Government, that relief was afforded in the first instance to the owners of these specific casks of spirits; and, the door having been thus opened for the infraction of the principle, so long and so strenuously defended, it was soon after abandoned, and the rule adopted which has since been followed, and which is more in consonance with a just and liberal policy.

It is much to be regretted that the full advantages of which the warehousing system is found to be susceptible were not recognised at the time of its first adoption. The Act of 1803 specifically permitted the warehousing of the most important articles of West India produce, without payment of duty, in the West India docks; and of rice, tobacco, wine, and spirits in the London docks: besides which, the permission was given to warehouse several articles, the bulk of which is great in proportion to their value, in places to be approved by the Commissioners of the Customs, and a more numerous assortment of goods might in the same way be deposited in warehouses to be approved by the Lords of the Treasury. Although the Act was thus confined in its operation, it contained authority to the Lords of the Treasury to extend its provisions to any other ports in Great Britain, and also to the warehousing of goods other than those mentioned in its various schedules. The power thus imparted was acted upon at first with the greatest caution. The construction and situation of the warehouses then existing in the various ports of the kingdom, and which had been built without reference to the kind of security required by the Government, were such that it was not considered consistent with the interests of the revenue to grant the same privileges to them as were conceded to the more secure warehouses of the docks in London. At the same time the small amount of advantages that would then have attended the construction of warehouses of satisfactory security was not sufficient to induce the merchants to make any efforts for obtaining it; and in proportion as trade increased, and fresh warehouses were needed, these were built on the old plans, and in appropriate situations, to meet the convenience of individual merchants. Had the system been placed at once upon its present liberal footing, the course in this respect pursued at the outports would have been different; warehouses equally secure with those of our great London establishments would have been at once erected, instead of those just described, which are too costly to admit of their being abandoned: and the effect of this has been in various ways injurious to commerce. The merchants at the outports, feeling jealous of those in London, have always importuned the Government to extend to themselves the indulgences which the importers in the metropolis received, and to which they were fairly entitled by the security against abuse which they could offer. On the other hand, the Government, feeling how difficult a thing it is to convince any body of men of the reasonableness of distinctions which

operate to their disadvantage, has been more slow than it would otherwise. have been to make concessions in situations where they would be unaccompanied by risk to the revenue; and in this way the progress of the warehousing system has been more slow, and up to the present moment is less favourable to commerce than it is capable of being made, or than it would have proved if a different course had been adopted from the first. The privilege of warehousing goods without payment of duty was first extended to Ireland in 1824. The different ports in the United Kingdom to which it is now granted, with the dates of its first concession to each, are as follows::

Among the practical advantages that have attended the adoption of the warehousing system, may be mentioned the simplification of the Custom-house accounts, and the abridgment of labour in the revenue departments. During the time when the duty was exacted on the importation of goods, and was returned upon their re-exportation, the machinery of the Custom-houses and Excise-offices throughout the kingdom was complicated, through the necessity of creating checks for the prevention of frauds on the part of the exporting merchants. At that time the largest part by far of the money received on importation was paid back on the subsequent exportation of the goods, and so systematically and extensively were frauds carried on under this system, that many large fortunes were created by that means, notwithstanding the enormous fines which at various times were imposed on their possessors when their fraudulent proceedings were brought to light. One extensive dealer in foreign spirits is known to have openly boasted to the Commissioners of Excise, on the occasion of paying to them a fine of 30,0007., that he was still very largely in their debt. At that time, and before the construction of docks in the port of London, large cargoes of valuable goods-the more valuable by all the amount of duties that had been paid upon them-were deposited in private vaults and warehouses in the city, where they were exposed to pilfering and to fraudulent admixtures and substitutions, very prejudicial to the owners, and for the amount of which the large compensations paid by the dock companies are considered to have formed a very inadequate compensation to the warehouse-keepers. It is no small praise of the warehousing system to say, that it has thus removed much of the temptation to fraudulent proceedings on the part of a numerous proportion of the persons to whom trusts of this kind were necessarily confided.

