TOPICS OF THE DAY.
MR. BALFOUR, AND THE FISCAL DEBATE.
MR. BALFOUR is rightly recognised as one of the chief men of the British Empire. Not only his past services to the State, but his position as Leader of the Oppo- sition and head of one of the great parties of the State, confer on him a place of the highest distinction. The official Unionists throughout the nation look to him for inspiration_ and guidance, and there are thousands of neutral men of all kinds who before they form their views desire to know what is Mr. Balfour's opinion. In these circumstances, his intervention in the Fiscal debate of this week was looked forward to with the keenest interest. It was felt that now at last Mr. Balfour would give the country a lead, and a clear lead. During the last two and a half years of his tenure of office he had taken up the position that the Fiscal question was not before the country or the House of Commons, and that therefore he was not called upon to make any pro- nouncement in regard to it from his place in Parliament. At the General Election he found another excuse for not speaking out in his declaration that the cause of the -Union was in danger, and that he wished to concentrate attention upon the risks involved in Home-rule. When, however, the question of Free-trade and Protection was brought before the House of Commons in a direct and simple • form, as it was by Sir James Kitson's Motion, it was expected that Mr. Balfour, unmuzzled and unre- strained by the considerations that weighed with him in the previous Parliament, would not only be able to tell the country what was his exact position, but to tell them in language which none could misunderstand.
We do not think we are exaggerating when we say that Mr. Balfour's speech has proved the cause of profound disappointment throughout the country. Instead of a plain and clear statement in regard to the issue which still divides opinion so deeply, he treated the nation to the most barren and futile of exercises in the art of dialectic. Instead of giving men. the lead they expected of him upon what is essentially a matter of practical politics, he played with the whole Problem by means of a series of questions, ingeniously devised to show that Free-trade and Protection are both unrealities, and that those who take either side in the con- troversy are really fighting with shadows. A speech more deplorable and more unworthy of a great issue or a great man has seldom been heard in the House of Commons, and we do not wonder that the new Members, who had heard so much of Mr. Balfour's powers as a speaker and as a leader. of men, turned in astonishment to ask whether it was possible that this was all the Leader of the Opposition had to say on _a problem which has divided the nation into hostile camps for the last two and a half years, and has broken to pieces one of the great parties in the State. Instead of an earnest and straightforward declaration of policy, they listened to a string of clever sophistries and evasions ,inspired by that . cynical spirit which declares of every political problem, "It isn't new, and it isn't true, and it doesn't matter."
It might perhaps be best to leave "the eternal trifler" and his subtle interrogatories without further comment, for in reality they contribute nothing, and were meant to con- tribute nothing, to the question of Free-trade and Protec- tion. In case, however, it may be deemed necessary that some notice should be taken of them, we may meet them on theirown ground with another series of questions. In such dialectic as Mr. Balfour uses the questionis the best weapon of defence as well as of offence. The first question, then, which we would put to 111r. Balfour is to ask him whether' he does or does not agree that in times of peace the only justification for interference by the State with trade— that •is, with buying and selling—is (1) the raising of revenue, or (2) the restraint of exchanges where moral problems are involved, as in the selling of intoxicants,, poisons, or explosives. Secondly, we would ask him, if he does not accept the principle of tariff for revenue only, whether he believes that the material wealth of a nation can be increased by taxation,—whether, that is, he holds that the benefits of exchanges • can be increased by restraining them or interfering with their natural. course. So much for the general questions which we should_ like to see answered by Mr. Balfour. Next, we should like' to ask him some specific questions arising out of these which he put to the Government. Mr. Balfour spoke of the existing Protective duties in this country. Does he contend that these so-called Protective duties on mann; factured tobacco and manufactured cocoa were im-. posed with a Protective intention, and not with the: intention of raising revenue ? Is he aware that one. of the objections held by Free-traders to indirect taxation is that duties which are not intended to be Protective have sometimes an incidental Protective effect ? Does he not know, further, that such slight incidental Protection has to be tolerated because it is impossible to raise sufficient revenue without recourse to indirect taxation ? Has he failed to' realise that this incidental Protection is not counterbalanced by an equivalent Excise-duty because in many cases the levying of such Excise-duty would exceed in cost the value of the tax ? Next we would ask: Is Mr. Balfour not aware that in the case of India it is necessary to raise revenue by Custom-duties because in an Oriental country the difficulties of raising large sums of reeney by: direct taxation are almost insuperable ? Is he not aware, again, that in India, and also in Egypt, Excise-duties. are imposed in all cases where the tax at the ports would otherwise have any serious Protective result ? The Pro- tective 'result -is only tolerated in cases where it is not worth while to invoke the complicated and costly machinery of an Excise-duty. Where Excise would raise a revenue worth raising it is employed.
