THE BUDGET.
THE sigh of relief with which elderly members of the London Clubs received the information that the Chan- cellor of the Exchequer had made no change at all in the taxation of the country, sufficiently attested that at length a Conservative Government has realised the ideal of a perfectly Conservative Budget. No doubt the extension of the great modern idea of the conservation of energy to include the conservation of taxation, is not one that would easily recommend itself to the popular mind. But human nature is so very complex a thing, that there certainly is a class of Conservatives,—and these in many respects the very ideals of Conservatives,—who find a satisfaction in hearing that there is to be no change at all,—not even a remission of taxes. Their financial motto is,— " My hopes no more must change their name,
I long for a repose that ever is the same."
And for the moment at all events, the Chancellor of the Exchequer has gratified that whimsical objection to startling surprises, even when displayed towards remissions of burdens and practical additions to resources. Nor do we think that the most sanguine financial authority in the world would have advised Sir Stafford Northcote to alter his financial proposals in the direction of generosity. For though it is rarely indeed that the experienced financial advisers on whom the Chancellor of the Exchequer relies, mislead him into plans which result in a serious deficiency, that is unquestionably the side on which there is most ground for anxiety in the pre- sent case. We have been so long used to an elastic and
prosperous revenue, that it may be far from easy for the most experienced men to conceive the possibility of a serious and continued decline, and yet the state of the commercial world Seems to show that if ever such a decline could be expected, it „ may be on the eve of occurring now. Mr. Childers, though his criticisms on the apparent crowding of revenue receipts into the last weeks of March at the expense of the first week in April, were sufficiently answered by the Chancellor of the Exchequer, certainly showed that the decline hitherto in revenue had been progressive, and was for a time rapidly pro- gressive. And though he may somewhat have exaggerated that , decline in the last quarter,—he did not allow, we think, for the effect of leap-year on the revenue of 1876, and the consequent relative diminution in the revenue of the last quarter of the financial year which has just expired,—there is still some legitimate reason for alarm in what Mr. Baxter so weightily said as to the great decline in the foreign demand for our manu- factured articles, and in the probable effect of that decline on the consuming power of our artisan population, and therefore, of course, on the revenue due to the articles which they consume. Mr. Baxter, speaking from personal experience, said that the state of the foreign demand for our manufactures had "never been worse." "In the United States, too, commerce was in a most unsatisfactory condition. Both the revenue and the rate of wages had diminiehed, and according to the American Trades Union statement, two millions of people were out of employment. In India and China there was not only no profit, but serious losses had been sustained." Mr. Mundella bore witness to the same tendency. "It was not in the first year or two of depression that the revenue suffered, but when savings and credit were gone ;" and he ex- pressed his fear that the working-classes, who have recently been supplying the deficiency in their wages out of their savings, had now come to the end of their resources, and that the revenue would suffer severely through their poverty in the coming year. We do not venture to say that Sir Stafford Northcote, with all the cautious and experienced advice he has had at his command, and of which the traces are clearly to be seen in the iiiminished estimates he proposes, has not taken all this sufficiently into account. That will depend, no doubt, on whether the deep commercial depression of the last half-year is to increase, instead of slowly passing away. But very little is known as yet of the permanent causes of these great periodic waves of depres- sion and prosperity, and there may be a worse time coming than even the half-year through which we have recently passed. Supposing, for instance, that any new act of national bankruptcy, seriously affecting the savings of the people of England, were to occur, the dismal forebodings of Mr. Childers, Mr. Baxter, and Mr. Mundella would almost certainly be realised. Unques- tionably the doubt about the Budget, if there be doubt, is not as to the existence of an excess of prudence, but rather as to the possibility of a deficiency. It is very likely that Sir Stafford Northcote will disappoint his critics of this year, as he disappointed his critics of last year, and with all our hearts we hope it may be so. Nay, he was probably quite right to act on the counsel he has re- ceived from men who knew all that his critics knew when they gave him that advice. Still we cannot doubt that even those advisers, and evidently the Chancellor of the Exchequer him- self,—if it be at all possible to judge from his tone,—are far less inclined to hope for any great surplus above what is calculated for, than to fear that events may take a turn which would result in a graver deficiency than has been experienced for many years. There has been unquestionably great " moderation " shown in estimating revenue, and if a much darker time be not impending, that moderation will ensure a sufficient sur- plus. But as far as we can judge, the Chancellor of the Exchequer does not fear, and has not allowed for, any con- siderable downward progress during the next year. He hopes that we are very near the bottom of the descent, and that even if we do not soon begin to improve, we shall not go materially lower. And if he is right, his Estimates are sound enough. If, however, he should prove to be wrong,—if there are several steps of the too easy descent still to be traversed,—it is pretty certain that his next review of his financial procedure will not be an agreeable one.
We have quoted Mr. Baxter on the prospects of the Revenue, but we cannot agree with the drift of his remarks on the state of the Expenditure. He advocated, for a year of serious depression like this, a wholesale cutting-down of the Esti- under similar circumstances, and indulge themselves with in perfect safety. But deeply as we distrust the tendencies of our present Government on foreign policy, we cannot say that it is reasonable to expect such a remorseless cutting-down of expenses in a year of so much foreign complication as the present. No doubt, as Mr. Mundella justly pointed out, the great fall in the price of materials within the last year makes the substantial though not large reduc- tion in the Navy Estimates, and the infinitesimal reduc- tion in the Army Estimates, equivalent to a virtual increase of expenditure. The difference between the cost of materials this year and the cost last year would have effected a con- siderably larger saving than that. But if the saving has been expended, as of course the Admiralty and the War Office will contend that it has been, in improving the effi- ciency of both Services, we think such a policy, in a year like the present, not only justifiable, but even obligatory on the Administration. Indeed, the only possible question would be rather as to the wisdom of making any saving at all in these Services at a period of so anxious a character. We say this in pure candour, though we are per- fectly aware that if the present Administration were called upon to make any external use at all of the power of England, the chances are very much greater that they would make a use of it we could not approve, than one that we could approve. Still it is obvious that we cannot blame the Administration for keeping up the Naval and Military strength of England, in a period of great anxiety, merely on the ground that its foreign policy is one we extremely distrust and dislike. Unless we are prepared to say, what we cannot say, that this is a time in which England could safely count on complete tranquillity, we must support the Government in keeping up the efficiency of the Services, and criticise what- ever use they may make of that efficiency, when the time comes,. as it seems to deserve. And if no great reduction could at the present time have been made in the Army and Navy, it is pretty clear that it could not have been effected in one of the most rapidly augmenting of our branches of expenditure, —the Civil Service Expenditure, the Estimates for which are £392,347 more for this year than last. To have cut down these estimates would have meant stopping the educational movement, which is probably more essential to the real progress of the country than any other expenditure whatever.
On the whole, this most Conservative of Budgets, which alters nothing and gives us nothing fresh to think about, is probably the wisest that Sir Stafford Northcote could have given la. The doubt about it is that it may be too hopeful, or rather, too little gloomy. But when the prospect is incalculable, we can hardly blame a Chancellor of the Ex- chequer for not calculating it ; and as far as we can see, a deficit, if it comes, will arise from causes as to the nature ancl extent of which it is nearly impossible to form at present any distinct conception.
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