T. E. Cliffe (Thomas Edward Cliffe) Leslie.

Essays in political economy online

. (page 38 of 41)
Online LibraryT. E. Cliffe (Thomas Edward Cliffe) LeslieEssays in political economy → online text (page 38 of 41)
Font size
QR-code for this ebook

principle to determine the incidence of rates in the case of the
lodgings of poor workpeople. We can only assume that the
letters of such lodgings get as much rent as they can, but its
payment is precarious ; and even if they succeed in shifting
both their own rent and the rates on their lodgers, they pay
themselves for the exemption in discomfort and injury to health.
And whether they or the lodgers are the real ratepayers, the
rate falls on a working class. Nor does the incidence of local

2 D 2

404: The Incidence of Imperial and Local Taxation

taxation on the working classes end there. Both as consumers
and as producers, they are likewise contributors to local rates
levied on shops and other trade premises, and to tolls and dues
for roads, bridges, canals, ferries, fairs, markets, and harbours.
They contribute as consumers, like other classes, when the price
of the commodities they use is enhanced by such local taxation.
And they pay much more heavily as small producers and
dealers, when their business is unremunerative, and they fail
to recover their outgoings. It has been demonstrated already
that so-called indirect imperial taxes are often crushing direct
taxes on poor working men and women with a small stock in
trade ; and local taxation, too, is sometimes the last straw that
breaks the back of the petty trader. It is, therefore, certain
that, on the whole, the working classes bear out of their scanty
incomes an amount of local taxation in rates which forms a
heavy addition to their imperial taxation. What, then, if
nearly one-half of the whole amount levied in rates is applied
in a manner which makes it, in fact, to a great extent a deduc-
tion from wages ? What if, in addition, a great part of the
remainder of the local revenue is applied to purposes from
which the owners of property derive the chief, and, in some
cases, the whole advantage, as in the case of various permanent
local improvements, and other objects of local expenditure which
raise the value of land and buildings ?

Out of nearly twenty-two millions of local taxation in Eng-
land and Wales, between seventeen and eighteen millions are
raised directly by rates, and of this amount about eight millions
are applied, directly or indirectly, to the relief of the poor.
But that the relief of the poor cheapens labour, and is to a
considerable extent taken out of wages, as Mr. Purdy and Mr.
Thorold Rogers have argued, appears incontrovertible. I by
no means go the length of saying that its operation in that
respect can be nicely calculated, or that the whole of the fund
raised for the relief of the poor — who must not in that sense be
confounded with the working classes, many of whom never get
any relief, and who are not the only classes relieved — is prac-
tically a deduction from wages. But it is certain that, were

On the WorJcing Classes. 405

it not for the poor-rate, there would be a smaller supply of
labour, and a higher rate of wages Both the preventive and
the positive checks to population would act in increased force.
There would be fewer improvident marriages and more emi-
gration, on the one hand ; and more deaths from sickness and
want, more vagrancy and mendicancy, on the other hand. If
the poor-rate were abolished, the difference would not all go
into the pockets either of landlords or farmers in the country,
or of owners or occupiers in towns ; for wages would certainly
rise in both country and town. And it follows that many
members of the working classes contribute in poor-rates to a
fund from which they not only derive no advantage, but which
is so applied that it diminishes their own earnings. They are
taxed, therefore, twice to the poor-rate ; and they are taxed
further for local improvements, from which a wealthier class
derives the chief benefit. It is not, indeed, possible to measure
exactly the amount of benefit derived by different classes from
the objects of either imperial or local taxation. And few falser
maxims of finance have ever been propounded than that of the
great French economist, M. Say, which Sir WilKam Harcourt
appears to follow, that ' the best system of finance is to spend
little, and the best taxation is that which is least in amount.'
On the contrary, as Mr. Wells observes in a Eeport on the
local taxation of New York, ' probably there is no act which
can be performed by a community, which brings in so large a
return to the credit of civilization and general happiness, as the
judicious expenditure, for public purposes, of a percentage of
the general wealth raised by an equitable system of taxation.
It will be found to be a general rule that no high degree of
civilization can be maintained in a community, and indeed no
highly civilized community can exist, without comparatively
large taxation.' Mr. Wells cites, in the same Report, the wise
remark of Mr. Jevons : — ' There is sure to be a continuous
increase of local taxation. We may hope for a reduction of
the general expenditure, and we shall expect rather to reduce
than raise the weight of duties ; but all the more immediate
needs of society — boards of health, medical officers, pubKc

