THE

LIVERPOOL FINANCIAL REFORM ASSOCIATION

WAS INSTITUTED IN LIVERPOOL, ON THE 20th OP APRIL, IMS,
FOR THE FOLLOWING

OBJECTS :-

1 . To use all lawful and constitutional means of inducing the most
rigid economy
in the expenditure of the Government, consistent with due e£Sciency
in the several
departments of the public service.

2. To advocate the adoption of a simple and equitable system of
direct taxation,
fairly levied upon property and income, in lieu of the present
unequal, complicated,
and expensively-collected duties upon commodities.

Political partisanship is distinctly disowned, the Association
being composed of
men of all political parties.

ROBERTSON GLADSTONE, Prmdmt.

TERMS OF MEMBERSHIP.

Every person contributing Five Shillings per annum, or upwards,
shall be a
Member Subscribers of Ten Shillings, or upwards, per annum, are
entitled to all
the Publications of the Association, including the back numbers, of
which a list •
is subjoined, postage free.



The following is a list of the Subjects discussed in these
publications : —

TRACTS.

The Civil List and the Pension List 1, 2.

Amount and Sources of Taxation 3.

Army, Ordnance, Commissariat, Navy, and Colonies. .. 4,6,7,9.

Cobden's National Budget 6.

Woods, Forests, and Estates of the Crown 8.

Shipbuilding and Engine making 10, 13.

Colonial Expenditure and Government 11, 12.

Miscellaneous Abuses 14.

Direct Taxation 16, 27.

National Expenditure 16.

Evils of Indirect Taxation 17, 19, 20, 21, 23, 24, 26.

Civil Service 18.

Patent Laws 22.

Stamp Laws 26.

Historical Review of the Fiscal System 28, 29, 80, 31, 82, 33, 34,
35.

NEW SERIES.

The Aristocracy and the Public Service 1, 2.

Income and Property Tax 3, 4.

Cost of Customs and Excise Duties

Turkey, Russia, and EngMsh Interference 6.

Ecclesiastical Courts of Record 6.

The Way the Public Money Goes 7.

Black Mail to Russia 8.

The War, the War Budget, the Ministry, and the Times . . 9.

Administrative Reform 10,11.

Decimal System of Currency and Accounts 12.

Governmental Improvidence 13.

The Royal Household 14.

The Army and the Income Tax 16.

Fiscal Doings of the Session, 1866 16, 17.

Cooking of tha National Accounts 18.

Addresses on Direct Taxation 19.

Governmental Gun Making 20.

The Hudson's Bay Company 21, 24.

National Book-keeping 22.

Governmental Mudel Farming 23.

Constitution, Objects, and Proceedings of tne Association. 24.

Post-office Orders to be made payable to the Treasurer of the
Association,
namely, John Smith, Esq., Waterloo, near Liverpool.

0, York BuiIiDinqs, Dale Strbkt,
LivBBFOOL, April, 1868.







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THE FINANCIAL REFORM ASSOCIATION.



As a sufficient number of the Financial Reform Tracts, of the
new series, to form a second volume, con'esponding with the first
in size, and, it is hoped, in value, has now been issued, it has
been deemed expedient to bring them to a close. The present
Tract will therefore be the last of the second series, and members
who may be in want of any of the back numbers to complete thoir
sets for binding will do well to make early application.

The question as to the propriety of commencing a third series
on the same plan, or of substituting for a Tract devoted to
one subject, and appearing at comparatively distant intervals, a
monthly periodical, embracing more variety of topics, and treating
of the many important matters which are constantly arising con-
nected with Finance, Taxation, and Commerce, whilst the public
interest in them is still fresh, has been seriously and anxiously
discussed at various meetings of the executive body. After
mature deliberation it has appeared to the Council that a publi-
cation of ihe latter nature, more diversified in its contents, and
more frequent and regular in its appearance, will be best adapted
to enlarge the circle of readers, to extend the adoption of the
principles of the Association, and, consequently, to promote the
accomplishment of its three grand objects. Public Economy,
Equitable Taxation, and perfect Freedom of Trade. For universal
adhesion to these principles, on the part of all true lovers of
their
country and mankind, the Council are thoroughly convinced that
nothing more is necessary than that they should be perfectly
understood.



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In lieu of the Tracts, therefore, and as a more efficient organ
of public instruction in fiscal philosophy, the new periodical will

be published at the beginning of every month under the title of
the Financial Reformer, It will be devoted to the consideration
of the same class of subjects as the Tracts, both editorially and
by correspondence; to a record of the proceedings of the Council;
to financial proceedings in parliament; and to important parlia-
mentary documents, the bulk and expense of which render them
inaccessible to the general public. Its mission will be to show
the great injustice, impolicy, and evil consequences of our present

fiscal system, both as regards the levying and expenditure of
taxes, on the one hand, and the great national advantages, to all
classes of the community, which would certainly result from the
adoption of a better system, on the other. In this important
work of enlightening public opinion on the true principles of
Taxation and Government, the Council expect to receive the aid
of able and valued coadjutors.

The Financial Reformer will be issued, like the Tracts, free
to members, at a low price to non-subscribers, and will be occa-
sionally foi-warded free to public men, who do not subscribe,
but are likely to be influenced beneficially by its facts and
arguments. As no sale can be calculated upon, at least for a
considerable time to come, to meet anything like the expenses
of publication and distribution, it is confidently hoped that all
the present members of the Association will not only continue
their subscriptions, but exert their influence with friends and
acquaintance to obtain new subscribers, more especially as it
must be obvious that the objects of the Association will be most
effectually aided by the largest possible circulation, which must
be to a considerable extent gratuitous.

The claims of the Association to continued and increased
support, grounded on the services which it has rendered and may
yet render are so fully set forth in the Report presented at the
last public meeting of its members and friends, that that document
may form an appropriate conclusion to the second scries of the



WIPI



Financial Reform Tracts. It was published, with the resolutions
and petition adopted at the meeting, in several of the local
papers at the time; but it is, nevertheless, desirable that the
whole should be placed on permanent record amongst the tran-
sactions of the Association, in order that they may be bound up
with the second volume, and the Council have therefore deter-
mined on their republication.

