CHAPTER XIII

CO-OPERATION

_Children of men! the Unseen Power, whose eye_

_For ever doth accompany mankind,_

_Hath looked on no religion scornfully_

_That man did ever find._

--MATTHEW ARNOLD.

This is not the place to discuss the merits or demerits of any

theological views or of any system of Church government, but the

question of the influence of religion on the life of the State and the

way in which and conditions under which it can be rightly exercised

cannot be overlooked. There is no doubt whatever that religious

influence might be a most potent and useful factor in Reconstruction,

using the word in the broadest sense. There are some branches of work in

which no other known influence can effect what is required. Leaving

aside for the moment the fact that there are needs of humanity which

religion alone can satisfy, and looking only to social improvement, the

power of religion has been proved again and again, especially in dealing

with the cases that seem most difficult and almost hopeless. In India,

for example, there are certain debased tribes which are habitually

criminal, and have, in fact, by tradition devoted themselves to the

commission of crime. The only agency which has been able to effect a

reclamation and improvement of these tribes is the Salvation Army,

which, by general consent, even of those who have no sympathy with its

particular religious views, has achieved wonderful results. There is no

doubt, too, that some of the worst parts of certain seaports in our own

country have been vastly improved by the same agency. This has been done

by a definite appeal made on religious grounds, and those who have made

it have been inspired by religious motives. It required, however, a body

which had peculiar methods of its own to do it. The basis of the action,

also, of such organisations as the Church Army and the Young Men's and

Young Women's Christian Associations is definitely religious, and the

vigorous and successful way in which their work has been carried on by

such associations is due mainly to the influence of religion. It would

be well for our present purpose to treat the question from a position,

whether real or assumed, of absolute detachment from any particular

religious belief, and from any special religious community. Looked at

even from such a detached position, it appears that the first condition

required to enable religious influence to be effectively exercised is to

secure religious peace. It is impossible to deny that there has been a

kind of jealousy and hostility between those who hold different opinions

about theological and ecclesiastical questions which injures the work of

all. Anyone, for example, who was in the habit of meeting educated

Indians at the time of the Kikuyu controversy could not have helped

noticing the harm done to the cause of the Christian religion by that

controversy. There were Indians, whose attitude to Christianity before

might almost have been called wistful admiration, seeing the brighter

hope and fuller life it opened to all classes, and the universal

brotherhood of men which it proclaimed, who then spoke in an altered

tone, and their feeling seemed to be tinged with a half-concealed and

almost contemptuous pity. How much beneficial action might be taken by

religious bodies acting in co-operation! There is a deep truth in a

remark once made by the late Bishop of Manchester, Dr. Moorhouse, when

speaking of possible co-operation on a certain matter between people

belonging to different religious communities: "It would be so easy did

we only recognise how large is the area covered by things on which we

agree, how important they are, compared with those on which we differ."

Some have felt so keenly the injury done by religious differences that

schemes have been put forward for corporate union of a number of

different Churches. Such union may or may not be possible, but, even if

it is, is it best to bring about such a union by any compromise under

which one side gives up part of what it regards as useful and important

in exchange for a similar concession on the other? May not a kind of

confederation between different bodies for certain purposes, each

maintaining its separate existence, be better than formal incorporation?

May there not be a unity of spirit and bond of peace between those whose

views differ, without either party giving up the iota to which he may

attach importance? Forms devoutly prized and helpful to one man may be

repellent and a hindrance to others.

There is much to be learnt from a saying quoted by Sir Edwin Pears in

writing of certain Mahommedan sects: "The paths leading to God are as

numerous as the breaths of His creatures; hence they consider religious

toleration as a duty." Toleration does not mean simply abstinence from

the thumbscrew and the rack or even the repeal of the Conventicle or the

Five Mile Act, but appreciation of the religious opinions and practices

of others, and due respect for them. Without formal union there may not

only be peace and goodwill between bodies which keep up their separate

organisations, they might also act together heartily and effectively

both in philanthropic work and in combating certain evils for which the

influence of religion is the most effective cure. It is a good sign of

the times that a joint volume has already been published on Religion and

Reconstruction, containing essays by a number of those whose views no

doubt differ widely, but who find no difficulty in uniting in a common

undertaking. The book contains essays by Bishop Welldon, Dr. Orchard,

Monsignor Poock, and others representing different communions, and they

appear to have had no difficulty at all in a joint enterprise of this

kind.

Is there any sufficient reason why the leaders of religious thought

belonging to other denominations should not be invited sometimes to

speak in the pulpits of the National Church? They would not use the

occasion for attacking Episcopacy. Conversely it might be a wholesome

thing if a Bishop or other well-known Episcopalian clergyman

occasionally spoke to the great congregations in such familiar London

meeting-places as the Newington Tabernacle or the City Temple. They

might be trusted not to choose Apostolic Succession as their subject.

Joint religious services have already been held, and the practice might

be extended. The Bishop of London has been seen in Hyde Park on the

platform with representative men from the Wesleyans, Independents (it is

pleasanter to use the old name rather than "Congregationalist," which

may be correct, but is hideous), and Presbyterians, with a band from the

Salvation Army in attendance. Such things do good, and are the best

reply to the orators by the Reformers' Tree, whose most effective weapon

is to sneer--not unnaturally--at the enmity amongst Christians. A

"church" parade for the Volunteers has in a village been held in the

Baptist chapel, and many who had never entered a Nonconformist place of

worship before, felt how real "unity of spirit" did exist.

Another fruitful opportunity for joint work is in the realm of study and

of theological education. This object would be promoted by the

establishment in our Universities of theological faculties where a

part--it may be a large part but not the whole--of the training of those

who intend to enter the ministry or for other reasons to devote

themselves to theological study may be carried on. Such a faculty has

been instituted with marked success in Manchester. No test is imposed

except tests of knowledge, but the faculty has been said to be the most

harmonious in the University. Whatever body he belongs to, whatever

Church he wishes to serve, the student could not fail to gain profit

from studying the language of the New Testament under a scholar like the

late Professor Moulton, and would never find anything that--to use the

words of the founder of the University--"could be reasonably offensive

to the conscience of any student." Already the effect of such a faculty

in advancing theological study and still more in uniting members of

different communions in the pursuit of truth has been most marked.

There is one point, however, in considering the influence of religion on

Reconstruction which must be borne in mind. Untold harm has been done in

the past by the intrusion of the lawgiver or the judge into the domain

of religion, and, on the other hand, by the intrusion of the minister of

religion into the domain of the legislator or the magistrate. It is

essential that in dealing with any question of legislation or political

action the clergy and ministers of all denominations, if they take part

at all, should speak as citizens, and not professionally. They, in

virtue of their office, ought not to be, and they have the highest

authority for not claiming to be, judges or lawgivers. They have not,

and ought not to claim, any authority to decide on the lawfulness of

paying tribute to Caesar; any such claim must be strenuously resisted.

The use of religious sanctions as weapons of political warfare is not

wholly obsolete. We hear of it from across St. George's Channel--it

should be condemned like poison gas on the battlefield. And, lastly, it

must never be forgotten that there are certain things with regard to

which attempted suppression by law is certain to result in evil and

disaster. With regard to these things the influence of religion, on the

other hand, may be all-effective if it is kept absolutely distinct from

any question of legislation or of legal penalties. The spheres of

religion and the criminal law must never be confused. Shakespeare, "the

mirror of human nature" for all time, once blended bitter irony with

infinite pathos. "Measure for Measure" has its warning for every age.

It would be well to study the ugliest as well as the most beautiful

parts of that drama, and see what it really means, and what is its

lesson.

Exercised within its proper sphere the influence of religion may still

be as potent a force now as in the past. It may inspire the right frame

of mind in dealing with every question, may encourage hope, sustain

faith, and diffuse charity.

