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EDUCATIONAL SERIES
THE BRITISH BUDGET
Tho following interesting article is taken from
an editorial printed in tho Galveston (Texas)
Daily News:
That England needs a larger revenue than it
now has is admitted hy liberal and conservative
alike. Tho need comes mainly from the increas
ing burden of pauperism and from tho policy
of enlarging tHe navy. Tho question of this
policy was made an issue last summer. The de
cision was something of a compromise. Moro
Dreadnoughts wore ordered not so many as the
conservatives demanded, but more than the lib
erals thought were needed to maintain the em
pire's naval supremacy. It was this decision
which made the need of greater revenue so clear
and imperative that all men of both parties recog
nized it.
The present issue is a question of how it shall
be raised. The conservatives, recanting some
what those doctrines of political economy that
they have, for the most part, adhered to for half
a century, and getting inspiration from Mr.
Chamberlain, proposed a restoration of tariff
duties. The liberals, nominally under the lead
ership of the premier, Mr. Asquith, but actually
under that of Mr. Lloyd-George, chancellor of
tho exchequer, protested against this policy as
one that would, tax the necessities of men, a
policy that would tax expenditures. They pro
posed to tax wealth, particularly excessive
wealth. The scheme they have devised is in the
budget.
This scheme, contrary to what seems to be
the popular notion, is not remarkable as a dis
covery of new sources of revenue. As a matter
of fact, it imposes only one new form of taxa
tion; and while most of the objection has been
aimed at that one new form, it is not that which
has engendered all the opposition. Much of
it arises from the fact that old taxes are in
creased Tho taxes, tlaat are increased are those
bearing on the liquor, traffic, motor car licenses,
on "unearned" incomes, and on "earned" in
comes exceeding; $15,000, and on estates of de
ceased persons, which last named tax is equiva
lent to our inheritance tax. The features of this
budget that may be called original are, first, a
supertax of about 12c on every $5 of incomes
of $25,000 or over, the supertax to apply, how
ever, only to the amount in excess of $15,000;
and, second, the increment taxes, applying to
land.
It is this increment tax that has excited the
bitterest opposition, as might have been expect
ed, since it was not only devised, but has been
very ingeniously designed to lay the hand of. tax
ation in a' discriminating way on the feudal hold
ings of the nobility, who, for the most part, spin
not, weave not, nor draw water, nor hew wood,
but who, if one must say it, aro mostly drones.
It would tax the patience of the ordinary read
er to explain this increment tax in full detail.
It will suffice for a fair understanding of it to
say that when a piece of property is sold, or
leased for a term of more than fourteen years,
the price at which it is sold or the valuation at
which it is leased is compared with the valua
tion at which the property was last taxed, and
the- difference is the increment. Of this incre
ment it is proposed that the government shall
take 20 per cent. Numerous exceptions are
made, always for the purpose of restricting the
tax to large property holders. There is no in
crement tax on agricultural land that has no
greater value than its value for agricultural pur
poses. "When the holding is not more than fifty
acres and the value not more than $375 an acre,
there is no increment tax, nor is the tax to-'be
levied where the increment results from expendi
tures for improvements. If a home site is in
London and its rental value is not more than
$200 a year, it is exempt from this tax; in other
cities above 60,000 population a home site is
exempt if its rental value does not exceed $150
. N va year, and in all other cities a' home site is ex
empt from this increment tax if its rental value
does not exceed $90 a year. There aro a number
of other exceptions, but these are the salient
ones.
This tax scheme is a frank effort to place a
greater part of the burden of government on
the shoulders of accumulated wealth, while the
increment tax is an equally frank effort to take
on behalf of society a part of those values which
are created by society as a whole. For when,,
during tlio course of a year, ten years, or any
interval, the value of land increases without hav
ing undergone any improvement, it is the in
dustry of society, and society's greater need of
land, that cause that enhancement. Heretofore
contributing nothing, or at best but a small frac
tion toward the enhancement of value, the own
ers of the land have gathered the whole of the
profit, and that, not by selling, and thus loosen
ing tho aristocracy's land monopoly, but by leas
ing it at a higher rental. It would be hard to
combat this principle, as an abstract proposi
tion, and it would seem that in England, where
the inequalities of fortune are so great and the
opportunities of the natural man so restricted,
only purblind privilege could have the temerity
to question the justice of it.
Now by rejecting it and thus violating long
established custom if not the letter of the con
stitution, the lords have left it to the people
to decide whether these new taxes shall be levied.
Since they are levied on the few for the benefit
of the many, there would seem to be no room to
doubt that they will be sanctioned at the polls;
and yet it is scarcely less incomprehensible that
the lords should brave the admitted perils of
this court unless they thought there was at least
a prospect of victory at the polls. Certainly it
must be regarded as the course of desperation,
and we may expect to witness all the coercion
that wealth and social prestige can exert to de
ter voters from giving voice to their sentiments
and desires.
BALFOUR DISCOMFITED
Asquith evidently scored a great hit while
Balfour was greatly discomfited during debate
in the house of commons on, the budget. The
following is taken from a London cablegram:
Mr. Balfour, leader of the opposition, evident
ly was suffering 'from the effects of his indis
position, and did not speak at his best. His
speech lacked the ring of sincerity and convic
tion which characterized the prime minister's.
The latter had "an easy task in pouring ridi
cule upon what he described, amid the rousing
and encouraging cheers of his supporters, as "a
new-fangled Caesarism," this "arrogant usurpa
tion" of the house of lords.
