higher figure than £22,000,000. Excise we estimate at £20,700,000; have been imposed during that period, Stamps (including £100,000 for Common has not been less than £11,000,000 per Law Stamps), at £9,550,000; Taxes at annum. When, therefore, we consider £3,500,000; the Property and Income the great reduction of the Income Tax, Tax, £6,000,000; Post Office, £4,650,000; and the other great remissions of taxation, Crown Lands, £340,000; and the Miscel- it is not very surprising that it is difficult laneous we put at £2,600,000. Under to fix on any particular tax of that extreme this last head there is an increase upon severity and apparent injustice that all the previous year, which I think was minds will agree at once that the resources £2,350,000; but there are items of a spe- of the country should be directed to alcial character to the amount of £255,000 leviate or remove it. There is, indeed, which will accrue this year. These are: no tax at the present moment that injuriestimated balance of Common Law ously affects the industry of any class of Fee Fund, released under the recent the community, except that affecting the Act, after paying salaries, &c., £80,000; industry of the producers of barley. I canthe Japanese idemnity, estimated share not avoid seeing that the incidence of the of Great Britain, after paying the other malt tax injuriously interferes with the inPowers, £68,000; constabulary fines dustry of a considerable portion of the comand penalties from Ireland, the salaries munity. But to deal with that tax would being provided for the future in the Esti- involve a very large question. I have, mates, £70,000; and re-payments by the indeed, in my generation, carefully conPost Office and Mint, and other charges sidered this question, and I have shown no connected with the Post Office Annuities, desire to evade the difficulties attending and Mint, re-payable to the Exchequer, the re-adjustment of a system which, as it £37,000. These justify us in placing the at present exists, injuriously and inequitEstimate under the head "Miscellaneous" ably affects the industry of a considerat £2,600,000. The total estimated in-able portion of Her Majesty's subjects. I come for the year will therefore be have, however, come to the conclusion £69,340,000, as against an estimated ex- that it is impossible to deal with the malt penditure of £68,134,000; and this will tax, unless you do it in a very compreleave an estimated suplus of £1,206,000 hensive and effectual manner. It is quite for the ensuing year. impossible, with the resources at my disNow, Sir, it is extremely easy, in mak-posal, that I can deal with this tax in ing the Financial Statement, to proceed to this manner. Putting aside the malt tax, this point; but, having shown that we there is no particular tax that can be parpossess a surplus, our difficulties commence ticularly alleged to be one that unduly inwhen we begin to consider how that sur-terferes with the industry of any portion plus is to be dealt with. There can be no of the community, or which from its severe doubt that, leaving a moderate but suffi- and unequal pressure demands our immecient balance, there is a sum, and not an diate attention. There is no tax, of course, inconsiderable sum, which may be applied of which the removal or the reduction to the general relief of the community. may not be vindicated and upheld by the The question then arises in what manner most plausible reasons; but I maintain this sum can be best applied in giving that that, generally speaking, there is no parrelief. Of course, the first impulse of ticular tax-with the exception which I every mind under the circumstances would have acknowledged, and with which I be to consider what taxes might be most ad- confess my inability to deal-there is no vantageously remitted. I would, however, tax which demands, before any other, speremind the House that the remission of cial consideration or immediate attention. taxation during the last ten years-I take Then, Sir, what is the next mode that period because it dates from the by which relief can be given to the termination of the Russian War has general interests of the country? The been very considerable. Irrespective of next mode, of course, is the reduction the reduction in the Income Tax, which of Debt. The attention of the Comnever stood at so low an amount as it does mittee will be obviously directed to the at the present moment-namely, 4d. in consideration of that question. Now, it the pound irrespective, I say, of the is impossible to deal effectively with the reduction in the Income Tax, the remis-reduction of the National Debt, unless you sion of taxation during the last ten years, do it by means of some specific sum which The over and above the amount of taxes that is charged upon the Consolidated Fund, I self had contemplated, did occur. I hapand which is annually applied to that ob-pened to be in that year, 1858, Chancellor ject. Of course, in considering the ques- of the Exchequer, and I had the melantion of the reduction of the Debt, I do choly satisfaction of proposing to the House not want for a moment to advert to the that the Sinking Fund should be termiexisting law, by which occasional sur- nated; and I think there never was a propluses, when our account every quarter is position which was agreed to with greater periodically settled, are