The calculated deficit will therefore amount to £3,263,781.

This is a lamentable enough exposition, more especially as it follows upon a year of singular hardship and depression. Burdened as we are already, both with state and with local burdens, we are now required to submit to a further pressure: the credit of the nation must be maintained, and in some way or other this additional impost must be levied. And here we shall state, at once, that, all things considered, we see no just grounds for charging Lord John Russell-or his Chancellor of the Exchequer, who seems, on this occasion, to have been superseded as incompetent—with any undue want of economy. An outcry will, of course, be made by the furious and fatuous fanatics of the League against the increase of the army and navy estimates, amounting altogether to about £300,000. This charge, for reasons which we have stated before, we believe to be just and reasonable, and it is certainly nothing more than the situation of the country demands. But supposing that not one additional shilling were to be laid out on the strengthening of either service, there would still remain a sum of nearly three millions to be provided for; and we have now to consider the means by which that additional impost may be fairly and equitably levied.

The system pursued of late years in this country, with regard to revenue matters, has been cowardly, dangerous, and, in one instance at least, deliberately deceptive. It has been cowardly, because ministers have not chosen to abide by principles which they have acknowledged to be just; but, on the contrary, for the sake of popularity and the retention of power, they have invariably yielded to clamour, and surrendered, one after another, many of the surest means of raising an adequate revenue. All idea of reducing the amount of the national debt has long since been abandoned. The moment any surplus appeared, some minor tax was remitted. If the consumer did not gain thereby, as in most instances has been the case, the ministry at least could claim credit for their desire to remove burdens; and these reductions, however profitless to the public, looked well in a financial statement. It has been dangerous,

because, as a natural consequence, the remissions made in a prosperous year, when the revenue was full, caused a corresponding defalcation in another when the scales had turned against us. It is easy and popular to remove an existing tax; but difficult and decidedly obnoxious to levy a new one. We had gradually cut down our indirect taxation so far, that any further reductions became impossible, without reverting to direct taxation, which is the most grievous and oppressive, as it is usually the most unequitable method of collecting a public revenue.

We were in this position when the great financial juggle of the age was attempted; and, we are sorry to say, successfully carried through by its schemer. The history of the imposition of the income-tax in 1842, must, hereafter, to the exclusion of all minor matters, be considered the point upon which the posthumous reputation of Sir Robert Peel will rest. No minister of this country ever assumed the reins of office under auspices more favourable, if his practice had been equal to his profession. In 1841-and the coincidence is singular-the Whigs found themselves placed in nearly the same financial difficulty as now. They had a deficit of about three millions to provide for, and they fell in consequence. All eyes were turned to Sir Robert Peel, whose prestige as a commercial minister was then at its very height. He was at the head of a great, concentrated, and enthusiastic party, whose chief fault was the consummate reliance which they were disposed to place in their leader; and the destinies of the nation were committed with extraordinary confidence into his hands. He had but to dictate his course, and every one was ready to obey. It was then that he came forward with the proposition of an income and property tax

not, be it remarked, as a permanent measure, but as the means of removing the temporary and pressing difficulty, and of sustaining the revenue until the ordinary sources should produce the necessary supply. It is needless, now, to recount the process of persuasive rhetoric employed by the minister to ensure the adoption of his scheme. The injustice of the tax was admitted; the sacrifice lauded as an example of public patriotism; and that portion of the community who were selected as

the victims, so hugged, coaxed, and wheedled, that it was almost beyond the power of human nature to deny a boon which was implored in such terms of seducing endearment. And, in truth, the scheme did involve a sacrifice; because it amounted to nothing less than a partial confiscation of property. One class of the community were to be directly taxed, whilst another was allowed to go free. What was still worse, two of the united kingdoms were to be subjected to a burden from which the third was altogether relieved. On principle, the income-tax was indefensible, nor did Sir Robert Peel attempt to place his measure so high. With much seeming candour he anticipated all objections, and his scheme was carried on the faith of its merely temporary endurance.

