to believe that the practice had but a limited existence. The parties detected in this violation of the law were prosecuted before the local magistrates, and were punished by the infliction of penalties.

We have already observed that there is no reason to attribute to the prevalence of illicit distillation the falling-off in the quantity of spirits brought to charge. In fact, it will be seen from the subjoined account of the number of detections of offences connected with the clandestine manufacture of spirits, that in England and Scotland there is scarcely any variation from last year. In Ireland it is true that there is an increase, but we are not inclined to attach much importance to it, or to regard it as an indication that the practice has been revived to any serious extent. Indeed, in the last quarter of the year, which is that in which the smugglers carry on their operations most extensively, there has been a decrease in the detections as compared with those of the corresponding period of the previous year; and we think that the inspector-general of constabulary is justified in his surmise that the apparent increase in the year is to be attributed, first, to the greater activity of his men, who have had the utmost vigilance enjoined upon them in anticipation of the effect of the high duty; and, secondly, to the practice of the smugglers, when hard pressed by the detecting officers, of dividing their "runs" into several separate parts, so as to diminish their loss in each case.

The number of bushels of malt charged with duty in the year, was 45,555,946, being 8,187,230 more than in 1861. In our report for the year 1859-60, we remarked that a larger quantity had been brought to charge than in any year since the duty was first imposed. We have now to state that the quantity of malt made in the last year exceeds that of 1859-60 by a million of bushels, and exceeds the average of the last 20 years by 6,522,313 bushels. This is owing to the quality and quantity of the barley of the last season, and to the deficiency in the stock on hand caused by the bad harvest of the preceding year. During the year there were exported 429,322 barrels of beer.

In the year 1861, there were 47,941 acres under cultivation with hops, and 23,952,087 lbs. charged with duty, producing 149,700l. This is the first year in which the duty has been payable within the financial year in which it was charged. Besides the sum above stated, there was a portion of the duty of 1860, and some arrears of the heavy duty of 1859, to be collected, and thus our receipts amounted to 215,806. The receipt of 1860 was the produce of the very large growth of 1859, so that although we state that the quantity of hops charged in 1861 was double that of 1860, our accounts of revenue under the head of hops show a decrease of 366,9221. The duty on foreign hops was reduced from 1. a cwt. to 158. on the 1st of January last, and there has consequently been a large importation. In the quarter ended the 31st of March, 7,361,984 lbs. were entered for home consumption. The fact that the hop duty has been repealed, though not properly falling within the events of the year of which we are speaking, may conveniently be recorded here. The collection of this duty by means of temporary officers was effected at a cost which formed but a small item in our general expenditure, and we shall not be enabled by its repeal to effect any reduction of our established staff. The saving will probably amount to 4,000l. per annum.

There has been a slight increase in the quantity of chicory brought to charge from 1861, 7,819 cwts.; 1862, 8,361 cwts.: increase, 542 cwts.

The whole of this has been charged in York and the neighbourhood, the growth of chicory being apparently confined to that part of the kingdom. The higher rate of duty, 11s. per cwt., which is imposed upon all Britishgrown chicory from the 1st of April last, will probably lessen its consumption. The paper duty appears for the last time in our accounts of revenue. It was abolished on the 1st of October, 1861. The stock of paper in the hands of wholesale dealers and stationers on that day was 62,387,089 lbs., and the drawback which was paid to them amounted to 355,491, an allowance of the whole duty being granted where the paper had been charged since the 15th of May, and of one penny per pound where it had been charged before that time. This, however, was not the whole return of duty extracted from the Exchequer in consequence of the repeal, for we find that between the 1st of April and the 1st of October there were exported on drawback 13,342,520 lbs., on which the remittance of duty amounted to 90,1597., or, in other words, that in six months of the year 1861 the quantity exported was equal to the average quantity in twelve months in previous years.

The reductions which the repeal enabled us to make in the establishment were as follows:-6 foot-walk supervisors, 1,470l.; 7 riding supervisors, 1,785.; 130 division officers, 17,550l.; 36 ride officers, 4,680%; 2 first-class assistants, 190l.; 1 export surveyor, 350l.; 1 export officer, 871.: total, 26,112. There has been a further annual saving of about 2,500l. for stationery and for the stamps and labels that were used to denote the charge of duty on each separate ream or parcel of paper.

In the law relating to licences several alterations have been made of a useful character, though not such as to attract much public attention. Such is the enactment that all beershop licences shall expire at a fixed period, viz., the 10th of October, instead of at the expiration of twelve months from their date as formerly, a regulation by which an immense amount of trouble was imposed upon our officers, and which occasioned some inconvenience to the traders themselves. Such also is the power given to licensed dealers in spirits to obtain a licence to sell by retail, a privilege long demanded for the sake of public convenience, earnestly advocated by us and by our predecessors in office, and recommended by committees of both Houses of Parliament, but hitherto successfully opposed by the licensed victuallers. We cannot but rejoice at such a termination of a long-standing annoyance to the dealers in spirits as well as to this department.