appropriated to unanimity; because the House thought the reduction of the National Debt. I that to inflict upon the country new take it for granted that no Gentleman on taxes at a moment when, like the preeither side of the House wishes to inter- sent, there was considerable monetary disfere with the action of that law. It is turbance and pressure and that to the founded on scientific principles, it is, as amount of £1,500,000-for the purpose far as it goes, extremely useful and bene- of paying off debt, would be to involve ficial, and the effects of which have to a ourselves in a ruinous and really silly certain extent been satisfactory. But that proceeding; and I think that was the last is not a course of legislation by which effort which will ever be made to establish we can deal on any large scale with such a Sinking Fund upon the old principle. a question as the Public Debt. Now, if However, there is another method by we admit that the only way of dealing which the reduction of the Debt can be effectively with the Public Debt is to effected. The Committee are of course deal with it by some specific amount aware of it. You may grant Terminable which shall be charged upon the Con- Annuities, or you may even do bettersolidated Fund, there are only two modes you may convert Stock into Terminable by which we can operate. The first Annuities; and that is a proceeding for is by a charge of that character, voted which there are great facilities in this annually, when the Financial Statement country, because the Government themis made, the amount of which shall be selves are very great holders of Stock; employed in the purchase and cancel- they hold Stock to the amount of many ling of stock and other public securi- millions on account of the savings banks ties-in short, what is called a Sinking and other interests. Last year the right Fund. Now, I have myself always looked hon. Gentleman (Mr. Gladstone) called our with great disfavour upon that mode of attention to this subject. He was imoperating on the Debt. I have always pressed with the policy of dealing with felt that, however sound might be the the amount of our National Debt. He situation at the time when such a fund is thought there having been a great remisestablished, whenever a strain should come sion of taxation for many years, that the upon our resources, such a fund would in- time had arrived when we ought to confallibly cease to operate. The last attempt sider whether our surplus revenue should made to establish a Sinking Fund upon not be employed to that object. Now, Sir, this principle was made during the Russian although the right hon. Gentleman, when war by the excellent Sir George Lewis; he opened his scheme, commenced with a and I felt it my duty then to oppose the sneer at myself, in consequence of an exproposition. I was supported in that op- pression which I had once used in regard position by the right hon. Gentleman my to the Public Debt-but which I had predecessor a rare and gratifying inci- never used in this House, and which dent; but notwithstanding our united therefore it was unnecessary for him to efforts, I am sorry to say we were com- have taken notice of— pletely defeated. But, Sir, Ministerseven those who are so popular as Lord Palmerston are totally uninfluential in the long run against the inexorable logic THE CHANCELLOR OF THE EXCHEof facts; and in a very short time there QUER: Well, I suppose my natural egowas no surplus to feed the Sinking Fund, tism induced me to appropriate the right and the only way in which the Sinking hon. Gentleman's remark to myself. At Fund could have been supplied would have any rate, I am responsible for using a very been by the imposition of new taxes upon familiar expression regarding the Public the community. That strain upon our Debt, though my respect for the House resources which adversity brings, and will not allow me to repeat it. I did anwhich the right hon. Gentleman and my-swer a great booby on the hustings of MR. GLADSTONE said, that he did not on that occasion allude to the right hon. Gentleman. , 1867 Statement 1118 my county, who quoted the great amount of our National Debt as a reason why we could not vindicate the honour of the country, or even defend its independence, that, compared with such considerations the Public Debt would be-I will not use the familiar expression-but that it might be compared to the incision of the most troublesome though not really the most unpopular of insects. Now, although the right hon. Gentleman commenced his speech with that quotation, which, with the egotism that influences all men, Iizing the stock which was to be conreally thought was intended for myself, because I was guilty of the phrase, I entirely approved of the policy which it enunciated. I thought it a wise policy and a sound policy. The measures which the right hon. Gentleman brought forward In to effect that policy were numerous. some instances I thought them unnecessarily complicated, and, further, that they attempted to deal with too great a space of time, and penetrated farther than it is necessary for Parliament to follow the scheme of a Minister. But these were small objections compared with the character of the policy itself, and I, and those with whom I act, entirely approved of that policy, and supported the right hon. Gentleman throughout. I must now very