The meeting in question was held at the Concert Hall, Lord
Nelson Street, on Thursday evening, January 91, 1867. It
was open to all comers and was most numerously attended. The
chair was occupied by L. Heyworth, Esq., M.P., and amongst the
invited guests was J. A. Roebuck, Esq., M.P. The proceedings
were perfectly unanimous. The following is a copy of the

REPORT.

In presenting an account of the proceedings of the Financial
Reform Association, since the last public meeting of the members
on the 16th December, 1853, and of its present condition, the
Council feel bound to allude, in the first instance, to the inter-
ruption of that wholesome and invigorating intercourse between
them and their constituents, which was contemplated in the 5th
rule passed for the guidance of the Association, at its original
institution, on the 20th of April, 1848 — viz. : " That there
should
be an annual general meeting for the presentation of a report,
and the passing of the accounts." The Council hope, however,
that a brief explanation on this point will be deemed satisfactory.


The annual meeting which ought to have taken place in 1853,
was delayed, from time to time, by circumstSSices over which the
Council had no control, until the proper period had long passed ;
and the two next years being years of warfare, the Council, though
divided as to the war itself, deemed it impolitic, if not
unpatriotic,
to present such an opportunity as a general meeting would have
afforded for any clashing of public opinion, which, by encouraging
the enemy, might have retarded the restoration of peace. This
difficulty being removed, the ordinary course of the Association is

now resumed ; the expression of public opinion is again invited ;
and the Council are convinced that the most unrestrained discus-
sion as to the origin of the late war, its policy, progress, and
results must be beneficial to the country.



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II 'i



These are questions to be argued otherwise than in a report of
the proceedings of the Association ; but it may be observed gene-
rally that all the disasters of the last two years, — tho lament-
able sacrifice of human life by other agencies than those of sword
or gun, — the squandering of millions more than would have
sufficed to furnish with every luxury of life the gallant soldiers
who were suffered to perish for want of its barest necessaries, —
in short, all the faults and follies exhibited in the disastrous
Crimean campaign are not only clearly traceable to defects in the
military, civil, and governmental services, which have been
exposed, over and over again, in the Financial Reform Tracts, but
were the necessary consequences of those defects.

If, after the harrowing details first proclaimed by newspaper
correspondents, established before the Sebastopol Committee of
the House of Commons, and confirmed by the Crimean Commis-
sioners, Sir John M'Neil and Colonel TuUoch, any doubt could
remain as to the true source of such evils, that doubt must have
been removed by the Report of the Chelsea Board of General
Officers, who, in their laboured attempt to exonerate inculpated
commanders ai d subordinate functionaries, endeavoured to show
that no person w^as to blame for anything that occurred in the
Crimea — that all that was possible was done by everybody, — and
that calamities which might have been avoided by the commonest
prudence, and the most ordinary precautions, were, one and all,
the results of inevitable necessity. Hence, whatever may be the
value of the general verdict of acquittal, at which the Chelsea
Board arrived, so far as individuals are concerned, that verdict
must be regarded as an unqualified condemnation of the system
under whieh the affairs of the British army, military and civil,
have hitherto been conducted.

The Council do not refer to the catalogue of blunders and
disasters which constitutes the history of the winter campaign
before Sebastopol, in order to . show that they have been true
prophets of evil. Their object is a higher and a better one.
They allude to them, as proving the necessity of extensive reforms
in the system, which not only rendered such things possible, but
is made to serve as an excuse for them when they occur. Accord-
ing to the proverb, "Experience gives wisdom to fools." The
dictum may be doubted ; but, certainly, the lessons of this hard
and stern teacher are only lost on fools ; and happy would it be









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for the nation, if, deriving wisdoia from the past, both mlers and
people should determine on adopting the measures requisite for
the avoidance of similar calamities in future.

For the reasons just glanced at, public assemblages of the
Association have been suspended ; but, in the interim, the weekly
meetings of the Council have been regularly held. At these
meetings questions of great interest, local as well as national,
have been discussed ; the action of the Legislature, the Govern-
ment, and of public servants generally has been watched ;
correspondence vrith friends of the cause in all parts of the king-

dom has been maintained ; and much valuable information has
been procured and disseminated by means of reports furnished to
the newspapers, and the publications of the Association. The
advantage of maintaining constantly at its post a body unwarped
by any considerations of private or party interests — ^uninfluenced

by any motive but a desire to promote the public good, must be
theoretically manife ,t. Some of vhe many proofs of its practical
utility will be given in the sequel.

Reflection and experience have more and more convinced the
Council of the Soundness of the two great principles on which this
Association was founded, viz., the strictest Economy, consistent
with efficiency in every branch of the public service ; and the
substitution of an Equitable system of Direct Taxation for the
present heterogeneous jumble of systems, under which imposts on
articles of general consumption, and materials of manufacture,
which increase prices far beyond the mere amount of the duties,
which are most costly in collection, and most demoralising in their

effects, and which diminish employment by restricting Trade, are
made to contribute far the greater part of the whole revenue of
the country. On the question of Economy there can be no second
opinion : on that of Direct versus Indirect the verdict would be
equally universal, if the advantages and disadvantages of both
systems were duly weighed. It is deeply to be regretted that the
indignation excited by an existing tax, which is most unequal in
itself, and most annoying in the mode of its enforcement, should
have indisposed the public mind for the calm consideration
essential to the determination of this important question, and
should also have been reflected on every form of Direct Taxation,
however different both ia principle and detail. To remove such
prejudices and disseminate sound principles of taxation, the






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Council have strenuously exerted themselves, and they rejoice to
say that their efforts have not been wholly unsuccessful. .

Since the last public meeting of the Association, seventeen
tracts have been issued, all, save one, within the last two years.
It is to be hoped that these have been studied by the members,
and circulated amongst their friends ; but as there are probably
many present who are unacquainted with these publications, a
brief sketch of their contents may not prove unacceptable.

The first of these tracts, entitled " Turkey, Russia, and English
Interference," was the production of a gentleman originally
opposed to the war, but afterwards, only anxious to carry it on
vigorously, and bring it to a successful conclusion. Its two main
objects were to denounce our constant intermeddling in the
domestic affairs of foreign nations, and the system of secret
diplomacy which is constantly involving us in disputes, often on
grounds which would be puerile if they only affected individuals,
but which are prepostei'ous in the highest degree as between
friendly nations. The Council hold that the Parliament and
people of this country have a constitutional right to be consulted
before either war is declared or peace concluded; and that the
exclusive privilege of doing both, claimed for the crown, by those
who act in its name, is a usurpation.