Reiterated until wearisome we hear the question asked, "What is wrong

with the Church?" sometimes from outside with a tone almost of contempt,

with little, or no care, for remedy if anything be wrong; sometimes from

within with a note of anxiety, uncertain whether it is safe to confess

openly the fact that anything can so be wrong. To the question coming

from within the Church, a voice might answer from the outer galilee, "Is

not what is wrong with the Church--like what is wrong with most of

us--thinking, perhaps talking, too much of itself, considering what

figure it makes in the world, rather than in self-forgetful devotion

giving itself to the work set before it, to delivering some message in

which it intensely believes as necessary for mankind?" It has been

likened to a bride; is not the bride too self-conscious, thinking

whether her garb is not fine enough or too fine, her possessions too

small or too large, her influence too weak or opposition to it too

strong? How much discussion is devoted to the question, what phrases

must be repeated, what forms adopted, to pass the janitor who guards her

doors! As has been truly said, the really useful reform for all of us

would be that each should do his appointed work at least ten per cent.

better than he has done it before. The work to be done should be the

special work assigned to each and for which each is best fitted. We long

for peace, but in settling the constitution of a League of Nations it

will be the jurist not the churchman who will help us. In aiming at

political or industrial peace the practical good sense of the

statesman, the employer, and the workman will best point out what is

wanted; the Church, as such, is better out of the way in framing

legislation. But suppose even that we establish securely international

and political, industrial and social peace, is that peace all we need?

Shall we not still in youth be restless, anxious about the future of our

own lives and the lives of those nearest to us, unsettled by ambitions

for what we may not attain, disappointed at the little progress we make;

restless all through life, disturbed by thoughts of what we desire but

cannot have; restless, most of all, in age, knowing that attainment is

no longer possible, and, if we have attained anything, feeling how

little it is worth? Who will take for his proper sphere to show the way

to a peace which may pass the understanding of those who, in

disappointment and loss and vain endeavour, which will go on even if the

dreams of national and social progress and improvement are realised, and

alike in failure or success, will need that peace more and more as long

as the life of man lasts? Sometimes we see among those round us calm

faces the living "index of a mind" at peace, which make us feel that

there are those working in our midst in whom that peace exists. Let her

tell the way to that and the answer would be, "There is nothing wrong

with the Church; she is fulfilling her mission; ever, as of old, will

glad welcome greet the footsteps of him that bringeth good tidings, that

publisheth peace." [7]

FOOTNOTES:

[Footnote 7: The word "Church" is used in the sense which each reader

chooses to attach to it. Definition in such matters leads to

dissension.]

Part III

RETRENCHMENT

CHAPTER XIV

STATE EXPENDITURE AND INCOME

_Political economy, as a branch of the science of a

statesman or legislator, proposes two distinct objects,

first, to provide plentiful revenue or subsistence for

the people or, more properly, to enable them to provide

such a revenue or subsistence for themselves, and,

secondly, to supply the slate or commonwealth with a

revenue sufficient for the public services._--ADAM SMITH.

Taking first the second of the two objects mentioned by Adam Smith, it

will be convenient under the heading of "Retrenchment" to treat not only

the question of economy in the expenditure of the State, but also the

other side of the account, and consider what general lines of action

should be adopted to make revenue balance expenditure, in the first

place by reducing expenditure, and, in the second, by increasing

revenue, in view of the fact that the absolutely necessary expenditure

will be enormously enhanced to meet the interest on the National Debt.

Assuming that the War were to end in the spring of 1919, the debt will

probably amount to about seven thousand millions after allowing for

loans due from the Allies and Dominions so far as they are likely to be

then recoverable. Taking interest at 5 per cent. with a sinking fund of

only half per cent., it is estimated that the permanent annual charge in

respect of the Debt will then be about 380 millions. No doubt part of

the Debt bears interest at a lower rate than 5 per cent., but a portion

has been borrowed at a higher. This is on the assumption that the War

will end within this financial year. Even if the War does end within the

financial year, much of the expenditure occasioned by it must go on

during the period of demobilisation, and during part of that period the

Debt will probably go on growing, as it can hardly be expected that

sufficient revenue can be raised by taxation to meet this continued

expenditure directly due to the War. There will also be for many years

to come a very heavy expenditure on pensions, and, whatever other

savings may be effected, the duty of providing pensions for injured and

disabled sailors and soldiers is paramount, and the provision must be

made generously.

It seems highly probable, therefore, that the annual Debt service will

ultimately amount to nearly 400 millions, and may be much more if the

War goes on over 1919. It is a gigantic burden to bear. Mr. Bonar Law

has stated in the House of Commons that a loan of one thousand millions

represents the labour of ten million men for a whole year, so we may

take it that the annual charge for the National Debt will require the

whole labour of four million men to meet it, and that this charge will

be continuous for many years. The normal expenditure after the War,

apart from Debt service, has been reckoned to be 270 millions. It will

certainly be more unless rigid economy is practised and all the new

schemes which are being proposed involving expenditure of money are

carefully scrutinised to see whether the expenditure is such as the

country ought to undertake in view of its financial obligations. As the

Debt service will be practically constant and irreducible unless revenue

largely exceeds the total annual expenditure, which is very improbable,

it is clear that a strong effort must be made to reduce this expenditure

and also, so far as possible, to increase the State revenue. Unless this

is done there will be a deficit even after the War, and the Debt will

have to be increased to meet it. There is no question of greater

urgency, and it must be resolutely faced. We shall probably find a

disposition, both in the Government and in Parliament, to shirk it. The

influence of the extension of the electorate will, in all likelihood, be

against rather than in favour of economy. There is a common assumption

that people can get the State to pay for things instead of paying for

them themselves; that there is no need to practise personal economy or

to save because the State will provide. Wage-earners who began by

practising some self-denial in order to save have said, "What is the use

of troubling? The man who saves is really no better off than the man who

spends all his earnings, as the State will provide what is required to

meet the needs of the latter."

What, then, can be done to reduce expenditure? It is impossible to do

more than indicate in outline the machinery by which this expenditure is

or might be controlled. During the War, for various reasons, the regular

and ordinary checks on extravagance and waste have almost ceased to

operate. The situation seems to have been getting worse until the

appointment of a Special Committee of the House of Commons on National

Expenditure in July, 1917. The Committee consisted of men with business

knowledge, and its reports have furnished valuable suggestions. On such

a subject anybody who has not direct access to documents and definite

personal knowledge of the work and expenditure of various departments,

and also some personal experience in State finance, may well hesitate to

express an opinion, and will prefer to quote the views of those who have

fuller information and better means of judging. There has been much

waste; what has gone on has even been described as a "wild orgy of

extravagance." The phrase has been used not only by irresponsible

critics, but by business men whose words carry weight. Let us call two

witnesses out of many available.

Mr. H. Samuel, in speaking of the work of the Select Committee, as late

as June 19, 1918, said, in the House of Commons, "that the Committee had

formed the opinion that in some cases the staffs of Government

departments had been swollen beyond all estimation; that they were

frequently ill-organised; that there was much waste of labour and

consequently of money in their establishments; that the Treasury had not

risen to the occasion during the War, and the Committee had regretfully

come to the conclusion that the War Office had been adopting a

deliberately obstructive attitude." Mr. Runciman on the same occasion

stated that "lax expenditure and loose control over distribution of

public money went far beyond the immediate departments concerned. It

went down into every factory, and the general effect was a scale of

national extravagance from which we should recover after the War only

with the greatest difficulty."

We shall not recover at all except by immediate, determined and, above

all, methodical action. Small economies, as Mr. Gladstone long ago

pointed out, are not to be despised. It is no doubt right to put up

notices in Government offices not to put coal on the fire after three

o'clock, but these savings will not go far when half a million can be

thrown away on the bogs and rocks round Loch Doon with no useful result

of any kind, and yet nobody seems to be made responsible for this waste,

nor can anyone say why it was allowed. We hear again and again of

improvident contracts and extravagant purchases, and also of absurd cost

incurred in supervising minute details. Why cannot clear general

authority to act on the spot in certain matters be given to some

responsible person, instead of instituting a system of checks which

often cause great delay as well as expense? A water pipe at a camp wants

some slight repair, costing less than half a sovereign. No one there has

authority to give an order, a well-paid official must be sent a day's

journey to inspect, and incurs expenses far exceeding the cost of the

work to be done. Why is good agricultural land taken for a site when

there is plenty of land near which is waste or of little value? Why does

a well-known firm which has a telephone and a post-bag think it worth

while to pay £15,000 for an introduction to a Government Department? Why

have we heard again and again of prices paid for goods greatly in excess

of the price for which they could be obtained from well-established

firms in the trade? Such instances could be multiplied, but enough has

come to light publicly, and been proved, to show how essential it is to

have some authority to deal with such matters and stop the leakage

which becomes a torrent. Apparently there has been an improvement lately

in many respects, but we are yet a long way from perfection.

