22 MAY 1920, Page 4

TOPICS OF THE DAY.

NATIONAL TRUSTEES.

OUR readers must pardon us if we return to the subject with which we dealt in our " News of the Week" last week—the need for meeting our financial difficulties by the one and only satisfactory method of cutting down expenditure. Everyone knows this to be as painful, as disagreeable, and as apparently impossible a method of procedure for Governments as for private individuals. Yet everyone knows also that in the last resort the thing not only can be done but must be done.

There are two ways commonly proposed for evading the dismal necessity for cutting down expenditure in order to avoid ultimate bankruptcy. Spending more each year than you receive each year can only have that end. The first way of evading cutting down expenses is the alternative method. Get more money. In business that often is a sound method of procedure because it means, if it is successful, putting more activity and more enterprise into one's business. The analogy does not, however, hold with Governments. We must never forget that Governments do not make money or create wealth. Instead they enforce contributions and they spend money, and very often do both these things in so wasteful a way as actually to destroy instead of producing wealth. No doubt some Governments try to earn money, but they almost always end in losing it. This means that Govern- ments which rely upon higher taxation in order to put their financial situation straight, end by paralysing indus- try. They take money out of men's pockets which could have fructified there and fling it into the morass of bureau- cratic administration. No doubt, national balance sheets an be made sound if there are still great untaxed resources !eft in a country, but where are such happy lands to be found ? Certainly the United Kingdom is not one of them. Everywhere taxation is enforced up to the hilt. In most cases, indeed, the point has been reached where to tax more would very soon produce a lesser, not a greater revenue ; that awful datum line which is the terror of :very Chancellor of the Exchequer.

The other way of evading or pretending to evade the stern fact that since no more can be got by taxation without ruin, expenditure must be reduced, be the process never so difficult or so expensive, is to say that the cutting town of expenses is impossible, and that nothing more :an be saved on the expenditure side. This was the position assumed by the Duke in the well-known story. When his affairs became hopelessly involved he called in friendly advisers. They went through his expenditure and reported thereon. There was nothing more to be got by mortgages or by raising loans or by cutting down timber or by any other device, therefore they had to cut down expenditure. In the list of items to be cut off one of the first noted was the abolition of the still-room and some five still-room maids. The Duke's advisers pointed out that there was no absolute necessity for this expen- diture. Oh, hang it all, a man must have a biscuit," was the amazed reply. The Duke never heard of getting biscuits without still-room maids and a still-room, and feeling that biscuits were necessary to social salvation, took up the line that it was impossible to cut down expen- diture. Yet he was wrong. The still-room went and the maids in pleasant caps, and yet the sky did not fall.

If we turn to the immediate needs of the hour it will be almost universally acknowledged that in England we have reached the point where we dare not impose further per- manent taxation and that we have probably or at any rate very possibly gone beyond the line where taxes cease to draw. By this we mean that if a period of financial depression comes, as it is sure to come, before long, we may find that high taxes will not yield more but less than lower taxes. Then we shall be faced with the problem which the Duke of Buckingham encountered. Are we to allow the plea of impossibility to prevent us cuttinac down expenditure ? If we do allow that plea the end will be ruin and revolution, for, remember, national bankruptcy is always the herald of revolution. Revolutions never take place by themselves or even because of popular misery or discontent. They come, as we must never be tired of pointing out, not from popular movements, but from the breakdown of the system of Government in being—from its paralysis and inability to carry on its proper work. The first stage in the breakdown of Governments is almost always some form of national bankruptcy. Therefore it is no use to talk about it being impossible to cut down expenditure. The thing has got to be done, even though as a nation we must go without still-room, still-room maids and biscuits, at our Public Offices and elsewhere.

But what method can we adopt for cutting down expen- diture, will be the question put to us by the plain man ? The Government tells us that they have reviewed the whole of the national expenditure and cut down enormously and add that nothing more can be done. Our answer to such criticism is that it must be done because national safety demands it. In other words, if the upholders of our large expenditure talk about national security, we answer that the worst danger to national security is expenditure beyond our means erected into a system. No danger is greater than that. Suppose it agreed upon that national expenditure must be cut down and cut down by some hundred millions a year, how is that to be accom.- plished ? We have always held that to obtain this end you must for a short time abolish the party system or at any rate suspend its worst inconveniences. We must do something in the national house equivalent to putting the brokers in. To use a less violent metaphor, we must for a limited period place the nation in the hands of trustees, and trustees whose sole business will be to pull our finances together.