The next tract was an exposure of the abuses of the Ecclesiastical
Courts of Record, contributed gratuitously by William Downing
Bruce, Esq., barrister at law. On this subject the Council refer
with satisfaction to a beneficial obstniction of legislation by the

Peers during the last Session of Parliament. They allude to the
Government bill establishing a new ecclesiastical tribunal, at an
annual expense of £50,000, in addition to about thrice that sum
as an outfit, for the transaction of part of the business of the
existing courts, (which were to be continued,) the decision of
doctrinal disputes, and the trial of clerical delinquents,
averaging,
perhaps, about half a dozen per annum. Scarcely ever was there
a more flagrant attempt at a job; yet it received the sanction of
the
peoples' representatives, and was rejected by the House of Lords.

The next tract, entitled "The way the public money goes,"
shows that seven years ago, 37,301 persons, exclusive of the hosts
employed in th(" Royal Household, the diplomatic and consular
establishments, and the civil services abroad, divided amongst
them £5,895,982 in the shape of salaries, pensions, and retired










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allowances, being a gnneral average of .£'158 per annum each.
This may appear a reasonable amount, but when it is considered
that of the number stated, 26,081 receive less than £150 e«ujh,
and thousands of these less than 20s. a week, it will be seen that
many hardworking public servants must be miserably underpaid,
whilst the great prizes are divided amongst a comparative handful
of individuals, many of whom do little, and not a few absolutely
nothing for what they receive. The tract is an analysis of a
parliamentary return of 1849, obtained on the motion of the late
Mr. Joseph Hume. This veteran reformer was a member of the
Financial Reform Association, took an active interest in its
proceedings, and rendered it many valuable services. Probably
the very last communication on any public subject, penned by his
hand, was a letter to its president on the impolicy and prejudical
effects of the law of blockade. On his decease, the Council had
the melancholy satisfaction of condoling with his family, on an
event which was not only their bereavement, but a loss to the
nation which he had so long, so zealously, and, as regards honours
and distinctions, so thanklessly served. Of this tract there were
issued 2,000 copies, of which about 400 were sent to ministers and
members of both Houses of Parliament, and 200 to merchants of
Liverpool and Manchester, not members of the Association.

Another phase of secret diplomacy is exhibited in the tract
entitled " Black Mail to Russia," the production of Mr. C. D.
Collet, of London, in which it is shown how, in the matter of the
Russo-Dutch loan, British interests and British money were
sacrificed for the sake of bribing Russia to acquiesce in British
arrangements of Continental matters — a most vicious policy, of
which recent events have exhibited the futility.

Of the next tract, "The War, the War Budget, and the
Ministry," a considerable portion was devoted to the gyrativ is of
the Tivies newspaper. It may be here ob8er^'ed, that if that
influential but most versatile organ of public opinion had, seven
years ago, sought the removal of abuses in our miUtary system as
zealously as this Association, instead of maintaining that that
system was all but perfection, and denouncing the financial
reformers of Liverpool as a set of meddling busy-bodies who did
not know what they were talking about, the Times, in all proba-
bility, would never have had to record the calamities which
tardily opened its eyes ta the fact that the system which it had

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10



lauded theoretically as the best, was, in reality, the very worst
in Europe. There is no other military service in the world in
which a man, without any qualifications for command, can pur-
chase the right to exercise it, and sell that right again to
another
equally disqualified, just as a ship, a house, or a bale of mer-
chandise might pass from hand to hand. Some attempts have
been made, under the strong pressure of public opinion, to reduce
the militaiy chaos into something like order; but the vicious
influences of family interest, court favour, and political
patronage,
must have remained in force until very recently, otherwise honours,

distinctions, and promotion, would never have been showered so
lavishly on men, many of whom have done nothing to deserve
reward; whilst others ought to have been cashiered for neglect
of duty and incapacity.

The Financial Reform Association may fairly claim credit for
its share in the attempt made recently to remedy one great
abuse in the army, viz., the old Tailor-Colonel system, which
gave military officers the temptation and the opportunity to mulct
both the soldier and the piblic, by eking out their '•egimental pay

with profits on clothing, and also with the cost of clothing never
'"urchased, for men borne on the establishment as it was termed,
bii never embodied. It may be doubted, however, whether the
proposed remedy will not prove worse than the disease. An Army
Clothing Board has been estabhshed, at the head of which has
been placed Sir Thomas Troubridge, a distinguished oflficer no
doubt, but profoundly ignorant of the mysteries of cloth buying
and tailoring. His colleagues appear but ill-qualified to supply
his deficiencies in these respects. They are— Mr. Ramsay, late
a third class treasury clerk, but nephew to Lord Panmure, t^e
War Minister; Mr. Howel, Director-General of Contracts, who
may know something of such matters, but whose principal recom-
mendation probably was his relationship to Mr. Hayter, the
whipper-in ; and Mr. Godley, an income-tax collector of two
months' standing, who has been appointed Director-General of
Stores. But even if the Board were properly constituted, its
functions, as oflicially described, render it little more than a
channel of communication between army clothiers and colonels of
regiments — the latter having still, as heretofore, to deal
directly
with the contractors, and still the opportunity of deriving a
profit
from every contrp.'.'t, besides the additional allowance of jBOOO
per



11






annum granted in lieu of former perquisites. It is evident that
much more remains to be done before we shall cease to hear of
flimsy and ill-made clothing, that only stands a few months' wear ;

boots and shoes, of which the soles and upper leather part com-
pany on contact with adhesive soil ; axes that will not cut ; and
picks that break at the first, second, or third blow against any
hard substance. Wliat a world of injustice as regards the soldier,
and of peculation as regards the public, was revealed by the
Minister of War when, in announcing to the House of Lords
last session, that he had, (of his own authority, and without
parliamentaiy sanction,) increased the pay of private soldiers in
the Crimea, he expressed his conviction that their former pay
would have been amply sufficient, but for the caprices and
exactions of commanding officers !

