WAR EXPENDITURE AND COMMERCIAL DEVELOPMENT.
Vsnsors historical parallels have been drawn to illustrate the pe- culiar position of our present Chancellor of the Exchequer in pro- posing his first war budget,—parallels between this budget and the last one, framed in the full blow and perfection of peace ; between the commencement of this war and of the last ; between Mr. Gladstone, the train of whose finance enters the dark tunnel of war-time, and the career of his great master, who developed a Free-trade policy in undisturbed peace. But in truth the contrasts that have been drawn are either imperfect or too feeble, and it might easily be shown that in all points the comparison fails. Mr. Gladstone enters the stern and responsible business of providing for the expenditure of a war under circumstances more happy than any which have attended his predecessors. He has ampler means; his hand is freer ; or where his hand is restrained, the restraint it- self becomes a strength. The reckless ardour for war as a path of national aggrandizement is replaced by a calmer resolution to ac- cept the necessity of war for the maintenance of justice, but for no further object. At the same time, the public opinion, whose clearer insight will exercise a stricter control over the Minister, will sup- port him with a proportionate discernment, and will not need to be deluded or cajoled.
Cajoling, indeed, is the last charge that could be made against Mr. Gladstone. If he is proposing a new expenditure for war pur- poses, he is making his proposition on principles and in a form which present it in the sternest, most real, and least attractive as- pect. He will not run up credit at the shop while he indulges the country in the exciting game of war—he calls for payment on the nail ; he will not let the pubho conceal its outlay—he demands it in a round sum by way of addition to the ordinary Income-tax. He thus realizes at once the worst reproach of the Income-tax, that it is a ready tool in the hands of the Chancellor of the Exche- quer for increasing the pressure with prompt facility, and, while he takes but a small advantage of that facility, he makes the pub- lic well aware that it exists. As he does so, it is desirable to enter upon the consideration of the Budget, especially in the view of any future debates, with a perfect apprehension of the distinction that exists between the question of increasing taxation for pe purposes of a just war or of rendering that increase nakedly appa- rent, and of exacting it in the form proposed; for there are many who will readily acquiesce in the increase, and in the nakedness of the increase, who would object to the particular form of getting at the money, on grounds of peculiar inconvenience attaching to the Income-tax itself. The less scrupulous opponents of the Income- tax will be ready enough perhaps to take advantage of objections to the war, white the opponents of war will press into their ser- vice the dislike to the Income-tax ; but every truly honest and clearsighted man will be able to keep the two questions as distinct as they really are.
There is another position of Mr. Gladstone, in which, generally speaking, goat persons will agree, but which must be accepted with some degree of qualification. It would not, he says, be worthy of the wealth and power of England to charge the burden of the war upon posterity : and in general terms the position is true. Equally true is it that we must endeavour to do it with a minimum of disturbance to trade and industry : but in attending to that paramount necessity, we may remember that posterity has an increased interest in the trade and industry even of our own day. Indeed, the interest of the present generation and of pos- terity cannot be so distinctly separated as it is sometimes assumed. In order to prove that acts beneficial to ourselves may carry down the benefit, it is only necessary to bear in mind that the progres- sive improvements which we have been enabled to secure in our political institutions will place our progeny in a condition of greater ability to turn the resources of the country to their advantage. It is the same with the improvements in commerce, by free trade ; with the improvements in finance, by a more honest arrange- ment of the accounts; and with improvements in agriculture ; to say nothing of a branch of improvement in which we have as yetdone too little—education. Now, if in the en-
deavour to Save the particular money-charge upon posterity, we should cripple our means for handing down these pregnant improvements, we should be sacrificing the greater to the less. Even in this present war posterity has at least as great an interest as we have, if not a greater. It is a war to maintain the standard of justice between civilized nations. If we suffer that standard to fall, we might suffer from the breach of duty, but how infinitely more would future generations, when political depravity had time to develop and extend itself ? Any money necessary to prevent the abasement of that standard is an investment for purchasing the rights of future generations, even more than our own. If we can secure those rights by means of the money in our hands upon cash principles, the absolute economy of the process will render it by far the best for us and for our successors ; but if we were to Sam- fice not less important duties to the pedantry of " paying our way," we should but rob posterity of free-trade, education, or agricultural improvement, in order to give posterity the much poorer advantage of a money saving. It follows, therefore, that to enter upon a loan —should a loan be necessary—might be as conducive to the interests of posterity as to our own. The necessity can only be judged by the circumstances of the time ; and it is not to be understood that the Chancellor of the Exchequer is debarred from claiming the assistance of our heirs, if the justice of the case should prove that the common interest Of ourselves and our progeny would suffer by stinting ourselves. In such a case, the loan is exactly like that which a landowner incurs for the benefit of his estate, and which his heir will pay as cheerfully as the original borrower, because, in truth, a larger share of the advantage will accrue with the de- velopment of the estate. This consideration would form a justi- fication of the loan not less powerful in pure reason than that ab- solute necessity which Mr. Gladstone contemplated as possibly driving him to the resource.
