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[PRICE 40. STAMPED aD.

with its wings into a soothing sense of security and repose
the unconscious object from whom it extracted in full
stream the current of life.
(The Chancellor exhibits signs of impatience and dissent.)
Sp. (continuing ) —llo you posssess the works of my- dis-
tinguished cotemporary and present coadjutor, Adam
Smith ?
! Ch. of Ex.—l have his works, and fiequently consult

them.
Sp.—Then turn to the Fifth Book, part 11., of his
" Wealth of Nations," under the head " Of Taxes," and
read what you find there written.
Ch. of Ex. (reading.)—l. " The subjects of every State
ought to contribute towards the support of the Govern-
ment, as nearly as possible, in proportion to their re-
sp3ctive abilities. The expense of Government to the in-
dividuals of a nation is like the expense of asanagement to
the joint tenants of a great estate, who are all obliged to
contribute in proportion to their respective interests in the
estate. In the observation or neglect of this maxim con-
sists what is called the equality or inequality of taxation."
Sp.—Very good. Now answer me. Is your tax on pro-
fits levied in accordance with the equitable and politic
dictum of Adam Smith?
Ch. of Ex.—Wei, that is, my respected predecessors and
myself, have anxiously considered the subject, with the
view of rendering the operation of the tax as, equitable as
possible, and finding the subject surrounded with difficul-
ties,
(interrupting)—Shirked it upon the House of Com-
mons.
Ch. of Ex.—ln one sense we did so ; that is to say, we
moved the appointment of a select committee of that
Honourable House, which resulted in—
Sp.—l know; a blue book, and an outlay of 1,0001. in
printing.
Ch. of Ex.—The Committee reported the evidence, and
that it was extremely difficult, indeed impossible, to levy
the tax more equitably.
Sp. (with indignation)—l'll simplify the matter for them
before I have done with it.
Ch. of Ex —I must admit, sir, that the tax is not strictly
a property tax ; but how do you prove that the burtheu
falls in the inverse ratio of equity and fairness ?
Sp.—l shall make you prove that. Get me down a copy
of my Rudiments of Arithmetic.
Ch. of Ex. (producing a dusty volume)—Here, sir, is a
copy of your invaluable treatise.
Sp. (sarcastically)—Yes, "invaluable treatise" indeed;
you may work a sum in the dust upon the cover.
Ch. of Ex.—l must plead guilty of neglect of the science
which derived additional listre from your
Sp. (interrupting impatiently)—Can you find the Pre.
sent value of an annual sum?
Ch. of Ex.—l think I can, aided by your useful manual.
Sp.—Then find me the present value of 1501. per annum
for three years ; interest at 41. per cent.*
(The Chancellor of the Exchequer works laboriously,
while Shade of Cocker arrives at the result, by mental
arithmetic of course.)
Ch. of Ex.—l make it 4161.
Sp.—That is right, nearly. Now sit down and find me
also the present values of 1501. per annum, for 5,7, 10, 15,
20, 23, 30, and 50 years, and in perpetuity; and place the
values, when found, in tabular juxtaposition.
Ch. of Ex. (after considerable pause).—Here are the re-
sults, sir, in a tabulated form.
THE PRESENT, OR PROPERTY VALDES or £l5O PER
ANNUM FOR SHE PERIODS UNDERMENTIONED :

3 5 7 10 1. 20 23 30 50 n Per
Yrs. Yrs. Yrs. Yrs. Yrs. Years. "ear.. Years. Years. petuity.
- - - - --
£ .£XXX £ £ £ £
4i 6 667 900 1216 1667 2038 2228 2593 3222 3750

Sp. (encouragingly)—Very well ; now answer the a few
questions. The sums you have found are the property
values of 1501. per annum?
Ch. of Ex.—Yes ; the amount which would be realised
in the market.

