’Nevertheless，thislatterkindoftaxesareinprincipleas
　　ineligibleastheformer，thoughnotpreciselyonthesame
　　ground。Aprotectingdutycanneverbeacauseofgain，but
　　alwaysandnecessarilyofloss，tothecountryimposingit，just
　　sofarasitisefficacioustoitsend。Anon—protectingduty，on
　　thecontrary，wouldinmostcasesbeasourceofgaintothe
　　countryimposingit，insofarasthrowingpartoftheweightof
　　itstaxesuponotherpeopleisagain;butitwouldbeameans
　　whichitcouldseldombeadvisabletoadopt，beingsoeasily
　　counteractedbyapreciselysimilarproceedingontheotherside。
　　’IfEngland，inthecasealreadysupposed，soughttoobtain
　　forherselfmorethanhernaturalshareoftheadvantageofthe
　　tradewithGermany，byimposingadutyuponlinen，Germanywould
　　onlyhavetoimposeadutyuponcloth，sufficienttodiminishthe
　　demandforthatarticleaboutasmuchasthedemandforlinenhad
　　beendiminishedinEnglandbythetax。Thingswouldthenbeas
　　before，andeachcountrywouldpayitsowntax。Unless，indeed，
　　thesumofthetwodutiesexceededtheentireadvantageofthe
　　trade;forinthatcasethetrade，anditsadvantage，wouldcease
　　entirely。’Therewouldbenoadvantage，therefore，in
　　imposingdutiesofthiskind，withaviewtogainbytheminthe
　　mannerwhichhasbeenpointedout。Butwhenanypartofthe
　　revenueisderivedfromtaxesoncommodities，thesemayoftenbe
　　aslittleobjectionableastherest。Itisevident，too，that
　　considerationsofreciprocity，whicharequiteunessentialwhen
　　thematterindebateisaprotectingduty，areofmaterial
　　importancewhentherepealofdutiesofthisotherdescriptionis
　　discussed。Acountrycannotbeexpectedtorenouncethepowerof
　　taxingforeigners，unlessforeignerswillinreturnpractise
　　towardsitselfthesameforbearance。Theonlymodeinwhicha
　　countrycansaveitselffrombeingaloserbytherevenueduties
　　imposedbyothercountriesonitscommodities，istoimpose
　　correspondingrevenuedutiesontheirs。Onlyitmusttakecare
　　thatthosedutiesbenotsohighastoexceedallthatremainsof
　　theadvantageofthetrade，andputanendtoimportation
　　altogether，causingthearticletobeeitherproducedathome，or
　　importedfromanotherandadearermarket。’
　　NOTES:
　　1。Itistrue，thisdoesnotconstitute，asatfirstsightit
　　appearstodo，acaseoftakingmoreoutofthepocketsofthe
　　peoplethanthestatereceives;sinceifthestateneedsthe
　　advance，andgetsitinthismanner，itcandispensewithan
　　equivalentamountofborrowinginstockorexchequerbills。But
　　itismoreeconomicalthatthenecessitiesofthestateshouldbe
　　suppliedfromthedisposablecapitalinthehandsofthelending
　　class，thanbyanartificialadditiontotheexpensesofoneor
　　severalclassesofproducersordealers。
　　2。Probablythestrongestknowninstanceofalargerevenue
　　raisedfromforeignersbyataxonexports，istheopiumtrade
　　withChina。ThehighpriceofthearticleundertheGovernment
　　monopoly（whichisequivalenttoahighexportduty）hasso
　　littleeffectindiscouragingitsconsumption，thatitissaidto
　　havebeenoccasionallysoldinChinaforasmuchasitsweightin
　　silver。
　　ThePrinciplesofPoliticalEconomy
　　byJohnStuartMill
　　Book5
　　Chapter5
　　OfSomeOtherTaxes
　　1。Besidesdirecttaxesonincome，andtaxesonconsumption，
　　thefinancialsystemsofmostcountriescompriseavarietyof
　　miscellaneousimposts，notstrictlyincludedineitherclass。The
　　modernEuropeansystemsretainmanysuchtaxes，thoughinmuch
　　lessnumberandvarietythanthosesemi—barbarousgovernments
　　whichEuropeaninfluencehasnotyetreached。Insomeofthese，
　　scarcelyanyincidentoflifehasescapedbeingmadeanexcuse
　　forsomefiscalexaction;hardlyanyact，notbelongingtodaily
　　routine，canbeperformedbyanyone，withoutobtainingleave
　　fromsomeagentofgovernment，whichisonlygrantedin
　　considerationofapayment:especiallywhentheactrequiresthe
　　aidorthepeculiarguaranteeofapublicauthority。Inthe
　　presenttreatisewemayconfineourattentiontosuchtaxesas
　　latelyexisted，orstillexist，incountriesusuallyclassedas
　　civilized。
　　Inalmostallnationsaconsiderablerevenueisdrawnfrom
　　taxesoncontracts。Theseareimposedinvariousforms。One
　　expedientisthatoftaxingthelegalinstrumentwhichservesas
　　evidenceofthecontract，andwhichiscommonlytheonlyevidence
　　legallyadmissible。InEngland，scarcelyanycontractisbinding
　　unlessexecutedonstampedpaper，whichhaspaidataxto
　　government;anduntilverylately，whenthecontractrelatedto
　　propertythetaxwasproportionallymuchheavieronthesmaller
　　thanonthelargertransactions;whichisstilltrueofsomeof
　　thosetaxes。Therearealsostamp—dutiesonthelegalinstruments
　　whichareevidenceofthefulfilmentofcontracts;suchas
　　acknowledgmentsofreceipt，anddeedsofrelease。Taxeson
　　contractsarenotalwaysleviedbymeansofstamps。Thedutyon
　　salesbyauction，abrogatedbySirRobertPeel，wasaninstance
　　inpoint。Thetaxesontransfersoflandedproperty，inFrance，
　　areanother:inEnglandtherearestamp—duties。Insome
　　countries，contractsofmanykindsarenotvalidunless
　　registered，andtheirregistrationismadeanoccasionforatax。
　　Oftaxesoncontracts，themostimportantarethoseonthe
　　transferofproperty;chieflyonpurchasesandsales。Taxeson
　　thesaleofconsumablecommoditiesaresimplytaxesonthose
　　commodities。Iftheyaffectonlysomeparticularcommodities，
　　theyraisethepricesofthosecommodities，andarepaidbythe
　　consumer。Iftheattemptweremadetotaxallpurchasesand
　　sales，which，howeverabsurd，wasforcenturiesthelawofSpain，
　　thetax，ifitcouldbeenforced，wouldbeequivalenttoataxon
　　allcommodities，andwouldnotaffectprices:ifleviedfromthe
　　sellers，itwouldbeataxonprofits，iffromthebuyers，atax