The report from the principal of our laboratory contains as usual much interesting matter. We wish particularly to call attention to his remarks upon the adulteration of tea, though we must take leave to differ from him in his conclusion that it is easy for the consumer to ascertain the existence of adulteration. It is chiefly the poorer classes, buyers of low-priced teas, who suffer, and we fear that the spread of education is not yet sufficiently wide to enable them to observe "the serrated edge and peculiar and delicate venation of the real leaf" with the same accuracy as Mr. Phillips in his laboratory.

There can be no doubt that this adulteration of an article of such universal consumption is a very serious evil to the community, and we fear we must add not only that it is increasing, but that we are almost powerless materially to check it. The difficulty is much augmented by the fact that a great portion of the adulteration is effected before importation, and as the officers of customs have no power to refuse to admit the tea for home con

sumption when the duty is paid, whatever may be their suspicions, or even their certainty as to its spurious quality, it becomes a very nice question whether our officers, though armed by law with authority to prosecute the person who sells it, can properly interfere. Yet it is to be apprehended that if it were announced that any adulteration would meet with impunity if effected before the tea be produced to the customs officers for admission to consumption in this country, the practice would be greatly encouraged, while on the other hand it can scarcely be doubted that a determined stand made against the introduction of the vile and sometimes noxious compositions which the Chinese prepare as our beverage, would not be long in working a reform in the habits of the tea merchants in that acute and ingenious nation.

The home manufacture of spurious tea, and the sophistication of tea after importation, appear to have engaged the attention of the legislature at a time when the use of tea was, comparatively, very limited. The first Act on this subject now in force is that of the 11th year of George the First (1724). The next Act is in the 4th year of George the Second. It recites that "several ill-disposed persons do frequently dye, fabricate, or manufacture very great quantities of sloe leaves, liquorice leaves, and leaves of tea that have been before used, or the leaves of other trees, shrubs, or plants, in imitation of tea, and do likewise mix, colour, stain, and dye such leaves, and likewise tea, with terra japonica, sugar, molasses, clay, logwood, and with other ingredients."

But it was in the reign of George the Third that the evil appears to have reached its maximum, for surely nothing which occurs in the present day can be compared to the injuries inflicted on the kingdom by the manufacture of spurious tea, as they are solemnly recorded by the Lords and Commons in Parliament assembled in the preamble to an Act of the 17th year of the reign of George the Third.

After quoting the previous Act, the statute continues thus,-" And whereas great quantities of sloe leaves, and leaves of asli, elder, and other trees, shrubs, and plants are dyed, fabricated, and manufactured, in imitation of tea, and such evil practices are increased to a very great degree, to the injury and destruction of great quantities of timber, woods, and underwoods, the prejudice of the health of his Majesty's subjects, the diminution of the revenue, the ruin of the fair trader, and the encouragement of idleness: Be it enacted, &c."

The progress of science has preserved the forest trees of England from annihilation. Instead of the ruder process of substituting the British for the Chinese leaf, our modern tea dealers have recourse to pigments which revive, to outward appearance, the exhausted dregs of the genuine article. Prussian blue and a little gum give what is called a "facing" to black tea; and there are materials not, it is to be feared, of so innocent a nature by which black tea is converted into green. This latter practice appears to be so general as to have become a regular and recognised part of tea dealers' business; and it is not a little amusing to see how entirely unconscious they are of the real purport of their acts. They write to us that they doubt whether it can be contrary to any statutory provisions to convert black tea into green; that if this really be the case, they must, of course, give up the practice, but that they hope to find that our officers are mistaken in so informing them, as it will be extremely inconvenient to them, and a great interference with their trade. We fear that we may be open to the

reproach of having departed from the calmness of official style and phraseology in pointing out to some of these gentlemen in our replies, that there is another law, besides that in the statute book, which they had somewhat contravened.

The net receipts from stamps in the year ended 31st March, 1862, was as follows:

Deeds and other instruments, 1,336,152.; bills of exchange and promissory notes, 549,759.; bankers' notes, 2,456l.; composition for bankers' bills and notes, 67,425l.; receipts and drafts, 423,9551.; probates of wills and letters of administration, and testamentary inventories, 1,307,307.; legacy and succession tax, 2,266,350l. ; fire insurances, 1,534,8421.; marine insurances, 335,1987.; patent medicines, 44,270l. ; cards and dice, 13,6377.; probate court fee stamps, 109,1991.; licences and certificates, 246,6467.; gold and silver plate duty, 57,0647.; newspapers, 128,127.; law, equity, exchequer, and chancery fund (Ireland), 43,9181.; Admiralty Court fee stamps, 9,6164.; divorce and matrimonial causes fee stamps, 2,624l. ; patents for inventions, 102,052. Total, 8,580,5971.

