GREAT BRITAIN: Chamberlain’s Budget

An obscure happening, ignored by headline writers 22 months ago, kicked open the throttle of a roaring train of events that has carried Rt. Hon. Arthur Neville Chamberlain to first political rank in Great Britain and marked him as Prime Minister James Ramsay MacDonald’s probable successor. Last week tall, husky-voiced, smoldering-eyed Chancellor Chamberlain of Britain’s Exchequer read to a hushed House of Commons the Empire’s first sky-high-tariff budget. That speech was sufficiently historic. The obscure happening 22 months ago was Mr. Chamberlain’s discreet success in getting himself appointed chairman of the Conservative Party by bumbling Party Leader Stanley Baldwin.

Mr. Baldwin, commercially inept, has bumbled away his large inherited fortune until he is today a man of merely comfortable means. He was bumbling the Conservative Party down the same hill 22 months ago, his most spectacular mistakes being to have no tariff policy, either for or against, and to have bitterly antagonized Britain’s two potent press lords, Baron Beaverbrook and Viscount Rothermere, men of fierce patriotism but as easily enraged as small, spoiled boys. What the Conservative Party needed and what it has had increasingly in recent months has been the cold, hard, managing head of a CHAMBERLAIN—that mighty name from Birmingham.

Old J., Sir A. & Neville. Without his name and inherited political prestige, able but scarcely likeable Neville Chamberlain could most certainly not have overhauled the whole Conservative Party machine, oiling grievances and rubbing off bumblerust. His husky voice would scarcely have had the authority to bring those bad boys, the Press Peers, to their basically Conservative senses. Finally, without his family’s name and prestigeous relations with Birmingham Mr. Chamberlain could not have applied the pressure necessary to make Mother Free Trade Britain change her middle name to High Tariff.

CHAMBERLAIN stands first for Birmingham’s late, great “Old Joe,” a hawk-nosed, bemonocled power in and behind several Victorian cabinets (though never Prime Minister). This elegant Parliamentarian whose daily orchid fascinated the House, lost the first two of his three wives after they bore him respectively:

Sir Joseph Austen Chamberlain, today 68, who retired with the Garter after winning the Nobel Peace Prize as British Foreign Secretary (TIME, Dec. 20, 1926).

Arthur Neville Chamberlain, today 63, whom nobody expected to become the Chamberlain of today—which he is.

Sent by his father to Rugby, to Mason College, Birmingham and to a sweaty job of plantation management in the Bahamas, worthy Neville seemed to have about fulfilled his Chamberlain destiny when he returned to Birmingham and after five years of local political plodding became its Lord Mayor during the War.

Free-Trader David Lloyd George, then Prime Minister, plucked Lord Mayor Chamberlain from Birmingham and brought him on the national scene as Director of National Service (1916-17). At the last British election (TIME, Nov. 9), the Conservative machine which Neville Chamberlain had overhauled obliterated Mr. Lloyd George— and rolled up for the Conservative Party the largest majority ever won by any British party: 472 seats out of the House total of 615.

Events beyond any one man’s control which made this Conservative victory possible included the Labor Cabinet’s split, the Naval mutiny and sterling’s slide off gold—but it was the Conservative Party machine, reorganized, conciliated within itself and tuned up by Neville Chamberlain which all over England turned the Labor enemy’s defeat into a rout. That rout was the reason why the 1932-33 Budget of His Majesty’s Exchequer was presented to the House of Commons last week by Rt. Hon. Arthur Neville Chamberlain as Chancellor.

The Budget. Promptly at 3:21 p. m. Edward of Wales, having climbed the narrow stair in the House of Commons to the Peers’ gallery, entered smiling and took the seat from which H. R. H. hears all budget speeches, the seat directly behind the clock.

Below on the oblong floor of the House, which is a great Gothic box, crisp English primroses bloomed in the buttonholes of scores of M. P.s, for Budget Day had happened to fall on “Primrose Day.”** On the Government front bench sat snowy-crested Scot MacDonald between the Empire’s two biggest bumblers, Stanley Baldwin, Lord President of the Council, and James Henry (“Jim”) Thomas, Secretary of State for the Dominions. Exactly at 3:30 p. m. Chancellor Chamberlain rose, ruffled his notes, took a stiff stance beside the red leather despatch box and, before he began to make his budget speech, cast a quick glance up at the packed public galleries.

Speaking as usual without effort or gestures, Mr. Chamberlain took his time, began with a tribute to his famed predecessor Viscount Snowden of Ickornshaw, a choleric Free Trader who attacks the present Chancellor’s tariff policies on any & every occasion. With the Olympian condescension of a Chamberlain, the new Chancellor declared last week: “Lord Snowden’s last budget is a model example of secure but sound and sane finance. We are now £9,000,000 better off than Lord Snowden anticipated.”

