PRINCIPLES OF TAXATION. 45 



lation — small and big, city, town, or hamlet — swarms with petty- 

 officials, who are paid to see that not an item of agricultural prod- 

 uce, of manufactured goods, or an operation of trade or commerce 

 or even a social event, like & fandango, a christening, a marriage, 

 or a funeral, escapes the payment of tribute. 



In fact, trade has been so hampered by this system of taxa- 

 tion that one can readily understand and accept the assertion 

 that has been made, that people with capital in Mexico really 

 dread to enter into business, and prefer to hoard their wealth, or 

 restrict their investments to land (which, as before pointed out, is 

 practically exempt from taxation), rather than subject themselves 

 to the never-ending inquisitions and annoyances which are attend- 

 ant upon almost every active employment of persons and capi- 

 tal, even were all other conditions favorable. Mexico, from the 

 influence of this system of taxation alone, must, therefore, remain 

 poor and undeveloped ; and no argument to the contrary can in any 

 degree weaken this assertion. Doubtless there are many intelli- 

 gent people in Mexico who recognize the gravity of the situation, 

 and are most anxious that something should be done in the way 

 of reform. But what can be done ? If autocratic powers were to 

 be given to a trained financier, thoroughly versed in all the prin- 

 ciples of taxation and of economic sciences, and conversant with 

 the results of actual experience, the problem of making things 

 speedily and radically better in this department of the Mexican 

 state is so difficult that he might well shrink from grappling 

 with it. 



In the first place, the great mass of the Mexican people have 

 little or no visible tangible property which is capable of direct 

 assessment. 



Again, in any permanent system of taxation, taxes in every 

 country or community, in common with all the elements of the 

 cost of production and subsistence — wages, profits, interest, de- 

 preciation, and materials — must be substantially drawn from each 

 year's product. Now, the annual product of Mexico is compara- 

 tively very small. Thus, for example, the annual product of one 

 of the least developed States of the Federal Union — South Caro- 

 lina — was in 1888 absolutely two and a half times — or, propor- 

 tionally to area, twenty-five times — as valuable as the then an- 

 nual product of the entire northern half of Mexico ; and the 

 Argentine Republic of South America, with only one third the 

 population of Mexico, has a revenue twenty per cent greater, and 

 double the amount of foreign commerce. Product being small, 

 consumption must of necessity be also small. " The average cost 

 of living (food and drink) to a laboring man in the city of Mexico 

 is about twenty-five cents per day ; in the country, from twelve 

 and a half to eighteen cents. The average annual cost of a man's 



