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History of Free Trade page 3

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The explanation of the doubled duty was that the manufacturer must not only be reimbursed the amount he has paid, but both he and the stationer must have a profit on the increased price of the article, to which had to be added a compensation for the hindrance to business, and the trouble and annoyance of excise regulations. Every step of the manufacture and sale of paper was conducted under the surveillance of the revenue officer. Any attempt to improve processes, or to apply paper to any new purpose, was naturally regarded with suspicion, and generally nipped in the bud by the annoyance to which any inventive genius who was unfortunate enough to turn his attention to paper was sure to be subjected. Indeed, it might have been supposed by any one who was ignorant of the origin of the tax, that the making of paper was a criminal act, which the Government, unable to repress entirely, had determined to check and regulate to the utmost of their power. The numerous provisions of the law as to entering, folding, weighing, sorting, labelling, and removing were more than any man could retain in his memory, while compliance was enforced under numerous penalties. The paper-mill owner was bound to give twenty-four or forty-eight hours' notice (according to the distance at which the exciseman lived) before he could change any paper, and to keep it in the mill for twenty-four hours afterwards before he could send it to market, unless it had been re-weighed by the supervisor. He was compelled to have the different rooms in his manufactory, and every engine, vat, press, and chest numbered. Labels had to be pasted on every ream, and if one label happened to be lost, the paper-maker was liable to a penalty of 200. One paper-maker informed Mr. Poulett Thompson that he generally wrote a request for 500 labels to the excise at one time; and that " if any person had got into the mill to steal or destroy them, the penalty would be 100,000." In addition to this he was until very lately compelled to admit the exciseman at all hours of the day or night, or pay 200; he had to keep sufficient scales and weights, and allow the officers to use them, or forfeit 100; and if he employed for his own purposes the more accurate weighing-machine used in other Government departments, the excise, ever jealous of innovation, compelled him to retain the old beam scale for the use of the exciseman. He had to help the exciseman to do his work, or on refusal forfeit 50; he had to enter daily in a book an account of the paper sent out of his mill, the penalty for any forgetfulness on this point being 50; he had to abstain from sending out any paper not tied up in wrappers properly labelled, or forfeit 20. If he had two mills, he could not move a ream of paper from one to the other without, notice, under a penalty of 50; and he was compelled to abstain from opening a stationer's shop within a mile of his manufactory under a penalty of 200. The paper duty was originally imposed in the reign of Queen Anne, for the avowed purpose of putting down newspapers and pamphlets. Dean Swift, in commenting upon the new taxes on knowledge, said, "As the person who advised the Queen had only in his thoughts the redressing of the political and factious libels, I think he ought to have taken care, by his great credit in the House, to have prepared some way by which that evil might be removed; the law for taxing single papers having produced quite a contrary effect, as was then foreseen by many persons, and has since been found true by experience; " and he complained that "those who would draw their pens by the side of their princes and country, are discouraged by this tax, which exceeds the intrinsic value both of the materials and the work; and this, if I be not mistaken, without example."

That the paper duty was not imposed for the sake of revenue is evidenced by the fact that in the first year it produced less than 14,000; but so effectual was it found in putting a stop to the objectionable manufacture, that in the following year the amount collected fell to less than half that sum. The duty was in 1717 made perpetual, and from time to time was increased, until it settled at 3d. per pound on all but common brown paper. In 1835 a Royal Commission, of which Sir Henry Parnell was the chairman, recommended that the duty be reduced to 1½d. on all paper - a change which was carried out in the following year. Some idea of the repressive effect of the old duty may be obtained from comparing the rate of progress of the manufacture for twenty-one years before and twenty-one years after the reduction of duty, as shown by the following figures: -

