CHAP. VII. Ministerial Exposition of the Financial Situation of the Country-Repeal of some, and Diminution of others, of the Assessed Taxes Ministerial Misrepresentation of the Amount of the Surplus Revenue -Improvident Contract with the Bank for the Payment of part of the Naval and Military Pensions-Bill regulating the Reduction of the National Debt-Budget-Amount of Taxes reduced since the lermination of the War-Mr. Maberly's Motion respecting the Redemption of the Land Tax-The Tax on Foreign Wools-Motion with respect to the Office of Lieutenant General of the Ordnance. MB R. Vansittart, now lord Bexley, left to his successor a much more agreeable duty, than that which it had been his own lot to discharge. Hitherto, the government, pressed by the necessity of maintaining the revenue at a level adequate to the exigencies of the state, had been obliged either to resist every proposed remission of taxes, or to concede it ungraciously. Circumstances were now altered. The expenses had been considerably diminished: such had been the increased productiveness of many branches of the revenue, that, notwithstanding the late reduction of several taxes, the total amount of the income of the state, had been little impaired and the Chancellor of the Exchequer found, that it was at length in his power to come forward spontane ously and propose an important diminution of the public burthens. : The ministers did not permit much of the session to elapse, be fore they exhibited themselves in this gracious light, On the 21st of February, the Chancellor of the Exchequer, in the committee of Ways and Means, gave an exposi tion of the financial circumstances of the country. He stated, that in the last year, the total revenue amounted to...... 54,414,650 The total expenditure to 49,499,130 The surplus to.... £.4,915,520 As to the present year, his estimate was, that the revenue, after allowing for the loss which it might be ex◄ pected to sustain by the full operation of the reduction of taxes effected in the last session, would produce, from the same sources as were available last year, not less, and perhaps somewhat more, than 52,200,000l., to which was to be added 4,800,000l., to be received from the trustees of half-pay and pensions. The total therefore would be about 57,000,000l. In this estimate he rated the Customs at 10,500,000l., that branch during 1822 produced 10,662,000l.: but there was to be deducted about 80,000l. of tonnage duty received in the first half of 1822 (prior to its abolition), which would no longer be levied. The Excise of 1822 amounted to 27,271,668l.: it lost by the reductions of last year, no less a sum than 1,576,000l.; to which was to stamps he took at 6,600,000%. which was something less than last year: the post-office at 1,400,000%. being less than last year by about 28,000l.; and this he did, only because he was unwilling to overstate any thing. The assessed taxes and land-tax. in 1822, amounted to 7,217,969l.: but, in the course of last session, the hearth and window taxes of Ireland were abolished, and consequently, towards the termination of the year, some loss was sustained upon that head: now, however, the whole of these taxes was to be deducted, and he therefore rated the assessed taxes and land-tax at no more than 7,100,000l., of which the assessed taxes would be 5,900,000l., and the land-tax 1,200,000l. To these larger branches of the revenue were to be added various miscellaneous items, amounting to 600,000l. The result, then, of the whole calculation was as follows: Total charge of funded unredeemed debt, including interest, long annuities, and management....... £,28,124,786 Other charges on the consolidated fund, such as civil-list, pensions by act of parliament, and various items of that description Annuity to trustees for half-pay and pensions Army... Navy... Ordnance Miscellaneous.... Interest of Exchequer bill ...... The result, then, was that taking the re venue at ..... 2,050,000 2,800,000 7,362,000 5,442,000 1,380,000 1,494,000 1,200,000 £.49,852,786 57,000,000 The expenditure at 49,852,786 The surplus would be............ vants. £.7,147,214 Of this surplus five millions were to be applied to the reduction of the debt; the residue, to the remission of taxes. The imposts, which had been selected as most proper to be lessened or abolished, were the assessed taxes on windows, houses, horses, carriages, and serAmong these, the first item repealed was the tax upon persons employed in trade and husbandry, who might also be occasionally employed in some other menial capacity, such as the care of a horse its amount was about 37,2001. The second was the tax upon occasional gardeners. That duty had