits, except rum. 
 Great Britain, per gall. Ireland, per gall. Total consumption. 
 
 
 £ s. 
 
 d. 
 
 
 
 s. 
 
 d. 
 
 Gallons. 
 
 1802 
 
 11 
 
 4f 
 
 
 
 8 
 
 6 
 
 2,431,577 
 
 1812 
 
 1 4 
 
 9i 
 
 
 
 12 
 
 7i 
 
 195,693 
 
 1821 
 
 1 2 
 
 1\ 
 
 
 
 17 
 
 3f 
 
 1,013,400 
 
 1831 
 
 
 £1 
 
 2 
 
 G 
 
 
 
 1,268,198 
 
 1838 
 
 
 1 
 
 2 
 
 6 
 
 
 
 1,232,574 
 
 1841 
 
 
 1 
 
 2 
 
 10 
 
 
 
 1,186,104 
 
 The diminished consumption of 1812 was caused by 
 the war, which closed the continental ports. The high 
 rates of duty, imposed in the first instance as a pro- 
 hibition, were maintained after the close of the war 
 for the purpose of protection to the agriculture and 
 industry of this country. The result is apparent in 
 
 • Portor.s' " Progi-ess of the Nation," pp. 567-8-9.
 
 26 The Queen's Taxes. 
 
 tlie diminislied import, respecting which Mr. Porter 
 observes that the effect of the duty "was partially- 
 counteracted through the agency of contraband traders; 
 but," he adds, "the remedy thus applied should be 
 considered as the substitution of a greater evil, and one 
 for which the legislature may be held morally res- 
 ponsible because of the temptation which it offers for 
 the commission of crime." In 1846 the duty on 
 foreign spirits was reduced from 22s. lOd. to 15s. ; 
 and in 1860, in accordance with the provisions of the 
 Prench treaty, it was further reduced to 10s. 5d. per 
 gallon. The following table shows the effect of these 
 reductions upon the importation and consumption of 
 brandy : — * 
 
 Imported. Eetained for 
 
 Consumption. 
 Gals. Gals. 
 
 1841 2,918,387 1,164,506 
 
 1845 1,988,210 1,058,274 
 
 1847 ■ 2,728,471 1,537,238 
 
 1851 2,930,967 1,859.273 
 
 1855 1,943,908 1,525^578 
 
 1859 4,030,175 1,305,969 
 
 1861 2,097,934 1,598,270 
 
 1865 3,122,576 2,664,289 
 
 1866 5,621,92S 3,120,950 
 
 1867 4,849,832 3,183,072 
 
 1868 4,062,884 3,317,641 
 
 The increased consmiiption of brandy has been pro- 
 duced by tw^o causes — the reduction of the duty, in 1860, 
 from 15s. to 10s. 5d. per gallon, and a subsequent 
 
 * statistical atstract, 1841 to 1855, pp. 10, 11, 13. Ibid, 1854 to 1868 
 pp. 24, 25, 40, 41.
 
 TJie Queen's Taxes. 27 
 
 reduction in price. The average price, exclusive of 
 duty, in 1855, was 9s. 9Jd. ; in 1859, 6s. ll|d. ; in 
 1861, 9s. Id. ; in 1865, 5s. 4f d. ; in 1866, 5s. O^d. ; in 
 1867, 5s. 8f d. ; and in 1868, 6s. 6d. per gallon.* 
 
 Eum, being a colonial product, has invariably been 
 admitted at a lower rate of duty than brandy and 
 other foreign spirits, in order to carry out the pro- 
 tective system in relation to oui* colonies. The 
 following are the rates of duty and consumption of 
 rum for the same years as previously given in the case 
 of foreign spiiits : — t 
 
 Great Britain. Ireland. 
 
 Per gallon. Per gallon. Consumption. 
 
 s. d. s. d. Gallons. 
 
 1802 9 Of 5 6i 3,310,065 
 
 1812 13 7f 10 3i 3,775,169 
 
 1821 13 Hi 12 9 2,324,315 
 
 1831 9 8 6 3,624,597 
 
 1838 9s. Od. 3,135,651 
 
 1841 93. 4d. 2,277,970 
 
 The duty on rum was reduced to 8s. lOd. per gallon, 
 in 1816 ; it was further reduced, in 1847, to 8s. 7d. per 
 gallon in England, 4s. 5d. per gallon in Scotland, and 
 3s. 5d. per gallon in Ireland ; it was again reduced, in 
 3 848, to 8s. 2d. per gallon in England, 4s. per gallon in 
 Scotland, and 3s. per gallon in Ireland. It was equalised, 
 in 1858, at 8s. 2d. per gallon, and increased, in 1860, 
 to 10s. 2d. per gallon. The follomng is the quantity 
 
 • statistical abstract, 1851 to 18G8, pp. .30, .37. Auniuil statement, 1808, p. 23. 
 I Porters' " Progix-BS of the Nation,"' p. 508.
 
 28 The Queeii's Taxes. 
 
 imported and 
 
 consumed in 
 
 each of the 
 
 specified : — * 
 
 
 
 
 Imported. 
 
 Consumption, 
 
 
 Gallons. 
 
 Gallons. 
 
 1846 
 
 3,855,464 
 
 2,683,701 
 
 1849 
 
 4,479,549 
 
 3,039,862 
 
 1859 
 
 7,078,586 
 
 3,575,139 
 
 18ei 
 
 8,114,823 
 
 3,451,384 
 
 18G5 
 
 6,898,599 
 
 3,697,849 
 
 1866 
 
 7,685,180 
 
 4,127,120 
 
 1867 
 
 6,845,503 
 
 4,314,778 
 
 1868 
 
 7,035,034 
 
 3,949,947 
 
 years 
 
 It appears from the returns for 1868, that foreign 
 and colonial have, to a certain extent, displaced home- 
 made spirits, the increased consumption of the former 
 having been accompanied by a diminution in the 
 latter. The following table shows the relative con- 
 sumption per head since 1859 : — f 
 
 
 Foreign & Colonial. 
 
 British & Irish. 
 
 Total. 
 
 
 Gallons. 
 
 Gallons, 
 
 Gallons. 
 
 1859 
 
 017 
 
 0-84 
 
 101 
 
 1861 
 
 0-18 
 
 0-68 
 
 086 
 
 1865 
 
 0-23 
 
 0-71 
 
 0-94 
 
 1866 
 
 0-26 
 
 0-75 
 
 1-01 
 
 1867 
 
 0-28 
 
 0-71 
 
 0-99 
 
 1868 
 
 0-28 
 
 0-70 
 
 0-98 
 
 There is no doubt whatever, that the maintenance 
 of the excessive rate of duty on foreign spirits was 
 productive of much smuggling. The reduction to 
 15s., in 1846, and to 10s. 5d., in 1860, have considerably 
 
 * statistical Abstract, 1841 to 1855, pp. 10, 11, 13. Ibid, 1854 to 1868, 
 pp. 24, 25, 40, 41. 
 
 t Statistical abstract, 1854 to 18G8, pp. 42, 43.
 
 The Queen's Taxes. 29 
 
 reduced the practice by rendering it less profitable. 
 Anotlier cause, however, was at work. The Adnes of 
 Prance were visited, in 1855, by a disease which 
 diminished production and increased price. The 
 average quantity of brandy imported annually during 
 the six years, 1819-5-4, had been 3,762,728' gallons, 
 which the increase of price reduced, during the four 
 followmg years, 1855-58, to 2,112,240 gallons.* The 
 Commissioners of Customs state, in their Report for 
 1859, that from the date of the failure of the wine crop 
 in France attempts to smuggle brandy into this country 
 appeared to have ceased, the price of the article being 
 so high as to deprive the smuggler of his usual profit, 
 but were recommenced in 185 8. f The cases reported in 
 subsequent years are few in number until the year 
 1867, whea a considerable increase was recorded. 
 The total number of gallons seized at the outports, 
 in 1866, in quantities of two gallons and upwards, 
 was 163; in 1867, 439; and in 1868, 460 gallons. $ 
 These are, however, the records of seizures : there are 
 no statistics of the number of gallons which have 
 been smuggled in successful A'entures. 
 
 Another evil fostered, if not mainly created, by 
 excessive duties is the practice of adulteration with 
 deleterious compounds, which tend to provoke ex- 
 cessive consumption and aggravate its injurious 
 
 • StatiKtical Abbtract, 1B41 to IHou, p. 11. ll-id, Ibol to IMGH, p. -Ji. 
 
 I Fourlli CubtoiuB Ik'iJort, IHGU, p. L'l. 
 ; Twelfth CuHtoma Report, 18G8, p. 05. Thirteenth ditto, 18G9, p. 57.
 
 so The Queen's Taxes. 
 
 consequences. It is alleged that adulteration would 
 be unprofitable were it not for the high duties levied 
 by the Government. It is, therefore, a matter 
 deserving serious enquiry whether the evils of intem- 
 perance are not aggravated rather than restrained by 
 the imposition of a heavy tax upon the consumption 
 of spirits. It is a well-known fact, that the arithmetic 
 of the customs does not follow the recognised rules of 
 the science, and it may, perhaps, be proved upon 
 further enquiry that the Custom House is equally 
 defective as a teacher of morality.
 
 The Queen's Taxes. 
 
 31 
 
 CHAPTER V. 
 
 WINE. 
 
 The followiug are the rates of duty, quantities 
 taxed, and total gross produce for the year 1868-9 : — * 
 
 Rates of Duty. 
 Is. per gallon. 
 
 Containing less than 
 
 2G degrees of Proof 
 
 Spirit 
 
 Containing 26 and 
 
 less than 42 degs. 
 
 of Proof Spirit ... 2s. 6d. per gallon. 
 Containing 42 or \ 
 
 more degrees of 
 
 Proof Spirit ... 2s. 6d. „ and 
 3d. additional for' 
 each degree of 
 strength beyond 
 41. 
 
 Gross 
 Quantities Taxed. Produce. 
 Gallons. £ 
 
 4,948,254 247,835 
 10,197,779 1,274,363 
 
 9,122 
 
 1,331 
 
 Total 
 
 15,155,155 1,523,529 
 
 The history of Wine in this country affords a 
 remarkable example of the way in which the taste of 
 a nation inay be perverted by the imposition of 
 excessive duties. Mr. G. 11. Porter, in liis " Progress 
 
 • railiamculai-y Taper " Taxchi aud Imposts." BcsBion 1869, No. 427.
 
 32 The Queen's Taxes. 
 
 of the Nation," says : — " In former times the taste of 
 Englishmen led them to a far greater proportionate 
 use of Prench wine, but, by the ill-judged Methuen 
 Treaty, concluded in 1703, whereby we bound our- 
 selves to impose 50 per cent, higher duties on the wine 
 of Prance than on that of Portugal, a great change in 
 this respect was gradually brought about, so that the 
 consumption of Prench wine was in time reduced to a 
 quantity altogether insignificant." 
 
 The Methuen- Treaty ceased to operate in 1831, and 
 from that time until 1860 the same rate of duty was 
 charged upon wine of all kinds. The following are 
 the rates imposed per imperial gallon at different 
 periods.* 
 
 Great Britain. Ireland. 
 
 Years. French. Other kinds. French. Other kinds. 
 
 s. d. s. d. s. d. 8. d. 
 
 1801 - 10 21 6 9f 6 H 3 11 
 
 1811 - 13 8| 9 li 10 6 7 Oi 
 
 1821 - 13 9 9 li 13 9 9 H 
 
 1831 -56 56 56 56 
 
 1841 -56 56 56 56 
 
 In 1811 an additional 5 per cent, was added, w^hich 
 increased the duty to 5s. 9fod. per gallon, at which 
 rate it was continued till the year 3.S60, when it was 
 reduced to 3s. until the 31st December. Prom the 
 1st January, 1861, the duty was reduced to Is. per 
 gallon on wines imported in the wood, and containing 
 less than 18 degrees of proof spirit ; Is. 9d. less than 
 26 ; 2s. 5d. less than 40 ; and 2s. lid. less than 45. 
 
 * Porter's " Progi-ess of the Nation," edition, IMl, p 570.
 
 The Queen's Taxes. 33 
 
 When imported in bottle and containing less than 
 40 degrees of proof spirit, the duty was reduced to 
 2s. 5d. In 1866 the present scale was adopted, and 
 the duties on wine imported in bottle and in the wood 
 were equalized.* The duty on wines from the Cape 
 and other British Possessions was for a long time fixed 
 at a very low rate. In 1825 it was reduced from 
 3s. O^d. to 2s. 5d. per gallon ; in 1853 it was increased 
 to 2s. lOfgd. per gallon ; and in 1860 it was equalized 
 at the same rate as on foreign wines. The quantity 
 imported from South Africa in 1859 was 786,621 
 gallons; in 1868 it was 12,328 gallons. f 
 
 The following table shows the quantity of wine of 
 aU kinds imported and retained for home consumption 
 
 since 1854. | 
 
 
 
 
 
 Importation. 
 
 Consumption. 
 
 
 Gallons. 
 
 Gallons. 
 
 Per head. 
 
 1854 - 
 
 10,875,855 
 
 6.776,086 
 
 0-24 
 
 1855 - 
 
 8,946,766 
 
 6,296,439 
 
 0-23 
 
 1S56 - 
 
 9,481,880 
 
 7,004,953 
 
 025 
 
 1857 - 
 
 10,336,845 
 
 6,601,690 
 
 23 
 
 1858 - 
 
 5,791.636 
 
 6,268,685 
 
 0-22 
 
 1859 - 
 
 8,195,513 
 
 6,775,992 
 
 0-24 
 
 1860 
 
 12,475,001 
 
 6,718,585 
 
 0-23 
 
 1861 - 
 
 11,052,436 
 
 10,093,071 
 
 0-37 
 
 1862 
 
 11,960,676 
 
 9,764.155 
 
 0-33 
 
 1863 
 
 14,185.195 
 
 10,420,761 
 
 035 
 
 1864 
 
 15,451.593 
 
 11.397,764 
 
 039 
 
 1865 - 
 
 14.269,752 
 
 11.993,760 
 
 0-40 
 
 1866 - 
 
 ]5,.32 1,028 
 
 13.244,864 
 
 044 
 
 1867 
 
 15,412.581 
 
 13,673,793 
 
 0-45 
 
 1868 - 
 
 16,953,454 
 
 15,064,628 
 
 0-50 
 
 * Fifth Customs Report, 1861, p 59. Eleventh ditto, 1867, p 75. 
 1 Customs and Excise Return, 1858, No. 511. Fifth Customs Report, 1861, 
 p. 61. Annual Statement, 1859, p 112. Ibid, 1868, p 108. 
 
 t Statistical Abstract, 16th No., IHV.I pp •li--lo, 40-13. 
 
 1)
 
 34 The Queen's Taxes. 
 
 The consumption during the previous ten years was 
 almost stationary, the lowest being 6,053,847 gallons 
 in 1847, and the' highest 6,838,684 gallons in 1844.* 
 
 The following table showing the quantity of Prench 
 Wine sold for home consumption and the rates of duty 
 thereon, between 1815 and 1845, is summarised from 
 a more elaborate statement in Porter's " Progress of 
 the Nation."! 
 
 Average 
 Consumption. Duty per 
 
 Years. Gallons. gallon. 
 
 1815 — 1818 182,408 13 8^ 
 
 1819 — 1824 177,538 13 9 
 
 1825 525,579 7 2\ 
 
 1826 — 1830 350,019 7 3 
 
 1831 — 1835 219,5GG ) 
 
 1836 — 1840 389,600 [ 5 6 
 
 1841 — 1845 396,744 ) 
 
 A Memorandum on the Commercial relations 
 between Prance and Pngland, printed at the Poreign 
 Office in 1853, gives the following statistics of the 
 quantity of French Wine imported in each of the 
 three specified years : — 
 
 Impoiied Consumed 
 
 Gallons. Gallons. 
 
 1831 335,430 266,113 
 1841 462,515 363,559 
 1851 750,204 456,489 
 
 The following table shows the quantities of Prench 
 
 * statistical Abstract, 1856, p 13. 
 t Edit. 1817. p 571.
 
 The Queen's Taxes. 
 
 Wines importec 
 
 :l and consumed 
 
 in each yei 
 
 1858.* 
 
 
 
 
 Gallons. 
 
 Gallons. 
 
 1S58 
 
 G23.0il 
 
 571.993 
 
 I0.39 
 
 1,010,888 
 
 095,913 
 
 1860 
 
 2,445,151 
 
 1,125,916 
 
 1861 
 
 2,187,521 
 
 2,229,028 
 
 1862 
 
 2,244,727 
 
 1,901,200 
 
 1803 
 
 2,180,706 
 
 1,940,193 
 
 1861 
 
 2,723,233 
 
 2,305,756 
 
 1865 
 
 2,915,357 
 
 2,611,771 
 
 1866 
 
 3,608,842 
 
 3,360,073 
 
 1867 
 
 3,771,301 
 
 3,595,598 
 
 1803 
 
 4,745,440 
 
 4,502,162 
 
 It is quite clear from these facts that the excessive 
 duties imposed upon the light wines of Prance were to 
 a very large extent prohibitory of their use, and that 
 the fiscal policy of the government developed a taste 
 for the stronger and, in many instances, brandied wines 
 of Spain and Portugal. The reductions of duty effected 
 in 18(»0 and lb06 have be(m productive of very remark- 
 able results iu changing the direction of the public 
 laste. It would be unreasonable to expect that the 
 work of more than half a century should be reversed 
 ill a few years. Comparison, however, of the year 1858 
 with the year 1868 shows that considerable progress 
 has been made, f 
 
 185H. 
 Gullous 
 
 2,6.-)7,131 
 
 1,921,077 
 
 571,993 
 
 Consuinption of Wiuc. 
 From Spain 
 
 „ Portui^ul .. 
 
 ,, France ... 
 
 1868. 
 
 Increase 
 
 Gallons. 
 
 per cent. 
 
 6,182,004 
 
 1321 
 
 2,853,012 
 
 48 
 
 4,502,102 
 
 Oii7 
 
 * Annual Slulemcuts of Trade uud Navigation, 1858 — 1868. 
 t Annual Slalciueuts, 18.38, 1801).
 
 36 The Queen's Taxes. 
 
 The marked increase in the consumption of French 
 vdnes has created a controversy on the wine duties. 
 Negociations were commenced in 1866 between the 
 Portuguese and the British Governments for a Com- 
 mercial Treaty, Portugal binding herself to a reduction 
 on some British manufactures, if our Government 
 would reduce the duty on Portuguese wines of 40 
 degrees and under to a shilling per gallon. To this 
 the Revenue Authorities object on the ground that 
 wines would be imported for the purpose of distilla- 
 tion, and the spirit revenue would be endangered. In 
 reply, it is asserted that the cost of producing spirits 
 from wine would render the transaction unprofitable, 
 and that it could not be carried on to any extent 
 without the knowledge of the revenue authorities. If 
 the present plan of taxing the alcohol in beer, wine, 
 and spirits is maintained, the equalisation of the duties 
 is not practicable. If a change is made it will become 
 necessary to revise the entire scale of duties upon 
 Alcoholic beverages. An increased import of wines 
 from Portugal would, no doubt, be followed by an 
 increase in our exports to that country. The mne 
 question is analogous to that of the sugar duties. In 
 the one case, it is attempted to tax the saccharine 
 matter in sugar, in the other to tax the alcohol in 
 wine. In neither case does the process appear to give 
 universal satisfaction.
 
 The Queen^s Taxes. 37 
 
 CHAPTEE YI. 
 
 SUGAR AND ARTICLES OF WHICH SUGAR IS AN 
 INGREDIENT. 
 
 A Parliamentary paper issued in 1857 respecting the 
 consumption of tea and sugar, and containing very 
 copious returns of consumption by the various classes 
 of the community, says that " the consumption of tea 
 and sugar among the working and poorer classes has 
 steadily and gradually increased to such an extent, 
 that these articles have now become, next to bread, 
 the prime necessaries of life." Mr. Dudley Baxter, in 
 his work on Taxation, gives the result of his enquiries 
 in every part of the United Kingdom, in the following 
 words : — " Irish families in Connemara, who seldom 
 taste meat, are great consumers of tea and sugar, eating 
 the sugar upon their bread and in their stir-about 
 in large quantities as often as they can get it. The 
 underpaid and highly-rented poor at the East-end of 
 London depend almost as much upon the same 
 articles."* A tax on sugar is emphatically a tax upon 
 one of the prime necessaries of life, and upon an 
 important article of commerce. 
 
 * Taxation of the United Kingdom, pp. 77—78.
 
 38 The Queen's Taxes. 
 
 The history of the sugar trade is a remarkable 
 illustratiou of the prejudicial effects of protective 
 duties and high customs tariffs. Until the year 1847 
 it was the avowed object of the Government to exclude 
 foreign, and especially slave grown sugar, from the 
 English market. Consumers of slave-grown cotton 
 and tobacco were scandalised at the idea of using slave- 
 grown sugar ; to the former they submitted without a 
 murmur, but the bare possibility of the latter aroused 
 their righteous indignation, and called forth loud 
 remonstrances. The reas )n for muc^h of this indigna- 
 tion was obvious ; the West Indian planters, who had 
 received £20,000,000 compensation upon the abolition 
 of their legal right to hold property in man, required 
 a further and perpetual compensation from their long 
 patient friend the British taxpayer, in the shape of a 
 protective duty upon their produce. Their protests 
 were, however, unavailing, and they were told that, 
 like the British landlords, they must endeavour to walk 
 without crutches. 
 
 The rates of duty levied upon raw sugar, in 1830, 
 were as follows : — 
 
 British "West India and Mauritius - £1 4 per cwt. 
 
 East India 1 12 „ 
 
 Foreign 3 3 
 
 In 1836 an additional distinction was introduced, the 
 duty on sugar " of any British possession within the 
 limits of the East India's Company's charter, into 
 which the importation of foreign sugar is prohibited, 
 and imported from thence," being reduced to £1 4s., 
 the duty of £1 12s. being retained upon sugar from
 
 TJie Queen's Taxes. 39 
 
 other British possessions in the East Indies. In 1840 
 an additional 5 per cent, was added to all the duties ; 
 and in 1844 a further classification of foreign sugar 
 was introduced, the duty on such sugar, not being the 
 produce of slave labour, being reduced to £1 15s. S^d. 
 In 1845 the duties were considerably reduced, with 
 the exception of slave grown sugar, the rate of which 
 was fixed at £3 3s. In 1846 the distinction between 
 free and slave grown sugar was abolished, and a 
 gradual reduction of duties, year by year, was com- 
 menced, which terminated, in 1854, by the equalization 
 of the duties upon sugar irrespective of its place of 
 production.* 
 
 Under the influence of the protective system, the 
 consumption of sugar was considerably diminished. 
 During the fourteen years ending 1841 it averaged 
 181b. 7oz. per head of the population ; during the 
 fourteen years ending 1844 it averaged only 171b. 2oz.; 
 the reduction and equalization of the duties increased 
 the consumption to 341bs. per head in 1854. In 1855 
 additional duties were imposed in consequence of the 
 Crimean War, and the average rate of duty on raw sugar 
 being increased from 12s. 4d. to 15s. 5d. per cwt., the 
 consumption fell to 281bs. per head ; in consequence 
 of subsequent reductions, it again increased, and in 
 18G8 the consumption of raw sugar was 39-561bs. per 
 head.f 
 
 * Tea and Sugar Retnrn. Sees. 1857. No. 184. 
 t Tea and Sugar Heturn. Sess. 1857, No. 181, Statistical Abstract, 18G9, p. 43.
 
 40 
 
 The Queen's Taxes. 
 
 The following table shows the alterations made 
 since 1854, and the quantity of each description taxed, 
 and the amount produced during the year 1868-9 : — * 
 
 1854. 
 
 1855. 
 
 CUSTOMS. Per cwt. Per cwt. Per cwt. Per Cwt. 
 
 s. d. 
 20 
 
 17 6 
 
 s. d. 
 18 4 
 
 16 
 
 B. d. 
 
 Refined & candy 16 
 
 1st class, equal) ^^ q 
 to white clayed | 
 
 2nd class, not\ 
 equal to white 
 clayed, butk2 
 equal to brown 1 
 clayed . . . . / 
 
 3rd class, not\ 
 equal to brown 
 clayed, butkl 
 equal to brown 
 muscovado . . / 
 
 4th class, not"\ 
 
 equal to brown Suf^ar, same rate as' 
 muscovado, in- V 3rd class before 1864 • 
 eluding cane Cane juice, 10s. 4d.^ 
 juice . . . . j 
 
 Molasses .... 43 54 50 
 
 s. d. 
 12 10 
 
 1867. Quantities Amount 
 
 Per Cwt. Taxed. Produced. 
 
 s. d. Cwt. £ 
 
 12 773,789 464,174 
 
 11 8 11 3 65,575 36,890 
 
 15 13 10 10 6 10 6; 3,006,101 1,578,489 
 
 13 9 12 8 9 4 9 7" 3,766,564 1,805,188 
 
 Glucose (liquid) i 
 or vegetable 
 spirit . . . . J 
 
 Increased in 1865 ] 
 to 8s. 2d. ' J" 
 
 The effect upon consumption 
 shown in the the following table 
 
 8 4,.S25,943 1,730,643 
 
 .•5 6 3 6 840,227 118,041 
 
 According to ) 
 
 the c|iiuntity I 10 yofi A 8S0 
 
 of saccharine f i<^,<-" ^,OOw 
 
 matter. I 
 
 £5,738,307 
 
 of these changes is 
 
 • Acts 17 & 18 Vic. c. 29. 18 Vic. c. 21. 20 & 21 Vic. c. 01. Ninth Cus- 
 toms Report 1865, p. 55. Twelfth ditto. 1868, p. 83. Parliamentary Paper 
 " Taxes and Imposts," Sess. 1869. No. 427. 
 
 t Statistical Abstract 1869, pp. 36—48. Annual Statement 1868, p. 23.
 
 The Qneen^s Taxes. 
 
 41 
 
 Year. 
 
 Quantity of Raw 
 Sugar entered for 
 Home Consump- 
 tion. 
 
 CVts. 
 
 Per 
 Head. 
 
 Average price per cwt. 
 of Yellow Muscovado or 
 Brown-clayed Sugar. 
 
 Cuba. Brit. West Indies 
 
 
 
 lbs. 
 
 s. 
 
 d. 
 
 s. 
 
 d. 
 
 1854 
 
 8,028,758 
 
 32-51 
 
 22 
 
 9 
 
 22 
 
 6 
 
 1855 
 
 7,259,148 
 
 2922 
 
 26 
 
 6 
 
 27 
 
 4 
 
 1856 
 
 6,813,470 
 
 27-24 
 
 31 
 
 
 
 31 
 
 
 
 1857 
 
 7,121,590 
 
 28-30 
 
 38 
 
 
 
 39 
 
 6 
 
 1858 
 
 8,490,256 
 
 33-50 
 
 30 
 
 9 
 
 30 
 
 1 
 
 1859 
 
 8,641,920 
 
 33-85 
 
 29 
 
 5 
 
 28 
 
 3 
 
 1860 
 
 8,506,882 
 
 33-11 
 
 29 
 
 7 
 
 28 
 
 10 
 
 1861 
 
 8,937,302 
 
 34-55 
 
 24 
 
 9 
 
 25 
 
 
 
 1862 
 
 9,111,621 
 
 34-94 
 
 22 
 
 9 
 
 23 
 
 4 
 
 1863 
 
 9,202,523 
 
 35 06 
 
 22 
 
 
 
 22 
 
 11 
 
 1864 
 
 8,937,313 
 
 3386 
 
 27 10 
 
 29 
 
 1 
 
 1865 
 
 9,878,933 
 
 37-17 
 
 22 
 
 10 
 
 22 
 
 5 
 
 1866 
 
 10,297,196 
 
 3853 
 
 21 
 
 5 
 
 22 
 
 
 
 1867 
 
 10,925,793 
 
 40-58 
 
 22 
 
 
 
 24 
 
 1 
 
 1868 
 
 10,729,601 
 
 39-56 
 
 24 
 
 
 
 24 
 
 3 
 
 The diminished consumption of 1855, 1856, and 1857, 
 as compared with 1S54, is attributed by the customs 
 authorities more to the advance in price of sugars in 
 bond than to the increased rate of duty. It was, however, 
 a misfortune that additional taxation upon sugar was 
 considered necessary at a time w4ien, from natural 
 causes, there was a check placed upon consumption. 
 It could have but one effect, that of further limiting 
 the demand. According to a report of the Surveyor- 
 General of the Customs, the increased duty obtained 
 was only 2 per cent., although the rate of duties had 
 
 First CuBtoms Report, 1857, pp. 49—50, IIG.
 
 42 
 
 The Queen's Taxes. 
 
 been advanced 25 per cent. :* a rather unprofitable 
 speculation from a commercial point of view. It was 
 not until the year 1858, that the consumption of 1854 
 was again reached. Nor was it materially increased 
 until the year 1865, when the combined effects of a 
 reduction in the duty and in the price, as compared 
 with 1858, of 7s. lid. per cwt., or a trifle more than 
 f d. per lb., increased the consumption to 37*17 per head. 
 The history of the increased duties levied on sugar, 
 in consequence of the Crimean War, affords an admir- 
 able illustration of the mode by which such taxes 
 enable the Government to extract a revenue from the 
 pockets of unwilling contributors. By the act im- 
 posing themf a gradual reduction was provided for in 
 the foUowinsj manner : — 
 
 
 
 Until April 5, 
 after the Peace. 
 
 Succeeding 
 Twelve Months. 
 
 There- 
 after. 
 
 
 
 per cwt. 
 £ s. d. 
 
 per 
 
 s. 
 
 cwt. 
 
 d. 
 
 per cwt. 
 s. d. 
 
 Eefined an 
 
 d Candy 
 
 ... 1 
 
 
 
 . 16 
 
 8 
 
 . 13 4 
 
 1st Class 
 
 ... ... 
 
 ... 17 
 
 6 
 
 . 14 
 
 7 
 
 . 11 8 
 
 2ad Class 
 
 ... ... 
 
 ... 15 
 
 
 
 . 12 
 
 9 
 
 . 10 6 
 
 3rd Class 
 
 
 ... 13 
 
 9 
 
 . 11 
 
 S 
 
 9 G 
 
 Molasses 
 
 
 
 ... 5 
 
 4 
 
 4 
 
 6 
 
 3 9 
 
 The Treaty of Peace was signed on the 30th March, 
 1856j but the war duties on sugar, which ought to 
 have expired in 1857, on the 5th of April following 
 the exchange of ratifications, were not finally repealed 
 until the year 1804. The war income tax, however, 
 was remitted one year sooner than the date fixed by 
 
 * First Customs Report, 1857, p.p. 49—50, 116. 
 t 18 Vic. c. 21
 
 The QueecCs Taxes. 
 
 43 
 
 the Act of Parliament by which it was imposed. The 
 different treatment of the two bnrdens, and the viola- 
 tion of the stijjulations under which they were both 
 imposed may perhaps be explained by the fact that, at 
 that time, payers of income tax enjoyed an exclusive 
 predominance in our electoral system. It was none 
 the less unjust as regarded the unrepresented con- 
 sumers of sugar, upon whom it imposed a heavy 
 burden of seven years' duration. 
 
 The imposition of a tax upon this necessary of life 
 involves the additional evil of a duty on each of the 
 following articles, in the composition of which sugar 
 is an ingredient : — * 
 
 
 
 
 
 Quantities 
 
 Gross 
 
 
 
 
 
 Taxed 
 
 Amount 
 
 • 
 
 
 
 
 lbs. 
 
 Produced 
 n 1868-9. 
 
 Almond Paste 
 
 \ ^ 
 
 / 
 
 
 102 
 
 
 Cherries, dried 
 
 u 
 
 
 283 
 
 1 
 
 Comfits, dry 
 Contectionery 
 
 
 
 
 
 
 'TJ 
 
 
 
 363,778 
 
 1,516 
 
 Ginfjer, preserved ... 
 
 ;3 
 
 
 
 321,561 
 
 1,340 
 
 Marmalade 
 
 
 
 17,942 
 
 75 
 
 Plums, preserved in 
 
 
 
 
 
 
 Sugar 
 
 o 
 
 
 
 482 
 
 2 
 
 Succades 
 
 / 
 
 o 
 
 ^ 
 
 
 526,219 
 
 2,193 
 
 
 
 
 
 Total 
 
 £5,127 
 
 
 Rate of D 
 
 uty 
 
 
 
 
 Excise. 
 
 Variou 
 
 3. 
 
 
 cwts. 
 
 
 Sugar, Home Made 
 
 8s. to 11 
 per cw 
 
 2s. 
 
 
 17,413 
 
 7;1S0 
 
 Used by Brewers ... 
 
 3s. (>d 
 
 '. 
 
 
 369,350 
 
 64,636 
 
 Customs Duties from p 
 
 age 40 
 )n Suga 
 
 " and 
 
 Articles 
 
 5,738,307 
 
 To^al (if Duty received c 
 
 
 containing Sugar 
 
 • •• . 
 
 •• 
 
 
 ... 
 
 £5,815,250 
 
 
 
 • Parliamentary Paper, ScKsiyu 18C9, No. 427.
 
 44 The Queen's Taxes. 
 
 The sugar duties have been productive of a contro- 
 versy between grocers and refiners, which it would 
 occupy a volume of considerable size to discuss fully. 
 The former advocate one uniform duty ; the latter 
 maintain the principle of a graduated scale. Both 
 grocers and refiners rest their advocacy upon the 
 principles of Pree Trade as commonly understood, 
 viz., that no advantage should be afforded by our fiscal 
 policy to either home, colonial, or foreign producers, 
 manufacturers, or dealers. The present scale of duties 
 has been framed with the intention of securing this 
 result, by taxing every description of sugar according 
 to the quantity of saccharine matter it contains. It 
 is advocated by the refiners and has been supported by 
 the high authority of Mr. Gladstone, and the late 
 Richard Cobden. The grocers, on the other hand, and 
 in their contention they have been supported by many 
 eminent sugar merchants, maintain that a uniform 
 duty, accompanied by the privilege of refining in 
 bond, would be at once the most advantageous mode 
 of raising a revenue from sugar, and a sufficient safe- 
 guard of the interests of the refiners. The Chairman 
 and Inspector-General of Customs were examined, as 
 to the proposal to allow refining in bond, before a Par- 
 liamentary Committee in 1862, and they both expressed 
 a decided opinion that it would be impossible to protect 
 the revenue if the practice were allowed. 
 
 The advocates of a uniform duty urge that the 
 existing system of discriminating duties forbids the 
 planters to make fine sugar, rewards the indolent, and 
 ruins the diligent ; that 3,000,000 tons are produced
 
 The Queen's Taxes. 45 
 
 annually, but that the plants which produce them 
 contain 6,000,000 tons at least, and that thus a 
 quantity of sugar equal to that now produced, and 
 worth £60,000,000 in bond, is directly sacrificed in 
 consequence of the slothful manufacture fostered by 
 the graduated duties. It is also alleged that two- 
 thirds of the sugar produced is exported in a damp 
 state, and unfit for consumption, in order to secure 
 admission at a low rate of duty, and that in con- 
 sequence there is a drainage of 15 per cent., represent- 
 ing a loss of 300,000 tons on the voyage. That the 
 cost of refining this sugar is excessive, and that the 
 combined effect of these e^ils is to double the price of 
 sugar, independently of the duty imposed upon it.* 
 If these statements are correct, and if, as asserted 
 upon the same authority, the price of sugar would be 
 reduced two-thirds by its admission free of duty, it is 
 clear that a good case has been made out for the entire 
 repeal of the sugar duties at the earliest practicable 
 period. 
 
 A practical illustration of the effect of a graduated 
 scale of duties in preventing the sale of the best 
 qualities of raw sugar was aftbrded the author some 
 years since in Newcastle-on-Tyne. He was shown a 
 sample of East-India raw sugar, which, owing to its 
 assessment at the highest rate of duty, was not market- 
 able in this country. Not being loaf sugar, purchasers 
 could not understand the reason of ^its excessive 
 price as compared with other raw sugars, and the 
 
 * Produce MuikotB Review, December 0, 18Gy.
 
 46 The Queen^s Taxes. 
 
 consequence was that its consumption was confined to 
 foreign seagoing ships, which are supplied with their 
 stores free of duty. 
 
 Another instance of the vexatious iaterference with 
 trade to which such duties always give rise has recently 
 occurred. A sugar has been brought out, intended not 
 merely as a dietetic article of consumption, but posses- 
 sing, as averred by Dr. Watson Bradshaw (a well- 
 known authority on dietetics, dyspepsia, and diseases 
 of the digestive organs), undoubted medicinal virtues, 
 inasmuch as it is a sugar which invalids and dysjiep- 
 tics may talie, when ordinary cane sugar is alto- 
 gether inadmissible. It is also asserted, on the 
 same authority, that it is pre-eminently adapted for 
 consumption by infants in lieu of ordinary sugar. In 
 applying for a patent considerable difficulty was 
 experienced at the hands of the Excise, and ultimately 
 the rate of duty payable upon it was fixed at £12 per 
 ton, the highest rate in the scale. The dietetic proper- 
 ties of this sugar entitle it to rank more as a remedial 
 agent than as a substance possessing only dulcifying 
 properties. It is called by the proprietor, Mr. 
 Alexander Manbre, Dietetic Grape Sugar; it is prepared 
 pound for pound from sago or tapioca ; and its inven- 
 tion is considered, by many who are competent to 
 judge, to be a triumph of Modern Chemistry. It opens 
 an entirely new supply of sugar for the consumer, of 
 a very superior quality, the consumption of which 
 will necessarily be limited by the high rate of duty 
 imposed.
 
 The Queen's Taxes. 47 
 
 The following table shows the total quantity of sugar 
 and molasses imported and consumed in 1844, 1854, 
 1864 and 1868.* 
 
 Imported ConBumed. 
 cwts. cwts. 
 
 1844 5,502,849 4,120,449t 
 
 1854 10,541,050 9,259,673 
 
 1864 12,279,620 10,239,981 
 
 1868 13,372,490 12,220,004 
 
 During the seA^en years ending 1867, our imports 
 of sugar came in about equal proportions from 
 Foreign Countries and our Colonial Possessions. If by 
 improved processes of production, consequent upon 
 the entire relief of this article from taxation, the pro- 
 duction of sugar in our Colonies could be doubled, 
 it is evident that the prosperity of those portions of 
 the Empire would be greatly promoted ; in return for 
 our increased imports of sugar there would also be 
 a corresponding increase in the demand for British 
 manufactures. 
 
 There are other aspects of the sugar duty as it afPects 
 trade and manufactures, not less important than those 
 already noticed. The argument recently used respecting 
 corn, that the removal of the duty would moke this 
 country the depot of Europe, applies with even greater 
 force to sugar. It is well known that trade loves 
 freedom; wherever there are the fewest restrictions, 
 capital and employment locate themselves in the 
 
 • statistical Abstract, 185C, pp. 10, 11, 13. Ibid, ISG'J, pp. 21-25, 40-41. 
 t The conbUinptiui: of 1811 doc; uot include Moliistjct-.
 
 48 The Queen's Taxes. 
 
 greatest abundance. "Were sugar admitted into Great 
 Britain and Ireland duty free, there is little doubt that 
 these islands would become the sugar market of 
 Europe. There is no reason whatever why sugar 
 should not become as important a feature in our 
 export trade as tea, coffee, cotton, or wool. The one 
 thing necessary to secure this result, in the case of 
 sugar, is by entirely repealing the heavy tax of 
 nearly 40 per cent, now levied upon that article. 
 There is another valid objection to this duty ; it is 
 mainly a tax upon a raw material. The records of 
 our imports of sugar prove this fact, inasmuch 
 as the importation of refined sugar, and of sugar 
 equal in quality thereto, in the year 1868, was only 
 729,865 cwts., while that of raw sugar was 
 11,796,161 cwts., and has been invariably 10,000,000 
 cwts. in excess of refined dui'ing the last five years.* 
 Sugar is also extensively used in the manufacture 
 of confectionery of various kinds, a branch of industry 
 which would be vastly increased were the raw material 
 to be obtained free of duty. At present this trade is 
 in a languid state, an evil which the removal of the tax 
 would effectually remedy. Many manufacturers of 
 confectionery have removed their manufactures from 
 Great Britain to the Channel Islands and elsewhere, 
 where lower duties are imposed upon sugar. In relation 
 to agriculture, especially in Ireland, the question is 
 also one of vital importance. The manufacture of 
 
 * Annual Statement, 1868, p. 16.
 
 The Queeti's Taxes. 49 
 
 beet root sugar would introduce a profitable article 
 of cultivation, for which many parts of the sister 
 island are admirably adapted. 
 
 To sum up the arguments against this tax; it is levied 
 upon an article of universal consumption and a prime 
 necessary of life ; it is imposed not upon sugar fit for 
 the table, but upon the raw material before it passes 
 into the hands of the refiner; it places serious re- 
 strictions upon our home trade and manufactures, and 
 retards the development of colonial industry; it lays 
 a burden upon the taxpayer out of all proportion to 
 the amount which it brings into the treasiuy. In all 
 these respects it offends against the canons of taxation 
 laid down by Adam Smith, and now recognised by all 
 authorities on the subject. Its removal would be a 
 boon to all classes of the community, and would 
 stimulate trade and industry in every part of the 
 United Kingdom.
 
 50 The Queen's Taxes. 
 
 CHAPTER VII. 
 
 TEA. 
 
 The consumption of t3a was for a long period 
 held in clieck in this country, notwithstanding the 
 fact that a taste for it had been diffused among aU 
 classes, by two causes; the high price consequent 
 upon its importation being a monopoly of the East 
 India Company, and the excessive duty levied upon 
 it by the Government. The following were the rates 
 of duty from the commencement of the present century 
 to the year 1852 : — * 
 
 Per cent, ad valorem. 
 
 If sold at or above If sold under 
 
 2s. 6d. per fc. 2s. 6d. per ft. 
 
 £ s. d. £ 8. d. 
 
 1801—1802 50 20 
 
 1803—1804 95 65 
 
 1805 95 2 6 65 2 6 
 
 1806—1818 £96 
 
 If sold at or above If sold at or under 
 
 2s. per lb. 2s. per lb. 
 
 1819—1833 £100 ...... £96 
 
 per lb. 
 
 I '" > 
 
 Congou, Twankay, Hyson 
 Bohea. Skin, Orange Pekoe, and Other 
 
 %. Campoi. sorts, 
 
 per lb. per lb. per lb. 
 
 1831 Is. 6d 2a. 2d 3s. 
 
 On all sorts. 
 s. d. 
 
 1836 2 1 
 
 ISiO— 1852 2 2i 
 
 Parliamentary Paper, Tea and Sugar, Session 1857, No. 184, p. 9.
 
 The Queen's Taxes. 
 
 51 
 
 The annual consumption per head from 1801 to 
 1833, when the East India Company enjoyed their 
 monopoly, varied from 1 lb. 3 oz. to 1 lb. 9 oz. per 
 head. The average of the five years, 1801-1805, was 
 not quite lib. 8 oz. per head; during the five years, 
 1829-1833, it was lib, 4 oz. per head; showing a 
 decrease of 4 oz. In the year 1 834 the trade was 
 thrown open, and from that period the consumption 
 has gradually increased, so that in 1852 it reached 
 2 lbs. per head.* 
 
 The following table shows the various modifications 
 of the duty since that period, and their effect upon 
 importation and consumption : — f 
 
 Year. 
 
 Duty 
 
 ler lb. 
 
 Total imported. 
 
 lb. 
 
 Consumption. 
 Per lb. 
 
 Per head. 
 
 lb. 
 
 1852 
 
 B. 
 
 2 
 
 2i 
 
 66,360,535 
 
 54,713,034 
 
 2 
 
 1853 
 
 
 10 
 
 70,735,135 
 
 58,834,087 
 
 214 
 
 1854 
 
 
 6 
 
 85,792,032 
 
 61,953,041 
 
 224 
 
 1855 
 
 
 9 
 
 83,259,657 
 
 63,429,286 
 
 2-28 
 
 1^56 
 
 
 9 
 
 86,200,414 
 
 63,278,212 
 
 2 26 
 
 1857 
 
 
 5 
 
 64,493,989 
 
 69,132,101 
 
 2 45 
 
 1852 
 
 
 5 
 
 114,787,361 
 
 78,793,977 
 
 2-70 
 
 1863 
 
 
 
 
 136,806,321 
 
 85,18.3,280 
 
 2-90 
 
 1864 
 
 
 
 
 124,359,243 
 
 88,599.235 
 
 3 00 
 
 1865 
 
 
 
 6 
 
 121,271,219 
 
 97,834,600 
 
 329 
 
 18e6 
 
 
 
 6 
 
 139,610,044 
 
 102,265,531 
 
 3 42 
 
 1867 
 
 
 
 6 
 
 128,028,726 
 
 110,988,209 
 
 3-68 
 
 1868 
 
 
 
 6 
 
 154,845,863 
 
 106,815,311 
 
 3 52 
 
 The amount of revenue for the year 18G8-9 was 
 
 • Parliamentary Paper, Tea and Sugar, Sess. 1857, No. 184, p. 8. 
 t Stati.stical AljBtract, 185G, pp. 11, 13. Pfirliamentary Paper, Session 1857, 
 No. 184. Statistical Abstract, 18G9, pp. 24, 25, 40, 43.
 
