in Great Britain leaves the interior commerce of the country, the inland and coasting trade, almost entirely free. Goods carried coast-wise and coals are exceptions. To this freedom of interior commerce, perhaps, the prosperity of the country is chiefly owing. If the same uniformity and freedom could be extended to Ireland,' and the plantations, the prosperity would probably be still greater. In France, too, the provinces most famous for wines are those in which the trade in that article is subject to the fewest restraints, arising from the complicated and provincial system of the French revenue laws. Complicated revenue laws are not peculiar to France; they exist in Milan and Parma to such a degree that nothing but the great fertility of the soil and the happiness of the climate could preserve such countries (divided as they are into several districts, each with its own system of taxation) from relapsing into the lowest state of poverty, pp. 498-500.

Taxes upon consumable commodities may be either levied by government itself, or they may be let in farm for a certain rent, the farmer being allowed to appoint his own officers to levy the tax. The best and most frugal way of levying a tax can never be by farm, since the farmer must always draw from the produce of the tax, besides the stipulated rent and expense of administration, a profit proportioned to the advance which he makes, to the risk which he runs, to the trouble which he is at, and to the knowledge and skill which it requires to manage so complicated a concern. farm any considerable branch of the revenue requires either a great capital or great credit, circumstances which of themselves restrain the competition to a very small number of people, who often combine together to offer no rent but what is below the real value. Hence farmers of the public revenue are generally very rich.

This has been done long since.

Το

They have no compassion for the contributors, but demand greater severity in the revenue laws, which are always most sanguinary in countries where the greater part of the public revenue is in farm, pp. 500-2.

A tax is sometimes farmed, and the farmer has, besides, the monopoly of the commodity taxed. In such cases the farmer, instead of one, levies two exorbitant profits upon the people. In France the enormous duties upon tobacco and salt are levied in this manner. The temptation of smuggling these articles is, from their excessive amount, to many people irresistible; and smuggling them sends every year several hundred people to the galleys, besides a considerable number whom it sends to the gibbet. Those who consider the blood of the people as nothing compared with the revenue of the prince may perhaps approve of this method of levying taxes, but the finances of France seem in their present state to admit of three very obvious reformations (1) By causing those taxes which fall finally on the proprietors of land to fall upon them directly. This would diminish both the expenses of collection and the vexation of the inferior orders of the people. (2) By introducing uniformity in taxation throughout the kingdom. (3) By abolishing the system of farming the taxes. At present France, though three times as populous, and much more oppressed by taxes than Great Britain (in spite of her better climate and older civilisation), has a revenue of not more than 15,000,000l. sterling, as opposed to the 10,000,000l. annually levied in Great Britain. With respect to the taxation of Holland, it is asserted that the heavy impositions on the necessaries of life have ruined their principal manu

2

Taxes are now equal throughout France.

2 At present the population of the United Kingdom is about 32,000,000, and the revenue about 80,000,000l.

The population of France is about 37,000,000, and the revenue about 109,000,000l.

factures. The revenue of the United Provinces is said to amount to more than 5,250,000l. sterling, and as their population cannot well be supposed to amount to more than a third part of that of Great Britain they must in proportion be more heavily taxed.' Such taxes, however, are probably due to the constant contests of the provinces to avoid being swallowed up, by the sea or by their neighbours. The form of the Dutch government, a republic of wealthy merchants, seems to be the principal support of the present grandeur of Holland. Should nobles and soldiers ever annihilate the importance of these wealthy merchants they would soon quit a country in which they were no longer likely to be much respected, and the industry and commerce of Holland would speedily follow them, pp. 502-6.

CHAPTER III.

Of Public Debts.

It has been shown in the Third Book of this Inquiry that in the rude state of society in which commerce and manufactures are unknown, the person who possesses a large revenue can enjoy that revenue in no other way than by maintaining nearly as many people as it can maintain. A hospitality in which there is no luxury, and a liberality in which there is no ostentation, occasion the principal expenses of the rich and great: but these are expenses by which people are not apt to ruin themselves. Some of their wool and raw hides our feudal ancestors were able to sell for money, some part of which they spent in objects of vanity, and some part they seem to

The population of Holland is now about 4,000,000, and the revenue about 8,700,0002.

1

have hoarded. To have traded with it would have been disgraceful to a gentleman, and to have lent it at 'usury '2 would have been still more so. In those times of violence it was convenient to have a hoard of money at hand; and it was equally convenient to conceal that hoard. The frequency of treasure trove demonstrates the frequency, in those times, both of hoarding and of concealing the hoard, pp. 506, 507.

The same disposition to save and to hoard prevailed in the sovereign as well as in the subjects. Among nations to whom commerce and manufactures are little known, the sovereign, it has been observed in the fourth book, is in a situation which naturally disposes him to the parsimony requisite for accumulation. All the ancient sovereigns of Europe, accordingly, had treasures. In a commercial country, the sovereign naturally spends a great part of his revenue in purchasing luxuries. His ordinary expense becomes equal to his ordinary revenue, and it is well if it does not frequently exceed it. When extraordinary exigencies require extraordinary expenses, he must call upon his subjects for an extraordinary aid. The want of parsimony in time of peace imposes the neces

The notion that trade was disgraceful to any man of gentle birth does not appear to have been prevalent in England until the time of Edward III., the tinsel chivalry of whose court introduced many Continental prejudices into England. Nor has it ever obtained anything approaching general acceptance amongst us. But on the Continent it was almost universal in all countries affected by the so-called feudal system, with the doubtful exceptions of Italy and Brittany, and even the edict of Louis XIV., declaring trade to be no derogation from nobility, was unable to conquer the sentiments of centuries.

2 The aversion of many of the ancient philosophers, of the Fathers and Councils, of most of the leading authorities of the Medieval Church, and of many of the chief reformers, to all taking of interest is well known. Much of the same spirit appears in the grotesque History of the Reformation in England, by the famous William Cobbett, and in Ruskin's article in the Contemporary Review, February 1880. It is almost needless to point out that any discredit thrown on the practice of taking interest discourages accumulation and therefore operates as a direct bribe to extravagance. See Lecky, History of Rationalism in Europe, vol. ii. pp. 273-95.

sity of contracting debt in the time of war. The same commercial state of society which brings government in this manner by the operation of moral causes, into the necessity of borrowing, produces in the subjects both an ability and an inclination to lend,' pp. 507–10.

Commerce and manufactures can seldom flourish long in any state which does not enjoy a regular administration of justice, and in which the people have not a certain degree of confidence in the justice of government. The same confidence which disposes merchants, upon ordinary occasions, to trust their property to the protection of a particular government, disposes them upon extraordinary occasions to trust that government with the use of their property. The merchant makes money by lending money to government, and instead of diminishing increases his trading capital. The government of such a state is apt to depend on its subjects for money on extraordinary occasions, and therefore dispenses itself from the duty of saving. In the rude state of society few people would be able, and nobody would be willing, to lend their hoarded money to government on extraordinary exigencies, pp. 510, 511.

The progress of the enormous debts which oppress, and which will probably ruin, all the great nations of Europe has been pretty uniform. Nations, like private men, have generally begun to borrow upon personal credit, without assigning any particular fund for the payment of the debt; and when this resource has failed them, they have gone on to borrow upon assignments of particular funds. What is called the unfunded debt of Great Britain is contracted in the former of these two ways. It consists partly in a debt which bears no interest, and partly in a debt which bears interest. The debts due for extraordinary services; part of the extraordinaries of the army, navy, ordnance, &c., usually con

1 See Macaulay's account of the origin of the national debt in his History of England, cap. xix.