JOURNAL OF BANKING, CURRENCY, AND FINANCE. City Bank Returns-The Bank Act Passed by the New York Legislature...... 394 New York Banks.. 395 NAUTICAL INTELLIGENCE. South Entrance to Moreton Bay by Rous or the Amity Point Channel.... 413 414 415 420 428 THE MERCHANTS' MAGAZINE AND COMMERCIAL REVIEW. JUNE, 1863. ENGLAND'S TAX SYSTEM. THE tax system of England has in the present century undergone great changes, consequent upon the exigencies of the nation and the large experience which her statesmen have been able to bring to the adjustment of the revenues. A nation of small means and of little comparative magnitude, in a financial point of view, has far less opportunity of working out the great economical problems than one which, like England, is compact, populous, enormously wealthy, and the foremost manufacturing and commercial nation of the world. She has also the advantage that her internal and external policy turn almost altogether on financial and commercial questions. Her colonial policy, her foreign policy, her commercial system, and her financial plans hinge upon the promotion of her material welfare. The extension and growth of her present business, with the means of its future expansion are the elements of her governmental policy. Her statesmen of all parties emulate each other in the pursuit of that object, and all parties, whether in or out of power, shape their course by such considerations. It is in this sense that the great NAPOLEON described her as "a nation of shop-keepers." If he had called her government "the great mercantile firm of the world," he would have been nearer the mark. Her colonial policy embraces forty-five colonies, spread over the earth, each of which she hopes will become, and manages with the sole idea that it may become, the germ of an empire, useing the English language and English goods long ages to come. Even the policy of holding or giving up those colonies depends entirely upon how it will affect the future market for goods. If it is thought that they will be better customers when independent, she will, as in the case of the Canadas a few years since, tell them to go or stay, as they please. In a word, everything is made to bend to the one idea of commercial prosperity. The few years that have elapsed since the masses were freed from actual servitude have sufficed to show the landed gentry, the aristocracy, and the government, that the more the industry and trade of the people prospers the greater are the revenues from lands, from rents, and from taxes. The power of the nation and the wealth and splendor of the nobles grow with the successful industry of the people. Freedom, too, was necessary that this prosperity might be developed, and especially is this true of the Anglo-Saxon race. The hope of reward stimulates it to exertion; while with the Doric races indolence is their only charm in liberty. When, therefore, feudal servitude gradually gave way to free industry in England, and broad tracts of land were rescued from the grasp of monasteries, when industry was encouraged and the prosperity of the people sought, wealth began to flow from the working many up through land owners into the treasury. The funding system, introduced by WILLIAM, drew into the service of the state a portion of the surplus capital of the country. From that time the national wealth continued to increase, and with it the amount of taxes required to liquidate the interest on the public debt. The property of the country was, however, hampered by reason of the crude ideas entertained by the governing classes on economical questions. They all recognized the importance of seeking the prosperity of the people, but it was supposed it might be encouraged by protection, promoted by prohibition, stimulated by special privileges, and improved by restriction. HENRY VIII. freed one of his slaves-a tailor-for a sum of money, and encouraged the making of cloth by preventing wool growers from selling to any but manufacturers in their neighborhood. Other sovereigns, especially ELIZABETH, farmed out all sorts of privileges for sums of money. These and multitudes of enactments lingered, some of them, down to within thirty years, while the light was slowly but irresistibly making its way into the legislative halls. The frightful expenditures undertaken at the close of the last century to maintain English ocean supremacy, and which were continued through twenty-four years, produced the most extensive system of taxation the world ever knew. The ability to bear that taxation was based entirely upon the fact that steam, with a multitude of automaton assistants, stepped forward to do more productive labor than the whole people of England had been before capable of. The isolated position of England kept her out of the arena of combat, while her navies commanded the ocean and kept open every market of the world for the sale of her new machine goods at monopoly prices. This conferred great ability to pay taxes, which reached the enormous sum of $350,000,000 per annum upon 11,000,000 persons. With the peace came a new state of affairs. The monopoly of machines and markets was no longer possible, neither was the continuance of paper practicable. Specie prices, exposed to sharp foreign competitors, became the rule, causing terrible distress. Vainly did England strive to maintain her position by stringent laws against the export of machines or any parts of them, against the export of wool or other raw materials, and by duties protecting every interest which was supposed to be dying in consequence of the importation of foreign competing goods. The conviction, however, gradually forced itself upon the governing classes that, for England to keep her markets, she must manufacture and transport at least as cheap as other people, and that to do so every burden must be removed from the cost of goods and from every productive interest. In 1828 the prohibition on the exports of machines, wool, and other articles were remitted. Navigation laws were modified in 1816, and under Mr. HUSKISON Some progress was made in a free trade direction by reciprocal treaties. The heavy taxes, however, failed to respond to the public wants, and additional taxes failed to increase the revenue. The nation was like an overladen ship that would no longer respond to the helm. The short harvests of 1836-7 produced a crisis. The annual deficits had been large, and the minister added ten per cent to all duties, resulting only in a larger deficit than ever. It was then that Sir ROBERT PEEL inaugurated the policy which has gone on progressively developing an unequalled degree of national prosperity. The policy was to remove all those taxes and restrictions which interfered with the free and prompt interchange of goods, since it is easily understood that the more promptly available are the products of industry the more production is encouraged. The most important of these was food. Provisions were prohibited and corn highly taxed. By removing these burdens food would be cheaper and all wages would be practically higher, since for the same money the laborer could procure more necessaries. A long list of articles-partly food and partly materials of manufacture-were subjected to gradual modifications. The result was, that while the manufacturer paid no more money for wages and much less for materials, he could produce a cheaper article for export, and at the same time the decline in the price of necessaries was equivalent to a rise in the wages of the workers. In other words, the same amount of labor enabled the worker to consume a larger amount of food and manufactures, and the shipper to compete more successfully with foreign rivals in third markets. The radical change produced in the government policy may be illustrated by the fact that in in 1842 Sir ROBERT PEEL found 1,052 articles subject to customs duties. There are now but 48 articles charged with duties, and the bulk of the revenue is raised from 15 only. The customs revenue in 1842, from 1,052 articles, was £23,515,374, and in 1862, £23,484,167, from 48 articles, or as follows: 1842.. 1862.. Articles taxed. Revenue. £23,515,374 23,484,167 Value of exports, £47,381,023 124,137,812 Nothing can more clearly demonstrate the vast success of the policy inaugurated by Sir ROBERT PEEL, and continued by Mr. GLADSTONE, than these few figures. The following table gives the revenues of Great Britain after twenty years of free trade : |