My grandfather writes to my father, 12 April 1842, “The farmers are grumbling about Sir Robert Peel’s measures. The shoemakers and the tanners are all by the ears as well, fearing the French will undersell them. I told them it was high time, for they had amongst them pocketed all the duty that was once on leather, and the public had received no benefit: which their friend Sir Robert saw.” The obnoxious measures were the Act reducing import duties and the Act imposing income tax, and the small traders were doubly aggrieved: they were called upon to pay a new tax to make up for loss of revenue from Customs, and the reduction in the Customs subjected them to foreign competition.
The tax was 7d. in the £, which does not seem much now, though it seemed heavy when the tax was new; but it was the assessment, rather than the payment, that caused the irritation. A friend of my father’s writes to him from Moreton, 5 January 1843, “They have been most unjust and tyrannical here: those that appealed were scarcely permitted to say a word.... The poor people having a small house each have been assessed, and have been obliged either to dance attendance at appeals at Crockernwell or pay Harvey half-a-crown for letting them off.” I presume it was well known that these poor people’s incomes were under £150 and thus exempt from tax.
Income tax, then known as property tax, was brought in as a temporary measure for the next three years, but was renewed time after time and finally made permanent. My grandfather writes in the third year, 23 February 1845, “The property tax is an inquisitorial and annoying thing: a real-property tax would not be so much amiss, even if it were to be made a permanency: in my opinion they could not levy a better tax.” His opinion was disinterested, as he had real-property enough for such a tax to hit him rather hard.
The tax would not yield much, if levied on net receipts: at any rate, not nearly as much as might have been expected then. He writes on 27 November 1853, “I never heard of land being valued at more than thirty years in Moreton,” that is, yielding less than 3⅓ per cent.; but on 13 March 1868 he writes, “I can say safely that no property that has been sold in this neighbourhood for above twenty years past is paying over 2½ p. ct. and some not over 2 p. ct. nor will it.” Ten years later (after he was dead) there was a greater fall.
Our present income tax supposes that the net receipts from land will be just double the rent. The owner pays the tax upon the rent, and the occupier pays the tax upon the other half, that is, his supposed profits after paying the rent. He pays no more if his real profits are more than the supposed amount, and pays less if they are less. As the occupier usually rents the land to make a living out of it, he tries to make as large a profit as he can; and large profits may mean reckless farming that impoverishes the land. But when the owner occupies the land himself, he may try to make as small a profit as he can, if he will thereby benefit the land. Suppose his net receipts are 20s. above the rental value, he pays 4s. 6d. in income tax and possibly as much or more in super tax; but he escapes these payments if he farms more prudently and thus reduces these net receipts to 0. He benefits the land to the extent of 20s. at a net cost of only 15s. 6d., or possibly no more than 10s. Taxes seem to be imposed without foreknowledge of their full effect.
In principle a tax on incomes is quite wrong: it ought to be a tax upon expenditure—not a penalty on amassing wealth, but a penalty on frittering wealth away—and import duties are a tax upon expenditure, as they are finally paid out of prices. Yet smuggling seems to be regarded as a game of skill, a sort of hide-and-seek in passengers’ luggage: the hider need not betray the lair, if the seeker cannot find it. I have seen this smuggling done by people of great probity, not because the payment would have hurt them, but just (I think) because the searching was a challenge to their skill. And once I met some foreigners on the Mont Cenis line smuggling things out of Italy into France, and not only priding themselves upon their skill but also on their merit in the sight of Heaven, as the things were destined for a convent or a church. They seemed to think that Heaven had helped them in dodging the douaniers; and I rather wondered if their confessors would take that view or would enjoin them to send conscience-money to the State.
While travelling in Switzerland in 1840, my father found a firm of watch-makers who would deliver gold Geneva watches in London at prices that did not allow for duty. When he wanted to make a handsome present, he would send over for a watch, and friends sometimes asked him to send for watches for them. He never enquired how the watches came, nor did his friends enquire; but one man (a diplomatist) took some pains to find out, and the explanation was, “We usually smuggle them in some diplomatist’s baggage, as that is not examined; and in this instance we smuggled them in your Excellency’s own.”
My father got my grandfather an English watch in London in 1850, and my grandfather did not consider it as good as one that he had chosen for himself in 1807. That always was the trouble about getting things for people here. A century ago Newton was a smaller place than Ashburton, and Torquay was smaller still; and though there were good shops at Exeter, they were not like the London shops. If people did not want to go up there themselves, they had to get some friend up there to choose things for them; and this was an invidious task, as they did not always like his choice, and then said unkind things about his judgement or his taste.
When my father was in London, his country friends were never shy of telling him of things they wanted done; and sometimes these were rather troublesome things to do. One friend (a lady) writes to him from Leicestershire, 15 February 1848, “We have a Ball here on next Thursday evening. Shall I be asking too great a liberty from you to procure some flowers for that occasion from Covent Garden?” Another writes from Exeter in the autumn of 1842, “I am obliged to give the Mayor a dinner next week.... Will you enquire the price of a haunch of venison at Burch’s and also turtle soup, a quart, and whilst you are about it, will you ask at Myer’s, I think—the great fish man in Vulture Court—the price of a turbot for about twelve, as I believe good fish is cheaper in London than here, and a certainty of getting it, which is not so here.”
The most naïve of all requests is from an Admiral who had just gone on the Retired List and found time heavy on his hands. He writes to my father, 15 April 1872, “You will perhaps be able to tell me if I am eligible to sit on the special jury they will most likely have in the coming Tichborne trial: several Naval men were on the last.... What steps, if any, should I take to get on the list?” I expect the reply was an extinguisher.