demonstration against the town for several days, in order to give the samorin time to make any overtures of peace. At length a Moor, dressed in the garb of a Franciscan friar, came on board with a message from the samorin, to which De Gama refused to listen, unless, as a preliminary, the king would agree to indemnify him for the goods destroyed when he suffered the Portuguese factory to be attacked. Several messages passed to no purpose, when De Gama informed the samorin that he would give him to the hour of noon to make a satisfactory reply. "The samorin, influenced by the Moors, returned no answer. Wherefore, when the time had expired, De Gama ordered a gun to be shot off, which was a signal for his captains to hang the captive Malabars, who were distributed through the fleet. Being dead, he ordered their feet and hands to be cut off, and sent in a paraw, guarded by two armed boats, with a letter for the samorin, written in Arabic, giving him to understand that in such manner he proposed to reward him for his repeated breaches of faith and deceitful dealings, and that as for the king his master's goods, he would recover them a hundred fold. After this he ordered three ships to advance as near the shore as possible in the night; and next morning their ordnance was played without intermission upon the city, whereby many houses were demolished, and among the rest the king's palace. This done, he departed for Cochin, leaving Vincent Sodre, with six ships, to scour the coast and obstruct the Moorish trade."

At Cochin, De Gama was received with great kindness and pomp. He delivered to the king a letter from his royal master, thanking him for his kindness to Cabral, together with a magnificent present, consisting of a crown of gold, set with brilliants, gold collar, silver fountains and basins, tapestry, cloth of gold, velvets, and a splendid crimson silk tent. The king was much pleased with his present. He entered into a most favorable commercial treaty, by which was settled the rates that spices were to be delivered at, and a Portuguese factory allowed. He also gave a present in return, consisting of gold bracelets, precious stones, scarfs of silver tissue, Bengal calico, and "a stone as big as a walnut, good against all poisons."

While lying in this port, a message came from the samorin to say that if he would return to Kalicut he should have the privilege of trading, and that all their difficulties should be amicably settled. The admiral was suspicious of some snare, but contrary to the advice of his captains, he resolved to go with only his own ship, depending for help in case of need upon Sodre's squadron cruising off Kalicut. As soon as he made his appearance, the samorin, finding that he was unaccompanied by his fleet, resolved to capture him if possible. Thirty large paraws were ordered to attack him, and the admiral was obliged to cut his cable and stand out to sea. Here the paraws followed him, and would probably have captured him had it not been for the fortunate appearance of Sodre with his ships. Finding that his scheme had failed, the samorin exerted himself to detach the king of Cochin from his alliance with the Portuguese. He reproached him with his preference for Christian pirates, and tried to stir up the nobles. of his court by bribery and intrigue, in which last he partially succeeded; but failing with the king himself, he resolved to commence an attack upon his neighbor as soon as the absence of the Portuguese should render it safe to do so; and in the mean time he busily employed himself in fitting out

a fleet of large vessels to intercept De Gama on his return, when he would, it was supposed, be deeply laden and unable to work his ships.

At parting, the king of Cochin informed him of all that the samorin had been doing, and gave the strongest assurances of his continued friendship for the Portuguese. De Gama promised him that he would be in no danger from the samorin, as the king his master would give him enough to do to defend himself without attacking others. Setting sail for Kananor, De Gama soon encountered the fleet which had been prepared by the samorin. It advanced towards him with some show of gallantry, but Sodre, with two other vessels, pushing on before the rest to receive them, attacked them with so much fury that the Moors were compelled to leap from their ships to escape their rage. Two large ships were captured, and three hundred Moors put to the sword. The other ships fled towards the land, where the Portuguese were prevented from following them by fear of the shoals. In the captured vessels there was much rich merchandise, and among other things a gold idol* weighing thirty pounds. The eyes were emeralds, and on the breast was an enormous ruby, and other precious stones. At. Kananor, De Gama completed his lading of spices, and leaving Sodre with his squadron of ships, with orders to worry the Moors and their friend the samorin as much as possible, and protect the king of Cochin, he set out on the twentieth of December, 1503, for home. After a stormy voyage in which some of his ships were separated from the fleet, he arrived in Portugal, where he was received with great and deserved honors. a few days after, Stephen de Gama, whose ship had been dismasted in a storm, arrived in the Tagus. This expedition was not only glorious, but exceedingly profitable. Their spices yielded an enormous profit, and yet were sold so much lower than the same articles brought overland, that the Venetian was obliged to succumb to the Lisbon market.

