from the French nation upon the Assembly. The French, as a nation, do
not care for or appreciate Parliamentary government. I have endeavoured
to explain how difficult it is for inexperienced mankind to take to
such a government; how much more natural, that is, how much more easy
to uneducated men is loyalty to a monarch. A nation which does not
expect good from a Parliament, cannot check or punish a Parliament.
France expects, I fear, too little from her Parliaments ever to get
what she ought. Now that the suffrage is universal, the average
intellect and the average culture of the constituent bodies are
excessively low; and even such mind and culture as there is has long
been enslaved to authority; the French peasant cares more for standing
well with his present prefet than for anything else whatever; he is far
too ignorant to check and watch his Parliament, and far too timid to
think of doing either if the executive authority nearest to him does
not like it. The experiment of a strictly Parliamentary Republic--of a
Republic where the Parliament appoints the executive--is being tried in
France at an extreme disadvantage, because in France a Parliament is
unusually likely to be bad, and unusually likely also to be free enough
to show its badness. Secondly, the present polity of France is not a
copy of the whole effective part of the British Constitution, but only
a part of it. By our Constitution nominally the Queen, but really the
Prime Minister, has the power of dissolving the Assembly. But M. Thiers
has no such power; and therefore, under ordinary circumstances, I
believe, the policy would soon become unmanageable. The result would
be, as I have tried to explain, that the Assembly would be always
changing its Ministry, that having no reason to fear the penalty which
that change so often brings in England, they would be ready to make it
once a month. Caprice is the characteristic vice of miscellaneous
assemblies, and without some check their selection would be unceasingly
mutable. This peculiar danger of the present Constitution of France has
however been prevented by its peculiar circumstances. The Assembly have
not been inclined to remove M. Thiers, because in their lamentable
present position they could not replace M. Thiers. He has a monopoly of
the necessary reputation. It is the Empire--the Empire which he always
opposed--that has done him this kindness. For twenty years no great
political reputation could arise in France. The Emperor governed and no
one member could show a capacity for government. M. Rouher, though of
vast real ability, was in the popular idea only the Emperor's agent;
and even had it been otherwise, M. Rouher, the one great man of
Imperialism, could not have been selected as a head of the Government,
at a moment of the greatest reaction against the Empire. Of the chiefs
before the twenty years' silence, of the eminent men known to be able
to handle Parliaments and to govern Parliaments, M. Thiers was the only
one still physically able to begin again to do so. The miracle is, that
at seventy-four even he should still be able. As no other great chief
of the Parliament regime existed, M. Thiers is not only the best
choice, but the only choice. If he were taken away, it would be most
difficult to make any other choice, and that difficulty keeps him where
he is. At every crisis the Assembly feels that after M. Thiers "the
deluge," and he lives upon that feeling. A change of the President,
though legally simple, is in practice all but impossible; because all
know that such a change might be a change, not only of the President,
but of much more too: that very probably it might be a change of the
polity--that it might bring in a Monarchy or an Empire.
Lastly, by a natural consequence of the position, M. Thiers does not
govern as a Parliamentary Premier governs. He is not, he boasts that he
is not, the head of a party. On the contrary, being the one person
essential to all parties, he selects Ministers from all parties, he
constructs a Cabinet in which no one Minister agrees with any other in
anything, and with all the members of which he himself frequently
disagrees. The selection is quite in his hand. Ordinarily a
Parliamentary Premier cannot choose; he is brought in by a party; he is
maintained in office by a party; and that party requires that as they
aid him, he shall aid them; that as they give him the very best thing
in the State, he shall give them the next best things. But M. Thiers is
under no such restriction. He can choose as he likes, and does choose.
Neither in the selection of his Cabinet nor in the management of the
Chamber, is M. Thiers guided as a similar person in common
circumstances would have to be guided. He is the exception of a moment;
he is not the example of a lasting condition.
For these reasons, though we may use the present Constitution of France
as a useful aid to our imaginations, in conceiving of a purely
Parliamentary Republic, of a monarchy minus the monarch, we must not
think of it as much more. It is too singular in its nature and too
peculiar in its accidents to be a guide to anything except itself.
