614,000 Receipts specially affected to the departmental budget, over and above the £9,360,000 already shown in the direct taxes, 1,852,000 £71,517,000 36,000 £71,481,000 It is quite unnecessary for the purpose the damage done by battle. It is, howof this article to extend this column of ever, recognized that the country must figures by giving the details of the ex-pay the value of all this, or, at all events, penditure side of the account; it is suffi- a large part of it. It would be flagrantly cient to say that interest on the Consoli- unjust to leave the money consequences dated Debt (Rentes) absorbed £14,000,- of the destruction caused by the war to 000, and that the nominal capital of those be paid solely by the inhabitants of the Rentes was £447,000,000. This was the 8000 communes which have been occupied situation when the war broke out. by the Prussians. The other 28,000 comIn August 1870 a first loan of £50,000-munes which have escaped all material 000 nominal was effected by M. Magne, suffering ought naturally to contribute then Minister of Finance. It was in 3 per their proportion to the losses incurred in cent Rentes, and was issued at 60 1-2. It consequently costs £1,500,000 a-year, and it produced in cash about £30,000,000. Three months later another loan for a nominal capital of £10,000,000 was brought out in England, in 6 per cent stock at 85. The annual interest on it amounts to £600,000, and its net product to the Treasury was £8,160,000. It results from these facts that on 1st January 1871 the nominal amount of the Consolidated Debt of France was about £507,000,000, and the annual amount of interest thereon about £16,100,000. the Northern Provinces; and they can only do it in the form of a national payment. The amount to be provided for this purpose is estimated at a minimum of £20,000.000. The cost of the Communal insurrection is another item to add to the list. No official statement has been made with respect to it; but it seems to result, from the various estimates which have been published, that it must reach somewhere about £6,000,000, not including, of course, the damage done in Paris by fire and bombardment, which alone is said to represent £18,000,000, and which will have The direct cost of the war is stated by to be borne by the municipality. Finally, M. Thiers to amount to about £320,000,- the interest, at 3 per cent, on the German 000, of which £200,000,000 is for the in- indemnity represents, for three years (on demnity to Germany, and about £120,- the £120,000,000 still unpaid), £10,800,000,000 for outlay by France. But the 000. The total of these various charges latter sum contains nothing for the requi- reache, about £357,000,000; and it must sitions made by the invading army, or for be re nembered that they include nothing but the liabilities which fall on the State that they make no allowance either for the large share of outlay which the towns and village corporations will have to cover, or for the deficiency of £27,000,000 which has arisen in the estimated product of the taxes in 1870 and 1871and that the vast sum represented by destruction of trade and by privation of profits must be added to them in order to M. Magne's loan gave about The English loan produced arrive at a general statement of the entire loss to France, which has, directly or indirectly, been provoked by the war and the insurrection. We, however, are dealing with the cost to the State alone; and we may take £357,000,000 as being very nearly the exact amount of that cost. Part of this sum has been paid already, the cash for it having been provided from the following sources:— The Departments contributed (for the Garde Mobile) about The Rentes of the army dotation were appropriated and sold for about Exchequer bills were issued for The new loan lastly raised. The total of the resources obtained to this date is consequently about . form a nominal capital in Rentes of about £300,000,000, supposing, which does not seem improbable, that the loans which have yet to be effected are arranged at par, with 5 per cent interest. The entire amount of the National Debt of France would, on this hypothesis, be carried to about £750,000,000, and the interest on it to about £28,000,000. The balance of war expenditure over and above the £258,000,000 will be successively repaid out of income. This brings us to the next part of the question; what will be the annual expenditure of France when all these charges are included in the Budget? With this sum the first £80,000,000 have been paid to Germany, and £113,000,000 of the French war expenses have been discharged. The amounts remaining to pay are a balance of some £7,000,000, on the French side, £120,000,000 to Prussia, about £11,000,000 of interest thereon, and £26,000,000 for the damage done by the war, and for the cost of the Communist rebellion; the total of these debts is about £164,000,000, forming, with the £193,000,000 already paid, the general amount of £357,000,000, already indicated. The whole of this sum will not, however, constitute a permanent debt; the advances obtained from the Bank, from the army dotations, In his speech of 20th June, on the Loan and on Exchequer bills, representing to- Bill, M. Thiers has given an explanation gether £69,440,000, and certain parts of of that budget; but, notwithstanding his the outstanding claims, will be paid off by lucidity, he does not enable us to exactly degrees out of income, and will never as- follow him, and there are some obscure sume a consolidated form: that at least is points in his statement