wage for securing labour of any kind whatever. This is even acknowledged where the reduction of the standard of whole classes of labourers is referred to as the result of reduction in their real wages through unwise taxation. And we suppose that Mr. Hobson will be as willing as any one to admit that higher wages, in the sense of higher weekly wages, do not of necessity mean dearer labour. How then shall we deal with the case of a marginal labourer at 15s. per week and another doing 40 per cent. more work at a guinea per week? Do the extra 6s. per week enter into the price of the product on the same terms as the 15s. or not? Can taxation fall on these 6s. with greater ease or certainty than on the 15s.? Might it not be well to deal with the labour as the land was dealt with, and speak of the purchase of so many units of "net-yield of labour-power?" If once we admit a community between the marginal-wage and any excess which we call "rent of superior powers," where shall we draw the line, and what payments for personal exertion may not be admitted to affect price and be subject to taxation in the same sense as are the 15s. per week of subsistence wage?

Though we find a difficulty in accepting either the point of view or the bulk of the conclusions of Mr. Hobson, we find much that stimulates to careful and precise thought in his book, were it only that one is driven to try to follow the process by which, with premises in many respects of the soundest, he finds himself at variance with the mode of treatment and many of the results of sound thinkers. In some respects we have been pleasantly surprised to find that this book not only did not repeat some conclusions in previous works of the same author which we believe to be faulty, but even set forth, in some sort, a refutation of them. The position that indefinite saving demands an indefinite durability of forms of capital seems to be abandoned and replaced by the idea of a persistence of capital through constant renewal, a renewal which may possibly not involve the maintenance of identity of form. The wear-and-tear allowance, or replacement fund, for a given machine, may be ultimately invested in an improved machine when the original is worn out, and the improved machine may yet be considered as economically the same capital as was previously represented by the less perfect instrument. We trust we are not reading into the author's words what we would fain believe him to hold, inasmuch as we believe it to be the truth.

It is worth while to call attention to Mr. Hobson's protest against bringing in the consumer as a fourth party in distribution. A rearrangement of the relative shares of the owners of the different factors of production may operate through a change in the position of any or all of them as consumers rather than as contributors to production, but that is only the direct and obvious phase of what is in reality a re-arrangement of their shares as owners of productive agents.

The last chapter, on the Theory of Surplus Value, enters into questions of tax-incidence. Mr. Hobson agrees with Dr. Commons

whose mathematical treatment of the problem of Distribution appeared some five or six years since. Taxation should properly fall on rents say both (including "forced gains" in Mr. Hobson's case). But Mr. Hobson himself shows how, in attempts to effect this, results which are not merely a pocketing of a part of these rents by the State may be produced. He freely admits the difficulty of assessing the amount of much of the gain which he regards as the legitimate object of taxation, and the problem of practical statemanship in regard to taxation does not seem much advanced. A. W. FLUX

The Effect of the Recent Changes in Monetary Standards upon the Distribution of Wealth. (American Economic Association. Economic Studies.) By FRANCIS S. KINDER. (New York: Macmillan Co.) 1899. Pp. 499.

THIS is an outcome of the bimetallic controversy, though it is very different from the mass of the literature thus produced. It is an honest and painstaking attempt to determine how the changes in the value of standard do affect the various classes of the community.

In Part I. the arguments brought forward by writers like Mr. D. A. Wells, who have endeavoured to show that the fall in prices since 1870 is almost entirely due either to the increase in production, or to the increase in the facilities for transportation, are dealt with. Mr. Kinder's contention is that, if these two sets of facts are in truth correlated in the way represented, we ought to find that the change from rising to falling prises, which occurred about 1870, was coincident with a great increase in the rate of production; whereas, as he clearly proves by means of numerous tables, the rate of the increase in the production of many of the most important commodities was as great or greater before that date. Neither was there any great change in the rate of the increase of the facilities for transport when prices began to fall. The author, therefore, comes to the conclusion that the change in prices must have been mainly due to changes in the monetary standards of the world.

In Part II. the effect of changes in prices on distribution is discussed. As regards income, the author points out that rising prices are injurious to the creditor, and that high rates of interest are injurious to the debtor; but that these two conditions, as a general rule, occur simultaneously. No doubt the influences thus produced are in a sense antagonistic; but to say that a tendency "to afford the lender the same real income" under rising and falling prices is thus produced is an example of the loose statements somewhat too common in this volume. The author goes on to prove by means of statistics (quoting Professor Irving Fisher and others) that the rate of real interest, taking changes in the real value of the principal into account, is lower under rising than under falling prices, and that the debtor is therefore injured by an appreciation of the standard.

The influence of price movements on the wages of the working classes is discussed in a separate chapter. The author commences by pointing out, as a reason for believing that the labourer will not be injured by a rise in average prices, that the effect of such a rise, if from monetary causes, is to increase the demand for raw material and machinery, whilst "the demand for the commodities of common consumption would be little affected in a direct way." The price of the necessaries of life will not rise before there is a rise in wages; because that rise could only be caused by an increase in demand, and that "increased demand must come in the main by and through an increased purchasing power in the hands of the masses." Then follows a considerable amount of carefully collected statistical information, which tends to confirm this theoretical conclusion that real wages rise as fast or faster during long periods of rising prices than during long periods of falling prices. In such a discussion as this, disputable points arise at every turn. For example, the author hardly appears to perceive that it is difficult to ascertain what are the effects of a rapid rise in prices if only the changes taking place during long periods are studied; for prices do not rise rapidly the whole time. Then again, we ought to look to the supply as well as to the demand in considering the causes of rising prices during periods of inflation. For example, freights are certain to rise at such times, and imported wheat will be placed on the English market at a higher price, even though the effect of such a putting up of the price is to diminish imports. An increased demand for machinary and raw material is not inconsistent with a slight decrease in the supply of the "necessaries" of life, a decrease quite sufficient to "explain" the rise in price. It is true that such a check in supply would probably not last long. On the whole, these tables do tend to confirm the view that a slow and steady rise in prices from monetary causes is not injurious to the working classes. From these theoretical arguments, in conjunction with the facts, other interesting conclusions might perhaps be drawn. It appears that the poorer the class of wage earner, the more their needs are confined to articles of ordinary consumption (which are less likely than luxuries to rise in price during periods of inflation), and the more their well-being is dependent on the regularity of employment rather than on the rate of wages; and, if this is so, it follows that the lower we go down in the social scale, the less likely is it that the labourer will be injuriously affected by a rise in prices from monetary causes.