　　onconsumption;andneitherclasscouldthrowtheburthenupon
　　theother。Ifconfinedtosomeonemodeofsale，asforexample
　　byauction，itdiscouragesrecoursetothatmode，andifofany
　　materialamount，preventsitfrombeingadoptedatall，unlessin
　　acaseofemergency;inwhichcaseasthesellerisundera
　　necessitytosell，butthebuyerundernonecessitytobuy，the
　　taxfallsontheseller;andthiswasthestrongestofthe
　　objectionstotheauctionduty:italmostalwaysfellona
　　necessitousperson，andinthecrisisofhisnecessities。
　　Taxesonthepurchaseandsaleoflandare，inmost
　　countries，liabletothesameobjection。Landedpropertyinold
　　countriesisseldompartedwith，exceptfromreduced
　　circumstances，orsomeurgentneed:theseller，therefore，must
　　takewhathecanget，whilethebuyer，whoseobjectisan
　　investment，makeshiscalculationsontheinterestwhichhecan
　　obtainforhismoneyinotherways，andwillnotbuyifheis
　　chargedwithagovernmenttaxonthetransaction。（1*）Ithas
　　indeedbeenobjected，thatthisargumentwouldnotapplyifall
　　modesofpermanentinvestment，suchasthepurchaseofgovernment
　　securities，sharesinjoint—stockcompanies，mortgages，andthe
　　like，weresubjecttothesametax。Buteventhen，ifpaidbythe
　　buyer，itwouldbeequivalenttoataxoninterest:if
　　sufficientlyheavytobeofanyimportance，itwoulddisturbthe
　　establishedrelationbetweeninterestandprofit;andthe
　　disturbancewouldredressitselfbyariseintherateof
　　interest，andafallofthepriceoflandandofallsecurities。
　　Itappearstome，therefore，thattheselleristhepersonby
　　whomsuchtaxes，unlessunderpeculiarcircumstances，will
　　generallybeborne。
　　Alltaxesmustbecondemnedwhichthrowobstaclesintheway
　　ofthesaleofland，orotherinstrumentsofproduction。Such
　　salestendnaturallytorenderthepropertymoreproductive。The
　　seller，whethermovedbynecessityorchoice，isprobablysome
　　onewhoiseitherwithoutthemeans，orwithoutthecapacity，to
　　makethemostadvantageoususeofthepropertyforproductive
　　purposes;whilethebuyer，ontheotherhand，isatanyratenot
　　needy，andisfrequentlybothinclinedandabletoimprovethe
　　property，since，asitisworthmoretosuchapersonthantoany
　　other，heislikelytoofferthehighestpriceforit。Alltaxes，
　　therefore，andalldifficultiesandexpenses，annexedtosuch
　　contracts，aredecidedlydetrimental;especiallyinthecaseof
　　land，thesourceofsubsistence，andtheoriginalfoundationof
　　allwealth，ontheimprovementofwhich，therefore，somuch
　　depends。Toogreatfacilitiescannotbegiventoenablelandto
　　passintothehands，andassumethemodesofaggregationor
　　division，mostconducivetoitsproductiveness。Iflanded
　　propertiesaretoolarge，alienationshouldbefree，inorder
　　thattheymaybesubdivided;iftoosmall，inorderthattheymay
　　beunited。Alltaxesonthetransferoflandedpropertyshouldbe
　　abolished;but，asthelandlordshavenoclaimtoberelieved
　　fromanyreservationwhichthestatehashithertomadeinitsown
　　favourfromtheamountoftheirrent，anannualimpostequivalent
　　totheaverageproduceofthesetaxesshouldbedistributedover
　　thelandgenerally，intheformofaland—tax。
　　Someofthetaxesoncontractsareverypernicious，imposing
　　avirtualpenaltyupontransactionswhichitoughttobethe
　　policyofthelegislatortoencourage。Ofthissortisthe
　　stamp—dutyonleases，whichinacountryoflargepropertiesare
　　anessentialconditionofgoodagriculture;andthetaxeson
　　insurances，adirectdiscouragementtoprudenceandforethought。
　　2。Nearlyalliedtothetaxesoncontractsarethoseon
　　communication。Theprincipaloftheseisthepostagetax;to
　　whichmaybeaddedtaxesonadvertisements，andonnewspapers，
　　whicharetaxesonthecommunicationofinformation。
　　Thecommonmodeoflevyingataxontheconveyanceof
　　letters，isbymakingthegovernmentthesoleauthorizedcarrier
　　ofthem，anddemandingamonopolyprice。Whenthispriceisso
　　moderateasitisinthiscountryundertheuniformpenny
　　postage，scarcelyifatallexceedingwhatwouldbechargedunder
　　thefreestcompetitionbyanyprivatecompany，itcanhardlybe
　　consideredastaxation，butratherastheprofitsofabusiness;
　　whateverexcessthereisabovetheordinaryprofitsofstock
　　beingafairresultofthesavingofexpense，causedbyhaving
　　onlyoneestablishmentandonesetofarrangementsforthewhole
　　country，insteadofmanycompetingones。Thebusiness，too，being
　　onewhichbothcanandoughttobeconductedonfixedrules，is
　　oneofthefewbusinesseswhichitisnotunsuitabletoa
　　governmenttoconduct。Thepostoffice，therefore，isatpresent
　　oneofthebestofthesourcesfromwhichthiscountryderives
　　itsrevenue。Butapostagemuchexceedingwhatwouldbepaidfor
　　thesameserviceinasystemoffreedom，isnotadesirabletax。
　　Itschiefweightfallsonlettersofbusiness，andincreasesthe
　　expenseofmercantilerelationsbetweendistantplaces。Itis
　　likeanattempttoraisealargerevenuebyheavytolls:it
　　obstructsalloperationsbywhichgoodsareconveyedfromplace
　　toplace，anddiscouragestheproductionofcommoditiesinone
　　placeforconsumptioninanother;whichisnotonlyinitselfone
　　ofthegreatestsourcesofeconomyoflabour，butisanecessary
　　conditionofalmostallimprovementsinproduction，andoneof
　　thestrongeststimulantstoindustry，andpromotersof
　　civilization。
　　Thetaxonadvertisementswasnotfreefromthesame
　　objection，sinceinwhateverdegreeadvertisementsareusefulto
　　business，byfacilitatingthecomingtogetherofthedealeror
　　producerandtheconsumer，inthatsamedegree，ifthetaxbe
　　highenoughtobeaseriousdiscouragementtoadvertising，it
　　prolongstheperiodduringwhichgoodsremainunsold，andcapital
　　lockedupinidleness。
