Part 26

One cardinal principle of the greatest English finance ministers has been the avoidance of deficits or undue surpluses. Gladstone's inheritance of doctrine from Peel "was to estimate expenditure liberally, to estimate revenue carefully, to make each year pay its own expenses, and to take care that your charge is not greater than your income." This method of treatment requires that taxation shall be productive in yield, and that it shall be so elastic as to admit of expansion, a function specially assigned to the income-tax. It may also be said to involve due care in the treatment of the national resources. The reaction of ill-chosen taxes on industry is a hindrance to their productiveness and their growth.

AUTHORITIES.--The constitutional historians--Stubbs, Gneist, Hallam--deal with the legal and constitutional aspects of finance. Special financial histories are: Sir J. Sinclair, _History of the Public Revenue of the British Empire_ (3 vols., 3rd ed., London, 1803); S. Dowell, _History of Taxation and Taxes in England_ (4 vols., 2nd ed., London, 1888); Schanz, _Englische Handelspolitik_ (2 vols., Leipzig, 1881), and H. Hall, _History of the Customs Revenue of England_ (2 vols., London, 1885), are valuable for the earlier periods. W. Cunningham, _Growth of English Industry and Commerce_ (2 vols., Cambridge, 1903-1907); H. O. Meredith, _Economic History of England_ (London, 1908), devote sections to finance. A. Smith, _Wealth of Nations_ (1776), Tooke and Newmarch, _History of Prices_ (6 vols., London, 1837-1856), give financial details. G. R. Porter, _Progress of the Nation_ (3rd ed., London, 1851); Sir S. Northcote, _Twenty Years of Financial Policy_ (London, 1862); S. Buxton, _Finance and Politics_ (2 vols., London, 1888); J. R. McCulloch, _Taxation and Funding_ (3rd ed., London, 1863); W. M. J. Williams, _The King's Revenue_ (London, 1908), for 19th-century finance. (C. F. B.)