| Expenditure 1897–98 | Estimated Expenditure 1910–11 | |
|---|---|---|
| Army | £19,330,000 | £27,760,000 |
| Navy | 20,850,000 | 40,604,000 |
| Civil Service | 23,446,000 | 42,686,000 |
| National Debt and other services | 25,000,000 | 36,945,000 |
| Post Office, Customs and Inland Revenue | 14,310,000 | 23,852,000 |
| Total | £102,936,000 | £171,847,000 |
These totals represent an expenditure per head of the total population of £2, 11s. in 1897–98 and of £3, 16s. in 1910–11.
We must remember, however, that the expenses of the Post Office are more than covered by the revenue derived from that institution, and that much of the addition to the Civil Service estimates is due to Old Age Pensions and to the increased provision for education. “The Civil Service charge has risen as the natural result of multiplied and enlarged activities, and advance has been specially heavy in the last two decades, but the Civil Service includes education, poor law, the improvement of roads and health, and many other services which conduce to national well-being. It stands on a very different economic level from armaments, which represent {227} the workings of international discord and jealousy.”[64] Yet there is no doubt that in all departments the public money is being expended more freely and extravagantly than was the case some twenty-five years ago.
The portentous increase in naval expenditure must be ascribed partly to the Boer War, but chiefly to our recent rivalry in naval construction with Germany, and our adoption of the Dreadnought type of battleship. Army expenditure increased between 1897 and 1899 through a series of “little wars” in Egypt and India, and since the South African War we have been practically maintaining a war establishment in time of peace.
Thus we see that owing to the growth of armaments and fresh expenditure on social needs the taxpayer has to endure a heavy burden, which threatens to grow as the rate of increase among the population slackens. Any expenditure beyond what is required for military efficiency and social well-being is not only wasteful but actually injurious to our industry and commerce, since it diverts capital from productive channels. There is no justification for maintaining taxation at a war level in time of peace. As Mr Gladstone said, money is best left to fructify in the pockets of the people; or, to quote his great opponent, Lord Beaconsfield, who was always in agreement with him on this point, “the more you reduce the burdens of the people in time of peace, the greater will be your strength when the hour of peril comes.”
[64] Economist, Nov. 19, 1910.
§ 4. Free Trade and Protection. The Colonies
Although the controversy is still unsettled, it is at present, for various reasons, somewhat in abeyance. Old Age Pensions, which were to have been provided out of the revenues of the tariff, have been granted without recourse to protection, and other questions have occupied the political field at home, while the recent great expansion both in home and foreign trade seems, in the eyes of the public, to have falsified the more gloomy predictions of the “Tariff Reformers.”
The supporters of the movement emphasize the growing political and commercial importance of our colonies, and the rapid advances made by Germany and the United States in neutral markets, and they point to the tariff walls which block our trade with foreign nations. Free-traders, in reply, maintain that the progress of Germany and America is due to a combination of many causes apart from their tariffs. They are, for purposes of internal trade, the largest free trade areas in the world. {229} Since the trade of nations is mutually interdependent we cannot suffer from an increase in commercial prosperity elsewhere, and retaliation has never proved a successful method of fighting hostile tariffs. In conclusion, they declare that an impossible task awaits any statesman who undertakes to frame a British tariff satisfactory alike to farmer, manufacturer, the colonies and India, and one which would not involve an increase in the price of food and other necessaries.
The reader must refer to larger treatises for details of the controversy, which has been much embittered by party spirit. But it seems at least that the war of statistics and arguments has not proved that the position of the working classes in regard to real wages, continuity of employment, and conditions of labour is better in protected countries than among our own people: indeed, as skilled economists constantly remind us, so many other factors are involved and so many qualifications must be made that it is almost impossible to draw trustworthy comparisons of this nature. Nor has the response of the colonies to the suggestions of the Preferentialists been encouraging. They have shown without ambiguity that highly as they value their connexion with the mother-country, they value equally highly their own political and commercial independence. In 1901 the various States of Australia united in a Federal Commonwealth whose tariff is highly protective, and in 1911 Canada began to negotiate mutual tariff concessions with the United States, her nearest and most important market. Our colonies are thus rapidly developing into practically independent States, bound to us, indeed, by ties of filial affection and interest, but determined to shape their own careers. South Africa has just entered upon the most hopeful chapter of her chequered history {230} by the federation of the four colonies in the Union of South Africa. The original settlements of Cape Colony and Natal and the two Boer States conquered in the late war form now a self-governing whole—a happy reconciliation, hardly to have been anticipated at the end of the war, which is a high tribute to the wisdom of statesmen at home and to the healing effects of time in South Africa.