the ranks of Russian naval officers. Take for instance the conduct of the Variag, which, though magnificent, "certainly was not war." With her great speed she could easily have escaped at night directly her captain appreciated the position off Chemulpho, taking with her the crews of the Korietz and Sungari ; instead of which he preferred to wait helplessly for daylight, when he took out his splendid cruiser with her little consort to certain destruction. Another subject of criticism is not unnaturally the continuous failure of Russian ordnance, which, so far as can be ascertained, has not inflicted any serious damage on any Japanese ship, and Admiral Togo is clearly justified in the belief that his ships run little risk in constantly coming within range of Russian batteries and submarine mines. There must be something seriously amiss with Russian shooting, which had a high reputation before it was tested. It is also somewhat strange that the twenty destroyers and torpedo-boats at Port Arthur should have been unable to effect anything whatsoever during the fateful April 13. Such and similar observations which will suggest themselves-e.g., the inertia of the Vladivostock squadron— are not made in any carping spirit, but simply because every incident in maritime war is of vital interest to the British, and it is imperative to make a critical appreciation of all the factors involved. To those Englishmen who suggest that we have nothing to learn because Japan, as the "England of the Far East," is merely acting as we should act in her place, we would answer that Japan has the enormous advantage over us, not only of having a Government which treats war seriously, but of being also an amphibious Power, not less formidable on land than on Having destroyed the Russian fleet she is now able to attack the Russian army. She is in fact a tiger as well as a shark. Great Britain is only a shark, though a very powerful one. Be it remembered that our future adversary, Germany, as we are graphically reminded by Mr. Wilson's remarkable diagram, is, like Japan, tiger as well as shark. We may dispose of the German shark, but how shall we deal with the German tiger?

sea.

The
Budget.

That Mr.Austen Chamberlain, the Chancellor of the Exchequer, has made the best of a very bad job in framing his Estimates for the current year, is universally conceded by friend and foe. It is his misfortune to be a member of a Government of unsettled convictions on the fiscal question, and to succeed a singularly inept financier, who, in his mean ambition to put a spoke in the policy of Imperial Preference, saddled the country with a heavy deficit by repealing

VOL. XLIII

24

the corn duty. Mr. Austen Chamberlain unfolded his first Budget, which we venture to predict will not be his last, on Tuesday, April 19, to a crowded and critical House containing no less than four ex-Chancellors of the Exchequer. His personal triumph was complete. His speech was a very great improvement upon the Budget speeches of recent years. Though long, it was never wearisome, for its crystalline clearness made it agreeable to listen to. It also had the merit of being a spoken and not a read speech. Moreover, it was in the very best taste, and was totally devoid of Treasury wit, which has usually taken the form of ghoulish glee over the demise of millionaires, and is about as amusing as the average judicial joke. While Mr. Austen Chamberlain ıs responsible for his excellent speech, circumstances have dictated his Budget, upon which the Spectator congratulates him with ecstatic enthusiasm on the ground that "the Budget was as completely a Free Trade Budget as any produced during the last forty years, and neither in fact nor intention is Protection to be found in it," a fact which our esteemed contemporary directly traces to the action of the Duke of Devonshire, Mr. Ritchie, Lord Balfour of Burleigh, Lord George Hamilton, and Mr. Arthur Elliot in withdrawing from the Government last year! "By the firm stand they took in opposing Protection, whether in its crude form as proclaimed by Mr. Chamberlain, or under the aliases favoured by Mr. Balfour, they ensured the triumph of Free Trade which was witnessed on Tuesday when Mr. Chamberlain opened his Budget." While we sincerely regret that the basis of our revenue has not been enlarged to meet the growing expenditure, it was too much to expect that a revolution in our fiscal system could be effected through the Budget, and therefore we do not contemplate taking up the Spectator's challenge in this connection. We reluctantly observe, however, that its fiscal fanaticism is driving an excellent paper further and further into the arms of Sir Henry Campbell-Bannerman, who has now become the subject of a weekly laudation in Wellington Street, whether he indulges in an attack on Lord Milner or complains of the increase of our Naval Estimates. Free imports is a dangerous inclined plane, which inevitably leads the so-called Free Trade Imperialist into the nethermost pit of Little Englandism. Observe that Mr. Winston Churchill, one of the fathers of the Free Food League, has already thrown off his Imperialist mask and has come out as a follower of Sir Henry Campbell-Bannerman at Manchester.

