Page:The Economic Journal Volume 1.djvu/256

 II.—Reform in Railroad Passenger Fares. By

Prof. James first passes in review the writers who in the course of the last half-century have advocated reform in railroad fares. The literature of the subject comprises many names well known in other walks of economical inquiry Scharling, Julius Lehr, and Hertzka. Follows a lucid description of the 'zone systems' adopted in Hungary and Austria systems similar but by no means identical. As the result of theory and experience, there is said to have been reached a consensus that distance should not play that role in determining raihvay tariffs which is at present assigned to it. In concluiion, Prof. James applies the experience of Europe to the railway problems of America. Much dissatisfied with the existing railway service, he advances the following weighty argument:—'There are two points in the development of every business where the profits of the business would be the same [two maximum points we should prefer to say], namely, the point of relatively small business and high profits on each transaction and that of large business and sinall profits on each transaction. There is no reason in the nature of the business why a man having reached the former should go to the latter. But there is a great reason, from the point of view of public interest, why he should do so. [cf. Marshall, Principles of Economics, book v. chap. 8.]....'

III.—The Tobacco Tax. By

The history of the tobacco tax in the United States for the years following 1862—when it was first imposed as a war measure presents a succession of changes not successfully adapted to baffle fraud and evasion. 'Under the Act of 1864, it can safely be said that the twenty millions of yearly revenue did not represent more than half the amount really due to the govermnent.' At length, in 1868, the simple machinery of an effective straightforward tax was attained. The subsequent history of the tax continues to throw light on fiscal problems. It is argued from incidents peculiar to the production of this commodity, that the tax upon the raw material does not take more from the consumer than reaches the government. The tax does not seem to discourage consumption, the increase of which (per head of population), in America, as in the old world, during recent years, has been portentous. That the tax should not affect consumption is not surprising, if it is true that it is 'not important in determining the market-price of the leaf.' This occurs partly in consequence of the foreign trade, partly, if we understand the argument, because the uncertainties of the crop exposed to 'the frost, the worms, the weather,' and after all 'overproduction'—are so violent as altogether to mask the influence of the be said to affect the speculative calculations of tax, which cannot the grower.

IV.—The next article, on the Verein für Socialpolitik, by will be studied with peculiar interest by the members of the British Economic Association. Less fortunate than the British Economic, the German Association was founded on a somewhat onesided basis with affinities to the prevalent ' historical' school. The founders 'were united in their opposition to the Manchester school.' However, this narrowness of foundation would not be inferred from the breadth which characterizes the work of the' Verein.' The following claim, made by its secretary, appears to be just: ' The Verein proves by an admirable example that science, without abandoning its high position above all parties, without descending to the level of the conflict of