　　Ataxonnewspapersisobjectionable，notsomuchwhereit
　　doesfallaswhereisdoesnot，thatis，whereitprevents
　　newspapersfrombeingused。Tothegeneralityofthosewhobuy
　　them，newspapersarealuxurywhichtheycanaswellaffordto
　　payforasanyotherindulgence，andwhichisasunexceptionable
　　asourceofrevenue。Buttothatlargepartofthecommunitywho
　　havebeentaughttoread，buthavereceivedlittleother
　　intellectualeducation，newspapersarethesourceofnearlyall
　　thegeneralinformationwhichtheypossess，andofnearlyall
　　theiracquaintancewiththeideasandtopicscurrentamong
　　mankind;andaninterestismoreeasilyexcitedinnewspapers，
　　thaninbooksorothermorereconditesourcesofinstruction。
　　Newspaperscontributesolittle，inadirectway，tothe
　　originationofusefulideas，thatmanypersonsundervaluethe
　　importanceoftheirofficeindisseminatingthem。Theycorrect
　　manyprejudicesandsuperstitions，andkeepupahabitof
　　discussion，andinterestinpublicconcerns，theabsenceofwhich
　　isagreatcauseofstagnationofmindusuallyfoundinthelower
　　andmiddle，ifnotinall，ranks，ofthosecountrieswhere
　　newspapersofanimportantorinterestingcharacterdonotexist。
　　Thereoughttobenotaxes（asinthiscountrytherenowarenot）
　　whichrenderthisgreatdiffuserofinformation，ofmental
　　excitement，andmentalexercise，lessaccessibletothatportion
　　ofthepublicwhichmostneedstobecarriedintoaregionof
　　ideasandinterestsbeyonditsownlimitedhorizon。
　　3。Intheenumerationofbadtaxes，aconspicuousplacemust
　　beassignedtolawtaxes;whichextractarevenueforthestate
　　fromthevariousoperationsinvolvedinanapplicationtothe
　　tribunals。Likeallneedlessexpensesattachedtolaw
　　proceedings，theyareataxonredress，andthereforeapremium
　　oninjury。Althoughsuchtaxeshavebeenabolishedinthis
　　countryasageneralsourceofrevenue，theystillexistinthe
　　formoffeesofcourt，fordefrayingtheexpenseofthecourtsof
　　justice;undertheidea，apparently，thatthosemayfairlybe
　　requiredtobeartheexpensesoftheadministrationofjustice，
　　whoreapthebenefitofit。Thefallacyofthisdoctrinewas
　　powerfullyexposedbyBentham。Asheremarked，thosewhoare
　　underthenecessityofgoingtolaw，arethosewhobenefitleast，
　　notmost，bythelawanditsadministration。Tothemthe
　　protectionwhichthelawaffordshasnotbeencomplete，since
　　theyhavebeenobligedtoresorttoacourtofjusticeto
　　ascertaintheirrights，ormaintainthoserightsagainst
　　infringement:whiletheremainderofthepublichaveenjoyedthe
　　immunityfrominjuryconferredbythelawandthetribunals，
　　withouttheinconvenienceofanappealtothem。
　　4。BesidesthegeneraltaxesoftheState，thereareinall
　　ormostcountrieslocaltaxes，todefrayanyexpensesofapublic
　　naturewhichitisthoughtbesttoplaceunderthecontrolor
　　managementofalocalauthority。Someoftheseexpensesare
　　incurredforpurposesinwhichtheparticularlocalityissolely
　　orchieflyinterested;asthepaving，cleansing，andlightingof
　　thestreets;orthemakingandrepairingofroadsandbridges，
　　whichmaybeimportanttopeoplefromanypartofthecountry，
　　butonlyinsofarasthey，orgoodsinwhichtheyhavean
　　interest，passalongtheroadsoroverthebridges。Inother
　　casesagain，theexpensesareofakindasnationallyimportant
　　asanyothers，butaredefrayedlocallybecausesupposedmore
　　likelytobewelladministeredbylocalbodies;as，inEngland，
　　thereliefofthepoor，andthesupportofgaols，andinsome
　　othercountries，ofschools。Todecideforwhatpublicobjects
　　localsuperintendenceisbestsuited，andwhatarethosewhich
　　shouldbekeptimmediatelyunderthecentralgovernment，orunder
　　amixedsystemoflocalmanagementandcentralsuperintendence，
　　isaquestionnotofpoliticaleconomy，butofadministration。It
　　isanimportantprinciple，however，thattaxesimposedbyalocal
　　authority，beinglessamenabletopublicityanddiscussionthan
　　theactsofthegovernment，shouldalwaysbespecial—laidon
　　forsomedefiniteservice，andnotexceedingtheexpenseactually
　　incurredinrenderingtheservice。Thuslimited，itisdesirable，
　　wheneverpracticable，thattheburthenshouldfallonthoseto
　　whomtheserviceisrendered;thattheexpense，forinstance，of
　　roadsandbridges，shouldbedefrayedbyatollonpassengersand
　　goodsconveyedbythem，thusdividingthecostbetweenthosewho
　　usethemforpleasureorconvenience，andtheconsumersofthe
　　goodswhichtheyenabletobebroughttoandfromthemarketata
　　diminishedexpense。When，however，thetollshaverepaidwith
　　interestthewholeoftheexpenditure，theroadorbridgeshould
　　bethrownopenfreeoftoll，thatitmaybeusedalsobythoseto
　　whom，unlessopengratuitously，itwouldbevalueless;provision
　　beingmadeforrepairseitherfromthefundsofthestate，orby
　　arateleviedonthelocalitieswhichreaptheprincipalbenefit。
　　InEngland，almostalllocaltaxesaredirect，（thecoalduty
　　oftheCityofLondon，andafewsimilarimposts，beingthechief
　　exceptions），thoughthegreatestpartofthetaxationforgeneral
　　purposesisindirect。Onthecontrary，inFrance，Austria，and
　　othercountrieswheredirecttaxationismuchmorelargely
　　employedbythestate，thelocalexpensesoftownsare
　　principallydefrayedbytaxesleviedoncommoditieswhenentering
　　them。Theseindirecttaxesaremuchmoreobjectionableintowns
　　thanonthefrontier，becausethethingswhichthecountry
　　suppliestothetownsarechieflythenecessariesoflifeandthe
　　materialsofmanufacture，while，ofwhatacountryimportsfrom
　　foreigncountries，thegreaterpartusuallyconsistsofluxuries。
　　Anoctroicannotproducealargerevenue，withoutpressing
　　severelyuponthelabouringclassesofthetowns;unlesstheir
　　wagesriseproportionally，inwhichcasethetaxfallsinagreat