Every Budget deals with two years, the past year and the current year, and it is not possible to separate the one from the other. Last year the shortage on

The

Budget. the Revenue estimated by the sanguine Mr. Ritchie was £2,724,000, but by supplementary estimates this deficit became swollen to £5,415,000, a portion of which was liquidated by the repayment of a sum of £3,000,000 temporarily advanced by the Imperial Exchequer to the Transvaal and Orange River Colonies, the Exchequer balance sheet for the year working out as follows:*

Mr. Austen Chamberlain proposes to utilise £1,000,000 of accumulated dividends on unclaimed Consols to increase the Exchequer balance sufficiently to wipe off the past year's deficit, and warned by his predecessor's blunder he refuses to make extravagant estimates as to the Revenue for the coming year, which is expected on the present basis of taxation to produce nearly two and a half million pounds less than last year. To this estimated deficit an addition has to be made of £500,000 required for the mantenance of the garrison in Somaliland. His final figures work out as follows:

This deficit of nearly four millions is to be wiped out by an increase in the Income Tax of a penny, raising it to Is. in the pound, while 2d. is to be added to the present tea duties, 6d. per

We have ventured to borrow this excellent table from the Daily Telegraph.

lb. to cigars, and is. per lb. upon foreign cigarettes, the estimated

The announcement that the Chancellor of the Exchequer had refused to raid the Sinking Fund, according to use and wont, was received with general approval in financial circles, and was followed by a substantial rise in Consols.

As we have admitted, on the assumption that the existing régime was sacrosanct, this is about as good a An Budget as could have been devised, but we have Alternative been and we remain totally unable to understand Budget. why the Government have rejected the golden opportunity which presented itself of broadening what is admittedly our too narrow basis of taxation. We are told that Mr. Balfour's public pledges and the necessity of preserving the sham unity of the Unionist party precluded any change in our Revenue system, but we cannot follow the argument. It is surely the whole duty of a British Government, when casting about for Revenue, to impose it in the least injurious manner to the vast body of British taxpayers. Therefore, instead of adding a penny to the already monstrous Income Tax and 2d. to the tea duties, which had already reached the extortionate proportion of 90 per cent. upon Indian tea, it would have been preferable to have imposed either a substantial tax of, say, 20 per cent. on all imported luxuries, which would have mainly fallen on a class at present taxed below their capacity, or a light duty of, say, 5 per cent. on our hundred millions of imported manufactured goods, which would have been paid by the foreign producer. We do not believe that in either case financial purists could have raised a successful outcry, while such a Budget would have been the most popular Budget of our generation, all the more if it had been coupled with a reduction of existing duties on Colonial products. Even if it had led to a defeat of the Government in the present fossilised House of Commons, Mr. Balfour would have been able to appeal to Cæsar either on the issue of whether the luxuries of the rich should be taxed in preference to the food of the people, or alternatively, supposing the general 5 per cent. duty had been proposed, whether the deficit should be borne

by the taxed Englishman or the untaxed foreigner. There is one aspect of the Revenue question-we reiterate that we are only referring to Revenue-which our statesmen have systematically shirked. Under the present one-sided arrangement British trade makes a substantial contribution to foreign exchequers, especially the German exchequer, while the German makes practically no contribution to our exchequer. Is this good business from our point of view? We cannot, admittedly, prevent Germany from imposing what taxation she pleases upon our trade, but we can equalise matters, as Mill recognised, by imposing Revenue taxes on German trade, and surely this would be the most effective manner of checking the naval megalomania of Germany. As soon as the German sees that he must become a substantial contributor to the British Navy, it will cease to be his interest to force the pace of naval construction. His ardour to rival us at sea will sensibly abate directly we touch his pocket. Unfortunately British statesmen prefer whining over the Estimates or soliloquising on the blessings of Disarmament.

Bill.

The introduction of the Government Licensing Bill was awaited with keen anxiety by the Unionist Party, and The Licensing with corresponding elation by the Opposition. It was rumoured to be a pinchbeck measure, merely limiting the discretion of the magistrates, and shirking the question of compensation. Such a Bill would have exasperated all serious friends of temperance, and have greatly irritated the magistracy throughout the country. Happily wiser counsels prevailed, and if, as is rumoured, the Bill was transformed at the eleventh hour, the Government are to be warmly congratulated on their action, for when introduced by Mr. Akers Douglas (the Home Secretary) on April 20 it caused as much satisfaction to the Ministerial Party as disappointment to the Opposition. It was, ex hypothesi, condemned offhand by fanatics of the Wilfred Lawson type, whose occupation as agitators is threatened by any serious settlement of this question, and it had the further advantage of being instantly condemned-before being printed-by Sir Henry Campbell-Bannerman, who egregiously declared that he and his associates would offer "the most strenuous opposition to the Bill at every stage." The Leader of the Opposition is rarely able to make good his boasts, and so it was on the present occasion. He had the humiliation of being beaten by a majority of more than two to one, as the first reading was carried by 314 to 147, this unusual majority being partly due to the unanimous support of the Unionist Party, but also to the