The Life of William Ewart Gladstone Volume II Part 4

III

(M17) Ruminating in the late evening of life over his legislative work, Mr. Gladstone wrote: "Selecting the larger measures and looking only to achieved results, I should take the following heads: 1. The Tariffs, 1842-60. 2. Oxford University Act. 3. Post Office Savings Banks. 4. Irish Church Disestablishment. 5. Irish Land Acts. 6. Franchise Act. Although this excludes the last of all the efforts, viz., the Irish Government bill." The third item in the list belongs to the period (1861) at which we have now arrived.

The points to be noted are three. 1. The whole of my action in 1859-65 was viewed with the utmost jealousy by a large minority and a section of the very limited majority. It was an object to me to get this bill pa.s.sed _sub silentio_, a full statement of my expectations from it would have been absolutely fatal. I admit they have been more than realised. 2. The Trustee Savings Banks were doubly defective, nay trebly, for they sometimes broke. (1) Their principle was left in doubt-were the general funds in trust, or cash at a banker's? This was vital. (2) They never got or could get within the doors of the ma.s.ses, for they smelt of cla.s.s. It was necessary to provide for the savings of the people with (_a_) safety, (_b_) cheapness, (_c_) convenience. The banks _cost_ money to the State. The Post Office Savings Banks bring in a revenue. 3.

Behind all this I had an object of first-rate importance, which has been attained: to provide the minister of finance with a strong financial arm, and to secure his independence of the City by giving him a large and certain command of money.

A sequel to this salutary measure was a bill three years later with the apparently unheroic but really beneficent object of facilitating the acquisition of small annuities, without the risk of fraud or bankruptcy.(37) An eyewitness tells how (March 7, 1864) "Mr. Gladstone held the house for two hours enchained by his defence of a measure which avowedly will not benefit the cla.s.s from which members are selected; which involves not only a 'wilderness of figures,' but calculations of a kind as intelligible to most men as equations to London cabdrivers; and which, though it might and would interest the nation, would never in the nature of things be made a hustings cry. The riveted attention of the House was in itself a triumph; the deep impression received by the nation on the following day was a greater one. It was felt that here was a man who really could lead, instead of merely reflecting the conclusions of the popular mind." The measure encountered a pretty stiff opposition. The insurance companies were vexed that they had neglected their proper business, others feared that it might undermine the poor law, others again took the pessimist's favourite line that it would be inoperative. But the case was good, Mr. Gladstone's hand was firm, and in due time the bill became law amid a loud chorus of approval.

(M18) Thus he encouraged, stimulated, and facilitated private and personal thrift, at the same time and in the same spirit in which he laboured his fervid exhortations to national economy. He was deeply convinced, he said and kept saying, "that all excess in the public expenditure beyond the legitimate wants of the country is not only a pecuniary waste, but a great political, and above all, a great moral evil. It is a characteristic of the mischiefs that arise from financial prodigality that they creep onwards with a noiseless and a stealthy step; that they commonly remain unseen and unfelt, until they have reached a magnitude absolutely overwhelming." He referred to the case of Austria, where these mischiefs seemed to threaten the very foundations of empire.

Chapter IV. The Spirit Of Gladstonian Finance. (1859-1866)

Nations seldom realise till too late how prominent a place a sound system of finance holds among the vital elements of national stability and well-being; how few political changes are worth purchasing by its sacrifice; how widely and seriously human happiness is affected by the downfall or the perturbation of national credit, or by excessive, injudicious, and unjust taxation.-LECKY.

I

In finance, the most important of all the many fields of his activity, Mr.

Gladstone had the signal distinction of creating the public opinion by which he worked, and warming the climate in which his projects throve. In other matters he followed, as it was his business and necessity to follow, the governing forces of the public mind; in finance he was a strenuous leader. He not only led with a boldness sometimes verging on improvidence; apart from the merits of this or that proposal, he raised finance to the high place that belongs to it in the interest, curiosity, and imperious concern of every sound self-governing community. Even its narrowest technicalities by his supple and resplendent power as orator were suffused with life and colour. When ephemeral critics disparaged him as mere rhetorician-and n.o.body denies that he was often declamatory and discursive, that he often over-argued and over-refined-they forgot that he nowhere exerted greater influence than in that department of affairs where words out of relation to fact are most surely exposed. If he often carried the proper rhetorical arts of amplification and development to excess, yet the basis of fact was both sound and clear, and his digressions, as when, for example, he introduced an account of the changes in the English taste for wine,(38) were found, and still remain, both relevant and extremely interesting.

