§ Order of the Day for the Second Reading read.587
§ The EARL of ABERDEEN
rose to move the Second Reading of the Bill, and said: My Lords, I rise to move the second reading of a Bill proposing to place a duty upon Successions. It is a Bill which has occupied the attention of the other House of Parliament for a considerable time past, whence, after having undergone great discussion, and having been minutely examined in all its parts, and having been fully and completely discussed, it has been sent up to your Lordships by a large majority of that House. My Lords, it is a measure which has been recommended to Her Majesty's Government by various considerations. In the first place, it enables us to relieve the industry of the country from burdens which have hitherto materially affected the employment of capital and labour; and the removal of those burdens will, I doubt not, operate most beneficially upon the industry and welfare of the country. This measure also enables Her Majesty's Government to make provision for that security which it was desirable to obtain for the means of dispensing with the income tax at the period which has been assigned for its continuance. In addition to this, the measure enables us to a certain degree to redress in equalities. Which have been complained of in the imposition of the income tax The noble Earl opposite (the Earl of Derby) and his friends have complained of the inequalities arising from the imposition of the tax, without any allowance being made for precarious incomes, or taking into account incomes derived from the exercise of intelligence and skill, and they have recommended the principle of differentiation in the imposition of that tax. My Lords, upon the present occasion her Majesty's Government have thought it right to tax property equally in all respects, without looking to the sources from which it is derived, or whether it bears more hardly upon the exercise of skill and intelligence than upon other classes. These have been the recommendations of the present measure in the eyes of Her Majesty's Government; but the greatest inducement to adopt the duty which I now propose to your Lordships, was that of remedying an injustice long complained of, and which, in fact, was gradually becoming intolerable to the country. Such was the sense of its injustice, that it could not much longer have been endured, and in a very short time it would have been impossible to avoid dealing with it. The injustice, indeed, is so manifest, that it is wonderful that it should have 588 Continued so long. Mr. Pitt, no doubt, made an attempt to remedy that which was an evil in his day, as great and as crying in its nature as in the present day; but he was defeated; and no Minister since his time has, I believe, made any attempt to do that which, although called for by the general voice of the country, the difficulties attending its execution were so great as to have deterred any Government from grappling with them. Now, however, I trust, that the country will feel that my right hon. Friend the Chancellor of the Exchequer has proved himself worthy of accomplishing the design of Mr. Pitt, and successfully he has done so; for, difficult as has been the task, he has grappled with and completed it. When I say that injustice has long prevailed in respect of the legacy duty, it is only necessary to state a single fact, and I cannot do it better than in the words of a writer held in great repute by noble Lords opposite, and to whose opinion they no doubt pay a due respect the writer says—The poor man who gets a legacy of 100l. pays 10l. direct to the Exchequer, and the executor, in addition, pays a heavy stamp on probate of the succession. But the great landowner succeeds to 100,000l. a year without paying a shilling to the State. A creditor in Scotland who succeeds to a bond for 100,000l. heritably secured pays nothing; if it is upon personal security he pays the full legacy duty of 10,000l. This glaring inequality, the remnant of the days of feudal oppression, or a relic of times when the landowners had no money, and when taxes could be extracted from moveable property only, should forthwith be abolished. Successions of all kinds, whether in land, bonds heritably secured, or moveable funds, should be taxed at the same rateMy Lords, I think that is perfectly just, aad it is the opinion of Sir Archibald Alison, a writer held in the greatest esteem by noble Lords opposite. This injustice and inequality were so apparent that the noble Earl opposite seems to have contemplated some measure by which it was proposed to meet and remedy the evil—at least the late Chancellor of the Exchequer, in the House of Commons, described this legacy duty as a system of injustice, and shadowed out some course of proceeding by which a remedy was to be provided, though what that course was, we were not permitted to know. My Lords, it is on the principle that every species of succession should be equally taxed, that we have proposed the measure which I now submit to the consideration of your Lordships. My Lords, this measure, although now only proposed to be read a second time, has occupied more 589 or less the attention of your Lordships upon different occasions. We have heard very strong denunciations of the injustice, oppression, and hardship, and great burdens which it would impose, and the grievous nature of the Bill which is now before That being the case, it is rather singular that that opinion does not seem to be shared by the country, for we have no petitions against the measure; although we have had petitions against every other species of burden that can be imagined. I thought when those eloquent and fervid declarations against the tyrannical and oppressive nature of this measure were so rife among us, that of course the table of the House would be loaded with petitions against it. I hold in my hand a very long list of petitions against every sort of tax, contained in the Report of the House of Commons on Public Petitions; but there be among them a single petition against the succession tax, although the Bill for imposing it has been before the House of Commons for not less than two months during which it has been actively debated, and this return is made up to the 15th of July. I believe that I might say the same for this House. I have been a constant attendant here, and I have heard of no petitions against this Bill, and I believe nonesuch have been presented, with the exception of one yesterday, presented by a noble Marquess, not now in his place, signed by four or five, I have no doubt very respectable, solicitors. That, my Lords, is the amount of the public disapprobation of this measure, so far as it has been signified by petitions to either House of Parliament. But, my Lords, as I understand that the noble Earl opposite (the Earl of Derby) does not intend to oppose the second reading of the Bill, it will not be necessary to detain your Lordships by going into any examination of the provisions of the Bill contained in its different clauses, as these may be better explained and discussed in a future stage of the measure. Nevertheless, I may venture, upon this occasion, to lay before your Lordships a general view of the objects and character of the measure we now propose for your adoption. My Lords, we propose that a duty shall be imposed upon every species of succession arising in consequence of death, or rather we propose to extend the present legacy duties to every succession of every description No other mode of transfer of property is taken into account—it is simply a duty on successions in consequence of 590 death. At present real property, whether settled or unsettled, as your Lordships are aware, pays no succession duty, and settled personalty pays no legacy duty. We propose to redress this anomaly, for there really seems no reasonable cause why settled personalty should not be dealt with in the same manner as unsettled personalty. We therefore propose to apply the same rule to every description of succession upon death. We propose to preserve the same scale of consanguinity in measuring the amount of duty as that which now exists, with the exception that whereas at present sons-in-law and daughters-in-law are treated is strangers, and pay 10 per cent upon inheritance, we propose to place them in the tame condition as sons and daughters. I know there is a great difference of opinion is to whether the existing scale might not be advantageously altered; but upon the whole, considering that it has existed so long, and that much difference of opinion prevails on the subject, I am of opinion hat it is better to retain the scale as it tow stands, with the single exception to which I have referred. In applying this principle to land, it was thought, from various causes, that it would be desirable; to give as much consideration, and to apply it as lightly as could reasonably be required. It is therefore proposed to estimate all successions to land according to the life interest of the person succeeding. Various modes are laid down in the Bill for estimating that life interest—but it will be estimated only on the life interest. Even upon less than a life interest, in vases where a less interest exists, persons succeeding will only pay upon that interest whatever may be its amount. It is also proposed, as was proposed by Mr. Pitt, to make the succession duty payable by eight half-yearly payments. The first, however, will only commence at the end of the first year, so that a period if four and a half years will be afforded or the discharge of the obligation. That appears to me to be as lenient an application of the imposition of the tax as can well be expected. To show the operation of the proposed measure, let us take a case n which a person succeeds to a landed; state, the capital value of which is 10,000l. This will afford a rental of 300l. a year. We will take the average age of succession a thirty-five years. That, I believe, is a fair estimate, and it is borne out by what ms been ascertained by taking the average age of succession of Members of this House, 591 which is found to be thirty-five years. The value of a life interest at 35 years of age would be 15½ years' purchase, taking the average length of life at 50½ years. The sum, therefore, upon which the duty would be charged would be somewhat less than hall the capital value of the estate, or 4,650l. The person succeeding to the estate will be charged He on that sum. The duty which would be chargeable on that sum, and which would be payable in four years and a half, in eight half-yearly instalments, would be 46l. 10s.; or, if he preferred paying the amount immediately, a discount would be allowed him of 4l. 13s., so that the whole amount of duty payable upon that succession would be 41l. 17s. My Lords, the produce of this tax is estimated at about 2,000,000l. annually. I know it has been supposed by some that the amount will be much higher and I think the noble Earl opposite some time ago intimated such an opinion himself I can only say that, according to all the, best calculations to which I have had access that does not appear to be the case, and that, allowing for those uncertainties which must necessarily occur in calculations of this kind, a sum of 2,000,000l. only can fairly be estimated as the produce of this tax. Considering also the amount of in come upon which the income tax is payable and which is considered to amount to 250,000,000l. it does not appear that a higher sum than 2,000,000l. Can safely hr relied upon as the produce of this tax. I am aware that it has been said, both in this House and elsewhere that this measure has been conceived in a spirit of hostility to the land. My Lords, I utterly deny that such is time case. We have endeavourer certainly in the financial measures we have proposed, to do our best to reduce inequalities, and in so doing we have no doubt imposed burdens on land from which it was formerly exempt, and we have thought this measure required by the claims of justice and expediency. I, for one, have never con tended that it is any advantage to the land that it should be placed upon a different footing from the rest of the property of the country. It has also been said, in a some what hasty manner, that the Government have resolved to lay a tax of 2,000,000l. upon land. Such persons neglect altogether the nature of the tax itself, and the manner in which it is proposed to be levies My Lords, instead of 2,000,000l. being imposed upon land, the fact is, that upon ever calculation which can be made, the utmost that can be expected to be derived, strictly 592 Speaking, from land, is only 400,000l.—or not one-fourth of the amount of the tax proposed to be raised. That is, exclusive of houses and leaseholds, land, strictly speaking, will not contribute more than 400,000l. Now, my Lords, having said thus much, and having stated the main objects of the Bill, and the principle on which it proceeds, I do not propose to go further into the provisions of the measure. The main object and principle of this Bill is, as I have already stated, to extend to all successions that duty which is now only confined to unsettled personal property. But I must make one observation on the course which I understand the noble Earl opposite (the Earl of Derby), proposes to take. I quite understand—and I make this observation with the utmost respect for the privileges of this House—I quite understand that if your Lordships receive a Tax Bill from the House of Commons which is oppressive and unjust in its nature—I say, I can quite understand your Lordships resisting such a measure, and refusing to entertain it. But I do not understand how, having adopted the principle of such a measure, your Lordships can enter upon the consideration of details, the practical consequence of which your Lordships must be very well aware of. If this measure be so unjust and so oppressive, I admit the right, and I do not quarrel with the expediency, of your Lordships rejecting it if the emergency be such as to require it. But, having assented to the principle of the measure, then to raise questions as to whether timber should be taxed in one way or another, or whether it should be taxed at all—I think that, considering the practical consequences of such a proceeding, if successful, these considerations are well worthy of your Lordships' attention. I only advert to this subject with the utmost respect and deference, but I earnestly entreat your Lordships to consider what may be the practical result of a course of this kind. I can only say that I have entire confidence in that good sense and moderation that have always been exhibited by this House upon such occasions. I believe that the course intended, as I understand, to be pursued and to be recommended to your Lordships, is such as has been very rarely practised in this House. My Lords, without further observations, I will now move the Second Reading of this Bill.
