446 KEPOET— 1889. 



own ground, and sliowinsf what a dangerous implement sucli a method of 

 taxation is, how impossible it is to foresee the direct, much more the 

 indirect, effects of the measures adopted ; but behind and above all minor 

 pleas of the kind lies the claim that national as well as universal interest 

 is best promoted by freedom. Against this argument there is, so far 

 as I can see, but one valid objection. The Governments of the world 

 need money, and they can in no way obtain it so easily as by charging 

 tolls on goods that enter their territories, with compensatory excise duties 

 on those goods when produced at home. Such a course brings in revenue 

 without causing the discontent that direct taxation must necessarily pro- 

 duce, and it cannot, therefore, be lightly abandoned. This plea is 

 undoubtedly of weight ; the revenue import duty is in this respect clearly 

 marked off from the protective one by being directed solely to the attaining 

 of funds for the State, and in general, too, by aimingat getting those funds 

 from the consumer. An export duty in the form of an excise, with no 

 drawback, might, too, under the condition of the country having a ' pro- 

 ducers' monopoly,' be defended on the same grounds ; but there is 

 another part of the question which has to be considered, viz. : the general 

 effect on trade by (1) its limitation, and (2) its diversion through the 

 action of duties. The history of the reforms of English fiscal policy dur- 

 ing the present century afibrds admirable illustrations. On the first 

 point abundant evidence has been collected by Mr. Porter as to the efiect 

 of low duties in causing, or rather in not retarding, the expansion of 

 trade and consumption ; to which we have only to add that ' no duty ' is 

 the lowest one possible, and causes no interference whatever with the 

 natural progress of trade. The second is equally true. It is impossible 

 to so arrange duties that they shall not more or less disturb the propor- 

 tionate values of the taxed articles ; but every disturbance of values alters 

 the force of demand, so that ill-adjusted revenue duties have this fault 

 in common with protective taxes, that they in many cases lead the con- 

 sumers to buy a less suitable article, or to abstain from that particular en- 

 joyment ; in each case, too, depriving the State of revenue, in addition to 

 the privation suffered by the individual. 



Granting, however, the absolute necessity of customs duties at present, 

 it does not follow that important reforms could not be introduced. We 

 may notice a continuous movement in the direction of enlarging the areas 

 over which fiscal systems extend ; and each enlargement implies the 

 substitution of excise duties, or direct taxation, for import and export 

 charges. At the commencement of the last century England, Ireland, and 

 Scotland were separate fiscal areas ; so was each French province, each 

 German and Italian principality. Now we ha.ve large areas, such as 

 France, Italy, Germany, the United States, and the United Kingdom, 

 within each of which all bai'riers to the movement of goods (the special 

 case of indirect local taxation excepted) have been removed— though on 

 their borders a dividing zone of customs is still maintained. Beside these 

 great regions, severally capable of being in some degree self-sufficing and 

 economically independent, there are many smaller states and economic 

 districts with separate tax systems. Might not something be done 

 towards fiscal grouping of the latter-mentioned, and towards fiscal uni- 

 formity in the larger states ? The British Empii'e affords some striking 

 cases of tariff absurdities. Take, e.g., the West Indian Islands : there 

 are at least thirteen distinct customs areas, levying variously-graded im- 

 port and export duties. West Indian planters complain bitterly of Con- 



