138 Transactions. — Miscellaneous. 



increase in proportion to expenditure. Of course, those who 

 obtain large money incomes as a consequence of the deprecia- 

 tion of gold, and indulge in a correspondingly large expendi- 

 ture, will pay taxes in proportion. The income and land 

 taxes are, however, exceptional because of the exemptions ; 

 these exemptions will become virtually smaller and smaller, 

 and more incomes and smaller holdings of land will become 

 subject to direct taxation. 



In the case of the revenue, Customs duties will increase 

 with prices ; land-tax and income-tax should increase rapidly ; 

 while railways, postal, and telegraph receipts, though made up 

 of fixed nominal charges and so liable to virtual loss, may pos- 

 sibly show expansion due to the depreciation of gold and the 

 consequent virtual reduction in the charges. On the whole, 

 and on the average, expanding revenues are to be expected, 

 though there may be at any time a temporary relapse, as 

 there may be a check to the upward tendency of prices. 



Expenditure, on the other hand, will not tend to increase 

 nearly so rapidly, for the expenditure of the Government is to 

 a very large degree made up of fixed charges, and salaries, 

 which, though not fixed, respond but slowly to the general 

 upward tendency. An era of big surpluses has already set 

 in, and for the above reasons may be expected to continue, 

 except in so far as temporary depression may interrupt them. 



One item in the Government expenditure deserves further 

 remark — that of interest and sinking fund. This amounted in 

 1901 to £1,745,616 out of a total expenditure of £6,514,049, 

 or more than one-fourth of the total. However gold may 

 depreciate, this charge will nominally be unaffected by such 

 depreciation — i.e., there will be a virtual reduction in the 

 charges. If the value of gold, e.g., were to depreciate by one- 

 half, the burden of the present debt and the debt itself would 

 be virtually reduced to one-half, and generally the virtual 

 reduction in the present debt and in the charges it necessitates 

 will be in proportion to the reduction in the value of gold. 

 For nearly a generation the colonies, as debtor nations, have 

 been hampered and their progress retarded by the apprecia- 

 tion of gold and the consequent virtual increase of debts. A 

 change has set in and must continue for no little time ; the 

 colonies will feel the burden of old debts less and less, 

 and this is already, and will be to a greater extent in the 

 future, one of the most powerful influences towards pro- 

 sperity. Creditor nations, on the other hand, must suffer ; 

 the interest they receive will represent a smaller and smaller 

 portion of the world's goods. 



Most that has been said with respect to the Government 

 will also obviously apply to municipalities and other local 

 bodies. 