§ Moved—"That the Bill be now read 2a."
§ The EARL of DERBY
said, that although he certainly thought the noble Earl, who 593 had just addressed their Lordships, had exhibited all his wonted prudence in abstaining from entering upon any discussion of the principles and provisions of this Bill, and in giving to their Lordships a very meagre sketch indeed of the scope and object of its enactments, yet he could not think the noble Earl had exercised the same prudence in showing what he had so often shown upon fernier occasions—namely, a disposition towards self-laudation—he meant the laudation of the noble Earl's Government—upon the unparalleled merits and the triumphant success of their financial policy. He thought that the noble Earl, to say the least of it, had chosen a very singular time for claiming a financial triumph, when he was introducing to their Lordships, as the basis of the financial proposals of the Government, a measure which the noble Earl had hesitated to characterise, but which he (the Earl of Derby) should take the liberty of describing to their Lordships. He confessed he entirely joined with the noble Earl in the high estimate which he had expressed of the consummate ability displayed in the course of the present Session by the right hon. Gentleman the Chancellor of the Exchequer, upon whom almost the whole burden of conducting the business of the Government in the other House of Parliament had fallen, and who certainly had with great skill and dexterity induced that House to assent to his financial proposals. But when the noble Earl claimed credit for the wonderful success of the right hon. Gentleman's financial operations, he must permit him to remind Jinn that the scheme of the right hon. Gentleman consisted of two propositions: one having reference to the conversion of the 3 per cents, which, if not admitted by the noble Earl himself, would, he thought, be admitted by every one else—although, in the first instance, a triumphant success had been claimed for that also—yet it would would now be admitted to be a signal and melancholy failure; and the other portion of the financial scheme of the Government was the Budget, of which this Bill was the corner stone and foundation, and without which it would be impossible to carry it into effect. Indeed the grounds upon which the noble Earl defended the introduction of this measure, so far as he had defended it at all, were the inability of the Government otherwise to carry into effect the remission of taxation upon the springs of industry, and the desire to compen- 594 sate to some extent for the inequalities of the income tax; and, in the next place, to redress the manifest injustice which the noble Earl considered to exist in the scale of taxation upon real as compared with personal property. Now, the Chancellor of the Exchequer, in carrying into effect the remission of taxation, was undoubtedly obliged to rely in a great measure upon the funds which he would derive from this measure. He certainly felt for the difficulty of the position in which the right hon. Gentleman and the Government were placed, when, shortly before the right hon. Gentleman assumed office, be laid it down as an axiom that no Chancellor of the Exchequer was worthy of his place who did not provide a permanent surplus of 600,000l., and when, at the present moment, as the result of the triumphant financial scheme of the Government, the right hon. Gentleman ventured to holdout to the House of Commons a possible surplus of 100,000l. provided Parliament gave him the 2,000,000l. to be derived from this tax. It was by the merits of this Bill—by its justice, its policy, its practicability, and its expediency—that the financial merits of the present Administration were to be judged, and their scheme of financial policy to be appreciated. And if the present Bill were, as he believed it to be, essentially unjust, oppressive, and impracticable—if it led to interminable evasion and constant vexation—if it altered the whole character of the property of this country—if, retrospectively, it imposed obnoxious and heavy burdens upon all former settlements—then, whatever pecuniary advantages might be derived by other classes of the community from remissions of burdens purchased by the adoption of a system so unjust and oppressive, he, for one, did not envy the Government that proposed this measure, with all its injustice and oppression, and then claimed credit for having relieved other classes of the community from grievances by the instrumentality of such a measure. With regard to the diminution of the inequalities of the existing income tax, inasmuch as no alteration whatever had been made, he confessed he was at a loss to understand the meaning of the noble Earl; but he presumed his meaning was, that by imposing additional burdens on real property their Lordships would compensate, to a certain extent, for an undue amount of pressure of income tax upon income arising from precarious sources, as compared with income arising from realised landed and personal 595 property. But the noble Earl went on to make the assertion—and a bold one it was—that the introduction of this measure was imperatively demanded by a sense of justice, looking to the favour which had been shown in the taxation of the country to the landed interest, and to realised property, in comparison with personal property. The noble Earl said that the exemption of real property and settled personal property, from succession duty was a grievance and an evil so crying and oppressive that the only wonder was that it had been tolerated so long, and that in a short period it would have been found intolerable. The noble Earl also said that Mr. Pitt had endeavoured to impose a succession duty, but had failed; and that from that time to the present no Minister had been found who had ventured to introduce to Parliament a proposition dealing with this subject. At length, however, Parliament had found a worthy successor of Mr. Pitt, a phœnix Chancellor of the Exchequer, in whom Mr. Pitt rose from his ashes with redoubled lustre, who had ventured to attempt what Mr. Pitt had failed in effecting, and which every Minister from Mr. Pitt's time to the present had shrunk from attempting. Now, he (the Earl of Derby), left it to the House and to the country to judge whether, there being such manifest advantages to be derived from such a tax, if such a measure had been founded on justice and capable of practical execution, some other Minister besides Mr. Pitt would not have ventured to attempt to avail himself of such a resource, and whether such an attempt as the right hon. Gentleman had made did not rather indicate rashness than any marvellous skill in making such a new proposal to the House. But let their Lordships see how the Bill would operate upon land and upon realised property. He begged noble Lords to bear in mind that be was not talking of the distinction now introduced as between land and other property, but of two distinctions which must be borne in mind, both of which this Bill proposed to deal with—the first, the distinction between real and personal property, real property including not only laud but many other things; and that further distinction which it was, for the first time, sought to abrogate and abolish—the distinction between property devised and property in settlement. The noble Earl said, in pointing out the distinction between real and personal property, that real property was exempted from the operation of the 596 legacy duty, while personal property was subject to it. But were there no charges to which real property was subject in this country, from which personal property was entirely exempted? And if the noble Earl was bent on equalising the burdens upon real and personal property, would he assent to subject personal property to an equivalent, or to anything like an equivalent, to the burdens to which real property was subjected under the existing law, and which, he could assure their Lordships, far more than counterbalanced the advantage, such as it was, of being exempt from legacy duty? Take only the poor-rates and the county rates. The total amount of real property, as shown by the poor-rates, was 67,000,000l. a year, or thereabouts; the charge upon that property for poor-rates and county rates being about 6,000,000l. Amounted to something like 1s. 10d. in the pound per annum. That was the amount which was borne by real property in this country, and from which personal property was altogether exempt. Now, he did not say that there might not be very good reasons for exempting personal property from those taxes, by reason of the difficulties of collection, and, perhaps, the practicability of localising that species of property so as to render it liable to the impost. The total amount of property rated to the income tax was 230,000,000l. a year, from which, if you deducted the 67,000,000l. which paid to the poor-rates, it left a sum of 163,000,000l. of personal property which did not contribute one single shilling to that charge for the poor, which he thought their Lordships would admit to be a charge which ought justly to fall upon all property alike, but which did practically fall upon less than one-third of the whole property of the country, that one-third of the property being thereby subjected to a tax of not less than 1s. 10d. in the pound annually, from which the other two-thirds of the property of the country were exempt. Now, a tax of only one half this amount upon personal property—a tax by way of commutation for poor-rates of only one half the amount of that which fell now upon real property-would produce at 11d. in the pound no less than 7,500,000l.; and so, if personal property paid its due share of taxation—if it paid, not its due share indeed, but only one half of the amount to which real property was subjected in respect to these charges, it would furnish us with a sum of 7,500,000l. a year—a sum amply sufficient, and more than sufficient, to enable us to dispense al- 597 together with the succession duty, to do away with the legacy duty, to do away with the probate duty, and place a very considerable surplus in the national exchequer. Now he was not proposing the imposition of such a tax; but when they came to argue this question as a matter of justice, and as a proper balance of taxation between class and class, then he thought he was entitled to show their Lordships what was the operation of the taxes to which he had alluded, and to show how that single charge upon real property infinitely counterbalanced the exemptions which it was declared to enjoy. Say what you will, it was quite certain that a legacy duty or a succession duty was in point of fact only a property tax in another form. It was a property tax, and a property tax of the most obnoxious and objectionable character, far more objectionable than would be an annual levy to the same amount upon property, which, as he had shown, already stood alone in paying ls. 10d. in the pound for the relief of the poor. It was said that personal property paid under the legacy duty Is in the pound; but if strict justice were to be insisted upon, those who made not the slightest objection to the exclusive payment by real property of 1s. 10d. in the pound annually, might be fairly called upon to show why they should not have to make a similar contribution to the public burdens; and if they were exempted from the payment of 1s. 10d. in the pound borne by real property, why were they to complain of the exemption of property so exclusively burdened from the comparatively light charges, under the law as it at present stood The noble Earl had told their Lordships what he (the Earl of Derby) fully admitted—that the legacy duty was in itself a most obnoxious impost. Be it so; but what was the noble Earl going to do? Was he going to remove the impost which he considered so obnoxious? Not in the least. He was going to leave all the pressure and hardship of the legacy duty as it stood; but the noble Earl thought those upon whom it bore might be reconciled to this obnoxious tax if they could only see the same amount of oppression and vexation thrown upon other property and another class. Now, that was not a very amiable view of human nature. It might be very true that that was the way in which men were sometimes disposed to act towards their neighbours; but he thought he had shown that in this case those neighbours were 598 already burdened by special taxes and special enactments, and were subjected to much greater pressure than the persons who declared them to be peculiarly exempt from national burdens. He repeated that legacy duty was a most objectionable tax; it was an objectionable mode of levying a tax upon property: but it was peculiarly objectionable when applied to landed property. In the case of personalty the legatee was enabled to devote at once flu portion of the gross amount of his legacy to the payment of the tax due to the State; he was subjected to no inconvenience in doing so, and the remainder was clear gain to him. But apply the tax to land which had passed by devise. The land was not capable of being so subdivided, and the man to whom twenty or thirty acre of land came in the shape of a devise was not in the same position as the man who received the price of twenty or thirty acres of land. The successor to landed estate could not cut off an acre or an acre and half and sell it for the purpose of paying the tax; but he was compelled to incur s debt in the first instance, which frequently became one of the most onerous character; and which he might not have the means of paying for some time; and when, there-fore, Government stepped in and called upon him to raise a heavy sum of money upon his succession, it was to such a man great and serious hardship. And as to the principle involved—what had their Lordships been hearing for the last four or five years? What had been continually dinner n to their ears by noble Lords opposite but that, of all taxes, of all abominations, of all impediments to improvement, of all grievances as connected with land, the payment of a fine on copyhold property was the most oppressive, the most grievous: he most subversive of all possibility of improvement—it was a system which could not endure the light for a single moment and Parliament bad, therefore, been asked to pass compulsory enfranchisement Bills for the relief of the copyholder; and what was the Government going to do by the Bill now before their Lordships? They were going to make all the land in the country copyhold. That which they which not tolerate, that which they declared was so grievous a burden, which offered such serious impediments in the way of improvement, and which they decided was an out rage upon the feelings of natural grief a the moment of death, when it existed it the few cases of copyholders—that which 599 they insisted on getting rid of in these private cases—they were now about to adopt with regard to all the land in the country. They were placing every fee-simple estate in the country at the power of the Crown just as if it were copyhold estate; they were reviving a system of taxation of landed property which did exist in ages far remote, but which had been found then to be so intolerable, so inconsistent with all the principles of the English system of land tenure, that since the time of Charles II. down to the present day there had been no attempt to reimpose it.
