² The chief sources remain Buxton, S. C., Finance and politics: an historical study, 1783–1885, 2 (1888)Google Scholar, Northcote, S. H., Twenty years of financial policy (1862)Google Scholar, Seligman, E. R. A., The income tax (1911Google Scholar, with a useful bibliography), Hirst, F. W., Gladstone as financier and economist. (1931)Google Scholar. 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 ffGoogle Scholar. 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)Google Scholar.

³ Keynes, J. M., The general theory of employment, interest and money (1936), 202, 148Google Scholar.

⁴ A. de Tocqueville, L'Ancien Régime et la Révolution, book 11, chapter ix.

⁵ Income tax debate, 13 03 1848, Hansard cxcvii. 509Google Scholar.

⁶ MacGregor, D. H., Public aspects of finance (1939), I2Google Scholar. 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), 149Google Scholar.

⁸ Shehab, F., Progressive taxation (1953)Google Scholar, 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 proposalsGoogle Scholar.

¹⁰ See, for example, Cobden's bouleversement between 1842 and 1848; Hilton, op. cit. p. 262 n. and Cobden, R., ‘National Budget’ (1848)Google Scholar.

¹¹ See McCulloch, J. R., A treatise on…taxation (1863 edn), 166–7Google Scholar. see also O'Brien, D. P., J. R. McCulloch: a study in classical economics (1970), ch. xiGoogle Scholar, 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)Google Scholar. 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), 3Google Scholar.

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 1848Google Scholar.

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 ffGoogle Scholar. 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. 455Google Scholar. 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. 476Google Scholar. Hume's amendment to the Property Tax Bill was carried against the government.

²⁰ See Gladstone's speech of 8 05 1851, H cxvi. 727Google Scholar; 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, 329Google Scholar.

²¹ Parl. Papers 1852, ix. 1, 463Google Scholar.

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)Google Scholar, 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), 128ffGoogle Scholar.

²⁴ See, for example, J. G. Hubbard's open letter to Disraeli, , ‘How should an income tax be levied?’ (1852)Google Scholar.

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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 ffGoogle Scholar.

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²⁹ Peel, to Ashburton, , 18 10 1841Google Scholar, in Parker, C. S., Sir Robert Peel (1899), 11, 499Google Scholar.

³⁰ Peel, quoting a letter of 1842, on 8 03 1848, H xcvii. 287Google Scholar. 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)Google Scholar.

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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)Google Scholar. 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)Google Scholar; Levi, L., ‘On statistics of the revenue.…in relation to taxation’, Journal of the Statistical Society (03 1884), especially pp. 19 ffGoogle Scholar.; 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 ffGoogle Scholar.; Baxter, R. D., National income (1868)Google Scholar and The taxation of the United Kingdom (1869). Baxter (following Greg, W. R., ‘Principles of taxation’ in Essays (1853))Google Scholar 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), 90–104CrossRefGoogle Scholar. 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.

³⁷ Ibid.

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, 134Google Scholar.

⁴⁰ Diaries, 5 04 1851, iv, 322Google Scholar. 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)Google Scholar.

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 ffGoogle Scholar.

⁴⁵ Gladstone to James Wilson, 1 April 1853, in Barrington, E. I., The servant of all (1927), p. 230Google Scholar; I am obliged to Dr A. J. B. Hilton for this reference.

⁴⁶ H cxxv. 1395 (18 04 1853)Google Scholar.

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)Google Scholar. 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. 635Google Scholar.

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)Google Scholar.

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)Google Scholar, ch. xiii.

⁵¹ The figures are calculated from the tables on schedule D in PP 1870, xx. 580Google Scholar 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. 586Google Scholar. 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, 189Google Scholar.

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⁵⁶ PP 1852, ix. 307Google Scholar. 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. 343Google Scholar. 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. 723Google Scholar.

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⁵⁸ Gladstone to Tabberner, 25 November 1859, in Tabberner, J. L., Direct taxation and parliamentary representation (1860)Google Scholar.

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)Google Scholar.

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⁶² Schumpeter, J. A., History of economic analysis (1954), p. 403Google Scholar. 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. 92Google Scholar.

⁶⁵ Diaries, iv, 478 (18 12 1852)Google Scholar.

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. 425Google Scholar.

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⁷¹ See The Gladstone diaries, v, 29 (21 02 1855) and introduction, v, xxix ffGoogle Scholar.

⁷² In 1867 Disraeli recalled this co-operation as ‘a rare and gratifying incident’: H clxxxvi. 1115 (4 04 1867)Google Scholar.

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⁷⁵ H clxxxvi. 1117 (4 04 1867)Google Scholar.

⁷⁶ H clxxxvi. 1114 (4 04 1867)Google Scholar.

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⁷⁹ See The Gladstone diaries, v, xxxvi and 6 03 1857Google Scholar.

⁸⁰ See Shehab, Progressive taxation, ch. 8.

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⁸³ Diaries, v, 105, 16 02 1856Google Scholar. 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 1896Google Scholar.

⁸⁷ See, for example, the table at PP 1870, xx. 597Google Scholar.

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⁸⁹ The abatement system led to difficulties in the classes actually likely to be enfranchised; seeBlake, R., Disraeli (1966), p. 462Google Scholar. The idea was not new; see the private members' bill of 1854 to enfranchise 40s. income tax payers; PP 1854–1855, iii. 133Google Scholar.

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. 115ffGoogle Scholar.

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, 6aGoogle Scholar) 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. 644Google Scholar.

⁹³ Northcote in H ccxxviii. 1362 (6 04 1876)Google Scholar.

⁹⁴ See Cornford, J. P., ‘The transformation of Conservatism in the late nineteenth century’, Victorian Studies VII (1963–1964), 35–66Google Scholar.

⁹⁵ Northcote, in his Twenty years of financial policy (1862), pp. 361–72Google Scholar, 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, 197Google Scholar.

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. 673Google Scholar.

⁹⁸ H, 3rd series, ccxcviii. 1421, 8 06 1885Google Scholar.

⁹⁹ H, 4th series, xxxix, 1074, 16 04 1896Google Scholar.

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)Google Scholar, 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. 278Google Scholar. 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), 103CrossRefGoogle Scholar; ‘Liberal finance and social policy’ in Freeden, M., The new Liberalism (1978), pp. 134ff.Google Scholar; ‘Government finance’ in Matthew, H. C. G., The Liberal Imperialists (1973), pp. 250ft.Google Scholar; Murray, B. K., ‘The politics of the “People's Budget”’, Historical Journal, XVI (1973), 555CrossRefGoogle Scholar.

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.Google Scholar, and Rosebery's, ‘Memorandum on Harcourt's death duties’ of 3 04 1894Google Scholar, Rosebery MSS, National Library of Scotland.

¹⁰⁵ Gladstone, , ‘The past and present administrations’, Quarterly Review, CIV (10 1858), 551Google Scholar.

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. 185Google Scholar. For the United States, see Paul, A. M., Conservative crisis and the rule of law (1960)Google Scholar; for Germany, see Huber, E. R., Deutsche Verfassungsgeschichte seit 1789 (1963), III, 947Google Scholar and Witt, P.-Chr., Die Finanzpolitic des Deutschen Retches von 1903 bis 1913 (1970)Google Scholar.