　　measureontheconsumersoftownproduce，whetherresidingin
　　townorcountry，sincecapitalwillnotremaininthetownsif
　　itsprofitsfallbelowtheirordinaryproportionascomparedwith
　　theruraldistricts。
　　NOTES:
　　1。Thestatementinthetextrequiresmodificationinthecaseof
　　countrieswherethelandisownedinsmallportions。These，being
　　neitherabadgeofimportance，noringeneralanobjectoflocal
　　attachment，arereadilypartedwithatasmalladvanceontheir
　　originalcost，withtheintentionofbuyingelsewhere;andthe
　　desireofacquiringlandevenondisadvantageoustermsisso
　　great，astobelittlecheckedbyevenahighrateoftaxation。
　　ThePrinciplesofPoliticalEconomy
　　byJohnStuartMill
　　Book5
　　Chapter6
　　ComparisonbetweenDirectandIndirectTaxes
　　1。Aredirectorindirecttaxesthemosteligible？This
　　question，atalltimesinteresting，hasoflateexciteda
　　considerableamountofdiscussion。InEnglandthereisapopular
　　feeling，ofoldstanding，infavourofindirect，oritshould
　　ratherbesaidinoppositiontodirect，taxation。Thefeelingis
　　notgroundedonthemeritsofthecase，andisofapuerilekind。
　　AnEnglishmandislikes，notsomuchthepayment，astheactof
　　paying。Hedislikesseeingthefaceofthetax—collector，and
　　beingsubjectedtohisperemptorydemand。Perhaps，too，themoney
　　whichheisrequiredtopaydirectlyoutofhispocketisthe
　　onlytaxationwhichheisquitesurethathepaysatall。Thata
　　taxofoneshillingperpoundontea，oroftwoshillingsper
　　bottleonwine，raisesthepriceofeachpoundofteaandbottle
　　ofwinewhichheconsumes，bythatandmorethanthatamount，
　　cannotindeedbedenied;itisthefact，andisintendedtobe
　　so，andhehimself，attimes，isperfectlyawareofit;butit
　　makeshardlyanyimpressiononhispracticalfeelingsand
　　associations，servingtoillustratethedistinctionbetweenwhat
　　ismerelyknowntobetrueandwhatisfelttobeso。The
　　unpopularityofdirecttaxation，contrastedwiththeeasymanner
　　inwhichthepublicconsenttoletthemselvesbefleecedinthe
　　pricesofcommodities，hasgeneratedinmanyfriendsof
　　improvementadirectlyoppositemodeofthinkingtothe
　　foregoing。Theycontendthattheveryreasonwhichmakesdirect
　　taxationdisagreeable，makesitpreferable。Underit，everyone
　　knowshowmuchhereallypays;andifhevotesforawar，orany
　　otherexpensivenationalluxury，hedoessowithhiseyesopento
　　whatitcostshim。Ifalltaxesweredirect，taxationwouldbe
　　muchmoreperceivedthanatpresent;andtherewouldbea
　　securitywhichnowthereisnot，foreconomyinthepublic
　　expenditure。
　　Althoughthisargumentisnotwithoutforce，itsweightis
　　likelytobeconstantlydiminishing。Therealincidenceof
　　indirecttaxationiseverydaymoregenerallyunderstoodandmore
　　familiarlyrecognized:andwhateverelsemaybesaidofthe
　　changeswhicharetakingplaceinthetendenciesofthehuman
　　mind，itcanscarcely，Ithink，bedenied，thatthingsaremore
　　andmoreestimatedaccordingtotheircalculatedvalue，andless
　　accordingtotheirnon—essentialaccompaniments。Themere
　　distinctionbetweenpayingmoneydirectlytothetax—collector，
　　andcontributingthesamesumthroughtheinterventionofthe
　　tea。dealerorthewine—merchant，nolongermakesthewhole
　　differencebetweendislikeoropposition，andpassive
　　acquiescence。Butfurther，whileanysuchinfirmityofthe
　　popularmindsubsists，theargumentgroundedonittellspartly
　　ontheothersideofthequestion。Ifourpresentrevenueof
　　aboutseventymillionswereallraisedbydirecttaxes，an
　　extremedissatisfactionwouldcertainlyariseathavingtopayso
　　much;butwhilemen’smindsaresolittleguidedbyreason，as
　　suchachangeoffeelingfromsoirrelevantacausewouldimply，
　　sogreatanaversiontotaxationmightnotbeanunqualified
　　good。Oftheseventymillionsinquestion，nearlythirtyare
　　pledged，underthemostbindingobligations，tothosewhose
　　propertyhasbeenborrowedandspentbythestate:andwhilethis
　　debtremainsunredeemed，agreatlyincreasedimpatienceof
　　taxationwouldinvolvenolittledangerofabreachoffaith，
　　similartothatwhich，inthedefaultingstatesofAmerica，has
　　beenproduced，andinsomeofthemstillcontinues，fromthesame
　　cause。Thatpart，indeed，ofthepublicexpenditure，whichis
　　devotedtothemaintenanceofcivilandmilitaryestablishments，
　　（thatis，allexcepttheinterestofthenationaldebt，）affords，
　　inmanyofitsdetails，amplescopeforretrenchment。Butwhile
　　muchoftherevenueiswastedunderthemerepretenceofpublic
　　service，somuchofthemostimportantbusinessofgovernmentis
　　leftundone，thatwhatevercanberescuedfromuseless
　　expenditureisurgentlyrequiredforuseful。Whethertheobject
　　beeducation;amoreefficientandaccessibleadministrationof
　　justice;reformsofanykindwhich，liketheSlaveEmancipation，
　　requirecompensationtoindividualinterests;orwhatisas
　　importantasanyofthese，theentertainmentofasufficient
　　staffofableandeducatedpublicservants，toconductina
　　betterthanthepresentawkwardmannerthebusinessof
　　legislationandadministration;everyoneofthesethingsimplies
　　considerableexpense，andmanyofthemhaveagainandagainbeen
　　preventedbythereluctancewhichexistedtoapplytoParliament
　　foranincreasedgrantofpublicmoney，though（besidesthatthe
　　existingmeanswouldprobablybesufficientifappliedtothe
　　properpurposes）thecostwouldberepaid，oftenahundredfold，
　　inmerepecuniaryadvantagetothecommunitygenerally。Ifso
　　greatanadditionweremadetothepublicdislikeoftaxationas
　　mightbetheconsequenceofconfiningittothedirectform，the
　　classeswhoprofitbythemisapplicationofpublicmoneymight
　　probablysucceedinsavingthatbywhichtheyprofit，atthe