He had endeavoured to show thus far, not that the Government were relieving personal property from any vexatious impost, but that they were subjecting landed and real property to a similar or even a much greater amount of vexation, and to a process wholly repugnant to the principles for which they had been contending for the last few years with regard to the holding of land, He came now to another conclusion, which was for the first time lost sight of in the present Bill, and which was niece important still—namely, the distinction between devised and settled property. He could not, apart from the peculiar circumstances affecting land, draw any broad distinction between the case of land devised and settled property devised. But what was the case with regard to the law in respect to settlement? The whole of the Bill, as far as related to the law of settlement, was a retrospective enactment of the grossest character, imposing by ex post facto legislation a tax, not upon that which a person had to inherit, but upon that which by law, by deed, by every solemnity which could be attached to it, was at this moment, and had been for perhaps twenty years, the property of the individual whom they were now about for the first time to tax. Observe, the Bill was to touch all the settlements of property, real and personal, throughout the whole country, upon which the fortunes and the position of every family in England depended, for the miserable purpose of raising a sum, as the noble Earl stated, at first of 400,000l. a year, and ultimately of 2,000,000l., for the miserable purpose of getting rid of the soap duty and diminishing the tea duties. These were good enough things in their way he admitted:—but this was the financial triumph of the present Administration! The financial triumph of the present Administration was a measure which upset every family arrange- 600 ment, every deed and every settlement, throughout the length and breadth of the land. As far as the justice of the case was concerned, settled personalty stood precisely upon the same footing as settled realty; and the injustice of the Bill was equally applicable to both—they were, by ex post facto legislation, upsetting all the foundations of property settled throughout this country. He protested against being supposed, by not asking their Lordships to divide against the second reading of this Bill, to assent to the Bill—he protested against being supposed to assent in the slightest degree to the principle of the measure. What was the second clause of the Bill? It enacted that—Every past or future disposition of property, by reason whereof any person has or shall become beneficially entitled to any property, or the income thereof; upon the death of any person dying after the time appointed for the commencement of this Act, either immediately, or after any interval, either certainly or contingently, and either originally or by way of substitutive limitation, and every devolution by law of any beneficial interest in property, or the income thereof; upon the death of any person dying after the time appointed for the commencement of this Act, to any other person, in possession or expectancy, shall be deemed to have conferred or to confer on the person entitled by reason of any such disposition or devolution a succession.That was to say, that every person who, by any deed passed twenty years ago, had become absolutely entitled in reversion to the property which had been made the subject of family settlement, which might have been given as security for money borrowed, or might have been disposed of by law in the open market, with the full certainty that the law gave him an indefeasible right to that property—every such person came under the operation of this law, and the moment he entered into the possession of his own the Government stepped in and deprived him, not of property which he then acquired for the first time, but of that which was his before the death of his predecessor. Well, then, look at the third clause, which enacted that—Where any persons shall, at or after the time appointed for the commencement of this Act, have any property vested in them jointly by any title not conferring on them a succession, any beneficial interest in such property accruing to any of them by survivorship shall be deemed to be a succession.He would put a case, and far from an impossible one, which might arise under this Bill. He would take the case of three elderly maiden ladies, who upon the death of their father had agreed to put together 601 such means as they had, and to reside together for the remainder of their lives. Suppose them each to have a life annuity, and that, combining together, they were enabled by the joint proceeds of those annuities to live in tolerable comfort. Suppose those three ladies also, for the purpose of having some common home in which to pass the remainder of their existence, had purchased a house or cottage which was held in fee-simple among the three ladies, with benefit of survivorship. This was not at all an improbable case. What happened? The first of the sisters died, her annuity dropped, and the two remaining sisters lost, of course, the benefit of one-third of their former income. Their difficulties were therefore considerably increased; but they had the benefit of survivorship, and, at the moment when they had lost the advantage of their sister's income to maintain the joint establishment, in stepped the Government, represented by the taxgatherer, who claimed from them a tax upon the benefit of survivorship, in the right of their house and garden. The second sister died, and the last was left, perhaps, at the age of seventy or eighty, the sole representative of the family, living in the house which her sisters inhabited for many years. Again occurred the benefit of survivorship, and when she had only her own single annuity to depend upon, in came the taxgatherer again, and, inasmuch as this cottage and garden were in fee-simple, this wretched creature, now seventy or eighty years of age, was taxed at the highest amount under the law. If he rightly understood the operation of the Bill, she would be taxed at the rate of 24½ years' purchase of her cottage and garden; and, if that were so, the poor creature would have nothing to do but to part with her house and premises, which were endeared to her by old associations, and in which she had Loped to die, in order to satisfy the claims of the taxgatherer under an Act of Parliament which she never dreamt of, or could dream of, at the moment she purchased the property. He had in this taken a case upon a very small scale. He would now take one upon a different scale. Turn to the 34th clause of this enactment. That clause provided—he hardly thought that those of their Lordships who had not read the Bill would believe that such could be its provisions—it provided that—In estimating the value of a succession, no allowance shall be made in respect of any in-cumbrance thereon created or incurred by the 602 successor, not made in execution of a prior special power of appointment.Now, take the case—he would not mention my names, but their Lordships would all now that there were cases similar to that me was about to mention—of a once princely fortune of 50,000l. a year, the owner in possession being a tenant for life, and being deeply and inextricably embarrassed. Take the case of a son, the successor to that property, who, coming forward to the relief of his father, had sacrificed all his prospect; For life, and consented that the estate; with his reversion, should be mortgaged for 40,000l. or more a year out of the 50,000l. Suppose that that son condemned himself with his eyes open to the reduction of his fortune, so that there was left nm barely sufficient to keep up the estate; and when he had cut down his income by that act of filial duty from 50,000l. to 10,000l. a year, the law stepped in and aid that the incumbrance upon the reversion was contracted with his own consent, and that upon 50,000l., and not upon 7,000l. a year, should he pay the tax the instant he entered upon the succession thus reduced by his own generous act. Was not this a monstrous case? Mind, no notice and been given to the son in such a case On the contrary, believing that he might rest upon the security of the law, and upon he inviolability of property, he would have undo unparalleled sacrifices; the result of which was, that their taxation—their iniquitous taxation—as he must call it, reduced the son to be almost a beggar, in consequence of the generous assistance extended by him to his father! Was there my justice or equity in this, and was it tolerable that such a law should pass—an ex post facto law, having an operation of that kind? But then they were told, "Oh, but he should not have sold his reversion." Now, he thought they had better have told him that before he did it. Well, but suppose that, with the natural reluctance of a man to part with his ancestral possessions, he had not sold the reversion of his property. In that case the individual would on doubt escape the injustice to which he alluded, but they made him an instrument if fraud upon other persons. By the 15th clause, if the reversion of the property were sold, the person in whom the property was rested, upon the death of the life tenant, bund himself placed in the position in which he successor would have been, and they axed him as if he had come into possession in his own right by the death of the 603 predecessor. There was a gross injustice in this. The successor, it was true, escaped, but escaped by fraud; and under this ex post facto legislation the person in whom the property was vested, by alienation or otherwise, found himself liable to a heavy charge which he had not dreamt of, although he had given a full and fair price at the outset for the value of his reversion. Again, suppose a man raised money upon a reversion, or the security of a reversion. The money being spent, the lender would come for his security, and would find that that security had diminished by the operation of this law; so that what had been in the first instance perfectly sufficient to cover the amount he had lent, might be made insufficient, and, consequently, he was deprived of what he had a fair right to expect. Was there any justice or equity in such a course of proceeding? He would not weary the House by multiplying cases to show the retrospective operation of the Bill, but he was convinced it would inflict injustice and hardship on all classes of the community. There was one point in which settled personalty did materially differ from settled realty, and that was in the infinite number of frauds to which, in regard to personalty, they would be subjected. They knew the property and to whom it went in the case of settled realty, and there could be no difficulty in levying the tax, or evasion with respect to it; but he did not see how it would be possible with settled personalty to get at the person who succeeded to it, or to whom it had devolved, or, in point of fact, to get at the property at all. There would be no means of tracing it. A man might have been living for all his life at the apparent rate of 1,000l. a year, and yet when he died his executors might be at a loss to know where the greater part of his income had been derived from. There might be property of which the executors knew nothing, or of which his family knew nothing; he might have hail a life interest in railways, in canals, or in banks, but his will would show nothing of it, and his bankbook would show nothing of it. The consequence would he, that there would be, with regard to settled personalty, constant and perpetual frauds and evasions, which would render the collection of the tax a matter of considerable difficulty. The framers of the Bill had evidently perceived that, and he begged their Lordships' attention to the mode in which they proposed to meet the difficulty. That mode was, by a system so inquisitorial and so objectionable 604 in every respect, that he was satisfied of this—let the noble Earl 'opposite say what he pleased about the imposition of this tax being the means of getting rid of the income tax, and boast as he pleased about the absence of petitions against it—he (the Earl of Derby) was certain that such would be the operation of this Bill, that at the end of seven years the noble Earl who talked of the absence of petitions now, would find that the machinery of the tax was so odious that there would be a very general petition as to the merits of the two taxes, praying that the income tax should be continued, and this intolerable and oppressive tax removed. By the 42nd clause the duty was made a first charge upon the property; and certainly, in looking through the Bill, it appeared as if the Chancellor of the Exchequer must be very hard run for ready money, for the Bill proposed to give bin power to raise money in a mode which had always hitherto been discouraged as much as possible in private life, and which was always accounted one of the most uneconomical and most discreditable modes of raising money—namely, by post obits. The Chancellor of the Exchequer was authorised by this Bill, on the part of the public, to raise money by post obits—to anticipate the money to be paid upon reversions, and to allow the persons so paying in advance an allowance calculated upon the time, during which the payment would otherwise be deferred upon an approved rate of interest. That was the new plan of raising money—anticipating the revenue for five, six, seven, eight, or ten years, according to the most extravagant and expensive mode of calculation. He could not help thinking that this clause indicated no great confidence on the part of the Chancellor of the Exchequer in the duration of the tax; it seemed as if he meant to get all he could, and take the chance of the law being repealed, and of not having to pay back the duty which he might have received in advance if such were the case. He was about to refer to the machinery by which it was proposed to secure the collection of the duty. He would beg to call the attention of such of their Lordships as were now acting as trustees to the persons enumerated in the Bill as being liable for the payment of the duty. Every guardian, committee, tutor, curator, or husband, was made liable for the payment of the duty on any succession, but to the extent only of funds disposed of by them. The noble Earl himself must 605 have felt strongly the gross injustice of this measure, if he thought that a trustee should be thankful for not being charged with the payment of duty on property that never came into his hands—
§ EARL GRANVILLE
The same proceeding that now took place under the legacy duty would take place to the full extent under the succeession duty.
