a I E) RA RY 
 
 OF THE 
 U N IVLR.SITY 
 or ILLI NOIS
 
 PAPER 
 
 ON 
 
 LOCAL TAXATION 
 
 AND 
 
 GOVERNMENT. 
 
 BY 
 
 WILLIAM MTHBONE, M.P. 
 
 ADDRESSED TO THE 
 
 RICHMOND HALL LIBEUL CLUB, 
 
 i1jI"v^e:e^:pooi1', 
 
 ON 
 
 FRIDAY, DECEMBER 20, 1872. 
 
 LIVERPOOL ! 
 
 E^erton Smith and Co. , Mercury Steam Printing Works, Manesty'i Lane. 
 
 #
 
 »
 
 LOCAL TAXATION 
 
 AND 
 
 GOYERNMENT. 
 
 The subject of Local Government and Taxation being one 
 to which I have given a great deal of attention, I liave accepted 
 your invitation to address you upon it, though not without 
 much hesitation, as I am painfully conscious of the difficulties 
 with which the question is beset, and also of the difficulty of 
 explaining my opinions clearly in a single evening. I know, 
 however, that I can rely fully on your kind forbearance, and 
 that the necessity for extreme condensation will lead you to 
 make allowance for much abruptness in style and incomplete- 
 ness of method in dealing with certain parts of the subject. ^ 
 
 The difficulties of dealing with even the most compli- 
 cated question are, however, greatly lessened when a 
 thoroughly healthy public interest in it has been awakened. 
 
 The Keport of the special committee of the Town Council 
 of Liverpool on Local Taxation, has done much to arouse 
 such public interest in Liverpool, and I am indebted to that 
 Eeport for many of the figures which I shall quote. It has 
 been followed up by able articles on the subject in our local 
 papers, and it was with great satisfaction tliat my colleague 
 and I received a Deputation from the Land and House Owners' 
 Association last month, and listened to speeches, showing how 
 much thought had been given, and how much interest had 
 been taken in the subject. 
 
 This interest being already awakened, I need therefore 
 only briefly state the reasons which appear to me to give the 
 subject such prominence at this moment. 
 
 These reasons are : — 
 
 The concentration of immense populations in towns, a 
 concentration which has greatly complicated the difficulties 
 with which Local Government has to content.
 
 The fact that local administrative bodies have now to deal 
 with a very large expenditure, on a scale indeed far exceeding 
 that to which, until quite recently, states of even considerable 
 magnitude had attained. 
 
 The fact that local bodies not only lay considerable burdens 
 upon the present generation, but have the power hy coiitracU 
 ing large loans to burden the industry of the future. 
 
 The fact that the public opinion of the present day 
 requires local bodies to undertake duties of a far more 
 complicated kind than formerly, and that some of their duties, 
 such for instance as those dealing with floating pauperism 
 and with criminals, are rather national than local ; a compli- 
 cation which has raised two difficult questions, one, how the 
 expenditure for these purposes can be equitably divided 
 between local ratepayers and Imperial taxpayers, the other, 
 how this can be done without sacrificing those guarantees for 
 economy and careful management which are secured when the 
 same bodies who spend the money have to find it. Unless we 
 proceed on carefully considered and clearly defined principles 
 in this matter, we shall have a general scramble between local 
 bodies for Imperial grants, attended by a wasteful, demoralising, 
 and ruinous expenditure of public money. But on the other 
 hand, I shall endeavour to show that the equitable arrangement 
 of these burdens may be made in such a way that, without 
 sacrificing existing guarantees for economy, it will provide 
 additional securities for the efficiency of local administration. 
 
 Last and not least, the fact that the vote of the House of 
 Commons on Sir Massey Lopes' motion has imposed on the 
 Government the obligation of dealing with the question at 
 once, and that they have distinctly accepted that obligation. 
 
 Figures are said to be proverbially dull, but I am afraid 
 that you will find the figures I am about to quote painfully 
 interesting, especially to the inhabitants of Liverpool. 
 
 The official tables show that the total amount of local 
 expenditure in England and Wales had reached in 1868 the 
 enormous sum of £30,240,000, namely — 
 
 For General Purposes £22,120,000 
 
 ,, New Works 4,250,000 
 
 ,, Interest on Debts 2,110,000 
 
 ,, Repayment of ditto 1,760,000 
 
 £30,240,000
 
 To meet this — 
 
 Kates produced 10,200,000 
 
 Dues, Tolls, and Fees 4,350,000 
 
 Contribution by Government to Local Purposes 1,225,000 
 
 Rents of Property and Sales of ditto 1, 325,000 
 
 Loans 5,500,000 
 
 Miscellaneous Eeceipts , 1,540,000 
 
 £30,140,000 * 
 But, startling as these figures are, it is the rapid increase 
 of Local Taxation rather than its amount, which has caused, 
 and rightly caused, such alarm ; and the same report esti- 
 mates the increase in the last 50 years in the amount of rates 
 levied annually at £8,500,000, of which town improvement 
 and police account for £5,500,000, and poor relief for 
 £2,000,000; (h) and as this increase is of such admitted impor- 
 tance, it is essential to ascertain on what shoulders it mainly 
 falls. The question is too often discussed as if it were mainly 
 a landowner's question. This is far from a true version of 
 the case, for late inquiries have shown that the increased 
 pressure of Local Taxation in this country falls almost exclu- 
 sively on house property, z.e., on the towns. The figures of 
 Mr. G-oschen's official report on Local Taxation (c) show 
 that out of £5,400,000 of new rates and new branches of ex- 
 penditure, nine-tenths fall upon towns and one-tenth only 
 upon rural districts, and that the old rates have increased 
 mainly in manufacturing, commercial, and metropolitan 
 counties. Purely agricultural counties are indeed less heavily 
 rated than formerly. [Pp. 21-25.] 
 
