man empire, in the days of its decline; by the dealing with colonies. It must not be supposed, | titles. The accounts of such sales under the Rohowever, that the system was necessarily lighter in the burdens it imposed than would have been a system of taxation. The constraints which the navigation acts of England*-designed to give to British shippers and British merchants the profits of the colonial trade-placed upon the energies of those young and growing communities, were frequently more galling and depressing than heavy taxation would have been. Another incident of the British colonial system in the past was patronage, affording, as that system did, a wide field for the employment of the friends, connections and political partisans of the home government. Until the reform of the civil service this was of a real and great fiscal value, being worth more to the administration than an addition of millions to the revenue would have been. Even now it is asserted that the Indian army is maintained and employed quite as much for the imperial interests of Great Britain as for the preservation of the peace and unity of India; that the salaries of British officials are there vastly greater than necessary or desirable; and that the construction of immense systems of public improvements, railways, canals and irrigating works, at the expense of India, has been controlled largely by the interests of British capitalists or by the demands of British cotton spinners.-The Danish Sound dues, "the most important transit duties in the world," | until 1857, constituted a striking example of this class of contributions. In the year named, these duties were finally abolished, Denmark receiving 30,476,325 rix dollars in final commutation, | of which sum Great Britain paid a full third. The United States subsequently joined in this purchase of the rights of Denmark over the navigation of the Baltic, having, at a much earlier period of its national history, made successive contributions to the revenues of the piratical Barbary states, for the privilege of sailing the Medit-employed by the central government, the departerranean. The principle of making the enemy, as far as possible, pay the cost of war while in progress, and exacting an indemnity subsequently for such expenses as could not be met by requisitions and billeting, is of too wide historical usage to require mention here. The application of that principle is only limited by the power of belligerents. After the treaty of 1842, the Chinese government was compelled to pay England sums approaching thirty millions of dollars on account of opium seized, and for the expenses of the expedition. It was reserved for Germany, after the war with France in 1870-71, to exact the most gigantic war indemnity ever paid in the history of mankind.-5. Still another source of revenue is found in the sale of offices, honors and * For the influence of these acts in the American colonies, see Bancroft's History of U. S., vol. v.. p. 265-6. + See the speeches of Rt. Hon. Henry Fawcett on successive Indian budgets. "India," says Prof. Fawcett, "seems too often to be looked upon as if she had been specially created to increase the profits of English merchants, to afford valuable opportunities for English youths, and to give us a bountiful supply of cheap cotton." "" ments and the communes." The domains of the state from which money or produce is derived, make, of course, a much larger figure in the history of finance, though no more truly, as we said at the beginning, constituting a part of the public revenue. -In England the royal domains were, at first, very ample. Even in the time of Edward the Confessor it was said that the crown was possessed of 1,422 manors, besides other lands and quit rents. The Norman conquest largely increased the landed wealth of the sovereign. In the reign of Henry V. this was augmented by the appropriation of the alien priories, 110 in number. Yet notwithstanding this large endowment, successive alienations, sometimes in real exigencies of the state, but more commonly wasteful and often shameful in their origin, so reduced the crown lands that the income of Henry VI. was stated at but £5,000. In this impoverishment of the crown, several general resumptions of grants See especially the works of Savigny, Ranke and De Tocqueville, passim. were authorized by parliament. The breach with Rome, and the plunder of the religious establishments by Henry VIII., placed vast wealth at the disposal of that disinterested reformer; but a similar course of improvident and wasteful alienations soon brought the income of the sovereign again below his urgent necessities. In the seventh year of James I. the entire land revenue of the crown and of the duchy of Lancaster amounted to only £66,870. James sold lands to the value of £775,000, and left debts to an equal amount. Prodigal, however, as had been the alienation of the crown lands under the Tudors and the Stuarts, it was William III., the author of the modern scheme of public finance, who did most to dissipate the hereditary property of the crown; nor is it likely that the two facts were