Appletons' Popular Science Monthly, April 1899

In Prussia the working of certain mines is in the hands of the state, and was originally looked upon as an important contribution to the income of the state. As in the Dutch experience, the changes in production throughout the world have greatly reduced the returns and made the income variable; yet there is little disposition to dispose of these possessions. "The danger of mineral supplies being worked in a reckless and extravagant manner without regard to the welfare of future generations, and the dread of combinations by the producers of such commodities as tin, copper, and salt, with the aim of raising prices, have both tended to hinder the alienation of state mines."7

The more common form of state monopoly is that which occupies a middle position, established for reasons of public safety or utility as well as of revenue. The salt monopoly enforced in Prussia was only abolished in 1867, and is still maintained in every canton of Switzerland. The strongest plea in its defense has been the guarantee by the state of the purity of the article sold, and this phase of the question has superseded the revenue aspect. Few articles of prime necessity, like salt, are subject to monopolies imposed by the state, and by a process of elimination it is only articles of luxury or voluntary consumption that are regarded as fit objects of monopoly for the benefit of the state.

A tax imposed upon an article at a certain stage of its production or manufacture may enforce the expediency or necessity of a state monopoly. Where the supervision of the state agents must be so close as to interfere with the conduct of the industry, the state intervenes and itself controls the manufacture and sale. Tobacco has long been subject to this fiscal régime, and, proving so productive of revenue, there is little to be said against a monopoly by the state of its manufacture and sale.

In Italy the tobacco monopoly is conceded to a company, but its return of net revenue to the state is nearly as large as the revenue derived from the taxes on real property (about thirty-eight million dollars a year). Prussia imposes a charge on the home-grown tobacco by a tax on the land devoted to its culture, but the return is very small, and Bismarck wished to introduce a true tobacco monopoly, modeled on that of France. But the conditions were opposed to his scheme, for the use of tobacco is general throughout the empire, and a proposition to increase its price by taxation or modify its free manufacture and distribution excited a widespread opposition. France maintains a full monopoly, and finds it too profitable to be lightly set aside unless some equally profitable source of revenue is discovered to make good the loss its abolition would involve.

While historical support is given to the maintenance of a monopoly as in France, it is not probable that the system will find imitators in other states, however tempting the returns obtained might seem. Great Britain has by her insular position solved the problem in another way. By interdicting the domestic cultivation of tobacco, all that is consumed must be imported, and a customs duty offers a ready instrument for making the plant, in whatever form it enters, contribute its dues to the exchequer. In Russia, as in the United States, where tobacco is a domestic product, the tax is imposed upon its manufacture, and this method requires supervision but no monopoly of the state.

The tobacco régime is defended almost entirely on fiscal grounds, and as a monopoly, an extreme measure, has proved its value as an instrument of taxation. Other reasons, of a moral character, are urged to induce the state to monopolize the manufacture and sale of distilled spirits. Both France and Germany have considered this question, and, in spite of confident predictions of a large profit, have decided not to undertake it. Russia, on the other hand, has taken it up quite as much on social as on revenue grounds, and is gradually securing a monopoly of the trade in spirits. The initial cost of the undertaking is large, and, as the system has not yet been perfected, it is too early to give a judgment on its availability as a financial instrument.

The transit dues, once commonly used by different countries, have been generally abandoned, and in China must they be sought for in their original forms of vexatious and unprofitable force. They arose from a desire to derive some benefit from a commerce permitted grudgingly, and rarely attaining any high results. The same end was sought by duties on exports, much employed when the country was supposed to be drained of its wealth by what was sent out of it. The conditions necessary for a successful duty on exports are not often found, and only in a few countries are they now existent. In Italy, South America, and Asia, exports of certain natural products are taxed, and, as in the case of Brazil, yield a notable revenue. In view of the rapid advancement of production in new countries and of inventions in the old, whereby many natural monopolies have been destroyed and competition made more general, such duties prove to be more obstructive to trade than productive of revenue, and are rapidly being abandoned. In spite of a formal prohibition of export duties in the Constitution of the United States, they are sometimes suggested in all seriousness.

