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a business license. Added to this the stamp tax forms, as in France, an important feature of the revenue, as do also the taxes on tobacco and spirituous liquors. Of tariff duties, as already indicated, the rates are fixed by the French Government and are applied to exports as well as imports, though export duties are levied on a comparatively small number of articles. The import duties are in most cases those of the French tariff, with some concessions in the interest of the colonies and some prohibitive duties to protect colonial products, while in still other cases the duties and local taxation are so adjusted as to discourage the manufacture in the colonies of articles produced in and exported from the mother country. This latter method, however, now prevails in but very few instances. The rates of duty applied are generally high, since in most cases they correspond with those of France, whose tariff policy is protective in its character. Customs revenues form the largest single item in the receipts of the French colonies as a whole, though the import duties alone fall slightly below the liquor tax. The revenues of the French colonies in 1898, omitting Algeria, which is governed as a province of France, amounted to about 47,000,000 francs, exclusive of the subventions by the Government, and of this amount about the value of 8,000,000 francs was from liquor tax, nearly 7,000,000 francs from import duties, a little over 4,000,000 francs from export duties, 3,750,000 francs from opium, 3,000,000 francs from sales of stamps, 3,000,000 francs from house taxes, 2,000,000 francs from land taxes, and 1,500,000 francs from poll taxes. The taxes collected from import duties amounted in Cochin China to about 15 per cent of the total revenue, in French Guiana about 20 per cent, and in Senegal more than 40 per cent.

THE MOST DIFFICULT OF COLONIAL PROBLEMS.

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11. Leroy Beaulieu, discussing the raising of revenue in the colonies, in his very valuable and complete work on colonization, *De la Colonization Chez les Peuples Modernes,” says:

“Of all branches of the colonial administration, perhaps the most difficult is that which is concerned with the assessment and collection of taxes. * The two best modes of raising colonial revenue, those that weigh least upon the colonies and interfere least with the development of the colony, and furthermore, those whose collection is easiest and least expensive are, first, customs duties on merchandise imported (the 'octroi de mer,' the term normally used in the French maritime colonies), and secondly, the sale of government lands. These are the almost only sources of revenue which were used in the British colonies, and it has always been remarked that provided the assessment be intelligent and the rates moderate, no bad effects resulted, whereas the revenue was sufficiently abundant. The import duties in the colonies should be merely fiscal in character and have no protective character, otherwise they might become obnoxious; provided they strike all sorts of merchandise without distinction of the country of origin, and at a moderate rate merely, not exceeding 5 or 10 per cent ad valorem, these duties will not offer any economic inconvenience. The colonists bear them without grumbling and their collection is very easy, for nearly all the new colonies being accessible only through a few ports, a limited number of agents established in these ports suffices to levy the tax on the cargoes of the entering vessels; there are none of those inquisitorial vexations which constitute a just object of criticism in the case of municipal gate duties (octroi). These import duties fall almost entirely on articles of immediate consumption, for the colonies do not import raw materials for manufactures. From the following facts, taken from the history of British colonies, an idea can be formed of the articles on which these taxes chiefly fall: The revenue of New South Wales in 1836 was £190,000, of which £126,000 came from the tax on imported spirits, and £17,000 from the tax on tobacco, whereas the 5 per cent tax on foreign merchandise yielded no more than £10,000. In New Brunswick, out of £58,000 of revenue, £49,000 came from taxes on strong liquors, sugar, coffee, and ad valorem duties on different articles of merchandise. Most economists disapprove of taxes on consumption and favor direct taxes. Much might be said on this subject, but in the colonies direct taxes are, at least in the beginning, very hard and costly to collect; moreover, their almost inevitable effect is to retard the development of the colony. On the contrary, taxes on consumption are collected easily and at slight cost in the ports of entry, and are being regarded quite favorable by the colonists when they are moderate. All these advantages seem to us sufficiently important to prompt the adoption of these taxes, notwithstanding the objection of many economists. If, in theory, it is easy to reason about the type of tax whose application would be desirable in preference to all others, in practice it become necessary to conform with social and geographical circumstances and conditions, the customs and tastes of the public, and the best tax under given circumstances is the one which weighs least on the taxpayers who have to support it, and which brings the most revenue to the state which collects it.

