TOPICS OF THE DAY.
MR. CHAMBERLAIN'S SPEECH.
LORD GOSCHEN once began a statistical speech by telling his audience that if they would only give him their attention, he would make them in love with figures. Mr. Chamberlain essays an even bolder task. In effect he tells us that if only we will listen to him, he will make us in love with taxes. To his eager and enthusiastic nature taxes have come to look like a positive blessing. He riots and revels in them. They are the most wonderful and beneficent things in the world. The poor benighted people of these islands in the bad old days of Free-trade used to think that taxes made people poorer. It seems they were quite mistaken. According to the Chamberlain faith, there is no such wealth-producing agency in the world as a good sot of taxes. Riches and happiness spring from them like mushrooms in a meadow. They are universal providers. Wave the wand of taxation in the proper way, and you can actually put 2d. a week in the poor man's pocket without hurting any one. That Mr. Chamberlain is perfectly sincere in his touching belief in the peculiar grace which attaches to taxation we do not doubt for a moment. Though a very clear-tongued man, he is not a man who thinks clearly or who really gets to the bottom of things. Indeed, he has the defect often to be noticed in the Latin races. His powers of exposition are greatly in advance of his powers of comprehension. He can expound with so marvellous and fascinating a lucidity that you feel convinced he must know his subject through and through. Yet all the time he has no true grasp of the matter. The lucidity is the effect of shallowness rather than of any essential luminousness. But be this as it may, and what- ever the cause, Mr. Chamberlain is for the moment in love with taxation, and we may expect for the next few weeks many an oratorical outburst in praise of the new idol.
Mr. Chamberlain in his usual impetuous way is quite sure that the British elector is going to follow him in paying court to his new " flame." For ourselves, we do not feel so sure. We expect that it is much less difficult for persons in easy circumstances to persuade themselves that taxation is an excellent thing in itself than it is to get the working man to think so. The man with £1 a week is too near to the taxes. They come home to him very much more forcibly than they do to the rich man, and so are far less likely to seem to him subjects for satisfaction. But whether or no the workman will be dazzled by the prospect Mr. Chamberlain holds out to him, there can be no doubt whatever of the fact that the country as a whole would feel the burden of taxation a great deal more under Mr. Chamberlain's policy than it does now. This is inevitable under any system of Pro- tection. If a Protective or Preference tax does what it is meant to do, and protects, it is bound. to be a bad drawing tax. It falls only on the foreign product, and the home and Imperial product escapes altogether. But since there cannot be two prices for one commodity, if the tax does what it is intended to do—helps the home and Imperial product, i.e., by raising its price—only a portion of the Protective tax goes into the Exchequer. Those, however, who pay an increased price for what they consume feel the burden of taxation quite as severely if only a part of what they pay extra goes to the State, as if it all went. Therefore when one is considering a Pro- tective tax one must remember that the burden of taxation must be much greater than it seems. Thus Mr. Chamber- lain's 2s. Corn-tax on foreign wheat, though it will only bring in some £3,000,000 a year, will impose a much greater burden on the consumer, probably one in all of nearly £8,000,000. Mr. Chamberlain, no doubt, admits this himself in part, though he is affected by the singular delusion that the foreigner is not now, in spite of free competition,. selling as cheaply as he can, but will be able to find the greater part of the duty out of his own pocket. We do not believe it; but if he does, then Mr. Chamberlain is offering the Colonies nothing. If the foreigner will be able to sell here as cheaply as ever, the Colonies will get no advantage. Unless the price of corn rises, the Colonies will gain nothing by Mr. Chamberlain's scheme.
The Corn-duty, though, as we have shown, it will yield comparatively little to the Exchequer, will prove a great burden on the nation at large. The same must be said of the Meat-tax and the Dairy-taxes. If they accomplish their object, they must burden the consumer without filling the Treasury. To these burdens must be added the burden of a tax averaging 10 per cent. on all manufactured and partly manufactured articles. Here again, if the tax is effective, the price of the home and protected manufactured articles will rise, and the burden on the taxpayer will be great. Exactly how great it is impossible to say ; but if the new tax pro- duces at least £9,000,000 a year, as Mr. Chamberlain proposes, the burden on the consumer will not be less than twice what is obtained in the way of revenue. And it will be a double burden in another way. It will not merely oppress the consumer, it will also oppress the producer. It is all very well to talk in the abstract of letting in all raw material free and' taxing all manufactured articles, but how is the line to be drawn ? Take the case of paper. In one sense paper is an absolutely finished manufactured product. As far as its paper nature is concerned it cannot be altered. But paper is the raw material of news- papers, of those who make paper bags and paper boxes. It enters, in fact, as a raw material into a hundred different factories. Is paper to be 'taxed ? If not, why not ? Prepared leather is another example in point. Is it a raw material or a manufactured article ? The same question can be asked of many sorts of metal and of innumerable articles. Indeed, except in the case of, say, a fitted dressing-bag or some such article, it is very difficult to find a manufactured article which is not also a raw material. Judged, then, by the raising of prices to the purchaser, and not merely by what comes into the Exchequer, it is therefore clear that the burden of taxation will be enor- mously increased by Mr. Chamberlain's policy. Against this the only set-off is the halving of the duties on sugar, on coffee, and on cocoa, and the reducing of the Tea- duties by three-fourths. Mr. Chamberlain endeavours to make out that this set-off will be so considerable that the working man will be 2d., or even 20., a week in pocket. We very greatly doubt Mr. Chamberlain's estimate ; but even if it were true, Mr. Chamberlain ignores the burden from the tax on manufactured goods. He apparently imagines that the £9,000,000 he expects to get from this scheme is going to come from nowhere. As a matter of fact, .the whole of that £9,000,000, plus the general rise in home prices, will come out of the pockets of the British people, and a very large part out of the pockets of the labourer and the artisan. Considering the enormous number of manufactured articles used by the working man, it is very doubtful if even 4d. a week, or 17s. a year, would represent' the extra cost to him. Though he will probably not be able actually to see it, he will pay a little more on everything he uses. There will be a raising of price, or a lowering of quantity or of quality, which is the same thing, in in- numerable articles. Again, if foreign iron and windows and doors are taxed, and so hindered from coming into the kingdom, and if, therefore, the prices of home products are raised, houses will cost more to build, and so will shops and factories. Accordingly the labourer will have to pay more for his house and have the area of his employment narrowed. Every impediment, to the cheap building of a factory or a workshop is an impediment to employment, and to that increased demand for labour which is the only source of its improved remuneration. You cannot in fact raise £9,000,000 a year in Protective taxation without it being felt,—and all experience shows that the place in which it is felt first is the home of the poor man.
