any further investments in the former. So far as he has already expended his capital in the improvement of land and the building of houses, it is at the mercy of the labourers, but they cannot compel him to improve more land, or to build more houses. Population goes on to increase. but the number of farms and houses remains stationary; the number of ploughs and horses is not increased. The capitalist finds a constantly increasing competition for the use of his capital, and he gradually raises the proportion of the product that he must receive as compensation for its use, until he at length obtains from the labourer as much as gives him the old rate of profit, after paying the taxes. Each family of labourers, meanwhile, is compelled to occupy a smaller portion of ground, and a smaller quantity of house room; the ratio of production to population is diminished, and the proportion falling to the labourer is diminished. Wages fall, and the labourer, instead of enjoying plenty and comfort, finds it difficult to obtain, by the severest labour, the means of subsistence.

In No. 2, on the contrary, is experienced a constant increase of the ratio of capital to population, arising out of the transfer thereto of the rents received from No. 1. New lands are brought into cultivation, and improved machinery enables each individual to cultivate an increased quantity; new roads are made, and that increased quantity is transported to market at a diminished cost; new shops are opened, and the products of the soil are exchanged for clothing and other commodities with a constantly decreasing charge for making those exchanges; new houses are built, and the constantly improving condition of the people enables them to occupy them. Their production is increased, and they are enabled to give to the capitalist a large return for the use of his capital, from a constantly decreasing proportion of the product. Wages rise; their condition is constantly improving; their children are educated, and with every hour there is an improvement in the condition of the capitalist.

If such would be the case when the operations were conducted by a single capitalist, still more would it be so when there were many. One by one, the proprietors in No. 1 would dispose of their farms and their houses, at prices diminished in consequence of the imposition of the tax, to those in whom the inertia common to all matter still existed to such extent as to prevent them from moving. Little by little, property would be concentrated in the hands of a smaller number of individuals; little by little the proportion of capital to population would be diminished; the ratio of production to population would be diminished, and the pro

portion of the capitalist would be increased; until at length the whole property would be found in the possession of a few families living in state, and surrounded by a wretched population, hewers of wood and drawers of water.

same course.

Here again justice and an enlightened self-interest point to the If neither would warrant the imposition of a poll tax by the capitalist, so neither would warrant the imposition, by the labourer, of heavy taxes upon capital. Both tend to produce the same effects-to impair the condition of the people, morally and physically; and both tend consequently to the injury of the capitalist. The labourer, desirous of maintaining and improving his condition, should avoid the latter, as sedulously as the capitalist should the former.

The third mode of raising a revenue is by taxes on consumption. The labourer requires as much, or nearly as much, sugar, as much tea, as much coffee, as much beer, as much salt, as his richer neighbour, and a tax upon them becomes, in effect, a poll tax. Were it possible to assess an equal per centage upon all objects of consumption, the effect would be nearly equal upon all classes of society; but such is not the case, because the consumption of commodities of the better qualities is small, and nearly the whole amount would be expended in its collection. For that reason taxes are always imposed upon those which are used in large quantities, as salt, sugar, coffee, cotton cloths, and tobacco, and thus they are paid almost entirely by the labouring classes. The objections to this class of taxes are the same that we have offered in relation to the poll tax, or claim for service, and neither justice nor an enlightened self-interest would counsel the capitalist thus to throw upon the labouring classes the support of government. In doing so he would diminish the power of consumption-prevent the improvement of the condition of the labourer-prevent the increase of security-limit the field for the employment of his capital-diminish production-and diminish the return obtained for the use of his capital. Such must be the effect of every measure tending to retard improvement in the condition of the people.

Monopolies, by the State, of the supply of the necessaries of life, for the purpose of enforcing the payment of taxes thereupon, have the same effect, but in a greater degree. They are taxes on consumption, and of the worst kind. The capital that would be employed in the production of those commodities, were not con

sumption diminished by the tax, lies idle and unproductive; improvement in the condition of the people is retarded, production is diminished, and the capitalist has a diminished amount of the necessaries, conveniences, or luxuries of life, in return for the use of his capital.

