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REVENUE, Public. Finance is declared by Bentham to be "an append and inseparable accompaniment of political economy." Economistsare, however, divided in their opinions regarding the closeness and the legitimacy of this connection. Joseph Garnier remarks, that certain writers of general treatises on political economy have not even touched the subject: Malthus, Skarbek, Senior, and James Mill. Others have only dealt with it in a highly summary manner: Sismondi, Rossi, Storch, Cherbuliez, Courcelle-Seneuil and Stuart Mill, while treating the subject very briefly, have yet pointed out and discussed the fundamental questions of finance. Adam Smith, continues M. Garnier, devoted to this subject a fourth of his "Wealth of Nations." J. B. Say has given a like proportion of his "Treatise" and of his "Course" in political economy to the causes and effects of the public consumption of wealth. He did not, however, examine, as Smith had done, the different kinds of taxes. Ricardo has entitled his chief work, "The Principles of Political Economy and Taxation"; but that which relates to finance, proper, occupies no more than a fourth of his work. McCulloch has not treated of financial questions in his political economy, but has discussed them in a separate treatise, giving to them a very full consideration. Rau has, likewise,

Nov. 13, by the county judge, sheriff, and a justice of the peace, excluding two precincts, and giving the vote as 130 republican, and 89 democratic, a republican majority of 41. The gist of the difficulty was thus in the double return from Baker county. Taking the second return from Baker county, and throwing out Clay county (164 democratic majority), the board reported, Dec. 27, a republican majority of 206 for electors, and a democratic majority of 195 for governor. This report the court refused to receive; and, Jan. 1, 1877, the board at last made return in accordance with the democratic claims, and the democratic state officers were inaugurated. But in the case of the electors it was too late. The Hayes electors had received the governor's certificate on the board's first return, had met and voted, Dec. 6, and were now dead in law. The Tilden electors had met and voted the same day, on a certificate given by a single member of the board. Jan. 17, 1877, the new legislature passed an act requiring the new state officers to canvass the returns for 1876. This they did, and declared the Tilden electors successful; but the electoral commission decided this action to be entirely ex post facto, and void. — In South Carolina the state supreme court ordered the board to exercise no judicial functions in the state count, Nov. 17, and in the presidential count, Nov. 22; but on the same day that the lat-treated separately that which M. Garnier calls ter action was taken, the board gave certificates to the republican electors and state officers, and adjourned sine die. They were arrested for contempt, but released by the federal circuit court on habeas corpus.

- In Louisiana and South Carolina

new election laws were at once passed by the new democratic legislatures, under which the judicial functions of the returning boards were almost entirely cut off. The same result had almost been reached in Florida by the supreme court's construction of the board's powers; but in 1878 the board (now democratic) again threw out two counties for informality. The state supreme court again decided against the board. It may be taken for granted in future that Judge Cooley's definition of the powers of a canvassing board, heretofore cited, will be followed by all American courts; and that any attempt by a state legislature to give such a board judicial functions, without a plain authorization of the act by the state constitution, will be held by the courts to be unconstitutional and void. For further proceedings in regard to the votes of the presidential electors, see ELECTORAL COMMISSION; DISPUTED ELECTIONS, IV. See constitutions of the states referred to in Poore's Federal and State Constitutions; summary of provisions for election returns in the various states, 2 Hough's American Constitutions, 758; authorities under ELECTORAL COMMISSION; Cooley's Constitutional Limitations, 3d edit., 734, and law authorities there cited; Louisiana Rev. Stat., 96 (act of Nov. 20, 1872); 25 Louisiana Annual Rep., 14, 263, 267; 16 Florida Reports, 17; and later author ities under LOUISIANA.

ALEXANDER JOHNSTON.

