ORGANIZATION OF AGRICULTURE.
FINANCIAL RESULTS FOR COLONIAL TRADE.
WE last week pointed to a broad fact respecting agricultural coun- tries. It is only such nations as have not directly taxed the pro- duce of their fields that are enabled largely to contribute to the trade of the world. It may be found worth the while to follow the clue thus obtained into some of the ramifications of finance and trade. Tax-payers and tax-gatherers are both agreed in the wish to raise a revenue ; but the latter are accused, and it must be owned scot always without reason, of not sufficiently caring whether the Ways and means are collected with all due consideration for the Convenience of contributors. We think it can as easily be proved that a large revenue may be collected with little pressure on those who pay it, as that a small one may be made ruinously burdensome even to a rich country. In applying this principle to the interests of landowners and agriculturists generally, we take the article of last week as our text.
The two countries whose contributions to our trade stand in the most marked contrast to each other are British India and the United States of America. In the United States, the field and its crops are free. Under this condition, with labour at about ten times the price that it is in Hindostan, not only does American competition throw the land of India out of cultivation, but the Americans are a well-fed, thriving, and powerful nation. We need not enter into details respecting the condition of our fellow subjects in India : the less that is said on that melancholy theme, in this place, the better. Now, at the risk of seem- ing paradoxical, we must declare that we trace the dif- ferent conditions of the two countries altogether to the mode of taxation which prevails in each ; and at the same time we confess that the revenue raised on the article that is most in- teresting to each of those lands is actually greater in America than it is in India. It is a fact, as we shall show, that cotton is more highly taxed in the United States than in India ; and yet it is found for the former to be a crop yielding wealth and power, while for our Indian planters it is a Dead Sea fruit, smiling to the view with promise of profit, but crumbling under the touch to dust and ashes. The solution of the problem, of course, lies in the principle that the amount of a tax is of secondary importance to the manner in which that tax is levied.
A writer who speaks from experience,* and who is supported by official statements, tells us that the land-tax levied in the dis- tricts of Guzerat and Baroach amounts on an average to 14d. per pound in round numbers. The shipping price of this cotton at Bombay has remained stationary for a long period at Si. per candy, or nearly 21d. per pound. The Indian planter thus can actually grow cotton at Id. per pound ; and yet the competition of a country where the planter receives for the same description at least 3d. per pound drives him out of the market. After mak- ing all due allowance for freight, and the good organization of the American trade as compared with that of India, there re- mains an evident impediment to the progress of the latter which cannot be separated from the operation of the land-tax in India. The instances furnished by European countries of the repressive influence of a moderate tax, serve to place in strong relief the mischief which the land-tax does in a country where it exceeds the cost of cultivation by 150 per cent. Now, that the difficulty arises from the circumstance that the tax is levied as a land-tax, and not because cotton from India pays a tax of 1/d. a pound, is to our apprehension proved by the simple fact that the cotton consumed in America actually pays a duty of fivepence per pound. This takes place in the following manner. The present import-duties on foreign cotton manufactures im- ported into the United States amount to twenty-five per cent on the value. Cotton, when manufactured, is worth from ls. 0d. to 2s. per pound. If we strike an average at 20d., we find that 25 per cent just gives 5d. per pound, or a duty more than 300 per cent heavier than is raised from the Hindoo ryot. But we hear nothing from America of the oppressive nature of this duty of 5d. per pound. No warehouses have been closed, no vessels sold, no labourers discharged, as a result of its im- position. Quite the contrary. The actual rate of the tariff is a kind of godsend as compared with the rate prevailing a short time back, when the duty was 10d. per pound ; the tariff standard having been 40 per cent on British manufactures.
Under the operation of an import-duty of 25 per cent, the United States imported in 1845 about the value of 3,000,000/. Of cotton goods. The export of cotton-wool from British India in the same year did not much exceed 700,000/. This is the language spoken by facts. It is too eloquent to need our comments to enhance its force.
If we are right in our detection of the principle, it clearly affords a practical rule of vital importance for agriculture, and not less so for taxation. It is evidently, on this showing, good policy to let raw produce circulate free, and to tax it when it comes back in a manufactured, that is to say, in a consumable shape. Could we suppose the plan applied to the revenues of India, 4 otton, exported to the value of 2,000,000/. sterling, on which no land-tax was charged, would first leave 1,000,000/. as profit in the hands of the grower, and when reimported with a 20 per cent duty on a manufactured value of 13,000,0001., would yield a revenue of 2,600,0001., which would be easily paid ; whereas the land-tax is now confessedly a ruinous impost, that is only retained because those who levy it do not know were to look for a. substitute. The fund to pay this increased revenue • " Free Trade and the Cotton Question. By F. C. Brown, Esq." would be formed by the increased profits arising from freedom of exertion in agriculture and trade ; the'Erst result of which would be seen in greatly increased exports of produce.
In the account as it stands between Great Britain and her Colonies as far as revenue from articles consumed in England is concerned, it clearly would, for the same reasons, be advantageous to indemnify the East India revenue, or any other obstacle that intervenes to render production difficult, for the sake of the ad- ditional revenue that we should be able to raise if the producer were left at liberty. Take for instance the article of sugar, which is worth about 3d. per pound in the English market, but on which we charge a duty of lid. If the land-tax levied in India, with all the supplementary deductions from the planters' profit, amounts to Id. per pound, it would evidently be good policy to undertake the payment of this tax in England upon all the sugar exported, in order to remove its present pressure upon the grower in India. We should clearly be gainers, probably by a very great increase on the quantity grown for exportation, but at least to the full extent of the difference between the present repressive land-tax and the import-duties. In the same manner, tobacco, indigo, or any other product of India, would, if released from the throttling gripe of the land-tax collector, swell our revenue, and cause a demand for manufactures, which would go far beyond creating a better organization of agriculture. But it is evidently with the field that we have to begin. The unaided agriculturist is a powerless member of society ; but he furnishes to all who associate with him the means of pro- ducing wealth, and consequently a fund worth the tax-gatherer's notice. It is injudicious to strangle in the cradle the Hercules whose help we so greatly need at maturity.
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