Page:Encyclopædia Britannica, Ninth Edition, v. 9.djvu/191

FINANCE 181 Lave contemplated the immediate contingency of war, and have known that the sum at which they fixed the revenue would be wholly inadequate for the emergencies which would arise ; but they were affirming a principle which should be permanent, while the contingency to be dealt with was temporary. It appears that the attitude taken by the parliament gave deep and lasting offence to William, and that the distrust and dislike which marked the relations of crown and parliament during this reign, and prepared the reaction under Anne, had no other origin than the settle ment of the revenue by the convention parliament. The parliament further determined, once for all, to affirm a principle, occasionally acted on in past times, and funda mental to the concession of extraordinary grants, by which all supplies, other than the civil list and the hereditary estate of the crown, should be strictly appropriated to the objects for which, they were granted. The demands of the crown in the Middle Ages were generally for public objects, in which the whole community was reputed to be interested, though sometimes, in accordance with the theory of the age, they were acknowledgments for favours received, petitions granted, or pardons allowed. They were therefore ordinarily granted to the exchequer, and no limit was put on the objects for which they were to be expended. But, as we have stated above, appropriations were made in the minority of Richard II. and of Henry VI., in the last year of James I., and pretty frequently after the Restoration, greatly to the disgust of some among the courtiers, who conceived that the prerogative of the crown was dangerously invaded, if Charles were disabled from diverting parliamentary grants from special objects to those which the king might be pleased to select. But from the Revolution the Appropriation Act has always denounced severe penalties on any minister of state, or head of department, who converts supply voted from one branch of the service into any other direction. The trial of Lord Melville, in 1806, illustrates the manner in which a parliament, otherwise disposed to trust implicitly in the Government, resented the apparent breach of a fundamental principle in English finance. The settlement of the revenue on William and Mary left the parliament in the possession of a surplus of 800,000, the difference between the grants made to James and the sums actually settled on the crown. But 200,000 of this was immediately remitted by the abolition of the hearth tax or chimney money. The nation had also incurred a debt to the Dutch of 600,000, which was repaid at once. To meet these charges, a sum of rather more than 400,000 was voted, to be raised by monthly instalments, and as a security for borrowing 370,000 at six per cent, in order to meet immediate requirements. The expedient of anticipating revenue by loans at short dates was very ancient, and is indeed obvious. At first, the Government of the Revolution, feeling its way cautiously, raised loans on short periods, at high rates of interest, and pledged particular taxes for the payment of the principal and interest. These taxes were new excise duties, i.e., tvxes on consumption ; a monthly assessment, i.e., a direct tax on income ; and a quarterly poll tax, which of course was graduated. A resolution was, moreover, passed by the IIou.se of Commons, by which it was proposed to lower the salaries of all offices under the crown to 500 a year m iximum, with the exception of certain cases. It took no effect, and was indeed a mere expression of dissatisfaction at the enormous gains of official statesmen. Nothing tended to lower political morality during the latter part of the 17th and the whole of the 18th centuries so much as the enormous perquisites which officials enjoyed. In 1693 a loan was raised on the basis of a tontine. This expedient was familiar to Italian financiers, and was probably suggested by the life loans of the papal Curia. It combined a limited security with the charms of survivor ship, a kind of lottery which is very often found to be attractive, unless, as is generally the case, the tontine is employed as a speculation by those who put selected lives into the loan. Tontines have been employed by English financiers as a means for raising money up to the begin ning of the present century. On this occasion, when a million was advanced on the security of additional excises to be levied on beer and ale, interest] was paid to all subscribers at the rate of ten per cent, for seven and a half years, after which date 70,000 per annum was to be divided among the survivors, till the number was reduced to seven, when the annuity of each was to revert to the public on his decease. In order to stimulate the operation of this loan, persons were allowed to nominate lives at ten per cent, on the capital invested on each life. Although the latter offer was equivalent to selling annuities at less than half their value, the loan was raised with difficulty. But the capital expedient of 1693 was the imposition of the land tax. Willing as the parliament was to extend the area of indirect taxation, it was impossible that landed estates should be allowed to go untaxed, especially as, within half a century, nearly all taxation had been derived from the contributions of land and property, and, as it was remembered that the emancipation of the military tenancies was effected at the expense of the general public. But the Government did not venture on departing from the old principle under which the subsidies were collected, that of making certain local authorities responsible for the assessment, or rather of relieving them of all virtual responsibility. The tax was fixed at four shillings in the pound on the profits of land and personal estate, the latter being taken at six per cent. But from the very beginning the assessment was unequal. It is said that those districts which were favourable to the principles of the Revolution assessed themselves fully and fairly, but that those in which Jacobite views were in the ascendant greatly understated their liabilities. It appears, too, that the assessment of personal estate was soon lost sight of, or rather merged in an aggregate local charge. In point of fact, no revaluation was made. Hence the estimated rental of agricultural estates remained unaltered, and the assessment of the towns, which was also taken as a fixed quantity, was imposed on the owners of property, the capital of the towns folk and traders being merged in the value of the premises. For example, if the assessment of a town was 1000 in 1693, this sum including both items in the land tax, the same assessment was charged whenever the full land tax was imposed. But the inhabitants of the town had the right of redistributing the fixed assessment on the property contained in the town, as the value of individual holdings was increased or diminished by the outlay of the owners, or the depreciation of the premises. The land taxes, therefore, in the county districts became virtually a secured rent payable to the crown ; in the towns it became a tax on improvements, though the amount was not considerable enough to discourage improvement. It was Adam Smith s opinion that in his time there were districts in which the land tax was half what it professed to be, an impost of four shillings in the pound on rents. Since the great increase in the rent of land, owing to the great improvements which have been made in the art of agriculture, the land tax is nowhere heavy, and in some districts is trivial. Taxes on the rent of land, or on its value as property to be rented, constitute a far larger percentage in the budget of foreign countries than they do in England. In the reign of William and Mary it is true that the land tax, where it was fairly assessed, was a very considerable impost, and the country gentlemen easily fell in with the pacific projects of Walpole, when he coupled them with the fact of a reduced