MR. GLADSTONE AS FINANCIER.
TORIES are dreadfully perplexed when they have to deal with Mr. Gladstone exclusively as a financier. As a politician, they can dispose of him, in words at all events, easily enough. He is "a Radical ;" he "does not understand Russia ;" he "cares about morality, and not about interests ;" he is " a master of sophistical verbosity," and so on, till read- ers, desiring to be convinced, think that reasons have been supplied for their convictions. That is all light work, but when the great orator deals with finance, some new line of argument, some other form of depreciative rhetoric, must of necessity be discovered. It is of no use to say that Mr. Glad- stone is in the wrong, for the country, ordinary Conservatives included, do not believe it. If the readers understand the subject, they see that Mr. Gladstone's figures are irrefutable ; and if they do not understand them, they know that he is the greatest living authority on finance. They may accept any explanation of his figures, but the figures themselves are data, the texts on which the sermon must be built. Nor is it of much more use to denounce Mr. Gladstone as a Radical. Even Tories see that his finance is, in spirit, strictly Conservative ; that he protects the Treasury against the Democracy ; that he insists on taxation, even when taxation offends the people ; that so far from robbing the rich to relieve the poor, one of his most often repeated proposals—in our judgment his only questionable proposal—is to takt off the only direct tax which the rich, severely feel. Nor can much be said about his contempt as a financier for "interests." Nothing hurts an " interest " like a tax, and Mr. Gladstone has, through all his official life, been taking off tae e till the best argument against his financial policy is that the Treasury has been left dependent upon too few sources of supply. So respectful is he to property that when he disestablished a Church, be treated every office like a freehold, and when he abolished Purchase gave full compensation even for illegal payments. Some new defencemust be found against his speeches, and in despair his Opponents usually fall back on two. One, and the truest, is that the ex- penditure has increased, as he says, but that a spirited foreign policy involves increased expenditure, and that they approve the spirited foreign policy and its consequences, ex- penditure included. That is an honest and in its way a sound argument, the only convincing answer to it being that the foreign policy adopted is bad, and not worth the money it has cost,—that the nation has bought a pennyworth of glory by payment of a sovereign in exchange. The other course is to admit the assertion that Mr. Gladstone is a great financier, and say that it does notsignify ; that sound finance is only economy, and that necessities have -arisen in the face of which economy must not be considered. This is, briefly put, the argument of the Pall .Mall Gazette, and it has, in spite of the cynicism with which it is sometimes stated, an appreciable weight. About the first argument we have to-day nothing to say, as the foreign policy of the Government is being sufficiently threshed out, but the latter seems to deserve a word. The notion that a great financier is not necessarily a great statesman, that a mere arithmetician, with nerve enough to refuse his assent to expenditure, may be a first-rate financier, is a good deal too widely spread. No idea can be less well founded. There was a time, probably, in the history of most States where a mere economist, using the wordin its old sense of a person who will not spend, was exceedingly useful, and might even make a State very powerful, or very well content. Our own Queen Elizabeth owed, we believe, something of her popular charm, if not to the penuriousness which Mr. Froude denounces, at least to its results. The first Frederic William of Prussia, the ill-con- ditioned despot who would spend nothing he could keep, either upon the State or the Palace, who gave Judges the wages of footmen, kept Ambassadors in second-rate lodgings, and could hardly bear the weekly bills of a thrifty cook, was an economist of that sort, and he accumulated the means which enabled his son to commence the march of Prussia to the top of the world. Sir Robert Walpole was, in a very different way,.a financier of the same kind, thinking always of his Treasury, and avoiding every enterprise, and more especially war, because if he began it he must increase the taxes and the Debt. But a great financier of our day sets to himself a far greater task than this, and must therefore be a far higher person. He has not only to make the State rich, to provide for it, that is, a revenue ample for its needs, but to provide it without pressing on its people, to liberate,. instead of limiting, their industry, to fill the national coffers from the pockets of the people, yet leave those pockets fuller than ever they were before. To do this, he must thoroughly understand both the temper of the people and their circum- stances, and the great laws, often almost invisible, which govern the creation of wealth ; must recognise where enormous libe- rality, as in the remission of taxes, will still" pay," and must dis- cern exactly what kinds of heavy taxation will least tend to stop up the perennial sources from which wealth is derived. He must so frame his proposals that their success shall be helped by popular willingness—that is, he must thoroughly under- stand the temper of the people he governs ; and he must so limit the national action, that it will never-outrun the national means—that is, he must thoroughly comprehend not only the intention, but the probable results of the policy of the State. And to obtain these esssential data, he must either rule the State himself, a position which has always been the most favourable to great financial reforms, as we see in the instances of Sir Robert Peel and Mr. Gladstone, or he must BO thoroughly secure the confidence alike of his eolleagues and the people that he is within his own department virtual ruler. He must possess judgment in a supreme degree, or his mistakes will be ruinous ; courage in a high degree, or he will never do any- thing great ; and that