In speculative physics, Lao-Tse teaches that creation proceeded from a First Principle, impersonal, self-existent and self-developing, which produced motion, whence issued all things in the universe, which have in them the dual principle of active and passive, or male and female. In politics, the sovereign elected of the people should be their model and teacher rather than ruler and judge. The voice of the people is Heaven's voice. The ruler must first right himself, then the country will be well governed. Too much government is to be deprecated. Light taxation, moderate punishments, the people well fed, but not too much enlightened, courtesy and moderation between states, will secure lasting peace and prosperity. Previous to Lao-Tse's time, the Chinese worshiped Shang-ti (Lord of Heaven, Theos, Jehovah) and Tien (Heaven). The Tau-ti King recognized God (Shang-ti) as before Tau, though it is through Tau that Heaven is to be attained. By means of Tau the soul was to attain its original state and be immortal. European scholars at first believed that the Hebrew name Jehovah was contained in LaoTse's book, both in phonetics, and by popular apprehension, but this idea is now exploded. The sage recognizes as fact the existence of God (Ti), but makes his Tau (Reason, the Way) primal, and superior to God. The Ti, or virtue of the Tau, becomes fulfilled in man in its highest development, by his abstraction from worldly cares, and freedom from anxiety. In other words, he teaches that non-existence is the goal of man, and equivalent to pure existence; or, as Hegel would say, they are identical. " Being and Non-being are the same." Whether Lao-Tse borrowed this tenet from the India Brahmans, or originated it, is uncertain, but the very vagueness of the system, increased by the terseness of his style, resembling that of oracles or enigmas, made it the fit soil for the strange crop that afterward grew upon it. Until the introduction of Buddhism, 68 A. D., idols were unknown in China, and Tauism was but a philosophy and a literary puzzle, though with new codes of natural and psychical philosophy grafted on it by disciples. As such it was more acceptable to minds to which metaphysical speculation was congenial, than the bald ethics of Confucius, based as these were on materialism and routine precedents; but its evolution was toward degradation. In contact and rivalry with Buddhism, the occult arts and superstitions of centuries past fastened upon Tauism so firmly that what was parasite and what was original stock could not be popularly distinguished. While the mystic element expanded voluminously, professing to teach corporeal immortality, the transmutation of metals, the composition of the elixir of life which raised men to the equal of genii-arts long after introduced into Europethe popular belief, travestying Buddhism, filled its temples with images of deities, which became gods of the state. Out of the crowd of the early fathers of war, medicine and literature, idol deities were multiplied indefinitely, until Buddhism

was offset with its own weapons, by a native instead of a foreign pantheon. The recognition of Tauism as a state religion practically began when Wu-ti (140-88 B. C.) encouraged the alchemists, though the Tang emperors (618-905 A. D.) first admitted Lao-Tse to the rank of gods, under the title of

Great Supreme, Emperor of the Dark First Cause." Later, titles were added by admiring emperors. It must be remembered that Confucianism was not until a thousand years after the death of its founder universally spread throughout China; nor was it until A. D. 1012 that he received by imperial mandate the title "Most Perfect Sage." During the early centuries of the Christian era, Tauism had the field. The first Tauist popedom, or patriarchate, held by Chang Tau-ling, which was founded in the first century, has been held in the line of his descendants to the present day, and the sect has spread into the various nations surrounding the Middle Kingdom that accept Chinese culture. In the popular religion, "the Three Pure Ones," which are found in Tauist temples, form the most conspicuous group of idols representing Lao-Tse, Chaos or Pan-kû, "The first man," and Shang-ti, or God, of the early Chinese religion. Many other idols, representing gods of every degree, incarnating perhaps the forces of nature, crowd the temples; and the religion of Tauism, though professedly based on reason, or at least rationalism, is a hopeless congeries of superstition. -LITERATURE. The Tau-ti King has been translated into English by the Rev. J. Chalmers (London), into French by Rémusat and Stanislas Julien, and into German by Pläncker and V. von Strauss, the first and last being considered the most faithful to the original. See also Legge's The Religions of China, New York, 1881; Martin's. The Chinese, New York, 1881; and Oriental Religions, China, Boston, 1881.

WM. ELLIOTT GRIFFIS.