There will be an immense dead weight of influence against economy owing

to the fact that so many persons are interested in keeping up and

increasing expenditure. As was said in the debate above referred to, "It

looks as if London were becoming a huge bureaucratic town where everyone

will be working in some Government department or other." One might say

everyone of all ages, remembering a remark made by someone entering a

building near Whitehall, and seeing the crowd of girls and boys in the

corridor, "I thought I was coming to a Government office, but it seems

to be a crêche."

For efficiency as well as for economy a thorough revision of the

executive departments of the Government is necessary. There is no doubt

that the present system has grown up at haphazard. It would be difficult

for anyone to form a clear idea of the duties assigned to or powers

conferred on the various departments, to say who in each department has

authority to do certain acts, or is responsible for seeing that they are

done properly.

To get the best account of the executive departments in England as they

existed before the War we must go to America. Professor A.L. Lowell's

book may be taken as the standard work on that subject. The chapters on

the Executive Departments, the Treasury, and the Civil Service give a

clear and interesting account of the administrative arrangements of the

British Government. He shows how new departments have grown up from time

to time to meet some new want as it arose, but their powers are often

ill defined. Various Boards were created, but in some cases it became an

established practice that the Board should not meet, or a Committee of

Council was set up and the work carried on under the supposed direction

of "my Lords." It was a mere fiction. There has been no clear and

consistent scheme for distributing the work of Government between the

various departments on any intelligible principles.

All are spending money, some of them enormous sums. Staffs are growing

inordinately, much of the work is duplicated, much consists in

communications with other departments which would be unnecessary if the

work of each were better defined.

It should be clear in each department who has authority to decide any

particular question, to incur expenditure, to enter into binding

agreements. The executive government of the country is in a chaotic

state, relieved to some extent by the good sense and good feeling of the

members of the great army of officials who carry it on. No one can deny

that the Civil Service is not only pure, but, taken as a whole, its

members individually are both able and industrious. It is better

organisation that is required. Some of the new Ministries ought to be

scrapped directly the War is over, and the business of others continued

only so far as necessary for winding up. But these new departments will

die hard.

Since the War new departments have grown up like mushrooms, sometimes

without any clear statement of their functions or powers being made, and

there has not been time to settle them at leisure by a course of

practice. The result is overlapping, friction which would be intolerable

but for the good-natured forbearance which English people have for a

state of confusion, waste of time and money in sending minutes, and in

correspondence between different departments, and often delays which

have had most unfortunate results. Does anyone know exactly what are the

respective functions and powers of the Ministry of Reconstruction, the

Ministry of Labour, the Board of Trade, the Ministry of Pensions, the

Ministry of National Service, the Board of Works, the Ministry of Food

Control, the Board of Agriculture and Fisheries, the War Trade

Department, the Home Office, the Local Government Board, the Committee

on Food Production, the Restriction of Enemy Supply Committee, the

Priorities Committees, the Ministry of Munitions, etc., etc. The list

might easily be extended.

A thorough revision of the executive departments is necessary if

government is to be both efficient and economical. There is plenty of

good material in the Civil Service, and it will always be easy to obtain

more. It is the system or want of system that is wrong.

The next question is to provide or restore a more effective general

control over expenditure and impose checks on the growing expenditure

which has been so marked in recent years, even before the War.

The ordinary machinery for dealing with and controlling expenditure is

or should be fourfold.

(1) The spending departments make definite estimates or are supposed to

do so. Since the War, this has not been the rule. Of course, there are

many cases in which it would have been absolutely impossible to let the

items of proposed expenditure be published or discussed in the House of

Commons; but, as soon as War requirements permit it, proper estimates

should again be prepared and pressure put upon the departments to reduce

them. At present the pressure is all the other way; the heads of the

departments apparently like to have a large establishment as well as to

extend their jurisdiction. It is not merely to give their department

more importance and a claim therefore to higher salaries; sometimes it

is the natural tendency of the vigorous man to enlarge the scope of his

influence. _Boni judicis_, says the old maxim, _ampliare

jurisdictionem_. ("It is characteristic of the good judge to extend his

jurisdiction.") It would be a good thing if instead of estimates being

laid directly before a Committee of the whole House of Commons, where

some small item is often the subject of long and acrimonious debate and

millions are passed without comment or consideration in a few minutes,

the estimates of each department were fully considered as a whole by

some small competent Committee of the House, uninfluenced by party

feeling, and representatives of departments could be asked questions on

their estimates.

To compare small things with great, a committee of this kind has been

found of the highest value in institutions where there are various

departments requiring large expenditure. It is usually then felt by each

person who sends in an estimate that it is to the credit of his

department not to make claims for expenditure which cannot be justified.

When the scale and character of the expenditure have been scrutinised

and the estimate has been passed, it is much better to leave a very free

hand as to the exact mode of expenditure. Outside control then becomes

irritating, and is itself a cause of extravagance; it means more

accounts, more correspondence, more consideration of papers.

(2) The Treasury is supposed to have the function of control, but a

change appears to have taken place, and it has now to a great extent

lost its control, and has even itself become a spending body. Professor

A.L. Lowell, in the work above referred to, after speaking of the

Treasury as the department which exhibits in the highest degree the

merits of the British Government, points out that even ten years ago,

"with the waning desire for economy and the growth of other interests,

the Treasury has to some extent lost its predominant position; although

it will no doubt maintain its control over the details of expenditure,

one cannot feel certain that its head will regain the powerful influence

upon general or financial policy exerted thirty years ago." A very

guarded statement, as was becoming in an author writing in another

country at a time when the tendencies to which he alludes were only

beginning to show themselves. Things have advanced during the last ten

years in the direction Professor Lowell indicated as probable, and it is

high time that this advance should be stopped.

We might venture to ask, indeed, the following questions: (i) Has not

the Treasury during the last ten years lost a large portion of its

control, and since the War almost its whole control over expenditure on

a large scale? (ii) Is the Treasury not more concerned with paltry

details than in imposing any real check on the extravagance of spending

departments? (iii) Has not the policy sometimes been actually to

encourage expenditure, and has not there been one case at least, even of

introducing vexatious taxation where the amount collected is far less

than the cost of collection? (iv) What has the Treasury done to prevent

or control "the orgy of extravagance" since the War began? The

department of State which has to do with revenue, with getting as much

as possible and spending only what is necessary, which has the duty of

"making both ends meet," ought to resume its functions and regain its

influence so that the Government may be conducted "on strict business

principles," to use Professor Lowell's phrase, "as it was throughout a

great part of the nineteenth century."

(3) The Cabinet should exercise more controlling power, and recognise

its collective responsibility for keeping down expenditure. As Professor

Lowell points out, the position of the Chancellor of the Exchequer in

the Cabinet was one of almost commanding influence. In Mr. Gladstone's

time his powerful personality, regularly exercised in favour of national

economy, did certainly have a great effect in preventing extravagance,

and some other Chancellors of the Exchequer no doubt used an influence

in that direction, but can it be safely asserted that there is in the

Cabinet as a whole sufficient attention given to retrenchment?

(4) Lastly, the House of Commons is supposed to control expenditure.