 52 The Queen's Taxes. 
 
 £2,597,980. Originally a luxury of the rich, tea has 
 become a necessary of life to all classes. It has been 
 already shown that in a Parliamentary paper issued 
 in 1857, it was described as, next to bread, one of 
 the prime necessaries of life. Enquiries made during 
 the last few months by Mr. Dudley Baxter, in con- 
 nection with his recent work on Taxation, show 
 that with working people tea and coffee are more 
 articles of food than with those who have plenty of 
 food Avithout them. " They drink them," he says, 
 "three times a day — for breakfast, dinner, and tea, 
 though weaker than we should be satisfied with." 
 The fact that this article has given its name to one 
 of the three recoo^nised meals of the bulk of the 
 population, shows its popularity. The main argu- 
 ment advanced in favour of taxing spirits cannot be 
 applicable to tea. If it be right to limit the con- 
 sumption of the one, it ought surely to be the duty 
 of the Government to remove all fiscal hindrances 
 from the increased consumption of the other. Ac- 
 cording to the statistical abstract the average price of 
 tea from China has varied during the last fifteen years 
 from Is. 3d. to Is. 8d. per lb., from India from Is. 3d. 
 to 2s. 4d., and from Japan from Is. 4d. to Is. 7d. The 
 pressure of the duty is much heavier upon the lower 
 cLiss of teas than it is upon the higher, and one of its 
 consequent disadvantages is the discouragement thus 
 given to the importation of first-class teas. The 
 im.iform duty practically operates as a protection in 
 favour of inferior teas. It was considered last year a 
 wise^ policy to abolish the tea license, so as to allow 
 the sale of tea in villages ; would it not be far wiser
 
 The Queen's Taxes. 53 
 
 to abolish the duty, and thus increase the consumption 
 of this mikl and grateful stimulant ? 
 
 In addition to the effect of previous reductions of 
 duty in increasing the consumption of tea, there has 
 been a large increase in the exports of British Pro- 
 duce and Manufactures to China as a consequence of 
 our increased imports from that country. The value 
 of these exports to China and Hong Kong in 1852 
 was £2,503,599, in 1857 it was only £2,449,982, but 
 in 1868 it reached the sum of £8,498,966.* There 
 has also been a great increase since the reduction of 
 the duty in the quantity of tea exported from this 
 country. The following table shows the excess of 
 importation over consumption and the quantities 
 exported in each of the specified years. In 1857, 
 owing to the War with China the consumption 
 exceeded the importation by 4,638,112 lbs. 
 
 Excess of Imports 
 
 
 Dnty 
 
 over Consumption. 
 
 Quantity Exported.* 
 
 Year 
 
 pel 
 
 •11). 
 
 lbs. 
 
 lbs. 
 
 1852 
 
 2 
 
 2i 
 
 11,647,501 
 
 6,134,743 
 
 1853 
 
 
 Hi 
 
 11,901,048 
 
 4,836,009 
 
 1854 
 
 
 (3| 
 
 23,838,991 
 
 8,655,955 
 
 1855 
 
 
 8 
 
 19,830,371 
 
 13,626,507 
 
 1856 
 
 
 9 
 
 24,922,202 
 
 5,718,764 
 
 1862 
 
 
 5 
 
 35,993,384 
 
 27,342,603 
 
 1863 
 
 
 
 
 51,623,041 
 
 26,219,654 
 
 1864 
 
 
 
 
 35,760,008 
 
 27,545,341 
 
 1865 
 
 
 
 6 
 
 23,436,619 
 
 32,633,451 
 
 1866 
 
 
 
 6 
 
 37,314,513 
 
 30,215,454 
 
 1867 
 
 
 
 6 
 
 17,040,517 
 
 31,131,112 
 
 1868 
 
 
 
 6 
 
 48,030,552 
 
 34,631,678 
 
 * statistical Abstract IH.OO, p. ID. Ibid. 1809, pp. 51-55. 
 
 * Statistical Abglract 1856, p. 23. Ibid I860, pp. 71, 75.
 
 54j The Queen's Taxes. 
 
 It is tolerably certain that two results would follow 
 the repeal of the duty ; an increased export of British 
 Manufactures to China and other tea growing coun- 
 tries, and an augmented export trade in the article 
 itself consequent upon the increased quantity which 
 the demand arising from the enth^e repeal of the duty 
 would attract to our shores. If the hindrances to trade 
 which are the invariable result of Customs duties 
 were removed, there exists no reason whatever why 
 Great Britain should not become the tea depot of 
 the whole of Europe, thus creating in this one article 
 alone a considerable extension of trade, commerce, 
 and employment, and adding to the social and domestic 
 comforts of our population.
 
 The Queen'' s Taxes. 55 
 
 CHAPTER VIII. 
 
 COFFEE AND CHICORY. 
 
 These articles are now almost as inseparably united 
 as the celebrated Siamese Twins ; no apology is needed, 
 therefore, for considering them under one and the 
 same head. In fact a review of the one duty would 
 be incomplete and unsatisfactory if no reference were 
 made to the other. Mr. Porter remarks very truly in 
 his invaluable work, that* " the facts exhibited by the 
 history of the home or consumption trade in this article 
 (coffee) are pregnant with lessons of great value as 
 regards taxation. There are but few articles fitted for 
 general use which have been subjected in an equal 
 degree to alternations of hisjh and low duties, and with 
 respect to which Ave are consequently enabled, with 
 equal certainty, to trace the effects of taxation in con- 
 tracting or enlarojing the enjoyments of the people, or 
 to mark the comparative advantage thus produced to 
 the Exchequer, 
 
 The following table of the duties levied at various 
 periods taken from a Parliamentary Paperf issued in 
 1857 is very interesting, and affords an admirable 
 example of the mode in which the people of this country 
 were formerly taxed for the benefit of individuals by the 
 protective system so long established. 
 
 * ProgresB of the Nation. 1847. p. 568. 
 
 t Tea and Sugar. Session 1857. No. 184, p. 11. The fractioual parts of a 
 pcuny in tha years 1810-44, represent the extra 5 per cent, imposed in 1840.
 
 56 
 
 The Queen's Taxes. 
 
 
 Duties levied upon 
 
 Coffee, 1801-55 : 
 
 
 
 British 
 
 
 
 
 
 
 Possessions 
 
 East India. 
 
 
 Foreign. 
 
 
 in An 
 
 lerica. 
 
 
 Per cent. 
 
 
 
 per 
 
 lb. 
 
 per lb. 
 
 
 ad val. 
 
 per lb. 
 
 Years. 
 
 B. 
 
 d. 
 
 s. d. 
 
 £ 
 
 s. d. 
 
 s. d. 
 
 1801 
 
 1 
 
 5i 
 
 2 7 
 
 and 2 
 
 
 
 2 7 
 
 1802 
 
 1 
 
 6 
 
 2 7i 
 
 2 
 
 
 
 2 7i 
 
 1803 
 
 1 
 
 61 
 
 1 111 
 
 2 
 
 16 3 
 
 2 5f 
 
 1804 
 
 1 
 
 7i 
 
 2 Oi 
 
 3 
 
 2 6 
 
 2 6i 
 
 1805 
 
 2 
 
 H 
 
 2 6| 
 
 „ 3 
 
 3 9 
 
 3 Oi 
 
 1806-7 
 
 2 
 
 11 
 
 2 6f 
 
 3 
 
 7 11 
 
 3 0| 
 
 1808 
 
 
 
 7 
 
 10 
 
 » 3 
 
 7 11 
 
 2 4 
 
 1809-12 
 
 7 
 
 10 
 
 3 
 
 6 8 
 
 2 4 
 
 1813 
 
 
 
 7f 
 
 lOi 
 
 3 
 
 19 2 
 
 2 4f 
 
 
 
 Per lb. 
 
 
 
 1814-18 
 
 71 
 
 
 Hi 
 
 
 2 41- 
 
 1819-24 1 
 
 
 
 
 1 6 
 
 
 2 6 
 
 1825 
 
 
 
 6 
 
 
 9 
 
 
 1 3 
 
 Of and from 
 
 British 
 
 Imported 
 
 from places within 
 
 
 Possessions in 
 
 the limits of the East India 
 
 Otherwise 
 
 
 America. 
 
 Company's Charter. 
 
 Imported. 
 
 
 
 
 
 
 Other 
 
 
 
 
 Per lb. 
 
 British Possessions. 
 
 places. 
 
 per lb. 
 
 
 
 
 per 
 
 lb. 
 
 per lb. 
 
 
 1826-1834 
 
 6d. 
 
 9d. 
 
 Is. 
 
 Is. 3d. 
 
 
 
 
 
 Not 
 
 
 
 
 
 
 ertified 
 
 Certified 
 
 
 
 
 
 
 as produce 
 
 as produce 
 
 
 
 
 
 
 of British 
 
 of British 
 
 
 
 
 
 
 Possns. 
 
 Possns. 
 
 
 
 
 
 
 per lb. 
 
 per lb. 
 
 
 
 1835-1839 
 
 6d. 
 
 6d. 
 
 9d. 
 
 Is. 
 
 Is. 3d. 
 
 1840-1841 
 
 6f. 
 
 e^d. 
 
 %d. 
 
 Is. ^«,d. 
 
 Is. 3id. 
 
 
 
 
 Of 
 
 and from 
 
 
 Of and from 
 
 
 
 
 I 
 
 British 
 
 
 Foreign 
 
 
 
 
 Pos 
 
 sessions. 
 
 
 Countries. 
 
 
 
 
 
 oer lb. 
 
 
 per lb. 
 
 1842- 
 
 -from 9th July 
 
 ,,, 
 
 4id. 
 
 ,,, 
 
 8id. 
 
 1844- 
 
 -from 6th June 
 
 ... 
 
 4id. 
 
 ... 
 
 %%^- 
 
 
 
 
 
 ; whatever 
 
 Growth an 
 
 d whencesc 
 
 ever Imported, 
 per lb. 
 
 1845- 
 
 -from 15th Apr 
 
 il ... 
 
 .. 
 
 
 4d. 
 
 1855- 
 
 -from 21st Apr 
 
 il ... 
 
 •>. •*. 
 
 • •• 
 
 3d.
 
 The Queeii's Taxes. 
 
 57 
 
 The extra penny imposed in 1855 to meet a portion 
 of the cost of the Crimean War was removed in 1857, 
 since which period the duty has remained at 3d. per 
 lb. The rates of duty, quantities taxed, and amount 
 collected in 1868-9 were as follows : — * 
 
 lbs. £ 
 
 Eaw, .3d. per lb 28,557,200 356,976 
 
 Kiln dried, roasted, or ground, 4d. per lb. 3,668 61 
 
 £357,037 
 The following tables show the alterations in the duty 
 and their effect upon consumption, imports, and 
 exports of foreign and colonial coffee since 1841 : — f 
 
 
 Rate of Duty. 
 
 Consumption. 
 
 
 Year. 
 
 
 
 
 
 Total. 
 
 
 Foreifjn, 
 
 Colonial, 
 
 Foreign. 
 
 Colonial. 
 
 
 
 per lb. 
 
 per tb. 
 
 lbs. 
 
 lbs. 
 
 
 1841 
 
 see a 
 
 bove 
 
 10,838,409 
 
 17,532,448 
 
 28,370,857 
 
 18i2 
 
 8 
 
 4 
 
 11,219,646 
 
 17.299,916 
 
 28,519,646 
 
 1843 
 
 8 
 
 4 
 
 9,848,774 
 
 20,130.630 
 
 29,979,404 
 
 1844 
 
 6 
 
 4 
 
 11,815,758 
 
 19,536,624 
 
 31,352,382 
 
 1850 
 
 6 
 
 4 
 
 2,316,323 
 
 28,850,035 
 
 31,166,358 
 
 1851 
 
 3 
 
 3 
 
 4,563,830 
 
 27,940,715 
 
 32,504,545 
 
 1854 
 
 3 
 
 3 
 
 6,542,698 
 
 30,808,226 
 
 37,350,924 
 
 1855 
 
 4 
 
 4 
 
 6,370,508 
 
 29,394,056 
 
 35,764,564 
 
 1857 
 
 3 
 
 3 
 
 6,995,334 
 
 27,357,789 
 
 34,353,123 
 
 1867 
 
 3 
 
 3 
 
 5,298,513 
 
 25,983,510 
 
 31,282,023 
 
 1868 
 
 3 
 
 3 
 
 4,804,304 
 
 25,552,741 
 
 30,357,045 
 
 It appears that in 18il, under the protective system, 
 more than 60 per cent, of the coffee consumed in this 
 country was of foreign production ; while in 1868 the 
 proportion of foreign to colonial was, in round 
 numbers, 18 per cent. 
 
 * Parliamentary Paper, Taxes and Imposts, Session 1869, No. 427. 
 t Statistical Abstract, 1841 to 1855, pp. 8, 9, 13, 22, 23. Ibid, 1854 to 1868, 
 pp. 20, 21, 10, 41, 72, 73.
 
 58 
 
 The Queen's Taxes. 
 
 
 Imports. 
 
 Exports. 
 
 Year. 
 
 Foreign, 
 lbs. 
 
 Colonial, 
 lbs. 
 
 Foreign. 
 lbs. 
 
 Colonial. 
 Tbs. 
 
 1841 
 1851 
 
 1857 
 1867 
 1868 
 
 26,256,770 
 17,138.497 
 18,280,672 
 33,937,404 
 87,681,327 
 
 17,060,992 
 
 35,972,163 
 
 40,612,054 
 
 103,792,312 
 
 136,221,150 
 
 13,914,254 
 10.106,276 
 4,055,856 
 26,139,824 
 31,861,106 
 
 359,842 
 
 12,606,583 
 
 11,726,854 
 
 71,456,123 
 
 103,205,228 
 
 Increase 
 
 of 1868 
 
 over 1841 
 
 11,424,557 
 
 119,160,158 
 
 17,946,852 
 
 102,845,386 
 
 It is shown clearly by these returns that the effort 
 to stimulate the trade in colonial coffee hy means of 
 protective duties was a complete failure, and that the 
 abolition of that pernicious policy was a boon to our 
 colonial possessions as far as coffee is concerned. 
 
 The average consumption per head during the pre- 
 sent century is shown in the following table : — * 
 
 Period of 4 Years. 
 
 lbs. 
 
 oz. 
 
 Single 
 
 
 1801—1804 
 
 
 1 
 
 Years. 
 
 lbs. 
 
 Periods of 5 Years. 
 
 
 
 1856 
 
 1-25 
 
 1805—1809 
 
 
 8 
 
 1857 ... 
 
 1-22 
 
 1810—1814 
 
 
 6 
 
 1858 ... 
 
 1-24 
 
 1815—1819 
 
 
 6 
 
 1859 ... 
 
 V20. 
 
 1820—1824 
 
 
 6 
 
 1860 ... . 
 
 1-23 
 
 1825—1829 
 
 
 11 
 
 1861 ... . 
 
 1-21 
 
 1830—1834 
 
 
 15 
 
 1862 ... . 
 
 l-]8 
 
 1835—1839 
 
 1 
 
 
 
 1863 ... . 
 
 . ... Ill 
 
 1840—1844 
 
 1 
 
 1 
 
 1864 ... . 
 
 106 
 
 1845—1849 
 
 ,. 1 
 
 5 
 
 3865 ... . 
 
 1-02 
 
 1850—1854 
 
 1 
 
 4 
 
 1866 ... . 
 
 102 
 
 Single Years. 
 
 
 
 1867 .. . 
 
 104 
 
 1855 
 
 .. 1 
 
 4 
 
 1868 ... . 
 
 1-00 
 
 1856 
 
 .. 1 
 
 4 
 
 
 
 * Parliamentary Paper, Tea and Sugar, 
 cal Abstract, 1851 to 1868, pp. 42, 43. 
 
 Sess., 1857, No. 184, p. 10. Statisti-
 
 The Queen's Taxes. 59 
 
 The statistics of the consumption of coffee afford an 
 admirable illustration of the effect of duties of customs 
 and excise in developing the practice of adulteration. 
 By the Act 43, Geo. III., cap. 129, the manufacturing 
 or selling of any vegetable substance so as to resemble 
 or serve as a substitute for coffee was prohibited. 
 Notwithstanding this enactment, chicory, upon which 
 the customs duty was smaller than on coffee, was 
 extensively used for that purpose. In the year 1832, 
 the treasury prohibited dealers from keeping for sale 
 coffee mixed 'with chicory, but permitted the sale of 
 chicory unmixed with coffee. The practice of mixing, 
 however, was continued, and, at length, in conse- 
 quence of its being found impossible to prevent this 
 form of adulteration, it was ordered by the Treasury, 
 in 1840, that no notice should be taken of offences 
 against the statute ; and from that date to the year 
 1852, when another change took place, but little pure 
 coffee, in a ground state, was sold. The sale of the 
 mixture was again prohibited in that year, but that of 
 substances prepared to resemble coffee was allowed, if 
 sold unmixed with that article. This arrangement 
 lasted until 1853, when the sale of mixtures of chicory 
 and coffee was legalised, provided the packages were 
 labelled as such.* In 1861 the Inland Revenue Com- 
 missionerst attributed the diminished consumption of 
 coffee mainly to its adulteration with chicory, and 
 asserted that in the case of coffee purchased at Is. 't 1. 
 
 • First Inland Revenue Keport, 1857, Appenilix, pp. 15, 16. 
 t Fifth Inland Revenue Report, 1801, Appenili.x, pp. 19, 20.
 
 60 
 
 The Queen's Taxes. 
 
 per lb., there was no limit to the proportion of the 
 latter article introduced; it was found, in some 
 instances, that such samples were composed entirely 
 of chicory. The following table giving the average 
 results of analysis made in the laboratory department 
 accompanies these observations : — 
 
 Average per centage of Chicory 
 found in samples purchased as 
 
 Mixtures of Coffee 
 
 Years. 
 1856 
 1857 
 IbSS 
 1859 
 1860 
 
 Pure Coffee. 
 21-3 
 22-2 
 268 
 24-2 
 291 
 
 and Chicory. 
 25-8 
 20-7 
 30-7 
 39 8 
 39-3 
 
 made in the 
 
 In that year it 
 
 valorem to 6d. 
 
 Numerous alterations have been 
 customs duty on chicory since 1832.* 
 was increased from 20 per cent, ad 
 per lb. In 1830 it was reduced on raw chicory to 20s., 
 and on roasted or ground to £2 16s. per cwt. In 
 1842 raw or kiln dried was charged £10 per cwt. if 
 from foreign countries, and 20s. per cwt. from British 
 possessions ; roasted or ground, of all kinds, 6d. per lb. 
 In 1845 the duty on foreign raw and kiln dried, was 
 reduced to the same rate as that charged on chicory 
 from British possessions. In 1853 it was reduced to 
 4s, per cwt., and in 1854 was entirely repealed. 
 During the above period no excise duty was levied on 
 home grown chicory. 
 
 * Parliamentary Paper, " Customs and Excise," Session 1858, No. 511, p. 19. 
 Acts of Parliament 3 and 4 Wm. IV., c. 56. 5 and 6 Vic. c, 47. 8 Vic, c. 12 
 16 and 17 Vic, c. 54.
 
 The Queen's Taxes. 
 
 61 
 
 The loss to the revenue caused by the extensive 
 adulteration of coffee which resulted from the free 
 admission of foreign and colonial, and the absence of 
 any excise upon home grown, chicory led, in the year 
 1860, to the imposition of duties, both of customs and 
 excise. It will be seen from the following analysis, 
 compiled from the Annual Reports of the Commis- 
 sioners of Customs and Inland Hevenue, of the rates 
 of duty levied since 1860, that an effort has been 
 made to remove all inducement to defraud the 
 revenue by the substitution, in whole or in part, of an 
 untaxed commodity for one upon which a duty is 
 levied varying from 30 to 50 per cent.* 
 
 
 Rates 
 
 of Duty on Chicory. 
 
 Customs. 
 
 Lxcise. 
 
 
 
 per cwt. 
 s. d. 
 
 per cwt. 
 s. d. 
 
 I860 
 
 
 6 
 
 3 
 
 1861 
 
 
 ... 12 
 
 6 
 
 1862 
 
 
 12 
 
 11 
 
 1SU3 
 
 
 ... 26 6 
 
 21 9 
 
 1861-68 
 
 
 ... 26 6 
 
 24 3 
 
 The effect of the duty imposed in 1860 was felt 
 immediately, the imports declined from 127,553 cwts. 
 in 1858,t and 266,909 cwts. in 1859t to 94,287 c^i;s. 
 in 1860, t 72,363 cwts. in 1861, t and 45,563 cwts. in 
 1862; I in 1863 j there was a recovery, the quantity 
 being 131,628 cwts.; and in 1864,J it was further 
 increased, being 136,272 cwts. The quantity grown 
 
 • Cnstoms Reports, 1861, p. GG. 1862, p. 4G. 18G4, p. 53. Inland Revenue 
 Report. 1865, App. p. 3. 
 
 t Fifth Cu8tom.s Report, 1861, p. 74. 
 J Aiiuual Statement for 1864, p. 14.
 
 62 The Queen's Taxes. 
 
 at home appears to be very small; formerly many 
 thousands of acres were cultivated with chicory, it 
 appears however from enquiries made in 1860 that not 
 more than 500 acres were then under cultivation in the 
 United Kingdom.* The following table shows the 
 extent to wliich chicory is at present used.f 
 
 Rate of Duty Quantity Gross Sum 
 
 Taxed. Produced. 
 
 1868-9. 1868-9. 
 
 Per Cwt. Per Cwt. 
 
 s. d. £. 
 
 Customs : — 
 
 Eaw or Kiln dried... 26 6 77,433 102,600 
 
 Ditto produce of ... 
 
 Channel Islands .. 24 3 1,145 1,389 
 
 Eoasted or Ground 4 per lb. 3,134 lbs. 52 
 
 Excise 24 3 11,842 4,358 
 
 £108,399 
 
 An enquiry made by the Author in June, 1869, of 
 one of the principal wholesale coffee dealers in London 
 as to the relative prices of chicory and coffee, and their 
 effect upon the practice of adulteration, was answered 
 as follows : — " the price of Haw Chicory in Bond is 
 about £15 per ton, while coffee in bond ranges from 
 £50 to £140 at the present time. The bulk of the 
 consumption in England is at present about £70 to 
 £80 per ton. There can be no question that the 
 original use of Chicory was induced by the fact that 
 there was no duty upon it, Avhile there was a heavy 
 duty on Coffee, although the duty on both is now £28 
 and \ per cent per ton. A large section of the public 
 
 * Mr. Gladstone's Financial Statements, 1863, p. 164. 
 t Parliamentary Paper Sess. 1869. No. 427.
 
 The Queen's Taxes. 63 
 
 still insists on Chicory being mixed with the Coffee, as 
 it makes it darker and gives a somewhat more pungent 
 taste, though of course not the proper Coffee flavour. 
 We may fairly state that the public taste has been 
 spoiled by the effect of the duty." The latter por- 
 tion of this statement is confirmed by information 
 communicated to the Author some years since by a 
 retail grocer, who was recommended, by a friend in the 
 same trade, to mix chicory with his coffee in order to 
 meet the competition of his neighbours. At first it 
 was disliked, in fact he used too much chicory. Sub- 
 sequently he commenced with a small quantity which 
 he gradually increased, and finally educated his cus- 
 tomers to the standard he had originally adopted. 
 
 The injurious effects of heavy protective duties upon 
 fhe interests of the Colonial growers, for whose sup- 
 jiosed advantage they were long maintained, is shown 
 very clearly by the history of the coffee trade. It will 
 be seen, from the figures previously quoted,that dmnng 
 the era of prot(;ctive duties the export trade of this 
 country in coffee was almost monopolised by the foreign 
 producer. The loss of protection was a gain to the 
 Colonist, and has placed him far ahead of his Eoreign 
 competitors. 
 
 The consumption of coffee has long been stationary 
 in this country ; the amount of duty it produces is 
 comparatively trifling ; it may therefore be reasonably 
 hoped that an early revision of the customs tariff will 
 afford the opportunity of repealing a duty, wliich 
 certainly belongs to that class of fiscal imposts — which, 
 in 1840, were well described as " nothing but burdens, 
 restrictions, and delays upon the industry and the 
 prosperity of the country "
 
 64 The Queen's Taxes. 
 
 CHAPTER IX. 
 
 MINOR ARTICLES. — COCOA 
 
 This duty is maintained because tea and coffee are 
 taxed. It is tlioroughly insignificant in itself, and 
 can only be defended upon the very improbable theory 
 that people would forsake tea and coffee and drink 
 cocoa were the duty now levied on it repealed. The 
 consumption in 1868 was 0'17 per head. In 1853 it 
 was 0*15, and since that year has varied considerably, 
 the lowest rate being 0*09 in 1857.* The duty on Cocoa 
 is one of those which, according to the recommenda- 
 tion of the Import Duties Committee of IS'IO, ought 
 long since to have been repealed.* 
 
 The following are the statistics of the year 1868 — 9 :t 
 
 
 Duty. 
 
 Quantity 
 Taxed. 
 
 Amount 
 Collected. 
 
 Cocoa 
 
 „ Husks & shells 
 
 „ Paste or Chocolate 
 
 Id. per lb. 
 28. per cwt. 
 2d. per lb. 
 
 5,930,043 lbs 
 10,419 cwts. 
 191,087 lbs. 
 
 £24,746 
 1,042 
 1,593 
 
 DRIED ERUIT. 
 
 It is difficult to assign any valid reason why Curants, 
 Pigs, Plums, Prunes, and Haisins should be taxed while 
 
 * statistical Abstract 1854 to 1868, pp. 42—43. 
 t Parliamentary Paper. Sess. 1869. No. 427-
 
 The Qaceii's Tcuves. 65 
 
 Dates are admitted free of duty. There is nothing to 
 be said in defence of these duties. Upon the prin- 
 ciples which have now for some time regulated our 
 fiscal policy they ought long since to have been swept 
 away. The quantity taxed and amount produced in 
 1 868-9* is shown below : — 
 
 
 Duty. 
 
 Quantity 
 
 Amount 
 
 
 
 Taxed. 
 
 CoUected. 
 
 
 Per Cwt. 
 
 Cwts. 
 
 £ 
 
 Currants 
 
 7 
 
 767,748 
 
 268,724 
 
 Figs, Plums, & Prunes 
 
 7 
 
 94,231 
 
 32,994 
 
 Eaisins 
 
 7 
 
 369,933 
 
 129,483 
 
 PATENT MEDICINES. 
 
 Although neither meat nor drink, these articles are 
 of very general consumption in many districts and 
 among many classes. It can hardly be affirmed that 
 the duty limits the demand for them. It is invariably 
 added to the price by the maker and wholesale vendor, 
 but in some places competition leads the retailer to 
 forego the demand of the duty from the purchaser, the 
 result being that the former pays the duty in the hope 
 of recouping himself by an increased sale. It is a 
 curious fact that so many people are ready to pay from 
 six to twelve times the value of these articles, merely 
 because they have some special designation. The main 
 items in the cost of their production are the charges 
 paid by their enterprising proprietors in order to 
 advertise their hidden virtues, and make known the 
 marvellous cures which they arc said to have pcr- 
 
 Parliamentary Paper, Scs«. 1800. No. 12'.).
 
 66 The Queen's Taxes. 
 
 formed. The most valid objection to the collection of 
 any portion of the revenue in this way seems to be the 
 fact that, in the minds of ignorant people, the govern- 
 ment stamp is considered a voucher for the merits of 
 the medicine to which it is attached. The number of 
 stamps for Medicines issued in 1868-9 was 8,603,685, 
 and the amount collected £66,860.* 
 
 PLAYING CARDS. 
 
 This tax was probably imposed upon moral conside- 
 rations. It produced during the last financial year 
 £338 from Customs, and £10,324 from stamps on the 
 home made article. f The insignificant amount col- 
 lected renders this duty unworthy a place in our 
 system of taxation. It was formerly Is. 3d. per pack, 
 and Avas then largely evaded, to remedy which it was 
 reduced to 3d., its present rate. A duty of 21s. per 
 pair was formerly imposed upon dice sold, which was 
 evaded by selling the ivory squares unmarked, leaving 
 the purchaser to perform the operation of marking 
 himself. In consequence of this practice the duty, 
 which had become obsolete, was repealed. Neither 
 morality nor the revenue would suffer if the duty on 
 playing cards were to follow. 
 
 GOLD AND SILVER PLATE. 
 
 The Customs duty on these articles is rendered 
 necessary by the Stamp duty collected upon home 
 manufactures by the Inland Hevenue. The genuine 
 
 * Parliamentary Paper, Sess. 1869. No. 427. 
 t Parliamentary Paper, Sess. 1860. No, 42?.
 
 The Queen^s Taxes. 67 
 
 nature of the articles is guaranteed by the stamp, and 
 it cannot be said that the duty is productive of any 
 considerable hardship. If the Government undertakes 
 to test and examine quality, it is clearly entitled to a 
 charge sufficient to defray the cost of the establish- 
 ments necessary for the purpose. 
 
 The following is the amount collected in 1868-9 . — * 
 
 Quantity Amouut 
 
 Datv Taxed. Collected. 
 
 Per oz. Troy. Oz. Troy. £ 
 
 Plate of Gold ... 17s. ... 120 ... 102 
 
 Plate of Silver ... Is. 6d. ... 48015 ... 3,581 
 
 Stamps CuXmT - ^°*^ ^^^^^^ Q^,^1^ 
 
 Parliameutary Paper, Ses?. 1869. No. 427.
 
 68 The Qiieeit's Taxes. 
 
 CHAPTEH X. 
 
 MALT AND ITS PRODUCTS, WITH THEIR SUBSTITUTES. 
 
 The Malt Tax was first imposed in England in 1697, 
 in Scotland in 1713, and in Ireland in 1785. The 
 folloAving statement of the various changes in this duty 
 was handed in to the Select Committee of the House 
 of Commons appointed, in 1867 to enquhe into the 
 operation of the Malt Tax, by Mr. Stephenson, the 
 Chairman of the Board of Inland Kevenue : — * 
 
 
 Euglaucl 
 
 Sec 
 
 )tlaiul 
 
 Ireland 
 
 
 Per Bushel. 
 
 Per 
 
 Bushel. 
 
 Per Bushel. 
 
 
 s. d. 
 
 s. 
 
 d. 
 
 
 
 
 1697 
 
 6 
 
 
 
 
 
 
 1713 
 
 6 
 
 
 6 
 
 
 
 
 1726 
 
 6 
 
 
 3 
 
 
 
 
 1760 
 
 9i 
 
 
 3 
 
 
 
 
 1780 
 
 1 4i 
 
 
 8 
 
 
 
 
 ]785 
 
 1 4i 
 
 
 8 
 
 
 
 7 
 
 1795 
 
 1 4i 
 
 
 8 
 
 
 1 
 
 3 
 
 1802 
 
 2 5 
 
 1 
 
 8f 
 
 
 1 
 
 9i 
 
 1804 
 
 4 5f 
 
 3 
 
 9i 
 
 
 2 
 
 3i 
 
 1813 
 
 4 5f 
 
 3 
 
 9i 
 
 
 3 
 
 3f 
 
 1815 
 
 4 5f 
 
 3 
 
 91 
 
 
 4 
 
 5 
 
 1816 
 
 2 5 
 
 1 
 
 8f 
 
 
 2 
 
 4.V 
 
 1819 
 
 3 7i 
 
 3 
 
 n 
 
 
 3 
 
 6f 
 
 1822 
 
 2 7 
 
 2 
 
 7 
 
 
 2 
 
 7 
 
 1840 
 
 2 8| 
 
 2 
 
 8* 
 
 
 2 
 
 81 
 
 1854 
 
 4 
 
 4 
 
 
 
 
 4 
 
 
 
 1856 
 
 2 8i 
 
 2 
 
 8i 
 
 
 2 
 
 8^ 
 
 * Report of Select Committee on 
 
 the Malt Tax, Sess. 
 
 1868. 
 
 Nc 
 
 1. 420, p. m.
 
 The Queen's Taxes. 69 
 
 No chano-e has been made since 1856, 
 
 In the course of his evidence before the Committee, 
 Mr. Stephenson stated as a remarkable fact, that the 
 consumption of malt had remained almost stationary 
 for 100 years prior to 1830, although the population 
 had largely increased ; that during this period it was 
 25,000,000 bushels a year ; and that on the repeal of 
 the beer duty in 1830 the consumption of malt rapidly 
 increased, until in 1866 it reached 45,000,000 bushels 
 for England only. In that year the amount of malt 
 on which duty was paid in the United Kingdom was 
 upwards of 52,000,000 bushels. These statements 
 led the committee to express an opinion that a reduc- 
 tion in the rate of duty would lead to a large increase 
 in the consumption of malt. 
 
 In reference to the diminution in the consumption 
 of malt which took place during the last century, Mr. 
 Porter observes* that it would not be correct to attri- 
 bute that fact entirely to the eflPect of taxation, the 
 introduction of tea and coffee into extensive use having 
 necessarily interfered with the consumption of beer. 
 The same effect has been produced by the increased 
 consumption of spirits, which it has been alleged was 
 caused to some extent at least, in the early part of the 
 present century, by the exorbitant duties then levied 
 on malt and becr.f There can be no doubt that tea 
 and colfec have proved powerful competitors for public 
 
 • Progress of tbc Naliou, 18i7, p. 503. 
 t McCulloch Cullocli on Taxntiou, 1815, p. '237.
 
 70 The Queen's Taxes, 
 
 favour. Their rivalry with ale and beer has, however, 
 been more equal than that of chicory with coffee, 
 excessive duties having been imposed upon both tea 
 and coffee from their first introduction until a recent 
 period, as well as upon sugar, which is generally an 
 important ingredient in the conversion of tea and 
 coffee into beverages. 
 
 Mr. Porter describes the tax on malt as one that 
 " has always been unfavourably viewed by the agricul- 
 tural interest, under the common but unaccountable 
 impression that the amount is paid by the producers, 
 and not, as it in fact is, by the consumers. Under this 
 impression, the endeavour to cause its repeal has at 
 times been strenuously made, and it is probable that 
 it would not always have been made in vain, could 
 any sufficient substitute for the revenue have been 
 found that would not have been even more distasteful 
 to landlords."* The idea that this tax is paid by he 
 producer is somewhat akin to the notion, formerly 
 prevalent in agricultural districts, that taxes upon 
 imports were paid by "the foreigner." Nothing can 
 be more certain than that all such imposts, whether of 
 Customs or Excise, fall upon the consumer, by whom 
 they are ultimately paid. This fact, however, does not 
 disprove the assertion that the Malt Tax is prejudicial 
 to the interests of the farmers. All indirect taxes are 
 more or less injurious to the producers of the articles 
 taxed, whatever may be the benefits they appear to 
 
 * Progress of the Nation, 1847, p. 505.
 
 The Queen^s Taxes. 71 
 
 confer upon the few capitalists, in whose favour they 
 create a monopoly of trade or manufacture. 
 
 The Select Committee of the House of Commons, 
 appointed in 1867, summed up the evidence laid before 
 them in the following words : — * 
 
 " Your Committee consider that the result of the 
 evidence taken by them is, that the malt tax prevents 
 the farmer from cultivating his land to the greatest 
 advantage ; that it obstructs him in the use of a 
 valuable article of food for cattle ; that, by making it 
 necessary to employ a large additional amount of 
 capital in the important trade of malting and brewing, 
 it has created and tends to foster two large monopolies ; 
 and that, by materially increasing the price of beer, 
 it encourages adulteration, and prevents to a great 
 extent the habit of brewing amongst the labouring 
 people." This clause of the report was carried by the 
 vote of the Chairman, f the members voting ybr it being 
 Mr. S. Cave, Lord Eustace Cecil, Sir E. Manningham 
 Buller, Mr. Read, Mr. Henry Surtees, and Mr. More. 
 Against : Mr. Goschen, Mr. Shaw Lefevre, Mr, Arthur 
 Peel, Mr. Ayrton, Mr. Dent and Mr. Hardcastle. The 
 Chairman, Colonel Barttelot, then voted for the clause. 
 
 The views of the minority were stated as follows, in 
 a draft report submitted by Mr. Dent,| " the evidence 
 of the officers of Excise, of the malsters, and of the 
 l)rewers, shows that the tax is one of yearly increasing 
 
 • Report of Select Committee of the House of Commons on Malt Tax, Scss. 
 IHOH. No. 120. p. V. 
 
 t Ibid p. xii. 
 
 \ Ibid p. xi.
 
 72 Tlie Queen's Taxes. 
 
 amount, easily and cheaply collected, and not pressing 
 with harshness upon the operations of trade, nor in- 
 juriously affecting the retail price of heer to the 
 consumer." It further stated that the evidence of the 
 corn-dealers, the large brewers, and the buyers of barley 
 tended to throw doubt on the objections raised to the 
 tax by the agriculturists, and after some other remarks 
 expressed unwillingness " to incur the responsibility of 
 disturbing so important a branch of the revenue as the 
 Malt Tax." 
 
 An analysis of the division list shows that four of 
 the members who voted for Mr. Dent's draft report 
 have since become members of the present Govern- 
 ment, and that the fifth is a brewer. It is mainly 
 based upon the evidence of the ofiB.cers of Excise, the 
 malsters, the brewers, corn-dealers, and buyers of barley, 
 who were examined before the committee. Its solitary 
 recommendation was to the effect that some relaxation 
 of the law, in favour of the farmer sprouting malt for 
 his cattle, should be considered by the excise ; the 
 interest of the Consumer was altogether ignored. As 
 respects the cheapness with which this duty is said to be 
 collected a few remarks will be found on a subsequent 
 page. That a tax is collected " easily " is not always 
 an advantage to the taxpayer though it may cause 
 officials to regard it with peculiar favour. As to the 
 evidence upon which the minority rely there is one 
 obvious reply ; revenue officers are apt to regard exist- 
 ing taxes as objects deserving their defence and protec- 
 tion ; very few dealers in taxed commodities desire the 
 removal of duties on the articles they sell, because the
 
 The Queen^s Taxes. 73 
 
 trade would be thereby opened to men of smaller 
 capital than themselves ; the evidence of farmers is 
 more trustworthy upon the agricultural part of the 
 question than that of corndealers, brewers, and buyers 
 of barley. No free-trader, or disciple of Eichard 
 Cobden, can admit that Mr. Dent's proposed report was 
 deserWng of the support it received. 
 
 It is manifestly inconsistent with the opinions of 
 Lord John Eussell, Mr. C. P. Villiers and Mr. Cobden, 
 as laid before the Committee in the evidence of 
 Mr. Pielden.* 
 
 Spealdng in 18^6, Lord John Eussell said : " If I 
 were Prime Minister when protection to agriculture 
 was abolished, the first tax I would repeal would be 
 the Malt Tax." Mr. Villiers declared in 1839, that 
 ''all those who were injured by the operation of the 
 Corn Laws would be willing, nay, would be anxious 
 to get rid of the Malt Tax." Mr. Cobden said, as late 
 as 1864, " it has often occurred to me to compare the 
 case of the British agriculturist, who, after raising a 
 bushel of barley, is compelled to pay a tax of 60 per 
 cent, before he is permitted to convert it into a 
 beverage for his own consmnption, with what I have 
 seen in foreign countries, and I can really call to mind 
 nothing so hard and so unreasonable. I am quite 
 sure that the cultivators of vineyards and the growers 
 of olives in Prance and Italy, would never tolerate 
 such treatment of their wine and oil." 
 
 * Report of Select Committee on the Malt Tftx. Session 18C8, No. 120, p. 15*2.
 
 74 The Queen's Taxes. 
 
 The most astounding assertion in Mr. Dent's draft 
 report was that which stated that the tax is cheaply 
 collected. It is true that the Chairman of the Board 
 of Inland Eevenue, in his evidence, estimated the cost 
 of collection at 3 per cent., or about £180,000 ; but it 
 must be remembered that the actual cost of collection 
 to the consumer is the amount he is made to pay in 
 excess of the natural price of his beer untaxed, plus 
 the tax itself. In this instance the consumer pays 
 the profits of the malster, the brewer, and the retailer ; 
 the tax being levied at the first stage of manufactm^e, 
 and its pressure being thereby greatly aggravated. 
 The evidence of Mr. Joshua Pielden (now M.P. for 
 the East West Riding) fixes the extra cost of collection 
 at 45 per cent.,* the tax charged by the retailer to 
 the consumer being 31s. 6d. per quarter of malt con- 
 sumed, while the amount received by the Exchequer 
 is only 21s. 8d. Mr. Dudley Baxter quotes Mr. 
 Eielden's evidence, f and calculates that, after making 
 allowance for the fervour of Mr. Eielden's opposition 
 to the tax, the increase may be safely taken at 31 per 
 cent. If Mr. Baxter's estimate is taken in preference 
 to that of Mr. Eielden, it will even then be seen that 
 the actual cost of collection is £2,000,000 in excess of 
 the amount stated by Mr. Stephenson. A revenue 
 collected at such a cost ought, in all conscience, to be 
 collected with ease. In these calculations, moreover, 
 
 * Malt Tax Report, 1868, p. 145 
 t The Taxation of the United Kingdom, p. 138.
 
 The Queen's Taxes. 75 
 
 no account is taken of the extra profits charged hy 
 licensed victuallers for beer sold by the pint or glass. 
 A detailed statement of the cost of Customs and 
 Excise was prepared and issued by the Pinancial 
 Reform Association of Liverpool, in 1852, which 
 entered into minute calculations based upon informa- 
 tion collected from brewers, dealers, and other com- 
 petent authorities. The following table shows the 
 conclusion arrived at in the case of beer. The figures 
 are based upon the returns of 1850 : — 
 
 £ 
 Cost to public free of duty including 
 
 profits 32,558,530 
 
 Net amount of duty on Malt and 
 
 Hops 4,232,931 
 
 Direct and Indirect cost of collecting 
 
 the revenue 9,888,714 
 
 46,080,175 
 In addition the writer estimated £125,745 as the 
 extra charges on malt and hops used in private families. 
 It is evident that the last calculation includes full 
 profits on consumption over the counter in small 
 quantities. It appears that the three estimates vary 
 from 31 to above 200 per cent. ; whichever may be 
 adopted as the standard it cannot be said with accu- 
 racy that this tax is collected at a small expense. 
 
 The imposition of duties upon malt and beer has 
 been defended on the ground that, by restricting con- 
 sumption, they check intemperance. There arc, how- 
 ever, two sides to tliis aspect of the question. Oppo- 
 nents of the Malt Tax urge that it is a powerful incen- 
 tive to the intemperate use of malt liquors in conse- 
 quence of the adulteration;, to wliicli it gives rise.
 
 76 The Queen's Taxes. 
 
 They allege that beer sold at public houses is rarely to 
 be had in a pure state ; that it excites instead of quench- 
 ing thirst ; that this adulteration is mainly caused by the 
 high duty on malt ; and that a large proportion of the 
 evils of intemperance are attributable thereto. It 
 is an ascertained fact that excessive duties upon articles 
 of consumption have a direct tendency to encourage 
 adulteration, which in the case of beer takes the form 
 of increasing the apparent strength of the beverage. It 
 is a question deserving of consideration by all who 
 desire to promote habits of temperance, whether the 
 increased consumption of pure malt liquor would not 
 be far preferable to the consumption of Nux Vomica, 
 Cocculus Indicus, Grains of Paradise, and some thirty 
 other ingredients, which are described by writers on 
 temperance as being largely employed in the adultera- 
 tion of beer. 
 
 It does not appear, from the demand now made for 
 the more stringent regulation of public houses, that 
 the existing laws, although aided by high taxes on 
 beer and spirits, have been effective for their purpose. 
 It may be well, therefore, to reconsider the whole 
 question. It seems to be a curious and anomalous 
 step to endeavour to promote sobriety by making the 
 Government a partner, to so large an extent, in the 
 profits derived from the sale of intoxicating drinks ; it 
 may yet be discovered that such a policy is a mistake, 
 and that the raising of a considerable portion of the 
 National Eevenue from such sources is by no means 
 an effective way of checking intemperance.
 
 The Queen's Taxes. 77 
 
 The amount of duty le^ded on malt during the year 
 1868-9 was as follows :— * 
 
 Duty, Quantities. Amount. 
 
 Per bushel. Bushels. £ 
 Excise. s. d. 
 
 Made from barley... 2 7 ( and 5 per cent ") 49,542,938 ) -, „cyA okk 
 
 „ bereorbigg... 2 Oi additional. ] 47,572 j '^''^^'^^D 
 Customs. 
 
 Isle of Man ... 25 per quarter 32 qrs. 4 bush. 41 
 
 Foreign ... ... 25 per quarter — — 
 
 £6,724,296 
 The Importation of Eoreign Malt was prohibited 
 prior to the year 1850 ; it is now admitted at a duty 
 of 25s. per quarter, the excess over^ the Tax levied on 
 British Malt being an equivalent for the licenses and 
 expenses caused by the supervision of the excise. The 
 quantity of malt imported is very insignificant, and, 
 according to the evidence adduced before the committee, 
 there is considerable variety of opinion as to the 
 probable effect of the repeal of the duty upon the 
 importation of malt from abroad. 
 