Two tracts have been devoted to the suggestion of improve-
ments in the various departments of the pubUc service, of each
of which the London Administrative Reform Association took
2,000 copies for gratui'^ous distribution. With Mr. Samuel
Morley, the first chairman of this body, and some of its leading
members, the Council have been in most friendly communication ;
and they have now the gratification of seeing amongst them
Mr. John Arthur Roebuck, its present president. The objects of
the two Associations are in fact nearly, if not quite identical,
there
being scarcely one of the Financial Reform Tracts which does not
bear directly on some question of Administrative Reform. The
Council rejoice in the acquisition of such an auxiliary, though
conscious, as their allies must also be, that Uttle substantial or
permanent good can be effected, if, whilst measures are taken to
improve the efficiency of subordinate emploijes, the higher offices

of the state are still to be all but monopolised by men of aristo-
cratic birth and connections, who disdain trade and all connected
w ith it ; if youths, fresh from college, who can repeat the names
of Homer's heroes, or Actceon's hounds, — trace the pedigree of
heathen gods and goddesses, — scan classic authors, — or tell the
altitude of the mountains in the moon, but arc utterly ignorant
>f all that relates to the practical business of life, are still to
be
foisted into most responsible situations, as they may be under the
Treasury minute, which enables the minister to dispense with any
preliminaiy scrutiny before the new Board of Examiners. Prin-
c^^als as well as subordinates should be properly qualified ; for,



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if the former fail in conduct or capacity, the latter, however
competent, and however zealous, are pretty sure to go aatray.
Efficient heads being provided for the different departments, to
them should be entrusted the power of promotion, punishment,
and dismissal, subject to parliamentary control ; and on each of
these heads of departments would then fairly rest the whole
responsibility for that particular branch of the pubUc service
committed to his charge.

Three other tracts devoted to an cwpose of "Governmental
improvidence," and two to the "fiscal doings" of the last session
of Parliament, may be mentioned as bearing on the same question
of Administrative Reform. Amongst the remedies suggested by
the Council, is the appointment of a permanent Finance Com-
mittee of the House of Commons, for the supervision of all
financial business — a matter hitherto neglected or slurred over by

the national stewards, in a manner which would entail disgrace
and dismissal on a highway board or parish vestry. In further
ance of this object, the Council issued a circular address to
nearly
every member of both Houses of Parliament, and twice petitioned
the House of Commons. The circular was also forwarded to the
newspapers, many of which published it, and warmly approved of
the suggestion. There is reason to believe that to these and other
remonstrances emanating from the Association, it is owing that
rather more attention was paid last session to financial business —

that the shamefully neglected state of the national audit was made
known, and that there is now some prospect of improvemont in
the management of the public purse.

The Council have issued a tract on the decimalisation of
coinage, weights and measures, conceiving that such a change
will be attended with most beneficial consequences, as regards
the community generally in all the ordinary transactions of
business, and also as regards the State, by the very considerable
reduction in the staff of clerks and accountants, in almost every
public department, which it will render practicable.

A tract on the Royal Household exhibits both the costliness of
that establishment, and its worse than uselessness for its
professed
objects, which are — the personal comfort of the Sovereign, and
the honour and dignity of the Crown. It is shown that the
purposes for which something like half a million is annually
expended are oligarchical not royal. The Council yield to none



13



in true loyalty to their Sovereign ; they giiidge nothing that is
essential to her happiness, or comfort, or the proper maintenance
of the dignity of the Crown ; but, convinced that those objects
aro in no way promoted by the crowds of parasites who surround
her, — regarding the Royal Household as a concentration of the
abuses which prevail in other departments, and as a constant
example of extravagance to the aristocracy, operating through
them on other classes, — and believing the system to be as
repulsive
to the Queen personally, as it must be to the reflecting portion
of her subjects, — the Council have ventured to put into the mouth
of her Majesty an imaginary speech to Parliament, which, wild
as some may deem it, probably conveys nothing more than she
would herself think, feel, say, and do, if, with a full knowledge
of
the evils which require reform or abolition, she had also the
power of carrying her wishes into effect. But, though nominally
at the head of the greatest ompire the sun ever shone upon, the
Sovereign of this country is, in reality, helpless against the
oligarchy which rules it in her name. It is, therefore, the height
of injustice to charge upon her abuses over Avhich she has little,
if any, more personal control than the meanest of her subjects.
The Sovereign and people have one common interest; when
once this fact comes to be thoroughly understood, and acted upon,
the long reign ox the factions which have preyed upon both will
soon see its termination. It may, perhaps, be regarded as a
symptom of some change for the better that the Times newspaper
which, seven years ago, lavished all its powers of sarcasm on the
financial reformers of Liverpool for presuming to criticise the
constitution of the Royal Household, has come round to the very
opinions which it then denounced. In that paper of the 19th of
March last, there was an article on the subject, apropos to the
plunder of the royal plate, on its way from Buckingham Palace to
Windsor, as sweeping in its condemnation as anything that ever
emanated from the I'inancial Reform Association. It is there
shown that, notwithstanding the multitudinous staff of principal
porters, assistant principal porters, gentlemen porters, yeomen
porters, extra yeomen porters, common porters, and porters of
various other titles and degrees, not a single individual of them
all could be found to degrade himself even by superintending the
loading and conveyance of the royal plate ! It was left to the care

of a common carrier and his men, just as if it had been an old



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14



applevvoman's crockery; they stopped to drink by the way, as
carriers will do, and whilst they were engaged at their potations
some clever thieves rifled the waggon and got clear off with the
most valuable part of the spoil. It is only a fair presumption
that the servants of any other department of the Royal Household
would be just as valuable, in any emergency, as were those of
the staff of porters on this occasion.