　　expenseofthatwhichwouldonlybeusefultothepublic。
　　Thereis，however，afrequentpleainsupportofindirect
　　taxation，whichmustbealtogetherrejected，asgroundedona
　　fallacy。Weareoftentoldthattaxesoncommoditiesareless
　　burthensomethanothertaxes，becausethecontributorcanescape
　　fromthembyceasingtousethetaxedcommodity。Hecertainly
　　can，ifthatbehisobject，deprivethegovernmentofthemoney:
　　buthedoessobyasacrificeofhisownindulgences，which（if
　　hechosetoundergoit）wouldequallymakeuptohimforthesame
　　amounttakenfromhimbydirecttaxation。Supposeataxlaidon
　　wine，sufficienttoaddfivepoundstothepriceofthequantity
　　ofwinewhichheconsumesinayear。Hehasonly（wearetold）to
　　diminishhisconsumptionofwineby5l。，andheescapesthe
　　burthen。True:butifthe5l。，insteadofbeinglaidonwine，
　　hadbeentakenfromhimbyanincometax，hecould，byexpending
　　5l。lessinwine，equallysavetheamountofthetax，sothat
　　thedifferencebetweenthetwocasesisreallyillusory。Ifthe
　　governmenttakesfromthecontributorfivepoundsayear，whether
　　inonewayoranother，exactlythatamountmustberetrenched
　　fromhisconsumptiontoleavehimaswelloffasbefore;andin
　　eitherwaythesameamountofsacrifice，neithermorenorless，
　　isimposedonhim。
　　Ontheotherhand，itissomeadvantageonthesideof
　　indirecttaxes，thatwhattheyexactfromthecontributoris
　　takenatatimeandinamannerlikelytobeconvenienttohim。
　　Itispaidatatimewhenhehasatanyrateapaymenttomake;
　　itcauses，therefore，noadditionaltrouble，nor（unlessthetax
　　beonnecessaries）anyinconveniencebutwhatisinseparablefrom
　　thepaymentoftheamount。Hecanalso，exceptinthecaseof
　　veryperishablearticles，selecthisowntimeforlayingina
　　stockofthecommodity，andconsequentlyforpaymentofthetax。
　　Theproducerordealerwhoadvancesthesetaxes，is，indeed，
　　sometimessubjectedtoinconvenience;but，inthecaseof
　　importedgoods，thisinconvenienceisreducedtoaminimumby
　　whatiscalledtheWarehousingSystem，underwhich，insteadof
　　payingthedutyatthetimeofimportation，heisonlyrequired
　　todosowhenhetakesoutthegoodsforconsumption，whichis
　　seldomdoneuntilhehaseitheractuallyfound，orhasthe
　　prospectofimmediatelyfinding，apurchaser。
　　Thestrongestobjection，however，toraisingthewholeorthe
　　greaterpartofalargerevenuebydirecttaxes，isthe
　　impossibilityofassessingthemfairlywithoutaconscientious
　　co—operationonthepartofthecontributors，nottobehopedfor
　　inthepresentlowstateofpublicmorality。Inthecaseofan
　　incometax，wehavealreadyseenthatunlessitbefound
　　practicabletoexemptsavingsaltogetherfromthetax，the
　　burthencannotbeapportionedwithanytolerableapproachto
　　fairnessuponthosewhoseincomesarederivedfrombusinessor
　　professions;andthisisinfactadmittedbymostofthe
　　advocatesofdirecttaxation，who，Iamafraid，generallyget
　　overthedifficultybyleavingthoseclassesuntaxed，and
　　confiningtheirprojectedincometaxto’realizedproperty’，in
　　whichformitcertainlyhasthemeritofbeingaveryeasyform
　　ofplunder。Butenoughhasbeensaidincondemnationofthis
　　expedient。Wehaveseen，however，thatahouse—taxisaformof
　　directtaxationnotliabletothesameobjectionsasanincome
　　tax，andindeedliabletoasfewobjectionsofanykindas
　　perhapsanyofourindirecttaxes。Butitwouldbeimpossibleto
　　raisebyahouse。taxalone，thegreatestpartoftherevenueof
　　GreatBritain，withoutproducingaveryobjectionable
　　overcrowdingofthepopulation，throughthestrongmotivewhich
　　allpersonswouldhavetoavoidthetaxbyrestrictingtheir
　　houseaccommodation。Besides，evenahouse—taxhasinequalities，
　　andconsequentinjustices;notaxisexemptfromthem，anditis
　　neitherjustnorpolitictomakealltheinequalitiesfallinthe
　　sameplaces，bycallingupononetaxtodefraythewholeorthe
　　chiefpartofthepublicexpenditure。Somuchofthelocal
　　taxation，inthiscountry，beingalreadyintheformofa
　　house。tax，itisprobablethattenmillionsayearwouldbefully
　　asmuchascouldbeneficiallybelevied，throughthismedium，for
　　generalpurposes。
　　Acertainamountofrevenuemay，aswehaveseen，beobtained
　　withoutinjusticebyapeculiartaxonrent。Besidesthepresent
　　land。tax，andanequivalentfortherevenuenowderivedfrom
　　stampdutiesontheconveyanceofland，somefurthertaxation
　　might，Ihavecontended，atsomefutureperiodbeimposed，to
　　enablethestatetoparticipateintheprogressiveincreaseof
　　theincomesoflandlordsfromnaturalcauses。Legaciesand
　　inheritances，wehavealsoseen，oughttobesubjectedto
　　taxationsufficienttoyieldaconsiderablerevenue。Withthese
　　taxes，andahouse。taxofsuitableamount;weshould，Ithink，
　　havereachedtheprudentlimitsofdirecttaxation，saveina
　　nationalemergencysourgentastojustifythegovernmentin
　　disregardingtheamountofinequalityandunfairnesswhichmay
　　ultimatelybefoundinseparablefromanincometax。Theremainder
　　oftherevenuewouldhavetobeprovidedbytaxesonconsumption，
　　andthequestionis，whichofthesearetheleastobjectionable。
　　2。Therearesomeformsofindirecttaxationwhichmustbe
　　peremptorilyexcluded。Taxesoncommodities，forrevenue
　　purposes，mustnotoperateasprotectingduties，butmustbe
　　leviedimpartiallyoneverymodeinwhichthearticlescanbe
　　obtained，whetherproducedinthecountryitself，orimported。An
　　exclusionmustalsobeputuponalltaxesonthenecessariesof
　　life，oronthematerialsorinstrumentsemployedinproducing
　　thosenecessaries。Suchtaxesarealwaysliabletoencroachon
　　whatshouldbeleftuntaxed，theincomesbarelysufficientfor
　　healthfulexistence;andonthemostfavourablesupposition，
　　namely，thatwagesrisetocompensatethelabourersforthetax，
