Spanish alcavala, the tax to which has been attributed the decadence of Spanish manufacturing industry.* It is an old Neapolitan measure, too; and, the fact that the Neapolitans preferred to pay commutation, in lieu of it, is a striking evidence of its odious nature.† It was also attempted to be enforced in Holland; but here, again, it proved unpopular. Ruinous in its effects in one country, avoided by com

* "In consequence of the notion, that duties upon consumable goods were taxed upon the profits of merchants, those duties have, in some countries, been repeated upon every successive sale of the goods. If the profits of the merchant, importer, or merchant-manufacturer, were taxed, equality seemed to require that those of all the middle buyers, who intervened between either of them and the consumer, should likewise be taxed. The famous alcavala of Spain seems to have been established upon this principle. It was at first a tax of ten per cent., afterwards of fourteen per cent., and it is at present only six per cent. upon the sale of every sort of property, whether movable or immovable; and it is repeated every time the property is sold." (Mémoires concernant les Droits, &c., tom. I., p. 455.) The levying of this tax requires a multitude of revenue officers, sufficient to guard the transportation of goods, not only from one province to another, but from one shop to another. It subjects, not only the dealers in some sorts of goods, but those in all sorts, every farmer, every manufacturer, every merchant and shop-keeper, to the continual visit and examination of the tax-gatherers. Through the greater part of the country in which a tax of this kind is established, nothing can be produced for distant sale. The produce of every part of the country must be proportioned to the consumption of the neighborhood. It is to the alcavala, accordingly, that Ustaritz imputes the ruin of the manufactures of Spain. He might have imputed to it, likewise, the declension of agriculture, it being imposed not only upon manufactures, but upon the crude produce of land." -Adam Smith, Wealth of Nations, p. 600. Aberdeen: 1848.

"In the kingdom of Naples, there is a similar tax of three per cent. upon the value of all contracts, and consequently upon that of all contracts of sale. It is both lighter than the Spanish tax, and the greater part of towns and parishes are allowed to pay a composition in lieu of it. They levy this composition in what manner they please, generally in a way that gives no interruption to the interior commerce of the place. The Neapolitan tax, therefore, is not near so ruinous as the Spanish one."-Ibid., p. 601.

The imposition of this tax in Spain and Naples could not have been so burdensome as it proved in Holland, for the latter was a country supported by intense commercial activity, where the national prosperity depended upon the freedom of its internal and foreign intercourse. It is in such countries, and the United States is such a country, that a tax of this nature proves most unbearable. The rigor with which it bore upon the Dutch is proved from the fact that, while they were patient under Alva's revengeful cruelties and religious persecutions, the moment he laid the alcavala, or, as it was called in Holland, the tenth denier, upon them, they revolted, and their revolt finally secured the independence of the Dutch Provinces, and led to the establishment of the greatest Republic which had ever existed since the days of Rome. It is related that, at the siege of Haarlem, the Dutch insurgents, enraged at the cruelty of the besiegers, beheaded eleven of their Spanish prisoners, and with grim facetiousness threw their heads over the walls into the camp of the Spaniards, with this note: "Duke of Alva, thou hast demanded a tenth from the town of Haarlem. Here is the sum, with an extra head for the interest !" Motley, in his Rise of the Dutch Republic, characterized this tax as "monstrous," "fatal to all trade and manufactures," "productive of an entire prostration of industry," &c., &c. See vol. ii., pp. 285, 289, 328, 347, 376 and 500 of Motley's work, and the authorities therein quoted, concerning the operation of this tax.

mutation in another, and violently opposed in a third, it would seem that this measure had been on trial often and long enough to be condemned.*

2. That, in a commercial country like the United States (and this distinction cannot be made too pointedly†), the tax would be especially infelicitous. Commerce, by employing a series of middle-men-such as jobbers, brokers, and the like—undoubtedly effects a great economy; but, if this tax measure were enforced, the economy which would ensue from avoiding it, would prove to be a consideration of superior moment; for the tax would, of course, apply to every repeated sale, from the producer to the final consumer, and thus would militate largely against the continued employment of middle-men or go-betweens. And, as these classes form no inconsiderable portion of the population, and would find it inconvenient, nay, even impossible, to discover other employments at once, they would suffer, at least for some considerable period of time, great loss, aud greater inconvenience.‡