406 The Incidence of Imperial and Local Taxation

schools, reformatories, free libraries, highway boards, main-
drainage schemes, water supplies, purgation of rivers, improved
police, better poor-laws — these and a score of other costly
reforms must be supported mainly out of local rates.' The
working classes undoubtedly share the benefits of such in-
stitutions, but a much larger share often accrues to a wealthier
class, whose contribution, in proportion to their ability, is
immeasurably smaller. Local improvements in towns, for ex-
ample, whether made by municipal authority or by great com-
panies, often raise prodigiously the value of the property of the
rich, while causing only loss and distress to working people,
whom they disturb from their dwellings, whose rents they raise,
and who do not remain long enough to participate in the ulti-
mate advantages.

As in the case of imperial, so in the case of local taxation,
I make no pretence to offer an exact estimate of the relative
burdens imposed on the working and other classes. But the
candid reader who has followed the investigation which my
limits have narrowly circumscribed must, I think, be convinced
that, on the one hand, imperial taxation falls with enormously
disproportionate weight on the working classes ; and, on the
other hand, local taxation, in place of redressing, greatly ag-
gravates the inequality. I will venture only to add that, under
these circumstances, to abolish the income-tax on Schedule D
(which includes many of the wealthiest and least taxed men in
the world), instead of repealing the duties on sugar and tea,
would be a monstrous injustice. In a debate in the House of
Commons on local taxation, in 1872, Mr. Rathbone, M.P. for
Liverpool, said : ' Local taxation, as at present levied, pressed
heavily on labour as compared with capital, and the wealthiest
classes were allowed to escape from paying anything like their
fair share of the rates. In the case of London, or any other sea-
port where merchants were the wealthy class, and their visible
personal estate consisted mainly of ships and stock-in-trade
of great value, the anomaly became apparent. It was this class
who directly or indirectly derived benefit from the labouring
classes, so long as they were earning wages, and escaped almost

On the Working Classes. 407

entirely when they became chargeable. From inquiry into a
number of cases he had ascertained that many large merchants
and brokers were only paying one -half to two per cent, (in
rates), while the labouring men in their employ were paying
twice to seven times as much in proportion to their income.
In a word, a merchant, or shipowner, deriving an income of
£15,000 a-year from a capital of £150,000, paid £62 in rates
on his counting-house and warehouses, and £65 on his suburban
residence assessed at £450 a-year. The young doctor or solicitor
paid £14 out of his income of £600 a-year on his £60 house ;
and the labourer £2 8s. 9f/. out of his £1 4s. a-week on his 4s.
cottage. Thus an income of £15,000 a-year paid less than
1 per cent. ; an income of £600 a-year paid 2| per cent. ; and
an income of £1 4s. a-week paid 4 per cent.'

Take also the evidence of a witness before the Select Com-
mittee on Local Taxation : —

' 2792. You are a Justice of the Peace at Liverpool ? — I am.

* 2793. Have you been a member of the Town Council at
Liverpool ? — Yes, for many years.

' 2938. ... A gentleman comes and hires an office in
Liverpool, and he makes his £50,000 a-year in it ; but he goes
and lives in Cheshire, and pays nothing to the rates of Liver-
pool beyond the rates that are levied on his office.'

The Chairman of the Middlesex Quarter Sessions, again,
stated with respect to the metropolitan county in which so
many millionaires live : —

' Unfortunately the rates do not keep pace with a man's
wealth ; there is many an individual that has £10,000 a-year,
whose rates are perhaps no more than upon a house of £500
a-year, and there is the injustice, I think, of the poor-rate.'

