neither wind nor tide, but of hostile invasion, washed the rocks, and broke beneath his feet.

In a moment all his wits returned, all his plenitude of resource, and unequalled vigour and coolness. With his left hand-for he was as ambidexter as a brave writer of this age requires-he caught up a handspike, and hurled it so truly along the line of torches that only two were left to blink; with his right he flung the last bale upon the shelf; then leaped out after it, and hurried it away. Then he sprang into the boat again, and held an oar in either hand.

'In the name of the King, surrender,' shouted Carroway, standing, tall and grim, in the bow of the pinnace, which he had skilfully driven through the entrance, leaving the other boats outside. We are three to one, we have muskets, and a cannon. In the name of the King, surrender.'

In the name of the devil, splash!' cried Robin, suiting the action to the word, striking the water with both broad blades, while his men snatched oars, and did the same. A whirl of flashing water filled the cave, as if with a tempest, soaked poor Carroway, and drenched his sword, and deluged the priming of the hostile guns. All was uproar, turmoil, and confusion thrice confounded; no man could tell where he was, and the grappling boats reeled to and fro.

Club your muskets, and at 'em!' cried the lieutenant, mad with rage, as the gunwale of his boat swung over. Their blood be upon

6

their own heads; draw your hangers, and at 'em.'

He never spoke another word, but furiously leaping at the smuggler chief, fell back into his own boat, and died, without a syllable, without a groan. The roar of a gun and the smoke of powder mingled with the watery hubbub, and hushed in a moment all the oaths of conflict.

The revenue men drew back, and sheathed their cutlasses, and laid down their guns; some looked with terror at one another, and some at their dead commander. His body lay across the heel of the mast, which had been unstepped at his order; and a heavy drip of blood was weltering into a ring upon the floor.

For several moments no one spoke, nor moved, nor listened carefully; but the fall of the poor lieutenant's death-drops, like the ticking of a clock, went on. Until an old tar, who had seen a sight of battles, crooked his leg across a thwart, and propped up the limp head upon his doubled knee.

'Dead as a door-nail,' he muttered, after laying his ear to the lips, and one hand on the too impetuous heart. Who takes command? This is a hanging job, I'm thinking.'

There was nobody to take command, not even a petty officer. The command fell to the readiest mind, as it must in such catastrophes. 'Jem, you do it,' whispered two or three; and being so elected, he was clear.

'Lay her broadside on to the mouth of the cave. Not a man

voice was sudden relief to most of them. In the wavering dimness they laid the pinnace across the narrow entrance, while the smugglers huddled all together in their boat. 'Burn two blue lights,' cried old Jem, and it was done.

'I'm not going to speechify to any cursed murderers,' the old sailor said, with a sense of authority, which made him use mild language; but take heed of one thing, I'll blow you all to pieces with this here four-pounder, without you strikes peremptory.'

The brilliance of the blue lights filled the cavern, throwing out everybody's attitude and features, especially those of the dead lieutenant. A fine job you have made of it this time!' said Jem.

They were beaten, they surrendered, they could scarcely even speak, to assert their own innocence of such a wicked job. They submitted to be bound, and cast down into their boat, imploring only that it might be there that they might not be taken to the other boat and laid beside the corpse of Carroway.

'Let the white-livered cowards have their way,' the old sailor said contemptuously. Put their captain on the top of them. Now which is Robin Lyth?'

The lights were burned out, and the cave was dark again, except when a slant of moonlight came through a fissure upon the southern side. The smugglers muttered something, but they were not heeded.

'Never mind, make her fast, fetch her out, you lubbers. We shall see him well enough, when we get outside.'

But in spite of all their certainty, they failed of this. They had only six prisoners, and not one of them was Lyth.

(To be continued.)

FREE TRADE PRINCIPLES AND TAXATION.

THERE

HERE is no expression more constantly used by speakers and writers on questions of commercial and fiscal interest than that which I place at the head of this paper. The statesman, to whichever party in the State he may belong, when addressing an audience at Manchester, Birmingham, or elsewhere, exclaims, I am a supporter of free trade principles.' The chambers of commerce throughout the kingdom echo the cry. The writers in the public press do not venture to dispute the efficacy of free trade. No one seems to dissent from principles so well established, so universally acknow-ledged to be sound. And yet when these votaries of free trade are engaged in discussing details and results arising out of the principles so named, it becomes at once apparent that they are not agreed in the meaning which they attach to the term they use. Before proceeding further, let me try to define the meaning which I attach to the term free trade.'

I understand by it a trade free from any hindrances applied to it by the Governments of the people who carry it on; freedom from restraints, direct or indirect, total or partial, in the production of goods; and freedom from interference, direct or indirect, in the exchange of one article for another article, whether one of them be money or be not money.

What then is a hindrance to the production of any article?

