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ENGLISH FINANCE
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See also:ENGLISH See also:FINANCE
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The See also:history of the See also:English fiscal See also:system affords the best example known of continuous See also:financial development, in respect both of institutions and methods
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Though certain See also:great periods of See also:change can be readily noticed, yet from the See also:time of the See also:Norman See also:Conquest to the beginning of the loth See also:century the See also:line of connexion is substantially unbroken
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Perhaps the most revolutionary changes occurred in the 17th century, as the outcome of the See also:Civil See also:War, and, later on, the revolution of 1688
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But even in this See also:case there was no real See also:breach of continuity
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It is, therefore, possible to trace the normal growth and expansion of See also:British See also:finance as one of the aspects of the nation's history
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The See also:primitive financial institutions of See also:England centre See also:round the See also:
Even before this organization was See also:developed the Domesday Survey (see DOMESDAY Boor)—now recognized as having a purely fiscal See also:object (in See also:Maitland's words " a tax See also:book, a geld book ")—shows the See also:movement towards careful observation of the See also:sources of revenue
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It is clear that See also: Further, the higher judicial organization assisted the expansion of See also:court fees; while, above all, the increased authority of the state made the casual receipts (for such they were) from See also:trade more profitable . In a broad view the sources of revenue fall under the following heads:—(t) The royal estates which were distributed over England, derived in See also:part from the possessions of the old English kings, but increased by the confiscations that followed the events of the Conqueror's reign, as well as by the See also:doctrine that unowned land was the king's (terra regis) . Over fourteen See also:hundred manors appear in Domesday as royal property . The forests, placed under special See also:laws, yielded little revenue, except in the form of penalties on offenders . The rural tenants, who at first paid their rents in produce, gradually commuted them into See also:money payments . As the royal See also:demesne was favourable for -the growth of towns the rents derived from See also:urban tenants became a valuable part of the yield from the demesne; this, later, took the shape of a See also:payment from the See also:town as a unit (the firma burgi) , a method which secured to the burghers freedom from the exactions of the See also:sheriff and which was See also:purchased by special payments . (2) The feudal rights . These included the claim to military service; the three See also:regular See also:aids and the payments of See also:relief at See also:succession to a See also:fief, as also the profits on wardships and marriages . Escheats and forfeitures completed the See also:list . The yield from this source varied with the See also:power of the king and was kept within See also:bounds by the resistance of the tenants as shown in the provisions of Magna Carta . (3) The See also:administration of See also:justice was a lucrative See also:prerogative of the crown . Suitors had to pay for securing, the See also:hearing of their cases in addition to the fees for writs, and both amercements and compositions increased the receipts under this head .
(4) Two special classes contributed to the royal exchequer
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As a great See also:deal of the See also:wealth of the See also:country was in the hands of the See also: Indications of change are, however, to be found . Thus the substitution of the " carucage " or plough tax for the "Danegeld " marks an advance towards direct taxation of land through its produce, and the introduction of " scutage " is not only further evidence of the same tendency, but also a step in the development of " money economy " in place of the earlier " natural economy " or system of payments in See also:kind . The special levies or " tallages " imposed at times of need on the towns in the king's demesne appear to have been a doubtful exercise of the royal prerogative, but scientifically they belong to the same class as the Danegeld and scutage . Perhaps the most important advance made in this period is the beginning of taxation of movables, first applied in the See also:Saladin tithe of 1189 and, later, See also:expanded into a general system . In the reign of John (1r99-1216) the loss of Normandy and the concession of the barons' demands by the issue of Magna Carta rendered financial readjustments inevitable . During the See also:long reign of Henry III. the struggle to maintain the privileges granted by the Charter acted on the fiscal system by checking the arbitrary use of tallages, and as a consequence, encouraging the regular See also:assessment of the tax on movables, which was becoming more prominent . The fruitful idea that it was necessary to obtain the consent of the payers of taxes before the See also:imposition operated powerfully in favour of the See also:establishment of bodies representing the several estates . It is through the reaction of constitutional on fiscal development that the transition from feudal to See also:parliamentary taxation in its earlier form is made . Almost at the opening of the See also:age of parliamentary taxation one of the older sources of revenue ceased . The pressure of popular opinon forced See also:Edward I. to See also:decree the expulsion of the Jews (1290), though he naturally desired to retain such profitable subjects . It is, indeed, probable that, owing to the exactions practised on them, the Jewish usurers had become less serviceable to the exchequer; while it is certain that the general resources of the kingdom had so increased as