CHAP. king had originally offered to surrender his claim to the feudal incidents.

I.

The Cus

toms.

In the days of the Stuarts the excise formed the most important branch of the king's revenue. The customs duties were, however, far more ancient, and hardly less profitable. Some authorities have derived the name from the antiquity of the tax-the 'custom custom' or use, which formally gave it to the king. Customs, under the name of prisage and butlerage, were paid to the kings of England after the Conquest. Prisage was the right of purchasing, at the moderate price of 20s. a tun, one tenth of the wine imported in English vessels into England. Butlerage was a duty of 2s. a tun on every tun of wine, to which foreign importers, in consideration of their exemption from prisage, were liable. Both these duties dated from the reign of Richard I. The customs, to use the word in its larger and usual sense, were of later origin. The custuma antiqua et magna comprised the export duties on the three staple commodities of the kingdom, wool, skins, and leather. The custuma parva et nova, or tunnage and poundage, as they were commonly called, duties on every tun of wine imported or every pound of merchandise exported, were originally imposed on aliens only, though they were subsequently exacted also from British citizens. The lesser customs could only be levied with the consent of Parliament; the greater customs were the inherent right of the crown. When Edward I. promised to take no customs from merchants without the consent of the realm, he added the significant words, saving to us and our heirs the customs on wool, skins, and leather, formerly granted to us by the commonalty aforesaid.' But after the Restoration, when the rates of the great customs had been increased, the whole of the customs duties were placed on a common footing,

6

1 The derivation is so given in Johnson's Dict.; the old Norman French coustume being the immediate root of the word.

and were all of them included in the permanent Revenue of the crown.

СНАР.

I.

Branches

The customs were farmed by John for 1,000 marks, or 2,000l. a year. In the reign of his successor they amounted to 6,000l. But the amount was said to be injurious to trade. In 1590 Elizabeth raised the farm, which was then held by Sir Thomas Smith, from 14,000l.1 to 50,000l. a year. But the yield of the duties rose rapidly afterwards. On James I.'s accession it amounted to 127,000l.; and, at the close of his reign, it had reached 190,000l.2 It is stated, though probably incorrectly, that, at the outbreak of the Civil War, it had been increased to 500,000l. It was estimated at the period of the Revolution at 577,000l. a year. At the Other time of the Revolution the entire revenue of the State of the Re only slightly exceeded 1,600,000l. a year. The customs and the excise together contributed very nearly 1,200,000l. of this amount. The only other branches of importance were the hearth money and the Post Office. The former produced 200,000l.; the latter about 55,000l. a year.3 Hearth money was a very ancient tax, but a very unpopular one. It is mentioned in Domesday Book under the name of fumage or fuage, and consequently must have existed before the Conquest. It had, however, long fallen into disuse, when it was revived after the restoration of Charles II. It was a tax of 2s. on each hearth on all houses paying to church and poor; and was of course very burdensome to the poorer householders. It was

1 The amount is given by Philips as 13,000l.,and by Camden as 14,000l. Naunton simply says that the amount was doubled; and Sinclair, from whom these references are taken, conceives that the 14,000l. of Camden is a mistake in the translation, and that 24,000. ought to have been written. Vide Hist. of Revenue, 3rd ed. vol. i. p. 207, note.

2 Hist. of Revenue, vol. i. pp. 100, 104, 235, 324, 326. McCulloch, ad verb. Customs. McCulloch on Taxation, p. 227. Hume's Hist. of England, vol. v. p. 474.

3 These figures are taken from Commons Journals, 1688, pp. 37, 38. They are given differently in the return of 1869, where the temporary and expired revenue is included.

venue.

CHAP. abolished, at William III.'s own instance, immediately after the Revolution.1

I.

The Revenue not settled in 1689.

