ARTICLE III.—TYRANNY IN TAXATION.

The Science of Wealth: A Manual of Political Economy. Embracing the Laws of Trade, Currency, and Finance. By AMASA WALKER, Lecturer on Public Economy in Amherst College. Boston: Little, Brown & Co. 1866.

Taxation: Its Levy and Expenditure, Past and Future; Being an Inquiry into our Financial Policy. By Sir S. MORTON PETO, Bart., M. P. for Finsbury. 1863. New York: D. Appleton & Co. 1866.

Report of Hon. DAVID A. WELLS, Special Commissioner of the Revenue, to the Secretary of the Treasury. Washington: Government Printing Office. 1866.

THE events of the past six years have given, unhappily, an increased importance, but fortunately a new impulse also, to the study by Americans of the general economy of public revenue and expenditure. However a few advanced philosophers might discern the principles which control the subject, however this or that commercial class might seek to control the subject for its own interest, the theories of the one and the greed of the other seldom stimulated the public mind into earnest political action, or into positive partisan schism. Even when rival parties proclaimed opposite systems for the levy of revenue as almost their sole subject of difference, the electoral mass refused to arrange itself by the line the politicians had laid down. From the date of the Missouri Compromise the consciousness never left the popular mind, never ceased to guide the popular action, that questions of duties and bounties were after all not the main questions; so that many a man who would have put special industries under the patronage of the state, voted invariably with the party which professed to condemn such state interference; and many another who longed for the liberation of commerce was unswerving in faithfulness to the opposite faction. While the

nation found itself, with few forms and low rates of taxation, burdened with an income so excessive that no better method for disposing of it could be found than a distribution, men could not easily be persuaded that the price of their tea, or the sale of their wares, concerned them more than the black cloud gathering in the southern sky. While politicians set up financial questions for party tests, the instinct of many men taught them that if finance was important, there was something in the background more important, and impelled them to action discordant with their financial notions. Men who would avert the coming trouble by mere concession, fell in with the party which was for conceding all: men who would avert it by withstanding it, could not well act but with the party which made some show of resistance. Thus many an earnest free-trader, in Massachusetts or New York, found himself a Whig; and ardent protectionists, in Pennsylvania and Virginia, adhered by necessity to the party called Democratic.

But time and the war have changed all that. On the one hand, slavery no longer exists; slave-owning politicians are dead, exiled, or disfranchised; their former bondsmen have civil rights and political powers; of all those states whose influence was once dominant in our government, the whole social order has been overturned, the territory laid waste, the inhabitants pauperized; and whatever delays or disorders may yet attend the establishment there of such institutions as the conquering government may think fit, no brave man need fear a reassertion of the old insolent supremacy. On the other hand, our surplus revenue, our almost imperceptible taxation, have given place to a mountain of public indebtedness, and to devices of exaction remarkable for variety, severity, and magnitude of gross results. In these altered circumstances it cannot be wondered at if men, thinking the old question well fought through, begin to turn to new ones; nor if questions of finance are driven in upon their thoughts in such a way that they cannot refuse to receive them, study them, wrestle about them, and not drop them until they are settled. We believe that the current of popular thought is already setting strongly in this direction; that issues lately the greatest must soon be content to become historical; and that existing parties must

either arrange themselves about the new lines of separation, or give place to others.

Concurring in this drift of popular thought, we purpose, without discussing the broad subject of Political Economy, to say something upon this particular subject of Taxation; of the relation sustained by the State to the property of the Citizen; of the principles, whether of morals or of expediency, which should govern the assumption of private property by the State; and how such principles may be contravened in practice. Let us first introduce the works named above, to which we may have occasion to refer as we go on.

There is much besides the elegant bodily form in which Mr. Walker's book is put forth, to induce us to regard it as the worthiest contribution which American literature has yet made to the Science of Wealth. We do not use this phrase as intending the highest eulogy possible; for, with full confidence in the capabilities of the American mind, we are among those who think its greenest laurels have been won in other fields than that of Political Economy. But while the work makes little pretence of announcing new principles, or of exploring the wilderness of unclassified facts much more thoroughly than others have done, it is yet entitled to high praise as a compact, orderly, lucid statement of the best results of the best and latest thinkers in this branch of philosophy. These results, moreover, are enforced by many excellent illustrations of the author's own choosing, and are applied by him, with admirable judgment, to the special circumstances of this country and the present day. A striking and commendable feature of the book is the free use of diagrams as a means of impressing upon the mind (oculis subjecta fidelibus) important arithmetical or statistical facts, the mere proposition of which in language might wholly fail of effect. We are aware that there may be a temptation to undue use of so convenient an application of geometric figures; we remember the ingenious one that demonstrated the wisdom of the Abbé Sieyès' constitution which never worked, and the mathematical scale which that no less daring theorist, Bentham, would have presented to every witness upon the stand, that he might say to what degree upon the scale, from zero upward, his belief of

