rious classes. To landed proprietors he would give 1-12th, to owners of house property 1-6th, to owners of mines and ironworks 15 per cent, to owners of quarries 10 per cent, and to the most favoured class of all-farmers, traders, professional men, and recipients of salaries from office, 33 per cent. There were some persons from whom his hon. Friend proposed to make no abatement-namely, the recipients of fines.

Persons who came to the Government for the purpose of purchasing those annuities brought with them a certain amount of money, and that money it was the duty of the Government, as laid down by law, to lay out in stock. But instead of seeking that stock in the open market they had carried over that stock from the Post Office savings banks and general savings banks accounts, and the money so procured they had used as means for carrying on the fortifications. The Government, therefore, had done nothing whatever to disturb the course of monetary transactions as far as the purchase and sale of stock were concerned.

With regard to the income tax, his hon. Friend had said that statements which fell from the Chancellor of the Exchequer were accepted as important, because they were believed to be accurate. Now, he would not yield even to his hon. Friend in the desire that all statements which he might submit to the House should be strictly accurate; but there was always a broad distinction between figures which professed to be accurate and rested upon matters of fact, and figures which rested entirely upon calculation. When his hon. Friend some time since submitted to the House his plan of raising the income tax, and it was fully discussed, he gave an intimation that he would return to the attack at "a future time." But, according to the traditional usages of the House in such matters that meant a future Session; and after a debate and division had taken place, it was thought that some respite had been purchased, and that it was not convenient to revive matters of the kind by delivering the same speeches textually and bodily over again in the course of the same Session. His hon. Friend said that he (the Chancellor of the Exchequer) had estimated the loss which would result from the adoption of his plan at £2,600,000, instead of some thing over £2,000,000. But the explanation was perfectly simple they were speaking of two different things. When his hon. Friend said that the loss would be about £2,000,000, he was not speaking of his second plan for deduction upon the lower incomes. The additional loss which that plan would entail might be estimated at £500,000, and that added to £2,100,000, which would be the loss under his hon. Friend's first plan, would make £2,600,000. Now, the deduction of £2,100,000 his hon. Friend would distribute with a generous hand among va

MR. HUBBARD said, with respect to that class, he proposed to make a deduction of the whole.

THE CHANCELLOR OF THE EXCHEQUER observed, that his hon. Friend would then make greater havoc with the tax than he had anticipated. He had been blamed by his hon. Friend for overstating the amount of burden sought by his hon. Friend's scheme to be laid on the owners of land and houses, and he thought it possible that in some respects he might have overstated the amount; but, whether that was so or not, it did not touch the reason and nature of the case. His hon. Friend was going to burden one class, and to do that by disburdening another; and that was the objection to the scheme. The owners of land were already under great disadvantage, inasmuch as they paid the tax on the gross and not on the net income. The owners of houses were under greater disadvantages than the owners of land; for, while they also paid on the gross, and not on the net income, unfortunately for them, their outgoings in a large amount of cases were greater than those of the owners of land. Then came his hon. Friend and proposed to deduct 1-12th from the owners of land, and 1-6th from the owners of houses. But what his hon. Friend deducted from the owners of lands and houses made its appearance again in the shape of a tax at a more elevated rate, which not only took away the whole benefit of the deductions, but positively imposed an additional burden, If his hon. Friend were to have his own way with the income tax, and were to carry his favourite project for reducing the rate on official salaries and on the incomes of bankers and merchants by onethird, he must, in order to make the tax produce the same amount as it then did, raise the rate from 9d. in the pound to 11d. The proposition only tended to create a new class of inequalities and anomalies, and would in some instances confer a boon totally unwarranted. In the case of the

open for the commission of fraud by means of making false returns, its pressure might be mitigated. He regretted that the Chancellor of the Exchequer had not acceded to the whole of the Motion, for the Returns moved for would have shown the country what would have been the real effect of the readjustment proposed by the hon. Member for Buckingham. Great injustice was at present done to the landowners, and to those who derived their incomes from certain kinds of house property, and the time had come when something should be done for their relief. He was the more anxious that the income tax should be placed upon a sound basis, because he desired to see it permanently established, believing that it had enabled the present and past Governments to improve our fiscal system, and that future Governments would find in it the means of taking off those indirect taxes which still restricted our commerce, and lessened the comforts of the great body of the people.

SIR HENRY WILLOUGHBY said, he must decline to discuss the income tax, because, do what they would, they could not make it agreeable. It was a most detestable impost, incapable of amendment, and the best plan would be to get rid of it as soon as possible. Such a tax ought not to exist in time of peace; and if, as they had been told by the right hon. Gentleman the Chancellor of the Exche quer, £65,000,000 was a revenue amply sufficient even during the Crimean war, there was some reason to hope, that if things went quietly, at least one-half of the income tax might be taken off next year. But what he wished to remark upon at that moment was the objection taken by the hon. Member for Buckingham (Mr. Hubbard) to the Chancellor of the Exchequer, when authorized by the Legislature to raise annuities, being permitted to sell those annuities practically to himself. It appeared that a large portion of the Fortification Annuities had been taken by the savings banks. Everybody knew that the manager of the savings banks had nothing to do with such transactions, which always took place between the Chancellor of the Exchequer of the day and the Commissioners for the Reduction of the National Debt. Now, the Chancellor of the Exchequer was a leading Commissioner, and practically he had sold the annuities to himself. That was a most vicious system, and he hoped the House would stamp it with its reprobation.