In this essay I made many remarks on the American Constitution, in
comparison with the English; and as to the American Constitution we
have had a whole world of experience since I first wrote. My great
object was to contrast the office of President as an executive officer
and to compare it with that of a Prime Minister; and I devoted much
space to showing that in one principal respect the English system is by
far the best. The English Premier being appointed by the selection, and
being removable at the pleasure, of the preponderant Legislative
Assembly, is sure to be able to rely on that Assembly. If he wants
legislation to aid his policy he can obtain that legislation; he can
carry out that policy. But the American President has no similar
security. He is elected in one way, at one time, and Congress (no
matter which House) is elected in another way, at another time. The two
have nothing to bind them together, and in matter of fact, they
continually disagree.
This was written in the time of Mr. Lincoln, when Congress, the
President, and all the North were united as one man in the war against
the South. There was then no patent instance of mere disunion. But
between the time when the essays were first written in the Fortnightly,
and their subsequent junction into a book, Mr. Lincoln was
assassinated, and Mr. Johnson, the Vice-President, became President,
and so continued for nearly four years. At such a time the
characteristic evils of the Presidential system were shown most
conspicuously. The President and the Assembly, so far from being (as it
is essential to good government that they should be) on terms of close
union, were not on terms of common courtesy. So far from being capable
of a continuous and concerted co-operation they were all the while
trying to thwart one another. He had one plan for the pacification of
the South and they another; they would have nothing to say to his
plans, and he vetoed their plans as long as the Constitution permitted,
and when they were, in spite of him, carried, he, as far as he could
(and this was very much), embarrassed them in action. The quarrel in
most countries would have gone beyond the law, and come to blows; even
in America, the most law-loving of countries, it went as far as
possible within the law. Mr. Johnson described the most popular branch
of the legislature--the House of Representatives--as a body "hanging on
the verge of government"; and that House impeached him criminally, in
the hope that in that way they might get rid of him civilly. Nothing
could be so conclusive against the American Constitution, as a
Constitution, as that incident. A hostile legislature and a hostile
executive were so tied together, that the legislature tried, and tried
in vain, to rid itself of the executive by accusing it of illegal
practices. The legislature was so afraid of the President's legal power
that it unfairly accused him of acting beyond the law. And the blame
thus cast on the American Constitution is so much praise to be given to
the American political character.
Few nations, perhaps scarcely any nation, could have borne such a trial
so easily and so perfectly. This was the most striking instance of
disunion between the President and the Congress that has ever yet
occurred, and which probably will ever occur. Probably for very many
years the United States will have great and painful reason to remember
that at the moment of all their history, when it was most important to
them to collect and concentrate all the strength and wisdom of their
policy on the pacification of the South, that policy was divided by a
strife in the last degree unseemly and degrading. But it will be for a
competent historian hereafter to trace out this accurately and in
detail; the time is yet too recent, and I cannot pretend that I know
enough to do so. I cannot venture myself to draw the full lessons from
these events; I can only predict that when they are drawn, those
lessons will be most important, and most interesting. There is,
however, one series of events which have happened in America since the
beginning of the Civil War, and since the first publication of these
essays, on which I should wish to say something in detail--I mean the
financial events. These lie within the scope of my peculiar studies,
and it is comparatively easy to judge of them, since whatever may be
the case with refined statistical reasoning, the great results of money
matters speak to and interest all mankind. And every incident in this
part of American financial history exemplifies the contrast between a
Parliamentary and Presidential government.
The distinguishing quality of Parliamentary government is, that in each
stage of a public transaction there is a discussion; that the public
assist at this discussion; that it can, through Parliament, turn out an
administration which is not doing as it likes, and can put in an
administration which will do as it likes. But the characteristic of a
Presidential government is, in a multitude of cases, that there is no
such discussion; that when there is a discussion the fate of Government
does not turn upon it, and, therefore, the people do not attend to it;
that upon the whole the administration itself is pretty much doing as
it likes, and neglecting as it likes, subject always to the check that
it must not too much offend the mass of the nation. The nation commonly
does not attend, but if by gigantic blunders you make it attend, it
will remember it and turn you out when its time comes; it will show you
that your power is short, and so on the instant weaken that power; it
will make your present life in office unbearable and uncomfortable by
the hundred modes in which a free people can, without ceasing, act upon
the rulers which it elected yesterday, and will have to reject or
re-elect to-morrow. In finance the most striking effect in America
has, on the first view of it, certainly been good. It has enabled the
Government to obtain and to keep a vast surplus of revenue over
expenditure. Even before the Civil War it did this--from 1837 to 1857.
