An Inquiry into the Nature and Causes of the Wealth of Nations by Adam Smith (ebook reader macos .TXT) 📕

are unjust. But a simple augmentation is an injustice of open

violence; whereas an adulteration is an injustice of treacherous

fraud. This latter operation, therefore, as soon as it has been

discovered, and it could never be concealed very long, has always

excited much greater indignation than the former. The coin, after

any considerable augmentation, has very seldom been brought back

to its former weight ; but after the greatest adulterations, it

has almost always been brought back to its former fineness. It

has scarce ever happened, that the fury and indignation of the

people could otherwise be appeased.

In the end of the reign of Henry VIII., and in the beginning of

that of Edward VI., the English coin was not only raised in its

denomination, but adulterated in its standard. The like frauds

were practised in Scotland during the minority of James VI. They

have occasionally been practised in most other countries.

That the public revenue of Great Britain can never be completely

liberated, or even that any considerable progress can ever be

made towards that liberation, while the surplus of that revenue,

or what is over and above defraying the annual expense of the

peace establishment, is so very small, it seems altogether in

vain to expect. That liberation, it is evident, can never be

brought about, without either some very considerable augmentation

of the public revenue, or some equally considerable reduction of

the public expense.

A more equal land tax, a more equal tax upon the rent of houses,

and such alterations in the present system of customs and excise

as those which have been mentioned in the foregoing chapter,

might, perhaps, without increasing the burden of the greater part

of the people, but only distributing the weight of it more

equally upon the whole, produce a considerable augmentation of

revenue. The most sanguine projector, however, could scarce

flatter himself, that any augmentation of this kind would be such

as could give any reasonable hopes, either of liberating the

public revenue altogether, or even of making such progress

towards that liberation in time of peace, as either to prevent or

to compensate the further accumulation of the public debt in the

next war.

By extending the British system of taxation to all the different

provinces of the empire, inhabited by people either of British or

European extraction, a much greater augmentation of revenue might

be expected. This, however, could scarce, perhaps, be done,

consistently with the principles of the British constitution,

without admitting into the British parliament, or, if you will,

into the states-general of the British empire, a fair and equal

representation of all those different provinces ; that of each

province bearing the same proportion to the produce of its taxes,

as the representation of Great Britain might bear to the produce

of the taxes levied upon Great Britain. The private interest of

many powerful individuals, the confirmed prejudices of great

bodies of people, seem, indeed, at present, to oppose to so great

a change, such obstacles as it may be very difficult, perhaps

altogether impossible, to surmount. Without, however, pretending

to determine whether such a union be practicable or

impracticable, it may not, perhaps, be improper, in a speculative

work of this kind, to consider how far the British system of

taxation might be applicable to all the different provinces of

the empire ; what revenue might be expected from it, if so

applied ; and in what manner a general union of this kind might

be likely to affect the happiness and prosperity of the

differrent provinces comprehended within it. Such a speculation,

can, at worst, be regarded but as a new Utopia, less amusing,

certainly, but no more useless and chimerical than the old one.

The land-tax, the stamp duties, and the different duties of

customs and excise, constitute the four principal branches of the

British taxes.

Ireland is certainly as able, and our American and West India

plantations more able, to pay a land tax, than Great Britain.

Where the landlord is subject neither to tythe nor poor’s rate,

he must certainly be more able to pay such a tax, than where he

is subject to both those other burdens. The tythe, where there is

no modus, and where it is levied in kind, diminishes more what

would otherwise be the rent of the landlord, than a land tax

which really amounted to five shillings in the pound. Such a

tythe will be found, in most cases, to amount to more than a

fourth part of the real rent of the land, or of what remains

after replacing completely the capital of the farmer, together

with his reasonable profit. If all moduses and all impropriations

were taken away, the complete church tythe of Great Britain and

Ireland could not well be estimated at less than six or seven

millions. If there was no tythe either in Great Britain or

Ireland, the landlords could afford to pay six or seven millions

additional land tax, without being more burdened than a very

great part of them are at present. America pays no tythe, and

could, therefore, very well afford to pay a land tax. The lands

in America and the West Indies, indeed, are, in general, not

tenanted nor leased out to farmers. They could not, therefore, be

assessed according to any rent roll. But neither were the lands

of Great Britain, in the 4th of William and Mary, assessed

according to any rent roll, but according to a very loose and

inaccurate estimation. The lands in America might be assessed

either in the same manner, or acording to an equitable valuation,

in consequence of an accurate survey, like that which was lately

made in the Milanese, and in the dominions of Austria, Prussia,

and Sardinia.