　　itoperatesasapeculiartaxonprofits，whichisatonce
　　unjust，anddetrimentaltonationalwealth。（1*）Whatremainare
　　taxesonluxuries。Andthesehavesomepropertieswhichstrongly
　　recommendthem。Inthefirstplace，theycannever，byany
　　possibility，touchthosewhosewholeincomeisexpendedon
　　necessaries;whiletheydoreachthosebywhomwhatisrequired
　　fornecessaries，isexpendedonindulgences。Inthenextplace，
　　theyoperateinsomecasesasanuseful，andtheonlyuseful，
　　kindofsumptuarylaw。Idisclaimallasceticism，andbynomeans
　　wishtoseediscouraged，eitherbylaworopinion，anyindulgence
　　（consistentwiththemeansandobligationsofthepersonusing
　　it）whichissoughtfromagenuineinclinationfor，andenjoyment
　　of，thethingitself;butagreatportionoftheexpensesofthe
　　higherandmiddleclassesinmostcountries，andthegreatestin
　　this，isnotincurredforthesakeofthepleasureaffordedby
　　thethingsonwhichthemoneyisspent，butfromregardto
　　opinion，andanideathatcertainexpensesareexpectedfrom
　　them，asanappendageofstation;andIcannotbutthinkthat
　　expenditureofthissortisamostdesirablesubjectoftaxation。
　　Iftaxationdiscouragesit，somegoodisdone，andifnot，no
　　harm;forinsofarastaxesareleviedonthingswhichare
　　desiredandpossessedfrommotivesofthisdescription，nobodyis
　　theworseforthem。Whenathingisboughtnotforitsusebut
　　foritscostliness，cheapnessisnorecommendation。AsSismondi
　　remarks，theconsequenceofcheapeningarticlesofvanity，isnot
　　thatlessisexpendedonsuchthings，butthatthebuyers
　　substituteforthecheapenedarticlesomeotherwhichismore
　　costly，oramoreelaboratequalityofthesamething;andasthe
　　inferiorqualityansweredthepurposeofvanityequallywellwhen
　　itwasequallyexpensive，ataxonthearticleisreallypaidby
　　nobody:itisacreationofpublicrevenuebywhichnobody
　　loses。（2*）
　　3。Inordertoreduceasmuchaspossibletheinconveniences，
　　andincreasetheadvantages，incidenttotaxesoncommodities，
　　thefollowingarethepracticalruleswhichsuggestthemselves。
　　1st。Toraiseaslargearevenueasconvenientlymaybe，from
　　thoseclassesofluxurieswhichhavemostconnexionwithvanity，
　　andleastwithpositiveenjoyment;suchasthemorecostly
　　qualitiesofallkindsofpersonalequipmentandornament。2ndly。
　　Wheneverpossible，todemandthetax，notfromtheproducer，but
　　directlyfromtheconsumer，sincewhenleviedontheproducerit
　　raisesthepricealwaysbymore，andoftenbymuchmore，thanthe
　　mereamountofthetax。Mostoftheminorassessedtaxesinthis
　　countryarerecommendedbyboththeseconsiderations。Butwith
　　regardtohorsesandcarriages，astherearemanypersonsto
　　whom，fromhealthorconstitution，thesearenotsomuchluxuries
　　asnecessaries，thetaxpaidbythosewhohavebutoneriding
　　horse，orbutonecarriage，especiallyofthecheaper
　　descriptions，shouldbelow;whiletaxationshouldrisevery
　　rapidlywiththenumberofhorsesandcarriages，andwiththeir
　　costliness。3rdly。Butastheonlyindirecttaxeswhichyielda
　　largerevenuearethosewhichfallonarticlesofuniversalor
　　verygeneralconsumption，andasitisthereforenecessaryto
　　havesometaxesonrealluxuries，thatis，onthingswhichafford
　　pleasureinthemselves，andarevaluedonthataccountrather
　　thanfortheircost;thesetaxesshould，ifpossible，beso
　　adjustedastofallwiththesameproportionalweightonsmall，
　　onmoderate，andonlargeincomes。Thisisnotaneasymatter;
　　sincethethingswhicharethesubjectsofthemoreproductive
　　taxes，areinproportionmorelargelyconsumedbythepoorer
　　membersofthecommunitythanbytherich。Tea，coffee，sugar，
　　tobacco，fermenteddrinks，canhardlybesotaxedthatthepoor
　　shallnotbearmorethantheirdueshareoftheburthen。
　　Somethingmightbedonebymakingthedutyonthesuperior
　　qualities，whichareusedbythericherconsumers，muchhigherin
　　proportiontothevalue（insteadofmuchlower，asisalmost
　　universallythepractice，underthepresentEnglishsystem）;but
　　insomecasesthedifficultyofatalladjustingthedutytothe
　　value，soastopreventevasion，issaid，withwhattruthIknow
　　not，tobeinsuperable;sothatitisthoughtnecessarytolevy
　　thesamefixeddutyonallthequalitiesalike:aflagrant
　　injusticetothepoorerclassofcontributors，unlesscompensated
　　bytheexistenceofothertaxesfromwhich，asfromthepresent
　　incometax，theyarealtogetherexempt。4thly。Asfarasis
　　consistentwiththeprecedingrules，taxationshouldratherbe
　　concentratedonafewarticlesthandiffusedovermany，inorder
　　thattheexpensesofcollectionmaybesmaller，andthatasfew
　　employmentsaspossiblemaybeburthensomelyandvexatiously
　　interferedwith。5thly。Amongluxuriesofgeneralconsumption，
　　taxationshouldbypreferenceattachitselftostimulants，
　　becausethese，thoughinthemselvesaslegitimateindulgencesas
　　anyothers，aremoreliablethanmostotherstobeusedin
　　excess，sothatthechecktoconsumption，naturallyarisingfrom
　　taxation，isonthewholebetterappliedtothemthantoother
　　things。6thly。Asfarasotherconsiderationspermit，taxation
　　shouldbeconfinedtoimportedarticles，sincethesecanbetaxed
　　withalessdegreeofvexatiousinterference，andwithfewer
　　incidentalbadeffects，thanwhenataxisleviedonthefieldor
　　ontheworkshop。Custom—dutiesare，caeterisparibus，muchless
　　objectionablethanexcise:buttheymustbelaidonlyonthings
　　whicheithercannot，oratleastwillnot，beproducedinthe
　　countryitself;orelsetheirproductiontheremustbeprohibited
　　（asinEnglandisthecasewithtobacco），orsubjectedtoan
　　excisedutyofequivalentamount。7thly。Notaxoughttobekept
　　sohighastofurnishamotivetoitsevasion，toostrongtobe
　　counteractedbyordinarymeansofprevention:andespeciallyno