 The following table shows the average consumption 
 of malt per head at various periods during the present 
 centm-y * 
 
 1801 
 
 1-20 
 
 1852 
 
 1-50 
 
 1811 
 
 1-60 
 
 1855 
 
 1-24 
 
 1821 
 
 1-38 
 
 1859 
 
 167 
 
 1831 
 
 1-63 
 
 18G2 
 
 1-50 
 
 1838 
 
 1-56 
 
 1864 
 
 1-75 
 
 1840 
 
 160 
 
 1866 
 
 1-82 
 
 1841 
 
 1-35 
 
 1868 
 
 1-73 
 
 * Parliamentary Paper, " Taxes and Imposts," Sess. 1869. No. I'll. 
 
 * Portcrb' Pro'TCris of the Nulion, 1817, p. oOl. Statistical Abstract 11th No. 
 1867, p. 12. Ibiil, 10th No., 1868, pp. 42, 13.
 
 78 The Qiiecii's Taxes. 
 
 The average consumption of each individual in each 
 
 decennary year from 1740 to 1790 was as follows : — * 
 
 1740 378 1770 338 
 
 1750 4-85 1780 394 
 
 1760 4-29 1790 257 
 
 The repeal of the duty on malt, without any equiva- 
 lent, appears to he abandoned by the warmest opponents 
 of the tax. It has powerful rivals for the favour of 
 the Chancellor of the Exchequer in tea, coffee, and 
 sugar, and there seems little prospect of the repeal of 
 the malt tax until the Free Breakfast Table has 
 become an accomplished fact. The Keport of the 
 Select Commitee recommends its commutation into a 
 tax upon the manufacture of beer. Prom this the 
 minority dissent on the ground that such a change 
 would involve considerably more trouble in the collec- 
 tion, and great risk to the revenue, without any suffi- 
 cient advantage. If a substitute for this impost is 
 required it may fairly be looked for in the direction 
 of that tax upon real property in lieu of which one 
 half the Excise was, in the reign of Charles the Second, 
 settled upon the King and his heirs for ever. If the 
 complaints of the agriculturists are well founded, it 
 must be evident that the removal of the duty on malt 
 would have the inevitable result of increasing the 
 rental of the Landowners. They have not suffered 
 any diminution of income in consequence of Eree 
 Trade, nor is Agriculture less prosperous than it was 
 imder Protection, when its distressed condition was the 
 
 Porter's Progi'ess of the Nation 1847, p. 564,
 
 The Queen'' s Taxes. 
 
 79 
 
 topic of constant Parliamentary discussion. On the 
 contrary, both Landlords and Tenants have vastly 
 benefited by every development of the Free Tiadc 
 policy. If the representatives of the County Con- 
 stituencies are in earnest in desiring- tJie repeal of this 
 tax, nothing is more easy of accomplishment. They 
 have merely to consent to a direct tax upon property, 
 which would be amply repaid them in enhanced 
 rentals, if their statements as to the prejudicial effects 
 of the tax upon agricultiu'e have any foundation in 
 fact. 
 
 The following duties are charged upon "products of 
 malt, with their substitutes :"* 
 
 
 Duty 
 
 Quantity 
 
 Amount 
 
 
 £ 
 
 Taxed. 
 
 Collected. 
 
 Customs. 
 
 
 Brls. Galls. 
 
 £ 
 
 Beer, Mum ... 
 
 1 per barrel 
 
 3 30 
 
 4 
 
 Spruce... 
 
 1 per barrel 
 
 1,666 31 
 
 1,667 
 
 Beer and ale of other 
 
 
 
 
 sorts 
 
 1 per barrel 
 
 2,537 21 
 
 Value. 
 £ 
 
 2,533 
 
 Essence of Spruce ... 
 
 10 per cent. ad. val. 7 
 
 1 
 
 
 
 Gallons. 
 
 
 Vinegar 
 
 3d. per gallon 
 
 52,242 
 
 653 
 
 Pickles preserved in 
 
 
 
 
 ditto 
 
 Id. per gallon 
 
 1,816 
 
 8 
 
 Excise. 
 
 
 
 
 Beer relanded, return 
 
 
 BaiTcls. 
 
 
 of drawback on ex- 
 
 
 
 
 portation ... 
 
 
 193 
 
 68 
 £4,934 
 
 Parliamentary Taper, " Taxes and Impoats," Scbsiou 1869, No. -127.
 
 80 The Queen's Taxes. 
 
 CHAPTER 11. 
 
 LICENSES ON TRADES AND PROFESSIONS. 
 
 Licenses have been required in this country mainly 
 in the case of manufacturers of, and dealers in, taxed 
 commodities, for the alleged purpose of protecting the 
 revenue. The levy of Excise duties necessitates super- 
 vision of the processes of manufacture ; hence, in order 
 that all makers of exciseable articles might be known 
 readily, the burden of a license duty was added to that 
 of the tax upon the manufacture itself. In some 
 cases licenses are employed for purposes of police 
 regulation. They have never been imposed in this 
 country, as in France, upon traders generally, owing 
 to the difiiculty of assessing them in an equitable 
 manner. If the license is uniform, it must press much 
 more heavily upon the small than upon the large 
 trader. Assessment, according to the extent of busi- 
 ness transacted, or the size of the premises occupied, is 
 difficult, and, even were that plan adopted, such a tax 
 would necessarily partake of the nature of a tax on 
 profits.
 
 The Queen^s Taxes. 81 
 
 The licenses now levied upon manufacturers are as 
 follows :* — 
 
 Manufacturers. 
 
 Duty. 
 
 No. of Licenses. Amoi 
 
 mt. 
 
 
 £ s. d. 
 
 
 £ 
 
 s. 
 
 Brewers 
 
 various 
 
 35,^64 
 
 355,672 
 
 5 
 
 Maltsters 
 
 various 
 
 5,494 
 
 15,425 
 
 8 
 
 Manufacturers of Tobacco and 
 
 
 
 
 
 Snuff 
 
 various 
 
 597 
 
 7,512 
 
 15 
 
 Distillers of Spirits ... 
 
 10 10 
 
 142 
 
 1,491 
 
 
 
 Eeetifiers of ditto 
 
 10 10 
 
 163 
 
 1,711 
 
 10 
 
 Makers of Methylated Spirits 
 
 10 10 
 
 9 
 
 94 
 
 10 
 
 Papermakers ... 
 
 4 4 
 
 408 
 
 1,713 
 
 12 
 
 Soapmakers ... 
 
 4 4 
 
 308 
 
 1,293 
 
 12 
 
 Roasters of Malt 
 
 20 
 
 21 
 
 420 
 
 
 
 Vinegar Makers 
 
 5 5 
 
 63 
 
 330 
 
 15 
 
 Makers of Playing Cards 
 
 1 
 
 14 
 
 14 
 
 
 
 Makers of Stills in Scotland 
 
 
 
 
 
 and Ireland 
 
 10 6 
 
 18 
 
 9 
 
 9 
 
 12 
 
 6 
 
 12 
 
 6 
 
 1 7 
 
 6 
 
 2 
 
 
 
 The license duties upon brewers are levied according 
 to the number of barrels brewed, the following being 
 the present scale of duties : — 
 
 Brewers of black or spruce beer, various rates 
 from 10s. 6d. to £78 15s. Od. according to 
 the quantities brewed. 
 
 Brewers of beer, other than black or spruce, 
 beginners ... 
 
 Quantity brewed not exceeding 20 barrels .. 
 
 Exceeding 20 and not exceeding 50 barrels .. 
 „ 50 100 „ 
 
 100 1,000 for every 
 50 or fractional part of 50 barrels over 
 100 barrels 15 
 
 Exceeding 1,U00 and not exceeding 50,000 in 
 addition to the above, for every 50, or 
 fractional part of 50 barrels over 1,000 ... 14 
 
 Exceeding 50,000 barrels, in addition to the 
 foregoing, for every 50 or fractional part 
 of 50 barrels 12 6 
 
 Brewers using sugar ... ... ... ... 10 
 
 Retail brewers under Act 5, Geo. IV., c 54. ... 5 10 3 
 
 * Parliamentary Paper, " Taxes and Imposts." Seesion 1869, No. 427. 
 
 G
 
 S2 The Queen's Taxes. 
 
 The present scale was adopted in the year 1862, when 
 the duty on hops was repealed, an addition being then 
 made to the brewer's license, calculated at the rate of 
 3d. per barrel of 36 gallons, which sum was considered 
 the minimum duty paid by the brewer upon hops. At 
 the same time the scale of licenses upon small brewers 
 was revised, it being found to press more heavily upon 
 them than upon those who had larger establishments. 
 
 The substitution of the additional license duty for 
 the tax on hops, removed an element of uncertainty 
 from the annual budgets of the Chancellor of the 
 Exchequer. It will be seen from the table on the 
 next page, which was handed in to the Malt Tax 
 Committee by Mr. Curling of the Inland Hevenue, 
 that during the ten years preceding the repeal of 
 the duty it fluctuated from £728,183 to £69,767, 
 and that during the same period the duty on brewers' 
 licenses was stationary. Since the year 1862, the 
 revenue from that source has steadily increased. * 
 
 The diminished receipt since the repeal of the hop 
 duty is owing partly to the fact that private brewers 
 pay no license duty, and have thus been relieved 
 entirely from taxation on account of hops ; and partly 
 to the calculation of 3d. per barrel being made upon 
 the quantity of hops used in ordinary brewing ; so 
 that brewers of bitter beer have been relieved entirely 
 from any duty upon the extra hops they use. 
 
 Malt Tax Eepoit, 18fi7, p. 141.
 
 The Queen^s Taxes. 
 
 83 
 
 Year 
 
 1852 
 1853 
 1854 
 1855 
 1856 
 1857 
 1858 
 1859 
 1860 
 1861 
 1862 
 1863 
 1864 
 1865 
 1866 
 
 Duty on 
 
 Brewers' 
 
 Licenses. 
 
 £ 
 
 80,611 
 
 82,342 
 
 79,887 
 
 76,646 
 
 78,167 
 
 79,493 
 
 78,464 
 
 80,662 
 
 80,928 
 
 77,814 
 
 302,403 
 
 353,541 
 
 378,092 
 
 384,966 
 
 443,080 
 
 Hop 
 
 Duty. 
 
 £ 
 447,143 
 277,807 
 
 86,422 
 728,183 
 488,850 
 417,526 
 464,842 
 599,346 
 
 69,767 
 149,709 
 
 Total 
 Brewers' 
 Licenses 
 & Hop Duty. 
 £ 
 527,754 
 360,149 
 166,309 
 804,829 
 567,017 
 497,019 
 543,306 
 680,008 
 150,695 
 227,523 
 
 Total 
 Brewers ' 
 
 Licenses. 
 & 
 
 302,403 
 353,541 
 378,092 
 384,966 
 443,080 
 
 4,524,609 1,862,082 
 452,461 
 
 372,416 
 
 Total 2,657,096 3,729,595 
 Average of ten years 
 Average of five years 
 
 It was proposed by some witnesses before the Malt 
 Tax Committee to increase the license duty upon 
 brewers, as a substitute for the malt tax. This 
 suggestion was met by the revenue officers with the 
 assertion, that it would be impossible to guarantee the 
 collection of the duty, if the license was increased to 
 such an extent, without completely altering all their 
 arrangements, and subjecting the brewers to a more 
 thorough supervision. It was also considered that 
 the difficulty of imposing a license upon private
 
 HI 
 
 The Queen's Taxes. 
 
 brewers, an illustration of which was aiforded by the 
 failure of that proposal when the hop duty was 
 repealed, would render it impossible to carry through 
 Parliament such a commutation of the duty on malt. 
 
 The following is the scale of license duty paid by 
 malstcrs :* — 
 
 Beginners, with a surcharge according to 
 the quantity made... 
 
 £ 8. d. 
 
 ... 
 
 ... 
 
 7 lOi 
 
 50 quarters 
 
 7 lOi 
 
 100 
 
 
 15 9 
 
 150 
 
 1 
 
 3 7i 
 
 200 
 
 1 
 
 11 6 
 
 250 
 
 1 
 
 19 4^ 
 
 300 
 
 2 
 
 7 3 
 
 350 
 
 2 
 
 15 1\ 
 
 400 
 
 3 
 
 3 
 
 450 
 
 3 
 
 10 lOL 
 
 500 
 
 3 
 
 18 9 
 
 550 
 
 4 
 
 6 7i 
 
 550 
 
 4 
 
 14 6 
 
 5 
 
 
 2 7i 
 
 Quantity made exceeding 
 Bye Maltsters, not exceeding 
 
 The following are the licenses paid by manufacturers 
 of tobacco and snuif :t — 
 
 £ s. d. 
 Beginners with a surcharge according to 
 
 quantity manufactured 
 Quantity „ not exceeding 20,000 lbs 
 
 40,000 
 
 60,000 
 
 80,000 
 
 „ 100,000 
 
 „ „ exceeding 100,000 
 
 5 
 
 5 
 
 
 
 5 
 
 5 
 
 
 
 10 
 
 10 
 
 
 
 15 
 
 15 
 
 
 
 21 
 
 
 
 
 
 26 
 
 5 
 
 
 
 31 
 
 10 
 
 
 
 * Parliamentary Paper, " Taxes and Imposts." Session 1869, No. 427, 
 
 t Ibid.
 
 The Queen's Taxes. 85 
 
 The brewer's license is intended to act as a tax on 
 beer, and there is no doubt it is paid by the consumer, 
 like other duties on commodities. It is difficult, how- 
 ever, to understand why tobacco manufacturers and 
 malsters, both of whose products are heavily taxed, 
 should pay a graduated scale of license duties, while 
 distillers and rectifiers of spirits pay one uniform 
 license, whatever the extent of their business. If it 
 be urged in reply to this objection, that the larger the 
 business the greater the supervision required for the 
 protection of the revenue, the tobacco manufacturer 
 and malster may fairly answer that that is no concern 
 of theirs. They are already sufficiently burdened in 
 their business by the imposition of a heavy duty upon 
 their manufacture, which renders it necessary for 
 them to provide a capital out of all proportion to the 
 extent of their business. Makers of soap and paper 
 may also enquire why they should be specially 
 selected to pay license duties, from which other 
 manufactm'crs are exempt. 
 
 BEER, SPIRIT, AND WINE DEALERS AND RETAILERS. 
 
 Licenses for the sale of intoxicating drinks being 
 levied not for the collection of a revenue, but mainly 
 as a matter of police regulation, it is not intended to 
 enter upon the discussion of them in this volume. 
 Even were there space sufficient for the purpose, such 
 a controversy would be somewhat out of place in a 
 work dealing solely with the collection of the revenue. 
 It appears tolerably certain that a great change in the 
 system of licensing public houses is imminent ; the
 
 86 The Queen's Taxes. 
 
 pressing nature of the problem is admitted by men of 
 all parties, and whatever may be the proposals made, 
 considerations of the amount of revenue to be derived 
 will have but little weight in the discussion. The 
 following table shows the existing scale of licenses, 
 the number issued, and the total gross sum received 
 from this source.* 
 
 Total Gross Sum 
 Description of License. Bate. Number, Produced. 
 
 £ s. d. £ s. d. 
 
 Beer Dealers : — 
 
 Sellers of strong beer in 
 quantities not less than 
 4i gallons, or two dozen 
 
 reputed quart bottles . . 3 6 If 5,952 19,684 19 llf 
 
 Sellers of strong beer to 
 retaU ; not to be con- 
 sumed on the premises 12^ 3,820 4,209 19 2 
 Beer Retailers : — 
 
 Publicans whose pi-emises 
 are rated under £20 per 
 annum in England and 
 
 Ireland 12 i 41,923 46,202 12 9^ 
 
 Publicans rated at £20 or 
 
 upwards 3 6 IJ 43,491 143,837 8 5i 
 
 Retailers of beer not to be 
 drunk on the premises 
 
 in England and Wales 1 2 i 3,460 3,813 4 2 
 
 Retailers of beer to be 
 
 drunk on the premises.. 3 6 If 49,130 162,487 4 9^ 
 
 Retailers of cyder or perry 
 
 only 1 2 i 368 405 11 4 
 
 Retailers of beer rated 
 
 under £10 in Scotland 2 10 299 747 10 
 
 Retailers of beer rated at 
 
 £10 or upwards .... 4 4 274 1,150 16 
 
 Retailers of table beer only 5 2,720 680 
 
 Spirit Dealers : — 
 
 Dealers in spirits, to sell 
 
 not less than two gals. 10 10 5,894 61,887 
 
 Dealers in spmts, to retail 
 
 foreign liqueurs .... 220 6 12 12 
 
 Dealers in spu-its, to retail 
 spirits, not less than one 
 quart bottle 3 3 2,894 9,116 2 
 
 * Parliamentary Paper " Taxes and Imposts." Session 1869, No. 427.
 
 The Queen^s Taxes. 
 
 87 
 
 Description of License. 
 
 ' 
 
 Rate. 
 
 
 
 £ 
 
 s. 
 
 d. 
 
 
 Spirit Retailers : — 
 
 
 
 
 
 England and Ireland : 
 
 
 
 
 
 Retailers of spirits whose 
 
 
 
 
 
 premises are rated — 
 
 
 
 
 
 under £10 
 
 2 
 
 4 
 
 1 
 
 ^ 
 
 At £10 and under £20 
 
 4 
 
 8 
 
 2^ 
 
 1 
 
 £20 „ £25 
 
 6 
 
 12 
 
 H 
 
 1 
 
 £25 „ £30 
 
 7 
 
 14 
 
 4 
 
 f 
 
 £30 „ £40 
 
 8 
 
 16 
 
 4J 
 
 £40 „ £50 
 
 9 
 
 18 
 
 H 
 
 
 £50 or upwards 
 
 11 
 
 
 
 6 
 
 J 
 
 Scotland only : 
 
 
 
 
 
 Retailers of spirits whose 
 
 
 
 
 
 premises are rated — 
 
 
 
 
 
 under £10 
 
 4 
 
 4 
 
 
 
 1 
 
 At £10 and under £20 
 
 5 
 
 5 
 
 
 
 1 
 
 £20 „ £25 
 
 9 
 
 9 
 
 
 
 1 
 
 £25 „ £30 
 
 10 
 
 10 
 
 
 
 \ 
 
 £30 „ £40 
 
 11 
 
 11 
 
 
 
 £40 „ £50 
 
 12 
 
 12 
 
 
 
 1 
 
 £50 or upwards . . 
 
 13 
 
 13 
 
 
 
 J 
 
 Ireland only : 
 
 
 
 
 
 Retailers of spirits being 
 
 
 
 
 
 licensed to sell tea, 
 
 
 
 
 
 coffee, &o., whose pre- 
 
 
 
 
 
 mises are rated — under 
 
 
 
 
 
 £25 
 
 9 
 
 18 
 
 5i 
 
 "\ 
 
 At £25 and under £30 
 
 11 
 
 
 
 6 
 
 1 
 
 £80 „ £40 
 
 12 
 
 2 
 
 H 
 
 1- 
 
 £40 „ £50 
 
 13 
 
 4 
 
 7 
 
 1 
 
 £50 or upwards . . 
 
 14 
 
 6 
 
 74 
 
 J 
 
 Retailers of Methylated 
 
 
 
 
 
 Spirits 
 
 
 
 10 
 
 
 
 
 Wine Dealers: — 
 
 
 
 
 
 Dealers in foreign wine, 
 
 
 
 
 
 not licensed to retail 
 
 
 
 
 
 beer or spirits 
 
 10 
 
 10 
 
 
 
 
 Dealers in foreign wine. 
 
 
 
 
 
 licensed to retal beer but 
 
 
 
 
 
 not spirits 
 
 4 
 
 8 
 
 2i 
 
 
 Dealers in foreign wine. 
 
 
 
 
 
 licensed to rotaii beer 
 
 
 
 
 
 and spirits 
 
 2 
 
 4 
 
 1 
 
 
 Scotland only : 
 
 
 
 
 
 Grocers selling wine not to 
 
 
 
 
 
 be consumed on the 
 
 
 
 
 
 premises, having the 
 
 
 
 
 
 justices' certificate to 
 
 
 
 
 
 retail beer but not spiritB 
 
 4 
 
 8 
 
 21 
 
 
 Number. 
 
 Total Gross Sum 
 Produced. 
 £ s. d. 
 
 83,984 
 
 539,208 9 7i 
 
 12,022 
 
 84,571 4 
 
 434 
 
 4,G99 14 Bi 
 
 1,180 
 
 590 
 
 3,639 
 
 38,209 10 
 
 69 
 
 304 4 10 i 
 
 43,779 
 
 96,496 4 3 
 
 24 
 
 105 16 6
 
 88 
 
 The Queen's Taxes. 
 
 Description of License. 
 
 Grocers Bellinf^f wine not to 
 be consumed on the pre- ] 
 mises, having the jus-^ 
 tices' certificate to retail.! 
 
 spirits only 
 
 Grocers selling wine not to 
 be consumed on the pre- 
 mises, having the jus- 
 tices' certificate to retail 
 beer and spirits 
 England* and Ireland: 
 Refreshment-housekeepers 
 selling wine to be con- 
 sumed on the premises — 
 If rated under £50 
 If rated at £50 or upwards 
 Retailers of wine not to be 
 consumed on the pre- 
 mises — 
 If rated under £50 . . 
 If rated at £50Jor upwards 
 Passage vessels for sale of 
 liquors and tobacco 
 
 Rate 
 £ s. d. 
 
 Number. 
 
 Total Gross Sum 
 Produced. 
 £ s. d- 
 
 2 4 1 
 
 110 
 
 2,050 
 
 2,153 
 821 
 
 2,098 
 608 
 
 374 
 
 4,518 10 10 
 
 6,781 19 
 4,310 5 
 
 4,405 16 
 1,915 4 
 
 392 14 
 
 The remaining licenses levied upon trades and pro- 
 fessions are the following : — * 
 
 
 Duty. 
 
 
 
 
 
 
 £ s. d. 
 
 
 
 No. 
 
 £ B. 
 
 Eefreshment Houses 
 
 
 
 
 
 
 rated under £30 
 
 10 6 
 
 
 
 2,812 
 
 1,476 G 
 
 At £30 and upwards 
 
 110 
 
 
 
 3,595 
 
 3,774 15 
 
 Dealers in Tobacco 
 
 5 3 
 
 
 
 284,124 
 
 74,582 11 
 
 Dealers in Sweets, to 
 
 
 
 
 
 
 sell not less 2 gals. 
 
 5 5 
 
 
 
 123 
 
 645 15 
 
 Eetailers of Sweets... 
 
 1 2 Oi 
 
 
 
 10,441 
 
 11,506 17 
 
 Dealers in Eoasted 
 
 
 
 
 
 
 Malt 
 
 10 
 
 
 
 12 
 
 120 
 
 Hawkers and Pedlars 
 
 various from £2 in Grt. 
 Britain £2 2s. Ireland 
 
 ] 
 
 20,740 
 
 52,095 
 
 Appraisers & House 
 
 
 
 
 
 
 Agents ... 
 
 2 
 
 
 
 3,922 
 
 7,844 
 
 * Parliamentary Paper " Taxes and Imposts." Sess. 1869. No. 427.
 
 The Queen's Taxes. 
 
 89 
 
 Auctioneers 
 Pawnbrokers : — ... 
 
 In London 
 
 Elsewhere 
 Dealers in Plate : — 
 
 To sell 2 oz. gold 
 
 or 30 oz. silver & 
 
 upwards ... 
 
 Tosell2dwts. gold 
 
 or more than 5 dwts. 
 
 silver, and under 
 
 2 oz. gold and 30 
 
 oz. silver 
 Sellers of Playing 
 
 Cards 
 Medicine Vendors : 
 
 In London and 
 
 Edinburgh 
 
 Other cities, boros', 
 
 or towns corporate 
 
 in Gt. Britain ... 
 
 Elsewhere in Gt. 
 
 Britain ... 
 Chemists and others 
 
 using stills 
 Stamps : — 
 Attornies, &c. 
 
 London, Edin- 
 
 boro', & Dublin... 
 
 Elsewhere 
 
 Bankers 
 
 Conveyancers 
 
 Drivers of Metropoli- 
 tan public carriages 
 Taxes : — 
 Horao dealers 
 
 Duty. 
 £ s. d. 
 10 
 
 15 
 710 
 
 515 
 
 2 
 
 9 yearly ") 
 6 0,, 5 
 Half only for the 
 first three years of 
 practice. 
 30 yearly 
 same as Attornies. 
 
 5 
 
 Carrying on business 
 within the bounds of 
 mortality £27 lOs. 
 Elsewhere 13 158. 
 
 No. £ s. 
 
 5,276 52,760 
 
 3,918 33,067 10 
 
 9,521 29,716 
 
 8,748 1,093 10 
 
 12,271 6,842 10 
 
 839 419 10 
 
 13,475 90,301 10 
 
 1,172 35,160 
 72 517 10 
 
 12,144 3,186 
 
 1,199} 1''^-*^ «
 
 90 The Queen's Taxes. 
 
 It is difficult to understand the raison d'etre of some 
 of the above licenses. The only class who have 
 hitherto made any complaint are the attorneys, hut as 
 yet they have been unsuccessful in obtaining any 
 relief. The multiplication of small and comparatively 
 unproductive taxes is no doubt attended with increased 
 cost of collection. It would seem, moreover, just, 
 unless there are any special reasons for continuing 
 any particular licenses, that the system should either 
 be extended to all trades and professions, or abrogated. 
 At some future time, when more serious and injurious 
 burdens have been removed, it is probable that the 
 number of license duties will be materially reduced.
 
 The Qtieen's Taxes, 91 
 
 CHAPTEH XII. 
 
 PROBATE, LEGACY, AND SUCCESSION DUTIES. 
 
 Stamp duties upon grants of probate and adminis- 
 tration were first imposed in England in 1694, at the 
 rate of 5s. upon every grant of probate or administra- 
 tion of property above £20 in value. The duty was 
 increased four years afterwards to 10s., at which rate 
 it continued for above 85 years, until August 1779, 
 when an ascending scale was imposed, reaching as 
 far as property of the value of £300 ; the scale was 
 increased in 1783, and extended as far as property 
 of the value of £1,000. The same process was repeated 
 in 1789, in 1795, and in 1801, when the rates of duty 
 were largely increased, and the ascending scale of duty 
 extended as far as property of the value of £100,000. 
 In 1804 the scale of duties was again revised, and 
 extended so as to reach property of the value of 
 £500,000, and in 1815 the present scale of duties was 
 adopted, stopping, however, at £] ,000,000. It was 
 extended to property above that amount iji 1859. 
 Prior to the year 1815 the duty on probates and letters 
 of administration was the same ; the duty on tlic 
 latter was then increased in the proportion of 3 to 2,
 
 92 
 
 The Queen^s Taxes. 
 
 thus taxing the property of an intestate one-third more 
 than that of a testator.* 
 
 The prohate duty was first imposed in Ireland in 
 1774 at 5s. for each grant of probate or administration 
 exceeding £30 in value. The amount of the tax was 
 subsequently increased by diflPerent Acts until 1806, 
 but at a lower rate than in England. In 1842 the 
 English rates were imposed in Ireland, but only tempo- 
 rarily ; in 1853 they were made permanent. No tax of 
 this description existed in Scotland until 1804, when 
 the same rate was imposed as in England, but practically 
 the tax was not equally paid in both countries. The 
 various alterations made in the rate of probate duty 
 are a test of the gradually increasing wealth of the 
 community. According to the successive Probate Tax 
 Acts, the probable limit of accumulation of personality 
 appears to have been as follows for each of the specified 
 periods : — 
 
 1779 to 1783 
 
 300 
 
 1783 „ 1789 
 
 1,000 
 
 1789 „ 1795 
 
 5,000 
 
 1795 „ 1801 
 
 10,000 
 
 1801 „ 1804 
 
 100,000 
 
 1804i „ 1815 
 
 500,000 
 
 1815 „ 1859 
 
 1,000,000 
 
 _ 1 J • 
 
 In 1859 the possibility of accumulations exceeding 
 £1,000,000 was first recognised. The earlier years 
 are in all probability no adequate test of accumu- 
 lation, but since 1801 the scale appears to have been 
 
 First Inland BevenUe Report, 1857, App. p. 22.
 
 The Queen's Taxes. 93 
 
 extended as the number of large fortunes increased. 
 The number of probate stamps issued of the " upper 
 value" (£1,000,000) from 1815 to 1860 was twelve. 
 Prom 1815 to 1825 none were required. From 1825 
 to 1855 there were issued eight; and from 1855 to 
 1860 four, the last being issued in June 1859, just 
 before the extension of the scale.* 
 
 The following is the present scale of duties : — § 
 
 
 
 
 With Will 
 
 Without a 
 
 
 Value 
 
 
 annexed. 
 
 Will annexed. 
 
 £ 
 
 
 £ 
 
 £ s. 
 
 £ s. 
 
 Above 20 and under 50 
 
 
 10 , 
 
 ,, 20 
 
 jj 
 
 100 
 
 10 
 
 
 of 50 
 
 
 100 
 
 
 1 
 
 100 
 
 }) 
 
 200 
 
 2 
 
 3 
 
 200 
 
 » 
 
 300 
 
 5 
 
 8 
 
 300 
 
 n 
 
 450 
 
 8 
 
 11 
 
 450 
 
 n 
 
 600 
 
 11 
 
 15 
 
 600 
 
 yy 
 
 800 
 
 15 
 
 22 
 
 800 
 
 » 
 
 1,000 
 
 22 
 
 30 
 
 1,000 
 
 5> 
 
 1,500 
 
 30 
 
 45 
 
 1,500 
 
 » 
 
 2,000 
 
 40 
 
 60 
 
 2,000 
 
 JJ 
 
 3,0U0 
 
 60 
 
 75 
 
 3,000 
 
 )J 
 
 4,000 
 
 60 
 
 90 
 
 4,000 
 
 » 
 
 5,000 
 
 80 
 
 120 
 
 5,000 
 
 I) 
 
 6,000 
 
 100 
 
 150 
 
 6,000 
 
 )) 
 
 7,000 
 
 120 
 
 180 
 
 7,000 
 
 >J 
 
 8,000 
 
 140 
 
 210. 
 
 8,000 
 
 >> 
 
 9,000 
 
 160 
 
 240 
 
 9,000 
 
 >> 
 
 10,000 
 
 180 
 
 270 
 
 10,000 
 
 >> 
 
 12,000 
 
 200 
 
 300 
 
 12,000 
 
 >> 
 
 14,000 
 
 220 
 
 330 
 
 14,000 
 
 J> 
 
 16,000 
 
 250 
 
 375 
 
 16,000 
 
 » 
 
 18,000 
 
 280 
 
 420 
 
 18,000 
 
 » 
 
 20,000 
 
 310 
 
 465 
 
 20,000 
 
 » 
 
 25,000 
 
 350 
 
 525 
 
 * Fourth Inland Revenue Report, 18G0, p. 17. 
 • First Inland Revenue Report, 1857, App. p. 101. Act 22 & 23 Vic, c. 36., s, 1.
 
 94 The Queen's Taxes. 
 
 
 
 
 With WiU 
 
 Without a 
 
 
 Value 
 
 annexed. 
 
 WUl annexed. 
 
 £ 
 
 
 £ 
 
 £ 
 
 £ 
 
 25,000 
 
 )> 
 
 30,000 
 
 400 
 
 600 
 
 30,000 
 
 j> 
 
 35,000 
 
 450 
 
 675 
 
 35,000 
 
 » 
 
 40,000 
 
 525 
 
 785 
 
 40,000 
 
 j> 
 
 45,000 
 
 600 
 
 900 
 
 45,000 
 
 5) 
 
 50,000 
 
 675 
 
 1,010 
 
 50,000 
 
 )> 
 
 60,000 
 
 750 
 
 1,125 
 
 60,000 
 
 »> 
 
 70,000 
 
 900 
 
 1,350 
 
 70,000 
 
 J> 
 
 80,000 
 
 1,050 
 
 1,575 
 
 80,000 
 
 5> 
 
 90,000 
 
 1,200 
 
 1,800 
 
 90,000 
 
 5> 
 
 100,000 
 
 1,350 
 
 2,025 
 
 100,000 
 
 )» 
 
 120,000 
 
 1,500 
 
 2,250 
 
 120.000 
 
 )) 
 
 140,000 
 
 1,800 
 
 2,700 
 
 140,000 
 
 )J 
 
 160,000 
 
 2,100 
 
 3,150 
 
 160,000 
 
 5) 
 
 180,000 
 
 2,400 
 
 3,600 
 
 180,000 
 
 J> 
 
 200,000 
 
 2,700 
 
 4,050 
 
 200,000 
 
 »J 
 
 250,000 
 
 3,000 
 
 4,500 
 
 250,000 
 
 >) 
 
 300,000 
 
 3,750 
 
 5,625 
 
 300,000 
 
 )' 
 
 350,00rt 
 
 4,500 
 
 6,750 
 
 350,000 
 
 5» 
 
 400,000 
 
 5,250 
 
 7,875 
 
 400,000 
 
 )J 
 
 500,000 
 
 6,000 
 
 9,000 
 
 500,000 
 
 )) 
 
 600,000 
 
 7,500 
 
 11,250 
 
 600,000 
 
 ') 
 
 700,000 
 
 9,000 
 
 13,500 
 
 700,000 
 
 )! 
 
 800,000 
 
 15.000 
 
 15,750 
 
 800,000 
 
 )) 
 
 900,000 
 
 12,000 
 
 18,000 
 
 900,000 
 
 )J 
 
 1,000,000 
 
 13,500 
 
 20,250 
 
 1,000,000 am 
 
 d upwards, then 
 
 
 
 for every £100,000, or por- 
 
 
 
 tion thereof, 
 
 an 
 
 additional 
 
 
 
 duty of 
 
 .. 
 
 ... 
 
 1,5J0 
 
 2,250 
 
 There are several inequalities in the assessment of 
 this duty, which render it peculiarly deserving the 
 early consideration of the Chancellor of the Exche- 
 quer. Sixteen years since, Mr. Gladstone, in the 
 Financial Statement of 1853, admitted that the pro- 
 bate duty reqmred reform, and expressed a hope that 
 in a future and early year it would come under 
 consideration. The public has waited with patience
 
 The Queen's Taxes. 95 
 
 for the practical realisation of this anticipation, but 
 with the exception of the extension of the duty to 
 properties beyond £1,000,000 in value nothing has yet 
 been done. 
 
 The most obvious grievance connected with this tax 
 is the fact that it is exacted from personal property 
 only, no probate duty being levied upon real estate, 
 whatever its value. The personalty of the struggling 
 tradesman is taxed ; the more valuable and permanent 
 real estate of the wealthy landed proprietor escapes. 
 It is difficult to imagine on what grounds the exemp- 
 tion of the latter can be justified ; it certainly is not 
 in accordance with those principles of equity which 
 should regulate the action of Government. The next 
 grievance is the assessment of large estates at a lower 
 rate than small ones. For example, the probate duty 
 upon £1,000 is 3 per cent, upon £10,000 it is 2 per 
 cent, and upon £50,000 it is only 1\ per cent. This 
 mode of framing a graduated scale imposes the heaviest 
 burden upon those who have the least means ; it is an 
 injustice towards the inheritors of the smaller legacies. 
 Another grievance is the payment of probate upon the 
 full amount of the property, including all debts OAving 
 to, " without deducting or allowing anything on 
 account of the debts due and owing from the deceased."* 
 The excess of duty paid is to be returned if claimed 
 within three years, or within such further time as the 
 Lords of the Treasury may consider reasonable. Mr. 
 
 • 55 Geo. III. c. ISl, Boc. 38.
 
 96 The Queen's Taxes. 
 
 Mc Culloch said with justice in 1815*, that "in the case 
 (and there must be many such) of a small tradesman 
 whose debts and credits nearly balance, and are (say) 
 about £2,000, it is surely a wanton and most oppres- 
 sive misapplication of a tax on successions to make his 
 family provisionally disburse £60 for the privilege of 
 winding up his affairs." This case moreover assumes 
 that the duty paid is returned, which in many instances 
 it is not, the trouble and expense of obtaining it being 
 frequently equal to, if not greater than, the actual 
 amount of the duty. The author is cognizant of an 
 instance of this kind in which the probate duty was 
 actually paid by a creditor, who was also the executor ; 
 the Solicitor acting on his behalf informing him that 
 the expense of recovering the duty would absorb the 
 amount recovered. The Commissioners of Inland 
 Revenue refer to this question, in their report for the 
 year 1865 — 6,t at some length, but strongly protest 
 against any change in the mode of assessing these 
 duties on the ground that it would open the door to 
 fraud. In corroboration of this opinion they refer to 
 attempts, which they allege have been made by execu- 
 tors, to include fictitious debts in claims for retmm of 
 probate duty. It is, however, a question deserving of 
 some consideration at their hands whether equity on 
 the part of the State would not stimulate honesty on 
 the part of the taxpayer. Danger to the revenue is 
 the invariable stock objection urged against improve- 
 ment of every description ; previous experience has 
 
 * Taxation and the Funding System, 1845, p. 294. 
 t Tenth Inland Revenue Revenue Report, 1866, pp.29 — 32,
 
 The Queen^s Taxes. 97 
 
 repeatedly demonstrated its futility. Ue venue autliori- 
 ties are slow to act upon the motto, fiat Just it la mat 
 caelum ; if they err at all it is on the side of excessive 
 caution, especially if change is likely to give extra 
 trouble. In this as in previous instances they will no 
 doubt find themselves quite capable of protecting 
 the revenue, whenever the change they now protest 
 against is demanded by public opinion. 
 
 Equally unjustifiable is the increased rate imposed 
 upon letters of administration. The absence of a will, 
 which in itself is generally a source of difiiculty and 
 trouble to the survivors of the deceased, is thus seized 
 upon by the law as an occasion of extorting an addi- 
 tional amount of taxation. It may be urged in 
 defence of this imposition that the fact of the increased 
 tax will induce people to make their wills. The 
 punishment, however, does not fall upon those who 
 have neglected this duty, but upon innocent sufferers 
 from the neglect. It does not appear that there is any 
 reason for an increased charge on account of extra 
 trouble caused in the collection of the duty ; the 
 difference is not founded either on reason or justice, 
 and it ought in common with the exemption of real 
 property to be at once abolished. If probate duties are 
 levied at all, every description of property should be 
 made to contriljute in a fair and equitable manner. 
 
 The legacy duty was first imposed in Great 
 Britain in 1780, when stamjis were required on 
 receipts for legacies ; tlie amount was increased in 
 1783, and again in 1789. The charge of this duty 
 on the receipt was diicovcred to be a mistake, so far 
 
 II
 
 98 The Queen's Taxes. 
 
 as making it a source of revenue was concerned, in 
 consequence of a case where it was judicially held 
 that, no receipt having been given, no duty was 
 payable. It was therefore necessary to amend the 
 law in order to make the tax a productive source of 
 revenue; and an act was passed in 1796 by which 
 the duty was imposed upon the legacy instead of the 
 receipt. In 1804 the rates of duty were increased ; in 
 1805 the tax was extended to children and their 
 issue, and increased in the case of strangers in blood ; 
 duties were also imposed upon legacies charged upon 
 real estate, or paid from monies arising from real estate 
 directed by the will to be sold. In 1815 the rates of 
 duty were further increased ; no change has been made 
 since that year. In Ireland it was first imposed in 
 1785 ; it was continued and increased by several subse- 
 quent acts, but always at a lower rate than in Great 
 Britain, until 1842, when the rates were made uniform 
 throughout the United Kingdom.* 
 
 The collection of the legacy duty from personal 
 property only was the subject of frequent complaints 
 on the part of the trading aiid manufacturing interests. 
 This injustice was brought before the notice of Parlia- 
 ment with great perseverance by the late Mr. Williams ; 
 but for a long time his efforts were unattended by any 
 apparent success. At length, however, in 1853 Mr. 
 Gladstone introduced and carried through Parliament 
 a succession duty on real estate. It was the intention 
 
 First Inland Revenue Report, 1857. App. p. xxiii.
 
 The Queen's Taxes. 99 
 
 of Mr. Pitt, when he introduced the legacy duty act of 
 179G, to tax both real and personal estate. Unfortu- 
 nately the two duties were embodied in separate bills, 
 the result being that Parliament passed the legacy 
 duty on personal property only, while the bill for 
 charging duties on real estate being strongly opposed, 
 was ultimately withdrawn, in consequence of one of 
 its last stages being carried only by the casting vote of 
 the speaker. The injustice thus perpetrated was per- 
 petuated for fifty seven years, and then only partially 
 redressed. 
 
 The following are the existing rates of duty : — * 
 
 Where the Legacy- 
 shall be £20 
 or more. 
 Per cent. 
 
 To children and descendants ... 1 
 
 Father or mother, or any lineal 
 
 ancestor ... ... ... ... 1 
 
 Brother or sister, or descendants ... 3 
 
 Brother or sister of a father or 
 
 mother, or their descendants ... 5 
 
 Brother or sister of a grandfather or 
 
 grandmother, or their descendants 6 
 
 Any other collateral relatives, or 
 
 strangers in blood ... ... 10 
 
 The rates of duty upon legacies and successions, 
 although nominally the same, are actually different; 
 upon personal property the tax is assessed on the full 
 value, while upon real estate it is assessed on the life 
 interest only of the legatee. The difference was 
 forcibly illustrated by Mr. Bright, in 185 9, f in the 
 
 * First Inland Revenue Report, 1857. App. p. ciii. 
 t SpoechcB, edited liy JamcB E. TlioroM llogor?, IBOH. Vol, 2, pp. 40 1- 8.
 
 100 The Queeu*s Taxes. 
 
 House of Commons. After stating that lie had had a 
 small property left him by a stranger in admiration of 
 his public services, which he sold for £1,400 or £1,500, 
 he added " when I came to pay my legacy duty — that 
 is, the succession tax — I was greatly astonished at the 
 small sum I had to pay. My age was taken ; an 
 estimate of the annual value of the property was made ; 
 and I was told that I had to pay something like £40 
 or £50. If the property liad been in the funds, or 
 invested in any other of the modes to which I have 
 referred (viz. railways, ships, machinery, or trade), I 
 should have had to pay £140 at least." Mr. Bright 
 adduced another instance in which a property, value 
 £32,000, was left to a member of the House, on which 
 the duty, had it been in personalty, would have been 
 £3,200 ; but being real estate the amount paid was only 
 £700. He then appealed to the House in the follow- 
 ing forcible words : — " Is it consistent with fairness — 
 with our personal honour — for after all that is a quality 
 which enters into these questions — with our duty 
 to the public, that we, sitting here as a representative 
 body, should take one class of property, the most solid 
 and durable, attracting to it the largest social and 
 pohtical advantages, having in it the greatest certainty 
 of accumulation and improvement from the general 
 impr6vement in the condition of the people, and 
 charge it to the extent of £700, while at the same time 
 we impose £3,200 upon another class of property not 
 more valuable and far more fleeting in its character?" 
 Prom the fact that no change has yet been made in 
 the law, it appears that a majority of the members of
 
 The Queen's Taxes. 101 
 
 the House do not consider their " personal honour " 
 inyolved in the matter. 
 
 The assessment of the duty on real property accord- 
 ing to life interest and not, as in the case of personalty, 
 upon the full value, was defended by Mr. Gladstone,* 
 in proposing the succession duty, on the ground that 
 real property bears special burdens in the shape of 
 local taxation. At the same time he proposed to alter 
 and amend the whole foundation of the law, by 
 declaring that whatcA'er exemption or partial advan- 
 tage was given to real property should be given, in 
 conjunction with it, to other property which was 
 subjected to similar burdens. By this alteration lease- 
 hold and copyhold properties were relieved from pro- 
 bate duty and assessed to the succession, instead of the 
 legacy, duty. 
 
 Mr. Gladstone estimated that the succession duty 
 would add £500,000 to the revenue for the year 
 1853 — 4; a further increase of £700,000 for the year 
 1854—5 ; £400,000 for the year 1855-6 ; and £400,000 
 more for the year 1856 — 7 making a total addition to 
 the permanent taxation of the country of not less than 
 £2,000,000 per annum.f The following table shows 
 to what extent his anticipations were realised. % 
 
 • Financial Statements, 18G3, pp. 04—06. t Ibid, p. 07. 
 J SecJond Inland Revenue Report, I808. App. p. v.
 
 102 
 
 The Queen^s Taxes. 
 
 Year ending 
 Jan. 5. 
 
 185i 
 
 Year ending March 31. 
 1855 
 1856 
 1857 
 
 1858 
 
 Amount paid for Legacy 
 
 and Succession 
 
 Duties. 
 
 £ 
 
 1,383,922 
 
 1,530,843 
 1,712,785 
 1,880,988 
 1,864,725 
 
 Amount 
 
 estimated by 
 
 Mr. Gladstone in 
 
 1853. 
 