Sp.—Exactly; whether realised by actual sale or found
by calculation, the sums you have given represent the
property values.
Ch. of Ex.—Yes • the property value of 1501. per annum
for three years is 4161., and for 15 years the value is 1,6671.
and in perpetuity it is worth 3,7501.
Sp. (angrily)—And yet you levy on all three the same
stun annually, notwithstanding the difference in value to
the possessors.
Co. of Ex.—llow so

Sp.—What tax do you levy on an income of 150/. per
annum ?

Ch, of Ex.-101., being ls. 43. in the pound.
Sp.—Just so. You make a property worth 41V. pay
101., and another worth 1,667/. pay 131., and another worth
3,7501. pay 101. Is this what yon call equitable taxation ?
Can you work a comtnou proportion ?
Ch. of Ex.—Yes.
Sp.—Then furnish me with the results of the following
proportions :
If £416 pays £lO, what is that per cent. ?
If £667 pays £lO, what is that per cent. ?
If £9OO pays £lO, what is that per cent. ?
If £1,216 pays £lO, what is that per cent. ?
If 21,657 pays £lO, what is that per cent. ?
If £2,038 pays £lO, what is that per cent.
If £2,228 pays £lO, what is that per cent. ?
If £2,592 pays £lO, what is that per cent. ?
If £3,222 pays £lO, what is that per cent'
If £3,750 pays £lO, what is that per cent.?
Ch. of Ex. (having worked out proportions)—Hera are
the several results :
£
d.
A with £416 pays it the rate of 2 8 0 per cent.

B with £667 Pais at the rate of 1 9 11 per cent.

C with £9OO pa -e at the rate of 1 2 2 per ceht;

D with £1,216 -pays at the rate of 0 16 5 per cent.
E with £1,667 pays at the rate of 0 it 11 per cent.
F with £2,038 pays at the rate of 0 9 9 per cant.

G with £4228 pays at the rate of 0 8 11 per cent.

. .
II with £2,593 pays at the rate of 0 7 8 Per cent.
I with £3,222 pays at the rate of 0 6 2 per cent.

K with £3,750 pays at the rate of 0 5 4 per cent.
Sp.—Now, air, you see the operation of your tax. Pro-
perty worth 4161., say, the tail of a lease, the end of a life
interest, the remnant of professional capacity, the Long
Annuities, which expire in 1860, and a thousand other
brief and precarious incomes, you tax at the enormous
rate of 21. Bs. per cent. on their property value, while
your Consols, Exchequer Bills, and other property in ab-
solute possession, upon which you may realise to-morrow
the full value of the perpetuity, you tax at the rate only
of ss. 4d. per cent
Ch. of Ex. (submissively)—That is so, sir.
Sp.—And you think this a near approach to absolute
equality, do you? to assume, first, that a man's brain is so
much property, and bringing it to a money value, to tax
4001. of that value as though it were 4,000/. stock on land;
imposing upon one 48s. per cent. property tax, and upon
another ss. 3d. per cent. only. Again, you think it fair
to tax the Long Annuitant, whose income expires in 1860,
and whose property sells now for 4161., according to your
own calculation, at the rate of 435. per cent. on the value,
while you impose on the owner of annuities expiring in
1880 (23 years hence) a tax at the rate of Bs. 11d. per cent.,
and on the owner of Consols, whose property will realise
to-day 3,7501., just ss. 4d. par cent.
Ch. of Ex.—l fear the tax cannot be justified on the
ground of equality.
Sp. (with dignity)—l should think not, indeed. Accept,
sir, and profit by this definition of your tax :—An Income
Tax, levied as at present, is a graduated Property Tax, the
gradation of taxation being so contrived as to fall with
crushing weight on the shoulders of industry, to the relief of
accumulated wealth. In addition to this definition, I fur-
nish you with a scale which I have prepared, to inform all
classes at what rates the tax falls upon them. (See Tables
I. and II.)
Ch. of Ex.—Pray do not publish your scale until I have
devised some tax as a substitute. Consider the difficulty
of my position, the maintenance of the credit of the State,
its honour at home and abroad, its dig--