doubtless been imposed under the notion that gardening : was a luxury, and a mere enjoy ment of the rich; but its effect had been, to deprive the poor of much casual employment, at seasons when it would be most desirable. A gentleman could not have a poor man to turn a walk, or to trim a flower bed in his garden, even for a single week, without being compelled to pay, for his charity; and though the tax was only 10s. for each person, it was very irksome to be called upon to pay for giving this sort of employment to the poor. The tax produced 19,700, and was to be abolished entirely. The next item-that of the lower class of taxed carts, was also to be abolished: it amounted to 9,300l. A similar fate was allotted to the 3s. duty upon ponies and, mules under thirteen hands high, employed by persons in trade and husbandry, which produced 4,480l. The last of the small duties thus entirely done away with, was that of 3s upon horses, employed by small farmers, who were engaged in trade. Its amount was about 6,500l. With respect to all the remaining taxes upon horses, carriages, and servants, the Chancellor of the Exchequer proposed a general reduction of 50 per cent. The pecuniary amount of this reduction was estimated as follows:On male servants .... £.159,500 Clerks and shopmen of traders Four-wheeled carriages Two-wheeled ditto ..... With respect to the tax on windows, the general principle, upon which Mr. Robinson proposed to proceed, was a diminution of 50 per cent. There was, however, one description of windows, which he wished to relieve entirely. The windows of shops and warehouses, detached from a house, were already exempt; and his wish was, to extend this exemption to the ground-floor windows of shops, whether attached to the house or not. The total reduction upon the head of windows, was estimated at 1,205,000l.; and the total reduction upon the whole of the assessed taxes, about 2,200,000l. It was further proposed to repeal the whole of the assessed taxes in Ireland. The diminution thus occasioned, amounting to about 100,000l., would, it was expected, be compensated by some new modifications of the Customs, which were intended to be carried into effect in that part of the empire. This communication of the finan cial plans of the ministers was received with loud applause by both sides of the House. Mr. Ricardo said, that he thought, that the science of political economy, which in the preceding session had been 98,050 so frequently attacked, had never 145,000 before had so able an expositor in 98,000 that House, as it had now found 17,650 in the person of the chancellor of the Exchequer. Upon one point, 324,000 however, Mr. Ricardo differed from Mr. Robinson; and that was, as to the amount of our sur9,100 plus revenue. "The right hon. 1,050 gentleman," said Mr. Ricardo, "had introduced into his surplus a quarter, and was to conclude on of 7,000,000l. a sum of 2,000,000l. the 5th of July, 1828. The basis to be received; he would like to on which it was formed, was, that know from whom? Could the taking the long annuities at the right hon. gentleman himself tell? price on which they were on the On the one side of the account he 1st of March, the day on which had put an amount of 2,800,000l. they closed, these new annuities to be paid for pensions and half- were to be estimated at a proporpay; and on the other side, he had tional value. On that day, an stated, that he was to receive annuity of 11. for 36 years and 4,800,000l. from the trustees, three quarters, was worth 187. 17s. whoever they might be, who 9d.; and the calculation was, that were to pay such pensions and half- the interest on that sum was the pay; and of these two items, the same as 4l. 2s. 1d. per cent. The balance was 2,000,000l. to be re- total sum, which the Bank would paid, of course, to these trustees or . have to advance in the 5 years, commissioners themselves. Un amounted to 13,089,419l. As, howdoubtedly, therefore, from this as- ever, it was not to be advanced at sumed surplus of 7,000,000l. of once, but by instalments, it was actual income over expenditure, calculated to be the same as if the there must be deducted these Bank advanced at once 11,883,1947. 