As regards the other mode of raising revenue, i. e., the sale of uncultivated land, it is known that the Wakefield system provided for the employment of the entire product of the ‘land fund' from the sale of lands for the support of subsidized immigration. With some essential restrictions of such an exclusive system we approve of the British policy, which generally employed a part of the money derived from the sale of lands for different essential public services. As regards the question of prices of virgin land, theory, of course, can not fix them. They depend on the circumstances and advantages which the colony presents for the cultivation of valuable products, varying between a mere nominal price of $1.25 per acre, as, for instance, in the United States, and a relatively high price of £1 or £1 159. per acre, as in Australia. But it is nearly always advantageous to sell the land instead of giving it away gratuitously, and the amounts realized from the sales furnish an excellent revenue. In the case of Australia this revenue was at times quite considerable.”

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IN THE BRITISH COLONIES.

In the British colonies, as above indicated, the only requirements of the home Government is that the colony shall be self-sustaining; the remaining details are left to the people of the colony with greater and more nearly complete freedom than perhaps any other government of the world. As a consequence the methods employed differ very greatly. Those of India, which are peculiar by reason of customs long existing, have been above described. In the other colonies import duties form a large share of the revenue, much larger than that supplied in the collection of revenue in the mother country, and in practically all cases except Canada there is no discrimination in iavor of the mother country. In practically all of the colonies of Great Britain other than India, import duties are levied on a much larger variety of articles than in the mother country and with rates very much higher.

Taking all the British colonies for which figures are obtainable, other than India, 33 per cent of the revenues are collected from customs, while in the United Kingdom customs form 24 per cent of the revenue. In many of the British colonies customs form a much larger percentage of the revenue than the average above named. In the Australian colonies the proportion of revenues collected from customs ranges from 14 to 37 per cent; in the South African colonies, from 17 to 28 per cent; in Mauritius, 38 per cent; in Jamaica, 46 per cent; in the West Indies, generally from 50 per cent upward; in Fiji, 53 per cent; in Canada, 54 per cent; in British Guiana, 58 per cent, and in the colonies of West Africa, 75 to 80 per cent of the total revenues. The table which follows shows the revenue from

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customs, total revenue, and the per cent which customs form of the total in each of the principal colonies of the United Kingdom as shown by the British Statistical Abstract for the colonies. The figures are for the year 1899, except in the case of India, which are for the year 1898. (The figures for India and Ceylon are stated upon the old basis of 10 rupees to the pound sterling.)

REVENUE OF BRITISH COLONIES, AND SHARE DERIVED FROM CUSTOMS.

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The following table prepared by Prof. Edwin R. A. Seligman, to accompany his paper on the revenues of the French colonies, extracts from which are published on another page, shows the revenues of the French colonies from various sources in 1898.

FRENCH COLONIAL REVENUES IN 1898.

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REVENUES OF INDIA,

The following table, taken from the Statesman's Year-Book for 1901, shows the estimated receipts of the Indian government for the fiscal year 1900–1901, the figures being the “Budget estimate.”

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The above statements, showing the revenues of the principal colonies of the world and the means by which they are collected, emphasize the assertion already made that methods of raising revenue differ widely with localities and customs which have prevailed in the countries in earlier times.

An examination of the above tables shows, first, that in the British colonies other than India, customs form the most acceptable single means of raising revenue, and that in the smaller colonies and in those less developed the proportion of the revenue raised from customs is greater than in the larger and more completely developed communities of Canada, Australia, and South Africa.

A study of the above group of tables showing the revenue methods of the British colonies, French colonies, Dutch colonies, and British India, respectively, coupled with the statements which precede them regarding conditions in each of those colonies, reveals the very wide range of systems adopted in different parts of the world and the disposition to apply or adapt systems which already prevailed in those communities where definite methods of government and administration existed when control of the territory was assumed by the present administering government.

RESULTS OF A STUDY BY THE AMERICAN ECONOMIC ASSOCIATION.

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These facts are pointed out in a valuable statement made by the colonial committee of the American Economic Association, composed of Prof. Jeremiah W. Jenks, Hon. Charles S. Hamlin, Prof. Edwin R. A. Seligman, and Dr. Albert Shaw. This committee, which was constituted at the eleventh annual meeting of the American Economic Association, has collected an admirable series of papers from members of the association, some of them prepared by members of the committee, upon financial methods in the world's colonies, and published the same in copyrighted forin in the August, 1900, issue of the publication of the American Economic Association, By the kind permission of the committee, such portions of these studies as relate to financial methods, especially in the East and West Indies, are herewith reproduced, with due credit to author and publisher. The following statement, prepared and signed by the abovenamed members of the committee, summarizes the result of the detailed studies and presents also the views of the committee upon the subject:

“As a result of this study the committee venture to offer the following general suggestions, some of which are applicable to the United States:

"First the finances of each colony should be managed exclusively for the sake of the colony and for its development, and not for the advantage of the mother country.