It is obvious that a prohibition of its production is a complete hindrance. A fine or tax levied on its production is a minor hindrance. A fine or tax levied on any of the facilities and processes which are requisite for its production is a less hindrance, but still a hindrance. For examples. The growth of tobacco within the British islands is prohibited by law. The use of chicory after it is grown is only permitted on payment of a tax on its further preparation for use. The malt tax is a hindrance to the manufacture of beer. The tax on spirits is a hindrance to the consumption of spirits. The tax on gold and silver plate is a hindrance to their use. According then to my definition, free trade does not exist at home in the production or manufacture of any of the articles above enumerated.

The hindrance to production, however, created by a fine or tax on facilities and requirements for production and manufacture does not in this country exist. By facilities and requirements I understand and include everything that is necessary for the application of mental and bodily labour to the task of production. These facilities and requirements are here free and untaxed, the result being a condition

I believe, belong to any other civilised community. I will explain and justify this statement further on.

Such being some of the hindrances to production and manufacture at home, what are the hindrances to the exchange of the commodities produced? Does free trade exist in the exchange of them? So far as exchange at home, in goods produced at home, is concerned, exchange is perfectly free, but not as regards all goods pro-duced abroad and imported into the country. Several descriptions of such goods are taxed, and highly so, when they are imported and exchanged for consumption. Such are tea, tobacco, wine, foreign spirits, coffee, cocoa, and some sorts of dried fruit. These goods are all taxed before they are delivered for consumption.

It would appear then that we are deceived if we suppose that free trade principles are completely established in this country in either our home or foreign trade. A State which imposes a tax prior to consumption, equal to five hundred per cent. on the value of one article manufactured at home-plain spirits-and of five hundred per cent. on the value of another article-tobacco-imported from abroad, and puts on taxes equal to a less, but still high, percentage on the value of some other goods manufactured at home or imported from abroad, cannot be said to have established free trade, nor indeed, strictly speaking, to have acted on free trade principles.

This country might have freed trade if it had been thought expedient to do so. It might have raised the whole revenue of the country by direct taxation, as it already raises-including local and imperial-nearly one-half of it on that principle. That it has not done so has been solely on the ground of expediency, not principle. And it is on the ground of expediency alone that it is constantly varying the proportions of the revenue raised by either process.

Let

What is it then that we have got which we suppose to be free trade? We have got, so far as it is within our own power to obtain it, an open competition trade, and anti-protection principles applied as strictly and conscientiously as we are able to apply them. try to define what I understand by anti-protection principles. I mean an effective agreement that no man shall be given by law an advantage over another in the prosecution of any work, trade, manufacture, or other form of profitable labour, at the expense of the rest, or of any other section of the community. The best illustration that can be given of this principle is in a violation of it which existed under the old law which taxed the consumption in this country of all agricultural produce imported from abroad. The effect of this law was, that agricultural produce at home having become more or less insufficient for the sustenance of the people, and importations being required to supply the insufficiency, the tax levied on the foreign supply raised the price not

FREE TRADE PRINCIPLES AND TAXATION.

HERE is no expression more constantly used by speakers and writers on questions of commercial and fiscal interest than that which I place at the head of this paper. The statesman, to whichever party in the State he may belong, when addressing an audience at Manchester, Birmingham, or elsewhere, exclaims, 'I am a sup‐ porter of free trade principles.' The chambers of commerce throughout the kingdom echo the cry. The writers in the public press do not venture to dispute the efficacy of free trade. No one seems to dissent from principles so well established, so universally acknow-ledged to be sound. And yet when these votaries of free trade are engaged in discussing details and results arising out of the principles so named, it becomes at once apparent that they are not agreed in the meaning which they attach to the term they use. Before proceeding further, let me try to define the meaning which I attach to the term free trade.'

I understand by it a trade free from any hindrances applied to it by the Governments of the people who carry it on; freedom from restraints, direct or indirect, total or partial, in the production of goods; and freedom from interference, direct or indirect, in the exchange of one article for another article, whether one of them be money or be not money.

What then is a hindrance to the production of any article?

It is obvious that a prohibition of its production is a complete hindrance. A fine or tax levied on its production is a minor hindrance. A fine or tax levied on any of the facilities and processes which are requisite for its production is a less hindrance, but still a hindrance. For examples. The growth of tobacco within the British islands is prohibited by law. The use of chicory after it is grown is only permitted on payment of a tax on its further preparation for use. The malt tax is a hindrance to the manufacture of beer. The tax on spirits is a hindrance to the consumption of spirits. The tax on gold and silver plate is a hindrance to their use. According then to my definition, free trade does not exist at home in the production or manufacture of any of the articles above enumerated.

The hindrance to production, however, created by a fine or tax on facilities and requirements for production and manufacture does not in this country exist. By facilities and requirements I understand and include everything that is necessary for the application of mental and bodily labour to the task of production. These facilities and requirements are here free and untaxed, the result being a condition