182 REPORT 1870. 



to see tlie difference. We are still told that there is no such thing as free trade, 

 and that we shall not have it until all custom-houses are swept away. This doc- 

 trine rests, however, upon a new interpretation of the expression free trade, which 

 is quietly substituted for the old meaning. Cobden, however much he might be 

 in favom' of direct taxation, took care to define exactly what he meant by free 

 trade. He said : — 



" What is free trade ? Not the pulling down of all custom-houses, as some of 

 our opponents try to persuade the agricultural labourers. Our children, or their 

 offspring, may be wise enough to dispense with custom-house duties ; they may 

 think it prudent and economical to raise revenue by direct taxation ; we do not 

 propose to do that. 



" By free trade we mean the abolition of all protective duties. 



" We do not want to touch duties simply for revenue, but we want to prevent 

 certain parties from having a revenue which is to benefit themselves, but advantage 

 none else ; we seek the improvement of Her Majesty's revenue." 



Let us, then, candidly acknowledge that in Cobden's sense free trade is actually 

 achieved. Any one the least acquainted with our revenue system knows with what 

 skiU our tariff' has been adjusted by Peel, Gladstone, and Lowe, so that the articles 

 taxed should be of entirely foreign production, or else the customs duty should be 

 exactly balanced by an excise duty. We have now a very large revenue of about 

 forty millions, raised by customs or excise duty on a small number of articles, with 

 the least possible interference with the trade of the country. A very large part, 

 too, is raised upon spirituous liquors, the consumption of which we desire, on other 

 grounds, to reduce rather than encourage. 



For the future, then, the remission of customs duties will be grounded on other 

 motives than it has often been in the past ; and it becomes an open question whether 

 there are not other branches of revenue far more deserving attention. It must not 

 be supposed that foreign trade is to be encouraged before everything else. The 

 internal trade and industry of the comitry is at least equally deserving of attention ; 

 and it may be that there are stamp-duties, licence-duties, rates, or other taxes which, 

 in proportion to the revenue they return, do far more injury than any customs duties 

 now remaining. It is impossible, for instance, to defend the heavy stamp-duty 

 paid by the articled clerks of attorneys on their admission ; and, if I went into 

 detail, it would be easy to point out scores of cases where the attention of the 

 Chancellor of the Exchequer is needed. 



I may point to local taxation especially as a subject requiring attention, even 

 more than any branch of the general revenue. Until within the last few years the 

 importance of the local rates was to a great extent overlooked, because there were 

 no adequate accounts of their amount. The returns recently obtained by the 

 Government are even now far from complete, but it becomes apparent that at least 

 one-fourth pai't of the whole revenue of the kingdom is raised by these neglected 

 rates and tolls. Their amount is more than equal to the whole of the customs 

 duties, upon the reform of which we have been engaged for thirty years. Never- 

 theless we continue to allow those rates to be levied substantially according to an 

 act passed in the reign of Queen Elizabeth. Whole classes of property which were 

 unrated three centm'ies ago are unrated now, and it vri.ll be a matter of great diffi- 

 culty to redress in an equitable manner inequalities which have been so long tole- 

 rated. The subject is of the more importance because there is sure to be a continuous 

 increase of local taxation. We may hope for a reduction of the general expendi- 

 ture, and we shall expect rather to reduce than raise the weight of duties ; but all 

 the more immediate needs of society, boards of health, medical oflicers, public 

 schools, reformatories, free libraries, highway boards, main-drainage schemes, water- 

 supplies, purification of rivers, improved police, better poor-law medical service — 

 these, and a score of other costly reforms, must be supported mainly out of the local 

 rates. Before the difficulties of the subject become even greater than they now 

 are, I think that the principles and machinery of local taxation should receive 

 thorough consideration. At present the complexity of the laws relatmg to poor 

 rates is something quite appalling, and it is the herculean nature of the reform 

 required which perhaps disinclines financial reformers from attacking it. Several 

 most able members of the Statistical Society have, however, treated the subject, 