without a vital connection. William, foreseeing the vast fiscal power of government, under the commercial as contrasted with the feudal organization of society, would seem to have regarded the traditional revenues of England with contempt. At the end of his reign, parliament, says Sir Erskine May, "having obtained accounts of the state of the land revenues, found that they had been reduced by grants, alienations, incumbrances, reversions and pensions, until they scarcely exceeded the rent roll of a squire.". Whatever William may have thought of landed revenues, as compared with the proceeds of excises and customs, his immediate successors were not content with the situation, and an act was passed in the first year of Anne's reign, whereby all future grants or leases from the crown, for any longer term than thirtyone years, or three lives, were declared void, except with regard to houses, which may be granted for fifty years. The misfortune is," says Blackstone, "that this act was made too late, after almost every valuable inheritance in possession of the crown had been granted away." "There are very few estates in the kingdom that have not, at some period or other since the Norman conquest, been vested in the hands of the king by forfeiture, escheat or otherwise. Fortunately for the liberty of the subject, this hereditary landed revenue, by a series of improvident mismanagement, is sunk almost to nothing."—It was especially the contemplation of English experience in this respect, which drew from Adam Smith that strong assertion of the impolicy of secking to derive revenue from public domains, which is so often quoted in discussion of this subject: The servants of the most negligent master are better superintended than the servants of the most vigilant sovereign." "The crown lands of Great Britain do not at present afford the fourth part of the rent which could probably be drawn from them if they were the property of private persons. If the crown lands were more extensive, it is probable they would be still worse managed. * * In the present state of the greater part of the civilized monarchies of Europe, the rent of all the lands in the country, managed as they probably would be, would scarce, perhaps, amount to the ordinary revenue which they levy upon the people even in peaceful times." Perhaps had Dr. Smith the opportunity to observe the able, comprehensive, frugal and solicitous Prussian administration of public estates to-day, he might find reason to qualify the judgment expressed above. — M. Cherbuliez, in his Science Economique, takes strong ground against making public domains an important element in the fiscal system. One remark is especially notable. Domains do not, he says, furnish an available resource in time of emergency. On the whole, this remark is both true and important; yet the recent examples of Chili and Peru, with their guano deposits,* Egypt, with the large sugar plantations of the khedive, Honduras, with her precious forests of mahogany, have shown that a tangible property of this kind. may sometimes afford a certain advantage for quickly placing a large loan, for a state of small credit. We have seen how the crown lands of England were wasted by improvident alienations. Everywhere much the same story is told by the shrunken domains of the state. What was once the chief fiscal resource of many states, now remains even an important item in the budgets of but a few states. Russia, says M. Cherbuliez, is almost the only state of modern Europe which draws from its fiscal domain a notable share of its revenue. Yet Prussia, Bavaria, Würtemberg and Sweden still retain extensive and profitable domains. The same might be said of the crown lands of Hanover, if any one could find out to whom they belong. In the United States the possession of vast areas of fertile territory by the new government, was, at the beginning of our fiscal history, looked upon by almost all the statesmen of the republic as a resource to be cherished and improved. Gradually, however, as told under other titles of this work, the project of drawing revenue from the public lands was abandoned; and for the past two generations it has been the object of the government to promote the appropriation of the public lands by individual citizens, on the payment of a merely nominal price, or of merely the fees of registration. This policy was announced by President Jackson, in his message of 1832, in which he said, "It seems to me to be our true policy that the public lands shall cease, as soon as practicable, to be a source of revenue; and that they be sold to settlers, in limited parcels, at a price barely sufficient to reimburse the United States the expense of the present system, and the cost arising under our Indian contracts.”In the respect of the proportion of revenue drawn from state domains and state enterprise, M. Leroy Beaulieu offers the following contrast between England and Prussia: The one has, so to speak, no revenues from domains; what remains of such revenues constitútes but an infinitesimal part of its vast budget. Moreover, it does not appear desirous of creating