which will not be the intention announced by M. Thiers, cleared up until the debate takes place and it is easy to understand why he should on ways and means: his figures permit wish to realize it; he cannot at present us, however, to form a very approximate raise money under 6 per cent by an issue idea of the truth, though in order to do of Rentes, but the money lent by the Bank so it is necessary to group the elements of France comes to him in notes which of the account in a different way from cost that institution nothing, and on which that which he adopted. he pays an interest of 3 per cent during this year, and of only 1 per cent from 1st January next; furthermore, this advance in no way presses, for it is repayable during eight years at the rate of £8,000,000 a year. The consequence is, that the real amount of lasting debt which will have to be contracted is £258,000,000, composed of M. Magne's loan, the English loan, the £80,000,000 just brought out, the £120,000,000 to come three years hence, and, probably, a special and separate i sue to provide the £20,000,000 which have to be paid for damages. This £258,000,000 would The nominal Budget of 1870 may be taken as the basis of the modified Budget of 1871; it amounted, as has been already showu, to £82,224,000 (including the double entries on each side). The items which will increase this sum will come into play at various dates; some of them will be temporary, some of them permanent; and in order to class them correctly, we are obliged to make two separate calculations; the first showing the Budget of 1871, as it seems likely to finally come out; the second indicating the Budget of some future year, after the war. This was the original estimate of the new taxes which France would have to support. The plan adopted involves, however, a diminution of that sum hereafter, amounting, as has been shown, to about £10,000,000, so leaving the permanent increase at about £13,000,000 altogether. all debts are discharged, and all tempora- | £10,000,000 a year, the effect of which will ry payments completed. be to produce a total increase of the BudThe economies proposed in this year's get during these ten years of about £23, expenditure do not appear to exceed 000,000, as compared with the total before £1,200,000. This figure is not distinctly given by M. Thiers, but it results or, seems to result, from his speech. If it be correct, the amount we start from that is to say, the total of the Peace Budget of 1871 will be £81,024,000. To this we have to add £4,600,000 for interest on the three loans already issued (it should be remembered that the coupons of the last M. Pouyer Quertier has laid before the loan date only from 1st July); £3,000,000 Chamber a scheme of taxes destined to for ten months' interest to Germany on make up this deficit: that scheme is mainly the £120,000,000 which remain unpaid; based on an increase of the customs duties, £1,600,000 for interest on the advance which means that, if it be adopted, France made by the Bank; £8,000,000 for the first will resume the practice of protection in talment of repayment of that advance which it abandoned in 1860 when the (due 1st January 1872); £4,000,000 for Treaty of Commerce was signed with the reconstitution of the dotation of the England. The interest of the subject is army; and a margin of, say, £2,000,000 for doubled by this proposal; it involves not the unforseen liabilities which will surely only the raising of some £23,000,000 of new arise at a moment of such complication. receipts, which is in itself a singularly This form of estimating the Budget in no large question, but also the probability of way resembles that adopted by M. Thiers; a total modification of the commercial polbut it does not appear to be far wrong, icy which France has followed for the last and it leads us to a total of £104,224,000 eleven years. Before the present project for 1871. After Germany is paid in full was communicated to the Assembly, the after the Bank of France has got back its feeling was general throughout the counadvances this amount will be considera- try that the Government would resort to bly diminished; it will probably fall to direct taxation in some shape to be deterabout £94,000,000, including therein the mined that income-tax was the most interest on the new loans of £120,000,000 likely solution, and that a return to profor Prussia, and of £20,000,000 for home tection (notwithstanding the well-known indemnities. Consequently the future personal proclivities of M. Thiers and of budgets of France seem likely to range Pouyer Quertier) could not reasonably between a maximum of £104,000,000 now, be expected. The publication of the Minand a minimum of £91,000,000 a few years isterial plan consequently produced conhence. These figures may be modified af- siderable surprise, some emotion, and ter discussion of the Budget by the Cham- endless discussion. The advocates of diber, but the principle of loading the pres-rect imposts, especially of income-tax, ent in order to diminish the permanent urged that, at a moment like this, the charges in the future is wise and practical, requisite revenue ought to be raised on and it is unlikely that the Assembly will production, and not on consumption; that reject it. When it became known that the taxes on consumption alone leave each war had cost about £350,000,000 the gen- consumer at liberty to determine for himeral idea was that the whole sum would self the amount which he will contribute to be raised in the form of Rentes, and that the needs of the