London, Friday, December 10, 1852 

My predictions on the eventful results of the renewed party 
struggle in Parliament have been realized.’ At the opening of the 
session” the opposition commanded a negative majority against 
ministers; but the several conflicting fractions which composed 
that majority have, since then, mutually paralyzed each other. The 
House of Commons, on the 26th of November, when it adopted, 
instead of the “radical” free trade resolution of Mr. Villiers, the 
equivocal amendment of Lord Palmerston, offered the spectacle of 
universal and mutual cheating, of the general dissolution and 
dislocation of all the old parliamentary parties. 

The resolution of Mr. Villiers, which designed the act of 18467” 
as “wise and just,” was drawn up without the knowledge of 
Cobden and Bright, the free traders par excellence. The Whigs had 
resolved to act for the interests of the free traders, without 
conceding to them either the initiative or any share in the 
Government, after the presumed victory. Russell, the original 
author of the words “wise and just,” so offensive to the ministry, 
gave his consent to the Graham amendment; the Peelites, joined 
by the Ministerialists, tendered a proposition which recognizes the 
expediency of free trade for the future, and denies it in the past, 
leaving the Tories at liberty to compensate for the losses sustained 
by the act of Sir Robert Peel; the same Peelites rejected the 
amendment of Disraeli, and reassuming their own proposition, 
prepared to support the original free trade resolution; the Whigs, 
on the very eve of triumph, routed by the appearance of 

> On November 4, 1852.— Ed. 

Palmerston, who took up the amendment of Graham, and thus, 
with the assistance of the Peelites, secured the victory to the 
Ministerialists; finally, the victory itself, won by a protectionist 
ministry, consisted in the recognition of free trade, and was 
opposed by none but the fifty-three most decided adherents of 
their own party. Such an imbroglio of false positions, party 
intrigues, Parliamentary maneuvers, mutual treasons, &c., is the 
résumé of the debate on the 26th, in which the policy of free trade 
was Officially acknowledged, but interpreted by Protectionists, 
represented by Protectionists, and to be carried out by Protection- 
ists. 

In a former letter, written before the commencement of the 
session, I indicated already that Disraeli, after dropping himself, in 
his electioneering speeches, the restoration of the Corn Laws, 
intended to compensate the landlords in the shape of a tax 
reform, which would enable the farmers to continue to pay their 
old Protectionist rents.* By taking off the farmer’s shoulders part 
of the present weight of taxation, and imposing it on the backs of 
the mass of the people, Disraeli flatters himself to have discovered 
a panacea for the suffering landlords far more available than the 
old precarious system of protection which speculated directly on 
the stomachs of the multitude. To speculate on their pockets—such 
is the ingenious plan of Mr. Disraeli, now revealed in his budget, 
which, on the 3d inst., he laid before the House of Commons, and 
the fate of which will probably be decided in this night’s debate. 

It is customary with German Governments and German 
philanthropists to talk of “measures for the elevation of the 
laboring classes.” (Massregeln zur Hebung der arbeitenden 
Klassen.) ?*! Now, Mr. Disraeli’s budget might not improperly be 
called a series of “measures for the elevation of the idle classes.” 
However, as in the case of our German Governments and 
philanthropists, such measures have regularly turned out mere 
shams, so also the plan at present contemplated by the English 
Chancellor of the Exchequer for the benefit of the idle classes is a 
plain humbug, intended to induce the farmers the more readily to 
pay their actual high rents, by holding out to them an apparent 
reduction of their burdens, a delusion which he can only practise 
upon them by some evident real defraudation of the town 
population. 

Disraeli had, for a long time, mysteriously announced his 

budget; he had promised the world with no less than an eighth 
miracle. His budget was to 

“put a term to the strife of interests; to end the internecine war between classes;” to 
“give satisfaction to all, without damaging any of them,” to “melt the different 
interests in one flourishing community;” to “create for the first ime a harmony 
between our commercial and financial systems, by the establishment of new 
principles,” looming in the future.” 

Let us now examine his revelations which no longer loom in the 
future, but have already since a week been communicated to the 
English Parliament and the world at large. As it behoves such 
revelations of mysteries, Disraeli introduced them with the fitting 
ceremonial and important-looking behavior. Peel, in his financial 
statement of 1842, had spoken for two hours; Disraeli takes no 
less than full five hours.” One hour he dilated in showing that the 
“suffering” interests do not suffer; another one in what he did not 
mean to do for them, on which occasion he contradicted Walpole’s, 
Packington’s, Malmesbury’s and his own former declarations; and 
the remainder of the five hours in the exposé of the budget, and 
sundry episodes on the condition of Ireland, the defense of the 
country, prospective reforms in the Administration, and other 
entertaining topics. 

