THE New Zealand Herald AND DAILY SOUTHERN CROSS. FRIDAY, APRIL 22, 1904. THE IMPERIAL BUDGET.

New Zealand Herald, Volume XLI, Issue 12555, 22 April 1904, Page 4

THE New Zealand Herald AND DAILY SOUTHERN CROSS. FRIDAY, APRIL 22, 1904. THE IMPERIAL BUDGET.

The contracting revenues of the Imperial Exchequer have revived in an aggravated form that deficit which once was habitual. The Budget laid before the British Parliament by Mr. Austen Chamberlain shows that the revenue for 1903-4 fell £2,724,000 below the estimate, and owing to unforeseen increase in expenditure was £5,415,000 short of requirements. The cause is not far to seek. The Boer War in itself would have excited exceptional industrial and commercial activity, for hundreds of millions of pounds sterling cannot be spent in extraordinary ways without producing such an effect. But apart from the Boer War, the entire civilised world has been passing through one of the cycles of prosperity which inevitably bring in their train counter-balanc-ing cycles of depression. It is true that the barometer of international trade and commerce rarely if ever falls quite so low after a period of prosperity as it did before. There is always a generally progressive tendency, but it is spasmodic, and marked by ebbs as well as by flows. The world at large is to-day struggling against a temporary return of that recent wave of prosperity which in the United Kingdom was made abnormally high by the vast spending that accompanied the Boer War. This colony has already felt the pressure of the reactionary movement in the decline of the butter market, a decline due far more to the reduced ability of the population of the United Kingdom to buy than to the increasing competition of other dairying countries. The same influences which have deprived out dairymen of a good many shillings per hundredweight have deprived the British Exchequer of several millions of pounds, for had " times" remained as they wer-3 a year ago, even as they were six or eight months ago, the revenue of the United Kingdom would not merely have equalled estimates, but would have so far exceeded them as to have largely off-set the very large increase of expenditure, mainly in naval requirements. The difficulty which the Balfour or any other Administration has now to face is not so much the present deficit, which the tremendous resources of the Mother Country are meeting without strain, but the probability, almost the certainty, that until the industrial and commercial depression, now proceeding, touches bottom, estimates of revenue will not be met and deficit will be the key-note of Budget speeches.

The critics of the Balfour Administration, including that retired Conservative Chancellor, Sir Michael Hicks-Beach, complain of the enormous growth of expenditure. But the nations are to-day in a perpetual state of armed truce, and it is manifestly impossible foi Britain to place itself upon a true peace footing when disarmament would inevitably bring a host of enemies clattering down upon it, armed from head to foot, and hungry for the spoiling of a defenceless Empire. So that when all is said and clone Imperial expenditures must be continued, and the only practical question is how they are to be met. Mr. Austen Chamberlain, speaking for the Balfour Cabinet, does not contemplate any reduction in ordinary expenditures, although certain extraordinary items are not anticipated as recurring in 1901-5. Altogether £142,880,000 will be required, for which £139,060,000 should bo forthcoming through current taxation methods, and four millions stealing in addition are to be raised from income tax-payers and tea-drinkers, half from each class. In addition, the tobacco duty is to be readjusted, we need hardly say to the disadvantage of the smoker. A small surplus is estimated towards recouping the Exchequer balance from which nearly three millions have been drawn during 1903-4, but this depends entirely upon the improbable event of estimates for 1904-5 being attained in hard cash. The income tax-payer, now assessed at one shilling in the pound, is somewhat heavily burdened. He labours under the misfortune of having a well-organised office permanently supervising his income, which office can collect p. shilling in the pound as easily as it can penny. He has endured heavy imposition, upon national emergency,. without more than the estimated amount of grumbling, but it remains to be seen whether permanent. demands of this character

will be born© with equanimity when other obvious sources of revenue re-: main unworked. As was to have been expected Mr. Austen Chamberlain's speech is flavoured with his father's theories. We might almost say that the voice is the voice of Austen, but the tone is the tone of Joseph. The effects of foreign competition upon British industrialism, the failure of the repeal of the corn tax to affect the price of bread, the determination — in readjusting tobacco drawbacks — encourage the export trade tc the colonies, are all indications of the growing fiscal agitation and of the trend o£ the reorganised Balfour Cabinet. Nor is the commercial ability of the Chamberlain party less noticeable in the determination to sustain the Sinking Fund and to restore consols to their accustomed place in the market quotations. The low price at which they have been quoted, in so far as it is due to the flooding of the market with " gilt-edged securities"— that is to say, with securities endorsed by the British Government— inflicted a very serious loss upon a vast number of small investors whose capital has been reduced by as much as 20 per cent, thereby. When the national existence imperatively required the issue of great loans there was nothing to be said. But to needlessly depress consols is a distinct wrong to all legitimate holders, and Mr. Chamberlain has gone far to restore confidence by his statement of exchequer policy in this direction. Altogether, ' the Budget Speech is satisfactory, and the situation disclosed is in no way alarming when Ave remember that if Imperial expenditures have doubled since the '70's, the actual ability to meet them of the United Kingdom has not merely doubled, but quadrupled.