Page:Encyclopædia Britannica, Ninth Edition, v. 9.djvu/190

180 FINANCE maritime counties only. The second and third of 1635 and 1636 were imposed on the inland counties as well, the judges affirming, at first privately, and afterwards, on Hampden s appeal, by a majority, that the crown could levy the tax at its discretion and without the consent of parliament. It seems that the tax yielded about 200,000, though it is said that after the judgment in Hampden s case, the payments were more reluctant and irregular than they were before the judges affirmed the legality of the impost. The civil war broke out in the autumn of 1642. The king was better off for soldiers, the parliament better off for money, and in the end the possession of adequate funds supplied the means by which the single advantage which the king possessed was neutralized. These were afforded by the new forces which Cromwell drilled effectively and paid highly. Not only was London, always in the interest of parliament, richer than all the towns in England put together; not only was the eastern district of England untouched by the war ; but Norfolk was by far the most wealthy and populous district in England, as Yorkshire and Lancashire were the poorest and least populous. The resources, therefore, from which the parliament could pro cure its means were ample and easily obtained, In 1643 the parliament imposed an excise on beer and ale within all the counties which acknowledged their authority, They also levied a heavy tax on tobacco and wine, and on other articles of consumption. The project was denounced by the king as an act of unheard-of oppres sion, but was soon imitated in the royalist district by the parliament which sat at Oxford, though, after it had made this grant, it did not meet again. In 1646 the par liament abolished the old feudal dues, turning all tenures into common socage. It is said that between the outbreak of the civil war and the year 1647 the parliament raised more than forty millions in the counties which they governed. Among other expedients, the Protector in 1656 established a general post office. According to the theory advocated by the crown lawyers at the Restoration, that all acts of the parliament from the date of the rupture with the king in the summer of 1642 were void, the old feudal liabilities were revived with the monarchy, and also, by implication, the royal privilege of purveyance. But as the country had been quit of these liabilities for fourteen years, the revival was felt to be an intolerable burden, and by 12 Charles II, cap. 12 they were extinguished. In common justice this emancipation should have been compensated according to the bargain nearly completed in 1610, which was known as " the great contract," by a land tax specially levied on lands which had hitherto been subject to feudal dues, and such an arrangement was proposed. But the cavalier party, now in the ascendant, contrived by a bare majority to carry a measure by which the king obtained the hereditary excise in lieu of his feudal dues, duties being imposed on beer, cider, perry, mead, spirits, coffee, tea, sherbet, and chocolate. Parliament also gave the king the old tonnage and poundage for life. The excise was an expedient borrowed from the Dutch. In the long War of Independence, the people of Holland were constrained to make great loans, and to pledge their revenues to pay interest on these loans. The debt was almost all held in the country, and to meet the charges the Dutch financiers imposed taxes on all articles of consump tion, whether necessaries or luxuries, on commercial transactions, on births, marriages, and deaths, on succes sions and legacies. A Dutchman in the 17th century was taxed from the cradle to the grave, and the expedients of the Dutch financiers formed for a long time a series of precedents from which other countries borrowed largely. In effect Holland was the source of modern finance, and proved how taxation, though apparently of crushing weight, could be easily endured, if it were counterbalanced by industry and thrift. In point of fact, only a few years after the disastrous war with the English Commonwealth (a war waged quite as much for the political reason that the Dutch democracy, always inclined to the House of Orange, which was connected by marriage with the Stuarts, favoured the English exiles, and insulted or even murdered the English envoys, as from motives of commercial rivalry), the state of Holland contrived to reduce the interest on its debt of nearly fourteen millions sterling from five to four per cent, by the threat of paying off the principal. In the same period this state established, for the first time, a genuine sinking fund, by which, principal and interest being paid together, the debt of fourteen millions was to be com pletely extinguished in twenty-one years. The rate of interest in England at this time was eight per cent. During the reign of Charles II. the English nation increased greatly in opulence, especially througu its foreign trade. But its internal trade and industry suffered severely by the appropriation in 1672 of the goldsmiths loans. The goldsmiths of London, who during the civil war had undertaken the office of bankers to the London merchants, and took in money at call, or at short notice on rates of interest, had lent these deposits to Charles, in anticipation of revenue, to the amount of more than a million and a quarter, at eight per cent. At the instigation of the Lord High Treasurer Clifford, the king suspended the payment of interest on this loan, for one year only, as he said. But the obligation was never acknowledged, and in 1701, nearly thirty years after the exchequer was shut up, the bankers debt was treated as a national debt, on which three per cent, interest was to be paid, but which might be redeemed on the payment of a moiety of the principal. It is the oldest portion of the English public debt. In 1720 it became part of the South Sea stock. Finance became a science in England at the Revolution. The immediate effect of the deposition of James was an alliance between England, Germany, Spain, and Holland, and a declaration of war against France. The war lasted for rather more than eight years, and was concluded by the peace of Ryswick. Now the founders of the English Revolution were determined that for the future the crown should be dependent for its supplies on the pleasure of parliament, and especially that its foreign policy should be held in check by the control of supply. There was the greater reason for this policy at the moment, for it was quite understood that the expulsion of James implied war with France, and that such a war, carried on as it would be by the vigour and determination of William, must be prolonged and costly. In 1688 the revenue was derived from (1) tonnage and poundage, (2) the hereditary excise granted in lieu of the old feudal incidents, (3) the profits of the post office, (4) the hearth money, a house tax, and (5) the grants made in the parliament of 1685 for eight years. The income derivsd from these sources has been variously computed at two millions to two and a half millions, and the receipts from the excise and customs were steadily increasing. William was under the impression that this great revenue was vested at once in him by the change of the succession, a view which was supported by several Whig lawyers, who urged that, as long as the late king lived, these duties were payable, but that they were to be enjoyed by his successor. But the political Whigs thought differently. They determined, and they carried without opposition, that a fixed revenue should be settled on the crown during time of peace, that this revenue should be divided into two portions, one for the household and the civil expenditure, the other for the public defence and other analogous charges. It is true that they must