SIR WILLIAM HA.RCOURT IN THE CITY.
MOST people, and especially most Liberals over fifty, will read Sir William Harcourt's speech ( f Wednesday in the City with hearty gratification. It is so pleasant to hear the old ideas on finance and economics and national prosperity set forward once more by a Chancellor of the Exchequer, and in a tone of authority. The world is not changing so fast as is imagined, but the audible classes have contracted such a habit of " testing" everything, as they say, that is, of denying the truth of every assumption, that the mind of the listener grows bewildered, and he begins to doubt whether even arithmetic can be permanently relied on. Everything that has been is pronounced a failure, and we are to have, besides a new Constitution, a new finance, new expenditure on new objects, a new cur- rency, and a new political economy. It is pleasant to see that there are Liberals left who are not carried away by such crazes. Sir William Harcourt is a Liberal, and, in the opinion of many, something more, and, at all events, he leads the Liberals, the Radicals included, in the House of Commons, and he has produced a Budget which does not displease Socialists ; yet on Wednesday he uttered a complete profession of faith in the ideas which for fifty years have governed his Department. He admitted "the depression" and his own ignorance as to its cause, which he considered still as much hidden as the causes of the weather, but he maintained that the depression was universal, and that the British fiscal policy of the last half- century was approved by its marvellous results. No nation had advanced in material prosperity like our own, or had made greater and more solid progress. No nation possesses such a wealth of credit. In no nation do the resources of the people respond so easily to any unusual call. The commercial, the fiscal, the monetary principles of the -United Kingdom have all, when tested by their success, been shown to be accurate. "Your commercial principles have built up a trade unexampled in the history of the world and without parallel in any other State. Your fiscal principles have enabled you to raise a revenue greater than almost that raised in any other State, and certainly with less of personal oppression and individual suffering. Your monetary principle has made you the great money market of the world, and, in my opinion, you will still remain so." Consequently, "there is nothing to do but to extend, to continue, and to maintain, a policy which has built up our commercial greatness, and which has sustained, and still sustains, the vast and unequalled credit of the British Empire." That is clear speaking at any rate, and must somewhat disconcert those among Liberals who maintain that our fiscal policy at all events should be thrown into the crucible ; that there is a "new economy" more righteous than the old—a better multiplication table, in fact—or that it would be safe to make a vast experiment in the direction of an expanded currency before we are certain either what the result would actually be, or what result beyond the vague one of "better times" we are supposed to be seeking.
It is all so true, too. If we were Radicals and wished to make a defence for an unchecked or little-checked House of Commons as the arbiter of British destinies, we should base the argument entirely upon its success in the region of economics. Led, no doubt, and in part controlled, by a succession of men of financial genius, the House has developed a physical prosperity absolutely unprecedented in history. All the efforts of foreign statesmen to " foster " commerce, efforts often quite mar- vellous in their energy and range, have failed utterly to develop the commerce which English statesmen have developed simply by removing the shackles. No naval conscription produces the naval force which we have drawn together since we gave up even the occasional use of the pressgang. The most elaborate contrivances for fostering shipping have been tried in every maritime country, and have failed. Our statesmen have but taken off fetters, and lo ! the carrying trade of the world is practically in our hands. The other nations which found colonies load them with laws intended to keep their trade ; we not only leave them free to buy and sell where they will, but we allow them to tax our own goods, and every British Colony is growing into a wealthy British State. The financiers of the Continent and America show the highest ability in devising new taxes, and their Treasuries are empty or disturbed by fears ; our Chancellors of the Exchequer have devoted themselves to taking taxes off, and the Treasury is so full, and every year we conse- quently so reduce the burden of the Debt, that the price of British Consols is the amazement, and sometimes the despair, of all timid investors. This fullness, moreover, has not been obtained at the cost of harass- ing the community. So perfect is now the system of taxation, so easy is it to meet all demands, that a new danger has arisen,—the community once so impatient for reductions, now feeling no pressure, is tempted to look on the State as possessing a bottomless purse, and. clamours every year for larger outlays, which are never seriously refused. So long as the line of policy which, as Sir William Harcourt says, Peel invented and Gladstone "consummated," is adhered to, the House of Commons, on many matters so fickle, always supports the Ministry. We have not spared the representatives on occasion, but we cannot remember a case in which, in financial affairs, they have for the past fifty years given way to a craze or have refused to follow the guidance of wise financiers. They have been, as a collective body, as free from currency dreams as if they were all City bankers ; while if they had been philanthropists, they could hardly have shown them- selves more disinterested. Middle-class themselves, they levy the most searching and severe Income-tax yet levied in a prosperous State ; representing the workmen, they never- theless place the next heaviest taxes upon their constituents' only luxuries,—liquor and tobacco. That they have been successful the whole world acknowledges, and they have also been what democracy is supposed never to be, con- sistent, reasonable, and free from any impulse of self- seeking. Their only apparent unfairness, the exemptions from the Income-tax, may have been dictated by a wish for popularity, but at least it has been recommended by acute financiers, and accepted by the leaders of all classes and both parties in the State.
The success of our financial management is mainly due of course to the national good sense in judging of matters which the nation is able, and knows it is able, to under- stand ; but our political system, it is evident, also protects finance. All Budget questions are practically left to the Cabinet, and the Cabinet alone. No private Member can propose a tax, or indeed a new expenditure, and we create no Budget Committee, such as exists in France, to divide responsibility with the Govern- ment. The Cabinet is practically absolute in the matter, and can, within certain limits, carry out its policy without fear,—a fact which makes the Chancellor- ship of the Exchequer tempting to the very strongest statesmen. To lead the House on finance is not only to occupy a great position, but to have a fair chance of carrying out one's own ideas in a very large and visible way. That reward is only partially present in France, where the Budget Committee constantly throws over Cabinet proposals ; and has no existence in America, where the Secretary of the Treasury, besides being directly under the authority of the President, has to carry all new proposals through a Congress in which he does not sit, only, when he has carried them, to see them nullified by a body, the Supreme Court, which has no responsibility for the national finances. No Cabinet really respon- sible for finance could have borne to see the mad waste on pensions of the last few years of Republican majorities, or would have failed to resign if a Court had declared that Congress had no power to levy an ordinary Income- tax. A great financier in the Government is almost impossible, either in France or in America; he would find himself so hampered by bodies as powerful as himself, yet either, like the Budget Committee in France, entirely irresponsible, or, like Congress, so independently respon- sible that it regards a suggestion from the Treasury as it might a suggestion from a financial newspaper, and goes on its own way, attentive or indifferent, as it pleases. The English system, on the other hand, brings the strongest financiers to the top, forces on the Cabinet complete respon- sibility, and enables the Commons, once they have accepted a system, to carry it steadily and rapidly into action. This system has its own dangers, no doubt, and very serious ones. The House of Commons in this department is prac- tically unchecked, and may, of course, adopt a ruinous tax, or abolish necessary sources of income, or plunge all com- merce into confusion by an unwise alteration in the cur- rency; but during the past fifty years it has, as Sir William Harcourt says, done none of these things, and, as we would add, has had but little temptation to do them. For there is no subject except foreign politics upon which the body of the people show such a wise spirit of confidence in their chiefs. They ordered the taxes to be taken off food, and in return for obedience accepted Free-trade ; but, except in rare moments of excitement, leave finance to the experts, and hardly care how the revenue is raised. Neither party, that we can see, ever refused a new tax, or is grateful for the remission of an old one ;—and that after all may be the secret of British financial success. An absolute House of Commons is on this subject guided by experts alone.
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