'One change produces another. When interest is brought down by statute, the price of land must immediately rise, and landed men will suddenly profit by the change in their favour. When it falls gently, by a natural change in the demand, the effects are more insensible; the sharper sighted only profit by it; others, from expectation of a still greater rise in the price of their lands, neglect to sell in the proper time, and may perhaps be disappointed by a new fluctuation in favour of money.

This is at present actually the case in Great Britain since the peace of 1762. I write in 1764.

These facts speak strongly in favour of Child's opinion, namely, that it is expedient to have recourse directly to statute, wherever there is a prospect of advancing the interests of trade by a reduction of interest." *

"Again, Dr. Smith having described the several legislative enactments from that of Henry VIII. to this of Queen Anne, observes upon them, All these different statutory regulations seem to have

Principles of Political Economy, book vi, ch. 5.

been made with great propriety. They seem to have followed, and not to have gone before, the market rate of interest, or the rate at which people of good credit usually borrowed.' "*

* Wealth of Nations, book i. ch. 9.

INCOME-TAX.

We are often threatened with an Income-Tax. Consider the nature and tendency of such a tax.

A TAX upon property, or a tax upon income, has the appearance of being highly reasonable. A man whose income depends on his personal industry ought no doubt to pay at a lower rate than a man whose income arises out of property, whether in land or money. In like manner, a man who has acquired property ought to pay at a lower rate than a man who has inherited it; because property inherited is the gift of the laws or institutions of society, which, therefore, have against it a large claim for support.

Supposing all these matters duly equalized, nothing seems more reasonable than that every man should pay taxes as the price of protection by the

state, in proportion to his interest in the property of the state. From the facility of collection and of augmentation, such a tax would always be acceptable to government. Why then should it not always be adopted?

It is only by the accumulation of wealth that the means are obtained of making roads, bridges, harbours, canals, useful buildings, machinery, improvement of land, and every other improvement. Every nation, therefore, ought to encourage the accumulation of wealth or capital. For that purpose government ought, as far as possible, to defray its expenses out of that part of the nations income that is meant to be spent, and not out of that part meant to be accumulated. In other words, taxes ought to be imposed on articles of luxury or vanity. When a heavy tax is imposed on a coach and six, that circumstance just makes a vain man the more to covet it. He pays the tax for the purpose of obtaining distinction; and if not spent in that way, he would spend the money in some other form of ostentation. But when a tax is imposed on every man's income, money which is meant to be saved is seized indiscriminately with that meant to be:

spent. Such a tax, therefore, prevents the accumulation of capital. It is a barbarous and unskilful mode of taxation. In certain circumstances it may be necessary, and necessity has no law. But a sum so levied annually, for a series of years, will arrest the progress of a nation in accumulating riches, and even ruin it, which levied on articles of luxury or vanity would do no harm whatever.

But there is one powerful argument in favour of an income-tax. It is said there are at present thirty-five thousand British subjects in France, who spend annually four millions sterling. Let it be supposed that in France, Italy, and the rest of the continent of Europe, the sum of six millions sterling is spent by our absentee countrymen and their families. Think what accommodation would result to Glasgow, Manchester, Leeds, and Spitalfields, from the expenditure at home of six millions sterling. Nay, consider what a boon it would be to our farmers to supply all these persons and their horses with food. They compel their countrymen at home to pay tribute to the continental farmers, weavers, tailors, shoemakers, milliners, &c. to the amount of six millions a-year. This is grossly un