THE BUDGET. T HE Budget is a tame one. There are
no new taxes and practically no remissions of taxation, for the alteration in the Cocoa Duties can hardly be called a remis- s sion. Here the Chancellor of the Exchequer merely dealt with an anomaly. There was no doubt, he declared, that at the present moment an element of protection entered into these duties. Manufactured chocolate contained ingredients which were not dutiable, and yet it was taxed at the same rate as cocoa without those ingredients. This had to be altered at a loss of £20,000 in duty on imports. At the same time the home manufacturers will get a " draw- back " of £25,000. They will, that is, receive repayment of the Cocoa Duty on any chocolate they may export. Another slight alteration in the scheme of taxation will be found in the Liquor Licences. Those licences will not be charged on those parts of the licensee's premises which have nothing to do with the sale of intoxicants. There is also a slight reduction of the Stamp Duty on short-term bonds, but this will have little or no effect on the revenue.
As we have explained. elsewhere, the manner in which the realized. surplus of the last two years, £5,607,000, is to be spent is as follows : A. sum of £1,500,000 is to go to the creation of sanatoria for insured workmen ; £250,000 is to be lent to Uganda and East Africa ; £1,500,000 is to go to the capital account of the development fund ; and the rest, £2,370,000, is to be allotted to the Sinking Fund. Admitted that the Government's policy of reducing the sums allotted. to the repayment of debt is a sound one— which we do not, of course, admit—the manner in which the realized surplus is to be spent cannot cause complaint. The proposal to deal with the scourge of consumption is, per se, a good one, and if the money is wisely spent, and not wasted, it will probably not only yield sound results in its prime object—the saving of human life and the checking of human misery—but will also stop a great deal of unnecessary waste. The prevalence of consumption and the haphazard way in which we now deal with it are a fruitful source of economic loss. Through consumption our population not only loses terribly in energy, but we fling away a vast amount of money in fighting the scourge un- successfully. The loan to Uganda and East Africa will also probably prove a. sound investment. The Colony will pay 31 per cent. interest with a 1 per cent. sinking fund, and as the present Uganda Railway has already turned out a paying line there is little doubt that the Colony will be able to fulfil its engagements. In regard to the money proposed to be allotted to the Development Fund. we feel very considerable doubts. On paper, no doubt, the objects are excellent, but the question is, Will the money be really wisely spent, or will it have to be entered under what was always the largest item in the accounts of the parish clerk in the story—the item " moodled away " ? The chief point of interest in the Chancellor's speech this year was not financial. It was the proposal to pay every Member of Parliament, not already in possession of a Government salary, £400 a year. As our readers know, we dislike the notion of Members of the House of Commons, as the true rulers of the country and the trustees of its treasury, dipping their hands into the public purse. We take the high—nay, the highest view of the functions of the House of Commons. Subject to the ultimate sovereignty of the people, a sovereignty which we desire should. be made more effective, they are our masters. But it is the mark of a master to pay, not to be paid--to pay the piper and call the tune, not to put himself in the piper's position and send round the hat. Ministers are quite rightly paid, because they are the servants of the nation—their official title is " the King's servants," and the King here stands for the whole Commonwealth. The House of Commons hitherto have been, and in our opinion ought to be, regarded as the representatives of the masters, and therefore not in the position of civil servants. Now they will pass from their proud position into that of some- what poorly-paid officials—officials drawing the pay of middle-aged lower division clerks or small inspectors.
So important are the functions and duties of a Member of Parliament that we can find no satisfactory answer to the criticism, " If the services of a Member of Parliament are worth anything they are certainly worth more than £400 a year." If we are to begin estimating the value of the work done by Members of Parliament it must surely be put as high as that of the work done by a County Court judge or a Commissioner of Inland Revenue. Though we greatly dislike increasing the burdens of the taxpayer, we say in all seriousness that we would rather see Members given £1,000 a year than £400. Some time ago, when £300 seemed likely to be the figure fixed upon, we pointed out that £600 should be the minimum if pay- ment were decided upon. As it is, we are glad that at any rate £400 has been chosen, for it appears to us the very least upon which a Member of Parliament, even though a working man, can live in independence while he is in the Commons. Remember that a Labour Member of Parliament without private means is pretty sure to be married, and that he will either have to live a great part of his life away from his own home, and under very expensive conditions, including heavy travel- ling expenses, or else must bring his wife and family to London for, say, five months, and then go back again to his home in the country at the end of the Session—a source of large expenditure, however careful a man may be. We can well believe that a married Member of Parliament with £400 a year would be worse off than a superior artisan living at home on £150 a year. A cynic will probably tell us, however, that we need. not trouble ourselves over this matter, and that, once Members of Parliament have begun to pay themselves, there i: not the slightest chance of the salaries stopping at £400 a year. As in America, the Members having once put their hands to the Treasury plough, and having complete power over that institution, will very soon, probably by a series of steps, raise their salaries to the highest point which the public will endure. If the American representatives vote themselves salaries and allow- ances, office accommodation and travelling expenses, which amount to very nearly £2,000 a year, our Members will be pretty sure ultimately to put their pay up to £1,000 or £1,200 a year. Members of the House of Lords, stung by the unfair and offensive things that have of late been said in regard to their House, may At any rate, mere bigness is not an evil provided the big concern does not attempt to employ unjust methods of carrying on its business. The real evil of the American Trust system is that the Trusts, or many of them, adopt business methods which the vast majority of people regard as essentially unfair.