faculty which, in his special State, con- duces to power, be it oratory in the market-place or per- suasiveness in the King's Council, or, as in Montagu's case, tact in the management of ruling classes, or his ideas will never be executive. A national financier, in short, to be great in our time, must be a statesman, and a states- man of the highest and most visibly many-sided kind, a man as competent to rule a kingdom as to direct a great bank. He must observe all things, from a possible war to a possible failure of the harvest ; must be able to direct all things, from foreign policy to a modification of the Land Laws ; and must control all departments, from the Army down to the Statis- tical Office. People talk as if a discreet banker could direct a Treasury, and no doubt he could manage its details ; but it is not by that kind of man that a nation's finance is so arranged, that while taxes disappear, and old methods of taxation become incredible, the Treasury grows so full that surpluses become perplexities, and credit becomes so limitless that the nation could commence a war of a generation without a cash reserve. The Hohenzollerns so administered Prussia for generations, that they had always from five to seven millions ready if war should come upon them, and historians say "what splendid foresight." Sir R. Peel and Mr. Gladstone have so administered England, that for a national war we have the command at any moment of seventy millions, or seven times seventy, and that, for- sooth, is not foresight I The proudest boast a vain-glorious Minister could think of was that it was not one or three campaigns which would exhaust the resources of Great Britain ; but he never added, "thanks to the financiers, whose wisdom, by letting those resources grow and developing credit with them, made them available for the State."
We are not writing upon this subject merely to point out the inaccuracy of a Tory argument. The delusion that finance can be separated from statesmanship, and is the function of an expert, who need not be qualified to rule, is a very wide- spread one, and very often works, we believe, very seri- ous mischief. The tendency of prominent statesmen on the Continent, for example, is not to study finance, but to rely for the assistance they need in that department upon men who are scarcely colleagues, whom they pick as they would pick geologists, or astronomers, or heads of a medical school. They do not, of course, choose ignorant men or corrupt men, or men who do not understand figures, but they choose men who are rather professionals than statesmen, who not only do not rule, but who, for the most part, would consider a claim to rule rather absurd. The Continental Chancellor of the Ex- chequer is almost universally either a financier in the City sense, that is, a man who understands dealings in money, or a banker. or a man who has written well upon political economy. His office is not only not considered the highest, but it is scarcely one of the highest, being decidedly inferior in prestige and in- fluence to that of the Premier, the Minister of the Interior, and the Minister for War. Even in France the strongest man is rarely the most distinguished in finance, and we cannot recall in the history of the Continent since 1848, though all careers have been fairly open, a single instance in which a man, distinguished first of all by this great quality, has risen to the very top. S. Minghetti is the nearest approach to it, and S. Minghetti was rather a great Minister of the Interior than a great financier. In Germany, the Minister of Finance has been a head clerk, lately of less importance even than the Minister of Education. In Austria and Hungary he has been usually a great professional, in Italy an economic writer, and in Russia an acute and laborious administrator, scarcely ex- pected to concern himself with the internal administration or foreign policy which, nevertheless, so profoundly affect his de- partment. The consequence is that, except in France, where the wealth and industry of the people make amends for every defect, financial strength and the popular progress in the accumulation of wealth are the two desired improve- ments which are slowest to appear. Germany is all-powerful, but so perplexed with deficits that her Chancellor has taken the financial reins into his own hands, and introduced a system which scientific financiers perceive can but help to impoverish her. Austria has gathered such strength that she has- acquired new provinces, and is hoping for more ; but after reorganising her Army, she can hardly move it for want of money, while her people complain that they grow no richer, The Russian Empire, after a successful war, is pronounced bankrupt, and though that is an illusion arising partly from prejudice, and partly from a failure to observe how lightly Russia is taxed, the State deriving much of its revenue from profits which elsewhere go to spirit-dealers, the immobility of Russian revenue is un- doubtedly the weakest point in her State organisation. The most remarkable instance, however, is India. There for a hundred years we have never—except, perhaps, for the single year of Mr. Wilson's charge of the department—reared, or found, or imported a financier equal to the modern requirements of finance. We have never had a man who understood at once and profoundly the means and the temper of the people and the necessities of the State. As a consequence, while the Government is in other respects fairly successful, the difficulties of the Treasury are a constant perplexity ; there is not enough money for the kind of government required, and yet it is probable that the pres- sure of the Government demand upon the sources of prosperity has become far too direct and heavy. Of course, on the Con- tinent and in India, many of these difficulties are the results of economic or political causes, some of which are irremovable, but they are all aggravated, as we believe, by the tendency of statesmen to think, as Tories are now saying they think, that the finance of States is of secondary importance, and that a man who is less than a great statesman can be a first-rate and reinvigorating financier.
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