PRINCIPLES OF TAXATION. 771 



is finally abandoned ; while his workmen are discharged, the vil- 

 lage where the shop is located runs down, the artisans, shop- 

 keepers, and professional men connected with it complain of hard 

 times and emigrate from the locality or the country, while the 

 railroad fails to confer all the benefit to the community or profit 

 to its stockholders that might be possible. B, on the other hand, 

 exempt from the tax, keeps on working, and when hard times 

 come continues his sales and the occupations of his workmen by 

 taking five per cent profits instead of ten, and selling his goods, 

 as he can afford to, at reduced prices to meet temporary condi- 

 tions. Actual practical illustrations of the injustice and disaster 

 consequent on such discrimination in respect to tax burdens and 

 exemptions are afforded on a small scale in the history of much 

 railroad management, and to a larger extent where two nations 

 with different systems of taxation undertake to compete with each 

 other in the sale of the products of their labor in the common 

 markets of the world. We find here an explanation also of the 

 immediate beneficial effects which attended the first tentative 

 measures of reform in the British tariff instituted by Sir Robert 

 Peel in 18-12 and 1845, which, although consisting mainly in the 

 removal of numerous small but obstructive duties, nevertheless 

 started British industry forward by leaps and bounds, even before 

 the larger burdens of tariff restrictions were removed in later years. 



As the characterizations of "poll," "head," or "capitation" 

 taxes, the only possible form of direct taxation on a person, and of 

 the advantages and disadvantages of indirect taxes, through the 

 agency of which the Federal Government collects the largest pro- 

 portion of its revenues, have been already pointed out, the field 

 of discussion under this head is practically limited to the existing 

 methods of State or local taxation on property and business, in 

 contradistinction to national or Federal taxation, or to the system 

 under which nearly six tenths of all the contributions which the 

 people of the United States make for the support of their govern- 

 ments are assessed and collected. 



In Great Britain about two thirds of the revenue of the king- 

 dom is from " local " in contradistinction to " national " taxation 

 53,000,000 in 1890. Of this amount some 32,000,000, or about 

 three fifths, is raised by rates on the annual value of land and 

 house property in various localities. The next largest source 

 of local revenue is from tolls, dues, etc., from docks, piers, har- 

 bors, ferries, and markets, and yields over 7,000,000, or thirteen 

 per cent of the total. The total expenditures for local purposes in 

 1890 were returned at 67,000,000; the difference between local 

 expenditures and receipts being made up by contributions or 

 grants from the inland revenue department of the kingdom and 

 by municipal loans. The aggregate local debt of the kingdom is 