Such is a brief review of the revenue of this country at the period at which it may first be said to have had a revenue. Almost the first act of the Convention Parliament, after the Revolution of 1688, was to consider whether the revenue had devolved on William and Mary. No one, as Macaulay has pointed out, doubted that the lands and hereditaments of the crown had passed with the crown to the new sovereigns." But the income, derivable from the lands and hereditaments of the crown, was inconsiderable in comparison with that which was drawn from the customs and excise. William himself was pardonably anxious to obtain uncontrolled possession of the whole of this revenue. Holt, who almost immediately afterwards was made chief justice of the King's Bench; Pollexfen, who, after serving for a few weeks as attorneygeneral, was made chief justice of the Court of Common Pleas; Treby, who succeeded Pollexfen as attorneygeneral-all took the king's side. They maintained that the revenue was subjected to the same regulations as private property; that, having been granted to James for the purposes of government during his life, it could not be alienated from that purpose, or follow him after he had deserted his public trust; but that, while he lived, it belonged to the person substituted in his official state.' Fortunately for the country, a greater man than any of these three saw through the legal technicalities in which they were assiduously wrapping up the subject. Somers, who had already become the life, the soul, the spirit' of the Whig party, argued-for there seems to be no doubt that Macaulay and Campbell have supplied a correct interpretation of the purport of a speech which has come

6

1 Sinclair's Hist. of Revenue, p.

2 Macaulay's Works, vol. ii. p. 133.

6

Somerville, Political Transactions, pp. 267, 268. Campbell's Lives of Chief Justices, vol. ii. p. 133.

I.

down to us in the shortest and most compressed of sum- CHAP. maries-that the word life,' in the Act by which the revenue had been settled, must in this instance be interpreted as synonymous with reign'; that it was absurd to maintain that the revenue was to be exacted because James was naturally alive,' but that it was to be paid to his successors because he was politically defunct.' The House, convinced by Somers' arguments, adopted his position as their own. They decided, without dividing, that 'the revenue had expired.' But they did not proceed, as William probably anticipated, and certainly hoped that they would, to resettle the revenue. 'A long and painful experience' had convinced them that all the evils, which the country had had to endure during the last two reigns, had arisen from the imprudent haste with which the Commons had settled a revenue on the crown, and which had enabled the king to dispense with the aid of a Parliament. The Whigs, on their part, were determined that this opportunity should never be placed in the hands of another sovereign. And at the risk of incurring the king's displeasure, with the possibility of provoking his abdication, they persisted in their determination. That determination constitutes by far the most important event in the financial history of this country. It probably did even more than either Magna Charta or the Declaration of Rights, to secure the liberties of the English nation.

In the 160 years which succeeded this debate, four men of first-rate financial genius at different periods administered the finances of the kingdom. It was the object of Charles Montagu, Lord Halifax, to establish the tottering credit of the nation; to organise the debt; to reform the currency; and to insure an audit. It was the object of Sir Robert Walpole to develope the trade of the kingdom, and to free it from every hindrance; while, at the same time, the pressure of taxation was concealed from the taxpayer. With these views he developed the

I.

CHAP. excise, and devised the warehousing system. It was the object of William Pitt-till his intentions were frustrated by war-to obtain financial concessions from foreign Governments in return for concessions of our own. With this view he negotiated the famous commercial treaty with France. It was the object of Sir Robert Peel to free trade from every possible shackle, and to raise the money required for the purposes of the State in the simplest and most direct manner. The reform of the tariff, the repeal of the corn-laws, and the revival of the incometax, were the salient features of this policy. Sir Robert Walpole's financial policy may be said to have been founded on free trade and indirect taxation. Pitt's upon reciprocity and indirect taxation. Sir Robert Peel's on free trade and direct taxation.

The subsequent growth of the Revenue.

During the same period, the revenue, which the nation in 1690 took into its own custody, had increased with marvellous and unexpected rapidity. At the date of the Revolution, the revenue, including the hearth money, amounted to only 1,600,000l. At the close of the reign of William III. the national income, without the hearth money, exceeded 4,869,000l.1 In the interval, indeed, a tax of 4s. in the pound had been laid upon all lands, tenements, and other hereditaments, and on the profits of some offices; while a poll-tax, graduated according to the station of the taxpayer, and various other duties, had also been imposed. But the revenue had not merely increased from the addition of fresh duties. The old branches had concurrently been developed. The advantages of settled government, and of an improved trade, were promoting the prosperity of the kingdom; and the customs and the excise, in the place of only 577,000l. and 610,000l., were yielding substantial revenues of 1,469,000l. and 1,396,000l. Notwithstanding the repeal of the polltax, the revenue still continued to be maintained, and, in 1 Parl. Return, Sess. 1869, No. 566, part i. p. 26.