3. That such as could afford to buy in large quantities, direct from the producer, would possess an unjust advantage over those who were compelled to buy at retail; for, in the

Bor says, boek vi., bl. 261, that when the Duke of Alva imposed this tax, which might attach itself twenty times a day to the same article, and each time enhance its value, "the shops were shut, the brewers refused to brew, the bakers to bake, the tapsters to tap."-(Consult Bor, boek v., bl. 279; Viglii, Comm. Dec. Denarii, s. 6; Grattan, Hist. Holland, p. 121, Phila., 1835, and the authorities therein quoted; Prescott's Ferdinand and Isabella, vol. iii., p. 438, Phila. Ed.; Meteren, boek iv., fol. 69; and Davies' Hist. Holland, vol. i., p. 569; London, 1841.)

* "Of taxes on contracts, the most important are those on the transfer of property; chiefly on purchases and sales. Taxes on the sale of consumable commodities are simply taxes on those commodities. If they affect only some particular commodities, they raise the price of those commodities, and are paid by the consumer. If the attempt were made to tax all purchases and sales, which, however absurd, was for centuries the law of Spain, the tax, if it could be enforced, would be equivalent to a tax on all commodities, and would not affect relative prices: if levied from the sellers, it would be a tax on profits; if from buyers, a tax on consumption; and neither class could throw the burden upon the other.”—(John Stuart Mill, Polit. Econ., b. v., ch. 5.)

"Alva could not understand why the alcavala, which produced 50,000 ducats annually in his native town of Alva, in Spain, should encounter such fierce opposition in the Netherlands."-Motley, Dutch Republic, vol. 2, pp. 287, 332.

The recent distress of the Lancashire operatives is a striking instance of the difficulty and suffering attending the loss of accustomed occupations. The keen competition of trade forces men into special occupations, which, to be successful in their pursuit, require undivided attention and constant practice. When this normal condition of commercial and manufacturing countries is disturbed, the results of whole lifetimes are thrown away in a moment, and the world has to be begun over again.

latter case, the goods will have passed through intermediate hands, and, consequently, be burdened with extra taxes.*

4. That an unfair advantage would be created for those manufacturers whose goods were capable of being put up at once in packages suitable for retailing, for they would reach the consumer unburdened by the taxes of intermediate sales.† 5. That it would damage the employment of speculative capital, always an important encouragement to production, and confine commercial dealings within the limits of the immediate wants of consumers.+

6. That, in a vast majority of cases, the tax would be impossible to collect, and would thus bear unequally upon those industries which could not escape it. For instance, a small farmer would carry a dozen chickens, or a basket of eggs, or a few pails of milk, or bunches of radishes to market, and sell them. This man cannot keep accounts; and, if he could, would it not be unfair to compel him to devote a half of each day to a record of the many little trifles he had disposed of during the other half? Can we expect a Western trapper, for instance, to keep an account of the furs he sells? Yet, these small industries make up an important aggregate. Take another instance, where the difficulty of collection consists less in the trouble of recording the sales, in order to comply with the assessor's requirements, than in that of determining what a sale is. Is filling a decayed tooth a sale? Is splicing a broken tooth a sale? If not, then why should putting in a whole set of false teeth be a sale? At what number of teeth does the surgeon's labor end, and the merchant's operations begin? Is the selling of medicine a sale? If so,

A familiar exemplification of this is found in the case of hotel-keepers, and other large house-keepers, who buy their food, furniture, &c., in wholesale quantities.

Uztariz (ch. xcvi., p. 320) notices this, and such other objectionable features of this tax, enumerated in the text, as were applicable to his times and the peculiar condition of his country, and says that it encouraged importations to the detriment of native manufactures, for the foreign article came to the consumer unburdened with the oft-repeated alcavala.

