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transfer fiscal burdens from the trading and professional classes to the classes possessed of fixed or realised property.

It is not very clear what Mr. Bright intends to include under the head of Property.' If he means 'realised property,' as his language would lead us to believe, that is to say the property charged with income tax under Schedules A. and C., property invested in the public funds and in land, buildings, mines, railway and canal shares, &c., then his estimate of the total amount of such property is wild and inaccurate in the extreme. The aggregate sum charged with duty under Schedule A. was, in 1858, 128 millions, of which nearly 60 millions consisted of houses and buildings, which cannot be capitalised at a ratio of more than 14 years; and upwards of 12 millions more consisted of railway and canal dividends, which cannot be taken at more than 25 years' purchase at the outside. The average of the whole, as we stated at p. 245., cannot be capitalised at more than 22 years' purchase, yielding a total of 2816 millions. If to this we add the assessment under Schedule C., viz. 29,500,0002, capitalised at an extreme value of 33 years' purchase or 957 millions, we arrive at an aggregate of 3773 millions instead of Mr. Bright's estimate of 6700 millions. If, then, Mr. Bright means by the word 'Property' what we have assumed him to mean, his calculation is nearly 3000 millions over the truth, and his required sum of 27,000,0001. annually would demand a tax not of 8s. per cent, but 14s.

But if we adopt for a moment Mr. Bright's own basis, and assume the taxable capital at 6,700,000,000l., it is true that a tax of 8s. per cent. will produce about 27,000,000l. The exact sum is 26,800,000l. An annual tax, though calculated upon an assessment of property, will in practice be a charge upon income. If we assume that realised property produces in this country, on an average, a clear annual income of 3 per cent a supposition which is rather over than under the truth -the proposed tax would in effect be a tax of 8s. on every 31. of annual income; in other words, it would be an income tax of 137. 6s. per cent., more than 31d. in the pound, or more than a seventh of the income. Now it will be observed that this heavy tax would fall, not exclusively on the rich, but upon all persons deriving an income, however small, from realised property, provided that property amounted to 1007. For example, a merchant, a banker, a manufacturer, a railway contractor, a barrister, a physician, an engineer, or even a minister of state receiving a clear income of 5000l. a year, would escape untaxed; but every person who had invested 1007. in the funds or in a

savings' bank, would receive his dividend with a deduction of more than 13 per cent.

Mr. Bright's estimate, however, is, as we have shown, quite erroneous, and on the real aggregate of 3773 millions, a tax not of 8s. but of 14s. would be required. Now 14s. on 1007. of property, or 37. of annual income, is an income tax of 56d. in the pound, or 231 per cent., or nearly one fourth of the income.

Such a tax, moreover, being laid exclusively on real and government securities, would discourage investment therein, and would depreciate the value of both to an amount which, though impossible to estimate, would certainly be considerable. It would operate to drive money into trade, and to keep it there; it would induce parties to hold ships in preference to land; and where timidity or ignorance did not prevent, would induce capitalists to invest their savings on foreign securities. Land and Consols would sell for fewer years' purchase than formerly; and the present holder of both would therefore be robbed to the full extent of the depreciation.

But if, as his figures though not his language would suggest, Mr. Bright meant to include under the term 'Property,' not only land, buildings, railways, Consols, and other fixed securities, but also ships, stock in trade, and all which on a man's death is valued as personalty for the probate duty, then his amount is still inaccurate and exaggerated, and his scheme becomes liable to a different set of objections. It is then merely a clumsy and imperfect mode of re-enacting the income tax, with a special exemption for the merchant or manufacturer who makes his 5000l. a year of profit; the Lord Chancellor or Secretary of State who receives his 5000l. a year of salary; and the physician or barrister who realises his 5000l. a year of professional fees, but calling on the widow who has 1007. in the funds for 13 per cent. out of her annual pittance. On this second supposition of Mr. Bright's meaning, he would appear to have arrived at his figures in the following mode: -The 128 millions charged under Schedule A. at 25 years' purchase gives in round numbers 3200 millions of real property, and 1,338,000l. of probate duty indicates, as we have shown (p. 245.), 3400 of personal property, making a total of 6600 millions. These may have been, and probably were, Mr. Bright's data, if he used the somewhat loose word Property' in its more comprehensive signification. But in this case, he has fallen into two capital errors. In the first place, as we have shown, the property assessed under Schedule A. cannot be capitalised at more than 22 years' purchase (instead of 25), which reduces the

