- MR. GLADSTONE'S. FINANCIAL CAREER.* Ms. BUXTON • has performed his'
task, which is that of giving a clear, accurate, : lively, and comprehensive view of Gladstone's financial • career, in a thoroughly histOrical spirit, resisting the temptation to obtrude criticisms or opinions. of his own, though there are Many indications throughout the volume of a sane and statesmanlike outlook on questions of public finance. In this reserve he has, we think, Shown/ considerable wisdom. Nothing is nowa- days taken for granted in political economy, authority is dead, and anything like assertion. of. belief in principles accepted a generation or two ago is apt , to be resented or laughed at. In view of the real or affected horror with which • any doctrine suspected of derivation from the Manchester School is mentioned in the Press or on the platform, Free-trade and economy are better left to speak by their results. We do not imply that this attitude of the public mind is wholly to be deplored. In so far as doubt is honest it is far better that it should be dispelled by facts, and experience than by assertion, and it is certain that there is room for honest doubt as to some of the positions taken up by the great school of econo- mists whose views were, broadly speaking, carried into practice by Mr. Gladstone. No one would now maintain that Free- trade was the only, or even perhaps the governing, cause of British commercial supremacy in the nineteenth century; and there is room for .question whether, tariffs, even. high tariffs, or the absence of them, are supremely important, factors in the: industrial rivalry of the nations and their .comparative prosperity. In the same way,the advantages of, economy .in expenditure may_ o a certain extent be held to:depend. on cir- cumstances. There is a school which, with the .support of high statistical authority, holds that the increase in • the national wealth is so enormous, and the taxable capacity of the popu- lation therefore so much greater than in past years, that a two hundred million Budget need have no terrors for: the present generation, and that the increase of indebtedness need give . rise to, no anxiety ; and. the undeniable: extrava- gance of _expenditure on luxury and, enjoyment in all gasses gives much colour . to :the view that taxation is not a burden which is appreciably . felt. As our readers are aware, there is, in our opinion, great exaggeration and some public danger in the persistency with which both these points Of view are now being put forward. As regards Pree-trade, the danger does not arise from any want 'of Perception, either' among the statesmen or the wage- earners, of the advantage, and indeed the necessity, of adherence to its main principles for a country like England, which is dependent for its daily bread on being:able to Manu- facture and- eipOrt at a cost law enough to enable her to compete on faiourable terms with her many formidableccim- petitors. The danger, and it is no imaginary danger, is all who are concerned with the public finances are well aware, consists in the difficulty of procuring for the -State an income commensurate with the supposed necessities of the cbuntry without recourse to largely increased tariffs for revenue - purposes, - and the practiCal ' impossibility of largely raising tariffs without Protection. It is for this reason that we • deprecate the peraistent • harping • on the colossal wealth or income of this county, indulged in by writers who follow' Sir Robert Giffen's lead It is too often forgotten that the national income, be it fifteen hundred or two thousand millions, for the calculation is largely conjectural, is not, except as regards a small fractions available for purposes of taxation, for out of it the whole subaistence of the people and their houaing and clothinghave first to he supplied to..tudint4in 'theni likcoine-producing • otasioni as ItCincellorot iite7Etthequcr a Study. "By Sydney XP. London : John Murray. Lys. net machines. When we are told that a far, larger proportion ,ot this slim was claimed by the State at the beginning of 'the last _century than nnw,-and might :again be so Claimed, it twit
be remetnberedthat:even if this, is the case, the desires of the population have increased with their means, that what were luxuries a hundred years ago, if they existed at all, are
necessaries now, and that in this natural process lies the whole,, secret of material :progress. . Further, the politiCal aspect of the question cannot be overlooked. If it be necessary to .reduee' the standard of comfort in a nation by increasing its taxation, how fails it possible .to inddce people . with votes to' , to such. a redUctiOn The reasons must be strong:indeed which will force GOverninent to ask for, or the :electorate to accept, a largely higher level of taxation, especially at a time When it' is iincertain,how the economic, condition of the country ',may be' affected by. the loss .Of the Industriar and commercial- aisPremacy which. belonged to it frOm the time of the 'Napoleonic War.. Whatever view ; may be taken ..of .spell questiQns as these, there is enough in the above consideration to make economy the . first necessity_ of : financial Statesmanship, " Whatever, he may be in praCtice," says. Mr. 'Brixton, " in theory no Chancellor of the Fxcheqiier can fail to be an economist. And Mr. Gladstone 'was, both in theory andln fact, a stern economist: .An economiat_ indeed of the 'old school; to whom any expenditure was an evil, 'though some- times a necessary evil, and who apart ,from its ,)bject,. indis- criminately condemned 'outlay as Wasteful. and' perniciode."
