The Sun.
London, England, 1844-07-18 00:00:00

POBTULATE-THAT TAXES LAID ON COMMODITIES DO NOT ADD TO THEIR INTRINSIC VALUE.

*,„* The Commodity, Wheal, has been taken as the Example, but the reasoning applies to all other corn-
modities.—lt is assumed that fifty per cent. has been required to be added to the price, in order to
remunerate the producer for the burdens imposed on him by indirect taxation.—The Sovereign and
One Pound Note are assumed to coexist for the sake of argument.

" Look here upon this picture and on this ,—The counterfeit presentment of two Brothers."

PITT'S POUND.
No. 11.
Two Pounds in Gold.

PEEL'S POUND.

No. I.
Two Pounds.
Gold as mcney.

No. I.
Two Pounds.
Gold as money.

No. IL
Three Pounds in Gold.

a136.4d. 13s. 4d. 136.44.
II If
[xl

0 0 0
tl 11
H•
M.7l•=tE 1 I [Et I fril.
IYHEAT. WHEAT

Gold as a commodity.

Gold ae a commodity.

[The 10 dwts. 6 grs. of gold in two sovereigns, and
the quarter of wheat are here assumed as natural
equivalents; i. e., their value in relation to each other
estimated by the labour necessary to bring them to
market.] _ _

[The 10 dwts. 6 grs. of gold in two sovereigns, and
the quarter of wheat are here assumed as natural
equivalents ; i. e. their value in relation to each other
estimated by the labour necessary to bring them to
market.]

PITT'S POUND.
(See above, Diagram No. II.)
In this ease it is assumed that the.pressure of indirect
taxation has forced up wheat from two pounds to three
pounds per quarter: the pound, therefore, loses its .value,
or power of purchasinz, in the proportion that indirect
taxation has added to the price of wheat. Each pound
loses one-third of its power to purchase, and goes no
further than 13s. 4d. would have done before taxation
was imposed. By thus permitting the paper pound to
depreciate with respect to the geld pound, the intrinsic
value of wheat in gold is preserved: a quarter of wheat
being still equal to 10 dwts. 6 grs of gold (see postu-
late). Under this system, taxation'tnay be added to the
price of commodities to any extent, without altering their
natural value in gold—a property of the highest conse-
quence, both with respect to the home and foreign
market.

PEEL'S POUND.
(See above, Diagram No. IL)

In this case, as in considering Pitt's pound, it is
assumed that the pressure of indirect taxation has forced
up wheat from two pounds to three pounds per quarter.
From the above diagram it will appear, that by keeping
the paper pound at par with the gold pound, as Sir Robert
Peel contends it should be, a quarter of wheat is now
equivalent to 15 dwts. 9. grs. of gold ; therefore, accord-
ing to Peel, taxation has added to the intrinsic value of
wheat (see postulate).; because if it has not, 15 dwts. 9
grs. of gold must be equal to 10 dwts. 6 grs., and three
gold pounds must be equal to two gold pounds., i. c.
3=.2, which is absurd. But Peel's pound, gold
though it be, has lost its value, or power of
purchasing, in proportion as taxation has added
to the price of wheat ; each
,pound has lost
one-third of its power to purchase, and goes no fur
ther than 13s. 4d. would have done before taxation was
imposed : as money, therefore, its value or power of pur-
chasing, is 13s. 4d. ; as a commodity its value is 20s.
Under this system, taxation cannot be added to the
price of commodities, without adding to their intrinsic
value in gold, which has a most ruinous tendency as re-
gards both our home and foreign trade.
With respect to our home trade, if we could surround
Britain with a wall to keep in the gold, and could com-
mand at will as much of it as the necessity of expressing
our taxation in it required, then might our pro-
ducer be enabled to recover from the consumer the amount
of taxation which, in the shape of Excise and Customs'
duties, he has originally advanced to the State ; but this
being out -of the question, the home producer must make
up his mind to sell his goods or produce at their natural
or untaxed level. The wealthy and unproductive
are thus freed from their just share of the burden
of taxation, which the producers cannot recover
from them- by an enhanced price of the products
of their industry. The burden of' indirect taxation thus
falls entirely on the productive classes of society ; who,
to shield themselves, are obliged to use every expedient
to diminish the expense of production—low wages,
lengthened hours of work, the substitution of the labour
of women and children for that of men, the introduction
of machinery to supersede, not assist, human labour:
all these are the fruits of the attempt to keep
the paper pound at par with the gold pound.
Low and unremunerating prices are the consequence ;
agriculture, manufactures, and trade languish ; la-
bourers and operatives are thrown out of employment; and
the cry of over-production, over-population, is heard:--the
revenue declines; and the Minister is driven to impose a
property and income-tax, which ten& still further to
impoverish the people, by the diminution of expenditure
and employment to which it gives rise.
In the foreign market we no longer deal on the prin-
ciple of barter; i. e. giving equal values for equal values;
for we are compelled to exchange the labour embodied
in 15 dwts. 9 gra. of gold for the labour em-
bodied in 10 dwts. 6 grs.•• We give the foreigner
three for two, and are congratulated on the excess of our
exports, and on the fitiourible state of the exchanges,
which is but an indication that the process of giving
three, and GETTING TWO, is in DISASTROUS OPE-
RATION ! Under this system the absentee derives a
profit by his want of patriotism—the income which he
draws from this country is no longer burdened with his
share of taxation, since, for every three pounds which
he draws, he receives 15 dwts. 9 grs. of gold, instead
of the 10 dwts. 6 grs. which is his due—he luxuriates
in a foreign land on the extra 5 dwts. 3 grs. of gold
wrung out of the tared producers of this country.
Should it happen that 'the expansive power of taxa-
tion in raising prices is allowed to operate by a free
'issue of money, and that prices in consequence approach
to, or even reach their taxed level, then the foreigner
will be glad to • dispose of his quarter of
wheat, or other commodity of equal value, and taking
advantage of our taxed price, obtain 15 dwts. 9 grs. of
gold, for what cost him in his own country only 10 dwts.
6 grs. ; thus he receives. a premium of 50 per cent. to
take our gold instead of our goods. Under this opera-
tion the gold vanishes, " panics" ensue, " fluctuations in
prices" occur to a fearful extent, and a deadly struggle is
again made to bring back the gold of which we have al-
lowed ourselves to be so absurdl7 robbed.
In Peel's Pound the National Debt has been
virtually doubled in Amount, and never can be
paid.