Mr. Wells tells us that, strange as it may seem, "there was not a
single year in which the unexpended balance in the National
Treasury--derived from various sources--at the end of the year, was not
in excess of the total expenditure of the preceding year; while in not
a few years the unexpended balance was absolutely greater than the sum
of the entire expenditure of the twelve months preceding". But this
history before the war is nothing to what has happened since. The
following are the surpluses of revenue over expenditure since the end
of the Civil War:--
Year ending June 30. Surplus. (pounds)
1866 . . . . . . . . 5,593,000
1867 . . . . . . . . 21,586,000
1868 . . . . . . . . 4,242,000
1869 . . . . . . . . 7,418,000
1870 . . . . . . . . 18,627,000
1871 . . . . . . . . 16,712,000
No one who knows anything of the working of Parliamentary government,
will for a moment imagine that any Parliament would have allowed any
executive to keep a surplus of this magnitude. In England, after the
French war, the Government of that day, which had brought it to a happy
end, which had the glory of Waterloo, which was in consequence
exceedingly strong, which had besides elements of strength from close
boroughs and Treasury influence such as certainly no Government has
ever had since, and such perhaps as no Government ever had before--that
Government proposed to keep a moderate surplus and to apply it to the
reduction of the debt, but even this the English Parliament would not
endure. The administration with all its power derived both from good
and evil had to yield; the income tax was abolished, with it went the
surplus, and with the surplus all chance of any considerable reduction
of the debt for that time. In truth taxation is so painful that in a
sensitive community which has strong organs of expression and action,
the maintenance of a great surplus is excessively difficult. The
Opposition will always say that it is unnecessary, is uncalled for, is
injudicious; the cry will be echoed in every constituency; there will
be a series of large meetings in the great cities; even in the smaller
constituencies there will mostly be smaller meetings; every member of
Parliament will be pressed upon by those who elect him; upon this point
there will be no distinction between town and country, the country
gentleman and the farmer disliking high taxes as much as any in the
towns. To maintain a great surplus by heavy taxes to pay off debt has
never yet in this country been possible, and to maintain a surplus of
the American magnitude would be plainly impossible.
Some part of the difference between England and America arises
undoubtedly not from political causes but from economical. America is
not a country sensitive to taxes; no great country has perhaps ever
been so unsensitive in this respect; certainly she is far less
sensitive than England. In reality America is too rich; daily industry
there is too common, too skilful, and too productive, for her to care
much for fiscal burdens. She is applying all the resources of science
and skill and trained labour, which have been in long ages painfully
acquired in old countries, to develop with great speed the richest soil
and the richest mines of new countries; and the result is untold
wealth. Even under a Parliamentary government such a community could
and would bear taxation much more easily than Englishmen ever would.
But difference of physical character in this respect is of little
moment in comparison with difference of political constitution. If
America was under a Parliamentary government, she would soon be
convinced that in maintaining this great surplus and in paying this
high taxation she would be doing herself great harm. She is not
performing a great duty, but perpetrating a great injustice. She is
injuring posterity by crippling and displacing industry, far more than
she is aiding it by reducing the taxes it will have to pay. In the
first place, the maintenance of the present high taxation compels the
retention of many taxes which are contrary to the maxims of free-trade.
Enormous customs duties are necessary, and it would be all but
impossible to impose equal excise duties even if the Americans desired
it. In consequence, besides what the Americans pay to the Government,
they are paying a great deal to some of their own citizens, and so are
rearing a set of industries which never ought to have existed, which
are bad speculations at present because other industries would have
paid better, and which may cause a great loss out of pocket hereafter
when the debt is paid off and the fostering tax withdrawn. Then
probably industry will return to its natural channel, the artificial
trade will be first depressed, then discontinued, and the fixed capital
employed in the trade will all be depreciated and much of it be
worthless. Secondly, all taxes on trade and manufacture are injurious
in various ways to them. You cannot put on a great series of such
duties without cramping trade in a hundred ways and without diminishing
their productiveness exceedingly. America is now working in heavy
fetters, and it would probably be better for her to lighten those
fetters even though a generation or two should have to pay rather
higher taxes. Those generations would really benefit, because they
would be so much richer that the slightly increased cost of government
would never be perceived. At any rate, under a Parliamentary government
this doctrine would have been incessantly inculcated; a whole party
would have made it their business to preach it, would have made
incessant small motions in Parliament about it, which is the way to
popularise their view. And in the end I do not doubt that they would
have prevailed. They would have had to teach a lesson both pleasant and
true, and such lessons are soon learned. On the whole, therefore, the
result of the comparison is that a Presidential government makes it
much easier than the Parliamentary to maintain a great surplus of
income over expenditure, but that it does not give the same facility
for examining whether it be good or not good to maintain a surplus,
and, therefore, that it works blindly, maintaining surpluses when they
do extreme harm just as much as when they are very beneficial.