SIR STAFFORD NORTHCOTE said, he would suggest that the hon. Member for Buckingham, in accordance with his own plan for the readjustment of the income tax, should distinguish in the Return for which he had moved between trades and professions generally and joint-stock companies. The proposal of the hon. Member was to allow trades and professions generally to deduct one-third from their incomes; but he would not permit joint stock companies carrying on business to make any deductions at all. Such a plan, if adopted, would operate most injuriously, and it was only right that the real effect of it should be made known to the country. His hon. Friend would by no means get rid of the difficulty and injustice of the income tax by his plan. He mitigated them only in a very insignificant degree. Nothing was easier than to point out anomalies in its incidence; but that fact only showed that they ought not to lay that stress on it they were now doing

that it was desirable to reduce the pressure to the minimum, and that they should only have recourse to the tax in an emergency, and for great objects; but the scheme proposed by his hon. Friend was full of objections and inequalities. Thus, for instance, there was no doubt that landed proprietors whose property was subject to mortgages were unjustly treated by the system of charging upon the gross rental; and he understood his hon. Friend to say that by his plan he would get rid of that injustice, by relieving the proprietor from a proportion of the charges of management; but that really was not sufficient, and would still leave him liable to more than his fair proportion as calculated upon his net income; and the proposal to increase the tax upon real property in order to relieve the taxpayer under Schedule D would increase the injustice, and make the proprietor of landed or house property liable to perhaps more than he paid then. His hon. Friend drew a line which would cause the greatest dissatisfaction, and give rise to questions that would go on spreading from year to year until the tax became perfectly odious, and utterly useless for all purposes of finance.

MR. HUBBARD replied: He should have been very glad to have his Return rectified according to the suggestion of his right hon. Friend the Member for Stamford; but he found that the Board of Inland Revenue could not, without much trouble and delay, distinguish the returns

of public companies. But the general result would not be very different from that under the form of Return he proposed. It was a principle in his scheme to assess differently the products of property and the earnings of skill and intelligence. The impossibility of learning the amount of traders' capital must reconcile one to the necessity of taxing the combined product of skill and capital in private trade; but as joint stock companies distinguished their proprietors' capital, it was both practicable and just to distinguish for taxation the salaries of the skilled labourer and manager from the dividend of the proprietor. His right hon. Friend objected to the second Return he had moved for; and as his right hon. Friend had admitted the point he wished to prove-namely, that his scheme so far from raising the effective tax on landowners' residue of rent from 11 d. to 13 d., would actually reduce it to 10d. he would omit it, and conclude by moving for the first Return only.

[Then the Returns, as amended, comprised in the Tabular Statement only, were agreed to, omitting the paragraph follow. ing the same.]

Returns ordered.

CHANNEL ISLANDS.
COMMISSION MOVED FOR.

SIR FREDERIC SMITH said, he rose to move the Address of which he had given notice. He could assure the House that he felt the responsibility he incurred in bringing so important a subject before it. Every year they had a debate raised upon the propriety of holding Alderney as a military station, and forming a harbour of refuge there. If that was a fit subject for discussion, how much more fit for it was the question whether they should hold those two larger Channel Islands, which were far more difficult to defend, and of much less value than Alderneynamely, Jersey and Guernsey. On what ground did they attempt to hold them? He did not believe they were under any moral obligation to do so; and still less did he believe in the possibility of their defending them with the small military force they possessed. He understood that the Duke of Wellington had suggested that 10,000 men would be required for the Channel Islands. Of that number Alderney would take 3,000; but what could be said in favour of locking up the remaining 7,000 in the other two islands? With

a properly organized militia Jersey and Guernsey could defend themselves. Some years ago the people of Guernsey maintained their own fortifications, but the works had been transferred to the War Department, and were maintained at the expense of this country. At Jersey England had always constructed the works. She built Fort Regent, placing it, however, in a wrong position, where the troops would be trapped instead of being sheltered; and it afforded no protection to the town of St. Helier's or the surrounding country. When the Duke of Wellington recommended 10,000 men for the Channel Islands, England had not the gigantic works now in progress at Portsmouth and elsewhere. The seventeen miles of fortifications proposed for Portsmouth would require a garrison of 25,000 men. Plymouth would require another 25,000, Chatham 15,000, Dover 6,000, Pembroke 8,000, the Isle of Wight 6,000, Sheerness 5,000, Ireland 10,000, and Scotland 10,000, making an aggre gate of between 100,000 and 110,000 men. The Militia and the Volunteers,

however valuable, could not defend their great arsenals against the best regular troops in Europe except their own; and they could not possibly spare 10,000 men of their regular army for the Channel Islands. Previous Commissions had inquired into the subject of the defence of these islands, but the Commissioners were mostly naval and military men who, though very able in their respective professions, required to have been associated with statesmen, so that the financial and political bearings of the question might be duly considered. Great blunders had been committed. In 1845 the Government determined, on the Report of a professional Commission, to construct the harbour of St. Catherine's, in Jersey, at a cost of £300,000. The work was stopped in 1862. That money had been entirely thrown away, and the work would be more useful to an enemy than it would be to England. It was worth nothing at present except to an enemy, and therefore the Government should either complete it, or remove what had been constructed. The militia of the islands should be put upon a proper footing, which certainly was not the case at present; for, if the inhabitants of Jersey could not in a great degree defend themselves, the 2,000 or 3,000 men we could send there would be thrown away. The points of landing upon the island were not numerous, and if—as would be the case