This is one of the objections raised by Adam Smith. If a thousand barrels of flour were purchased on speculation, in Chicago, for instance, and before the flour came to be consumed in New-York, several fluctuations in its price were followed as they now most frequently are, by as many different sales, it is easily perceived the tax would soon get the better of the speculator, and drive him, and the employment of his capital, away.

then, does a physician make a sale, when he furnishes you with a homœopathic dose of iodine? Does a journalist make a sale, when he finds a market for his lucubrations?

7. That, as the tax is laid in money and not in kind, it would encourage bartering, and correspondingly discourage the more convenient use of lawful money; for, in the large number of cases where bartering might become the common method of transfer, the tax could not be conveniently collected.*

8. That those who produced all they needed to consume, as the farmer, who raises his own food and wears homespun clothes, would be exempted from the operation of the tax. This, besides being an injustice to all other classes, would encourage unprofitable production.

Thus, this tax would variously attack the interests of middle-men-certain buyers, certain sellers, speculators, and certain producers and all these classes would conspire, in different ways, to evade its imposition.

But, the advocates of the measure may justly reply, that, because it is an old expedient, is no reason why it should not be a good one-the tax may be scientifically correct after all. As for the alcavala, it was collected at the time each sale was made; hence, its vexatious character, and the sacrifices made to avoid it. Besides, the alcavala was a tax of not less than five per cent., in Holland; six, in Spain; and, in the latter country, often, of ten, and even fourteen; hence, its disastrous effects. And, as to its having ruined Spain, the reply is, that there were other causes at work, which contributed to reduce that country to its unhappy condition. This appears to dispose of objection No. 1. Nos. 2, 3, 4 and 5 are met very plausibly by answering, that they apply as well to many other methods of taxation as to the tax upon sales. The circumstances of the producer, the middle-man, and the consumer are changed by the operation of all tax laws, which, in the present condition of society, are capable of being practically enforced; and, as a natural consequence, those persons suffer

The Commissioner supplies instances in his Report where bartering is already the ordinary mode of exchanging commodities. One-fourth of the entire productions of the country, he estimates, "do not enter the market," and may, consequently, be supposed to be bartered, or personally consumed.

therefrom. But the statesman should be anxious less about particular interests than that the required yield of taxes be gathered with the least amount of disturbance to the interests and occupations of the whole people.

Objections Nos. 6, 7 and 8 would appear to be insuperable; but, it is contended, that, as this tax is not designed to supplant all others, but rather to be supplementary to those already in operation, except where a tax upon sales is already laid by existing laws-such as the sales by wholesale and retail dealers, by wholesale dealers in liquors, and by stock, money, and commercial brokers-those cases wherein the imposition of the tax would be either particularly oppressive to the tax-payer, or difficult to be collected by the revenue officer, could be covered by other modes of taxation-as upon production, income, real estate, etc.* This answer we must consider well founded.

In addition to the above, it is said to work well in the cases where it is already imposed; and that, if adopted as a general measure-taxing the sales of all "merchandise, produce, and other articles of traffic"-it would involve less expense in its collection than any other mode of taxation. These arguments, however, do not appear to be so convincing as the preceding ones; for, where the tax is already imposed, is just where it is most easily imposed, and easily collected, namely, -among the commercial classes; and this, of course, affords no criterion for the most numerous and important cases, of agriculturists, manufacturers, and small consumers. And again, as to its involving less expense, this could not be true while the tax was only supplementary to an extensive mixed system of taxation, already employing countless officers, and subject to an enormous expenditure.

The main argument in favor of this tax is, after all, the belief that it rests upon a principle, contained in those words of

* We have not included among what are termed the principal objections to this tax, its oppressive nature in the case of sales at auction, because we considered it subordinate to the more important ones enumerated, and not deserving to be classed among them; but its force is by no means insignificant when we consider the extent of this important branch of industry. The objection consists in the fact that the tax is extracted from necessitous sellers in the very crises of their difficulties. Nor is a sale at auction the only instance of this kind. Many sales are made without profit, and many at a positive loss to the seller.