PRINCIPLES OF TAXATION. 593 



absurd than the defense of a housebreaker, who, being convicted 

 of carrying off a merchant's money, should plead that he did him 

 no injury, for the money would be returned to him in the pur- 

 chase of the commodities in which he dealt." 



" It is obvious that the services rendered by the various pub- 

 lic functionaries who receive the proceeds of taxation form the 

 only return made to the taxpayers. And it is undoubtedly true 

 that these services are of the highest value, and that, when 

 neither the number nor the salaries of those by whom they are 

 rendered are unnecessarily large, they constitute a full and ample 

 equivalent for the sums expended upon them. But all beyond 

 this — all that is drawn from the people by means of taxes, to be 

 expended in maintaining unnecessary functionaries, or in over- 

 paying them — is wholly lost to the taxpayers, or is not in any 

 way compensated to them." — McCulloch. 



" We might as well say that it would be a good thing to put 

 snags in the rivers, to fell trees across the roads, to dull all our 

 tools, as to say that unnecessary taxation could work a blessing." 

 — Prof. W. G. Sumner. 



Some writers of repute have advocated the special imposition 

 of taxes on the ground that they act as stimulants to industry. 

 M. Gamier entertained this opinion. The late J. R. McCulloch, 

 who wrote learnedly on the Principles of Taxation, favored such 

 practice on the part of government, provided the taxation was 

 "moderate." But of taxation employed for such object which 

 was not moderate he wrote as follows : 



" The effect of exorbitant taxes is not to stimulate industry, 

 but to destroy it. The stimulus given by excessive taxation to 

 industry has been not inaptly compared to the stimulus given by 

 the lash to the slave — a stimulus which the experience of all ages 

 and nations has proved to be as ineffectual as it is inhuman, when 

 compared to that which the exiDcctation of improving his condi- 

 tion gives to the productive energies of the citizen of the free 

 state." 



The direct beneficial agency, not merely of moderate but of 

 most excessive taxation, as a stimulant to industry, is also obvi- 

 ously a fundamental principle in every so-called " protective tariff 

 system." 



Very curiously, the best refutation of these ideas was made by 

 the late H. C. Carey, in a Treatise on Wealth, published in 1838. 

 After indorsing the statement of Mr. McCulloch as to the influ- 

 ence of exorbitant taxation on industry, and the correctness of his 

 analogy between the stimulus afforded thereby and that imparted 

 by the lash, he antagonizes the proposition that the effect of even 

 moderate taxation imposed as a stimulus to industry can be in any 

 degree beneficial, by asserting that what is true of the influence 



VOL. XLIX. — 4*7 