§ The EARL of DERBY
said, he did not think the noble Earl was attending to what he said. There was a broad distinction between the case of a trustee who was concerned in the payment of duty on property passed by will, and property under settlement. In one case there would be no difficulty in ascertaining the liabilities, and in the other case he might not be able to ascertain them. Next, it was proposed that all the persons who were made accountable should give notice to the Commissioners or other officers of their liability. The 45th clause provided that—The persons made accountable for the payment of duty in respect of any succession, or some of them, shall, in the case of personal property, at the time of the first payment, delivery, retainer, satisfaction, or other discharge of the same or any part thereof to or for the successor or any person in his right, and in the case of real property, when any duty in respect thereof shall first become payable, give notice to the Commissioners or to their officers of their liability to such duty, and shall at the same time deliver to the Commissioners or to their officers a full and true account of the property, for the duty whereon they shall respectively be accountable, and of the value thereof, and of the deductions claimed by them, together with the names of the successor and predecessor, and their relation to each other, and all such other particulars as shall be necessary or proper for enabling the Commissioners fully and correctly to ascertain the duties due.That was pretty well. The executors were made the instrument for giving information to the Government taxing officers. They were bound to give notice to the Commissioners, to deliver to the Commissioners a full and true account of the property and the value thereof, and all the particulars necessary to enable the Commissioners to ascertain exactly the duty payable; but, if the Commissioners were dissatisfied with the information so given, they were authorised to cause another account to be taken by persons appointed by themselves, with power to examine into all such papers and documents as might be necessary to make a new assessment; and if the trustee did not appeal against that decision, he was to be saddled not only with the additional amount of duty, but also with the expenses of the inquiry and examination insti- 606 tuted by the Commissioners at their discretion. His only alternative was to appeal, which appeal, in cases where the amount was above 50l., was to lie to the Court of Exchequer, which had power to distribute the expenses as it might think fit. Here was a trustee, having no interest, made personally accountable and liable to furnish all these documents and give all this information; and in the next place he was compelled to accept the estimate of the Commissioners themselves, or to incur the expense of an appeal to the Court of Exchequer. If the person who was liable to the payment of duty should fail to pay it within one month, for every month he was in default he was liable to pay, by way of penalty, a sum of 10l. on the whole amount. He would not go through a variety of clauses by which provisions were made for every possible case; for a case, for example, where payment of the duty was made in the first instance, notwithstanding contingent incumbrances, and where it would be necessary to call on the Commissioners to obtain a remission of a portion of that duty. No doubt such machinery as this—grievous and inquisitorial as it was—was necessary to the collection of the duty; but he contended that it very seriously deteriorated from the expediency and the good policy of the imposition of such a tax, and was a serious diminution from that immense credit which the noble Earl had taken to himself and the Chancellor of the Exchequer for the triumph of their financial operations. But he had not quite done with the vexations and annoyances of this Bill. The noble Earl had told them that the duty was to be levied as upon the value of an annuity, estimated according to the life of the person coming into possession. Perhaps the noble Earl would explain to him at what rate or on what condition a person seised in fee-simple was to be taxed for an annuity—for while he told them on the one hand that a person should be taxed by way of annuity on the probable duration of his own life, he found in a clause of the Bill that there was an annuity to be charged for a period of ninety-five years, or in perpetuity, which he apprehended was a case of fee-simple; and consequently on a person coming into possession of a fee-simple, the duty would be charged at the rate of twenty-four and a half years' purchase of the property—that person inheriting from a remote ancestor. He would take another case. They would naturally suppose that when a son succeeded his 607 father he would have only to pay a duty of 1 per cent in all cases. Not at all. If that property should have descended from a remote ancestor, and his father have been only tenant for life, and the son succeeded to the father in consequence of an original settlement, he was to be charged with the full amount of 10 per cent, though he should succeed his father in property of which he had been long in possession. He knew of several such cases. He would take the case of a man who had the misfortune of being a natural son. He had long ago the property settled upon him; he had a son, or perhaps a daughter, or it might be a case in which the property had been settled on a natural daughter and her heir male. She had taken this property, and the heir male had the right in reversion to this property long before the passing of this Act; but, inasmuch as she had no legal claim, when she died, and her son came into possession of the property, he had all his feelings wounded and embittered, in addition to the pecuniary injury done to him by the tax, by being told that in consequence of the misfortune of his mother's birth, which it was possible he then learnt for the first time, he succeeded to the daughter of nobody, and consequently he was taxed to the amount of 10 per cent, as if he had received his estate from a perfect stranger. He would ask their Lordships next to consider by what process it was proposed to ascertain the value of an estate to be charged in the first instance with the payment of this tax? The 49th clause provided that—Every person who, under the provisions of this Act, may deliver any account or estimate of the property comprised in any succession shall, if required by the Commissioners, produce before them such books and documents in the custody or control of such person, so far as the same relate to such account or estimate, as may be capable of affording any necessary information for the purpose of ascertaining such property and the duty payable thereon.Thus the Commissioners had the power, under this clause, to compel them to produce, not only all their rentals, and leases, and covenants with tenants, and to lay bare all the circumstances of their estate, and all their embarrassments, but the whole amount of their morgtages and their family settlements, and make these Commissioners acquainted with all the circumstances of their family—and even, he believed, of their title deeds. He was told that it would not be absolutely necessary 608 for the Commissioners so to call upon them; but it was clear that if the Commissioners should be of opinion that their documents were necessary, they might call upon them for their title deeds, just as well as for any other document. Certainly, so far as he saw, there was nothing in the clause to prevent them. When by this disclosure of their family affairs and settlements, and all that had been secret, even to the members of their family, had been effected—then, in estimating the value of land used for agricultural purposes, houses, buildings, &c., when the property was not of fluctuating character, an allowance was to be made for all necessary outgoings; but who was to judge of what should be necessary outgoings? As far as this clause went, the Commissioners might hereafter, according to their sovereign will and pleasure, tell every man what he should lay out on his estate, and the amount of expenditure he should be entitled to deduct from the duty payable to him. Then, again, he would beg their attention to the provision with regard to mines. How was it proposed that the yearly value of mines, and property of a fluctuating character, should be ascertained? The 26th clause provided—The yearly value of any manor, opened mine, or other real property of a a fluctuating yearly income, shall either be calculated upon the average profits or income derived therefrom, after deducting all necessary outgoings, during such a number of preceding years as shall be agreed upon for this purpose between the Commissioner and the successor, before the first payment of duty on the succession shall have become due.Now, he defied any man living to tell the principal value of a mine, a mine in course of working. There might be mines worth a million, only they could not raise it in the course of the next 100 years. There might be mines worth one million, that were not drawing one-hundredth part of the annual value, and might not possibly pay the cost of working them for a number of years. When the principal value was ascertained, 3 per cent per annum was to be charged on the amount of such principal value. Though they were realising nothing, still they were to be taxed 3 per cent on the value of their mine. One more case, and he would have done with the injustices and hardships of the Bill. Take the case of timber. With regard to timber, a calculation in the first instance was to be made of the net amount that might be received by the sale of the timber in an average number of years; and if that calculation 609 was accepted, then the duty was to be fixed; otherwise, he would have forthwith to announce the fact to the taxgatherer—to show him the accounts of his woodcutters, and the charges for carting, and so on—to go through all this process for the purpose of telling the taxgatherer that the sum of 4s. had become due to Her Majesty. Certainly the penalty for non-compliance with those regulations was not very formidable, and he had no doubt that many of their Lordships would prefer violating the law to going through all this process. The duty payable for cutting 10l. worth of timber was 4s., and the penalty for failing to give the necassary information was 10 per cent, so that they might violate the law systematically and perseveringly at the rate of about ½d. per month. This tax upon the casual cutting of timber was a gross injustice, as well as a permanent, constant, and wearying system of vexation. If either of the noble Earls acquainted with Cumberland had been present, they would have been able to tell their Lordships of the disastrous effects of the storms of 1849, by which timber was blown down which they would probably have given many thousand pounds to preserve. If such were to happen again, and if they presumed to make the least use of those fallings, instead of leaving them to rot on the ground, they would have to go to the taxgatherer and acquaint him of what they had done—to tell him that they had suffered a damage which they would probably have given much to avoid, and, consequently, that it was their duty to pay very considerable sum to Her Majesty. He confessed it was with some regret that he had heard the noble Earl, in introducing this Bill, make use of the claptrap argument that it was unfair that the rich man of 10,000l. a year should be exempted, while the poor man should pay who only came into the possession of 100l. That, he thought, was not a sound argument nor one which ought to be put forward in that House. He could tell noble Lords that they were much mistaken if they thought that it was upon the rich that the burden of this tax would fall. It was upon that numerous class of men who were just able to keep themselves above water, that the tax, with all its vexations, its annoyances, and its expenses, in the shape perpetual litigation, would chiefly fall. He had been much surprised to hear, the other day, on the authority of Mr. M'Culloch, that the average amount of rentals from 610 landed property in this country was not above 170l. He would leave it, then, to their Lordships to consider—taking into account the many large landed properties of the country—what an enormous number of rentals there must be of from 50l. to 100l., or even below that. All these holders would be subject to the annoyances and vexations of this Bill. Such persons as these must almost necessarily be thrown into the hands of lawyers, and there could be no doubt that the lawyers must reap an abundant harvest from the proposed new system.
He had now stated to their Lordships his objections to the Bill. They were not objections only to details—they were objections to the very principle of the measure. He had endeavoured to show their Lordships, first, that on the ground of justice there was no reason to impose an additional and most obnoxious tax on the owners of real or settled property. He had endeavoured to show that with respect to property, and settled property more especially, there would be an amount of fraud and evasion created by the Bill, which would either deprive them of a greater portion of the pecuniary result of this measure, or would cover the country from one end to the other with an interminable litigation; that with respect to settled property they were for the first time introducing an abrogation of the distinction which had always been drawn between it and devised property, and that, in doing so, they were subjecting, by a retrospective operation, all owners of such property to an amount of grievous oppression and injustice not to be compensated by any amount of pecuniary advantage to the revenue. He had shown that the owner of property must be subjected, not once for all, as in the case of the legacy duty, but from the commencement of his possession to the close of his life, to a constant succession of inquisitorial proceedings—to an exposure of his family settlements, of the secret disposition of his property, and of all his secret embarrassments, and that from time to time he never would be free from the most odious of all positions—that of a public accountant for a debt which never could be discharged. He had shown them that the Bill would not press exclusively, or even principally, on the large landowners, or on the wealthier classes—unjust as he thought that would be; but that it would press more heavily and seriously on the humbler classes, who were at present ignorant of its operation. They had not, indeed, as the noble 611 Earl remarked, loaded the table with petitions against this measure, which they had been led to believed was for the purpose of taxing the great owners of property; but he did not hesitate to say, five years would not pass before their Lordships would have no reason to complain of any want of petitions and appeals to them to provide a remedy for the grievances to which this Bill would give rise. Now this Bill, which was the crowning triumph of the Government of the noble Earl opposite—this measure, which was the basis whereon the fame of his administration in finance must rest—and which was the main principle of that Budget which had placed Mr. Gladstone on a pinnacle of eminence far higher than that on which Mr. Pitt's character, as a Finance Minister, rested—was not a measure to meet any present exigency of the State, or introduced as a temporary measure which might be tolerated for a short period, but was laid down emphatically in the preamble as being the permanent system under which the financial affairs of this country were to be administered. Now, he told the noble Earl, that as a permanent measure under which the finances of the country were to be administered, this country would not bear it—nay, more, that this country ought not to bear it; and he was satisfied that so far from this Bill being permanent, even if the noble Earl succeeded in passing it in its present shape, no very lengthened period would elapse before it would be repealed by the unanimous demand of all classes in this country who were connected with property, except the attorneys and solicitors, who would derive a very rich harvest from the litigation which would arise under it.