nation, for he has only to the interest thereon would involve, at an diminish the quantities of the objects average of 6 per cent, a durable addition which he eats, drinks, and wears, in order of £21,000,000 to the national expenditure. to simultaneously diminish the taxes which But instead of borrowing £350,000,000, M. he pays; that duties on production oblige Thiers takes only £258,000,000 (including each citizen, on the contrary, to pay up £20,000,000 for French damages); and in- in proportion to what he gains, and destead of incurring a permanent annual prive him of the faculty of evading by payment of £21,000,000 for interest, he economical living the proportion of rewill leave behind him an augmentation on sponsibility which attaches to his position that head, which probably will not exceed in the world. The Protectionists retort £14,000.000. To attain this result, how- that these are only disguised arguments ever, the next ten years will have to bear in favour of income-tax, which is, in fact, a special load, averaging something like the only "impost on production; " that income-tax is impossible in France, not only because the people will not have it, and would steadfastly make false returns in order to escape it, but also because the average income of adult Frenchmen is under £80 a-year, and consequently of fers no ground for the application of such a duty; that the whole nation hates the sight of a tax-gatherer, and would prefer to support any amount of indirect contributions rather than get off for a iess sum continue to be exported under such a load. It is evident that an increase of one-fifth in the cost of raw silk would be fatal to Lyons, for the home growth has been so diminished during the last twenty years that it is quite incapable of supplying the looms, and the proposed system of drawbacks on exportation is so cumbersome and unpractical that it is not likely to counterbalance the disorder which would be introduced into the trade by so enormous an import duty. on condition of paying it straight away; finally, that the manufacturing in- The arguments employed in France terests absolutely need protection against against the entire plan leave out, however, foreign competition in order. to enable altogether one of the most striking points them to compensate the additional burdens connected with it. They take no notice which they have henceforth to bear. The of the fact that it would carry the customs Free-Traders reply, with a mixture of irri- dues in one jump from £5,000,000 to £15.tation and scorn, that the pretended hor-500,000, and they do not invoke the difror of the tax-gatherer is all nonsense, that a French peasant is as crafty a calculator as any Paris banker can be, and that he knows his own interests well enough to elect the form of taxation which costs him the least, no matter whether he has to pay directly or indirectly; that as in 1870 the direct taxes produced £22,670,000, while the custom and excise dues together did not reach quite £20,000,000, it is evident that he is as much accustomed to one as to the other; that the objection based on the average insufficiency of incomes throughout France is, in fact, a strong argument in favour of taxes which specially affect the rich, and against duties which weigh equally on rich and poor alike; and that the idea of protecting home manufacturers because they have to pay their share of the new taxes is totally inadmissible, since it applies with equal force to every Frenchman whatever be his trade. ficulty, if not the impossibility, of trebling taxes on consumption without so diminishing that consumption that it will no longer produce the anticipated yield, especially as this huge addition of dues is given as the net result after deducting all drawbacks on exportation. Can it be expected that £20,000,000 worth of raw material will continue to be imported annually into France in the face of such a duty as 20 per cent? The £2,120,000 of proposed extra taxes on sugar and coffee might perhaps be realized, but the £3,200,000 expected to be raised on textile goods would seem to be a most uncertain item. Furthermore, none of these additional duties could be put into force until the commercial treaties by which France is bound to other countries have been modified or annulled. For these various reasons, it is in no way surprising to find that a serious opposition to the whole scheme is being organized in the Chamber, and that its chances of passing into law are diminishing every week. This opposition applies al most exclusively to the adoption of customs dues as the essential element of the arrangement; its other parts are less attacked. The proposed increase of the stamp and registration fees, the new taxes on marine and fire insurances, on playingcards, paper, allumettes, and the chicory used as a substitute for coffee; the augmentation of the excise duties on wine, spirits, beer, and cider; and even the rise of one sou on the cost of letter postage,· are all considered more or less practical and wise solutions; but the adoption of such tremendous import duties seem likely to raise a real storm. The extra revenue All these arguments, however, refer only to the principles involved in the discussion; it is when it approaches the details of M. Pouyer Quertier's scheme that it grows bitter, because direct personal interests then come into play. That scheme proposes to add £10,520,000 to the import duties hitherto levied, £4,000,000 thereof being on raw material of various kinds, the new tax being at the rate of 20 per cent