form our several constitutions.

It is the convention that determines in what manner, and by what means, the general welfare shall be consulted. It is the convention which traces out the various political institutions necessary to act in concert for the promotion of this great object; and what powers and authority it is expedient to withhold, or to delegate and entrust for this purpose. It is the convention that prescribes in what manner the legislature, executive, and judicial departments, shall act in promoting the general welfare; and limits their powers and authorities for this purpose, tracing out the precise course they are required to pursue. The federal legislature, and the state legislatures can act upon the general welfare, no otherwise than the convention has permitted them to act, by the terms of the constitution which that convention has drawn up, to mark the bounds and limits of the authority so delegated and entrusted. If the general welfare at any time, should call for an enlargement of the authority thus committed, the people alone have the right of enlarging it. The agent cannot substitute himself upon all or upon any occasion, for his principal, and extend his own authority at his own pleasure. The United States' constitution contains the necessary provisions for any required amendment.

CHAPTER 22.

OF TAXES: DIRECT, AND INDIRECT.

It has been supposed that taxes have no tendency to im poverish a nation, since they are expended at home among the people from whom they are exacted. It is (say the supposers) taking with one hand and returning with another: nay, the greater and more liberal the expenditures of the government, the more is industry of all kinds, fostered and promoted.

This is a most convenient theory for governments of every description, and most sedulously has it been propagated. On the contrary, I assume this position, viz:

When a man is deprived of a part of his property without an equivalent in return, he is the poorer for it. I do not know how to prove the truth of a proposition as self evident without argument, as any argument can make it. I will therefore take for granted, that it is so.

Suppose a man should drop a dollar out of his hand into the river or that he should lose it at play: or that his pocket should be picked of a dollar: or that he gave it in charity: or that he paid for a seat at the theatre: or for a bottle of wine which he stood in no need of: or that he was taxed by government to that amount:-in all these cases, the result is exactly the same; his dollar is gone, and he has received no equivalent; nothing remains to shew for it.

Is not this different from his purchasing a pair of stockings, or a dish of meat for his family's dinner, or a book for his son at school, or any other article of absolute necessity, or of real, substantial utility?

Suppose the tax-payer to deal in an article wanted by government, and that the dollar so paid by him in taxes, is laid out by the agents of government at his store-is it not clear that he gains nothing by this but the profit on his dollar's worth of goods? He gives two values each of a dollar in worth, and he receives one. Whereas, in the ordinary transactions of trade, he gives one value and receives one.

Government receives a sum in taxes; purchases gunpowder with it, and fires it away at sea. How am I the richer, for this gunpowder being thus consumed? The powder maker who pays in tax one dollar, and gains in profit one hundred dollars, may be ninety-nine dollars the richer, but the public is poorer by one hundred.-All consumption that produces no manifest, substantial tangible equivalent in is place, is so much lost, whether the consumption be individual or governmental.

I do not mean to say, that such consumption is not sometimes expedient, sometimes absolutely necessary; as when we eat or drink to sustain nature; or wear cloathing suitable to our station; and so on. In like manner, as government is necessary to society, the reasonable expences of government are so too. Still, no man is enriched by consumption; the more we are compelled to consume of the products of our industry, the poorer we are; the less we are compelled to consume, the more remains to us, to exchange for other values which we stand in need of. The products purchased by taxation, are lost to the nation; they are consumed-destroyed: the nation is the poorer by reason of this consumption or destruction, however necessary it may be. Is a man the richer because his situation in life compels him to live

at a great expence? However prudent or even necessary his expences may be, he is the poorer at the end of the year in consequence of that necessity. Suppose a tailor to get into a law suit, and to pay a lawyer fifty dollars for successfully conducting his cause or to break his leg, and pay a surgeon fifty dollars for setting it; these payments are prudent, and the services rendered fully justify them; but is he the richer for these misfortunes? Even though the lawyer and the surgeon should lay out the fifty dollars with him for a suit of cloaths, it is no compensation, for he furnishes the cloaths after having furnished also the money that pays for them. It is melancholy to think that these positions should require to be gravely argued; but the present state of popular opinion requires it. Let it therefore be remembered, that if government receives in taxes a million for instance, and lays it out at home, government receives two values, and the nation one. This is not the way to enrich the nation, but the contrary. When my neighbour deals with me, or I with him, the operation on both sides is value for value, and each is enriched by it.