 In 1826, agricultural land in England and Wales bore 
 about two-thirds of a total poor rate of £6,966,000, say 
 £4,795,000 ; but in 1868 it only bore about one-third of a 
 total poor rate of £10,439,000, say £3,466,000, so that while 
 in forty-two years the total poor rate of England and Wales 
 had increased from £6,966,000 to £10,439,000, the amount 
 of it borne by a2:ricultural lands had actually decreased from 
 £4,795,000 to £3,466,000 (cU). 
 
 * Local Taxation : Parliamentary Paper 470 of 1870, pp. 4-5. 
 
 (h) Parliamentary Paper 470 of 1870, pp. 12-13. 
 
 (c) Parliamentary Paper 470 of 1870, pp. 9-10. 
 
 {d) I may, in connection with tliis subject of the two kinds of real projjerty, 
 here mention a serious fact, that whereas in 1817 land constituted 09Je per 
 cent , and hoiises only 27^ per cent, of the real estate of the covmtry, in 1868 
 land constituted only 33 1 per cent., while houses had risen to 47^ per cent, of 
 the real property of England and Wales. 
 
 (c) In France and Belgium 30 years ago, and England 60 years ago, land 
 represented for the purposes of taxation about two-thirds of the value of
 
 6 
 
 But in fairness it must not be forgotten that the pressure 
 of the poor rate previous to the passing of the new Poor Law 
 was ruinous in some districts ; and of late years new rates or 
 burdens on rates have been imposed on the occupier in agri- 
 cultural districts, the growth of which should be watched 
 with the utmost jealousy. 
 
 As a striking illustration of the growth of Local Tax- 
 ation in towns, let us take our own town, for which we have 
 more complete figures than we have for the country generally, 
 and I know no town in which all the difficulties which sur- 
 round the subject of Local Taxation are more completely 
 represented. 
 
 I may state here that, with few exceptions, the facts in 
 these papers founded on figures are taken or calculated either 
 from Grovernment returns or from published official docu- 
 ments. Some few figures I have had to get from the 
 Treasury. 
 
 In order to show the growth of Local Taxation in 
 Liverpool, I propose to compare four years with intervals of 
 ten years between them ; the years 1841, 1851, 1861, 1871. 
 
 In each of these four years the country was prosperous ; 
 they therefore afford fair materials for comparison. It is 
 unnecessary to go back to an earlier date than 1841, as the 
 modern multiplication of rates and increase of Local Taxation 
 did not begin before the first of these periods, while 1871 
 brings the comparison up to the latest practicable date. 
 
 The total rates for sanitary and general purposes levied in 
 that part of the borough comprised in the parish of Liver- 
 pool in 1841 amounted to Is. Id. in the pound, yielding 
 £33,330, and the parochial rates to Is. 7id., yielding £48,443. 
 Therefore the total Local Taxation in the parish was 2s. 8^d. 
 in the pound, and the total amount collected £81,773 ; but 
 in addition to this there was applied out of the Borough 
 fund, derived from property and markets, an amount equal to 
 Is. 5d. in the pound, which, but for these sources of income, 
 must have been provided for out of the rates. 
 
 In 1 846 the Town Council took over the powers and duties 
 of the Commissioners of Sewers, and obtained fresh rating 
 powers, and in 1851 the total municipal rates had risen to 
 Is. 2d. in the pound, the amount collected to £48,295 ; and 
 the parochial rates to 2s. 2d. in the pound, and the amount 
 
 real property. In France and Belgium lands still represent about the same 
 proportion, but in England they only represent one-third instead of two-thirds 
 of such value.
 
 collected to ^88,491. Together they reached 3s. 4d. in the 
 pound, which rate realised £136,786 collected in the parish, 
 in addition to an amount provided by the Borough Fund 
 equivalent to ll:^d. in the pound. 
 
 Between 1851 and 1861 an addition was made by the 
 Improvement Act of 1858 to the municipal rating and bor- 
 rowing powers for public offices, for widening streets, &c., 
 and the municipal rates rose to Is. 8|^d. in the pound, yielding 
 £85,512. The parochial rate was 2s. IJd. in the pound — a 
 slight decrease in the poundage, but yielding £108, 784 — the 
 total rates rising to 3s. 9|d. in the pound, and to £194,296 
 collected in addition to an amount provided out of the 
 Borough Fund equivalent to 8d. in the pound. 
 
 But it is in the last ten years [ending in 1871] that we 
 meet with the most striking increase. The Liverpool Im- 
 provement Act of 1861, the Water Act of 1862, the Sanitary 
 Act of 1864, the Improvement Act of 1864, the Improvement 
 and Parks Act of 1865, and the Improvement Act of 1867, 
 imposed new duties — no doubt necessary ones— and conferred 
 new rating and borrowing powers, and in 1871 we find the 
 municipal rates had risen to 2s. 6d. in the pound, and the 
 amount collected to £173,676. In the Parish, as the liability 
 of the Dock and Harbour Estate to contribute had been 
 established, the parochial rate was only Is. l^d. in the pound, 
 but yielded £127,265. The total rates in 1871 rose to 4s. 5Jd. 
 in the pound, and the amount to £300,941 collected in addition 
 to an amount applied from the Borough Fund equivalent to a 
 further 9d. in the pound. 
 
 Besides all this expenditure, there has been spent out of 
 the Surplus Fund account, in aid of various rates, institutions, 
 public schools, &c., an average of £28,477 per annum between 
 1854 and 1861, and of £32,817 per annum between 1861 and 
 1871 : also out of the Capital Account of the Corporation 
 £505,838, between 1841 and 1851 ; £339,502 between 1851 
 and 1861 ; and £241,206 between 1861 and 1871. 
 
