Who is there, of those who pay it, that will not look back with envy from these days of 1s. income tax, almost as a permanent charge in times of peace, to times when a tax of 8d. was regarded as abnormally high; when one Chancellor of the Exchequer was resolved to reduce it to 5d., and when his successor (Mr. Goschen) declared that, except for purposes of war, 6d. was a proper limit? Of all Lord Randolph’s proposals none, it may be safely said, would have been greeted with more general approval than his intended reduction of the income-tax from 8d. to 5d. At that time incomes below 150l. a year were exempt, but incomes of 150l. and less than 400l. were allowed an abatement of 120l. Incomes of and above 400l. a year had to pay on the full amount. Official statistics have always been silent as to the total number of income tax payers, it being apparently impossible to frame a trustworthy estimate. It is nevertheless probable that the bulk of persons who are called upon to pay this impost are included in the 150l.-400l. class. It was to this considerable class, composed mainly of persons emerging into an independence they have earned for themselves, and rising by their own industry from the level of exemption to that of income-tax-paying means, that Lord Randolph’s sympathies were directed. The small householder, pinched by having to pay in the early days of January the landlord’s tax under Schedule A, which he cannot recover till he pays his rent at the end of March; the petty tradesman or struggling professional man who defends a precarious respectability by a systematic thrift too often unknown to the burly wage-earner; these are the special beneficiaries from such a reduction, and they share in a peculiar degree in the general expansion of comfort and energy which must follow when five millions of money are surrendered by the State and left to fructify in the pockets of the people.
The largest claim upon the surplus was in respect of Local Government. Lord Randolph proposed to assign the revenue received from a large number of Excise licence duties to the various local authorities about to be established. As it was undesirable to saddle the new-born authorities with the difficulty and expense of collecting many duties for which they possessed no adequate machinery, he arranged that a large number were still to be collected by the State, and the proceeds, less the cost of collection, were to be afterwards transferred. Dogs, guns, game, carriages, servants, armorial bearings, auctioneers, hawkers, patent medicine vendors, plate dealers, refreshment houses, pawnbrokers, tobacco and sweets dealers, beer, wine and spirit dealers, and the new tax on horses, aggregating in all 2,700,000l., were to be thus for the time being reserved. But all licences which the local bodies could collect without any additional cost or trouble were to be handed over at once. 1,544,000l. worth of liquor licences fell into this latter class. They were to be granted, as heretofore, only on the production of a magisterial consent, and nothing was simpler than to make the paying of the duty and the obtaining of the consent simultaneous. Lord Randolph’s schemes on this point travelled beyond both the Budget and the Local Government Bill, and embraced local option in the drink traffic. He believed that the liquor laws ought to be intimately connected with Local Government. He wished to entrust local authorities with very large powers to regulate the sale of liquor in their districts; and he thought that if the revenue which arose from liquor licences was made an important source of revenue for the local authority, a salutary check would be provided against hasty or fanatical action, leading perhaps upon a popular impulse to total prohibition, and upon the rebound to an unrestricted sale. ‘When you are legislating,’ he said a year later at Sunderland (October 27, 1887), ‘about subjects which interest human beings, it is just as well not to leave altogether out of account human nature.’ The transfer by different methods of these sources of revenue, together with the contribution of 800,000l. in aid of the indoor poor, provided the round sum of 5,000,000l. as the foundation upon which Local Government was to be erected.
The preparation of such a Budget required an extraordinary exertion. Scheme after scheme was formulated, only to break down in discussion and to be dismissed. Many days—wrested by an effort from other pressing occupations—were consumed in study and reflection. But at length all was in order and the plan was in detail settled and complete. In every respect—in the definite economy, in the reduction in the expenditure on armaments, in the increase in the proportion of direct taxation, in the immense diminution of public burdens, in the enormous simplification of the death duties and the introduction of a logical system of graduation, in the ample provision for the needs of Local Government—it was a democratic Budget. Yet it was cunningly contrived. The importance and cohesion of the scheme would have secured it a momentum of its own. Objections upon detail could at every point have been answered by general principles. The low income-tax balanced the diminished Sinking Fund. The economies in public charges justified the remissions of taxation. The tremendous appeal to the middle classes of a 5d. income-tax would have provided the driving power needed from within the Conservative party. Nevertheless, it was in a grave and nervous mood that the young Chancellor introduced it to the Cabinet in the early days of December. He spoke long and earnestly. He exerted all his power of luminous and attractive exposition. The whole proposal was unfolded. His colleagues seemed for the moment fascinated. Objections and doubts were silenced together. No one cared to assail in detail a scheme all parts of which hung so closely together and which, in the mass, displayed such novel and spacious outlines. Even Lord Iddesleigh, the creator of the threatened Sinking Fund, consented to its dissolution for the sake of the integrity of the scheme. Lord Randolph had come prepared for an uncertain and protracted battle. He seemed to have won the victory at a single charge.
His friends at the Treasury waited anxiously for his return. Startled as they had been by some of his views, foreign to their traditions as was his treatment of the debt, they had been drawn into the momentum of what was, after all, a great design. They were prompt to offer their congratulations upon the Cabinet acquiescence. But Lord Randolph was far from confident. The silence of his colleagues oppressed him. ‘They said nothing,’ he told Lord Welby, ‘nothing at all; but you should have seen their faces!’ He proceeded to give instructions for checking every figure and recasting every calculation from the beginning, as if he apprehended some tardy attack, against which preparations should be made. This arranged, as was his habit he pushed the whole matter from his mind. ‘There,’ he said grandly to Sir Algernon West later in the day, ‘are the materials of our Budget. They are unpolished gems; put the facets on them as well as you can; but do not speak to me on the subject again until the end of the financial year.’