The levy of a large portion of the revenue by indirect taxa-
tion gives, however, the smaller incomes included in Schedule D
a claim to exemption, and the argument for it is fortified by
the fact that otherwise the income-tax must, for reasons given
above, fall indirectly on the working classes. Those classes are,
moreover, virtually subjected to a heavy income-tax (though
one which brings nothing into the treasury of the State) in the

408 The Incidence of Imperial and Local Taxation , ^c.

diminution of wages resulting from customs and excise duties
and regulations. A remodelled succession duty, equalizing the
duties on real and personal property, and raising both in the
case of remote successions, but reducing both in case of suc-
cessions to property of small value, seems the best remedy for
the inequalities of the income-tax as regards permanent and
temporary incomes — inequalities which are not peculiar to the
income-tax, being incident also to all duties on articles of com-
mon consumption. To substitute a naked property-tax for the
income-tax is to tax the houses and savings of poor working
people in order to exempt the income of the Rothschilds from



Our most distant North American colonies, British Columbia
and A^ancouver Island, move in a com'se the very reverse of
what Adam Smith has called the natural progress of opulence.
He argues that as subsistence is necessarily prior to comfort and
luxury, the cultivation and improvement of the country must, in
the nature of things, precede the growth of towns, and the greater
part of the capital of a rising community must be first directed
to agriculture, next to manufacture, and last of all to foreign
commerce. This necessary order of things is also, he observes,
in conformity with the natural inclinations of mankind ; agricul-
ture being the pleasantest of all occupations, and being unattended
with the risks of trade. From these premises the philosopher
concludes that if human institutions had not thwarted nature,
the towns would nowhere have increased beyond what the im-
provement and cultivation of the territory in which they were
situated could support, until the whole of that territory was
completely cultivated. But he points out that this natural
order of progress was inverted in the growth of all the States
of Europe after the dissolution of the Roman Empire. The
foreign commerce of these cities introduced all tlieii- fine manu-
factures, and manufactures and commerce together gave birth to
the principal improvements of agriculture. The causes which
forced the different countries of Europe into ' the unnatural and
retrograde order ' are investigated in the Third Book of the
Wealth of Nations ; and the explanation amounts in brief to
this, that the mediaeval laws and customs affecting the owner-
ship and tenure of land discouraged agriculture, while the

* Saturday lievieiv, October 25, 1862.

410 British Columhia in 1862.

inhabitants of towns arrived at independence and liberty much
earlier than the occupiers of the soil.

But how are we to account for the phenomenon that the
youngest colonies of Grreat Britain in North America are
following the same paths of progress as the feudal States of the
Middle Ages ? The very first consequence of the rush to the
mines of British Columbia in 1858 was to create the flourishing
town of Yictoria in Yancouver Island, which before was merely
a factory of the Hudson Bay Company. On the mainland, the
less populous and less prosperous town of New Westminster, the
capital of British Columbia, grew up, between which and the
mining districts are now several smaller towns. All these towns
are purely commercial. In Vancouver Island agriculture is
still in its infancy. In British Columbia it can hardly be said
to exist as yet. In the latter the colonial population, as distinct
from the native Indian tribes, consists almost exclusively of
miners, shopkeepers, carriers, or packers, town and road
labourers, and military and civil officials — the mining element
largely preponderating during the mining season. Some time
ago the Victoria ' Daily British Colonist,' a sensibly written,
but villainously printed paper, observed : — ' The town and
country begin to swarm with men, most of them inured to
labour. The majority are, perhaps, better acquainted with
agriculture than with any other art. Yet all profess to be
bound for Cariboo. Agriculture seems never to be taken into
account.' This is a state of things not only irreconcilable, in
appearance at least, with Adam Smith's doctrine, but diametri-
cally opposed to the precepts of a yet more famous philosopher
respecting a colonial community. ' The people wherewith you
plant,' according to Lord Bacon, ' ought to be gardeners,
labourers, smiths, carpenters, joiners, fishermen, fowlers, with
some few apothecaries, engineers, cooks, and bakers. But,' he
adds, ' moil not too much underground, for the hope of mines is
uncertain, and useth to make the planters lazy in other things.'

