PRINCIPLES OF TAXATION. 43 



provinces of America — a system filtered down through Spanish 

 traditions from the times when the imposition of taxes and the 

 regulation of local trade were regarded by cities and communities 

 in the light of an afiirmation of their right to self-government, 

 and as a barrier against feudal interference and tyranny; and 

 when the idea of protecting industry through like devices was 

 not limited as now to international commerce, but was made ap- 

 plicable to the commercial intercourse of cities and communities 

 of the same country, and even to separate trades or " guilds " of 

 the same city ? Whether such speculations have any warrant in 

 fact or not, it is at least certain that we have in the Mexico of to- 

 day a perfect example of what was common in Europe in the 

 middle ages ; namely, of protection to separate interests (through 

 taxation) carried out to its fullest and logical extent, and also of 

 its commercial and industrial consequences. 



So much for the tariff system of Mexico and its adjuncts. The 

 " excise " or " internal revenue " system of the country is no less 

 extraordinary. It is essentially a tax on sales, collected in great 

 part through the agency of stamps, and is a repetition of the old 

 " alcalvdla " tax of Spain, even to the extent of retaining its name 

 slightly modified from alca vala to " alca bala " ; and which Adam 

 Smith, in his Wealth of Nations, describes as one of the worst 

 forms of taxation that could be inflicted upon a country, and as 

 largely responsible for the decay of Spanish manufactures and 

 agriculture. Thus a Federal statute of Mexico, enacted in 1885, 

 imposed a tax of " one half of one per cent upon the value in ex- 

 cess of twenty dollars of transactions of buying or selling of every 

 kind of merchandise, whether at wholesale or retail, in whatever 

 place throughout the whole republic." Also, one half of one per 

 cent " on all sales and resales of country or city property ; upon 

 all exchanges of movable or immovable property ; on mortgages, 

 transfers, or gifts, collateral or bequeathed inheritances ; on bonds, 

 rents of farms, when the rent exceeds two thousand dollars an- 

 nually ; and on all contracts with the Federal, State, or inunicipal 

 governments." Every inhabitant of the republic who sells goods 

 to the value of over twenty dollars must give to the buyer " an 

 invoice, note, or other document accrediting the purchase," and 

 affix to the same, and cancel, a stamp corresponding to the value 

 of the sale. Sales at retail are exempt from this tax ; and retail 

 sales are defined to be " sales made with a single buyer, whose 

 value does not exceed twenty dollars. The reunion, in a single 

 invoice, of various parcels, one of which does not amount to 

 twenty dollars, but which in the aggregate exceed that quan- 

 tity," remains subject to the tax. Retail sales in the public mar- 

 kets, or by ambulatory sellers, or licensed establishments whose 

 capital does not exceed three hundred dollars, are also exempt. 



