Mr. Balfour in his reply, after emphasising his general agreement
with Mr. Chamberlain in regard to the need of re- modelling our fiscal relations with other Governments and our Colonies, states that the only point of difference between them has been in regard to the practicability of a proposal involving taxes on food. For such an arrangement, the Premier is convinced, public opinion is not ripe. Mr. Chamberlain, he is glad to see, recognises that the other branch of fiscal reform—i.c., the assertion of our freedom to retaliate—is not indissolubly connected with the question of the inclusion of food taxation within the limits of practical politics. But if Mr. Chamberlain should regard its temporary exclusion as rendering it difficult for him to remain in "the Cabinet, Mr. Balfour reluctantly acquiesces. " The loss to the Government is great indeed, but the gain to the cause you have at heart may be greater still." Ina significant postscript, after expressing his satisfaction that Mr. Austen Chamberlain is ready to retain office, Mr. Balfour observes : " There could be no more conclusive evidence that in your judgment, as in mine, the exclusion of taxation on food from the party programme is in existing circumstances the course best fitted practically to further the cause of fiscal reform."