And now one word as to the course he would take. The noble Earl had said he could understand the course of objecting to the principle of the Bill, and rejecting it on the second reading; but that he could not see how they could assent to the second reading and to the principle of the measure, and then ask the House to deal with the details in such a way as to defeat the object in view. Now, in the first place, he protested on the part of himself and of the noble friends with whom he had the honour to act, against being held in the slightest degree to assent to the principle of the Bill, and, though they should abstain from taking the sense of the House on the second reading, and content themselves with saying "Not content," they should take that course, not in the absence of a strong sense of the 612 evils and unparalleled injustice of the Bill, but from a desire not unnecessarily to embarrass the financial affairs of Her Majesty's Government. But at the same time he must say, that if their Lordships were to carry their submission so far, and if they were humbly to bow the head to every injustice that the House of Commons pleased to inflict; if they were to tell them they were exceedingly thankful for inflicting this grievous injury because it was no worse; and if they allowed the rights of the people to be infringed, and serious injustice done to the community at large because the privileges of their Lordships' House prohibited their seeking to limit the evil and to mitigate the injustice—better, he said, would it be for their Lordships to abandon their functions altogether, mid not to have any Taxation Bills at all sent up for their consideration. And he trusted that the House of Commons would not push their privileges to the extent he had indicated. He trusted their Lordships would not, notwithstanding the advice which had been given to them, pass that Bill as it stood; and though he would not ask them to reject the Bill at this stage, he certainly would not abstain from submitting, on Monday next, such Amendments as, in his judgment, would tend to mitigate the grosser injustices of the Bill. The first Amendment he should submit would arise on the second clause of the Bill, with respect to which he would propose the omission of the words "past or," so as to make the Bill altogether prospective in its operation. It would save all those settlements and rights of property that had been created under a different state of the law, and without any expectation on the part of the persons who were interested that either House of Parliament would, by any affect their rights. He should probably propose other Amendments also. He should submit these Amendments with no desire that the Bill should not have the fullest and fairest consideration; nay, in the present state of circumstances, with no desire that a Bill founded on the principle of the Bill before them should not pass for the present; but amongst his Amendments there was one, by which he should ask for the judgment of their Lordships, whether they were prepared to adopt this measure, not only as a means of meeting the present temper of the people of England, but as a permanent system on which the finances of this country shall be established.
The DUKE of ARGYLL
said, that any 613 noble Lord who should rise to follow the noble Earl (the Earl of Derby) would at all times require the indulgence of the House, but that he himself always felt that he stood especially in need of it. He did not, however, despair, humble as were his powers, of persuading the House that the noble Earl had materially misrepresented the Bill now before their Lordships, and that it was not characterised by the mischief and injustice which he had attributed to it. The first part of the noble Earl's speech consisted of a passage of irony directed against his noble Friend at the head of the Government, because he had ventured to pass a high, and, as he (the Duke of Argyll) considered, a just eulogium on the right hon. Gentleman the Chancellor of the Exchequer; but he (the Duke of Argyll) did not think that the irony of the noble Earl was at all deserved. They were accustomed to refer to Hansard for the purpose sometimes of showing that opinions once held by certain persons had been abandoned, and for other purposes of the day; but he believed the speech of the right hon. Gentleman the Chancellor of the Exchequer, in introducing his financial scheme during this Session of Parliament, was one of those speeches that would be referred to at future times for the guidance of that and the other House of Parliament in the settlement of great principles of finance, and the public policy of this country. The first point in detail to which the noble referred was with regard to the Budget of the Government, and he expressed his surprise that the surplus was so extremely small; but he (the Duke of Argyll) could only say that Her Majesty's Government owed no thanks to the friends of the noble Earl opposite that the surplus was not smaller—for during the Session that section of the friends of the noble Earl with whom he was more immediately connected voted against every proposal for a new tax, and in favour of every proposal for removing an old one. The next point to which the noble Earl referred, was to the incidence of local taxation upon real property as compared with personal property, and he combated the argument of his noble Friend at the head of the Government, that it was unjust that real property should be exempt from the legacy duty. That was an old subject, and had been frequently debated in their Lordships House. He did not know that the landed interest would be materially benefited if it were possible to extend to personal pro- 614 perty the incidents of local taxation. Of course, the personal property of farmers and their stock in trade would be subject to local burdens; and he did not think it vas possible that the noble Earl himself would propose as a means of relief to the landed interest, that personal property should be liable to the charges which now ordinarily fell upon land. If the noble Earl did propose it, and if such a system were adopted, he believed those incidents would tell most seriously against the landed interest, and the occupants of land. The noble Earl went on to say that the measure of the Government placed in effect all the real property in the country in the position of copyholds subject to fines, with the Chancellor of the Exchequer as receiver. It was a plausible analogy, but here was a great fallacy in it, for the principal evil of fines was their arbitrary and uncertain rate; whereas in the ease of the succession duty the rate of tax would be Fixed, and payable only at certain and known times. The next point to which the noble Earl adverted was to what he considered the enormity of extending the principle of the legacy duty to settled as well as to devised property. There had been much discussion on the point; he (the Duke of Argyll) confessed that the distinction which noble Lords opposite seemed to draw between persons in possession of property under wills, and persons in possession of property under settlements, seemed to him, altogether fanciful and arbitrary. He could not see any difference in abstract principle, except, as had been said by his noble Friend on the woolsack, that one was possessed of his property by a will of a short date, and the other by a will of a long date. And when the noble Earl said he thought the principle of a legacy duty was a bad one, he (the Duke of Argyll) must observe that he did not agree with him. He did not think they could often recur to abstract principle in defence of any tax; but if there was one occasion on which he thought they ought fairly to declare that it was the duty of individuals to contribute to the necessities of the State, he thought that all persons were especially called on to contribute when they were receiving benefits and advantages solely by the force and authority of the public law; and if there ever was a time in a man's life when this was the case, it was when, by virtue of the will of his predecessor, he became the possessor of property. So much for the general principle of the tax, 615 And so far as the distinction between property taken by will and that taken by deed went, he thought the obligation to contribute to the necessities of the State was greater in the latter than in the former case. A settlement often carried a property to a fixed and final destination against the likings and dislikings of intermediate possessors, and he thought that a person who came into its possession under such a law, which could only be maintained in a highly artificial and settled state of society, was certainly liable above all others, in abstract principle, to be called upon to contribute to the necessities of the State. He would not follow the noble Earl into all the remarks he had made on the clauses of the Bill, as they were merely on matters of detail which would be discussed hereafter; but he would refer to one point on which the noble Earl had dwelt with great emphasis—the injustice and hardship which, he said, this Bill would impose on persons coming into estates for the future, and who had burdened their reversionary interests. It was not possible to deny that under this, as under any other law, cases of great individual hardship might occur; but could they alter the provisions of this Bill without giving a bonus to extravagance? How would they distinguish between persons who had burdened their reversionary interest from commendable motives, and those who had done so in order to spend their inheritance in extravagance, and to anticipate the period of their possession? The noble Earl then referred to the hardship of calling upon persons who had purchased a reversionary interest to pay this tax, when they had laid out their money not knowing that they would have to pay this charge. That remark was equally applicable to the income tax, and, indeed, to all new taxes. The noble Earl had himself been a Member of a Government which had imposed the payment of the income tax upon persons who had laid out a sum of money upon the purchase of terminable annuities, at a time when they were not liable to that tax. There was not the slightest difference between the two cases; and, in fact, the objection was one which must to some extent apply to the imposition of every new tax. The next point to which the noble Earl objected, was the alleged monstrous power given to Commissioners to call for the production of documents to prove the mode in which a person coming into possession of property, had derived it. This objection 616 really seemed to him the greatest bugbear which had been raised for the purpose of opposing this measure. Why, their Lordships had just passed a Bill for the registration of all deeds whatever; and in Scotland all the title deeds and entails of landed property were accessible to every one who chose to pay a shilling for inspecting them at the Registration-office; and when a return of probate duty was required, any of the documents which noble Lords opposite were afraid should see the light, might be called for by the Commissioners of Inland Revenue. The noble Earl then asked whether persons succeeding to property in fee-simple were to be charged upon their life interest? He (the Duke of Argyll) believed they were. In reply to another question, he might state, that a person coining into possession of settled property would pay duty as if he derived it immediately from the settlor. Cases might be put, in which the tax would operate very unjustly; but he (the Duke of Argyll) believed that in most instances the provision would be a great advantage to the owners of landed estates. Take the case of several brothers successively taking an estate. They would, under this provision, be charged only 1 per cent, as if they took immediately from their father, the settler, instead of 3 per cent as if they took from each other. The noble Earl then objected to the clause which provided for an "allowance being made for all necessary outlays;" but he had not considered that these words were introduced as being the most favourable that could be devised to the owners of real property; they might be somewhat vague, but it was found quite impossible to define what were the necessary outlays on land. With regard to timber the noble Earl seemed to think it would be a great hardship if the duty was made payable on timber blown down in a storm; but he (the Duke of Argyll) did not see that any alteration could with justice be made in the clauses relating to the taxation of this article; he thought it was impossible to distinguish the case of timber from that of any other produce of land, as far as the principle of taxation was concerned. Almost the last point to which the noble Earl had adverted, was what he must call the claptrap argument about the injustice of exempting the rich man from the legacy tax, and imposing it on the owner of small property. Said the noble Earl, "the operation of this Bill will not tell against great estates, while it will press most severely upon small landed pro- 617 parties." Now, unfortunately for the force of that argument, a great part of the small landed properties of the country, not under settlement, were brought under the existing legacy duty. He would refer their Lordships on this point to the evidence of Mr. Baxter, who was examined before the Committee of their Lordships' House, which inquired into the burdens upon real property. That gentleman was asked how the legacy duty operated on property in the county of York. Much of the property in that county was copyhold and customary freehold, which was not intended to be subject to the legacy duty; but by the construction of the Act, Mr. Baxter stated that the parties found themselves bound to pay the duty in every case where the land was devised to be sold, for the purpose of the produce being divided among the children, or others, of the testator. A very large proportion of the smaller properties in that county were so devised, and were consequently converted into personalty, and rendered liable to the tax. It was perfectly apparent, therefore, that small landed properties were liable to the existing; legacy duties, while large lauded properties were exempt. Was it fair or reasonable that this difference should exist—that, while small proprietors were subject to the impost, great landed proprietors should be entirely exempt from paying that duty on succeeding to their estates? The noble Earl referred to this measure for the extension of the income tax as being the keystone of the Budget of the Government, and said that it was, in fact, their whole Budget, the rest being but of slight importance—
§ The EARL of DERBY
said, that what he had stated was, that the whole Budget depended on this tax. Had it not been for the funds to be derived from this tax, the Government would not have been able to make the remissions they proposed.
