TABLE II.-INDEX NUMBERS, 1856-1898.

(From paper by Houldsworth-"Manchester Philosophical Society,"

TABLE III.-EXPORTS OF THE UNITED KINGDOM (VOLUMES), 1856-1898.

(Calculated by method described in paper).

TABLE IV.-SUGAR CROPS (CANE AND BEET), 1856-1898.

Figures supplied by Messrs. Willett & Gray, Sugar Brokers, of New York.

The figures for the American crop have been taken from the circular published annually by the Liverpool Cotton Association. The figures for the American, Brazilian, Egyptian, and Indian crops were supplied to the author by the secretary of the Manchester Cotton Association. The latter have been used in constructing curve IV. in the Diagram.

The figures in "A" column are taken from Beerbohm's Corn Trade List, October 16th, 1896.

The figures in "B" column are from the publications of the United States Statistical Bureau, series No. 9 of Statistical Summaries. These figures are based upon official returns; but as those in "A" column cover a longer period of years, the latter have been used in drawing the curve V. in the Diagram.

TABLE VII.-SUGAR, COTTON, AND WHEAT CROPS OF WORLD, 1876-1898.

The figures in this Table have been obtained from those in Tables IV., V. and VI., by adding together according to the following method

Cotton (wheat x 10) + sugar.

JOHN B. C. KERSHAW

THE INCIDENCE OF URBAN RATES. III.1

III. Rates on Owners.2-The schemes which have been proposed for rating owners of urban lands and buildings in this country fall under two heads, (I.) the division of rates between occupier and owner, and (II.) the imposition of a special rate on site values.

I. The proposed division of the occupier's burden may be either (A) only with his immediate landlord, the rackrent holder, or (B) with a series of "superiors." 3

A. The short and simple division is governed by the principle that theoretically in general, apart from "friction," and except for the short period during which the occupiers' leases run, it makes no difference whether the tax-collector takes his share of the price paid for the commodity house-accommodation from the hands of the buyer or those of the seller. Not many occupiers are so incautious as Sir John Thwaite, who stated in evidence that "he had taken a house worth £280 without knowing that there was a land-tax of 2s. 101d. in the £."5 Compare the experts:

Courtney, p. 89 :—“ At the commencement or revision of a tenancy, rents would be settled in view of the power of deduction supposed to be granted, so that the real burden of rates and the real benefit of rents would remain as before."

Giffen, p. 97:- 'The real incidence is not affected by the question as to who pays in the first instance."

Sidgwick, p. 108:-"If the land or house is let from year to year, I do not

1 See Articles I. and II., at pp. 172 and 340 respectively of the ECONOMIC JOURNAL for 1900.

In answer to the question: "Distinguish and discuss schemes which have

been proposed for rating owners of urban lands and buildings" (p. 173).

3 It is convenient to use this term in a sense wider than the legal definition.

• See the present writer's answer to Question 12 in Mem., which abbreviation the reader will remember denotes Memoranda chiefly relating to the Classification and Incidence of Imperial and Local Taxes, issued by the Royal Commission on Local Taxation, 1899. [C. 9528.]

5 Select Committee on Local Taxation, 1870, Q. 4038. No. 40.-VOL. X.

K K

see how the occupier can gain by the power of deduction, except on the assumption that by a strange want of foresight he does not adequately take the rate into account in bargaining about the rent, unless the rate varies materially from year to year."

Bastable, p. 143:-" With short tenancies and where competition is effec tive, the question of division is a minor one.'

Gonner, p. 158 :-" In abstract theory, and granted the assumptions enumerated in the previous answer, no difference would occur through the change of method suggested in the present question." (Q. 12.)

Cannan, p. 171:-" If occupiers were allowed to deduct either rates, or the cost of getting their hair cut, or any other expense from their rents, then their rents would be that much higher."

Sargant, p. 215:-"The ultimate incidence of rates is the same whether the Occupier pays or the owner."

Gomme, p. 242:-" Assuming that no other element of value affected the matter, it may be shortly stated that if taxation were deducted from rent, rent would increase by the amount of taxation deducted."

These propositions remain true in the limiting case where the share of the rate levied from the occupier is zero-the case of the "compound householder." 1

If the experts regard division of rates as a matter of little importance, why do so many of them recommend it? "To some extent for the sake of justice, but more to prevent discontent," in the words of Professor Sidgwick.2 To some extent the proposed" deduction" by the occupier would be operative in virtue of a certain friction which is described by several of the experts, especially by Mr. Price. What little advantage may accrue to the occupier from this effect of friction it may seem just to allow him for a reason of which a particularly definite statement is that given by Mr. Cannan :

"So much of the rates as is raised to pay off capital expenditure ought, strictly speaking, to be paid by the owners, since it is payment for a remote benefit (that of being free from the payment of interest on the loan raised for the capital expenditure). In the case of new occupiers, the payment will be allowed for, just like any other disadvantage, but some injustice is done to old occupiers unable to revise their bargains with their landlords if new and unforseen payments for capital expenditure are saddled upon them. . . . . The occupier receives the benefit of the things provided by the capital expenditure till the conclusion of his term of tenancy, and should therefore pay the interest on the capital. But it is no advantage to him that the capital should be sunk or written off." (Mem., p. 171.)

1 Even if the landlord is to be regarded as a monopolist, as alleged by some (e. g., Select Committee on Town Holdings, 1890, Q. 4529), it still remains true in abstract theory that it is indifferent on which party the rate is levied.

2 Mem., p. 107.

3 Mem., pp. 180, 181, 185. See also Farrer, p. 79 et seq.; Courtney, p. 89; Sidgwick, pp. 107, 108; Bastable, p. 143; Gonner, p. 157. Cf. Report of Select Committee on Town Holdings, 1892, § xiii.