TOPICS OF THE DAY.
AWISE Imperial administrator once said to the present writer that he was always having admirable schemes for reform, and for the development and improve- ment of the country over whose destinies he presided, brought before him,—schemes which were often not only excellent on paper, but would no doubt have been very beneficial in practice. He made it a rule, however, before he began to consider them seriously and in detail to ask : "What will it cost ? " and to have a proper financial estimate made as a preliminary to any discussion of the merits. The next step was to ask : "Where is the money to come from ? " By the time these two questions had. been asked and answered, prudence and common-sense showed in the majority of cases that it would be inex- pedient to proceed with the schemes. This no doubt was a depressing process, not only for the excellent people who advocated the particular project of amelioration, but also for the administrator anxious to do his best in his trust. But the facts were inexorable, and it was useless to quarrel with them. After all, the process is one very well known to every private individual. Who is there who does not know of a dozen plans for effecting an enormous improve- ment in his method of life ? Unfortunately, we are almost always brought up short by the two questions : "What will it cost ? " and "Where is the money to come from ? " In spite, however, of such private experiences, a vast number of people refuse to apply these two questions to public affairs, but act as if "What will it cost?" were a very small matter, and "Where is the money to come from ? " no matter at all. The assumption is, of course, that the State possesses somewhere or other an inexhaustible fund out of which money can always be produced if only it is asked for with sufficient vehemence. This belief in the Fortunatus' purse of the State is indeed the greatest of all the illusions which perplex administra- tion. Not only is it difficult to get the public to see the error. It is often quite as difficult to bring it home to the statesman.
- The administrator of whom we have just spoken, who is by nature far more of an optimist than a cynic, went on to say that though it was often very disappointing to have to give up fascinating schemes of improvement and reform on the grounds we have stated, he found his consolation in the thought that after all there was no better way of helping the mass of the people than by refusing to add to their financial burdens. To tax people as little as possible—that is, to allow them to spend their own money in their own way—is to endow them with no in- considerable benefit. He who prevents a rise in taxation, and still more he who lowers taxation, is always and necessarily a public benefactor, though for the moment the world seems to have forgottenethe fact.
• One can hardly doubt, when one considers the legislative programme put liefore Parliament this Session in the "King's Speech, that our rulers have forgotten to ask themselves the two questions : " What will it cost ? " and "Where is the money to come from ? " But though they have forgotten them, the facts are there and will not be 'denied. Let us attempt as well as we can to estimate what the Government Bills mean in the matter of new expenditure. We are at last able to estimate more or less accurately the cost of laying the foundations of old- age pensions. Mr. Burns in his speech on the un- employed question mentioned incidentally that the number of persons who would receive pensions under the Govern- ment scheme would be a million. Now 5s. a week is £13 a year, and therefore the cost of the modified scheme cannot be less than thirteen millions a year. To this we must add at least half-a-million for administrative pur- poses, for, as the New Zealand example shows, the cost of ascertaining whether people are really sixty-five, and also whether under a discriminatory scheme they are entitled to help, is bound to be very great. We may also feel sure that though the Government now hope to keep the pensioners down to a million, they will in the course of the Bill's passage through the House make concessions, and under pressure let in categories which they now propose to keep out. But if they extend their numbers by only four per cent., or forty thousand men and women, this will mean an extra half-a-million of money. Therefore we can hardly put the cost of laying the foundations at less than fourteen millions of permanent extra annual expenditure. In addition to this, as the Westminster Gazette has clearly implied, all future automatic increases in the revenue are to be mortgaged. for extensions of the pension scheme. Leaving that apart, however, and thinking only of the financial demands for the year, what a prospect is before us ! While old-age pensions are to mean fourteen millions extra annual expenditure, the Education Bill, if it passes, will certainly cost an extra million a year, and probably more. In view of Sir Edward Grey's speech, the additional Navy Estimates can hardly be leas than a million and a half; and unless the Housing Bill is to be strangely different from any other Bill of its kind, at the very lowest estimate an extra half-a- million, either on rates or taxes, will be required to launch it. Other Government Bills, such as the Valuation Bills, are pretty sure to involve another million in either rates or taxes. But this means in all a prospective extra expenditure of eighteen millions, almost all of which is recurrent. Note that we have said nothing as to extra Army expenditure, although it is almost certain that next year, if not indeed this, another million will be required for military expenditure. The new Territorial system is not going to prove a form of retrenchment.
Now can any one in his senses profess to believe that such a prospect means anything short of financial disaster, and in a special degree disaster to the cause of Free-trade? It is all very well for Ministers and their supporters to say that they never felt more strong and more determined to maintain the cause of Free-trade. We are quite willing to admit their good intentions in this respect, but unfortu- nately good intentions are of no avail. As far as Free-trade is concerned, we would much rather have an economical Government with unsound abstract principles on the Fiscal question than a spendthrift one with the most admirable grasp of the true principles of the science of exchange. It has often been said, and said quite truly, that the Tariff Reformers, if they came into office to-morrow, would en- counter so many practical obstacles in the way of carrying out their principles that they would probably find their task an impossible one. The arrangement of a tariff in the abstract is one of the most difficult jobs that men can undertake. All begin by agreeing that they want to leave raw material absolutely alone, and that their only desire is for a reasonable protection from the incursions of the foreigner,—" incursions which are taking the bread out of the mouths of British workmen." It is when people begin to ask in detail what is a finished product and what is raw material that scientific taxation breaks down. It is then found that what is a highly finished and manufac- tured product for one maa is somebody else's bedrock raw material. The demand of Jones the tanner that foreign leather must be placed at a disadvantage in order that his works shall be kept going, but that untanned hides, which are his raw material, shall come in free, is met on the one side by the cattle-raiser, who asks whether his hides do not deserve protection, and on the other by the users of leather, like saddle-makers, boot-manufacturers, and a hundred other trades, who demand that their raw material shall not be placed at a disadvantage, or, as they would. say, that they shall not have to turn thousands of men away from their works to swell the ranks of the un- employed. Scientific taxation is a matter almost im- possible of adjustment.
