MR. GLADSTONE AND HIS DISCIPLES.
MANY of those who differed from Mr. Gladstone's Irish policy are likely before long to be fighting his successors in the Liberal Party upon the same ground. Yet where other principles of statesmanship are concerned these successors are pursuing lines diametrically opposed to those which he followed. The young and " forward " section of the party seems to be the most retrogressive along the paths of Liberalism by which he led his party, though sometimes that section is the keenest to take his name in vain. Their innocence in economics is only equal to their ignorance of the political history of the country. Upon nearly every page of his published speeches on finance Mr. Gladstone out of his own mouth refutes the argu- ments and shatters the policy of his self-styled dis- ciples. Opposition to the fallacies of Tariff Reform has led them, fortuitously rather than by knowledge or conviction, to be faithful to his principles in dealing with Customs duties on foreign imports. So much may be allowed to them, and thankfully allowed, since Mr. Glad- stone's greatest triumphs as a finance Minister lay in putting into practice the theories of the Free Trade School. But these, whom we would rather call anti-Tariff Reformers than Free Traders, soon part company with Gladstonian principles, as any of the speeches can show. His condem- nation of the payment of members has of late been quoted of ten enough ,and one can hardly imagine his present successor at the Exchequer giving vent (say in a speech on licensing) to such a generous expression as "that incomparable and most wholesome article which we term bitter beer," a rotund phrase used by Mr. Gladstone in 1862 in reference to the Hop Duties. But narrowing the issue down to finance one finds that he put into words many principles of expenditure and taxation which can no more be brought into any sort of harmony with the Government's finance than can Mr. Chain- berlain's fiscal views with those of Richard Cobden. In introducing his Budget in 1863 Mr. Gladstone discussed the incidence of the income-tax, and referred to the incomes of artisans' families which exceeded the taxable standard, though the income of the head of the family might not reach it, and said: "It has been felt by the Legislature that to investigate and ascertain the separate earnings, such as they may be, of the wife or children would entail an inquisition quite intolerable." What scruples now restrain the inquisitions of the various Inland Revenue Departments which shower " forms " upon the bewildered husbands and wives who are subjects of the super-tax and other sources of the Treasury's income? On no question of taxation was Mr. Gladstone more instructive than upon the income-tax. Time after time he reiterated that it should be a reserve which could and should be remitted as nearly as possible to vanishing point in prosperous days. Herein he found objections to the many plausible exemptions and differentiations which were in force or proposed. He desired "to mark it effectually as a temporary tax," and therefore be objected to elaborations, experiments, differentiations, and such like "pranks," What a. wholesome reminder of a plain fact is the following sentence, referring to persons claiming exemptions, and to Ireland (for, by the way, the advantages of Ireland over the United Kingdom in matters of taxation were quite apparent to Mr. Gladstone) :— "Exemptions does not mean that we have got a bottom- less purse, and that we can dispense exemptions to one man without injuring another ; no, Sir, the exemption of one man means the extra taxation of another, and the exemption of one country means the extra taxation of another," Again, what democratic Chancellor of the Exchequer would venture to-day to widen the sense of reeponsi- bility by lowering the point at which small incomes are taxable Yet in 1853 Mr. Gladstone proposed "that incomes between £100 and £150 should be liable at the' rata of 5d. in the pound " ; and in 1863, after reviewing the history of the income-tax and painting out the great increase in the number of incomes up to £200 a year, he said: "As regards the amount at which the application of the income-tax commences, in the opinion of the Govern- ment it is justly fixed by the present law at the sum of £100," and he recommended that point for retention. He never regarded this source of revenue apart from the broad principles of Free-Trade which he was so success- fully developing. That Free Trade and economy are complementary the one to the other was to him an axiom, though it is one which is flouted by the present Govern- ment. For a hundred reasons he was convinced that Free Trade was the best fiscal policy for the country, and he took an unfeigned delight in substituting a few hundreds of thousands of pounds of direct taxation for the same amount of indirect taxation which laid burdens of millions upon the freedom of commerce and exchange. His corollary was that those who benefited most directly by the remission of tariffs should, if they could afford to pay anything, contribute to the revenue directly. In 1853 he explained, with his astonishing lucidity in dealing with figures, how by the remission of £12,000,000 of protective duties incomes between £100 and £150 had benefited by 6 or 7 per cent., and with a 5d. income-tax these incomes would still be worth 4 per cent. more than before the remissions, and "her Majesty's Government think that in justice we ought to make this demand upon them." And this was long before the same people received free education for their children and other benefits from the taxes. In the same speech he laid down the principle "that the income-tax ought to be marked as a temporary measure . . . and, above all, that it should be associated in the last term of its existence, as it was in its first, with those remissions of indirect taxation which have so greatly redounded to the profit of the country." As to the sources of income he sympathized with the theory of relieving industry, and brains, but how little he believed in the specious rhetoric of to-day upon earned and unearned incomes is to be learnt from the following quotation from his Budget speech of 1853 :— " Some persons would place industrious incomes on the one side and lazy incomes on the other. Now, in my opinion, a great deal may be said in favour of that doctrine, but observe the effect it must have with regard to the public creditor. The landholder must exert himself with respect to his land, tho house- holder as to his house, and the mortgages must either look out himself, or pay his lawyer for looking out, to ascertain the safety of the investment proposed for his money ; and I do not believe there is any inoome which is perfectly and entirely a lazy income, except the income of the fundholder. . . . I conceive that it is unsound in principle to levy the revenue of the country in sub- stance by a tax upon its property, for I think that income is, in the main, the proper basis of taxation, . . . I frankly own my total inability to meet the feeling which has been excited upon the subject of the income-tax by any attempt to vary the rate of the tax according to the source of the income; nay, more, I think I should be guilty of a high political offenee if I attempted it."
