Please note, due to scheduled maintenance online transactions will not be possible between 07:00 - 10:00 GMT, on Thursday 21st March (03:00-06:00 EDT, 21 March, 2019). We apologise for any inconvenience.
2 The chief sources remain Buxton, S. C., Finance and politics: an historical study, 1783–1885, 2 (1888), Northcote, S. H., Twenty years of financial policy (1862), Seligman, E. R. A., The income tax (1911, with a useful bibliography), Hirst, F. W., Gladstone as financier and economist. (1931). Hirst's study was specifically commissioned as an anti-Keynesian work by H. N. Gladstone in 1930 (see its preface). Useful surveys of an apolitical sort will be found in Sabine, B. E. V., ‘Great budgets’ in British Tax Review, 1971 ff. No interest in budgets or their effects is shown in Hughes, J. R. T., Fluctuations in trade, industry and finance: a study of British economic development 1850–60 (1960).
3 Keynes, J. M., The general theory of employment, interest and money (1936), 202, 148.
4 A. de Tocqueville, L'Ancien Régime et la Révolution, book 11, chapter ix.
5 Income tax debate, 13 03 1848, Hansard cxcvii. 509.
6 MacGregor, D. H., Public aspects of finance (1939), I2. By neglecting local taxation and financing of domestic expenditure by loans from 1860 onwards, MacGregor overestimates the change in attitude to finance which he discerns in about 1880.
7 Gladstone, W. E., Political speeches in Scotland (1879), 149.
8 Shehab, F., Progressive taxation (1953), by considering only direct taxation, misses the overall dimension.
9 See Hilton, Boyd, Corn, cash, commerce (1977), 261–3 for a subtle discussion of the context of the 1830 proposals.
10 See, for example, Cobden's bouleversement between 1842 and 1848; Hilton, op. cit. p. 262 n. and Cobden, R., ‘National Budget’ (1848).
11 See McCulloch, J. R., A treatise on…taxation (1863 edn), 166–7. see also O'Brien, D. P., J. R. McCulloch: a study in classical economics (1970), ch. xi, and, for Robert Torrens' shift of position, Hilton, op. cit. pp. 263–4.
12 Mill found that ‘an income-tax, fairly assessed on these principles, would be, in point of justice, the least exceptionable of all taxes’ (Principles ed. Ashley, W. J. (1909), 831). But his failure to achieve differentiation led him to oppose the tax in practice.
13 For a comment on this, see Seligman, E. R. A., Progressive taxation in theory and practice (1908), 3.
14 Financial Reform tracts 1st series, 1848–52, especially ‘The national budget for 1849, by Richard Cobden, Esq., M.P., in a letter to Robertson Gladstone’ (Tract 6).
15 See Hume's draft ‘report’ (note 22 below).
16 H xcvii. 506, 13 03 1848.
17 Although Disraeli called for part of local taxation to be taken over by the Consolidated Fund, he denied the [Financial Reform Association] ‘inference from my system, namely, that you should have recourse to a system of national rating’ 8 03 1849, H ciii. 425 ff. Hume's amendment (which mustered 70 votes) to Disraeli's motion was the first showing in the Commons of the F.R.A.
18 2 05 1851, H cxvi. 455. McCulloch wrote a memorandum to outline some of the inadequacies of Disraeli's 1852 direct tax proposals; see Hughenden MSS, B/IV/D/36b.
19 2 05 1851, H cxvi. 476. Hume's amendment to the Property Tax Bill was carried against the government.
20 See Gladstone's speech of 8 05 1851, H cxvi. 727; Gladstone had made a hurried return from Scotland to oppose the committee; see The Gladstone diaries, ed. Foot, M. R. D. and Matthew, H. C. G. (1974), 8 05 1951, iv, 329.
21 Parl. Papers 1852, ix. 1, 463.
22 There is a copy in the Derby MSS, Box 45. It is headed ‘Private and Confidential. It is particularly requested that this Paper, distributed to the Members of the Cabinet, may be considered strictly Confidential.’ It is unclear whether Hume sent his report directly to Disraeli; they were in fairly regular contact in 1851–2, but the relevant letter of? early June 1852 is missing from the Hughenden MSS (B xxi, H 73). The draft report was later printed by the , F.R.A.; Financial Reform Association pamphlets, 2nd series, n. 4 (1852), and Hume to Disraeli, November 1852, Hughenden MSS (B xxi, H 73).