By means of increased prices in the home market, the
producer is enabled t . recover from the consumer the-
amount of that taxation which, in the shape of Excise
and Customs' duties, he has originally advanced to the
State: the labourer charges the taxation, which enters
into the articles which he consumes, to his employer:
the employer adds it to the price. The wealthy and un-
productive are thus made to bear their just share of the
burden of taxation in the enhanced price which. they
pay for every product of industry. The-producers, too;
contribute to the revenue in their capacity of consumers;
and, by the stimulus which remunerating prices give to
the agricultural and manufacturing producer, new energy
is imparted to -all; new fields of enterprise are opened
up; new wealth is called into existence; the wants and
tastes of the people, not only keep pace, but expand, with
the powers of production. The greater the production,
and the greater the popuation, the mere easily does the
burden of taxation fall on all. With the distributive
power which such a currency gives, the wealth of the
country is proportionably diffused through all classes of
society in their several degrees; and, as no excessive toil
is exacted from the labourer in field or factory, a fnir
opportunity is given him of raising himself in the social
scale.

in the foreign market we thus deal on the principle of
barter; our high prices not interfering with the intrinsic
or gold value of our goods or produce. The foreigner
may sill to us his quarter, of wheat, or other commodity
of equal value, for three pounds instead of the two, for
which he would have sold it before taxation enhanced
its price in this country ; but, as in this case, his three
pounds exchange for 10 dwts. 6 grs. of gold only, he
derives no undue advantage over :us—he has sold his
goods to us at their natural price. In like manner,
when we sell abroad our quarter of wheat, or com-
modity of equal value, we are content to receive in ex-
change 10 dwts. 6 grs. of gold, or goods of equal value;
for the gold or goods will command the high prices of
this country, and exchange tor three pounds of its cur •
rency. We may thus carry on a flourishing foreign
trade with all the foreign exchanges against us—they
bei,.g merely so nominally.
Under this system, the absentee is prevented from
profiting by his want of patriotism: Every three pounds
which he draws from this country will bear his share of
taxation, and yield, him only 10 (I% ts. 6 grs. of.. gold ;
which will command no more abroad than his' three
pounds would do at home.
Under this system, the paper pound becomes the
pound Of account in all transactions in this country; and
it derives its value from being receivable at the Treasury
in payment of taxes. Its value is regulated by the
amount of indirect taxation. It loses its power of
purchasing as taxation is increased—it increases in its
power purchasing as taxation is diminished. Under
this system no " panics " or " fluctuations in prices "
can be experienced, the pound preserving a unifoimity
of value indicated by the gradual operation of taxation.
Under this system all our wealth remains among-us, and
we may confer as much of it as we please on the indus-
trious classes of society, by increasing the wages of the
labourer and the artisan.
In Pitt's Pound the National Debt was chiefly con-
tracted, and might have been paid off within the last
twenty-five years.
Pitt's Pound WOULD SATE the country.