to make their contribution relatively much smaller . The first effects of the representative influence in the fiscal domain are the See also:abandonment of the tallages on towns and the decline of scutage as a mode of See also:levy . The tax on movables was framed in a more systematic way . Instead of distinct charges on different classes, or See also:variations in proportion of levy from one-fourth to one-fortieth, the policy of imposing a tax of one-tenth on the towns and one-fifteenth on the counties was adopted . Greater strictness in assessment was sought by the See also:appointment of commissioners for each See also:county, supplied with special instructions as to taxable goods and exemptions . This method continued in force for the tax on movables from 1290 till 1334, though in some cases the proportions imposed on the towns and counties were varied (e.g. an eighth and a fifth were granted in 1297, and a tenth and a See also:sixth in 1322) . A more general influence was the growing national economy which led to greater activity on the part of the king as See also:administrator, and which also increased the need of the state for revenue . Though the doctrine that " The king should live of his own " was generally accepted as a constitutional See also:maxim, the force of events was making it obsolete . .From being an infrequent and uncertain kind of taxation the direct tax on movables, which was practically absorbing the older forms, became usual and regular . Under See also:medieval conditions the collection of a general property tax (for such, in fact, was the nature of " the tenth and fifteenth ") presented serious difficulties . Each locality gained by keeping its assessment down to the lowest point, while the See also:borough authorities were naturally not eager to enforce the See also:charge on their See also:fellow-citizens . England in the 14th century was not ripe for a system that has been found hardto make effective in more advanced See also:societies . Hence, from 1334 onward, the method of " See also:apportionment was employed, i.e. the tenth and fifteenth was taken as affording a definite sum measured by the yield on the See also:ancient valuation . As this gave, in the aggregate, between £38,000 and £39,000, " the tenth and fifteenth " became for the future " practically a fiscal expression for a sum of about £39,000 "; the See also:total to be divided or " apportioned "between the several counties, cities and boroughs according to their former payments .
This See also:settlement, which remained in force for centuries and affected all the later direct taxes, had the great advantages of certainty and adaptability
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The in-habitants of any particular town knew their total liability and could distribute it amongst themselves in the manner most convenient to them
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From the royal standpoint also the arrangement was satisfactory, for the " tenth and fifteenth " could be multi-plied (e.g. in 1352 three "tenths and fifteenths " were voted for three years), and supplied a See also:stable revenue for the service of the kingdom
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To the See also:parliament the power of regulating the policy of the crown by the bestowal or refusal of grants was naturally agreeable
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Thus, all sections of the nation See also:united in support of the system established in 1334, just before the opening of the Hundred Years' War, in connexion with which it was particularly serviceable
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Akin to the tax that has just been described, at least in its nature as a direct See also:impost, is the See also:poll or capitation tax
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Financial pressure at the See also:close of Edward III.'s reign (1377) led to the See also:adoption of a tax of fourpence per head on all persons in the kingdom (mendicants and persons under fourteen years being excepted)
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This " See also:tallage of groats," which seems to be derived by See also:analogy from the See also:hearth money for See also:Peter's pence, was followed by the graduated poll taxes of 1379 and 1380
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In the former the See also:scale ranged from ten marks (£6:13:4) imposed on the royal See also:dukes and the viscounts, through six marks on earls, bishops and abbots, and three on barons, down to the See also:groat or fourpence payable by all persons over sixteen years of age
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Such a form of taxation approximated—as See also:Adam See also: It was abandoned, with one exception, for nearly three hundred years; and its occasional employment in the 17th century did not result in its permanent revival . Apart from special circumstances it is See also:plain that the " tenth and fifteenth " was better suited than the poll tax for the purpose of English finance . The machinery for collection was ready to See also:hand for the former, while special agents had to gather the latter, even from the poorest classes . In fact, the See also:episode of the poll taxes may be regarded as an See also:attempt—fortunately unsuccessful—to relieve the propertied classes at the expense of the peasants and poorer burghers . Failure in this respect helped in the See also:maintenance of the settlement of direct taxation devised in 1334 . Parallel with the See also:evolution of direct taxation, but decidedly lagging behind, is the progress of indirect taxation . As already mentioned, the right of levying dues on goods entering or leaving English ports belonged from very See also:early times to the king . Whether this power was, in its origin, due to the See also:protection afforded to traders and thus a kind of See also:insurance, or the result of the royal prerogative of pre-emption is immaterial for finance . What is established is that the prisage " of See also:wine or levy of one cask in ten, and the taking of one-tenth or one-fifteenth of other commodities was in force . Attempts to impose additional dues were forbidden by an important See also:article (41) of the Great Charter which recognized " the ancient and just customs." One of the earliest effects of parliamentary influence is manifested in the establishment of duties on See also:wool, woolfells and See also:leather by Edward I.'s first parliament . After some efforts by the king to gather increased duties, the " See also:Confirmation of the Charters " (I 297) forbade any increases on the amounts fixed in 1275, which were henceforth known as the ancient customs . Another attempt was made to obtain a higher scale of duties by arrangement with the merchants . The See also:foreign traders consented to the royal proposals, which comprised duties on wine, wool, hides and See also:wax, as well as a general tax of It % on all imports and exports . Thus, in addition to the old customs of half a See also:mark (6s . 