he seemed at times to take them for external realities, as a diseased eye projects an image into the space before it. Candid and truth-loving as he undoubtedly was, this is the only mode of explaining his resistance to a fact of the most common experience. It is almost amusing to see him quarrelling with Say, one of the strictest of theorists, because he was not strict enough in an extreme case to prefer the reasoning to the reality. Both writers started from postulates which warranted the conclusion that a tax imposed upon a commodity falls wholly upon the consumer; a conclusion which would be perfectly true if the premises were true, but which, in fact, is very remote from the truth. Say, to do him justice, was very steady in keeping to the strict logical path; but in this case he had been struck by a common fact, and went out of the straight line to acknowledge it. He said that " a manufacturer is not enabled to make the consumer pay the whole tax levied on his commodity, because its increased price will diminish its consumption." There is no seller of a taxed commodity who will not vouch for the truth of this statement. It agreed with the fact, but it did not agree with the theory, and Ricardo, like Mrs. Battle at whist, loved the " rigour of the game." His answer to Say is an example of the most resolute logic that ever rode full tilt against a fact. Should this be the case," he says, "should the consumption be diminished, will not the supply also speedily be diminished? Why should the manufacturer continue in the trade if his profits are below the general level?" Why, indeed? Answer the question, ye paper-makers and soap-boilers who annually besiege the Chancellor of the Exchequer. According to the strict principles of abstract political economy, the tax ought to be to you a matter of perfect indifference.

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Of course, if it were true that capital could be transferred as a liquid is poured from one vessel to another without spilling most of it in the process, and if all-powerful habit did not keep men, while a gleam of hope remains, in the employments in which their lives have been spent, and, above all, if capital

created its own return, so that there was not always a fund looking out in vain for new investment, then the Ricardo dogma would be impregnable; but the first and second assumptions being very wide of the truth, and the third in direct contradiction to it, we cannot wonder that both that dogma, and all others built upon the same foundations, have to be abandoned as untenable whenever they are wanted for any practical purpose.

Real Incidence of Taxation.

The truth is, that the incidence of a particular tax can no more be determined than the pressure of a particular tub of water after it has been flung into the river, or the exact limits of a morsel of infectious matter when once placed within an animal body. The moment a new tax is imposed, the sensitive spot which is struck, begins to work it off into the surrounding region, and the new weight soon coalesces with the whole preexisting mass, to be moved to and fro under the influence of an immense concurrence of causes. If, therefore, the question be, upon whom a certain tax fell when it was originally imposed, the answer may be, one particular class. If the question be, upon whom, after existing for one or more generations, it now falls, that is to say, whose income is now less than it would have been if no such tax had been imposed, the answer will point to quite a different class. If, lastly, the question be, as to whom the removal of an old tax will immediately benefit, the answer, paradoxical as it may seem, must carry us to a class different from that on which, in the sense of the second reply, the tax does actually press.

If, for the purpose of science, it were allowable to disregard the element of time, and confining our view to the main line of causation, to combine its extreme limits in a single proposition, then the general truth would be, under our monetary system, that all taxation falls upon the receivers of landed, funded, and official incomes, or upon foreigners. In other words, if

there had been no taxation in England during the last fifty years, then neither the labourer nor the capitalist would at this moment receive a larger share of the produce than he actually does; and there being of course no funded or official incomes, the aggregate of what now goes in taxation would be enjoyed to some small extent by foreigners, but, with that exception, wholly by the owners of land. This result would have been brought about by the twofold competition of capitalists and labourers. Taking periods of considerable length, wages stand at the moral minimum, being kept up to that point by the existence of a certain standard of comfort in the minds of the people which makes them struggle hard to secure it; but being also forced down to the same point, or prevented from rising above it, by the competition of the labourers. In like manner, profits are habitually at a minimum, kept up to that point because capitalists will not go on if profits sink much below it, and kept down to the same point by a competition even more intense than that of the labourers. Hence, in a scientific sense, and taking those long periods into view which are usual with economists, the incidence of the bulk of taxation must be upon the receivers of what may be called residuary incomes. If a tax now seems to go out of wages, the absence of that tax would have allowed the same forces which fixed wages at the present point, to fix them so much lower. In like manner, a tax which seems to go out of profits, if it had not been imposed, would have left a surplus to be worked off by competition in the same manner, and profits and wages being thus habitually pared down each to its minimum, the whole remainder of the national produce must have gone to the landlords. All incomes and calculations being computed in money, the landlords would have obtained in this way higher money rents, and not only that, but with equal sums a greater proportionate command over commodities, from the constant lowering of prices. In the actual state of things, the latter benefit is shared by the possessors of funded and official incomes. Hence, upon the same assumptions as before, every remission of taxation tends to pass

through all other classes, and away from them, until it comes to operate permanently to the advantage of the owners of residuary incomes. This is the only general scientific statement that can be advanced respecting the incidence of taxation, and the corrections which it would require at any moment, in order to correspond with reality, must be made by allowances for a multitude of disturbing forces which, though the nature of each may be understood abstractedly, defy all estimate or precise analysis in their concrete operation.

Effect of Remissions on Producers and Consumers.

It will hold practically true, however, that the remission of a tax is always of most immediate importance to the producer of the taxed commodity, or to some of those who intervene between him and the consumer. One may see this from the way in which the benefit of a fall of price is so often intercepted by dealers. The butcher, the baker, the miller, the brewer, all do this habitually, and the case in which the chief benefit of a fall or remission is not a long time in reaching the consumer, is that in which some important addition is made to the sources of supply. Enlargement of supply may or may not concur with the remission of a tax, but wherever it does occur, it is the most powerful cause of rendering commodities cheap to the consumer. In no case, however, in which a tax causes the demand for a commodity to be less than it would otherwise be, can it be said that the producer of that commodity would not derive important benefit from its removal.

Questions of Taxation subordinate.

But the practical importance of these questions is greatly exaggerated. There is no doubt room for financial reforms, in getting rid of taxes which obstruct the diffusion of knowledge, in removing when it is possible those which, like the soap tax,

obstruct domestic industry, and in judicious reductions which might leave the gross revenue safe, as in the case of the exces sive duty on tea; but such questions are at present subordinate, and the aggregate of the national revenue cannot be reduced with safety to the highest interests of the country. Nearly one-half of the bulk of our taxation is appropriated, under the most binding obligations, to the payment of the national debt, which, however unwisely incurred, is now under the protection of the national faith, and however burthensome in past times, has been growing continually less so from year to year, and is now certain to be of less importance than ever. To disturb or meddle with that obligation, even by discussion, is as wrong as to bring into question the titles of landowners to their estates. In both matters a reckless logic may gain very cheap triumphs, but the peril of such attempts to lift the foundations is awful. Their tendency can be only to violent revolution and a scramble, and to the inconceivable wretchedness and hopeless demoralization which such events always engender. The other half of the revenue may not be either levied or expended with the soundest judgment, but its aggregate amount, instead of being too great, is too small for the great objects which ought to be accomplished by the English Government. This opinion is sustained by the high authority of Mr. Mill, and the convictions of men like Mr. Mill and Mr. Norman must ultimately have more weight than all the vague popular prejudices which are now everywhere ready to float about the hustings. Let us, therefore, while we remove as far as we can from that decaying prejudice of a narrow political economy, which would bar the most important exercises of the power bestowed upon Governments by civilization, cast also aside this popular error of the unparalleled weight of our taxation, and endeavour with minds free from bias to look at the great facts of our real position at the present time, and see whether, upon grounds intelligible to every man of common sense, there be not some measures of a comprehensive nature required, to serve as a counterpoise to the over-rapid development of com