The object of another tract published by the Association was
twofold — first, to show the gross injustice, and manifold
anomalies
of the existing duties on profits, commonly, but most improperly,
called the Property and Income Tax; and, secondly, the great
advantages which would result from such an equitable adjust-
ment and extension of that tax as should require from every man,
no more, and no less, than his fair contribution towards the
proper wants of the state, and would at the same time render the
impost a substitute for all the taxes which now depress and cripple

commerce, manufactures and industry. On this subject the
Council have also issued two addresses, the first of which the
Times published on the 26th December, 1856, the second on the
16th instant. Both were accompanied by long editorial com-
ments, in which there was not a single argument, either in
justification of our present fiscal system, or against the
principle
of Direct Taxation, but a superabundance of sneers, cavils, and
objections, all founded on the difficulty, or supposed
impossibility,
of carrying that principle into operation. On the other hand, the
Council have received very numerous communications from all
parts of the kingdom, some of them from gentlemen of landed
property — all, with one single exception, expressing unqualified
approbation of the change suggested, and some of them speaking
of it ia the most enthusiastic terms. That sound principles are
making progress has been manifested at Belfast, and various
other places ; and they will contrive to do so in defiance of the
attempts of the Times to put an extinguisher upon them either by
its sneers, or by its silence. The Council can never believe either

that what is just is not also practicable; or that gross and
manifest
injustice in human legislation is incapable of a remedy.

Most unfortunately for its own fame, and for the nation, the
otherwise glorious Anti-Corn Law League imagined that its mission
was accomplished, and Free Trade established, when the restric-
tions on one article only were abolished, instead of continuing its




15



labours until commerce and manufactures were perfectly freed by
a properly adjusted system of Direct Taxation, from all the fetters

and clogs which a false and moot mischievous policy has placed
upon them. Instead of committing suicide when the first
triumph was achieved, the League ought to have made that the
starting point for fresh struggles and fresh successes against
monopoly and restriction. Its dissolution was a grievous mistake;
but still more grievous is the error of many nominal free traders,
who now, instead of demanding a complete revision of our fiscal
system, would seem to desire the continuance and increase of
restrictive duties, which press most onerously on the poor, by
joining in the clamour against a tax which, whatever be its
defects — and they are many — has at least this merit, — that it
effectually reaches the rich. Every real free trader must be an
advocate of Direct Taxation.

Amongst the persons with whom the Council have been in
communication on this subject was Lord Stanley, to whom the
tract on the, income tax was submitted. In reference to the
scheme there sketched, his lordship says ; — ** I agree in the
preferability of direct over indirect taxation, if two conditions
be
conceded — the first, that of equality between classes, which, by
the capitalisation theory, seems attainable ; the second, that of
accurate knowledge by Government of private incomes, which I
know no m'>an3 of obtaining It is this latter difficulty, more
than the former, which prevents many public men from acceding
to the principle of a large extension of Direct Taxation." In the
opinion of the Council this is a concession of the whole question.
The preferability of one system over another being admitted, they
hold that it is the duty of "public men," and of Government, to
set seriously about encountering and removing the obstacles
which prevent, or retard, the adoption of the best. They ai'e also
convinced that if Direct Taxation be rendered just to aH classes,
as it may be, it will be willingly borne, to the full extent
required,
for just and economical government ; and, further, that cases of
fraud and evasion, which are now so numerous, and which have
been palliated, nay, almost justified, by a minister of the crown,
as naturally resulting from the oppressive nature of the present
tax, will become only exceptions to the general rule of honest
payment. To devise a proper system of taxation is the province
of the government or the legislature ; to insist that the thing



16



shall be done is the business of the people ; but, in any case, the

Council hope that the Financial Reformers of Liverpool will
adhere to the second great principle of their Association, viz. —
"The adoption of a simple and equitable system of Direct
Taxation, fairly levied upon property and income, in lieu of the
present unequal, complicated, and expensively collected duties
upon commodities."

The Council have devoted a tract to an examination of the
mode of keeping the national accounts, mth a view to show the
facilities which it affords both for the commission of fraud, and
its concealment when effected. That this is no visionary danger
is proved by the embezzlements and defalcations that have taken
place from time to time, and most especially by the Exchequer
Bill Forgeries, which to this day remain a mystery. Il is highly
probable that these robberies, discovered almost fortuitously, bear

no proportion to those which have altogether escaped detection ;
or, at least, exposure. As bearing on those facilities for fraud,
the revelations before the Select Committee of last session, on
public moneys, and particularly those made by Lord Monteagle,
Comptroller of Her Majesty's Exchequer, are perfectly astounding.
The reported evidence proves conclusively the following facts : —
1st. That the public money once voted, its disposal is completely
at the discretion, not merely of the liords of the Tieasury, but of

heads of departments and their subordinates. 2nd. That the
apportionment of supplies by the House of Commons is nothing
better than an idle form, money voted for specific purposes, being
constantly, and systematically applied to other purposes not
intended by the House of Commons. Thirdly. That the control
exercised by the Comptroller of the Exchequer, excepting as to
matters of form and technicality, is merely nominal — a fact
further acknowledged and deplored by his lordship, in a letter to
the President of the Association, touching the Hereditary Pension
job. Fourthly. That the audit of the pubhc accounts, for which
many thousand pounds are annually paid, is really worth less
than nothing ; and, lastly, that the general supposition that the
whole gross revenue is now paid into the exchequer, without any
stoppage in transitu, excepting only that derived from the Crown
Lands, is a complete delusion. To effect this latter object the
late Mr. Hume laboured zealously for years, and imagined that
he had, in part at least, accomplished it ; to complete what was



17



left undone, with the exception of the crown lands, the late Chan-
cellor of the Exchequer, Mr. Gladstone, passed a bill through
Parliament, in 1854; yet we have it on the authority of Lord
Monteagle that, in the way of stoppages and payments beforehand,
all goes on now exactly as heretofore — that the gross revenue is
not paid into the Exchequer — that the Comptroller of the Exche-
quer has no check whatever over the abstractions made from it
on the way ; that he does not know, and has no means of learning,
whether what the Receiver-general receives and pays into his
account is what has been, or ought to have been received and
paid in or not; and, in short, that the only alteration that has
been made consists in a formal juggle of accounts. Such being
the modes in which the public money is ke})t, distributed, and
accounted for, it can only be said that if all public servants are
honest, amidst such temptations and opportunities, the fact may
safely be called miraculous, even in an age when miracles are
supposed to have ceased. The tract in question endeavours to
show clearly wl^at the national " finance accounts " are, and what
they ought to be. It is mainly the composition of Mr. Henry
Lloyd Morgan, of London, a gentleman to whom the public is
largely indebted for his successful labours in the cause of Customs

reform, and also for his endeavours, through the press, to force
upon the Government an honest and intelligible system of public
bookkeeping. In a recent letter to the secretary, Mr. Morgan
says : — " What little I have been able to do is mainly oAving to
the invaluable information conveyed in the financial reform tracts
which I have carefully studied." This testimony must be gratify-
ing to the members of the Association, to whom the knowledge
that Mr. Bowyer moved for the return, which shows the disgrace-
fully neglected state of the national audit, in consequence of his
having read the tract on " Governmental Improvidence," and the
probability that Sir Francis Baring was induced to move the
appointment of the Select Committee on public moneys, by
similar means, will be additional sources of satisfaction, as
proving
the practical utility of the Association.