(M19) One recorder who had listened to all the financiers from Peel downwards, said that Peel's statements were ingenious and able, but dry; Disraeli was clever but out of his element; Wood was like a cart without springs on a heavy road; Gladstone was the only man who could lead his hearers over the arid desert, and yet keep them cheerful and lively and interested without flagging. Another is reminded of Sir Joshua's picture of Garrick between tragedy and comedy, such was his duality of att.i.tude and expression; such the skill with which he varied his moods in a single speech, his fervid eloquence and pa.s.sion, his lightness and buoyancy of humour, his lambent and spontaneous sarcasm. Just as Macaulay made thousands read history who before had turned from it as dry and repulsive, so Mr. Gladstone made thousands eager to follow the public balance-sheet, and the whole nation became his audience, interested in him and his themes and in the House where his dazzling wonders were performed. All this made a magnificent contribution to the national spirit of his time. Such extraordinary power over others had its mainspring in the depths and zeal of his own conviction and concern. "For nine or ten months of the year,"

he told Sir Henry Taylor in 1864, "I am always willing to go out of office, but in the two or three that precede the budget I begin to feel an itch to have the handling of it. Last summer I should have been delighted to go out; now [December] I am indifferent; in February, if I live as long, I shall, I have no doubt, be loath; but in April quite ready again.

Such are my signs of the zodiac." The eagerness of his own mind transmitted itself like an electric current through his audience.

Interest abroad was almost as much alive as the interest felt in England itself. We have already seen how keenly Cavour followed Mr. Gladstone's performances. His budget speeches were circulated by foreign ministers among deputies and editors. Fould, one of the best of Napoleon's finance ministers, kept up a pretty steady correspondence with the English chancellor: appeals to him as to the sound doctrine on sugar drawbacks; is much struck by his proposals on Scotch banks; says mournfully to him (April 28, 1863), in a sentence that is a whole chapter in the history of the empire: "You are very fortunate in being able to give such relief to the taxpayers; if it had not been for the war in Mexico, I should perhaps have been able to do something of the same sort, and that would have been, especially in view of the elections, very favourable to the government of the Emperor.'"

When Mr. Gladstone came to leave office in 1866, he said to Fould (July 11): "The statesmen of to-day have a new mission opened to them: the mission of subst.i.tuting the concert of nations for their conflicts, and of teaching them to grow great in common, and to give to others by giving to themselves. Of this beneficent work a good share has fallen to the departments with which we have respectively been connected." Fould had already deplored his loss. "I counted," he says, "on the influence of your wise doctrines in finance, to help me in maintaining our country in that system of order and economy, of which you were setting the example." Alas, in France and in continental Europe generally at that time, selfish material interests and their cla.s.s representatives were very strong, popular power was weak; in most of them the soldier was the master.

Happily for our famous chancellor of the exchequer, England was different.