The premier's ironical reference to the "in
stinct of divination" of the peers on reaching
manhood dissolved his hearers in laughter. He
quoted with trenchant effect the speech of Mr.
Balfour less than a year ago, in which the ex
premier described himself as a "house of com
mons man," and said:
"It is the house of commons, not the house
of lords, which settles and controls our financial
system. If the house of lords could touch the
money bills, the executive machinery of the
country would be brought to a standstill."
The amusement which the house showed at
these quotations from Balfour against himself
was only equaled by the chagrin depicted on the
faces of Mr. Balfour's followers. Altogether,
Mr. Asquith surpassed himself, and his elated
followers declare that he never made a finer or
more effective speech.
THE PRESEDENT'S MESSAGE
"President Taft's first annual message wasl
one of the tamest documents ever 'delivered byL.
the chief executive to the American congress.
-The president recommends a law "requiring that
candidates in elections of members of the house
of representatives and committees in charge of
their candidacy and campaign, file in a proper
office of the United States government a state
ment of the contributions received and of the
expenditures incurred in the campaign for such
elections, and that similar legislation be enacted
in respect to all other elections which are con
stitutionally within the control of congress."
The important point in such legislation is
that the facts be made public prior to election
day in order that the people may understand
the character of the political party's backing.
The Important point in this portion of President
Taft'a message is that he did not suggest this
essential feature. Mr. Taft admits "the ad
vancing prices of living" and by his pleas for
economy confesses the extraordinary extrava
gance of the administration of public affairs by
his political party. In his reference to the tariff
question he emphasizes the idea that threatened
tariff revision "halts business and Interferes
with the course of prosperity." And it must
be plain that no honest tariff revisionist among
the people can find a note of comfort in the
VOLUME 9, NUMBER 49
president's references to this Important subject.
The people are told that the important ques
tions now before the public will be treated in
special messages. But it ought to be clear to
every intelligent person that from the tone of
the president's annual message these special
messages will not suggest reforms that will
be unacceptable to the representatives of special
interests. The president says that the Sherman
anti-trust law needs amendment. He is mis
taken, that law needs enforcement vigorous,
relentless enforcement of its criminal clause so
that the proud violators of a time dishonored
statute may be made to know that under the
American government the law is no respecter
of persons, and the officers of the law are tho
defenders of the public welfare rather than the
champions of the special interests. The presi
dent lays great emjphasis upon the postoflico
deficit and the claim that it is brought about
by the low rate of postage on second-class mail
matter. He says nothing about the exorbitant
prices paid to the railroads for carrying the mail
and the padding of the mails in the interests
of the railroads during the period (supposed
to be known only to government officials) during
which the malls are weighed. Mr. Taft is to be
congratulated in that he does not use a mask
in dealing with ship subsidy. He calls It "Bliip
subsidy" and boldly declares in favor of it.
"The proportionate increase" says the presi
dent "in the output of gold which today is the
chief medium of exchange and is in some re
spects a measure of value, furnishes a substan
tial explanation of at least part of the Increase
in prices." Then after all the democrats were
right when they insisted upon the quantitative
theory of money.
"The increase in population," says the presi
dent, "and the more expensive mode of living
of the people which have not been accompanied
by a proportionate increase in acreage produc
tion may furnish a further reason." But what
about the trusts organized and imposing upon
the people in the face of a criminal clause that
is ignored by republican officials? And what
about the republican tariff enacted in the in
terests 0$ great manufacturing concerns that
provided the republican party with its campaign
funds?
The people are not quite so simple, Mr. Taft,
as republican leaders think they are.
The president's message excites little com
ment for two reasons: First, because he re
serves for special messages several important
subjects, namely the trusts, inter-state com
merce, conservation of national resources and
finance, and, second, because his recommenda
tions on other subjects had been previously an
nounced In the press dispatches.
He is to be commended for reducing the esti
mates for the ;.rmy and navy, although he doe3
so under stress of necessity to save a deficit.
His recommendations as to the reformation of
the criminal law are good, and his proposed lim
itation of the writ of injunction is also good as
far as ft goes.
He urges the postal savings bank to prevent
the establishment of guaranteed banks. It
would be better to tfrge the guaranteed bank
in order that government savings banks might
not be necessary. It is to be hoped that tho
bankers will at last see that they must accept
one or the other and the guaranteed bank is
tho better systems of the two.
He errs in recommending the ship subsidy
and errs again in recommending civil pensions.
He errs also in trying to postpone further
discussion of the tariff question. The people
do not need investigation; they need relief.
The average citizen does not require the report
of a committee of experts to convince him that
the Aldrich law was made for the tariff barons
and not for the consumers.
The progressive republicans will not see any
symptoms of reform in the message but it will
please those who, haying their hands in other
peoples' pockets, do not want to be disturbed.
BRAVE TALK
The Philadelphia North American (rep.) says
that if President Taft does not take his stand
against Aldrich and Cannon "he will be a fail
ure as a president;" also "if he does not do so
he will wreck his reputation. If he does not
do it he will split the republican party."
This Is all very brave talk but the Philadelphia
North American has printed similar editorials
before between election days and In tho enci
has been found battling for the ticket supporter
by tho system. Tho 'Philadelphia' North Ameri
can so far as its political 'efforts are concerned
is "fearfully and wonderfully' made."
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