Lord Salisbury to Lord Randolph Churchill.
Hatfield House, Hatfield, Herts: December 19, 1886.
My dear Randolph,—In the course of discussions on the Local Government Bill you have two or three times expressed the belief that the country gentlemen would be consoled for all they might lose under that Bill by the financial arrangements which were to be proposed; or, as you expressed it, that ‘the pill would be gilded.’ I think you have overlooked the fact that your local taxation proposals will relieve the towns more than the rural districts. At least, I have looked up the figures for Hertfordshire, Suffolk, and Devonshire, and enclose a statement of them. The result is (if I rightly understood your proposals) that the ordinary country gentleman will have an extra burden of ninepence in the pound—which is gilding of a negative kind.
Ever yours truly,
Salisbury.
The situation was fast becoming acute. At a dinner on the 18th, when the Prime Minister was Lord Randolph’s guest, shrewd observers had noticed, underneath much personal courtesy, an air of harsh political antagonism. The effect of these letters was decisive. Lord Randolph forwarded the figures which Lord Salisbury had enclosed to the Treasury and called for a memorandum in reply. His pencilled comment on the paper is, ‘Lord Salisbury’s figures are incomprehensible.’ The Treasury answer required a little time to prepare; but the next day Lord Randolph wrote back:—
Treasury Chambers, Whitehall, S.W.: December 20, 1886.
Dear Lord Salisbury,—I know the country gentlemen, like the farmers, always think they are being plundered and ruined. The facts are, however, that whereas the ratepayers used to receive in gross three millions from the taxes, they would in future under my scheme receive over five millions. Of course the towns will get the bulk of the indoor pauper contribution.
Real estate pays succession duty on an average about once in thirty years. We do not estimate that the change in the succession duty will add more than a million a year to the present yield of 800,000l., and it will take at least twelve years to work up to this amount. When the succession duties were first voted by Parliament, they were estimated to produce 2,000,000l. I believe the produce has never exceeded 900,000l. The assimilation of the incidence of death duties on real estate to that which falls upon personal estate has not of late years been resisted in principle even by the strictest sect of the Tories.
I enclose you the G.O.M.’s reply to my communication. I hear rumours that he is contemplating the policy of throwing over the Home Rulers.
Yours most sincerely,
Randolph S. Churchill.