Were there no land fit for either pasture or tillage in British
Columbia, it would be needless to say anything more about
the cause of the backwardness of agricultm'e. No one now

British ColiimUa in 18G2. 411

disputes that Yancouver Island possesses, in addition to a
climate closely resembling that of England, several rich tracts
of arable and pasture land, whicb are however only beginning
to be settled. But as to the agricultural capabilities of British
Columbia, there has been some controversy, which appears to
have arisen from a confusion between the coast and inland dis-
tricts. In the former, mountains and forests predominate,
but the mines are all in the interior, and beyond the range of
the Cascade Mountains. There is abundant room for a large
farming population. In the country of the Thompson, the
Bonaparte, and the Pavilion Hivers, for example, as well as in
that of the Similkameen and of the O'Kanagan Lake, there are
great tracts of excellent land. The soil and climate are not the
obstacles to the growth of agriculture in British Columbia. The
traveller there may indeed be reminded of the gloomy horrors
of ' those matted woods where birds forget to sing,' to which
the exiles from the Deserted Village were driven ; but we have
unquestionable evidence that between the Thompson and the
Quesnelle Eivers there are vast undulating table-lands where
there is not more than sufficient wood for the settlers' require-
ments. The traveller, for instance, from Kamloops may canter
his horse for days without a check from the nature of the
ground, turning him out to grass at night. Such being the
capabilities of this country, the ' British Colonist ' impresses upon
its readers that there is a way in which a fortune can be made
in British Columbia without breasting the snow on the hills or
packing beans and bacon on their backs from creek to creek in
Cariboo : — ' That way is simply by taking farms on the road
to Cariboo. That way is by raising hay, oats, wheat, potatoes,
beans, pork, beef, and mutton. These are the commodities that
can be most easily exchanged for gold. There is not a country
under the face of heaven that now offers such brilliant induce-
ments to the farmer as British Columbia.'

How is it then that such brilliant inducements have been
held out in vain if they exist ? Is it simply an instance of the
truth of Bacon's observation, that the hope of mines useth to
make the planters lazy in other things ? Or is there anything

412 British Columhia in 1862.

peculiar to the economic condition of a gold country tending
to the discouragement of agriculture, and to the removal of
the order of industrial development that Adam Smith describes
as the natural one ? Upon Adam Smith's own principles it
follows that the industries which supply the prime necessaries
of the miner's Kfe and occupation must be the first to settle
themselves near the gold diggings, and this alone would ac-
count for commerce taking precedence of agriculture, since the
miner cannot wait for food until it is grown in his new country,
and he wants many things besides the food that the most fertile
soil can supply him with. He wants, for instance, first of all
things, whisky. ' If j^ou ask,' says a Cariboo correspondent
of the 'British Colonist,' ' why provisions are so high, look at the
nature of the first invoices which invariably follow civilization,
and the predominant article will invariably be whisky.' The
miner wants also tools, boots, and other articles, which will not
grow out of the ground, and which he must get from the mer-
chant, and not from the farmer. For this reason alone we might
look for the appearance of ships before farms in a mining colony,
and the growth of towns before the cultivation of the country.
But this is not the whole of the matter. Another principle,
known to the student of modern political economy, is on the
side of commerce against agriculture. That is, when a country
has a pre-eminent advantage over other countries in the produc-
tion of one or two commodities, it may be more profitable to
import than to produce at home commodities for the production
of which it has not so decided a superiority. It may be that
British Columbia has pastures richer than any in the British
Isles ; yet it may be cheaper to bring English cheeses and Irish
cattle round Cape Horn than to find tliem in the colony. The
' British Colonist ' speaks of Cariboo prices as offering a bounty
on farming near Cariboo, but forgets that those prices also
impose an enormous tax on the farmer, who has to pay for
labour and every other requisite at an extravagant rate. Gold
is cheap at Cariboo, and dear abroad ; it flies from the cheap to
the dear market, and the first people to surround the miner are
those who act as his ag-ents and carriers to and from foreio:n

British Columbia in 18Q2. 413

countries. Packers, storekeepers, merchauts, are the people he
deals with, because they fetch what he wants from places where
gold is comparatively scarce, and labour comparatively cheap.
The metallic riches of British Columbia make agriculture pro-
portionately costly in the colony, since every labourer looks for
a miner's earnings, and farm labourers are not to be had unless
for enormous wages. It is not, then, absence of fertile land, nor
the presence of Red Indians and mosquitoes that forms the main
impediment to farming in British Columbia ; it is the presence
of mines of still greater fertility for the time than its richest
soils. The distance of the mines from the coast, the distance,
again, of the colonial harbours from Oregon and San Francisco,
may afford protection to the colonial producer of fresh meat and
vegetables for the gold diggings ; but the growth of cereals
to any extent, or anything in the nature of elaborate agricul-
ture, is not likely to be seen in British Columbia for years. Its
exports of gold for some time will probably be great, and its
imports of provisions in exchange will as probably not be small.



