IV

One of the few failures of this active and fruitful period was the proposal (1863) that charities should pay income-tax upon the returns from their endowments. What is their exemption but the equivalent of a gift to them from the general taxpayer? He has to make good the sum that ought in reason and equity to have been paid by them, as by other people, to the government that protects them. Why should this burden be compulsorily laid upon him? What is the quality of an endowment for a charitable purpose that const.i.tutes a valid claim for such a boon? Into this case Mr.

Gladstone threw himself with full force. The opposition to him was as heated and as vigorous as he ever provoked, and the violence of the resistance roused an answering vehemence in him. He speaks in his diary of his "deadly encounter with the so-called charities." "I was endeavouring,"

he says, "to uphold the reality of truth and justice against their superficial and flimsy appearances." "Spoke from 5.10 to 8.20, with all my might, such as it was." This speech, with its fierce cogency and trenchant reasoning, was counted by good judges who heard it, to be among the two or three most powerful that he ever made, and even to-day it may be read with the same sort of interest as we give to Turgot's famous disquisition on Foundations. It turns a rude searchlight upon illusions about charity that are all the more painful to dispel, because they often spring from pity and from sympathy, not the commonest of human elements. It affects the jurist, the economist, the moralist, the politician. The House was profoundly impressed by both the argument and the performance, but the clamour was too loud, all the idols of market-place and tribe were marched out in high parade, and the proposal at last was dropped.

(M24) Though the idea of putting a tax on the income of charitable endowments was rejected, the budget of 1863 was the record of a triumph that was complete. The American civil war by arresting the supply of cotton had half ruined Lancashire. The same cause had diminished the export trade to America by six millions sterling. Three bad seasons spoiled the crops. There was distress in Ireland. Yet the chancellor had a revenue in excess of expenditure by the n.o.ble figure of three millions and three quarters. Mr. Gladstone naturally took the opportunity of surveying the effects of four years of his financial policy. He admitted that they had been four years of tension, and this tension had been enhanced by his large remissions of duty, and by taking in hand the completion of the great work of commercial legislation. The end of it all was a growth of wealth, as he called it, almost intoxicating. The value of British goods sent to France had risen from four millions and three quarters to nearly nine millions and one quarter, in other words had about doubled under the operations of the treaty of commerce.(45) If to this were added foreign and colonial produce sent through us, and acquired by us in exchange for our own produce, the value had risen from nine and a half in 1859 to twenty-one and three quarters in 1862. In Mr. Gladstone's own description later, the export trade of 1860, in spite of a bad harvest, was so stimulated by the liberating customs act, that it rose at once from a hundred and thirty millions to a hundred and thirty-five. The next year it fell to a hundred and twenty-five, and in 1862 it fell by another million owing to the withdrawal, by reason of the American war, of the material of our greatest manufacture. In 1866 it rose to a hundred and eighty-eight millions.(46) Then under the head of income-tax, and comparing 1842 with 1862, over the same area, and with the same limitations, the aggregate amount of a.s.sessed income had risen from one hundred and fifty-six millions to two hundred and twenty-one. Other tests and figures need not detain us.

_April 16, 1863._-My statement lasted three hours, and this with a good deal of compression. It wound up, I hope, a chapter in finance and in my life. Thanks to G.o.d. 17.-The usual sense of relaxation after an effort. I am oppressed too with a feeling of deep unworthiness, inability to answer my vocation, and the desire of rest. 18.-To Windsor, had an audience of the Queen; so warm about Sir G. Lewis, and she warned me not to overwork.

Lewis had died five days before (April 13), and this is Mr. Gladstone's entry:-

_April 14._-Reached C.H.T. at 11-1/4, and was met by the sad news of the death of Sir George Lewis. I am pained to think of my differences with him at one time on finance; however, he took benefit by them rather than otherwise. A most able, most learned, most unselfish, and most genial man.

To Sir Gilbert Lewis, he wrote (April 18):-

Like several eminent public men of our time, he had many qualities for which the outer world did not perhaps, though it may not have denied them, ever give him full positive credit. For example, his singular courtesy and careful attention to others in all transactions great and small; his thoroughly warm and most forthcoming and genial disposition; his almost unconsciousness of the vast stores of his mind, and of the great facility and marvellous precision with which he used them; and, if I may so say, the n.o.ble and antique simplicity of character which he united with such knowledge of men and of affairs.