2,000,000l., which the sinking If that sum had been advanced at fund itself was to supply. It this once, then the permanent interest view of the subject was correct, would have been 487,700l.; but as the right hon. gentleman, when he the plan was to give an annuity should have carried his plan into for 44 years at the same rate of effect, of giving the proposed relief interest, it would amount to to the country, would actually 585,740l.; and on that arrangeleave us with a clear sinking ment the treaty was concluded. fund, not of 5,000,000l., but of The negotiation began on the 2nd 3,000,000l." Of the accuracy of of March, was approved by the this remark of Mr. Ricardo, no proprietors of Bank stock on doubt can be entertained: for the the 20th of that month, was reestimated revenue of 57,000,000%. duced into a formal contract on the includes an item of 4,800,000l., all 27th, and ratified by an act which of which, except 2,800,000l. was received the royal assent on the a loan from the trustees of half-pay 2nd of May. This act was not and pensions. passed without keen opposition. In the Commons the third reading was carried by 140 against 91. In the Lords, it was opposed by the marquis of Lansdown, lord Ellenborough, and lord King. Nor did the latter at all exaggerate the absurdity of the measure, when, to show the folly of the principle on which it proceeded, he jocularly moved as an amendment that the following clause should be added, "and whereas the present gene The proposed reductions of taxes were carried into effect by passing the necessary bills. The permanent annuities for a fixed number of years, which had been created for meeting the charge of the naval and military pensions, had not found any purchasers in the former year. Now, however, the Bank of England contracted for the purchase of part of them. The contract was to last for five years and ration and posterity may derive great benefit from extending the principle of the aforesaid act, wherein the principle of a sinking fund is properly sustained by combining the same with the system of loans, be it enacted, that the lords commissioners of the Treasury may have power, in order to increase the revenue, to raise from the Bank any sum not exceeding 10,000,000l. a-year, for the period of a hundred years, by the sale of deferred stock, the interest to commence from April 1923." We showed in our last volume the delusive principles of this plan, and the financial disadvantages attending it. It would, however, be unfair to make Mr. Robinson responsible for the demerits of a scheme, which must be regarded, not as sprung from him, but as a favourite bantling bequeathed to his gratitude and friendship by his predecessor in office. At the same time he deserves some blame for carrying it further than Mr. Vansittart had done. The latter, much to his mortification, had left it a mere name as a contract between the Treasury and certain trustees of the public money-a contract, in short, of the nation with itself. This nominal contract was converted by Mr. Robinson into a substantial agreement with the Bank, and at a moment, too, most disadvantageous for the operation. The transaction was in substance a loan; and what was the moment chosen for this loan? Why, the very moment when the public credit had sustained a sudden depression, and when the government was therefore obliged to offer terms proportionally high. The terms were fixed by the then price of the long annuities; and that price was about a tenth lower than what it had been a year before, and a fifth lower than what it was a year afterwards. The only supposition, on which the conduct of the minis ters in this affair can be justified as reasonable, is, that they expected' the funds to fall to a permanently lower rate than their prices on the 1st of March. Another financial regulation introduced by Mr. Robinson was of a very different character. The operations of the sinking fund had been encumbered with a variety of machinery, of no use except to give an air of complication and mystery to a matter which in itself was very simple. The Chancellor of the Exchequer resolved to do away with all these petty contrivances, and to place the reduction of the national debt on its only proper basis-the regular payment to commissioners of a fixed sum, which was to be applied exclusively to that purpose. To accomplish All this end, he brought forward a bill, founded on resolutions which had been approved by the House. By this bill it was provided, that the payment of all sums of money, charged upon and issuable out of the consolidated fund of the united kingdom of Great Britain and Ireland, to the commissioners for the reduction of the national debt, should upon and after the 5th of April 1823, cease and determine. capital stock (except the capital stock arising from donations and bequests towards reducing the national debt), and all annuities for terms of years, standing on the 5th of April, 1823, in the names of the commissioners for the reduction of the national debt, in the books of the Bank of England, or of the South Sea company, or of the Bank of Ireland, either on account of the sinking fund, or for |