 In addition to these large amounts raised by taxation or 
 provided for by the income possessed by the Town, a large 
 debt has been incurred. In 1841, the Municipal debt was 
 £1,212,192; now it is £4,363,070, including the water debt 
 of £2,204,187, but we must deduct from this a sinking fund 
 of £329,749. On the other hand had it not been for the 
 receipt of £1,500,000 as compensation for the Town dues, 
 the debt would have been so much larger. The net amount
 
 8 
 
 of the debt would now have been £5,463,321, or four times 
 the debt of 1841 — an increase of four millions two hundred 
 and fifty-one thousand pounds. And it is all the more 
 necessary jealously to watch the increase of this debt, 
 because, though large in itself, it is small in proportion to 
 the security which the bondholders possess, and it therefore 
 might be largely increased without injuring the credit of the 
 Corporation. 
 
 I am aware how difficult it is to follow such figures, and 
 I will therefore ask your attention while I state the result in 
 a few words. 
 
 The total amount collected in the parish has in thirty 
 years increased by 268 per cent. 
 
 To state it in another way : The inhabitants of the 
 parish of Liverpool paid in Local Taxation Vs. 4d. per head 
 in 1841, and in 1871 they paid £1 5s. 3d., i.e., they now pay 
 more than three times as much per head as they did formerly. 
 
 The most serious feature in this increase is not the total 
 amount of it, but the circumstance that it is so much 
 heavier relatively, both to the value of the property on which 
 it is levied, and to the ability of the persons who have to pay 
 it; for whereas it amounted in 1841 to 2s. 8^d. in the 
 pound, it amounted in 1871 to 4s. 5Jd. in the pound, 
 being an increase of sixty-four per cent, in the proportion 
 which local taxation in the parish of Liverpool bore to the 
 value of the property on which it is levied. And, with re- 
 spect to its proportion to the income of the occupier, it 
 would seem that, against this 64 per cent, rise in the rates 
 per pound, labourers' wages have only risen about 23 per 
 cent.; bricklayers', masons', and slaters', 27 per cent. ; joiners' 
 29 per cent. ; smiths', 30 per cent. That is, in no case is the 
 increase in wages equal to one-half the increase in rate per 
 pound on the rent of the dwellings occupied by the majority 
 of the Eatepayers. 
 
 In the other parts of Liverpool the increase is still 
 greater. In West Derby, for instance, the Local Eates in 1841 
 were only Is. 7d. in the pound ; in 1871 they were 5s. 5d. 
 
 A budget for the borough of Liverpool for the year 1871 
 would show 
 
 Kates levied by the Parochial authorities £196,360 
 
 Ditto by the Town Council 284,729 
 
 Total Rates £481,089 
 
 Income other than Rates 479,427 
 
 Total gross Income £960,516
 
 Amounts received from Kates levied for Parochial and 
 Municipal purposes : — 
 
 By Parochial authorities for Parochial purposes. 
 
 Select Vestry, Liverpool £127,265 
 
 Kirkdale Township 32,205 16 
 
 Everton do 18,668 19 8 
 
 West Derby do 12,157 3 
 
 ToxtethPark 26,063 9^8 
 
 £196,360 8 4 
 By the Town Council for Municipal purposes. 
 
 Paving Kate i;47,780 15 1 
 
 Sewer Kate 23,167 16 6 
 
 General Rates 56,171 5 5 
 
 Water Rate 55,049 17 1 
 
 Lighting and Fire Police Rate 17,395 13 5 
 
 Improvement Rate 57,520 11 2 
 
 PubUc Parks Rate 27,642 15 6 
 
 £284,728 14 2 
 
 £481,089 2 6 
 Other Municipal Income. 
 
 Ordinary Account £335,062 10 
 
 Capital or Extraordinary Account 144,365 3 
 
 £479.427 3 10 
 
 £960,516 6 4 
 
 The above rates are levied by six separate and indepen- 
 dent rating authorities. Many have felt, and all can imagine, 
 the annoyance and confusion caused by each rating authority 
 making separate collections, and differing frotn the other in 
 dates of fixing rates and closing accounts, &c. 
 
 In considering the question of the incidence of Local 
 Taxation it is too customary to treat all so called real pro- 
 perty as of the same nature ; but there is an essential 
 difference between land and houses which it is important to 
 bear in mind. Nearly all the witnesses who gave evidence be- 
 fore the House of Commons considered that with respect to 
 land, though the occupier felt for a time any fluctuation of 
 rates, after a certain time a permanent rate fell on the owner. 
 But land is only a portion of the value of house property. 
 Houses, unlike land, are a species of manufacture, and like 
 most other species of manufactures are only increased when 
 such increase yields an adequate net profit to the builder, 
 independent of local rates and taxes. Before he will manu- 
 facture any new houses, he must see his way to leceive from 
 the occupier such net rent, independent of all rates and taxes, 
 as shall remunerate him for the investment, and the rates 
 and taxes therefore must not only be paid in the first instance, 
 but permanently borne by the occupier. 
 
 I think I have now made clear the great increase of 
 Local Taxation ; that this increase is mainly in towns ; and 
 that it is borne chiefly by the occupiers of real property in 
 them.
 
 10 
 
 In the foregoing remarks, I may be accused of having 
 left out of calculation the enormous increase in personal pro- 
 perty in the hands of the capitalists of the towns. I have 
 done so advisedly and justly. I am not now comparing the 
 position of the owner of capital in land with that of the owner 
 of capital in personalty. I am not seeking to justify the ex- 
 emption of the rich capitalist of the town from contributing 
 his share of Local Taxation. I have always deprecated that 
 exemption. But I have shown by comparative statistics, that 
 of the the two classes who complain of the increase of Local 
 Taxation, and the present mode of levying it, the owners of 
 agricultural land, a comparatively wealthy class, do not bear the 
 increased burden, allowing for the increased value of land, but 
 that the occupiers of houses and shops in towns, bear a largely 
 increased burden, and that to relieve the most suffering class, 
 must be a primary object of any just reform. 
 