That control has generally been used, and quite rightly, as a means of

calling attention to grievances, and as giving an opportunity for

criticism of the executive; but the House of Commons should also put

pressure on the executive to curtail expenditure, not so much by

discussing small details which would be far better dealt with by such a

small Estimates Examination Committee as suggested, but by using its

influence generally against an increase of expenditure unless a clear

case for it is made out. During the War, Parliamentary control, at least

until the appointment of the Committee above mentioned, seems almost to

have gone. The House of Commons does not now exercise its influence as

it ought, to check extravagance, and probably the more widely the

electorate is extended, as already said, the less will the House of

Commons care to exercise rigid control in favour of economy. It is

always an easy way of getting popularity to be what is called "generous"

when dealing with other people's money. Everyone who looks after the

public interest by trying to prevent expenditure, whether national or

local, which is not imperatively called for, is styled mean and

narrow-minded, and his task is a thankless one. Everyone who wants money

spent will be able to make out a plausible case, either that the amount

is so small or the object is so important that what he asks must be

granted, and he will have some eager constituents to back him up. The

best chance for economy is to have a body of men whose decisions the

House will respect and not overrule, except for really good cause, who

have both the knowledge and the strength of character to go through the

estimates and call attention to the cases in which substantial

reductions could be effected, or proposals for increased expenditure

refused. It will not be an agreeable task, and now probably less popular

than ever. The masses admire lavish expenditure whether by public bodies

or by the private person who spends his money "like a gentleman," and it

is to be feared there will not be much help from the women electors, as

women, although they may practise economy occasionally themselves,

usually regard it as a most objectionable virtue in a man. How often in

families do we find the mother and sisters will admire the

self-indulgent idle youth who spends money freely even if he borrows

from them, rather than the steady, plodding son who, by rigid economy

and personal self-denial, helps to provide them with the means of

livelihood!

Turning to the other side of the account, what can be done to increase

the revenue of the State? It has been estimated that for the year

1919-20 it will amount to £900,000,000, but of this £300,000,000 is

excess profits duty, which can hardly continue--in its present form at

least--beyond the period during which additional expenditure above the

permanent normal requirements is needed, in order to carry out

demobilisation. Putting the permanent charge to meet interest on debt

and the cost of the public services at £670,000,000, there may be a

deficit even if the present rate of taxation is maintained, and the

normal expenditure remains at its existing level. There will be no

surplus for the reduction of debt, or to meet new demands. Some new

sources of revenue must, if possible, be found, and the old ones require

readjustment.

Income tax, if levied on the present system, has touched the extreme

limit. A rate of taxation willingly borne to meet the cost of war while

danger threatened will be felt more and more burdensome as time goes on.

To meet a higher income tax there will be pressure to increase salaries

paid by the Government and all public authorities. An official salary

fixed at £5,000 a year when income tax was one shilling and sixpence,

may be thought insufficient when it is nearly ten shillings including

super-tax. Persons have incurred liabilities for rent and other fixed

payments which they are not able to reduce. All along the line there

will be claims for higher payments for services rendered or goods

supplied. On the other hand, industrial undertakings will have to pay

more for the capital they must borrow to carry on and develop their

work, and 6 per cent. instead of 4 per cent. will have to be paid for

debenture capital now raised by the best industrial companies. For those

who have money to lend, the burden of tax may thus be practically met by

an increased income, but for those whose money is locked up in permanent

investments there will be no indirect relief in higher rates of

interest. Income tax, house duty, and rates will absorb so much that the

margin for voluntary expenditure will be small even out of incomes that

are nominally high.

The death duties, especially where a deceased person leaves a large

family, already cause much hardship. A general increase in the existing

rates of estate duty cannot be made without discouraging thrift. It is a

hardship if it is made impossible for parents to make reasonable

provision for children some of whom may from various causes be unable to

earn for themselves. On the contrary, where there are no children and no

widow to be provided for, death duties might be much increased without

causing hardship. A very much higher legacy duty might be charged in the

case of large sums passing on death to persons other than the widow,

direct descendants, or other near relatives of a deceased person. On

small legacies the present rates should suffice, but there is no moral

claim for distant relatives to be allowed to take large sums. Would

there be any real hardship in imposing a heavy duty of, say, 25 per

cent. on gifts over, say, £1,000 to collateral relations not dependent

on the testator or to strangers? Or there might be a graded scale

according to the remoteness of the relationship. In case of intestacy it

would be often a real advantage to take the _whole property_ for the

State, if there were no relations within the third or fourth degree,

i.e., uncles and aunts, and nephews and nieces being in the third

degree, first cousins in the fourth. Economists for the last hundred

years--Bentham, Mill, and others--have advocated such a change. Nearly

every judge or officer of the Courts who has to do with the

administration of estates would support a change which would do away

with much wasteful litigation and disappoint no reasonable expectations.

No source of revenue should be neglected if it can truly be said that by

imposing the additional taxation proposed there will be (i) no

dislocation of trade or hampering of industry or commerce; (ii) no

discouragement of thrift; (iii) no real hardship; (iv) no great expense

incurred in collection in proportion to the amount raised. It is only

sheer stupidity that refuses to adopt a means of raising even a small

amount when the method proposed for doing so would have positively

beneficial results in other ways.

The land increment duty should be a warning as regards cost of

collection. That cost relatively to the amount produced has been

enormous. But actual cost of collection as returned, represents only a

small part of the expenditure really caused by the tax. The time taken

up in making returns and filling up forms and obtaining the necessary

advice in doing so is a burden on those who own even the smallest landed

property and causes real hardship and injury. It discourages people from

acquiring small properties.

The only other source of additional revenue in immediate contemplation

appears to be the luxury tax. If this can be levied so as to fall on

articles which are really luxuries, i.e., things not required for full

and healthy life, the effect of such a tax should be wholly beneficial.

If, notwithstanding the tax, people go on buying such luxuries the State

will gain. If, on the other hand, the effect of the tax is to check

expenditure on luxuries it will be a gain to the country, because its

productive power and its purchasing power will be used to obtain

articles which are really valuable and do promote national welfare. The

idea that those who spend money on luxuries are helping trade, and so

benefiting others, ought to have been exploded long ago. If the industry

which has been devoted to producing articles which are really useless

were diverted to producing things of utility, the aggregate of human

happiness would be greatly increased. A difficulty in applying the tax

is that the price of an article is little criterion as to whether it is

a luxury or not.

There are two other sources from which additional revenue might be

obtained.

First, to impose again an export duty on coal. Such a duty would help

rather than hinder British industry. That industry is dependent

absolutely on the supply of coal. British Coal Measures are an asset

which enables the country to keep industries going, but it is a wasting

asset. Deeper and better mining may have upset calculations made by

Professor Jevons many years ago when he warned the country of the

disastrous consequences of using up our coal supplies, but sooner or

later the pinch will come. An export duty ought to be imposed on coal

directly the present war restrictions can be removed. Our stores of coal

cannot be indefinitely increased by increased industry. If the duty

operated to reduce export of coal British manufacturers would gain, and

be able to produce commodities at less cost. If the demand from abroad

were so strong that export did not diminish, the country would gain to

the whole extent of the duty paid by foreign purchasers. The ordinary

arguments in favour of free trade do not support objection to such an

export duty as this. There will be ample demand for all the coal that

can be produced. Even if there were not, it would be well not to use it

up so quickly. There are some kinds of coal, of which the amount

available is very limited, yet until the War broke out quantities of

such coal were freely sent to other countries, some of it to those who

are now at war with us, and so used to help our enemies, who got the

precious mineral cheap because we refused to allow the imposition of an

export duty. Probably the duty when it was tried was not imposed in the

best way, being charged at a fixed rate per ton instead of on an _ad

valorem_ scale, but this fault could easily be corrected. Special

exceptions in favour of Colonies or Allies, or for the supply of certain

places, might be made by arrangement in consideration of some equivalent

favour, or to meet some particular need.

