Union with itself, at different periods. Florida and Mississippi follow in the train of England, and stand, at the present moment, in a state of repudiation. California now does the same, while Massachusetts enjoys a credit equal with that of any country of the world. The Federal Government extinguished its debt, in 1835, by help of the tariff of 1828; whereas, in 1842, with no war upon its hands, it was unable to borrow at any rate of interest. The strength of the State grows with growth in the value of land and labor, and with increase in the proportion borne by fixed to movable capital. American policy tends towards increasing the movable capital at the expense of that which is fixed, and hence the growing weakness of the State.

§ 15. The views thus presented, differing wholly from those of the Ricardo-Malthusian school-trade being there regarded as first among the pursuits of man, and slavery, as the goal at which he must arrive-we may, for a moment, turn to one of its most distinguished professors, for the reasons offered in support of the doctrines therein taught.

"Indirect taxes," says Mr. McCulloch, "have been the greatest favorites of princes and subjects;" "there being," as he thinks, "very sufficient reasons for the preference"-constituting, as they do, "an ingenious plan" for extracting from the people a portion of their substance, leaving their "prejudices" untouched.*

In support of this view, he quotes from the Marquis Garnier, who highly approves of filching the means of maintaining governments-it being "in the midst of the profusion of the repast, that the taxes have ever been and still are paid-the public treasury thus finding a source of profit in the provocatives to expense excited by the gaiety of feasts."'

This is, certainly, a very proper argument, to be used by those who regard man as a mere beast of burden an animal that must be fed, that will procreate, and that can be made to work; but, how far it is a proper one to be addressed to the thinking MAN-the being created in the image of his Maker, and endowed with faculties qualifying him for obtaining dominion over nature, the reader may determine for himself.

Mr. McCulloch is opposed to direct taxation in general, but

* MCCULLOCH: Taxation and Funding, p. 147.

more especially to taxes on land, as "perpetual premiums" to "those who had been idle and improvident"-leaving their properties unimproved; while their neighbors had been causing theirs to produce twenty, thirty, or forty bushels to the acre, where five, six, or eight, had been, before, the usual crop. The reply to this would seem to be found in the fact, that the most rapid augmentation in the productiveness of agriculture, recorded in British history, is that of the half century preceding the abolition of the land-tax-that period, too, having been marked by a great improvement in the condition of the agricultural laborer. Since then, direct taxes have disappeared, but the rental of the land of the United Kingdom has remained, for forty years, nearly stationary; while the condition of those who plough the land has much deteriorated.*

Turning to the continent, we find land increasing rapidly in value, where taxation is becoming more and more direct, while diminishing, in all of those in which it is becoming more indirect. Looking to Italy and Greece of ancient times, we see direct taxation to have been in use when land was rising in value, and man was becoming free-indirect taxation having taken its place, as land became consolidated, and man became re-enslaved. Mr. McCulloch's theory would seem, therefore, to be little more than a record of the phenomena observed in all countries, in which, as now in Britain, land was becoming monopolised, and small proprietors were disappearing from the land. The owner of large estates can afford to be "idle and improvident;" small proprietors cannot.

Taxes on land being thus objectionable, Mr. McCulloch finds no substitute in those which might be imposed upon stock in banks and insurance companies-holding, that they "would really be a tax on the property of some of the most useful and industrious classes of the community." Such taxes, tempting many persons to keep their capital idle at their banker's, or in the strongbox, would, as he thinks, do an injury to the industrious classes, without securing any corresponding advantage to the State."+

* See ante, vol. ii. p. 95. The land of England was assessed, in 1814-15, at £34,330,463, and that of Scotland at £5,075,242-making a total of £39,405,705. In 1848, the total was £47,982,221. In the same time, the land of Ireland had greatly declined.

† On Taxation and Funding, p. 117.

1

Taxes on the accumulations of the past, tending, thus, in Mr. McCulloch's view, to produce idleness and improvidence, he turns, necessarily, to interferences with commerce, and taxes on the labor of the present, for the means of making working people more industrious. It being, as he thinks, "abundantly certain, that taxes, when judiciously imposed, and not carried to an oppressive height, occasion an increase of industry and economy, * he finds, in contributions by malt, beer, cloth, and other articles, on their way from the producer to the consumer, "the fairest, most equal, and least burdensome of taxes"- quoting Arthur Young in support of the idea, that the Dutch, "deservedly esteemed the wisest nation in Europe," have been "enabled to preserve their industry," under heavy burdens, "principally by their having adopted this mode of taxation." It may, however, as he says, "be doubted, whether the taxes on tobacco and spirits have added materially to the wages of the laborer." Equally, as we think, might it be doubted, if the necessity for carrying all his products to his master, leaving to him the work of distribution, "added materially to the wages" of the slave of Brazil, or Carolina.