We have shown that Mr. Chamberlain, rightly or wrongly, is going, if he can, to make a very great increase in the taxation borne by the British elector. What are his reasons for doing so ? One is economic, the other political. Let is take the economic first. He tells us that we must ,find some remedy for the fact that we( are stagnating commercially. " In the United Kingdom," he assures us, " trade has been practically stagnant for thirty years." Could a statement more preposterously wide of the mark be made than this ? Instead of trade being stagnant in the past thirty years, it has been going up by leaps and bounds. How does Mr. Chamberlain arrive at his extraordinary conclusion ? To begin with, he takes the export statistics. of a. specially inflated year thirty years agoi.e., 1872, the year when France, and even Germany, were both calling to us to help them in making up the waste of the war, and when our exports went up at a bound —and compares them with those of last year. But even if the comparison as regards years were sound, it would be rendered useless by the change in values caused by the appreciation of gold. Prices measured in gold were far higher in 1872 than in 1902, and therefore a series of comparisons in bulk would alone be of value. A million pounds represents now a vastly greatek amount of goods than it did in 1872. But, .even if all this is left out of account, Mr. Chamberlain's declaration is ludicrously false. The real way to see whether a nation's trade is stagnant is not to take the imperfect, incoherent, and badly based figures of one portion of our trade- i.e., the export trade—but to look at the condition of the nation as a whole. We refuse to admit that a nation is prospering, because its export trade rises, just as we refuse to consider that an individual is prospering because of the number of things he sends out of his house for sale in the year. But if, instead of making the goods we have to part with to the foreigner to pay for what he sends us the thermometer or index of pros- perity, we make the general trade of the nation the test, we shall find that we have prospered in the last thirty years beyond all precedent. Thirty years ago a penny in the Income-tax used to bring in only about half what it does now. Could a greater or a more certain proof of the increase in national prosperity be found ? Further, look at the vast growth in the national prosperity shown by the increase of capital employed at home, and also of our investments abroad. Finally, see how in those thirty years the nation has been practically rehoused, and rehoused in an infinitely more expensive way. Take wages, again. Not only have wages risen immensely in all trades—in agriculture they have risen some 25 or 30 per cent.—but their purchasing power has also vastly increased. Go into any workman's house to-day and compare it, the things in it, and the condition of its inhabitants with what they were thirty years ago, and the comparison must be greatly in favour of the present. Instead of being stagnant, the nation has prospered in substantial wealth beyond any Continental nation, and has even kept pace with America, the land of vast and unexhausted natural resources. If we have been stagnant in the last thirty years, then by all means let us remain stagnant; and heaven preserve us from Mr. Chamberlain's efforts to reverse our position. The truth is, we, who inhabit a little island with a bad climate, have no natural right to the prosperity which we enjoy. We only enjoy it because of our wise and liberal policy, and because of the folly of our neigh- bours. If Mr. Chamberlain has his way, however, he will soon change all that. His policy of enriching the nation by taxation, if it is ever carried, will give him quite enough leverage to topple over the Campanile of our prosperity in utter ruin.
Mr. Chamberlain's other reason for his policy is political. He wants us to accept his scheme in order to unite the Empire. This reason is even worse than the economic. Instead of union, it would bring discord and dismemberment. None love the Empire more than we do, none would be ready to make greater sacrifices for its unity, but we will never willingly consent to a policy which will oppress the poor at home while causing jealousy and ill-feeling in the Colonies. As we have said before, Mr. Chamberlain's policy is the little loaf at home and the apple of discord in the Empire.
The Colonies can hardly fling Mr. Chamberlain's proposal back in his face, but there is plenty of evidence that they would very much rather that the matter had never been raised. Already they begin to realise that preference is only too likely to end in interference. Even as it is, Mr. Chamberlain tells us that he wants no new industries to spring up in the Colonies. "Tied-house " Imperialism will be obliged to tolerate the industries already existing, but it will not tolerate any further developments. Assuredly this is the old Colonial system in its worst form. The Colonies are not to be allowed to develop their home industries further for fear of spoiling the market of the Mother-country !
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