A MSTORY OF BUDGETS.* ME. SYDNEY BUXTON has managed to
produce a couple of extremely interesting and readable volumes out of the un- promising materials of old Budgets. Budgets are not good historical reading as a rule. However interesting Budget speeches may be at the time of delivery—and often they are the most interesting of all speeches to the listeners or readers who want to know whether they are to have twopence put on or taken off the Income-tax—they are decidedly not the most interesting of reading when they are cold in the tombs of past "Hansards." Even the eloquence of Mr. Gladstone or the epigrams of Robert Lowe cannot make Budget speeches interesting reading to those who have no interest in the result, who have not got to take the pill of new taxes concealed by the silver of the speech, or to enjoy the sugar-plum in the remission of imposts. It says a good deal, therefore, for the skill of the writer that what is mainly a history of Budgets, a summary from 1784 to 1860, and a detailed examination from 1860 to 1880, should have been made interesting and almost entertaining.
The general result certainly bears out the saying which Mr. Buxton has adopted as part of the title of his book, that finance depends on policy. In the trou.blous times of war, the most skilful financier must see his best-laid schemes of financial reform and remission of burdens upset; while his only chance of distinction is the unenviable one of facility of expedient in devising new taxes. The times of peace are the oppor- tunity and the glory of the successful Chancellor of the Exchequer, and it is astonishing how few those opportunities have been for this so-called peaceful nation. What with Crimean Wars, French Colonel' scares, 'Alabama' claims, Indian Mutinies, and those delightful little wars—New Zealand, Canadian, Abyssinian, Cape, Afghan, Egyptian, and Burmese—which are the godsend of our "prancing Pro- Consuls" and practising Generals, as much as they are the curse of our Chancellors of the Exchequer, few indeed are the financiers who have been able to form far-reaching schemes of reduced expenditure and decrease in taxation.
The Budget history from 1793 to 1874 may be divided into two periods,—the period of European wars, when Pitt and the Tories were continually increasing the Debt and devising new taxes ; and the period of European peace—broken only by the Crimean War—when the Liberal Party decreased the Debt and remitted taxes, while carrying into practice the principles of freedom and progress. Financially considered, the latter period, with all its efforts and achievements, did little more than undo the evils of the former, and bring back the nation, after a century of struggle, to something like the same position in which it stood in 1784. The chief method of cure has been one which Lord Salisbury is fond of objecting to,—the substitution of a few largely productive duties or taxes for a great many burdensome and unproductive ones. Thus, in 1820, 1,280 articles were subject to Customs duties. The semi-Liberal Administration of Canning, and the Liberal Administrations of Grey and Melbourne, had by 1840 reduced these in number to 1,046, while largely reducing the burdens and the expenditure of the country. With the aid of the Report of the Import Duties Committee of 1840, appointed by a Liberal Government, Peel was enabled to repeal the duties on 605 articles, and reduce them on many more. In 1853, Mr. Gladstone, in his first Budget, repealed duties on 158 articles, and reduced them on 180. In 1860, Mr. Gladstone repealed duties on 259 articles, and reduced them on 56; and by 1867 he had brought the total articles charged to 64. By abolishing the Sugar-duty and incidental duties, and the "Registration-tax" on corn, the articles now
* l'inanc,s and Polities: an Historical Study. By Sydney Buxton. London: john Murray.
subject to Customs duties have been reduced to 12. The Excise duties have been pari passu reduced.