In

As it may be interesting to some to know the ultimate fate of the hero who had contributed so much to the success of these most brilliant commercial enterprises, we will cite a note to one of the translations of Castanneda: Don Vasco de Gama, now Count Videgueyra, (one of King Manuel's own titles, which he had transferred to him,) was, in the year 1524, appointed viceroy of India by King John III. He set sail with fourteen ships and three thousand fighting men. Three were lost on the voyage, with all the men of two. Being in the sea of Cambaya, in a dead calm, of a sudden the vessels tossed so that all gave themselves up for gone, every one casting about how to save himself. One leaped overboard, thinking to escape that way, and was drowned. Such as lay sick of fevers, were cured with the fright. Don Vasco perceiving that it was the effect of an earthquake, cried out aloud, 'Courage, my friends, for the sea trembles for fear of you, who are upon it.' To make amends for these misfortunes, Don George de Menesis, one of the captains, took a great ship of Mecca, with sixty thousand crowns. The new viceroy

* The term “ Moor" is very indefinitely used by writers on this subject. It ought to be confined to the Arabian and Mohammedan merchants, and others residing in, or trading to, the cities of India. In this case it is decidedly a mistake, as a Moorish or Mohammedan crew would never tolerate an idol among them. The population of Kalicut consisted of a large number of these Mohammedans, with original natives, and a good proportion calling themselves Armenian Christians, and professing most of the doctrines of the Armenian church.

being arrived at Goa, visited a few forts, and gave the necessary orders for regulating affairs; but had not time to put any of his great designs in execution, for he died on Christmas eve, after he had held the government three months. He was of a middle statue, somewhat gross, and ruddy complexion. He is painted with a black cap, cloak and breeches edged with velvet, all slashed, through which appears the crimson lining; the doublet of crimson satin, and over it his armor inlaid with gold. De Gama had a natural boldness for any great undertaking. When angry he was terrible, patient under fatigue, and hasty in execution of justice; in fine, fit for all that was intrusted to him as captain, discoverer, or viceroy."

ART. V.-REDUCTION OF PRICE AND RATE OF DUTY.

REMARKS ON THE FALLACY OF THE DOCTRINE THAT, BY REDUCTION OF PRICE AND RATE OF DUTY, CONSUMPTION CAN BE INCREASED IN A GREATER PROPORTION THAN PRICE IS DECREASED, AND SO MUCH SO AS TO PRODUCE INCREASED REVENUE.

LORD (then Mr.) Brougham, in his speech on the opening of Parliament, February, 1825, speaking of duties as affecting the revenue, is reported, in the London Packet, to have said: "I then, as I thought, successfully showed that what Dean Swift had observed of the arithmetic of revenue was fully illustrated in the result, viz, that two and two did not make four on customary articles. With respect to the produce of the last laid wine duties, it was manifest that two and two did not make even three. In the article of coffee the same result was established, though by a different process. On coffee, the duties were reduced, and the consequence was, that an increased consumption gave you a much greater revenue than the large impost produced; while on the increase of the wine duties, there was such a falling off in the consumption as to lower the amount of revenue below that which was actually forthcoming on the lesser imposition." And in the Edinburgh Review for January, 1840, article "Post-office Reform," page 297, there occur the following passages.

"The degree in which reduction of postage would operate cannot be accurately estimated; but Mr. Hill has indicated a guiding principle which points at a minimum of increase, leaving its maximum still to be ascertained. His position is, that no reduction hitherto made in the price of any article in general demand, has diminished the total amount of public expenditure upon that article. And he adduces the following evidence in proof of its correctness :—

"1. The price of soap, for instance, has recently* fallen by about one eighth; the consumption in the same time has increased by one third. Tea, again, the price of which, since the opening of the China trade, has fallen by about one sixth, has increased in consumption by almost a half. The consumption of silk goods, which subsequently to the year 1823, have fallen in price by about one fifth, has more than doubled. The consumption of coffee, the price of which, subsequently to 1823, has fallen

* That is, at the close of 1836.

about one fourth, has more than tripled. And the consumption of cotton goods, the price of which, during the last twenty years, has fallen by nearly one half, has in the same time been fourfolded.'-Post-office Reform, p. 70.

"2. The sale of newspapers for the twelve months before the late reduction in stamps was 35,576,056,* at an average price, say 7d., costing the public £1,037,634.

"For the twelve months subsequent to the reduction it was 53,496,207,† at an average price, say of 43d., costing the public £1,058,779.

"3. The annual number of advertisements before the late reduction in the advertisement duty, was 1,010,000 at an average price, say of 6s., costing the public £303,000.

