TAXATION THROUGH MONOPOLY 325 hands of the state; (3) the elaborateness of the technical pro- cesses employed. Where much fixed capital is required, and where invention is active, it is not advisable to establish a state monopoly; (4) the extent of the industry. A complete withdrawal .of any branch of industry from the hands of private producers is in itself, an evil, and the larger the industry the greater the loss in- flicted. Even on the supposition that cotton goods were the most suitable objects of taxation, a state monopoly of the English cotton industry would be too absurd to be thought of. Taking these conditions together, we find that there is a tolerably well- defined area within which alone the use of monopoly is admissible, and that it belongs to trained financial practice to wisely apply it within those bounds. The whole inquiry also illustrates the proposition that financial systems must be adjusted to suit special situations. There is no pure a pt/or/ system of taxation. Each state requires what is fitted for its special circumstances. The place of general princi- ples is not to assist the financier in laying down hard and fast rules, but in indicating the forces that are likely to operate in all cases, but with varying intensity in each separate instance. [NOTE.MSince the above article was written, public attention has been drawn to the opium monopoly by the debate and division on Sir J. Pease's motion (April 10th, 1891). The fact that mono- poly is nothing but a particular form of taxation disposes effectually of the proposal, made on moral grounds, to substitute an excise or export duty for the present system. Even the permission of free cultivation without any taxation is met by Sir H. Maine's dictum that 'For moral purposes there is no distinction between what a despotic Government does itself, and what it permits its subjects to do.' ?Ve are not called on to balance the arguments for total prohibition, and for retention of the monopoly. But it may be noticed that the financial sacrifice of the former would, if the burden were borne by England, be smaller than is commonly believed. The Indian Budget estimate for 1891-2 puts the net receipts from opium at R.X. 5,301,700, or, taking the rupee at ls. 5d. (the Budget figure), only ?3,810,600, less than half of the 'eight millions' of popular statements. Should the decline be as rapid in the future as it has been since 1880-1 the problem will soon solve itself.] C. F. BASTABLE