The final budget of this most remarkable series was that of 1866, when he swept away the last of the old vexatious duties on timber. It contained another element as to which, as I have said, some thought he had not been keen enough. In the budget of 1866 he first started the scheme of a sinking fund, which, when amplified, and particularly when simplified by his successors, did so much to reduce the dead weight of debt.(47) The complication of his scheme was due to his desire to make sure of its stability, and undoubtedly he would have carried it if he had remained in office through the session. He is, however, ent.i.tled to credit for laying the foundation of an effective sinking fund.

One word more may be added on Mr. Gladstone as financier. He was far too comprehensive in his outlook to suppose that the great outburst of material prosperity during the years in which he controlled the exchequer and guided parliament in affairs of money, was wholly and without qualification due to budgets alone. To insist on ascribing complex results to single causes is the well-known vice of narrow and untrained minds. He was quite alive to the effects of "the enormous, constant, rapid, and diversified development of mechanical power, and the consequent saving of labour by the extension of machinery." He was well aware of the share of new means of locomotion in the growth of industrial enterprise. But the special cause of what was most peculiar to England in the experience of this period he considered to be the wise legislation of parliament, in seeking every opportunity for abolishing restrictions upon the application of capital and the exercise of industry and skill. In this wise legislation his own energetic and beneficent genius played the master part.

Chapter V. American Civil War. (1861-1863)

Then came the outbreak which had been so often foretold, so often menaced; and the ground reeled under the nation during four years of agony, until at last, after the smoke of the battlefield had cleared away, the horrid shape which had cast its shadow over a whole continent had vanished, and was gone for ever.-JOHN BRIGHT.

I

Sir Cornewall Lewis in a memorandum printed for the use of his colleagues both truly and impressively described the momentous struggle that at this time broke upon the family of civilised nations in both hemispheres. "It may be fairly a.s.serted," says the particularly competent writer of it, "that the war in America is the greatest event that has occurred in the political world since the definitive fall of Napoleon in 1815. The expulsion of the elder branch of the Bourbons in 1830; the expulsion of Louis Philippe in 1848; the re-establishment of a republic, and the subsequent restoration of a Bonaparte to the imperial throne-were all important events, both to France and to the rest of Europe; but (with the exception of the recent annexation of Savoy and Nice) they have not altered the boundaries of France; and Europe still, in spite of minor changes, substantially retains the form impressed upon it by the treaty of Vienna.(48) With respect to the internal consequences of these changes, a French revolution has become a fight in the streets of Paris, in order to determine who shall be the occupant of the Tuileries. The administrative body and the army-the two great governing powers of France-remain substantially unaffected; whereas the American civil war threatens a complete territorial re-arrangement of the Union; it also portends a fundamental change in the const.i.tution, by which both its federal and state elements will be recast."

Of this immense conflict Mr. Gladstone, like most of the leading statesmen of the time, and like the majority of his countrymen, failed to take the true measure. The error that lay at the root of our English misconception of the American struggle is now clear. We applied ordinary political maxims to what was not merely a political contest, but a social revolution. Without scrutiny of the cardinal realities beneath, we discussed it like some superficial conflict in our old world about boundaries, successions, territorial part.i.tions, dynastic preponderance.

The significance of the American war was its relation to slavery. That war arose from the economic, social, and political consequences that flowed from slavery-its wasteful cultivation, the consequent need for extension of slave territory, the probable revival of the accursed African trade, the const.i.tution of slave-holders as the sole depositaries of social prestige and political power. Secession was undertaken for the purpose of erecting into an independent state a community whose whole structure was moulded on a system that held labour in contempt, that kept the labourer in ignorance and cruel bondage, that demanded a vigilant censorship of the press and an army of watchmen and spies. And this barbaric state was to set itself up on the border of a great nation, founded on free industry, political equality, diffused knowledge, energetic progress. Such was the meaning of secession. "The rebellion," as Charles Sumner well said to Mr.

Gladstone in 1864, "is slavery in arms, revolting, indecent, imperious."