The same reasoning applies to national debt. This consists of values, the produce of individual industry converted into money, paid over to government, and consumed, expended, destroyed; leaving no trace or memorial of value in return. This expenditure may or may not have been necessary: still, these values so received are in either case annihilated: they might have been laid out by the individuals who contribute their share of this debt, in augmentation of capital; and have per manently encreased the productive industry and the population of the country; but they are dissolved,

And like the baseless fabric of a vision

Leave not a wreck behind.

Hence I conclude, that all taxation encreases the number of unproductive consumers, and the amount of unproductive consumption; and tends, not to enrich, but to impoverish a nation. Hence as taxes are an evil, the fewer we have of them and the smaller in amount, the better. That government is best, and those political institutions are most eligible, that are efficient at the cheapest rate. There is no more reason why we should pay our public servants extravagantly, or maintain more of them than our public wants require, than our private servants. An

establishment adequate to our wants and no more-a compensation that will ensure the best talents and reasonably compensate the services rendered, and no more-are the guiding maxims of common sense, both in the one case and the other.

Let us see then, what are the general principles that ought to govern taxation, so that a burthen necessary to be borne, be not unnecessarily encreased. The elementary character of these lectures forbid me entering into details. The methods of estab lishing in practice, those principles by which the practice ought to be guided. would require much laborious and minute investigation which cannot be pursued here. But we have a right to expect all the necessary knowledge both of principle and detail in the public agents whom we employ to manage the fiscal con-cerns of the public; and it is high time that we should shake off the childish delusion, that a man however ignorant he may previously be, acquires of course, suddenly and by intuition, all the knowledge necessary to conduct a department of any kind when he is once placed at the head of it. This may do very well in the old European governments of legitimacy, where places and honors are not bestowed as the rewards of appropriate knowle edge or technical merit, but it is a disgrace to a republic to follow this absurd practice. It will however be followed among us, until the principles of Political Economy are more generally disseminated and understood; the necessary knowledge will then be exacted and obtained; but not before.

Dr. Adam Smith in his Wealth of Nations, book 5, chap. 2, part 2, lays down four general maxims as to taxation, viz:

"1. The citizens of every state (subjects he terms them) ought to contribute to the support of government as nearly as possible in proportion to their respective abilities: that is, in proportion to the revenue they respectively enjoy under the protection of the state." This proportion I shall contend, ought not to be direct, but progressive in proportion to income. For instance, suppose a tax amounting to one tenth of a man's income: this would deprive a man of one hundred a year of necessaries, but would hardly be felt by a man of ten thousand a year. It is a great evil to be deprived of any of the necessaries of life: it is a hardship to be deprived of any of the comforts and conweniencies of life: it is much less so to be deprived of more

superfluities. The burthen therefore actually borne does not depend on the mere pecuniary estimate.

Again. Suppose one man of sixty years has a salary office of one thousand dollars a year, and another, one thousand dollars a year rent: to tax each thousand dollars to the same amount would be manifest injustice. The one is earned by the labour of the person who receives the salary: the other is earned by no labour at all: the one is worth twenty years purchase, the other about six. The one requires the receiver to lay up one half for the future support of his family, the other enjoins no such necessity, for his family will enjoy the income by descent.

"2. The tax which each individual is bound to pay, ought to be certain and not arbitrary."

"3. Every tax ought to be levied at the time and in the manner in which it is likely to be most convenient to the contributor to pay it." This is very little consulted in the excise laws of Great Britain: a system efficient at the expence of intolerable vexation.

4. Every tax ought to be so contrived, as to take out and keep out of the pockets of the people, as little as possible over and above what it brings into the public treasury. A tax may take out and keep out of the pockets of the people a great deal more than it brings into the public treasury, in the four following ways:

"The levying of it may require a great number of officers, whose salaries may consume a great part of the produce of the tax; and whose perquisites of office may impose an additional tax on the people.

"It may obstruct the industry of the people, and discourage them from applying to certain branches of business, which might give maintenance and employment to multitudes.

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By the forfeitures and other penalties which those unfortunate individuals incur, who unsuccessfully attempt to evade the tax, it may frequently ruin them; and thereby put an end to the benefit which the public might otherwise have received by the employment of their capitals.

"Lastly, by subjecting the people to the frequent visits, and odious examination of tax gatherers, it may expose them to much unnecessary trouble, vexation and oppression. And although vexation is not strictly speaking expence, it is certainly