Chapter IV. The Spirit Of Gladstonian Finance. (1859-1866)
Nations seldom realise till too late how prominent a place a sound system of finance holds among the vital elements of national stability and well-being; how few political changes are worth purchasing by its sacrifice; how widely and seriously human happiness is affected by the downfall or the perturbation of national credit, or by excessive, injudicious, and unjust taxation.—Lecky.
I
In finance, the most important of all the many fields of his activity, Mr. Gladstone had the signal distinction of creating the public opinion by which he worked, and warming the climate in which his projects throve. In other matters he followed, as it was his business and necessity to follow, the governing forces of the public mind; in finance he was a strenuous leader. He not only led with a boldness sometimes verging on improvidence; apart from the merits of this or that proposal, he raised finance to the high place that belongs to it in the interest, curiosity, and imperious concern of every sound self-governing community. Even its narrowest technicalities by his supple and resplendent power as orator were suffused with life and colour. When ephemeral critics disparaged him as mere rhetorician—and nobody denies that he was often declamatory and discursive, that he often over-argued and over-refined—they forgot that he nowhere exerted greater influence than in that department of affairs where words out of relation to fact are most surely exposed. If he often carried the proper rhetorical arts of amplification and development to excess, yet the basis of fact was both sound and clear, and his digressions, as when, for example, he introduced an account of the [pg 055] changes in the English taste for wine,[38] were found, and still remain, both relevant and extremely interesting.
Creation Of Public Interest
One recorder who had listened to all the financiers from Peel downwards, said that Peel's statements were ingenious and able, but dry; Disraeli was clever but out of his element; Wood was like a cart without springs on a heavy road; Gladstone was the only man who could lead his hearers over the arid desert, and yet keep them cheerful and lively and interested without flagging. Another is reminded of Sir Joshua's picture of Garrick between tragedy and comedy, such was his duality of attitude and expression; such the skill with which he varied his moods in a single speech, his fervid eloquence and passion, his lightness and buoyancy of humour, his lambent and spontaneous sarcasm. Just as Macaulay made thousands read history who before had turned from it as dry and repulsive, so Mr. Gladstone made thousands eager to follow the public balance-sheet, and the whole nation became his audience, interested in him and his themes and in the House where his dazzling wonders were performed. All this made a magnificent contribution to the national spirit of his time. Such extraordinary power over others had its mainspring in the depths and zeal of his own conviction and concern. “For nine or ten months of the year,” he told Sir Henry Taylor in 1864, “I am always willing to go out of office, but in the two or three that precede the budget I begin to feel an itch to have the handling of it. Last summer I should have been delighted to go out; now [December] I am indifferent; in February, if I live as long, I shall, I have no doubt, be loath; but in April quite ready again. Such are my signs of the zodiac.” The eagerness of his own mind transmitted itself like an electric current through his audience.
Interest abroad was almost as much alive as the interest felt in England itself. We have already seen how keenly Cavour followed Mr. Gladstone's performances. His budget speeches were circulated by foreign ministers among deputies and editors. Fould, one of the best of Napoleon's finance ministers, kept up a pretty steady correspondence with the [pg 056] English chancellor: appeals to him as to the sound doctrine on sugar drawbacks; is much struck by his proposals on Scotch banks; says mournfully to him (April 28, 1863), in a sentence that is a whole chapter in the history of the empire: “You are very fortunate in being able to give such relief to the taxpayers; if it had not been for the war in Mexico, I should perhaps have been able to do something of the same sort, and that would have been, especially in view of the elections, very favourable to the government of the Emperor.'”
When Mr. Gladstone came to leave office in 1866, he said to Fould (July 11): “The statesmen of to-day have a new mission opened to them: the mission of substituting the concert of nations for their conflicts, and of teaching them to grow great in common, and to give to others by giving to themselves. Of this beneficent work a good share has fallen to the departments with which we have respectively been connected.” Fould had already deplored his loss. “I counted,” he says, “on the influence of your wise doctrines in finance, to help me in maintaining our country in that system of order and economy, of which you were setting the example.” Alas, in France and in continental Europe generally at that time, selfish material interests and their class representatives were very strong, popular power was weak; in most of them the soldier was the master. Happily for our famous chancellor of the exchequer, England was different.
It has often been said that he ignored the social question; did not even seem to know there was one. The truth is, that what marks him from other chancellors is exactly the dominating hold gained by the social question in all its depth and breadth upon his most susceptible imagination. Tariff reform, adjustment of burdens, invincible repugnance to waste or profusion, accurate keeping and continuous scrutiny of accounts, substitution of a few good taxes for many bad ones,—all these were not merely the love of a methodical and thrifty man for habits of business; they were directly associated in him with the amelioration of the hard lot of the toiling mass, and sprang from an ardent concern in improving human well-being, and raising the moral ideals of mankind. In his “musings for the good of man,” Liberation of Intercourse, [pg 057] to borrow his own larger name for free trade, figured in his mind's eye as one of the promoting conditions of abundant employment. “If you want,” he said in a pregnant proposition, “to benefit the labouring classes and to do the maximum of good, it is not enough to operate upon the articles consumed by them; you should rather operate on the articles that give them the maximum of employment.” In other words, you should extend the area of trade by steadily removing restrictions. He recalled the days when our predecessors thought it must be for man's good to have “most of the avenues by which the mind, and also the hand of man conveyed and exchanged their respective products,” blocked or narrowed by regulation and taxation. Dissemination of news, travelling, letters, transit of goods, were all made as costly and difficult as the legislator could make them. “I rank,” he said, “the introduction of cheap postage for letters, documents, patterns, and printed matter, and the abolition of all taxes on printed matter, in the catalogue of free trade legislation. These great measures may well take their place beside the abolition of prohibitions and protective duties, the simplifying of revenue laws, and the repeal of the Navigation Act, as forming together the great code of industrial emancipation.”[39]
The True Social Question
It was not unnatural that fault should be found with him for not making a more resolute effort to lighten the burden of that heavy mortgage which, under the name of the National Debt, we have laid upon the industry and property of the nation. In 1866 he was keenly excited by Jevons's argument from the ultimate shrinkage of our coal supply, and he accepted the inference that we should vigorously apply ourselves by reduction of the debt to preparation for the arrival of the evil day. But, as he wrote to Jevons (March 16, 1866), “Until the great work of the liberation of industry was in the main effected, it would have been premature or even wrong to give too much prominence to [pg 058] this view of the subject. Nor do I regard that liberation as yet having reached the point at which we might say, we will now cease to make remission of taxes a principal element and aim in finance. But we are in my judgment near it. And I am most anxious that the public should begin to take a closer and more practical view of the topics which you have done so much to bring into prominence.”
He was always thinking of the emancipation of commerce, like Peel and Cobden. His general policy was simple. When great expenditure demanded large revenue, he raised his money by high income-tax, and high rates of duty on a few articles, neither absolute necessities of life nor raw materials of manufacture. He left the income-tax at fourpence. In 1866, he told the House that the new parliament then about to be elected might dispense with the tax. “If,” he said, “parliament and the country preferred to retain the tax, then the rate of fourpence is the rate at which in time of peace and in the absence of any special emergency, we believe it may be most justly and wisely so retained.” While cordially embracing Cobden's policy of combining free trade with retrenchment, he could not withstand a carnal satisfaction at abundant revenue. Deploring expenditure with all his soul, he still rubs his hands in professional pride at the elasticity of the revenue under his management.