In thus clearing the path of what may be called dead or dying methods of recent tax systems, the advantages enjoyed by the United States in their freedom from such survivals become more evident. The practice of farming taxes never gained a foothold in any part of the country. Lotteries have been occasional, and with two exceptions have been conducted on a limited scale – that of Louisiana is well known; an earlier instance is less known. During the Revolution one of the means resorted to by the Continental Congress for income was a lottery, but the attempt proved disastrous to all concerned, and was finally abandoned even more thoroughly than was the continental currency. State monopolies of production and sale of any commodity have never met with favor, and stand condemned in the desire for individual initiative. As sources of revenue, the public lands, state control of the post office, and of such municipal undertakings as the water and, in a very few cases, the gas supply, has been employed, and in place of profit the mere cost of management is sought. More than any country of continental Europe, the United States has depended upon taxes, pure and simple, unsupported or modified by state domains, state mines, state manufactures, or state monopolies. Even Great Britain in her local taxation is bound and hampered by precedent, and pursues a system that is notoriously confused, costly, and vexatious. Long usage and the erection of independent and conflicting authorities on principles other than fiscal have imposed upon the local agents the duty of assessing and collecting county and borough taxes which are as indefensible in theory as they are difficult in practice.

From this weight of tradition and precedent the United States has been almost entirely free, and it was possible to construct out of small beginnings systems of Federal and State taxation at least reasonable and consistent, producing an increasing revenue with the rapid development of wealth and the larger number of taxable objects; and so elastic as to adapt themselves to such changes as are inevitable in any progressive movement of commerce or industry. That no such system has resulted after a century of national life, and an even longer term of local (colonial and State) activities, these papers have tended to show. That the time is at hand when the problem of a thorough reform of both State and Federal taxation must be met, current facts prove beyond any doubt. If I have aided in a proper comprehension of these problems, and, by collecting certain experiences in taxation among other peoples and in different stages of civilization, contributed toward a proper solution, the end of this work will have been attained. It is not possible to introduce a complete change of policy at once; it is not only feasible but necessary to indicate the direction this change should take, and the ends to be secured in making them. And first as to Federal taxation:

In a democracy like that of the United States, the continuance of a mixed system of direct and indirect taxes is a foregone conclusion. Not that there is an absence of change or modification in the details of this double system, or in the application or distribution of a particular impost or duty. To deny such modification is to deny any movement in the body politic, or any progress in the industrial and commercial economy of the people. There is a steady and continuous movement in every direction, and the mere effort to escape taxation results in a new adjustment of related facts. This development has, partly through necessity and partly through a rising consciousness of what a tax implies, been tending from indirect to direct taxes. Ever restive under a rigid supervision by the state of private concerns, there has been a wholesome opposition to inquisitorial taxes. But this opposition has been carried too far, and is due more to the ignorant and at times brutal disregard by the agents selected for enforcing the law than to an appreciation of the injustice of the tax. Whether in customs or excise, the same blunders of management have been committed, and created a spirit in the people that is injurious to their best interests. On the one hand, private enterprises have been unduly favored by the removal of foreign competition, a favor that is now disappearing through the remarkable development of domestic competition. Thus taxes have been extensively used for other purposes than to obtain revenue, and for private ends. On the other hand, there has been created the feeling that taxation is a proper instrument for effecting a more equal distribution of wealth among the people, and readily becomes an instrument of oppression.

The almost absolute dependence of the Federal Government upon the customs duties for revenue through a great part of its existence was a striking fact. The simplicity of collection and the comparatively moderate scale of duties, although considered high at the time of imposition, gave this branch of the possible sources of revenue a magnified importance. The development of the country was slow, and at times greatly hampered by the tariff policy; but until about 1857 no other source of income was needed to meet the expenditures of the Government in a time of peace.

In recent years this has all changed, and not for the better. The immense development in manufactures and financial ability accomplished since 1860 has made a tariff for protection an anachronism. The political features of customs legislation have been pushed so far as almost to overshadow the fiscal qualities. The wave of protectionism that followed the abrogation of the commercial treaties of Europe about 1880 has resulted in tariffs framed with the desire to injure the commerce of other states rather than to meet the needs of a treasury. In the United States this policy has been carried beyond that of Europe, and the tariff now in existence is more protective than any hitherto enforced, short of absolute prohibition of imports.

In more respects than one the tariff law of 1897 was an extreme application of the protective policy. Each year the United States has demonstrated its ability not only to meet the industrial competition of the world on an equal footing, but to engage with it aggressively and with complete success. It is not necessary to give the figures of exports of manufactures to establish this fact; it is now beyond question. To frame a measure of extreme protection was, therefore, to overlook the most striking phase of the industrial situation existing in the United States. With an ability to manufacture cheaply and on a grand scale, and with a capacity to supply the demands of a market larger than any home market, there was no foreign competition to encounter, and the higher rates of duties meant nothing, either for protection or for revenue. In carrying further into action a tariff framed more for protection than for revenue, a twofold error was committed. The provisions were so complicated as to make the application difficult, and in applying these provisions inquisitorial and vexatious regulations were necessary to assure even a reasonable fulfillment of the requirements. In former tariff laws a general description carried a large class of articles, and a uniform duty, usually ad valorem, was collected. But under the demand for a more scientific tariff, these general classes were broken up into a number of enumerated articles, each one carrying a specific or mixed duty, and an omnium or basket clause at the end to catch any article that could not be included in any enumeration. This desire to fix specific rates upon each imported commodity has been applied more generally in the law of 1897 than in any previous tariff act. An examination of the imports of manufactures of textile fibers will illustrate this increase of complexity without any increase of revenue. Indeed, these classifications and rates, being suggested by interested parties, have for their object a reduction of imports, and as a rule a reduction in revenue from them follows.