TAXATION, Principles of. It would seem. to be in the nature of an economic or commonsense axiom, that a large and varied experience in respect to the management of any one of the great departments of the world's business would result in the gradual evolution and final definite establishment of certain rules or principles which would be almost universally recognized and accepted as a basis for practical application and procedure. But in respect to the matter of taxation-which is a fundamental necessity for the maintenance of civilization and of all government, and is constantly, outside of sheer barbarism, everywhere maintained-no such result has been attained. In no department of economic science is there so much of obscurity and conflicting opinion. 'Most economists agree, that there is no science of taxation as there is a science of exchanges"; and "that there are no great natural laws running through and controlling taxation and its effects." And while the student will find examples in the history of states or govern

ments of the practical application of almost every form of taxation which human ingenuity, prompted by necessity, selfishness or greed, could devise; and a sufficient record of effects, to warrant the drawing of general and correct inferences, it is nevertheless probably true, that there is not, at the present time, a single existing tax decreed by despotism, or authorized by the representatives of the tax payers, which has been primarily adopted or enacted solely with reference to any involved economic principles, or which has primarily sought to establish the largest practical conformity under the existing circumstances to what are acknowledged to be the fundamental principles of equity, justice and rational liberty. But, on the contrary, the influence of temporary circumstances, as viewed in most instances from the standpoint of a governmental administrationdespotism or republican alike-desirous of retaining power, has ever been the controlling motive in determining the character of taxation; or, as Colbert, the celebrated finance minister of Louis XIV., is reported to have expressed it, in saying, 'that the act of taxation consists in so plucking the goose [i. e., the people] as to procure the largest quantity of feathers with the least possible amount of squealing." Hence, apart from its methods of distributing power and patronage, the popular idea of evil, as connected with government, may almost always be referred back to unequal or excessive taxation as a source; and to the reality of which, as evils, more than to any other one agency, may be referred the French revolution, and the ferocity with which it was conducted. Hence, also, the preference almost always shown, on the part alike of those who enact and those who pay taxes, for indirect taxation, which very successfully blinds the tax payer as to the amount which he pays, and as to the time and place of its collection. And hence, finally, the idea, which has come to be all but universally entertained, that taxation per se is in itself an evil; something to be avoided if possible, and an escape from which is always "good fortune"; when the real truth undoubtedly is, that there is no one act which can be performed by a community, which brings in so large return to the credit of civilization and general happiness, as the judicious expenditure, for public purposes, of a fair percentage of the general wealth raised by an equitable system of taxation. The fruits of such expenditure are general education and general health; improved roads, diminished expenses of transportation, and security for life and property. And it will be found to be a general rule, that no high degree of civilization can be maintained in a community, and indeed that no highly civilized community can exist, without comparatively large taxation; the converse of this proposition, however, at the same time not being admitted, that the existence of high taxes are necessarily a sign of high civilization. In short, taxation in itself is no more of an evil than any other necessary and desirable form of

| expenditure; but it is an evil when taxation is rendered excessive through injudicious or wasteful expenditures; or when, by reason of ill adjustment, the levy of the tax is made an occasion for the collection from the people, through the enhancement of profits and prices, of a far greater sum than is requisite to meet the public requirements. Adam Smith, in his "Wealth of Nations," laid down four canons, or maxims, (to be hereafter stated), in respect to the levying and collection of taxes in general, which, as they are constantly quoted and referred to with favor, have a better claim to be regarded as in the nature of fundamental truths than any other propositions which have thus far been formulated on this subject. But as these propositions are, as their author characterized them, "general," and not particular, in their nature; and as at least one of them is, in the light of a larger experience, not considered as correct, there is, it must be conceded, much warrant for the assumption, that in the sense of propositions, or rules, universally, or in any large degree, recognized and made the basis of practical application, there are no principles of taxation. To admit the correctness of such an assumption, is, however, at the same time to confess, that human knowledge, in at least one department, has reached its largest limit; and that a class of transactions, which, more than almost any other, are determinative of the distribution of wealth, and the forms in which industry shall be exerted, are best directed by accident or caprice. It is accordingly proposed, in the present article, to make the true state of the case the main objective of inquiry; and, in place of framing any theory at the outset, to rather aim to place before the reader such a review of our knowledge of this subject, and more especially such a summary of the most recent experiences and investigations, as will qualify him for the forming of an opinion, whether any deductions which may be made are to be regarded as merely curious or valuable contributions to the department of economic science under consideration, or whether they rise to the dignity and importance of fundamental and incontrovertible truths or proposi tions. And as the first step in such a discussion, it is important to start with a definition, and define, at the outset, what is meant by taxation. Taxation (from the Latin taxo, or taxare, "to rate," "to value"), in the ordinary sense, means the act or process of apportioning or assessing, and of collecting or gathering from a people, a portion of their property, for the use or support of their government, and for all public needs. The command of a constant and adequate revenue being absolutely essential to the existence of organized government, the power to compel or enforce contributions from the people governed, or, as it is termed, "to tax," is inherent in and an incident of every sovereignty, and rests upon necessity. The question of the obtaining of such revenue, obviously, therefore, is the question of first importance in the economy of a state; the one in

