Imatges de pÓgina
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persons, refused to register his edict, and after his fall the system remained as before. Of the corvée in 1776 Turgot said that it cost to the people and to the State two or even three times in days of men and wagons more than it would cost in cash. It was urged by the Prince de Conti that it ought to fall on the roturiers who, by their estate, were born taxable and corveable, while the nobles, on the contrary, were exempt. One of the first acts of the Assembly of Berry, under Necker, was to substitute for the corvée a payment based on the taille. But the Parlements were most unwilling to carry it out. When Calonne in 1786–7 replaced it by a money payment, most of the Parlements refused to register the edict.

But all the same by this slave labour more than four hundred bridges were built in the century, and more than six thousand leagues of roads were made or improved. There were a number of uncomfortable vehicles which travelled in leisure over these royal roads, coaches crawling from Paris to the large provincial towns at intervals. The carabas, an unwieldy vehicle carrying twenty persons in a long wicker cage drawn by eight horses, which took six and a half hours to go from Paris to Versailles ; the coucou, a one-horse chaise, having six passengers inside, but taking before and behind six others in “rabbits” and “spiders ”; the two-wheeled cars, carrioles which did service round Paris, carts covered with awning and containing a set of eight chairs. The coaches called carrosse, afterwards diligence, were first closed with a simple curtain, then, in the eighteenth century, by panels. Drawn by four horses, they went at such a pace that the young Count of Vaublanc in 1774 asked his uncle to make the journey on foot because of the slow speed of the coach. The post consisted of a mail which the postilion carried on the crupper. Later, two-wheeled carts were employed covered with a tarred sheet.

The carosse from Paris to Rouen went three times a week, taking a day and a half in transit ; from Paris to Lyons twice a week, the carriage containing ten persons and the journey taking six days; and from Paris to Bordeaux once a week, the journey taking fourteen days. From Châlons to Lyons one took the boat. The boat, where possible, would be preferable on account of cost, freedom from accidents, danger and highway robbers, and, probably, an advantage in speed. In the earlier part of the eighteenth century several great canal projects, connecting the Loire and the Seine, were carried out.

Turgot, in 1775, attempted a thorough reform, appreciating the value of quick transport. He provided light, convenient and well swung carriages for the royal post, and made the public service a monopoly under a directing contractor. But after his dismissal there was a reaction against all his reforms under the influence of the clergy and the nobles.

CHAPTER IV

FINANCE

i. Ways and Means. Banking.–Successful commerce rests on good finance, that is to say, on the good management of the means required for making bargains. Without such power to bargain there can be no freedom of trade. The subject is very complicated and obstruse ; one would willingly leave it to one side ; but it stands in the forefront of the problems of the eighteenth century, and mention of it cannot be avoided.

It divides easily into two parts: the one, the management of the public revenue, the sums required for the performance of the services of the State to the individual; the effort of the governing authority being to obtain by the path of least resistance the greatest amount of money for the carrying on of organized government. This is countered by the attempt on the part of each section of the patriotic community to avoid or to lessen its contribution to the public service, either by refusal or by shifting the burden to some other body of persons. The other part relates to the careful use by corporate bodies or by individuals of the wealth of the community for the purposes of exchange in trade. The two parts are closely interconnected, owing to the disturbance of trade for the requirements of the State by the imposition of taxes, duties and customs.

The first part is best illustrated from English history, in which the dispute over the right of the Crown to levy taxes in addition to the fixed feudal burdens without the consent of the community expressed by its Assembly has been going on ever since the days of the Scandinavian raiders, the kings trying to escape from their iron cage of fixed income in a time of changing value, and the Puritan or the Whig refusing to give them the key.

When world discovery by sea and influx of precious metals brought industrial expansion in the seventeenth century, the rising prices hit hard the rulers of society everywhere, while public revenues tended to remain much as usual. As the ruler paid the expenses of State out of his fixed revenue, he tried to obtain from an increased commerce additional means either by excise, the taxation of goods produced in the country, or by customs tariffs on goods imported. Every war, treaty or change of economic course brought changes of tariff which subordinated commercial to political interests, or to the necessity of financial balance for the State. Whichever course he took, the ruler found himself in conflict with the real or supposed interests of commerce.

