5 APRIL 1862, Page 7



Tpresent Chancellor of the Exchequer can scarcely be called a democrat, and yet it is impossible to deny that the one distinction of his budgets has been that they have been popular budgets; in other words, that they have given more pleasure or less pain than the taxpayers had any right to expect. Now, whatever ought to be popular—and we, at least, would not deny that many legislative measures, and even many financial measures, ought to be popular—the one thing that ought not to be popular on its own account, is a budget. If the expenditure of the country has been diminished, if the estimates have been materially reduced, then, of course, there is a very good reason why the taxes should be remitted, and the budget attract to itself some of the general satisfaction which prosperity always produces. But then the root of the popularity does not lie in the budget but in the departments Which produce the estimates. If they are not moderate, it is a bad sign when the budget sur- prises us with its moderation. The taxation ought to increase with the expenditure like its own shadow, which in fad it is ; and when we have a series of budgets in which the pain of taxation is less in proportion than might be expected from the magnitude of expenditure, we have, in fact, had a too' easy account-keeper, one who thinks too miich of the happi- ness of the community -and too little of the wholescene and necessary anguish of filling the purse at least as fast as it is emptied. Now we fear it cannot be denied that this is the case with Mr. Gladstone. He is a great statesman but a bad Chancellor of the Exchequer. He came into office in July, 1857, and since then we have had the following state of the public solvency.

1859-1860. 1860-61. 1861-62.

Estimated Income . . 69,460,000 72,248,000 70,283,000 Actual Income 71,089,669 70,282,674 69,674,479 ----- Below Below Above Estimate. . 1,629,669 Estimate 1,964,326 Estimate 608,521 Estimated Expenditure 69,207,000 73,534,000 70,401,000 Actual Expenditure . . 69,502,289 72,842,059 70,838,000 Below Above Above Estimate . . 295,289 Estimate 691,941 Estimate 437,000 Hence, while in two out of three of these years the actual in-

come has fallen very considerably beneath the estimated income in two out of three of these years the actual expenditure has mounted above the estimated expenditure, and this though supplementary autumn budgets have in each case been included in the estimates. In other words, Mr. Gladstone has taken too easy and sanguine a view in four cases out of six : and where he has been wrong on the cautious side to the amount of little more than two millions in the three years, he has been wrong on the wrong or sanguine side to the amount of above three million sterling, notwithstanding a careful autumn revise of his spring hopes in two cases out of the three.

We -should have supposed then, that after such an expe- rience, Mr. Gladstone would not be anxious to sail too near the wind again. Both this year and last he has been compelled to diminish the balances in the Exchequer—the ready money of the country—to meet his difficulties ; and it would be humiliating even if it were possible to resort to the same ex- pedient again. This year, therefore, we might have hoped from him a budget which would show a careful margin ; which would save us from all risk of spending our floating capital as income ; which would be the budget of a business-like nation. We cannot say that Mr. Gladstone has fulfilled these predictions, and we greatly regret that he has not. He has, in fact, prepared us to face next year a greater de- ficiency than ever, unless an extremely improbable good fortune should bring more into the Exchequer than we have any reason to expect, or, what is still more unlikely, bring fewer calls on what is already there than we have any reason to expect. We call both these events in the highest degree improbable, and we think with good reason. As to income it would not be improbable—it might be very probable— but for the exceedingly threatening aspect of American affairs. That the revenue of this country depends on its con,suming power no one expounds better than Mr. Glad- stone ; and that its consuming power is at all likely to in- crease—that it is not rather likely to decrease much under the pressure of the cotton crisis, Mr. Gladstone evidently cannot hope. We cannot, therefore, evade the belief that the present budget is unwisely, even recklessly, conciliatory to the tax payers—that it is the budget of a financier who sluinks from the stern duty of providing ample means for the country's expenditure. We did not think last year that the paper tax could be safely spared—we now know that it could not be safely spared.