The history of the Standard Oil Trust is a case in point. It had its origin more than forty years ago in an arrange- ment between a few company promoters and various railway companies. The company promoters acquired a, controlling interest in certain oil wells and refineries, and, by methods which have never been disclosed, persuaded the railway companies to charge higher rates to their competitors than to themselves. Not only so, but the companies actually agreed that the excess rates which were charged upon the firms outside this combination were to be handed over to the combination. In other words, the incipient Standard Oil Trust grew rich by levying a rail- way toll upon its competitors. In 1881 an official of the Pennsylvania Railroad testified before the New York Legislative Committee that in eighteen months the Standard Oil combination had received rebates from the railroads to the amount of 10,000,000 dols. This pro- ceeding alone is so palpably unfair that it is sufficient to condemn American Trust methods. Necessarily, however, the evil did not end with the toll thus levied. The com- peting concerns quickly found that it was quite impossible for them to carry on business in face of such a railway preference. They also found that no one was willing to buy their undertakings except the Standard Oil Trust, and consequently had to sell to the Trust on such terms as the Trust chose to impose. By this method the Trust obtained control of the principal sources of supply. It also, since it was making enormous profits, easily obtained command of unlimited capital. It was thus able to develop the business—in particular by laying down pipe lines, and generally by improving methods of manufacture. The defenders of the Trust are fond of pointing to these improvements as a proof of the beneficial work that the Trust has accomplished. There is not the slightest evidence, however, that the same advance would not have been secured by ordinary methods of carrying on business. Invention is not slow in the United States, and most of the improvements introduced into the oil industry are the results of American inventiveness and not of Trust methods.
The whole purpose of the Standard Oil Trust, as of other Trusts in the United States, has been to acquire a monopoly, and it is this purpose which distinguishes a Trust from an ordinary big manufacturing concern. Why the Trust system as thus defined should have taken so much stronger root in the United States than in the United Kingdom is one of the most interesting of modern problems. The tariff undoubtedly accounts for part of the difference. It is clearly much more difficult to establish a Trust in a country subject to foreign competition than in a country from which foreign competition is excluded by means of a tariff. This consideration, however, does not apply to the Standard Oil Trust. That Trust depends upon the monopolization of the natural sources of supply, and is in no way shielded from external competition, for at the present time petroleum, both crude and refined, enters the United States free of duty. When, however, we note the part played by the railways in building up the monopoly of the Standard Oil Trust, it becomes clear that another factor in England's favour is the relative smallness of her area and the length of her coast line. Railways in the United Kingdom cannot dominate the commercial life of the country as they can in the United States, for the simple reason that at most important indus- trial centres sea. carriage has a controlling influence over the rates that can be charged for rail carriage. These two factors—the absence of tariffs and the presence of sea carriage—make it difficult for any body of capitalists, however enterprising and however un- scrupulous, to establish Trusts in the United Kingdom on the American model. There is a further factor on which we insist with a little more hesitation, but to which we attach very great importance. This is the personal or moral factor. Broadly speaking, the Englishman in his business relations never forgets the good old English maxim of " Live and let live," and rarely drives a bargain to the extreme point which an American regards as justifi- able. If one talks to an ordinary English business man, whether engaged in commerce or in manufacturing or in agriculture, one finds that he is instinctively actuated by the feeling that a bargain, to be a good bargain, must be profitable to both sides. The Americans, unless their view of life is altogether misconstrued by those who have dealings with them, act on the strict interpretation of the hard legal doctrine, Caveat employ. In making this contrast we do not wish to impute any general sin to the American people, or any excess of virtue to our own countrymen. We merely wish to point out that there is a broad difference of outlook upon commercial transactions, and this difference is of a character to make public feeling in England instinctively revolt against any- thing in the nature of Trusts. In the long run this is probably our best safeguard against the American Trust system, and we may add it is also our best safeguard against. the American tariff system.
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