Aberystwith, Cardigan, Guernsey, Jersey, Kirkwall, Maldon, Padstow, Stranraer, and Wigton, the total cost of the Custom Houses was £6,778 4s. 4d., and there was not a single penny collected, all the work done being the restriction of trade as much as possible. The total cost of the collection of the Customs dues was £787,876 11s. 1d., which was nearly four per cent. on the amount collected. Well, this peculiar state of things must exist as long as the taxes are collected with such a clumsy contrivance as the Custom House. With a system of direct taxation, this would be done away with, and in addition to the saving thus effected, trade would be allowed to expand as much as possible. For, while indirect taxation cramps and prevents trade, any steps towards direct taxation relieve it, and allow it to expand. From 1842 to 1866, there were repealed or reduced Customs or Excise duties to the net amount of £19,692,895; and during the same period the revenue derived from these two departments increased from £35,667,679 in 1842, to £42,973,000 in 1866. The amount of prosperity here shown is very great, and I am quite sure that with further reforms in the same direction equally great benefits will follow. As Voltaire says, Taxes are necessary; the best mode of levying them is that which most facilitates labour

66

and commerce.”

Again, a tax is a payment for services rendered by the State, from which every individual ought to derive an equal benefit. The tax ought, therefore, not only to be equitably assessed, but deemed as obligatory as any other payment for services rendered. Now, all indirect taxes can be entirely or in part avoided and shifted on to one's neighbours, without the neighbours knowing it, while a direct tax, equitably assessed, must fall upon the parties intended. "The certainty of what each individual ought to pay," says Mill, "is in taxation a matter of so great importance, that a very considerable degree of inequality, it appears, I believe from the experience of all nations, is not near so great an evil as a very small degree of uncertainty." Adam Smith expresses a similar opinion; and again, Dr. Chalmers: "A free people ought to know what they pay for freedom, and should scorn to be cheated into paying for it." I am aware that the immediate substitution of direct taxes would be unpopular. People have been so used to paying without knowing it, that it would be some time before they became reconciled to the visits of the tax-gatherer in propria persona. But I am equally sure that when once a man realises the real advantages of a just system he must infinitely prefer it to being fleeced in the price of commodities; and as

Handel Cossham says, "If a man knows what he pays, he is anxious to know why he pays." With direct taxation, from half a dozen to a score of members of Parliament, always with a majority of officials, would no longer be left at one, two, or three o'clock in the morning, as at present, to vote away millions of the public money in an extravagant and merciless manner.

revenue.

I say, then, in conclusion, that direct taxation is the only proper and equitable mode of raising a To say that it is impracticable is absurd in the face of the fact that our local rates are nearly all raised in that manner, and no sane man would wish that the municipal rates should be raised by taxes on commodities. A direct tax is in accordance with the canons of taxation. It takes no more out of the taxpayers' pockets than is required by the State, with a minimum cost of collection added; it is the only kind of tax that can be equitably adjusted; under it a man knows what he pays, and can therefore discover if he pay too much; it is the only check upon the extravagance of the Government: and it releases trade from the shackles which enslave it.

"Instead of taxing Nature, let us tax ourselves." Let us have no more taxes on trade; they are the barbarous contrivance of a barbarous age,

56

ADVANTAGES OF DIRECT TAXATION.

when the industrious were outside the pale of the constitution, and only warriors were within it. They are the deadly enemies of production, of manufacture, and the free intercourse of nations; they are opposed to the interests of peace, and to the progress of civilisation, and they are unworthy the days of the Electric Telegraph, the Suez Canal, the Mont Cenis Tunnel, and the Great Pacific Railway. Let us remove this solecism, this anomaly, and substitute a system of direct taxation, equitably assessed, cheaply collected, and equally imposed, leaving commerce as free as the air we breathe, and restraining that governmental extravagance which, as Mr. Bright said, every government in its turn condemns, and none seems able to reduce.

III.

THE INCIDENCE OF TAXATION.

Probably no subject has given rise to more crotchets than that of the Incidence of Taxation. So long ago as 1690, the great John Locke maintained that, levy a tax how you will, it ultimately falls upon the land. "The merchant will not bear it," he says, "the labourer cannot, and therefore the landholder must." He then pertinently asks the landowner whether he had not better bear it "by laying it directly where it will at last settle, or by letting it come to him by the sinking of his rents, which, when they are once fallen, every one knows are not easily raised again." This great thinker has had numerous followers, and there are still many persons who believe in his doctrine. Others say that the cultivators of the soil recoup themselves by paying less wages, and that therefore any tax falls upon the labourer; others maintain that it falls upon profits, others again upon capital; while it is also argued, with great plausibility, that a tax, however