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Rh system based on the tributes of the dependencies became possible. To a great extent the pre-existing forms of revenue were retained, but were gradually systematized. In legal theory the land of conquered communities passed into the ownership of the Roman state; in practice a revenue was obtained through land taxes in the form of either tithes (decumae) or money payments (stipendia). To the latter were adjoined capitation and trade taxes (the tributum capitis). For pasture land a special rent was paid. In some provinces (e.g. Sicily) payment in produce was preferred, as affording the supply needed for the free distribution of corn at Rome.

The great form of indirect taxation consisted in the customs dues (portoria), which were collected at the provincial boundaries and varied in amount, though the maximum did not exceed 5%. Under the same head were included the town dues (or octrois). Further, the local administration was charged on the district concerned, and requisitions for the public service were frequently made on the provincial communities. Supplies of grain, ships and timber for military use were often demanded.

The methods of levy may be regarded as an additional tax. “Vexation,” as Adam Smith remarks, “though not strictly speaking expense, is certainly equivalent to the expense at which every man would be willing to redeem himself from it”; and the Roman system was extraordinarily vexatious. From an early date the collection of the taxes had been farmed out to companies of contractors (societates vectigales), who became a by-word for rapacity. Being bound to pay a stated sum to the public authorities these publicani naturally aimed at extracting the largest possible amount from the unfortunate provincials, and, as they belonged to the Roman capitalist class, they were able to influence the provincial governors. Undue claims on the part of the tax collectors were aggravated by the extortion of the public officials. The defects of the financial organization were a serious influence in the complex of causes that brought about the fall of the Republic.

One of the reasons that induced the subject populations to accept with pleasure the establishment of the Empire was the improvement in financial treatment that it secured. The corrupt and uneconomical method of farming out the collection of the revenue was, to a great extent, replaced by collection through the officials of the imperial household. The earlier Roman treasury (aerarium) was formally retained for the receipt of revenue from the senatorial provinces, but the officials were appointed by the Princeps and became gradually mere municipal officers. The real centre of finance was the fiscus or imperial treasury, which was under the exclusive control of the ruler (“res fiscales,” says Ulpian, “quasi propriae et privatae principis sunt”), and was administered by officials of his household. Under the Republic the Senate had been the financial authority, with the Censors as finance ministers and the Quaestors as secretaries of the treasury. Never very precise, this system in the 1st century fell into extreme decay. By means of his freedmen the emperor introduced the more rigorous economy of the Roman household into public finance. The census as a method of valuation was revived; the important and productive land taxes were placed on a more definite footing; while, above all, the substitution of direct collection by state officials for the letting out by auction of the tax-collection to the companies of publicani was made general. Thus some of the most valuable lessons as to the normal evolution of a system of finance are to be learned in this connexion. Of equal, or even greater moment is the failure of the administrative reforms of the Empire to secure lasting improvement, a result due to the absence of constitutional guarantees. The close relation between finance and general policy is most impressively illustrated in this failure of benevolent autocracy.

Viewed broadly, the financial resources of the earlier Empire were obtained from (1) the public land alike of the state and the Princeps; (2) the monopolies, principally of minerals; (3) the land tax; (4) the customs; (5) the taxes on inheritances, on sales and on the purchase of slaves (vectigalia). One result of the establishment of the Principate was the consolidation of the public domain. The old “public land” in Italy had nearly disappeared; but the royal possessions in the conquered provinces and the private properties of the emperor became ultimately a part of the property of the Fiscus. Such land was let either on five-year leases or in perpetuity to coloni. Mines were also taken over for public use and worked by slaves or, in later times, by convict labour. The tendency towards state monopoly became more marked in the closing days of the Empire, the 4th and 5th centuries Perhaps the most comprehensive of the fiscal reforms of the Empire was the reconstruction of the land tax, based on a census or (to use the French term) cadastre, in which the area, the modes of cultivation and the estimated productiveness of each holding were stated, the average of ten preceding years being taken as the standard. After the reconstruction under Diocletian at the end of the 3rd century , fifteen years (the indictio)—though probably used as early as the time of Hadrian—was recognized as the period for revaluation. With the growing needs of the state this taxation became more rigorous and was one of the great grievances of the population, especially of the sections that were declining in status and passing into the condition of villenage. The portoria, or customs, received a better organization, though the varying rates for different provinces continued. By degrees the older maximum of 5% was exceeded, until in the 4th century 12% was in some cases levied. Even at this higher rate the facilities for trade were greater than in medieval or (until the revolution in transport) modern times. In spite of certain prejudices against the import of luxuries and the export of gold, there is little indication of the influence of mercantilist or protectionist ideas. The nearest approach to excise was the duty of 1% on all sales, a tax that in Gibbon’s words “has ever been the occasion of clamour and discontent.” The higher charge of 4% on the purchase of slaves, and the still heavier 5% on successions after death, were likewise established at the beginning of the Empire and specially applied to the full citizens. Escheats and lapsed legacies (caduca) were further miscellaneous sources of gain to the state.

Taken as a whole, the financial system of Imperial Rome shows a very high elaboration in form. The patrimonium, the tributa and the vectigalia are divisions parallel to the domaine, the contributions directes and the contributions indirectes of modern French administration; or the English “non-tax” revenue, inland revenue and “customs and excise.” The careful regulations given in the Codes and the Digest show the observance of technical conditions as to assessment and accounting. In substance and spirit, however, Roman finance was essentially backward. Without altogether accepting Merivale’s judgment that “their principles of finance were to the last rude and unphilosophical,” it may be granted that Roman statesmen never seriously faced the questions of just distribution and maximum productiveness in the tax system. Still less did they perceive the connexion between these two aspects of finance. Mechanical uniformity and minute regulation are inadequate substitutes for observance of the canons of equality, certainty and economy in the operation of the tax system. Whether (as has been suggested) an Adam Smith in power could have saved the Empire is doubtful; but he would certainly have remodelled its finance. The most glaring fault was plainly the undue and increasing pressure on the productive classes. Each century saw heavier burdens imposed on the actual workers and on their employers, while expenditure was chiefly devoted to unproductive purposes. The distribution was also unfair as between the different territorial divisions. The capital and certain provincial towns were favoured at the expense of the provinces and the country districts. Again, the cost of collection, though less than under the farming-out system, was far too great. Some alleviation was indeed obtained by the apportionment of contributions amongst the districts liable, leaving to the community to decide as it thought best between its members. The allotment of the land-tax to units (juga) of equal value whatever might be the area, was a contrivance similar in character.