Many classes undoubtedly do suffer from rising prices. Their case is but very lightly touched on in this work; and the effect is to make the whole statement of the case seem somewhat unbalanced. This is intensified by the fact that there is no summary of general conclusions, and one closes the volume with a rather unsatisfied appetite.

L. DARWIN

The English Income Tax; with special reference to Administration and Methods of Assessment. By JOSEPH A. HILL, Ph.D. (New York: for the American Economic Association, The Macmillan Company; London: Swan, Sonnenschein & Co. 1899. Pp. 155. 18.)

THIS work is the outcome of a visit to England in 1897, when Dr. Hill, at the suggestion of the Massachusetts Commission on Taxation, undertook an investigation of the practical workings of the English Income Tax on the spot. The report then written and presented, but not published, has been expanded by the inclusion of the results of a subsequent study of the literature of the subject; but the monograph is still mainly devoted to the branches of the subject referred to in the sub-title. There has been no attempt to write an exhaustive treatise, several important spheres of inquiry and discussion in relation to the ethical and legal bases of the tax being purposely left untouched. Such matters as the taxation of foreigners, the equal assessment of the income from property and the earnings of industry and skill, and the suggestions for the full adoption of the principle of progression, are passed by as outside the scope and limits prescribed for himself by the author. As already indicated, it is the practice rather than the theory of the income tax with which he has chiefly concerned himself, and within these limits his success is undeniable.

Dr. Hill has divided up his matter into seven chapters headed respectively (1) Introduction; (2) the general character of the assessment; (3) the machinery of assessment; (4) the process of assessment; (5) exemptions and abatements; (6) the general character of the tax service; and (7) the growth and completeness of the assessment. The key-notes of the work are sounded in the introductory chapter, which concludes with the observation that "the success of the tax in surviving the test of experience is in no small degree due to the method by which it is assessed, and the manner in which the assessment is carred out through the agency of competent officials." The method here referred to and described in chapters 2 and 5, is that of the taxation of the income at its sources, the advantages of which, in respect of productivity and avoidance of a general disclosure of income, secure the admiration of Dr. Hill as they have previously secured that of other American economists. But the avoidance of a full disclosure, formerly one of the best features of the system, has ceased to be a strong point in it. Owing to the extension of the abatement limit to £700, probably five-sixths of the persons assessed are under the necessity of making a full statement of income in order to obtain the relief to which they are entitled; whilst large numbers of persons who are not liable to the tax at all are placed under the like disability by the stoppage of the tax from their income from investments. Dr. Hill's observations on this topic (see chapter 5) appear to us to be both just and weighty.

Chapter 4 contains a description of the processes of assessment, which, considering the intricacy and complexity of the subject, is surprisingly clear and complete. The writer of it was fortunate enough to secure the guidance of competent officials in threading the mazes of the system; but he has obviously brought a highly-trained intelligence to bear, and has turned his opportunities to excellent account.

Perhaps the most interesting portion of the work is the exposition of the inner workings of the administration of the tax contained in chapters 3 and 6. We learn that the historic and universal fear of the rapacity of the tax officers of the central government induced the British Parliament to place almost all the legal authority and power in the hands of local commissioners and their officers. But the increasing magnitude of the business, and still more its extreme complexity and delicacy, have caused it to completely outgrow the means of administration provided, and the direction and management have, from sheer force of necessity, gradually passed into the hands of the surveyors of taxes and their clerical staffs. With a truly British disregrad of the necessity of adjusting the legal framework to the facts of daily practice, Parliament still neglects or declines to remedy this anomalous state of things, finding their justification in the fact that the resulting example of government by compromise is much more satisfactory than could be expected. All this is clearly brought out by Dr. Hill, who has been the first to lift the veil of official reserve which has hitherto been kept somewhat closely drawn over this subject.

As this work is likely to become a book of reference, and as its merits are such as to lead us to anticipate the need for a second edition at no very distant date, it may be worth while to draw attention to a few passages in which some slight emendation appears to be required. On p. 262, the statements contained in the fifth paragraph need modification, the land and buildings used for industrial and business purposes being usually assessed under Schedule A, and not under Schedule D. The exceptions are, however, of sufficient importance to render their enumeration desirable in the next edition. The paragraph which follows describes Schedule C too briefly, and needs amplification. On pp. 276 and 277, it is stated that the general commissioners are appointed by the Land Tax Commissioners from their own number. This is very largely the case, but their range of choice is not limited to their own body, and as a matter of fact other appointments are often made. The remuneration of assessors is not usually graded according to the amount of work to be done, as stated on p. 279; it is based on the poundage payable at the time the change to salaries took effect some ten years ago. In relation to the assessment of property (p. 287, &c.), it should be stated that the process of assessment is only repeated at intervals of five years, and that the returns of rent then called for are used for charging the Inhabited House Duty as well as the Income Tax. In the Metropolis they also