20 APRIL 1889, Page 4



MR. GOSCHEN has hardly been a lucky Chancellor of the Exchequer, though he has been certainly the most brilliant since Mr. Gladstone, and his Budgets com- pare favourably even with Mr. Gladstone's best Budgets. But he has had no surpluses to deal with which were not mortgaged beforehand to some prearranged policy. When he first became Chancellor of the Exchequer, moreover, he found our richest classes as well as the farmers in a very depressed condition, and it was only the increasing savings and investments of the lower-middle class,—the income of Companies with a great number of shareholders,—that kept up the Revenue at all. The pressure on the wealthy, and on the agricultural interest generally, was so severe in 1887 that Mr. Goschen, greatly to his credit, and in spite of the vehement protests of his old comrades on the Opposition benches, determined to diminish the fixed payments out of which the Sinking Fund was pro- vided, from £28,000,000, where it had been placed by the late Lord Iddesleigh, to .t26,000,000, in order that he might remit a penny on the Income-tax, and so give some fresh stimulus to reviving trade. The economists in full chorus denounced this proposal as utterly immoral, but time has fully vindicated it. No one who read Mr. Goschen's speech of last Monday will doubt for a moment that Mr. Goschen has paid off more debt by his courageous disregard of conventional economics, than he would have done had he not in 1887 relieved the pressure on the income of the people. Then came the year of the Local Government Bill and of the huge assignments of national revenue to local purposes which that Bill required, and which again deprived Mr. Goschen of any surplus. And now in 1888, Mr. Goschen has not only had to give away, according to promise, another smaller cantle of national revenue to local purposes, but he has had to provide for the Naval Defence Fund, which has swallowed up all his resources. Therefore, we say that Mr. Goschen, though be has been a brilliant, has not been a lucky Chancellor of the Exchequer. He has had to row against the stream, to create for himself his own opportunities out of his difficulties ; and this he has really done. He has stimulated production by reducing the Income-tax ; he has paid off a large amount of debt, and provided for the extinction of a great deal more ; he has lowered the rate of interest ; he has relieved the pressure on local taxation by two and a half millions a year ; and he has provided the means for a great increase of our naval defences,—all without the smallest additional pressure on the poor. That is what we call brilliant finance, and brilliant finance effected not by making use of obvious and conspicuous means, but in spite of great discourage- ments and impediments. It is a long time since any Chancellor of the Exchequer has inspired so much con- fidence, and within two years redeemed so many promises of financial reform.

Of the Budget of Monday, it is tolerably safe to say that it will encounter no very serious opposition, unless the dis- content of the richer brewers with Mr. Goschen's minute addition to the Beer-tax can be accounted serious, which we do not think it can. The chief feature of Mr. Goschen's proposal is to impose a new Death-duty of 1 per cent. on estates of either personal or real property exceeding .210,000, which Mr. Goschen regards as a proposal quite in harmony with that which allows incomes under £400 a year to be taxed only upon the difference between £150 (the maximum untaxed income) and their actual amount. This implies, apparently, a belief that. persons who have less than that income have greater proportional sacrifices to make in paying Income-tax than those who have larger incomes ; and if this be so, then estates of £10,000 and upwards (X10,000 at 4 per cent. would yield £400 a year) could pay a higher Estate-duty than estates falling under that value, without involving more than an equal sacrifice from those who inherit them. The principle is, indeed, a recognition of something reasonable at the bottom of the notion that a higher rate of taxation for the rich is not inconsistent with an equality of burden ; yet it does not involve the injustice and oppressiveness of the impel pro gressif. It is, of course, a very rough and partial recognition of the notion, that well-to-do people have less difficulty in contributing to the wants of the State' than the poor, without the mischievous discouragement to saving which a regular rise in the rates of taxation for the higher incomes would involve. If anybody chose to say that it is in effect a ransom paid to the poorest for the toleration of wealth, we could only characterise that description as a paradoxical way of indicating that it is not unjust to do in a milder form for the struggling classes something like what we have long recognised Our obligation to do for the destitute classes,—namely, assure them that there is no wish in the classes above them to* drive them to desperation ; that, on the con- trary, there is a wish to render their position somewhat more hopeful. If we rightly do that on a large scale for the destitute, it cannot certainly be wrong to do it on a much smaller scale for the struggling classes, so as to render saving easier to them, and to diminish the chance of their sinking into the class below them. If the destitute are to be saved from dying of hunger on conditions which only those who are really in danger of starvation will accept, it cannot be objectionable in principle, and it may be very prudent, to attenuate the difficulties of those who are fear- ful of sinking into poverty, but who have the chance of rising into the possession of a modest competence. Mr. Goschen has only carried out in relation to the Death- duties the principle which has already been acknowledged in the assessment of Income-tax as well as in the Poor-Laws. Of course, there are plenty of people who call this practical socialism, as there are plenty who call the Poor-Law practical socialism. But experience seems to show that " practical socialism" of this very moderate kind has a. much greater tendency to prevent than to accelerate the descent to real socialism.

One of the most remarkable evidences of Mr. Goschen's prudence in taking a penny off the Income-tax two years ago, when he was so vehemently assailed for pursuing that course, is the evidence he produced that the gradual rise of wages of which he had proof from all sides, is not leading to increased expenditure on drink, or, so far as can be judged, on luxuries of any kind like tea and coffee, and is leading to a vastly increased in- vestment in the new Companies,—of which we can only say that we sincerely hope that the majority of them may prove to be sound. It is clear that, on the whole, the working classes have not been much pinched for the articles of consumption they most use, for if they had been, the rise in wages would have led at once to a greatly increased expenditure on articles like tea, coffee, beer, and the rest. But with the rise of wages there has been no such increase. The consumption of tobacco has somewhat increased, but in tea the only effect has been that stronger teas are used, and used economically, so that though as much stimulus is got out of these stronger teas, no larger quantity, in proportion to the population, is bought. The use of spirits and beer, on the other hand, is still de- clining, and the way in which the new prosperity tells is in the larger desire of the relatively poor to invest in joint-stock Associations, from which they hope for profit. In other words, the prosperity of England is coming to mean more and more the prosperity of the lower-middle class, and this even though during, the two years since Mr. Goschen first became Chancellor of the Exchequer, the exceptional pressure even on the richer classes has diminished, while the prosperity of the lower-middle class has greatly in- creased. We are become more and more a people of increasing collective wealth, with decreasing averages of individual wealth,—a people whose industry and whose prospenty depend on the number of persons of small wealth and narrow activities. That is a great change from the England of old. But if there ever were a financier who understood well the secret of managing the affairs of such a people, that financier is Mr. Goschen.