The principal features of the budget are as follows: 

1. The Shipping Interest. A portion of the light dues is relaxed, 
amounting to about £100,000 per annum. This is a relief of less 
than sixpence per tun per annum, and cannot reach the shipping 
interest before the middle of the ensuing year. The charge for 
passing tolls is entirely to cease. Some of the powers of the 
Admiralty, which have given offense to the merchant navy, shall 
be done away with, viz.: the officers of the navy, if they enlist 
seamen of foreign stations, are not to require immediate payment 
of their wages—they are to furnish gratuitous assistance to vessels 
in distress—and in harbor they are not to drive peaceable craft 
out of the most eligible anchorage. Finally, a Committee of the 

House of Commons, November 11, 1852 (The Times, No. 21271, November 12, 

The Times, No. 21290, December 4, 1852, under the title “The Financial 

House of Commons is to be appointed on the subject of pilotage 
and ballasting. So much for the shipping interest. Lest the free 
traders should boast of any positive concession made to them by 
these provisions, the remnant of the timber duties remains as it 
was. 

2. Colonial Interest. Leave is granted to refine sugar in bond, so 
that henceforth duty will be payable upon the quantity of saleable 
refined sugar produced, instead of upon the raw produce itself. 
Besides this, the Chinese immigration to the West Indies is to be 
encouraged to supply the planters with a sufficient number of 
cheap labor. The differential duties on sugar shall not be 
abolished. 

3. Malt-Tax and Hop-Duties. The malt-tax is to be reduced by 
one-half, which, according to Mr. Disraeli’s statement, would 
engender a loss of revenue amounting to £2,500,000. The 
hop-duties are likewise to be reduced to one-half, which would 
create another loss of about £300,000. These reductions are to 
take place on and from the 10th of October, 1853. Instead of the 
existing prohibition of foreign malt, and the actual duty on 
foreign hop, foreign hop and malt will be admitted at a duty 
corresponding to the excise-duty charged there. 

4. Tea. The present duty shall be reduced from 2s.2'/, d. to 
ls. per 1b. upon all qualities, but this reduction shall be effected 
gradually within six years, so that in 1853 there will be a reduction 
of 4'/. d. and every following year of 2d. till the expiration of 
1858. The reduction for the year 1853 would thereby amount to 
£400,000. 

5. Property-and Income-Tax. This tax, which has only been 
voted until August 5, 1853, is to be renewed for three years, the 
amount remaining the same, but the distribution to be altered. 
There shall be a distinction between the charges on realized 
property and those on industrial income. Real properties and the 
funds continue to be charged at 7 pence the pound; while on 
industrial incomes (farmers, trades, professions, and salaries) an 
abatement on the charge from 3 per cent. upon 2 per cent. is 
projected. The latter are henceforth only to pay 5'/d. in the 
pound. On the other hand the standard of exemption shall be 
lowered from £150 to £100 per annum, and upon property and 
funds to £50 a year. To prevent all losses to farmers by this 
projected change, they are to be charged at the rate of one-third 
of the rent, in place of one-half at present, so that the alteration 
will exempt all farmers renting less than £300 a year. As a boon to 
the Church, all parsons with an income of £100 a year shall 

remain exempt from the tax. Finally, the income-tax is for the first 
time to be extended to Ireland, not by any means, to the 
landlords, but only as far as regards funds and salaries. 

6. House-Tax—This is to be extended to all occupiers of houses 
rented at £10 per annum, instead, as formerly, only to those 
occupiers of houses valued at £20 per annum. Besides, the rate of 
the house-tax shall be doubled, i.e., from sixpence in the pound 
on shops, and ninepence in the pound on dwelling-houses, to one 
shilling and one shilling sixpence respectively. 

The résumé of this budget would be— 

On one side: Extension of the income-tax in England to such 
classes of the town population as have hitherto been exempted 
from it, and introduction of the same into Ireland for fund- 
holders and public functionaries; extension of the house-tax to 
such classes of the town population as were hitherto exempted 
from it, and doubling of the rate of the tax. On the other side: 
Diminution of the agricultural malt-tax and hop-duty by 
£2,800,000; relief of the shipping interest by £100,000; reduction 
of the tea-duties by £400,000. 

