(4.ix.10) It is obvious that the persons having the 5 loaves, going to market with 50 pence tobuy the 5 pounds 9 of meat, will pay for it at the rate of 10 pence per pound, and that the personswith the meat, going to market for the bread, will pay for it at the rate of 10 pence the loaf. If wesuppose that the production of the loaves and the meat is perpetually renewed, it is evident thatthe same exchanges, at the same money price, may take place for ever. All this, I think, is clear.
(4.ix.11) Let us then suppose, that government taxes these commodities 10 per cent, andobserve attentively what happens. When the first loaf of bread is sold for 10 pence, one penny out of the10 pence received is paid by the seller to the government, and when one pound of meat is sold,one penny out of the 10 pence received is in like manner paid to the government. By the timethat one exchange of all the commodities is effected, one-tenth of the money has been paid togovernment. With the money, government, as fast as it received it, has come into the market topurchase the same goods. The former purchasers came with all the former quantity, namely, with100 pence, government came with a tenth more. For the same quantity of goods, therefore, forwhich 100 pence were paid before, 110 pence have been paid now; it is therefore proved that theprice of goods is raised at the rate of the tax. The reason is, that one portion of the money whichonly performed one operation, in effecting one exchange of the goods, now performs twooperations.
(4.ix.12) The case would be precisely the same, if we supposed the rapidity of circulation tobe much greater, and that each piece of money had to perform 10 operations in order to effect oneexchange of the whole of the commodities. It is necessary to observe that this is the only correctmeaning of the term rapidity of circulation. This is the only meaning in which rapidity ofcirculation has any effect upon the value of the money. This is strictly, therefore, the sense inwhich the term is here employed. If we suppose that in order to perform one exchange of thewhole of the commodities, the money has to be exchanged 10 times, it is obvious, as beforeexplained, that it exchanges each time for precisely one-tenth of the goods. Let us conceive thatthe bread and the meat, supposed in the former case, are 10 times as great, the loaves 50, and thepounds of meat 50, the money remaining the same, but performing 10 operations to effect oneexchange of the whole. It is very obvious that the effect which we have just explained, as takingplace, in consequence of the tax, upon the whole of the goods, when the whole was exchangedby one operation of the money, will now take place upon the one-tenth of the goods which isexchanged by one operation of the money; it will be raised one-tenth in money value; each tenthwill be so raised; and therefore by necessary consequence the whole.
Section X. A Tax Upon the Produce of the Land (4.x.1) A tax upon the produce of land, a tax upon corn, for example, would raise the priceof corn, as of any other commodity. It would fall by consequence, neither upon the farmer, norupon the landlord, but upon the consumer. The farmer is situated as any other capitalist, orproducer; and we have seen sufficiently in what manner the tax upon commodities is transferredfrom him that produces to him that consumes.
(4.x.2) The landlord is equally exempted. We have already seen that there is a portion of thecapital employed upon the land, the return to which is sufficient to yield the ordinary profits ofstock, and no more. The price of produce must be sufficient to yield this profit, otherwise thecapital would be withdrawn. If a tax is imposed upon produce, and levied upon the cultivator, itfollows that the price of produce must rise sufficiently to refund the tax. If the tax is 10 per cent. or any other rate, upon the selling price, corn must rise in value one-tenth) or any otherproportion.
(4.x.3) In that case it is easy to see, that no part of the tax falls upon the landlord. It is thesame as if one-tenth of the produce were paid in kind. In that case, it is evident, that one-tenth less ofthe produce would come to the landlord; but as it would rise one-tenth in value, hiscompensation would be complete. His rent, though not the same in point of produce, would bethe same in point of value.
(4.x.4) If, instead of a money-tax, varying according to price, it were a fixed money-tax uponthe bushel, or the quarter, the money-rent of the landlord would still be the same. Suppose the landor capital, which, as explained above, yields no rent, to produce in all two quarters, that whichdoes yield rent to produce six quarters; four quarters, in that case, are the share of the landlord.
Suppose the tax per quarter to be 1 l.; corn must rise 1 l. per quarter. The farmer, before theimposition of the tax, paid the landlord the price of four quarters; after it, he pays him the priceof four quarters, deducting 1 l. per quarter for what he had paid as tax. But corn has risen 1 l. perquarter. He, therefore, pays him the same sum as before.
Section XI. A Tax Upon the Profits of the Farmer, and UponAgricultural Instruments (4.xi.1) If a tax were imposed upon the profits of the farmer, without being imposed uponthe profits of any other class of producers, the following would be its effects.
(4.xi.2) It would in the first place raise the price of raw produce; because that price isdetermined by the produce of the capital which pays no rent, and which, if it sustains a tax, mustrise like any other taxed commodity, to indemnify the producer.
(4.xi.3) In consequence of this rise of price, it would increase the rent of the landlords.