 If we now turn from the consideration of the vast amount 
 and increase of Local Taxation to the mode of its collection and 
 administration, we shall marvel that, in a practical country like 
 this, such a state of things could exist. The multiplication of 
 areas and authorities, and the consequent amount of confusion 
 and obscurity, make economy and good administration a practi- 
 cal impossibility. The tables published by the Select Committee 
 on Local Taxation of 1870, enumerate 37 different rates; and 
 Mr. Groschen, in his Report, enumerates 20 classes of bodies 
 entrusted with the expenditure of these rate?. It will at once 
 be evident that the multiplication of rates directly adds to the 
 burden on the ratepayers, for it materially increases the 
 expense of collection and the cost of distribution, and there- 
 fore the amount to be collected. 
 
 Can we wonder that Mr. Groschen described the state of 
 things as " chaos as regards authorities, chaos as regards rates, 
 and a worse chaos than all as regards areas?" And, while, as 
 you are aware, the attention of the nation is periodically 
 concentrated on the total amount, and on the particulars of 
 Imperial Taxation by the annual statement and discussion in 
 Parliament before the whole country, the amount of Local 
 Taxation on the other hand, is buried in obscurity by being 
 split up, and is only known to a few statisticians. 
 
 Every person in this country is informed at least once a year 
 of the amount of the Imperial Budget and the present rate of 
 Income Tax, but I doubt if many here present were aware till I 
 stated it this evening, that they are in 1872 paying in rates, for
 
 11 
 
 local purposes, 4s. 6^d. in the pound if they live in the Parish 
 of Liverpool; 6s. l^d. if they live in the Township of Ever- 
 ton ; 6s. Ofd. if they live in the Township of Kirkdale,1[ or that 
 the Local Budget of the Town of Liverpool for the year 1871, 
 was £960,516. Thus the salutary check of a vigilant public 
 opinion is enfeebled, the evil creeps subtly on till at some time 
 of public distress the nation will wake up to find its wealth 
 eaten into, its local administration enfeebled and corrupted, 
 and the industry and independence of its people endangered 
 by laxity and waste.* 
 
 Such subdivisions, confusion, and obscurity tend also to 
 increase an evil which I conceive to be now amongst the 
 greatest dangers of this country. It becomes more difficult to 
 interest men in Local Grovernment when so sub-divided, because 
 its real magnitude and importance are concealed by a multi- 
 plicity of small rates and offices which separately appear too 
 insignificant to compensate the time and attention which 
 their careful management would demand. It discourages 
 even those who understand its importance and would be in- 
 clined to take an interest in it, when they feel how impossible 
 it is to bring order out of such confusion. 
 
 But what is to become of this country with its vast wealth, 
 its dense and industrious population, and its freedom— endow- 
 ments which are either enormous powers for progress and for 
 good, or enormous possibilities of corruption and decay — and 
 how are the difficult problems of our complicated civilisation 
 to be solved unless each class takes its due share of local 
 government ? Every class has its own special powers and 
 capabilities, and England has reached a period when she 
 needs the combined action of all to avoid most serious dan- 
 gers, and to develop magnificent possibilities. 
 
 The magnitude of the dangers which arise from general 
 indifference to local government and expenditure has re- 
 ceived a startling illustration from recent events in New York, 
 
 IT EATES LEVIED IN 1872. 
 
 Poor. Sanitary. Total. 
 
 s. d. s. d. s. d. 
 
 Liverpool, Pariah 1 Sh 2 10 4 6i 
 
 Everton, Township 2 1 4 0^ 6 1^ 
 
 Kirkdale do 2 2 3 10| 6 04 
 
 WestDerbydo 111^ 3 9^ 5 8^ 
 
 ToxtethPk do I Municipal..... 2 q 3 j^q 6 10 
 
 ioxtetn ric. ao. | Parliamentary ^ 
 
 *What happened to Holland, once our successful rival in commerce and mari- 
 time greatness, Mr. McCulloch, in his principles of political econonay, says :— 
 " But whenever taxes become so heavy that their influence cannot be deteated 
 by increased economy and industry, it becomes most injurious. Ihe oppres-
 
 12 
 
 The causes of the neglect in New Yorkf were, no doubt, diffe- 
 rent from the causes which threaten similar neglect here, but 
 the results of such neglect, from whatever cause they arise, 
 would be analogous. 
 
 For more than 20 years to my knowledge that neglect in 
 New York has continued to be notorious, but I will only 
 give you the figures of the last ten years. In 1861 the 
 amount of taxes collected by the city of New York was 
 :g2,006,975; in 1871 it had risen to £4,066,160. In 1861 
 the debt was, after deducting sinking fund, £3,697,049 ; in 
 1871 it had risen to the enormous amount of £13, 687, 617. Not 
 only has the expenditure been extravagant, but I have it on 
 undoubted authority that in the last three years when the 
 ring was in full swing the actual robbery amounted to over 
 £5,153,374. The direct plunder of city funds in the city of 
 New York in three years exceeded by nearly one million the 
 total debt of Liverpool. 
 
 It was indeed the effect of the incidence of local taxation 
 
 on local administration which first led me to take an interest 
 
 in local taxation. I found much unnecessary waste of life 
 
 and health and deterioration of character in our crowded 
 
 courts and streets. I found that the attempts of our vestry 
 
 and others to remedy these evils were made more difficult 
 
 from the want of uniformity of administration in the country. 
 