 £ 
 
 1,883,922 
 2,583,922 
 2,983,922 
 3,383,932 
 
 It appears, therefore, that the amount received in 
 1856-7 was £1,519,207 less than the estimate. In the 
 following year the receipt showed an actual decrease 
 of £16,263. The Commissioners confessed their 
 inability to account for this fact ; the Controller of 
 Legacy Duties attributed it to the remission of duties 
 legally payable, the high value of money during the 
 latter part of the year, and pending litigation of ques- 
 tions under the Succession Duty Act, which was 
 described as having been "most unscrupulous and 
 incessant."* The last named fact says little for the 
 framing of the Act, or for the willingness of landed 
 proprietors to pay the new duty. 
 
 The only remission of duty, legally payable, of any 
 importance in 1858 arose in connection with the 
 eleventh section of the Succession Duty Act, which 
 placed a son in-laAV or daughter-in-law on the same 
 footing as a son or daughter in blood, reducing the 
 duty on such legacies from ten per cent, to one per 
 cent. The benefit was limited by the clause to property 
 
 t Second Inland Eevenue Report, 1858, pp. 20-23.
 
 The Queen's Taxes. 103 
 
 inherited imder the will of a person dying after the 
 passing of the Act. It soon became apparent that 
 the limitation could not he maintained, and authority 
 was obtained fi'om the Treasury to consider the provi- 
 sions of the Act applicable to the cases of all legacies 
 thereafter charged with duty, without reference to 
 the date of the testator's death. 
 
 The accounts of monies received on legacy and 
 succession duties were not kept distinct until the year 
 1860, when it appears that the amounts were — 
 
 Legacy Duty . . £1,528,245 
 
 Successiou^Duty . . 601,775 
 
 Total . . £2,130,020* 
 
 The Reports of the Inland Revenue Commissioners 
 since 1858 contain little respecting these duties but 
 records of litigation. The amount they produce varies 
 considerably, according as the estates brought under 
 charge are large or small. They have been materially 
 affected since 1866 by the depreciation of shares in 
 public companies which followed the panic of that year. 
 The following are the amounts realised during the last 
 fom* financial years : — f 
 
 Year ending 
 31st March. 
 
 1866 
 1867 
 1868 
 1869 
 
 Legacy and Succession 
 Duty. 
 £ 
 2,604,332 
 2,508,044 
 2,882,748 
 2,784,997 
 
 Average 
 
 ... £2,710,030 
 
 • Fourth Inland Revenue Report, 1860, p. 16. 
 t Twelfth Inland Revenue Report, Appendix, p. ■! ; Parliamentary Paper, 
 Session IBCJ, No. 427.
 
 104 The Queen's Taxes, 
 
 being still less by the sum of £673,902 than the amount 
 anticipated by Mr. Gladstone. 
 
 The most recent Reports of the Inland Revenue 
 Commissioners give the following details of the pro- 
 perty assessed at each rate of daty to the legacy and 
 the succession duties. The totals were as follows :* — 
 
 Year. Legacy Duty. Succession Duty. 
 
 £ £ 
 
 1865-6 75,890,324 30,815,686 
 
 1866-7 74,383,693 31,893,430 
 
 1867-8 88,069,712 35,143,007 
 
 The return professes to give the "amount of 
 property on which duty was paid," but, inasmuch as 
 the legacy duty is assessed upon the full value, while 
 succession duty is assessed upon the life interest only, 
 the table is useless for estimating the pressure of the 
 tax on personalty as compared with realty. 
 
 It was, no doubt, a considerable achievement on the 
 part of Mr. Gladstone to carry through a Parliament 
 composed mainly of landed proprietors, a tax upon the 
 succession of estates, which his great predecessor, Mr. 
 Pitt, was unable to persuade their ancestors to accept. 
 He would have been equally unsuccessful but for the 
 fact that popular support was secured by a large 
 relaxation of the customs tariff, and of duties of excise, 
 which relieved the country from above £2,600,000 
 of more oppressive taxation. The budget was violently 
 opposed by the minority, by whom it was stigmatised 
 as a war against property and a blow at the Constitu- 
 
 • Eleventh Inland Revenue Report, 1867, App. p. 11. Twelfth ditto, 1869, 
 App. p. 11.
 
 The Queen's Taxes. 105 
 
 tion. The magnitude of the injustice which the 
 succession duty of 1853 partially remedied, may be 
 estimated from the fact that during the period com- 
 mencing with the repeal of the income tax in 1816, 
 and its re-enactment ia 1812, the only taxes levied 
 du'ectly upon real property were the Land Tax, pro- 
 ducing about £1,000,000, and the stamp duty on 
 deeds and instruments, one-half of which is probably 
 paid by real estate. In other words, out of a revenue 
 of £52,000,000 collected in ISll, real property contri- 
 buted little more than £1,500,000. It is true that 
 owners of real property paid indirect taxes, in common 
 with other taxpayers, but they had not then learnt 
 the important lesson that it is but a short-sighted 
 policy to impose oppressive burdens upon trade and 
 industry, and thus prevent the development of their 
 own wealth, by checking the productive power of the 
 community. 
 
 In estimating the value of the argument in favour 
 of a reduced assessment of land to the succession 
 duty on the ground of local burdens, there are several 
 facts, material to the issue, which the advocates of the 
 existing arrangement are apt to overlook. Many of 
 the local taxes, such as highway, paving, and sewer 
 rates, are in reality payments for improvementswhich 
 render the property assessed available for use ; and 
 without which it would be of comparatively little 
 value. They partake somewhat of the nature of the 
 investments which manufactm*crs are compelled to 
 make, from time to time, in improved^ machinery 
 for the purpose of rendering their capital more
 
 106 The QueerCs Taxes. 
 
 productive. The existence of such conveniences, paid 
 for out of the public rates, increases the amount of 
 rent received hy the landlords. Moreover, local rates 
 do not fall wholly upon the land, but partially upon 
 the occupiers. In the long run, it is true, the inci- 
 dence of such burdens is upon the property itself, but 
 every increase falls in the first instance upon the 
 tenant, and if it be merely temporary, upon him 
 exclusively; if it become permanent, it affects the 
 amount of rent which the landlord would otherwise 
 have received upon the renewal of a tenancy. Ac- 
 cording to the ordinary arguments frequently employed 
 upon the subject, it might be supposed that the 
 landlord actually pays the local rates out of his rental, 
 or, in other words, out of the net sum which he receives 
 from the tenant after the latter has paid the local rates. 
 If this were true, they would be paid twice over ; it 
 is, however, quite contrary to the actual fact. 
 
 The obvious argument against any inequality in the 
 assessment of real and personal property to this tax, 
 is the fact that the value of the former is based upon 
 the net income received by the landowner ; local rates 
 are excluded from the calculation. As Mr. John 
 Stuart Mill has clearly shown, they become a rent 
 charge upon the property in favour of the State;* 
 upon the capital which the local burdens represent no 
 duty of any kind is paid ; they form an element in 
 calculating the amount of rent to be paid to the 
 
 * Principles of Political Economy. Book V., c. ii., sees. 5, 6. See Note to 
 sec. 6.
 
 The QueerCs Taxes. 107 
 
 landlord, but not in calculating the capitalised value 
 of that rent. The recipient of a legacy of £10,000 in 
 land occupies an exactly similar position to the 
 recipient of £10,000 in money, as far as local bm'dens 
 are concerned; there is, however, this great dis- 
 tinction in favour of the former, his mvestment is the 
 most sure and stable that it is possible to conceive. 
 He has comparatively little care or anxiety, he may 
 quietly fold his arms, and will still receive the 
 increasing rent which a prosperous and active com- 
 munity will pour into his coffers. The recipient of 
 £3.0,000 in capital must look well to the security of 
 his investments ; if he employs it in trade or manufac- 
 tures he must diligently and carefully devote himself 
 to the management of his busiaess. " The ordinary 
 progress of a society," says Mr. John Stuart Mill, 
 " which increases in wealth, is at all times tending to 
 augment the incomes of landlords ; to give them both 
 a greater amount and a greater proportion of the 
 wealth of the community, independently of any 
 trouble or outlay incmTcd by themselves. They grow 
 richer, as it were, in their sleep, without working, 
 risking, or economizing. "What claim have they, on 
 the general principles of social justice, to this accession 
 of riches ? " Mr. Mill raises a broad question, mto 
 which it is unnecessary to enter at present ; the facts 
 upon which he bases his arguments are, however, 
 indisputable ; the taxpaying public may, therefore, 
 fairly ask, what claim have the o"\\iicrs of the land to 
 the exemption from taxation, which they now enjoy 
 under the Act which levies the succession duties ?
 
 108 The Queen^s Taxes. 
 
 The most obvious reply appears to be, that the duty, 
 as now imposed, was all that the Government of 1853 
 felt themselves able to carry; it was a compromise 
 which secured an instalment of justice, not its perfect 
 triiunph. 
 
 It is true that Mr. Dudley Baxter questions the 
 soundness of Mr. Mill's arguiiient ;* and endeavours to 
 ilhistrate the case by examples taken from commercial 
 transactions. There is, however, this great distinction 
 between landed and other kinds of property. The 
 value of the former increases, as Mr Mill observes, 
 " without exertion or sacrifice on the part of the 
 owners, but with complete passiveness on their part." 
 The merchant who buys a cargo of tea, or stores a 
 large quantity of corn is not passive ; the profit he 
 receives is the result of his active enterprise. Mr. 
 Mill's argument is simply this, the enterprise of the 
 merchant and trader, the industry and skill of the 
 manufacturer, farmer, mechanic, and labourer increase 
 the value of real property, without any eff'ort on the 
 part of the landlord. What right has the latter to reap 
 exclusively the results of such enterprise ? Mr. Baxter 
 asks, has the State a right to the increased value 
 of land in a town which a capitalist has purchased in 
 order to reap the profits of such increase when required 
 for building ? No question could possibly arise on 
 this point were the condition of such special taxation 
 understood at the time of purchase; it is solely 
 
 * The Taxation of the United Kingdom, 1869, pp. 50—58,
 
 The Queen's Taxes. 109 
 
 because the sound principle advocated by Mr. Mill 
 has not been law that any difficulty exists. He has, 
 however, carefully guarded his argument against the 
 charge of injustice, by an explanation of the mode in 
 which he would practically carry out his proposal. 
 Mr. Baxter asks, if a landlord makes a road or railway 
 through his property, is that a case in which the State 
 should claim the increased value thus created ? In such 
 a case the increase is created by the enterprise of the 
 landowner — it is not the spontaneous increase of which 
 Mr. Mill writes. There is, without doubt, a great 
 evil in our system of local rating, in the fact that no 
 measures have been adopted to reach the excessive 
 ground rents, which are a legitimate subject of taxa- 
 tion. The greatest pressure has been thereby thrown, 
 in times of distress, upon those least able to bear it, 
 while the revenues of wealthy ground landlords have 
 been comparatively imtouched. 
 
 A suggestion was made by Mr. Newmarch, at a 
 recent meeting of the Statistical Society, that an 
 equivalent for the succession duty should be levied 
 upon all property held by Corporations. This is mani- 
 festly an equitable proposition ; the tax is levied upon 
 property ; it is paid in return for the protection afforded 
 by the State. If property, which otherwise would be 
 subject to this tax, escapes in consequence of its being 
 held by a body which being perpetual has no suc- 
 cessors, a heavier l)urden is thrown upon all other 
 prop(.'rty in consequence of this exemption. If " the 
 exemption of one man means the extra taxation of 
 another," as asserted by Mr. Gladstone, in his Finan- 
 cial Statement for 1853, it is equally true that the
 
 110 The Queen's Taxes. 
 
 exemption of one class of property means the extra 
 taxation of all other property. The same argument 
 applies to the taxation of property held by charities. 
 Exemption in that case involves a compulsory contri- 
 bution from the remainder of the community, which 
 should be done, if desirable, by a direct vote of the 
 House of Commons. 
 
 Objections have been raised that these duties are 
 paid out of capital, that they are therefore fines 
 upon industry, and discourage accumulation. It does 
 not appear, however, that they have exercised any 
 serious influence in this direction. It has been already 
 shown in the case of real estate, that during a series of 
 years the tendency of value is almost invariably 
 upwards ; the succession duty may therefore be justly 
 regarded as a deferred payment of taxation. During 
 the life of the owner he has been allowed to retain a 
 portion of his rental, which otherwise would have been 
 received yearly by the State. It is clear that this may, 
 if he choose, be invested and the payment of the 
 succession duty thus provided for. In that happy 
 period when a perfect system of taxation shall have 
 been devised, it may be possible to dispense with 
 legacy and succession duties ; at present they seem to 
 be almost indispensable. They are not by any means, 
 the most injurious portion of our fiscal system ; they 
 press upon industry with far less weight than duties of 
 Customs and Excise, taxes on locomotion, or Licenses 
 upon trade and manufactures. If confined to a 
 moderate rate, and levied fairly and equitably on all 
 sorts of property they are less objectionable than many 
 other taxes.
 
 The Queen's Taxes, 
 
 111 
 
 CHAPTER XIII. 
 
 MISCELLANEOUS STAMP DUTIES. 
 
 A very wide range of taxation is comprised under 
 the head of Stamps. It has been ah-eady seen that 
 several licenses on trades and professions, some taxes 
 on commodities, and the legacy and succession duties 
 are collected in this manner. The remaining stamp 
 duties are enumerated in Sir Thomas Bazley's return 
 
 under the following heads 
 
 Number 
 
 Deeds and other Instruments not 
 
 
 
 
 otherwise enumerated 
 
 
 1,580,809 
 
 7 
 
 Bills of Exchange, Inland 
 
 6,112,589 
 
 381,633 
 
 3 
 
 „ Foreign 
 
 277,478 
 
 324,04j5 
 
 IG 
 
 Bankers' Notes and Composition 
 
 
 
 
 for Bankers' Bills and Notes ... 
 
 
 131,714 
 
 
 
 Eeceipts and Drafts, and other 
 
 
 
 
 documents 
 
 142,041,810 
 
 591,840 
 
 17 
 
 Marine Insurances 
 
 No account kept. 
 
 85,900 
 
 9 
 
 Newspaper Stamps 
 
 20,908,115 
 
 115,987 
 
 19 
 
 Probate Court Fee Stamps 
 
 377,084 
 
 136,584 
 
 15 
 
 Admiralty Court Fee Stamps ... 
 
 21,900 
 
 8,686 
 
 10 
 
 Divorce and Matrimonial Causes 
 
 
 
 
 Fee Stamps (England) 
 
 13,811 
 
 2,836 
 
 15 
 
 Patents for Inventions ... 
 
 101,742 
 
 119,380 
 
 1 
 
 • Parliamentary Paper, " Taxes and Imposts," Sess. 1869. No. 427.
 
 Number. 
 
 £ s. 
 
 4,147 
 
 1,501 10 
 
 694,840 
 
 91,775 6 
 
 13,968 
 
 7,516 18 
 
 49,106 
 
 10,873 1 
 
 217 
 
 63 5 
 
 76,711 
 
 15,600 14 
 
 623,274 
 
 30,542 18 
 
 1,397 
 3,058 
 
 1,620 
 590 10 
 
 112 The Queen's Taxes. 
 
 Land Eegistry Fee Stamps,) 
 England j 
 
 Commou Law Court Fee Stamps 
 Companiea Eegiatration Fee 
 
 Stamps 
 Eegiatration of Deeds Fee Stamps! 
 Ireland ) 
 
 Eecord of Title Fee Stamps,") 
 Ireland j 
 
 Chancery Fee Fund Stamps 
 Law, Chancery, Judgments Ee--) 
 gistry, and Civil Bill Funds, \ 
 Ireland ' 
 
 Copyhold, Inclosure, and Tithe 
 
 Commission Fee Stamps 
 Public Eecord Fee Stamps 
 
 The collection of Stamp Duties is rendered com- 
 paratively easy from the circumstance that payment 
 of the duty is generally necessary to ensure the affix- 
 ing of the stamp which renders the document valid. 
 The principle upon which they were originally based 
 was, that all documents requiring stamps were to be 
 written on parchment or paper already stamped. In 
 practice this was found inconvenient,and especially so, 
 as in some instances it was almost impossible to decide 
 what amount of duty was payable. The complexity of 
 the Stamp duties, previously to recent alterations, was 
 such that expensive litigation was frequently caused 
 owing to the insufficiency of stamps used even in cases 
 in which they had been adopted under legal advice. 
 In alluding to this evil Mr. Mc Culloch said of these 
 duties, in 1845 ;* — "one would think they had been 
 
 Treatise on Taxation, pp. 276 — 7.
 
 The Queen's Taxes. 113 
 
 intended to serve as decoys with which to entrap 
 parties, and force them into the courts ; the difficulty 
 which they create of determining what is and what is 
 not a proper stamp is itself a most proKfic source 
 of uncertainty, and consequently of litigation and 
 expense." 
 
 It was impossihle that evils such as are thus des- 
 scribed should escape attention during a period in which 
 successive revisions of taxation have taken place. 
 Accordingly these duties have been materially modified 
 since 184^9 ; in many instances they have been largely 
 reduced, and thus rendered more tolerable to the tax- 
 payer. The most notable example was the reduction 
 of the stamp upon receipts to a uniform duty of one 
 penny, in place of rates varying from 3d. to 10s. It 
 is a well-known fact that payment of this duty was 
 very largely evaded before the introduction of the 
 penny stamp. In commercial transactions the law 
 was almost a dead letter, stamps being hardly ever 
 employed unless demanded by the payer, and even then 
 the requirement of a stamped receipt was held to be a 
 reflection upon the honesty of the person receiving 
 the money. The introduction of the uniform penny 
 receipt worked an entire change ; the modest request 
 of a penny was readily complied \di\\, and the use of 
 stamped receipts became general. The result of this 
 measure in securing the due collection of the duty is 
 shown in the amount collected before and after the 
 reduction, which took place in 1853.* 
 
 • Firfit Inland Rcvonuo Report, 1857. Api). p. xi-ix.
 
 1 L 1 The Queen's Taxes. 
 
 Di'foro Koiliictiou. After Reduction. 
 
 £ £ 
 
 185 L 187,876 1854. 215,867 
 
 1852 191,088 1855 281,84-5 
 
 The increase of the first complete year, under the 
 new system, over the hist complete year of the old, 
 was ,t:*51,'J7'.). 
 
 Taxes ui)()n the sale and transfer of property are 
 considered ohjectionahle by political economists, be- 
 cause they are levied u])()n transactions which are 
 l)enelicial to the community. Tliere is also another 
 {)])jection, that they fall mainly upon one description 
 of i)roperty. It is true that, according to the words 
 of the Statute, the duties arc levied upon the con- 
 veyance of property real or personal, but as the bulk of 
 personal property requires no written conveyance the 
 incidence of the duty is mainly upon real estate. It 
 is dilUcult to allege a reason why a transfer of land 
 should be subject to a tax, while a transfer of iron, 
 cotton, or any similar article is untaxed, unless there 
 be a special service rendered by the State in the case 
 of the tirst named transaction. If stamp duties upon 
 the sale of property gave increased security to such 
 transactions, they would possess a compensating feature 
 which would render them a more equitable means of 
 raising a portion of the national revenue than they 
 are at present. Upon this point the following remarks 
 by .Mr. McCulloch are deserving attention : — * 
 
 *'Atax on the transfer of property should bear a 
 uniform proportion to the value of the property trans- 
 
 Treatise on Taxation, pp. 275-6.
 
 The Queen's Taxes. 115 
 
 ferred ; and the burden which it imposes should be, in 
 part at least, compensated by assessing the tax so as 
 to facilitate and authenticate the transactions on which 
 it is charged, and to render them less hazardous to the 
 parties concerned. The mode of levying this tax 
 resorted to in many countries of Europe, where it is 
 imposed on registration, imder a system adapted to 
 facilitate the proofs of transfer, and to guard against 
 fraudulent conveyances, seems to secure tliese advan- 
 ta^rcs, and to be the best hitherto su2:2:ested." 
 
 In addition to stamps on conveyances, the duties col- 
 lected under the head of " deeds and other instruments 
 not otherwise eniunerated " include stamps on admis- 
 sion of Barristers, Attorneys, and Physicians ; articles 
 of clerkship; indentures of apprenticeship; agreements, 
 leases, awards, bonds ; collation to ecclesiastical bene- 
 fices, dignities or promotions; commissions in the 
 Army, Navy, and other offices; registration of public 
 companies ; delivery orders, dock warrants ; grants of 
 letters patent under the Great Seal of honours, dignities 
 and offices ; mortgages, power of attorney, and several 
 other duties. It is quite impossible to enter into a 
 detailed examination of these numerous duties within 
 the limits of this work. Collected under the authority 
 of various Acts of Parliament, beginning with the 
 reign of William and Mary, and regulated by 
 numerous decisions of the Coui'ts of Law, the Stamp 
 duti(;s are a code of laws in themselves, requiring a 
 special technical treatise for their interpretation. Long 
 use has accustomed the ])ublie to tliese j):tyments, and 
 aithon<4'ii they may he indeleiisihle n|i(m pureh 
 ah>tr;iel grounds, the\' raise ;i eoiisiderahle I'eNciiue in
 
 116 The Queen's Taxes. 
 
 a mode to wliich apparently the public does not enter- 
 tain any serious objection, and, except in some special 
 cases, where the duties are paid by solicitors at 
 the Stamp Office, and attendances for that purpose are 
 charged to their clients, at a moderate cost compared 
 with the heavy burden involved in taxes upon com- 
 modities. 
 
 The convenience of stamps as instruments for the 
 payment of fees in Courts of Law, especially the 
 security they afford for the due payment of such fees 
 into the Treasury, have led to their employment for 
 that purpose. Taxes upon law proceedings are gene- 
 rally condemned by political economists, on the ground 
 that they are an impediment to the obtaining of 
 justice. Heavy taxes upon the administration of the 
 law are, without doubt, objectionable, but moderate 
 fees payable during the various stages of legal pro- 
 ceedings cannot be said to produce any serious evil, 
 but rather to check unnecessary litigation. In this 
 way tiie cost is divided between the general public 
 and the parties more immediately interested in the 
 actions tried in Courts of Law. If litigation were to 
 be had perfectly free of charge it is very questionable 
 whether the remedy would not, in many cases, be worse 
 than the disease. At the rates now paid these fees 
 form a very small proportion of the costs of a suit 
 either in law or equity, and can hardly be said to 
 hinder the course of justice. 
 
 A much more serious objection may be urged 
 against the duty on Marine Insurances, which, like the 
 Fire Insui^ance Duty just repealed, is a tax imposed 
 upon prudence. It falls mainly upon the smaller
 
 The Queen's Taxes. 117 
 
 owners, large capitalists being able to insure their 
 own ships. It is a remnant of the fiscal system which 
 seized upon every available transaction for the purpose 
 of obtaining taxes for the government, and is utterly- 
 indefensible upon any principle of taxation, recognised 
 by any system of sound political economy. If a tax on 
 shipping is advisable it should be universal in its 
 incidence, and not, as at present, levied exclusively 
 upon prudent men who seek to protect themselves 
 against the possibility of loss from causes over which 
 they have no control. 
 
 There may be some show of reason for a tax upon 
 shipping, on the ground that a considerable portion of 
 our naval expenditure is incurred for its special 
 protection, but none for a tax specially levied upon 
 its insurance against the elements. A tax on shipping 
 would, however, be paid by the consumer, and would 
 enhance the price of commodities ; it would be quite 
 as reasonable to tax railway trucks. 
 
 The Stamp Duties on Patents of Invention are open 
 to similar objections, if levied at a rate more than 
 sufficient to defray the expenses of registration. The 
 inventor of a new process is a public benefactor ; it is, 
 therefore, impolitic for the State to impose a tax in 
 consequence of his having exercised his talent in the 
 public service. The existing law of patents was framed 
 for the purpose of enabling invcutors to reap tlie profit 
 of their inventions ; in return they may be fairly ex- 
 pected to contribute a sum a(le([uate to tlu? maintenance 
 of tlie Tatent Office, to which purpose the fees payable 
 upon the granting of patents ought to bo strictly 
 limited.
 
 118 The Queen's Taxes. 
 
 CHAPTER XIV. 
 
 TAXES ON RAILWAYS, SERVANTS, CARRIAGES, HORSES, 
 MULES, DOGS, AND ARMORIAL BEARINGS. 
 
 The only special tax now remaining on locomotion 
 is the railway passenger duty, which is assessed at 
 5 per cent, on all sums received for conveyance of 
 passengers, excepting such as are conveyed, in com- 
 pliance with the terms of the Railway Act, at one 
 penny per mile. It produced, during the last financial 
 year, the sum of £500,383 3s. on £10,007,667.* 
 
 The taxes on locomotion repealed, by the Act 
 32 & 33 Vic, cap. 14, from the 1st of January, 1869, 
 are the following : — 
 
 Amount for 
 year 1868-9.t 
 £ s. d. 
 
 Stage Carriage Duty 36,274 2 
 
 Hackney Carriage Duty 100,050 4 
 
 Post Horse License Duty 142,196 3 
 
 Stage Carriage Licenses ... ... 6,524 3 
 
 Hackney Carriage Licenses (London) 6,109 
 
 It is difficult to understand why the duty on railway 
 passengers should remain, when similar imposts have 
 
 * Parliamentary Return, Session 1867, No. 427. t IWd.
 
 TJie Queen's Taxes. 119 
 
 been repealed. The only valid reason that can be 
 assigned, is the want of a sufficient surplus to ensure 
 its removal. Railway Companies are assessed to the 
 income tax, railway stock pays probate and legacy 
 duties, railways contribute to local taxation ; it would 
 seem, therefore, that they are adequately taxed with- 
 out any special payment being imposed upon them. 
 In some cases they meet with competition from steam 
 boats, which, in addition to the advantage of having 
 no permanent way to provide for, pay no passenger 
 duty. It may, however, be expected from the 
 observations of the Chancellor of the Exchequer, in 
 his Budget speech for 1869, that at an early period 
 this tax will also follow the other recently repealed 
 taxes on locomotion, and disappear from our fiscal 
 system. The taxes on horses, carriages, and dogs were 
 formerly collected as Assessed Taxes. In 1867 the 
 tax on dogs was changed from an assessed tax to 
 an excise license, and the duty reduced from 12s. 
 to 5s. each. At the same time, the exemption in 
 favour of dogs used in tending or driving sheep 
 and cattle was abolished, and the collection of the 
 duty removed from the hands of persons appointed 
 by District Commissioners to those of the officers of 
 the Excise. The effect of this cliange was seen in the 
 increased number of dogs charged with duty. Tiie 
 number assessed in Great Britain during the year 
 ending 5th April, 1860, was 391-,8;i7 ; while the 
 number of dog licenses granted between the 1st April 
 and the 15th November, 1867, was 817,970 ; shoAving 
 an increase of above; d.0(),()()0 dogs licensed in eight
 
 120 The Queen's Taxes. 
 
 months of 1867, above tlie number returned to the 
 Assessed Taxes during the whole of the preceding 
 year. The number of licenses granted during the 
 year ending 31st March, 1869, was 1,068,221, and the 
 amount of revenue £267,055. "It is evident from 
 these figures," say the Inland Uevenue Commis- 
 sioners, " that the ' local knowledge ' of the parochial 
 assessors, on which so much reliance is placed, has 
 failed to discover the existence of many hundred 
 thousand dogs which the new system of collection has 
 at once brought into charge."* 
 
 The success of this measure led to the introduction 
 by Mr. Lowe of a similar change in the collection of 
 the duties on servants, carriages, horses, and armorial 
 bearings. By the Customs and Inland Revenue Act, 
 passed on the 24th June, 1869, the assessed duties 
 le\ded in respect of male servants, carriages, horses, 
 mares, geldings, mules, hair powder, and armorial 
 bearings were repealed after the 5th of April, 1869, 
 in England, and the 24th of May, 1869, in Scotland. 
 In lieu thereof, the following Excise Licences were 
 imposed from the 1st of January, 1870 : — 
 
 £ s. d. 
 Tor every Male Servant ... ... 15 
 
 Eor every Carriage — 
 
 If such Carriage shall have four or 
 more wheels, and shall be of the 
 weight of four hundredweight, or 
 upwards ... ... ... ... 2 2 
 
 Eleventh Inland Revenue Reioort, 18G7, pp. 13, 14, 15.
 
 The Queen's Taxes. 121 
 
 If such Carriage shall have less than 
 four wheels, or having four or 
 more wheels, shall be of a less 
 weight than four hundredweight . 15 
 
 Yor every Horse or Mule ... ... 10 G 
 
 Eor Armorial Bearings — 
 
 If such Armorial Bearings shall be 
 painted, marked, or affixed on or to 
 any Carriage ... ... .,.220 
 
 If such Armorial Bearings shall not 
 be so painted, marked, or affixed, 
 but shall be otherwise worn or 
 used 110 
 
 The duties for whicli this simple tahle is substituted 
 were thirty-two in number, assessed at various rates. 
 The assessed taxes on carriages let for hire have been 
 increased by the measure, but this is more than com- 
 pensated by the removal of the license duty on post 
 liorses and stage carriages. One great merit of the 
 measure is the mode in which it has simplified the 
 law respecting these taxes. By the Customs and 
 Inland Revenue Act of the Session of 1869, thirty-two 
 Acts of Parliament relating to assessed and excise 
 duties are wholly, and twenty are partially, repealed. 
 Eleven of these Acts were passed in the reign of 
 George III., ten in that of George IV., thirteen in 
 that of William IV., and eighteen during the reign of 
 her present Majesty. The law relating to duties upon 
 male servants, carriages, horses, and armorial bearings 
 is now comprised in twenty sections of an Act of 
 Parliament ; the excise licenses are made payable 
 during tlie month of January in each year, and a 
 declaration is required from every person liable to
 
 122 The Queen's Taxes. 
 
 pay them, giving full particulars as to liis liability. 
 Provisions are also made to secure the revenue against 
 fraudulent returns, and for the infliction of penalties 
 upon defaulters who have not made the necessary 
 returns. 
 
 Horses used solely in husbandry and in underground 
 mines and mares kept for breeding purposes are 
 exempt from duty. It is a curious anomaly that 
 the owners of horses engaged in agriculture should 
 be exempt from a tax which the owners of horses 
 engaged in the delivery of agricultural produce to 
 the consumer are compelled to pay ; there is no valid 
 reason for any special exemption from this tax. It 
 is no doubt intended that these duties should fall 
 mainly upon the wealthy; but in many instances 
 owners of horses are taxed whose living depends 
 upon hard work, and who are quite as deserving of 
 relief from such a burden upon their trade as the 
 agriculturists of Great Britain. The inconsistencies 
 and inequalities of the Assessed Taxes are a valid 
 argument against them. It is difficult to know why 
 male servants alone should be taxed, or why a 
 tradesman who employs his errand boy to clean 
 knives and shoes should pay a tax for him as a 
 servant. It is equally difficult to understand why a 
 waiter at an hotel should be charged, while assistants 
 in a retail shop escape. All taxes on employment 
 are bad taxes ; it is quite impossible to assess them in 
 a way which shall cause them to operate, as evidently 
 intended, as taxes upon wealth. The changes of last 
 year have no doubt simplified these imposts, but have
 
 The Queen's Taxes. 123 
 
 not removed the fundamental objection to sucli a 
 method of taxation. They have one advantage as 
 contrasted with some portions of our fiscal system ; 
 being paid directly, they do not take more from the 
 taxpayer than is received by the Government, in 
 other respects they are quite as objectionable as 
 duties of customs and excise upon commodities.
 
 124j The Qitccu's Taxes. 
 
 CHAPTER XV. 
 
 INHABITED HOUSE DUTY. 
 
 The present house tax was substituted in 1851 for 
 the duty previously assessed on windows. The Inland 
 E/Cvenue Commissioners estimate the amount of relief to 
 the taxpayer afforded by this measure to be represented 
 by an actual loss to the revenue of about £1,000,000 : 
 the window duty in 1850 having produced £1,708,504, 
 and the house duty having varied from £693,736 to 
 £728,969.* The amount produced during the financial 
 year ending March 31, 1869, was £1^131,582 10s., 
 being a considerable increase since 1857, but still not 
 equal in amount to the produce of the window duty in 
 1850.t 
 
 The gross amount of the assessment was as follows : 
 
 
 
 Annual Value 
 
 
 Duty. 
 
 Assessed. 
 
 Shops and warehouses 
 
 
 
 partially occupied as 
 
 
 £ 
 
 dwellings 
 
 Gd. in £ 
 
 8,049,332 
 
 Beer- shops 
 
 6d in £ 
 
 3,118,229 
 
 Farm-houses 
 
 6d. in £ 
 
 629,143 
 
 Dwelling-houses 
 
 9d. in £ 
 
 23,267,149 
 
 * Fii-st Inland Revenue Report, 1857, p. 35. 
 t Parliamentary Paper, Sess. 18G9. No. 427.
 
 The Queeu*s Taxes. 125 
 
 The relief to the taxpayer arising from the substitu- 
 tion of this tax for the window duty, which was 
 £1,000,000 in 1857, is now fully £l,50o',000, owing to 
 the increased number of houses which, but for that 
 change, would have been subject to the heavier burden 
 of the window duty. 
 
 The following are the words of the Act of Parlia- 
 ment granting these duties : — " Eor every inhabited 
 dwelling-house which, with the household and other 
 offices, yards, and gardens therewith occupied and 
 charged, is or shall be worth the rent of £20 or up- 
 wards by the year; where any such dwelling-house 
 shall be occupied by any person in trade who shall 
 expose to sale and sell any goods, wares, or merchan- 
 dise in any shop or warehouse, being part of the same 
 dwelling-house, and in the front and on the ground or 
 basement story thereof ; and also where any such 
 dwelling-house shall be occupied by any person who 
 shall be duly licensed by the laws in force to sell 
 therein by retail beer, ale, wine or other liquors, 
 although the room or rooms thereof in which any such 
 liquors shall be exposed to sale, sold, drunk or con- 
 sumed shall not be such shop or warehouse as afore- 
 said ; and also where any such dwelling-house shall be 
 a farm-house occupied by a tenant or farm servant, 
 and bond fide used for the purposes of husbandry only, 
 there shall be charged for every 20s. of such annual 
 value of any such dwelling-house the sum of Gd. And 
 where any such dwelling-house shall not be occupied 
 and used for any such purpose aud in manner afore-
 
 126 The Queen's Taxes. 
 
 said, there shall he charged for every 20s. of such 
 annual value thereof the sum of 9d."* 
 
 A Tax on Houses was, for a very long period, a 
 part of the ordinary revenue of Great Britain. It was 
 first imposed in 1696, during the reign of William 
 the Third, and continued uninterruptedly till the 
 year 1834, when it was repealed. A tax on windows 
 was imposed at the same time; at first it formed a 
 supplementary house duty, hut in 1747 it hecame 
 a separate tax and continued in existence until the 
 year 1851. f A tax on windows is much more 
 objectionable on many accounts than a tax on houses. 
 The number of windows in a house is no criterion 
 of its value, or of the means of the occupier; the 
 rent paid for a house, on the contrary, generally 
 bears a fixed proportion to the income of the occu- 
 pier. The imposition of the tax on windows interfered 
 seriously with the health and comfort of the people. 
 It led to the construction of houses upon imperfect 
 principles in respect to the two great essentials of 
 light and ventilation ; the number of windows being 
 generally regulated, not according to the necessities 
 of the occupants, but in order to evade, as far as 
 possible, the window duty. The commutation of this 
 obnoxious impost into the tax now levied upon 
 dwellings was almost universally regarded as a great 
 boon, at the time when the change was made, and 
 
 * 14 and 15 Vic, c. 36. 
 
 t Fii-it Inland Revenue Report, 1857. App. p. cliii. Act 14 and 15 Vic. 
 cap. 36, sec. 1.
 
 The Queen^s Taxes. 127 
 
 there can be no question that it has added very 
 largely to the public comfort, convenience, and health. 
 
 The houses subject to this tax are inhabited dwell- 
 ing-houses ; warehouses, and places entirely occupied 
 for business purposes, being exempt from duty. It 
 operates with hardship in some instances : the trades- 
 man who lives in a highly rented house for the pur- 
 poses of his trade is assessed at sixpence in the pound, 
 while the physician, to whom a good situation is 
 equally important, has to pay the full rate of nine- 
 pence. It has been decided by the judges that a house 
 occupied by a carpenter and builder, part of which 
 was employed as a counting-house and workshops, is 
 liable to the ninepenny rate.* The same decision was 
 given in the case of an eating-house and coffee-shop, 
 although cooked meat was exposed in the shop window 
 on the ground floor, f These are inequalities in the 
 assessment of the tax, which ought to be removed by 
 leo"islation ; if the differential rate in favour of houses 
 partly occupied for trade purposes is continued, it 
 should be equally and fairly applied. 
 
 The House Tax is regarded as an equitable tax by 
 most writers on the subject of Taxation. Mr. John 
 Stuart Mill, in the Principles of Political Economy, J 
 enters at some length into the question of its 
 incidence, and the conclusion at which he arrives is 
 
 Fourth lulaml lieveuue Report, 18(J0, App. p. 25. 
 t Ibid. 18f31, A].p. p. 57. 
 ' I'ook 5, c. iii. sir. (>.
 
 328 Tlie Queen's Taxes. 
 
 that " a house-tax, if justly proportioned to the value 
 of the house, is one of the fairest and most unobjec- 
 tionable of all taxes. No part of a person's expen- 
 diture is a better criterion of his means, or bears, on 
 the whole, more nearly the same proportion to them." 
 Mr. McCuUoch,* writing soon after the repeal of the 
 House Tax, in 1834, says : — " We cannot help regard- 
 ing the abolition of the late house-tax as an ill- 
 advised concession to vulsrar and unfounded clamour. 
 A tax on houses interferes with no department or 
 branch of industry ; the subject on which the tax is 
 laid is obvious, and cannot be concealed ; and it is 
 never any very difficult matter to determine the value 
 of houses with sufficient precision for its fair assess- 
 ment." He also says, " when these taxes are assessed 
 according to the rent they are among the least 
 exceptional that can be devised." 
 
 " The rent of a house," says Adam Smith,t " may be 
 distinguished into two parts, of which the one may 
 very properly be called the building rent, the other is 
 commonly called the ground rent." This division of 
 rent is an unquestionable fact, and it therefore follows 
 that a tax on the rent of a house is partly a tax on 
 the land upon which it stands, and partly a tax on the 
 house itself. The proportion which the ground rent 
 and the house rent bear to each other depends entirely 
 upon the situation of the house. In many parts of 
 
 * Treatise on Taxation, 18^6, p. 70. 
 t Wealth of Nations, Book 5 c. 2.
 
 The Queen^s Taxes. 129 
 
 the country a dwelling house may be obtained at a 
 rent of twenty pounds, for which forty, fifty, or even 
 sixty would be paid in London and some of the larger 
 cities and towns. The difference is not in the amount 
 of rent paid for the building, but in the value of 
 the ground on which it stands. 
 
 That portion of the rent which is paid for the house 
 itself is regulated by the amount necessary to provide 
 for the interest upon the capital expended in its con- 
 struction, for repairs, and for the ordinary trade profits 
 of the builder. If the demand for houses is great and 
 rents arc increased, fresh capital is attracted into the 
 business of providing dwelling houses ; if, on the 
 other hand, the demand is less than the supply, rents 
 decrease, and capital seeks more profitable channels 
 for investment. In this, as in other avocations, the 
 rate of profit cannot long remain higher than the 
 average of general trade profits. In considering the 
 question of the incidence of this portion of the house 
 tax, these facts must not be lost sight of ; the profits 
 of the owner of the building being regulated by the 
 current rate of trade profits, it appears that the 
 portion of the tax, which appertains to the building 
 itself, falls upon the occupier. 
 
 It has been already shown tliat the respective pro- 
 portions of ground and building rents vary according 
 to locality. In villages and SMiaHcr towns wliei'c 
 land is i)lentiful, ground rent forms a very inconsider- 
 able portion of the gross amount. In larger towns 
 and the metropolis, especially in peculiar situations, it 
 frequently forms the larger proportion. On no other 
 
 K
 
 130 The QueevCs Taxes. 
 
 principle can widely different rents for the same class 
 of buildings be explained. In cases where the higher 
 rents are paid the larger proportion of the house tax 
 is not a tax upon the house, but upon the land on 
 which it stands, and, although paid by the occupier, 
 ultimately falls upon the owner. It may be true, as 
 urged by Mr. Mill, that in the case of the lowest rates 
 of ground rents, which are but a trifle above the rents 
 obtained for agricultural purposes, the incidence of the 
 tax is aifected by the circumstance that, as land 
 becomes more valuable for building than for cultiva- 
 tion, fresh land is brought into the market. This 
 process is not, however, capable of indefinite exten- 
 sion ; as towns and cities increase in size, land in. 
 the centre of them becomes more and more valuable 
 the supply being limited, and owners of the soil enjoy 
 a monopoly, by means of which they obtain excessive 
 rents. The amount which occupiers are able to pay is 
 represented by the rent 'plus the tax; if the latter 
 were repealed it may fairly be presumed that, upon 
 the termination of existing holdings, the entire benefit 
 would be absorbed by the landlord, the relief to the 
 occupier would be but temporary. In the case of all 
 leases entered upon since the imposition of the house 
 tax in 1851 there can be no doubt that its amount, 
 as well as the local rates, was an element in the 
 consideration of the rent to be paid; while, in the 
 case of all leases dated before that period, there has 
 been a considerable relief from taxation hy the sub- 
 stitution of this duty for the more burdensome tax on 
 windows. The repeal of the house tax, in so far as it
 
 The Queen's Taxes. 131 
 
 is a tax upon the high ground rents of large towns, 
 would simply bestow a bonus upon the landed pro- 
 prietors at the expense of the rest of the community. 
 
 This opinion appears to be fully corroborated by 
 the information received in answer to enquiries 
 made by Mr. Dudley Baxter, during the preparation 
 of his recent work on Taxation.* Speaking of local 
 rates which are levied upon the same principle as the 
 House Tax, he says : — " Many practical men concur 
 with me in thinking that the average incidence of 
 rates is three-fourths on the landlord, and one-fourth 
 on the tenant." If this be the case, and there does 
 not appear any reason to doubt the accuracy of his 
 conclusion, it appears that the amount of relief that 
 would accrue to the occupiers of Great Britain by the 
 repeal of the House Tax, would be £282,895. It has 
 been ah'eady shown that, so far as the building is 
 concerned, profits are not affected by the tax, so that 
 the sum of £848,687, being the difference between the 
 full amount produced by the tax and the portion paid 
 by the occupier, would, after a shorter or longer 
 interval, according to the duration of the present 
 occupancy, be simply transferred from the State to 
 the owners of the property. 
 
 It has been recently ru'ged as a complaint against 
 this tax, that it imposes injurious and unnecessary 
 restrictions upon the erection of dwellings for the 
 working classes. It is difiicult to sec how this can 
 
 • The Taxation of the Uiiitf.d Kingdom, pp. ."jO-C?.
 
 132 The Queen's Taxes. 
 
 be the case, inasmiicli as all houses under £20 rental 
 are exempt. It wdll no doubt be said that in London, 
 owing to the high ground rents, workmen are com- 
 pelled to reside in unfurnished lodgings, and that the 
 houses thus let out, being beyond the value of £20, 
 are assessed to the House Tax. That fact may be an 
 argument in favour of remitting the tax upon houses 
 thus occupied by the working classes, but would not 
 justify its entire repeal. It cannot, however, be 
 seriously maintained that the tax places any injurious 
 restrictions upon workmen's dwellings, if they are 
 rightly constructed. It is true that houses of the 
 value of £20 are taxed, but if houses for the working 
 classes are built in flats, so as to bring the rent of each 
 separate occupation under £20, they are not subject 
 to the tax. It is only when the present pernicious 
 system of crowding several families into a single house 
 is followed, that the working-man is subject to the 
 House Tax. Moreover, it is not the tax that is the 
 difficulty, but the value of the land ; unless that can 
 be reduced, the removal of the House Tax will afford 
 but small facility for the erection of workmen's 
 dwellings. As far as this tax is a tax upon ground 
 rents, no relief would be afforded to the working 
 classes by its removal; the whole benefit would be 
 absorbed by the landlord. It is merely in respect of 
 that portion which falls upon building rent, that they 
 would derive any advantage. The difficulty, as far as 
 working-men are concerned, would be met by adopting 
 Mr. Mill's proposal to value and assess separately
 
 The Queen's Taxes. 133 
 
 every portion of a house which is occupied by a separate 
 tenant, as is now usually the case with chambers. 
 
 Another ground of objection is that it presses very 
 unequally upon different classes of the couimunity, 
 and falls most heavily upon persons of moderate means. 
 If all taxes which offend in these respects are to be 
 proscribed, the Chancellor of the Exchequer has before 
 him the arduous task of inventing an entirely new 
 system of taxation. The income tax falls most heavily 
 on persons of moderate means ; so do duties of 
 Customs and Excise. If ten per cent, is taken by 
 taxation from an income of £200, it falls upon that 
 income far more heavily than a tax of ten per cent, 
 upon £2,000. This is an evil which is not peculiar to 
 the house tax, and, unless a graduated scale of taxa- 
 tion be adopted, taking a larger proportion from large 
 incomes than from small ones, it is impossible to 
 remedy this grievance. At all events it is hardly fair 
 to charge as a peculiar hardship in the case of the 
 house tax, an imperfection which it shares in common 
 with all other taxes. 
 