“Second. No uniform system of detailed fiscal management for a number of colonies in different parts of the world can be established. Each colony must be considered by itself and its system must be adapted to its conditions.

“Third. Each colony should, as far as possible, be made self-supporting; but the mother country may well sustain the colony's credit or make advances to be repaid at a later date.

“Fourth. In undeveloped colonies whose inhabitants are not capable of managing important public works, such as railways, canals, telegraph systems, etc., these improvements may well be owned by the government and managed by government officials rather than by private companies.

“Fifth. The selection of sources of revenue must in each case be determined in accordance with the economic and social conditions of the colony.

“Sixth. Where the colony is so situated that the development of trade with foreign countries is the chief economic consideration, import duties should be very low or practically nonexistent.

“Severth. In colonies of undeveloped economic resources the chief reliance for general government income should be on a system of internal-revenue taxes. Excise duties should be levied primarily on a few articles of general consumption, like alcoholic drinks, opium, and rice. When any colony has decided advantages in the production of some specially favored commodities, like sugar, tobacco, hemp, etc., it may be desirable to impose business licenses or similar duties on them. It is even a question whether low export duties on such commodities may not be advantageously employed in exceptional cases, it being assumed that under these circumstances a duty on colonial exports would not be inconsistent with the Constitution of the United States.

“Eighth. It is undesirable to utilize an octroi or a system of taxes on consumption for local purposes. Local revenue should in most cases be derived in a large measure from real estate, business licenses, and kindred specific taxes.

“Ninth. Wherever possible, in the administration of fiscal affairs, natives should be utilized as officials. It should be fully understood, however, that in the last resort the desires of the United States Government, expressed by the proper authority, are to be paramount and its decisions final.

"Tenth. As long as any of the colonies have not attained modern industrial conditions, it may be advisable to continue, as far as possible, native customs during the period of transition. For example, it is quite possible that for some time to come the system of farming out the revenue to contractors, especially to native chiefs, should be retained under such restrictions as may prove practicable.

"Eleventh. For the proper administration of the fiscal system is any of the dependencies of the United States it is absolutely essential to establish a civil service which is beyond question as respects the ability and honesty of its personnel.

“Twelíth. In those dependencies where it is difficult to secure an adequate supply of efficient native labor, the question of the admission of foreign laborers should be seriously considered. While there may be sufficient justification for the exclusion of Chinese workmen from the United States, it by no means follows that they should be excluded from the Philippines.” * * *

FINANCIAL METHODS IN THE FRENCH COLONIES.

The statement which follows is from a paper on the “French colonial fiscal system,” prepared by Prof. Edwin R. A. Seligman, copyrighted and published as part of a series issued by the American Economic Association, August, 1900, under the title of “Essays in Colonial Finance,” and reproduced by consent of the publishers:

“The home Government is responsible for a number of expenses, the most important of which are those for the army and navy; for the salaries of the civil, judicial, and religious officers; for the penal institutions; and for the so-called common expenses, which include the salary of the colonial minister and his oilice, as well as of the two colonial inspectors. These expenses may be classed under two main heads: The expenses of sovereignty and the subventions accorded to the separate colonies to aid them in defraying their local expenses. In 1898 the expenses for which the home Government thus made itself responsible amounted to orer 91,000,000 francs. In addition to this large sum, France also makes considerable grants in the shape of shipping subsidies (and to a minor extent, cable subsidies) to the lines having relations with the colonies. These grants, which amounted in 1898 to 23,500,000 francs, are also included in the budget of the colonies, which forms a part of the home budget. Thus the total expenses chargeable to the colonies, but paid by the home Government, amounted in 1898 to over 116,000,000 francs.

HOME RECEIPTS FROM THE COLOXIES.

“Against these expenses which appear in the French budget proper ought to be put the receipts from the colonies which go to swell the income of the mother country and appear in its budget. These receipts are of four kinds: First, the so-called “contingents' imposed on the colonies; second, the India rent; third, the deductions from salaries for civil pensions; fourth, the sale of State property and the proceeds of prison labor. The contingents comprise a number of small contributions, supposed to be paid by the various colonies. The purposes for which the contingents are paid are fixed by the law of 1866, which, it is to be noted, applies only to the three so-called ancient colonies, Guadeloupe, Martinique, and Reunion; but the principles of the law of 1866 have been extended to the other colonies by subsequent legislation, especially in the eighties. Although the contingents are in general insignificant, the reverse is true of Cochin China. In the budget of 1891 the total contingents amounted to 5,839,000 francs. The remainder was distributed in small amounts among the other colonies. The above figures comprise not only the colonial contingents, so called, as defined by the law of 1866 and its successors, but also the additional colonial contributions as fixed by the arrangement of 1893. In theory the contingents are supposed to be a payment on the part of the colonies in return for the expenses of sovereignty defrayed by the mother country and chargeable to the general French budget. On the other hand, the so-called 'contributions are supposed to be payments toward the general expenses of the home Government, whether these expenses have been incurred for colonial purposes or not. As a matter of fact, however, most of these contributions go toward defraying the expenses of certain institutions in Paris which have been created for colonial purposes. The contributions themselves are insignificant, amounting to less than half a million francs, as against contingents of more than 5,000,000 francs. Thus the sums raised in the colonies by both contingents and contributions are in fact spent for purposes which redound to the interests of the colonies themselves.