The other suggestion involves more difficulties, and is of a more

far-reaching character. Would it not be possible to replace to some

extent the excess profits duty, which cannot be permanent, by a duty on

"excess dividends," that is, on the amounts paid out of the profits of a

business for the use of capital above a certain percentage? The excess

profits duty, in spite of all its anomalies and the difficulties of

assessment, has saved the financial situation during the War; a tax on

excess dividends might "save the situation" afterwards. When a business

is successful, paying, as many businesses have recently done, dividends

of 30 to 50 per cent., and sometimes even more, the return made to those

who have invested money in them is clearly excessive. From such

profitable businesses those who have the responsible management no doubt

may generally get better remuneration, possibly the workmen may get a

small bonus or share in such profits, but those who by a mere stroke of

good luck have embarked their money in these businesses, shareholders

who very likely know nothing whatever about the conduct of them, benefit

enormously. Such a tax would not discourage thrift or prevent a person

from getting a reasonable return on his savings. Take the case, say, of

two professional men. Both, by hard work and using up their lives in the

effort, manage to make a fair income and bring up their families. One of

them, to make provision for the future, invests £2,000 in safe

securities with fixed rate of interest, and £2,000 in some company whose

business is of a more or less speculative character, but by good fortune

becomes able to pay a dividend of 30 per cent. The other invests a like

sum in firm securities, and £2,000 in another company which turns out a

failure. Neither of them has anything to do with the conduct of the

business of the company in which he invests, but one has got a tip from

some friend or other who thinks he knows of a good thing. The work of

the two men is exactly the same; it is a mere fluke that one gets a huge

return and the other puts his money into a company which, without any

fault on his part, brings in nothing.

The tax suggested would be levied on the excessive profits distributed

in respect of the capital embarked in businesses of every kind. It was

pointed out long ago that a tax thus levied on all alike would be paid

wholly by the capitalist and "would neither affect the prices of the

commodities produced nor the distribution of capital." The duty might be

graded according to the percentage to be received on the capital of

each investor. It might be reasonable for the first 10 per cent. to pay

only the ordinary rate of income tax. Money in fixed permanent

securities may now produce 5 per cent. or 6 per cent., and the

additional 4 per cent. free from the excess duty would be a fair return

for risk and an inducement to enterprise. The rate of excess duty might

be increased according to the excess of profits above 10 per cent. until

when the profits reached, say, 30 per cent. the duty on the amount in

excess of 20 per cent. might be very high. The effect of the tax would

not be to reduce the spending power of the community; it would only be

that the State instead of the individual would to the extent of the duty

obtain the power of purchasing what it required, and discharging its

liabilities with the money it took from excessive profits. The amount of

the tax, the method of grading and mode of levying it, would require

careful consideration; but if the difficulties and inequalities

introduced by the War excess profits duty could be met, there seems no

reason why the difficulties of the tax thus proposed should not be also

solved; at all events, an attempt should be made to see how it would

work out.

Where money is rapidly acquired by some stroke of fortune and is not the

result of steady industry the result is constantly unwise and often

harmful expenditure either by those who have acquired it or their

immediate successors. There is an old Lancashire saying as to fortunes

rapidly made, that there are only three generations from clogs to clogs:

"What is unreasonably gathered is also unreasonably spent by the persons

into whose hands it finally falls." It may be spent "in a stupefying

luxury twice harmful both in being indulged in by the rich and witnessed

by the poor."

There is a great danger to the State at the present time from large

amounts of money rapidly acquired being accumulated in few hands. There

are many signs that we are likely to enter a period which may be

described as the reign of the "nouveaux riches." The great financiers,

the persons with enormous interests in huge combines, will exercise more

and more an undue and dangerous influence on fiscal policy and political

life. The old nobility and the class of country gentlemen will have less

power. Their resources will be seriously crippled, and their families

perhaps extinguished through losses in the War. The middle class, which,

in the last century, exercised the strongest influence on political

life, and from which most of our men of letters and science have sprung,

may now be crushed. On the more highly educated part of the middle

classes whose means are limited the burden of the War has fallen most

heavily. Taxation seems deliberately arranged to place as heavy a burden

as possible on those of the middle classes who have children to bring up

and to educate in the way they think best, and who endeavour to provide

means by which their families can occupy the same position in life which

their parents have done. The rate of income tax paid by a bachelor and a

spinster is increased if they marry, although their necessary expenses

will be enormously increased if they have a family to support. A

bachelor with £500 a year may be living in ease and luxury; if he

marries and has four or five children to educate he may find difficulty

in meeting the needs of his family with £1,500. In the same way the

death duties are absurdly small on the estate of the bachelor who leaves

no family, but are a real hardship on the family of the man who dies

leaving a number of children.

The tendency is towards a rapid accumulation of huge fortunes. In

considering the incidence of taxation Bacon's advice might well be

remembered: "Above all things, good policy is to be used that the

treasure and moneys in a State be not gathered into few hands, for

otherwise the State may have great stock and yet starve, for money is

like muck, not good except it be spread."

CHAPTER XV

NATIONAL EXPENDITURE

_But where is the money to come from? Yes, that is to be

asked. Let us as quite the first business in this our

national crisis look not only into our affairs but into

our accounts and obtain some notion of how we annually

spend our money, and what we are getting for it. Not the

public revenue only; of that some account is rendered

already. But let us do the best we can to set down the

items of the national private expenditure and know what

we spend altogether and how._--JOHN RUSKIN.

The revenue and expenditure of the State have already been discussed;

over that the State has a direct control. Over the expenditure of the

nation the control of the State is only indirect. Though the two

questions should be kept distinct, one affects the other. Both are

vitally important and now more serious than ever in view of the huge

debt and other conditions which will exist after the War. How are we to

provide and pay for the commodities we need for the support of the

nation? Before the War the balance required to pay for the excess of

imports over exports was apparently provided, first, by interest on

investments in other countries--Englishmen having provided capital all

over the world--and, second, by freights. A large amount of these

foreign investments has been sold. How far shall we still be a creditor

country after the War? As regards freights, British shipping has

suffered very heavy losses. One of the first duties both during and

after the War must be to repair the losses and increase British tonnage

available for trade. To this end no effort should be spared, and the

State should do all that is possible to foster shipbuilding, or even

undertake the work itself, if possible without interfering, as

unfortunately it has already done, with the output of private

shipbuilding yards.

As regards national as well as State expenditure, it will be essential,

first, to increase the income, and second, to guard against every form

of waste. To increase the income the only way is to increase production

both from the land and the factory (_a_) of things needed for use at

home, (_b_) of things which can be sold abroad, i.e., exported in

exchange for the supplies that must be imported. In both cases it is

necessary to consider not merely the increase in the amount produced or

the volume of trade, but how far are the articles produced for home use

or imported from abroad of real value in promoting the healthy life of

the nation, how far are they things that are really needed. Books on

political economy have sometimes stated that only "value in exchange is

to be considered"; "value in use" is still more important. We want to

ascertain the things that will really do us good, and devote our

energies to the production and importation of such things. The teachings

of the physiologist as to food values, the study of hygiene in its

widest sense, must form part of political economy in the true sense as

well as the laws of supply and demand or the theory of wages or of

foreign exchange or currency.

Some of the methods for obtaining increased production from industry by

better conditions of labour leading to more effective efforts have been

discussed in another chapter; the question of obtaining increased output

from the land so as to produce a larger amount of food for home

consumption will be mentioned in a subsequent chapter dealing with

reconstruction or reform relating to agriculture. Improved forestry may

be regarded as a branch of the same subject.

With regard to expenditure, it will be incumbent on all classes to act

rigorously so as to prevent waste, but it is not to be expected that the

national expenditure as a whole can be greatly reduced as compared with

the pre-War standard. The expenditure of certain classes of people

might, of course, be greatly reduced without any injury to healthy life

or development or in any way impairing real efficiency or even affecting

their happiness; but as regards the majority this is not so. The

conditions of life of the working classes, especially as regards such

matters as housing, require to be improved. It is a wiser expenditure,

not a reduction in expenditure, that must be the aim for them. The

expenditure on drink is, of course, unnecessarily large, and in many

cases absolutely detrimental, and a reduction in this respect is

required for national well-being. The manner of dealing with the

question must be the subject of separate consideration; but it is a

remarkable fact that, though no evil has been more prominent, though for

more than half a century no subject has provoked more discussion, though

none has been the object of more organised attempts at reform, in none

has so little of value been done by State action or legislation, at

least until the establishment of the Board of Control during the War.