The DUKE of ARGYLL
proceeded: The noble Earl had also instituted a comparison between the Budget of the present Government, and that brought forward by the Government of the noble Earl. Now he (the Duke of Argyll) was quite willing to compare the present Budget with that of the late Government, and he did not think that the former would suffer in the comparison. When a new tax was proposed, they ought to consider it in reference to the necessity out of which it arose. Within four months two great financial statements had been presented to Parliament, both being similar in this respect, that each proposed large 618 remissions of existing taxes, coupled with the imposition of new taxes. Both also were alike in proposing the remission of the tea duties, and the extension of the area of taxation to the income tax. The remissions peculiar to the Budget of the late Government were almost confined to those of the duties on malt and hops, amounting to 2,650,000l. of revenue. Now, he thought, when the country was called on to pay a new tax of any kind, it was entitled to ask what were the necessities that rendered its imposition necessary. Now, in order to remit the duties on malt and hops, it was proposed to impose a house tax; and yet he believed that if these taxes, so to be remitted, were considered with reference to the consumer, there were no taxes upon consumption, the removal of which were less called for. He had no doubt, indeed, that the proposition of the late Government to remit these taxes, was made not so much in the interest of the consumer as the producer; but he believed that the benefit derived by the landed interest from the removal of these taxes would have been very slight, if, indeed, they had derived any benefit whatever, coupled as this remission was with the admission of the principle of the graduation of the income tax. Now, not only was the succession duty on real property different from the house tax proposed by the late Government, in not being a new tax, but only a continuation of the existing legacy duty; but it was also different, inasmuch as it was proposed, not so much for the purpose of remitting indirect taxation, which must render the continuance of the income tax absolutely necessary, as for the purpose of enabling Parliament to make provision for the termination of that very income tax. The noble Earl seemed to think that much reliance could not be placed upon the extinction of the income tax in 1860. He saw a smile on the lips of the noble Earl. Nevertheless, he (the Duke of Argyll) would repeat that the object of this succession tax was to enable Parliament to dispense with the income and property tax altogether in the year 1860. He did not think that statement afforded any grounds for the noble Earl's sarcasms; at any rate his Government had not made any proposition which would, even under any circumstances, have enabled Parliament to effect this object if it pleased. By this extension of the legacy duty he (the Duke of Argyll) thought it very probable that in 1860 the 619 income tax might be abolished. Of course they could not know what would take place at that period. The present Parliament could not bind any future Parliament to abandon the tax; but at any rate the pre sent Government did what the late Government did not—they did all that a Government could do in providing a resource which would enable Parliament to terminate this tax in 1860, unless subsequent measure interfered with that state of things. I was the necessity of providing for the ultimate extinction of the income tax which had rendered it necessary for the Government to propose some new tax. The question, then, was what that tax should be; and, looking to all the resources on which they could rely, he would ask on what other source of taxation could the Government have re he d than that which was embraced in the Bill before the House? They could not by possibility propose an increase in the Customs duties. They found an existing tax which affected all personal property no under settlement. They found, on research that attempts had been made, under almost every Government for years past, to extend that tax to real and to settled personal property. Motions had been annually brought forward for that purpose; and when they looked at the arguments by which that proposal had always been resisted by each succeeding Chancellor of the Exchequer—all of them endeavouring to show that under the existing law legacy duties were realised to a very great extent virtually from real property—it was felt that the argument was too weak to be maintained, and that there really existed no sound reason why one description of property should be subjected to the duty, and another description be exempt from it. And then, when they regarded the declaration of the Chancellor of the Exchequer to the noble Earl's own Government, that the legacy duties constituted a system of injustice that could no possibly remain unredressed, and saw that it was impossible to do away with the existing duty, and to provide a popular substitute—under these circumstances, seeing that it was absolutely necessary some new impost should be devised to enable Parliament to deal with the property tax it seemed to the Government that there was no alternative so consistent, not merely with the necessity of our position, but with abstract right and justice, as that of extending the legacy duty to all property. These were the circumstances which justified the Government in proposing this tax; circum- 620 stances and grounds so satisfactory to the country that there had not been a single petition (except the one presented to-night from some few solicitors) presented against the tax in either House of Parliament. He would, in conclusion, remark that the Chancellor of the Exchequer, by proposing this tax, had not only done so, as a provision by means of which Parliament might at a future period terminate the income tax, but that the latter tax should, during its continuance on a descending scale, continue to be connected with the great purpose of the remission of indirect taxes on great articles of consumption, for which it had been originally imposed, and with reference to which its imposition had been attended with such signal success. He was not me of those who entertained the objection, upon an abstract principle, to an income tax being used except as a war tax. He believed that it might be resorted to most advantageously under other circumstances, and at other times, than those connected with war; and he thought it never could have been associated more happily than it had been with the gigantic scheme which was commenced by the late Sir Robert Peel in 1842, and with which scheme the tax had been connected down to the present moment. He would remind the House; that the amount of Customs and Excise; taxes remitted since that scheme had been in operation, was between 11,000,000l. and 12,000,000l.; and yet, if they looked at those two great branches of revenue, they would see that they produced nearly the smile amount as they yielded when Sir Robert Peel introduced his new system of finance in 1842. All this had been accomplished by means of the income tax; and now, such was their position, that if they pleased they might reserve that tax "or the future service of the country. The experience of the past thus gave us the right to entertain a confident hope that the income tax would finally cease and determine in 1860; and in order to attain this most desirable consummation, which he did not think the noble Earl opposite was justified in considering as utterly impossible, he hoped the House would not refuse their assent to this Bill.
§ The EARL of MALMESBURY
My Lords, I am quite sure you will excuse me if I do not now enter upon a comparison of the Budget of my right hon. Friend the Member for Buckinghamshire and that of the present Chancellor of the Exchequer. Comparisons, they say, are at 621 all times odious; and I am sure I shall the more deserve the indulgence of your Lordships if I adhere strictly to the question before the House. I rise, with some reluctance, to speak on this subject, as upon it I detained your Lordships for some time on a former occasion. My Lords, I cannot but regret that your Lordships did not give me a Committee to investigate this question. I do not regret that I asked for it, for since the period when I addressed your Lordships the House of Commons has so completely altered the Bill which I then held in my hand, that the first twelve clauses are wholly and entirely changed. It appears to me, my Lords, that we should not have lost anything if we had passed the last six weeks or two months in endeavouring to ascertain the incidence of such a tax, and in determining where the injustice, if any, lay. Among the many boasts of this age—and it is an age of boasting—whether in the public press, or in the speeches at public meetings—there is the boast that this country is increasing in power and intelligence. But I must say that of all these boasts none is so loud and so unreasoning as the boast continually made that we have arrived at perfection in the mode of conducting our financial arrangements. It was strange, indeed, that such perfection should be said to have been attained in the middle of the 19th century, if this Bill is to be regarded as the consummation of the system; for the measure now before your Lordships is identical in its principle, and almost identical in its working, with a law which was brought into this country at the time of the Norman Conquest, and which continued in operation from the time of the First William, till the year 1664, when the Revolution swept away this tax, as it did many other oppressive laws of the time. In the counties of England there were persons called "escheators," whom the King employed, at the death of certain tenants called tenants in capite, to ascertain the value of their lands, from which to extract a fine which he believed was equal to one year's value of the land. This principle, which is precisely the same as that embodied in the present Bill, was abolished in 1664 by the growing intelligence and desire of liberty then prevailing in this country; and now, 200 years afterwards, in the middle of the 19th century, it is left for the Government of the noble Earl (the Earl of Aberdeen) to endeavour to renew as a general law what was even at that time only in 622 partial existence. If your Lordships will bear with me for a few moments, I think I shall be able to prove to your Lordships that this tax is in its nature the most absurd, and, if I may be allowed the term without offence, cowardly and most unjust ever proposed—nothing but the sternest necessity can justify it. Since 1796, when there might have been an excuse for it in the existence or imminency of war, this tax on legacies has been continued by various Governments, not only during the long war, but also during the long peace that succeeded the war, rather from the reluctance to change anything against which there was no cry, than from its own merits. But I beg you, my Lords, to consider well the policy and principle of such a tax, and its obvious tendency. Of its principle there can be, I think, but one opinion. I am speaking not so much against this particular measure as against any tax on successions of any sort or kind; and certainly my first feeling was one of astonishment that a tax which was founded on so evil a principle should have been adopted and applied to the whole community by a statesman bearing the character of the Chancellor of the Exchequer, who, whatever we may say as to his want of financial experience (which he himself would scarcely assert was very great), has always assumed a high standard of moral principle, which, indeed, he is continually exhibiting both by profession and practice; and who, if his works are to be accepted as illustrations of his mind; he has made it one of his objects to enhance and to elevate the moral standard of public opinion in this country on all subjects which are canvassed by public opinion. Yet the right hon. Gentleman has founded his financial policy upon speculation on some of the worst and vilest feelings of human nature. He has speculated upon the selfishness of humanity, by proposing to press, not upon the present possessors of property, but on those who may hereafter possess it, and who may, perhaps, not now be in existence. That was the principle on which he brought forward his scheme for conversion of stock. He attempted to frighten those who held money in the funds, by holding up to them the prospect of conversion of the 3 per cents as almost certain; whereas the highest financial authorities would have told the right hon. Gentleman that such a thing was all but an impossibility; but his offers were all intended to work on that egotistic feeling in our na- 623 ture which prompts us to sacrifice others to save ourselves. So as to the succession tax. It is a tax not likely to press upon those at present possessed of property, or on men like your Lordships and the Members of the other House of Parliament, for they, for the most part, have probably already acquired all the property they are likely to inherit; but you are called upon to vote a tax which others will have to pay, and which will press upon the future possessors of your property. The tendency of the tax is therefore most immoral, founded as it is upon the idea of saddling posterity with those demands which we ought to be prepared to meet ourselves My Lords, the tax may be characterised as cowardly, because those who are now determined upon extending it, with those who originally imposed it in 1797, are perfectly aware that it is only actually imposed upon one man at a time; it is not, like most taxes, levied on the whole community at once, when all feel its pressure at the same time, but it seizes on each man separately one at a time, and after fleecing him seize another, to deal with him in the same manner; so that you never have the whole or any great portion of the community exposed to its pressure and disposed to resist it; nor can you ever bring their combined force to bear on the Minister of the day. Let us look, my Lords, at some of the absurd and unreasonable consequents out of a tax on succession. My own ideas of a tax is, that it ought to be so imposed as to bring the largest possible amount into the Exchequer—that it should be imposed as equally as possible—and that from the very first moment of its operation it should afford indications of the prosperity of the country by a gradual but continual increase in its returns. But a succession tax is nothing of the kind; it will operate most unequally, and I am afraid that its first effect will be to depreciate the value of landed property very much indeed; that it will render a sale very difficult, and will there by defeat its object of bringing large returns into the Exchequer. It might be said that this was only a matter of opinion, and therefore I will say no more on the point. Indeed, the Chancellor of the Exchequer seems only to care about getting money out of the country, and cares no how, only the more he gets the better he will be pleased. It might indeed be said