Mr. Balfour in his last question urged the Government to admit that in times of great national emergency, or for the purpose of carrying out some great social reform, it might be right to broaden the basis of taxation, "even. though it be found practically impossible to carry out that_ broadening process without putting on Custom-duties that shall not be exactly and nicely balanced by Excise." In our opinion, this was the worst and most reckless thing said by Mr. Balfour in his speech, for in this question he gives encouragement to one of the most dangerous tendencies of the modern Protectionist spirit. To put the matter plainly and clearly, the' latter-day Protectionist realises that it is almost impossible to get the people of' a modern democratic State' to agree to interfere with and impede exchanges when the only reason advanced is a .Pro- tective one. The people instinctively recoil frOni the paradox that taxation is a good thing in itself,—a bene- ficent goddess who will automatically increase the wealth' of nations. The only practical method of introducing Protection is to make it necessary for some reason or other to raise large sums of money for State purposes. When that necessity exists, or seems to exist, and when it can be shown that further direct taxation is not possible, recourse must be had to indirect taxation. But granted the need for large and general indirect taxation, it is comparatively easy to persuade people not to bother themselves • about the incidental Protective effects of such general indirect taxation. "You have got to raise revenue by a general tariff. Why grudge the British farmer or the British manufacturer the small amount of advantage which he will get thereby ? The Treasury will get plenty out of the foreigner, and incidentally there will be more work here." So runs the argument. The fact that the .recourse to indirect taxation on a large scale is sure to involve Protection tends to make the convinced Pro- tectionist desire expenditure for its own sake. He realises that it will necessitate recourse to general indirect taxation. This is what happened in America: After the bulk of the Debt incurred during the Civil War had been paid off, the Americans found themselves laced by a situation. which would, if it continued, oblige 'them to take off indirect taxation. They realised that they would soon have no need for the money raised by Custom-duties. In these circumstances, large expenditure was felt to be a vital necessity by those who desired to maintain and increase the Protective character of the tariff. Accordingly the pension system, under which the United States gets rid of some thirty millions sterling'a year, was devised as an excuse for more indirect taxation, and so for a Pro- tective tariff. If the country were committed to the expenditure of a vast sum on pensions, it would be necessary to raise money by indirect taxation, and indirect taxation involved Protection. As long as it is necessary to raise large sums by a general tariff, but only so long, the Protectionist feels safe.
We note that Mr. Chamberlain, and now, unfortu- nately, Mr. Balfour, are beginning to talk about the neea for great and. increasing expenditure on social reforms. To put it brutally, this means that the Tariff Reformers are beginning to realise that they will not bél able to introduce Protection unless they can show the need for further indirect taxation. If the nation c,onimits itself to spending a quarter of a million a year on payment of Members, five millions a year on feeding all school-children, three millions a year on public works for the unemployed, two millions a year on a great housing scheme, a million a year on the creation of small holdings, three-quarters of a million extra on im- proving primary education, and ten millions a year on old- age pensions, we should it once have a magnificent excuse for raising some twenty-two millions a year by means of a general tariff. But granted a general tariff of this kind, it would be the easiest thing in the world to give it an all-round Protectionist character. Certain trades would. no doubt benefit more than others, but everybody would appear to get a little. In these circumstances, it behoves all those who are determined. to maintain Free-trade, and. not least the Labour Members, to keep a very close and anxious watch upon all proposals for increased expendi- ture on social objects. Many of these schemes will no doubt be excellent in themselves, and will appeal strongly to the Radical and Labour Party. If, however, they acquiesce in them ' without first counting the cost and ascertaining how the money can be raised, they will soon find themselves caught in the toils of Protection. Just as the thirty millions sterling a year voted by Congress for pensions to the veterans of the war riveted the tariff on the backs of the people of the United States, so indulgence in any great scheme of Socialistic expenditure will be almost certain to end in the introduction of Protection into this country.
Remember that the Protectionist only asks for a very little to begin with. When once he has got that little, he knows quite well that he will be able to foster it and. develop it until it blossoms into a full-blown flower. It will be useless for the Socialists and the Radicals to console themselves with the thought that their own intentions are not Protectionist. The tariff-monger cares for none of these things. All he asks is to be allowed a good large dose. of indirect taxation in the form of Custom- duties. That granted, he will do the rest. To obtain this boon he will be perfectly willing to meet the Socialists in the handsomest way, and. to vote public money for any- thing and everything that the working man desires. If Mr. Balfour had been wise, he would. not have spoken so openly in his fifth question of broadening the basis of taxation to carry out some great social reform. There he hoisted the colours of Protection, and. allowed us to see clearly the flag under which he and Mr. Chamberlain intend to sail. If our working men want to keep the blessings of untaxed. food, they will fire upon that flag whenever and wherever they see it, and will refuse to be deceived by the excuse that though it is flown at the main, the Socialist pennant will also be run up at the mizzen.
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