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realty by 384 millions, or to 2816 millions; and in the second place, leaseholds, mortgages, railway shares, &c., which are taxed under Schedule A. also pay probate duty as personalty, and are thus reckoned by Mr. Bright twice over. Moreover, under the probate duty all household furniture, pictures, books, even clothes, are taxed. To include these under Mr. Bright's tax an annual valuation, such as now takes place only at a man's death, would be required. A further deduction to an indefinite amount must thus be made from Mr. Bright's estimate, which it will be seen by reference to our previous calculations (which we need not here repeat) is at least 1000 millions too high. If, therefore, we suppose him to have intended to include personal as well as real property in his scheme, a tax not of eight but of ten shillings would still be needed to produce the sum required, or more than 16 per cent. And this would be imposed, not, as we have seen, to relieve the poor man from taxation, but in order that trading and professional incomes may go free. With these remarks we leave Mr. Bright's scheme to such further elucidation as he may vouchsafe, and we also leave his accuracy and candour as a financier to the judgment of the country.

THE

EDINBURGH

REVIEW.

APRIL, 1860.

No. CCXXVI.

ART. I.-1. Examen du Système Commercial connu sous le nom du Système Protecteur. Par M. MICHEL CHEVALIER, Membre de l'Institut, Conseiller d'Etat. Deuxième Édition. Paris: 1853.

2. Etude Économique sur les Tarifs des Douanes. Par M. AMÉ, Directeur des Douanes et Contributions Indirectes à Bordeaux. Deuxième Edition, revue et augmentée. Paris:

1860.

3. Mélanges d'Économie Politique et de Finances. Par M. LÉON FAUCHER. Membre de l'Institut, Ancien Ministre de l'Intérieur. 2 vols. Paris: 1856.

THE Emperor Napoleon I., who, at the height of his power,

used and abused the prohibitive system to the last excess, as an instrument of war against this country, appears, before the close of his life, and in the solitude of St. Helena, to have formed a more correct and dispassionate judgment of the true commercial policy of France and of the commercial interests of mankind. It is related in one of the conversations of the exiled conqueror, that he wound up his opinion on the restrictive or protective system of commercial policy, as applied to the French nation, by these remarkable words: We must fall back on the free navigation of the sea, and the entire freedom of universal interchange.'

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M. Michel Chevalier, who quotes this sentence in the last page of his book, then proceeds to terminate his unanswerable confutation of the protective system, by the no less pregnant

VOL. CXI. NO. CCXXVI.

U

and prophetic remark-It is from the heir of Napoleon that 'we dare to ask the fulfilment of this design.'

The

The Emperor of the French has proceeded to fulfil this design by the only means in his power, namely, by a Treaty of Commerce with the nation most advanced in freedom of trade, inspired and negotiated by an Englishman whom we are proud to call the Apostle of Free Trade, and extending quite as far as it was possible for the French Government at this time to advance. It would be unworthy of the freedom we ourselves enjoy, and of the candour we profess, if we could hesitate to acknowledge the wisdom and the courage of this action on the part of the present Head of the Government in France, however much on other grounds we may dislike his policy and distrust his character. If, as we trust, this Treaty lasts long enough to bear its natural fruits, it will be regarded hereafter as the most important victory Napoleon III. could achieve, for it has been won over the prejudices and ignorance of his own subjects, and the interested hostility of many of his own supporters and advisers. wisdom of his policy will be recognised in France, when, by the removal of commercial restrictions, he has succeeded in placing the first necessaries of life at a cheaper rate within reach of the masses of the people, and in opening broader channels of communication between that country and the other nations of the earth. No doubt, this measure is of incomparably greater moment to France than it can be to ourselves, and we are surprised that this remark should have been pressed into the service of the objectors to the Treaty. In France it inaugurates a new era by substituting protection for prohibition, by relieving the raw material of manufactures from pernicious restrictions, by introducing a change which will be felt in all the relations of social and domestic life. Such a revolution is comparable-and alone comparable-to the effect in this country of the measures of commercial reform which were commenced by Sir R. Peel in 1843, and consummated by the Repeal of the Corn Laws. It is a truism to say that on our side very little remained to be performed. But is that a reason for underrating the magnitude of the change abroad? To the British Parliament and the British nation belongs the lasting glory of having led the way in that course of social improvement which the economists and philosophers of this country had been the first to urge upon the convictions of mankind. Having therefore but little change to make in the tariffs of England in order to bring them to an exact conformity with the standard of our principles, it is a memorable achieve

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