TOPICS OF THE DAY.
THE POSSIBLE WITHDRAWAL OF THE CORN-DUTY.
WE trust that there may be truth in the rumour that the Government is seriously considering the with- drawal of the Corn-tax in view of the prospects of peace and the consequent improvement in the fiscal situation. Certainly Sir Michael Hicks Beach's answer to the depu- tation from the Trade-Union Conference which he re- ceived on Wednesday seemed to indicate that the matter was under discussion in the Cabinet. If not, and if no change were held possible, be would surely have said right out that the tax was as great a necessity as ever, and that the scheme must go forward. Instead, he merely pointed out that the deputation could hardly expect him to make a statement on a subject which must be decided by the Cabinet as a whole, but added that he would lay the representations of the deputation before his colleagues. Our readers know that we have taken no impracticable or pedantic line in regard to the Corn-duty. We do not think that the tax is per se a wicked tax, that it will grind the faces of the poor, or that it will raise the price of bread to an extent which will inflict misery and starvation on the working man. It will not have any of those sensational consequences ; and granted that the money must be raised, and cannot be conveniently got in some other way, we hold that the tax must be imposed, and cannot be fought on the ground either that it is a piece of pure Protection or an act of criminal oppression of the poor. It is none of these things, and to attempt to make out that it is is to bring an element of partisanship and gross exaggera- tion into a question which ought to be considered and decided on sober and common-sense lines. If, however, it is found that not so much money need be raised this year as was at first believed, and if, therefore, some one of the pro- posed taxes may safely be relinquished, then we are most strongly of opinion that it is the Corn-tax which ought to be abandoned. It is certainly the tax most open to objection, and therefore the tax which ought to be the first to go under improved circumstances.
The reasons which induce us to take this view are not by any means confined to strictly economic con- siderations, but cover a much wider field. In the first place, the tax is a new tax,—i.e., a tax which was not already in existence. A wholly new machinery will have to be called into existence to secure its collection, and machinery of an expensive Sand vexatious order. Before the money raised by a new tax can be got into the Exchequer and made of use to the public, a very large sum must be deducted for the cost of collection. Again, the friction and business disturbance caused by the intrusion of the Custom-house officer into an area which has been previously free from his visitations is always a serious matter. Importers and dealers who have been previously under no necessity to deal with Customs officials in carry- ing on their business naturally dislike and resent having to put a novel set of machinery in motion before they can call their goods their own. In a word, in no plane of life is it truer that new chains gall worse than old than in that of commerce and finance. Of course existing taxes cannot be raised indefinitely in amount, but when an existing tax can be raised, and is raised, the advantage is clear. There is no increased cost of collection, and business is not disturbed. The next reason for abandon- ing the tax is that though its incidence is, in fact, very small on the consumer, whatever burden there is falls, since it is placed on a prime necessity of life, most heavily on the poorest part of the community. The poorer a man is the more largely his diet con- sists of bread, and therefore the larger his propor- tion of contribution to a Bread tax. The agricultural labourer with only 12s. a week and a large family spends a far greater proportion of his wages on bread than does the artisan with ..t2 a week. Hence the incidence of the tax is apt to graduate in the wrong direction. We admit that the actual rise in bread is likely when things have settled down to be very small, owing to the process of spreading the tax by effecting little economies in ten or twelve different places,—for example, in the transport of the corn, in the milling, in the baking, and in the distribution of the finished article. Still, whatever incidence there is on the consumer, and some little incidence there is bound to be, will fall where it is least desirable that it should fall.
These are, in our opinion, strong fiscal reasons for abandoning the tax, if the money is not imperatively needed. The political reasons are equally strong. It is clear, to begin with, that the Opposition mean to work the Corn-tax for all it is worth. They will use the cry of dear bread and the little loaf to prejudice the Unionist cause at all points. It is not to be supposed that a party whose leader attempted to make political capital out of the alleged " methods of barbarism ' employed in South Africa will be particularly scrupulous in its campaign against a Bread-tax. We are certain to see the tax represented as an attempt to steal the poor man's bread, and to plunge him into misery in order to save the pockets of the rich. As Mr. Balfour said in his speech, all the old stories of the cruelty and oppression wrought by a perfectly different tax—i.e., the old and really oppressive Corn-law—will be brought out to prejudice the renewed registration duty. It is all very well to say that these untrue accusations will be of no avail in face of British common-sense, but we know that a certain amount of the mud thrown will stick. It would, of course, have been right and necessary to face this if the tax were imperatively needed. If it is not, it is surely not worth while to do so. It cannot be wise to let either the cause of the Union or of a sound and permanent settlement in South Africa be jeopardised even in the least degree by the cry of dear bread. Yet another political reason for withdrawing the tax is to be found in the false hopes that the tax has undoubtedly raised among the Protec- tionists and Fair-traders both at home and in the Colonies. They have come to regard the tax as the thin end of the wedge of Protection, and proclaim it as such with the utmost pertinacity and delight. But we know from the most solemn and explicit declarations of the Government that they had no Protectionist intentions whatever in pro- posing the tax, and that they proposed it for revenue pur- poses, and for revenue purposes alone. The Government, that is, in the debates in the House of Commons not only gave no support to the view that the tax was a first step towards Protection, but again and again repudiated the idea, and denounced it as grossly unfair. In spite of this, however, the Protectionists have insisted on regarding the tax as a triumph for themselves, and have let it be believed that at the coming Conference of Colonial Premiers the Corn-tax will be made the basis of an Imperial Zollverein,—a system of privileged trade within the Empire. We do not doubt, of course, the sincerity of the Government in their repudiation of Protection, nor do we suppose that they would yield to proposals for destroying our Free-trade system, however much pressed upon them from outside. At the same time, the undeceiving even of self-deceived men is often a very dangerous and difficult task, and might cause very great embarrassment. But if the Corn-tax is withdrawn, that source of embarrassment will go too. No doubt the Pro- tectionists would be angry for a time, but they would have no real cause of grievance, and without an actual Corn-tax to build upon, their Protectionist sand-castles must soon crumble away.
The Government, then, have a number of very strong reasons, economic and political, to induce them to with- draw the Corn-tax,—granted that the extra money it would yield is not now needed. Except on that assumption, in- deed, we should not think of urging the withdrawal of the tax. To withdraw it merely because of the clamour and opposition would no doubt be bad policy. There would, if the money were as much needed as before, be no sound ground for a change of policy, and the Government would be rightly open to the accusation of wobbling and not knowing their own minds. The coming of peace, however, with the consequence that money is not now so much needed, alters the whole situation, and gives, in our opinion, a complete justification for a withdrawal of the tax. Had the money been required the Government should have persevered with their proposals, however great the oppo- sition. If the money is not needed, they have not only a right, but are under an absolute necessity, to abandon whatever tax is most open to objection. Since that tax is the Corn-tax, the fact that it happens to have been opposed with special vehemence by the Opposition is not a circumstance which need, or ought to, be taken into consideration.
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