TOPICS OF THE DAY.
MR. LOWE has learnt the same lesson from his own experience of Estimates and Revenue which we tried to enforce last week. He is no longer disposed to estimate gloomily, even in order to be able to dispose of an artificially created surplus. And the consequence is, that he has found a very considerable sum at his disposal, which he proposes to spend partly in paying our debt to the United States, and partly in remission of taxation, without, as we believe, incurring any just reproach. For practical purposes we may say that Mr. Lowe takes the income of the ensuing year as the same as that of the financial year just elapsed, which has undoubtedly been a year of almost unexampled prosperity. Nay, he does rather more. While proposing to pay one-half of the Alabama indemnity out of the income of the coming year, he evidently hopes to pay the other half of it also out of that income, for which purpose it would be necessary that the revenue should yield £1,600,000 over his estimate, for while taking power to issue Exchequer bills to that amount, he avows his hope that it may not be necessary to issue them at all. In other words, Mr. Lowe calculates that the revenue returns will not fall below those of this year, and hopes that they will rise above them by more than a million and a half. His calculation appears very sanguine to Mr. Fawcett and to some of our contemporaries, and his hope appears even extravagant ; and they give as their reasons for so thinking, the exceptionally large revenue of last year, especially as regards the Excise duties ; the tendency to diminish rapidly towards the end of the year which the receipts for these latter duties indicated ; and the inherent probability that in a time of dear coal, dear iron, and many strikes, the working class will be compelled to abridge its indulgence and intemperance, and so to disappoint the expec- tations of the Revenue Department. We do not think that these reasons in the least prove Mr. Lowe's estimate to have been a sanguine one. In the first place, as we pointed out last week, though the Excise revenue has fallen off towards the end of the last financial year, the Customs have steadily increased up to the close of it, and Mr. Lowe's estimate for the Customs shows no increase above the actual yield of the year now expired. If, then, he is sanguine in assuming, as he does, that the Excise will yield almost as much as last year, he is very cautious in estimating the Customs at no higher yield, and the caution in the one case may be set off against the hopefulness in the other. As for the probability that dear coal, dear iron, and misunderstandings between capital and labour, will greatly dimi- nish the expenditure of the working-classes during the coming year, and consequently the productiveness of the revenue, we can only say that these causes have certainly been at work through a great part of the past year without producing the effect dreaded, and that there is nothing at present to justify new apprehensions. Coal will in all probability never fall back quite to its old price, but wages continue very high and are still increasing, and the foreign commerce of the country as regards every export but coal, iron, and steel has seldom promised better ; and even as regards iron and steel, there is no sign in the Export tables for the first two months of the year of the predicted short-coming. Mr. Lowe's other estimates are all extremely moderate, and computed for no increase over the yield of the last year. On the whole, then, we are inclined to think that Mr. Lowe is not too sanguine even in his hopes. In his calculations assuredly he has been perfectly sober.
The great question, however, of the Budget is not so much the sobriety of its character, which is only denied by those who are ostentatiously timid, or ostentatiously partisan, but the mode which Mr. Lowe has adopted of disposing of the surplus. It was a question between paying the whole of the Alabama indemnity (£3,200,000) out of the admitted surplus of the coming year and using only the balance (£1,546,000) in the remission of taxation on the one hand, and paying only half of it out of that surplus and so getting a larger sum out of which to remit taxation on the other. The former course is, no doubt, the one which Mr. Lowe would have preferred to adopt, and which would cer- tainly have been the " heroic" policy. If we are not to pay our debts while we are as prosperous as we are just now, it is difficult to say when we should pay them. If we are to be told, as certain Members of the House of Commons maintain, Mr. Laing, for instance, that it is better to let the country grow richer by remitting taxation than to diminish. its obligations by paying debt, we shall never pay our debts at all. Those who argue in this way forget. that a great deal of the taxation remitted does not go to increase the wealth of the country, but only its indul- gences, while all that is spent in paying debt diminishes its. obligations. No doubt there may be a point beyond which. taxation makes the country permanently poorer by even a much greater sum than that which it takes out of the pockets. of the taxpayers, but while we " drink ourselves out of a difficulty " like the Alabama difficulty, it is not easy to sup- pose that that point is at all near at hand. Ih point of fact,. nothing can be idler than Mr. Laing's assumption that all taxation remitted is a sinking of fixed capital in per- manent improvements. And for our own parts, we should' have been as glad as, we suspect, Mr. Lowe would have been, to pay the whole Alabama indemnity out of the revenue of the- current year, and use the balance of £1,546,000, and that alone, for the remission of taxation. If ever there were a great opportunity of diminishing the burdens we must otherwise transmit to posterity, without undue pressure on the present- generation, that opportunity is ours now. There can be little doubt that we are using up the capital of the country as we exhaust our coal-beds—for almost all our wealth is trans- formed steam—and are transmitting to future generations our burdens without the wealth to bear them. Hence we should cordially have admired the action of the Government, instead of simply not censuring it, had this been the course determined on.
But looking not to ideals, but to practical life, remembering that Ministries depend as much upon popular support as wealth does on steam-power, that Liberal Members are continually pressing on the Administration with all their power a popular Budget,—a lump of sugar to take out the taste of the salts and senna of the Irish University Bill,—and that with rumours of a possible dissolution in every mouth, Mr. Glyn must regard it as almost a solemn duty to insist on proposals which can be canvassed at election meetings without leading to angry grain- blings and manifold desertions from the party,—we do not think that the Government have, on the whole, done badly. It is impossible to assert that the Alabama indemnity is an ordinary expense of any one year, or that if distributed, as it may be under Mr. Lowe's proposals, over two years, there will be any practical injustice done. Quite enough of the people whose perverted sympathies supported the operations of the Messrs. Laird in 1862 will still be living even in 1874, to render it quite morally reasonable that a proportion of the expense of the year should be defrayed out of that year's taxation ; and if, as seems most probable, the whole of the cost should be forth- coming out of the current year's revenue without fresh bor- rowing, Mr. Lowe's action will be practically justified. There was this great difficulty, too, in dealing with such a surplus as would have remained if the whole Alabama indemnity had. been paid out of the calculated surplus of the current year,— that it would not have admitted of convenient division between the direct and the indirect taxation,—that there would not have been enough for such a division of relief, and that- a very great outcry would have been raised, had Mr. Lowe proposed either to leave the income-tax untouched, while dealing solely with the indirect taxes, or to take off a. penny of the income-tax without relieving the more needy taxpayer whom the income-tax does not touch. Had it been possible indeed, with the sum at Mr. Lowe's disposal, to follow out Mr. Fawcett's suggestions,—namely, to raise the limit beneath which no income-tax should be levied to incomes of £150, and to reduce the rate of taxation for temporary as compared with that of permanent incomes, we should much have preferred that kind of relief to the payers of income-tax to the mere reduction of the rate by ld. in the pound. But only the Chancellor of the Exchequer has the means of judg- ing how far the means at his disposal would have effected such changes as these, and it is vain work sketching out theoretical reforms without having before us the data by which we might judge of their practicability. On the whole, the Budget, if not one of heroic Ministerial virtue, is likely to be popular, and is certainly not unmindful of the nation's higher duties. It leaves the means of reducing the National Debt by £6,000,000 at least in the two years, besides dis- charging at once not less than half of what we owe to the United States. And "for such creatures as we are, in such a world as the present," that amount of virtuous effort is not wholly despicable.