of the present Chancellor of the Exchequer, that he speculates upon mortality, and compels every man worth 20l. to ex- 624 hibit the spirit of a patriot and die for his country; at any rate he takes care that the country shall benefit by his death. Thus, the right hon. Gentleman will have a lively interest in the increase of mortality, especially among the upper classes of the community, and a sickly season will prove a harvest for the Exchequer. On the same principle it might be said that their Lordships, and especially the noble Earl (the Earl of Shaftesbury) were acting most unpatriotically in labouring, by boards of health and sanitary measures, to length en human life, and diminish the rate of mortality, the result of which, of course, must be to deprive the Exchequer of considerable returns, and diminish the amount of its revenues. My Lords, under this system if you are really friends to your country, you ought to die once in every four year—you ought to obstruct all sanitary measures, and if you were "heart and soul in the matter," you would struggle against the prolongation of human life by any measures of legislation. My Lords, a Chancellor of the Exchequer has never probably, been very popular in this country; still upon the whole, he has hitherto been tolerably well received in good society. But now what will be his position? Why, my, Lords, he will be a kind of vulture soaring, over society—waiting for the rich harvest which death will pour into his treasury. He trill be heir to everybody's property—he will be a general heir having an interest in every man's decease. It will be worse than it was in days of feudal tyranny—every one will hold under the Crown an the Chancellor of the Exchequer, and ever, heir will pay a fine. My Lords, the social position of the right hon. Gentleman will be most embarrassing and most disagreeable to himself and others. I have in these remarks, my Lords, spoken with some lightness; but the subject is serious, and I beg of your Lordships to consider what is the principle on which the tax is founded. It is to be levied on a calculation of the value of the property to the party who succeeds to it, and this is to be estimated according to his age, and on this he will have to pay a poundage according to the degree of his consanguinity to his predecessor. Now that might be oppressive but to a certain extent it would be consistent, if human life always ceased at the same period, and existed under the same circumstances—if each man lived exactly a century, if every man man married at twenty-five, and had a child nine months 625 after marriage, and the whole affair went on like clock-work. But that is not so, and your calculation is not practical but theoretical. The Government say, that because one man comes into his property at the age of twenty-one years, and his property is worth twenty years' purchase, all others of the same age shall pay at the same rate. It may be so, or it may not as to him; but another man at the same age might be in a galloping consumption, with but one lung left; yet, on this calculation, he must enjoy the property twenty years before he will have acquired the equivalent to the amount of tax which he will be called upon to pay on succeeding to it, and when in reality his life is not worth three years' purchase. This is not the mode followed by insurance offices. The Government tables profess to have been drawn up on the data of actuaries; but insurance offices are not satisfied with such calculations. There every man is thoroughly examined by the medical attendant of the office, the stethoscope is applied to his chest for the purpose of sounding his lungs, inquiries are made as to his habits of life, and conclusions are drawn from all these matters as to the probable duration of his age. If there be an infirmity in his health, the rate of insurance is increased, and if it be serious, he is probably rejected altogether. Nothing of this kind is to be done under this Bill; for the duty is to be charged alike on all lives, no matter what the state of health of the person succeeding to the property, and differing in amount only in proportion to the degree of consanguinity. How, then, can it be just to charge all who succeed to property at a certain age at the same rate? I am arguing against the abstract justice of the whole system. How can it be just to measure the value of human lives in such a manner that the life of the elder son of a Peer may be taken as of no greater value than that of a military office who come into possession of the property in the midst of a war, or that of a manufacturer engaged in some process notoriously unfavourable to life? I cannot conceive a more flagrant injustice than to make a mere theoretical and arithmetical calculation to determine the value of life of all persons without consideration of age or health. My Lords, it has been said that this succession tax is a species of compensation for the promised cessation of the income tax, which it is predicted will expire in seven years. I only hope the 626 prophecy will become true; but as to which tax is the most unjust, I think there can be little question. For my own part, I had rather pay the income tax for the rest of my life than support a succession tax to be levied upon my posterity for ever. For what is the difference? The income tax is levied on the property a man possesses, and is in the bonâ fide enjoyment—enjoyed by those who are liberal in spending, and by those who are avaricious in hoarding; whereas the succession duty is a tax on what has scarcely been acquired, and which, perhaps, may never be enjoyed. The tax is calculated upon the value of the property for twenty years to come; but he may not have it for two years. My Lords, to talk of such a tax as compensation for an income tax levied year by year on what a man actually has received, is an insult to common sense, and in my opinion downright nonsense. Another argument, my Lords, that has been adduced in favour of the succession duty is, that personal property has long been subjected to the legacy duty, and that it is most unfair that real property should not be taxed in the same manner. But is it your Lordships' opinion that the imposition of a second injustice will remove or palliate the first? Would it not be more statesmanlike to do away with what you allow to be an evil, rather than to extend it and render it universal? Do you say you could not do away with it? I believe that you could. It is of no avail to allege that the late Government did not do so. We were prevented by events which had taken place, and because when we came into office we were bound to diminish taxation in a certain direction—it was a point of honour with us to do so. We attempted to do so. We failed; but it was not our fault. We were obliged—we believed ourselves obliged—to propose a reduction of the malt duty, and to relieve a portion of the community whom we believed to have been the principal sufferers from recent legislation. We could not therefore, afford to repeal the legacy duty. My right hon Friend the Member for Bucks (Mr. Disraeli) alluded to the subject; and as he has been much misrepresented upon it, I may say that when he spoke of it as an unjust tax, he did no mean merely that it was relatively unjust, because personalty paid it, and realty chit not; but he meant that it was in its own nature unjust, and that on account of its inherent injustice he had considered whether it could not be abolished. I think I 627 am justified in making these observations on this subject, because it has been alluded to by noble Lords opposite in a manner which renders this explanation necessary. My Lords, I repeat what I have already said. I am opposing the principle of any succession tax. But there is a feature in the proposed plan open to especial observation—I mean the graduated scale of duty on different degrees of consanguinity, which is not the least objectionable and absurd part of the system. I do not suppose that the right hon. Gentleman would acknowledge that he had endeavoured to secure that an estate should be taxed as heavily and as frequently as posssible; but he considered, no doubt, how he could most easily pass the measure and diminish the number of its opponents. I certainly cannot see why brothers should be charged more than eldest sons—why, while a brother is to be charged at the rate of three per cent, a son is to be charged one per cent. Why should that be? It is likely that a brother should succeed brother more quickly than a son would succeed to a father. There is rarely any very great difference in the ages of brothers; and one is likely to succeed another not many years after he has come into possession, yet the brother is to be charged at a higher rate than the son, who, probably, will succeed the father many years after the father has come to the property. It is difficult, indeed, to conceive why one heir is to be taxed more heavily than another, all being equally heirs in the eye of the law, and equally entitled to the property. But if any difference is to be made, surely those who succeed most rapidly should be taxed at the lowest rate. As to natural children, again, the measure is very harsh. I admit the bar sinister which heralds place within escutcheons; but in this age of liberality it is unjust by legislation to add a mark by which mankind may point them out as the victims of crimes of others, not their own; and this system is calculated to increase and revive the unfortunate circumstances of their birth, which ought rather to be concealed. It cannot but be observed, my Lords, that those who will pay at the rate of ten per cent will be few in number, although it is estimated that the aggregate amount they will pay will be greater than that contributed by those who are taxed at a lower rate—it is evident that it is because they are few in number they are to be heavily taxed—it is because they are weak they 628 are to be wronged—and the Chancellor of the Exchequer, who durst not lay four per cent on a large body, upon them can safely perpetrate his injustice. My Lords, my noble Friend the noble Earl (the Earl of Derby) has gone so fully into the different clauses of the Bill, that I shall not enter into them. I would, however, offer an observation on something which fell from the noble Earl opposite (Earl Granville), the Lord President of the Council, on a former occasion, something more in the nature of an admonition than an argument—when he warned your Lordships that opposition to this measure would render you odious or unpopular, because you would thereby endeavour to continue exempted from the payment of the succession duty. My Lords, I must remind your Lordships that there is a very large amount of property in the country entirely exempted from the tax—the property of the Church. My Lords, I rejoice it is so, for I am not of those who, because one half of the community are ill used, would ill use the other half. But what, my Lords, becomes of the argument of the noble Earl, who is afraid your Lordships might become unpopular if you were to oppose the tax? What is the opinion of the noble Earl as to the exemption of the Church? Does he think the Church will become unpopular? I should be sorry to suppose the noble Earl less anxious as to the popularity of the Church than of the aristocracy. If the Church will not become unpopular by reason of not paying the tax, why should your Lordships, by reason of opposing it? My Lords, my noble Friend near me (the Earl of Derby), has given notice of his intention of moving in Committee several Amendments on the clauses of the Bill:—if the noble Earl shall not propose an Amendment in the Bill, with regard to the disclosures of title deeds, I shall feel obliged to do so. Those of your Lordships who have estates in the country, and who live there, are doubtless well aware of the power which the country attorneys hold over the small landed proprietors; and I will ask them if, in their opinion, it will be safe for the owners of small landed property to trust the deeds of that property in the custody of these attorneys, who will rush, immediately upon a person's coming into a succession, to explain the meaning of this not very intelligible Act, and conduct the business in what they will no doubt call the best manner possible? I will not enter into the subject of the danger of litigation being brought 629 on by the title deeds of property being exposed to the observation of strangers or of designing persons; but it is a well-known fact that estates have been lost, or costly litigation of many years' duration have been in numerous instances the result of title deeds to property being committed to the charge of persons unworthy of the trust, who have used their knowledge for their own ends, or lent themselves to the ends of others. For these reasons, my Lords, I feel so strongly the justice of protecting muniments of title from the disclosure enforced under this Act, that, I shall certainly ask your Lordships' opinion upon it. I shall also, my Lords, feel it my duty to propose Amendments on the question of timber being included in the operation of this tax. I hope that the Government will before going into Committee on this measure, consider how the case really stands as regards timber. Persons succeeding to estates on which timber grew, unless they like to enter into an arrangement (which I must say I consider would be a species of gambling), will be obliged to pay for the timber as they cut it an ad valorem duty, settled according to the degree of consanguinity to their predecessors. A man who inherits from a stranger will pay, when he cuts his timber, 10 per cent on its value; but your Lordships will remember that he at the same time is subject to the income tax; so that, in point of fact, he will pay 13 per cent on the value of all the timber he cuts. Now, I will ask your Lordships to consider the matter from a different point of view. The duty upon foreign timber is less than, by this measure, it will be upon home timber. Upon timber from the Baltic the highest duty is not above 9 per cent; Canada timber pays a nominal duty of 1 per cent, while staves and such things are admitted duty free. Thus then by the present measure, timber small and large—down to under-wood, will in some cases pay 13 per cent, often far more—in some cases ten times as much as the foreign or colonial timber. The result, in short, will be, that Her Majesty's Government, the strenuous advocates of free trade, will place a duty on a home article, in some cases, five times as heavy as upon the same article produced abroad. I will but repeat my request to the Government to consider this question before Monday, with a view of seeing if some alteration will not be made in the clause referring to timber. I will not trespass any longer on your Lordships' time, 630 for I hardly dare to trust myself to say what I think of the character and nature of the measure. It is a Bill which I can only characterise as a Bill of pains and penalties; it is one which will keep a ledger between the holder of landed property and the Government continually open, and it will never close but that death will open it again.