such a revenue. The other M. Garnier states, that, in the budget of Chili guano stands for a revenue of 114,000,000 francs, against 4,000,000from customs, and 1,250,000 from all other sources. nation, on the contrary, while relying upon taxation for the greater part of its revenue, nevertheless draws sums relatively enormous, in part from the private estates of the crown, in part from industries which it carries on subject to competition, and in part even from floating capital which it has placed at home or abroad. This nation, moreover, appears not the least in the world desirous of abandoning this system; it seems, on the contrary, to wish to extend it." Prussia, remarks this excellent writer on finance, is agriculteur, industriel, entrepreneur de transports. The following is his summary of the revenue of Prussia from this general class of resources, during the year under discussion : Domains, properly so called, i. e., estates under culture Produce of forests.. Gross revenue of the state railways.. Tolls upon canals.. From the profits of the bank of Prussia.. Produce of the state printing establishment.. Francs. 35,531,000 7,507,000 | erations, great and small alike,* most of which were susceptible of individual management. The study, not of finance but of political economy (for the distinction is one important to be observed), has freed industry and trade from monopolies of the order of those of the seventeenth and eighteenth centuries. The monopolies of to-day rest upon a few great industries, carefully selected for their fiscal capabilities; and these, by preference, such as naturally tend toward monopoly, for example, banking or railway traffic. A few articles of manufacture of exceptional "richness" as the subjects of monopoly, such as opium, tobacco, salt and matches, have been hit upon by the governments of several European countries. The manufacture of tobacco is a state monopoly in France, Italy, Spain and Austria. Even the 54,525,000 imperious will of Prince Bismarck has, however, 173,500,000 failed to introduce this monopoly into the fiscal 5,720,000 system of the German empire. The government 2,250,000 monopoly of this article was established in France 1,290,100 in 1674. During the revolution, under the power1,232,500 ful impulse experienced toward the removal of 3,958,030 all restrictions upon industry and society, the constituent assembly abolished the monopoly, and threw open the manufacture to competition; but sought still to retain the revenue previously derived from this source, by imposing a requirement of licenses for the manufacture. This measure was followed by the rapid diminution of receipts; and in 1810 Napoleon restored the monopoly, conferring upon the régie the combined rights of the purchase of tobacco in the leaf, and of the manufacture and sale of the article for consumption. In 1864 the gross receipts were, in francs, 220,000,000, and the expenses of administration, 66,000,000; net receipts, 154,000,000 francs. In 1877 the gross receipts had risen to 312,000,000 francs. A most instructive lesson in finance is furnished by the recent experience of the government of France in enforcing the monopoly of the manufacture of matches, the government having been completely baffled, in its earlier efforts, through the ease of illicit manufacture in the case of this article, nothing being required for the purpose but "a small quantity of phosphorous paste and a bundle of wood." The student of fiscal science will be well repaid by reading the Paris correspondence of the "London Economist" on this subject, extending through 1874, 1875 and 1876.-2. Lotteries. These 112,343,555 Extending this comparison to the countries of Europe generally, M. Maurice Block presents the following instructive table: COUNTRIES. Revenue-Percentage derived from Do- Direct Indirect Other mains. Taxes. Taxes. Sources. 5.5 19.4 55.1 20.0 44.0 19.0 37.0 Total 100 100 France Prussia 100 11.0 -III. We reach, now, the class of public reve- *Thus, Brodie, referring to the soap monopoly, constituted by Charles I. of England, says: "Almost every article of ordinary consumption, whether of manufacture or not, was exposed to a similar abuse: salt, starch, coals, iron, wine, pens, cards and dice, beavers, pelts, bone-lace, etc., meat dressed in taverns, tobacco, wine casks, brewing and distilling, lampreys, weighing of hay and straw in London and Westminster, gauging of red herrings, butter casks, kelp and seaweed, linen cloth, rags, hops, buttons, hats, gutstring, spectacles, combs, tobacco pipes, etc., saltpetre, gunpowder, in short, articles down to the sole gathering of rags, were all under the fetters of monopolies, and consequently deeply taxed." Of Queen Elizabeth's system of monopolies Hume remarks that, had it been continued, the England of his day would have contained as little industry as Morocco or the coast of Barbary. revenue could safely leave out of account. - The question of the equity or expediency of judicial fees may be studied with amusement and profit, in the vigorous writings of Jeremy Bentham. Almost in the degree in which communities advance in civilization, are roads and bridges made free to travel; and the expenses of their construction and maintenance assumed by the state, instead of being charged upon the individuals using them. — 5. Coinage.