　　commodityshouldbetaxedsohighlyastoraiseupaclassof
　　lawlesscharacters，smugglers，illicitdistillers，andthelike。
　　Oftheexciseandcustomdutieslatelyexistinginthis
　　country，allwhichareintrinsicallyunfittoformpartofagood
　　systemoftaxation，have，sincethelastreformsbyMrGladstone，
　　beengotridof。Amongthesearealldutiesonordinaryarticles
　　offood，whetherforhumanbeingsorforcattle;thoseontimber，
　　asfall。ingonthematerialsoflodging，whichisoneofthe
　　necessariesoflife;alldutiesonthemetals，andonimplements
　　madeofthem;taxesonsoap，whichisanecessaryofcleanliness，
　　andontallow，thematerialbothofthatandofsomeother
　　necessaries;thetaxonpaper，anindispensableinstrumentof
　　almostallbusinessandofmostkindsofinstruction。Theduties
　　whichnowyieldnearlythewholeofthecustomsandexcise
　　revenue，thoseonsugar，coffee，tea，wine，beer，spirits，and
　　tobacco，areinthemselveswherealargeamountofrevenueis
　　necessary，extremelypropertaxes;butatpresentgrosslyunjust，
　　fromthedisproportionateweightwithwhichtheypressonthe
　　poorerclasses;andsomeofthem（thoseonspiritsandtobacco）
　　aresohighastocauseaconsiderableamountofsmuggling。Itis
　　probablethatmostofthesetaxesmightbearagreatreduction
　　withoutanymateriallossofrevenue。Inwhatmannerthefiner
　　articlesofmanufacture，consumedbytherich，mightmost
　　advantageouslybetaxed，Imustleavetobedecidedbythosewho
　　havetherequisitepracticalknowledge。Thedifficultywouldbe，
　　toeffectitwithoutaninadmissibledegreeofinterferencewith
　　production。Incountrieswhich，liketheUnitedStates，import
　　theprincipalpartofthefinermanufactureswhichtheyconsume，
　　thereislittledifficultyinthematter:andevenwherenothing
　　isimportedbuttherawmaterial，thatmaybetaxed，especially
　　thequalitiesofitwhichareexclusivelyemployedforthe
　　fabricsusedbythericherclassofconsumers。Thus，inEnglanda
　　highcustom—dutyonrawsilkwouldbeconsistentwithprinciple;
　　anditmightperhapsbepracticabletotaxthefinerqualitiesof
　　cottonorlinenyarn，whetherspuninthecountryitselfor
　　imported。
　　NOTES:
　　1。Somearguethatthematerialsandinstrumentsofall
　　productionshouldbeexemptfromtaxation;butthese，whenthey
　　donotenterintotheproductionofnecessaries，seemasproper
　　subjectsoftaxationasthefinishedarticle。Itischieflywith
　　referencetoforeigntrade，thatsuchtaxeshavebeenconsidered
　　injurious。Internationallyspeaking，theymaybelookeduponas
　　exportduties，and，unlessincasesinwhichanexportdutyis
　　advisable，theyshouldbeaccompaniedwithanequivalentdrawback
　　onexportation。Butthereisnosufficientreasonagainsttaxing
　　thematerialsandinstrumentsusedintheproductionofanything
　　whichisitselfafitobjectoftaxation。
　　2。’Werewetosupposethatdiamondscouldonlybeprocuredfrom
　　oneparticularanddistantcountry，andpearlsfromanother，and
　　weretheproduceoftheminesintheformer，andofthefishery
　　inthelatter，fromtheoperationofnaturalcauses，tobecome
　　doublydifficulttoprocure，theeffectwouldmerelybethatin
　　timehalfthequantityofdiamondsandpearlswouldbesufficient
　　tomarkacertainopulenceandrank，thatithadbeforebeen
　　necessarytoemployforthatpurpose。Thesamequantityofgold，
　　orsomecommodityreducibleatlasttolabour，wouldberequired
　　toproducethenowreducedamount，astheformerlargeramount。
　　Werethedifficultyinterposedbytheregulationsof
　　legislators……itcouldpurposesofmakenodifferencetothe
　　fitnessofthesearticlestoservethevanity。’Supposethat
　　meanswerediscoveredwherebythephysiologicalprocesswhich
　　generatesthepearlmightbeinducedadlibitum，theresultbeing
　　thattheamountoflabourexpendedinprocuringeachpearl，came
　　tobeonlythefivehundredthpartofwhatitwasbefore。’The
　　ultimateeffectofsuchachangewoulddependonwhetherthe
　　fisherywerefreeornot。Wereitfreetoall，aspearlscouldbe
　　gotsimplyforthelabouroffishingforthem，astringofthem
　　mightbehadforafewpence。Theverypoorestclassofsociety
　　couldthereforeaffordtodecoratetheirpersonswiththem。They
　　wouldthussoonbecomeextremelyvulgarandunfashionable，andso
　　atlastvalueless。Ifhoweverwesupposethatinsteadofthe
　　fisherybeingfree，thelegislatorownsandhascompletecommand
　　oftheplace，wherealonepearlsaretobeprocured;asthe
　　progressofdiscoveryadvanced，hemightimposeadutyonthem
　　equaltothediminutionoflabournecessarytoprocurethem。They
　　wouldthenbeasmuchesteemedastheywerebefore。Whatsimple
　　beautytheyhavewouldremainunchanged。Thedifficultytobe
　　surmountedinordertoobtainthemwouldbedifferent，but
　　equallygreat。andtheywouldthereforeequallyservetomarkthe
　　opulenceofthosewhopossessedthem。’Thenetrevenueobtained
　　bysuchatax’wouldnotcostthesocietyanything。Ifnotabused
　　initsapplication，itwouldbeaclearadditionofsomuchto
　　theresourcesofthecommunity。’——Rae，NewPrinciplesof
　　PoliticalEconomy，pp。369—71。
　　ThePrinciplesofPoliticalEconomy
　　byJohnStuartMill
　　Book5
　　Chapter7
　　OfaNationalDebt
　　1。Thequestionmustnowbeconsidered，howfaritisright
　　orexpedienttoraisemoneyforthepurposeofgovernment，notby
　　layingontaxestotheamountrequired，butbytakingaportion
　　ofthecapitalofthecountryintheformofaloan，andcharging
　　thepublicrevenuewithonlytheinterest。Nothingneedsbesaid
　　aboutprovidingfortemporarywantsbytakingupmoney;for
　　instance，byanissueofexchequerbills，destinedtobepaid
　　off，atfurthestinayearortwo，fromtheproceedsofthe
　　existingtaxes。Thisisaconvenientexpedient，andwhenthe
　　governmentdoesnotpossessatreasureorhoard，isoftena
