THE INCIDENCE AND EFFECTS OF IMrORT AND EXPOBT DUTIES, 447 



tinental sugar bounties, but say Utile of the export duties levied on that 

 article ia ten of the islands. Surely a fiscal union of the islands and a 

 revised tariff would be an obvious boon. An Australasian customs union 

 is a practical matter for Colonial statesmen, and it could scarcely be any- 

 thing but advantageous. Still more ambitious schemes have been pro- 

 posed for the union of even larger ' nations,' or groups of nations, using 

 the latter term in its.economic meaning. Such are the proposals to form 

 a ZoUverein of the British Empire, or of the North American Continent; 

 or, again, the plan of De Molinari and Kaufmann for a customs league 

 between France and Germany leading to a league of Central Europe. 

 Though there is no prospect of the realisation of any of the above 

 arrangements in the near future, yet the two latter would be economi- 

 cally feasible; and it may be of interest to note that the theoretical 

 inquiry into the action of import and export duties points out elements 

 of evil possibly resulting from tlieir accomplishment. If the world is 

 combined into a few great fiscal divisions, it will be much easier to use 

 the tax system as an agent for manipulating the course of trade. A 

 Central European or North American league would have a far more 

 formidable power over the conditions of supply and demand than any 

 single state could possess. Competition, both in production and con- 

 sumption, would not be destroyed, but it would be limited. A smaller 

 ' nation ' which was not in any of those leagues might find itself seriously 

 injured by the policy of its neighbours. This possible drawback notwith- 

 standing, the general results would, by freeing trade over large territories, 

 prove beneficial, being, in fact, the repetition on a larger scale of the 

 removal of provincial customs barriers, which has been the work of the 

 last two centuries. 



In another direction tariff reform may be suggested, viz., in reducing 

 the duties levied in different countries to something of uniformity. We 

 find that now a nation taxes each article at a rate suggested solely by its 

 own real or supposed need of revenue or ' protection.' Might not some 

 steps be taken towards obtaining a common standard, more particularly 

 in neighbouring countries P If the leading continental countries are 

 determined to ' protect ' agriculture, would they not at least be wise in all 

 agreeing to charge the same duty ? A customs union implies the same 

 charge in all parts of the league's territory ; and where this is not possible 

 •would not assimilation of duties be a good way of approaching it ? The 

 various standards of living and the lower position of the mass of the 

 people in some countries than in others may be urged as an objection ; 

 bat if there can be a common system of duties for Lancashire and Doneoul, 

 for Normandy and Limousin, for Westphalia and Posen, there can be°no 

 insuperable diflSculty in devising a fairly uniform standard for France and 

 Germany.' International prejudice is the chief obstacle, and proposals for 

 tariff union or uniformity seem at present rather out of place ; but then, 

 120 years ago the most sagacious and broad-minded of economists declared 

 that to even expect perfect free trade in Great Britain was Utopian. 



Practical difficulties apart, it remains true that the advantage of these 



' There is also the obvious objection tliat the i)roportion of national income re- 

 ■quircd for the use of the State is not tlie same in any two countries ; but it is met by 

 the equally obvious fact that direct taxation affords a ready means of supplementinfj 

 any deticicncy in the yield from the reformed duties on cotiimoditie.s —a policy which 

 is .sufjjrested by the history of the Eno:lisli income tax and by the employment of 

 direct local taxation in the United Kingdom, 