succinctly call the attention of the Committee to the general character of those plans of the right hon. Gentleman; because one of them indeed very much affects-whatever may be the decision as to the proposals that I am going to make at the present momentthe state of our finances. The right hon. Gentleman proposed first to cancel Debt to the amount of £5,000,000 which we owe to some of the savings banks, by its conversion into an annuity, which was to terminate in the year 1885-eighteen years' time. One moiety of that £5,000,000 belonged to the Post Office savings banks, and the other moiety to the old savings banks. The measure was agreed to; but before it could be carried into operation very great changes had taken place in the monied world, to which I have already referred, and it became impossible at that time to carry out the original intention. But fortunately there was what was called a suspending power in that Act-the Chancellor of the Exchequer had discretion to suspend its operation, if necessary, and generally to act as circumstances would allow him for the completion of the scheme. Now the £2,500,000 that was applicable verted-and at one time it even seemed The next operation proposed by the right ever come into operation, it would be a great mistake to suppose that that fact was occasioned by any change in the Government. Her Majesty's Government entirely approved the general policy of the right hon. Gentleman on the subject; and, if circumstances had permitted it, although they might have slightly modified some of the secondary arrangements, they would have loyally attempted to carry it into effect. But very considerable changes occurred in our financial position; and when we acceded to office we found that the surplus upon which the right hon. Gentleman counted as the basis of his operations had been already considerably diminished; and circumstances were hourly occurring which created a further diminution or an almost entire absorption of it. There were the circumstances of the cattle plague, the distress of Irish railways, the battle of Sadowa, which brought about a complete revolution in our small arms, and other circumstances no doubt familiar to the Committee, which materially affected the surplus upon which the right hon. Gentleman had counted. The consequence was that it was quite impossible to proceed with that operation; and the House will perhaps recollect that on coming into office I made a statement on the subject, the fairness of which was not contested, and the policy of which was assented to by the right hon. Gentle man. Now, Sir, I wish the Committee to consider to-night a proposition- the effect of a proposition which I am going to make in reference to this large sum of £24,000,000, which is of a simpler description than that recommended to our notice last year by the right hon. Gentleman; but to the merits of which, if the proposition have any merits, the right hon. Gentleman is solely entitled. What I wish the Committee to consider is the effect of cancelling this debt of £24,000,000 by granting Terminable Annuities which shall cease in 1885; and which shall not be accompanied by any of those more complicated arrangements which would have extended it to the year 1905. Before, however, the Committee decide on the proposition which we recommend, perhaps they will allow me to give some figures which will be explanatory of the result, and without which they can scarcely come to a decision on the subject. It is necessary that the Committee should bear in mind that this sum of £24,000,000 consists of two amounts. One is a sum of £18,000,000, and the other of £6,000,000. The interest upon these two amounts is payable at different times in the year, summer and winter-on one in July and January, and on the other in October and April. The plan we wish the Committee to consider is this: we propose to convert the £18,000,000, now yielding an interest of £540,000 a year, into an annuity of about £1,332,000 per annum, terminating on the 5th of July, 1885, and payable half-yearly, the first quarter to be payable on the 5th of July, 1867. We propose to convert the £6,000,000, now yielding an interest of £180,000 a year, into an annuity, terminable on the 5th of April, 1885, of about £440,000, payable half-yearly - namely, on the 5th April and the 10th October, the first quarter to be payable in October, 1867. The total of both annuities will be £1,776,000. We have got an annuity, then, of about £1,776,000 by which to cancel this debt of £24,000,000. I wish to show to the Committee the amount of the annuity which will be payable in the present financial year. There will be one quarter payable on the 5th of July, 1867, on the annuity of £18,000,000, which will be £333,000, and a half-year on the 5th of January, 1868, on the same annuity, which will be £666,000. There will be, on the annuity for £6,000,000, a quarter payable on the 10th of October, 1867, amounting to £111,000. But we must add to our liabilities the interest of those two capital sums until the dates of conversion-making, firstly, for the one half-year on the £18,000,000 due the 5th of April, 1867, £270,000, and secondly, for the one halfyear on the £6,000,000, due the 5th July, 1867, £90,000, being a total of £1,470,000. But then of course we must deduct from that sum the interest we are now paying during the