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THE COLONIAL BUDGETS.

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“It may be said in general that the colonies in fixing their own budgets have a large measure of autonomy, modified, however, in some important particulars. On the side of expenses, for instance, there are certain so-called obligatory expenses for which each colony is compelled to provide in its own budget On the revenue side the colonies have a free hand, except that since 1892 they have lost the right of fixing the rate of the tariff duties. This power is now reserved to the home Government. The colonial budget itself is discussed and fixed by the general council in all the colonies where that institution exists. It must then be submitted to the colonial governor, who represents the home Government. The powers of the governor, however, are carefully defined by the law of 1866. If the budget balances, and if all the obligatory expenses have been provided for, the governor can not modify the budget in any way; his consent is therefore in such cases a simple formality. If, however, there is a deficit, or if no adequate appropriation has been made for the obligatory expenses, the governor may intervene. The same holds true of the so-called supplementary credits, where intervention by the governor is also permissible. *

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THE COLONIAL EXPENDITURES.

“The most marked characteristic of colonial expenditures is their division into obligatory and opitional expenditures. This division was clearly brought out by the law of 1866, which fixed the obligatory expenses for the three old colonies of Martinique, Guadeloupe, and Réunion. The law declared the obligatory payments to be eleven in number: First, the payment of the debt; second, the maintenance of the government buildings and of the assistants connected with the governor's residence; third, the maintenance of the buildings for judicial and religious purposes; fourth, the rent and maintenance of the governor's private residence; fifth, the building and clerks of the governor's secretary; sixth, a part of the maintenance of and salaries for public instruction, police, insane, and poor children; seventh, the housing of the policemen; eighth, the return of immigrants; ninth, the cost of the publication of finance accounts; tenth, the contingent imposed upon the colony; eleventh, certain unforeseen expenses. The laws of 1882 and 1885 extended this list to most of the other colonies. As we have already intimated, however, the obligatory expenses in the case of Cochin China are considerably more numerous. All the colonies are obliged to provide for these obligatory expenditures in their budgets, and where they amount to a large sum, as in Cochin Chim, the discontent is very marked.

“In contractinction to the obligatory expenditures are the optional and extraordinary expenditures, wrich may be fixed at will by each colony separately.

IIOW THE COLONIAL REVENUES ARE RAISED.

"The colonial revenues are derived from four sources: First, taxation proper; second, tariff duties (which in France are put in a class by themselves); third, income from colonial property; and fourth, subventions from the home Government.

SYSTEM OF TAXATION BASED ON THAT OF THE MOTHER COUNTRY.

“The system of taxation is supposed to be based largely on that of the mother country. Indeed, the colonial tax systems resemble those of the mother country primarily in the fact that by far the greater part of the revenue comes from indirect taxation. But, so far as direct taxes are concerned, the colonies differ in many respects, not only from the mother country, but also from each other. This is due, of course, to the influence of local conditions and of the varying degrees of economic and social development. Common to almost all the colonies is the poll tax, the business tax, the export and import duties, the tax on spirituous liquors, and the stamp tax.

“The direct taxes of the mother country, as is well known, are of four kinds. They comprise the land tax, the “personal and movables' tax (being a combination of a poll tax with a tax on rentals), the door and window tax, and the business tax. Of these four taxes, that on doors and windows is entirely lacking in the colonies; the personal and movables tax has generally shrunk to a poll tax, while the land tax and the business taxes are assessed on very different principles from those observed at home. The land tax is found, with exceptions, in most of the colonies, but in several it applies only to land on which houses are built, thus becoming virtually a house tax. On the other hand, even where the land tax proper exists, it is not levied, as in France, on the annual revenue, but, as in all primitive land taxes, it is assessed on the area or gross produce. In some cases it even takes the shape of a definite rate on different classes of land. In Tunis and Algiers, moreover, the original Arab land taxes are still in force, and in Algiers no real estate tax at all is levied on Frenchmen. In but one case, that of Réunion, is the tax assessed on property value, and even there it is applied only to houses, the rate being thirty-five one hundredths of 1 per cent. In the Antilles sugar lands are exempt from the land tax, which is there replaced by an export duty on sugar. A similar principle applies to salt lands in New Caledonia, India, and Cochin China.