SECTION IV.

PUBLIC REVENUE AND EXPENDITURE.

CHAPTER I.

FINANCIAL SITUATION OF THE KINGDOM AT THE BEGINNING OF THE PRESENT CENTURY.

Financial Condition at the close of the 18th Century-Triple Assessment-Income-tax Imposed-Repealed - Enormous Government Expenditure-Fallacious show of Prosperity-Misery of the Working Classes-Their diminished Command of the Necessaries of Life-Effect of Mechanical Inventions in supporting the Country under Difficulties.

In order to give an intelligible account of the financial state of the kingdom at the beginning of the present century, it is necessary to explain briefly the system which had been brought into operation by Mr. Pitt during the preceding three years.

In November, 1797, that minister had recourse to what he was pleased to call "a perfectly new and solid system of finance." The public expenditure of that year amounted to 25 millions, of which sum only 6 millions were provided for by existing unmortgaged taxes, leaving 19 millions to be raised by extraordinary means. In the then condition of the money-market it was felt to be impossible to borrow such an amount in the ordinary manner, that is, providing by new taxes for the payment of only the permanent annual burthen occasioned by the increased debt; and a new impost, calculated to produce seven millions, was sanctioned by Parliament, which impost was to be continued until it should, in conjunction with the produce of the sinking fund, repay the twelve millions that would be still deficient. This new system of finance might have been entitled to the character given of it by Mr. Pitt, if it had not been probable-nay, certain-that in the following years an equal expenditure must be met by similar means, until the seven millions would prove inadequate even for the payment of the annual interest of the sums for

which the tax was imposed, when it would become part of the permanent burthens of the country. This new impost, to which the name of "triple assessment" was given, was in fact an addition made to the assessed taxes, "in a triplicate proportion to their previous amount-limited, however, to the tenth of each person's income."

The adoption of this, or some similar plan of financial arrangement, was hardly a matter of choice with the minister, by whom the funding system, as ordinarily practised, could not have been any further pursued at that time. Unfortunately for the success of the principle which it was thus sought to establish, the mode in which it was proposed to raise the seven millions of additional revenue was highly unpopular, and indeed it has always excited dissatisfaction on the part of the public to be called on for the payment of any tax from which they have not the power to protect themselves, by abstaining from the use of the taxed commodity. It is this consideration which has always made our finance ministers prefer indirect to direct taxation, and which led, during the progress of a long and expensive war, to the imposition of duties that weighed with destructive force upon the springs of industry. The financial difficulties by which the Government was then embarrassed may be known from the fact that a loan of three millions was raised in April, 1798, at the rate of 2001. 3 per cent. stock, and 5s. long annuity for each 1007. borrowed, being at the rate of 6 per cent., and that the "triple asesssment," which was calculated to produce seven millions, yielded no more than 4 millions. In the following December the triple assessment was repealed, and in lieu of it an income-tax was imposed at the rate of 10 per cent. upon all incomes amounting to 2007. and upwards, with diminishing rates upon smaller incomes, down to 607. per annum, below which rate the tax was not to apply. This tax was estimated to produce ten millions: it was called a war tax; but when the minister proceeded to mortgage its produce to defray the interest of loans to a large amount, such a name appeared to be little better than a delusion. Like the triple assessment, the produce of the income-tax fell greatly short of its estimated amount, and yielded no more than seven millions, a large part of which was quickly absorbed to defray the interest of loans for which it was successively pledged. In 1801, after deducting the sums thus chargeable on it, this tax produced only four millions towards the national expenditure. In proposing a loan of 25+ millions for the service of that year, it was considered inexpedient to mortgage the income-tax any further, and new taxes were imposed, estimated to yield 1,800,000l. per annum. In March, 1802, peace was made with France, and in the same month notice was given by the Chancellor of the Exchequer, Mr. Addington, of his intention to repeal the income-tax, which was felt to be highly oppressive, and had become more and more odious to the people. In effecting this repeal, and at the same time to