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ECONOMISTES FINANCIERS.

LECTURE
V.

taxation in

France ard

England.

LECTURE V.

Systems of THE distinctive peculiarities of the systems of taxation, which prevailed in France and England respectively, will in some measure account for the different tendencies of speculative inquiry in the two countries on questions connected with national wealth. In France, a considerable portion of the taxes were direct, in England, on the other hand, they were chiefly indirect; in France, they were imposed at the arbitrary discretion of the king's council, in England, they could not be levied without the consent of the representatives of the Commons, and an instance occurs, as early as in the reign of Henry VII., of a general subsidy having been refused. (Roper's Life of Sir Thomas More.) Accordingly, we find the investigations of the earliest writers in France more immediately directed to the circumstances which regulate the distribution of wealth, as they perceived that the burdens of taxation were distributed most unequally whereas, in England, where the taxes. were mainly levied indirectly upon articles of consumption, and so bore a definite proportion to the means of each contributor, as measured by his consumption of such articles, the determination of the laws which regulate the production of wealth, seems to have been a subject of more immediate interest. Thus the earliest French writers, in the collection of the works of the most distinguished economists of the French and English schools, now publishing in Paris, are classed under the head of "E'conomistes Financiers. Financiers," including Le Maréchal Vauban, Le Sieur de Boisguillebert, John Law of Lauriston, as a natu

Écono

mistes

LE MARÉCHAL VAUBAN.

V.

131

ralised French subject, Jean François Melon, Law's LECTURE secretary, and M. Dutot, the cashier of the Company of the Indies. The three last names have already been alluded to in the preceding Lecture.

dal system

The traditions of the Feudal System were not Traditions entirely extinguished in France until the revolution of the feuof 1789. Amongst these was the legal inequality of in France. the Tiers Etat, which comprised all the productive classes of the nation, and its subjection to a system of direct taxation, from which the nobles and the clergy were both exempt. The Taille, for instance, the Capitation tax, the Vingtièmes, and a host of petty imposts, bore almost exclusively upon profits, and rents contributed little or nothing to the state. Of course there might be some exceptions; but this would be the general rule. The tendency of such a system was clearly to check the accumulation of capital, and so to limit the means of setting productive industry to work, the inevitable result of which would be a retardation of prosperity, and most probably an actual impoverishment of the country. Vauban was convinced by a variety of facts, which a Vauban. course of statistical inquiries had brought under his notice, that the continuance of the existing system, such as he found it, would be most ruinous to France, and he therefore proposed to substitute, in the place of the Taille and other taxes, a Dîme Royale, the king's tenth, similar to the clergy's tenth, to be levied in kind on the annual gross produce of the land, and in money on the annual gross income from personal property and other sources.

d'une Dîme

It is not necessary to examine the details of his plan, which he termed "Projet d'une Dîme Royale," Projet as to its applicability to further the end which he Royale. had in view. Sir James Steuart, in the 4th volume of his Principles of Political Economy, has assigned a Steuart's chapter to its examination, and points out a variety Economy.

Political

132

V.

PROJET D'UNE DÎME ROYALE.

LECTURE of objections to it. There can be no doubt that had Louis XIV., to whom the Maréchal presented a copy of his work, entertained a favourable view of the principles advocated in it, many modifications would have been found necessary in executing the scheme. But the work did not secure for its author the consideration to which he was entitled. It was published by him in 1707, without his name, and its sale was immediately prohibited by an order of the king's council; and, if we are to believe the memoirs of the Duc de St. Simon, the illustrious author, to whom both his sovereign and his country were in other respects so deeply indebted, met with so ungracious a reception from the king, that he withdrew in grief and disappointment to his château, where he died shortly afterwards. His work, however, with all its defects, is still valuable, from the information which it supplies in regard to the condition of the industrious classes in France, towards the conclusion of the reign of Louis XIV., and the general embarrassment then pervading every rank of society.

Reign of

Louis XIV.

General misery in France.

"From the researches," Vauban writes in his preface," which I have been enabled to make during several years since I have given attention to the subject, I have observed, that of late about one-tenth part of the people is reduced to beggary, and actually begs subsistence; that of the nine other parts, there are not five which are able to assist the first part, because they are themselves almost reduced to the same unfortunate condition. Of the remaining four parts, three are in any thing but easy circumstances, and are hampered with debts and lawsuits; and the tenth division, in which I include the military, the legal and clerical professions, all the hereditary nobility, the nobility of distinction, all the civil and military officials, the merchants, and the tradesmen of property, does not comprise more than 100,000 fami

LE SIEUR DE BOISGUILLEBERT.

V.

133

lies; and I think I shall be within the mark in say- LECTURE ing, that there are not ten thousand of these, great or small, whose circumstances are in every respect easy; and of this latter body, the majority, in some way or other, with the exception of a few merchants, receive payments from the Crown."

Boisguille

Almost contemporaneously with the interdict against the sale of Vauban's work, the resentment of the ministers of Louis XIV. was directed against the Sieur de Boisguillebert, one of the chief magistrates of Sieur de Normandy, as the author of a work entitled "Fac- bert tum de la France." The practical object of this treatise was to recommend the adoption of certain modifications in the mode of levying the taille, and the substitution of a capitation tax of one tenth, payable in money upon real and personal property, in lieu of the indirect taxes usually farmed out to contractors. This alteration, it was contended, would secure a large increase in the revenues of the Crown, whilst the demands upon the funds of the subject would at the same time be much reduced. With these changes it was proposed to combine the abolition of all duties upon the transport of commodities from one province of the kingdom to another, as well as upon the exportation of them, and the reduction of the duties upon foreign imports. "Wealth," he writes, "consists in the continual exchange of the surplus which one individual possesses for the surplus which another possesses; for the moment that the means of effecting this exchange are wanting, a country becomes distressed in the midst of abundance. Now such will be the result whenever the just proportions of commodities are destroyed, and whenever one party to the transaction cannot effect an exchange, except at a loss, in respect of the cost of production; in which case commerce is suspended and distress ensues, for as the opulence of a state

134

V.

Taxes on agricultural produce.

TAXES ON AGRICULTURE.

LECTURE consists in the maintenance of all the various departments of labour, and as they reciprocally depend upon one another for support, the depression of one branch of industry acts injuriously upon all the others." (Chap. X.) Such De Boisguillebert contended had been the result of the heavy taxes levied upon agricultural produce. They had raised the market price so high that the consumption of wheat, wine, &c., was checked by it, and the growers were obliged to abandon their produce to the tax-gatherer; and as the cessation of consumption entailed as a necessary consequence the cessation of production, with every diminution of production there was a corresponding diminution of national wealth. "How can the peasant of Picardy or Normandy afford to drink the wine of Anjou or the Orleanais, when he has to pay twenty or twentyfour sous for what the wine-grower sells for a single sou? And how can the wine-grower continue to cultivate the vine, when the single sou, which he receives for his produce, will not defray the expense of cultivation? One effect of levying indirect taxes upon the consumption of domestic produce is to dry up the sources of the direct taxes; and whilst a great portion of the indirect taxes is lost to the Crown from the expenses of collecting them, they have checked cultivation to that extent, that the Crown has lost six times as much by the diminution in the direct taxes on produce (la taille), as it has gained by the indirect taxes on consumption."

We find that at this time a growing disposition existed in France to attribute the distress of the country to a deficiency of money. This notion De Boisguillebert combats as full of absurdity, pointing out, that although a country like Peru, whose only produce was silver, and where silver was used not as a measure of exchangeable value, but as the only article of exchange, the people would die of famine, if they had no silver, since they would have no

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