I rejoice to see that neither the heat, the stench, nor service in the courts can exhaust even your superfluous vigour; and it is most ennobling to see such energies devoted to the highest of all purposes—that of replenishing her Majesty's exchequer. I hope, however, that in one point the case stands better than I had supposed. The proof of absolute contumacy is not yet complete, though, alas, the animus furandi stands forth in all its hideous colours. I spoke yesterday to Lord Palmerston on the painful theme; and he confessed to me with much emotion that he has not yet resorted to those mild means of exhortation—what the presbyterians call dealing with an erring brother—from which we had hoped much. The unhappy men may therefore yet come to their senses; in any case I rejoice to think that you, in the new capacity of mad doctor, are sure to cure them and abate the mischief, if the which do not happen (I quote the new Tennyson):—
“some evil chance
Will make the smouldering scandal break and blaze
Before the people and our Lord the King.”[44]
After a due amount of amusing correspondence, the recusant confederacy struck their colours and paid their money.
When he went to Corfu in the Terrible in 1858, some two or three sleeping cabins were made by wooden partitions put up round spaces taken off the deck. Thirteen years after, his unslumbering memory made this an illustrating point in an exhortation to a first lord of the admiralty not to disregard small outgoings. “I never in my life was more astonished than upon being told the sum this had cost; [pg 065] I think it was in hundreds of pounds, where I should have expected tens.” Sometimes, no doubt, this thrift descended to the ludicrous. On this same expedition to Corfu, among the small pieces of economy enjoined by Mr. Gladstone on the members of his mission, one was to scratch out the address on the parchment label of the despatch bags and to use the same label in returning the bag to the colonial office in London. One day while the secretary was busily engaged in thus saving a few halfpence, an officer came into the room, having arrived by a special steamer from Trieste at a cost of between seven and eight hundred pounds. The ordinary mail-boat would have brought him a very few hours later. We can hardly wonder that the heroical economist denounced such pranks as “profligate” and much else. Though an individual case may often enough seem ludicrous, yet the system and the spirit engendered by it were to the taxpayer, that is to the nation, priceless.
IV
One of the few failures of this active and fruitful period was the proposal (1863) that charities should pay income-tax upon the returns from their endowments. What is their exemption but the equivalent of a gift to them from the general taxpayer? He has to make good the sum that ought in reason and equity to have been paid by them, as by other people, to the government that protects them. Why should this burden be compulsorily laid upon him? What is the quality of an endowment for a charitable purpose that constitutes a valid claim for such a boon? Into this case Mr. Gladstone threw himself with full force. The opposition to him was as heated and as vigorous as he ever provoked, and the violence of the resistance roused an answering vehemence in him. He speaks in his diary of his “deadly encounter with the so-called charities.” “I was endeavouring,” he says, “to uphold the reality of truth and justice against their superficial and flimsy appearances.” “Spoke from 5.10 to 8.20, with all my might, such as it was.” This speech, with its fierce cogency and trenchant reasoning, was counted by good judges who heard it, to be among the [pg 066] two or three most powerful that he ever made, and even to-day it may be read with the same sort of interest as we give to Turgot's famous disquisition on Foundations. It turns a rude searchlight upon illusions about charity that are all the more painful to dispel, because they often spring from pity and from sympathy, not the commonest of human elements. It affects the jurist, the economist, the moralist, the politician. The House was profoundly impressed by both the argument and the performance, but the clamour was too loud, all the idols of market-place and tribe were marched out in high parade, and the proposal at last was dropped.
Budget Of 1863
Though the idea of putting a tax on the income of charitable endowments was rejected, the budget of 1863 was the record of a triumph that was complete. The American civil war by arresting the supply of cotton had half ruined Lancashire. The same cause had diminished the export trade to America by six millions sterling. Three bad seasons spoiled the crops. There was distress in Ireland. Yet the chancellor had a revenue in excess of expenditure by the noble figure of three millions and three quarters. Mr. Gladstone naturally took the opportunity of surveying the effects of four years of his financial policy. He admitted that they had been four years of tension, and this tension had been enhanced by his large remissions of duty, and by taking in hand the completion of the great work of commercial legislation. The end of it all was a growth of wealth, as he called it, almost intoxicating. The value of British goods sent to France had risen from four millions and three quarters to nearly nine millions and one quarter, in other words had about doubled under the operations of the treaty of commerce.[45] If to this were added foreign and colonial produce sent through us, and acquired by us in exchange for our own produce, the value had risen from nine and a half in 1859 to twenty-one and three quarters in 1862. In Mr. Gladstone's own description later, the export trade of 1860, in spite of a bad harvest, was so stimulated by the liberating customs act, that it [pg 067] rose at once from a hundred and thirty millions to a hundred and thirty-five. The next year it fell to a hundred and twenty-five, and in 1862 it fell by another million owing to the withdrawal, by reason of the American war, of the material of our greatest manufacture. In 1866 it rose to a hundred and eighty-eight millions.[46] Then under the head of income-tax, and comparing 1842 with 1862, over the same area, and with the same limitations, the aggregate amount of assessed income had risen from one hundred and fifty-six millions to two hundred and twenty-one. Other tests and figures need not detain us.