A second source of saving would be to prevent the waste of food which

goes on in all classes. It is not only that food is actually thrown

away, but that too little attempt is made to choose and to use the

healthiest and most nutritious forms of food, and there is an

indisposition to try any unaccustomed form of food. If one were asked

what would be the most useful practical reform at the present time,

probably the best answer would be, "Promote more general use of oatmeal

porridge." Attention to the best choice and use of food would do much to

make a healthy nation, and at the same time effect a saving in

expenditure. "Grow more oats and eat them" would be a wise precept for

the nation to follow. With that, an effort must be made to secure a

fuller supply of milk at lower prices. This is vital for the welfare of

the coming generation. The cost of transport and of distribution of milk

might be reduced by better organisation.

Allied to this subject is the enormous waste caused by ignorance of

cookery. A really excellent dinner in France or in Switzerland is often

made from materials which would be despised in this country. Anyone who

is in the habit of roaming about the country on foot or on a bicycle

will know that in many parts it is impossible to get a decent meal; the

provision made is frequently nasty without being cheap. In rural

districts in France delicious meals can be obtained at a lower price.

Domestic economy should be taught in every school, and to people of

every rank, but the teaching should be practical. I remember wishing to

see in an excellent school something of the teaching of domestic

economy, and found the girls and boys, instead of learning to cook, were

learning what was called science, writing down in copy-books "the

operative principle of tea is theme." This kind of pseudo-science,

teaching people to write a jargon which conveys no meaning to their

minds, is one of the things which is called education, but is really

mental demoralisation. The process may be continued, perhaps, in classes

on "practical citizenship" for adolescents, who will be taught to say

"the operative principle for the amelioration of states is

democratisation." Great improvements in the teaching of domestic economy

have been made during the last few years in many places, but there is no

doubt that an enormous amount of waste is due to ignorance and neglect

in the choice and preparation of food.

Again, every possible effort should be made to encourage habits of

thrift, and to provide satisfactory modes of investment for small

savings. As regards this question, War conditions have positively had a

beneficial effect. The need for all classes to contribute to War Loans

has been recognised; facilities to enable the small investor to

contribute have been carefully arranged, and the War Savings Committees

have done admirable work in bringing the question home to the people.

The result has been on the whole most satisfactory. Not only has a very

substantial sum been provided towards meeting the cost of the War, but

habits of thrift have been fostered, and the sense of having a stake in

the country, a direct financial interest in the national funds, makes

for order and will form an element of stability in national life which

will be invaluable.

Notwithstanding the "ingrained prejudice against thrift" among the

majority of all classes, which is a marked characteristic of the English

nation as compared, for example, with the French, the number of holders

of national securities has increased enormously. Before the outbreak of

the War it appears that only 345,100 persons held securities of the

British Government. It was estimated that at the end of the year 1917

Government securities had been distributed among no fewer than 16

million persons, including 10 million holdings of War Savings

Certificates.[8] It was further estimated that "during 1917 over 51

millions were contributed to the Post Office issues of War securities,

which, together with the net value of nearly 64 millions from War

Savings Certificates and an increase of deposits over withdrawals in the

Post Office Savings Bank of no less than £5,683,000, provides in all a

sum of £120,723,000 odd, the total contributions of small investors

during the year." Since the beginning of the War the contributions of

small investors already amount in all to a grand total of about

£253,000,000.

Care in expenditure and a habit of saving will, in view of the financial

position after the War, be alike necessary; the nation cannot afford

waste in any form; after the War, as well as during the War, the

national welfare demands that any balance beyond what is required for

healthy life should be saved and made available to meet the national

needs, including not only the fulfilment of the national obligations,

which is an imperative condition for the maintenance of credit and

prosperity, but also the provision of the means for future betterment,

material or moral. We do not wish to reduce useful expenditure, but to

get money for what we need by increasing production and by more careful

spending. It will be a time for all classes to refrain from expenditure

on luxuries or ostentation, or in fulfilling those imagined claims which

convention imposes. In different ways almost all classes are fettered by

these conventional obligations. How much of the expenditure of a person

with fairly good income is devoted to things which give him no

additional pleasure and confer no real benefit on himself or others!

Both rich and poor waste great quantities of food, sometimes because

they are afraid of being thought mean if they did not do so. There is a

strange power exercised over our acts and our liberty is curtailed by

the opinions of our neighbours or members of the same class. Much might

be accomplished if we could enlist these conventions on the side of

economy. Why, for example, should it not be considered "worse form" to

take on the plate good food that is not wanted and leave it, than to eat

peas with a knife? How greatly did an alliance with Mrs. Grundy support

morality in mid-Victorian days! If we could turn social observances from

encouraging extravagance to promoting economy, it would go far towards

eliminating national waste.

FOOTNOTES:

[Footnote 8: See _Economist_, July 13, 1918.]

Part IV

REFORM

CHAPTER XVI

THE FIELD

_Above all things, order and distribution and singling

out of parts is the life of despatch._--FRANCIS BACON.

It has been usual to associate the term "reform" mainly with

constitutional changes, and especially with the extension of the

franchise. Fortunately, the present Parliament has dealt with that

question in a manner which makes great further changes unnecessary, and

will leave the new Parliament free to deal with others. Instead of

taking up time with the discussion of alterations in the franchise and

arrangements for elections, the legislative machinery should be ready

for use. But it is not merely to legislation that we have to look. More

and more will depend on the action of executive departments of

Government. Their field of activity has been extended during the War,

and new departments have been established. Some of the new activities

should be continued after the War, others should be stopped as soon as

possible. It will be necessary to discriminate carefully. The powers of

local authorities may be increased, and those authorities may be urged

to more energetic use of them. There will probably be strong demands for

interference by the State and local authorities, and the advantage of

the free action of private individuals is likely to be overlooked,

although where it is possible for a reform to be carried out by private

effort better results are usually obtained, and at less cost than by

action of the State. We are suffering and shall probably continue to

suffer from too much regulation. One of the first reforms will be to

get rid of restrictions which the War has for a time rendered

necessary, to restore liberty of action, and to stop the expenditure

occasioned by State interference wherever such interference is no longer

needed.

Using the term "reform" to include all improvements which can be made

either by restoring former conditions or by introducing beneficial

changes, it will be necessary to look into each question separately and

see in what cases and to what extent action by the State is required to

accomplish the end desired. The most convenient course will be to draw

up a list of subjects which ought to be dealt with, and then see how far

(i) legislation, and (ii) executive action by some department are called

for in each case, and how far private action will be effective.

The following appear to be the most important and most urgent matters

which require to be considered either during the War or immediately

after peace is declared. All of them will involve some action on the

part of the State, although in many cases that action will be to enable

voluntary associations or private individuals to take up the work and to

aid them in doing so.

The list, though by no means complete, looks formidable:--

1. Restore constitutional law and liberty.

2. Remove the fetters on trade, commerce and industry.

3. Demobilise the army and decide what naval and military forces will

still have to be maintained, and what provision ought to be made in

regard to military training in the future.

4. Reform the War Office.[9] Reconsider the constitution and procedure

of courts martial, and provide for really judicial inquiry into

grievances. Revive and use the Territorial system.

5. Complete the arrangements for adequate pensions and develop means for

giving such technical training and providing such openings for work as

will enable partially disabled men to earn comfortable subsistence in

addition.

6. Provide permanent homes and sanatoria for those who are more

seriously injured, and find suitable light employment for those who can

undertake it.

7. Arrange the best places and provide proper training for discharged

soldiers and sailors (and others) who may be willing to settle on the

land.

8. Consider how to restore the discharged men to their former places or

accustomed work, and how to meet the needs of the temporary workers who

will be displaced.

