he had lost sight of. Houses were divisible into freehold and leasehold, and the pressure of taxation was exactly the same on both, whereas the lease might only have a few years to run, while the freehold was in perpetuity. The income derivable from a leasehold house was divided into two parts, principal and interest, that from a freehold consisted of interest only, but the tax made no distinction between the two; a return of the tax on the principal ought to be made. No doubt it was necessary for the purposes of the revenue that the tax should be deducted at its source. When Mr. Pitt first introduced the income tax, a schedule was sent to every man requiring him to make a return of his income from all sources, and the aggregate return was found to fall very short of the estimate. In 1803 the system now in vogue of collecting the tax at its source, whenever practicable, was applied. Schedule B had always been a mystery to him, and he could not understand why a farmer, any more than a manufacturer, should not be asked to make a return of the profits from his trade. Schedule C called for little remark, but Schedule D had exercised the minds of Mr. Hubbard and many other gentlemen. It was a popular delusion that the sums assured in a life assurance society went always to the families of the deceased. In a large proportion of cases they went to creditors, lent on the premiums, which in these cases were in effect instalments of loans, abatements of income tax were allowed. He quite agreed with Mr. Elliott that it was time that abatement was abolished, and some other form of alleviation allowed to tax on incomes derived from personal exertion. Mr. Gladstone had said that it was hopeless to expect to do that, but he (Mr. Bailey) was unable to see why some distinction should not be drawn between incomes derived from property, and those derived from personal

exertions.

Major CRAIGIE said the last speaker had raised the question of differentiating between the taxation of incomes from different sources according to the permanence of the sources from which they were derived. The answer usually made in parliament from the treasury bench was that the income tax from its very nature took no cognisance of anything but the income for the year. In return for the protection afforded, the State claimed so many sixpences or eightpences out of every pound of real or assumed income. The moment a man's income ceased the tax ceased. He thought Mr. Elliott, in his very useful paper, had conclusively shown that in the fact of the income tax being in one of its schedules however what it was not in the other four, partly a property tax, there was an injustice of another character done to the owners of real property. Nominally the tax under Schedule A fell upon the rental of land or houses; it really fell upon something which was not income at all, but outgoings, and in the case of land, at this crisis, the disparity between the owner's receipts and the sum he was taxed on was peculiarly great. No doubt it would be argued that after all the income tax was only one of many forms of taxation, and the taxation of the country was adjusted to the backs of the taxpayers as the knapsack was to the back of the soldier, not by

one strap but by a great many, and these were distributed in such a way that the whole of the people were supposed to bear their proper shares of the national burden. He (Major Craigie) did not think that this perfect distribution of national taxation had yet been reached. The tendency to which Mr. Elliott had so opportunely called attention, to treat the income tax as the only flexible one, augmented the anomalies of taxation. The income tax was intended no doubt to reach the richer part of the community, but he quite agreed with Mr. Bailey that its facility of imposition had been abused by recent chancellors of the exchequer. Thus the cost of the Egyptian campaign, for example, had been thrown entirely upon the few hundreds of thousands of income tax payers, and the millions of voters responsible for the national outlay paid nothing. It was too not a little dangerous to note, as they could do in a Society like this without any question of party bias, that the statesmen of the day seemed to consist to lay heavier burdens and a larger share of the cost of government actually on the classes whose share in the direction of the national policy was at the same moment being steadily diminished. In dealing with income tax and land tax alone, Mr. Elliott had not taken account of another still heavier set of taxes on property and income. It should always be borne in mind that there was a weighty series of local taxes levied upon houses and land. Some 26 million £ was extracted in England and Wales alone out of lands and houses by means of rates, in addition to the imperial taxation. This vastly overweighted the property which the paper showed to be most burdened for imperial taxes. On another point he thought improvements might be made in the form of our income tax statistics with great advantage. The assessment of rental under Schedule A had been found to be so unjust that the treasury for the last six years had permitted a return of the tax to those owners who had not received a portion of their rents. Then why should the money which was no longer received still appear and be quoted in all statistical statements as forming part of the rental of the United Kingdom? The rents appearing in the assessments were very far in excess of those that reached the pockets of the owners of land. The reductions of late years in the assessment of land rental by no means represented the real shrinkage of rent. He was not quite certain how far they could hope to arrive at any improved method of charging income tax on the net value, such as had been hinted at, until the assessment values were made to correspond more nearly to the actual facts. In Schedule B there was a still greater example of the same statistical error. Ever since 1843 there had been standing in the gross assessment of income tax under this schedule a figure which neither in the theory of law, nor in the intention of parliament represented the income of the person charged on the gross profits from the occupation of land. That error was no doubt in part corrected by a note recently placed in the returns to the effect that the gross assessment was not the farmers' legally assessed income, but something more than twice that amount. Yet no correction was made in totals of the income tax assessment, and repeated errors arose from this mode of statement. The adjustment of

farmers' incomes should be made in the assessment, not on the duty. Mr. Elliott's calculations as to the effect of Mr. Hubbard's proposals were useful and interesting. Some years ago he (Major Craigie) had suggested to Mr. Hubbard that the effect of that gentleman's proposed alteration of the law would be that land per se would pay 4 per cent. more income tax, tenant farmers under Schedule B 8 per cent. more, owners of personal capital, mortgagees, &c., 20 per cent. more, while industrial occupations, houses, and buildings would pay 20 per cent. less. That calculation was however made when the tax was at its normal level of 5d. He had never been able to follow the theory of some economists that the land tax was no tax at all, and should be taken no account of. He held it was impossible to say that because a tax like this had been paid for a very long period, it had ceased to be a tax; such a doctrine would be very convenient to tax imposers, and might very soon with equal justice be applied to the income tax itself. Mr. Elliott was quite right in including the redeemed portion also of the land tax, the cost of redemption being a permanent deduction from income. No doubt they all looked forward to some better adjustment of the incidence of taxation, but he did not agree with one remark of Mr. Elliott's, to the effect that the burdens borne by real and personal property as a whole were at any times nearly identical. They certainly were not so now, and in his opinion there had always been a vastly preponderating burden on real property which the larger reliance on the income tax, and the annual growth of rates, made heavier and more exceptional year by year.

