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PITT'S FINANCIAL MEASURES.

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assessment had been supplied by a hasty and temporary expedient. It was proposed that persons who might be reluctant to submit to the inquisitorial process of an income tax, yet willing to contribute liberally to the extraordinary exigencies of the State, should be permitted, partly by way of composition, and partly by way of voluntary contribution, to subscribe certain sums. A clause to this effect was included in the Tax Bill. Many public bodies and persons of known wealth availed themselves of this clause, or perhaps were led by example, or forced by public opinion, to adopt it. The King gave twentyfive thousand pounds, which he said he could ill afford. Some of the ministers thought themselves obliged to give a year's salary. Pitt,* who could not pay his tradespeople, gave two thousand pounds. In this manner two millions were obtained. But an expedient so clumsy, so unfair, and so oppressive, could not be repeated. The emergency which had arisen was not one of that kind, which claims the liberality of the rich. It was not a famine, or a pestilence which had suddenly fallen upon the country, but a demand for money to carry on a great war, which was as much a part of the public service as the garrison at Portsmouth or the Court of King's Bench. Wealthy landowners and ministers of State had no greater interest in measures necessary for the defence of the country, or the vindication of the national honour, than farmers, shopkeepers, or others; and they might as reasonably have been expected to make up the deficiencies of the Customs or Excise, as to eke out the proceeds of any particular tax imposed for the extraordinary charges of the army and navy. Voluntary assessments and loyalty loans are but empirical modes of providing for the charges of a great nation.

* Lord Stanhope's Life of Pitt.-Courts and Cabinets of George the Third.

238

PITT'S FINANCIAL MEASURES.

CH. XL.

The estimate of expenditure for the ensuing year was twenty-nine millions; and as the ordinary sources of revenue yielded little more than six millions, adding to the estimate a million for contingencies, there would be twenty-four millions to be raised by extraordinary ways and means. Notwithstanding these vast demands, amounting to nearly five times the ordinary income, Pitt adhered to his policy of raising the war funds, partly by taxation, and partly by loan. The tax on income, though it had partially failed when applied through the medium of the assessed taxes, was an engine of such power, that it only required proper machinery to raise any amount which property could pay. And the only machinery by which it can be effectually worked, is the simple process of taking so much of every man's income, from whatever source it may be derived. To this plan, which is, in fact, a recurrence to the raw principle of taxation, Mr. Pitt now resorted. He proposed to take two shillings in the pound from every income of two hundred pounds and upwards. From that amount to sixty pounds a year, at which the tax commenced, there was to be a descending scale of assessment. Certain abatements were to be made, so as to eliminate the nett income, upon which only the impost was to attach. Computed in this way, the taxable income of the country was estimated at one hundred and two millions, upon which a levy of ten per cent. would raise, in round numbers, ten millions. The remainder of the charge, fourteen millions, was to be raised by open loan. All the objections to an income tax with which the present generation is familiar, were stated by Mr. Tierney and other opponents of the measure. The inquisitorial proceedings which it rendered necessary-the injustice of exacting the same contributions from permanent and precarious incomes-from incomes for life and incomes for years-from profits of trade,

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THE INCOME TAX.

239

arising from a mixture of capital and industry; and profits of professions derived from industry alone ;these arguments were urged with convincing force, and were met by the only intelligible answer they have ever received, that an equitable adjustment of an income tax was impracticable. But all men felt that if the war was to go on, it had become necessary to resort to sources of supply, deeper and wider than those which sufficed for the ordinary service of the country. Hence there appeared a general disposition to submit to a hard necessity, and not to waste time in abstruse calculations, with the view of ascertaining the just proportion in which each man should contribute. To mitigate the arbitrary character of this tax, the assessment was entrusted, not to the officers of revenue, but to commissioners elected by popular suffrage. The commissioners were sworn to secrecy, and had power to administer an oath when the information afforded was not satisfactory. There could be no question as to the exact amount of liability in the cases of fundholders, mortgagees, and annuitants. There was little difficulty in ascertaining the rental of real property; but the difficulty amounted to impossibility of obtaining faithful returns of the vast incomes derived from commerce, manufactures, trades, and professions. The temptations to make fraudulent returns among this class of proprietors has always proved irresistible; in fact, they virtually assess themselves; and the consequence has been, that the revenue has been deprived of a very large proportion of the just proceeds of the tax. It is in this inherent defect, that the real injustice of an income tax consists. The tax presses with undue weight on those who are neither able nor willing to evade it, in proportion as others decline to bear their due share of the burden. The bill was passed by a large majority.