9. Curtail the vast expenditure on the departments organised for War

work, reducing the staffs and finding other work for those who must be

discharged. Dispense altogether with some of the new Ministries. The

question of employment for women after the War will be most urgent.

10. Organise and correlate the various departments so as to secure more

efficiency, and so assign and arrange the work of each as to avoid

circumlocution, friction and waste.

11. Reconstitute the Cabinet on clearer lines, and let competence for

the work of each department, instead of recognition of party services,

be the guide in appointing the Minister responsible for each.

12. Reform the procedure of the House of Commons to check verbosity and

facilitate business.[10] Delegate certain powers and duties.

13. Find means for raising additional revenue and making the incidence

of taxation fairer. In particular, revise the provisions as to income

tax and death duties, so as to increase revenue without adding to the

hardships and burdens due to the present conditions. Some definite steps

with that object are quite practicable.

14. Examine what industries, if any, are to be specially fostered as

"key industries," and whether this can be done without injury to other

industries or adding to the heavy cost borne by the consumer.

15. Arrange plans for enabling labour to co-operate fully in settling

the conditions under which industry is to be carried on, and make

provision for preventing disputes, increasing production, allocating

profits fairly, and for reducing hours of work without diminishing

output.

16. Provide more and better housing, not only to secure the bare

accommodation necessary for health and decency, but also to make

attractive homes.

17. Increase the productivity of the land and promote agriculture, not

only for financial reasons, but to maintain and induce the growth of a

larger rural population. Stimulate education and research bearing on

agriculture.

18. Develop industrial villages, and also land settlements and

co-operative farming. Multiply allotments, both urban and rural, so far

as economic conditions permit and there is a supply of people desirous

and capable of working them.

19. Introduce methods enabling persons without ready capital to acquire

their cottages or small holdings by paying instalments on reasonable

terms. Why not an Ashbourne Act for England?

20. Control the liquor traffic, not with a view to injure the publican,

but to promote temperance, remembering that the business of the

licensed victualler should be to provide wholesome food as well as

drink, not to act merely as manager of a licensed house for extending

the trade, and enhancing the profits of a brewery or distillery.

21. Simplify the Land Laws and make transfer easier and less costly.

22. Amend the law relating to marriage, and also on some points

affecting personal status and devolution of property on death.

23. Consolidate the Statute Law and amend and codify the Criminal Law.

Carry out the amendment of the Patent Law.

24. Aid the development of Education without destroying the liberty of

teacher or scholar or the variety of methods by too much control, rigid

system, or over-elaborate organisation.

25. Combat disease, encourage research in preventive medicine, and

extend the application of its results. In particular carry on the

campaign against infectious and contagious diseases, and especially

against venereal disease.

26. Make better provision for playing-fields and open spaces, preserve

places of historic interest and natural beauty, and make them accessible

for the enjoyment of those who really care for them.

27. Develop fisheries.

28. Undertake afforestation systematically.

29. Improve and cheapen internal transport, especially by reviving

waterways.

A fairly long programme, but it might be added to. Some of it is

essential, all of it useful; some of it wants carefully guarding; none

of it is beyond the sphere of practical politics. We cannot afford to

neglect any of the items. All the activities of the Government, of the

Legislature, and of private effort will be needed. It is worth notice

that there is not a single question in the whole list that need divide

Parliament or the country on party lines.

This list deals only with strictly home matters. Concurrently it will

be necessary to deal with international questions, such as the formation

of the League for securing peace, the constitution and regulation of

tribunals for settling disputes, the resuscitation of International Law

and reconsideration of its rules. An attempt should be made towards

assimilating, by arrangement, the laws of the mother country and the

colonies and also of different nations, affecting commerce, and also as

regards personal status--nationality, naturalisation, and the validity

of marriages.

The whole subject of co-operation between different parts of the Empire

in determining its policy and dealing with matters affecting the whole

demands earnest and immediate attention. The totally different question

of the devolution of powers to any parts of the United Kingdom has yet

to be settled. The claims of national sentiment have to be recognised

while the welfare and safety of the whole are secured. What are the

units to be on which powers can be conferred, and what should be their

extent? Who exactly are those whose national claims are being asserted,

and how far are they at unity among themselves? All these questions must

be treated as matters for constructive statesmanship, not as pawns in

party contests. They must be dealt with as practical problems having

regard to the special circumstances of each case, not as opportunities

for embodying some general political theory. There is a commendable

opportunism which knows how to take "occasion by the hand," to do the

wisest thing under the conditions subsisting at the time, as well as a

blameworthy one, which looks out how to use them for personal advantage.

There will be need, too, for the "trimmer on principle"--the man who,

when the boat is going over on one side, deliberately and quickly

transfers his weight to the other, or the steers-man who tacks when the

wind is contrary in order to bring his ship to the port where his

passengers desire to land. Such a man, as was said of Lord Halifax in

the time of Charles II, "must not be confounded with the vulgar crowd of

renegades, for though like them he passed from side to side, his

transition was always in the _direction opposite to theirs_. The party

to which he belonged was the party which at that moment he liked least,

because it was the party of which he had the nearest view. He was,

therefore, always severe upon his violent associates, and was always in

friendly relation with his moderate opponents."

It is obviously impossible to discuss all these questions in a volume,

still less to propound in detail the steps to be taken in dealing with

them. Most of the more pressing ones will be touched upon and some

suggestions made with regard to them; a few worked out rather more fully

as examples. In some cases the remedies are obvious, and could be

applied without difficulty, in others they require great special

knowledge and careful thought, and their application will involve

serious risks unless very great care and skill are used. To appear

dogmatic in speaking of these subjects is inevitable if one would be

definite; mistakes may be made, but "truth emerges from error more

readily than from confusion."

FOOTNOTES:

[Footnote 9: The last report of the Select Committee on Expenditure

shows some of the grounds why this is urgent, and that very strong

resolution will be needed to effect reform. The Prime Minister's

determined action in insisting on unity of command for the Allied forces

has already saved the country from enormous losses and done more than

any other action of the Government to bring victory nearer. Any layman

of average intelligence could see that the step was necessary; where did

the opposition come from? There are politicians who would use their

country's troubles to secure a party triumph.]

[Footnote 10: The abuse of the power of asking questions in Parliament

has become a scandal. There are a few persistent persons whose desire to

embarrass a Government they dislike, in carrying on the War, makes them

indifferent to the injury they may do to the national cause. Some check

is necessary. The right to question Ministers is one of the most

important safeguards against improper action by the executive, but the

House of Commons is discredited by the manner in which that right has

often been exercised of late. A report of proceedings in question-time

constantly brings to mind a scene in "Alice in Wonderland," and the

retort made to the arch-interrogator, "Why do you waste time asking

questions to which there is no answer?"]

CHAPTER XVII

RESTORATION OF LAW AND LIBERTY

_What is long suspended is in danger of being totally

abrogated._--EDMUND BURKE.

It is hardly too much to say that English Constitutional Law has been

scrapped since the War. Immediately after the establishment of Peace the

first duty will be to restore the old Constitutional Law which has been

suspended to meet the new conditions due to the War, and to revive again

the old safeguards for the liberty and rights of the subject against

arbitrary action by the executive. The nation has rightly acquiesced in

the exercise of powers by the executive during the War in a manner which

nothing but the necessity of the time could justify. Powers to take a

person's property at the will of some executive department without any

definite principle or procedure even for assessing compensation ought at

once to cease when there is no longer immediate urgency for using such

powers to secure the safety of the country. Powers to deprive persons of

their liberty on vague charges, or to try anyone except by ordinary

course of law in the regular Courts, should be discontinued. The Reign

of Law must be re-established to control the executive Government as

well as the private citizen. Nothing is more infectious than a habit of

substituting arbitrary will for law. Tyranny breeds anarchy, and anarchy

tyranny in regular succession, and "the authority of one man over

another not regulated by fixed law or justified by absolute necessity is

tyranny." With the advent of Peace "_Dora_ must disappear."