Mr. S. BOURNE found a difficulty in comprehending how the large amount of 20 million £ duty at 8d. was arrived at in Tables L and M. He regarded most of the land tax as a veritable tax, not a mere rent charge. He himself paid on one property 21. a-year upon property, which, if he could rent it, would only bring in 6ol. That was in consequence of the builder of the house not having redeemed the freehold before he commenced building operations. Table E showed less than 2 million £ as the collection on lands, the annual value of which was 160 million £, at which average he ought only to pay 158. Neither could he agree with Mr. Hendriks's views about the returns from Indian, colonial, and foreign investments. The money paid for the purchase of food was not paid by those who received the income. Therefore he did not see any relation between the two in the shape of cause and effect. He regarded the tax under Schedule D as utterly wrong in principle. The taxation levied upon property was on the principle that a certain proportion of that which was created became the property of the State which protected the creation of the money; but in the case of the income tax a large proportion of the income on which it was paid was no creation at all; it was rather a charge on the distribution of that which had been created, so that the tax was paid three or four times over by successive recipients of that which came originally from but one

source.

Mr. JAMES LEAKEY believed that in one of the cantons of Switzerland the income tax was graduated from the highest to the lowest. If that could be done in England, both rich and poor would be responsible for the expenses of wars. The graduation of income tax would never be truly humane nor equitable without an important modification in which again Switzerland had already led the way, namely, a reduction of the tax to parents or guardians

young families, the reduction being proportioned to the number of children they support. Education being free in Switzerland, this wise reduction is the more notable and creditable to the country.

Mr. F. H. JANSON observed that Mr. Garnett had spoken of the land tax that had been redeemed as necessarily extinguished, which was not quite the fact, inasmuch as a certain proportion of the land tax had been redeemed by strangers to the property charged, the Land Tax Redemption Acts allowing strangers to redeem when the owners declined to exercise their right of redemption-in which case the land is not exonerated. It would be interesting to know what proportion of land tax still payable was held by individuals and was no longer payable to the Government.

The CHAIRMAN said it was not to be wondered at that opinions should vary about the important questions treated of in the paper, but he was sure every one present would join in thanking Mr. Elliott for the trouble he had taken, and for the valuable contribution he had made to the records of the Society.

Mr. T. H. ELLIOTT in reply said he had noticed that those who regarded the land tax simply as a rent charge, had always been the most anxious to remove the hereditary privileges of land. If, as had been the case, those privileges were taken away, the least that could be done was to take away the burdens also. He had included the redeemed land tax in his tables because he was anxious to take the fairest possible view of what he could never but consider as a burden on property. No doubt, as Mr. Garnett had pointed out, inequalities in inequalities could be found, but he had endeavoured to deal with broad effects rather than with smaller matters. He did not agree with Mr. Bailey that leasehold and freehold houses should be differently assessed. It was rather a question of apportionment as between the various interests in those houses than a question of the amount contributed in respect of each house to the revenue. As regards the observations of Mr. Leakey, he could only say that he entirely adhered to the opinion he had expressed, "that any attempt to aggregate in all cases the income arising from various sources, but accruing to each individual," would be a failure, and that no system of graduation would be possible under such an arrangement. He added that Tables L and M were not intended, as Mr. Garnett and Mr. Bourne had thought, to show the net produce under each head, but the gross amount chargeable. The net produce would of course vary, not according to the class of property or income possessed, but according to the aggregate amount in the hands of each individual.

The INHABITANTS of TOWER HAMLETS (SCHOOL BOARD DIVISION), their CONDITION and OCCUPATIONS. By CHARLES BOOTH, ESQ.

[Read before the Royal Statistical Society, 17th May, 1887.
Dr. T. GRAHAM BALFOUR, F.R.S., a Vice-President, in the Chair.]

I.-Object and Method of the Inquiry.

I HAVE the honour of laying before the Royal Statistical Society the first results of a proposed inquiry into the condition and occupations of the people of London. The facts and figures which follow apply to the district included in the Tower Hamlets School Board Division, and have been mostly obtained from the thirty-four visitors employed by the School Board; to whom, and to the Superintendent, I wish to express my sincere thanks for the courtesy they have shown me, and the unwearying pains with which they have lent themselves to my purpose. I have also to thank the Board itself for the kind permission to make this use of the information in the hands of their visitors.

The general plan of the inquiry, as applying to the whole of London, is to divide the entire population by districts and by groups of trades, each answering to a similar division in the census; and then to deal with each district by a local inquiry, and with each group of trades by a trade inquiry. The principal object of the district inquiry would be to show the conditions under which the people live, but it would also give their employments; the principal object of the trade inquiry would be to show the conditions under which the people work, but it would indirectly deal with their manner of life. The double method would provide a check upon the results of each, and much light be thrown upon the one inquiry by the other.

This very large scheme is more than any man could hope to accomplish by himself; but this is not called for, as much of it is