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It deserves to be studied with care, especially as we shall have to revert to it in the course of this chapter.

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In looking over this table it will be noticed that the revenue derived from taxes increased from £19,258,814 in 1792 to £72,210,512 in 1815. Nobody can say with absolute certainty how much of this increase was due to the automatic expansion of the ordinary peace expenditure, and how much to the War. Therefore, we must make an estimate. We shall probably be fairly correct if we assume that the national expenditure, and with it the tax revenue which should provide for it, would, from 1792 to 1816, have gradually increased by, let us say, 60 per cent., that is, from £19,000,000

in round figures to £31,000,000, had there been peace. That gradual increase over the whole period under review would give us an average yearly expenditure of £25,000,000 per year, and an equally large tax revenue to balance it. During the twenty-four years from 1792 to 1915 the total British Tax Revenue should therefore have amounted to £600,000,000, had peace been maintained. As, however, the British Tax Revenue from 1792 to 1815 amounted in the aggregate to no less than £1,082,000,000, we may assume that of the revenue raised by taxes between 1792 and 1815, £482,000,000 were raised owing to the war. Hence, the true cost of the Great War should consist of £601,500,000 raised by loan, and of £482,000,000 raised by taxation, or £1,083,500,000 in all. My estimate that the British War expenditure in the Great War came to about £1,100,000,000 should err, if at all, on the side of moderation. Let us now endeavour to gauge the significance of the gigantic financial effort made by this country by looking at it from the contemporary point of view.

In 1814 Mr. P. Colquhoun, an eminent writer on economics and statistics, published his excellent Treatise on the Wealth, Power, and Resources of the British Empire.' It was based on the Treasury statistics. According to him the whole private and public property of the nation represented a money value of £2,736,640,000. It is noteworthy that of that sum £1,200,640,000 was in respect of agricultural land alone. Manufacturing, commerce, and trade, which now are the principal wealth-creating resources of the country, were evidently of relatively small importance at the time. According to his painstaking and conscientious investigations, the national income amounted then to £430,521,372 per year. Its composition is shown in the table on page 222.

If we accept as correct my estimate that Great Britain's expenditure on the war with France amounted to about £1,100,000,000, it follows that a century ago Great Britain spent on the war a sum about equivalent to the national

income of two and a half years, and considerably larger than one-third of the entire national capital. If, a century ago, Great Britain was able to spend on war more than one-third of the national capital, she should certainly be able to make proportionately as great a financial sacrifice at the present time, when rapidly producing machinery has taken the place of slowly producing agriculture, when capital lost or diverted by the War can more quickly be replaced. As the national capital amounts at least to £15,000,000,000, Great Britain should now be able to spend again more than one-third, or from £5,000,000,000 to £6,000,000,000, on war. If the Empire as a whole should finance the War, that amount

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could easily be doubled.

Of course some allowance

must be made for the fact that whereas a hundred years ago British war expenditure was spread over twenty years, it will now be spread over a much shorter period. Hence, the necessary economic measures, similar to those which were taken a century ago, must not be taken dilatorily but speedily.

Before considering the consequences of the nation's gigantic expenditure upon its economic position and future, let us briefly study the means by which, a century ago, Great Britain raised the colossal funds required for the war against France, for such an investigation will supply us with some very valuable precedents.

A hundred years ago, as now, the war was paid for partly with the proceeds of loans, partly with funds pro

vided by taxation. If, as I have endeavoured to show, the war cost this country £1,100,000,000, it appears that £600,000,000, or three-fifths, were raised by loans and £500,000,000, or two-fifths, by taxation. If we now turn back to the interesting table of national revenue and expenditure previously given, it will be seen that taxation was enormously increased during the Napoleonic era. Between 1792 and 1815 it increased from £19,258,814 to £72,210,512, or was almost quadrupled, and as the substantial increase of taxation only began in 1796, it was almost quadrupled in the small space of twenty years! How great was the financial sacrifice made by the nation during the Napoleonic wars may be seen by the fact that British taxation was generally considered to be 'intolerably high' before the war began. It was indeed very high. If we look at the table of British National Debt given in the beginning of this chapter, it appears that the National Debt had been almost exactly doubled by the costly war with the American Colonies, France, Spain, and Holland from 1775 to 1784, that this country entered the Napoleonic War with the dead weight of an enormous war debt pressing on it. From the table of National Revenue and Expenditure it appears furthermore that in 1792 no less than practically one-half of the entire national expenditure consisted of interest paid on the National Debt, that one-half of the Budgetary expenditure in time of peace was, in fact, expenditure caused by the previous wars.

During the Napoleonic War the public burdens were vastly increased. Reference to the table of National Revenue and Expenditure shows that the interest paid per year on the National Debt increased from £9,767,333 in 1792 to no less than £32,938,751 in 1816, growing no less than three and a half fold. The British national expenditure of 1792 was at the time rightly considered to be a very heavy one. It was exactly twice as large as in 1775. Yet, between 1813 and 1816 Great Britain spent on an average per year on interest on the National Debt alone

50 per cent. more than the total amount of the British national expenditure of 1792, and three times as much as the whole national expenditure of 1775.

We have no reason to complain of the present war taxes. Compared with those established during the Napoleonic time they are very light indeed.

Now let us study the way by which Great Britain raised her war taxes during the Great War.

As the Budgets of a century ago form in their bulky original a maze in which the uninitiated are lost, I would give a useful analytical digest of the Budget revenue for the year 1815, taken from the second volume of Mr. Stephen Dowell's valuable History of Taxation and Taxes in England.' Details of the revenue of Great Britain, exclusive of Ireland, are shown in the table on page 225.

The revenue from taxes in Ireland for the year 1815, ending January 5, 1816, was, in British currency, equal to £6,258,723.

It will be noticed that a century ago, as now, the direct taxes on capital and income and the taxes on luxuries such as beer, wine, spirits, sugar, tea, coffee, tobacco, houses, coaches, &c., provided the bulk of the revenue. However, not only these but everything taxable was taxed. Exports, imports, and internal trade, coal and timber, raw materials used in the industries and manufactured articles produced in Great Britain, all had to pay their share. Sydney Smith, the witty Canon of St. Paul's, wrote in an article in The Edinburgh Review in 1820:

We can inform Brother Jonathan what are the inevitable consequences of being too fond of glory. Taxes upon every article which enters into the mouth, or covers the back, or is placed under the foot. Taxes upon anything that is pleasant to see, hear, feel, smell, or taste. Taxes upon warmth, light, and locomotion. Taxes upon everything on earth, or under the earth, on everything that comes from abroad, or is grown at home. Taxes on the raw material, taxes on every fresh value that is added to it by the industry

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