Instead of producing three millions, as was anticipated, the income-tax returns amounted to considerably more than five; and, as trade did revive, it was within the power of Sir Robert Peel to have redeemed his pledge with honour, and to have relieved the class which had been subjected, voluntarily, to this unusual burden, at the termination of the first period of three years. It then, however, appeared that the revenue so raised had been diverted from its proper purpose. It was not used as the substitute for a temporary deficiency, but as the means of making that deficiency absolutely permanent. More indirect taxes were taken off, more duties repealed; so that, at the end of three years, it was impossible to dispense with the income-tax. In fact, the minister had broken his word. The horse, says Æsop, being desirous to avenge himself on his old enemy the stag, allowed the man to clap a saddle on his back, and to ride in pursuit. He had his revenge, indeed, but the saddle has never been removed to the present day. It would be well if, in this age, when prevarication and disingenuity are so rife in high places, the fables of the shrewd Phrygian were consulted more frequently, for the sake of the morals which they convey.

Of all the gorgeous promises held out in 1842, and since repeated, not only by ministers, but by the accredited organs of free-trade, not one has been fulfilled. Instead of the

Pactolus which was to flow in to us, we find that the ordinary streams of commerce have shrunk alarmingly in their channel: instead of being relieved from the temporary income-tax, there is another deficit of three millions staring us in the face. The statutory period of the income-tax expires in April next we are now asked to renew it for another period of five years, and to augment it, for two of these years, from three to five per cent. The income-tax, therefore, has changed its character. It is no longer a voluntary grant, but has become part and parcel of our national system of taxation. It is to be maintained and levied in order to make up for the deficiencies occasioned by the late commercial experiments; and Lord John Russell does not propose to modify or alter its arrangements in any degree whatever. to be drawn from the same class as before, with this difference, that whereas we have hitherto paid sevenpence in the pound, we are now to contribute a shilling.

It is

This is, indeed, a most serious matter; and we shall look forward to the financial debate with feelings of the greatest anxiety. This is no ordinary crisis, and it must be met with corresponding fortitude and promptness. A measure, admittedly unjust in its principle, is now to be recognised as a law; and the faith which was plighted, a few years ago, to the most important section of the community, is now to be deliberately broken. Property is at last assailed, not covertly but openly; and the worst anticipations of those who deprecated our departure from the older system, are upon the eve of being realised.

Two considerations now arise, and each of them is of the utmost importance. The first concerns the policy of this measure: the second relates to its injustice. On both points we have a few words to say.

And first, as to its policy. A direct property or income-tax has hitherto been considered and acknowledged by all governments of this country as the very last which can be resorted to in cases of extraordinary emergency. In the event of danger, of war or of invasion, unusual imposts will be submitted to without a murmur: in time of

L

peace it has always been held as a principle, that the ordinary expenditure should be met by the ordinary methods of taxation; and these have been for the most part indirect. Of all our sources of revenue, that derived from the customs, which has been most tampered with, is the easiest of collection. It amounts to much more than one-third of the whole, and in time of peace is capable of contraction and of expansion. That is the mark at which the free-traders have discharged the whole of their battery, and certainly they have succeeded in effecting a notable reduction. In consequence, we are now called upon in time of peace to submit to a war-tax, which is in effect a sort of monetary conscription. By adopting it, we sacrifice the power of falling back in any case of emergency upon a strong existing reserve. It will be conceded on all hands, that in time of war we cannot look to the customs and excise for any additional support; and if we go on multiplying direct taxation in the time of peace, to what source can we turn in the event of an unforeseen emergeney? This is perhaps the most mischievous result of our adoption of the free-trade doctrines, because it leaves us utterly fettered, at the moment when freedom of action is most necessary for the safety of the whole state. We are extremely glad that on this point we are corroborated by the opinions of Mr Francis Baring, formerly Chancellor of the Exchequer under the Melbourne administration, whose clear and forcible denunciation of the proposed financial policy must have been listened to by his former colleagues with feelings of considerable shame. "At a time," said Mr Baring, "when we talk of preparing our defences, I deeply regret that we should be throwing away that which is the most powerful financial weapon in our whole armoury in the case of a war. If you now lay on a tax of five per cent, in case of a war to what source of taxation would you turn? Do you think you could raise the income-tax above five per cent? or are you prepared, at a time when you shall be in difficulty and distress, to have recourse to the taxes on customs and excise which you have so lavishly thrown away? I opposed the income-tax at its first introduction,