We can accept this view the more confidently since the po- sition taken by the Chancellor of the Exchequer is contrasted, we believe, with that of his predecessors, not only in uniting a sudden demand upon the exchequer with the profitable results of those progressive improvements which have been supposed to belong exclusively to seasons of peace, but also in showing by the figures of his statement that it is quite possible for that progres- sive improvement to continue, notwithstanding the claims upon the exchequer for extraneous purposes. Indeed, fiscal reform is more independent of what are called crises in finance than was formerly supposed. The last reductions of taxations show that such processes as reduction, when conducted with sagacity and discretion, are in themselves absolutely remunerative. Notwithstanding reductions in import-duties, the Customs stand within a small fraction at the very point which was esti- mated for them without reference to those reductions. The Excise, subject to a still greater pruning, has actually advanced beyond the estimate which was made without reference to the reductions. Those well-considered reductions promote the growth of the very revenue which they seem to prune, like well-considered prunings of the vine, which cause the branches to sprout beyond the point to which they would otherwise have grown, and to be more heavily laden with fruit.
But the real profit of the transaction goes yet further. By these reductions, not only is the consumption of the article liable to duty rendered freer and abler to grow, but the general trade of the country gains by the increased freedom, and thus the sources of other taxes are developed. The consequence is, that notwith- standing these reductions—which amount altogether to 1,500,0001. —the very departments liable to the reduction have maintained their standard p; and that the aggregate revenue shows a gross in- crease of more than a million upon the estimated amount. Now this is a process which is self-supporting; and it is therefore, to a great extent, independent of mere claims from the exchequer for a larger or smaller amount of cash. In other words, whatever the amount of cash which the exchequer may require, a good distribu- tion of taxes contributes to the free play and extension of com- merce, and thus develops the source of taxation.
It would manifestly be possible to continue this progress in wise reductions for the very purpose of sustaining the taxation under the growing demands of the exchequer. On the showing of the present statement, there is no reason why financial reform should not proceed under the pressure of a war expenditure ; and if Sir Robert Peel could raise a particular tax to facilitate the reduction and redistribution of taxes, unquestionably a Finance Minister would be justified in accepting a loan rather than placing any pre- mature stop to a process of financial culture which develops the very sources of loans and of taxes, and all that a Chancellor depends upon. In this respect, then, Mr. Gladstone's position is contrasted with that of his predecessors, not only that he is better off—that his estate, so to speak, is in better condition than theirs was when they entered upon war—but that the power has been shown to exist of continuing the improvements even under the pressure of a special expenditure, and therefore, that the disturbance of war does not necessarily arrest the progress of blessings which have been deemed exclusively pertaining to peace. It thus follows, however, that the consideration upon which we insisted last week is corroborated upon these grounds as well as upon those which we were then debating. Besides introducing budgets in Parliament, and extracting taxes from the pocket of the subject, a fresh duty is thrown upon the Chancellor of the Ex- chequer by the newly-discovered opportunities of his position. It will be his part in the councils of the Cabinet of which he is one, to use all his influence, to bring forward all his experience, in order to induce that policy which will most tend to limit the war to a political contest between governments—to a direct military trial of strength, for which any necessary sacrifice will be given, but to protect from its aggression and disturbance that broad field of commerce in which England and her best allies have a stake so much larger than that which any semibarbaric potentate can pos- sibly possess. It is on the peaceable field of commerce that the best alliances will continue to hold their conventions ; and to keep that neutral field clear from the political conflict between military chiefs and ambitious princes, is the duty above all others of that Government which rules over the country strongest politically and strongest commercially.
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