Speakingof last year, Mr. Gladstone eays " I have stated that the expenditure was 70,838,000/, the revenue was 60,674,000/. Thedeficit upon a comparison of these two figures is 1,164,000/. The supplemental charges subsequent to the financial arrange- ments of the year were 1,499,0001., and deducting the deficit as it stands of 1,164,0001., it follows that, aocording to the original financial arrangements, there would have been a smallsurplusof 335,0007." Now, surely, Mr. Gladstone mast see that it is to the credit of a financier to provide against deviations from the "original financial arrangements." It may be true, that had nothing expensive happened, Mr. Gladstone's calculation would have seemed tolerably cautious, but it is a truism that a budget which only provides for certainties will never show a surplus. Nor is it only the unexpected Canadian expenditure and the supplementary votes of this year which have put Mr. Gladstone's calculations wrong. As he himself tells us, that only amounts to 973,0007., while 526,000/. was voted last session. Granting, then that the latter expense alone was fairly within a fuuinbier's foresight, there would still have been a deficiency, without these supplementary votes, of 191,000/. No one can say that the supplementary votes of last autumn were votes for expenses against the risk of which it would have been absurd to provide in the spring. And now, with this experience before him, Mr. Gladstone is content not only to pay the deficit out of the floating balances, but to embark on another year with what he freely admits is practically no prospect of a surplus at all. 150,0001., the estimated surplus, is to be avowedly diminished by 45000/. through the proposed change in the hop duties, and by something more than 45,0007., probably. Whether the brewer's license system will work time only can show. It cannot, indeed, be asserted that Mr. Gladstone's estimates of the details of the next year's revenue are certainly over sanguine. It is impossible to gauge what the result of a great Lancashire crisis might be ; but if that be averted, he has probably made ample allowance for the cloud which now rests on the national commerce, so far as the separate items of the revenue go. Looking at the wonderful elasticity of the Customs revenue which has during such a year as the last increased 1044;00/. beyond Mr. Gladstone's hopes, it is not too much to count that next year it may not fall back further than it has expanded during the year just elapsed. Nor is there anything very sanguine in expecting that the Excise will continue to yield what it did last year, looking to the unfavourable circumstances of the late malt season. It is not in the items of revenue that Mr. Gladstone shows his anxiety to give a popular Budget, but in either the sanguine temperament or the timidity which allows him to think it safe to begin the year 1862-3 without any provision at all for unforeseen:contingencies. It' ever them were a year in which evil contingences should be provided for it is the one now approaching. Nowhere in Europe are the omens exceedingly pacific, and even if we escape all European orAmerican quarrel, what is to secure us against those thou- sand contingencies abroad and at home—in New Zealand, or the West Indies, or in Mexico, Turkey, orin Morocco—which might at once insure a new and vast outlay? We are guaran- teeing or half-guaranteeing loans in all directions, and out of these things quarrels arise. The call for iron ships, too, is likely enough to necessitate some increase of expenditure very soon. And Mr. Gladstone's clever argument that to have nothing is the best protection against parliamentary beggars, is, we fear, but a feint of rhetoric. It might be true if it were not so fatally easy for Chancellors of the Exchequer to buy on credit. It would be nearer the truth to say that the better the balance the more pride has the Chancellor in pro- tecting it against intrusive claims. The fact certainly is, that when once the limit is passed which separates wealth from debt, the debtor, whether public or private, is apt to grow reckless. Mr. Gladstone, with his disposition to measure his success not by the actual fact, but by reference to the "original financial arrangements," is fast leading us into the unfortu- nate French system of ordinary and extraordinary budgets, —a system specially devised, as we hold, for concealing extra- vagance. When you have banished a new expense to the class "extraordinary" you cease entirely to feel remorse for it. Special circumstances caused it which are not to recur again, and you are satisfied. Extraordinary budgets will become a chronic feature of English finance if we are to begin the practice of calculating expenditure without surplus, and classing everything as exceptional which tan- sounds the "original financial arrangements."