NEWS OF THE WEEK.
MR. GLADSTONE'S financial speech of last Monday is a contribution Iv history. We may say this irrespectively of the speaker's per- tonal traits, though they came out strongly, in the lucid statement with which he confronted the charges of spiteful and foolish de- tractors, and with which he laid before the House of Commons the views and methods that guide him in conducting the finance of the country. In dealing with his statement, we are handling more than a speech; we are handling the substantial interests, the commercial rule, the fiscal conduct of the wealthiest and most powerful nation in the world, at the very moment when England foi,e4pfpg . upon a straggle whose extent cannot now be mea- sured. It was not one statement, but many,—a vindication of the Minister, of the Administration, of a financial policy in prin. triple and in detail, and also a proposal for carrying out that policy in the immediate requirements of the day. It was also, in fact though not in form, a great lesson to the Commons; informing ,1.---th.em on the subject of duties especially theirs, and setting a voluntary example of the way in which a Minister should be brought to account. Mr. Gladstone explained the past as well as the present and the future. He informed the House of the principles on which he had in the first instance lowered the in- terest on Exchequer Bills and then raised it, and stated the result. He explained to the House how the high premium of Exchequer Bills prevented Government from buying them in, and left the market clogged with that species of temporary security ; unless Government had chosen the alternative of funding, which is almost always effeoted at a loss. He showed that his lowering the in- terest had brought down the premium; had enabled him to buy in a considerable proportion, and had relieved the market of the &sting securities to an extent which would enable him to use that resource when it might be necessary. He showed how utterly fabulous were the retrospective assertions of various Members, that they had prophesied the failure of his South Sea conversion scheme through specific causes. He showed that the understand- ing with the Bank of England remains exactly what it ought to be between a financial Minister of the Government and the ma- nagers of that great trading corporation. He laid before the House his exact position with regard to the proposal of raising 6,000,0001. on Exchequer Bonds, with the reasons for the partial failure; and such reasons for his desiring the command of sufficient money for a limited time, as to have enlightened the public mate- rially on the new class of securities, and proportionately strength- ened their credit.
Some part of these explanations was not necessary for the pre- sent purposes of finance, excepting in one important particular at the outset, Mr. Gladstone spurned the proffered indulgence of the Opposition, which expresses itself in the suggestion that a period of war is not a time when questions of confidence or want of confidence should be mooted. The motive for that suggestion is transparent : not strong enough to meet the Ministers fairly, the Opposition shun straightforward contest, but seek to obtain the credit of a triumph that they cannot seize, by pretending that they waive it through a spirit of patriotic forbearance. Whatever the motive, Mr. Gladstone's doctrine is as sound as its assertion is manly—that war-time is most peculiarly the time when the Fi- nance Minister ought to possess that competency and character shish would secure to him the necessary trust of Parliament, and in return would secure to the country the due appropriation of its resources. It was therefore necessary to the present and future conduct of finance, that he should place before the country the
most substantial proofs that the acting Minister of Finance is worthy of its confidence, and capable of carrying on the great operations which fall within his department. This Mr. Gladstone did, not by abstract casuistry or refinements, but by the simple re- cital of facts as they have happened one after another. One part of his speech, dovetailed with other portions, explained the general aim or theory of his recent proceedings. It consists in maintaining a command over the unfunded debt, as the elastic means for securing supplies pending the receipt of the revenue ; in abstaining from drawing out of the public pocket more than is actually required handsomely to cover the necessities of the time ; in meeting the liabilities incurred through the actions of the day with the taxation of the day—not running into debt while the ready money system can be acted on ; and finally, in so arranging the taxation as not to press upon commerce either with fiscal bur- dens or with restrictions like those of the excise.
In accordance with these views, Mr. Gladstone frames his new budget just to meet the supplemental estimates of 6,000,0001. with a handsome margin of 850,0001. to cover unforeseen contin- gencies. The new taxes are—a continuance of the doubled In- come-tax during the war, which will give him this year 3,307,0001. ; a modification of the Sugar-duties, yielding him about 700,0001.; the augmentation of Spirit-duty, in Scotland by is., in Ireland by 8d. the gallon, yielding together 450,000/. ; and lastly, an enhance- ment of the Malt-duty, from a little more than 2s. 80. to 4e. ; making a total of 6,850,0001. His interim command of cash he proposed to secure by the issue of Exchequer Bonds and Exchequer Bills to the amount which he had already announced to the public-6,000,0001. It is rendered necessary by his evident though not expressed desire to keep in- dependent of the Bank, coupled with the exigencies of newly-com- menced war. Of the amount for which he had invited tenders, he has received nearly the 2,000,0001. of bonds A; the greatest pro- portion of the tenders being made within a very small fraction of his own price. The 4,000,0001. is still required ; because, although the new taxes will place the income on an equality with the esti- mated expenditure, they will not be gathered. in ; and it is better policy for the credit of the Government, and for the working Of business generally, that Mr. Gladstone should leave taxes to find their .placid way into the exchequer, and obtain his cash without spurring the taxgatherer to more vigorous courses. His income and expenditure, his assets and liabilities, balance on the great national ledger; and the Exchequer Bonds or Bills will secure him the command of ready money. Now that the object of the scheme is understood, and that its relation with the whole of an able and.' intelligent policy has been explained, it is probable that he will have less difficulty in his ftiture operations. Indeed, the Exche- quer Bonds are already at a premium. Such are the principles on which Mr. Gladstone invites._ the country to provide for its warlike liabilities as it goes; such are the means by which he proposes to carry out that policy. He, like others, as he eloquently set forth towards the close of his speech, has read Mr. Pitta financial career not without respect. Hid re- spect, however, was not for the skill with which Mr. Pitt inveigled the. country into an enormous expenditure without grumbling at the first outset; it was not for the Heaven-born liberality with which that Minister created 1001. of stock on payment of little more than half that sum in cash, and incurred a debt of 250,000,0001. on account of which the public never received a shilling; nor for the juggling device of sinking-fund supported by little excrescent loans. These were warnings—examples to avoid. But it was in the policy of that statesman's latter years—the resolve resolutely to buckle up the income to the full requirement of each year—that Mr. Gladstone found the true moral of Pitt's financial career. This was a great practical earnest of Pitt's penitence, and the true course indicated for the sound financier in the next war by Pitt's hard-earned sagacity in the last. In our day there are peculiar reasons for such an amended course : we have learned to respect the independent opinions of severed generations, without pre- suming the sanction of posterity for acts which we may judge necessary, and for which we therefore should pay ; and with an accumulation of wealth unprecedented, we have no right to pre- sume that the future will yield ampler means of payment than the present. The historian will therefore turn with great interest to this the first financial speech of England's new war, and will compare the sound course of conscious power with the mistaken ingenuity that left so many embarrassments as the legacies of the last war; and that real financial exordium of "an epoch" is the Parliamentary event of this current week.
