has considerable force. And his appreciation of the fact that the first step in social progress is the development of human wants, is admirable. But the minor arguments contained in a book cannot rescue it from criticism. A book that is well written must be properly adjusted to the scheme of thought to which it professedly allies itself, and the premises it assumes must be logically carried out. When the great book on the protective policy shall have been written, it will be found to fit into a general theory of dynamic sociology. Professor Patten's book does not so fit. The place left vacant, now that modern protectionists have repudiated Friedrich List, is still vacant. HENRY C. ADAMS.

Die Steuern der Schweiz in ihrer Entwickelung seit Beginn des 19. Jahrhunderts. Von GEORG SCHANZ. Stuttgart, J. G. Cotta Nachfolger, 1890.5 vols., large 8vo, 384, 487, 383, 289, 489 pp.

Among all the European countries Switzerland is the only one where the general property tax is still to be found. It is the one state above all others whose methods of taxation bear a close resemblance to those of the United States. It would be only fair to expect, therefore, that a work of such prodigious proportions as that of Professor Schanz on Swiss taxes should be of the utmost importance to all Americans. And the expectation is not disappointed. But rarely before in the history of economic literature, has a work been published which is at all comparable to this in its value to the American student of finance.

Professor Schanz earned his reputation by the thorough work displayed in Englische Handelspolitik gegen Ende des Mittelalters, published about ten years ago, as well as by several minor works on the history of labor. In 1884 he started the Finanzarchiv, which is still the only serious review devoted exclusively to the science of finance. In this periodical Dr. Schanz has been publishing for the past few years detailed histories and descriptions of the tax systems of different German commonwealths, which have challenged admiration for their thoroughness and accuracy. And now he offers to the scientific world a work which stands unequalled in magnitude of scope and detail of treatment. A word first as to the methods of the author. The opening volume is devoted to a sketch of the general development. A preliminary chapter treats of the federal taxes and the general situation; a second chapter, of the general direct taxes in the cantons; a third chapter, of the licenses, succession duties, military tax, etc.; a fourth chapter, of the indirect taxes on consumption; while a final part is devoted to the questions of local taxation. The three following volumes take up each of twenty-five separate cantons or commonwealths in detail; describe the history, not only of all the changes, but of all the attempted reforms;

and close with a minute statement of the existing condition in each. The fifth and final volume contains the text of all the important tax laws and administrative ordinances for each commonwealth since the beginning of the century. It will be seen at a glance how stupendous must have been the labor necessary to complete such a task.

Let us now endeavor to ascertain in what respects the work is especially important to Americans. Professor Schanz begins by accepting the theory advanced by the present writer regarding the historical development of taxation and the position of the general property tax in this development (volume i, pages 52 et seq.). He shows that Switzerland like the United States has retained the mediaval property tax up to this day; but he further shows and this is the important point — that Switzerland, unlike the United States, has successfully endeavored to reconstruct its property tax and to supplement it by another system which has brought it more into harmony with the needs of the present century. The conception of general property as the basis of taxation has been permeated, gradually but with ever-increasing rapidity during the past thirty years, with the ideas of product and income. attempt to realize the principle of ability to pay has resulted in a dissatisfaction with the old property tax and a remodelling of the whole system. The methods in the various cantons may be summed up as follows: (1) a property tax plus a general income tax; (2) a property tax plus a partial income tax; (3) a property tax plus a supplementary income tax, in the sense that only the surplus income above a certain percentage supposed to represent the interest of the taxable property is assessed; (4) a real property tax plus a general income tax. Only three of the smaller cantons still hold to the general property and poll tax; while only one canton clings to the once universal, but still more primitive system of the single land tax.

This is the one great lesson to be drawn from Swiss experience. It ought to be sufficient to silence all those enthusiasts who cry out for a retention of our present American system and point with triumph to the only democratic republic in Europe as practising the same methods. On the contrary, the one great effort of the Swiss legislatures during the past half-century has been to supersede the general property tax, not necessarily by the income tax, but by some form of income taxation; by some system which, directly or indirectly, makes not the property, but the product of the property, not objects, but individuals, the basis of taxation. As Professor Schanz sums it up: "Ueberall drängt sich eben mit elementarer Gewalt der Gedanke durch, dass es doch nicht das Vermögen, sondern das Einkommen ist, welches man eigentlich treffen will."

But let us leave this main fact, which might amply serve as a text for

a whole volume on American taxation, and turn to some of the other points of chief interest to Americans. The question of taxation of corporations is not discussed as a whole by Professor Schanz, but the facts are presented. The most important have been used by me in an article in the present number of the POLITICAL SCIENCE QUARTERLY, and the topic may therefore be passed over in this place. Other points upon which the Swiss experience is extremely instructive are: the different rates of taxation for the different kinds of property; the various methods of assessment, according to market value, insurance value or par value; the exemption of church or other property; the distinction between funded and unfunded income; and the great subject of double taxation in all its various forms. But the four chief points to which I desire to call attention are these: the methods of controlling assessments, the question of progressive taxation, the succession taxes and the system of local taxation.

