M. FOULD'S BUDGET.
rOITR years of French finance are again before the public. X' M. Fould has submitted his Report to the Emperor, reaching back to 1865, and looking forward to 1868. The report is a very business-like document. The financial results of 1865 and 1866, and the financial prospects of 1867 and 1868, a summary of the events of last year, with their effect upon the French Exchequer, and just a few decorative passages moralizing on the necessity of economy, and paying the neces- sary amount of compliment to the Emperor, are crowded into a short statement which would scarcely fill two columns of the Times. The report of the French Minister of Finance to the Emperor is practically equivalent to the Budget speech of the English Chancellor of the Exchequer. It is the regular annual announcement of the financial policy which is to be pursued, coupled with a retrospect of the past. But, apart from a certain scenic effect with which the intro- duction of the English Budget to the House of Commons is accompanied, especially if the secret of the proposals to be made has been well preserved, it is easy to see why the report of the French Minister should be of inferior in- terest. Practically the French taxpayers have known their fate up to the end of 1867 ever since M. Fould issued his report in December, 1865. Since December they knew that they could not expect any remission of taxation until after that time, and that if any new proposals should be embodied in the report of 1866, they would be of no effect till 1868. There is a vast difference between expecting an immediate reduction of an income-tax or any other burden, and looking forward to the possibility of some remission of taxation by and by, with all the intermediate chances that a "rectifying budget" may annihilate their hopes. Thus the ordinary, or first budget lacks the charm of certainty, and the second, or rectifying budget, lacks the charm of novelty, and so it is ex- ceedingly natural that the report of the French Minister of Finance should not arouse that keen interest and curiosity which surrounds the introduction of the English Budget. And there is a further difference. The French statement bears its cha- racter clearly written in every line. It is the report of a stew- ard to his employer, a steward bound to carry out orders and to- find the money required of him by hook or by crook, though pri- vileged to hold independent and honest language to his master. It is not a declaration of policy for which the Minister is per- sonally responsible, and of which he may claim the credit or bear the blame. Yet, in spite of all these drawbacks, and not- withstanding the entire absence of a popular element from M. Fould's report, many conclusions of the highest interest may- be drawn, both from what he says and from what he does not say. For instance, we may certainly infer that M. Fould has made up his mind that he will do uncommonly well if the expenditure is kept near its present level, and that any re- mission of taxation to which France may look forward (in 1869 at the earliest), must be expected from increased receipts, not from reduced expenditure. As far as receipts are con-- cerned, nothing can be more satisfactory than the story which M. Fould has to tell and the prophecies in which he indulges. The product of the indirect taxes was greater by 1,800,000/. in 1866 than in 1865. M. Fould hopes that in 1867 this rate of increase will be doubled, so that the excess of the- receipts for the indirect taxes will exceed the estimated amount by 3,600,000/., and further, that the total revenue of 1868 will exceed that of 1867 by 2,000,000/. Though he does not specify the particular source from which this in- crease of 2,000,000/. is to come, he clearly expects the- greater part to be secured by the same rate of progress in the indirect taxes of about 1,800,000/. a year. But if the revenues are elastic and the receipts increasing, they only keep pace with the increased demands of the various depart- ments, and the incidental and extraordinary expenses into which a paternal government inevitably falls. M. Fould sees - a surplus before him every year on the " ordinary " budget, but this surplus has to be carried to the credit of the " extra- ordinary " budget in order to cover contingent outlays, and even in the sanguine expectation of a Minister of Finance will only just suffice to cover the probable extraordinary demand. In 1864 there was a final deficit of about 2,000,000/. The• increase of receipts has enabled M. Fould to announce that in 1865 and 1866 the expenditure is balanced by income, but the probable surplus of 4,000,000/. in 1867, and of 5,000,000/. in 1868 on the ordinary budgets, are already stated to be required in their entirety for the purpose of balancing the ex- traordinary budgets. It is clear that when public works find their way into budgets they may easily form an item sufficiently absorbing to eat up any ordinary surplus. The loan of forty millions sterling for the purpose of finding employment for the French working classes seems, if ever seriously entertained, to- have been definitely abandoned. We watched this project with considerable curiosity. In these days, when the pros- perity of our manufacturing interests is said to be in the greatest jeopardy from the hostile attitude assumed by labour against capital, and when we are threatened with a foreign com- petition, which is entirely to change the current of industrial_ enterprise, it was interesting to observe that eminent statesmen on the other side of the Channel should deem it necessary to find artificial employment for their working classes by an enormous and unparalleled Government expenditure on publics works. It appeared, at least, that the working classes were feared as much abroad as at home, but that far more artificial and make-shift measures were contemplated in France to procure temporary satisfaction, than would pass muster with the more- practical and less logical politicians of England. We are glad to see that the project of this monster loan has not ripened' into a fact, but there are very ominous indications of the popu- larity of the "endowments for public works" throughout M.. Fould's report. Speaking of the year 1866, the Minister says, "Not only has not the impulse given to public works been checked for a single moment, but their endowments have been increased by nearly 12,000,000f." (480,0000 Speaking of the year 1867, M. Fould points out that he must rectify his first estimate by adding twenty-two millions of franca. (808,0001.), to the expenditure of the Ministry of AgricuL- true, Commerce, and Public Works (of which amount about half is due to the results of the inundations) ; and he adds later on, "If we reflect on the increased expenditure for public works, there is reason to congratulate ourselves that the ordinary resources of the budget should suffice to cover all these expenses without the necessity of imposing new taxes or appealing to credit." In the " ordinary " budget of 1868 there is a proposed increase of about 80,000E in the amount placed at the disposal of the Ministry of Public Works over the amount for 1867, but the outlay on public works is to be sought rather in the " extraordinary " than in the "ordinary" budget. In the extraordinary budget for 1867, the depart- ment in question figures for 72,300,000f. (nearly 2,900,0001.); in the same budget for 1868 the same Ministry figures for 69,600,000f. (about 190,000/. less) ; but M. Fould hastens to add, in an apologetic tone, that the diminution is apparent, and not real, and that, owing to peculiar circumstances "the obli- gatory charges in this respect are decreased by 6,000,000E, but that the appropriation for public works in 1868 is really increased by about 3,000,000f." We can easily understand what becomes of a surplus when such ideas are entertained.