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"this important branch of political economy." - The causes which have thus led to the exclusion of finance from formal treatises on political economy, or to its very slight and partial recognition therein, may be stated as follows: First, According to the most frequent classification of the subject, the revenue of the state falls into that one of the old-fashioned "departments" of political economy, which is known as consumption.' The tendency of the writers of the present and of the last generation has been to omit all consideration of the consumption of wealth, whether as to its objects or as to its effects. Secondly, The revenue of the state falls outside the sphere of contract, which would be a sufficient reason for omitting to take note of it, in the case of the school of writers who make political economy to be purely "the science of exchanges." As Dr. Sturtevant remarks, "The wages of government are not determined by economic laws; it receives whatever it demands. In some cases it takes the position of a partner, and accepts for its compensation a certain percentage of the profits; but that share is not determined by an agreement between the partners, but by the will of this one partner." Thirdly, and chiefly, considerations purely political always enter in a great degree, and often in a controlling degree, into the decision of questions relating to the collection of public revenue. The statesman, as financier, may legitimately ask, not which is the best tax, or the most economical mode of assessment, but which is the most politic. He not only may, he must, consult the temper and habits of his people. He must consider the times and the circumstances,

quite as heedfully as he does the normal operation of economic laws. Even the special race-quality imparted by descent must be respected in the collection of public revenue. "A land tax," wrote Sir James Steuart, in the last century, "exoites the indignation of a Frenchman; an excise that of an Englishman." Thomas Jefferson observed a corresponding difference in the susceptibilities of the northern and the southern portions of this country, in his day. In most of the middle and southern states," he says,

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application of an income tax equally among the contributors summoned to declare their fortunes, and among the assessors charged with supervising and correcting these declarations? I could not,' he concludes, "assert that there is among the Germanic peoples more of authority or of liberty than among the Neo-Latin peoples. What seems cer tain is, that authority and liberty are there distributed and understood in a different manner. The Germanic peoples appear to accept more easily some land tax is now than do the Neo-Latins, authority coming close to paid into the state treasury; and, for this purpose, the individual, at the hearth of the family, in the the lands have been classed and valued, and the town or near at hand." It will readily appear tax is assessed according to that valuation. In that differences in race aptitudes for taxation, such these, an excise is most odious. In the eastern as those indicated by M. de Parieu, may not only states land taxes are odious; excises, less unpopu- control the forms of assessment or contribution, lar."― M. de Paricu, in his monumental work on as between one community and another, but may 'Taxation," thus expresses a striking character- have power to appreciably affect the proportion istic difference between the Teutonic and the of the aggregate income of a community which the Latin nations in enduring taxes on property and treasury can command, whether for ordinary pubincome : "While countries inhabited by the pure lic purposes or in the great exigencies of state. Of Germanic race, or by its principal branches, Ger- two nations of equal wealth, one may, through many, Scandinavia, Great Britain and North the stronger sense of justice native in its people, America, support almost universally taxes of this through an excess of loyalty and spontaneity in kind, the financial history of the Neo-Latin peo- the support of the government, possess a fiscal ples has made us acquainted with but a small force twice or thrice that of the other. — It is not, number of isolated applications, temporary or however, alone differences of a moral nature which abortive, of such a rule of contribution. Even in affect the relative fiscal force of communities. Switzerland, a country of mixed race, the field of Differences in the prevailing occupations of the general taxes upon property and income appears, people, in the rapidity of circulation, and in the with the exception of Geneva, to be confined with- distribution of wealth, irrespective of its aggrein the frontiers which circumscribe the German gate amount, may have important effects upon the race and language. This difference of moral power of the treasury to secure contributions to aptitude in relation to the taxes under discussion, public uses. In a commercial or manufacturing which appears in comparison of the Germanic and nation, where capitals are concentrated, and where the Latin races, whether from history or from nearly the whole body of the annual product becontemporary statistics, long since attracted the comes the subject of exchange, perhaps is even attention of certain Italian publicists. Machia- | exchanged several successive times between the velli, Botero and Braggia have mentioned German hands of the producer and those of the consumer, customs in this regard as exceptional. * That the government can command a far higher proporwhich characterizes the methods of applying gen- tion of the aggregate income of the people than eral taxes to property and income, is the neces- can be done in a purely agricultural state. But sity of a certain degree of loyalty,* patience, and while considerations like the foregoing may propeven of spontaneity, among the tax payers. "Is erly enter to influence the views of the financier, it not," continues M. de Parieu, easy to under- in matters which can hardly be termed matters of stand that, following the analogy of individuals, detail, the essential subjection of the fiscal intersome nations may present, relatively to others, ests of the treasury to the economic interests of the character of greater sincerity, of a greater the community,‡ can never safely be disregarded. disposition spontaneously to burden themselves, Mr. R. H. Patterson, in his "Science of Finance," and of a greater patience when in contempla- justly says, paraphrasing in his final sentence tion of a right object? Is it inconsistent with Burke's remark about justice as the great standour observation of manners and morals to ac- ing policy of nations, that "the statesman may, knowledge that certain populations possess, with for reasons such as have been intimated, deal with a temperament more cold, a stronger infusion of the collection and disbursement of revenue on that natural sense of justice, so necessary in the methods somewhat different from those which the strict application of economical principles would require; but it must always be as a conscious deviation from a right rule. He must never go very

