the ideas which most need extraction for present use are those which deal with the relations of public debts to imperialism. When Adam Smith wrote the growth of empire had meant the growth of debt; from his time to our own we find the same correlation. Adam Smith, as usual, faces the difficulties, and applies his principles with utmost candour. Since the debt has been incurred for the sake of the empire the constituent parts of the empire should contribute towards the payment of the interest and the extinction of the principal.

For this purpose, as well as for the expenses of imperial defence and of imperial administration, an additional revenue must be obtained by means of taxation from the rest of the Empire. Adam Smith accordingly goes on to consider what would be the effect of extending the British system of taxation to "Ireland and the plantations," and what modifications would be required.

§ 7. The Union with Ireland.

It must be remembered that Adam Smith was writing before the Union with Ireland (1800), of which, altogether apart from any wider imperial federation, he strongly approved. "By a union with Great Britain Ireland would gain, besides the freedom of trade, other advantages much more important, and which would more than compensate any increase of taxes that might accompany that union." These much greater advantages are to be found in the deliverance of the people of the country from the

rule of "an oppressive aristocracy founded on the most odious of all distinctions, those of religious and political prejudices, distinctions which more than any other animate both the insolence of the oppressors and the hatred and the indignation of the oppressed, and which commonly render the inhabitants of the same country more hostile to one another than those of different countries ever are. Without a union with Great Britain the inhabitants of Ireland are not likely for many ages to consider themselves one people." Those who wish to get at first hand the evidence which more than confirms this reference by Adam Smith to the ruling aristocracy of Ireland have only to read Arthur Young's Tour in Ireland, which, curiously enough, was begun just after the publication of the Wealth of Nations. Arthur Young's observations and records of the economic, political, religious, and social conditions of Ireland extend over a period of three years (1776-1779), and the book is one of the most fascinating ever written, though, until recently, strangely neglected in comparison with the other works by this most famous agriculturist.

§ 8. Imperial Taxation and Representation.

To return to the main argument: Adam Smith's scheme of imperial federation was intended to apply both to Ireland and the Colonies, and was to involve as a foundation the extension of the British system of taxation, so far as suitable throughout the whole empire. Such an extension, however, he thought,

"could perhaps scarcely be done consistently with the principles of the British constitution without admitting into the British Parliament, or, if you will, into the states-general of the British empire, a fair and equal representation of all those different provinces; that of each province bearing the same proportion to the produce of its taxes as the representation of Great Britain might bear to the produce of the taxes levied upon Great Britain." This is a repetition of the proposal in the chapter on Colonies, and it is to be observed that already he is forced to admit that the prejudices of great bodies of people impose obstacles which it is perhaps impossible to surmount.1

And to show still more clearly his appreciation of the difficulties, he continues :—

"Without pretending to determine whether such a union be practicable or impracticable, it may not, perhaps, be improper in a speculative work of this kind to consider how far the British system of taxation might be applicable to all the different provinces of the empire; what revenue might be expected from it if so applied; and in what manner a general union of this kind might be likely to affect the happiness and the prosperity of the different provinces comprehended within it. Such a speculation can at worst be regarded but as a new Utopia, less amusing certainly, but no more useless and chimerical than the old."

2

1 See above, § 4. Both quotations are from the first edition, which, however, was not published till 1776-the year of the American separation.

This passage shows clearly that Adam Smith did not consider the question of empire, as is sometimes asserted, merely from the point of view of benefit to Britain.

It may be recalled that Adam Smith had already applied the term Utopian with much more emphasis to the possible establishment of free trade in the case of Great Britain; and his calculations of the imperial revenue are all founded on existing facts, and are by no means illustrations from hypothetical arithmetic.

§ 9. Bases of Imperial Taxation.

The four principal branches of British revenue were in his day the land-tax, the stamp duties, and the customs and excise duties. Each of these is examined from the point of view of use for imperial purposes.

At the moment the observations on the land-tax are of peculiar interest, and may be quoted at length. "If there were no tythe either in Great Britain or Ireland the landlords could afford to pay six or seven millions additional land-tax without being more burdened than a very great part of them are at present. America pays no tythe, and could, therefore, very well afford to pay a land-tax. The lands in America and the West Indies are, indeed, in general, not tenanted or leased out to farmers. They could not, therefore, be assessed according to any rent-roll. But neither were the lands of Great Britain in the 4th of William and Mary assessed according to any rent-roll, but according to a very loose and inaccurate estimation. The lands in America might be assessed in the same manner, or according to an equitable valuation, in consequence of an accurate survey like that which was lately made in the Milanese and in the dominions

of Austria, Prussia, and Sardinia." Adam Smith regarded taxes on land with special favour.1 The stamp duties, he considered, might be levied without any variation in all colonies where the forms of law process, and the deeds by which property, both real and personal, is transferred are the same, or nearly the same.

"The extension of the customs-house laws of Great Britain to Ireland and the plantations, provided it was accompanied, as in justice it ought to be, with an extension of the freedom of trade, would be in the highest degree advantageous to both. . The British empire would thus afford within itself an immense internal market for every part of the produce of all its different provinces. So great an extension of market would soon compensate, both to Ireland and the plantations, all that they could suffer from the increase of the customs duties." 2

The excise is the only part of the system which Adam Smith considered would present any real difficulties owing to the difference in the kinds of produce, and even the excise might be adapted with some modifications to the circumstances of the different provinces.

Having examined the application of the British system of taxation to the empire, he proceeds to calculate, on the existing yield in Britain, the probable imperial revenue. It is not necessary to go into these calculations, but the general results are worth notice. The aggregate imperial revenue would amount to 1 Cf. Wealth of Nations, Book v. chap. ii. part ii. art. 1. See below, Chapter XVI. § 5.

2 Cf. Chapter XVI. § 6.