the facts testified to corresponded; and we admit that the device may mislead. But we do not think it possible to give in any other way so distinct an idea (to say nothing of giving the idea so instantaneously) of the relation, for example, between the volume of currency in a nation and its imports for consumption, as is given by the scaled lines in Diagram No. 8. And this very use of simple means for enforcing great truths, goes far to justify the title of a Hand-book, or "Manual" of Political Economy.

We cannot complete this hasty notice of a book so valuable upon the whole, so correct in general principles and special facts, so worthy to fill the educational place from which the progress of the science alone has been able to dislodge Dr. Wayland's excellent treatise, without adverting to a singular error, or rather complication of errors, upon that entangled subject, however, which excuses almost any error, of American coinage and British exchange. Mr. Walker explains the wellknown anomaly thus:

"When the American government was first formed, the old Spanish milled dollar was in use; and $4.44 were equal to the British gold coin called a sovereign or pound sterling. And Congress enacted that $4.44 should be the rate at which the pound sterling must be computed at our custom-houses.

"Since that time, important changes have taken place; the relative value [qu. values?] of gold and silver have changed. The latter has advanced, or the former declined. The American dollar, too, has been altered, so that it has a less quantity of silver; and our gold coins, also, proportionately. It therefore now takes $4.86*6, in American coin, to be equal to a pound sterling. Thus the Actual value of a pound sterling is...... Legal valuation,.....

* *

Difference,...

.$4.86.6

4.44.4

.42.2

which, it will be seen, is equal to very nearly nine and one-half per cent; so that when exchange is quoted at nine and one-half per cent, it is really at actual par. The late Secretary of the United States Treasury, Mr. Chase, tried to induce Congress to rectify the great difference between the nominal and the real value of our coins, as compared with foreign coins; but the proposal was not sustained by legislative action."-Science of Wealth, pp. 247-9.

Now let us take that rapid glance at the actual legislation of Congress upon this subject, the omission of which is hardly pardonable in an author of Mr. Walker's substantial character, and which would have saved him and his readers from serious inaccuracy.

15 to 1. (In

The earliest statute upon the coinage is that of 1792. It fixed the dollar at "the value of the Spanish milled dollar," to contain 371 grains pure, or 416 standard silver; and the eagle at 247 grains pure, or 270 standard gold; that is, the relative commercial values of the two metals were assumed to be exactly, as no doubt they were very nearly, as the time of Julius Cæsar, they were as 12 to 1.) In 1834, the gradual alteration of relative values had advanced still further. Independently of any personal recollection of that time, we are not afraid to assert that before 1834 there had been a marvelous disappearance of gold coin from circulation. We draw this inference from the record that in that year it was enacted that the gold coinage should be reduced in weight, the eagle to contain 232 grains pure, or 258 standard gold, being in the ratio of value to the silver coinage (which remained unchanged) of exactly 16 to 1. But in 1848, the California mines checked this continued appreciation of gold as compared with silver; and very soon the profuse supply turned the current back, so that an ounce of gold was worth less than sixteen ounces of silver. Of course, the silver, in obedience to a law as inexorable as gravitation, rushed abroad, or to the melting pot, and debts were paid in the cheaper currency. In 1852, there was a universal destitution of silver coin; the equivalency of the two coinages must be restored. To reverse the enactment of 1834 would have done it; but it seems a historical impossibility for governments ever to appreciate their coinage. On the other hand, Congressional financiers were possessed of a vague, though just idea, that the silver dollar was the standard, or pivot, of the system, and must not be tampered with. Leaving this, therefore, untouched, they enacted, in February, 1853, that all smaller coins should contain at the rate of but 384 grains of standard silver to the dollar; providing, however, as with an honest suspicion that there might be something not quite right about it, that these false fractions of the dollar should be legal tender for no sum above five dollars. As an inevitable result, from that day to the disappearance of all metallic money in the days of Chase, the traditional" almighty dollar," however vital in the breasts of its supposed votaries,