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* Selbstschätzung, says M. Rau; self-taxation, an Englishman would say, according to the analogy of "self-government."

+ In addition to the facts of self-assessment, fully attested as occurring in Geneva, Bremen and Holland, must be placed to the credit of the morality of the Germanic peoples, those very numerous acts of restitutions to the treasury, which form what is in England termed "conscience money." In France the yield of reparations of this sort, though on the increase, has never been large.

Ajoutons que c'est par l'étude de la science économique en général qu'il serait bon de commencer celle des finances publiques. * *Mais, dira-ton, la solution des questions de finances comporte divers points de vue: le point de vue économique, et les divers points de vue, fiscal, politique et moral. L'observation est exacte. Mais les raisons fondamentales sont d'ordre économique. (Jos. Garnier.)

far from principles, or remain long away. Else, his policy will prove no policy at all." Mr. Patterson adds, as justly as piquantly, "there are many things in the world which have the knack of being as broad as they are long; and this is peculiarly the case with state finance." - Taxes and public revenue are commonly used as interconvertible terms, and in popular speech, or for the purposes of approximate statement, this is well enough. Yet for scientific purposes, or in any careful survey of the fiscal history of a country, or in a comparative statement of the fiscal resources of two or more nations, the public revenue may include something more than, perhaps something very far in excess of, the aggregate of all sums received into the treasury as the result of official assessment and of compulsory collection. Among these may be named the sums received by gift or voluntary contribution of citizens, the value, known or estimated, of all prerogatives or privileges of requisition or of purveyance, respecting services or supplies, together with a fair rental of all domains, buildings or other property occupied or used for public purposes. - The revenue of France, for instance, during the present year, when properly stated, will include, in addition to the actual receipts into the treasury, the market value of the services rendered by some hundreds of thousands of citizens of the republic, as soldiers under the conscription act, over and above that which the state actually pays as wages to these involuntary servants. This last item is of enormous consequence in all countries having a compulsory military system. Indeed, this, which by some has been called "the blood tax," is by far the greatest of all the taxes of modern times. Were it necessary for France, Germany or Russia to go into the market for labor, and pay wages sufficient to induce men, to the number of its present soldiery, to enter its service voluntarily, the expenses of the government would be enormously increased, probably to the result of early fiscal bankruptcy. It is fairly matter of question whether any one of the countries named could, by the utmost exertion of the power of taxation, short of producing universal revolt, raise money enough to hire the services of its existing army. Yet the market value of these services clearly belongs to the revenue of the state, whether those services are obtained by payments out of the treasury, or through an exertion of legal authority in the form of conscription; while it is certain that the cost of those services to the people, obtained as they are by abruptly and violently withdrawing from industry and trade that number of workers, many of them of the higher grades of intelligence, and occupying positions of responsibility, is vastly greater than would be involved in obtaining an equal number of equally good soldiers through solicitation and voluntary enlistment. In like manner, if the government of France exercises rights of requisition or purveyance through officials, high or low, as to supplies, whether for peace or war, the amount saved to the treasury thereby,