It has often been said that he ignored the social question; did not even seem to know there was one. The truth is, that what marks him from other chancellors is exactly the dominating hold gained by the social question in all its depth and breadth upon his most susceptible imagination. Tariff reform, adjustment of burdens, invincible repugnance to waste or profusion, accurate keeping and continuous scrutiny of accounts, subst.i.tution of a few good taxes for many bad ones,-all these were not merely the love of a methodical and thrifty man for habits of business; they were directly a.s.sociated in him with the amelioration of the hard lot of the toiling ma.s.s, and sprang from an ardent concern in improving human well-being, and raising the moral ideals of mankind. In his "musings for the good of man," Liberation of Intercourse, to borrow his own larger name for free trade, figured in his mind's eye as one of the promoting conditions of abundant employment. "If you want," he said in a pregnant proposition, "to benefit the labouring cla.s.ses and to do the maximum of good, it is not enough to operate upon the articles consumed by them; you should rather operate on the articles that give them the maximum of employment." In other words, you should extend the area of trade by steadily removing restrictions. He recalled the days when our predecessors thought it must be for man's good to have "most of the avenues by which the mind, and also the hand of man conveyed and exchanged their respective products," blocked or narrowed by regulation and taxation. Dissemination of news, travelling, letters, transit of goods, were all made as costly and difficult as the legislator could make them. "I rank," he said, "the introduction of cheap postage for letters, doc.u.ments, patterns, and printed matter, and the abolition of all taxes on printed matter, in the catalogue of free trade legislation. These great measures may well take their place beside the abolition of prohibitions and protective duties, the simplifying of revenue laws, and the repeal of the Navigation Act, as forming together the great code of industrial emanc.i.p.ation."(39)

(M20) It was not unnatural that fault should be found with him for not making a more resolute effort to lighten the burden of that heavy mortgage which, under the name of the National Debt, we have laid upon the industry and property of the nation. In 1866 he was keenly excited by Jevons's argument from the ultimate shrinkage of our coal supply, and he accepted the inference that we should vigorously apply ourselves by reduction of the debt to preparation for the arrival of the evil day. But, as he wrote to Jevons (March 16, 1866), "Until the great work of the liberation of industry was in the main effected, it would have been premature or even wrong to give too much prominence to this view of the subject. Nor do I regard that liberation as yet having reached the point at which we might say, we will now cease to make remission of taxes a princ.i.p.al element and aim in finance. But we are in my judgment near it. And I am most anxious that the public should begin to take a closer and more practical view of the topics which you have done so much to bring into prominence."

He was always thinking of the emanc.i.p.ation of commerce, like Peel and Cobden. His general policy was simple. When great expenditure demanded large revenue, he raised his money by high income-tax, and high rates of duty on a few articles, neither absolute necessities of life nor raw materials of manufacture. He left the income-tax at fourpence. In 1866, he told the House that the new parliament then about to be elected might dispense with the tax. "If," he said, "parliament and the country preferred to retain the tax, then the rate of fourpence is the rate at which in time of peace and in the absence of any special emergency, we believe it may be most justly and wisely so retained." While cordially embracing Cobden's policy of combining free trade with retrenchment, he could not withstand a carnal satisfaction at abundant revenue. Deploring expenditure with all his soul, he still rubs his hands in professional pride at the elasticity of the revenue under his management.

II

When it is asked, with no particular relevancy, what original contribution of the first order was made by Mr. Gladstone to the science of national finance, we may return the same answer as if it were asked of Walpole, Pitt, or Peel. It was for Adam Smith from his retreat upon the sea-beach of distant Kirkcaldy to introduce new and fruitful ideas, though he too owed a debt to French economists. The statesman's business is not to invent ideas in finance, but to create occasions and contrive expedients for applying them. "What an extraordinary man Pitt is," said Adam Smith; "he understands my ideas better than I understand them myself."

Originality may lie as much in perception of opportunity as in invention.

Cobden discovered no new economic truths that I know of, but his perception of the bearings of abstract economic truths upon the actual and prospective circ.u.mstances of his country and the world, made him the most original economic statesman of his day. The glory of Mr. Gladstone was different. It rested on the practical power and tenacity with which he opened new paths, and forced the application of sound doctrine over long successions of countless obstacles.

(M21) If we probe his fame as financier to the core and marrow, it was not his power as orator, it was not his ingenuity in device and expedient, it was his unswerving faith in certain fixed aims, and his steadfast and insistent zeal in pursuing them, that built up the splendid edifice. Pitt performed striking financial feats, especially in the consolidation of duties, in reformed administration, and in the French treaty of 1786. But ill-fortune dragged him into the vortex of European war, and finance sank into the place of a secondary instrument, an art for devising aliments, some of them desperate enough, for feeding the war-chest of the nation.

