But the cost of production is further increased by the effects of indirect taxation. More than one half of the fifty-five millions which constitute the public revenue—twenty-eight and a half millions, arise from taxes imposed on the following articles of consumption—spirits, malt, tobacco, tea, sugar, and soap. All these are consumed principally by the labouring classes, and must be paid for out of produce in the shape of wages. Consequently, in addition to the prime cost of produce and the profit of the grower, the consumer does or ought to pay that portion both of direct and indirect taxation which is leviable according to justice, and distinctly levied by the State on the article which he purchases. To make this matter more plain, let it be understood that every quarter of wheat grown in Great Britain, before it can be brought to market, is charged with a portion of the direct taxes which we have enumerated above, and also of the indirect taxes which come through the labourer; and that these are positive burdens levied by the State for the public service and the payment of the national obligations. Now, mark the anomaly. The cry is raised for cheap bread, and it appears that cheap bread can be obtained by importing grain free of duty from abroad. A law is passed allowing that importation, and an immense quantity of corn is immediately thrown into the British markets. But on the production of that corn on a foreign soil, no such charges are leviable as exist here. Direct burdens on the lands do not, in many countries, exist; and in no country save our own are indirect taxes levied to the same amount upon articles indispensable for the labourer's consumption. The excise duty on soap alone—in 1848, close upon a million—is said to cost each labouring man in this country a week's wages in the year. What is the consequence? The foreign grain is brought into this country, and exposed at a price which immediately drags down the value of British grain. If the supply were limited, the power of the foreign grower to exact an enormous profit might in some measure tend to counteract the evil; but the supply being unlimited—not confined to one locality, but extended to two continents—there arises a competition between foreign markets for the supply, which drags down prices still more. The farmer, when he complains of the ruin which has overtaken him, and the writer who advocates the cause of Native Industry, when he points out the disastrous consequences which must arise from the pursuance of such a course of policy, are met—not by argument, but by flippant and contemptible sneers. We are asked "whether we object to have our food cheap?"—"whether plenty is a positive evil?"—and so forth: questions which only expose the shallowness and the imbecility of the inquirers. We have no objections to cheap bread—quite the reverse—provided you can have that consistently with putting the British grower upon an exact level or equality with the foreigner. Take off the direct taxes on land, and the indirect taxes which bear upon the labourer; persuade the manufacturers, now so uncommonly prosperous, to defray the interest of the national debt; clear away customs and excise duties on malt, tea, tobacco, sugar, and soap: and then—but not till then—will we join with you in your gratulation, and throw up our caps in honour of your veiled goddess of Free Trade.
Two things cannot be doubted—the existence of such burdens here, and their non-existence abroad. Well, then, let us see if Britain possesses any peculiar counterbalancing advantages. Our climate, it will be conceded, is later and more uncertain. This remark applies even to the south of England, which is but a section of the corn-growing districts. In Scotland we notoriously struggle under vast climatic disadvantages. Capital may be more easily commanded than elsewhere; but then, people seem to forget that in order to have the use of capital it is necessary to pay interest, and the payment of that adds materially to the cost of rearing produce. We are said to have more skill—and we believe it in part; but if we farm better, we farm also more expensively; and those who are now our competitors have had the full benefit of our experience without the corresponding risk and loss. As for freights, these are as low from ports in the Baltic as they are from many of our corn-growing districts to the nearest available market. If there are any other points for consideration, we shall be glad to hear them; but we know of no other: and the upshot of the whole is, that our landowners and farmers are now expected to compete on equal terms with the foreigner in the home market—the equality consisting in the produce of the former being taxed directly and indirectly to an amount certainly exceeding two-thirds of the whole national revenue, whilst that of the latter is admitted tax free, on payment of the merest trifle!