Monopolies granted to individuals for the supply of certain articles, by the imposition of restraints upon exchanges with foreign nations, have precisely the same effect. The capital which should be employed in producing them at one place, is now forced into their production at another, and so long as it will yield the ordinary rate of interest it is so employed. The effect of such restraints is to increase the quantity of labour required for the production of those commodities, for if they could be produced at home by the same quantity of labour, those restraints would be unnecessary. With the diminution of production, there is a diminished power of consumption: wages, when estimated in those commodities, fall: improvement in the condition of the people is arrested: the field for the employment of capital is limited: and the profits of capital are lessened. Neither justice nor regard to his own interest, therefore, warrants the capitalist in demanding such monopolies.

The extent to which these injurious effects are produced is precisely in the ratio of the necessary consumption of the commodities, the production of which is thus limited. If it be of food, the amount of injury to both labourer and capitalist is immense; if of clothing used by the labouring classes, it is considerable, but yet small when compared with food; if of the commodities used in small quantities, the effect is trifling. Little disadvantage results from a tax of 100 per cent. upon nutmegs, compared with one of 25 per cent. upon sugar.

Wherever such interferences exist they should be abated. It is, however, of importance to recollect that they are the result of error on the part of both capitalist and legislator. If the former were, during their existence, enabled to demand a larger amount of profit than was obtained by persons whose capital was employed in the production of other commodities, there could be little hesitation in making a prompt reduction; but such is not the case. Ignorance of his true interest induced the first application of the capitalist for such monopoly, and in ignorance of the interests of both capitalist and labourer it was granted to him. He has himself been the sufferer by it. It has diminished instead of increasing the profits of his capital. He is therefore entitled to consideration, as he has, by error of legislation, been led to misapply

his means in a mode that has been pointed out to him by the community. In the correction of this evil moderation is therefore necessary, and such moderation will best promote the interest of all parties. A sudden change would annihilate the capital of the man who has but obeyed the direction of the law; it would perhaps throw out of employment thousands of labourers, before capital could be transferred to the production of the commodities required under the new state of things, and great distress might be the consequence; whereas, under a gradual change of policy, both labour and capital are gradually transferred from the production of one commodity to that of another,-production is daily increased the demand for capital is daily increased-the labourer obtains a constantly increasing proportion of his products, with constantly increasing wages-and the capitalist a constantly decreasing proportion, with a constant increase in the quantity of the conveniences and luxuries of life obtainable for a given quantity of capital.

We will now consider the fourth and last mode of raising the supplies requisite for the maintenance of government, viz. a tax on income. By such a tax every man contributes in the ratio of his interest. The capitalist with a large revenue pays his share, while the labourer, with an income of two or three hundred dollars per annum, pays, as he ought, for that tranquillity which tends to promote the growth of capital and to secure to him a large reward for his exertions. Paying for it, he values it, and while he will be disposed to furnish the necessary contribution, he will have every inducement to watch that the quantity is not greater than is required for an economical administration. Both labourer and capitalist will feel that every dollar unnecessarily taken tends to limit their power of expenditure, or their power of accumulation, and both will have the same interest in regulating the proceedings of the government in such manner as will tend most to permit the growth of capital. They will be opposed to the maintenance of large armies or navies, and especially opposed to wars. They will see that no advantage can be derived from foreign colonies, because those colonies, where taxation is equitably levied, cannot be made to contribute towards the payment of the cost of maintaining any government but their own. By thus avoiding the colonial system, they will avoid the risk of collision with other nations, and the necessity for either fleets or armies. Pursuing this course, capital will accumulate, and the labourer's proportion will increase with the increase of production; whereas,

VOL. IL-41.

under a different system, with large fleets and armies, expensive colonies, and expensive wars with their neighbours, the growth of capital must be arrested-production can no longer keep pace with population-the proportion of the capitalist must be increasedthat of the labourer must be diminished-the capitalist must find increased difficulty in obtaining those conveniences and luxuries of life to which he has been accustomed-while the diminished wages of the labourer give him a constantly decreasing measure of the necessaries and comforts of life, and compel those who have heretofore lived by their labour to resort to mendicity, or to spend their days in alms-houses, supported by contributions from the increased proportion, but diminished means, of the capitalist. With a view to illustrate this position, we shall now examine into the effect produced upon the labourer and capitalist of England by the immense expenditure of the wars from 1793 to 1815.