In this point the contrast of Presidential with Parliamentary
government is mixed; one of the defects of Parliamentary government
probably is the difficulty under it of maintaining a surplus revenue to
discharge debt, and this defect Presidential government escapes, though
at the cost of being likely to maintain that surplus upon inexpedient
occasions as well as upon expedient. But in all other respects a
Parliamentary government has in finance an unmixed advantage over the
Presidential in the incessant discussion. Though in one single case it
produces evil as well as good, in most cases it produces good only. And
three of these cases are illustrated by recent American experience.
First, as Mr. Goldwin Smith--no unfavourable judge of anything
American--justly said some years since, the capital error made by the
United States Government was the "Legal Tender Act," as it is called,
by which it made inconvertible paper notes issued by the Treasury the
sole circulating medium of the country. The temptation to do this was
very great, because it gave at once a great war fund when it was
needed, and with no pain to any one. If the notes of a Government
supersede the metallic currency medium of a country to the extent of
$80,000,000, this is equivalent to a recent loan of $80,000,000 to the
Government for all purposes within the country. Whenever the precious
metals are not required, and for domestic purposes in such a case they
are not required, notes will buy what the Government want, and it can
buy to the extent of its issue. But, like all easy expedients out of a
great difficulty, it is accompanied by the greatest evils; if it had
not been so, it would have been the regular device in such cases, and
the difficulty would have been no difficulty at all; there would have
been a known easy way out of it. As is well known, inconvertible paper
issued by Government is sure to be issued in great quantities, as the
American currency soon was; it is sure to be depreciated as against
coin; it is sure to disturb values and to derange markets; it is
certain to defraud the lender; it is certain to give the borrower more
than he ought to have. In the case of America there was a further evil.
Being a new country, she ought in her times of financial want to borrow
of old countries; but the old countries were frightened by the probable
issue of unlimited inconvertible paper, and they would not lend a
shilling. Much more than the mercantile credit of America was thus
lost. The great commercial houses in England are the most natural and
most effectual conveyers of intelligence from other countries to
Europe. If they had been financially interested in giving in a sound
report as to the progress of the war, a sound report we should have
had. But as the Northern States raised no loans in Lombard Street (and
could raise none because of their vicious paper money), Lombard Street
did not care about them, and England was very imperfectly informed of
the progress of the civil struggle, and on the whole matter, which was
then new and very complex, England had to judge without having her
usual materials for judgment, and (since the guidance of the "City" on
political matter is very quietly and imperceptibly given) without
knowing she had not those materials. Of course, this error might have
been committed, and perhaps would have been committed under a
Parliamentary government. But if it had, its effects would ere long
have been thoroughly searched into and effectually frustrated. The
whole force of the greatest inquiring machine and the greatest
discussing machine which the world has ever known would have been
directed to this subject. In a year or two the American public would
have had it forced upon them in every form till they must have
comprehended it. But under the Presidential form of government, and
owing to the inferior power of generating discussion, the information
given to the American people has been imperfect in the extreme. And in
consequence, after nearly ten years of painful experience, they do not
now understand how much they have suffered from their inconvertible
currency.