8d.) per See also:sack of wool and on each three hundred woolfells, and one mark (13s . 4d.) per last or load of leather, the foreign merchants paid an extra See also:duty (or surtax) of So% and also 2s. on the See also:tun of wine —the so-called " butlerage." The privileges granted in the Carta Mercatoria (1303) were probably the See also:consideration for accepting these enhanced dues . The English merchants, how-ever, for the tivie, successfully resisted the application in their case of the higher charges, and consequently remained under the old prisage of wine . In spite of parliamentary opposition, on the ground that they amounted to an infringement of the Great Charter, the new customs were maintained in force . After being suspended in 1311 they were revived in 1322, See also:con-firmed by royal authority in 1328, and finally sanctioned by parliament in the See also:Statute of the See also:Staple (1353) . They became a part of the permanent crown revenue from the ports, and, with the old customs, were the basis for further development . Just as the old direct taxes were first supplemented by, and then absorbed in, the general taxation of movables, so the customs, in the strict sense, were followed by the subsidies or parliamentary grants . One great source of English wealth in the 14th century was the export of the peculiarly See also:fine wool of the country, and the political circumstances of Edward III.'s time suggested the manipulation of the trade in this commodity for purposes of policy as well as revenue . Sometimes, in order to influence the towns of See also:Flanders, the export of wool was absolutely prohibited; at others, export duties of varying amounts were imposed on wool, skins and leather . In the early years of the reign these arrangements were settled by agreement with the merchants . The subsidies of this class began in 1340 and henceforward were frequently granted, though complaints were very often made . Thus, in 1348 the See also:Commons objected to the See also:subsidy of an export duty of £2 per sack on wool on the ground that it was really a tax on the landowners, who received a See also:lower See also:price for their wool in consequence of the duty . Bargains between the king and the merchants were forbidden, and this See also:species of taxation was brought under parliamentary control by statutes passed in 1362 and 1371 . Along with the special duties on wool there was an increase of the imposts on wine and general goods . By agreement with the merchants a charge of 2s. per tun on wine and 21% on goods was levied in 1347 . Between 1371 and 1376 these dues were established as parliamentary grants under the names of " Tunnage " and " Poundage," leaving the older dues intact . One class or " See also:estate " occupied a peculiar position . The See also:clergy still claimed the See also:privilege of self-taxation, and therefore it was See also:convocation, not parliament, that voted the tenths imposed on clerical property . In some instances much heavier charges (e.g. in 1296 one-third) were decreed by the king, but the taxation of the clergy declined in productiveness during the 14th century . By the close of the reign of See also:Richard II. the results of the transition from feudalism to a parliamentary constitution were practically See also:complete . In respect to finance the most important of these were: (I) The disappearance or reduction to unimportance of the feudal dues . The fact that this change occurred at, relatively speaking, so early a date is of special significance for English development . (2) The royal demesne, though it had not suffered the losses that the grants of later times inflicted on it, had also lost some of its value as a source of revenue . (3) In See also:compensation the direct taxation of property had become a ready means of supplying the growing requirements of the administration, and the mode of levy had been reduced to a well-recognized form, unsatisfactory experiments—such as the poll tax—being withdrawn . (4) The growth of import and ex-See also:port duties through the " old " and " new " customs and the subsidies furnished a large part of the requisite funds . In fact,in the course of a little over three hundred years the constituent parts of the public income had, without any violent change, been completely altered in relative value and in organization . The period of the Lancastrian kings, extending over two-thirds of the 15th century (1399-1471), is noticeable for various experiments in the system of direct taxation . The See also:standard tax —" the tenth and fifteenth "—failed to suit the changed conditions . In consequence of the decay of some of the towns allowances had to be made to them, amounting to over IS% (£6000), which, with other deductions, lowered the yield from a " tenth and fifteenth " to £31,000 . As a supplement a land tax, affecting only the large owners, was voted at the See also:rate of 5% 111 1404, and repeated with wider See also:scope, but at the lower rate of 1f%0, in 1411 . A See also:house tax made its See also:appearance in 1428 . Taxes on See also:knight's fees and other freeholds were also tried, while in 1435 and 1450 the graduated income tax was employed . The minimum rate, 21%, applied to incomes under £See also:loo (or under £2o in the tax of 1450), and See also:rose to ro% on the higher incomes . These devices are evidence of the demand for larger revenue, and also of the increasing unfitness of the existing direct taxation .