23 See Walling, R. A. J., ed., The diaries of John Bright (1930), 128ff.
24 See, for example, J. G. Hubbard's open letter to Disraeli, , ‘How should an income tax be levied?’ (1852).
25 H cxxi. 53 (30 04 1852).
26 H cxxii. 458. For the negotiations surrounding this and other amendments see Conacher, J. B., The Peelites and the party system, 1846–52 (1972), pp. 152 ff.
27 Diaries, 26 11 1852, iv, 471.
28 Diaries, 27 11 1852, iv, 472.
29 Peel, to Ashburton, , 18 10 1841, in Parker, C. S., Sir Robert Peel (1899), 11, 499.
30 Peel, quoting a letter of 1842, on 8 03 1848, H xcvii. 287. Quoted by J. Hume in his draft report of 1852.
31 Gladstone to Peel, 4 11 1841. Parker, Peel, 11, 502.
32 Calculated from Public finance 4 in Mitchell, B. R. and Deane, P., Abstract of British historical statistics (1971).
33 Hubbard, J. G. in H ccxxix. 1205 (25 05 1876).
34 This was the conventional categorization of taxes; Baxter, R. Dudley suggested ‘Receipts and Outgoings’ as a more useful distinction (The taxation of the United Kingdom (1869), p. 20). There is a large contemporary literature on direct and indirect taxation and the appropriate ratio between them; see, for example, Utley, J., ‘The people's dialogue on direct and indirect taxation’ (1863); Levi, L., ‘On statistics of the revenue.…in relation to taxation’, Journal of the Statistical Society (03 1884), especially pp. 19 ff.; Newmarch, W., ‘Memorandum.… with especial reference to which direct and indirect modes of raising revenue are employed’, Journal of the Statistical Society (03 1861), pp.30 ff.; Baxter, R. D., National income (1868) and The taxation of the United Kingdom (1869). Baxter (following Greg, W. R., ‘Principles of taxation’ in Essays (1853)) was at odds with Levi on the amount indirect taxation bore proportionately on the working classes, Baxter arguing that their burden was usually exaggerated.
35 For its history see Calkins, W. N., ‘A Victorian free trade lobby’, Economic History Review, xiii (1960–1961), 90–104. Because there are no letters from Robertson to his brother in the main collection of the Gladstone papers in the British Museum, Mr Calkins believed that ‘there is no evidence that Robertson Gladstone carried on a systematic correspondence with his younger brother, William’. The hundreds of letters-on both sides of the correspondence – are in St Deiniol's Library, Hawarden, deposited in the Clwyd Record Office. I do not follow Mr Calkins in his view that the F.R.A. had little impact ‘as a moulder of public policy’, though certainly it failed in its main aims.
36 W. E. Gladstone to R. Gladstone, 27 December 1848, Hawarden papers.
38 Gladstone to Bagehot, 29 December 1859, Add. MS 44530, f. 123. He went on to state the Peelite view: ‘If I had a journal, I would, with the amount of reserve I might find necessary and no more, aim at showing again and again the profitableness of remissions which reproduce revenue by means of enriching the people; and in quiet comparison with vast outlay on military establishments…’.
39 ‘An examination of the official reply of the Neapolitan Government 1852’ in Gleanings of past years (1879), iv, 134.
40 Diaries, 5 04 1851, iv, 322. In this, Gladstone's aim was directly contrary to that of the F.R.A., and of his brother; see Calkins, op. cit. p. 101.
41 Some passages suggest this; H cxxiii. 1681, 1685 (16 12 1852).
42 For the committee, see The Gladstone diaries, iv, 479 ff. For Gladstone's memorandum of 4 January 1853 for the committee, essentially to prevent differentiation, but also analysing various approaches to the tax, see Add. MS 44741, f. 2.
43 To avoid controversy, the machinery remained decentralized; PP 1870, xx. 342.
44 1853 budget speech, in Bassett, A. T., Gladstone's speeches (1916), 182 ff.