The town population is to receive an increase of taxation in the 
shape of a new income-tax, an extension of the house-tax, and a 
double rate of the same, in order to relieve the rural population of 
a tax-amount of £2,800,000. The small shopkeeper, the better- 
paid mechanic and the commercial clerk would thus find them- 
selves contributors to the house-tax, and become for the first time 
subject to the income-tax. The land accordingly would have to pay 
sevenpence in the pound, while dwelling-houses would pay two 
shillings one penny. The reduction in the tea-duties does not 
affect this proportion, its amount being comparatively very small 
with regard to the increased direct taxation, and its advantages 
being alike accessible to the country and to the towns. 

The exemption of Irish landlords from all income-tax, of 
English farmers and clergymen from the extended income- 
tax, is manifestly a favor bestowed on the country at the cost 
of the towns. But who is the gainer by the reduction of the 
malt-tax—the landlord, the farmer, or the consumer? A reduction 
of taxes is a reduction of the risks of production. According to the 
laws of political economy, a reduction in the costs of production 
would involve a reduction of prices, and consequently benefit 
neither the landlord nor the farmer, but only the consumer. 

There are, however, two circumstances to be considered in this 
case. In the first place, the soil on which first-rate barley can be 
grown is monopoly land in England, and restricted to Notting- 

hamshire, Norfolk, etc., while the foreign supply of malt is 
limited by the nature of the commodity itself, neither barley nor 
malt being able to support long sea-voyages. Secondly, the large 
English brewers virtually possess a monopoly, chiefly supported by 
the present license system, so that even the abolition of the Corn 
Laws has effected no fall in the prices of porter and ale. 

Thus, then, the gain on the reduction of the malt-tax would 
neither be in favor of the farmer nor the consumer, but only 
become divided between the landlords and the great brew- 
ers.— And as the odious interference of the excise with agriculture 
is to be maintained, the collecting of half the sum of the former 
taxes would continue to absorb the same amount of administrative 
costs as that of the whole did before. At present, the costs of 
collecting £14,400,000 of excise duties amount to £5 6s per cent. 
After the reduction of the tax by three millions, the rate would 
amount from £6 to £6 4s. Briefly, there would be so much less profit, 
and so much mischievous expense more. 

The budget of Disraeli thus resumes itself into a compensation 
to landlords; “a compensation with a revenge.” 

But this budget has yet another no less interesting feature. 

If you want to carry your commercial system of free trade, you 
have first of all to change your financial system. “You have to 
return from indirect taxation to direct taxation,” says Disraeli, and 
Disraeli is right. 

Direct taxation, as the most simple, is also the most ancient and 
first mode of taxation, contemporaneously with a state of society 
based on landed property. The towns afterward introduced the 
system of indirect taxation, but in the course of time, with the 
modern division of labor, the system of Great Industry, and the 
direct dependence of the home trade upon the foreign trade and the 
market of the world, the system of indirect taxation comes into a 
twofold conflict with the social wants. On the frontiers it becomes 
identical with protective duties, and disturbs or prevents the free 
intercourse with other countries. In the interior it is identical with 
fiscal interference in production—unsettles the relative value of 
commodities, and disturbs free competition and exchange. From 
both these reasons its abolition becomes a necessity. The system of 
direct taxation must be returned to. But direct taxation admits of no 
delusions, and every class perceives exactly what share it has in the 
contribution towards the public expenses. Nothing is therefore less 
popular in England than direct taxation, income-tax, property-tax, 
house-tax, etc. Now the question is, how the industrial classes of 
England, forced by free trade to adopt the system of direct taxation 

will be able to introduce it without either incurring popular 
indignation or increasing their own burdens. 

Only by three ways. 

By attacking the public debt; but that would be a violation of public 
credit, confiscation, a revolutionary measure. 

By chiefly taxing the rent of land; but that also would be an attack 
upon property, confiscation, a revolutionary measure. 

By re-vindicating the Church estates, but that again is a further 
attack upon property, confiscation, revolutionary measure. 

“By no means,” says Cobden; “let us reduce the public expenses 
and we shall be able to reduce also our present taxation!” 

This is Utopian. Firstly the international relations of England 
with the Continent require a perpetual increase of the national 
expenses; secondly, a victory of the industrial class, represented by 
Cobden, would have the same consequences, for the war between 
capital and labor would become only the more intense and the 
means of repression require to be increased —in other words, the 
budget admits of no reduction. Let me resume. 

Free Trade drives towards the system of direct taxation; the 
system of direct taxation involves revolutionary measures against 
the Church, Landlords and Fund-holders; these revolutionary 
measures necessitate an alliance with the working classes; and this 
alliance deprives the English bourgeoisie of the principal results it 
expected from Free Trade, viz.: the illimited domination of capital 
over labor. 

Written about December 10, 1852 Reproduced from the New-York 

Tribune, No. 3650, December 28, 1852,