CHAPTER XVI
RESIGNATION
Happy the man, and happy he alone,
He who can call to-day his own—
He who, secure within, can say:
‘To-morrow do thy worst, for I have lived to-day.
Come fair or foul, or rain, or shine,
The joys I have possessed, in spite of fate, are mine.
Not Heaven itself over the past hath power;
But what has been has been, and I have had my hour.’
Lines from Dryden copied out by Lord Randolph
Churchill about 1891.
ON the morning of December 23 all who took an interest in politics—and in those days these were a very great number—were startled to read in the Times newspaper that Lord Randolph Churchill had resigned the offices of Chancellor of the Exchequer and Leader of the House of Commons and had retired altogether from the Government. As the news was telegraphed abroad, it became everywhere the chief subject of rumour and discussion, and Cabinet Ministers—dispersed on their holidays—hurried back to London to find out the truth of the matter and to prepare for the changes that must follow. To the political world the event came as a complete surprise. No important issue had arisen in foreign or domestic affairs; no great question likely to lead to such a breach was before the country; there had been hardly a whisper of Cabinet dissension. But if the reader has followed this account with any considerable measure of agreement or sympathy, he will see in this resignation no inexplicable mystery, no deep-laid intrigue, no explosion of temper; but the logical and inevitable consequence of all that had gone before.
Everything may go well with a liberal-minded man who belongs to the Tory party while his party is in Opposition. The natural disagreements which arise upon so many questions between the Government of the day and their political opponents make a broad platform on which the Democratic Tory and the old-fashioned Conservative can fight side by side in combination. When to those disagreements were added the danger of an Imperial disaster, acutely realised, and the antagonism which Mr. Gladstone inspired in all who did not worship him, the combination ripened into comradeship; and out of comradeship was born a sense of agreement which, after all, was pure illusion. It is not until men who really differ, try to work together at the business of government that their worst troubles begin. Even in the short Administration of 1885 the divergence between Lord Salisbury and Lord Randolph Churchill had been plain. But the ‘Ministry of Caretakers’ was in a minority. It was in a sense an Opposition rather than a Government. It had never exercised power. The disruption of the Liberal party and the decision of the electors had vitally altered the political situation. The Conservative party, with their Unionist allies, were now supreme. They had achieved great power. What would they do with it?
Many of the letters which passed between Lord Randolph and the Prime Minister during their varied and eventful association have been printed here. A change, distinct and palpable, is to be noticed in the tone of their communications after the election of 1886. It is still friendly and open; Lord Randolph’s letters still preserve their unvarying air of respect towards a higher officer of State and of deference to an older and far more experienced man. Yet it is less the correspondence of a lieutenant with his chief and more like that between separate authorities. The two men were, in fact, sustained by two different, and to some extent conflicting, sets of forces, and they stood for different ideas. Nor were those forces on which Lord Randolph Churchill counted so inconsiderable as the event might seem to prove. Tory Democracy had gained repeated victories in the past three years over the more Conservative element in the party. Lord Salisbury himself, under pressure, personal and of circumstances, had advanced vastly from his political position in the early ‘eighties. He had gone as far as Newport. He had gone as far as Dartford. It did not seem improbable that, if pressed, he would go still further and that without any serious damage to party unity the liberalizing process which had already effected so much in the composition, character and prospects of the Tory party might continue. The ‘old gang’ was now widely scattered. Some had retired; some were in the Lords. Others had not been included in the Government. The Cabinet had been largely formed of men whose speeches and general views were democratic. The younger and more active elements in the party were adventurous and progressive. Many of the members returned by the constituencies, and especially by the boroughs, had given pledges to the electors at which ‘high and dry’ Tories stood aghast.
A careful examination of the Conservative majority in the House of Commons justified the belief that it was neither unfitted nor unwilling to be the instrument of large constructive reforms. It seemed, moreover, that the alliance with the Unionist Liberals and Radicals, on which the existence of the Government depended, would strengthen powerfully the more Liberal elements in the Conservative ranks and would even require an increasing measure of Liberal legislation as a condition of support. Mr. Chamberlain and his immediate followers were also a very important factor; and Lord Randolph, as the principal link which united them to Lord Salisbury’s Government, had every reason as well as every inclination to study their wishes. Looking broadly at the situation during the autumn of 1886, it was not unreasonable to hope that an era of domestic reform might be safely and prosperously inaugurated. But, in any case, Lord Randolph’s own position was perfectly well understood. His declarations had been clear and full. He had made no secret of his opinions; and upon finance, upon Local Government, upon Ireland, upon land and liquor, upon questions connected with property and labour, they were unmistakably declared. Yet with the full knowledge of his opinions and every indication which the past could supply that he would fight sternly for them, the Prime Minister had invited him to undertake the second post in his Government, and Lord Randolph’s acceptance had been, with unimportant exceptions, endorsed and even acclaimed by the whole party. Why should it ever have been supposed that he would have abandoned forthwith all his liberal views, would have repudiated or ignored all his pledges of economy and would have settled down to the adroit manipulation of a Parliamentary majority for strictly Conservative ends and the elaboration of ingenious excuses for departmental and administrative scandals. The Prime Minister and the party must have known—and they did know when Lord Randolph Churchill was called to lead them in the House of Commons—that he could only lead them in one direction, and that direction, so far as domestic affairs were concerned, a Liberal direction.