* Coinage has always been one of the most cherished attributes of sovereignty the world over. Of India, Dr. Hunter says: "Little potentates, who, in every other respect, acknowledged allegiance to Delhi, maintained their independent right of coining. As it was the last privilege to which fallen dynasties clung, so it was the first to which adventurers, rising into power, aspired. While the Mahrattas were still mountain robbers, they set up a mint; and in 1685 the East India company, at a period when it had only a few houses and gardens in Bengal, intrigued for the dignity of striking its own coin." -But it was not only the right of striking the coin which kings asserted for themselves. The right of debasing the coin, was, says Hallam, a flower of the crown." The imposition known as moneyage, after the Norman conquest of England, was a tax of one shil"Aling paid every three years by each hearth in the kingdom specifically to induce the king not to use his prerogative in debasing the coin. By the charter of Henry I. this imposition was abolished, but not with any impeachment of the right of the crown to debase the coin at its pleasure. The antiquarian, Ruding, states that, at one period in the reign of Edward IV. the seigniorage on gold money was above 13 per cent. In France the debasement of the coin, under the royal prerogative, was carried to a far greater extent. The seigniorage exacted by John II. rose at times, it is stated, to three-fifths, changing, says Le Blanc, almost every week, and sometimes oftener. Seigniorage, to the extent of the cost of rendering bullion into coin, has received the approval of almost all economists, from Adam Smith down; yet the English government has, since 1666, coined gold of full value free of charge. That government has, however, since 1816, exacted a heavy seigniorage on its silver coin, which is legal tender in only a limited amount. Such a seigniorage on the smaller coin of a country affords a proper source of revenue, either to cover the expense of minting the principal coin, wherever the English system of gratuitous coinage is adopted, or to be brought into the treasury, for the general purposes of gov ernment. 6. The issue of paper money. Paper money is money in respect to which seigniorage is carried out to the full nominal value of the piece. Instead of taking out, say 1 per cent., to cover the cost of coinage; instead of taking out, say, 10 per cent., as tribute to the sovereign, the entire amount of bullion is abstracted, and a paper sign, only require to be mentioned, as a source of revenue largely made use of in the past by nearly all governments, and still constituting a not unim portant feature of the budgets of many countries. The profit which the public draws from lotteries," wrote Hamilton, "may be considered as a tax on the spirit of gaming, and added to the amount of other taxes." While lotteries afford a most ef fective means of securing revenue in the immediate instance, there can be no question that, in their ultimate effect, they reduce the fiscal capabilities of a people, by discouraging patient and steady industry, and by weakening the instincts of frugality and abstinence.-3. Another quasi tax, once widely in exercise, but now restrained and confined, and in almost all civilized states wholly discontinued, except in the event of warlike operations, is purveyance, defined by Blackstone as the "right enjoyed by the crown, of buying up provisions and other necessaries, by the intervention of the king's purveyors, for the use of his royal household, at an appraised valuation, in preference to all others, and even without consent of the owner; and also of forcibly impressing the carriages and horses of the subject to do the king's business on the public roads, in the conveyance of timber, baggage and the like, however inconvenient to the proprietor, upon paying him a fixed price." prerogative," adds the commentator, “which prevailed pretty generally throughout Europe during the scarcity of gold and silver, and the high valuation of money consequential thereupon."-4. Another mode of raising a revenue, which partakes largely of the nature of a tax, without bearing its form, is through the exaction of fees for stated or occasional services, performed by the agents of the state. The mention of fees brings up an illustration of what was said at the beginning of this article regarding the difficulty of comparing the revenues of different states. Take the matter of tolls upon bridges and roads. community, travel is free; the great cost of maintaining this service goes into the budget of ex penditures; and the amount to be collected in taxes is by just so much increased. In another, perhaps an adjacent, community, transport and transit pay tolls, which are employed to maintain the bridges and roads in repair, to pay interest on the cost of construction, and perhaps also to accumulate a sinking fund for the final