The revenue from stamps is for the most part collected with so much ease that we have but few observations to make upon it in our annual statements. Of course this remark does not apply to the legacy and succession duties, in the assessing of which questions of great intricacy are continually occurring. We need only refer to the cases which have been submitted to judicial decision during the last year in confirmation of our assertion. It may be expected that we should advert to a point in the collection of the stamp duties which has lately been the subject of some discussion, viz., the expediency of supplying stamps through collectors of excise or other persons in the out-door establishment of the revenue departments, instead of appointing distributors and sub-distributors specially for the purpose. The subject is one which requires much consideration, both as to the security of the revenue and as to economy in its collection. True it is that in some large towns arrangements might be made to confine our collector to his office for the transaction of his duties in connection with excise and taxes, instead of sending him, as at present, on the collecting rounds, and that in such instances he might attend to the distribution of stamps. This, however, could only be effected by the appointment of additional collectors; and when it is considered, first, that the salary of the distributing collector must be greatly increased in consequence of the large security which he must find and the heavy responsibility which he incurs; secondly, that an increase of the number of collectors would be required; and, thirdly, that compensation must be given to the distributors displaced; it may be doubted whether any saving worth mentioning would be effected by the change, while at the same time there can be no doubt that we should be unable to obtain from such persons as our collectors the same amount of indemnity against losses and defalcations as the distributors furnish by means of their sureties. Speaking generally, therefore, we could not recommend the entire subversion of the present system of distribution, but we have shown, in the case of Glasgow, that when we see our way to effect an amalgamation of offices, we do not omit the opportunity, and we shall not fail to consider the practicability of making other arrangements for the distribution of stamps and the collection of this portion of the revenue in any districts in which vacancies arise.

Net receipt from land and assessed taxes, in the year ended 31st March,

1862, was as follows:-Land tax, 1,135,2217. ; inhabited houses, 826,6231.; servants, 201,3471.; carriages, 332,7491.; horses, 368,825l.; dogs, 196,527l; horse dealers, 14,3177.; hair powder, 1,114l.; armorial bearings, 56,926l.; game duty transferred to excise; additional 10 per cent. per Act 3 Vict. c. 17, 1,431l.: net receipt, 3,135,0807.

Net receipt from property and income tax, in the year ended 31st March, 1862, was as follows:-Schedule A, 4,943,1924.; schedule B, 575,8174; schedule C, 1,004,135l.; schedule D, 3,263,9261.; schedule E, 684,137l.: net receipt, 10,471,207; rate of tax, 9d. in the £.

The principal event in the year, as regards the income-tax, is the quarterly collection of it, if indeed such a term can, with any propriety, be applied to the mode of collection adopted. For it was found impossible, owing to the late period of the session at which the Act was passed, to complete the assessments in time to collect the tax for the first quarter until after the second quarter's tax had become payable, and thus the two quarters were, as usual, dealt with at the same time, the only difference being that the receipt was held in October, which was rather earlier than formerly. The third quarter's tax was paid in January, and the fourth in April, after the termination of the financial year. Such a mode of collection can scarcely be said to afford a test of the practicability of a quarterly collection; and, therefore, when we record as our experience of the arrangements of last year that they were satisfactory, we must not allow it to be supposed that we are either so careless or so disingenuous as to wish it to be inferred that this was a conclusive experiment in favour of holding receipts for the income-tax in each quarter as it becomes due. We think it our duty from time to time to call attention to the deficient returns of profits under schedule D. We have already reported to your lordships one remarkable case of recent occurrence, where a trading firm having returned "nil" as their profits for the year 1861-62, the surveyor induced the district commissioners to assess them at 12,000l., and upon appeal obtained a close confirmation of his estimate by proof from their own books that the correct charge was rather more than 12,000l. as the average of the three preceding years. The penalty of treble duty was inflicted by the district commissioners, and was paid. To take another example from a different part of the kingdom:-A. B. some years ago returned 15,000l. as his assessable income, but the amount was raised by the commissioners to 20,000l., on which he paid. The following year he made no return, and the assessment of the commissioners was again 20,000l., but the surveyor charged him on 45,000l., the duty on which was paid without appeal. Again, the next year he made no return, and again the charge was raised by the surveyor, who assessed him on 60,000l., with the same result as in the former instance.

Three thousand pounds appear to be a favourite amount for assessments. We have before us two cases in which that sum had been accepted for years by the district commissioners as the chargeable income. In the one case, in which the party was assessed on his own return, the surveyor raised the assessment to 8,000l., and in the other to 10,000l., the duty being paid in both without question. From the first case, however, there has been additional profit to the revenue, the party having made a return of upwards of 17,000l. for the following year.

In one place the assessment of a large trading firm having been found greatly inadequate, inquiries were instituted as to the charges under