The second objection to the increasing complexity of the tariff laws is to be found in the petty annoyances imposed upon importers and others in enforcing the not always consistent provisions of the law. These vexations are made all the more telling by the fact that the administration of the law is apt to be in the hands of those who are openly hostile to foreign importations, and therefore regard the importer in an unfriendly spirit. The power given to the customs agents is enormous, and it is not remarkable that it is abused. The demand for samples, the appraisement of articles, the classification of new or compound commodities, all offer room for controversy, which is not always decided by an appeal to the courts of justice. In special instances, where a section of the law has been framed in behalf of a special interest, the attempt to enforce it becomes petty tyranny of the most intolerable kind.

In operation the law soon exhibited its failure as a revenue measure. Although duties were generally increased, the more important articles taxed yielded a smaller revenue than under lower rates. The aggregate collections under the bill did not meet the expectations of its sponsors, and for two reasons: first, because the higher duties discouraged imports; and secondly, the demand for imported articles was steadily decreasing under the expanding ability of home manufactures to meet the needs of the market. No measure short of a direct encouragement to importations can change this situation, or prevent the further shrinkage in the use of foreign manufactures. It follows that the tariff, unless radically altered, can no longer be depended on for a return sufficient to defray one half of the rapidly increasing expenditures of the national Government. By refusing to impose moderate duties on articles of general consumption, revenue is sacrificed; by insisting upon imposing protective duties where little revenue can be had, the tariff is converted into a political weapon. Its dangerous qualities are strengthened by turning these duties against the products of certain countries, a policy specially fit to invite reprisals.

Even the framers of this latest tariff entertained the belief that some provision should be made for breaking its full effect. The familiar scheme for reciprocity treaties, under which moderate concessions in some of the duties could be made, was retained; but France was the only power that could have an object in seriously entertaining the proposition to enter into a negotiation. No real reduction in duties could be given to Germany or any other country, and it has become a recognized fact that Germany does not hesitate to seize an opportunity to exclude the products of the United States, and on the same grounds as support the high duties in the American tariff. The system of drawbacks has ceased to be of much moment in our customs policy, and in the export interest in canned goods finds its chief exercise. Nor does a privilege to manufacture in bond affect more than one article of importance – ores of lead containing silver. No matter how it is regarded, the tariff of 1897 was not framed for revenue, and in experience has not proved sufficiently productive to meet its share of the expenditures of Government. The animus of its sponsors in attaining the immediate political object sacrificed the more important and permanent object of revenue.

Were the true object of customs duties – revenue – to be kept in view in tariff legislation, it would be a simple matter to devise a measure that would be satisfactory and highly productive of revenue. In the fifteen hundred or more articles enumerated in the tariff schedules, more than fourteen hundred are nonproductive, or yield so small a return as to have in the aggregate no appreciable effect on the total receipts. The number left after so large an exclusion can be still further reduced without reducing the revenue one tenth; and it is from a small number of articles, hardly twenty-five, that the great part of the customs revenue is obtained. By reducing the rates of duties on these to a point of highest revenue efficiency, at which the import is not interfered with and yet not encouraged, a higher return could be had than from the existing complicated, overloaded, and political compilation of duties, usually imposed for any reason other than what they will bring into the treasury.

When, therefore, the best methods of Federal taxation are broached, the reform of the tariff stands first in importance. It is necessary to bring it more into line with the industrial conditions of to-day, which call for foreign markets rather than a domestic or closed market; and for a liberal commercial policy in place of one that regards the products of other countries, whether imported in the crude or manufactured forms, as constituting a menace to American labor and American interests. It calls for a systematic and intelligent revision, which shall throw out such duties as are no longer of service even for protection, and to reduce those that are hostile to the products of other countries and bear in themselves the seeds of reprisals in the future. Now that the United States is going into the great markets with its manufactures, and obtaining a foothold against all competitors, the invitation to retaliation holds a danger far greater to its own interests than any that can be inflicted on other peoples. The greater the advances made the more readily will recourse be had to reprisals and hostile legislation; and in support of every act appeal may be had to examples set by the United States.8

MENTAL DEFECTIVES AND THE SOCIAL WELFARE

By MARTIN W. BARR, M. D.,CHIEF PHYSICIAN, PENNSYLVANIA TRAINING SCHOOL FOR FEEBLE-MINDED CHILDREN, ELWYN, PA

Periods of extraordinary efflorescence or fruitage are followed by exhaustion and sterility not infrequently demanding the free use of the pruning knife; and, just as we remark how frequent is idiocy the offspring of genius, so do we find the same seeming paradox, of mental defect in rank and increasing growth the product of this most wonderful nineteenth century.

