putting on it as Democratic members two men universally recognized as extreme partisans, one of them with a reputation for making irresponsible accusations against political opponents, insurgent Republican members consulted the President as leader of the party. It was as a consequence of their consultation that enough insurgents voted with the regulars to make the Democratic act of bad faith of no effect. More serious even than the obstacles between the Administration and Congress are the obstacles between the Administration and the public. These virtually all arise from the failure of the Administration, through misfortune perhaps as much as through fault, to establish relations of confidence between the public and itself. Mr. Taft is a lawyer; most of his Cabinet are lawyers. It is the habit of the lawyer, like the habit of the physician, not to talk publicly about what he is going to do. In this case, however, the public is not an outside party, but is the Administration's client. Somehow the client has not been learning authoritatively how its cases are being tried or how its estates are being managed; and somehow the counsel for the public has not learned what the client is thinking about or what its will in these matters is. The Administration has been very busy in thinking of its pledges and of the task involved in trying to fulfill them. Counsel and client have grown apart. The chief means by which either could learn about the mind of the other is the newspaper and periodical press. Indeed, this is the chief means by which the numerous branches of the Government itself can be kept informed of the Administration's plans, and in turn can let the Administration know of its own spirit. is true even here in Washington. some way the newspaper and periodical press has not found it possible—or at least easy to let the people know what the plans or measures of the Administration mean, what they are designed to accomplish, what exigencies they meet. In place of information there has grown up almost a code of surmises. The public has been educated up to an enthusiasm for conservation, and all that it knows about the man selected to conserve those That In A resources is that he was trained in the Land Office which was established for the express purpose of disposing of the public domain and the wealth it contains. corporation tax law is passed as a part of the tariff law, and the public is totally unprepared to learn that that law will help to make it impossible for manufacturing corporations to come to Congress and falsely plead poverty as an excuse for greater protection. A Federal Incorporation law is proposed, and not a newspaper in advance has forestalled the suspicion that it is a refuge for monopolies. Consequently, not only in Washington, but in the West, misguided friends of Mr. Roosevelt and his policies actually believe that the best service they can render the public is to attempt to discredit the present Administration; progressive men, believers in the very measures for which the Administration stands, look with special scrutiny on every measure it proposes; and even in the ranks of the Administration itself there has arisen such dissension that it has passed into the stage of Congressional inquiry. On the other hand, we find that the Statehood Bill, which is a matter of public indifference-too much so—and regarded by many people as full of menace to our form of representative government, but which corresponds to a plank in the party platform, is considered by official Washington as more surely a party measure than the urgent and publicly demanded measures for the conservation of resources. This is the situation as it appears in Washington. If it should prevent the passage of the Taft measures through Congress, it is likely to bring about a Democratic House at the next election, which would effectually tie the hands of the Administration for the rest of the term. If, in spite of it, the President succeeds in inducing Congress to pass effective conservation bills, secure better control over inter-State commerce, establish postal savings banks, and increase Federal regulation of corporations by Federal incorporation, the progressive movement which began under the Roosevelt Administration will reach a point cf real and lasting effectiveness under the Administration of Mr. Taft. ERNEST HAMLIN ABBOTT. ENGLAND IN EVOLUTION BY HAROLD J. HOWLAND FIRST PAPER THE BUDGET BEGAN IT The illustrations which accompany this article are reproductions of election posters selected from a score or more sent to us from England by the author of the article, who is a member of the editorial staff of The Outlook. These posters are printed in bold colors, and in some instances are affixed to what we call "billboards " and what the English call "hoardings." But more often they are pasted in any available space where they may attract public notice, after the manner of theatrical and circus advertisements in this country. In the election preceding the present one prizes were offered on behalf of the Liberal party for the best and most taking designs for such posters, and the offer resulted in a very lively, widespread, and successful competition throughout the British Isles. In this respect the English elections are very much less conservative than American elections. It is as if the Democratic party spread broadcast throughout the United States cartoons of Mr. Taft, or the Republican party put up in all sorts of public places caricatures of Mr. Bryan and the so-called Populist farmer. This method of attracting the attention of the voter may very easily degenerate into an undesirable lampoonery, but custom and tradition enable the English party managers to keep within proper limits. The purpose of these English posters is not to arouse personal passion or animosity, but so far as possible to make the voter think. The present article will be followed by others from Mr. Howland's pen, giving some description of actual scenes and personal incidents in the Budget campaign as they appear to an American observer.