"It is now 1,670,000, at an average price, say of 4s., costing the public £334,000.

"4. The number of persons paying for admission to the Tower was, in the ten months prior to the late reduction 9,568, at 3s. each, (including the warder's fee)=£1,426.

"In the ten months subsequent to the reduction it was 37,431, at 1s. each £1,871.

"The rule established by these facts, viz, that the demand for the article increases in a greater proportion than the price decreases; so that, if one thousand are sold at 1s., many more than two thousand would be sold at 6d., is, it is believed, without exception.'-Third Report of the Select Committee on Postage."

These are great authorities; and it is perhaps rather a hazardous thing to say that the observation of the learned Dean, viz, that two and two did not make four on customary articles-that is, as illustrated by the showing of the great statesman, that increased consumption and consequent increased revenue resulted from decreased rate of duty-and the rule of the select committee, viz, that the demand for the article increases in a greater proportion than the price decreases, are both founded on erroneous inferences, and alike involve a fallacy. But we believe that they are so; and that the fallacy, like that of the sinking fund, and that of paper money, arises from mistaking the results of particular applications of a principle for the result of a general application of it; and amounts to a belief that it is possible, by some witchery in the science of political economy, to make two and two really make more than four, and falsify the schoolboy's axiom by proving that you can both have your cake and eat it.

Of the same nature, too—we remark by the way-as this fallacy, is that of supposing it possible to obtain protection to domestic industry and revenue at the same time, and from the same thing. A rate of duty upon foreign products, be it what it may, can only be protection in the degree that it is prohibition; and exactly in the degree that it is prohibition it will be anti-revenue.

The "rule established" by the showing of the great statesman-for such a rule we understand him to assert-is less in accordance with reason and common sense than that of the select committee. It assumes a much greater degree of increased expenditure as resulting from reduction of rate of duty, than that of the committee assumes as resulting from reduction

* No. 307, Session 1838.

+ No. 184, Session 1839.

of price; but we contend that in the theory of taxation you have no right to assume such increased expenditure at all; and that no "fact" in apparent proof of either of the rules, but what could be satisfactorily accounted for on other principles, has ever occurred in the practice. We contend that it is perfectly fair, and in strict accordance with reason and common sense, to assume that the public spend just as much money on taxable and other articles as they choose or can afford to spend. And, that exactly that which you give to the government, in the form of taxes, you take from the people, and that which you give back to the people you take from the government. And, that any results not in accordance with these simple and common sense views, are those of anomalies inseparable from the operation of revenue laws.

Among the most prominent of these anomalies are smuggling, speculative supply and demand, and the changing of demand from one article to another. This last, indeed, is so comprehensive that we shall assume it, in our reasoning, as including all anomalies.

When a rate of duty is lessened there takes place a lessening of the motive for smuggling, and a consequent increase of means to purchase the article duty paid. Also, a speculative desire to be the first to bring to market at the reduced price, and a consequent withdrawal of capital from other things for the purpose. And, a changing of demand generally from things which have not been reduced in price, owing to such lessening of duty, to those that have.

These things manifest themselves in the appearance, and with much of the reality of "increased consumption;" but not an increased consumption capable of establishing a rule involving an increased aggregate expenditure; much less a rule involving an increase capable of producing an increase of revenue. The increase arises mainly from the giving back to the people. We repeat, that the public spend all that they choose or can afford to spend on taxable or other articles, on wine, on soap, on tea, on silk goods, on coffee, on cotton goods, on newspapers, on sightseeing on every thing. Give them as much more for their money as you can; doubtless they will consume it; but away with the notion of increased aggregate expenditure and increased revenue.

But granting, for the sake of the argument, the right to this assumption, there is, surely, still, in the noble lord's showing, a great and palpable fallacy. For if the "lesser imposition" of duty gave the " greater revenue," why would not the lesser still give the greater still? and, by parity of reasoning, why would not the least possible imposition of duty give the greatest revenue? In illustration, let us suppose the consumption of wine to be 20 pipes, at a cost to the consumer of £50 per pipe, of which £20 per pipe is for duty. The expenditure would then be £1,000, and the revenue £400. Then suppose you reduce the duty to £19 per pipe, and by so doing you increase the consumption to 22 pipes; the expenditure would then be £1,078, and the revenue £418; that is, the public have been induced to spend £78 more on wine, and the "lesser imposition" of duty has given the "greater revenue." So far, so good. But then, as far

The fluctuating action of the "credit system"-that is to say, of paper money-is also an anomaly. It causes a premature increase of the means of the public to increase expenditure, which is always followed by a proportionate decrease.