Sp. (impatiently)—Fudge ! How an the credit and ho-
nour of any country be maintained by injustice and op-
pression? " Righteousness (equity) exalteth a nation"—so
we read. Levy your taxes fairly, and the honour and
credit of thecountry will take care of themselves.
Ch. of Ex.—True, sir ; but I was about, when you inter-
rupted me, to remind you of the claims of the public) cre-
ditor. Can you add to the obligations already conferred on
me, by suggesting a tax as a substitute for that which, I
suppose, I must relinquish ?
6p.—efore doing so, I must inform you that we spirits
enjoy clearer views of these things than we did while look-
ing through mortal eyes, and we do not perceive any occa-
sion at all for providing a tax as a substitute. To me it is
quite apparent that a proper representation of the tax-pay-
ing people, due attention to the voting of supplies (which
is now a farce), together with the very simple expedient of
the publication of a detailed statement of the national re-
ceipt and expenditure, would obviate any occasion for a
substituted taxation.
Ch. of Ex. (exhibiting extreme agitation)—Surely, sir

... _ .
you would notadvocate so imprudent a measure as the
publication of the details of the expenditure of the several
departments?
Sp.—lndeed, I do advocate it. You have required it
of the poor law unions, have you not ?
Ch. of Ex.—Yes.
Sp.—And of the municipal corporations, the savings
banks, the prisons, the police, the county courts, the Court
of Chancery, &c.
Ch. of Ex.—Very true; but consider the different na-
ture of their expenditure. You would not expose to the
impertinent curiosity of the public gaze the amount re-
ceived by this or that official, disclosing the secrets of the
various departments? It would be striking a blow at the
roots of our political institutions.
Sp.—l know it would, and shall take ateps for promul-
gating.
O h
omf yE views
eoxnt
rtehme
istuy of b jec this
agitation forgetting the
spiritual nature of his visitant)—l pray you,
not act with precipitation in this matter ; I pill speak
air, do
ill speak to

___
4' The arithmetical term " present value"
is emp1...t.0
property value or amount which would be paid
represent the
oyed
down by a purchaser for any sum to be received at a future
period or periods, so as to recoup the NrellaSer the Prince.
pal, with interest at a given rate. In commercial langu'age'
it is the discounted value of a future payment or payments.
Thus 1001. to be received at the eud of a year is worth now
100/.,mitms the interest of 100/. Inlike manner,tho vat" °f an
i
annuity of 1001. for three years' interest is 1001•,minugo
i
year's interest, added to 1001., minus two years' in other
interest,
added to 1001., minus three, years' interest; or,
words, the amount of three sums of
NW. discounted
respec-
tively for one, two, and three years. no 1 interest
is always charged and allowed in such
by common
ing of the exact present value of an
annual sum
Bruesorted to. The
arithmetic is at best a tedious process, lifivie.d ; but all process, by logarithms is greatlY simplified'
by the use of
the
calcula-
tionsfind-
of the kind are almost entirelY :'
num, constructed by
Tables of the present value of i Acsalecu°lmai'omi calculations,
cilperbanerlaites-office London,
John Smart, formerly of the Chamberlain
all st'anda'rd worksli treating ,
which Tables are to be fain" in ere multiplication of any 1
of compound interest. By them
fraction, found in the tables,
into the annuity, the result is
almost instantaneousbr found. Thus, if the value of 1501. per
required,
interest at 41. per cent.,
annum for three years istabe give, as tho value of 1/. per
payable half-yearly, thebe jug
multiplied into 150/. gives 416/.
minute, 2'775, which
58. as the result'
resent values lies at the base of all
This mode of tindinugr
Pchase and sale of freehold and lease-
calculations for the.
hold estates, P
ties for terms of years, &c. The Tables
in the ii-iegacy Duty "Lunand Succession Duty Alta, for deter-
,
mining values
at death, are derived from the same data, which
could be mull
aPp 1
ied ix findiu valuta for ether fiscal pur•
pQSOO.