because I thought it a dangerous course to accumulate in direct taxation any very large amount of taxation of a different kind." With these sentiments we entirely coincide; nor could such a tax, we venture to say, have been originally imposed, unless it had been broadly and explicitly stated that it was only temporary in its duration. At every step we encounter the effects of Sir Robert Peel's indefensible and cruel want of candour. Had he acted in that noble and upright spirit which has characterised British statesmen of a former age, we should have been spared that distress and difficulty; but he chose to prefer the crooked path to the straight one; he hatched and harboured commercial designs which he did not dare to impart to his colleagues, and he asked the support of a large body of the community on the strength of representations which he never intended to fulfil. It is not surprising that Lord John Russell should adopt without hesitation the legacy of his predecessor, and attempt to profit by the income-tax when he has the machinery ready to his hand. But we warn the people of this country -we warn those who were betrayed into yielding by specious promises, but who now find to their cost that they in reality are to become the bearers of the burden of the state -we warn them that the same game will be continued, and that, if they consent to this augmentation, it will not be by any means the last. If the proposals of the ministry should unfortunately be adopted, and if once more the defalcation in the national revenue should be made good-if trade again revives, and a surplus is exhibited in the balance sheet, more indirect taxes will be repealed, more tampering with our ordinary revenue be resorted to; free-trade will progress as it has begun, crippling our native industry, destroying our means, and sacrificing the British labourer even in the home market to the foreigner, until the defalcation again arises, and another attack is made directly upon property. When that time shall arrive-and unless prompt resistance is now made, we do not think it is far distant-the limits of taxation will have been reached. It will be no longer possible to go on. The lesser

confiscation will give way to the greater, and the sponge be propounded as the remedy.

But the second point-that of the injustice of this measure-is most glaring, and demands immediate attention. Opposed as we are to the substitution of direct for indirect taxation, we can yet understand the motives of a minister who comes forward with a distinct and equable plan for an entire remodelment of the system. We believe that no such scheme can possibly be reduced to practice; and that, if attempted, it would prove utterly obnoxious and subversive of the national interest: we think that it would be unwise, but at the same time it might not be unjust as be tween man and man in the community. There is a certain burden to be borne by the whole of the nation, and the great problem is, to find out how every man can be made to contribute his proper share. Laws are framed and institutions founded for the protection of property and person; and, strictly speaking, every one is bound to bear the expense according to his means. The only effectual method which has ever yet been discovered for securing this, is the system of indirect taxation. By that system each man contributes to the revenue in proportion to the amount of taxed articles which he consumes. Wealth, in the aggregate, superinduces luxury, and the higher classes pay proportionably for the increased comforts they enjoy. Such were the principles of indirect taxation before Sir Robert Peel began to alter it, and even yet many of the original features remain. But we cannot recognise in his tariffs any thing of a consistent plan. That foreign luxuries, which cannot be produced in this country, should be brought in at as low a rate of duty as the state of the revenue will allow, is admitted on all hands. Wine, for example, which is no product of ours, is a case in point. But when we find him deliberately fostering foreign industry at the expense of home manufactures reducing or abolishing the duties upon such articles as ornamental glass, boots, gloves, or made-up fancy silks, which, from their natures, are consumed by the higher classes only, our belief in

his sagacity vanishes. The time is fast approaching when the artisan will feel severely the effects of that departure from our older system, which regarded home industry with peculiar favour, and refused to sacrifice it for the sake of increasing the yearly amount of our imports. Every curtailed or superseded branch of employment in this overpeopled country is a national loss and a misfortune.

Direct taxation might be accepted as a substitute if it only could be adequately enforced. This, however, we know to be impossible. The expense of collection below a certain limit would entirely swallow up the profit; and besides, it is clearly beyond the power of human ingenuity to ascertain, with any thing like accuracy, the means of the whole population. The only approximation to the direct system which has ever been suggested, is through a regulated house-tax; but even that would fail in accomplishing its end, and the inequality would still prevail. Direct taxation is liable to infinite abuse. It is odious and inquisitorial in its nature, and no minister has been bold enough to propound a plan for making it supersede the other.

