‘The plan I propose is to absorb a great quantity of stock’
In the prefatory remarks to his Manual, Jefferson declared that an assemÂbly’s ‘code of rules’ should bring about ‘accuracy in business, economy of time, order, uniformity, and impartiality’.39 Jefferson assumed that there would always be a divergence between any description of legislators’ actual
‘The average price of peace and war’ 103 behaviour (in committee or on the floor) and, on the other hand, behaviour which a code of rules prescribes.
When this gap narrowed, ‘accuracy in busiÂness’ was achieved and merit outcomes would benefit from this convergence.Each of the two case studies illustrates how members of Commons and the Senate went about assessing their respective institutional experience in rule-writing and rule-revising. Jefferson’s performance standards - incorporating Hatsell’s - raise the consciousness of members. The stanÂdard for ‘accuracy in business’ permits investigators to score Commons’ conduct in 1774 and 1797-99. In the former case, Commons diligently considered the needs of stakeholders. In 1797-99, Commons disregarded its past experience in financial oversight. In the United States, President Washington laid out a detailed case for the Senate’s procedures governing ratification of treaties. Slightly more than a decade later the Senate turned its attention to points Washington had made in his 1789 memoranda.
The case studies, moreover, shed light on an important aspect of parliaÂmentary rule-making. Institutional performance standards - such as JefferÂson’s ‘accuracy in business’ - may not suitably guide an assembly’s detailed attention to rule-review and rule-revision. More precisely, additional modelÂling was required to bring these standards into play. What was at stake was the assembly’s management of stakeholders’ expectations of goodness and fairness in the law-making process.
Take taxpayers as a discrete and familiar class of stakeholders. In his speech of 3 December 1798, Pitt proposed a tax on incomes to supplement government revenue; government revenues were, at the time, overly reliant on customs duties and the tax on land-holdings. The system of duties on imports and exports, for example, had grown so complex that publication of tariffs filled six folio volumes. As for the land tax, out-of-date valuaÂtions depressed government collections. To supplement revenue from these creaky regimes, Pitt proposed to tax private incomes at the rate of.83 perÂcent above £60 per annum; that figure served as a standard deduction.
Parliament enacted Pitt’s income tax in four bills. The first appears at 39 Geo. 3 c. 13; the text of the act was divided into 124 sections. Parliament then enacted 39 Geo. 3 c. 22. Detailed provisions in the latter Act framed ‘Schedules to which this Act refers’. These forms take up 11 pages in RunÂnington. Schedules required taxpayers to state their income and disclose details that the taxpayer might claim against such income. Pitt’s regime - ‘as near perfection as human wisdom could devise’40 - obliged taxpayers to reveal financial details to the ‘Commercial Commissioners’ in the TreaÂsury. For example, the tax-form required disclosure of the taxpayer’s rental income under the heading ‘£. s. d.’ regarding ‘Lands demised to me at Rent, and underlet to a Tenant at an improved Rent’. This form was titled ‘SchedÂule of Income; item 14’. The rate at which lands were ‘demised at Rack Rent’, had been addressed in 39 Geo. 3 c. 13, Section XCIV. This bit of legÂislative wisdom anticipated cases in which the landlord might have managed his affairs to obscure the ‘fair and just Estimate of such Income’.
As in the case of the Trent-to-Mersey canal bill (1766), the House of Commons set about composing tax-law in code to modern standards. These efforts required the assembly to devote considerable attention to detail.
SpeÂcifically, members were obliged to visualise a future encounter between any given taxpayer and the Treasury’s Commercial Commissioners. With this in mind, law-makers set about formulating the schedules to frame the behavÂiour expected from taxpayer and revenue agent.41 In turn, these arrangeÂments were nested within an even larger frame. Pitt’s taxing and spending policies had broken new ground earlier in 1798. Landowners, saddled perÂmanently at the 4s in the pound sterling assessed valuation, might buy out 20 years’ of future land tax obligations.The leading object of the plan which I shall have the honour to propose is, to absorb a great quantity of stock, to transfer a considerable portion of the funded security to landed security, and, by the redemption of the present land tax, to purchase a quantity of stock, more than equivalent to the amount of the tax.42
By capitalising these obligations, Pitt was able to offer favourable terms to the country squires in his speech of 2 April 1798. The ‘public stock’ Pitt tempted landowner-investors to redeem - via his bill (enacted as 38 Geo. 3 c. 16) - served as the currency that landowner might tender for 20 years’ tax-free occupation of his land. ‘The present price of three per cents being about 50’, he dazzled the House of Commons, every ‘pound of annual tax, therefore will be equal to £40 capital stock’. Pitt had more to offer the House of Commons for its consideration in his Land Tax Redemption scheme that year. This was nothing less than a put option securing landowners from the risk of market-downturn in government funds. Those not in title, such as tenants, could also buy ‘puts’ on their ‘consols’, otherwise known as the 3 percent annuities.