England and WalesScotlandIrelandTotal
The stimulus given to cheap publications by this step towards the complete freedom of the paper trade was enormous, although the tax still pressed with crushing effect upon all classes of publications except those luxurious and ornamental or valuable copyright works in which paper bears but a small proportion to the entire cost. From a statement drawn up by one of the largest publishing houses in London, it appeared that, as a rule, where an edition of a book was an average one of 750 copies, the duties amounted to about a seventh of the cost of the edition; and that if the edition consisted of 500 or 750 copies, the duties amounted to more than the entire remuneration of the author. This, however, was on the supposition that the entire number of copies printed were sold off at full publication price - a thing which rarely happened; for, of course, the sale of books under these heavy burdens was greatly restricted. As a rule, half the original impression of a work was rarely sold off except at a ruinous sacrifice. But if, in the previous example of an edition of 750 copies, it happened that only 625, instead of 750, were sold, the result would be that only 57 19s. would remain as profit to the author and publisher, and as a compensation for interest, the risk of bad debts, &c. Were only 500 copies sold, the cost would not be more than balanced; and there would be nothing whatever to remunerate the author for his labour, or the bookseller for the use of his capital. Were only 400 copies sold, Government would have received 28 19s. lid. of duty from a speculation by which the author had lost all his labour, and the bookseller 36 15s. of his capital. The mere possibility of such a supposition being realised, would have been a sufficient ground for a revision of the duties; but, in point of fact, such cases, instead of being merely possible or rare, were of every-day occurrence.

On an investigation into the affairs of an extensive publishing concern, it was found that, of 130 works published by it in a given time, 50 had not paid their expenses. Of the 80 that did pay, 13 only had arrived at a second edition; but, in most instances, these second editions had not been profitable. In general it was estimated, that of the books published, a fourth did not pay their expenses; and that only 1 in 8 or 10 could be reprinted with advantage. As respects pamphlets, it was stated that not 1 in 50 paid the expenses of publication.

" Such," says the same authority (writing in 1834), "is the encouragement given to literature, such the facilities afforded to the diffusion of useful information, by the popular Government of England. All other businesses meet with very different treatment. Dealers in gin or brandy, for example, may lodge their goods in bonded warehouses, and are not obliged to pay any duty upon them until they are sold for home consumption; but such privilege is denied to the bookseller, though the article in which he deals be a thousand times more capricious. He must pay the duty on the whole impression of every book, before bringing a single copy of it to market; so that he not unfrequently pays duty upon 1,000 volumes, though unable to sell above 150 or 200, except as waste paper! Even this is not the whole injury done him; for upon an advertisement announcing the sale of a 6d. pamphlet, as heavy a duty is charged as if it announced the sale of an estate worth 100,000! "

Even such a trifling article as starch was subjected, up to 1835, to a duty which produced upwards of 100,000 per annum. The starch was charged with a duty of 3d. per lb., and its manufacture was consequently placed under the control of the excise. Every maker of starch for sale had to take out an annual licence, which cost 5. Notice was to be given to the excise of the erection, and of all changes in the construction, of workshops, implements, &c., used in the manufacture of starch, under a penalty of 200. All starch, before it was put into any stove or place to dry, was to be papered and sealed or stamped by the officer, under a penalty of 100. Any person forging or counterfeiting such stamp or seal was guilty of felony, but with the benefit of clergy. Any person knowingly selling any starch with a forged or counterfeit stamp, &c., forfeited 500. No quantity of starch exceeding 28 lbs. could be removed from one place to another, unless the word " starch " were marked on the package, in legible letters three inches long, under forfeiture of the package, and of the cattle and carts conveying the same. Any dealer in starch receiving any quantity exceeding 28 lbs. not marked as above, forfeited 200. Starch-makers were to make weekly entries of the starch made by them, under a penalty of 50, and to make payment of the duties within a week of such entry. Permits granted for shipping starch to be carried coastwise were to express the quality, quantity, weight, the mark of the package, by whom made and sold, and to whom consigned; and if shipped without such docket, it might be seized. No starch was to be imported unless in packages containing at least 224 lbs. stowed openly in the hold, on pain of forfeiture and a penalty of 50. No starch was to be exported unless the package as originally sealed or stamped by the officer was entire, and unless the officer marked the word "exportation" upon it.