True, science has contributed to numbers by revealing as mental defectives the many "misunderstood," "the backward," "the feebly gifted," as well as by showing what was once esteemed moral perversion to be moral imbecility; but a truth to which science also attests is, that unstable nerve centers uniting and reacting through successive generations, producing various forms of neuroses, evidenced in insanity, moral and mental imbecility, idiocy and epilepsy, do show the influence of a highly nervous age.

Our last census reports, although necessarily uncertain and unreliable, yet show ninety thousand mental defectives, not including the insane. Unrecognized and unacknowledged cases swell the number easily to one hundred thousand within our present borders – how many we are going to annex remains to be seen; but this is an enemy that attacks not our frontiers but our hearthstones. We have reached that point when we must conquer it, lest it should conquer us, and the means to this end may be summed up in three words – separation, asexualization, and permanent sequestration. "Diseases desperate grown by desperate appliances are relieved, or not at all," and we must recognize that heroic measures now are as essential to the welfare of the unfortunate as to society, which will then naturally adjust itself to new conditions. Viewing the separation and massing of these irresponsibles – innocent victims of ignorance, debauchery, or selfish lust – men will come to realize that a greater crime than taking is the giving of such life; and so a greater reverence for the sacredness of marriage, a deeper sense of the great responsibilities of parenthood, will do more to avert this evil than the most stringent marriage laws. That the present demands some restraint upon the ignorant and the indifferent there can be no doubt, and laws preventing the marriage of defectives and of their immediate descendants would go far to stem the tide of harmful heredity.

But what to do with those now in our midst is the vital question! They must be provided for in a way that shall insure safety to society, economy to the State, and protection and happiness to the individual. The answer found in the experience of half a century is, briefly, asylums for the helpless – training schools and colonies for those capable of becoming helpful. These in very name and nature being widely separate, just as separate as titles and names indicate, should be their working systems. Work among the feeble-minded, a philanthropic movement directed first toward the idiot, soon found a limit in dealing with a subject not trainable and but slightly if at all improvable. Thence, diverging and broadening as idiocy became better understood and imbecility in various phases became recognized, it found its true province in strengthening and encouraging feeble intellects, arousing and stimulating indolent and weak wills, and in training and directing into healthful channels the abnormal energy of those destitute of the moral sense. How wide the divergence can readily be seen, as also how entirely incompatible with union must be work further apart in reality than is the training of an imbecile and a normal child.

For the idiot, who not only can not be trained, but who in many cases is unimprovable even in the simplest matters of self-help, nothing is needed but that care and attention found in every well-regulated nursery of delicate children, the sine qua non being regular hours, simple nourishing food, frequent baths, and tender mothering. As many are paralyzed, blind, lame, or epileptic, it is desirable that the dormitories, well ventilated, be on the same floor with the living rooms and of easy access to bathrooms and playgrounds. Covered and carefully guarded porches should afford the much-needed fresh air and outdoor life in all weathers. These, with cheerful, sunny playrooms, provided with simple toys and furnished with bright decorations varying with the season, will contribute the maximum of pleasure for this life of perpetual infancy. Low vitality, general poverty of the whole physical make-up, the prevalence of phthisis and epilepsy and kindred diseases require the daily inspection of a physician, while the comfort and well-being of the whole, both workers and children, are insured by a capable and sympathetic house mother.

The character of attendants is of the first importance, as these are they who live with the children; it should combine that firmness, tenderness, and balance that constitute an even temperament, capable of recognizing and meeting an occasion without loss of self-control. The duties involve not only the care of the idiots, but the training and direction of idio-imbeciles as aids, and this dealing with natures often wholly animal, requires a certain refinement and dignity of character – at least an entire absence of coarseness – while a knowledge of the simpler manual arts, and if possible of drawing and music, will do much to soften and brighten these darkened natures. As these qualities are valuable as well as rare, the remuneration should be in proportion; certainly sufficient to induce permanency and to compensate for such isolation. A life of constant wear and tear demands also regular periods of rest, and the corps therefore should be sufficiently large to give relief hours daily as well as vacations.