TRANSACTIONS OF SECTION F. 739 



all undue inter-state competition as to price and as to the quality of the manu- 

 factures; hut hy its divided technical management it preserves a healthy rivalry 

 as to satisfactory conditions of manufacture, and as to financial results to be credited 

 each half of the Empire at the end of the year. 



This inter-state or ' federal ' monopoly organisation ofTers a new idea for State 

 activity — control by central authorities, but technical management by provincial 

 officials for provincial credit. Even where the system of provincial credits does 

 not exist, the same principle of organisation will hold good for the general details 

 of manufacture. 



As to the efl'eets of the monopoly on export trade there are two features to be 

 considered : the danger of State monopolies being aftected in their sales abroad by 

 international relationships, a factor of direct influence on exportation, and seemingly 

 quite overlooked in financial treatises ; and secondly, the fact that State monopoly, 

 by increasing home manufacture, renders the question of actual export of relatively 

 small importance. Germany, for instance, for 1893, had a surplus of imports over 

 exports of sixty-one tons ; Austria of exports over imports of sixty-seven. And 

 although this year is exceptional, the fact wiU serve to emphasise the point which 

 the foregoing years have sufficiently shown. This is in direct contradiction to 

 Koscher's opinion, and sets the question of monopoly export in a new light. 



With regard to the actual weight of monopoly taxation, the enormous revenues 

 from tobacco would seem to indicate a high rate, that is, a decidedly high price 

 tariff. Austro-Hungary's tobacco revenue for 1893 was 3i^ million dollars ; 

 Italy's 30 millions, and that of France reached the high figure of 61 millions. 

 Yet everywhere we find cheap tobaccos for the small pocket-book. In Austria 

 in 1893, for instance, 50 per cent, of the cigarettes sold (retail) were at 2 c. per 

 package of ten ; 50 per cent, of the monopoly cigars sold (retail) were at f c. each 

 and under ; 54 per cent, of the imported Havanna cigars were at 4| c. each ; 

 73 per cent, of the smoking tobaccos were at 22 grammes for 1 c. 



This surprising condition of aflairs largely explains itself by savings through 

 avoiding unnecessary competition, and by increased earnings otherwise going to 

 different classes of capitalists (box-makers, lithographers, etc ). And in fact, the 

 actual results of a close comparison of monopoly and competition tobacco prices 

 give results relatively not unfavourable to the former. Monopoly taxation does 

 not appear, therefore, to be at all as high as the large revenues would lead us to 

 suppose. 



Finally, as to the question of a progressive indirect tax, a tax said to be possible 

 only under a State monopoly. An investigation of the direction of tobacco con- 

 sumption under a monopoly shows such a tax to be prima facie improbable, since 

 the consumption tends so strongly to concentrate itself, as indicated, on very few 

 grades, these being, moreover, mamly of the cheaper qualities. On the other hand, 

 these latter qualities, representing machine work, leave a larger tax margin than do 

 the finer qualities consisting mostly of handwork. 



The assumption then supporting the possibilities of a progressive rate, viz., 

 . that the tobacco consumption will show a gradation as to quality somewhat like 

 the schedules of a progressive income tax, cannot stand. And, on the other hand, 

 given the condition of a large revenue, for the same reasons the tax prices miist be 

 set simply according to fiscal principles, that is, according to what each quality 

 will bear — a good principle for fiscal manipulation, not for the realisation of the 

 idealised gradation. In fact, between such a principle and the latter there is no 

 direct connection. And in face of the above-mentioned tendency of the consump- 

 tion to the cheaper qualities, a progressive rate will be in general possible only 

 under a very low revenue tariff. 



These conclusions, the author hopes, will be found to possess a more or less 

 general validity making for a better understanding of the peculiar position of State 

 industries. For fuller details see the author's paper in Schanz's ' Finanz-Archif,' 

 1897, i., p. 198 et seq. 



4. Statistics of Deaf-Mutism in Canada. By G. Johnson. 



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