Therefore those who fought against secession fought against slavery and all that was involved in that dark burden, and whatever their motives may at different times have been, they rendered an immortal service to humanity.(49)

(M25) At a very early period Mr. Gladstone formed the opinion that the attempt to restore the Union by force would and must fail. "As far as the _controversy_ between North and South," he wrote to the d.u.c.h.ess of Sutherland (May 29, 1861) "is a controversy on the principle announced by the vice-president of the South, viz. that which a.s.serts the superiority of the white man, and therewith founds on it his right to hold the black in slavery, I think that principle detestable, and I am wholly with the opponents of it.... No distinction can in my eyes be broader than the distinction between the question whether the Southern ideas of slavery are right, and the question whether they can justifiably be put down by war from the North." To Cyrus Field he wrote (Nov. 27, 1862): "Your frightful conflict may be regarded from many points of view. The competency of the Southern states to secede; the rightfulness of their conduct in seceding (two matters wholly distinct and a great deal too much confounded); the natural reluctance of Northern Americans to acquiesce in the severance of the union, and the apparent loss of strength and glory to their country; the bearing of the separation on the real interests and on the moral character of the North; again, for an Englishman, its bearing with respect to British interests;-all these are texts of which any one affords ample matter for reflection, but I will only state as regards the last of them, that I for one have never hesitated to maintain that, in my opinion, the separate and special interests of England were all on the side of the maintenance of the old union, and if I were to look at those interests alone, and had the power of choosing in what way the war should end, I would choose for its ending by the restoration of the old union this very day."

In a letter to the d.u.c.h.ess of Sutherland (Nov. 7, 1862), he says: "A friendly correspondent writes to say he is sorry the South has my sympathies. But the South has not my sympathies, except in the sense in which the North has them also. I wish them both cordially well, which I believe is more than most Englishmen can at present say with truth. In both I see the elements of future power and good; in both I see also the elements of danger and mischief.' To another correspondent: 'I have never to my knowledge expressed any sympathy with the Southern cause in any speech at Newcastle or elsewhere, nor have I pa.s.sed any eulogium upon President Davis. In dealing whether with South or North I have thought it out of my province to touch in any way the complicated question of praise and blame."

At a very early stage the Duke of Argyll sent him some letter of Mrs.

Beecher Stowe's, and Mr. Gladstone in acknowledging it from Penmaenmawr (Aug. 26, 1861) writes expressing all possible respect for her character and talents, but thinks that she has lost intellectual integrity:-

It seems to me that the South has two objects in view: firstly the liberation of its trade and people from the law of tribute to the North; secondly and perhaps mainly, the maintenance of the slave system without fear or risk of Northern interference. That on the other hand it is very difficult to a.n.a.lyse that movement of the North which Mrs. Stowe finds sublime, but which in my eyes is tumultuous. There is the anti-slavery motive impelling with great vehemence a small section, which she rather offensively calls the Christian people of the union; there is the spirit of protection and monopoly, unwilling to surrender future booty; there is the unquietness in the great towns, found in America as in all countries, and ever ready for a row; there is the fear which Mr.

Motley described, that unless a firm front were shown against secession it would not stop where it had begun; there is last and (relatively to this subject matter) best of all the strong instinct of national life, and the abhorrence of nature itself towards all severance of an organised body. This last sentiment, as well as the first, deserved to be treated by us with great tenderness and respect.... As to the authority and t.i.tle of the North it must be granted _prima facie_, but on examination it is subject to a good deal of doubt, and I think it seems to have been the intention of the framers of the const.i.tution not to lay down a rule for the solution of a great question of this kind, but to leave it open. And if so, I think they were wise; for such a question could only arise for any practical purpose at a time when the foundations of the great social deep are broken up, and when the forces brought into unrestrained play are by far too gigantic to be controlled by paper conventions.

So much for his view of the case in its general aspect.

II

At one dangerous moment in the conflict it seemed possible that Great Britain might be forced to take a part. The commander of an American man-of-war boarded the _Trent_ (Nov. 8, 1861), a British mail-boat, seized two emissaries from the Southern confederacy on their way to Europe, and carried them off to his own ship, whence they were afterwards landed and thrown into prison. This act was in direct violation of those rights of neutrals of which the United States. .h.i.therto had been the strictest champion against Great Britain; and nothing was to be gained by it, for the presence of the two commissioners was not in the least likely to effect any change in the policy of either England or France. Violent explosions of public feeling broke out on both sides of the Atlantic; of anger in England, of exultation in America. Mr. Gladstone's movements at this critical hour are interesting. On Nov. 27, says Phillimore, "Gladstones dined here. Gladstone, with the account in his pocket from the evening papers of the capture of the Southern envoys out of the English mail-ship." The next two nights he was at court.

_Nov. 28._-Off at 6.30 to Windsor. The Queen and Prince spoke much of the American news.

_Nov. 29_ (Friday).-Came up to town for the cabinet on American news. Returned to Windsor for dinner, and reported to Queen and Prince.