"All these," says the Free-trader calmly, "are exploded fallacies!" Are they so, most excellent Wiseacre? Then tell us, if you please, where, when, and by whom they were exploded? Admirable Solon as you esteem yourself—and we admit that you are qualified for the Bass—it would puzzle you, with the aid of all the collective wisdom you can gather from the speeches or writings of Cobden, Bright, Wilson, Peel, or your daily organs of information, to refute one single proposition which has been here advanced, or to negative a single conclusion. Do you deny that the burdens we have specified exist in Britain? You cannot. Do you deny that the wheat-growing countries from which we now receive our principal supplies are exempt from similar charges and taxation? You cannot. Do you deny the truth of the economical proposition, that all burdens and taxes imposed by the State upon any kind of produce are proper elements of the cost of production, and ought to be paid by the consumer? You do not. Well, then, will you venture to aver that, at present prices, wheat being at 42s. 2d. per quarter, according to the average of England, or at any period which you may choose to specify within the last eighteen months, the purchaser of British wheat has repaid the grower of it the whole cost of its production, comprehending the full amount of its direct and indirect taxation? If you venture to say Yes, then you are at issue, in point of fact, with your own vaunted authorities, Sir Robert Peel, Wilson of the Economist, and every writer of the best ability on your side, none of whom have supposed that wheat can be grown in this country with a profit at a lower rate than 52s. 2d. per quarter, whilst others assume the minimum rate to be 56s. If you answer No, the whole question is conceded.
The fact is, that our opponents, if they had the least regard for common decency, ought to be chary of talking about exploded fallacies. We should like to know on which side the burden of the fallacy lies? Have we not, even within the last six months, seen long and elaborate articles in the leading Free-Trade journals, assuring us that wheat was rising, and must rise to a profitable point? Was not this argued over and over again in the columns of the Economist, with such an array of statistical authorities as might have overcome the conviction of the most desponding farmer? Where are the assurances now, and the arguments to prove that a free importation of foreign corn would simply have the effect of steadying, and not of permanently depressing prices? And yet these men, as miserably detected and exposed as Guy Fawkes when dragged from the cellar, have the consummate assurance to talk about "exploded fallacies!"
But we must not suffer ourselves to be led away from the point which we were discussing. What we wish to enforce is the fact, that at present there are no fixed principles whatever to regulate the taxation of the kingdom; and we have brought forward the case of the agriculturists, not being able to find one more important or strictly apposite as a remarkable illustration of this. Taxation remains the same, notwithstanding the operation of a law which has produced a violent and permanent change in the value of agricultural produce. Now, if produce is accepted as the real thing to be taxed—and you can truly tax nothing else, since all taxes must be paid from produce—can this be just and equitable? Certainly not, if your former mode of taxation was likewise just and equitable. The agriculturist who was secured by law against unlimited foreign competition, might calculate on selling his hundred quarters of wheat for £280, on an average of years, and could therefore pay his taxes. You change the law, bring down the value of his wheat to £200, and yet charge him the same as before. How can his possibly be otherwise than a losing trade? Then mark what follows. We have said that no kind of produce whatever can be remunerative unless the consumer of it repays the grower the full cost of production, along with the grower's profit, and the whole of the direct and incidental taxation to which it is liable. In the case of corn this cannot be, because you now admit to the British market grain which is exempt from all taxes, and grown at far less cost than here, and the competition so engendered drags down the price of British corn far below the remunerative point, consequently the consumer does not pay the charges and costs of production, (taxes inclusive,) and the farmer goes to the wall. Such is the plain and inevitable course of things; and those who sneer at the tales of agricultural distress will do well to examine the matter dispassionately for themselves, and see if it can be otherwise. Very possibly it may never have occurred to them—for it does not seem to have occurred to our statesmen—that the indirect taxation of the country is at least as great an element in the cost of produce as that which is direct. Nevertheless it is so. The beer which the labourer drinks, the tobacco which he smokes, the tea and sugar used by his wife and family, the soap which washes their clothes, and many other articles, all pay toll to Government, and all contribute to the cost of the grain. And if the grain when brought to market will not pay its cost, there is an end not only of British agriculture, but of the best part of the revenue which at the present time is levied from the customs and excise!