If, therefore, this income-tax, palmed upon us through fraudulent representation, and now proposed as perpetual on the plea of pressing emergency, is to be continued for ever, it will be necessary for us to consider. how far it is levied on those benefited by the removal of indirect taxes-how far it applies to all classes-and whether it is one-sided and unjust, or fair and equitable, in its operation. Before we consent to an impost which must affect us and our children, it is well that we should thoroughly understand the nature of the obligation we undertake. The income-tax was originally proposed to supply the loss of revenue sustained in consequence of an overreduction of the indirect taxes; and as a matter of equity it follows, that the supplies should be drawn, though in a different form, from the same portion of the community.

Is this the case? Can any man venture to say that the income-tax, as we have known it for the last five years, has been borne with equal

fairness by all classes of the community? Is it not, on the contrary, the most unequal, the most unjust, and the most oppressive tax that ever yet was levied? We hardly believe that on this point there can be any difference of opinion: and we shall now proceed to notice the separate considerations upon which our decided and determined hostility to the measure is based.

By exempting from taxation all incomes below £150, a glaring act of injustice is committed. There is no reason whatever why that amount should be fixed upon as the lowest point-why the tradesman, clerk, or rising professional man, who barely clears that amount of profit, should be made to pay permanently for the others who are not so industrious or so fortunate. It is not, however, difficult to understand why Sir Robert Peel, in proposing the tax as a mere temporary relief, should have been cautious to avoid any agitation of the masses on a question so vitally important to their well-being, had justice been the foundation of his plan. He probably thought that, by exempting that portion of the middle classes whose incomes did not reach the above amount, he would at all events secure their neutrality, and perhaps purchase their support in any subsequent attempt to render the tax perpetual. This view is fortified by the exposition contained in the famous Elbing letter, and though we may admire the ingenuity of the scheme, we cannot commend it for morality. If this tax is to be continued and augmented, we are in justice entitled to demand that it shall be carried down to the very lowest point at which the amount of revenue drawn may exceed the cost of collection. In 1798, according to Mr Porter," an income tax was imposed at the rate of ten per cent upon all incomes amounting to £200 and upwards, with diminishing rates upon smaller incomes, down to £60 per annum, below which rate the tax was not to apply." If we are to persevere in this unwholesome style of taxation, there is no reason whatever why some such arrangement as the above should not be adopted. It is contrary to the constitution of a free country, that any class should be selected as the

subjects of isolated taxation, and doubly so when the selection is made for the almost avowed purpose of relieving some other class from the impost. Equal laws and equal rights can only be maintained where there is a proper equality of burdens; and if it be difficult to arrange the scale, as it undoubtedly is, the difficulty must be met by those who propose to substitute this unconstitutional mode of taxation for that which applied equally to all classes of the community. Why should each and all of us, who subsist by our own industry, and who are ready to pay our own share of the national expenditure, be forced in addition to pay the quota of others whose incomes do not amount to £150? Surely, there is less difference in position between the man who clears £140 a-year by his trade, and another whose gross profits amount to £155, than between the latter and the possessor of a revenue of £10,000 per annum? And yet, the two last are to be charged five per cent on their incomes, whilst the other, who has the sense to moderate his industry, is to be entitled to escape scot-free!

Another monstrous hardship of the income-tax is its pressure upon professional men, and upon those whose incomes are precarious. No distinction is made by the act of 1842, between profits accruing from realised property, and those which are entirely the product of individual and personal exertion; and yet, in every point of view, there is a vast difference between the parties so situated. The man who derives an income of £1000 a-year from landed property, or from the funds, is in a far better position than the divine, the lawyer, the physician, or the military officer, whose incomes perish with their persons. That most pressing duty of life, the necessity of laying by some provision for a rising family, is in the one case already fulfilled-in the other it is urgent; and yet no distinction whatever is made between the two. The professional man is compelled year after year to lay aside a large portion of his income, for the sake of securing, by insurance or otherwise, the means of subsistence for his family in the case of sudden death. He may not be able to spend one half of