THE INTERCURSUS MAGNUS.

111 after the Seven Years' War was over, England had lost her most important colonies, and people thought that her place among nations was gone. In the end the loss proved to her how unwise it is to make war in order to secure a monopoly of markets.

The Intercursus Magnus of 1496 is the first, and, on the whole, the most instructive type of these numerous commercial treaties which have been negotiated from that to recent times. Henry VII. had a political motive in it to check Yorkist intrigues in the Low Countries. He was shrewd enough to know that when you make it the interest of a nation to discourage foreign adventurers, who seek to make their asylum the home in which to hatch plots, you are more secure from such people than you would be if you disregarded such interests. The first clause of this famous treaty conceded free trade, provided a license or passport was produced; the second allowed ships to be armed though engaged in trade; the third allowed a free fishery in waters claimed by the English. By the fourth clause no pirate or privateer was allowed access to the harbours of either nation; and by the fifth, refuge from storm or war was permitted to merchant vessels. By the sixth enemies' goods were prohibited access; and by the seventh the law of wreck was greatly improved. By the eighth Flemish merchants were permitted to reside in English, English in Flemish towns; and provision is made that the levy of customs should be made without damage to the goods liable. There was to be no compulsory sale of goods, and security might be given for debt by the tenth and eleventh clauses. By the twelfth the barbarous custom of reprisals is abandoned, and legal process substituted for it, with, of course, the assurance that the decisions would be respected. And, lastly, the trade in foreign bullion was declared free.

The liberality and wisdom of these agreements, many of them anticipating by nearly four centuries what civilized nations have professed to agree on as rules for future practice, are sufficiently surprising. They lasted unfortunately no longer than the agreement was itself of importance to the contracting parties. In less than a century the granddaughter of Henry, and the great grandson of Maximilian were to be in bitterest feud, and every one of these principles was cast to the winds. But the Intercursus was a monument and a protest. a monument of monetary wisdom, and

a protest against the infinite barbarism with which the wars of religion threatened the world. It deserves the praise which the more enlightened men of that and succeeding ages bestowed on it.

I have mentioned more than once that the wars of the eighteenth century were mainly wars for the monopoly of markets. The treaties partook of the same nature, and the most significant and typical of them is the Methuen treaty, negotiated in 1703, between England and Portugal. In the great war of the Spanish succession, it was of importance to the allies to get the accession of Portugal, and there were reasons why the Kings of Portugal should take that side. In the first place, the dynasty was only sixty years old, and the result of a successful revolt from Spain on behalf of a pretender of doubtful legitimacy. We may be certain that the hereditary rights of the crown of Spain were not forgotten. In the next, it gave the guarantee of the allied powers to the Portuguese succession. In the next, it secured the Portuguese East Indies from Dutch aggression, possibly from Dutch intrigues, for Holland was profoundly interested in the war of the Spanish succession, since it involved the Dutch frontier. Now it was possible to found a treaty on the basis of reciprocal monopoly markets. England was to exclude French wine, and take Portuguese. Portugal was to give a free market to English woollens. But the discontent of those who had to give up claret and take to port found loud expression. It seems that the English Government imagined that by prohibiting French imports they would cripple French resources. So hereafter French wine was not found in the books of the customs. But in some way or other, it got to the cellars of the consumers. I would not decry patriotism, but I am convinced that it is not always superior to opportunities, especially when the opportunity is very obvious, and the patriotism is expensive and distasteful. The Methuen treaty remained a type of commercial diplomacy up to nearly the end of the eighteenth century.

After the close of the American War, a new form of commercial treaty was set on foot, that of reciprocal customs, and a clause under which the contracting parties were included under the most favoured nation advantages. Such a treaty was that negotiated by Mr. Eden between Great Britain and France in 1786. It was, to be sure, to

METHUEN'S, EDEN'S, AND COBDEN'S TREATIES. 113

be of short duration, for its life was even briefer than that of the Intercursus Magnus near three centuries before. But it was eagerly accepted, and the fashion spread. A treaty of the same kind was set on foot between France and Russia, and soon afterwards between the United States and Prussia. In a short time Europe would have been armed with a network of treaties, and these, so fondly do people believe in the spread of humanity and civilization among statesmen and kings, were supposed to be a guarantee of international peace. But within eight years after Mr. Eden's labours, the French Revolution had broken forth. France precipitated herself on astonished and unprepared Europe, and statesmen and kings were tumbling about altogether.

The treaty of 1786 was the model of the treaty negotiated between France and Great Britain in 1861. This was carried out by my friend Mr. Cobden. Himself an advocate of free trade in its broadest sense, as the true economical interest of nations, and being entirely and most lucidly in the right in his convictions, he was not unwilling to accept a part of what he would have gladly claimed in its entirety. Nor was he discouraged by his natural distrust of the very singular person who went by the name of Napoleon III. He told me that he should have been, had he been a Frenchman, in constant opposition to that man's government. But he saw no reason why he should not, being an Englishman, avail himself of an authority which, as he believed, would do good to English and French trade, and assist English and French amity. Some persons, being doctrinaire free traders, objected to the negotiation of half truths. But until, all men being wise, every man sees how hollow and unsatisfactory political and social compromises are, compromises must be made. The sphere of the speculative economist is one which the practical man might envy, were not the practical man constrained to act. Men who have lived for years, as he lived, as I have lived, in an atmosphere of compromises, learn that such a necessity is rarely logically, perhaps rarely morally, justifiable. It seldom occurs to any one, even in a long public life, to assist in a final change, one from which there can be no progress, and can be no retrogression. I cannot say that the treaty of 1861 was the best arrangement conceivable, but I am convinced that it was the best arrangement possible. And though nine years afterwards came the

furious storm which swept the French emperor from the place which he had so grossly abused, I am sure that the treaty of 1861 had its place in lightening the enormous calamities which overtook France, calamities to which a less elastic nation might have succumbed, in which a less hopeful nation might have despaired.

THE CHARACTER OF EARLY TAXATION.

Turgot's canons of taxation-The first the most important—Adam Smith's word, "enjoy" under the protection of the State-The king's estate-The consent of the taxpayers always necessary-The growth of parliamentary power-Customs on a large scale impossibleGraduated income taxes-The assessment of Tandridge in 1600— The subsidy and its frequency in war times-Taxes on towns— Tallages-The income taxes of 1435 and 1450-The houses of Lancaster and York-Grants by the Commons, origin of the custom-The grants of 1453 and 1503—The growth of the Commons-Cecil's book of rates-The ship money.

THE history of English taxation in early times is totally unlike anything in modern experience. It was exceptional, not regular, was the hardest task which the monarch and his advisers could undergo, and frequently provoked the bitterest resentments and outbreaks. At the same time, the annals of parliamentary finance are full of the strangest precedents, of procedure which would be thought impossible now, of Acts which modern traditions would call violent invasions of property, of sacrifices willingly made by certain classes, which these classes have at least been long unused to, of expedients which, unluckily for the financier, have entirely passed away, as human societies have grown more alike, or as special advantages, once entirely local, have been diffused over the world. Of course, the economical principles which regulate or interpret taxation were the same then as now, and these principles should be before us.

The famous canons of taxation which Adam Smith borrowed from Turgot, are four in number. Taxation should be equal, on