the treatment of the
financial policy of the nation. Canons as to the proper system of
administration, taxation and borrowing come to be noticed by statesmen
and officials.

These influences may be followed out in their working by observing the
chief lines of adjustment and modification that followed the conclusion
of peace. Relieved from the extraordinary outlay of the preceding years,
the government felt bound to propose reductions. With commendable
prudence it was resolved to retain the income-tax at 5% (one-half of the
former rate), and to join with this reduction the removal of some war
duties on malt and spirits. Popular feeling against direct taxation was
so strong that the income-tax had to be surrendered _in toto_, a course
which seriously embarrassed the finances of the following years. For
over twenty-five years the income-tax remained in abeyance, to the great
detriment of the revenue system. Its revival by Peel (1842), intended as
a temporary expedient, proved its services as a permanent tax: it has
continued and expanded considerably since. Both the excise and customs
at the close of the war were marked by some of the worst defects of a
vicious kind of taxation. The former had the evil effect of restricting
the progress of industry and hampering invention. The raw materials and
the auxiliary substances of industry were in many cases raised in price.
The duties on salt and glass specially illustrated the bad results of
the excise. New processes were hindered and routine made compulsory. The
customs duties were still more restrictive of trade; as they practically
excluded foreign manufactures, and were both costly and in many
instances unproductive of revenue. As G. R. Porter has shown, the really
profitable customs taxes were few in number. Less than a score of
articles contributed more than nineteen-twentieths of the revenue from
import duties. The duties on transactions, levied chiefly by stamps,
were ill-graded and lacking in comprehensiveness. From the standpoint of
equity the ground for criticism was equally plain. The great weight of
taxation fell on the poorer classes. The owners of land escaped giving
any return for the property that they held under the state, and other
persons were not taxed in proportion to their abilities, which had been
long recognized as the proper criterion.

The grievance as to distribution has been modified, if not removed, by
the great development of (1) the income-tax, (