We repeat that we cordially admit that the French people has every reason to be satisfied with the buoyancy of its revenue. In this respect nothing can be more satisfactory than the figures quoted by M. Fould, and of the two we are inclined to believe that it is more gratifying to see revenue increasing than expenditure diminishing, for the latter rests, after all, with the will of the governing powers, who can restrain that expenditure if they choose, whereas the increase of revenue without the imposition of new taxes is a matter beyond Government control. The French may point with just bride to the fact that, notwith- standing all the drawbacks of 1866, their commerce has flourished and their consuming power has suffered no dimi- nution whatever. We have had more drawbacks than the French, a severer monetary crisis, a heavier visitation of the cattle plague, and notwithstanding our revenue returns are not less satisfactory than theirs ; but this need not in any way diminish their sense of satisfaction, though when M. Fould points with pride to the fact that the rate of interest in France remained moderate, while it was rising in all other markets, he ought to be reminded that this was mainly due to the fact that the French bankers were so frightened by the events in Germany and elsewhere that they were unwilling to embark in any business, and kept all their money at home, so that capital was cheap, simply because there was no employ- ment for it.
The dark side of the French account is the expenditure. We doubt very much whether the English public would be satisfied if proofs were offered to it in a congratulatory and triumphant tone, that the revenues were likely to be largely increased during the next two years, and that Government hoped that these extra receipts would provide for the necessary increase in military expenditure, and for providing "a still more energetic impulse to all works of general utility."
The arrangement of the French Budget is so different from that of our own, that it is difficult to draw any exact com- parisons. Still it is .interesting to know that the estimated ordinary expenditure for 1868 is about 62,000,000/., and the extraordinary is about 6,000,000/., so that the total would be somewhat larger than our own expenditure,—decidedly larger, if we take into consideration that we have a much heavier charge for our public debt. The French estimates show about 20,520,000/. for "public debt and dotations," while our ex- penditure for the public debt alone, without the other charges on the Consolidated Fund, amounts to 26,000,0001.; the general "Services" of the Ministries, which are more or less equivalent to our "Supply," amount to 31,620,0001.; the expenses of the collection and management of the 'taxes and public revenues to about 9,320,0001.; and repayment; discounts, premiums, &c., to about 500,0001., together about 62,000,000/., besides the extraordinary budget. What appears to us to call for especial remark is the enormous charge for the collection and manage- ment of the taxes and public revenues, amounting to upwards of nine millions sterling, while we collect a larger revenue for half that sum. If we take into account how much more cheaply everything is managed in France than here, not only in public matters, but in all private enterprises, we cannot fail to recognize the immense advantage offered by our own fiscal system over the French in the way of cheap collection and management. We have hero an enormous economy as compared with our neighbours, who invariably beat us out of the field in the way of cheap administration. We have only still to add that there is no single novelty in M. Fould's report of this year. We find neither remission, nor readjustment, nor increase of taxation. Till the end of 1866, as far as at present appears, everything is to be left in statu quo. Last year M. Fould, like Mr. Gladstone, had, at least, a new scheme for a sinking fund, and proposed some important alterations in the mode of keeping the account. This year he has nothing whatever of any kind to propose. The upshot of his report is very simple : " Our revenues are increasing, but so is our expenditure, and the progressive increase of revenue on which I believe I can calculate for 1866, 1867, and 1868 will, I hope, suffice to meet, without any appeal to credit, or any new taxation, the extraordinary expenditure for military purposes, and for public works to which the Imperial Govern- ment stands pledged."
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