The time may come soon enough when . remorseless economy may again become the order..cif the day; Nit it will be king
before we find again a Minister *hoae tastes and fortune com- bined gave him so long an ascendency at the Treasury asf to make him absolute master'of his subject, and to produce, he marvellous efficiency in financial administrative business which distinguiShed him, as ithad done Peel in even wider Measure. ;It is this businesslike aspect of Mr. Gladstone's work in the matter
of the purgingpf the old tariff, rather than its originality, which impresses the reader, who when he hears that betWeen'1860 and 1863 the revenue. deereased only £546,000,' while tares had been remitted tothe extent of £6,668,000, -realises that 'the oppoSite, process of `.` broadening the basis of taxation " may be as -dangerous to imports, as the narrowing .prOeess was :stimulating to-them... We may quote Mr. Buxton's account of Mr. Gladstone's fiscal ideas :— " That the true basis of a solid and large revenue lay in the exten- sion-of trade abroad:and of industry at home. That and unre- stricted play should be given to capital and enterprise. That taxa- tion should be levied for revenue purposes alone, and that wheneier an article- taxed is 'both 'produced at home and 'imported from abroad, the Excise duty on the former should be equivalent to the Customs duty. on the latter. . That:as all duties are impediments to trade, taxation should be as far as possible simplified, and its basis narrowed. That no. duty should remain in force:uilesa it produced a substantial sum ; and that no duty should be levied which incurred costly or vexatious collection. - That Excise duties should be confined' to intoxicants and should /be levied . on : the finished article, . not on. the. raw material. That the indirect taxation should be concentrated on a few articles of general con- sumption. That the taxation on these articles should be kept at such a figure that the consumption should be stimulated and not checked, the object being not so much that the consumer should on the whole pay less in taxation, but that he should pay it on a larger consumption. In a • word, that the • national revenue should be derived from a few. great sources of taxation Tihich could themselves be enlarged or diminished at a minimum of inconvenience to the consumer, to the taxpayer, and: to trade." It would be difficult to describe better in a few, words the principles not only of Mr. Gladstone's finance, 'but of all good finance.-- The best testimony to the advantages of -the system is to be -found in the • manner in which it has proved adequate to the needs Of the, present time without affecting
the prosperity-,of the country, and there is no reasen, in our opinion, why it should not prove adequate within bounds (for there are very definite limits to taxation of any kind) to meet
even larger prospective demands of the -Exchequer. The tea and sugar ,duties and the duty. on beer are undoubtedly capable. of increase; the real- difficulty is how to increase direct taxation without an increased recourse to what for, an
improvident population may be an injurious form of taxation, namely, Death-duties. The financial crux of the moment • is perhaps the possibility of reforming the Income-tax. The prOductiVeness of the tax is so great; its .on the whole; owing . to the construction placed upon ' its
obscure provisions by the Law Courts and the Administra- tion, so smooth, that practical men hesitate to dell with it. But its permanent rise to its present level will be difficult to maintain without some attempt to modernise its machinery and to bring it into harmony with scientific ideas on the taxation of net income with the corollary of a certain measure of relief to incomes from personal exertion. We have sometimes regretted that Mr. Gladstone's attempt to bring about its repeal in 1874 did not succeed, for it must have been speedily reimposed, and it could not have been reimposed without a complete overhauling of its machinery and its principles. Well or ill founded, objections of the class of which we have heard little since Mr. Hubbard's time and Mr. Gladstone's famous Budget speech of 1853 seem to be reappearing, and will sooner or later have to be met. The main defect of this tax, the impossibility of graduating it except by the method of abatement, cannot perhaps be remedied; but some method of increasing the taxation of the richer classes—a radical reform of the House-duty might be one—will have to be found, for all the evidence goes to show that quite sufficient if not too large a share of the burden of taxation still falls on the poorer classes, and the example of the Estate-duty has for the first time in financial history conclusively proved that in a wealthy community graduation may be made a source of immense profit to the Revenue. Mr. Buxton, as becomes a possible future Chancellor of the Exchequer, does not commit himself on these questions, but we are glad to see that he does not share the "passionate dislike" which Mr. Gladstone constantly ex- pressed, and no doubt felt, for the Income-tax, an in- strument of taxation which, after all, is almost the only one with any pretension to justice in its incidence, and which he first showed us how to use to the fullest advantage. His many utterances on the subject do not supply us with any sufficient explanation of this dislike, and we are forced to assume that it was an attitude dictated by deference to the sentiment of what in the " sixties " was still, politically, an important class. Mr. Buxton is more plausible than con- vincing in his discussion of this point, but he criticises severely. Mr. Gladstone's dealing with the National Debt. The reader, however, as we began by warning him, must not expect to find in this volume a critical dissertation on methods of finance and taxation such as Mr. Buxton would be well quali- fied to write, for he has preferred to give a straightforward account of Mr. Gladstone's actual work, and to enrich it with anecdotes and with quotations, among which we recognise many famous passages, such as the description of direct and indirect taxation as " two attractive sisters," and Mr. Cobden's account of the manner in which the burden of taxation had been adjusted to the back of the animal which had to carry it, passages which the dreary records of finance cannot afford to let die. Mr. Buxton writes well, and he has been successful, no small achievement, in giving a thoroughly readable and in- teresting account of the most inspiring page in English financial history, a page from which it is impossible to turn with any feeling of satisfaction to that which is now opening before the country.
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