　　necessaryone，ontheoccurrenceofextraordinaryexpenses，orof
　　atemporaryfailureintheordinarysourcesofrevenue。Whatwe
　　havetodiscussistheproprietyofcontractinganationaldebt
　　ofapermanentcharacter;defrayingtheexpensesofawar，orof
　　anyseasonofdifficulty，byloans，toberedeemedeithervery
　　graduallyandatadistantperiod，ornotatall。
　　ThisquestionhasalreadybeentoucheduponintheFirst
　　Book。Weremarked，thatifthecapitaltakeninloansis
　　abstractedfromfundseitherengagedinproduction，ordestined
　　tobeemployedinit，theirdiversionfromthatpurposeis
　　equivalenttotakingtheamountfromthewagesofthelabouring
　　classes。Borrowing，inthiscase，isnotasubstituteforraising
　　thesupplieswithintheyear。Agovernmentwhichborrowsdoes
　　actuallytaketheamountwithintheyear，andthattoobyatax
　　exclusivelyonthelabouringclasses:thanwhichitcouldhave
　　donenothingworse，ifithadsupplieditswantsbyavowed
　　taxation;andinthatcasethetransaction，anditsevils，would
　　haveendedwiththeemergency;whilebythecircuitousmode
　　adopted，thevalueextractedfromthelabourersisgained，notby
　　thestate，butbytheemployersoflabour，thestateremaining
　　chargedwiththedebtbesides，andwithitsinterestin
　　perpetuity。Thesystemofpublicloans，insuchcircumstances，
　　maybepronouncedtheveryworstwhich，inthepresentstateof
　　civilization，isstillincludedinthecatalogueoffinancial
　　expedients。
　　Wehoweverremarkedthatthereareothercircumstancesin
　　whichloansarenotchargeablewiththesepernicious
　　consequences:namely，first，whenwhatisborrowedisforeign
　　capital，theoverflowingsofthegeneralaccumulationofthe
　　world;or，secondly，whenitiscapitalwhicheitherwouldnot
　　havebeensavedatallunlessthismodeofinvestmenthadbeen
　　opentoit，orafterbeingsaved，wouldhavebeenwastedin
　　unproductiveenterprises，orsenttoseekemploymentinforeign
　　countries。Whentheprogressofaccumulationhasreducedprofits
　　eithertotheultimateortothepracticalminimum，——tothe
　　rate，lessthanwhichwouldeitherputastoptotheincreaseof
　　capital，orsendthewholeofthenewaccumulationsabroad;
　　governmentmayannuallyinterceptthesenewaccumulations，
　　withouttrenchingontheemploymentorwagesofthelabouring
　　classesinthecountryitself，orperhapsinanyothercountry。
　　Tothisextent，therefore，theloansystemmaybecarried，
　　withoutbeingliabletotheutterandperemptorycondemnation
　　whichisduetoitwhenitoverpassesthislimit。Whatiswanted
　　isanindextodeterminewhether，inanygivenseriesofyears，
　　asduringthelastgreatwarforexample，thelimithasbeen
　　exceededornot。
　　Suchanindexexists，atonceacertainandanobviousone。
　　Didthegovernment，byitsloanoperations，augmenttherateof
　　interest？Ifitonlyopenedachannelforcapitalwhichwouldnot
　　otherwisehavebeenaccumulated，orwhich，ifaccumulated，would
　　nothavebeenemployedwithinthecountry;thisimpliesthatthe
　　capital，whichthegovernmenttookandexpended，couldnothave
　　foundemploymentattheexistingrateofinterest。Solongasthe
　　loansdonomorethanabsorbthissurplus，theypreventany
　　tendencytoafalloftherateofinterest，buttheycannot
　　occasionanyrise。Whentheydoraisetherateofinterest，as
　　theydidinamostextraordinarydegreeduringtheFrenchwar，
　　thisispositiveproofthatthegovernmentisacompetitorfor
　　capitalwiththeordinarychannels，ofproductiveinvestment，and
　　iscarryingoff，notmerelyfundswhichwouldnot，butfunds
　　whichwould，havefoundproductiveemploymentwithinthecountry。
　　Tothefullextent，therefore，towhichtheloansofgovernment，
　　duringthewar，causedtherateofinteresttoexceedwhatitwas
　　before，andwhatithasbeensince，thoseloansarechargeable
　　withalltheevilswhichhavebeendescribed。Ifitbeobjected
　　thatinterestonlyrosebecauseprofitsrose，Ireplythatthis
　　doesnotweaken，butstrengthens，theargument。Ifthegovernment
　　loansproducedtheriseofprofitsbythegreatamountofcapital
　　whichtheyabsorbed，bywhatmeanscantheyhavehadthiseffect，
　　unlessbyloweringthewagesoflabour？Itwillperhapsbesaid，
　　thatwhatkeptprofitshighduringthewarwasnotthedrafts
　　madeonthenationalcapitalbytheloans，buttherapidprogress
　　ofindustrialimprovements。This，inagreatmeasure，wasthe
　　fact;anditnodoubtalleviatedthehardshiptothelabouring
　　classes，andmadethefinancialsystemwhichwaspursuedless。
　　activelymischievous，butnotlesscontrarytoprinciple。These
　　veryimprovementsinindustry，maderoomforalargeramountof
　　capital;andthegovernment，bydrainingawayagreatpartofthe
　　annualaccumulations，didnotindeedpreventthatcapitalfrom
　　existingultimately，（foritstartedintoexistencewithgreat
　　rapidityafterthepeace），butpreventeditfromexistingatthe
　　time，andsubtractedjustsomuch，whilethewarlasted，from
　　distributionamongproductivelabourers。Ifthegovernmenthad
　　abstainedfromtakingthiscapitalbyloan，andhadalloweditto
　　reachthelabourers，buthadraisedthesupplieswhichit
　　requiredbyadirecttaxonthelabouringclasses，itwouldhave
　　produced（ineveryrespectbuttheexpenseandinconvenienceof
　　collectingthetax）theverysameeconomicaleffectswhichitdid
　　produce，exceptthatweshouldnotnowhavehadthedebt。The
　　courseitactuallytookwasthereforeworsethantheveryworst
　　modewhichitcouldpossiblyhaveadoptedofraisingthesupplies
　　withintheyear:andtheonlyexcuse，orjustification，whichit
　　admitsof，（sofarasthatexcusecouldbetrulypleaded），was
　　hardnecessity;theimpossibilityofraisingsoenormousan
　　annualsumbytaxation，withoutresortingtotaxeswhichfrom
　　theirodiousness，orfromthefacilityofevasion，itwouldhave
　　beenfoundimpracticabletoenforce。