45 Gladstone to James Wilson, 1 April 1853, in Barrington, E. I., The servant of all (1927), p. 230; I am obliged to Dr A. J. B. Hilton for this reference.
46 H cxxv. 1395 (18 04 1853).
47 Maintainers of the direct tax tradition in the 1860s continued to give far more attention to details of indirect taxes to be taken off than to implications of direct taxes to be imposed. See e.g. Noble, J., ‘Fiscal reform: suggestions for a further revision of taxation’ (1865). An exception was W. Pollard Urquhart's paper at the Sheffield meeting of the National Association for the Promotion of Social Science in 1864, an important landmark in the history of the land tax movement; see Transactions of the National Association of Social Science (1864), p. 635.
48 Gladstone often referred to the danger of ‘socialism’ or ‘communism’ when his form of the tax was threatened; see his comments on Northcote's reconstruction in 1876: H ccxxix. 989 ff. (18 05 1876).
49 H cxxiii. 881, 887. Disraeli also proposed to extend the tax ‘to funded property in Ireland and to salaries in that country’ Ireland was being used as a tax haven. The extension of income tax to Ireland (in return for wiping out debts resulting from the famine) cannot have affected very many individuals; the number of ‘persons’ charged under Schedule D in 1854 was 16, 686, rising to 20, 307 in 1868; PP 1870, xx. 584.
50 Stamp, J. C., British incomes and property (1916), ch. xiii.
51 The figures are calculated from the tables on schedule D in PP 1870, xx. 580 ff. ‘Persons’ in these tables did not mean ‘individuals’ the schedule D figures therefore merely suggest a trend; see Stamp, op. cit. pp. 238 ff.
52 See the table in PP 1870, xx. 586. For the problems of calculations and assumptions about the abatements, see Stamp, op. cit. pp. 295 ff. The treasury seems to have overcome most of these problems in producing this table.
53 J. Lloyd Phelps to Gladstone, and reply, 21 April 1853, Add MS 44374, f. 253, not found published. For a note on this theme see Anderson, O., ‘Wage earners and income tax: a mid-nineteenth-century discussion’, Public Administration (1963), XLI, 189.
54 H cxxxvii. 1592, 20 04 1855.
55 Baxter, R. D., National income (1868), p.65.
56 PP 1852, ix. 307. Tax surveyors were locally, not centrally organized, and their findings were locally common knowledge. Centralization of tax inspection was strongly resisted, only being achieved in 1868. The Commissioners of Inland Revenue commented on this change in 1870: ‘The concentration of the entire body of Inspectors at the Head Office…has brought about a greater uniformity of action among the Inspectors in superintending the assessment and collection of taxes throughout the country and in controlling the proceedings of the Surveyors’ PP 1870, xx. 343. Even after centralization embarrassment continued, SirPrimrose, H. telling the 1906 select committee ‘there are a certain number of people who are extremely sensitive about disclosing even to the officials at Somerset House the fact that they have not got more than a certain amount’, claims for abatement consequently not being submitted: PP 1906, ix. 723.
57 H ccxix. 968 (18 05 1876).
58 Gladstone to Tabberner, 25 November 1859, in Tabberner, J. L., Direct taxation and parliamentary representation (1860).
59 This was disputed by R. Dudley Baxter, Disraeli's statistician; see above note 34.
60 Quaritch, B., ‘The franchise considered in a letter to…W. E. Gladstone’ (1866).
61 Buxton, S., A handbook to political questions of the day (9th edn, 1892), p. 342.
62 Schumpeter, J. A., History of economic analysis (1954), p. 403. It was wholly appropriate that Schumpeter should make Gladstone his chief example in his chapter ‘Socio-political backgrounds’; Gladstone certainly saw his activities in Schumpeterian terms, though Schumpeter seems to me to have an over-simplistic view of what ‘Gladstonian finance’ actually consisted of.