 Whatever may be urged against a tax upon houses, 
 there can be no question that a tax on ground rents is 
 a legitimate source from which to derive a portion of 
 the national revenue, and it has been shown that in 
 the larger towns this tax is, in a great degree, a tax on 
 ground rents, and to that extent is quite unobjection- 
 able. The house tax does not interfere with building, it 
 imposes no burdens upon trade or maiud'actures, it is 
 paid directly to the State, and involves no extra charges 
 upon the taxpayer. It is assessed \\\)ym that portion
 
 134 The Queen's Taxes. 
 
 of his income which he feels that he can afford to 
 spend, and thus leaves his savings untouched. In all 
 these respects it possesses great advantages as com- 
 pared with many other existing taxes, and until more 
 serious hurdens upon trade, manufactures, and employ- 
 ment have heen removed, it would be a great pity to 
 part with a source of revenue to which so little excep- 
 tion can be taken.
 
 The Queen's Taxes. 135 
 
 CHAPTER XVI. 
 
 THE LAND TAX. 
 
 This tax is the sole surviving fragment of that 
 portion of the ancient constitution of England, which 
 imposed the duty of providing for the defence of 
 the realm upon the holders of landed estate. During 
 the feudal ages all the lands of the country were 
 held either directly or indirectly from the Crown, in 
 consideration of certain services to he rendered, and 
 of certain payments to ho made by the tenants. 
 For a very long period the main portion of the 
 revenue of the country was derived from the land. 
 Customs duties were but small and unproductivCj 
 and the Excise was unknown, prior to its imposi- 
 tion by the Long Parliament. Mr. Mc Culloch 
 says:* " during the feudal system the obligation of 
 military service, with the different payments to the 
 sovereign, und(.T the heads of aids, reliefs, fines on 
 alienation, purveyance, wardship, prim(;r-seisin, scu- 
 tages, hydages, escheats, and so ibrtli, due by the pro- 
 prietors of estates hpld directly of the Crown (who 
 
 PiiiiciplcH of Taxation, 1845, pp. 5G-57.
 
 136 The Queen's Taxes. 
 
 in their turn exacted similar payments from their 
 suh-tenants), fell wholly on the land, and were, in effect, 
 so many land taxes. These revenues, added to the 
 rental of the Crown estates, were for a considerahle 
 period adequate to defray the expenses of govern- 
 ment." 
 
 The transfer of these hurdens from the land- 
 owners to the people was accompanied by another 
 change in the long established policy of the realm, 
 the introduction of a standing army. In Saxon 
 tiraes, the Militia, which was established l)y king 
 Alfred, made all the people soldiers. During the feudal 
 ao-es standing armies were unknown. In addition 
 to the feudal services of the holders of land the 
 people were trained to the use of arms, and the 
 defence of the kingdom was entrusted to their care. 
 Upon the restoration of Charles the Second an 
 entirely new system was inaugurated. The army, 
 which during the troubled period of the Common- 
 wealth had become a power in the State, was made a 
 permanent institution, the landholders relieved them- 
 selves from their feudal obligations, and in lieu 
 thereof settled one-half the excise upon the king and 
 his heirs for ever. The civil war paved the way for 
 this change ; during its continuance each party was 
 compelled to raise a force, irrespective of the old 
 conditions of knight service, and new modes of 
 raising a revenue were required. These consisted 
 mainly of taxes on real and personal property and 
 the excise. It appears, from the best information 
 that can be obtained, that the total amount raised
 
 The Queen^s Taxes. 137 
 
 in England during the period of the Common- 
 wealth was ahove £83,000,000, or ahout £4,300,000 
 annually, half of which was obtained by various 
 contributions from the land.* 
 
 At the restoration of Charles the Second all the 
 feudal prerogatives of the Sovereign were restored 
 also ; but the great landowners embraced the oppor- 
 tunity, afforded by the necessity of providing a 
 revenue for the Crown, to make a fundamental change 
 in their tenures, and thus relieved themselves from 
 the obKgations under which they had previously held 
 their estates, throwing the burden upon the people 
 in the shape of duties of excise. The measure, how- 
 ever, met with considerable opposition, many members 
 of Parliament speaking strongly against the excise, 
 and in favour of a tax upon the land. Ultimately 
 it was resolved, by a majority of 2, the numbers 
 being for the resolution 151, and against it 149, 
 "that the moiety of the excise of beer, ale, cyder, 
 perry, and strong waters, at the rate it was now 
 levied, shall be settled on the King's majesty, his 
 heirs and successors, in full recompense and satisfac- 
 tion for all tenures in capite, and by knight service ; 
 and of the Court of wards and liveries; and all 
 emoluments thereby accruing, and in full satisfaction 
 of all purveyance." t 
 
 This resolution was carried into effect by th(i Act 
 
 • The Constitutional Right to a Revision of Land Tax, Ridgway, 1842, rP- 
 22, 23. 
 
 t Ibid., pp. 25—20.
 
 138 The Queen's Taxes. 
 
 12 Chas. II, cap. 24, which is described by Blackstone 
 as a greater acquisition to the property of the King- 
 dom than even Magna Charta itself, inasmuch as the 
 latter only pruned the luxuriances, which had grown 
 out of military tenures, whereas this statute exter- 
 pated them root and branch.* There can be very 
 little doubt that the feudal prerogatives of the Crown 
 had been frequently exercised in a very oppressive 
 manner, and with little regard to the actual rights of 
 the parties. The system, however admirably it might 
 have been adapted for a feudal era, was, no doubt, out 
 of place as another phase of society was gradually 
 developed, Relief from the uncertainties and vexa- 
 tions of feudal obligations was a special and peculiar 
 advantage to the landlords. The grievances abolished 
 directly affected them only, and in justice the substi- 
 tute provided ought to have been a tax on land, as 
 advocated by the minority of 149. Such an arrange- 
 ment would have been a great advantage to the 
 landowners, while it would have imposed no fresh 
 burdens upon the people. The course adopted, in 
 preference to this simj)le and honest commutation of 
 previous obligations, laid the foundation of a fiscal 
 policy, which proved not only most disastrous for the 
 public, but highly disadvantageous for the very class 
 in whose supposed interest it was framed. Excise 
 Duties then fi.rst permanently levied, were afterwards 
 increased and multiplied to such an extent, that at 
 
 * Stephen's Commentaries on the Laws of England, Book 2, part 1, chap. 2, 
 1858, p. 205.
 
 The Queen's Taxes. 139 
 
 length, in conjunction with an elaborate and protective 
 customs tariff, they nearly annihilated the productive 
 industry of the country. Agriculture was for a very 
 long period in a condition of chronic distress, and 
 there can he little doubt that the rents received by 
 the landlords, during the period of heavy duties, were 
 far smaller than they would have been if the industry 
 of the country had been left free from the trammels 
 of customs and excise. 
 
 Another most important change then introduced, 
 was the conversion of the landholders into landowners. 
 By the feudal system the land of the country was 
 vested in the Crown as the representative of the com- 
 munity. It was held by the great landholders, subject 
 to the performance of certain duties and the payment 
 of certain taxes. It was the means by which the 
 Sovereign obtained soldiers for the conduct of his 
 wars. The change in the tenure of land, effected in 
 1660, is described, in a work previously referred to,* 
 as one which " completely altered the fundamental 
 element of the constitution of this country. The 
 Government of England previously to that Act was 
 a feudal monarchy, the very essence of which is, that 
 the public expenses of the Government, both in war 
 and peace, shall be defrayed by the various feudatories, 
 the deficiency, if any, being provided for out of the 
 public property in land vested in the monarch for the 
 time being, and by tax(^s or subsidies granted by Par- 
 liament, and levied on the land and personal property 
 
 • TLo Constitutional Right to a Revision of the Land Tux, pp. '28-2'J.
 
 140 The Queen's Taxes. 
 
 of the kingdom. This Act gave to tlie feudatories of 
 England a complete discharge, as the lawyers are in 
 the habit of very correctly wording it, from the 
 oppressive fruits and incidents of their tenure. It 
 confirmed to them their rights, discharged from the 
 correlative obligations ; and thus created the moral 
 and legal anomaly of rights without obligations — an 
 anomaly which cannot exist without a legal and 
 logical absurdity, and a moral fraud." From the 
 passing of that A.ct the property of the nation in the 
 soil was transferred to a section of the community. 
 Another serious evil followed this injustice ; the 
 privilege of Government became divorced from the 
 responsibility of providing the ways and means of its 
 administration and the cost of the wars, in which the 
 Sovereign and his advisers might involve the nation. 
 So long as the obligations of the military tenures 
 existed, the landholders had a direct interest, both 
 in checking needless wars, and in bringing such as 
 were undertaken to a speedy termination. The 
 modern system having placed the burden upon the 
 shoulders of the people, who were unrepresented in 
 Parliament, the direct incentive to frugality, which 
 the sense of personal responsibility for expenditure 
 provided, was removed. It was this circumstance 
 which rendered it possible for the rulers of this 
 coimtry to involve the nation in long and costly 
 Continental wars, for objects in which the interests of 
 the people were but little concerned. The so-called 
 balance of power might be a question of great import- 
 ance to the ruling classes, but it was one of little
 
 The Queen's Taxes. 141 
 
 moment to the masses of the population, who were 
 far more deeply interested in good government at 
 home, than in the questionable proceedings of the 
 notorious Holy Alliance. The sole result of these 
 wars, so far as the great mass of the people of this 
 country were concerned, was an intolerable addition 
 to the burdens imposed upon trade and industry, and 
 the imposition of restraints upon personal and political 
 freedom, from which the nation is not even yet 
 entirely free. 
 
 It has been already seen that during the period of 
 the Commonwealth a considerable portion of the 
 revenue was raised by assessments on real and personal 
 property, levied according to the public exigencies. 
 As the sum of £1,200,000 a year fixed for the ordinary 
 revenue of Charles II. was insufficient to provide for 
 all his expenses, the assessment of property, established 
 during the Commonwealth, was continued to supply the 
 deficiency. 
 
 The following table shows the various items of the 
 revenue and the average annual receipt during the 
 reigns of Charles II, and James II. : — * 
 
 
 Charles II. 
 
 James II. 
 
 
 £ 
 
 £ 
 
 Crown lands 
 
 105,000 
 
 
 Land tax 
 
 500,000 
 
 100,000 
 
 Customs 
 
 400,000 
 
 1,015,472 
 
 Excise 
 
 294,050 
 
 07(3,387 
 
 Miscellaneous ... 
 
 380,760 
 
 310,000 
 
 Total 
 
 £1,080,710 
 
 £2,101,859 
 
 The Constitutional Right to a Revision of the Land Tax, p.p. CC-57.
 
 142 The QueerCs Taxes. 
 
 It appears from these figures that the annual sum 
 received from duties of Customs and Excise, during 
 the reign of James II., was considerably more than 
 double the amount raised in that manner during the 
 reio'n of his brother. The amount derived annually 
 from the tax on property was, however, but one-fifth 
 of that which had been paid during the reign of 
 Charles II. In fact the land-owners refused to grant 
 more than one aid of £400,000 from that source. The 
 burden thus thrown upon the people gave rise to 
 serious complaints, and it was one of the promises 
 held out by the friends of William III. that there 
 should be a reduction and re-adjustment of taxation. 
 Accordingly one of the first Acts of the Convention 
 Parliament, which met in 1689, was the grant of an 
 aid of six monthly assessments on real and personal 
 property, exclusive of stock on land, which was 
 declared exempt. Two further aids were granted 
 durins: the same year on the same terms as the first. 
 These three aids amounted, in the year 1689-90, to a 
 tax of 4s. in the pound on the yearly rental of real 
 property, and 24s. for every £100 of personal property 
 (except debts, stock on land, and household goods) ; 
 or 4s. in the pound on £6, the then legal interest of 
 money, thus rating both descriptions of property alike. 
 They produced the sum of £2,018,704. This mode of 
 assessing the land tax was adopted with some slight 
 variation until the year 1697, when another important 
 change was introduced, by which the State was 
 deprived of its right to a growing revenue from the 
 increasing value of property.
 
 The Queen's Taxes. 143 
 
 It was provided, by the various Acts passed during 
 the early years of the reign of William and Mary, 
 that the tax on land should be paid on the " full true 
 yearly value thereof at the time of assessing thereof." 
 Upon this principle the tax was voted annually until 
 1097, when the arrangement made with the nation in 
 in 1689 was deliberately set aside. By the land tax 
 Act passed in 1697 a fixed sum of £1,484,015 was 
 granted which was to be paid first by personal estate 
 (except desperate debts, stock on land, household 
 goods, and loans to his Majesty) and employments of 
 profit, except military and naval. Then lands, tene- 
 ments, &c., were to be " charged with as much 
 equality and indiflFerency as was possible by a pound 
 rate, for or towards the said several and respective sums 
 of money by this Act set and imposed." The effect of 
 this statute was first to levy a fixed rate on personal 
 property and offices of emolument, and then to make 
 up any deficiency in the amount voted, by a rate on 
 real property. Nothing is said in the act about any 
 valuation of real property, and, in consequence 
 of this omission, the last valuation made prior 
 to the passing of that act has been the one 
 employed from that time to the present. In the 
 following year (1698) the same sum was voted, and 
 from that date, the sum to be raised by the land tax 
 was voted yearly in the same way until the year 1798, 
 when it was made perpetual at the amount then levied. 
 
 It is obvious that the designation of tliis tax, as 
 imposed in 1697, was inaccurate, and that it would 
 have been more correctly described as a property lax.
 
 144 The Queen's Taxes. 
 
 It soon became, however, really, as well as nominally, 
 a land tax, the assessment of personal property being 
 abandoned, although it was not relieved by statute 
 until the year 1833. The exemption of personalty 
 seems to have been effected gradually, and it does not 
 appear that, at any period, the officers of the revenue 
 have been able to assign any reason for this evasion 
 of the law. It is obvious, however, that as personal 
 property increased in value, the assessment of the 
 land tax at a fixed rate upon that description of pro- 
 perty, as provided in the statute, would have produced 
 more than was necessary to meet the sum voted by 
 parliament. In that case land, which it was provided 
 was to be taxed merely to supply the deficiency of 
 personalty, would have entirely escaped. A writer on 
 the subject, previously quoted, expresses his conviction 
 that the act upon which all subsequent land tax acts 
 were based was skilfully framed so as to throw the 
 chief burden of the tax on personalty, which was 
 subsequently gradually relieved from assessment, in 
 order to prevent that enquiry into the mode in which 
 parliament had dealt with the tax, which its enforce- 
 ment upon personalty according to the letter of the 
 law, would necessarily have provoked. One fact is 
 certain, that during the whole of the period in which 
 personalty was liable to the tax from 1697 to 1833, 
 the landed interest was supreme in the House of 
 Commons, and the result of that supremacy is seen in the 
 successive measures they adopted to relieve themselves 
 from burdens upon their property, which were the 
 legitimate and advantageous commutation of the
 
 The Queen's Taxes. 145 
 
 heavier obligations of the feudal system.* The mode 
 in which this branch of the public revenue has been 
 appropriated, since the abolition of feudal tenures in 
 1660, by a powerful section of the community was 
 fitly described by Mr. Cobden, in 1842, f as an ex- 
 ample of legislative fraud scarcely surpassed by the 
 Corn Laws." 
 
 It has been seen already that in 1798 the tax was 
 made permanent by Mr. Pitt, and the amount to be 
 contributed by each parish fixed by statute. This was 
 done with a view to the early redemption of the 
 tax, in order to provide funds for the War. The 
 measure, however, was not successful, the amount 
 redeemed being much less than was anticipated. In 
 fact the tax had become so insignificant in its 
 amount that the yearly payment was a smaller 
 burden than the trouble of redemption. The amount 
 redeemed can be easily ascertained ; in 1798 the 
 produce of the tax was £1,989,673; in the year ending 
 31st March, 1869, it was £1,131,301, showing that 
 the amount redeemed during fifty years was £858,372. 
 Of this sum £135,888 was redeemed in the years 
 1798-99.11 The maintenance of the valuation of 1695 
 for the land tax produces some remarkably grotesque 
 
 * The above remarks have been mainly summarised from the Pamphlet 
 previously referred to—" The Constitutional Rijjht to a revision of the Land Tax " 
 —which contains full details of the mode in which this Tax has been treated, with 
 copious references to the oripnal documents. See also Siuchiir's History of the 
 Kevenue, and McCuUoch's Treatisa on Taxation. 
 
 t Com Law Debate, March Id, 1812. 
 
 II First Inland Revenue Report, 1857, pp. 38-3y, and App. pp. 30-32. 
 
 L
 
 146 The Queen's Taxes. 
 
 results. In some pai'ishes the tax amounts at the 
 present time to 10 per cent, of the rental, in others to 
 5 per cent., while in some Instances it is but a half- 
 penny or a farthing in the pound, and in the case of 
 Liverpool it is less than the thirty-sixth part of a 
 penny in the pound.* In fact it has ceased to he 
 a tax, and has become simply a small rent charge 
 created on certain lands in favour of the State. 
 
 If the land tax had been invariably assessed accord- 
 ing to the evident intention of the Act, 12 Car. 2, 
 cap. 24, upon the actual rent, a very considerable 
 revenue would now have been derived from that 
 source. If the four shillings in the pound was a fair 
 assessment in 1660 it would not have pressed unjustly 
 upon the increased assessments, which the augmented 
 value of the soil would have created. In his lectures 
 on Political Economy, Professor P. W. Newman argues 
 that a tax of even 50 per cent, upon rent, if imposed 
 at the period when it first became generally payable, 
 would have been a perfectly unexceptionable source 
 of revenue. t In parting with the ownership of the 
 soil it was quite competent for the State to have ii^iposed 
 a rent charge of one-fifth upon the landlords, the re- 
 maining four-fifths of the rental being retained by 
 them as their remuneration for the management of 
 the estates. It is difficult to estimate with accuracy 
 what would have been the full effect of such an 
 arrangement upon the amount of their rentals. There is 
 
 • Eeturns of Land Tax Valuation, Parliamentary Paper, Session 1844, No. 316. 
 t Lectures on Political Economy, 1851, p. 211.
 
 The Queen's Taxes. 147 
 
 little doubt that the heavy burdens so long imposed 
 upon trade and industry by duties of customs and 
 excise have exercised a powerful influence in 
 retarding the development of national prosperity, 
 and have materially diminished the amount 
 that, under more favourable conditions, would have 
 accrued to the landed proprietors. The transfer of 
 their legitimate obligations to the people by the sub- 
 stitution of excise duties, for the obligations previously 
 imposed upon them, was not by any means a profitable 
 bargain. The remission of burdens upon land, which 
 had existed for centuries, at the expense of the con- 
 sumers of commodities was neither more nor less than a 
 fraud upon the community, unattended by any corres- 
 ponding advantage to the class, in whose supposed 
 interest it was perpetrated.
 
 148 The Queen's Taxes. 
 
 CHAPTER XVII. 
 
 PROPERTY AND INCOME TAX. 
 
 An attempt to levy an Income Tax was first made 
 by Mr. Pitt in 1798, in the form of an addition to the 
 assessed taxes, regulated by the amount of income 
 possessed by the persons who were subject to the 
 payment of the duties then imposed. It was intended 
 as an aid and contribution for the prosecution of the 
 war, but in that respect it disappointed the expecta- 
 tions of its projector, the amount it yielded during 
 the year being only £1,855,996. In consequence of 
 this failure, the duties imposed in 1798 were repealed 
 in the following year, and, in lieu thereof, a tax of 
 10 per cent, was imposed on all incomes of £200 and 
 upwards. Incomes below £60 were exempt from 
 taxation, and incomes between that amount and £200 
 were charged at reduced rates. The new tax pro- 
 duced the sum of £6,046,624 during the first year of 
 its existence ; and being found a profitable source of 
 revenue, was continued until the year 1802, when it 
 was repealed in consequence of the peace of Amiens. 
 It was re-imposed on the renewal of the war in the
 
 The Queen's Taxes. 149 
 
 following year, and, subject to modifications in detail, 
 formed an important constituent in the fiscal system 
 of Great Britain until the peace of 1815, Avhen it was 
 again repealed. The net receipt of this tax during 
 the ten years ending 1816 was £129,011,299, a 
 yearly average of above £12,900,000.* The causes 
 which led to its revival by Sir Robert Peel, in 1842, 
 must be well known to all who are acquainted with 
 the history of that period. A fresh generation has, 
 however, come into existence since that year, and it 
 may, therefore, be necessary briefly to recount the 
 facts of the case. Por several years the revenue had 
 suffered from a chronic deficiency, which was esti- 
 mated, by Sir Robert Peel, for the year 1842-3, at 
 £2,570,000 ; and for the six years ending 1843, unless 
 remedial measures were applied, at £10,072,000. 
 Every interest in the kingdom was in a condition of 
 intense depression; it w^as stated in the House of 
 Commons that half the mills in Lancashire were 
 closed, and that the fixed capital of that county had 
 depreciated within a few years fully 50 per cent. ; a 
 similar condition of affairs prevailed in other manu- 
 factaring districts ; shipping was an unremuncrative 
 property; agricultural distress had been for a 
 lengthened period the constant topic of discussion 
 in Parliament, and enquiry by Select Committees; 
 the number of able-bodied paupers had increased 
 more than two-fold since 1830; the number of 
 
 Fii-st Inland iicvcinic llcpurt, 18.J7, pp. M'M. Apii., p. cxxvii.
 
 150 The Queen's Taxes. 
 
 emigrants had riseD from 44,478 in 1835 to 128,344 
 in 1842, and would liave been far larger if the people 
 had possessed the means with which to defray their 
 passage ; in the district of Manchester 8,000 persons 
 were living on 15 d. each per week, and in that and 
 other manufacturing districts thousands of work- 
 people were wandering through the streets in search 
 of employment. The industry of the country had 
 been " protected " with such success, that the exports 
 of British produce and manufactures were not equal 
 in value to those of the year 1815, and the home 
 demand was materially diminished through the 
 absence of remunerative employment. It was to 
 provide a remedy for this deplorable condition of 
 affairs that Sir Robert Peel proposed the re-enactment 
 of the Income Tax. It is a noteworthy fact that, in 
 this instance, as well as in 1798, an attempt had been 
 made to provide for the deficiency of revenue in 
 another way. In 1840 the Whig Government pro- 
 posed, with the approval of Sir Eobert Peel, and 
 carried successfully through Parliament, an increase 
 of 10 per cent, on all the assessed taxes except the post 
 horse duty, and 5 per cent, on all duties of Customs 
 and Excise, except those on spirits which were 
 increased 4d. per gallon, and corn, in which no altera- 
 tion was made. The anticipated gain to the revenue 
 from these sources was £2,186,000, the actual increase 
 only £677,485. In the following year the Ministry 
 were defeated on a vote of want of confidence and 
 dissolved Parliament, the question submitted to the 
 constituencies being the acceptance or rejection of a
 
 The Queen's Taxes. 151 
 
 fixed duty on com. In the new House of Commons 
 the Ministry found themselves in a minority of 91, and 
 Sir Robert Peel took office at the head of a Conserva- 
 tive and Protectionist administration, with the avowed 
 intention of maintaining the existing Corn Laws. 
 The first task imposed upon him was that of providing 
 for the chronic deficiency of the revenue, and in 1842 
 he proposed the re-enactment of the Income Tax 
 appealing to owners of property to make a temporary 
 sacrifice, for the purpose not only of supplying the 
 deficiency, hut of enabling him with confidence to 
 propose great commercial reforms, which would afford 
 a hope of reviving commerce, and such an improve- 
 ment in the manufacturing interest as would react 
 upon every other interest in the community.* 
 Intended as a temporary expedient the Income Tax 
 has remained a permanent feature of our fiscal 
 system; it has been renewed upon several occasions 
 for the purpose of seeming further remissions of 
 indirect taxation; it has been increased to provide 
 for the expenses of several wars, and to defray the 
 large additions to om- naval and mihtary expenditure 
 which followed the Crimean War. The various 
 changes in the rate of the tax, and other modifi- 
 cations introduced since 1812, are shown in the 
 following table if — 
 
 • For more complete details respecting the renewal of the lucomo TaX; see 
 Fiscal Lej,'iHktion, 1812-05. Longmans, pp. 8-17 
 
 t Parliamentary Paper, Schs. 1802, No. 31G. Twelfth Ii.l ui.l Revenue Report, 
 App. p vii. .\cts of Parliament, U Vic. c. 28 '6'1 ami 33, Vic. c. 11.
 
 152 The Queeti's Taxes. 
 
 Year in which 
 the change 
 was made. 
 
 Eate in 
 on £150 
 and upwards 
 8. d. 
 
 the£ 
 on £100 
 to £150. 
 s. d. 
 
 1842-3* 
 
 7 
 
 nil. 
 
 1853-4 
 
 7 
 
 5 
 
 1854-5 
 
 1 2 
 
 10 
 
 1855-6 
 
 1 4 
 
 114 
 
 1857-8 
 
 7 
 
 5 
 
 1858-9 
 
 5 
 
 5 
 
 1859-60 
 
 9 
 
 6i 
 
 1860-1 
 
 10 
 
 7 
 
 1861-2 
 
 9 
 
 6 
 
 £100 and upwards. 
 
 An abatement allowed of 
 the duty on £60 from 
 Incomes under £200. 
 
 1863-4 7d. 
 
 1864-5 6 
 
 1865-6 4 
 
 1867-8 5 
 
 1868-9 6 
 
 1869-70 5 
 
 Farmers assessed on lialf their rent in England, and 
 one-third in Scotland and Ireland. 
 
 The Income Tax has been described, with great 
 
 accuracy, bv Mr. Dudley Baxter,! as " not so much 
 
 a tax as a code of taxes, bringing within its 
 
 jurisdiction income of every description, from land, 
 
 from houses, from farming, from the funds, from 
 
 trades and professions, and from public salaries and 
 
 pensions." The following table shows the various 
 
 schedules under which it is assessed, the amount of 
 
 In Great Britain only, extended to Ireland in 1853. 
 t Taxation of the United Kingdom, p 26.
 
 The Queen^s Taxes. 
 
 153 
 
 income, and the produce of the tax for the year 
 ending 31st March, 1869 :* 
 
 Scheilule. Description. Rate in the 
 
 Amount 
 
 Amount 
 
 
 
 £ 
 
 Assessed. Collected. 
 
 
 
 d. 
 
 £ \ £ s- d 
 
 A 
 
 Lands, tenements, 
 
 
 
 
 
 and hereditaments 
 
 6 
 
 132,273,709 
 
 
 B 
 
 Occupation of lands 
 
 
 
 
 
 England 
 
 3 
 
 30.453 918 
 
 
 
 Scotland, Ireland 
 
 2i 
 
 7,053,o51 
 
 
 
 Nurseries and 
 
 
 
 
 
 market gardens 
 
 6 
 
 84,698 
 
 
 
 Compositions for 
 
 
 
 
 
 tithes and tithes 
 
 
 
 
 
 leased 
 
 H 
 
 2,085 
 
 8,743,462 10 C 
 
 C 
 
 Annuities, divi- 
 
 
 \ 
 
 
 dends, &c 
 
 6 
 
 33,689,568 
 
 
 D 
 
 Professions, trades 
 employm ents, 
 mines, ironworks, 
 railways,and simi- 
 
 
 
 
 
 lar undertakings 
 
 6 
 
 160,978,671 
 
 
 E 
 
 Salaries and pen- 
 sions paid out of 
 
 
 
 
 
 public revenue... 
 
 6 
 
 22,005,866 
 
 
 Total £3S6,542,366| 
 
 In the enactment of the Income Tax in 1842, Sir 
 Robert Peel followed the example of Mr. Pitt, and 
 confined its operation to Great Britain. The exemp- 
 tion of Ireland from the tax was discontinued in 
 1853, on the plea that slie had received her full 
 proportion of the benefit attending previous remis- 
 sions of taxation, obtained through the income tax 
 which Great Britain had hitherto borne alone, and 
 would also profit largely by the remission of taxation 
 
 ♦ Purliamcntary Paper, Sess. 18G0, No. 427.
 
 154 The Queen^s Taxes. 
 
 then proposed; at the same time the balance of the 
 debt due from Ireland to England on account of 
 advances for the establisliment of the Poor Law in 
 Ireland and the Irish Famine, amounting to 
 £4,500,000, was remitted.* 
 
 In the same year the tax was extended from in- 
 comes of £150, the limit fixed by Sir Robert Peel, to 
 incomes of £100, which were assessed at a lower rate 
 of duty. This arrangement was continued until the 
 year 1863, when a uniform rate was adopted for all 
 incomes, commencing at £100 a year, but an abate- 
 ment of £60 allowed on incomes under £200. In 
 consequence of this arrangement the owner of an in- 
 come of £100 pays the tax on £40 only, the owner of 
 £200, on £140 ; and intermediate incomes in like 
 proportion. 
 
 A very important mitigation of the tax was intro- 
 duced in 1853, by the exemption of sums invested in 
 deferred annuities or policies of insurance, to the 
 extent of one-seventh of the whole income. This 
 measure was a concession to the principle, advocated 
 by Mr. Mill and other economists, that savings ought 
 to be exempt from taxation. It is true that it only 
 meets the requirements of one form of saving; the 
 question naturally arises if such investments are 
 exempt, on what principle are other savings held liable 
 to the tax ? The only answer to this question is the 
 one given by Mr. Gladstone, upon the introduction of 
 
 Mr. Gladstone's Financial Statements, pp. 58-60, 71-73.
 
 The Queen's Taxes. 155 
 
 the exemption just named, that he did not think it 
 possible to make provisions of that kind applicable to 
 savings simply as such. There are, no doubt, diffi- 
 culties in the way of a universal application of the 
 principle, but it surely cannot be an utter impossi- 
 bility to produce bond fide evidence of all monies 
 invested as savings, whatever may be the form such 
 investments may take. 
 
 These are the main features of the tax, and are 
 common to all its schedules. The pressure of the tax 
 varies according to the nature of the income assessed, 
 and it has therefore been found convenient to make 
 each schedule the subject of a separate chapter. 
 
 Before proceeding to the consideration of the 
 various schedules in detail, there is one objection 
 very commonly urged against this tax, which deserves 
 notice — the assessment of permanent and precarious 
 incomes at the same rate. In defence of this practice, 
 it is argued that the State protects the income of the 
 3''ear, and that, therefore, the tax should be assessed 
 upon the income of the year exclusively, irrespective 
 of the source from which it may be derived. There is 
 a simplicity about this argument which is rather 
 captivating, especially to the owners of permanent 
 incomes. It will, however, hardly bear investigation. 
 In protecting real property the State protects not 
 merely present, but also future income ; the owner 
 may die within the year, but his property remains, 
 and along with it the income it produces. In the 
 case of professional and trading incomes, which depend 
 upon the continuance (jf physical and mental ])()wers,
 
 156 The Queen's Taxes. 
 
 the income itself terminates with the ability of the 
 individual to pursue his avocation. In the one case 
 the State protects permanent property, in the other 
 precarious earnings ; it can hardly be alleged that 
 services so dissimilar are of equal value ; if they are 
 not, with what show of justice can the present mode 
 of equal assessment be maintained ? It is, unques- 
 tionably, the fact that the general opinion of the 
 community is most decidedly opposed to this feature 
 of the Income Tax, and it is diflB.cult to believe that it 
 can long be maintained upon a footing, so entirely 
 repugnant to the prevailing sentiment of those by 
 whom it is paid. 
 
 The Committee of the House of Commons, appointed 
 in 1852 to inquire into the then existing mode of 
 assessing and collecting the Income Tax, examined 
 many witnesses upon this point. Among them was 
 Mr. Mill, who advocated the exemption of all savings 
 from taxation, but, if that plan should prove imprac- 
 ticable, he would adopt that of taxing temporary or 
 precarious incomes at a lower scale than permanent 
 incomes. If real or permanent property be taxed at 
 7d. in the £ on the net income, he would tax tem- 
 porary incomes at 7d. on three-fourths of the net 
 income, and those that are not only temporary, but 
 precarious, at 6d. in the £ on three-fourths of the 
 net annual income. The capitalization of incomes 
 and levying the tax upon the value so ascertained was 
 advocated by the following actuaries : Mr. S. Brown, 
 Mr. C. Jellicoe, Mr. Peter Hardy, and Mr. G. P. 
 Neison ; by Dr. William Parr, the Registrar- General,
 
 The Queen's Taxes. 157 
 
 and by Mr, J. U. Jeffery, of Liverpool. Other modes 
 of rendering the tax more equitable were suggested by 
 Mr. Erskine Scott and Mr. T. R. Edmonds, actuaries. 
 Mr. Babbage and Mr. Henry Warburton supported 
 the uniform assessment of income from whatever 
 source derived. The committee made no report, on 
 the ground that the state of business and the prospect 
 of an early prorogation did not afford sufficient time 
 for discussing and preparing one that would do justice 
 to the subject. The evidence presented to Parhament 
 contains a mass of valuable information on this im- 
 portant subject.* 
 
 * First and Second Reports of Select Committee on the Property and Income 
 Tax. Sess. 1852, Nos. 354, 510. For summary of the evidence referred to, see 
 Mr. Hume's Draft Report, pp. xxviii., xxix. of Second Report.
 
 158 The Queen's Taxes. 
 
 CHAPTEE XVIII. 
 
 INCOME TAX, SCHEDULE A. — LANDS, HOUSES, ETC. 
 
 This schedule of the Income Tax is now the only 
 contrihution to the public revenue assessed upon the 
 rental of real property, and paid out of the net income 
 of the landlords. It has been already shown that the 
 land was formerly the principal source of the revenues 
 of the Crown, that the Land Tax imposed originally at 
 4s. in the £ on the clear annual value of the land has 
 dwindled away, under the influence of landowning 
 Parliaments into a small rent charge levied upon a 
 portion only of the lands of the kingdom. In 1798 
 the amount to be contributed by each parish to the 
 Land Tax was fixed in perpetuity with privilege of 
 redemption if desu^ed, and in the following year a tax 
 on incomes was introduced, which, in the case of 
 owners of real property, was a tax upon rent. Prom 
 that period to the termination of the war real property 
 was assessed, by the Property and Income Tax, in a 
 mode analogous to that intended by the original Land 
 Tax of William and Mary. In the year 1815, how- 
 ever, by the repeal of the Income Tax, the owners of 
 real property were relieved from any direct payments 
 on account thereof; the heavy burdens laid upon 
 trade and industry during the war by means of duties
 
 The Queen^s Taxes. 159 
 
 ou home productions and foreign imports were re- 
 tained, but land, formerly the chief source of revenue, 
 became but only tangible property exempt from 
 taxation. The impolicy of this proceeding is now 
 almost universally acknowledged ; its results w^ere 
 seen in depression of trade, diminution of the demand 
 for labour, increase of pauperism, and deficiency of 
 revenue, until at length the re-imposition of a direct 
 tax became an imperative necessity. 
 
 The amount of income assessed under this schedule 
 of the Income Tax during the last three financial years 
 was as follows : — * 
 
 Year ending 
 
 31st March, £ 
 
 1867 . 154,119,601 
 
 1868 125,070,065 
 
 1869 132,273,709 
 
 Increase of 1869 over 1868, £7,203,644. 
 
 The decrease of property assessed in 1868 and 1869 
 compared with the year 1867, arises from the transfer 
 of the profits of several commercial undertakings, pre- 
 viously assessed under this schedule, to schedule D, to 
 which they more properly belong. The tax upon such 
 undertakings will, therefore, be considered under the 
 schedule in which they are now placed. 
 
 Judging from the mode in which the land tax was 
 dealt with by Parliament, the objections raised by the 
 landed proprietors to tlic income tax, and the readiness 
 with which they repealed it in 1815, and have reduced 
 it whenever practicable, a tax on rent would appear to 
 
 • Parliamentary Paper, Taxes and Imposts, SosBion 18C7, No. 545 ; Scssiou 
 1868, No. 403 ; ScBsiou IbCj, No. 427.
 
 IGO The Queen's Taxes. 
 
 be very unpopular with the owners of land. It is an 
 ostensible burden, but is infinitely less onerous and 
 prejudicial to owners of real property than duties 
 of Customs and Excise, which are none the less 
 deleterious because their operations are concealed 
 from sight. There can be no doubt that the 
 *' temporary sacrifice " which Sir E,obert Peel 
 demanded from holders of property in 1842 has proved 
 a permanent advantage. By means of the Income 
 Tax duties have been removed, not merely from the 
 prime necessaries of existence, but from nearly every 
 article of luxury consumed by the rich ; simultaneously 
 with this process, the liberated industry of the com- 
 m.unity has steadily increased the value of real 
 property. 
 
 A tax on the rent of land was denounced by Mr. 
 McCuUoch, in his work on Taxation, as extremely 
 objectionable, on the ground that it had always been, 
 and would unavoidably continue to be, a formidable 
 barrier to agricultural improvements. In his opinion 
 it was far preferable to levy duties on the luxuries 
 consumed by the proprietors of land.* Since the publi- 
 cation of these speculations, a policy the exact reverse 
 of the one he recommended has been pursued by 
 successive administrations. Taxes upon luxuries have 
 been, one by one, repealed, through the instrumentality 
 of a direct tax falling upon rent in common with other 
 kinds of income, until there is no luxury, mainly 
 consumed by the wealthy, subject to taxation but 
 
 * McCulloch'B Treatise on Taxation, 1845, pp. 43-56.
 
 The Q?we?i's Taxes. 161 
 
 wine. It does not appear, however, that agricultiu'al im- 
 provement has heen checked, or that landed proprietors 
 have suffered any diminution in their rents. On the 
 contrary, the value of land has materially increased, 
 and improvements have heen introduced into the 
 practice of agricultiu'e, much greater in extent and 
 importance than at any previous period of our history. 
 
 A complete test of the accuracy of the opinions, 
 enunciated by Mr. McCulloch, is to he found in the 
 income tax returns of different periods. Let us, there- 
 fore, enquire to what extent his views have heen veri- 
 fied by facts. Dming the period commencing mtli 
 the year 1815, when the tax was repealed, and 
 terminating with the year 1842, when it was 
 re-imposed, there Avas no imperial tax levied upon 
 the rent of land, while the luxuries of the 
 rich were subject to numerous duties. The gross 
 rental of land in England and Wales for the 
 year 1814-15, according to Parliamentary retm^ns, 
 was £34,330,462, or allowing 10 per cent, for the 
 depreciation of the currency, £30,897,410. In 
 the year 1842-3, it was £40,167,089, showing a total 
 increase, in 28 years, of £9,269,673, or an annual 
 average of £331,059.* 
 
 In 1842 the Income Tax was revived for the purpose 
 of enabling Sir Hobcrt Peel to propose remissions of 
 taxation upon trade and industry. In 1815 furtlier 
 relaxations, mainly of taxes upon necessaries of life, 
 
 • M'Culloch's Britisb Empire, cJ. 1817., vol. 1, pp. 553-4. 
 
 M
 
 162 The QueerCs Taxes. 
 
 took place ; in 1846 the principle of free trade in corn 
 was adopted by Parliament ; and in subsequent years 
 numerous other duties of customs and excise have been 
 repealed or reduced. The benefits of the free trade 
 policy were not, however, immediately experienced 
 so far as agriculture was concerned. It was a mis- 
 fortune that the Conservative party did not accept 
 free trade as an accomplished fact in 1846, but main- 
 tained an unwise and delusive agitation for the resto- 
 ration of protection, which was not terminated until 
 the decisive verdict of the general election of 1852. 
 As a natural consequence of such a policy the ener- 
 gies of the farmer were mainly directed to political 
 agitation, not to the introduction of such agricultural 
 improvements as were rendered necessary by his altered 
 circumstances. According to the evidence of Mr. Jas. 
 Caird,* in 1852, the most antiquated and wasteful 
 practices were then to be found side by side with the 
 few modern improvements then introduced, but little 
 progress having in many cases been made for nearly a 
 century. In numerous instances he witnessed the 
 same rude processes which were recorded by Arthur 
 Young, eighty years previously ; scientific cultivation 
 was then the exception, the "wisdom of our ancestors" 
 the rule, in agricultural pursuits. It is not, therefore, 
 to be wondered at that during the period of purely 
 political agitation, which immediately followed the 
 repeal of the Corn Laws, there was but little increase 
 
 Caii-d's English Agriculture, 1852, pp. 498-500.
 
 The Queen's Taxes. 163 
 
 in the rental of the kingdom. The amount assessed 
 in Ensrland and Wales under schedule A for rent of 
 land in the year 1852-3 was £41,086,209,* an increase 
 over 1812-3 of £919,180, the yearly average being 
 only £91,918. The year 1852-3 may be fairly taken 
 as the concluding year of the protectionist era. It 
 was then that the farmers finally abandoned all idea 
 of the re-enactment of the Corn Laws, and set to work 
 to meet their altered circumstances. If the rental of 
 that year is compared with that of the year 1815 it 
 will be seen that the increase during 37 years was 
 £10,188,853, the annual average of the period being 
 £275,371. 
 
 It is now our task to enquire into the effect of the 
 free trade policy which was inaugurated, and indeed, 
 rendered practicable, by the levy of direct taxation on 
 income, including rent. It does not appear, from the 
 returns since 1852, that the landowners have suffered 
 in consequence of the change. The increased value 
 of land in England and Wales is shown in the follow- 
 
 ing table. 
 
 Value of Lands 
 
 
 Year. 
 
 Assessed 
 under Schedule A. 
 
 Increase 
 
 
 £ 
 
 £ 
 
 1852-3 
 
 41,086,269 
 
 over 1852-3 
 
 1856-7t 
 
 41,176,957 
 
 90,688 
 over 1856-7 
 
 1864-5+ 
 
 46,403,437 
 
 5,226,480 
 
 • Property and Income Tax Return, Sess. 1860, No. 592. 
 t Ibid. 
 \ Tenth Inland Revenue Report, 1866, App. p. Iz.
 
 164 The Queen's Taxes. 
 
 The annual average increase for the 8 years ending 
 1864-5 being £653,310. 
 
 The following are the returns for Scotland during 
 the same periods :' 
 
 
 Value of Lands 
 
 
 Year. 
 
 Assessed under 
 Schedule A. 
 
 
 
 £ 
 
 £ 
 
 1814-15 
 
 5,075,242 
 
 Increase over 1814-15 
 
 1842-3 
 
 5,586,527 
 
 511,285 
 
 Decrease compared 
 with 1842-3 
 
 1S52-3 
 
 5,499,404 
 
 87,123 
 Increase over 1852-3 
 
 1856-7 
 
 5,932,156 
 
 432,752 
 
 1864-5 
 
 6,830,639 
 
 898,483 
 
 It appears, from these figures, that the increased 
 rental of land in Scotland for the year 1864 compared 
 with the year 1852, was £1,331,235, or 24 per cent. ; 
 while, in England and Wales, the increase during the 
 same period was £5,317,168, or about 12f per cent. 
 An enquiry into the conditions under which the 
 practice of agricultm'c exists in England, as compared 
 with Scotland, will no doubt demonstrate that the 
 growth of rent in the latter portion of the island has 
 been stimulated because superior security is afiPorded 
 to capital invested in agriculture. A very competent 
 authority says,t in reference to the system of yearly 
 
 * First Inland Revenue Repoi-t, 1857. App. p. cxxix. Property and Income 
 Tax Retiu-ns, Sess. 1815, No. 102, and Sess. 1800, No. 592. Tenth Inland 
 Revenue Repoii, 1866. p. ix. 
 
 t On the Conditions of Agiicultm-al Success. Bv George Hope, Fentou Barns. 
 Transactions of the National Association for the Promotion of Social Science 
 1863 : Longmans, p. 778.
 
 Tlie Queen's Taxes. 165 
 
 tenancy, so largely prevalent in England, " I feel 
 j)crfectly amazed that public policy should permit 
 such a state of matters to continue. In Scotland no 
 such diflB.culty is felt, and even on the most strictly 
 entailed estates, leases for 19 and 21 years are imi- 
 versal. There is not a doubt that this fact has had 
 much to do in placing Scotch Agriculture in the high 
 position it at present holds, and that it has enabled 
 Scotch farmers to pay rents higher in amount than is 
 obtained for naturally richer soils in the more genial 
 climate of the South." 
 
 It must be evident from the statistics already quoted 
 that a tax on rent is not necessarily a hindrance to the 
 improvement of agriculture. Uncertainty of tenure, 
 the consequent insecurity of capital employed in the 
 cultivation of land, which is its invariable attendant, 
 and fiscal restrictions upon trade, manufactures, and 
 employment are the real evils against which the land- 
 owners have had to contend. In throwins; the weisrht 
 of taxation upon commodities consumed by the popu- 
 lation, and thus relieving their estates from the direct 
 tax, which was imposed in lieu of feudal tenures, the 
 landholders of England conferred no real benefits upon 
 their descendants. In proportion as trade and industry 
 have been liberated from fiscal exactions, and mainly 
 indeed in consequence of sucli liberation, the people 
 have become more prosperous, and improvements in 
 agriculture have been rendered imperative in order to 
 meet the increased demand for agi'ietdtural produce, 
 which is the natural result of the growing prosperity 
 of the community. Tiie distressed condition <jf tlir
 
 166 The Queen's Taxes. 
 
 agricultural interest, wliich during the era of protection 
 was the standing topic of Parliamentary discussion, 
 has long ceased to occupy that position, and the land- 
 owners, according to their own admission, have no 
 reason whatever to regret the increased freedom of 
 commerce, which was rendered possible by direct 
 taxation. 
 