“Of more fiscal importance than the land tax is the poll tax which, as is well known, has all but disappeared in most modern countries. The poll tax is not found in the Antilles, in the newer African possessions, or in Guinea. In most of these it has been replaced by a tax on rentals. But in the older African and more especially the newer Asiatic possessions the poll tax still forms an important part of the revenue.

"The business tax is modeled quite largely upon the French ‘patente,' which at home is composed of a so-called 'droit fixe' and a 'droit proportionnel.' In the colonies, however, it is generally either the one or the other. Practically it is a kind of business license. It is found in almost all of the colonies, although it is not of significance in the so-called old colonies. In addition to these direct taxes, we find almost everywhere the so-called tax for the ' verification of weights and measures,' which is in reality nothing but a fee, and which has been rendered necessary by the extension of the decimal system to the colonies. While the poll, land, and business taxes are common to many of the colonies, we also find a few isolated taxes, which are levied only in a single colony, or at most in two or three colonies. Such are the carriage tax in Reunion and India; the boat tax in Cochin China, Anam, and Tonkin; the tax on mine rents in Guinea, and especially in New Caledonia; and finally a kind of income tax from intangible personalty in Martinique and Guadeloupe. This latter tax is, however, for local purposes only.

"In treating of the direct taxes,a word must be said finally about Algiers. Although Algiers, as has already been stated, is treated to a certain extent as a part of France itself, in dealing with fiscal as well as with general administrative principles, a line is drawn between the French citizens proper and the bulk of the native Arah population. In the case of the native population with its entirely different social and economical basis, the revenue system is, as might be expected, completely different. The so-called Arabian taxes to which the native population is still subject are four in number: the hockor, the achour, the zekkat, and the lezma. The hockor is a tax on the lands still held in common, for in Algiers, as in all primitive countries, private property in land is an institution of slow growth. The achour is a tax on the gross produce based mainly on the number of plows. It is still largely paid in kind. The zekkat is a tax on the cattle owned by the nomadic population, while the lezma is in some cases a tax on palm trees and in others a graduated poll tax. In Tunis also the native taxes are still levied.

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INDIRECT TAXES THE IMPORTANT FEATURE OF THE SYSTEM.

“Of greater fiscal significance than the direct taxes are the indirect taxes. Here, as in France, the stamp duties play a great rôle. They are found everywhere except in St. Pierre, and include a large variety of transactions. A still greater revenue is afforded by the tax on spirituous liquors, which is levied in almost every colony. Tobacco is not a state monopoly as in France, but is subject to an excise duty in a number of the colonies. In addition to these imposts we find isolated taxes on oil, on fats, on matches, and on playing cards. Indirect taxes on commodities that do not exist in France are the following: On salt fish in Guadeloupe, on native gold in Guinea, on india rubber in Senegal, on rice in Cochin China, on petroleum in St. Pierre, on dynamite in Senegal. Opium forms a colonial monopoly in Cochin China and in Oceania, and is taxed in Guinea and New Caledonia. Salt is everywhere exempt from taxation except in French India, where it forms a colonial monopoly.

TARIFF DUTIES.

Scarcely less important than the taxes on liquors and tobacco are the tariff duties. These are levied on both imports and exports, and, as has been stated above, are now fixed by the home Government, not by the colonies themselves. The export duties are ordinarily confined to a few important articles. Thus in Martinique we find export duties on sugar and molasses; in Réunion, on the so-called colonial goods (sugar, spices, etc.); in Cochin China, on rice; in Oceania, on mother-of-pearl. The import duties are in general those of the French tariff itself, with a few concessions in the interests of the colonies. In several cases particular commodities are absolutely prohibited in order to protect colonial products. This is true of sugar in Martinique and Indo-China, of rum and molasses in Réunion, and of opium in Indo-China and Mayotte.

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THE COLOXIES MAY RECOMMEND BUT NOT MAKE THE TARIFF.

“Although the home Government is invested with the duty of fixing the tariff for all the colonies, the colonial councils have the right of pointing out to the home Government the modifications which are desirable for each special colony. A few such changes have been made, chiefly in the direction of lower duties or complete exemption; but the deviations from the general French tariff are insignificant. There are only two colonies without tariff duties, namely, Obock and the towns of French India.

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