-THE EDITORS. E NGLAND at a crisis. A crisis involving a fiscal policy, a programme of social reform, a constitutional question between two estates of the realm, a conflict between the interests of two classes of the people. That is the subject which I am to depict for American readers. And it must be done in a series of sketches in which the truth is suggested rather than drawn in with scrupulous fidelity to detail. The pictures will be, not the photographs of the microscopist, in which the number of hairs on the hind leg of the flea may be counted with infallible accuracy, but the sketches of the impressionist, which must be viewed at arm's length, and judged on their effect as a whole, not on the accuracy of each particular line. I shall show the scene as it looked to an observer from without, watching for a few weeks the shifting play of opposing forces. The first sketch shall be somewhat historical, and may be called, The Budget Began It. In one respect England manages her problems of income and expenditure better than we. At the beginning of each year the Chancellor of the Exchequer, like the financial manager of any business, takes stock of his prospective expenses for the next twelve months, considers the sources of income open to him, and strikes a balance between the two. The result he embodies in proposed financial legislation, including the appropriations and the taxation for the year. That is, he prepares a Budget. Here he plans an economy to meet a shrinking income, there he suggests a new tax to provide for an inevitable increase of expenditure. In April last, Mr. David Lloyd-George, the Liberal Chancellor of the Exchequer, in casting up his accounts, found himself confronted with a prospective deficit of £16,000,000, or $80,000,000.1 The deficit was due to three causes: a decrease in the imports of spirits, the growing cost of the navy, and the new In these papers I shall consider the English pound as equal to five dollars, and the shilling as equal to twenty-five cents. While this is obviously not a perfectly exact translation of values, it is sufficiently so for the purposes of a series of impressions. policy of old age pensions. Public opinPublic opinion, aroused by the rapid strides being made by Germany in naval construction, had persuaded the Liberal Government to provide for the laying down of eight great battle-ships--super-Dreadnoughts in the parlance of the day-instead of four, as it had at first proposed. Such an extended naval programme involved an increased expenditure for 1909 of $15,000,000. The Old Age Pension Law, passed by the Liberals in 1908, grants to every needy person seventy years old, of British nationality and twenty years' residence in the United Kingdom, not a pauper receiving local aid, a weekly pension of from one to five shillings (25 cents to $1.25), depending on the extent of his other income. The Chancellor estimated the cost of this measure of social amelioration, by which, in 1909, 700,000 persons would benefit, at $27,000,000 for the year. The problem before the Chancellor of the Exchequer was to balance his Budget by providing an additional revenue of $80,000,000. He attacked the problem fearlessly. England's main sources of revenue are customs duties on spirits, sugar, tea, and tobacco; internal revenue taxes on beer and spirits; liquor licenses; death duties, or inheritance taxes; stamp taxes; and the income tax. Mr. Lloyd-George's proposals group themselves under eight heads : 1. Income Tax. An increase of onesixth in the tax rate on all unearned incomes and on earned incomes above $10,000. In addition, a super-tax of two and one-half per cent on incomes of over $25,000, the super-tax being chargeable, however, only on the sum by which the income exceeds $15,000. Thus an income of $30,000 would pay a tax of $1,750 and a super-tax of $375. It was also provided that a man whose income was less than $2,500 might have deducted from it, in calculating the tax, $50 for each child under sixteen years of age. 2. Death Duties. The tax on estates under $25,000 was unchanged, remaining at one, two, or three per cent, according to value. Above that figure the Chancellor proposed, to use his own words, "to shorten the steps and steepen the graduation." The maximum rate of fifteen per cent was not to be increased, but it was to be reached at $5,000,000, instead of at $15,000,000 as under the existing law. Increases were also made in the rates on settlement estates, where the property does not pass into absolute ownership, and on legacies and succession in any but the direct line of descent. 3. Stamp Taxes. The tax upon transfer of property was raised from one-half of one per cent to one per cent. 4. Tobacco. The import duty on tobacco was increased 90 cents a pound. 5. Spirits. The import duty on spirits. was increased 93 cents a gallon. 