The English Constitution. Walter Bagehot
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,