All this absurd interference with industry was swept away in 1834, and in the same year a considerable reduction was made in the duty on that necessary article, soap. In the same year of reform, a ridiculous duty on stone bottles was swept away - a duty which, for the sake of about 4,000 per annum, subjected the manufacturers of earthenware to annoyances no less harassing than those which we have sketched above. Among the odd effects of the repeal of this silly duty, we may notice the rapid extension of the consumption of that popular beverage, ginger-beer, which is invariably kept in stone bottles, and which, before the removal of the duty, was scarcely known. Sweets and mead were also emancipated in 1835; but from that period until Sir Robert Peel's great changes, in 1845-6, the beneficial course of remission of excise duties was unhappily suspended. The results of these changes have been in the highest degree satisfactory. They have shown that the multiplication of vexatious restraints upon industrial liberty was not only an evil, but a folly. The removal of each duty has been followed in every case by an enormous progress in the manufacture. New uses have been discovered for every article, improvements made in the article itself and in the processes of manufacture, and fresh employment has been found for the people. The consumption of every kind of commodity, taxed and untaxed, has thus been increased, and, as a consequence, it has been found that all this relief to industry and to the consumer of the articles has absolutely cost the revenue nothing. This will be best shown by looking forward a little beyond the period which we are now describing. In 1830 we had 27 different excise duties, which produced 20,076,862; in 1831, 24, which produced 17,795,512; in 1833, 23, which produced 17,510,073; in 1834, 21, which produced 17,573,209; in 1835, 18, which produced 17,861,624; in 1846, 16, which produced 18,183,454; in 1853, 15, which produced 19,105,404; in 1854, 12, which produced 19,739,185; while in 1858, these 12 duties actually produced 339,440 more than the whole 27 had produced in 1830.

The tariff reforms during this period were less important. Indeed, the systematic and extensive revision of the customs duties was, to a very considerable extent (as remarked by Mr. Tooke), in the position in which it had been left by Mr. Huskisson in 1826. The budget of 1831 had, however, relinquished 979,000 on coals brought coastwise, a manifestly unfair species of domestic protection to the inland coal mines, and a great injustice to those parts of the kingdom to which coals had to be brought by sea. The timber duties had long been, in the eyes of Free-traders, among the most unwise and injurious of all the protective duties in the tariff. Baltic timber, of which we now obtain such enormous supplies, was loaded with a duty so high that it was virtually prohibitory, while timber from Canada was imported at a trifling rate. The evil effects of this tax were almost incalculable. The practice of encouraging Canadian timber was one of the mischievous consequences of the great war with France, during which the Baltic was for a short time closed. So beneficial, however, was it found to the class interests at home, that in 1813, after Napoleon's Russian campaign, and when the Baltic was once more open, 25 per cent, was added to the duties. " The absurdity of this conduct," says a writer in 1834, "will appear still more striking, if we reflect for a moment on the peculiar situation of the countries in the north of Europe. The nations round the Baltic have made little progress in manufacturing industry. They possess an abundance of valuable raw products, but they are wholly destitute of the finer species of manufactured commodities, nor have they any real inducement to take measures for obtaining a supply of them. Their iron and copper mines, their vast forests, and their immense tracts of fertile and hitherto unoccupied land, afford far more ready and advantageous investments for their deficient capital than could be found in manufactures or foreign trade. Russia and Prussia have, indeed, been tempted, by our corn and timber laws, to exclude some species of manufactured goods; but it is not possible for them materially to limit our exports to them, unless we second their efforts by refusing to admit their products. Of all the countries in the world, there is obviously none which has so many facilities for carrying on an advantageous trade with the North as Great Britain. We have a surplus of all those products of which Russia, 'Prussia, Sweden, Denmark, and Norway stand most in need; and, on the other hand, they have a surplus of many things of which we are comparatively destitute. The immense traffic we carry on with the Baltic does not, therefore, depend in any considerable degree on artificial or accidental circumstances."

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