year for the £24,000,000 stock debt, which amounts to £720,000-so that the total additional charge for 1867-8 will be £750,000. It will be necessary, in the next place, that I should put before the Committee what will be the effect of this operation in its entirety, and therefore I must take the next year, and see what will be the complete charge on the Consolidated Fund when the whole shall be in operation for the entire year. The future annual charge will be £1,776,000, less of course by the amount of the annual interest we are now paying on the capital sums to be converted, which is £720,000. Therefore the increase | are based upon the principle of a graduated of annual charge from 1868-9 up to 1885, scale, and in that scale there are a great when the annuity will cease, will be many degrees. They commence by 3d. £1,056,000 per annum. But I must re- per cent, and they go as high as 4s. per mind the Committee that the "Dead cent. They are so framed that precisely Weight Annuity" which amounts to as the premium is higher-that is to say £585,740, from which the country will as the danger is greater-the duty innow be totally freed, has to be deducted; creases. Therefore you are really taxing and therefore, practically, the increase of risks and inflicting a penalty on the inannual charge by which we shall cancel curring of danger. Now, that is a principle this £24,000,000 of debt, will be a sum which I cannot think the Committee will less than £500,000 a year. That is the for a moment approve of. Moreover, the proposition which we recommend to the tax in its present form has led to great Committee to adopt. It is a sensible and evasions; it is a great restriction upon very considerable reduction of our Public commercial intercourse; and in an infinite Debt; amounting, coupled with the origi- variety of ways this complicated arrangenal measure which the right hon. Gentle- ment of the duties of Marine Insurances man carried last year, and which I hope to exercises a very baneful influence upon our bring to completion, to £29,000,000; and, general commercial intercourse. What we practically, it will be effected, as far as propose to do is-with one slight excep£24,000,000 is concerned, by a charge tion, which is rather of a technical than less than £500,000 a year. of a fiscal character-at least it is rather a technical than a fiscal reason which influences us-is to establish one uniform rate of Marine Insurance, and to fix it at the lowest amount which now prevails. Therefore you will have for all policies, whether they be time policies or voyage policies, a uniform rate of 3d. per cent, except in the case of time policies exceeding six months, the duty on which will be 6d. per cent. And the reason is that if that arrangement is not made no policies will be negotiated except time. policies of the length of twelve months. Now the fact is that time policies for twelve months are not in accordance with the spirit of the age, nor the circumstances under which we live; and there is no reason why time policies, with the rapid communication at present at our command, should be for a longer period than six months. But, certainly, unless that increase is made with regard to time policies after six months, it will have an injurious effect upon all voyage policies; and therefore we recommend that, in establishing what we wish to make a uniform rate, that exception should be sanctioned, with the conviction that after a short time the fashion of time policies for twelve months will become a thing of the past. Now, Sir, if the Committee will, after consideration, adopt the measure we recommend, the surplus of the year will be reduced by the sum of £750,000, and there will still remain a surplus of £456,000. Now, under ordinary circumstances, if the balances in the Exchequer were in the same condition as they were in this time last year, I should not hesitate to recommend the Committee not to deal with that surplus. If our balances were £1,000,000 or £2,000,000 less, I do not think it would be wise to reduce a surplus of £456,000. But in the present state of our balances I think that we are justified in dealing with this portion of it. That portion cannot be very considerable; but the great point is to employ our resources in the manner which will be most effective, and which will give the most sensible relief to the community. Although the amount is not large, there are several modes by which it may be beneficially appropriated. After much consideration of the subject it appeared to Her Majesty's Government that the manner by which the most extensive relief could be given would be by dealing with the question of Marine Insurances. That is a portion of our fiscal system which has long been open to various objections, and to which all persons who are interested in Now, Sir, I have informed the Comthe transactions of trade have frequently mittee of the state of our finances and our called the attention of the Government. The surplus, and the mode in which we recomCommittee are probably aware of the ex-mend the Committee to deal with that tremely complicated character of the law as at present existing in reference to the tax upon Marine Insurances. These duties VOL. CLXXXVI. [THIRD SERIES.] surplus. [An hon. MEMBER: What is the amount of the reduction of the Marine Insurance?] It will cost about £210,000; 20 |