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through avoiding purchase in an open market, is | properly to be included in an account of the public revenue. In a word, the revenue of any state, for any given year, is constituted of each and every valuable thing which is, in that year, applied to governmental purposes. · A classification of the several principal sources of public revenue has long been a desideratum. No such scheme could be free from objection, and many a scheme may, in some one respect, possess an advantage over that scheme which is, as a whole, the best. following classification will be observed in this article: Sources of Public Revenue. I. Voluntary contributions. II. Public property, lucrative prerogatives and state enterprise. 1, rent charges in favor of the state, as the proprietor of all lands; 2, escheat; 3, fines and forfeitures for criminality and delinquency; 4, tributes from colonies, dependencies and conquered nations, including war fines, requisitions and indemnities; 5, sale of offices, honors and titles; 6, domains (L'état capitaliste); 7, state enterprise (L'état entrepreneur). III. Quasi taxes. 1, monopolies; 2, lotteries; 3, purveyance of supplies, and requisition of services; 4, fees; 5, seigniorage on coin; 6, paper money. IV. Taxation, in its various forms. Taxes may be assessed, 1, on the basis of realized wealth, commonly spoken of as capital; 2, on the basis of annual income or revenue; 3, on the basis of faculty, or native and acquired power of production; 4, on the basis of expenditure, or the individual consumption of wealth. Exemption from taxation may be claimed, 1, for noble and privileged classes; 2, for clerical persons and religious orders; 3, for charitable and educational institutions; 4, for the poorer classes of the community, either through the omission from assessment of a certain minimum income, or through an ascending scale of taxation upon higher incomes (progressivity in taxation). Taxes may be collected, 1, in services; 2, in products; 3, in money. Taxes are commonly, in discussion, divided as, 1, direct; 2, indirect. This distinction, however, is of only very general use, it being impossible to distribute the taxes actually levied in any state, under these two heads, without great confusion and much manifest error. The French writers further divide direct taxes into, 1, taxes de répartition, of which the produce is certain and known in advance; 2, taxes de quotité, of which the produce can not be known in advance, and varies with external conditions. — The following classification of taxes, made by M. de Parieu, according to the objects they reach, or at least upon which they are assessed, is believed to be the most convenient and useful: 1. Les impôts sur les personnes, ou capitations-Taxes upon persons, or poll taxes; 2. Les impôts sur la richesse, ou sur la possession des capitaux et revenues-Taxes upon wealth, or upon the possession of capital or income; 3. Les impôts sur les jouissances-Taxes upon use or occupation [corresponding very closely to the English assessed taxes on carriages, horses, windows, lodgings, etc.]; 4. Les impôts sur les consommations-Taxes upon consumption; 5. Les im

pôts sur les actes-Taxes upon transactions [sales, etc.] Of these five classes, M. de Paricu remarks, that the first three approximately conform to the general definition of direct taxes, the last two being indirect. Of the first group, taxes upon wealth, and of the second group, taxes upon consumption, are at once most characteristic and the most important. These constitute "the two poles of the general system of taxation."— Having offered the foregoing classification of the sources of public revenue, we will proceed to speak briefly of each. -I. Voluntary Contributions. It is difficult for the man of the present age to conceive of the state as supported by voluntary contributions; yet not only were these once, in theory, almost the sole resource of the ruler, except through personal services; but they, in fact, survive to this day, in a few isolated communities, in the form of the self-assessment of the citizen. To go no farther back than the feudal days, in England, while the chief military support of the kingdom was afforded by the muster of the vassals, it was the fiction of the law, that, so far as aids and subsidies were concerned, the tax payer made a voluntary offering to relieve the wants of the prince; and that the promise of a tax bound only the individual who made it. It was the practice of bringing personal property and income under contribution, which gave rise to the idea that taxation and representation must go together, and caused the formal grant of money. At the beginning of the system of poor relief, in the early years of Elizabeth, collections were taken in churches, and each person was left to be the judge of what for him constituted "a reasonable contribution.". The papal revenues, also, may perhaps be brought under this head. The pope was by far the greatest capitalist of the middle ages. The British parliament at one time declared that the contributions made by their people to the pope were five times as great as those made to the sovereign. — Adam Smith cites Hamburgh, Basle, Zurich, Unterwald and Holland, among the communities where the self-valuation of the citizen was still, in his day, accepted. Riesbeck, in his "Travels in Germany," says of the first named city, "some taxes are voluntary, and the burghers have the right to put what they think their quota into the purse, which is shut, and the deputies dare not open it in their presence." Even within a few years there have remained free cities in Germany and cantons in Switzerland, where the rule of voluntary contribution still subsisted in all its purity. -II. Public Property, Lucrative Prerogatives and State Enterprise. 1. Rent charges in favor of the state, as the proprietor of all lands. Throughout considerable portions of Asia and in Turkey in Europe, the rent of land, paid to the state, furnishes by far the greater part of the public revenues. That the soil originally belonged to the community or nation, private property in land being, indeed, a comparatively modern institution, and finding its justification only in political expediency, is admitted by nearly all publicists of