Bonaparte, on his return from Egypt, found the French people prepared to receive him as a conqueror.

240

BONAPARTE'S RETURN FROM EGYPT.

CH. XL.

Bonaparte's reception in Paris.

On his arrival at Paris, the Directory did not venture to call their unwelcome General to account for absenting himself from the army without leave; nor did he condescend to offer a word of explanation on the subject. The pear was now ripe. The series of rapid and wellcontrived manoeuvres by which Bonaparte abolished the effete Directory, dispersed the legislature, and constituted himself Dictator, under the title of First Consul, proved him as great a master of politics as of war. His triumph was distinguished by a moderation unknown to the various revolutions of the last ten years. There were no proscriptions; nearly all the State prisoners, amounting to many thousands, were released; the churches were re-opened, and the priesthood was re-established. The law of hostages, the forced loans, and other revolutionary edicts, were repealed. It soon became manifest that it was the intention of the new ruler of France to restore monarchical institutions, and the people, disgusted with liberty and equality, were eager for the restitution of order, under a permanent and intelligible form of Government.

Bonaparte's letter to the King.

One of the earliest measures of the First Consul was to propitiate foreign powers by a circular letter addressed to the diplomatic agents of the Republic at the different Courts of Europe, announcing the moderate and pacific views of the new Government. To Great Britain, Bonaparte made a direct proposal of peace, in the form of a letter to the King. Setting aside the impertinence of a mode of communication alike irregular and unnecessary, the letter was striking and plausible. Must the war which has ravaged the four quarters of the globe for eight years be eternal?' asked the writer. Why should the two most powerful and enlightened nations of Europe sacrifice their prosperity and happiness to war? Why should they

6

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LORD GRENVILLE'S REPLY.

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persevere in a war which involved all other nations?' The note, which was very brief, contained no distinct proposition; but it seemed to suggest a cession of conquered territory on either side as a basis of treaty. However this might be, the Cabinet decided on rejecting the overture. The despatch in which Lord Grenville conveyed this decision was calculated to repel the advances of the First Consul, even if those advances had been sincere. A paper so sarcastic, contemptuous, and dictatorial, is not to be found in the records of diplomacy. His Majesty,' said the Secretary of State, was not engaged in any contest for a vain or false glory; but for the defence of his dominions against unprovoked attack; nor could he hope for any satisfactory result from a negotiation entered into with those whom a fresh revolution had so recently placed in the exercise of power.' The minister went on to inveigh, in unmeasured terms, against the indiscriminate spirit of destruction which actuated the French Government, against the ravages and anarchy which they had carried into unoffending countries; against their habitual violation of solemn treaties by fresh aggressions.

His

The concluding paragraphs of this memorable despatch were conceived in a spirit of dictatorial insolence, which seemed to have been caught from the diplomacy of the French Revolution. Majesty was made to say, that although he did not insist on the restoration of the legitimate monarchy as affording the only possible security for peace, yet that such an event would not only remove all obstacles to negotiation, but would ensure that tranquillity and security which the nations of Europe were compelled to seek by arms. Finally it was intimated, that the King had no confidence in the stability of the Government with which he was invited to negotiate, and that a period of probation must be undergone before such confidence could be created.