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James Corry, &c. &c. There is also prefixed to the work, a portrait of the Founder of the Society, the late Mr Richard Power, followed by a tribute to the high qualities of that excellent man, from one of the best and warmest hearts, (says the Editor of the work,) united with, perhaps, the finest talents that Ireland ever produced.'* From this just and eloquent eulogy we give the following short extract.

It was truly said of him, that he never made an enemy, or lost a friend, and in a country distracted by civil and religious discord, a man could not be found, of any sect or party, who felt unkindly towards him. Yet this popularity was not earned by the compliances of a timid or assenting character; he had a benevolent disposition, which made it pleasure to him to make others happy, and he shrunk from giving pain almost with the same instinct that men shrink from suffering it. This made him prompt to approve, and slow to censure; indulgent to error, and encouraging to merit; yet there was something about him that repelled and rebuked whatever was sordid or mean; and, when firmness was required, his integrity was uncompromising, and his courage not to be shaken,'

ART. V.-Remarks on the Financial Situation of Great Britain. Pp. 70. London. 1827.

To attempt to prove by argument that many great and signal advantages would result from making a considerable deduction from the amount of taxation, will, probably, seem to many, an unnecessary waste of labour. We hope, however, to be exeused for making a few observations on this subject, not so much in the view of showing the oppressiveness of taxation, as of pointing out the mode of its operation. A great deal of misapprehension is entertained with respect to the effect of taxation; and we are ready to admit, that an exaggerated influence has often been aseribed to it. Still, however, it is impossible to doubt, that when carried to the extent to which it has been carried in this country, it is productive of many most pernicious results. It is unnecessary, in order to establish the truth of this proposition, to enter into any details with respect to the nature and operation of particular taxes. However imposed in the first instance, they must ultimately fall on one or more of the three sources of all income

The person alluded to as the writer of the Eulogy, is, we have reason to believe, the able and eloquent Chief Justice Bushe.

rent, profit, and wages; and it is obvious, that when they become very heavy, they inevitably occasion corresponding privations amongst all classes of the community. If taxes are laid directly on wages, or if they are laid on the commodities usually consumed by the labourer,-and unless they are imposed in one or other of these ways, they will very rarely be productive,-it is plain that they must either depress the condition of the labouring classes, who form the great bulk of every society, or they must, by raising wages, lower the rate of profit. Most commonly they have both effects; but in countries where the labouring classes are either very poor, or where they are as much distinguished for prudence and forethought, as in Holland or Great Britain, a tax laid on wages, or on the commodities consumed by the labourers, however injurious to them in its immediate operation, has almost invariably, in the end, the effect to raise their wages nearly in proportion to its amount. When this is the case, the tax falls wholly on the employers of labour, and consequently occasions a corresponding decline in the rate of profit.

It has been said, however, that if the principal effect of heavy taxation be merely to lessen the profits of the capitalist, or, as it is termed, to diminish the power of the rich to consume luxuries, its reduction would be of comparatively little consequence! But it is principally because a heavy taxation has this effect, that we are anxious it should be materially reduced. In our view of the matter, a decline in the rate of profit is decidedly the greatest evil of which taxation, when it becomes oppressive, is productive. The most comprehensive experience shows, that those countries in which capital is increasing with the greatest rapidity, are, cateris paribus, uniformly the most prosperous. They have a constantly increasing demand for labour; and the quantity of necessaries and conveniencies falling to the share of the labourer, is large, compared with the quantity that falls to his share in countries that are nearly stationary. But the principle of increase, by keeping up the population of every country to the level of subsistence, renders it impossible, in most cases, for those who subsist on wages, to do more than support themselves and their families. It is from rent and profit, but in an incomparably greater degree from the latter, that capital is. almost entirely formed; and there is no proposition in the whole compass of the science better established than that which teaches that the power of all countries to amass capital, and, by consequence, to advance in the career of wealth and civilization, must be dependent upon, and pretty nearly proportioned to, the respective rates of profit in each. It is obvious, for example, that

it is this circumstance, or the different rates of profit, that obtain in Holland, England, and the United States, that renders the increase of wealth and population almost stationary in the first, slowly progressive in the second, and comparatively rapid in the last. A capital of a million employed in these different countries, would, most probably, yield L.39,000 of nett profit in the first, L.50,000 in the second, and L.80,000 in the last:* And as the owners of capital must, in all cases, live upon its profits, it is plain that the surplus remaining to them, or that the means of accumulation, would, under the circumstances supposed, be in England more than double what they are in Holland, and in the United States more than double what they are in England.

It is plain, therefore, that the prosperity of a country is to be measured by the rate of profit which the capital in her possession yields, or, which is the same thing, by the capacity which she possesses of employing capital and labour with advantage, and not by the absolute amount of her capital, or the number of her people. The capital of Holland, as compared with her population, is undoubtedly larger than that of the United States; though, as the latter is able to employ her capital with infinitely greater advantage than the former, every one is ready to admit that she is also infinitely more prosperous. The progressive state is justly characterised by Dr Smith, as being, in reality, the 'cheerful and hearty state to all the different orders of the society; the stationary is dull, the declining melancholy.' as this progressive state is wholly a consequence of a comparatively high rate of profit, it follows, that whatever has any tendency to reduce that rate, ought to be most particularly guarded against.