 I found that this want of uniformity threw on those who 
 
 attempted to do their work efficiently the duties of those 
 
 who did not, and on classes not the most wealthy or able to 
 
 bear it, a burden which ought to be shared by all. I became 
 
 thoroughly satisfied that by a better system, and by bringing 
 
 home to all classes their responsibilities and their duties, 
 
 the waste of health, life, and virtue might be diminished, the 
 
 pressure be made less unequal, and its total amount ultimately 
 
 diminished, and that we should thereby be able to secure value 
 
 for our expenditure. Indeed in accepting the honourable but 
 
 deeply responsible position of your representative, it was one 
 
 of my most earnest wishes that I might be able in some degree 
 
 to forward this work. 
 
 siveness of taxation was in truth the principal cause of the lowness of profits in 
 the United provinces (of Holland, &c.,) during the last two centuries, and of 
 the decline of their manufacturing and commerciax prosperity." 
 
 tit is sometimes said that in America the leisure classes are practically 
 excluded from their share in the Government, but when roused, as in Califoruia 
 some years ago, and as recently in New York, they have shown that they havf 
 the power to set things right when they care to do so,
 
 13 
 
 Do not understand me to underrate the injustice 
 of the incidence of Local Taxation. I do not lose sight of the 
 direct injustice and hardship of its unequal pressure. I have 
 repeatedly called attention to it, but what I wish to assert is, 
 that, in addition to this direct evil, unequal incidence is one 
 of the causes of defective administration ; while inefficient 
 administration in its turn augments the amount of taxation. 
 
 This point is so important that I should wish to show 
 you somewhat more fully the share which the unequal inci- 
 dence of Local Taxation has in lessening the prospect of good 
 management. 
 
 The defect which has contributed most to draw public 
 attention to the incidence of Local Taxation, and especially to 
 its rapid increase, is, of course, its unequal pressure — 
 unequal whether considered in relation to ability to pay, or to 
 benefits derived from the expenditure provided for by such 
 taxation. Personal property which does not pay rates has 
 enormously increased, and its wealthiest possessors, manufac- 
 turers, merchants, &c., who have in many cases caused and 
 profited by the aggregation of labourers, which has made 
 the expenditure necessary, do not pay their fair share of 
 Local Taxation. As I stated in the House of Commons, 
 whereas many wealthy merchants, shipowners, or brokers are 
 paying in local rates and Taxes only one-half per cent., and as 
 far as I have been able to learn few pay as much as two per 
 cent. ; the labouring man in their employ is paying 3| per cent. ; 
 the young doctor or other professional man 2^ per cent. ; and 
 the retail tradesman five to twelve per cent., or even more, of 
 their respective incomes. This mode of taxation falls very 
 heavily on professional men, small shopkeepers, and also on 
 the class just one remove from pauperism; classes whose rent 
 is a very heavy item in their outgoings. Unfortunately also 
 rates increase most rapidly in those periods of distress, which 
 at the same time cause a serious reduction in the incomes 
 of those classes. 
 
 I have on a previous occasion gone so fully into this in- 
 justice, and it has been so recently brought before the town 
 in the speeches of Mr. Pierce, the chairman of the Land and 
 House Owners' Association, and of my friend Mr. Owen 
 Williams, that I need not detain you further on the point. 
 
 The effect of this injustice on administration is the point 
 to which I wish to draw your attention. While the com- 
 mercial and other capitalists thus escape, as has been shown,
 
 14 
 
 from the payment of their due share of Local Taxation, we can- 
 not wonder that its fluctuations or excess do not excite their 
 attention and interest. We cannot wonder that they do not 
 seek out those among them who have ability and leisure, 
 induce them to take a share in Local Grovejnment, and 
 stimulate their efforts by watchfulness, en'^ouragement, and 
 approval. 
 
 But besid3 the exeription of personalty, there are other 
 exemptions as glaringly unjust. I will only enumerate the 
 property of the State, such as Dockyards, which add 
 materially to local burdens, and the royalty on certain kinds 
 of mines, but as I believe these exemptions are universally 
 condemned, and Grovernment have admitted the necessity of 
 their abolition, I need not dwell on them any further. 
 
 Again, while there is no doubt that the owner of land 
 does ultimately bear much of the permanent burden of rates, 
 yet as long as he does not pay rates directly, he does not feel 
 directly their fluctuations. It is only when a new contract 
 has to be made, that the owner finds out that the amount of 
 rates does affect the rent he can obtain, but he is not period- 
 ically reminded by the calls of the Tax gatherers to inquire 
 whether an increased rate arises from unavoidable causes, or 
 from mismanagement, and we cannot therefore be surprised 
 to find that the only class of owners who, as a rule, take an 
 active interest in Local Taxation and management, are those, 
 who under the compounding acts pay rates directly. 
 
 The increasing severance of owners as a class from the 
 administration of local affairs, is considered by thoughtful 
 statesmen, as likely to prove most injurious to the public 
 interest. 
 
 I need hardly add that the owners of landed property 
 are themselves the most interested in the cessation of this 
 severance, for since it is the value of their property which is 
 ultimately affected by the amount of the permanent rates, it 
 is surely most desirable that these rates should be levied in 
 such a way as to impress them with the fact that it is 
 their interest to look after the administration of these rates, 
 as well as to make their right to do so quite clear and 
 distinct. This view of the subject is not new in Liverpool, 
 for in this town some new rates have been divided between 
 owners and occupiers, and in this town owners do take a more 
 enlightened interest in the subject than in many other towns. 
 