Meanwhile, the instrument by which these financial reforms have been effected has been chiefly the Income-tax. The history of this tax, with which no small part of these volumes is concerned, is a curious instance of how little, even in financial arrangements, the most clear-sighted financiers can foresee the future, far less control it. It is also a curious instance of the persistent misrepresentation to which Mr. Gladstone has at various periods of his career been subject. When, in 1874, he suddenly dissolved Parliament, and in his election address promised a repeal of the Income-tax, he was represented as offering a gigantic bribe to the middle classes to return him to power. Yet, in point of fact, he was only endeavouring to carry out a long-promised and long-cherished scheme of financial reform, to which he, along with, though more than any other statesmen, was then deeply pledged. The Income-tax was one of Pitt's war-taxes in 1799; in 1815 it had been renewed only "until the 6th day of April next, after the ratification of peace ;" and on the motion of Brougham, it was repealed, and the Government defeated, by 238 to 201, "amidst the greatest cheering and the loudest exultation ever -witnessed within the walls of the British Senate," and the House ordered all the books and records relating to it to be destroyed. Most of that time it was at the rate of 210 per cent., or 2s. in the pound. Peel revived it in 1842 at the rate of 3 per cent. (7d. in the pound), to carry out his fiscal reforms, professedly for three years only ; but it was renewed and renewed till 1852, when it was continued for a year. In 1853 came Mr. Gladstone's first great Budget, in which he dealt not only with the taxation of that year, but with the whole financial position till 1860. He then stated that the tax was open to many objections on the ground of unfairness and inequality of incidence, but he protested then, as he has often protested since, that reform was "beyond the power of man to conduct with satisfaction," and the only satisfactory way was abolition. In his Budget he provided for abolition, after gradual reductions, in 1860, by which time the new Succession- duty and the reforms of the Customs tariff would enable the Exchequer to dispense with its aid. But, alas ! the Crimean War, followed by the Mutiny and the China War, came and upset all Mr. Gladstone's well-laid schemes, and the Succes- sion-duty, estimated by alarmist landlords to produce four millions a year, and by Mr. Gladstone himself at two millions, only produced half-a-million. Without the Income-tax—then 9d. in the el, instead of 5d., as intended in 1853—there would be a deficit for the year of close on ten millions. The French Commercial Treaty then being negotiated would cause a further loss of revenue. In the result, therefore, Mr. Glad- stone preferred reforming the Customs tariff to diminishing the Income-tax, which he was wholly unable to abolish,—and, indeed, he actually increased it by a penny for the sake of abolishing the Paper-duty. Mr. Buxton half-defends the House of Lords for rejecting the Paper-duty Abolition Bill ; why, it is difficult to see, since Mr. Gladstone's financial anticipa- tions were fully justified, and next year, in spite of the Canadian expedition, he not only repealed the Paper-duty, but reduced the Income-tax and the duty on wine. By successive reductions, Mr. Gladstone reduced the Tea-duty and the Income-tax together, the former from is. 5d. to 6d., the latter to 441. Mr. Gladstone's career was interrupted by the Derby Administration of 1867, the Abyssinian War, and a Navy panic -under Mr. Ward Hunt, and expenditure and Income-tax went up alike. Mr. Lowe again moved through reduction to repeal of the Income-tax, at the same time reducing the duty on coffee and abolishing that on sugar. In 1874, the Income-tax stood at 3d., and, therefore, the "stupendous bribe" offered by Mr. Gladstone in promising its abolition was not very large, and if the tax had been abolished, it would only have been the realisation of an object for which he had been consistently striving through twenty years of his public life as Chancellor of the Exchequer and Prime Minister. The result of the Election of 1874, and the subsequent finance and policy by the Disraeli Cabinet from 1874 to 1880, followed by those disastrous outcrops, the Transvaal and Egyptian Wars, during Mr. Gladstone's Government in 1880-85, have postponed for a generation at least, if not for ever, all hope of a repeal of this tax, which Mr. Gladstone has pronounced incorrigible, and which does not touch the bulk of the present electorate.
There is not space to touch on the subject which looms next largest in Mr. Buxton's book,—the reduction of the National Debt. Not the least interesting part of the volumes is that devoted to showing how futile all the sinking-funds have been in their working, Pitt borrowing at enormous rates to keep his sinking-fund going, and his successors devouring their own or their predecessors' offspring, by suspending or diverting their sinking-funds whenever they were in a difficulty.
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