TRANSACTIONS OF SECTION F. 877 
showsa succession of stages of expansion, shock (or crisis), contraction (or liquida- 
tion), stagnation, and renewed expansion. The crash or the Copper Syndicate, 
of the Panama Canal Company and the Daring crisis fit in with a movement of 
this kind. 
The International Institute of Statistics had propounded the question, What 
is the best measure of the economic condition of a nation? The consumption of 
coal, iron, and corn, had been suggested as the measure ; but these are partial at 
best. The credit circulation, on the contrary, embraces the whole industrial and 
commercial activity of the country, cash and credit alike, for the second carries 
with it the first. 
A remarkable confirmation of the pervading power of credit is afforded by 
diagrams showing the number of marriages and births in London and Paris, in 
France, England, Germany, Prussia, Austria, Italy, Belgium, Switzerland. These 
expand and contract with striking similarity, increasing in good times when credit 
is active, contracting in bad times when credit is diminishing or sluggish, Similar 
diagrams of the number of deaths show no such concordance with the movements of 
credit, because, unlike credit, they are largely determined independently of 
human volition, though the minimum on this curve usually occurs in a period of 
prosperity. 
FRIDAY, SEPTEMBER 18. 
The following Papers were read :— 
1. That Ability is not the Proper Basis of Local Taxation. 
By Evwin Cannan, JA. 
The assessment of the poor rate, to which nearly all other English rates are 
now mere additions, was originally founded on the principle of ability to pay, 
and that principle has never been expressly repudiated. But the successive steps 
by which it has been practically abandoned have been called for by public opinion, 
and, in spite of complaints, loud rather than dezp, the present system is generally 
approved. 
en portion of public expenditure on what are realiy national objects is still 
raised by local taxation, in order to secure economy and efficiency of administra- 
tion, The making of this expenditure a local charge is in itself a negation of 
the principle of taxation according to ability, and the only question is whether 
an attempt should be made to re-establish in each locality a principle which 
has been abandoned as regards the nation as a whole. The answer is in the 
negative. Most people migrate before reaching the prime of life, and the effect 
of their consideration where to settle is to equalise tue advantages and dis- 
advantages of different localities as places of business and residence. Local 
taxation is a disadvantage duly taken into account, and consequently, no matter 
what it is laid upon in the first instance, it tends to reduce the value of the land 
and other fixed property of the locality. This being the case, it is expedient to 
levy it directly in respect of such property, Even, therefore, if all local expendi- 
ture were of this class, ability would not be the proper basis of local taxation. 
But by far the greater portion of modern local expenditure is of a class to 
which it would be unjust as well as inexpedient to apply the principle of taxation 
according to ability, either locally or nationally. The principle is approved in 
the case of national taxation, because the benefits produced by the national! expendi- 
ture are of such a kind that their distribution cannot be traced and their amount 
measured. The ideal commonly held is practically equal distribution modified by 
differences of need, and this communistic principle has its natural counterpart in 
payment according to ability. But the greater portion of modern local expendi- 
ture is calculated (owing to the competition between localities) to produce com- 
mensurable pecuniary benefits to the owners of land and other fixed property. 