But the mode in which the Presidential government of America managed
its taxation during the Civil War, is even a more striking example of
its defects. Mr. Wells tells us:--
"In the outset all direct or internal taxation was avoided, there
having been apparently an apprehension on the part of Congress, that
inasmuch as the people had never been accustomed to it, and as all
machinery for assessment and collection was wholly wanting, its
adoption would create discontent, and thereby interfere with a vigorous
prosecution of hostilities. Congress, therefore, confined itself at
first to the enactment of measures looking to an increase of revenue
from the increase of indirect taxes upon imports; and it was not until
four months after the actual outbreak of hostilities that a direct tax
of $20,000,000 per annum was apportioned among the States, and an
income tax of 3 per cent. on the excess of all incomes over $800 was
provided for; the first being made to take effect practically eight,
and the second ten months after date of enactment. Such laws of course
took effect, and became immediately operative in the loyal States only,
and produced but comparatively little revenue; and although the range
of taxation was soon extended, the whole receipts from all sources by
the Government for the second year of the war, from excise, income,
stamp, and all other internal taxes, were less than $42,000,000; and
that, too, at a time when the expenditures were in excess $60,000,000
per month, or at the rate of over $700,000,000 per annum. And as
showing how novel was this whole subject of direct and internal
taxation to the people, and how completely the Government officials
were lacking in all experience in respect to it, the following incident
may be noted. The Secretary of the Treasury, in his report for 1863,
stated that, with a view of determining his resources, he employed a
very competent person, with the aid of practical men, to estimate the
probable amount of revenue to be derived from each department of
internal taxation for the previous year. The estimate arrived at was
$85,000,000, but the actual receipts were only $37,000,000."
Now, no doubt, this might have happened under a Parliamentary
government. But, then, many members of Parliament, the entire
Opposition in Parliament, would have been active to unravel the matter.
All the principles of finance would have been worked and propounded.
The light would have come from above, not from below--it would have
come from Parliament to the nation instead of from the nation to
Parliament But exactly the reverse happened in America. Mr. Wells goes
on to say:--
"The people of the loyal States were, however, more determined and in
earnest in respect to this matter of taxation than were their rulers;
and before long the popular discontent at the existing state of things
was openly manifest. Every where the opinion was expressed that
taxation in all possible forms should immediately, and to the largest
extent, be made effective and imperative; and Congress spurred up, and
right fully relying on public sentiment to sustain their action, at
last took up the matter resolutely and in earnest, and devised and
inaugurated a system of internal and direct taxation, which for its
universality and peculiarities has probably no parallel in anything
which has heretofore been recorded in civil history, or is likely to be
experienced hereafter. The one necessity of the situation was revenue,
and to obtain it speedily and in large amounts through taxation the
only principle recognised--if it can be called a principle--was akin to
that recommended to the traditionary Irishman on his visit to
Donnybrook Fair, 'Wherever you see a head hit it'. Wherever you find an
article, a product, a trade, a profession, or a source of income, tax
it! And so an edict went forth to this effect, and the people
cheerfully submitted. Incomes under $5,000 were taxed 5 per cent., with
an exemption of $600 and house rent actually paid; these exemptions
being allowed on this ground, that they represented an amount
sufficient at the time to enable a small family to procure the bare
necessaries of life, and thus take out from the operation of the law
all those who were dependent upon each day's earnings to supply each
day's needs. Incomes in excess of $5,000 and not in excess of $10,000
were taxed 2 1/2 per cent. in addition; and incomes over $10,000 5 per
cent. additional, without any abeyance or exemptions whatever."
Now this is all contrary to and worse than what would have happened
under a Parliamentary government. The delay to tax would not have
occurred under it: the movement by the country to get taxation would
never have been necessary under it. The excessive taxation accordingly
imposed would not have been permitted under it. The last point I think
I need not labour at length. The evils of a bad tax are quite sure to
be pressed upon the ears of Parliament in season and out of season; the
few persons who have to pay it are thoroughly certain to make
themselves heard. The sort of taxation tried in America, that of taxing
everything, and seeing what every thing would yield, could not have
been tried under a Government delicately and quickly sensitive to
public opinion.
I do not apologise for dwelling at length upon these points, for the
subject is one of transcendent importance. The practical choice of
first-rate nations is between the Presidential government and the
Parliamentary; no State can be first-rate which has not a government by
discussion, and those are the only two existing species of that
government. It is between them that a nation which has to choose its
government must choose. And nothing therefore can be more important
than to compare the two, and to decide upon the testimony of
experience, and by facts, which of them is the better.
THE POPLARS, WIMBLEDON:
June 20, 1872.
NO. II.
THE CABINET.