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| authority. By vesting the title to the soil in individuals, the state sacrifices that large revenue resulting from the progressive enhancement of the value of land, which would otherwise have accrued to the treasury. It is equally beyond question that all the advantages of the private ownership of land might have been obtained, while yet the state imposed fiscal charges and military or political obligations which would have secured for the community a considerable share of that progressive enhancement of values. The proposition to reassert the right and interest of the state in all the land which has become the subject of individual ownership, was made by Mr. John Stuart Mill, in the later days of his life, and the programme for this substitution of rent for taxation, with the arguments in its favor, will be found in his later speeches and essays. Mr. Mill pointed to the commutation of the feudal obligations of the English landowners, for the altogether insufficient consideration of a tax of four shillings in the pound upon the valuation of 1692, and also to the sacrifice of the interests of the crown in the lands of a portion of British India, by which the "unearned increment" was allowed to pass into the hands of individual proprietors, instead of being reserved to the public treasury. Mr. Mill's practical proposition was to appraise all estates according to their present market value, and thereafter to assess them to the full amount of all enhanced value which could not be shown to be due to applications of labor and capital. To this he looked as a fiscal resource which should relieve the community from the greater part if not all of the burden of taxation. More recently Mr. Henry George has proposed, in his "Progress and Poverty," to assert the right of the state, not only to all future increase of value in the land, but to its present value, asserting that all grants of exclusive property in land are and have always been void, and that the proprietors of land are not even entitled to reserve the value of their improvements. -2. Escheat, the principle, viz., that the state is the proprietor of all estates, real or personal, to which individual titles or claims are lost. It will at once appear that the scope of this principle, from the point of view of revenue, will widen or contract in correspondence with the laws which regulate the descent and bequest of property, and prescribe the times and modes of proving claims, in which respect some countries are far more liberal than others. Under the feudal system. escheat constituted a most important source of revenue. England the right of devising real property did not exist, after the conquest, until the time of Henry VIII.; and no small proportion of the lands of the kingdom passed to the crown under the operation of this principle. Modern society, however, whether out of sympathy with the instincts of property right,* or from a politic desire to promote the spirit of accumulation, has given continually wider and wider extension to the

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Sinclair, in his "History of the Revenue," stigmatizes escheat as "a species of confiscation."