The taxation of the United Kingdom, including poor-rates and local expenditures, being, according to Mr. McCulloch, £73,000,000, and largely exceeding the rental of landed property, were the whole confiscated, it would still, as he says, "be necessary to raise several millions a-year by additional taxes." The question, however, is: Would the amount of taxation be one-half of what it now is, or even one-third of it, had those who have directed the affairs of government, been compelled, at all times, to go directly to the people for the revenue they needed? Would the American Revolution, or the series of wars that terminated at Waterloo, have taken place, had it not been that ministers were, by means of the system advocated by Mr. McCulloch, enabled to filch from the people, the contributions that they dared not ask from the holders of fixed capital? Had there been no such wars, should we now see Great Britain-wielding, by means of her machinery, a power of hundreds of millions of men- struggling under a weight of

* On Taxation and Funding, p. 6. Ibid, p. 93.

Ibid, p. 241.
Ibid, p. 51.

taxation so terrific? Would the doctrines of over-population, and eventual slavery, ever have been invented? Could it be, that, in this enlightened age, we should have distinguished economists assuring us, that "government has done its duty" when it has found the things best suited to bear taxation *" equality of contribution" being left wholly out of view, as "an inferior consideration ?" Assuredly not. Sound morals require, that every man should contribute his fair share, towards the maintenance of the government that affords protection to himself and his, in the exercise of their rights of person and of property. Who, however, are the people that pay taxes on malt, hops, tobacco, sugar, tea, and coffee? The men who labor, and have little to protect. Who is it that escape taxation? The men who have stocks and bonds-representatives of the accumulations of the past. The whole system tends to prevent capital from becoming fixed-to increase the proportion that remains movable to augment the necessity for interferences with commerce; and the result is seen in the payment of an amount of taxes that is greatly more than the whole annual value of the land. Had the system looked to the maintenance of commerce, in accordance with the advice of Adam Smith, the land would now be twice as valuable, while taxes would not be a fifth as great.

§ 16. Beginning, as did Messrs. Malthus and Ricardo, with the false assumption that men began with the rich soils of the earth, they were, of course, led to find "a fear of want" accompanying that growth of wealth and population which produced a necessity for resorting to poorer soils, with constantly decreasing return to labor. Such being the great law of God, it followed, inevitably, that the time must arrive, when the laborer, pressed by famine, would gladly sell himself, his wife, and children, to the land-owner-slavery being the goal at which society was destined ultimately, and certainly, to arrive. Hence it is, that Mr. McCulloch finds in fear, the means of stimulating men to action leaving wholly out of view, the idea of hope for further

improvement.

Adam Smith believed in commerce. His successors worship at * On Taxation and Funding, p. 20. † Ibid, p. 18.

the shrine of trade. The one held, that the nearer the consumer and the producer, the larger must be the production, the greater the power of accumulation, and the greater the competition for the purchase of the laborer's services. The other holds, that ships are more productive than cornfields—the former increasing in their powers from year to year, while the latter as steadily decline. The more distant the producer from the consumer, and the more numerous the middlemen, the larger, as we are assured, must be the quantity of things produced-consumers and producers finding the demand for their services increasing, as they become more widely separated. The one desired to produce competition for the purchase of labor; and therefore did he denounce the system based upon the idea of cheapening the raw materials of manufactures, labor included. The other-seeking to produce competition for the sale of labor-advocates a system based upon cheapening corn and cotton, and requiring "a cheap and abundant supply of labor," by means of which to convert them into cloth.*

The lower the price of land and labor, the greater must be the necessity for indirect and fraudulent taxation. The higher those prices, the greater must be the power of a government, openly and honestly, to claim that both shall contribute to the expenses of the government; and the higher will the community rank among the nations of the world. Centralization tends in the direction of the one, while concentration leads towards the other.

§ 17. The road towards freedom lies in the direction of rents and taxes, certain in amount-leaving the owner, or occupant, free to determine, for himself, how he shall employ his land, or his time, and what he will do with the product, when obtained. That tending towards slavery, is found in the adoption of taxes on property in motion-the malt and the hops paying in the form of a charge on beer; sand, and other materials, paying in that of one on glass. These are indirect taxes; but a higher form of indirection, would be found in the interposition of a fluctuating money value. -the beer and the glass paying more, or less, as prices changed from day to day. Such, precisely, was the mode of the Spanish alcavala, by means of which the State obtained a

* See ante, vol. i. p. 239.