Autograph letter signed by Herbert Asquith about King Edward VII's taxes 1909

ASQUITH, Herbert, Henry. Autograph Letter Signed to Sir George Murray concerning Edward VII's income tax and the proposed super-tax. 10 May 1909.
 
Autograph letter signed "H.H.A.", 10 Downing Street, Whitehall, 10 May 1909. A single sheet folded of embossed and printed 10 Downing Street stationery, written in black ink on all sides to Sir George Murray, Permanent Secretary to the Treasury. Old folds and light handling, otherwise very good.
 
A significant letter in which Prime Minister H. H. Asquith records his personal discussion with Edward VII and the King's private secretary, Francis Knollys, concerning the sovereign's income-tax arrangements, written only eleven days after Lloyd George introduced the People's Budget of 29 April 1909. Asquith explains that when the original arrangement was made at Edward VII's accession in 1901, income tax stood at 1s 2d in the pound. The King had subsequently paid at the higher rate of 1s 3d, but Edward and Knollys maintained that this had occurred by inadvertence, the understanding having been that the King should pay "at not a higher rate than that (1/2) which was current at his accession." 
 
Asquith accepts this account and records that Edward will therefore pay at 1s 2d for the current financial year. He then addresses the newly proposed super-tax, one of the major innovations of Lloyd George's People's Budget: "I also said that I did not think we ought to regard a super-tax as within contemplation when the matter was arranged, & that we would not attempt to exact it."
 
The super-tax had been announced less than a fortnight earlier as an additional levy on very high incomes. Although the Finance Bill was subsequently rejected by the House of Lords and did not receive Royal Assent until 29 April 1910, the resulting Finance (1909-10) Act imposed the tax retrospectively for the financial year beginning 6 April 1909. Asquith's letter therefore records an undertaking that was potentially of practical consequence once the tax finally became law.
The final paragraph is particularly revealing. Asquith instructs Murray: "I think you had better have a written arrangement with Knollys. Apparently there is no record of what took place in 1901."
 
The letter thus preserves unusually specific evidence of an apparently undocumented understanding concerning Edward VII's taxation: a ceiling linked to the income-tax rate prevailing at his accession, together with Asquith's decision that the newly proposed super-tax should not be exacted from the King. Sir George Herbert Murray was Permanent Secretary to the Treasury from 1903 to 1911 and was therefore the senior civil servant responsible for implementing such an arrangement. Francis Knollys, later Viscount Knollys, was Edward VII's private secretary and one of the principal intermediaries between the sovereign and his ministers.
 
The letter provides a, most likely not well known, first-hand record of policy being privately settled at the highest level between Prime Minister, sovereign, Palace and Treasury at the opening of the People's Budget controversy. this being a record in Asquith's own hand about the terms on which the King was to be treated under the new fiscal regime and avoidance of the super tax imposed by Lloyd George's budget.