Switzerland, like the United States, has tried all forms of assessment for the general property tax- self-assessment and official assessment, oaths and no oaths, publicity and secrecy; and all have proved equally inefficient. One institution, however, has been developed in the last few decades that is peculiar to Switzerland. It is that of the inventory (Inventarisation). As soon as a tax-payer dies, his entire property is seized by the government and held until an exact inventory is made out. If the inventory discloses fraud in the previous self-assessments, punitive taxes must be paid ranging in some cantons over a period of ten years. This method of control is of course based on the right idea. But it has its objectionable sides. It must be distressing, to say the least, to the family of the deceased when the tax officials clap their seals on the property, as it were in the very chamber of death. It has also it weak sides. Those who have a short time to prepare for death commonly give away a large part of their property. Again, the inventory naturally becomes a less trustworthy guide the farther back we go, so that at its best it can serve as an index for a very few years only. But notwithstanding all these defects, the inventory has done good service in increasing the tax receipts, and it forms to-day the chief subject of dispute in the Swiss cantons. Perhaps the principle of back taxes is partly applicable in the United States.

Another point which has attracted the attention of foreign countries is that of progressive taxation. Without going into the arguments pro and contra, it may be said that Switzerland has now definitively accepted the principle of graduated taxation, and that the cantons apply it not only to income but also to property taxes. Since 1870 especially, a large majority of the commonwealths have inserted the principle of progressive taxation into their constitutions, while only a few constitutions

fix the limit of the progression. And the system, far from causing any wholesale exodus or any such startling confiscation as we read of from time to time in the American newspapers, has proved so satisfactory that wherever tried, it has never been abandoned. There also Switzerland is not at one with the United States.

Thirdly, about two-thirds of the Swiss commonwealths have supplemented their system of direct taxation by taxes on inheritance and bequests. This movement is an old one and antedates (except in Bern and Zürich) the movement to supplement the property tax by an income tax. We in the United States are still in the first phases of the reform; for we are now agitating only for an extension of the collateral-inheritance tax system. Switzerland has passed beyond this phase. Its system applies not only to collateral inheritances, but to all inheritances and bequests. The rate ranges from three per cent in case of husband or wife in Waadt, to as much as twenty per cent for non-relatives in Aargau.

Finally, the methods of local taxation are very instructive. Only a few cantons pursue the same system for both local and commonwealth purposes. In most cases the income tax is a commonwealth tax, while the local tax is a property tax, and often a real-property tax. In addition to the local property tax, however, we find very generally a local "household " tax, which is practically a system of poll taxation designed to reach some of those who escape the real-property tax. The whole local tax system is marked by two significant facts. In the first place, the idea of progression, which is almost universally applied to the commonwealth taxes, is absent in the local taxes. The local property taxes are almost uniformly proportional and not progressive. Secondly, the exemption of debts-mortgage debts as well as others - is permitted in state taxes, but is found only to a very limited degree in local taxes. To state the reasons of this distinction and the important inferences to be drawn therefrom would lead me entirely too far in this brief review.

Enough has been said to show the importance of Professor Schanz's work. It does not pretend to discuss questions of theory, and yet almost every page contains matter of more significance to the average American than whole chapters of some of the common text-books on finance. In some few questions of finance Switzerland has a little to learn from us; in most matters we have an important lesson to learn from Switzerland. What that lesson is has been only faintly outlined in the above remarks. It is to be hoped that its full significance will ere long be appreciated by every American student and by every American legislator. EDWIN R. A. SELIGMAN.

Analisi della Proprietá Capitalista.

By ACHILLE LORIA.

Torino, Fratelli Bocca, 1889. - 2 vols. gr. octavo, 777, 474 pp.

66

Ingens iterabimus aequor," as the author says at the end of his first volume, looking forward to the second. Italy has long been giving us much of our best economic literature, and this is her masterpiece. Already well known by his work on the Law of Population in the Social System (1882) and his monograph on the Influence of Ground Rent in the Topographical Distribution of Industry (Rendiconti dell' Acc. dei Lincei, 1888), Loria now presents his magnum opus in a radical examination of the phenomenon of profits, viewed in the Smithian sense of gross return for the use of capital. Loria is a professor in the University of Siena. His essay has been crowned with a royal prize offered for the best discussion of an economic topic. Its first volume sets forth the theory abstractly, the second seeks to justify it a posteriori by a careful industrial history of Europe and the colonies. This at least is well done, and the reader, even should he feel obliged to eliminate the author's theorizing, will find the volume a most valuable addition to economic history. The chief topics in this historical survey are profits as based (1) on slavery, (2) on serfdom and (3) on wages. The book reminds one in many ways of Marx's Kapital. Starting, like that, from Ricardo and essaying to complete him, it breaks as radically with economic orthodoxy, betrays the same keen analysis, a more consistent logic and an even more astonishing mastery of economic literature, whether standard or recondite, old or recent. In the last respect the author is second to Roscher alone. While he is familiar with the libraries of Rome and Berlin, long study in the British Museum has rendered him specially fond of the English economists. He refers to them oftener than to the German, far oftener than to the French. He is at home in the latest American and Austrian economic treatises, and more than once quotes from the Russian. He is well read in philosophy too, even in authors so wide apart as Hegel and Herbert Spencer. Nor do his learned references seem artificially paraded. The broad scope of the Analysis affords space and occasion for review of every cardinal topic in political economy, population, value, money, interest, taxation, and upon none of them does Loria fail to show himself a master. Specially noteworthy is his conception of "natural" or "pure" wages, and his proof that it need not be starvation wages.

The theoretical part of the work canvasses the same problem which engaged Marx, though solving it rather by the method of Henry George. Loria's main thesis is that profits arise solely from the suppression of free land. So long- this is the thought of chapter i, volume i-as free lands exist, accessible to the laborer, either "dissociate economy" or