Another course was to tax internal property apart from trade for national defence, as when Charles I. imposed the ship money which the wealthy Hampden refused to pay. The struggle went on throughout the Stuart times until by treason the Parliament won and subordinated the British interests to the Dutchman as king. “The opinion of the most recent investigators,” says Cunningham in Growth of British Industry and Commerce, Vol. 2, p. 216,“ appears to be that the Crown was exceedingly well advised in the various attempts to obtain an extra parliamentary income.” When Charles by Noy's advice levied ship money, "special care was also taken with the assessment of this tax, and it was admittedly fair." James I. put duties on foreign trade, on tobacco, currants, etc., but he failed in imposing excise duties at home. Yet these taxes on internal commerce were common abroad, probably because the variety of customary laws under local government had accustomed people to local and internal taxes. Charles also granted patents to corporations which indirectly taxed trade.

During the civil war Charles had no money and was dependent on generosity or plunder for his troops, while Parliament laid on direct taxes, levied on internal trade like France, and in 1643 levied an excise on beer, ale and cider, and in 1644 on victuals, salt, starch and textile goods. Then, at the Restoration, the king gave up the feudal payments and received instead £1,200,000, including hereditary excise and customs dues in the way of tonnage and poundage and hearth money, also the farm of the post office which had been created by a patent from Charles I.

Great difficulty was experienced in providing taxes in the place of the feudal burdens destroyed. The House of Commons were very unwilling that the king should be able to carry on without perpetual recourse to them; so when war came there was no money with which to provide for naval and military forces. Emergencies were met by subsidies, which in the eighteenth century were replaced by a land tax. This at first, in 1679, was a shilling in the pound. But as a result of the war of the Spanish Succession it rose to three shillings, and in 1727 went to four shillings. Walpole, intending to lighten this land tax, brought in an Excise Bill, but the measure, owing to the mode of collection by inspection of houses, was so unpopular that it had to be abandoned. Borrowing was looked upon as a temporary measure to be repaid almost immediately. The land tax was the chief tax and it fell entirely on real property. There was a great difficulty felt in taxing money values, though the attempt was made to tax money lent out at interest. William tried poll tax, house tax and stamp duty, and excise on various goods.

It is as well to remember that throughout the eighteenth century, up to the French Revolution, the French still retained the feudal burdens which the British had given up and were able, in spite of their approaching bankruptcy, to tax trade in a way impossible in Britain. The taxes which in Britain fell on the land, in France fell on personalty. The necessity of balancing the budget by seeking new sources of taxation which might increase in value led, in the hands of the Whig minister of George III., to the loss of the American colonies by the imposition of internal taxes at the hand of George Grenville, and secondly of customs duties by Charles Townshend in Chatham's ministry, a loss which the Whig writers have since persistently attributed to the policy of King George III., to whom no part of it was due.

The only other source of revenue for the Crown was borrowing from the goldsmiths with whom people deposited their money, receiving six per cent. on the deposit. The goldsmith lent to the Crown at eight per cent. on the security of sums voted by Parliament, but not collected. In 1672, at the outbreak of the Dutch War, Charles II. stopped repayment of money borrowed from the goldsmiths to the amount of over £1,800,000, a debt eventually taken over by the South Sea Company and merged in the National Debt.

The goldsmiths lent to the merchants for commercial business which was profitable but risky, not for what we should call investment. In Scotland the means of borrowing was provided by the shopkeepers as a money-lending business, they negotiating their customers' bills. John Coutts & Co. and many other merchants continued to lend money in this way after banks

came.

Then just before the eighteenth century a great change came. In the place of the deposit of cash for safety with the goldsmiths and loans on short time from them came the banking system of to-day, though, as a fact, it made little headway until the middle of the century. In 1692 revenue for William's wars had been raised by the creation of life annuities carrying ten per cent., afterwards reduced to seven per cent., the annuities ceasing as the lives fell out. In 1694 the Government proposed to borrow on the terms of perpetual annuities, the principal not to be repaid, the interest to be secured on increase of customs duties set apart for the purpose. The sum required, £1,200,000, was raised by a band of subscribers who formed a banking corporation for dealing in money. They were incorporated as the Bank of England.

This banking project was a Whig adventure, which killed the last chances of restoration of the Stuarts. The fear of losing the interest on the annuities lined up the careful patriot for the illustrious House who held the throne, " while they do hold possession ” as against any one who might repudiate the permanent charge. The Banking Company was allowed to issue promises to pay on demand, or, in other words, bank notes, as against the bullion in their possession. The goldsmiths tried to upset the Bank by buying up the bank notes and presenting them at a time when a recoinage was going on, when there was a great scarcity of bullion ; but the Bank survived it.

In 1695 the Bank of Scotland, also a Whig Bank, was founded

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