We should like to see Five National Trustees chosen from among the best of our men of business, the best of our politicians and the best of our Civil Servants, with a soldier and a sailor added to them as assessors. To this Peace Cabinet of National Trustees we would turn over the control of our Finances for three years with the following mandate : They must not during that period increase taxation though they might decrease it or alter it in the sense of making it less arduous, provided, of course, they could obtain the assent of Parliament. Next they should cut down the national expenditure to a figure 10 per cent. below the amount estimated as the yield of the present taxes. At the end of the three years the Trustee, or Peace Cabinet should resign and return the control of Finance to the Ministers who would have continued in their offices.

Why cannot this be done ? What is the objection ? If that question is put to any man versed in affairs even though he is a man by nature and tradition inclined to economy and anxious about the present state of affairs, he will probably reply, " The scheme is sound and workable in itself, but it cannot be carried out for this reason.

Expenditure is a question of policy. Unless you can control the policy of the State, you cannot control its expen- diture and Parliament, and Ministers, who look to the voters over the heads of Parliament, have and always will insist on having a policy beyond the mere policy of balancing the national budget. They will tell you, and perhaps from their own point of view rightly, that in order to carry out these policies, which are of great importance to the nation, they must have unlimited power over the purse. How else can they meet some popular demand involving great expenditure ? " Our answer to this criticism, in itself, of course, a reasonable one, is that though Parliament and the country could not and would not endure to be deprived of the power of the purse for ever, they could and ought to be willing to surrender it for a period say, of two or three years.

Remember, too, that even when the Trustees had settled the maximum amounts which could be allowed for the Army, the Navy, civil expenditure, grants in aid, and so forth, the ordinary Government—as we said above we contemplate an ordinary Cabinet side by side with the Peace or Trustee Cabinet—would always be allowed to re-shuffle the financial cards. One year they might save something from the civil expenditure in order to add a little more to the Army or Navy. Another year they could cut a little off the land or sea or air expenditure in order to do something needful at home. Within the necessary limit, imposed by fixed taxes, there would be a certain elasticity.

Though we feel sure that our suggestion of putting the nation into the hands of Trustees for a short period of financial reconstruction is a sound one, we admit that we are not likely to get it, for the very good reason that the politicians mean to keep power and that power in the last resort is the purse. That is why the Lord High Treasurer or the First Lord of the Treasury has 'always been the biggest man in the kingdom. But if we cannot obtain our ideal to the full we shall not as Englishmen refuse to have anything more to say in the matter. Instead we shall see whether we cannot get our ideal by some other means. It seems to us that the best device will be for some Party or Coalition Party to be created in Parliament, and in the country make its appeal for votes on the ground of retrenchment—No new taxes, and less expenditure. If some man of light and leading, such a man for example as Lord Robert Cecil, would come forward and make this appeal his life work he would soon become a national hero. He would declare that whatever other people's policy, his policy for the next three years was to concentrate on economy. That economy must take the form of rationing the great spending Departments. He would say to them, " This is all that can be spared for Army, Navy, Air and Home services, and you must make the best you can of Every head of every Department would of course say, like the Duke, that a man must have a biscuit and that if he was rationed he could not produce biscuits. In the end, however, and if the rationing was sensibly, moderately and not wildly done, the Department would find, as did Lord Cromer and Lord Kitchener, that by cutting your coat according to your cloth, though it is not a pleasant operation, you could produce a coat big enough to keep you warm and decent. Further, out of the effort to be economical would rise new energy which would bring great benefits in its train and make the national service not, as it is now, a school for extravagance but a school for efficiency. Why do our Departments earn the scornful remark of St. Just : " They think too little and they write too much " ? They earn it because they have been hopelessly indulged ; they have become, in a word, the spoilt children of the nation, and like all spoilt children Are wasteful, peevish and noisy.