TOPICS OF THE DAY.
THEGROWTH OF THE NATION'S WEALTH. THE most striking comment yet made on Mr. Chamber- lain's policy is one not made consciously or directly, or by any partisan, but accidentally or autcpnatically, and certainly quite impartially, by a great public office. The Annual Report of the Commissioners of Inland Revenue, issued on Wednesday, shows with a quite astonishing degree of completeness the folly and fatuity of the Chamberlain proposals. If fiscal Blue- books were read by the electors, this last addition to their number could not but have the most crushing effect. It is the final answer to the plea of the ProteCtionists. Let us see how this comes about. If you search the Pro- tectionist plea to the uttermost—that ocean of error of which "the Chamberlain policy" is a gulf or inlet—you will find that it rests on the allegation that Free-trade is ruin- ing the country. The Protectionist asserts that we are "bleeding to death." He backs that assertion up by official statistics showing that every year we buy abroad a great deal more than we sell. Our imports greatly exceed our exports. When the Free-trader answers that the thing is impossible ; that trade is an exchange, and money only the token of exchange and the measure of value ; that the apparent want of balance is due to the imperfection of the statistics; and finally, that we may be perfectly happy about our seeming to take in more goods than we send out, since the foreigner will not go without payment, the reply of the Protectionist is prompt. He answers in effect I admit that the foreigner will not go without payment, but that does not help you. We are living on our capital. The accumu- lated wealth of the nation is every year being drained away to pay for our excess of imports over exports. We are, that is, bleeding to death, and unless this process is stopped the spendthrift's inevitable crash must soon be upon us. Some fine day we shall discover that our precious wealth has been all drained away. When that has happened the foreigner will send us no more imports, and we shall be left bled white as veal in our congested little island, with an idle and pauperised population, without industries and without hope. That is an appalling picture. If it is true in fact, and if under Free-trade our capital is being gradually "sold out" in order to pay for our imports, our position is indeed desperate, and demands an immediate remedy. Fortunately, it is possible to bring the matter to a test, and to decide the fiscal controversy for those who have ears to hear and eyes to see. For the last twenty- five years—i.e., ever since the Fair-trade movement began— we have been told that the bleeding process has been going on. Let us, then, look at the figures of national income, and compare those of to-day with those of the past. If our national income—i.e., the incomes of the inhabitants of the United Kingdom—has gone down, then it must be ad- mitted that we have been living on our capital. If, on the other• hand, the national income has gone up, then it is absolutely impossible that we can have been living on our capital. A nation cannot keep selling out stock, and yet find itself richer. There are, of course, no returns to show the income of all• the inhabitants of the nation, but owing to the Income-tax we are able to ascertain and compare with certainty the incomes of a large portion of the population,—i.e., of those with whom the Commissioners of Inland Revenue have dealings. Know- ing, as we do, that wages of all kinds have increased, we may be sure that if the incomes within the purview of the Income-tax Commissioners have also gone up, the nation is not poorer but richer than it was.
Let us turn to the figures supplied by the Board of Inland Revenue, and apply the test. The Commissioners in their Report have selected for comparison the incomes brought under 'review in a certain series of years,--i.e., in the years 1868-69, 1875-76,1894-95, and 1901-2. In 1868-69 the gross income brought under the review of the Department was £398,794,000; in 1875-76 the figures were £544,376,000, an increase of .2145,582,000, or 36-5 per cent. ; in 1894-95 the gross income was £657,097,000; in 1901-2 it was £866,993,000, being an increase of £209,896,000, or 31-9 per cent. on the gross income. [The Commissioners also supply the figures for the income on which tax was received, but we do not give these, as, though they are also favourable to the Free-trade contention, they are not useful for purposes of comparison, owing to the exemptions from the full tax, which have been a marked featureof recent years. The figures as to gross income under review. are the only figures which can be employed for purposes of 'Com- parison.] In other words, then, during the period when the "bleeding-to-death "-and-living-on-our-capital process has been, according to the Protectionists, fully at work the gross income under the review of the Board of Inland Revenue has risen from £544,376,000 in 1875-76 to .2866,993,000 in 1901-2. If this is living on our capital, the process is surely one which we ought all to follow. But what makes these figures the• more remarkable, as the Commissioners point out, is that the years with which the present state of things is compared were years of abnormal prosperity. "It must be remembered," says the Report, "that in the years 1868-69 to 1875-76 an abnormal impetus had been given to our trade by 'various circumstances,—by the enor- mous demands of the United States of America for steel and iron in connection with the extension of her railways, and other works of rehabilitation following on the Civil War; by the interruption of Continental competition due to the Franco-German War; and by the numerous foreign loans raised in this country, of which much was expended on products and manufactures of the United Kingdom. In the period 1894-95 to 1901-2 the country has enjoyed no such special advantages. On the contrary, it has been itself engaged in war, which, though it may have stimu- lated trade in some directions, has certainly depressed it in others." If the returns are examined in detail, the im- pression, instead of becoming less, becomes more favour- able to the Free-trade contention. The rate of increment in incomes under Schedule D—i .e., trades and professions —is higher than that in all incomes taken together, which shows that the traders have not been "bleeding to death:" Very interesting, too, is the table as to investments abroad. We are perpetually being told that every year more and more of our foreign investments are being thrown out to the wolves of foreign Protection,—i.e., have to be sold to pay for our imports. What are the facts ? A table in the Blue-book which presents a survey of such, in- come for a period of twenty years shows that the amount has almost doubled, rising from £31,890,000 in 1882-83 to £62,550,000 in 1901-2. Clearly there is not much "bleed- ing to death" going on here. The figures of the Death.. duties, owing to the recent reorganisation of those imposts, are not available for comparisons over a long period, but, as far as they go, they show -a constant accumulation of capital to be taking place in these islands. In spite of the fact that arrangements for avoiding Death- duties legally are far more common than formerly, the amount of wealth liable to the duties steadily increases.
We have dealt as yet only with the evidence that we are not living on our capital afforded by the Income-tax returns. If, however, as the Standard points' out in its excellent leading article of Thursday, we go to the returns dealing with the Bankers' Clearing-house, British shipping, savings-banks, and the returns as to Friendly Societies, the same story is told,—i.e., of increasing capital. The Bankers' Clearing-house figures are now nearly double what they were in 1871. Our shipping returns for 1902 are ten millions. Thirty years before they were only six millions. The savings-bank deposits have doubled in twenty years, while those of the Friendly Societies have trebled. We cannot, however, to-day do more than just touch on these signs of prosperity, and must be content with pointing out that the Income-tax figures are an absolute an conclusive .proof that we are not living on our capital and "bleeding to death," but just the reverse. No doubt the Protectionist, driven from his " bleeding-to-death " position, as he must be, will say that even if Free-trade has not impoverished but enriched us, Protection would do the same, only far more quiakly ; and that if we want to reach heights of prosperity yet undreamt of, we must follow Mr. Chamberlain's moving light across the fiscal morass. Strange as it may seem to the Protectionist, we prefer the smooth road which we are already on—a road which we know is going in the right direction—:to any so-called short-cut across a doubtful beg, the only recommendation of which short-cut is that it has been used by a great many foreigners. Unless we are greatly mistaken, this will also be the answer of the nation. Every day the invitation to try the Protec ort.iiit short- cut becomes less and less attractive to the . ople of this country. Dr. Johnson once said that "no u n was ever written down but by himself." Itblooks very much as if Mr. Chamberlain with his millions of leaflets were going to afford us a very significant illustration of this shrewd saying.
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