Sir Robert Walpole, Mr. Gladstone wrote, "had not to contend with like difficulties, and I think his administration should be compared with the early years of Pitt, in which way of judging he would come off second, though a man of cool and sagacious judgment, while morally he stood low."(40)

In the happier conditions of his time, Mr. Gladstone was able to use wise and bold finance as the lever for enlarging all the facilities of life, and diffusing them over the widest area. If men sometimes smile at his extraordinary zeal for cheap wines and cheap books and low railway fares, if they are sometimes provoked by his rather harsh views on privileges for patents and copyrights for authors, restrictive of the common enjoyment, it is well to remember that all this and the like came from what was at once clear financial vision and true social feeling. "A financial experience," he once said, "which is long and wide, has profoundly convinced me that, as a rule, the state or individual or company thrives best which dives deepest down into the ma.s.s of the community, and adapts its arrangements to the wants of the greatest number." His exultation in the stimulus given by fiscal freedom to extended trade, and therefore to more abundant employment at higher wages, was less the exultation of the economist watching the intoxicating growth of wealth, than of the social moralist surveying multiplied access to fuller life and more felicity. I always remember, in a roving talk with him in 1891, when he was a very old man and ill, how he gradually took fire at the notion-I forget how it arose-of the iniquities under which the poor man suffered a generation ago. "See-the sons and daughters went forth from their homes; the cost of postage was so high that correspondence was practically prohibited; yet the rich all the time, by the privilege of franking, carried on a really immense amount of letter-writing absolutely free. Think what a softening of domestic exile; what an aid in keeping warm the feel of family affection, in mitigating the rude breach in the circle of the hearth."

This vigorous sympathy was with Mr. Gladstone a living part of his Christian enthusiasm. "If you would gain mankind," said old Jeremy Bentham, "the best way is to appear to love them, and the best way of appearing to love them, is to love them in reality." When he thought of the effect of his work at the exchequer, he derived "profound and inestimable consolation from the reflection that while the rich have been growing richer, the poor have become less poor." Yet, as my readers have by this time found out, there never was a man less in need of Aristotle's warning, that to be forever hunting after the useful befits not those of free and lofty soul.(41) As was noted by contemporaries, like all the followers of Sir Robert Peel he never thought without an eye to utilitarian results, but mixed with that att.i.tude of mind he had "a certain refinement and subtlety of religiousness that redeemed it from the coldness, if it sometimes overshadowed the clearness, of mere statesmanlike prudence." On the other hand, he had "the Lancashire temperament."

III

(M22) This thought and feeling for the taxpayer was at the root of another achievement, no less original than the peculiar interest that he was able to excite by his manner of stating a financial case. Peel was only prime minister for five years, and only four months chancellor. Mr. Gladstone was prime minister for twelve-ten years short of Sir Robert Walpole in that office, seven years short of Pitt. But he was also chancellor of the exchequer under three other prime ministers for ten years. Thus his connection with the treasury covered a longer period than was attained by the greatest of his predecessors. His long reign at the treasury, and his personal predominance in parliament and the country, enabled him to stamp on the public departments administrative principles of the utmost breadth and strength. Thrift of public money, resolute resistance to waste, rigid exact.i.tude in time, and all the other aspects of official duty, conviction that in the working of the vast machinery of state nothing is a trifle-through the firm establishment of maxims and principles of this sort, Mr. Gladstone built up a strong and efficacious system of administrative unity that must be counted a conspicuous part of his very greatest work. "No chancellor of the exchequer," he once said, "is worth his salt who makes his own popularity either his first consideration, or any consideration at all, in administering the public purse. In my opinion, the chancellor of the exchequer is the trusted and confidential steward of the public. He is under a sacred obligation with regard to all that he consents to spend."(42) This tone of thinking and feeling about the service of the state spread under his magisterial influence from chancellors and the permanent officers that bear un.o.btrusive but effective sway in Whitehall, down to tide waiters and distributors of stamps. As Burke put the old Latin saw, he endeavoured to "give us a system of economy, which is itself a great revenue." The Exchequer and Audit Act of 1866 is a monument of his zeal and power in this direction. It converted the nominal control by parliament into a real control, and has borne the strain of nearly forty years.