Stamp duties, it is evident, might be levied without any

variation, in all countries where the forms of law process, and

the deeds by which property, both real and personal, is

transferred, are the same, or nearly the same.

The extension of the custom-house laws of Great Britain to

Ireland and the plantations, provided it was accompanied, as in

justice it ought to be, with an extension of the freedom of

trade, would be in the highest degree advantageous to both. All

the invidious restraints which at present oppress the trade of

Ireland, the distinction between the enumerated and

non-enumerated commodities of America, would be entirely at an

end. The countries north of Cape Finisterre would be as open to

every part of the produce of America, as those south of that cape

are to some parts of that produce at present. The trade between

all the different parts of the British empire would, in

consequence of this uniformity in the custom-house laws, be as

free as the coasting trade of Great Britain is at present. The

British empire would thus afford, within itself, an immense

internal market for every part of the produce of all its

different provinces. So great an extension of market would soon

compensate, both to Ireland and the plantations, all that they

could suffer from the increase of the duties of customs.

The excise is the only part of the British system of taxation,

which would require to be varied in any respect, according as it

was applied to the different provinces of the empire. It might be

applied to Ireland without any variation ; the produce and

consumption of that kingdom being exactly of tho same nature with

those of Great Britain. In its application to America and the

West Indies, of which the produce and consumption are so very

different from those of Great Britain, some modification might be

necessary, in the same manner as in its application to the cyder

and beer counties of England.

A fermented liquor, for example, which is called beer, but which,

as it is made of molasses, bears very little resemblance to our

beer, makes a considerable part of the common drink of the people

in America. This liquor, as it can be kept only for a few days,

cannot, like our beer, be prepared and stored up for sale in

great breweries ; but every private family must brew it for their

own use, in the same manner as they cook their victuals. But to

subject every private family to the odious visits and examination

of the tax-gatherers, in the same manner as we subject the

keepers of alehouses and the brewers for public sale, would be

altogether inconsistent with liberty. If, for the sake of

equality, it was thought necessary to lay a tax upon this liquor,

it might be taxed by taxing the material of which it is made,

either at the place of manufacture, or, if the circumstances of

the trade rendered such an excise improper, by laying a duty upon

its importation into the colony in which it was to be consumed.

Besides the duty of one penny a-gallon imposed by the British

parliament upon the importation of molasses into America, there

is a provincial tax of this kind upon their importation into

Massachusetts Bay, in ships belonging to any other colony, of

eightpence the hogshead; and another upon their importation from

the northern colonies into South Carolina, of fivepence the

gallon. Or, if neither of these methods was found convenient,

each family might compound for its consumption of this liquor,

either according to the number of persons of which it consisted,

in the same manner as private families compound for the malt tax

in England; or according to the different ages and sexes of those

persons, in the same manner as several different taxes are levied

in Holland ; or, nearly as Sir Matthew Decker proposes, that all

taxes upon consumable commodities should be levied in England.

This mode of taxation, it has already been observed, when applied

to objects of a speedy consumption, is not a very convenient one.

It might be adopted, however, in cases where no better could be

done.

Sugar, rum, and tobacco, are commodities which are nowhere

necessaries of life, which are become objects of almost universal

consumption, and which are, therefore, extremely proper subjects

of taxation. If a union with the colonies were to take place,

those commodities might be taxed, either before they go out of

the hands of the manufacturer or grower ; or, if this mode of

taxation did not suit the circumstances of those persons, they

might be deposited in public warehouses, both at the place of

manufacture, and at all the different ports of the empire, to

which they might afterwards be transported, to remain there,

under the joint custody of the owner and the revenue officer,

till such time as they should be delivered out, either to the

consumer, to the merchant-retailer for home consumption, or to

the merchant-exporter; the tax not to be advanced till such

delivery. When delivered out for exportation, to go duty-free,

upon proper security being given, that they should really be

exported out of the empire. These are, perhaps, the principal

commodities, with regard to which the union with the colonies

might require some considerable change in the present system of

British taxation.

What might be the amount of the revenue which this system of

taxation, extended to all the different provinces of the empire,

might produce, it must, no doubt, be altogether impossible to

ascertain with tolerable exactness. By means of this system,

there is annually levied in Great Britain, upon less than eight

millions of people, more than ten millions of revenue. Ireland

contains more than two millions of people, and, according to the

accounts laid before the congress, the twelve associated

provinces of America contain more than three. Those accounts,

however, may have been exaggerated, in order, perhaps, either to

encourage their own people, or to intimidate those of this

country ; and we shall suppose, therefore,