discharge of the principal sum; and the tolls so paid do not enter at all into the budget. In the same way the expenses of judicial proceedings and of the administration of justice may be met out of the general treasury, in monthly or quarterly salaries, or may be paid, in minuter portions, by individual suitors. According as the one or the other method prevails, the apparent receipts and expen. ditures of the state will be increased or diminished, without regard to the real burden resting upon the community. The earlier abolition of tolls in the northern than in the southern states of the American Union, in England than in Ireland, for ex ample, is a fact which no student of comparative In one The regulation of weights and measures in England was, until 11 and 12 Wm. III. (c. 20) conducted to secure a profit to the state. . of the mass of citizens into a fiscal obligation for token or promise is substituted. The issue of paper money having legal-tender power, offers a resource to government which has always been found most tempting in periods of great national exigency. Provided the circulation at the outbreak of a war, for instance, consisted of metal money, it would be possible for the government to issue paper to the same denominative amount, replacing the gold or silver in the circulation, whereupon the metal could be exported to buy goods and supplies abroad. According to Ricardo's doctrine of money, the paper, so issued, would not, so long as it did not exceed the full denominative amount of the metal money replaced, necessarily become subject to depreciation. Thereafter, the advantage to government would be limited to the profit of a forced loan, without interest. During the war of the revolution the continental congress had recourse to this expedient. "The United States," says Dr. Ramsey, "for a considerable time derived as much benefit from this paper creation of their own, though without any fixed funds for its support or redemption, as would have resulted to them from the gift of as many Mexican dollars." In 1862-4 the United States issued several hundred millions of dollars, in payment for services or supplies, of which it enjoyed the use without payment of interest until 1879. The value of the use of that amount of capital, for that term of years, was, in effect, levied upon the people of the United States, by a species of irregular and doubtless very mischievous taxation. -The issue of paper money without legal-tender power, its circulation to be secured by the offer of government to receive it in payment of taxes, and to redeem it on demand, is quite a different thing. This is not open to any grave economical objections. Under the title of treasury notes, such issues frequently took place in the fiscal history of the United States, long before the exigencies of the war of secession caused the issue of the legal tender "greenbacks.” — IV. Taxation, in its Va-pelled to go into the market for labor and hire the rious Forms. Public contributions may be ex- services it now commands. This element is rapidly acted in three ways: in service, in products, or in increasing the difficulty of ascertaining the commoney. 1. By services. This was the original | parative cost of government, for it is eminently form of taxation, and corresponds closely to the characteristic of taxes by personal service that ideal tax upon faculty, as distinguished from the their real value can never be ascertained. M. Gartax upon income, upon realized wealth or capital, nier speaks of impôts tout à fait latents; qui ne rapor upon expenditure. In the early history of portent rien au fisc et qui n'en pèsent pas moins sur Greece and Rome the citizen served his country les populations. Such, eminently, is the obligation in the army, as a matter of direct personal obliga- | of military service. Of course the weight of it, tion, irrespective of payment. The custom of pay-measured by the loss it inflicts, will vary greating the soldiery was not introduced into Athens ly according to the occupations of the people, until the age of Pericles; and did not become gen- | whether engaged in manufactures and commerce, eral throughout Greece for more than a generation afterward. It was not until the siege of Veji that the practice was introduced into the Roman armies. After the downfall of the Roman empire, the institution of the feudal system created a national militia which was adequate to wars carried on with the lance, the sword, the pike and the crossbow. The introduction of gunpowder was soon followed by the creation of mercenary armies, and by the conversion of the military obligation or in agriculture; according to the severity with which military requirements are enforced, and penalties for delinquency exacted; according to the spirit which presides over headquarters, and passes down to animate commanders and staff. Even in a purely agricultural community how great a difference will be made by a call to field manœuvres ten days before, or ten days after, harvest;* or by * Baron Riesbeck, in his travels through Germany in the middle of the last century, thus speaks of the army of the |