PREFACE. IT is at all times important to form a correct estimate of the condition of our national finances. The elasticity of our industries, the stability of our political institutions, the character of our diplomatic relations, and the moral and physical strength of the Empire are all seriously affected by the extent and pressure of national burdens, and, above all, by the condition of public credit. All are interested in this great and practical question. The financial system not only determines the amount of taxation, and the best mode of collecting the revenue, but mingles itself with all national interests, and affects materially the growth of national prosperity. How many industries have been injured, checked, and often destroyed by ill-judged measures of taxation and interference. And, on the contrary, how soon did we reap the fruits of a policy more in unison with natural laws! What a difference between the slow and crippled progress of the nation before, and the rapid development of its resources since, the introduction of free-trade! And what was the cause of the prevalence of such erroneous doctrines and policy but ignorance and an entire misconception of economical laws? Study these, and the mist of prejudice and error will speedily disappear. We have now abundance of materials to illustrate the operation of such laws; and it is most gratifying to find that the numerous facts which are reviewed in the following pages corroborate and establish the dictates of economical science in a manner that will obtain for them the assent of every candid and intelligent mind in this and other countries. The state of British finances at this moment is, it is true, not quite satisfactory, entirely owing, however, to a large increase in our national expenditure. The revenue has been all that could be desired, notwithstanding the constant remission of taxes; but, ever since the unfortunate war with Russia, the wants of the nation have been so far beyond our customary income, that we have never yet seen the way to a perfect equilibrium. And the great question at the present time is, will our national expenditure permanently range at about 60,000,000l. to 70,000,000l., or shall we soon return to the ordinary peace expenditure of 55,000,000l.? The latter alternative is, we fear, very distant. If we consult the political aspect of Europe, and consider the temper of the nation, it seems idle to expect any material reduction in our army and navy. All other branches of expenditure are, moreover, constantly increasing. With the expansion of national resources, with a large increase in our population and commerce, and with possessions scattered far and wide, the duties of the State are necessarily much more ex tensive, and a larger number of officers in the various departments is required. Salaries and wages are also higher, and, if we add the increased cost of necessaries, which swell so largely the amount required for our soldiers and sailors, it will be allowed that the expenditure for all public purposes must be considerably enlarged. We must, therefore, make up our mind to an increase of taxation from past limits. Fortunately, the nation has increased resources to meet it, and it becomes the duty of those who have the administration of our finances to place the revenue and expenditure of the country in a safe and satisfactory condition. The mode in which our present taxation is raised and expended will be best appreciated if we exhibit side by side the amount and the contribution per head of the entire population, as follows: The taxes on paper and on insurance, and some of the licence duties, are likely to be abolished as soon as the finances will allow; but other taxes will probably continue to be levied with increased productiveness. The principal difficulty is with the income tax, which is maintained from year to year in a most unsatisfactory manner. As it is universally admitted that it would be inexpedient to increase the present amount of indirect taxes, we trust the attention of Parliament will be early directed to devise means for a more equitable and comprehensive assessment of the income and property tax. To abandon our present mixed system of direct and indirect taxes for any exclusive plan of direct taxes on income or on wealth does not seem desirable. We may well picture to our mind an ideal community, so enlightened as to the interests of the State, so conscientious as regards the duty they owe to it, and withal so attached and loyal to the constituted authorities, that each member will be ready and willing to pay whatever share of the expense is found necessary for maintaining order and security. Such a community will, doubtless, prefer paying the amount required in a direct manner, rather than by any indirect and shifting process; but, under present circumstances, we should scarcely be justified in acting on such an assumption. The facts and figures inserted in the essay have been derived from official and Parliamentary documents, and other works of authority. My aim has been to pre |