§ EARL GRANVILLE
said, he would, in the few observations which he felt called upon to offer to their Lordships, adhere to the merits of the Bill a little more strictly, perhaps, than the noble Earl who had just sat down. He had certainly expected that the noble Earl would have addressed himself very particularly to the scheme of taxation proposed by the present Government; but the noble Earl had not only compared the Budget of his right hon. Friend the Chancellor of the Exchequer with the Budget of the late Government, but he had gone a great deal further, for he had compared it with that of William the Conqueror. He confessed he had thought that the noble Earl who followed his noble Friend who moved the second reading of the measure, had employed epithets sufficiently strong with regard to the Bill, and, indeed, he had considered that epithets were exhausted; but he must do the noble Earl who had just sat down the justice of saying, that he had employed epithets as strong, and in quite a new style, when he spoke of the Bill as being "cowardly and absurd, as well as unjust." The noble Earl had made some remarks with regard to the unjust operation of this Act in the case of persons in a weak state of health, if the value of their succession should be computed according to the invariable rules laid down in this Bill, whereas, he said, in insurance offices very different rules were acted upon; but it was quite clear that in legislation you could only act upon general rules, and could not enter into individual cases—to make exceptions for the case of bad lives was clearly impossible: on the other hand, any one acquainted practically with the principles of life assurance would see that it would be impossible to make exceptions with regard to the question of consanguinity. It was, he was quite willing to admit, not possible to arrive at perfection; but the measure had been prepared with due regard to the probabilities of succession, because instead of paying a percentage on the fee-simple, it was to be paid only on the value of the life interest; and as regarded the principle of consanguinity, 631 the principle was to proportion the amount of the tax to be paid to the expectancy of the persons succeeding. In the case of natural children, to whom reference had been made, the question was certainly a very difficult one, but not, he considered, relevant in the slightest degree to the proposition before their Lordships. If any change in the condition of such children as regarded inheritance were to be made, it would involve a question of great importance, as affecting public morality; but it ought to be brought on in a regular way, and not by a sidewind, as its introduction into the present subject would be. The question before their Lordships was, whether they would allow it to go forth to the people of this country that they had rejected a measure which had been received with satisfaction by the country—["Oh!"]—with satisfaction he would repeat—for the fact of there having been, as stated by his noble Friend who moved the second reading, no petition against the measure—with the exception of the five solicitors whose petition the noble Earl had presented that evening, and who were probably the "five respectable solicitors" whom the noble Earl said he had consulted when he made his first speech on this subject—was a pretty plain proof that the country did net feel in the slightest degree the injustice of this tax. This measure was also important, because upon its adoption depended, in an indirect manner, the means of affording those remissions to the people at large which were proposed to be given by the Budget. With regard to the exemption of the property of the Church, the people of this country were perfectly able to discern a distinction between members, of the aristocracy succeeding to landed estates for their own advantage, and the case Church, the revenues of which must be regarded as a salary for duties performed. The noble Earl who had just sat down had given notice of his intention, in the event of the noble Earl who sat near him (the Earl of Derby) not doing so, of moving an Amendment with regard to the production of documents and title deeds before the Commissioners. Now, he could only assure the noble and learned Friend on the woolsack, that, in practice, the production of papers could be required whenever a request was made for the repayment of probate duty. He was unable to understand the absurdity and jealously which existed 632 on the question of exhibiting the title deeds of property, after they had so recently passed a Bill for the registration of title deeds, and when it was considered that in Scotland and Ireland the titles to estates were all registered and were accessible to the public. He would also remind their Lordships, that in England the greatest number of mortgages on land were raised from persons to whom the borrowers had to submit their title deeds often without any guarantee that an improper use would not be made of them; and yet it was never found that any evil resulted from the practice. If there existed so much indifference as to the exposure of title deeds in the one case, he was unable to understand the extreme sensitiveness manifested in the other. He would also point out to their Lordships that unless some such power were given to the Commissioners under this Act, in the event of a false representation being made to them as to the value of the property succeeded to, they would be entirely without a remedy; and in all cases where successors or persons acting for them, and accredited as their agents, should be required to produce such documents, the Commissioners would only look to the title itself, and not to its origin; they would only examine the title to the property, without, in the smallest possible way, caring how the predecessor acquired that title; and in the case of a person succeeding to property from his father, if he stated that there were charges on the property, for which he claimed exemption, and the Commissioners, entertaining some doubt as to that statement, required the production of his title deeds and documents, as a general rule—he spoke subject to correction—the practice would be adopted of allowing the person to seal up under of a succession to the property of the an affidavit all parts of his deeds and documents which did not bear any reference to the particular question at issue. He did think that if any expression of contempt were allowable, the term "bugbear," as applied to the compulsory production of documents by the noble Duke near him, (the Duke of Argyll) was justifiable; and he did hope that if the noble Earl proposed any Amendment to do away with the compulsory production of such documents, their Lordships would reject that Amendment. He did not approve the principle of discussing the Bill at its present stage, clause by clause; but as that course had been adopted, he was compelled, in reply, to refer to particular clauses. With regard 633 to the question of imposing the tax upon timber, on which the noble Earl opposite had also given notice of his intention to move an Amendment, he would put it to their Lordships if the value of the timber upon an estate was not one of the first considerations, generally speaking, which entered into the mind of the purchaser. Timber was as clearly property as anything possibly could be, and he could not see the slightest reason why it should be exempted from a tax which professed to be levied upon all descriptions of property. The clause, as amended, dealt with that particular description of property in the most favourable possible way, inasmuch as the duty was charged solely upon the net amount of money received in hand for the sale of the timber. In addition, it was extremely easy to avoid all the annoyance to which the noble Earl had made allusion, by agreeing at once to a computation of the value of the property. He did not think it necessary to enter further into details at present, as the measure would soon go into Committee, where the various clauses would have to be considered; but as the noble Earl opposite had given notice of his intention to move Amendments in Committee, he hoped that he would, with his usual courtesy, lay upon the table of the House the terms of those Amendments, so that the Government, or noble Lords who were not yet quite decided as to the course which they meant to adopt, might not be taken by surprise.
§ LORD ST. LEONARDS
was understood to say that he should defer entering into the subject of this Bill until it got into Committee; but he wished to ask a question. The noble Earl who commenced that discussion said that brothers-in-law and sisters-in-law were to be exonerated from this tax?
The LORD CHANCELLOR
said, that his noble Friend who moved the second reading of this Bill stated that by the present Act sons-in-law and daughters-in-law would stand in the same predicament as sons or daughters by blood. His noble Friend might have gone higher—a brother-in-law would stand in the same position as a brother, and a sister-in-law as a sister. He should be sorry to differ from his noble and learned Friend on a point of law, but it was certainly his entire conviction, that, according to the law as it at present stood, a legacy to a son or daughter-in-law paid a duty of 10 per cent.
§ The EARL of HARROWBY
thought the 634 Chancellor of the Exchequer had fallen into considerable inconsistency in proposing this tax; because the right hon. Gentleman had himself first shown that they could not establish a balance between the burdens upon real property and personal property, but that if they took the whole scheme of our national taxation into account, it would be found that their relative burdens were fairly adjusted; and, having done this, the right hon. Gentleman, strange to say, immediately proceeded to lay down an equality between real and personal property in respect of the legacy duty, as if they ought both to be taxed in the same way. The ought hon. Gentleman overlooked the essential difference between the two species of property. The property which now paid legacy duty was capital, whereas landed property was not capital, but income; and yet it was now proposed to treat land as capital, and expose it to all the entanglements and embarrassments of extending his tax, thereby bringing the unhappy landowner into constant collision with the government. All classes of property were not treated alike under the other parts of our system of taxation. Personal property, for instance, was not subject to the poor-law, because of the great inconvenience and the inequalities and injustices there would be in assessing it to the re he f of the poor. Well, the same argument applied to this Bill. Land was already taxed more than its fair share; the Chancellor of the Exchequer himself had shown that paid more towards the income tax than ought to do—it was liable to the stamp duty—and in every transaction it was embarrassed by the claims of the revenue. It was all very well to say that serious inequalities and injustices were inseparable from this succession tax; but that was a reason why they should not impose it. One of the great vices of this tax was, that it would entail legal and other expense greater even than the amount of the duty itself; it would render a man a Crown debtor for five years, and make him the slave of his landlord for the same period. And again, the difficulties which the Bill cast upon land would press most severely upon the smaller class of proprietors, and it would greatly tend, generally to check improvements. All these social evils were overlooked by this Bill, which would not only inflict a tax, but also sterility and inextricable entanglements upon the land. Again, the injustice of the Bill was further seen in the fact that one estate 635 would have to pay the tax over and over again in the same period as another estate I only paid once. He thought the very absence of opposition, so far from justifying a boast, marked the dangerous character of this measure. They could not suppose that those who were expectant heirs to estates could meet together to agitate against the imposition of this duty, and, therefore, it was a tax against which they could have no great class organising to remonstrate.
§ The EARL of DERBY
, in consequence of the appeal made to him by the noble Earl, begged to say that it would be impossible for him to lay on the table the Amendments which he might think it advisable to make during the progress of the Bill. The Bill had been only printed in the course of yesterday morning, and there had been very little time to consider more than the main principle of the measure. He could not, therefore, say that he would lay on the table the Amendments he might consider necessary during the progress of the measure. Undoubtedly an Amendment he should propose in the second clause would be one to make the Bill prospective altogether, so as to save existing settlements; and he should also propose an Amendment, the object of which would be to limit the operation of the Bill to five years.
§ On Question, Resolved in the Affirmative.
§ Bill read 2a accordingly, and committed to a Committee of the whole House on Monday next.
§ House adjourned to Monday next.