Even before the War there had been a tendency, on the one hand, to

substitute administrative action for regular judicial procedure, and, on

the other, to allow certain associations to act without regard to law,

to injure individuals and infringe their rights without remedy. That

tendency must be checked or liberty will be destroyed. Law and liberty

as well as law and order are correlative terms. A real control over

expenditure must be re-established and made more effective than it was

even before the necessities of war in our unprepared condition made the

present hand-to-mouth procedure to some extent excusable. The

happy-go-lucky way in which new Ministries and new departments with

vague and ill-defined but enormous powers have been created must come to

an end. We should have some definite and recognised method of

authorising changes in the system of Government. To set aside the

Cabinet which, although it had no legal position, had powers sanctioned

and established by long constitutional custom, and to concentrate

authority in a small body selected and increased or diminished from time

to time at the will of a Prime Minister, was probably necessary for

successful prosecution of the War, but nothing else could justify some

of the irregularities that have been committed.

Doctrines have been put forward sometimes in the Courts during the War

by counsel representing the Crown--i.e., in effect some Ministry--which

would have seemed questionable even in the days of the Stuarts. The

whole of the special War Legislation, both Statutes and Orders of all

kinds, will require to be revised and, unless there is strong reason to

the contrary in any special cases, repealed. The burden of proof should

be on those who think any of this exceptional legislation should be

retained. Of course, care must be taken, especially in matters affecting

commerce and industry, to give due notice of alterations and to change

gradually so as not to prejudice arrangements already made and contracts

in course of fulfilment.

Special attention will have to be given to the early removal of those

restraints on trade--prohibition of exports and imports--which have been

frequently necessary, either to retain in the country what is wanted to

satisfy home requirements or to prevent goods from finding their way to

the enemy, or to ensure that the limited tonnage available is used to

bring the commodities which are vital to meet the pressing needs either

of the forces engaged in War or of the civilian population. These

restraints, however, are not only most harassing to merchants and

involve much additional labour when labour is scarce, but if continued

would prevent this country from carrying on the valuable entrepôt trade

for which its geographical position, its financial resources, and its

command of shipping specially fit it. That trade at least depends on the

maintenance of a policy of the open door both for coming in and going

out. England is a good distributing centre--unless by artificial

restrictions we destroy our opportunities. Merchants and manufacturers

have been very patient as a rule under the fetters it has been thought

necessary to impose to meet War conditions; these fetters should be

removed as soon as possible. Unless this is done they will be fatally

handicapped when Hamburg and Bremen again come into competition with

them as distributing centres for the countries now neutral, and even for

those which have been in alliance with us.

There is sure to be a cry to protect certain industries; in some cases

it may be necessary to do so for a time at least, but every such claim

should be most jealously scrutinised. The interests of any powerful

section of the community always find influential advocates. They can

exercise strong pressure on any Government or on Members of Parliament.

The general interests of the people who have no trade organisation to

support them will be likely to be overlooked. The restoration of freedom

is the first reform that should attend the restoration of Peace.

CHAPTER XVIII

RESTORATION OF INDUSTRY

_Neither one person nor any number of persons is

warranted in saying to another human being of ripe years

that he shall not do with his life for his own benefit

what he chooses to do with it._--JOHN STUART MILL.

The next task will be the restoration of industry to its ordinary

channels, and the return of the men who have been in the army to

civilian occupations. Mr. Bonar Law has said that nothing has ever

happened more wonderful than the way in which the British Empire has

changed its Peace organisation into a War organisation. To reverse the

process and change the War organisation into a Peace organisation may be

still more difficult. In creating the War organisation enormous sums of

money have been expended, the wheels have been lavishly greased to

enable the new machinery to work. That process cannot continue, as with

the reorganisation after Peace there must also be retrenchment. In the

War Cabinet's Report for 1917 it is said that "1917 may be described as

the year in which State control was extended until it covered not only

national activities directly affecting the military effort but every

section of industry, production, transport, and manufacture." To get rid

of some of that control as regards industry as well as commerce, must be

one of the first steps in reconstruction. State interference not only

involves the expense of an enormous army of officials, inspectors,

clerks, accountants, and others, but also causes friction, while the

regulations which it has been found necessary to impose have been one of

the causes of labour unrest. Any State regulations of labour are rightly

watched with the greatest jealousy. Pledges have been given that

certain pre-War conditions as regards labour shall be re-established as

soon as possible.

During the War the exceptional conditions demanded exceptional measures.

To prevent competition for labour in order to fulfil the enormously

profitable contracts when the demand for munitions was so imperative,

special legislation was found absolutely necessary before the end of the

first year of the War. Employers had to be prohibited from engaging

workmen who had been on munitions work within six weeks before taking up

new employment, unless they had a certificate that the workmen had left

with the former employer's consent, or a tribunal held that consent had

been unreasonably withheld. Many persons who were in a position to form

a sound opinion consider that this provision "saved the situation." At

all events, it prevented the workmen, under the influence of the

inducements offered by competing employers, from running from place to

place to find where the highest wage could be obtained, and dislocating

the work in which they had been engaged.

The provision for manufacture of munitions had to be made very

hurriedly, as it took the Government and the heads of the army a long

time to realise the fact that in a war against the organised forces of

Germany greater quantities of munitions of all sorts, some of an

entirely new kind, would be required by the army and navy. Our infantry

were exposed to the bombardment of the enemy while the British artillery

was unable to reply. Nothing is more wonderful and more creditable to

the Minister who first took charge of the matter, to the heads of

producing firms, and also to the workmen and the leaders of their Trade

unions all over the country, than the way in which new factories were

built, old factories enlarged, and output increased to the utmost. In

the course of a few months rough vacant spaces all over the country were

covered with admirably planned and well organised works. In a short time

employers generally learned to understand and to observe the

restrictions imposed, which were for the common good, though often

irritating to individuals.

There was, however, some dissatisfaction among many of the workmen, and

after two years the provisions as to certificates were repealed, and the

Ministry of Munitions obtained wide powers for giving directions as to

remuneration, and also to prevent munition workers from being taken for

other work. The Ministry also exercised powers for regulating what

workmen of different classes should be allowed to go to various

establishments. Such regulation was and is necessary, but it will be a

relief to British industry when this State control and the restrictions

and regulations it involves can be done away with. The process of

reversion to normal conditions as regards industry will take time,

especially in adapting establishments where the products of the munition

works are articles which are not required in time of peace. Fortunately,

there will be a great demand for labour after the War to resume work

that has been postponed, as well as for new undertakings, especially for

housing and for repairs and renewals in railways, roads, and buildings.

Work that has been put on one side to allow undivided attention to be

given to munitions will require the services of a great number of

persons and help to prevent unemployment which might otherwise arise

when the new army is disbanded.

Of the questions affecting employment after the War, the position of

discharged soldiers and sailors naturally comes first. They may be

divided into two classes, namely, those who are in any way disabled, and

who are discharged during the War suffering from some kind of injury to

limb or to health, and, secondly, those who will be discharged when the

army is demobilised. For the first class, the honour of the nation

demands that proper and liberal provision should be made by pensions,

having regard to the nature and extent of the injury received. For the

totally disabled there must be an adequate subsistence; for the

partially disabled the object will be, in addition to the pension, to

find suitable employment and to train those who wish to take up some new

employment suited to the varied requirements of men who have been

disabled in different ways, and also in which higher remuneration may be

obtained by reason of a skill thus acquired, and the greater demand for

work of the class. It has been estimated that, apart from the provision

for officers, forty millions a year will be required for pensions for

soldiers and sailors. It is an expenditure which the country would least

think of grudging. The Ministry of Pensions, in co-operation with other

Departments concerned, has already taken in hand the question of dealing

with the disabled, not only as regards the regulation and payment of

pensions, but also as to qualifying those who are partially disabled to

take up suitable employment. The work thus begun will have to go on for

a considerable period after the close of the War. So far as inquiries

have at present been made, a large percentage of the partially disabled

men will be able to go back to the employment in which they were engaged

before the War; others will be able to find similar employment without

special training; many will be engaged in various simple light

occupations.