 I have tried to bring before you the present state of 
 Local Taxation in this countiy, and some of the evils arising
 
 15 
 
 out of its injustice and want of system. I now pro- 
 ceed, as fully as the time will allow, to consider whether 
 it is possible to mitigate these evils, and I hope to show 
 that it is possible by the same measures at once to diminish 
 inequality and to improve administration. 
 
 The effect of the new Poor Law in the agricultural 
 districts showed what can be done by improved legislation in 
 checking expenditure and promoting industry, morality, and 
 independence. Under its working the Poor Kate in England 
 fell from £6,317,255 in 1834 to £4,044,741 in 1837. 
 
 It is difficult to prove industry or morality by statistics 
 but I may mention one telling fact. In the parochial year 
 in which the new Act was passed the number of bastards, 
 chargeable to all parishes in England and Wales was 71,298, 
 but in the following year it dropped to 61,826. 
 
 What the new Poor Law did for the country districts 
 in checking expenditure and improving administration we 
 now want improved legislation to do for the towns. 
 
 I am afraid I have detained you so long in discussing the 
 magnitude of the evils that I have little time left for the 
 more important question of their remedies. I am not bold 
 enough to suppose that I can suggest remedies adequate to 
 the solution of so difficult and important a problem, but 
 probably the discussion of the evils and difficulties will have 
 led you naturally to anticipate some of the following sug- 
 gestions. 
 
 All, I believe, admit that Government are right in endea- 
 vouring first to consolidate and simplify rates, areas, and 
 authorities. The taxpayer ought to see at a glance what he 
 has to pay for local taxation. A single rate paper should show 
 not only the total amount, but also the proportion of f lie rate 
 rendered necessary by each several branch of expenditure of 
 adequate importance to warrant a separate account. There is 
 also a growing opinion that, as proposed by Mr. Groschen, after 
 the termination of existing contracts, the payment of rates 
 should be more generally divided between owners and occupiers, 
 and that the owners should have facility and inducement to in- 
 terest themselves in local administration. The evidence before 
 the Select Committee came out very strongly in favour of this 
 change. Mr. Tom Taylor, secretary of the Local Government 
 Office, Mr. Clare Kead, the representative in Parliament of 
 the English Tenant Farmers, Mr. Dudley Baxter, the well- 
 known Conservative statistician, all were in favour of it ; and
 
 ie 
 
 Mr. Caird and all the Scotch witnesses spoke decidedly of the 
 advantage which Scotland was deriving from the system of 
 dividing rates between owner and occupier in the interest 
 which owners of real property took in local affairs. I think 
 it must be evident to anyone that if much of the burden of 
 local taxation, when it becomes permanent, falls on the land, 
 it is clearly the owner's interest that his attention 
 should be naturally and with timely notice called to its 
 expenditure and management before laxity or inefficiency has 
 tied the permanent burden round his neck. In Liverpool 
 one half of the sewer rate and water rate has always been 
 paid by the owner ; and as to other rates we have not felt, to 
 the same extent as other places, the disadvantages of charging 
 local taxation solely upon the occupier because in Liverpool 
 a large proportion of the property is built upon by the Free- 
 holders or by Lessees under the Corporation. 
 
 But in London and other places, where large landowners 
 have let out their ground on long leases, with covenants for 
 the tenants to pay all rates and taxes, the sanitary and other 
 improvements, not contemplated when the leases were made, 
 improvements many of them benefiting the property, and 
 therefore the owner, have been made entirely at the expense 
 of the Tenant. In addition to the injury to the individual 
 it is not, for many reasons, for the public interest that some 
 of the wealthiest citizens should be able to contract them- 
 selves and their wealth out of the reach of the tax gatherer. 
 
 But if owners are to share with occupiers the payment of 
 local taxes, they ought to have a real and effective share in 
 administration, on which the amount of Local Taxation so 
 much depends. This is provided for now in most parishes, 
 after a very imperfect fashion by ex officio guardians, who 
 generally represent owners of property. Where, as in many rural 
 parishes, a few such ex offcio members attend regularly, and 
 where those who do not attend regularly do not interfere at all, 
 the system works very well. But in many cases, the ex officio 
 Gruardians either do not attend regularly or do not attend at 
 all, or still worse, only attend when either patronage is to be 
 exercised in an appointment, or some question is to be carried 
 over the heads of those who usually do the work. Some of the 
 evils of the present system would be avoided if a certain number 
 of magistrates were selected [ix. were selected from the present 
 ex offcio Gruardians] to represent the owners, and neglect of 
 their duties by men so selected should involve retirement
 
 17 
 
 from the bench. In any case, owners and occupiers should be 
 equally eligible as members of the governing bodies, and the 
 owners should have the same voting powers as the occupiers. 
 The present G-overnment proposed to relieve Local Taxation 
 by relinquishing the house tax to the localities. This would 
 have been a very substantial relief, especially to the Towns. 
 In Liverpool the contribution from what is now Imperial 
 in relief of Local Taxation would amount to £31,959 against a 
 contribution of £'40,895. 19s. 7d. under Sir Massey Lopes's 
 proposals. But to carry out Sir M. Lopes's proposals Liver- 
 pool would have to pay her share of £2,100,000 of Imperial 
 Taxation; under Mr. (roschen's her share of only £1,262,611. 
 The relief afforded by Sir M. Lopes's proposals has been stated 
 at a much higher figure, but I believe the above figures will 
 be found correct. 
 
 Mr. Stansfeld has already in his Public Health Act carried 
 out the suggestion that the State should relieve the locality 
 by the use of Imperial credit, the State borrowing and lending 
 to the local authority money at a low rate of interest, — a 
 valuable saving, but one which renders safeguards against lax 
 expenditure more important than ever, inasmuch as it facili- 
 tates borrowing money, and therefore taxing "posterity for 
 present expenditure. 
 
