t." "But how," he wrote to Cobden (Jan.
5, 1864), "is the spirit of expenditure to be exorcised? Not by my
preaching; I doubt if even by yours. I seriously doubt whether it will
ever give place to the old spirit of economy, as long as we have the
income-tax. There, or hard by, lie questions of deep practical moment."
This last pregnant reference to the income-tax, makes it worth while to
insert here a word or two from letters of 1859 to his brother Robertson,
an even more ardent financial reformer than himself:--

Economy is the first and great article (economy such as I
understand it) in my financial creed. The controversy between
direct and indirect taxation holds a minor though important place.
I have not the smallest doubt we should at this moment have had a
smaller expenditure if financial reformers had not directed their
chief attention, not to the question how much of expenditure and
taxes we shall have, but to the question how it should be
raised.... I agree with you that if you had only direct taxes, you
would have economical government. But in my opinion the indirect
taxes will last as long as the monarchy; and while we have them, I
am deeply convinced that the facility of recurring to, and of
maintaining, income-tax has been a main source of that
extravagance in government, which I date from the Russian war (for
before that a good spirit had prevailed for some twenty-five
years).

Bagehot, that economist who united such experience and sense with so much
subtlety and humour, wrote to Mr. Gladstone in 1868: "Indirect taxation so
cramps trade and heavy direct taxation so impairs morality that a large
expenditure becomes a great evil. I have often said so to Sir G. Lewis,
but he always answered, 'Government is a very rough business. You must be
content with very unsatisfactory results.' " This was a content that Mr.
Gladstone never learned.

(M23) It was not only in the finance of millions that he showed himself a
hero. "The chancellor of the exchequer," he said, "should boldly uphold
economy in detail; and it is the mark of a chicken-hearted chancellor when
he shrinks from upholding economy in detail, when because it is a question
of only two or three thousand pounds, he says that is no matter. He is
ridiculed, no doubt, for what is called candle-ends and cheese-parings,
but he is not worth his salt if he is not ready to save what are meant by
ca