63 I have discussed this point further in the introduction to The Gladstone diaries, v, xxxvii.
64 Letter of 8 December 1852 in Bassett, A. Tilney, Gladstone to his wife (1936), p. 92.
65 Diaries, iv, 478 (18 12 1852).
66 The fiction of the temporary tax was maintained for the rest of the century, but the fact was made officially clear in the great résumé of national finance ordered by Gladstone just as he ceased to be chancellor in 1866: income tax ‘has since become recognised as a permanent source of the Public Income’; PP 1868–1869, xxxv. 425.
67 Budget speech, 1853, in Bassett, A. Tilney, Gladstone's speeches (1916), p. 219.
68 R. Gladstone to W. E. Gladstone, 23 April 1853, Hawarden MSS.
69 H xcvii. 309 (8 03 1848).
70 ‘Minutes of evidence taken before the committee of public accounts’, 2 06 1862, PP 1862, xi. 104–15.
71 See The Gladstone diaries, v, 29 (21 02 1855) and introduction, v, xxix ff.
72 In 1867 Disraeli recalled this co-operation as ‘a rare and gratifying incident’: H clxxxvi. 1115 (4 04 1867).
73 In fact, British overseas investment earnings increased from £11.8 m. in 1853 to £31.1 m. in 1868. See Mitchell and Deane, op. cit., Overseas trade 16.
74 H clxxxvi. 1138 (4 04 1867).
75 H clxxxvi. 1117 (4 04 1867).
76 H clxxxvi. 1114 (4 04 1867).
77 Derby to Gladstone, 11 February 1857, Derby MSS Box 135, in care of Lord Blake.
78 Gladstone to Sir W. Heathcote, 4 May 1861, quoted in Morley, J., Life of Gladstone (1903) 11, 633.
79 See The Gladstone diaries, v, xxxvi and 6 03 1857.
80 See Shehab, Progressive taxation, ch. 8.
81 H clxx. 2241 (16 04 1863).
82 Diaries, v, 197, 14 02 1857.
83 Diaries, v, 105, 16 02 1856. The house duty, rather than the income tax had been Gladstone's proposal in 1841–2; see Gladstone to Peel, 4 November 1841, in Parker, Peel, II, 502. He considered expanding house duty in 1874; Add. MS 44542.
84 Budget speech of 1861, quoted in Hirst, op. cit. p. 205.
85 Mallet, British budgets, 1st series, p. 74, seems to me to misinterpret this simile.
86 H, 4th series, xxxix. 1074, 16 04 1896.
87 See, for example, the table at PP 1870, xx. 597.
88 Account of a meeting in January 1874 by Welby, R. E. in his ‘Mr. Morley's life of Gladstone’, The Empire Review (11 1903).
89 The abatement system led to difficulties in the classes actually likely to be enfranchised; seeBlake, R., Disraeli (1966), p. 462. The idea was not new; see the private members' bill of 1854 to enfranchise 40s. income tax payers; PP 1854–1855, iii. 133.
90 Marlborough to Lord A. Churchill, n.d. [ca. April 1860], Blenheim MSS; I am obliged to Dr R. Quinault for this reference. See alsoSmith, P., Lord Salisbury on politics (1972), pp. 115ff.
91 H ccxx. 1016, 3 July 1874. Lewis's motion received virtually no support, save from J. G. Hubbard, stating his well-known views on differentiation. Lewis was opposed by Grant Duff, Fawcett and Lubbock, who stated the liberal predilection for direct taxation. Lewis's motion was defeated by 139:38; the House had to be counted four times during the brief debate. The National Anti-Income Tax League was inaugurated at a meeting in the Guildhall on 13 December 1872(see The Times, 14 12 1872, 6a) but seems to have had no subsequent history. It sprang from an anti-income tax conferencein Birmingham in May 1872 (see The Times, 23 May 1872).
92 Northcote in H ccxxix. 984 (18 May 1876). The actual total was ‘about 244,000 fewer persons brought into assessment for 1876–7 under Schedules D and E’; 20th board of inland revenue report, PP 1878, xxvi. 644.
93 Northcote in H ccxxviii. 1362 (6 04 1876).
94 See Cornford, J. P., ‘The transformation of Conservatism in the late nineteenth century’, Victorian Studies VII (1963–1964), 35–66.