 In several Continental countries certain additional license 
 duties are applied to local purposes. 
 
 It will occur to you that there are licences of such a nature 
 that they would offer a tolerably fair test of the claims of the 
 locality on those using them. For instance, the licenses to 
 carry on certain trades and professions, and the licenses for 
 horses and carriages, might very fairly go to the local autho- 
 rity that has to defray the cost of paving. 
 
 You may be surprised that I have not yet suggested 
 any remedy for the grievance which more than any other 
 has caused the present demand for reform in our system of 
 Local Taxation. I mean, of course, the escape of personal 
 property from contribution to local rates, and of its wealthy 
 owners from their share of the labours of local administration. 
 I have left it to the last on account both of its difi&culty 
 and of its importance. 
 
 The difficulties are so great and the dangers to be guarded 
 against so serious that statesmen have generally either not 
 made the attempt to remedy the grievance, or have abandoned 
 it in despair. But Parliament has decided that an effort
 
 18 
 
 shall be made at least to diminish the present unequal inci- 
 dence, and, as I have already said, I believe the danger may 
 be guarded against. 
 
 The proposal locally tq tax personal property for local 
 objects has been abandoned as impracticable even by many of 
 the most determined advocates for a change in the present 
 system. Sir Massey Lopes said plainly that, however just, 
 it is not feasible ; and Mr. Ward Hunt, the Conservative 
 Chancellor of the Exchequer, in a speech advocating the 
 assumption by the State of certain local burdens, pointed out 
 the impossibility of localising personal property. Even if the 
 difficulties in the way of raising the tax on personalty locally 
 were disposed of, a rate raised locally would not adjust with 
 any appproach to fairness the claims on personalty. Take a 
 shipowner for instance who lives in Whitehaven, whose ships 
 generally sail out of London, Liverpool, or other ports. The 
 porters who unload his ships and their families live in those 
 towns, and the families of the sailors who sail his ships live 
 in all parts of England, Scotland, and Ireland. The sanitary 
 or relief expenditure for the benefit of those families is not 
 borne by Whitehaven, but by those other towns. The rate- 
 payers of those towns who bear the burden have therefore a 
 just claim to their proportion of the shipowners' contribution. 
 
 These difficulties have led Sir Massey Lopes and most of 
 the advocates of relief of local taxation to adopt the principle 
 of the plan proposed in February 1868 by the Liverpool vestry, 
 and agreed to by a meeting of delegates from the Boards of 
 Gruardians of the principal large towns of the north. They 
 proposed that subsidies should be distributed by the Imperial 
 Grovernment in relief of certain portions of Local expenditure, 
 but subject to stringent precautions against abuse. 
 
 I believe that proposal to be a sound one, and that with 
 proper precautions we may actually diminish instead of 
 increasing the apprehended dangers of laxity and mal-ad- 
 ministration. 
 
 The precautions which I think would be effectual are the 
 following : — 
 
 1st. I think that tunds distributed by a Central 
 Grovernment for local expenditure ought to be raised by taxes 
 levied distinctly and avowedly for that purpose. I mean 
 that there should be two Imperial budgets, one including all 
 expenditure for local grants, and the other embracing ex- 
 penditure for more strictly Imperial purposes. By this plan, 
 the amount of taxation which local expenditure involves
 
 19 
 
 would be brought clearly home to those who pay the taxes 
 to provide for it. If, in addition to this, the admirable 
 suggestion of Sir Massey Lopes were adopted, and the 
 President of the Local Grovernment Board gave an annual 
 account of local taxation and expenditure to Parliament, we 
 might reasonably hope that a more general and vigilant 
 interest would be awakened on the subject. 
 
 2nd. I do not propose that the Imperial Grovernment should 
 supply the whole of any branch of local expenditure, but only- 
 make a fixed contribution, leaving any rise or fall in expendi- 
 ture to be borne by the locality. This was the Liverpool pro- 
 posal, and I think it is even safer than Sir M. Lopes' proposal 
 that the State should bear a proportion of the expenditure. 
 To take as an instance the expenditure on lunatics, the 
 cost of which has been estimated at about 10s. per head 
 per week, whether the state paid one-half the expenditure, 
 whatever that might be in any union or paid a fixed contri- 
 bution of 5s. per head, the guardians would still on either 
 plan pay more than for an ordinary pauper whose whole 
 maintenance was defrayed out of the rates, and would therefore 
 still have a stronger motive than in the case of the ordinary 
 pauper for guarding against lunatics being thrown improperly 
 on public support, but they would have just double the pecu- 
 niary inducement to economy in providing for tlte lunatic, if 
 they had to pay all beyond a fixed payment, than if they 
 received half of the total expenditure from Grovernment. 
 
 Now this system of Imperial grants, conditional on 
 efl&ciency, would not only mitigate the unjust incidence of 
 Local Taxation, but I believe it would conduce to improyad 
 management, and so far from increasing risk of collision 
 between the central and local authorities would lead to more 
 cordial relations between the representatives of the ratepayers 
 on the one hand, and the representatives of the Imperial 
 taxpayers on the other. 
 
 Many blunders might be saved, and great improvement 
 effected, if cordial relations could be established all over the 
 country, between the local bodies, and a really superior class 
 of Grovernment Inspectors. The Inspectors should be 
 the collectors, preservers, and distributors of the experience 
 of the different local authorities. 
 
 With this collective experience at the disposal of local 
 bodies, we should not have the constant spectacle of the repe- 
 tition of the same costly mistakes in different places.
 