Sift the matter as closely as you will—the more closely the better—and you can arrive at no other conclusion than this, that in the long run all taxation must necessarily be levied from produce. If so, what is the inference? Clearly this, that you cannot permanently levy taxation except upon a scale commensurate to the value of produce.
If the value of production is lowered, the power of taxation must decrease in the same ratio. Cheap bread then ceases to advantage the consumer; for that amount of taxation which was formerly levied from the production of corn in this country, must necessarily, since taxes have a fixed money value, be raised from something else—that is, from some other product—if any can be found adequate to sustain the burden. Towards this consummation we must gradually tend by the operation of an inevitable law, unless the eyes of our statesmen, and also of the constituencies of Britain, are opened to the extreme folly of the course which we are just now pursuing. In pure theory no one can object to Free Trade. It is a simple rule of nature, and a fundamental one of commerce, the free exchange of superfluities among nations. But taxation alters the whole question. We are not now, as before the Revolution of 1688, free from debt as a nation, and at little annual cost for the maintenance of our establishments. By an arrangement, in which the present generation certainly had no share, we have taken upon us the debts not only of our fathers, but of our ancestors of the third and fourth generation, and have become bound to pay the annual interest of the expenses of wars, the very name of which is not familiar in our mouths. The annual amount of taxation necessary for that purpose has heightened the price and value of all commodities in Britain, and consequently, by rendering living more expensive, has increased the cost of our establishments. How, then, is it possible, under such circumstances, to have free trade? You may have it, doubtless, in one article, or in many—that is, you may have free importations, but that is not free trade; nor can it exist until you have abolished the last farthing of customs duties at the ports. Well, then, let us suppose this done; let us assume that every article of foreign produce is admitted duty-free: the question still remains, how are you to raise the fifty-five millions for the public revenue, and a still further enormous sum for local taxation, including the maintenance of the established churches, the poor and county rates, and all the other necessary charges? It obviously cannot be done from capital, without gradually, but surely, making capital disappear altogether. It must be done from income; and income, as we have seen, is entirely dependent upon the value of produce. Agricultural production, estimated at the former prices, was calculated to amount to £250,000,000 annually. That can no longer be calculated upon. £91,000,000, according to Mr Villiers, was the amount of the depreciation in a single year; and as the net rental of Great Britain and Ireland is under £59,000,000, it is plain that, supposing all rents were abolished, the tenantry must expect to draw £32,000,000 less than formerly, a depreciation which evidently would leave no room for taxation whatever. We must, however, upon the supposition above stated, that all customs duties are abolished, (and we shall include also the excise,) deduct from this latter sum the amount of the labourer's consumption of articles formerly taxed. In order to avoid cavil, we shall estimate the number of the agricultural labourers, with their families, at 10,000,000; and as the customs and excise duties together amount to about £30,000,000, we take off £11,500,000 as the labourer's proportion. This is greatly above the mark; but it will serve for illustration. It reduces the tenant's loss, after extinction of the rents, to £20,500,000 annually.
Next, let us see what manufactures would or could do for maintaining our public establishments, and discharging our engagements to the national creditor. It will, we think, be shortly conceded, if it is not so already, that agricultural distress cannot possibly stimulate the consumption of manufactures in the home market. That market, indeed, depends entirely upon agriculture, because we have no other very important branch of produce which can furnish it with customers. Without agriculture the home trade must utterly decay; and as for the foreign trade, it is enough to observe, that in the very best year we have yet known (1845) we exported goods from this country to the value of just £60,000,000, being only £5,000,000 more than the amount of our yearly revenue, independent altogether of the large local taxation.