95 Northcote, in his Twenty years of financial policy (1862), pp. 361–72, complained about the permanence of the income tax after 1853, but on the grounds that it encouraged expenditure, not because of its social implications.
96 Churchill planned to balance this on the direct side by a reduction of income tax from 8 d. to 5d. But while the income tax reduction would surely have been short-lived, the new death duties (a graduated succession duty) would have had consequences as profound as those of Harcourt's graduated estate duty of 1894. His son observed laconically: ‘The increase which Lord Randolph contemplated in the death duties, would have been unpopular with the Conservative party.’ Churchill, W. S., Lord Randolph Churchill (1906), II, 197.
97 H 4th series, xi. 1310–50, 27 April 1893. There is an obvious need for a detailed study of conservative and liberal unionist finance, especially with respect to its views on the relationship of national and local taxation. A useful summary of the development of this relationship will be found in the memoranda of Sir E. W. Hamilton and Sir G. H. Murray to the Balfour royal commission on local taxation, PP 1899, xxxvi. 673.
98 H, 3rd series, ccxcviii. 1421, 8 06 1885.
99 H, 4th series, xxxix, 1074, 16 04 1896.
100 See Mallet, British budgets, 1st series, table XIV.
101 One of the demands of the ‘Newcastle programme’; see Maccoby, S., The English radical tradition (1952), item 69.
102 For most of the nineteenth century, income tax was in principle at a flat rate, but with abatements at the lower end; up to 1863 incomes between £100 and £150 paid at a lower rate, after 1863 an abatement of £60 on incomes between £100 and £200 was allowed, a system which was subsequently several times expanded. As Stamp observes, ‘The use of abatements is merely a device to obtain a kind of graduation’ Stamp, J. C., British incomes and property (1916), p. 278. For what may be called ‘positive’ graduation, see the report and evidence of Dilke's 1906 select committee on the income tax, PP ix. 659.
103 See Mallet, British budgets, 1st series, part 1. For the Edwardian taxation crisis, seeEmy, H. V., ‘Financial policy and party politics before 1914’, Historical Journal, XV (1972), 103; ‘Liberal finance and social policy’ in Freeden, M., The new Liberalism (1978), pp. 134ff.; ‘Government finance’ in Matthew, H. C. G., The Liberal Imperialists (1973), pp. 250ft.; Murray, B. K., ‘The politics of the “People's Budget”’, Historical Journal, XVI (1973), 555.
104 Of course, neither side was unanimous: the liberal unionists and conservatives most obviously not so on tariffs, but some liberals in turn were alarmed at disproportionate increases in direct taxation; see Gardiner, A. G., The life of Sir William Harcourt (1923), II, 282ff., and Rosebery's, ‘Memorandum on Harcourt's death duties’ of 3 04 1894, Rosebery MSS, National Library of Scotland.
105 Gladstone, , ‘The past and present administrations’, Quarterly Review, CIV (10 1858), 551.
106 Gladstone to Robertson Gladstone, 20 April 1853; Hawarden papers.
107 By 1900 the following had an income tax: Prussia (from 1891 graduated from £45 to £5,000) and several other of the larger German states (but raised as State, not federal, taxes), Switzerland, Austria, the Netherlands, Denmark, Sweden and Norway, Italy, Spain, Japan, most British colonies of European settlement. Countries with no income tax: United States (declared unconstitutional in Pollock v. Farmers' Loan and Trust Company, 1894), France, Belgium, Hungary, Portugal, Russia. See PP 1906, lxxxv. 33 and liii. 185. For the United States, see Paul, A. M., Conservative crisis and the rule of law (1960); for Germany, see Huber, E. R., Deutsche Verfassungsgeschichte seit 1789 (1963), III, 947 and Witt, P.-Chr., Die Finanzpolitic des Deutschen Retches von 1903 bis 1913 (1970).
1 An earlier version of this paper was given at a colloquium organized by The Disraeli Project at Queen's University, Ontario. I am obliged to Mr J. A. Kay and Dr R. I. McKibbin for their comments on a later draft.
Email your librarian or administrator to recommend adding this journal to your organisation's collection.
* Views captured on Cambridge Core between <date>. This data will be updated every 24 hours.
Usage data cannot currently be displayed