He was more alive than any man at the exchequer had ever been before, to the mischiefs of the spirit of expenditure. As he told the House of Commons in 1863 (April 16): "I mean this, that together with the so-called increase of expenditure there grows up what may be termed a spirit of expenditure, a desire, a tendency prevailing in the country, which, insensibly and unconsciously perhaps, but really, affects the spirit of the people, the spirit of parliament, the spirit of the public departments, and perhaps even the spirit of those whose duty it is to submit the estimates to parliament." "But how," he wrote to Cobden (Jan.

5, 1864), "is the spirit of expenditure to be exorcised? Not by my preaching; I doubt if even by yours. I seriously doubt whether it will ever give place to the old spirit of economy, as long as we have the income-tax. There, or hard by, lie questions of deep practical moment."

This last pregnant reference to the income-tax, makes it worth while to insert here a word or two from letters of 1859 to his brother Robertson, an even more ardent financial reformer than himself:-

Economy is the first and great article (economy such as I understand it) in my financial creed. The controversy between direct and indirect taxation holds a minor though important place.

I have not the smallest doubt we should at this moment have had a smaller expenditure if financial reformers had not directed their chief attention, not to the question how much of expenditure and taxes we shall have, but to the question how it should be raised.... I agree with you that if you had only direct taxes, you would have economical government. But in my opinion the indirect taxes will last as long as the monarchy; and while we have them, I am deeply convinced that the facility of recurring to, and of maintaining, income-tax has been a main source of that extravagance in government, which I date from the Russian war (for before that a good spirit had prevailed for some twenty-five years).

Bagehot, that economist who united such experience and sense with so much subtlety and humour, wrote to Mr. Gladstone in 1868: "Indirect taxation so cramps trade and heavy direct taxation so impairs morality that a large expenditure becomes a great evil. I have often said so to Sir G. Lewis, but he always answered, 'Government is a very rough business. You must be content with very unsatisfactory results.' " This was a content that Mr.

Gladstone never learned.

(M23) It was not only in the finance of millions that he showed himself a hero. "The chancellor of the exchequer," he said, "should boldly uphold economy in detail; and it is the mark of a chicken-hearted chancellor when he shrinks from upholding economy in detail, when because it is a question of only two or three thousand pounds, he says that is no matter. He is ridiculed, no doubt, for what is called candle-ends and cheese-parings, but he is not worth his salt if he is not ready to save what are meant by candle-ends and cheese-parings in the cause of the country."(43) He held it to be his special duty in his office not simply to abolish sinecures, but to watch for every opportunity of cutting down all unnecessary appointments. He hears that a clerk at the national debt office is at death's door, and on the instant writes to Lord Palmerston that there is no necessity to appoint a successor. During the last twenty years, he said in 1863, "since I began to deal with these subjects, every financial change beneficial to the country at large has been met with a threat that somebody would be dismissed." All such discouragements he treated with the half scornful scepticism without which no administrative reformer will go far.

He did not think it beneath his dignity to appeal to the foreign office for a retrenchment in fly-leaves and thick folio sheets used for docketing only, and the same for mere covering despatches without description; for all these had to be bound, and the bound books wanted bookcases, and the bookcases wanted buildings, and the libraries wanted librarians. "My idea is that it would be quite worth while to appoint an official committee from various departments to go over the 'contingencies' and minor charges of the different departments into which abuse must always be creeping, from the nature of the case and without much blame to any one." Sir R.

Beth.e.l.l as attorney-general insisted on the duty inc.u.mbent on certain high officials, including secretaries of state, of taking out patents for their offices, and paying the stamp duties of two hundred pounds apiece thereon.

"I shall deal with these eminent persons," he wrote to the chancellor of the exchequer, "exactly as I should and do daily deal with John Smith accused of fraud as a distiller, or John Brown reported as guilty of smuggling tobacco." Mr. Gladstone replies (1859):-

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 enn.o.bling 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 part.i.tions put up round s.p.a.ces taken off the deck. Thirteen years after, his unslumbering memory made this an ill.u.s.trating 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; 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.