Yet Cabinet Ministers have boasted of their intention to commit this "high political offence." Again, what sympathy could the Socialist allies of this Government have found in the Chancellor of the Exchequer who said in 1863 :— "Indirectly, indeed, the mere augmentation of capital is of the utmost advantage to the labouring class, because that augmenta- tion cheapens the commodity which, in the whole business of production, comes into direct competition with labour. . . . It is a matter of profound and inestimable consolation to reflect that, while the rich have been growing richer, the poor have become less poor. . . . It must always be borne in mind that when we speak of the expenditure of the Government we speak of that which is taken in a great measure out of the earnings of the people, and which forms in no small degree a deduction from a scanty store."
Mr. Gladstone was alarmed at the increase of taxation in those days. What would have been his horror at the lighthearted spendthrifts who call themselves his disciples! He said in 1860, when accounting for an expenditure of 871 millions in 1859-60: "I am not satisfied with the state of public expenditure and the too rapid rate of its growth," He compared the relative growths of wealth and of taxa- tion in the ten years before the Crimean War. "The increase in her the country's] wealth was apparently at the rate of 12 per cent.. and the growth of her expenditure at the rate of 8t per cent." This to his mind represented progress and real prosperity : it is the reverse of the present-day theories of Radicals and Tariff Reformers that a nation can be taxed into prosperity. Ho was including local expenditure and that for which Parliament was directly responsible. The old wail, Privatinx opulentia, publice egestas, had no terrors for him. It would be profitable if space allowed to compare the relation between the growths of wealth and expenditure after 1853. which he deplored, and the same growths during the years of this century. In 1862 he said : " In years of peace . • . you expect to have, and if finance is prudently conducted you will usually have, a considerable surplus of revenue available for the reduction of public debt and leading to a, diminution of taxation." Have we seen such diminution under the policy of the latter-day Liberals ? Space forbids the quotation of a tithe of Mr. Gladstone's strictures upon high national expenditure and taxation. Let us give two examples. In 1863 he said :— "There grows up what may be termed a spirit of expenditure ; a desire, a tendency prevailing in the country, which, insensibly and unconsciously perhaps, but really, affects the spirit of the people, the spirit of Parliament, the spirit of the public departments, and perhaps even the spirit of those whose duty it is to submit the Estimates to Parliament, and who are most specially and directly responsible for the disbiumements of the State. When this spirit of expenditure is in action, we must, expect to find some relaxa- tion of the old principle4 of prudence and rules for thrift which direct and require that whatever service is to be performed for the publics should be executed in the most efficient manner, but like- wise at the lowest practicable cost."
In 1861 he said :— " I am deeply convinced that all excess in the public expendi- ture beyond the legitimate wants of the country is not only a pecuniary waste . . . but a great political and, above all, a great moral evil. It is characteristic, Sir, of the inischiefs which arise from financial prodigality that they creep onwards with a noise- less and a stealthy step ; that they commonly remain unseen and unfelt until they have reached a magnitude absolutely over- whelming."
There is irony, bitter enough, in such condemnation, from such a source, of our present finance ; and it is strange that the few remaining politicians who worked with Mr. Gladstone can suffer the betrayal of his principles by their party. As for the young, headstrong "forwards ' we can only infer either that they are totally ignorant of his principles or that they do not care a fig for them. Such is the homage of the Liberal Party to the greatest Free Trade financier of the country.
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