But remember that these difficulties vanish away if, and when, the nation is faced with the imperative need of raising revenue. That is the Protectionist's universal solvent. The Finance Minister or Chancellor of the Exchequer breaks in upon the wrangles of the contending manufacturers with the plain words :—" Gentlemen, I have got to get money from somewhere to meet the nation's bills. The time has gone by for your theories of scientific taxation. I must frame a tariff that will give me an extra fifteen or twenty millions of revenue. Granted I get the money, I have no objection whatever to letting the tariff in question protect certain manufacturers, but the essential thing is to get the money." In face of facts of this kind, somebody has got to go to the wall, and the result is that a tariff is framed in which the weakest find their raw material raised immensely in price in order that revenue may be got without injury being done to the strongest or politically best organised industries. That we are drawing no fancy picture can be shown by an appeal to experience. Tariffs have, in fact, never been creat ed by the advocates of scientific taxation, but have arisen, as in America, France, and Germany, owing to the plain and homely need of raising revenue to meet gigantic expenditure. No doubt when once established they have been modified and. maintained in the interests of Protection, but the originating cause has always been the needs of the Treasury. To put it shortly. The Liberal Cabinet propose to give the Tariff Reformers the one thing needful, the one thing without which they cannot do their work of establishing a tariff. That they will receive this gift from sincere votaries of Free-trade is to us, at any rate, no consolation whatever. Therefore we say, as we have said before, that the present Government by their plans for lavish expenditure, and especially by their policy of old-age pensions, are proving the very worst enemies of the cause they profess to serve.
Though little has been said in public, except in the Spectator, as to the effect on Free-trade of lavish expenditure, we have reason to believe that a great deal of anxiety is beginning to be felt, and especially in regard to the old-age pensions scheme, among the more moderate section of the Liberal Party. Nor should we be surprised, indeed, if a good many members of the Government also felt alarm at the prospect before them. No doubt, owing to the paragraph in the King's Speech, Ministers are now collectively committed to some scheme of old-age pensions, but this, we imagine, does not make that policy any more palatable to those who have grave doubts, not only as to the advantages of a gigantic scheme of outdoor relief for the aged poor, but also as to the effects of vast expenditure. -Unless we are greatly mistaken, the policy of old-age pensions may yet prove the question upon which the present Ministry will receive their first serious set-back. Possibly, however, they may find an opportunity of escape in the over-eagerness of the extremists who have been pressing old-age pensions upon them. It is by no means unlikely that when the scheme is produced it will, owing to its restricted character, be denounced by the Labour Party as unacceptable. In that case the Government will have good ground for withdrawing it altogether.
If no window for escape is opened here, we should be by no means surprised if the Government found them- selves in such difficulties, internal and external, over the question that they will be forced to cut the Gordian knot by dissolving,—not of course on the question of old-age pensions directly, but upon some other question which will divide them less, and prevent a breach upon proposals which, not unnaturally, they would very greatly dislike to differ about in public. If the old-age pensions problem proves too thorny for solution on grounds acceptable to the Cabinet as a whole, we can under- stand Ministers preferring Dissolution to disruption. If the policy of riding for a fall were to become impera- tive, the Government would have no difficulty in finding a suitable mount for the purpose. As our readers know, we hope that the Irish University Bill may become law. We cannot conceal from ourselves, however, that it is a measure which will provoke most strenuous opposition on the part of the Nonconformists. If they press that opposition as far as some students of Parliamentary affairs believe they will, the Government will find plenty of excuse for a Dissolution. A Dissolu- tion, remember, though it would reduce the Government majority, need by no means destroy it, but, on the contrary, might provide a more stable support to a mixed Cabinet.
Before we leave the question of enhanced expenditure we must meet a very obvious objection which will be made to our contention. Those who disagree with us will say : "How do you reconcile your plea for economy with your "insistence upon the fact that the German naval programme must be met by further expenditure, and expenditure on a large scale ?" A moment's thought, however, will show that there is in reality no inconsistency whatever in our position. One of the chief reasons for our objecting to new forms of civil and internal expenditure is our belief that increased expenditure upon the Navy, and unhappily expenditure on a large scale, and also probably increased expenditure upon the Army, has become necessary if we are to make our national position what it ought to be,— secure from all risks. If the need. for fresh and growing naval expenditure were not so absolute, we should feel less anxious as to the expenditure on matters of so- called social reform. Before we begin to reform the State we must make sure that the State will survive. But the State, or at any rate the State as we know it now, will not survive if we lose command of the sea. Insurance against destruction is, and must be, the first charge on the nation, and that insurance must be adequate. The need for outbuilding Germany in the matter of great ships of war is a most disagreeable need, but it has got to be faced, and in order to face it adequately we must refuse to dissipate our national resources in other directions.
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