Besides their own publications, the Council have adopted, for
circulation, the pamphlet of the Rev. Mr. M'Conkey, on the
mismanagement of Cathedral funds, conceiving that, as the author
exposes pretty much the same sort of abuses in the temporal
concerns of the Church, as those which flourish so luxuriously in



18



the State, and does not touch on any doctrinal points, his work
came strictly within the objects of the Financial Reform Associa-
tion, and might be distributed advantageously amongst its
members.

During the last two sessions of Parliament, various petitions
from the Council have been presented to the House of Commons.
Amongst them were two on the subject of a permanent Finance
Committee : one praying that ministers of the crown may have,
ex-offi,cio, access to both Houses of Parliament, for the purpose
of
explaining their measures and policy, without votes in the House
of Commons; one against the Appellate Jurisdiction Bill; and one
against the improvident purchase, without any parliamentary
authority, of hereditary pensions for which no public service was
ever rendered. The Council also protested, through their Pre-
sident, against another most unwarrantable job, said to have
been in contemplation, viz., the granting of a perpetual dowry
of £70,000 per annum to the Princess Royal on her nuptials,
with the probable successor to the Prussian Throne. The fact
that scarcely a word was said either against the pension or the
dowiy, until the Council protested against them both, may be
mentioned as an additional proof of the utility of a body like the
Financial Reform Association, ever watchful over national
interests,
looking to measures, not to men, having no personal ends to
serve, and seeking the public good alone.

Another example to the like effect may be cited in the address
of the Council to the people of the United States of America,
which elicited so gratifying a response from the mayor and
citizens of Philadelphia, and was cordially welcomed by the most
influential portion of the American press ; and yet another in the
fact that, but for this Association, Livei-pool would have been
wholly unrepresented in the congress of free traders recently held
at Brussels. In th, first instance, this Association had no
inconsiderable share in convincing the respective governments
that on such grounds as their diplomatic squabbles presented,
two nations so united by ties of blood, language, and mutual
interests, w^ould not fight. In the second, the effects on the
minds of continental free traders and protectionists which must
have been produced by the non-representation of Liverpool on
such an occasion were avoided. One of its Vice-Presidents, Mr.
Francis Boult, most handsomely volunteered to act as the



10



delegate of the Financial Reform Association ; and, at the instance

of the Council, measures were taken which resulted in the
Chamber of Commerce also sending a representative. On another
question more strictly local, — the opposition to a most
improvident
disposal of the site of the old borough gaol — the Council took
the initiative.

Amongst the many other subjects which has occupied the
attention of the Council from time to time, the following may
be enumerated: — The advantage of having one central building
in each town or district, for the transaction of all business
connected with taxes, general, municipal and parochial; the
monopoly of the Bank of England, and the absurdity of paying
to that institution large sums annually for the loan of its own
paper, on the security of that of the Government ; the injustice
of the system under which the whole country is made to pay for
metropolitan improvements, such as the widening of streets,
sewerage, or the formation and maintenance of public parks, for
police magistrates, police courts, policemen, and gaols, for
public rejoicings, and for various other matters which the inhabi-
tants of the provinces have to provide for themselves ; the
defective
state of the criminal law, under which the country is put to all
the expense of formal trial in the cases of offenders acknowledging

their guilt, before the committing magistrates, or taken in
flagrante delicto; and the bungling legislation which has loaded
the statute book with acts to amend or repeal other acts, or parts
of acts, thus rendering the law such a mass of confusion and
perplexity, that the ablest judges are often puzzled to know what
it really is, and not unfrequently givo conflicting decisions, when

the plain and obvious principle is, that a new act should comprise
all such portions of the preceding statutes as are intended to be
retained, repeal the rest by their omission, and enact such new
provisions as may be necessary, thus embracing the whole law
on that particular subject.

From this hurried and imperfect sketch of proceedings since
the last public meeting, it must be manifest, at least so tie
Council hope, that the Association, though comparatively inacti/e
during part of the period, has rendered important services, ai d
that, with increased means, and additional acting members in tl e
executive, it may be instrumental in rendering many more. Th 3
steady support of a great number of the original members, an<l



90



the acquisition of many new ones, especially of late, in London,
and other parts of England, Scotland, and Ireland, as well as in
Liverpool, may be taken as indications that the Council have
retained the public confidence; and the accounts show the
Association's own financial affairs, though not in a very
flourishing
condition, are so far satisfactory, that it is out of debt, and has

a small balance in its favour. With additional means, its
efficiency
might be very greatly increased, by the employment of able
lecturers, the gratuitous distribution of short tracts and broad
leaves, and the establishment of a systematic course of agitation,
such as led to the triumph of the Anti Corn-Law League. The
legacy of £1,000 bequeathed to the Association by one of its
earliest and most zealous members — the late John Collett, Esq.,
formerly M.P. for Athlone — may serve as a nucleus for more
extended operations; but on this it would be scarcely prudent
to calculate until the money is actually in hand. In the mean-
while, the strength of the Association will be best promoted by
increased exertions on the part of existing members, and the
enrolment of fresh recniits.