Not only, however, has a heavy taxation the effect to check the progress of a country by reducing the rate of profit, but it has also a powerful tendency to drive its capital and industry abroad. If a country were isolated from all others, if it were surrounded by Bishop Berkeley's wall of brass, a fall of profits would be of less consequence. It would then merely lessen the rate at which capital was previously accumulating, but it would not lessen its amount, nor consequently the power of the country to feed and support the existing population. But in the actual state of the world, capital is easily transferred to other

*These numbers are not set down as being perfectly accurate, (though, we believe, they are very nearly so,) but to illustrate the principle.


countries; and whenever its transference begins to take place, to any considerable extent, it forms an almost insuperable obstacle to the farther increase of wealth or of taxation. It is not because a man cannot pay more, but because he will not pay more, that taxes frequently cease to be productive. It is very difficult, indeed, to set limits to the power of a great nation, where the security of property and the freedom of industry are maintained, to bear taxes; but, as Mr Ricardo has truly stated, there are limits, and those not so remote as is commonly imagined, to the price which individuals will submit to pay for the privilege of living, or of employing their capital, in their native country. The rate of profit is always tending to the same common level. That principle of competition which reduces the profits derived from the capital invested in different businesses carried on in the same country to the same average rate, extends its influence over all those countries that have any intercourse together. The same motives that prevent a capitalist from employing capital in any branch of industry carried on in Liverpool or Manchester, for example, unless it yields as large a profit as might be derived from employing it in London, would, provided the moral or immaterial advantages attending the investment of capital were the same, lead him to employ it in France rather than in England, if by so doing he could realize a larger return. It is, no doubt, true, that there are a variety of circumstances, such as the difference of language, the ignorance of foreign manners and customs, and sometimes the greater want of security, that in many cases, oppose the most formidable obstacles to the transfer of capital to foreign countries. But experience has shown, that a comparatively low rate of profit has invariably proved more than sufficient to overbalance these disadvantages. The low rate of profit in Holland, during the last century, prevented her capitalists from laying out any portion of their accumulations at home, and thus paved the way for the slow but gradual, and, ultimately, complete destruction of her fisheries, manufactures, and commerce. It will be singular infatuation, if we do not endeavour to profit by this awful warning. Our situation bears, in many respects, a very close resemblance to that of Holland in the early part of last century. The low rate of profit that has obtained amongst us since the peace, has already been productive of consequences that ought to excite the most anxious attention to the means by which their future recurrence may be averted.

* Principles of Political Economy and Taxation, 1st edit. p. 340.


has served to counterbalance the most extreme risk that can be supposed to attend foreign investments, and has tempted our capitalists to adventure in the most ruinous enterprises. Every foreign state, no matter what sort of security she had to offer, has been able to negotiate loans in England; and notwithstanding the immense losses that have been already sustained, there is not, with the single exception perhaps of Ferdinand of Spain, a sovereign in Europe, or a cacique in South America, whom the capitalists of London would not willingly undertake to supply with the largest sums of money on the most reasonable terms.

In our view of the matter, therefore, we are inclined to consider the heavy taxation to which we are subjected, as likely to be infinitely more injurious in time to come than it has been hitherto, or is likely to be for some considerable period. During the war, capital could not be easily transferred to other countries; and the waste occasioned by the expenses to which we were subjected, was in a great measure defrayed by the increased spirit of frugality and industry that the increase of taxation infused into all classes. But a period of peace not only enables other nations to avail themselves of those superior facilities of production, which have hitherto enabled us to support our comparatively heavy burdens; but it also affords unusual facilities for the transference of capital to them. It is true, indeed, that the disastrous effects which a comparatively heavy taxation may thus be expected to produce, are not of a description that can speedily develope themselves; they undermine by slow degrees; and any considerable discovery in the arts might serve partially to counteract them; and, by increasing our powers of production, would, in so far, lessen the pressure of our burdens. But though such discoveries may be expected to occur, it would be wrong to calculate too confidently upon them; and though they should oceur, still, as they cannot be monopolized, it is clear that a relatively heavy taxation must act as a constant premium on and incentive to the transference of capital from every country subject to its operation; and can hardly, therefore, fail of being, in the end, productive of the most disastrous consequences.

Under these circumstances, none can doubt that it is the bounden duty of Ministers to make every possible retrenchment, and to confine the public expense within the narrowest limit within which it can be compressed, consistently with the maintenance of the tranquillity and independence of the country. Nothing, therefore, could be more satisfactory or gratifying, than the statement made by Mr Canning, corroborated as it was by the pledge in the speech from the Throne at the prorogation, that Ministers had resolved to submit the consideration of all matters connected

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