Of this important cabinet, Mr. Gladstone wrote an account to the Duke of Argyll, then absent from London:-

_Dec. 3, '61._-The cabinet determined on Friday to ask reparation, and on Sat.u.r.day they agreed to two despatches to Lord Lyons of which the one recited the facts, stated we could not but suppose the American government would of itself be desirous to afford us reparation, and said that in any case we must have (1) the commissioners returned to British protection; and (2) an apology or expression of regret. The second of these despatches desired Lyons to come away within seven days if the demands are not complied with. _I thought and urged that we should hear what the Americans had to say before withdrawing Lyons, for I could not feel sure that we were at the bottom of the law of the case, or could judge here and now what form it would a.s.sume. But this view did not prevail._

We may a.s.sume that Mr. Gladstone, in reporting these proceedings at Windsor, did not conceal his own arguments for moderation which had been overruled. On the following day the cabinet again met. "Nov. 30 (Sat.).

Left Windsor at 11.25. Cabinet 3-5-. Lord Russell's draft softened and abridged." That is to say the draft was brought nearer, though not near enough, to the temper urged upon the cabinet and represented at court by Mr. Gladstone the day before.

The story of the first of these two critical despatches is pretty well known; how the draft initialled by Lord Russell was sent down the same night to Windsor; how the Prince Consort-then as it proved rapidly sinking down into his fatal illness-found it somewhat meagre, and suggested modifications and simplifications; how the Queen returned the draft with the suggestions in a letter to the prime minister; how Palmerston thought them excellent, and after remodelling the draft in the more temperate spirit recommended by the Prince, though dropping at least one irritating phrase in the Queen's memorandum,(50) sent it back to the foreign office, whence it was duly sent on (Dec. 1) to Lord Lyons at Washington. It seems, moreover, that a day's reflection had brought his colleagues round to Mr.

Gladstone's mind, for Lord Russell wrote to Lord Lyons a private note (Dec. 1) in effect instructing him to say nothing about withdrawing in seven days.(51)

(M26) The British despatches were delivered to Lord Lyons at Washington at midnight on December 18; the reparation despatch was formally read to Mr.

Seward on the 23rd; and on Christmas Day Lincoln had a meeting of his cabinet. Sumner was invited to attend, and he read long letters from Cobden and Bright. "At all hazards," said Bright, "you must not let this matter grow to a war with England. Even if you are right and we are wrong, war will be fatal to your idea of restoring the union.... I implore you not, on any feeling that nothing can be conceded, and that England is arrogant and seeking a quarrel, to play the game of every enemy of your country."(52) A French despatch in the English sense was also read. Seward and Sumner were in favour of giving up the men. The president, thinking of popular excitement, hesitated. In the end, partly because the case was bad on the merits, partly because they could not afford to have a second great war upon their hands, all came round to Seward's view.(53)

III

By the autumn of 1862 the war had lasted a year and a half. It was already entailing a cost heavier than our war with Napoleon at its most expensive period. The North had still failed to execute its declared purpose of reducing the South to submission. The blockade of the Southern ports, by stopping the export of cotton, was declared to have produced worse privations, loss, and suffering to England and France than were ever produced to neutral nations by a war. It was not in Mr. Gladstone's nature to sit with folded hands in sight of what he took to be hideous and unavailing carnage and havoc. Lord Palmerston, he tells Mrs. Gladstone (July 29, 1862), "has come exactly to my mind about some early representation of a friendly kind to America, if we can get France _and_ Russia to join." A day or two later (Aug. 3) he writes to the Duke of Argyll: "My _opinion_ is that it is vain, and wholly unsustained by precedent, to say nothing shall be done until both parties are desirous of it; that, however, we ought to avoid sole action, or anything except acting in such a combination as would morally represent the weight of impartial Europe; that with this view we ought to communicate with France and Russia; to make with them a friendly representation (if they are ready to do it) of the mischief and the hopelessness of prolonging the contest in which both sides have made extraordinary and heroic efforts; but if they are not ready, then to wait for some opportunity when they may be disposed to move with us. The adhesion of other powers would be desirable if it does not enc.u.mber the movement."

"In the year 1862," says Mr. Gladstone in a fragment of autobiography, "I had emerged from very grave financial [budget] difficulties, which in 1860 and 1861 went near to breaking me down. A blue sky was now above me, and some of the Northern liberals devised for me a triumphant visit to the Tyne, which of course entailed as one of its incidents a public dinner."