It may be added that they indicate a disposition to adopt foreign See also:models, particularly the methods of taxation in use in See also:France and See also:Italy
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As to indirect taxation the receipts seem at first to have declined, and the subsidies were only granted for fixed terms (the victory of See also:Agincourt gained a See also:life See also:
See also: The force of personal See also:monarchy exercised by the Tudors, depending as it did on popular support, tended to encourage the collection of dues which had a legal ground in preference to taxation of the community . Of similar character was the employment of the old right of See also:purveyance (q.v.), in See also:restraint of which a See also:series of statutes had been passed . Whatever possibilities of obtaining some additional revenue from the crown lands or prerogative rights may have existed in the 16th century, and these were slight, all the political and social conditions tended more and more to make the need of taxation as the See also:principal financial resource imperative . Amongst the cases of increased calls for funds to maintain the machinery of state, the rise of prices, due to increased supplies of the See also:precious metals, must be included as one of the chief, and its effect extends into the 17th century . It was under this influence that the old forms of revenue became less profitable and that fresh developments were necessitated . Direct taxation still retained in one of its branches the See also:pattern set in the reign of Edward III . " Tenths and fifteenths " continued to be voted, and for some time all attempts to introduce new methods failed . In 1488 a military grant framed on the See also:model of the abortive tax of 1472 yielded only a little over one-third of the estimate (£27,000 out of £75,000), and the unsatisfactory result prevented further experiments on the part of Henry VII . The foreign policy of Henry VIII.—particularly his See also:French expedition—with its attendant outlay, accounts for the graduated capitation tax of 1513, which was even less in accordance with anticipation than the tax of 1488 (it yielded only 50,000 instead of £160,000) . But these failures cleared the way for a more effective form of direct impost, which appeared in the " subsidy " or general tax on land and goods . The first case of this tax (1514) was a modest one—21%; it, however, soon took on a typical form, so that the subsidy came to mean a charge of 4S. in the See also:pound on land and 2S . 8d. in the pound on goods, a scale evidently devised with reference to the older tenth and fifteenth, which was henceforth put in a subordinate position, The subsidy became the established mode of grant under both Tudors and Stuarts, though by degrees it underwent a change similar to that experienced by its predecessor . The taxing statutes made elaborate provisions for the assessment and collection of the tax in order to secure a full return . Old habits proved too strong and the subsidy " slipped into the same kind of groove as that of the fifteenth and tenth, and became, in practice, a grant of a sum of money of about the same amount as the yield of the last preceding subsidy " (Dowell) . The consequence was that each subsidy came, in the middle of the 16th century, to be a sum of £100,000, and at its close only £8o,000 . The parallel See also:vote of the clergy in convocation (which after 1533 had to be confirmed in parliament) amounted to £20,000 . The usual parliamentary proceeding was to vote so many " tenths and fifteenths " and so many subsidies, e.g . Elizabeth's first parliament voted her " two fifteenths and tenths and a subsidy," or, taking the usual values, £16o,000 . At times of crisis such as the arrival of the See also:Armada the votes were enlarged by granting more tenths and fifteenths and subsidies . The history of the subsidy is instructive as to the tendencies of direct taxation in all countries . The assessment becomes inelastic and approximates to a fixed sum . As the subsidy follows the course of the later medieval taxation, so it is the undesigned model of the later land and property tax . In the history of the port duties under the Tudors the first point for See also:notice is the life grant to each of the sovereigns of the subsidies on wool, hides and leather, together with tunnage at 3s. and poundage at 5%; thus, with the hereditary customs, supplying a considerable revenue for the crown's use . No better indication of the increased power and popularity of the monarchy could be found . The contrast with the suspicious and grudging attitude of the See also:Plantagenet and Lancastrian parliaments is significant of the change in national sentiment . A duty on See also:malmsey (1490) had a retaliatory rather than a fiscal aim, being directed against the Venetians who had imposed restrictions on English trade . In several later cases wine became liable to extra duties, chiefly applied to French trade in further pursuance of the policy of retaliation . Restrictions on import and export as well as the hostile See also:measures against foreign merchants were matters of economic policy rather than finance, but they had the indirect effect of increasing the control exercised at the ports . The loss of See also:Calais (1558) dislocated the system of the staple and cut off one centre of customs revenue; and it was also probably the cause of an important change in the mode of valuing goods for duty . For the See also:declaration on See also:oath of the See also:merchant a fixed valuation was substituted and set forth in a book of rates, the first of its class (1558) . Following this reform came more stringent regulations against See also:smuggling and See also:fraud on the part of officials . All through the Tudor period the cost of collection was unduly high . For the first six years of Elizabeth it has been estimated at one-sixth of the See also:gross receipts . Just as in the 14th century the subsidy had followed the " old " and " new " customs, so in the 16th the " impositions " levied by royal prerogative form |