Page:The Economic Journal Volume 1.djvu/346

 324 TH ECONOMIC JOURNAL will never be productive of much tax revenue; nor can we expect that municipal resources will be largely assisted by monopoly of special industries. Another feature in successful monopoly is its operation on articles of luxury. With the exception if it really be an exception of salt, this method of taxation is best applied to commodities that are at once luxuries and in general use; it/n fact conforms to the rule that governs all taxation of commodities. The sumptuary element, if it may be so described, is also present. The alcohol monopoly has been advocated as much to restrain/n- temperance as to increase revenue, and the same idea reappears i/the monopoly of tobacco. The one serious objection to the system is found in its violation of industrial liberty. The general value of freedom in industry is however always impaired by taxation. An excise duty can only be effective with the aid of constant watchfulness and interference on the part of the revenue ofcials. 'The system of control,' says Cliffe Leslie,' which excise duties involve in the case of produc- tions subject to them is scarcely a smaller violation of industrial freedom than absolute prohibition, ' and the evidence that he adduces fully supports his statement. The difference, so far as infringement of liberty is concemecl, between excise supervision and monopoly is merely one of degree, and if, as most economists and financiers maintain, taxation of commodities is necessary under present, conditions, it follows that the choice between monopoly and excise taxation depends on the particular circum- stances of each case. For instance, the French tobacco monopoly seems generally accepted as the only effective mode open for raising a suciently large sum from that commoclity. 2 The United States, who do not need revenue, can adopt the milder and less stringent form of a stamp cluty. 3 In deciding between the different methods of taxation, the following conditions are the most important, vfz. (1) the rate of taxation ..the heavier the rate of charge the fireater the probability that monopoly w/11 be necessary to enable it to be effectively collected; (2) the possibility of full supervision of private proclucersthe more cliffcult this is the stronger is the case for placing the industry entirely in the  "Financial Reform," in CoSiest Cl Essay/8 (2ncl series), p. 224. s, Nous conseillons i tousles pays qui ont le monopole clu tabac de le conserver. En fait de its sur cette clenre les plus &lev&s sont les meilleurs, i la settle condition qu'ils soient les plus productifs pour le Tr&sor. Tant que nous aurons une grande &rm&e et une grosse' clette nous devrons maintenir le monopole clu tabac." Leroy. Beaulieu, raitd  Fn, vol. h p. 706; c. Stourm, vol. i. p. 898.  For the details of the tobacco tax in the United States, see an interestin 8 article by F. L. Olmstecl, r]/Journal o cs, January 1891, pp. 198, e