ad valorem. The announcement of this project produced a general outcry in the trades which draw their raw material from abroad; the silk-weavers particularly declared that such a duty would ruin them, and sent a deputation to Versailles to protest against it. Whether other manufacturers conld support it better will appear in the debate hereafter, but there does not appear to be any reason to suppose that French-made goods can mittee has rejected the duty on raw materials. Since the above was written, the Budget Com which France wants now at once is stated France is not rlch enough to pay an inby the Minister to amount to about £19,- come-tax is absurd on the face of it; if 300,000, though it results from the preced- such a statement were true, France would ing calculation that a larger sum will be never be able to get out of its present needed if the unfunded part of the new difficulties at all, for it is income alone, debt is to be paid off by annual instal- or, more exactly, the accumulation of ments. That revenue, whatever be its wealth represented by it, which can supprecise figure, must be raised; whether ply £100,000,000 a-year to the Exchequer. the people like it or not, they will have to It may possibly be true that the average provide it, in some form or other, but at annual receipt of each Frenchman does all events they have the right, through not exceed £80; but in every country in their representatives and by direct action the world the mass of the population is of their own, to manifest their wishes and poor, and France is no exception to the to protect their interests. These wishes and rule. It is, however, equally true that the interests cannot be correctly judged from incomes above £80 a-year make up a total our English standard; neither in cause, of about £300,000,000; and that, before from or result do they exactly resemble our the disasters of the last twelve months, own desires or necessities; but the French the country was regularly laying by oneabsolutely agree with us in the main prin- third of that sum. £300,000,000 of taxable ciple that agricultural and wine-growing revenue certainly supply matter enough districts have nothing to gain by the ap- for the extraction of the £10,000,000 which plication of duties on the importation of are wanted. If the entire sum were honraw or manufactured articles. About estly stated in the returns, a rate of 3 1-2 three quarters of the population would, per cent (8 1-2d. in the pound) would therefore, if they expressed their opinions, suffice; and if we admit that only be opposed to taxes which, while they in- £200,000,000 would be acknowledged by crease the cost of their food and clothes, the public, a tax of 5 per cent (a shilling bring them no kind of corresponding ad- in the pound) would produce the requivantage. It is only in certain branches of site amount. The latter rate appears to manufacture that any compensating ad- be the maximum which would have to vantage would be found; and as, notwith- be applied; the question, therefore, lies standing the recent enormous develop between 20 per cent of import duties, or ment of its industrial productions, France 5 per cent of income-tax. The declared is still essentially an agricultural country, intention of M. Thiers being, however, to it is clear that the proportion between abandon office rather than accept the latthose who would gain and those who ter solution, it may be supposed that if the would lose by a readoption of protection | majority of the Chamber should reject the is very small indeed. An income-tax duties on raw material, a compromise of (which is not, however the only other some kind will be effected, both sides practical solution) would have the merit abandoning their theories, and that some of weighing equally on everybody; but altogether new tax will be adopted to fill its application would probably be difficult, up the gap. There are in France a group and its opponents may be right in urging of economists who have taken up incomethat all kinds of frand would be prac-tax with enthusiasm, as if it were a tised in order to evade it. Furthermore, remedy for all difficulties, and a panacea French Government employés are, as a for all trials. This party is influential and rule, the most offensive, inquisitorial, inso-active, but it has become so blinded by lent class in Europe; they would inevitably ¦ its own convictions that it has ceased to discharge their duties of verification with recognize that whatever be the merits of a want of tact, with an indiscreet zeal and its plan it is not the only one which the a personal curiosity, which would render position offers. France is singularly rich that verification more disagreeable still. in taxable matter, and if from real inherBut these considerations, serious as they ent objections, or from the purely politiare, can scarcely be admitted to constitute cal motives which might result from the a sufficient and valid motive for rejecting | resolute opposition of M. Thiers, all the principle of such a tax; they would parties should agree that income-tax shall naturally induce the Legislature to seek not be tried, there will remain several all practicable means of protecting the other solutions capable of providing the public from unnecessary annoyance, but £10,000,000. A tax on clothing, especialthat is the only real result which they ly on the dearer articles which are inought to be permittted to bring about. cluded under that head, would be a wise The other and far graver argument that and popular arrangement: it would |