THE IN'CIDENCE AND EFFECTS OF IMPORT AND EXPORT DUTIES. 441 



•derived from the study of special taxes can never be anything more than 

 probable. All collections of fiscal statistics need careful deductive 

 interpretation before they can be used with advantage, while analysis of 

 the fundamental conditions requires to be fully verified, though from the 

 nature of the case this confirmation is not easily to be obtained. 



The historical development of the system of international taxation 

 shows very clearly the character of the various taxes. The earliest form is 

 that of the transit chdi/, which sought to gain profit by charging foreigners 

 for the use of the roads or water-ways of a territory. Such taxes appear 

 to be an intermediate form between import and export duties, or perhaps 

 may be better regarded as a combination of both. They possessed the 

 happy feature of bringing in revenue without any loss to the State or 

 obstruction to its domestic industry. They have now, in the new position 

 of European society, ceased to possess any practical interest, unless, in- 

 deed, the rates of international railways and inter-oceanic canals can be 

 looked on as similar. Though the transit duty did not directly affect the 

 subjects of the taxing State, it must, by hindering the development of 

 the carrying trade, have reduced the gain which was derived from ex- 

 change, and in this respect it resembles its successors. Next in order of 

 time is probably the export duty or toll levied on some staple commodity 

 when sold to foreigners. Its primary object was revenue ; but it is 

 possible that even in their origin these duties were sometimes intended 

 to benefit a favoured class, by hindering the export of an article which 

 its members consumed. It is more important to notice that the term 

 ' export duty ' comprises two different kinds of tax — viz. (1), an excise 

 duty loithout a draivbach when the home consumers are not benefited, and 

 (2), a simple export duty on an article untaxed for home use — the latter 

 favours, and is generally intended to favour, the native consumer. Latest 

 in time, but now by far the most prominent, is the import duty, divided into 

 (1) revenue and (2) protective, according as the competition of homo 

 producers who are free from the tax is absent or present. Under the rule 

 of ideas derived from the mercantile system, the simple export ^ and pro- 

 tective duties w^ere objects of special favour ; but State needs and, in Eng- 

 land at least, the adoption of free trade views have now made the revenue 

 import duty the leading tax. The effects of such duties may, therefore, 

 be considered first. 



An import tax may conveniently be described as ' a charge levied on 

 a commodity on its entry within a given area or nation.' Popular 

 opinions would give a very simple solution, or solutions, of its incidence, 

 the ordinary free-trader regarding it as an additional charge on the con- 

 sumer, while the protectionist, or ' fair- trader,' would probably hold that 

 it was a toll levied on the foreign producer for the privilege of sending 

 his wares to market. Neither of these simple and easily-stated formulas 

 can be accepted, though the former is much nearer the truth. In fact, 

 the incidence of an import duty depends on a number of conditions, 

 which it is in practice very hard to estimate with any precision, but 

 which can be indicated generally. They are (1), the conditions of demand : 

 the imposition of a duty on an imported commodity will at first tend to 

 raise its price, and the increased price will probably reduce demand for 

 tlie commodity within the taxing nation ; but the nature of the want 

 -satisfied may not allow of such a course. The consumers may take as 



' Jn the case of raw materials needed for domestic manufactures. 