 The following table shows the increase in the value 
 of house property assessed since 1815.* 
 
 England and Wales. Scotland. 
 
 £ £ 
 
 1814-15 14,895,130 1,364,270 
 
 1842-43 35,556,399 2,919,338 
 
 1852-53 40,621,408 3,847,004 
 
 1859-60 48,779,076 4,988,840 
 
 1864-65 59,285,537 5,801,551 
 
 It appears from these figures that the increased 
 rental of houses or messuages in England and Wales 
 for the year 1842-3, over the year 1814-15, was 
 £20,661,269, an annual average for the twenty-eio^ht 
 years of £737,902. The increase of the year 1864-5 
 over 1842-3 was £23,729,138, an annual average 
 during twenty-two years of £1,078,597. In Scotland 
 the increase of the two periods was respectively 
 £1,555,068 and £2,882,213, the annual average being 
 respectively £55,538 and £135,555. The large 
 reductions of expenditure which resulted from the ter- 
 mination of the Prench War stimulated the growth of 
 
 ♦ First Inland Revenue Report, 1857. App. p. cxxix. Property and Income 
 Tax Returns, Sess. 18-15, No. 102, and Sess. 1860, No. 592. Tenth Inland 
 Revenue Report, 1866, p. Ix.
 
 The Queen's Taxes. 167 
 
 manufactures, and consequently added largely to the 
 rental derived from houses, shops, factories, and other 
 huildings used for trading purposes. In the last year 
 of the war (1814) the amount expended for naval and 
 miUiary piu^poses,* including the interest of the debt, 
 was £101,738,072, a large part of which was sent 
 abroad in the shape of subsidies to foreign Govern- 
 ments, and consequently was abstracted from the 
 capital of the nation. Durhig the twenty-two years 
 ending 1814, no less a sum than £46,289,459 was ex- 
 pended upon our allies in direct money subsidies, in 
 addition to supplies of clothing and other stores, the 
 value of which it is impossible to ascertain. The 
 expenditure for the year 1816 was upon a much 
 smaller scale than that of 1815, being only 
 £65,169,771 ; in the following year it was reduced to 
 £55,281,288, the average for the twelve years ending 
 January 5, 1828, being £55,909,000. About that 
 time a strong demand arose for further retrenchment, 
 which resulted, in the year 1829, in a reduction of 
 about £5,600,000, the annual average of the twelve 
 years ending January 5, 1840, being £48,220,000.1 
 
 A review of the finances of the United Kingdom 
 since 1842 presents a remarkable contrast, as far as 
 expenditure is concerned. The repeal of numerous 
 taxes has been attended by a steady increase in the 
 amount of taxation, which appears to have grown in 
 
 ProfrebS of the Nation, 1847, p. 511-618. 
 t Il-i(l, 11. 4h:5.
 
 168 The Queen's Taxes. 
 
 an almost equal ratio with the ability of the people 
 to bear the burden. The increased assessment of 
 Schedule A, since that year, has not been produced in 
 any degree by a diminution in the gross amount of 
 taxation, but solely by a more judicious accommo- 
 dation of the burden, by means of which the produc- 
 tive power of capital and labour has been augmented, 
 and the country been made prosperous, in spite of the 
 large increase in the public expenditure. It may be 
 urged in opposition to this view that we are now 
 experiencing stagnation in trade and a considerable 
 diminution of employment, which shows an unhealthy 
 and dangerous condition of affairs. This is no doubt 
 true, and if it continue as long as similar periods 
 of commercial depression during the protective era, 
 it will no doubt ultimately affect rent and depreciate 
 the value of real property. If the course adopted on 
 previous occasions of commercial vicissitude be ex- 
 amined, it will be found that the true remedy for the 
 existing distress is to be sought in a further remission 
 of indirect taxation. The encouragement of imports 
 is the readiest way of increasing our exports ; rents 
 advance with advancing commerce. A progressive 
 condition of trade is the most desirable one for land- 
 lords. If they would increase the value of their 
 property, they will act wisely in urging upon Parlia- 
 ment a further development of the principle of free 
 trade, although it may involve an increase in the 
 amount of their direct contributions to the national 
 revenue. An additional tax on property, in order to 
 secure the immediate repeal of a large portion of the
 
 The Queen^s Taxes. 169 
 
 remaining duties of customs and excise, with a view to 
 the gradual extinction of all restraints upon freedom 
 of exchange, would prove a wise investment on the 
 part of owners of real property. 
 
 The Income Tax was not extended to Ireland 
 until the year 1853, and the various items comprising 
 Schedule A, as far as that portion of the United 
 Kingdom is concerned, were not distinguished until 
 the year 1861-2, so that a detailed comparison 
 cannot be made even for the short period that 
 the Irish landowners have contributed to this tax. 
 The following are the assessments for the years 1861-2 
 and 186i-5 :*— 
 
 1864—5. 
 
 £ 
 
 8,893,060 
 
 3,670,106 
 
 812 
 
 27,037 
 
 In comparing the assessments of England, Scot- 
 land, and Ireland, it must not be forgotten that in the 
 two former instances, lands and houses are assessed 
 upon the full annual value or rack rent, while in 
 Ireland they are assessed on the Poor Law A^aluation, 
 whicli the Inland Eevcnuc Commissioners believe to 
 be at least 20 per cent, under the true value, making 
 the total rental about £15,000,000, instead of 
 £12,500,000. 
 
 The burdens placed on land have been a long 
 
 * Tuuth luluud Revuuuc Uoport, IWOO. App. p. Ix, 
 
 
 1861—2. 
 £ 
 
 Lands 
 
 Messuages ... 
 Manors 
 
 8,990,830 
 
 3,333,783 
 
 59 
 
 Fines 
 
 32,214
 
 170 The Queen's Taxes. 
 
 standing ground of complaint, which may be appro- 
 priately noticed in the present chapter. It does not 
 appear that the landholders have any special ground 
 of complaint at the present time, the proportion of 
 the burden borne by them having been considerably 
 reduced. In a paper read at the last annual meeting 
 of the British Association, by Mr. Purdy, it was shown 
 that, while sixteen years ago landed property, including 
 the tithe rent charge, bore 4.5*6 per cent, of the aggre- 
 gate local and imperial burdens, in 1864 — 5 it bore 
 only 35-3 per cent. This relief has been obtained by 
 the great increase in other descriptions of property, in 
 the creation of which the Income Tax has been a 
 powerful instrument, having made the repeal of more 
 obnoxious and wasteful taxes a possibility. It cannot 
 be denied that, as far as strictly Imperial taxation is 
 concerned, real property has for a very long period 
 been highly favoured, if indeed a policy which hinders 
 the full development of its value can justly be con- 
 sidered a favom\ The main ground of complaint 
 relates to the incidence of local burdens, which it is 
 alleged increase the price of food. These taxes, how- 
 ever, fall mainly upon rent, which is not an element 
 in the price of agricultural produce. Under a system 
 of Pree Trade prices are regulated by competition ; 
 rent being the surplus of profit after the cultivators of 
 the soil have been remunerated for their capital, skill, 
 and industry. If local burdens could by any possi- 
 bility be aboHshed, the permanent gainers would be 
 the landlords ; that portion of the surplus profit, which 
 is now paid in the shape of local rates, would find its 
 way into their pockets.
 
 The Queen's Taxes. 171 
 
 There is also another aspect of the question, very 
 frequently overlooked. In so far as taxes upon pro- 
 perty are of long standing they partake of the nature 
 of rent charges, and are not any burden whatever 
 upon the present holders, who have purchased or 
 inherited their estates subject to these responsibilities. 
 The diminished percentage of the public burdens now 
 borne by the land, compared with the burden of 
 sixteen years since, shows that, as a class, the land- 
 owners have not any valid grievance. If local rates 
 increase, the pressiu'e falls, in the first instance, upon 
 the tenant, but if the increase becomes permanent it 
 ultimately forms a deduction from the rent, which the 
 landlord would otherwise have received. A consider- 
 able portion moreover of local taxation, such as 
 highway and drainage rates, is necessary to render 
 the estates upon which such improvements are effected 
 productive to their owners, and cannot be regarded as 
 special burdens in any other sense than investments 
 in machinery are special burdens upon millowners 
 and manufacturers. As respects the Poor Eates 
 there can be little doubt that the Poor Law system, as 
 administered in the rural districts, is one cause of the 
 low rate of wages which prevails. If there were no 
 poor law, and the agricultural labourers were com- 
 pelled in consequence to make that provision against 
 old age, whicli is common among other classes, there 
 would of necessity be an increase in the rate of wages. 
 This increase would be met, not by trenching upon 
 the profits of the agriculturists, which are regulated 
 by the facilities for the employment of capital in
 
 172 The Queen's Taxes. 
 
 other pursuits, but by a deduction from the rentals 
 of the landowners. A thorough investigation into 
 the incidence of local taxation, especially that of the 
 rural as compared with town districts, would not 
 disclose any serious cause of complaint on the part 
 of the landed or farming interests. It must also be 
 borne in mind, in considering this question, that 
 landowners have secured from the government pecu- 
 liar facilities of borrowing money from the State at 
 low rates of interest, and on easy terms of repayment. 
 This is a great advantage which they enjoy over other 
 sections of the community ; though it is fairly open 
 to question whether such an interference on the part 
 of the government with the legitimate operations of 
 private enterprise has been altogether advantageous to 
 the community at large.
 
 TJie Queen's Taxes. 173 
 
 CHAPTER XIX. 
 
 INCOME TAX, SCHEDULE B. — OCCUPATION OF LAND. 
 
 The profits of farmers are assessed, for income tax 
 purposes, upon the amount of one-half their rental in 
 En2:laud and Wales, and one-third in Scotland and 
 Ireland. Mr. McCulloch describes this as the very 
 best plan that could be devised for assessing such 
 incomes,* though it is difficult to see on what ground 
 it can be defended, except that farmers are such im- 
 perfect or negligent accountants that they would be 
 quite unable to render any statement of their profits, 
 like those which are required from other traders. 
 
 In the year 1851 a new provision was introduced, 
 intended to meet the objection that farmers who had 
 not made the assumed profits were compelled by tlie 
 law as it stood to pay the full amount of their assess- 
 ment. By the Act 1^ Vic. c. 12, permission was given 
 to persons gaining their livelihood principally by 
 husbandry, in the event of their not having realised 
 
 Treatise on Taxation, IBlo, p. 131.
 
 174 The Queen's Taxes. 
 
 the assumed profit, to attend before the District Com- 
 missioners and obtain relief by the reduction of the 
 charge to the amount of profit they had actually 
 made. The number of applications made under this 
 provision has been very small, and it may, therefore, 
 be fairly assumed either that there is no real grievance 
 in this mode of assessment, or that persons engaged in 
 husbandry are not able to present accounts for the 
 consideration of the commissioners which show a 
 diminution of profits below their estimated rate. 
 
 The following table shows the net rental assessed at 
 different periods since the imposiiion of the tax in 
 1842.* 
 
 
 England and Wales. 
 
 Scotland. 
 
 
 £ 
 
 £ 
 
 1842-3t 
 
 21,202,216 
 
 2,435,040 
 
 1853-4t 
 
 24.835,288 
 
 2,905,080 
 
 1857-8 
 
 26,842,243 
 
 3,397,365 
 
 1864-5 
 
 29,153,450 
 
 3,918,451 
 
 These figm^es show the amount paid as rent by farmers 
 liable to the tax, and therefore indicate the extent to 
 which the landlords of purely agricultm^al lands have 
 been benefited since the year 1842. The returns are 
 no doubt modified by two circumstances, the extension 
 of the tax in 1853 to incomes between £100 and £150, 
 and the consolidation of small holdings. In the latter 
 case, however, it may be fairly assumed that consoli- 
 
 * Income Tax Return, Sess. 1860, No. 136. Tenth Inland Revenue Report, 
 1866. App. p. lix. 
 
 t The figures in this return give the net profits assessed, which are in England 
 one half, and in Scotland one third the actual rent.
 
 The Queen's Taxes. 175 
 
 dation takes place with a view to increased rent. 
 After eTery possible allowance has been made for the 
 influence of these two circumstances it cannot be 
 denied that the return presents a very satisfactory 
 aspect as regards the landed proprietors. It is also 
 certain that these increased rents would not accrue, 
 unless the farmers themselves were securing an ade- 
 quate remuneration in return for the employment of 
 their capital and skill in the piu'suit of agriculture. 
 
 The net amount assessed in Ireland in 1855-6 was 
 £2,574,684, and in 1864-5 £2,946,072,* the assumed 
 profit being one-third the amoimt of the rent. This 
 assessment, like that of schedule A, being made upon 
 the Poor Law Valuation in Ireland, and not on the 
 full value as in Great Britain, the actual rental in 
 1864-5 would appear to be about £3,500,000. 
 
 * Tenth Inland Revenue Report, 1866. App. p. lix.
 
 176 The Queen's Taxes. 
 
 CHAPTER XX. 
 
 INCOME TAX, SCnEDULE C. — DIVIDENDS FROM PUBLIC 
 
 REVENUE. 
 
 This schedule includes all incomes derived from 
 dividends in the Public Funds and in Poreign Govern- 
 ment Securities. In the imposition of the Income 
 Tax upon the fundholders, Sir Hobert Peel followed 
 the example of Mr. Pitt, and treated these dividends 
 in the same way as any other kind of income, notwith- 
 standing the provision that they should be paid "free 
 of all taxes and charges whatsoever." It is difficult 
 to understand in what respect such a proceeding differs 
 from simple repudiation of a portion of the public 
 debt unless, indeed, some equivalent were bestowed 
 upon the fundholder. It was justified by Sir Robert 
 Peel on two grounds : first, that other taxes were 
 repealed which pressed more heavily upon consumers, 
 so that a reduction was made in the cost of living to 
 a greater extent than the amount of tax imposed ; 
 secondly, that the tendency of his financial policy was 
 to improve the value of the funds, which rose to the 
 extent of 4 per cent, within a few weeks of the intro- 
 duction of the budget of 184^2. The former of these
 
 The Queen's Taxes. 177 
 
 reasons, it is evident, does not apply to foreigners hold- 
 ing investments in the funds, and it was upon the 
 argument that no distinction was made in any Act of 
 Parliament between native and foreign fundliolders, 
 and that the rise in value, which followed the proposal 
 of his budget in 18 i2, enabled any foreigner, who 
 wished to escape the tax, to sell out on very favour- 
 able terms, that he justified the imposition of the tax 
 upon such dividends. There can be no doubt that 
 liability to taxation affects the market value of these 
 securities, and that in consequence of this fact the 
 original injusitce has been remedied, present holders 
 having purchased or inherited subject tj taxation. 
 
 The amount of income assessed under this Schedule 
 for the year 18i2-3 was £27,909,793; for the year 
 1861-5 it was £30,889,559 ; and in Ireland, not subject 
 to the tax in 1842, £1,151,930.* The annual interest 
 of the funded debt of the United Kinj?dom havinir 
 been decreased to the extent of two millions stediui? 
 since 1812-3, by the falling in of the long annuities, 
 the increase in this Schedule arises from investments 
 in Foreign, Indian, and Colonial securities. Objection 
 has been taken by some writers on taxation to the im- 
 position of taxes upon income derived from foreign 
 investments, which it is urged should be taxed only in 
 the country from which such income is derived The 
 argument against such taxes is based upon the 
 principle, that the subjects of every State ought to 
 
 ♦ Property and Iucoiik' Tax Rotnrii, Sess. 1852, No. 399. Tenth Inland 
 Revenue Report, IbCC, App. p. 57. 
 
 N
 
 178 The Queen's Taxes. 
 
 contribute in proportion to tlie revenue, which they 
 respectively enjoy under the protection of the State, 
 and that such income is protected by the State in 
 which it accrues, not by that in which it is expended. 
 If the country in which such income is expended is 
 fairly entitled to tax it, and the country from which 
 it is received follow our example in respect to foreign 
 holders in our funds, it is evident that it may be taxed 
 twice over. The only valid defence of a tax upon 
 incomes derived from foreign investments appears to 
 be that of Sir E/obert Peel, that a tax upon income is 
 less burdensome than taxes upon commodities, from 
 which no description of income can escape ; and that, 
 in consequence of the substitution of the one for the 
 other, holders of foreign securities derive a benefit 
 greater than the biu^den imposed upon their dividends. 
 The amount assessed under this Schedule in England 
 is £82,500,000, and in Ireland £1,115,000, but this 
 does not represent the amount contributed by each 
 country, as all the investments of Scotland, Ireland, 
 the Colocies, and Toreigners in our own public funds, 
 and in foreign securities, are placed to the account of 
 England, in which country the dividends are made 
 payable. * 
 
 * Twelfth Inland Revenue Report, 1869, p. 25.
 
 The Queen's Taxes. 170 
 
 CHAPTER XXI. 
 
 INCOME TAX, SCHEDULE D. — PROFITS OF TRADES, 
 PROFESSIONS, AND EMPLOYMENTS. 
 
 The amount of income assessed under this Schedule 
 was largely increased in the year 18G6, by the transfer 
 from Schedule A of the profits of quarries, mines, iron- 
 works, and similar undertakings, in compliance with 
 the 8th Section of the Act 29 Vic. c. 36. This transfer 
 is one of those changes which introduce an element 
 of confusion into the returns of the tax. In order to 
 make a more accurate comparison of the growth of 
 profits at different periods, it is desirable to confine our 
 our attention in the first instance to such descriptions 
 of income as have been always assessed under tliis 
 Schedule, comprising the profits of ordinary trades, 
 professions, and employments, incomes from property 
 not assessed in other Schedules, and ]:)rofits earned 
 abroad by residents in tlie United Kingdom. 
 
 It is difficult to arrive at any accurate estimate of 
 the rate at which profits of trades and professions have 
 increased at different periods since 1814, owing to the 
 want of returns showing exactly corn's])on(liiig items. 
 The amount of profits, assessed under Schedule D, in 
 1814 was £37,058,087, of which £13,601, 630 consisted
 
 180 The Queen's Taxes. 
 
 of incomes below £150 ; the amount assessed on in- 
 comes of £150 and upwards being £23,454,348.* In 
 the year 1842-3, when the tax commenced at £150, 
 the amount assessed was £57,603, 196, f shewing a 
 total increase in such incomes, compared with the 
 years 1814-15, of £34,209,148, the annual rate being 
 £1,221,755. Prom this, however, some allowance 
 must be made for that portion of the amount assessed, 
 which consisted of incomes from trade below £150, 
 belonging to persons having other property, which, 
 added to their income under this Schedule, rendered 
 them liable to the tax. The analysis of the returns 
 of the year 1864-5, published by the Inland Eevenue 
 Commissioners, does not give the details of incomes 
 between £100 and £150. It is, therefore, impossible 
 to institute an accurate comparison between that year 
 and the year 1542-3. If it is assumed that one-half 
 of the incomes between £100 and £200 are below 
 £150, it would seem that the total amount assessed at 
 £150 and upwards in 1861-5 was £95,480,636,1 the 
 increase over 1842-3 being £37,817,140, and the 
 annual rate £1,718,960. On the supposition that these 
 figures are correct, it will be seen that the yearly 
 increase in profits, commencing with incomes of £150, 
 during the twenty-two years ending 1864-5, has been 
 nearly £500,000 in excess of that of the twenty-eight 
 
 * First Inland Revenue Report, 1857, App. pp. 130-31. 
 
 t Income Tax Return, Sess. 1860, No. 136. 
 \ Tenth Inland Revenue Repoi-t, 1866, App. pp. Ixii-lxiii.
 
 The Queen's Taxes. 181 
 
 years ending 1842-3. It is a fact worthy of notice in 
 connection with this increase in the rate of profits that 
 the growth of population in Great Britain was con- 
 siderably less during the latter than it was during the 
 former period. The exemption of Ireland from the 
 tax imtil the year 1853, renders it impossible to make 
 any comparison of the income of that portion of the 
 United Kingdom for similar periods. 
 
 The following table gives the amount assessed in 
 each of the three Kingdoms for the ten years ending 
 5th AprU, 1867.* 
 
 Year ending 
 
 England 
 
 Scotland 
 
 Ireland 
 
 Total 
 
 5th April 
 
 & Wales 
 
 
 
 
 
 £ 
 
 £ 
 
 £ 
 
 £ 
 
 1856 
 
 67,832,390 
 
 6,718,656 
 
 4,336,674 
 
 78,887,720 
 
 1857 
 
 69,110,522 
 
 6,856,106 
 
 4,280,182 
 
 80,246,810 
 
 1858 
 
 73,106,832 
 
 7,107,287 
 
 4,510,470 
 
 84,724,589 
 
 1859 
 
 73,444,998 
 
 6,779,421 
 
 4,587,457 
 
 84,811,876 
 
 1860 
 
 76,990,577 
 
 7,382,513 
 
 4,627,922 
 
 89,001,012 
 
 1801 
 
 77,824,790 
 
 7,176,475 
 
 4,604,257 
 
 89,605,522 
 
 1862 
 
 81,120,368 
 
 7,893,125 
 
 4,677,568 
 
 93,691,061 
 
 1863 
 
 85,088,087 
 
 8,234,777 
 
 4,673,743 
 
 97,996,607 
 
 1864 
 
 87,307.970 
 
 8,536,243 
 
 4,368,610 
 
 100,212,832 
 
 1865 
 
 95,636,761 
 
 9,799,026 
 
 4,669,979 
 
 110,105,766 
 
 1866 
 
 103,908,302 
 
 10,942,857 
 
 5,296,536 
 
 120,147,695 
 
 1867 
 
 135,504,680 
 
 15,644,661 
 
 7,054,716 
 
 158,204,057 
 
 During the whole of the above period the tax com- 
 menced ^vith incomes of £100. The returns for 18G7 
 are largely augmented by the transfer from Schedule 
 A of railways, mines, ironworks, gasworks, &c. It 
 
 • Tenth Inland iiuvcuuc Kepoit. I8GG, Ai'i). p. l.viii. Twclltb^ tUlto, IHliO, 
 App. p. xiii.
 
 182 The Queen^s Taxes. 
 
 might, perhaps, be considered reasonable that full and 
 precise information should be given by the Inland 
 Revenue Commissioners of the effect of this change ; 
 this, however, has not been done. It appears that the 
 increase in the profits of trades and professions, for 
 the year 1866-7 over 1865-6, including railways, mines, 
 ironworks, and gasworks, in England and Scotland, 
 was £7,549,000, so that £30,507,362 of the total in- 
 crease of Schedule D may be assumed to be mainly due 
 to the transfer of railways, mines, ironworks, &c.* 
 The total assessment of Schedule A for 1866-7 was 
 £125,249,705, of which £1,963,000 was the increased, 
 assessment of " houses " over 1865-6. This amount 
 deducted from the return for 1866-7 reduces the gross 
 assessment of 1865-6 on lands, houses, manors, and 
 fines to £123,286,705. The total assessment of 
 Schedule A for that year being £154,119,601, it 
 would seem according to the figures of this Schedule 
 that £30,832,896 was the amount transferred from the 
 one schedule to the other, an excess of £325,534 as 
 compared with the preceding estimate, which it would 
 have been easy for the Commissioners to explain. 
 The difference is no doubt composed of the increased 
 assessments of mines, ironworks, and gasworks in 
 Ireland, and of quarries, fisheries, canals, and other 
 undertakings in the United Kingdom. 
 
 The increase on trades and professions for the year 
 1866-7 was £4,019,000 in England, £1,099,000 in 
 
 Twelfth Inland Revenue Report, 1869, pp. 17-19. App. p. xiii.
 
 The Queen's Taxes. 183 
 
 Scotland, and £630,000 in Ireland, these amounts 
 
 added to the figm'es of the previous year make the 
 
 assessment for the year 186G-7 as folloAvs : — 
 
 £ 
 
 England 107,927,302 
 
 Scotland 12,041,857 
 
 Ireland 5,927,536 
 
 Total 125,896,695 
 
 It will be seen that the rate of increase in incomes 
 derived from trades and professions compared with 
 that of the two preceding years shows a considerable 
 diminution, the returns of the years 1864-5 being 
 £9,892,934 in excess of those of 1863-4, and those 
 of the year 1865-6 being £10,041,929 in excess of 
 the year 1864-5, while the increase of the year 1866-7 
 over the year 1865-6 was only £5,749,000. This is 
 no doubt attributable to the panic of 1866 which swept 
 away so many banks and joint stock companies. It 
 is, however, a noteworthy fact that the only district 
 wliich showed any considerable decrease was the City 
 of London, where the greater number of such com- 
 panies had their head quarters. The falling off in 
 that district amounted to £1,052,000 ; the assessment 
 for 1865-6 being £24,653,000, and for 1866-7 
 £23,601,000.* The investments of persons resident 
 in all parts of the United Kingdom and elsewhere in 
 public companies, whose head offices arc in London, 
 are assessed there, thus swelling the English return. 
 
 * Twelfth Inland Revenue Report, 1869, pp. 18-19.
 
 18di The Qiieen^s Taxes. 
 
 The investments of the Irish themselves, say the Com- 
 missioners, in Irish Companies are assessed to Income 
 Tax not unfreqaently in London, where the head 
 offices of the companies are situated. 
 
 There can be no doubt that the substitution in 184*2 
 of a tax upon the profits of trades, professions, and 
 employments in lieu of the duties of Customs and Ex- 
 cise, then reduced or repealed, has been productive 
 of great advantage to the trading and manufacturing 
 community. A tax on income causes much less inter- 
 ference with production and exchange, than duties of 
 Customs and Excise. It leaves industry free, it im- 
 poses no restraint upon trade, it presents no obstruc- 
 tion to the creation of wealth, and in its economic 
 results it is in every respect superior to any form of 
 indirect taxation. It has proved a powerful resource 
 in war, and a beneficent instrument of industrial and 
 commercial advancement in peace. Notwithstanding 
 these advantages it has been invariably regarded with 
 dislike by a large section of the mercantile and trading 
 conm, unity, by whom every reduction of the tax has 
 been hailed with satisfaction. At the termination of 
 the Crimean War it was the war income tax which 
 aroused their hostility ; the war duties on tea and sugar 
 were not reduced for many years. The opposition of 
 the trading class in 1842, before they had experienced 
 any of the benefits which this tax was destined to 
 secure for them, may be easily understood ; but that a 
 commercial people should prefer the reduction of a tax 
 on profits to the removal of restrictions upon trade, 
 after they had experienced the beneficial results of
 
 The Queen's Taxes. 185 
 
 such a course of legislation, is somewhat marvellous. 
 If tlie original rate of 7cL in the pound had hcen 
 maintained as the minimum, it is clear that many 
 imposts which place restraints upon the development of 
 the trade of the country might long since have been 
 entirely repealed. The two main objections urged 
 against the tax are, first, its inquisitorial nature, 
 especially that portion of its machinery which involves 
 the disclosm-e of private affairs to Commissioners, who 
 may be neighbours and possibly rivals in trade ; and, 
 secondly, the injustice of taxing incomes from trades 
 and professions, (which, inasmuch as they depend upon 
 the continued health of those who earn them, are 
 precarious,) at the same rate as incomes derived from 
 realised property. These are evils capable of remedy ; 
 and it would have been far more conducive to their real 
 interests if the trading community had directed their 
 energies towards securing a more perfect form of direct 
 taxation instead of systematically urging upon Parlia- 
 ment the reduction of the Income Tax. 
 
 A far more serious evil in connection with this 
 impost is the wholesale manner in which it has been 
 evaded by means of false returns. In 1853 Mr. 
 Gladstone referred, in his budget speech, in illustration 
 of this evil, to claims made by twenty-eight persons in 
 the City for compensation for loss of business during 
 the construction of Cannon-street. They claimed 
 £48,159 as one year's profits, and obtained from the 
 jury £20,973, the amount at which they had returned 
 themselves to the Income Tax Commissioners being
 
 186 The Queen^s Taxes. 
 
 only £9,000.* In the annual reports of tlie Inland 
 Revenue Commissioners, frequent instances in which 
 such evasions of the tax have been discovered are 
 reo^ularly recorded. In their latest report, t the Com- 
 missioners say, " the claims to compensation which 
 have arisen out of a recent extensive demolition of 
 houses in a certain district by the Metropolitan Board 
 of Works have given the usual evidence of the frauds 
 which prevail in returns under Schedule D." It 
 appears that in this case 200 claims for compensation 
 were examined by the Inland Hevenue oflB.cers, in 80 
 of which surcharges were made and sustained upon 
 appeal. The aggregate of taxable incomes returned 
 by the parties themselves was £73,642, the amount 
 ultimately found correct was £171,370, being in 
 excess of the returns by £97,728, or about 130 per 
 cent. The Commissioners then proceed to estimate 
 the jorobable loss from this source, taking, for the pur- 
 poses of their calculation, the year 1861-5. After 
 remarking that the practice is not confined to any 
 particular class, trade, or profession, but has been 
 found prevaihng in the case of legal practitioners 
 claiming compensation on the abolition of exclusive 
 privileges, on all occasions of demolitions of property 
 for great public works, and in the accounts of great 
 public companies and firms having world-wide reputa- 
 tions, they state their opinion that the sum on which 
 
 * Financial Statements, 1863, pp. 28-29. 
 t Twelfth Inland Revenue Report, 1869, pp. 19-^4.
 
 The Queen^s Taxes. 187 
 
 duty was evaded, in the year 1864-5 was £57,254,997. 
 At the then rate of 6d. in the pound, this would have 
 added £1,131,374 to the revenue, or about the produce 
 of a penny on the whole tax. If accuracy is to he ex- 
 pected in any case it might, perhaps, he assumed in 
 that of public companies. The report, however, 
 dispels this delusion by the publication of eleven 
 instances in which the total amount returned Avas 
 £308,573, the amount ultimately assessed being 
 £577,214 ; in a twelfth instance no return was made, 
 and the assessment was ultimately fixed at £63,949. 
 In these twelve cases the amount unreturned was 
 £332,590. From another report* we learn that one 
 joint stock company, which returned £6,000 as assess- 
 able profits, ultimately paid on £88,000, and that 
 another, which returned £190,000, was finally com- 
 pelled to admit that the true return should have been 
 £250,000. 
 
 The opinion of the Commissioners as to extensive 
 evasions of the tax receives considerable confirmation 
 from the return of persons assessed under schedule 
 D, at various amounts, in the United Kingdom,! 
 which will be fouiid on the next page. A similar fact 
 is noticed by the Special Commissioner of the Itcvenuc 
 of the United States in his report for the year 1869, 
 in respect to the assessment of the Income Tax in that 
 country. 
 
 * TeutU Inland llovenuo Report, 18G(5, \>. 42. 
 \ Ibiil. App. pj). liLi — Ixiii.
 
 188 
 
 The Queen's Taxes. 
 
 Assessment to Schedule D 
 
 Number Assessed. 
 
 Amouut of 
 
 for 1865-( 
 
 ). 
 
 
 Profits. 
 
 £ 
 3,155,059 
 
 £100* 
 
 
 Under 
 
 72,290 
 
 £1J0 and 
 
 under £200 
 
 167,535 
 
 14,776,975 
 
 200 „ 
 
 » 
 
 300 
 
 46,773 
 
 10,306,036 
 
 300 „ 
 
 3J 
 
 400 
 
 20,310 
 
 6,492,813 
 
 400 „ 
 
 » 
 
 500 
 
 10,501 
 
 4,385,440 
 
 500 „ 
 
 5J 
 
 600 
 
 7,828 
 
 4,016,413 
 
 (300 „ 
 
 
 700 
 
 4,555 
 
 2,810,574 
 
 700 „ 
 
 )J 
 
 800 
 
 2,891 
 
 2,088,690 
 
 800 „ 
 
 )> 
 
 900 
 
 2,493 
 
 2,031,368 
 
 900 „ 
 
 
 1,000 
 
 1,136 
 
 1,041,620 
 
 1,000 „ 
 
 
 2,000 
 
 7,716 
 
 9,835,270 
 
 2,000 „ 
 
 
 3,000 
 
 2,307 
 
 5,309,026 
 
 3,000 „ 
 
 
 4,000 
 
 1,188 
 
 3,904,098 
 
 4,000 „ 
 
 
 5,000 
 
 655 
 
 2,805,341 
 
 5,000 „ 
 
 
 10,000 
 
 1,327 
 
 8,855,282 
 
 10,000 
 
 
 50,000 
 
 891 
 
 16,939,995 
 
 50,000 and 
 
 upwards 
 
 110 
 
 11,351,766 
 
 
 Total ... 
 
 350,512 
 
 £110,105,766 
 
 It seems incredible that, in the whole of the United 
 Kingdom, there are only 655 persons, engaged in trades 
 and professions assessed at incomes between £4,000 
 and £5,000. The following instances of deficient 
 returns are given in one of the reports previously 
 referred to : — t 
 
 Returns Assessment 
 
 £ £ 
 
 1,800 6,000 
 
 2,000 9,000 
 
 750 4,900 
 
 1,000 4,000 
 
 1,000 2,344 
 
 1,000 2,376 
 
 ♦ Having income also from other sources. 
 \ Twelfth Inland Revenue Report, 1869, pp. 20-22
 
 The Queen's Taxes. 189 
 
 The excuses offered in cases of detection, in order 
 to ubtain a mitigation of penalties, disclose a belief 
 in the mind of the parties proceeded against that this 
 mode of retm'ning their incomes is by no means 
 singular. In one case a person returned his income 
 in 1865 at £250 ; he was surcharged and assessed at 
 £400. In the year 1867, a Metropolitan Improve- 
 ment being imminent which would include his 
 premises, he returned his profits at £1,000 and was 
 surcharged at £1,900, which on appeal was confirmed 
 by the District Commissioners. His excuse was that 
 he did not know what his income really was ; it will 
 be observed, however, that as soon as he began to 
 anticipate that his premises would be required by the 
 Metropolitan Board of Works, he voluntarily in- 
 creased his assessment from £100 to £1,000. In 
 another case a return of £1,200 in 1865 was increased 
 to £1,500 in 1866, and £2,000 in 1867. A surcharge 
 was made in order to compel the parties to produce 
 their accounts, when it was found that they were 
 liable to assessment in 1867 on £3,311. In justifica- 
 tion of themselves they urged that " their returns 
 l)orp fully as large a proportion to their actual income 
 as the returns made by their competitors and others 
 in trade ;" and that to have made true returns " would 
 have been in effect to penalise themselves." In 
 another case no return was made for four years, 
 during three of which, 1861 — 5 — 6 the firm was 
 assessed at £800 and in 1867 at £1,000. The 
 accountants employed in making their claim for com- 
 pensation fixed the average profits for the four years
 
 190 The Qtieen's Taxes. 
 
 at £4,477.* It is useless to multiply instances, whicli 
 if necessary might easily be done. Sufficient evidence 
 has been adduced to show that the practice of making 
 false returns prevails to a very large extent. In many 
 instances the errors are no doubt unintentional, but 
 inasmuch as the tax on lands and houses, on dividends, 
 and on salaries and pensions of public officers is 
 levied nearly to the uttermost farthing which is due, 
 it is evident that, as far as the principle of taxing all 
 incomes equally (irrespective of the source from which 
 they are derived) is concerned, the income tax is 
 practically a failure. 
 
 In the financial statement of 1853, Mr. Gladstone 
 in alluding to such evasions of Income Tax made the 
 declaration that " the exemption of one man means 
 the extra taxation of another." That this is the case 
 there can be no doubt ; but it would be somewhat 
 difficult to show in what material respect evasion of 
 taxation, by means of a false return, differs from evasion 
 of taxation by abstaining from taxed commodities. 
 The result so far as other taxpayers are concerned is 
 identical, and yet a portion of our fiscal system has 
 been praised by its advocates because it is voluntary ; 
 no man need pay it unless he likes. It matters little 
 to A with an income of £1,000 a year whether B 
 with a like income throws an undue burden upon him 
 by making a false return, or by abstaining from taxed 
 commodities and thus escaping indirect taxes to which 
 
 Twelfth Inland Revenue Report, 1869, p. 20.
 
 The Queen's Taxes. 191 
 
 A contributes. In both cases the same result is pro- 
 duced, the exemption of B involves the extra taxation 
 of A. In this respect duties of Customs and Excise 
 stand upon the same ground as Schedule D of the 
 Income Tax. The real difference consists in the fact 
 that in the one case the State is a party to unequal 
 taxation by making the payment of taxes depend upon 
 the taste, whim, caprice, or necessities of the tax- 
 payer ; while in the other the same result is produced 
 by fraud or negligence in making the return required 
 by the law. 
 
 Inequality of taxation is, however, a small evil 
 compared -with the demoralising effects which are in- 
 evitably produced by the habit of making false 
 retm-ns. If the practice spread and become general, 
 as the disclosures previously referred to unquestionably 
 indicate that it has, a most deleterious influence must 
 be exerted upon the morals of the trading com- 
 munity. It was one of the strongest arguments 
 employed against high duties of Customs and Excise, 
 that they promoted crime by rendering the practice 
 of smuggling profitable. It can hardly be alleged 
 that a system of direct taxation which opens the door 
 to such frauds as have been from time to time 
 disclosed in respect to the Income Tax, will produce 
 no evil results. The transition from a fraud 
 upon the Government to a fraud upon the public is 
 comparatively easy, and there is much reason to fear 
 that commercial morality has not been advanced by 
 the laxity with which merchants and traders have 
 assessed themselves to the Income Tax.
 
 192 The Queen^s Taxes. 
 
 The profits transf<;rred in 18GG, from Schedule A 
 include " Quarries, Mines, Iron-works, Gas-works, 
 Salt Springs or Works. Alum Mines or Works, Water- 
 works, Streams of Water, Canals, Inland Navigations, 
 Docks, Drains and Levels, Pishings, Rights of Mar- 
 ket, and Fairs, Tolls, Railways and other ways. 
 Bridges, Ferries and other concerns of the like nature, 
 from, or arising out of, any Lands, Hereditaments, or 
 Heritages,"* It is impossible to form an accurate 
 comparison of the profits of each separate class of 
 undertaking for the years 1814 — 15, 1812 — 43, and 
 1861 — 65, owing to the imperfect nature of the earlier 
 returns. In the year 1811 — 15, Quarries, Mines and 
 Ironworks are the only works mentioned separately, 
 the remainder heing included under the head of 
 " general profits," which also contained profits arising 
 from Lands, Tenements, Hereditaments, or Heritages 
 not in the actual possession or occupation of the party 
 to be charged. The last amount assessed under the 
 head in 1811—15 was £65,257. The following table 
 shows the amount assessed on Quarries, Mines and 
 Ironworks in Great Britain at three different periods..! 
 
 1814—15 1812—43 ' 186i— 65 
 
 £ £ £ 
 
 Quarries ... 70,378 240,483 582,217 
 
 Mines ... 678,787 2,081,387 4,743,406 
 
 Ironworks ... 637,686 559,435 1,798,431 
 
 1,386,851 2,881,305 7,124,054 
 
 * Act 29 Vict., c. 36. 
 
 * First Inland Revenue Report, 1857. App. p. cxxix. Real Property Return, 
 Sess. 1845, No. 102. Tenth Inland Revenue Report, 1866. App. pp. Ix., Ixi.
 
 The Queen's Taxes. 193 
 
 It will be seen that the increase of these three 
 heads, in 1842 — 43 over 1814 — 15, was 107 per cent., 
 while in 1864 — 65 over 1842 — 43 it was 147 per cent, 
 The most noteworthy fact in connection with this 
 table is the decreased income from Ironworks in 
 1842 — 43 as compared with 1814 — 15. It does not 
 appear that protection had proved an advantage to 
 that branch of British Industry. The returns of our 
 Export Trade corroborate this view, the Exports of 
 British Manufacture entered under the head of Iron 
 and Steel being as follows :* — 
 
 £ 
 1815 ... ... 1,280,962 
 
 1842 ... ... 2,157,717 
 
 1SG8 ... ... 15,036,.39S 
 
 If we take Hardwares and Cutlery the contrast is 
 even more striking, a considerable decrease having 
 taken place between 1815 and 1842; the values were 
 as follows : — 
 
 £ 
 1815 ... ... 2,349,662 
 
 1842 ... ... 1,398,487 
 
 1868 ... ... 3,854,742 
 
 The following table gives the remaining items of 
 this schedule for the years 1842 — 43 and 1864 — 65. f 
 
 * The Earl of Liverpool on Foreign Trade, 1820. Ilatchiinl A- Son App. 
 p. 54. Statistical Abstract, 1812— 185G, p. 20. Annual Statoujeut, 1hG8, p. :?!. 
 
 t Real Propertj' Return, Seas. 1845, No. 102. Tenth Inland Revenue Report, 
 18G6. Aj)p. pp. Ix — Ixi. The figures for LsGS — are those of Groat IJritiiin 
 only, Ireland not being subject to the tax in 1842. 
 
 O
 
 194 The Queen's Taxes. 
 
 1842—43 1864—65 Increase. 
 
 £ £ 
 
 Pisheries ... 58,914 96,003 61f per cent. 
 
 Eailways ... 2,598,942 15,654,723 502 per cent. 
 
 Gasworks ) ^«t entei^d ^ 1703,787 K^^ 
 
 > separately. \. >'"->> 'O' > 205 per cent, 
 other Property. ) 1,509,884 ) 2,842,791 ) 
 
 Decrease. 
 Canals ... 1,307,093 870,112 33 per cent. 
 
 Increase. 
 Add Quarries, Mines, 
 
 and Ironworks ... 2,881,305 7,124,054 147 per cent. 
 
 Total ... 8,356,138 28,351,470 239 per cent. 
 
 The return for 1842-3 includes, under the head of 
 other projierty, some income not derived from the 
 undertakings transferred to Schedule D. The sum of 
 £1,509,884 has, therefore, been estimated on the 
 supposition that the relative proportions of income 
 assessed as " other property" and " general profits " 
 were the same in 1842-3 as in 1864-5. It is probable, 
 therefore, that the above figures are not strictly 
 accurate, but the substantial result will not be 
 materially affected. It will be seen that railways 
 form a very important feature of this section of the 
 Income Tax Assessment, but on every other descrip- 
 tion of property, except canals, which have no doubt 
 suffered from the formidable competition of railways, 
 there is also a satisfactory increase. 
 
 The following table shows the respective amounts 
 assessed in England, Scotland, and Ireland, and the 
 totals for the United Kingdom in 1864-5. * 
 
 * Tenth Inland Revenue Report, 1866. App., pp. Ls-lxi.
 
 The Queen's Taxes. 
 
 195 
 
 United 
 
 England. Scotland. Ireland. Kingdom. 
 
 £ £ £ £ 
 
 Quarries 526,049 56,168 8,005 690,222 
 
 Mines 4,276,567 466,839 85,983 4,829,389 
 
 Iron Works... 1,247,597 550,834 — 1,798,431 
 
 Fisheries 30,913 65,090 12,004 108,007 
 
 Canals 785,809 84,303 29,005 899,717 
 
 Eailways 13,882,200 1,772,523 920,853 16,575,576 
 
 Gas Works... 1,618,071 145,716 84,735 1,848,522 
 Other pro- 
 perty 2,485,831 356,960 60,762 2,903,553 
 
 Total £24,853,037 £3,498,433 £1,201,947 £29,553,417 
 
 The items comprised under the head of " other 
 property" are salt springs or works, alum mines or 
 works, docks, drains and levels, rights of markets and 
 fau's, tolls, bridges and ferries.
 
 196 The Queen's Taxes. 
 
 CHAPTER XXII. 
 
 INCOME TAX. SCHEDULE E. PUBLIC OFFICES AND 
 PENSIONS. 
 
 This Schedule includes every public office or employ- 
 ment of profit, and every annuity, pension, or stipend 
 payable by Her Majesty, or out of the public revenue 
 of the United Kingdom, except annuities and dividends 
 from the public funds, which are assessed under 
 Schedule C. The amount of income assessed under 
 this head at different periods has been as follows :* — 
 
 
 Great Britain. 
 
 L:eland. 
 
 Total. 
 
 . 
 
 £ 
 
 £ 
 
 £ 
 
 1814-15 
 
 14,823,783 
 
 not 
 
 
 1812-43 
 
 9,718,454 
 
 liable. 
 
 
 1855-56 
 
 16,082,655 
 
 925,767 
 
 17,008,422 
 
 1864-65 
 
 19,293,924 
 
 1,157,242 
 
 20,451,166 
 
 It appears, at first sight, from the above figures, that 
 there has been, since 1842, an increase of 98 per cent, 
 in the amount paid in salaries and pensions. This 
 result, however, is considerably modified by the 
 
 * Property and Income Tax Return, Sess. 1852, No. 399. Tenth Inland 
 Revenue Report, 18 6G, App. p. Iviii.
 