This is a simple sketch of Free Trade, worked out from ascertained and unquestionable statistics. The reader may like it or not, according to his preconceived political or economical impressions, but "to this complexion it must inevitably come at last." What we are doing, and have been doing for the last five or six years, is to reduce the value of all kinds of British produce as much as possible, and that by admitting foreign produce, which is in fact foreign labour, duty-free; and still we expect to maintain our revenue—all derivable from British produce—at the same money value as before! Such is the besotted state of political opinion, that a Ministry holding these views, and daily plunging the country deeper into ruin, can command a majority in the House of Commons; and whenever an intelligent and clear-sighted foreigner, like the American Minister, ventures to express an opinion, however carefully and cautiously worded, in favour of agricultural protection, the whole pack of the Ministerial press assails him open-mouthed, yelling and yelping as though he had committed some atrocious and inexpiable crime.
We have thus shown, we hope clearly enough, the dependence of revenue upon produce; a very important point, but one which is apt to be lost sight of in consequence of our complicated arrangements. People used to talk magniloquently, and in high-sounding terms, about taxed corn, and we have had ditties innumerable to the same effect, more or less barbarous, from Ebenezer Elliott and his compeers; but neither orator nor poetaster ever condescended to remark that the sole reason why duties were levied on the importation of foreign grain, was the existence of other duties to an enormous extent, directly and indirectly levied by Government from the British grower. Relieve the latter of these burdens, and he does not fear the competition of the world. But so long as you tax him who is, on the one hand, your largest producer, and, on the other, the best customer for your manufactures, you cannot, in reason, wonder if he demands that an equivalent for his taxation shall be imposed upon foreign produce; so that the economical law, and not less the law of common sense, which provides that the consumer shall pay all charges, may not be defeated—in other words, that his trade may not be annihilated altogether. We have seen articles, intended to be pungent and satirical, about the farmers "whining for protection." The writers who use such language evidently intend to insinuate that the British agriculturist is a poor weak creature, unable to cope with foreign tillers of the soil—more ignorant than the Dane, more idle than the German, less active than the Polish serf, and not near so handy as the American squatter. If they do not mean this, they mean nothing. It is not worth while replying directly to such paltry and contemptible libels, but we may as well remind these gentlemen with whom the "whining" commenced. It began with the manufacturers, who have been whining for heaven knows how many years, that bread was too dear, and that they were forced to pay high wages in consequence. The papermakers are "whining" at this moment for a reduction of excise, and the nasal notes of a good many newspaper editors and conductors of cheap and trashy periodicals are adding power and pathos to the whine. No spaniel at the outside of a street-door ever whined more piteously than Mr Cardwell is doing at this hour about reduction of the tea duties. He is absolutely not safe over a cup of ordinary hyson. There are whines about hops, whines about sugar, whines about window taxes, whines about cotton, and all Ireland is and has been in a state of perpetual whine. In short, if by "whining" is meant a complaint against taxation, we apprehend it would be difficult to find a single individual who, in the present anomalous and jumbled state of finance, could not advance sufficient reasons for uttering a cry. The only way to remedy this is to reconstruct the whole system. Let this be done on principles clear and intelligible to all men, and we are perfectly convinced that for the future there would be few symptoms of complaint. It is not the amount of taxation which causes such general dissatisfaction; it is the unequal distribution of it, rendered still more glaring by the pernicious habit indulged in by Ministers of arbitrarily remitting taxes for the benefit of some exclusive class, and laying, on others—such as the Income-Tax—not on the plea of absolute State necessity, but confessedly "to make experiments." Of course, after such all announcement, everybody thinks that he, in his own person, may profit by the experimentalising. Without asking, nothing is to be had, especially from the Exchequer; and accordingly there is hardly any duty whatever which is not made the subject of petition, and against many there is a regular organised agitation. This is a most unhappy state of things, for it is inconsistent with the security of property. Values may be raised or depressed in a day at the single will of a Minister. Those who gain become clamorous for a further concession; those who lose become disgusted with what seems to them a gross partiality. In short, we devoutly trust that the days of experiment are over; and the Whigs may be informed, once for all, by the general voice of the nation, that it is now absolutely necessary for them to undertake the task of setting the financial house in order. The best method of accomplishing this desirable end, is by sternly refusing to permit the Income-Tax to be reimposed for the fourth time upon any plea or pretext, whatever.