In the growth of the principles founding the groundwork of
this Association, in the establishment of other Associations,
having, more or less, kindred objects in \aew, in the widely
spread conviction that something must be done to reform efiectuaUy
the abuses which prevail in every department of the state — in the
very disasters which have proclaimed the defects of our system of
administration to the whole civilised world ; and in the
palliatives
which those disasters have forced upon unwilling functionaries
of the Government, the Council see every motive for perseverance —
none for despair. The only ground for apprehension lies in the
possibility that the public generally, roused by events into
temporary activity, may again sink into a state of apathetic
indifference to matters vitally affecting their own interests and
the welfare of the nation. In such possibility lies the necessity
for increased exertions on the part of such Associations as this.
Perseverance, therefore, is what the Council recommend to the
Association, and concluding their report with this recommendation,
they indulge the hope that their successors will, with equal zeal
and greater ability, labour to bring to a successful issue its
combined objects — Financial RefoiTn, Direct Taxation, ami
perfect Freedom of Trade.









31



The following resolutions were proposed and passed unani-
mously : —

On the motion of J. T. Danson, Esq., seconded by Thomas
Crosfield, Esq., and after a forcible address from J. A. Roebuck,
Esq., M.P.,—

"That the beneficial results of the fiscal changes introduced
by the late Sir Robert Peel — changes rendered practicable by a
partial adoption of the principles of Free Trade and Direct
Taxation — are evident in the immense development of the
resources of the country thereby permitted, and demonstrate the
sound policy of extending the operation of those principles in
such a manner as to secure perfect freedom to Commerce,
Manufactures, and Industry."

On the motion of Francis Boult, Esq., seconded by Wm.
Penn Smith, Esq., —

"That the true interests of this country demand an entire
revision of our fiscal system, with a view to the substitution of
an equitable Tax on Property and Capitalized Income, requiring
from every man a fair contribution to state necessities, according
to his means, for the present cumbrous, injurious, expensively-
collected, and demoralizing taxes on commodities and materials
of manufacture; and that, in the meanwhile, the present
Property and Income Tax (with all its faults,) is preferable to an
increase or continuance of existing imposts on articles of general
consumption."

On the motion of John Smith, Esq., seconded by T. Crosfield,
Esq.,—

"That the present pressure of taxation is enormous, demanding,
for its reduction, an enforcement of the most rigid economy,
consistent with due efl&amp;ciency, in every branch of the Public
Service ; and that, for the furtherance of this object, as well as
to insure a proper mode of keeping and auditing the public
accounts, a permanent Finance Committee of the House of
Commons ought to be appointed, and vested with all the powers
requisite for an effective superintendence of the Public Income
and Expenditure."



On the motion of Charles Robertson, Esq., seconded by
Charles Edward Rawlins, Esq., —

" That the following Petition be adopted, submitted for general
signature, and entrusted to J. C. Ewart, Esq., for presentation."

" To the Honourable the Commons of the United Kingdom in

Parliament assembled.
"The Petition of the undersigned members of the Financial

Reform Association, and other inhabitants of Liverpool,
♦' Humbly Sheweth,

"That the fiscal changes introduced by the late Sir Robert Peel,
and sanctioned by your honourable house, have conferred immense
advantages upon this country, by permitting a great, though still
imperfect, development of trade, thus improving the condition of
all classes of the community.

"That these changes were rendered practicable by a partial
adoption of the principle of Direct Taxation, and that their
beneficial results demonstrate the sound policy of extending the
operation of that principle in such a manner as to secure perfect
freedom to commerce, manufactures, and industry.

" That, for thie puipose, it is essentially necessary that there
should be a complete revision of our fiscal system, with a view
to the substitution of an equitable tax on property and capitalized

income, requiring from every man a fair contribution to State
necessities, according to his means, for existing taxes on com-
modities, and materials of manufacture, which fetter trade,
prevent its development in new and important branches, and
press most unjustly on the industrial classes, whilst, at the same
time, they are most costly in the collection, and most demoralising

in their operation; and that, in the meanwhile, the present
Property and Income Tax is preferable to an increase, or continu-
ance, of existing imposts on articles of general consumption.

" That to eifect a reduction in the present enormous pressure
of taxation, the most rigid economy, consistent with due
efficiency,
ought to be enforced in every branch of the public service ; and
that, in order to promote this important object, as well as to
insure the proper keeping and auditing of the public accounts,
a permanent Finance Committee of your honourable house
should be appointed, and vested with such powers as will enable
it effectively to superintend the public income and expenditure.



98

" Your Petitioners therefore humbly pray,

" That your honourable house will be pleased to adopt such
measures as to its wisdom may seem expedient for the complete
liberation of commerce, manufactures, and industry, — for the
substitution of an equitable tax on property and capitalized income

for imposts now weighing most injuriously upon them all, — for
the enforcement of a salutary economy in every branch of the
public service, — and for the appointment of a standing Finance
Committee to superintend all details connected with the public
income and expenditure."

Moved, seconded, and carried by acclamation, —

" That the thanks of this meeting be given to the President,
Vice-Presidents, Treasurer, and other members of the Council ;
and that the following gentlemen do constitute the Council for
the ensuing year, with power to add to their numbers."

President.
ROBERTSON GLADSTONE, Esq.

Vice-Presidents.
LAWRENCE HEYWORTH, Esq, M.P.
CHARLES ROBERTSON, Esq. FRANCIS BOULT, Esq.
RICHARD SHEIL, Esq. J. R. JEFFERY, Esq.

Treasurer.
JOHN SMITH, Esq.



CHARLES HOLLAND, Esq.
J. T. DANSON, Esq.
JOHN FINCH, Esq.
R. W. RONALD, Esq.



A. C. STEWART, Esq.
J. JOHNSON STITT, Esq.
JOHN FINCH, JuN., Esq.
WM. PENN smith, Esq.



[Since the issue of this Report, the Association has lost the
valuable aid of two of the gentlemen named, the Messrs. Finch,
both deceased. Messrs. Sheil and Stitt have resigned; C. J.
CoRBALLY, Esq., and Owen Williams, Esq., have been elected
members of the Council. The Association now numbers between
six and seven hundred members.]



THE HUDSON'S BAY COMPANY,



AND THE LATE GOVERNMENT.