 The Queen's Taxes. 197 
 
 extension of the Income tax in 1853 to incomes of 
 £100 a-year. In that year the increased produce of this 
 Schedule was 12 per cent., nearly the whole of which 
 may he fairly attributed to the extension of the tax. 
 The same fact will also modify the figures of the fol- 
 lowing years, as compared with 1842-43. The returns 
 for 1855-56 and 1864-5 show an increase of 20 per 
 cent, for the whole United Kingdom in nine years. 
 It may, therefore, be fairly supposed that the increase 
 of 1864-5 over 1842-3 is fully 75 or 80 per cent. 
 There can be no doubt that this Schedule is collected 
 very fully, the amount of Government salaries, pensions, 
 and superannuations being accurately knoAMi. It is 
 equally certain that evasions of the tax by the 
 mercantile community throw a heavier burden upon 
 officials with fixed salaries than they would other- 
 wise have to bear, whether they are in the service of the 
 Government or of private firms. In either case they 
 have no means of evading payment of the tax, their 
 incomes being in the one instance known to the heads 
 of their departments, and in the other returned by 
 their employers. 
 
 The same remarks apply to this as to other 
 schedules, in reference to the assessments of Great 
 Britain and of Ireland. The officers of public com- 
 panies are charged at their head offices, and nearly the 
 whole of the civil servants of the Crown. Even the 
 public servants employed in Ireland and abi-oad, are 
 for the most part charged in Enghuid.
 
 198 The Queen's Taxes. 
 
 CHAPTEU XXIII. 
 
 MODE or PAYMENT OF TAXES. 
 
 " The people must pay, and not know it ; mnst be 
 deceived a little, or they would not pay after this 
 fashion." In this extract from a sermon by the late 
 Theodore Parker,* there is a very pithy summary of 
 the main argument employed in favour of the mode of 
 paying taxes, by means of which two-thirds of our 
 revenue are collected. Taxes paid, not as direct con- 
 tributions to the State, but in the price of commodities, 
 are obtained surreptitiously ; the people pay and do not 
 know it ; they imagine they are purchasing tea, 
 coffee, sugar, beer, spirits, or tobacco, when in every 
 instance a large portion, in some an excessively 
 preponderating portion, of the price they pay, is for 
 the tax imposed upon the article they purchase. The 
 arguments generally used in favour of this system of 
 collecting the revenue were very forcibly refuted by 
 Dr. Channing in the following words if — "we attach 
 
 * Collected Works of Theodore Parker. TrLuner & Co. 1863. Vol. IV., p. 12. 
 t Dr. Channing's Works. Griffin & Co. 1840. The Union— p. 119.
 
 The Queen's Taxes. 199 
 
 no importance to what is deemed the chief benefit of 
 tariffs, that they save the necessity of direct taxation, 
 and draw from the people a large revenue without 
 then knowledge. In the first place, we say, that a 
 free people ought to know what they pay for freedom, 
 and to pay it joyfully, and that they should as truly 
 scorn to be cheated into the support of their Govern- 
 ment, as into the support of their children. In the 
 next place, a large revenue is no blessing. An over- 
 flowing treasury will always be corrupting to the 
 governors and the governed. A revenue rigorously 
 proportioned to the wants of a people, is as much as 
 can be trusted safely to men in power." 
 
 Taxes are usually divided into two classes, direct 
 and indirect ; the former are paid, as their name 
 implies, directly, to a servant of the Government ; the 
 latter, indirectly, to dealers in taxed commodities, by 
 whom the tax is advanced, and then recovered, with a 
 profit thereon, in the price of the articles sold. It has 
 been held by some Avriters on taxation that, inasmuch 
 as some direct taxes are analogous in their economic 
 effects to indirect taxes, the above distinction is inac- 
 cm'ate, and that the term indirect should include all 
 taxes which tend to restrict consumption, whether 
 they are levied directly or indirectly. There have 
 been numerous controversies upon this question, but 
 it is better, upon the whole, to adhere, as far as possible, 
 to the actual meaning of the words em])loyed as delini- 
 tions; neither is it advisable to conceal the fact tliat 
 direct taxation may be applied in a form which is 
 economically unsound. Tlie grand distinction between
 
 200 The Queen^s Taxes. 
 
 the two systems is, that while direct taxation may, 
 indirect taxation must be pernicious in its effects upon 
 trade and employment, and unjust in its incidence 
 upon the taxpayer. 
 
 " Every tax ought to he levied at the time, or in the 
 manner in which it is most likely to be convenient for 
 the contributor to pay it."* This is the principle laid 
 down by Adam Smith, and adopted by subsequent 
 economists in relation to the collection of the Revenue. 
 This is not, however, the sole condition ; one of still 
 greater importance being economy in the cost of 
 collection. In the words of Adam Smith : — " Every 
 tax ou2:ht to be so contrived as both to take out and 
 to keep out of the pockets of the people, as little as 
 possible, over and above what it brings into the public 
 treasury of the State." A tax may comply perfectly 
 with the first condition, and at the same time offend 
 flagrantly against the second. Eor example, taxes 
 upon commodities may be said to be paid at times 
 most convenient to the taxpayer ; he pays them " little 
 by little, as he has occasion to buy the goods." This 
 advantage will be found, however, to be more than 
 neutralised by the increased cost to the taxpayer 
 involved in this mode of collecting a revenue. 
 It must be obvious that any inconvenience to tax- 
 payers, arising from the periodical payment of taxes, 
 may be met by voluntary appropriations of weekly or 
 monthly proportions of income, and in this way all 
 
 Wealth of ^'atioIls. Book V., Chap. II., Part 2.
 
 The Queen's Taxes. 201 
 
 the advantages of taxes upon commodities may be 
 secured without any of their drawbacks. All prudent 
 persons make arrangements for the payment of their 
 rent, and might, with equal ease, do so for the 
 payment of their taxes. 
 
 By the Customs and Inland Revenue Duties Act, 
 1869, the provisions made by preAdous Acts for the 
 payment of the land tax, the duties on inhabited 
 houses, and the income tax (excepting such as are 
 payable by way of deduction, or are assessable in 
 respect of railways) were repealed. In lieu thereof these 
 taxes are made payable on or before the 1st day of 
 January in each year, not in advance, as many people 
 have supposed, but for the year commencing on the 
 25th of March previous to, and terminating upon, the 
 5th of April following. By this arrangement the 
 taxes which would otherwise have been payable in July 
 and October, are not due until January, the sole pay- 
 ment in advance being for the quarter ending the 
 5th of April. This has been the mode of payment 
 previously in force in Scotland, without causing any 
 objection on the part of the taxpayers of that country. 
 In fact, it is difficult to understand what reasonable 
 ground of complaint can exist in respect to an arrange- 
 ment which allows the taxpayer to retain capital in 
 his own hands which would otherwise have been paid 
 to the Government in the shape of taxes, at least three 
 months previously to the period when they are now 
 demanded. 
 
 By the same Act (32 and 33 Vic, c. It) the (liiii(>s 
 of assessed taxes lc\ led in (Jrcal l^ril.-iin were icix-alcd
 
 202 The Queen^s Taxes. 
 
 from the 6th of April, 1869, in England, and the 25th 
 of May, 1869, in Scotland, and in lieu thereof license 
 duties on servants, carriages, horses, and armorial 
 hearings were suhstituted. These licenses are placed 
 under the control of the Excise, and are payable before 
 the end of the month of January in each year. The 
 regulations under which they are issued have already 
 been described. The complaint urged against the new 
 arrangement is that it makes a whole year's land, 
 house, income, and assessed taxes payable in the 
 month of January when other • heavy payments are 
 usually demanded. The observations previously made 
 in reference to the convenient time of payment 
 assumed in the case of taxes on commodities, are 
 applicable to the mode of collection now under con- 
 sideration ; no inconvenience has been felt in Scotland 
 from this arrangement ; in fact, it merely requires 
 the exercise of prudence to enable the taxpayer to 
 provide for this annual payment. There are some 
 facts which those who grumble at the new arrange- 
 ment overlook. Eirst, they have credit for at least 
 six months' land tax, income tax, and House Duty ; 
 secondly, no assessed taxes were demanded for ten 
 months of the year 1869, the taxes payable during the 
 year ending 31st March, 1870, being for servants em- 
 ployed and articles used during the year ending 31st 
 March, 1869 ; thirdly, the arrangement of which they 
 conplain enabled the Chancellor of the Exchequer to 
 propose the repeal of the following taxes : — * 
 
 * Parliamentary Return. Taxes and Imposts. Session 1869. No. 427
 
 The Queen's Taxes. 203 
 
 Amount produced 
 in 1868-9. 
 £ 
 Com, meal, flour, and 14 similar articles ... 915,585 
 
 Fire Insurance 1,070,046 
 
 Tea License ... ... ... ... ... 72 778 
 
 One Penny of the Income Tax 1,457,243 
 
 £3,515,652 
 In addition, the following trade licenses were repealed 
 from the 1st of January, 1870 : — 
 
 £ 
 
 License to let post horses ... 142,196 
 
 Hackney carriage licenses and duties 106,159 
 
 Stage carriage licenses and duties 42,798 
 
 291,153 
 The assessed taxes were also reduced and simplified. 
 The Fire Insurance Duty was repealed from mid- 
 summer, and the Tea License from July 5, 1869, The 
 entire remission was estimated hy Mr. Lowe as 
 follows : — 
 
 £ 
 
 Taxes repealed 2,520,000 
 
 Modification of the assessed taxes ... ... 420 000 
 
 £2,940,000 
 
 In considering the effect of the changes, introduced 
 hy the Budget of 1869, in the collection of taxes, it is 
 not just to overlook the remissions of taxation, of 
 which it was the instrument. Would tlu^ present 
 ohjectors have preferred the continuance of a sixpenny 
 Income Tax, of the Fire Insurance Duty, and of tlio 
 other taxes then repealed ? If not, it is diilicult to
 
 20i The Qaeeu's Taxes. 
 
 see in what respect they have any valid reason for the 
 outcry they have made. 
 
 The remainder of the direct taxes, including trade 
 licenses (except such as are levied according to the 
 quantity manufactured), legacy and succession duties, 
 stamps, and law-fees are payable at various times, 
 generally upon the receipt or payment of money, and 
 appear, on the whole, to he collected without any 
 serious inconvenience. Those who admire the con- 
 venience of collecting a revenue by means of Customs 
 and Excise Duties are apt to overlook the fact, that 
 the facility of easy payment may be dearly purchased. 
 If the effect of such duties is invariably to limit trade 
 and thus diminish the means of purchasing, it must be 
 obvious that the convenience of such taxes is appa- 
 rent only, not real. It is of no advantage to estabUsh 
 convenient modes of payment if the ability to pay is 
 thereby diminished.
 
 The Queen's Taxes. 205 
 
 CHAPTER XXIV. 
 
 COST OF COLLECTION OF TAXES. 
 
 A far more important consideration, than the mode 
 of payment, is the cost of collection. Direct taxes as 
 a rule cost the taxpayer nothing beyond the amount 
 he actually pays to the tax collector. There are, no 
 doubt, exceptions to this rule, but not to anv con- 
 siderable extent. Mr. Dudley Baxter points out, in 
 his work on Taxation, that the income tax on Schedule 
 A being assessed on rack-rent with no allowance for 
 repairs, insurance, cost of management, or abatements 
 of rent, becomes on a tax of 5d. in the pound, 23 per 
 cent, on the net income an increase of one-third per 
 cent. ; that the Land Tax costs the landowners 
 £2,037,000 instead of £1,093,000, the sum of £911,000 
 having been redeemed ; that the probate duty being 
 paid out of capital is a tax of 2^ per cent, on the 
 income derived from such property, and that the 
 legacy duty on personal property, and proptnty 
 devised for sale becomes a tax of 3.^, per cent, on 
 income, instead of the 2.! per cent, whicli is received
 
 206 Tte Queen's Tajeef. 
 
 bv the State.* As respects the income tax assessed to 
 ijohedule A in Ireland his remarks do not apply, the 
 tax heins levied on the Poor Law ralimtion, which is 
 20 per cent, below the actnal ralne. The assessment 
 of land and houses in. Great Britain for the year 
 1S66-7, according to the Inland Eerenne report, f was 
 £lli2.3SS,^4 ; if we allow 16 per cent, deduction, the 
 net rental wiU be £94.^06,277 upon which an in- 
 crease of one-third per cent, amounts to £olJ:,6^7. 
 "With respect to the redemption of the Land Tax, the 
 excess to which ^Ir. Baxter allndes is not paid bv the 
 owneas of lands still subject to the tax, and it may be 
 presumed that the redemption was a profitable bargaia 
 for those who yoltmtarily commuted their annual pay- 
 ments for a fixed sum. There is no doubt that the 
 payment of Probate and Legacy duty, if valued upon 
 the income derived from legacies, increases the per 
 centage of the tax : these imposts are, however, taxes 
 upon property, not upon income, they are ostensiblY 
 jaid out of capital inherited, and do not exact from 
 the receiver of a legacy more than the actual per 
 centase at which the tax is levied- Ihe £12,659,760 
 paid for Land aTid Income Taxes, and for the Probate 
 and Legacy Ihity in 1S6S-9 was the full amotrnt paid by 
 the taxpayer. This is also the case with other direct 
 taxes, but when we come to investigate the cost of 
 indirect taxation we arrive at a very different result. 

 
 The Qmeem's Taxa. 207 
 
 The cost of ooIlectXDg the Cnstoms Berenne has 
 heea discussed \sf the Commissioiieis of CiKkDms on 
 sereial oocasioiis. ia two of their Awnnal Beports 
 thev claim to hare the Icdlowin^ ftf?zr!5 cf exrezditnre 
 excluded from the cost erf coDeiliiL ; — * 
 
 j::.xpe]i3e of file StaliwSflcd DeT.i:rm-^zT :. -a 
 
 Expenses under Mci c l mit SL:: : ^ . L : 
 
 Codectifm of X^^ Does ... -^^.*j 
 
 ^fiawdHaneoiK fangtimaii of a- : : ^^ ... 7 /r^^ 
 
 Bent, lanr d mg i Bfc , AcL, ttwii; : 
 
 £77-513 
 
 The Commissioiieis also daim, in hoth repori^ to 
 deduct the expenses of the wardionsiiig department on 
 the gronnd that it is not in any way accessory to the 
 collection of the rerenoe, hut simplj a postparaement 
 of the just does of the Croim for the adrantage of 
 the merchant. The present Commisdanexs may per- 
 haps he excused the inaccuiacT of this statement, as 
 their experience may not comprehend the penod 
 prior to the introduction of the warphoiising: srstem, 
 and thcT are not presumed to study Terr doselT the 
 history of eren their own department. Against their 
 opinion, that of the late Mr. G. R. Porter may rery 
 fairly he placed. He conddered that among the 
 practical advantages that attended the adoption of the 
 warehousing system were the amplification of the 
 Custom-house accounts, the ahndgement of labour in 
 
 ' FotttCwIiiM Bggart. lata. ffL »-m. 8ei«iaCl»i^lfie,|f>.lS-il-
 
 208 The Queen^s Taxes. 
 
 the revenue departments, and the prevention of 
 systematic and extensive frauds by which large 
 fortunes had been created.* It appears therefore that it 
 has some connection with the collection of the revenue. 
 Independently of these considerations it is quite a 
 sufficient answer to the allegations of the Commis- 
 sioners to say that customs duties being emphatically 
 taxes upon consumption, should be levied, not upon 
 importation, but as nearly as possible at the period of 
 actual purchase by the consumer. It is also deserv- 
 ing of their consideration whether, in these days of 
 increasing commerce, the continuance of the Custom 
 House would be possible, unless its evils were mitigated 
 by some arrangement of the kind. If there were not 
 duties there would be no w^arehousing system. The 
 Commissioners also claim to deduct the expenses of the 
 Coast Guard, now under the control of the Admiralty, 
 on the ground that it performs other functions. 
 In so far as it is employed in the protection of the 
 revenue, this service is an item in the cost of collec- 
 tion. The expense during the last year in which it 
 was exclusively under the control of the Custom 
 House, 1855, was £450,000. It is also alleged that 
 superannuations and compensations ought not to be 
 included, but these payments aref as certainly incurred 
 in connection with the revenue as the salaries of 
 officers who are actively employed therein. The whole 
 question of such payments is one well deserving of 
 consideration. It would probably be conducive to 
 
 * Progress of the Nation, 1847, pp. 473—474.
 
 The Queen's Taxes. 209 
 
 ef&ciency, if servants of the Crown Avere placed upon 
 the same footing as servants of the Mercantile Com- 
 munity : so long, however, as these pajonents are made, 
 they are clearly items in the cost of collection. 
 
 Tlie amount paid for the expenditure of the Cus- 
 toms Department for the year 1868-9, according to 
 the Einance Accounts,* was £945,737, to which should 
 be added £5,801 advanced out of revenue, beyond the 
 amount due from the Treasury at the commencement 
 of the year, 
 
 Making a total of ... ... ... ... ... £951,541 
 
 The Coast Gruard Service expenditure estimated at .. 450,000 
 
 Increases the actual cost to ... ... ... ... 1,401,511 
 
 From this deduct extraneous expenses, adding £3,000 
 for examining Foreign Cattle ; and taking the expenses 
 under the Merchant Shipping Act at £G,000, the sura 
 voted by Parliament, the remainder being provided by 
 the Board of Trade 66,953 
 
 The balance £1,334,588 
 
 will show the actual cost of collecting the revenue of 
 the Customs. The net produce of the duties collected 
 in the United Kingdom was £22,291,645 ; in the Isle 
 of Manf £12,532 ; the Spirit duties collected for the 
 Inland lievenue £1,522,385 ; other receipts, except 
 Fees under Merchant Shipping Acts and Payments 
 fi'om Merchants for special Services, accounted for in 
 
 * Finance Accounts, 18G8 — 9. 
 
 t The Expenses of tlic Inland Eslablishmrnts wore first inchi'li il in the Ejti- 
 matcB for 1808— 9.
 
 210 The Queen's Taxes. 
 
 the amount deducted from cost of collection, £93,342 ; 
 making the total net revenue collected by the depart- 
 ment £23,919,904, at a cost of £1,334,588, or 5J 
 per cent. This result differs no doubt from that 
 arrived at by the Commissioners of Customs, on the 
 principle laid down in their seventh annual report, of 
 excluding the Coast Guard and Superannuations. The 
 cost of collecting £24,099,617, in the year 1868, was, 
 according to their method of calculation, only £3 5s. 
 lOd. per cent. The omission of such important items 
 of expense as have been mentioned would not be 
 considered satisfactory in any mercantile balance 
 sheet, and there is no reason whatever for placing the 
 Customs establishment on a different basis. 
 
 The amount paid for salaries and other expenses in 
 the Inland Hevenue department, for the year 1868 — 9, 
 was £1,591,950. The revenue collected, deducting 
 £1,522,385, spirit duties collected by the Customs, 
 was £41,309,320, showing a cost of £3 17s. per cent. 
 The expenses of collection of each separate branch 
 cannot be ascertained. In the case of both Customs 
 and Excise, the interest and capital expended in the 
 purchase and erection of Custom Houses and other 
 revenue ofiS.ces, the repairs and renewal of furniture, 
 and some other expenses, ought to be added in order 
 to arrive at the exact cost, upon sound commercial 
 principles. Detailed information upon these points is, 
 however, inaccessible, and we must therefore be con- 
 tent to ascertain the annual charge for Salaries and 
 Superannuations ,
 
 The Queen's Taxes. 211 
 
 The cost of collection to the government does not, 
 however, represent the actual cost to the taxpayer. 
 In the case of duties of Customs and Excise the 
 profits of traders converted into tax-gatherers must be 
 added. The amount of revenue so collected (including 
 those Brewers' and Malsters' Licenses, which increase 
 with the quantities produced,) is, in round numbers, 
 £40,380,000. Upon the capital employed in the 
 payment of these taxes, the traders, by whom they are 
 advanced, charge a profit as certainly as they do upon 
 that portion of their capital which is invested in the 
 articles themselves. The problem for solution is : — 
 how much does this process add to the cost of 
 collection ? 
 
 A wTiter in the " Produce Markets Review,"* after 
 describing minutely the hindrances, delays, and 
 expenses, in which Merchants are involved by the 
 system of import duties, says : — " All this trouble, 
 expense, serene officialism, delay and inconvenience, 
 have, of course, eventually to be paid for by the public, 
 in addition to the duty. The goods generally have to 
 go through another middle-man's hands before reaching 
 the shopkeeper. In this case buyer number two's 
 profit is calculated on the original cost of the article, 
 plus the duty, plus the merchant's expenses in dealing 
 with the Customs, and plus buyer number one's 
 expenses in paying the duty, his profit upon it, and 
 
 * December 5tb, 18G8.
 
 212 The Queen's Taxes. 
 
 on the merchant's expenses, and all these items have 
 to he added to the original cost hy the retail buyer 
 ■who next gets the goods, before he adds his charge 
 for selling to the public. Thus, it is estimated, with 
 fair probability of accuracy, that a net revenue, for 
 instance on Tea, of say in round numbers £2,300,000, 
 actually costs the public in England not £2,300,000 
 bat nearly £3,900,000, or a clear loss of £1,600,000 ; 
 or again, a revenue which could be raised du'cctly by 
 2d. in the pound on the income-tax, costs really, 
 raised indirectly, a sum equal to 3d. in the pound." 
 
 The case of sugar, as described in the same article, 
 is even stronger, the effect of graduated duties 
 heing an encouragement of slovenly production and 
 waste, to such a degree that " Sugar which, vsdth Tree 
 Trade, ought to cost the public £10 a ton, plus 8 per 
 cent., or less than £11, actually costs them £31 per 
 ton, or three times what it ought to cost. In other 
 words, without duties. Sugar would in a few years be 
 sold in England at l^d. per lb., w4iile it now costs 
 4^d. Put in another way, the £5,550,000 revenue 
 returned by Sugar, in round numbers, really costs 
 £13,000,000, as it raises the cost of the 600,000 
 tons of Sugar we use yearly, from a cost, at £11 
 per ton, of £6,600,000, to a cost, at £32 per ton, of 
 £19,000,000; or, to obtain indirectly what would be 
 4d. in the pound on the income tax, we tax our 
 possible incomes Is. in the pound." 
 
 The collection of the Malt Tax is equally costly,
 
 The Queen's Taxes. 213 
 
 if the calculations of its oj)pouents are correct. Mr. 
 E. S. Cayley, the well-known anti-Malt Tax Advo- 
 cate, estimates that it it costs £10,000,000 to collect 
 the £6,000,000 of revenue derived from this article.* 
 It was stated by Sir Fitzroy Kelly, in the House of 
 Commons, that the £60,000,000 spent upon heer 
 would he reduced to £40,000,000 if the Malt Tax 
 were repealed. t Mr. Joshua Eielden of Todmorden 
 (now M.P. for the West Riding), in his evidence 
 before the Malt Tax Committee, 1868, entered into 
 calculations showing that the successive profits of the 
 malster, brewer, and retailer, increased the tax from 
 21s. 8d. per quarter to 31s. 6d,, or 45 per cent.:|: 
 
 If we examine the more moderate estimates of 
 Mr. Dudley Baxter as to the effect of such taxes upon 
 price, we obtain the following result :§ — 
 
 Articles. 
 
 Tea, CoiFee, Chicory 
 
 and Cocoa .. 
 Wine, Beer, and \ 
 
 Spirits 
 
 Tobacco 
 
 £33,561,327 £8,70G,0i6 
 
 The estimate for tea is low ; in making it a probable 
 
 Dnty. 
 £ 
 
 Per 
 
 Cent. 
 
 Additional Cost 
 of Duties. 
 Amount. 
 £ 
 
 '} 3,100,797 
 
 10 
 
 310,079 
 
 1 23,918,009 
 
 31 
 
 7,414,598 
 
 G,542,4G1 
 
 15 
 
 981,309 
 
 • Malt Tax Rcpoi-t 1807, p. 82-85. 
 t Malt Tax Dubate, AprU 17,1860. 
 J Malt Tax Report 1808, p. 145. 
 § The Taxation of the United Kinf,'douj, pp. IH2 1 10.
 
 214 The Queen^s Taxes. 
 
 rise in price consequent upon the abolition of tlie 
 duty has been taken into account, 10 per cent, being 
 the full benefit which Mr. Baxter believes the con- 
 sumer would derive from the repeal of the tax. The 
 per centage on tobacco is also small, especially when 
 it is considered that the duty is paid upon unmanu- 
 factured tobacco, and is, consequently, a tax upon a 
 raw material. Upon sugar Mr. Baxter believes there 
 is no extra cost, as the trade sells that article without 
 profit. This may be true of retail grocers, who make 
 their profit by increasing the price of their tea, but 
 the bulk of the sugar consumed in this country passes 
 throiigh the hands of the refiner, who has no oppor- 
 tunity of obtaining a profit on any other article. 
 There can be no doubt, whatever, that he charges 
 interest and profit upon the capital he advances in 
 payment of duties ; it is, perhaps, difficult to ascertain 
 the rate of profit with exactness, but it certainly 
 cannot be beyond the mark to estimate the increased 
 cost of the sugar tax at 10 per cent., or £574,300. 
 
 If Mr. Dudley Baxter's estimate is adopted with 
 the addition of 10 per cent, iipon sugar, it will be 
 seen that a bm-den of £9,280,346 is placed upon the 
 consumer in excess of the amount received by the 
 Government. It must be borne in mind that this 
 calculation takes no account of the increased cost of 
 taxation consequent upon the habit of purchasing in 
 small quantities. Mr. Baxter assigns as a reason for 
 the omission, that these extreme prices arise from 
 the habits and weaknesses of consumers, and not
 
 The Queen's Taxes. 215 
 
 from taxation. It must, however, be clear that there 
 would be no increased cost of taxation in consequence 
 of this habit, unless commodities were taxed. The 
 enhanced profits of traders upon the taxes they 
 advance, are a burden upon the consumer created by 
 the system of indirect taxation. It is difficult, more- 
 over, to imagine by what means a labouring man, earn- 
 ing say 12s., a week can make his purchases otherwise 
 than in small quantities. 
 
 In a paper read at the Annual Meeting of the 
 British Association, in 1850,* Mr. G. R. Porter gave 
 the result of a very careful enquiry into the retail 
 prices of spirits, beer, and tobacco. British spirits 
 being most largely consumed by the working classes, 
 and sold in very small quantities, necessarily bear a 
 high rate of profit. The opinion of several distillers 
 was ascertained, and Mr. Porter arrived at the con- 
 clusion that every gallon consumed cost the purchaser 
 three times the amount of the duty. This, he esti- 
 mates, is also the case with rum, the class of con- 
 sumers being the same, and the means of distribution 
 nearly, if not wholly, identical. Brandy being, for 
 the most part, drunk by persons not of the working 
 classes, as that terra is generally but somewhat arbi- 
 trarily understood, and being sold much more 
 frequently than British spirits in quantities of two 
 
 ■» On the Self-ImpoHed Taxation of the Working Classes. PrintuJ for privalo 
 circulation. Sec also Transactions of tho Association, vol. I'.l, yy. l(tl-10:5.
 
 216 The Queen's Taxes. 
 
 gallons and upwards, does not afford so large a per 
 centage of profit. A considerable quantity is sold, 
 however, in small quantities, and it cannot be consi- 
 dered, according to Mr. Porter, an over estimate, 
 averaging tlie quantities sold in two gallons and 
 upwards with that sold at inns and public-houses by 
 the glass, to fix 50 per cent, as the rate of profit upon 
 import duty and cost. It is true that these calcula- 
 tions were made nearly twenty years since, but there 
 is no reason to suppose that any change has taken 
 place in the rate of profit upon these articles since 
 that time. 
 
 The following tables show the result of Mr. Porter's 
 estimate as affecting 1868-9 : — 
 
 
 
 Wholesale 
 
 Total 
 
 Quantity 
 
 
 cost exclusive 
 
 wholesale 
 
 charged. 
 
 Duly. 
 
 of duty. 
 
 cost. 
 
 Gallons. 
 
 £ 
 
 £ 
 
 £ 
 
 British Spirits ... 21,930,393 
 
 10,965,195 
 
 2,741,299 
 
 13,706,494 
 
 Eum 3,S75,0i6 
 
 1,9G9,201 
 
 484.380 
 
 2,453,581 
 
 Brandy ... ... 3,317,503 
 
 1,743,522 
 
 1,087,957 
 
 2,831,479 
 
 Geneva 134,877 
 
 70,253 
 
 15,735 
 
 85,988 
 
 Otiier sorts, Foreign 1,007,088 
 
 524,527 
 
 100,708 
 
 625,235 
 
 30,294,967 15,272,698 4,430,079 19,702,777 
 
 The abCiVe calculation is based upon the following 
 estimate of prices : — British spirits and rum, 2s. 6d. 
 per gallon ; brandy, 6s. 6d. per gallon ; Geneva, 
 2s. 4d. per gallon ; other sorts, 2s. per gallon. The 
 prices for foreign and colonial spirits are based upon 
 the prices in the Annual Statement of the Board of 
 Trade for 1868 ; British spirits have been averaged at
 
 The Queen's Taxes. 217 
 
 2s. 6d., which the author believes to be a liberal 
 estimate. In every instance the prices fixed are over 
 rather than under the average. 
 
 Profit upon Eato of Profit 
 
 Eetail price. total profit charged on 
 r, wholesale cost, per cent. duty. 
 
 £ £ 
 
 British Spirits 32,895,585 19,189,091 139 15,241,621 
 
 Eutn 5,907,603 3,154,022 140 2,756,881 
 
 Brandy 4,247,218 1,415,739 50 871,761 
 
 Geneva 128,982 42,994 50 35,126 
 
 Other Foreign Spirits 1,573,581 948,346 151 792,035 
 
 £44,752,969 £25,050,192 £19,697,424 
 
 In this table the retail profit on Geneva is supposed 
 to be the same as on brandy, and of the inferior foreign 
 spirits imported principally from Hamburg the same 
 as on British spirits. It appears, therefore, according 
 to estimates based upon Mr. Porter's calculations, that 
 the cost of collecting £15,272,698 of revenue from 
 spmts, in addition to the salaries and expenses of the 
 revenue department, is £19,697,424. 
 
 Mr. Porter also enters into minute calculations 
 respecting the manufacture and profits of the tobacco 
 trade. lie estimates the latter at 50 per cent, upon tlie 
 cost of the tobacco as imported and the duty paid 
 thereon, adding " a moderate increase to defray all the 
 expenses of manufacture, and the charges attendant 
 upon the retailing of an article, nearly the whole of 
 whicli is paid for in copper coins." As the heavy 
 duty upon tobacco must l)e paid before the manufac- 
 turer is allowed to manipulate it, tliere can be no 
 doubt tliat tlu; profit upon the tax is equal to thai 
 charged u])on the tobacco, and may be fairly estimated
 
 218 The Queen's Taxes. 
 
 at 50 per cent, or £3,271,230. It appears, tlierefore, 
 from these calculations, that the extra cost of collect- 
 ing the duties on spirits and tobacco in 1868-9, be- 
 yond the salaries and expenses paid by the Treasury, 
 was £22,968,654, and that these duties imposed a 
 burden on the taxpayer of £44,783,813, of which the 
 Treasury received only £21,815,159, or less than one- 
 half the amount actually paid by the consumer. 
 
 When it is considered that the purchaser of a taxed 
 article has to pay the accumulated profits of importers 
 or manufacturers, wholesale dealers, and retailers ; 
 that the taxes upon sugar, tobacco, and malt are levied 
 upon raw materials, or at a very early stage of manu- 
 facture ; and that our existing duties are derived to so 
 large an extent from taxes on commodities, which all 
 classes are in the habit of purchasing in small quanti- 
 ties ; it must be apparent that the increased cost to the 
 consumer becomes a very heavy burden. If the very 
 moderate estimate of 25 per cent, is adopted it will be 
 seen that the £40,000,000 collected by Customs and 
 Excise costs the public £10,000,000 beyond the 
 amount paid into the Exchequer. That the actual 
 cost is much heavier than 25 per cent, upon the 
 amount of the tax must be evident to any one who 
 examines the figures already quoted ; which take no 
 account, moreover, of the influence of such taxes in 
 diminishing trade and employment. They are two- 
 edged weapons, taking an undue per centage from the 
 income of the people, and preventing, in so far as they 
 are restraints upon trade, any increase in the amount 
 of income received.
 
 The Queen's Taxes. 219 
 
 CHAPTER XXV. 
 
 CONCLUDING OBSERVATIONS. 
 
 Two questions remain for consideration — the com- 
 parative pressure of taxation upon various descriptions 
 of income and property, and its economic results. As 
 respects the former it is a difficult task to apportion 
 exactly the amounts paid by real property, by per- 
 sonalty, and by industrial incomes. The follo\^^ng 
 table gives an approximate result, which it is believed 
 will be foimd to be tolerably accm-ate. 
 
 Eeal Property : — £ 
 
 Land tax, succession duty, schedule A of income tax ; 
 half the stamps, law fees, game, racehorse, and dog 
 licenses, surcharges, and assessed taxes ; one-third 
 
 the inhabited house duty 8,000,000 
 
 Personal Poperty : — 
 Probate and legacy duty, half game, racehorse, and 
 
 dog licenses, and schedule C of income tax ... ... 4,900,000 
 
 Trades, Professions, and Employments : — 
 Licenses, except brewers, and maltsters, charged to 
 consumption ; marine insurances ; patents ; income 
 tax, schedules B, D, E ; two-thirds iuliabited house 
 duty ; half stamps, assessed taxes, and surcharges ... 9,500,000 
 Consumption :— 
 Customs and excise and stamp duties on commodities ; 
 
 brewers' and maltsters' licenses ... ... ... 40,000,000 
 
 Additional 25 per cent, on ditto 10,000,000 
 
 £72,400,000
 
 220 The Queen's Taxes. 
 
 In the above calculation allowance lias been made 
 for the Pire Insurance Duties, Tax on Corn, and other 
 taxes repealed in 1869. The estimate of stamps and 
 other taxes upon real property, excepting such as are 
 distinctly separate in the accounts, is believed to be 
 in excess of the actual proportion. 
 
 The great difiiculty in ascertaining the comparative 
 presssure of taxation on different classes arises from 
 that large portion which is assessed by taxes on 
 commodities. Of the 40,000,000 so levied, or, includ- 
 ing the estimated addition for collection of 25 per 
 cent., £50,000,000, the duties on wine and gold and 
 silver plate can alone be described as paid entirely 
 by the upper and middle classes. These amount to 
 £1,990,000, leaving £48,000,000, in round numbers, 
 to be apportioned between industrial, trading, and 
 propertied incomes. 
 
 It is not necessary to enter into a minute enquiry 
 in order to arrive at the solution of this problem ; the 
 facts of the case lie on the sm-face. V^ith the 
 exceptions already named, all our duties of Customs 
 and Excise are levied upon articles of universal con- 
 sumption, some of which are used most extensively 
 by the poorer classes. The rich are not able to 
 consume more of these commodities than the poor, as 
 far, at least, as physical appetite is concerned. It 
 must, therefore, be obvious that the chief pressure of 
 this portion of our fiscal system falls upon the most 
 numerous class, upon those who have the smallest
 
 The Queen's Taxes. 221 
 
 means witli which to make their purchases, and who 
 have no property but their labour. This fact was 
 acknowledged by the late Sh- Robert Peel.* Speaking 
 in reference to families, the head of which earned less 
 than 30s. a week, he said : — " It is inevitable with a 
 system of indirect taxation that they must pay 
 heavily ; but I know, if the burden presses unjustly 
 upon them, it is from no want of sympathy on the 
 part of the gentlemen of England; it is, however, 
 inevitable. We must raise a great part of our 
 taxation by indirect taxes, and the bm-den will be 
 unequally distributed." It is possible that the owners 
 of wage-incomes, when they come to understand 
 thoroughly the pressure of inilirect taxation, may not 
 be content with mere sympathy, but may endeavour 
 to ascertain whether a system of taxation which 
 presses unjustly upon them is really inevitable. 
 
 It is not however in the mere pressure of indirect 
 taxation upon the working classes, nor in its increased 
 cost, consequent upon the profits advanced for duties, 
 that it is most burdensome. Every tax ought " to keep 
 out of the pockets of the people as little as possible, 
 over and above what it brings into the pubHc treasury 
 of the State."! If there is any lesson to bo learnt 
 from the fiscal history of the last half century it is 
 that taxes levied upon commodities, whether by 
 
 * Speech on the Coru Laws, Marc-li '27th, 1810. 
 1 Wealth of Nations, Book v., C'hui'. ii. Part ii.
 
 222 The Queen^s Taxes. 
 
 means of duties of Customs or Excise, or in any other 
 form, are a restraint upon trade, that they hinder the 
 creation of wealth, lessen the demand for labour, and, 
 as a natural consequence, keep out of the pockets of 
 the people far more than they bring into the treasury 
 of the State. Every relaxation of our fiscal system 
 has been followed by a marked increase in our trade, 
 manufactures, and employment ; every increase in 
 duties on commodities has diminished trade. The 
 reduction in the price which results from repeal of 
 duty increases the home market for other articles, 
 while the augmented imports of foreign products are 
 attended by a corresponding demand abroad for our 
 own manufactures. It has been the policy of 
 releasing Imports from taxation, which has extended 
 trade and increased the Exports of British Produce 
 and Manufactures, from £47,000,000 in 1842 to 
 £179,000,000 in 1868. If we desire a further 
 development of our industry, and a revival of trade 
 and employment, they will be found in the further 
 removal of restrictions upon freedom of exchange. 
 
 There are few subjects which have given rise to 
 more controversy than that of the incidence of taxa- 
 tion. It was held by John Locke, by the Erench 
 Economists of the last century, from Quesnay down to 
 Turgot, and in our own day by Dr. Chalmers, that all 
 taxation, however levied, falls ultimately upon rent. 
 This opinion is not held by Adam Smith or the prin- 
 cipal modern economists. The conclusions of the
 
 The Queen's Taxes. 223 
 
 Prencli economists are summed up by Mr. Pollard- 
 TJrquliart* in the following sentence : — " The whole of 
 the taxation of a country, in what manner soever it 
 is levied, or by whomsoever it is paid in the first 
 instance, comes ultimatQj.y from the revenues of 
 the landowners, either as a direct deduction from their 
 rents, or by depressing the value of their properties to 
 an equal amount." 
 
 In considering this proposition care must be taken 
 to distinguish between rent, properly so called, and 
 that portion of the payment commonly designated 
 rent, which consists of the profits of capital invested 
 either in agricultural improvements, or in the con- 
 struction of dwellings and other buildings. The latter 
 payment stands upon precisely the same footing as 
 the profits of capital invested in any other business. 
 In a paper read by Mr. Pollard-Urquhart at the York 
 Meeting of the Social Science Association, in 1SG4, it 
 is stated that the amount of property taxed under 
 Schedule A in the previous year was, in round 
 numbers, £140,000,000. This, however, included 
 rent paid for buildings, interest upon capital laid out 
 in improvements, and the profits of railways, iron- 
 works, gas and waterworks, mines, and similar under- 
 takings, since transferred to Schedule D. To the 
 extent that such items are included under the general 
 term rent, it must be evident that an increased rental 
 
 • Dialogues on Taxation, p. 51.
 
 224 The Queen's Taxes. 
 
 is precisely similar to an increased profit in any other 
 trade or employment. 
 
 There can be no doubt that injudicious taxes prevent 
 the growth of rent ; but they also diminish profits and 
 reduce wages. The Income Tax returns for Great 
 Britain, as far as the same items can be compared, 
 show the following result :* — 
 
 Amount of Income Assessed. 
 1842-3 1864-5 Increase. 
 
 £ £ £ 
 
 Lands, Houses,) 
 Tithes, Manors, [ 86,661,944 118,737,072 32,075,128 
 
 and Fines ■' 
 
 Quarries, Mines,'j 
 
 Ironworks, I 6,846,256 23,744,892 16,898,636 
 
 Fisheries, Canals, 
 and Railways ... j 
 Trades, Profes-] 
 
 sions,& Employ- f 71,330,344 110,367,232 39,036,888 
 
 ments ) 
 
 It will be obvious that the increase in houses arises 
 partly from profit upon the capital employed in build- 
 ing, and that part of the increased rent of lands is the 
 profit upon capital invested by landlords in agricultural 
 improvements. It is the remaining portion only 
 which can strictly be designated rent. 
 
 The increase appears to be on lands, houses, &c., 
 about 37 per cent. ; on quarries, mines, railways, &c., 
 246 per cent. ; and on profits of trades and professions, 
 54 per cent. A similar result would doubtless follow 
 
 * Real Property Return ; Session 1845, No. 102. Property and Income Tax 
 Return; Session 1852, No. 399. Tenth Inland Revenue Report, 1866. App. 
 lix — Ixi.
 
 The Queen's Taxes. 225 
 
 any further remission of indii'ect taxation ; rent and 
 profits would both share the advantage. 
 
 The case is by no means different when considered 
 in respect to the effect of taxation upon labour. High 
 duties of customs and excise increase the prices of 
 commodities, and by limiting exchange diminish the 
 demand for labour. The effect upon the wage-re- 
 ceiving classes is therefore two-fold, and this is an 
 incident of taxation which it is impossible for them to 
 transfer to holders of property. If an artificial scarcity 
 is produced, the labourer is compelled to increase the 
 number of hom-s he works per day, in order to obtain 
 subsistence. It is true this process increases pauperism 
 and consequently adds to the poor rates, which are 
 ultimately a deduction from rent. The j)eculiar inci- 
 dence of taxation upon labour cannot, however, be 
 transferred to the shoulders of the landed interest. 
 Every section of the community is affected by inju- 
 dicious taxation ; rent, profits, and wages are all dimi- 
 nished by fiscal hindrances to freedom of exchange. 
 
 In like manner, the whole community is advantaged 
 by the removal of such burdens. Tlie workman 
 experiences a fresh demand for labour, and enjoys an 
 advance of wages; the capitalist finds new and profi- 
 table undertakings in which to embark his caj)i(al ; 
 and the landlord, though perhaps the last to receive 
 his share of the benefit thus conferred, enjoys the 
 most permanent advantage. Capital and labour (em- 
 ployed in commerce and manufactures (in addition 
 
 Q
 
 226 The Queen's Taxes. 
 
 to the profits and wages earned by the capitalist and 
 labourer) augment the value of real property, quite 
 irrespective of any effort on the part of the landlords. 
 They enjoy what may be called a spontaneous increase 
 as far as any efforts of their own are concerned, and 
 may fairly be expected to contribute towards the 
 public requirements a larger per centage of their 
 incomes than the capitalist and labourer by whom 
 this augmented wealth is created. 
 
 It is frequently urged that the transfer of taxation 
 from commodities to property is injurious to the 
 interests of those who own the soil. If such transfer 
 were productive of no increase in rent, there might be 
 some force in the argument, but, inasmuch as every 
 relief afforded to trade and industry creates an addition 
 to the rent enjoyed by the landlords, it must be 
 obvious that the repeal of burdens upon trade and 
 industry, although obtained by an additional tax on 
 rent, is not a penalty upon the propertied classes, but 
 a profitable investment. It surely can be no hardship 
 to pay a direct tax, the effect of which is to create an 
 increased income for the class by whom it is paid. 
 Taxes upon production and consumption are far more 
 onerous in their incidence upon the landlords than 
 taxes upon their property, inasmuch as the operation 
 of the former is to diminish the amount of income 
 which they would otherwise enjoy. 
 
 It is alleared that modern lesrislationhas relieved the 
 consumers of commodities at the expense of the
 
 The Queen's Taxes. 227 
 
 owners of real property. This, however, is not the 
 fact ; since the year 1842 taxation upon the luxuries 
 of the rich has been almost entirely repealed ; taxation 
 upon articles consumed by the masses of the popula- 
 tion remains. Silks, velvets, jewellery, and other 
 articles of luxury are now exempt from duty ; tea, 
 coifee, sugar, spirits, malt, and tobacco, all of Avhich 
 are necessarily consumed most largely by the most 
 numerous class, constitute, at the present time, as 
 they did before the era of tariff reforms, the main 
 sources from which the bulk of our taxation is derived. 
 The repeal of the window duty and of the tax on fire 
 insurances, and the re-adjustment of the assessed 
 taxes upon horses, carriages, and servants, have been 
 a relief to the propertied classes, not to those whose 
 only property is their labour. 
 
 It has been already shown that a system of taxation 
 which presses heavily upon the wage-receiving class 
 is also prejudicial to the interests of the landlord and 
 the capitalist. The inevitable result of the artificial 
 increase in price which is created by customs and 
 excise is to diminish employment, to restrict the field 
 for the profitable investment of capital, and to lessen 
 the rental which would otherwise accrue to the land- 
 lords. It is entirely different in its effects from that 
 increase in price which, notwithstanding immense 
 foreign supplies, has taken place in many articles, and 
 has been caused by the increased ability of the people 
 to purchase such commodities.
 