In the magnificent picture of the physical geography of France,
with which the genius of Michelet has illustrated its history,
only a few harsh touches are given to the province of Auvergne,
depicted hriefly as a land of inconsistencies and contradictions,
cold beneath a southern sky, and inhabited by a southern race
shivering on the ashes of volcanoes ; a land of vineyards, whose
wine does not please, of orchards, of which distant strangers
eat even the commonest fruits, and one to whose mountains
thousands of emigrants yearly return without a new idea.
It is, in fact, a land of contrasts, physical and moral ; containing
regions whose features, social and economic, as well as geological,
are widely dissimilar. Yet the contrasts involve no real contra-
dictions. The chief physical contrast is between mountain and
plain, and remarkable economic and social diversities spring
from it. But mountain and plain are correlatives and comple-
ments, not contradictions, to one another ; and differences of
life, occupation, usage, thought, and feeling in their inhabitants
are but consequences of the same laws of human nature,
operating under diverse conditions, and afford excellent illus-
trations of the mode in which differences of structure and
character in human societies, often superficially attributed to
diversity of ancestral origin or race, are really produced.

* Fortnightly Review, December, 1874. — Some controversy exists on the point
■whether, in translating the name 1' Auvergne, the English article should be used,
as in the case of the BourLonnais, the Lyonnais, the Vivarais, the Ardennes, the
Seine, the Creuse, &c., or whether we should say simply Auvergne, as in the case
of Normandy, Brittany, Picardy, Flanders, &c. A German philologer whom I
consulted on the point, and in whose opinion a French philologer also consulted,
concurs, draws the following distinction between the cases in which the article
should be used in English, and those in which it is more idiomatic to discard it : —

Auvergne. 415

It is not the scenery of Auvergne that this essay seeks to
describe, but some of its chief economic and social phenomena ;
they are, however, so related to some of its physical features,
that the latter cannot be left altogether unnoticed. Of the
two departments into which the ancient province once called
Arvernes, from the Arverni, is now divided, that of the Cautal,
formerly La Haute Auvergne, is wholly a mountainous region ;
while the richer, more populous, and far more important de-
partment of the Puy-de-D6me — so named from the huge moun-
tain overhanging Clermont-Ferrand, its capital — contains both
mountainous districts, and also the famous plain or valley
named the Limagne, traversed by the railway from Grannat to
Issoire ; of which, thirteen hundred years ago. King Childebert
said, ' there was but one thing he desired before he died, that
was to see the beautiful Limagne of the Auvergne, which was
said to be the masterpiece of nature, and a land of enchantment.'
A century earlier Sidonius Apollinaris wrote from a country-
seat in this rich valley, 'The Auvergne is so beautiful that
strangers who have once entered it cannot make up their minds
to leave it, and forget in it their native land.' The strangers
who enter Auvergne at the present day are for the most part
either geologists about to inspect its extinct volcanoes and other
similar phenomena, or invalids on their way to the mineral
waters of Eoyat, La Bourboule, or Mont Dore, or ordinary
tourists coming to see both its exhausted craters and its baths.
The geologists and the tourists usually make up their minds to
leave the province after a few days ; and a few weeks at the
baths generally suffice to give the invalids strength and reso-
lution to return home. Least of all, perhaps, is the visitor who
comes (as has happened more than once to the present writer)

* The Bourbonnais, the Lyonnais, the Vivarais, are adjectival formations, and
therefore naturally take the article in English. The French departments, ao-ain
being the names of rivers and mountain chains, take the article in English, just as
■we say the Seine, the Loire, the Alps, the Pyrenees, of the rivers and mountains
themselves. But the only French province \Yhich could properly take the article in

Online LibraryT. E. Cliffe (Thomas Edward Cliffe) LeslieEssays in political economy → online text (page 38 of 41)