In one respect Chancellor Snowden erred conspicuously last year, overestimated by £18,000,000 the revenue from estate duties. To this error (resulting from the fact that an unusually small number of rich men died during the year) Chancellor Chamberlain alluded by making the only joke in his budget speech. “I am reminded,” said he stroking his mustache, “of that story concerning the Peninsular War, the story of the General who saw his troops hesitate to charge and encouraged them by exclaiming, ‘You don’t want to live forever, do you?’ ”

This joke the House of Commons received at first in dead silence. Suddenly, after a lapse of perhaps 45 seconds, the Englishmen, Scotsmen and Welshmen present saw the joke and roared. Chancellor Chamberlain, his stern features relaxing in a smile of pleasure, got down to business.

As the bombshell of his speech he solemnly indicated Great Britain’s determination that the Lausanne Conference next June shall finally cancel both Reparations and War Debts—thus leaving the U. S. taxpayer holding the entire bag. “After the deliberations at Lausanne,” said Mr. Chamberlain, “I shall submit to Parliament whatever proposals may be necessary to give effect to the measures we have agreed to.” He presented in his budget no figure for such payments, either by Britain to the U. S. or to Britain from the Continent. “The best course is to refrain from all conjectures,” said he, “and treat the account on both sides as being in suspense.” By this technique Neville Chamberlain balanced his “maiden budget” at roughly $3,000,000.000—the lowest British balancing figure since 1924.

On the tariff side Chancellor Chamberlain of course reduced by not one inch or penny Great Britain’s brand new tariff wall. The Chancellor announced a new duty on “foreign tea” of fourpence a pound, on “Empire tea,” of twopence a pound. But tea-loving and beer-loving Englishmen had also expected Mr. Chamberlain to cut the beer tax.

“I believe beer has been overtaxed,” said the Chancellor. “But remission . . . would cost me [the Exchequer] £10,000,000 in the present year,” he added firmly, refused to make the sacrifice. Finally Mr. Chamberlain left the British income tax alone, drank a glass of water, sat down amid cheers from his party.

Most Heavily Taxed? Thus Chancellor Chamberlain did not much alter the tax status quo conjured up by that bleak British boast, “We are the world’s most heavily taxed people.”

Roughly the national income tax burdens on a U. S. and on a British citizen, each with a wife and two children, compare as follows in three significant income tax brackets :

Income ………………………..Tax U. S. ………………………Tax G. B.

$3,500 …………………………..nil ……………………………….$411

$10,000 …………………………$83 …………………………….$1,926

$25,000 ………………………….$933 …………………………..$7,588

There are no local income taxes in Great Britain.†The local “rates” (county taxes) are assessed on the rented or presumptive rental value of property. Contrarywise in the U. S., property taxes are assessed on the presumptive sale value.

As yet neither the U. S. nor Great Britain has a sales tax on manufactures, but Canada has and Chancellor Chamberlain has long been fixing his dark eye upon Canada. In urging Britain to abandon Free Trade he recalled on every possible occasion that Canada had adopted tariffs. He cried from many a hustings, “Why should we not take a leaf out of the Canadian book?”

Definitely a politician—a bargainer and adjuster—Chancellor Chamberlain now looks forward to the Imperial Conference at Ottawa next summer as his chief hope for Empire recovery. His object will be to exclude non-Empire goods by an Empire tariff wall around the Mother Country and Dominions, this with the avowed plan of later bargaining with other high-tariff countries.

From the Flames. Tall and purposeful Chancellor Chamberlain faced the world last week resolved to play a role not smaller than that which his brother Austen attempted at Locarno. Today the “Locarno Spirit” of European goodwill is dead, killed by Depression and cremated by the flames of nationalism. Out of these flames (and high tariffs are a fiery essence of nationalism) Rt. Hon. Arthur Neville Chamberlain hopes to extract with honor not only the Empire but the world. Toward the U. S. cold Neville is studiously friendly, never tires of assuring British doubters that U. S. currency is safe & sound on gold and will remain there.

*Four M. P.s now comprise the “Lloyd George Party” in the Commons: himself, his daughter Miss Megan, his son Major Gwilym, and his son’s brother-in-law, Major Goronwy Jones.

**Commemorating the death in 1881 of that great statesman whose favorite flower was the primrose and who sent so many of them to Queen Victoria: Benjamin Disraeli, 1st Earl of Beaconsfield.

†ln the U. S., 20 States have income taxes. In these States the maximum normal tax on maximum incomes does not exceed 8%. Thus the U. S. citizen in all cases is liable to much lower total income tax than the British citizen.