 228 The Queen's Taxes, 
 
 The great end to be attained, in the levy of taxation, 
 is to adjust the burden so as to place the fewest 
 possible restraints upon industry. Such a policy is 
 not only wise as respects the community generally, 
 but it is also just as respects the incidence of taxation 
 upon its yarious sections. No one can be said to be 
 injured by the payment of any tax which ensures 
 freedom for industry and security for property, unless 
 it be excessive in amount or injurious in its economic 
 effects. The premium necessary to ensure against loss 
 by fire, or at sea, is paid without a complaint ; if our 
 taxes were levied upon equally sound principles, there 
 would be as little reason to complain of them. Much 
 has been accomplished during the last quarter of a 
 century in the removal of injurious and oppressive 
 taxes, but much remains to be done. 
 
 It is now ten years since the last great revision of 
 the tariff, in 1860 ; since that period the duties upon 
 tea and sugar have been reduced, and the remaining 
 tax upon corn has been abolished. A further revision 
 of our fiscal system is now eminently desirable, in the 
 interests not only of our foreign, but our domestic 
 commerce. The artificial prices, created by taxation 
 upon the necessaries and comforts of life, lessen the 
 purchasing power of the masses of the population, 
 while, at the same time, they diminish the demand 
 lor their labour, and affect both the profits of capital 
 and rent of land. The true principles upon which 
 taxation should be based, in order to inflict the least
 
 The Queen's Taxes. 229 
 
 injury upon all classes, was well described by Lord 
 Palmerston in the following words* : — " If we are 
 obliged to call upon any class to make for the public 
 service a sacrifice of a large portion of their incomes, 
 whether arising from commerce, from professions, or 
 from labour, that very fact is the strongest possible 
 reason why we should endeavour to enable them to 
 make that remainder, which we leave to them, go as 
 far as it possibly can in procuring for them, according 
 to their respective situations in life, the necessaries, 
 the conveniences, or the luxuries which they may 
 wisb to enjoy." 
 
 • Corn Law Debate, March 27th, ] 846.
 
 230 The Queen's Taxes. 
 
 CHAPTER XXVI. 
 
 SUPPLEMENTARY. THE BUDGET OF 1870. 
 
 The preceding chapters were written, and nearly the 
 whole of them were in type, before the introduction of 
 Mr. Lowe's second Budget. In the year 1869 he con- 
 verted a deficiency into a surplus by an alteration in 
 the collection of the Income and Assessed Taxes, which 
 enabled him to reduce instead of increasing taxation. 
 This operation, although it was a relief to the tax- 
 payer, was severely criticised by some of his political 
 opponents, who were, however, effectually silenced by 
 the surplus of £7,870,000, which enabled the Govern- 
 ment to defray liabilities, on account of the Abyssinian 
 Expedition, amounting to £4,300,000, without im- 
 posing any additional taxation, and to reduce the 
 funded and unfunded debt by the sum of £3,284,600. 
 It was his good fortune to announce, in the financial 
 statement of the present year, an expected surplus of 
 £4,337,000, which he proposed to increase to 
 £4,487,000, by the substitution of fire-arm Kcenses for 
 game certificates. Of this surplus the sum of £190,000 
 was employed in payment of the increased interest 
 payable upon terminable annuities created for the
 
 The Queen's Taxes. 23 1 
 
 reduction of the debt, thus reduciug tlie available 
 surplus to £4,297,000. 
 
 In the appropriation of this large sum to the remis- 
 sion of taxation, Mr. Lowe acted upon the following 
 principles : — the repeal of small find unproductive 
 taxes, the simplification of the Revenue Laws, and 
 the reduction of taxation, both direct and indirect, 
 without destroying any considerable branch of tlie 
 revenue. The following is a summary of the changes 
 he proposed, in his own words : — * 
 
 " The licenses for foot hawkers which are abolished from the Ist of 
 October, will cost us £16,000 this year ; the abolition of licenses for 
 paper makers, soap makers, watch case makers, still makers, and 
 playing card dealers, involves a remission of £6,000 ; the abolition 
 of stamps on hailstorm, cattle, boiler, and plate glass insurance from 
 the 1st of July, involves a remission of £1,000. The revision of 
 duties under the Stamps Consolidation Bill, which ia to take effect 
 from the 1st of January 1871, will involve a remission of £50,000; 
 in impressed stamps for postage on printed matter, abolished from 
 the 1st of October, we remit £60,000 ; in the rate of postage on 
 printed matter and newspapers, which is reduced one-half from the 
 Ist of October, we remit £125,000 ; by the alteration of the duty 
 on railways we remit £108,000 ; by taking a penny in the pound off 
 the income tax we remit £1,250,000; and by reducing one-half the 
 duty on sugar and molasses we take off £2,310,000. The surplus 
 we have to deal with being £4,297,000 and the remissions amount- 
 ing to £3,966,000, there will remain a net surplus of £331,000." 
 
 The remission of one-half the Sugar Duty was 
 unquestionably tlie most important feature of the 
 
 • Financial Statement, 1870, R. J. Bush. pp. 32-23.
 
 5 « 
 
 5 3 
 
 4 9 
 
 4 
 
 232 The Queen's Taxes. 
 
 budget, and, although it formed an appropriate climax 
 to Mr. Lowe's financial statement, may fairly claim 
 the first place in consideration here. The following is 
 the new scale of duties :* — 
 
 s. d. 
 
 Eefiaed Sugar, per cwt. ... ... ... 6 
 
 First Class „ 
 
 Second Class „ 
 Third Class 
 
 Fourth Class „ 
 Fifth Class, or 
 
 Molasses „ ... ... ... 1 9 
 
 In allusion to the demand for the total repeal of 
 
 this duty, recommended by the President of the Board 
 
 of Trade, Mr. Lowe said :— " I wish it to be clearly 
 
 understood that, in making this proposal, I am not 
 
 preparing the way for either further reduction or for 
 
 abolition, but that I have gone as far as I intend, and 
 
 make this declaration in order to give stability to the 
 
 trade, and free it from periodical annoyance, owing to 
 
 apprehensions of change." It is, therefore, clear that 
 
 the advocates of a Free Breakfast Table have no 
 
 reason to rely upon the sympathies of the present 
 
 Chancellor of the Exchequer. It is, however, possible 
 
 that he may change his mind. In 1844 Sir Eobert 
 
 Peel said respecting the Corn Laws if — ■" I must give 
 
 my solemn and unqualified opposition to this proposal 
 
 for the immediate removal of the present protection 
 
 to agriculture ; " in 1845 he made the following 
 
 • Financial Statement, 1870, p. 32. 
 t Speech on Mr. Villiers' Motion. Jane 26111, 1844.
 
 The Queen's Taxes. 233 
 
 important admission :* — '' if the doctrine is good for 
 corn it is good for everything else ; '' and in 1846, he 
 proposed the repeal of the Corn Laws. The con- 
 yictions of Ministers of the Crown are generally 
 influenced by the growth of public opinion; when- 
 ever the constituencies demand the repeal of this tax, 
 either Mr. Lowe, or some other Chancellor of the 
 Exchequer, will be found to comply with their request. 
 It must be evident that a mere reduction of the 
 duty does not remove the objections which have been 
 already advanced against this tax. The sugar question 
 is one of great importance, not merely as affecting an 
 article of large consumption in this country, but in 
 relation to our foreign commerce. The United 
 Kingdom is in possession of every facility for carrying 
 on a large trade in this important article. In our 
 Colonial Possessions the growth of sugar may be 
 developed to an almost unlimited extent ; in this 
 country there are facilities for refining equal to those 
 possessed in any other part of the world, while the 
 extent of our shipping gives us great advantage in the 
 pursuit of a trade, in which facility of transit is so 
 important an ingredient. Notwithstanding the pos- 
 session of all these advantages, it is a noteworthy fact 
 that our export of sugar is insignificant, in comparison 
 witli that of other tropical products. 1'he lioard of 
 Trade Returns show that in 1808 our exports of sugar 
 
 * Coru Law Debate. June 10th, 1845.
 
 234 The Queen's Taxes. 
 
 formed 2 per cent, of our imports, while, in the case 
 of tea, they formed 22 per cent., and in that of coffee 
 77 per cent. The solution of this problem will, in all 
 probability, be found in the fact that, while our export 
 of sugar is restricted by the duty, the import and 
 export trade in tea and coffee is perfectly free from 
 any such hindrance to trade. 
 
 It is not merely in respect to om- Exports that the 
 sugar duty has a prejudicial effect upon employment, 
 but also in relation to the home market. The Board 
 of Trade returns show that during the five years 
 ending 1868 there was an increase of 170 per cent, 
 in the import of refined sugar, as compared with the 
 five years ending 1863, while the increase in raw 
 sugar was only 10 per cent ; in the export of British 
 refined sugar there was an increase of 9 per cent. 
 If our refiners had been able, during the above period, 
 to compete with those of other countries upon an 
 equal footing, subject only to such advantages as are 
 naturally enjoyed in each country, there would be no 
 ground of complaint; the import of refined sugar 
 would be an unquestionable advantage. Such, how- 
 ever, has not been the case ; Eoreign Governments, 
 under the guise of a drawback, endeavoured to foster 
 their export trade by means of bounties, and thus 
 enabled their producers to compete with ours, not 
 merely in foreign markets but in the United Kingdom. 
 It was to put an end to this state of things that the 
 convention of the 8th November, 1864, was signed in
 
 The Queen's Taxes. 235 
 
 Paris, and a series of experiments were then com- 
 menced with the \dew of ascertaining the basis upon 
 which drawbacks should in future be allowed by the 
 parties to the Convention. In the year 1867, the 
 Commissioners of Customs annoimced the final settle- 
 ment of the question, but deferred, until the following 
 year, any description of the alterations thereby intro- 
 duced into our scale of duties, a promise which to 
 the present time has not been fulfilled.* 
 
 The basis of the duties and drawbacks fixed by the 
 treaty is the quantity of pure sugar which can be 
 obtained from different qualities and descriptions of 
 raw sugar. A little consideration will show that a 
 drawback upon this basis is not a full equivalent for 
 the advance of duty. The present rate upon raw 
 sugar is about 20 per cent, ad valorem, and it is 
 therefore necesssary for the refiner to increase the 
 capital employed in his business to that extent. The 
 drawback allowed being calculated according to the 
 amount of duty paid, it is obvious that the interest 
 and [)rof]t upon this capital become a charge upon the 
 refiner, which he recovers from the consumer. In 
 proportion as the rate of taxation levied upon sugar is 
 high or low this effect of the duty is more or less pre- 
 judicial, and an illustration of this fact may be found 
 in the removal of some branches of industry, in 
 
 • Ninth CuBtoms Kcport, pp. 39—40. Tenth ditto, pp. 17 — 49. Elcvculh 
 ditto, pp. 01—52.
 
 236 The Queen's Taxes. 
 
 connection with the sugar trade, from the United 
 Kingdom to other places, where lower duties have 
 been imi^osed. 
 
 Another effect of the graduated scale of duties is to 
 prevent the growers from sending their sugar here in 
 the most profitable form, both for themselves and the 
 consumer. If there were no duties, or one uniform 
 rate, the bulk of the sugar imported would reach us 
 either in the form of cane juice, or sugar fit for the 
 table ; in either case economy of production would be 
 obtained, securing a reduction in price and an in- 
 creased supply. In proposing the repeal of the 
 shilling tax on Corn, Mr. Lowe said very truly : — * 
 " I am satisfied we shall be doing that which will 
 greatly tend to their benefit," alluding to the poorest 
 and most helpless class of the community, " and be 
 laying the foundation of a great entrepot of trade 
 which will not only be of advantage to the mercantile 
 classes, but which will have the equally desirable 
 result of creating that abundance to which the 
 existence of an entrepot so largely contributes by 
 circulating trafl&c and lowering prices." These words 
 are quite as applicable to the case of sugar as they 
 were to that of corn. 
 
 The reduction of the Income Tax to 4d. in the 
 pound, the sum which, in 1865, Mr. Gladstone 
 recommended as the ordinary permanent rate of the 
 
 * Fiuancial Statement, 1869, p. 23.
 
 The Queen's Taxes. 237 
 
 tax, was generally anticipated. One or two protests 
 were made on the ground that it would hare been 
 wiser even to increase the tax by a penny or two- 
 pence, in order to secure the entire repeal of the 
 sugar duties. It is very questionable whether Par- 
 liament or the country would have responded to 
 such a proposal. An injustice, which is open and 
 palpable, invariably excites greater hostility than one 
 which is concealed, although the latter may be the 
 more injurious in its effects. This is especially the 
 case when it appears in the specious and seductive 
 form of "voluntary taxation." Tliat the present 
 income tax is unfair in its comparative incidence 
 upon real and personal property, cannot be denied. 
 It has also other objectionable features which will 
 jorevent it, unless under exceptional circumstances, 
 from being emj)loyed in the repeal of indirect 
 taxation. It is quite hopeless to expect the exten- 
 sion, unless from pressing necessity, of a tax which 
 is condemned as unjust by a large proportion of 
 those by whom it is paid. 
 
 The repeal of small and unproductive licenses is a 
 measure quite in accordance with the fiscal policy of 
 recent years. That upon foot lunvkers has been 
 enforced at considerable expense ; if law expenses 
 and the maintenance of prisoners, convicted of 
 infringing the provisions of the law by hawking Avitli- 
 out a license, could be ascertained, it would in all 
 probability be found that the duly has ])een inotluc-
 
 238 The Queen's Taxes. 
 
 tive of actual loss to the Exchequer. The repeal of 
 the stamp duties on hail-storm, cattle, boiler, and 
 plate-glass insurances, is a measure which may be 
 justified, not merely on the grounds alleged by Mr. 
 Lowe that the amount produced is not worth the 
 trouble and cost of collection, but also on the ground 
 that these imposts, like the defunct fire-insurance duty, 
 are taxes upon prudence. The sole surviving insu- 
 rance duty, that on Marine Insurances, is equally 
 objectionable in principle, and ought to be repealed at 
 the earliest possible opportunity. 
 
 The imposition of a tax upon guns, in the form of 
 a license duty, will be regarded with satisfaction by 
 all dwellers on the outskirts of the Metropolis and 
 other large towns, if it tend to check the indiscrimi- 
 nate shooting of small birds which takes place, 
 especially on Sundays and holidays, to the annoyance 
 of the general public and, in agricultural districts, to 
 the injury of the farmers, the small birds thus 
 wantonly killed being the great destroyers of the 
 numerous insects which prey upon young crops. 
 
 One of the most important features of the budget, 
 apart from the mere question of revenue, is the con- 
 solidation of the Stamp Laws, by the reduction of the 
 whole law, at present embodied in an enormous 
 number of Acts, into a single Act of Parliament. The 
 principal changes introduced are the abolition of the 
 progressive duty levied upon deeds according to the 
 number of w^ords contained ; the reduction of the duty 
 on deeds, on wdiich there is not an ad valorem stamp,
 
 The Queen's Taxes. 239 
 
 from 35s. to 10s. and of the duty on letters of 
 attorney from 30s. to 10s., and the abolition of the 
 duty on the admittance of copyhold conveyances, 
 retaioing only that levied upon surrender. The hill 
 introduced to carry into effect Mr. Lowe's proposals 
 respecting the Stamp Duties is mainly, and of neces- 
 sity, a consolidation of the existing laws, and does not 
 deal with these complicated imposts upon their merits. 
 The substitution of a single Act of Parliament in 
 place of the numerous statutes by which these duties 
 are now levied, is, however, a measure of very great 
 importance, and will bring this branch of the revenue, 
 yielding an annual income of above £9,000,000, into 
 a position in which its merits and demerits may 
 receive adequate consideration. 
 
 The abolition of the impressed stamp on newspapers 
 along Avith the attendant privilege of free transmission 
 for fifteen days, and the substitution in lieu thereof of 
 a halfpenny postage for each transmission of a single 
 copy of a bond fide newspaper weighing less than six 
 ounces, will be a benefit not merely to the newspaper 
 press but also to the public g( morally. The reduction 
 of the postage on printed matter from one penny for 
 every four ounces, or portion thereof, to one hall'peiniy 
 for every two ounces, or portion thereof, and the in- 
 troduction of a halfpenny card postage for messages 
 in which secrecy is not required, arc also measures uf 
 great public advantage. It is to be hoped that in 
 carrying out these changes tiie Post-oflice authorities 
 will take ample measures to secure due efliciency, so
 
 240 The Queen's Taxes. 
 
 that communication may not be hindered by appa- 
 rently increased facilities. 
 
 The gross receipts, the expenses, and net proceeds 
 of the Post-office for the year 1868-9 appear to be as 
 follows : — * 
 
 Receipts. £> 
 
 Postage 4,378,570 
 
 Commission on Money Orders ... ... 175,010 
 
 Newspaper Stamps, collected by the Inland 
 
 Revenue 115,987 
 
 
 4,669,567 
 
 Expenditure. 
 
 
 Cost of Collection : — 
 
 
 Postage 3,077,526 
 
 
 Money Orders 121,037 
 
 
 Manufacture : — 
 
 
 Of Postage Stamps charged by 
 
 
 Inhmd Revenue ... ... 32,330 
 
 
 Newspaper Stamps (estimated) 4,500 
 
 
 Packet Service 1,090,338 
 
 
 
 ' 4,331,731 
 
 
 Net Revenue ... 337,836 
 
 According to Mr. Lowe's estimate the abolition of 
 the impressed stamp on newspapers will involve a loss 
 to the revenue of £120,000, and the reduction of the 
 rate on printed matter a further loss of £250,000, 
 making a total of £370,000, or an excess of £32,000 
 
 * Return " Taxes anil Imposts," Sess. 1869, No. 427- Finance Accounts, 1868-9. 
 pp. 70-77. Civil Service Estimates, 1868-9, Revetme Departments, p. 32.
 
 The Queen's Taxes. 241 
 
 beyond the net revenue of the Post Office. In these 
 estimates, however, no allowance appears to be made 
 for the increased business which mil be transacted in 
 consequence of a reduction in the rates of charge. 
 
 The only serious objection to the alterations proposed 
 in the transit of newspapers and printed matter has 
 reference to the peculiar facilities afforded to the 
 former, and the favour shown to certain ncAvspapers. 
 If the Post Office is able to carry six ounces of printed 
 matter for a half-penny in the shape of a single news- 
 paper, it may fairly be presumed that it can carry, at 
 the same rate, a packet containing six ounces of news- 
 papers irrespective of the number of copies contained 
 in such packet, and that printed matter of any descrip- 
 tion can be carried on the same terms. The vexed 
 question of what constitutes a newspaper, which has 
 already occasioned extensive and costly litigation in 
 relation to the compulsory newspaper stamp, is re- 
 opened by this measure. All the former difficulties 
 of the Post Office, in connection with the transmission 
 of newspapers, are revived, throwing an amount of 
 labour upon the department which, in all prol)ability, 
 will seriously impede its successful working. A far 
 more simple and practicable method would be the levy 
 of two distinct rates f )r printed matter — a quick rate 
 which would be generally used for ncwspajx^rs and 
 packets requiring speed, and a slow rate for books and 
 other printed matter, in n^pect to which a delay in 
 the delivery is not of such imporUirice. 
 
 The proposal of the Budget which excited tlic 
 
 R
 
 242 The Queen's Taxes. 
 
 greatest hostility, and which was eventually withdrawn, 
 was the commutation of the duty of 5 per cent, upon 
 first and second class passengers into a duty of 1 per 
 cent, upon the gross receipts of railways. In repealing 
 the other taxes on locomotion in 1869, Mr. Lowe, held 
 out an expectation that, in consideration of some new 
 arrangements respecting the conveyance of the mails 
 and of troops, he would he able in a future Budget to 
 relieve railways from special taxation. In the Budget 
 for 1870 he acted like the celebrated characters in 
 Macbeth, who were said to 
 
 " Keep the word of promise to our ear, 
 And break it to our hope !" 
 
 The practical working of the proposed change would 
 have relieved certain railways at the expense of others ; 
 some passenger railways would have benefited con- 
 siderably by the change ; those whose trafiic consists 
 mainly of goods, especially mineral lines, would have 
 been mulcted in a very hea^'y addition to their present 
 taxation ; while several of the larger railways, which 
 had been allowed by Parliament, in consideration of 
 reductions in the rates of fares, to charge the railway 
 passenger duty upon their customers, would have been 
 unable to do so, and the duty would have been trans- 
 ferred to the shareholders. It is possible to collect a 
 tax of 5 per cent, upon first and second class passen- 
 gers, but quite impossible to recover 1 per cent, upon 
 gross receipts. 
 
 The main reason urged by Mr. Lowe, in support of
 
 The Queen's Taxes. 243 
 
 the special taxation of railways was tlie assertion 
 that " they enjoy a certain qualified kind of mo- 
 nopoly," and, in favour of this theory, the high 
 authority of the " Economist " newspaper has been 
 enlisted, on the ground that the State has a right to 
 share the profits of a monopoly. It would appear 
 from such an argument that railways enjoyed a rate 
 of profit in excess of that of other trades, instead of 
 being, as described by Mr. Lowe himself,* an " in- 
 terest, which has made everybody's fortune except its 
 own." According to the estimate of Mr. Dudley 
 Baxter, t which is based upon Parliamentary returns, 
 the average rate of dividend on ordinary share capital, 
 which bears the whole weight of this taxation, is 3 per 
 cent., the burden imposed by local rates and Govern- 
 ment duty being equivalent to nearly 16 per cent, 
 upon such income, besides Income Tax and the 
 Probate and Legacy Duties. "Prom this special 
 burden the debenture capital and the preference 
 stock, the average rate of interest on which is more 
 than 4^ per cent., are exempt. There are railways 
 which pay no interest upon either their original or 
 their preference capital ; it certainly cannot be just to 
 levy upon the holders of such unproductive property 
 a special tax, from which they are now exempt. 
 
 The doctrine that the State has a right to participate 
 
 • Financial Statement, iHd'J, ji. 'i<A. 
 \ The Taxation of the United Kingdom, p. lO.'i-Uil.
 
 244 The Queen^s Taxes. 
 
 in the profits of a monopoly lias a far wider signifi- 
 cance than the advocates of its application to the case 
 of railways intend. Kent is an effect of monopoly,* 
 in which, according to the principle laid down by the 
 authorities just quoted, the State has a right to partici- 
 pate. In connection with this argument, as employed 
 in favour of a special tax upon railways, it may he 
 well to consider the effect they have produced upon 
 rent. In a paper read by Mr. Dudley Baxter before 
 the Statistical Society,! it is shown that "it is almost 
 impossible to construct a railway through a new 
 district, of fair agricultural capabiUties, without saving 
 to the landowner and farmer alone the whole cost of 
 the line." Notwithstanding this great and unques- 
 tionable advantage, landowners, as a rule, have 
 claimed and obtained heavy sums by way of compen- 
 sation for the compulsory sale of land required for the 
 construction of railways, and have thus derived a two- 
 fold advantage from that interest upon which exclu- 
 sively a special taxation is now advocated. 
 
 The railway passenger duty was first imposed in 
 1832, at the rate of one halfpenny for every four 
 passengers ; in 1S42, it was altered to 5 per cent, upon 
 the gross receipts of passenger traffic ; and in 1844, 
 when Parliament compelled railway companies to 
 carry third-class passengers at a penny a mile, that 
 
 * Mill's Principles of Political Economy, Book II., c. xvi. 
 t Journal of the Statistical Society. December, 1866.
 
 The Queen's Taxes. 21.5 
 
 portion of their passenger traffic was made exempt 
 from duty.* The introduction of such a tax was 
 opposed by Mr. Hume, on the ground that it was un- 
 sound in principle to tax locomotion. The only plea 
 upon which it was defended by the Chancellor of the 
 Exchequer (Lord Althorp), and the Secretary to the 
 Treasury (Mr. Spring-Eice), was that the State could 
 not afford to dispense with the duty upon stage 
 coaches, with which railways would compete .f The 
 original duty upon railway passengers aa^is IcAaed in 
 the same form as that upon stage coaches, another 
 proof that the two imposts were identical in their 
 origin. The growth of railways having reduced the 
 stage carriage duty to an amount which was hardly 
 worth collection, it was repealed, and a new pretext 
 is now discovered for perpetuating the tax upon rail- 
 way passengers. 
 
 It is somewhat amusing to find [the argument of 
 monopoly advanced, at a time when the great com- 
 plaint of many of our railways is tlie encom-agement 
 by Parliament of excessive competition. On every 
 considerable route there are competing lines, which 
 have reduced fares, and increased facilities for traffic ; 
 in the conveyance of goods, railways have, in many 
 instances, to meet the competition of canals and 
 steam vessels, bjtli of which are exempt from taxa- 
 
 • First Inlaml Revenue Uipuit, pp. lG-17. 
 t Hansard'H Puiliuinentiiry Debutes, .July iHiJ'-i.
 
 246 The Queen's Taxes. 
 
 tion, and in the case of the latter have no permanent 
 way to provide, maintain, and renew. It must he 
 apparent that the " certain qualified kind of mono- 
 poly " enjoyed hy railways is of a very peculiar kind, 
 the qualifications heing so numerous and effective as 
 to deprive the shareholders of any one of the advan- 
 tages which usually attend the possession of a mono- 
 poly. It may, no douht, he urged in justification of a 
 tax upon railway traffic, that stage coaches are liable 
 to the carriage duty, and the tax on horses. Hallways, 
 however, are assessed to local taxation, upon the perma- 
 nent way, which they construct themselves, while the 
 owners of other conveyances are liable to no such 
 burden. The assessment of railways to the local rates 
 must be more than an equivalent for the carriage 
 duty levied upon other public conveyances. 
 
 The following table shows the amount produced by 
 the stage carriage and railway passenger duties in 
 1833, the first complete year during which the latter 
 tax was received; in 1842, the year in which the tax 
 was altered to 5 per cent, upon gross receipts; in 1844 
 the year when " parliamentary " trafl&c was freed from 
 duty ; and in 1868-9* 
 
 
 Railway Duty. 
 
 Stage Carriages. 
 
 Total 
 
 
 £ 
 
 £ 
 
 £ 
 
 1833 
 
 6,131 
 
 458,028 
 
 464,159 
 
 1842 
 
 153,831 
 
 287,672 
 
 441,503 
 
 1844 
 
 167,854 
 
 242,728 
 
 410,582 
 
 1868-9 
 
 460,208 
 
 49,030 
 
 509,238 
 
 * Report of Commissioners of Inland Revenue, 1870, vol 2, pp. 29, 32.
 
 The Queen's Taxes, 247 
 
 It is clear, from these returns, tliat the railway pas- 
 senger duty had replaced the stage carriage duty as a 
 source of revenue, and that the special taxes on loco- 
 motion cannot he said to he repealed so long as a tax 
 upon railway traffic is maintained. The Stage Carri- 
 age Duty and the Railway Passenger Duty ought to 
 have been repealed at the same time. 
 
 The proposals of the Budget, however, involved 
 thi'ee distinct changes : the reduction of the existing 
 duty ; the renewal of the duty upon third-class traffic, 
 which had been repealed in 184i ; and the imposition, 
 for the first time, of a tax upon the transit of goods. 
 If it had been intended simply to relieve railways 
 from taxation, a mere reduction of the duty would 
 have been sufficient for the purpose. The Inland 
 Revenue Commissioners had, however, another object 
 in view ; controversies had arisen between them and 
 the companies as to the liability of certain kinds of 
 traffic to the duty ; litigation was pending or in pro- 
 gress, when, no doubt, the happy idea occurred to 
 some ingenious guardian of the revenue that a legis- 
 lative Goup d'etat would solve the difficulty. Hence 
 the appearance in the Budget of the proposed tax on 
 gross receipts, and the endeavour to upset tlie existing 
 arrangement which had been justilicd by the rrinic 
 Minister* on the ground that "a great distinction 
 should be drawn between the locomotion of luxury 
 and pleasure, and that which is of necessity." Tho 
 
 Fiiiniiciiil Statciuciit, IHdO.
 
 248 The Queen's Taxes. 
 
 difficulty with the revenue authorities as to the 
 assessment of the present tax, relates solely to 
 excursion traffic at rates very much below the Parlia- 
 mentary limit of a penny a mile. Whether such 
 traffic, especially in its relation to inhabitants of 
 large towns, is locomotion of luxury and pleasure, or 
 of necessity, may be left for casuists to determine; 
 and, until they have done so, the zeal of the Inland 
 Revenue Commissioners may very reasonably be 
 allowed to rest. 
 
 A tax of 1 per cent, upon the gross receipts of 
 railways has a very modest unassuming aspect, but 
 presents vastly different features upon a close exami- 
 nation. In the first place, it has very much the 
 appearance of an additional leg to that metaphorical 
 table of which Mr. Lowe once spoke. One per cent., 
 upon an emergency may be raised to 2, 3, or even 
 5 per cent., by a Chancellor of the Exchequer engaged 
 in the pursuit, well described by Sir Robert Peel, of 
 fishing for a Budget. In the second place, a tax of 
 1 per cent, upon gross receipts is a tax of 2 per cent, 
 upon net earnings, the average working expenses of 
 railways being fully 50 per cent. In the third place, 
 the whole bmTlen of the tax would fall upon less than 
 half the capital invested, and become practically an 
 additional income tax upon holders of ordinary stock 
 of fully 4 per cent. According to the latest return,* 
 the capital of railways was distributed as follows : — 
 
 * Lords' Eeturn, " Railways," Sesbion 1868, No. 292.
 
 The Queen's Taxes. 249 
 
 £ 
 
 Preference Stock ... .. 143,209,357 
 
 Debenture Stock 15,637,117 
 
 Debenture Loans 110,392,559 
 
 269.239,033 
 Ordinary Stock 233,023,851! 
 
 Total £502,262,887 
 
 It is on the amount invested in ordinary shares, 
 forming about 46 per cent, of the total capital, and 
 paying an average dividend of 3 per cent,, that the 
 whole weight of such an impost would fall. In the 
 case of railways, which pay no dividend to their 
 ordinary shareholders, it would amount to a confisca- 
 tion of the property of the preference shareholders, 
 and in that of some lines, which are unable to meet 
 the claims of their preference shareholders, to a smiilar 
 operation in respect to the interest due to their 
 creditors. It was no doubt quite competent for Parlia- 
 ment to impose conditions upon railways at the time 
 of granting powers for their construction ; it was then 
 at the option of the companies to accept their Acts 
 upon the terms imposed or to refuse them, but it 
 is difficult to justify the imposition of a special burden, 
 falling upon capital invested in loans or preference 
 shares, on the faith of existing arrangements, facility 
 of internal communication is, moreover, an important 
 element of national prosperity, Avhich ought not to ])e 
 interfered with by exceptional fiscal arrangements. 
 
 A concession was made to tlie ngricnlturnl interest 
 by according the ])rivil('ge. under restrict ions as to the
 
 250 The Queen^s Taxes. 
 
 distance from a malt kiln at which the process may be 
 carried on, of steeping barley for the purpose of feed- 
 ing cattle. The proposal to convert the Malt Tax into 
 a license duty upon brewers was rejected on account of 
 the greater difficulty involved in collecting such an 
 impost, owing to the increased number of persons 
 from whom it would have to be received, and the im- 
 possibility of imposing it upon private brewers. 
 
 The nature of taxation and the true principle upon 
 which it should be based formed the subject of the con- 
 cluding portion of Mr. Lowe's financial statement. 
 He does not agree either vpith those who hold that all 
 taxation should be direct, or with those who would 
 advocate the exclusive employment of indirect 
 taxation. According to his theory the imposition of 
 taxation is the distribution of so much misery, which 
 it is his function to make as tolerable as possible, by 
 spreading it over a number of articles. Taxation 
 being a payment to the State for services rendered, it 
 is difficult to see why it should be more productive of 
 misery than the payment of rent, of premiums upon 
 insurance, or any other contribution in return for the 
 performance of a service. Mr. Lowe admits fully the 
 great advantage of direct taxation, but condemns it as 
 the sole source of revenue, because the payment of it 
 is compulsory. He further alleges that you compel 
 a man to pay it when payment may be ruin; if, 
 however, it is faMy levied, according to the amount 
 of property owned by each taxpayer, it is difficult to 
 understand in what respect this allegation can be sus-
 
 The Queen's Taxes. 251 
 
 tamed. No one complains that he is ruined by any- 
 similar payment ; it would have been more accurate to 
 describe the function of the Chancellor of the Exche- 
 quer as that of securing an adequate contribution from 
 each taxpayer in proportion to his means, as an equi- 
 valent for the advantages he derives from the 
 existence of Civil Government. The doctrine now 
 advanced by Mr. Lowe is very similar to the one laid 
 down, in 1857, by Sir G. C. Lewis, which was at once 
 disclaimed by Mr. Gladstone.* It has also been 
 described by the author of the Biglow Papers in the 
 following lines : — 
 
 " I du believe in any plan 
 
 0' levyin' the taxes, 
 Ez long ez, like a lumberman, 
 
 I git jest wut I axes : 
 I go free-trade thru thick an' thin, 
 
 Because it kind o' rouses, 
 The folks to vote, — an' keeps us in 
 
 Our quiet custom-houses." 
 
 Mr. Lowe assumes that the repeal of indu'ect taxa- 
 tion would throw a heavy pressure elsewhere, and 
 lavs down the sound principle that " everybody 
 should contribute, however small his contribution, to 
 the revenue." The latter doctrine is held with equal 
 firmness by the advocates of direct taxation ; the 
 question at issue between them and their njjpouents, 
 in respect to this branch of the subject, being wiiethcr 
 
 * Fiscal Lcgiiilatioii. Longiuaus. pp. 7'J— 73.
 
 252 The Queen's Taxes. 
 
 indirect taxation does, or does not, place the heaviest 
 burden upon those who have the smallest means. 
 The opinion that the repeal of duties of customs and 
 excise would, of necessity, place an undue burden 
 ■upon any class of the community is one which they 
 deny, the lesson which they gather from our past 
 financial experience being that no class of the com- 
 munity would derive greater benefit from the substi- 
 tution of direct for indirect taxation than owners of 
 property of every description That indirect taxation 
 is wasteful and extravagant, Mr. Lowe has fully 
 admitted ; its one advantage, in his eyes, is the fact 
 that it is optional, a condition which is certainly at 
 variance with the sound principle, advocated by all 
 political economists, of contribution according to 
 means of each taxpayer. 
 
 Another argument employed by Mr. Lowe in 
 defence of his theory is the inexpediency of narrowing 
 too much the basis of taxation and the necessity of 
 being prepared for emergencies which will render 
 an increased revenue inevitably necessary. No tax, 
 whether direct or indirect, is the basis of taxation, but 
 an instrument by means of which taxation is raised. 
 It would be quite as reasonable to describe a pump as 
 the basis of a water supply. There are three funds 
 which form the basis of taxation, — rent, profits, and 
 wages ; any tax which prevents the growth of these 
 sources of revenue narrows the basis of taxation. If 
 it be desirable, which few will deny, to be prepared 
 for any emergency that may arise, the best mode of
 
 The Queen's Taxes. 253 
 
 ensuring such preparation is the levy of our taxation 
 in the mode which causes tlie least interference with 
 the growth of the fund, from which such increased 
 resources must be drawn. 
 
 The great questions of controversy between the 
 advocates of Direct and Indirect Taxation cannot be 
 solved by reference to phenomena in Natural History, 
 which have no analogy whatever to the subject. 
 These may, perhaps, serve to enliven a financial state- 
 ment, and help to carry a budget, l)ut are quite 
 useless in the examination of a problem, which 
 requires a close and careful study of its own peculiar 
 phenomena. If it be proved by investigation into 
 facts that any portion of our fiscal system imposes 
 burdens upon the people far in excess of the amount 
 received by the State, that it tends to diminish employ- 
 ment and depreciate the value of property, and that 
 these evils far outweigh its advantages, it ^\i\\ be alike 
 the duty and the interest of the community to endea- 
 vour to find some substitute, by means of which the 
 Taxation of the United Kingdom may be placed 
 upon a Sound and Equitable Pooting. 
 
 FINIS. 
 
 O. niLL, f5TEAM miNTER, WKSTMlNSTKn UniDOi: HOAD,
 
 255 
 
 EXPLANATOEY EEFERENCES. 
 
 Page 6. Table showing the proceeds of the Customs Revenue at different 
 periods. The figiu-es for the year 1815 are from McCulloch's British 
 Empire. In the First Customs Report the amount for that year is 
 £14,330,390, and for the year 181G it is £11,891,563. 
 
 Page 54. Add : — " The quantity charged with duty and the amount produced, 
 for the year 1868-9, were : — 
 
 " Quantity taxed 103,918,241 lbs. 
 
 Amount produced £2,597,980." 
 
 Page 114. Table of Stamp Duties : — The figures in the First Inland Revenue 
 Report and the revised edition vary slightly. The figui-es quoted 
 are from the Fii'st Report, omitting shillings and pence. 
 
 Page 120. Lines 3,4,5: —These figures are from Parliamentary Paper, Session 
 18G9, No. 427. 
 
 Page 145. Land Tax. The Inland Revenue Commissioners state the amount of 
 Land Tax redeemed, to the present time, as £800,397, the (.lifference 
 between this amount and the balance of the sums realised in ] 798 
 and 1869 is, no doubt, owing to the non-assessment in the last 
 named year of personal property. 
 
 Page 149. The net receipt of the Income Tax, for the ten years ending 1816, is 
 not given in the revised Report, published in 1870. There is, 
 therefore, no corresponding reference for these figures. 
 
 Page 1C4. Table of Lands Assessed under Schedule A, 1864-65 :— The increase 
 of " £898,483," for the year 18C4-5, is over 1856-7. 
 
 Page 203. Line 17 : — After " entire remission," insert the words " dm-ing the 
 current year." See Financial Statement, 1869, p. 29. 
 
 Page 242. Line 25: — After "It is possible" insert "for the Railway Com- 
 panies." Line 26 : — For " upon " read " from." 
 
 ADDITIONAL KEFERENCES. 
 
 The First Annual Koport of tlio Inland Rcvcnuo ConiniiHsioners 
 being out of print, it lias been ('on.sidcred advis;ible to add a table 
 showing the correwponding rcfi-reucoH iu llio new and rcvisid
 
 256 
 
 edition, issued since the greater part of this work was printed. In 
 some instances tlie fiiiiures vary slightly in the two reports, and in 
 others information which was contained in the original report, 
 principally relating to taxes since repealed, has been omitted from 
 the new and revised edition. 
 
 First Inland Revenue 
 Report— 1857. 
 
 Inland Revenue 
 Report— 1870. 
 
 Page 19. 
 
 App. p. 43. 
 
 Vol. II., p. 9. 
 
 „ 20. 
 
 pp. 3-6. 
 
 Vol. I., p. 12. 
 
 „ 24. 
 
 pp. 6, 7, 8. 
 
 Vol. I., pp. 24-26. 
 
 „ 59. 
 
 App. pp. 15, 16. 
 
 Vol. I., p. 37. 
 
 n 92. 
 
 App. p. 22. 
 
 Vol. I., p. 94. 
 
 „ 93. 
 
 App. p. 101. 
 
 Vol. II., p. 157. 
 
 „ 98. 
 
 App. p. xsiii. 
 
 Vol. I., pp. 95. 
 
 „ 99. 
 
 App. p. ciii. 
 
 Vol. II., p. 157. 
 
 ,, 113. 
 
 App. p. xcix. 
 
 Vol. II., p. 127. 
 
 „ 124. 
 
 p. 35. 
 
 Vol. I., p. 116. 
 
 „ 145. 
 
 pp. 38-39. 
 
 Vol. I., p. 112. 
 
 n >) 
 
 App, pp. ro-32. 
 
 Vol. II., pp. 159-160. 
 
 „ 149. 
 
 pp. 30-31. 
 
 Vol. I., pp. 120-121. 
 
 ,, 151. 
 
 Second note. 
 
 Vol. II., p. 190. 
 
 „ 164. 
 
 App. p. cxxix. 
 
 Vol. II., p. 185. 
 
 „ 166. 
 
 App. p. cxxix. 
 
 Vol. II., p. 185. 
 
 „ 180. 
 
 App. pp. 130, 131. 
 
 Vol. II., pp. 186, 187 
 
 „ 192. 
 
 App. p. cxxix. 
 
 Vol. II., pp. 185. 
 
 „ 245. 
 
 pp. 16, 17. 
 
 Vol. I., pp. 47-48.
 
 .257 
 
 ERRATA 
 
 Page 23. Scotland, 1856 :— for " 7,715,939 gaUons," read 7,175,939 gallons ; 
 Ireland, 1862 :— for " 4,929,512 gallons," read 4,929,572 gallons. 
 
 Page 28. Table of Imports of Earn, 1849 :— for "4,479,549 gallons," read 
 5,306,827 gallons. 
 
 Page 35. Second Note : — for " 1859," read 1868. 
 
 Page 41. Last line for "2 per cent," read 15 per cent. 
 
 Page 51. Table of Imports and Consumption of Tea, line 7 : — for " 1852," read 
 1862. 
 
 Page 57. Table of Consumption, 1842, Foreign, 1812 :— for " 11,219,646 lbs," 
 read 11,219,730 lbs. Second line aftt-r Table of Rate of Duty and 
 Consumption of Coffee : — for " 60 per cent," read 38 per cent. 
 Last line: — for " 18 per cent," read 15f per cent. 
 
 Page 60, Note -.—After " 3 and 4 Wm. 4, c. 56," insert 6 and 7 Wm. 4, c. 60. 
 
 Pagy 61. Table of Rates of Duty on Chicory, 1861, Excise :— for " 6s. Od.,'" 
 read 5s. 6d. from Apiil 1, and 8s. 6d. from June 12. 
 
 Page 62. Table of Duty, Quantity Taxed, and Sum produced, of Chicory, 
 Excise:— for "£4,358," read £14,358. Total, for "£108,399," 
 read £118,399. 
 
 Page 77. Table of Malt Duties : — "32 qrs. 4 bush.," and " £41," are the quan- 
 tity and amount of " Foreign," not " Isle of Man." 
 
 Page 89. Drivers of Metropolitan Public Carnages: — for "12,144," read 
 12,744. 
 
 Page 91. Line 11 :— for " 1795," read 1797. 
 Page 92. Line 6 :— for " 1806," read 1816. 
 Pago 92. Lines 21 and 22 :— for " 1795," read 1797. 
 
 Page 93. Table of Probate Duties: — Property under £100 has been exempt 
 since July, 1864. 
 
 Page 94. Table of Probate Duties :— " £700,000 to £800,000 with will 
 annexed ":— for "£15,000," read £10,500. 
 
 Page 102. Table of Amount paid for L'gacy and • Succession Duties: — for 
 " £1,864,725," road £1,804,587.
 
 258 
 
 Page 124. Table of House Duty:— Shops and Warehouses, for "£8,049,332," 
 read £8,049,322. 
 
 Page 128. Fii-st Note :— for " 184G," read 1845. 
 
 Page 145, Line 19:— for "£1,989,673," read 2,037,627. Line 20:— for 
 "1,181,301," read 1,131,321. Line 21 :— for "858,372," read 
 906,306. 
 
 Page 164. First Note, Tenth Inland Revenue Report :— for "p. ix.," read p. Ix. 
 
 Page 167. Page 18 :— for " £55,909,000," read 55,900,000. 
 
 Page 183. Table of Income Tax Assessment, Ireland:— for "£5,927,536," read 
 5,926,536. Total :— for " £125,896,695," read 125,895,695. 
 
 Page 192, Lines 19, 20 :— for " The last amount assessed under the head," read 
 The amount assessed under the last head. 
 
 Page 194. Table :— Fisheries, for " 61 j per cent.," read 62j per cent. 
 
 Page 209. Second Note :— for " Inland," read Island. 
 
 Page 246. In Table of Railway Duty :— 
 
 1842 for 
 
 £ 
 " 153,831," 
 
 £ 
 
 read 168,957 
 
 1844 „ 
 
 " 410,854," 
 
 „ 177,603 
 
 1868-9 „ 
 
 " 460,208," 
 
 „ 500,383 
 
 Total of Railways and Stage Carriages : — 
 
 £ £ 
 
 1842 for " 441,503," read 456,629 
 
 1844 „ " 410,582," „ 420,331 
 
 1868-9 „ " 509,238," „ 549,413
 
 WORKS BY TRB SAME AVTEOB. 
 
 FISCAL LEGISLATION, 1842-1865. A Review of the Financial changes 
 of that period, and their effects upon Revenue, Trade, Manufactures, and 
 Employment. 1 vol. 8vo. 7s. 6d. 
 
 OUR IMPORTS AND EXPORTS : with some remarks upon the Balance 
 of Teade. Also a complete analysis of the Imports and Exports of 1868, showing 
 the respective proportions of food and other articles of consumption, raw 
 materials, and manufactures. 8vo. sewed, 2s. 6d. ' 
 
 London : Longmans, Green, Reader & Dyer. 
 
 FREE TRADE, RECIPROCITY, AND THE REVIVERS : an Enquiry 
 into the effects of the Free Trade Policy upon Trade, Manufactures, and 
 Employment. Sewed 6d. 
 
 London : Simpkin, Marshall & Co.