A Parliamentary paper, dated Colonial Office, aSnd February,
1858, numbered 94, and entitled " Copies or Extracts of any
correspondence that has taken place between the Colonial Office
and the Hudson's Bay Company, or the Government of Canada,
in consequence of the Report of the Select Committee on the
affiiirs of the Company which sat in the last session of
parliament,"
has been published. From the correspondence it appears that
the iRte Government were quite prepared to act upon the recom-
mendations of the Se^^'t Committee, opposed as these were to
Imperial and Canadi ..iterests ; and also, that the Hudson's
Bay Company was fully disposed, as it might well be, to acquiesce
in the slight concessions stipulated ^o)' as conditions on which
its licensed monopoly is to be continued, and its chartered one
left unquestioned. Her Maje?ty's present advisers, if they be
wise, and really wish to serve the country, will set aside the
blind bargain concocted by their predecessors, and more especially
by Mr. Labouchere, the late Colonial Minister, who, in that
capacity, and also as chairman of the Select Committee, seemed
to sink all other considerations in his desire to promote the
interests of the monopolists.

The Report of the Select Committee was carried by a ma-
jority of six to five, and that by something very like management,
in the absence of several members who took the side of the
public against the Company. That Repoi't recommended that
"whatever may the validity or othenvise of the rights claimed
by the Hudson's Bay Company under the Charter," the Company
should be allowed to retain possession of all its assumed
territories,
with all existing privileges, whether claimed by Charter or held



35



by Royal License, with the exception only of the Sasiiatchewan
and Red River districts, to be ceded to Canada "on equitable
principles," and of Vancouver's Island, to be resumed by Govern-
ment. These recommendations were based, as the Report states,
mainly on the following considerations: —

" Ist. The great importance to the more peopled portions
of British North America that law and order should, as far as
possible, be maintained in these territories."

" 2nd. The fatal effects which they believe would infallibly
result to the Indian population from a system of open competition
in the fur trade, and the consequent introduction of spirits in a
far greater degree than is the case at present."

" 3rd. The probability of the indiscriminate destruction of •
the more valuable fur-bearing animals in the course of a few
years."

The worthlessness of these " considerations," and the hypocrisy
of the affected regard for the welfare of the Indians are exposed
in the 31st Financial Reform Tract, of the second series, in
which will be found a full history of the Company, — its Charter, —

its usurpations, — its plunder of the Indians in the way of barter,
—
and its gross inattention to their improvement, either temporal
or spiritual. The disregard of all the principles of justice, which

seems to have actuated the Committee, is manifested by its
professedly ignoring all reference to the validity or invalidity of

the Charter, whilst, in the same breath it recommends that
territories to which the Company may have no claim whatever,
if the Charter be invalid, or which may be expressly excluded
by the Charter, if it be valid, shall only be ceded to Canada
"on equitable principles," — that is by purchase from the Company.
The arrangements proposed by the late Government and accepted
by the Company were in strict accordance with these recom-
mendations of the Select Committee.

In a letter dated Downing Street, January 20, 1858, Mr. H.
Merivale, of the Colonial Office, announces to John Shepherd,
Esq., Home Governor of the Company, the intention of Her

D



'20



■'l^'-'f'



Majesty's Government to renew the License of Exclusive Trading
in the Indian Territories, for a further term of 31 years from its
approaching expiration on the 30th of May, 1859, — reserving,
however, the right to establish colonies, and excepting f' om the
License Vancouver's Island, as already a constituted colony. In
a letter of the same date, to the same personage, Mr. Merivale
states that Government intends " to repurchcise " Vancouver's
Island, and asks for a statement of the Company's expenditure
on the Island, for which repayment may be demanded. On this
it may be remarked that, although the Coinpany ought certainly
to be indemnified for any substantial improvements, it ijan only
be allowed the privilege of selling a gift which, improvident as it

was, was made subject to the right of resumption by the giver,
in virtue of that peculiar species of "equitable principles" which
seems to have been invented for the especial benefit of the
Company.

Mr. Merivale states further that although both the Government
and the Company consider it very desirable that the boundary
question should be decided by some competent authority, such as
the Judicial Committee of the Priw Council, Canada is not
prepared to concur in this course unless allowed also to discuss
the validity of the Charter itself, " a question which, on public
grounds, Her Majesty's Government do not consider themselves
authorized to raise." If, however, any parties in Canada choose
to contest the Company's alleged *' rights to the full extent
before a legal tribunal," — why they must do so on their own
responsibility.

Now, it is part of the case of Great Britain and Canada against
the Hudson's Bay Company, that the Charter of King Charles II.
was invalid from the first, and always subsequently, never having
been confirmed by Parliament, excepting during seven years of
the reign of William and Mary ; that all its conditions, save only
tiip trading in furs, have been violated ; and that the privileges
it confers are contrary not merely to public policy but to the
express laws of England: — yet here are "public grounds" alleged



97

against testing the question whether a few private individuals
are rightful owners of territories sufficient to constitute half a
dozen colonies each as large as Canada, or mere usurpers !
Mr. Merivale does not explain what "public grounds" militate
against so obvious an act of public justice as the testing of this
question; and his principal, Mr. Labouchere, who raises the
same objection, is not a whit more explicit.

In a letter to the Governor General of Canada, dated January
22, 1858, Mr. Labouchere gives Canada the option of trying the
boundary question alone, in concurrence with the Government
and the Company; — or ».f testing the validity of the Charter
by itself, adding that "Her Majesty's Government have come
to the conclusion that it would be impossible for them to institute

proceedings, with a view to raise th's question before a legal
tribunal, without departing from those principles of equity by
which their conduct ought to be guided." The " equitable prin-
ciples," and the " public grounds " on which the late Government
shirked the manifest public duty of testing the monstrous
privileges claimed against the whole British public are perfectly
incomprehensible. If the Charter be invalid the Company has
no just claim to one penny of compensation, excepting for actual
improvements ; whilst, if it be valid in all respects, so impolitic

and injurious a monopoly ought to be forthwith abolished on
such terms of indemnification as may fairly meet the justice of
the case.

As a matter of course Governor Shepherd and the Company
were happy to acquiesce in the course proposed, taking care,
however, to prepare the way for heavy demands by representing
the Red River and Saskatchewan districts as peculiarly valuable
to them for purposes connected with the fur trade, and also as
the only sources from which the annual supply of provisions is
drawn. This is another sample of the grasping spirit of the
Company. It does not raise its own provisions in these or any
other districts, but buys them from the settlers ; — therefore it
will
be a gainer instead of u loser by more extended cultivation.