comparison with which all others are subordinate. For without revenue (and a government never has any resources except what it has obtained from the people), regularly and uniformly obtainable and coming in, no governmental machinery for the protection of life and property, through the dispensing of justice, and the providing for the common defense, could long be maintained; and in default thereof, production would stop or be reduced to a minimum, accumulations would cease or become speedily exhausted, and civilization would inevitably give place to barbarism and the wilderness. - Again, the power of taxation being an incident of sovereignty, the right to exercise that power must be coextensive with that of which it is the incident; or, in other words, as the power of every complete sovereignty over the persons and property of its subjects is unlimited, the power, therefore, in every such sovereignty to compel contributions for the service of the state, or, as we term it, "to tax," must be unrestricted. Thus, "the power to tax," says Chief Justice Marshall, in giving the opinion of the supreme court denying the right of Maryland to tax the bank of the United States, "involves the power to destroy"; and in the case of Weston vs. The City of Charleston, the same court, by the same eminent authority, held further, "that if the right to impose a tax exists, it is a right which in its nature acknowledges no limits. It may be carried to any extent within the jurisdiction of the state or corporation which imposes it, which the will of such state or corporation may prescribe." In the United States, however, it may be here noted, that the sovereignty of the national government, and of the separate states, is materially limited in respect to both taxation and other matters; on the one hand, in virtue of an agreement of union accepted by all the states, and known as the federal constitution; and on the other, in virtue of certain original powers retained by the states, and not delegated by them, in entering the federal Union, to any other or higher sovereignty. Thus, no state of the federal Union can impose any tax upon any agency of the federal government, its mails, its custom houses, its lands, its judicial processes, its money, or through its evidences of indebtedness, upon its credit or borrowing power. On the other hand, the federal government can not tax the agencies or instrumentalities by which any state performs its functions. That such reciprocal limitations are natural and necessary, and exist by implication, not only in the constitution of the United States, but also in the very structure of the federal Union, must be evident, when one reflects that otherwise the federal government on the one hand, and the governments of the states on the other, might impose taxation to an extent that would cripple, if not wholly defeat, the operations of the two authorities, each within its respective and proper sphere of action.Natural Limitations on the Meaning and Exercise of Taxation. The term taxation, however, in

volves something more than the mere act of taking on the part of a government, or its unrestrained power of compelling contributions for the use of the state. The essence of all taxation consists in making the burden of taxation equal upon all subjects of immediate competition; and when this principle is violated, the act of taking, or the enforced contribution, is no longer entitled to be considered taxation, but becomes at once an arbitrary spoliation or confiscation. Thus, to illustrate: suppose it were proposed to tax the stock in trade of red-haired men 5 per cent., and those of red-nosed men 10 per cent.; or (as was proposed by a bill introduced into the congress of the United States in 1874) to exempt incomes below $5,000 from taxation, and tax those equal to $5,000 5 per cent., and all above, 10 per cent.; or to do as actually once was done in England under an income tax law enacted in 1691-tax Catholics at rates double those imposed on Protestants; it seems clear that such transactions could not involve any principle, or be regarded in any other light than the mere arbitrary and despotic exercise of power; or the making of the possession of a red nose, or red hair, or the result of enter prise, skill, economy, or the fortuitous circumstance of birth or belief, the occasion for inflicting a penalty. Yet, this was what substantially was done in the middle ages, when nobles were exempt from taxation because they were nobles, and the common people were taxed because they were villains or bondsmen; when Jews were assessed because they were not Christians, and Catholics because they were not Protestants. And if it be said, as it doubtless will be, in rejoinder to a part of the above illustration, that the rich, by reason of their riches, are abundantly able to pay, and, therefore, should be made to, the answer is, that under a universal and uniform income tax (if there could be such a thing), which would establish a comparative equality of burden, they would pay more by an inevitable law and yet pay equally; while under an unequal law, which takes from them because they are rich, the act of taking has no claim to be considered a tax, but is simply confiscation. For if the state may take five per cent. from the man with $5,000 income, and ten per cent. from the man with more than $5,000, why stop at this amount? We have not approximated the limit or capability of the persons assessed to make contributions. Why not take all that such individuals receive in excess of the average income of the masses? Why not divide up and put every one on an equality? The advocacy of any such forms of contribution under the name of taxation (although the advocates may not be, and generally are not, aware of it), is simply, therefore, the advocacy of the most radical principles of communism. There is, accordingly, a broad and philosophical distinction, which may be claimed to rise to the dignity of an economic principle, between "taxation" and "arbitrary taking." In the soundings which have been made at great depths in the