 20 
 
 Again, the increased demands of local government require 
 a superior and more highly trained set of officers than are 
 found in many places. Without such aid, the unpaid mem- 
 bers of local governments will find it impossible to do the 
 work in the time they can spare, and good men will not 
 undertake duties they cannot perform. Probably no better 
 form of imperial contribution to local purposes could be made 
 than one in aid of salaries of the officers, the appointments 
 being left as now with the local authorities, but subject, 
 for important offices, to a certain examination as to fitness. 
 
 The inspector should not be required or encouraged to refer 
 everything to the Central Board, but should feel that he will 
 be judged by the state of his district. He would then, if fit 
 for his post, be anxious to work harmoniously with the local 
 authorities. He would avoid the appearance of dictation, but 
 be anxious to give every information and inducement to good 
 management. He would inform all good officers deserving 
 promotion when suitable vacancies arose in other parts of 
 his district, and the guardians where good men were to be 
 found. 
 
 The Inspectors as representing the Imperial Grovernment 
 and national taxpayers, would, of course, have to certify that 
 the conditions of efficiency on which the Imperial contribu- 
 tion is to be paid have been fulfilled, but this is very different 
 from the Central authority imposing on the representatives ot 
 the local taxpayers expenditure, unaccompanied by any con- 
 tribution in aid of the outlay thus arbitrarily required. 
 
 If the Inspector comes as representing the Imperia 1 
 Grovernment, as large contributors in relief of local taxation, 
 to see that the money raised by the Central Grovernment is 
 properly expended. Englishmen will recognise the justice of 
 such representation, but if the Inspectors come merely to 
 represent the assumed superior wisdom of the Central depart- 
 ment, people will always resent their interference. 
 
 This j oint action between the representatives of the Central 
 and Local Authorities, if placed on a sound footing, does not 
 necessarily diminish the interest of the latter in their work, 
 as has been proved by the working of the system in Edu- 
 cation. 
 
 Have grants in aid of education, accompanied by inspec- 
 tion, discouraged local interest in schools ? Is it not notorious 
 that they have had the contrary effect — that not only have
 
 21 
 
 they encouraged voluntary efforts and the rapid extension 
 of our common school system, but that they have very much 
 raised the standard of education ? 
 
 Yet I fancy it would be hard to point out men less 
 likely to brook useless arbitrary interference than the classes 
 who furnish our school managers ; the clergy of all denomi- 
 nations, the squires, the successful men of business who are 
 active and influential in .religious bodies, are all classes of 
 men accustomed to have their own way, and who, especially 
 when they are expected voluntarily to put their hands 
 into their own pockets, expect to obtain it. No doubt of 
 late years the revised code and the appointment of some 
 inexperienced sub-inspectors have caused some little soreness, 
 but as a rule the inspector is generally welcomed as a valued 
 friend by all active school managers. 
 
 It is evident therefore that any difficulties which may 
 arise in regard to Government inspection are due to remov- 
 able causes; and past experience shows that where the sys- 
 tem of Grovernment inspection is put into good order, and 
 subject to proper conditions, it works smoothly and well. 
 
 In 1867 I advocated the principle of this suggestion in 
 the Liverpool vestry. In 1868 I made it the srfbject of one 
 of my election addresses. In 1869 I moved in the House of 
 Commons the following resolution : 
 
 • ' That in the opinion of this House a closer and more harmonious 
 correspondence between the central and local Poor Law Authorities, and 
 in consequence a more uniform and efficient system of parochial adminis- 
 tration would be established, and the incidence of local taxation would 
 be safely rectified if, as in the case of education, grants conditional on 
 efl&ciency were made from national sources through the medium of the 
 Poor Law Board. 
 
 What I now propose is to extend the application of the 
 principle of that resolution to some other branches of local 
 taxation and administration. 
 
 To sum up briefly. The principal suggestions I have ven- 
 tured to bring vmder your notice to-night are. 
 
 First. — By simplifying and consolidating the areas of Local 
 Taxation and the authorities by whom it is administered, by 
 levying local rates more directly on those who ultimately bear 
 the burden, and in such a form that the rate-payer may 
 clearly see how much he pays in all, and how much for 
 each large separate branch of expenditure, to secure efficient 
 local government, subject to the control of a vigilant public 
 opinion.
 
 2^ 
 
 Second — To bring personal property more equitably, 
 fully, and directly under contribution to local expenditure, by 
 means of Imperial grants, such grants to be only for a portion 
 of the various branches of expenditure, so that any waste may 
 still be sensibly felt by those electors who are responsible for 
 the selection of the authorities by whom the expenditure is 
 administered. 
 
 Third. — To secure the vigilance of Parliament over 
 Imperial grants for Local purposes, by providing for such 
 grants by a separate Imperial budget. 
 
 I believe if those remedies were adopted, the Local Civil 
 Service would be raised and improved; that local bodies 
 would receive far more assistance and be less subject to 
 vexatious interference from the Central Grovernment ; that 
 interest in local Grovernment would be increased, local ad- 
 ministration improved, real economy promoted ; and that our 
 local expenditure would produce adequate results in the 
 health and well-being of our people. 
 
 But while it is right that everyone who has attended 
 to the subject should do what he can to throw light upon so 
 difficult a question, I rejoice that it is receiving the anxious 
 consideration of those most able to solve its difficult 
 problems; that Mr. Griadstone, Mr. Stansfeld, and their 
 colleagues, are coneentrating their great financial and 
 administrative abilities upon it. Their proposals will be 
 looked for with the greatest interest by us all, and I believe 
 will be considered by men of all parties with the anxious 
 desire to arrive at a just and satisfactory settlement. 
 
 To any one who wishes to study the question of Local 
 Taxation Mr. Paigrave's prize essay on the Local Taxation 
 of Grreat Britain and Ireland, published by John Murray, 
 Albemarle-street, London, will be found full of most valuable 
 information.
 
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