6. Liquor Licenses. The license fees. for public-houses and all kinds of places where liquors are sold were substantially increased, especially on those houses doing the largest business. 7. Motor Cars. A new tax on motor cars. ranging from $10.50 on a car of less than six and one-half horse-power to $210 on a car of more than sixty horse-power. Doctors' cars to be taxed at only one-half these rates. In addition, a duty of six cents a gallon on petrol (gasoline) used for motor cars. The revenue from these two sources was to go into a fund for the construction and maintenance of good roads. 8. Land Taxes. Four new taxes on land, beginning with a tax on undeveloped or unimproved land, not agricultural or park land to which the public has access, of one-tenth of one per cent. Second, a tax of ten per cent on the benefit accruing to the landowner at the expiration of a lease. (This tax, which depends on a system of land tenure comparatively unknown in the United States, requires some further elucidation, which I shall try to give in a later article.) Third, a tax of five per cent on mineral royalties; that is, on the royalties which a landowner receives on the output of mines on his land which he allows others to work. Fourth, a tax of twenty per cent on the unearned increment in land; that is, on that increase in the value of land which is due "to no expenditure of capital or thought on the part of the owner," but is Mr. Lloyd-George's proposals, with two exceptions, have, it will be noted, one dominant note-increased taxes on property. Spirits and tobacco are luxuries, of however extensive use, and higher duties on them are justified by the financial needs of the country. But the increase in the tax on large incomes, the steeper graduation of the death duties, the higher license duties, the tax on motor cars and the raw material of their motive power, and the four taxes on land, are all aimed at property. And the most important, the most far-reaching, and, in the minds of his opponents, the most revolutionary taxes in the Lloyd-George Budget were aimed at the property which is founded on natural resources. It was not by accident that this was true. The Chancellor, wisely or unwisely, fairly or unfairly, with the skill of a statesman or the blindness of a demagogue, aimed at just such a goal. "All we ask," said he, "is that wealth shall pay its fair share. We are simply seeking to establish in an Act of Parliament a very old friend and honored fiscal principle, that men should contribute to the needs of the State as God has prospered them.". As I have said, two causes lay beneath the need for more taxation-the demand for a bigger navy and old age pensions. The demand for the greater navy came most loudly from the owners of property; therefore, said Mr. Lloyd-George, let them pay their rightful share of the bill. And on the second point, of pensions for the aged needy, he declared: I do, without fear of misrepresentation, say that the first charge on the great natural resources of this country ought to be the maintenance above want of all those who are giving their labor and brain and muscle to the cultivation and development of those resources." Property must pay for the protection against the foreigner which it demands; property must pay its fair share for the amelioration of the condition of those who have helped to build up property and in their old age are suffering want. Inseparably connected with the Budget, in the intentions of its framers, is a programme of social reform of which the old age pensions already established formed the first item. "This," said Mr. Lloyd-George, "is a War Budget. It is for raising money to wage implacable warfare against poverty and squalidness. I cannot help hoping and believing that before this generation has passed away we shall have advanced a great step toward that good time when poverty and the wretchedness and human degradation which always follow in its camp will be as remote to the people of this country as the wolves which once infested its forests." The Budget was hailed as revolutionary, Socialistic, confiscatory. The land taxes in particular were denounced and attacked, derided and assailed. The debate in the House of Commons lasted from the end of April until November, when the bill was passed by the great majority of 230. The vote was 379 to 149. In the House of Lords the Budget was attacked with even greater vehemence, and, after a powerful debate, the House took the unprecedented action of declaring "that this House is not justified in giving its consent to this bill until it has been submitted to the judgment of the country." The motion was adopted in spite of weighty warnings from some of the most eminent peers that the House was going beyond its rights and powers in rejecting a Finance Bill, and thus refusing to grant to the Crown the supplies necessary for the carrying on of the Government. The vote in the Lords was 350 to 75. On December 2 the House of Commons adopted a resolution declaring "that the action of the House of Lords in refusing to pass into law the financial provision made by this House for the service of the year is a breach of the Constitution and a usurpation of the rights of the Commons." There was nothing left but an appeal to the country. Parliament was prorogued, with the intention of dissolving it early in January, and the campaign for a general election began forthwith. Here let us look a little at the system |