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ures in personal loyalty, although not rising to what in the present day would be deemed crimes against society, were punished by heavy fines or total forfeiture. Second, the crimes of those days were largely political, and great offenders were likely to be men of wealth and position who would be fat subjects for amercement. The wars of the roses, for example, were so fruitful of for feitures that a large proportion of the land of the realm became the property of the crown. In the present age, political crimes have become comparatively infrequent, and the criminal class are mainly drawn from the poor. Hence, this branch of the public revenue has shrunk to comparative insignificance. Fines and forfeitures still pay a part of the expenses of strictly judicial establishments, especially in the lower or police courts, but they add little to the general revenues of the state. Even the labor of condemned criminals is seldom found to be sufficiently remunerative to pay the cost of their maintenance under ward. — 4. Tributes from colonies, dependencies and con

power of bequest and to the principle of inheritance, until escheat, as a source of revenue, has ceased to be of much importance. In 1795 Jeremy Bentham published a notable tract entitled "Escheat vs. Taxation," in which that daring reformer proposed an extension of the existing law of escheat, a law coeval with the very first elements of the constitution," with a corresponding limitation of the power of bequest. The intended effect was "the appropriating to the use of the public all vacant successions, property of every denomination included, on the failure of near relatives, will or no will, subject only to the power of bequest, as hereinafter limited." By 'near relatives" Bentham intends "such relatives as stand within the degrees termed prohibited, with reference to marriage." Furthermore, in the case of "such relatives" within the pale as are not only childless, but without prospect of children, he proposes that, instead of taking their share in ready money, they should take only the interest of it, in the shape of an annuity for life. As to the latitude to be left to the power of bequest, hequered nations, including war fines, requisitions says, "I should propose that it be continued in respect to the half of whatsoever property would be at present subject to that power.' Bentham argues that the scheme he proposes for dispensing with taxation by limiting the power of bequest and restricting succession to near relatives, would work no wrong. Hardship, in the distribution of property, is in proportion to disappointment: expectation thwarted. If distant relatives were taught by the general provisions of the law that they could not succeed, no expectations would be excited, and such persons would suffer no wrong, being simply put into the case of others who have no rich distant relatives. Bentham's proposal received no special attention at the time; and, except in the way of taxes upon successions and bequests, little progress has since been made in the direction indicated; but it is probable that among the earliest of the measures of a militant and triumphant democracy would be the limitation of the power of bequest and the restriction of succession, each in the interest of the state, as the proprietor of all estates to which individu- | al titles or claims may be lost. 3. Fines and forfeitures for criminality and delinquency. It might be supposed, that, since government exists largely for the protection of property and life, and for the punishment of offenses against society, the cost of maintaining government and administering justice might largely be thrown upon delinquents and criminals. In feudal times, fines and forfeitures constituted a very important source of revenue to the crown. This was the result of two causes. First, the relation of the tenant to the lord was a personal one, and fail

By the revenue measures introduced by Mr. Gladstone in 1853, the tax upon the direct succession of a child to a parent was placed at 1 per cent.; that upon the succession of an entire stranger in blood, at 10 per cent. Intermediate rates were fixed for successions within certain degrees of consanguinity. If 10 per cent., why not 50?

and indemnities. "In all ages," says Sir Erskine May, "taxes and tribute have been characteristic incidents of a dependency. The subject powers of Asiatic monarchies, in ancient and modern times, were despoiled by the rapacity of satraps and pashas, and the greed of the central government. The Greek colonies, which resembled those of England more than any other dependencies of antiquity, were forced to send contributions to the treasury of the parent state. Carthage exacted tribute from her subject towns and territories. The Roman provinces paid tribute to Cæsar.' In modern times Spain received tribute from her European dependencies, and a revenue from the gold and silver mines of her American colonies. It was also the policy of France, Holland and Portugal to derive a tribute from their settlements." In our own day, Holland has drawn a net revenue of £3,000,000 from the island of Java, the natives being required to cultivate defined portions of land in specified crops. That compulsory cultivation used to include many crops; subsequently, it was for a long time confined to sugar and coffee; since 1880, as I understand it, coffee has remained the sole crop so cultivated. I have quoted a passage from Sir E. May, relative to the forced contributions of colonies and dependencies: let me complete the sentence. "But England, satisfied with its colonial trade, by which her subjects at home were enriched, imposed upon them alone all the burdens of the state." This sentence expresses the essential characteristic of the English system of

The extortions of the early kings of England, under the pretense of administering justice, are very strikingly portrayed by Mr. Hume, in his "History."

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