THE VARIOUS KINDS OF COMPENSATION.
§ 92. Those services rendered by the public administration which belong in the first of the above enumerated classes are those that admit of being admeasured and requited by kind and quantity, so that each individual member of the community shall pay for what he gets. We have adopted as a briefer characteri zation of this class the standard of measure employed, i. e., the " benefit " enjoyed.
On looking about us to see what is usual as regards the forms which compensation assumes in industrial intercourse, we find directly that this class runs in the well-worn ruts along which the intercourse between private establishments is accustomed to move. The same form which has become the customary one in private intercourse for the discharge of thousands of diverse mutual ser vices is also the form adapted to this class of public services. In looking into the history of the past we have seen how this most readily intelligible form of compensation, coming as it does closer than any other to the ideas and habits of thought of everyday life, has been found extremely desirable and accept able for the purposes of the public administration, and also that its ready adaptation to the cruder views of early stages of national development has repeatedly led the government to extend its use to branches of the public business that are not by nature well adapted to it. Down to the present hour this method has been, and unquestionably also for a long time to come it will be found to be the most convenient, and it will therefore maintain itself wherever it can be legitimately employed.
If we want a concise designation for this form of public con tribution we shall find it ready to our hand in the usage both of everyday life and of the science. It is of the nature of a price. Had this been the only form of compensation employed by the public administration, no other designation would have been required. The main facts of finance would then have been discussed from the standpoint of the general economic doctrine of Price, just as is conventionally the case with respect to the affairs of private life.
In any case we shall have to fall back on this general doctrine of Price wherever and to the extent to which it applies to this first class of public contributions. And for this first class the principle of Price is in fact to be taken as the essential principle by which to determine the proper amount of the contribution.
§ 93. In case we had to do with this class of contributions alone, the chief problems of finance would simply not exist. Every government undertaking would in that case automatically defray its own expenses—very much after the fashion of a public railway whose receipts are sufficient to defray operating expenses and interest on its fixed capital ; it would then cease to figure in discussions of finance at all, or rather would not ask for consideration by the finance department, being fully able to take care of itself,— for the reason, in other words, that such a public undertaking would be competent to find any economic means it might require. The like is true of water works, gas works, post, telegraph, etc.
But such is the case only up to a certain point, and in fact, only up to a certain imaginary point which in the actual course of affairs is very rarely attained,—which, indeed, neither need nor ought to be attained, and which in many cases even cannot be attained.
The premise on which the view in question proceeds is this, that there shall subsist a precise equilibrium between the expen ditures of the business and the receipts which it itself brings in. At the instant at which an excess or deficiency on one side or the other disturbs this equilibrium this whole self-sufficiency is at an end. An excess on the side of the expenses indicates a shortage in receipts, which will have to be covered by some other means ; while an excess of receipts confronts the admin istration with the question, To whom does this surplus properly belong ? § 94. But it follows directly from the essential nature of the purposes for which public administration exists that this equilib rium will unavoidably fail (cf. vol. i. secs. 400-402). The fol lowing are some of the reasons : Among the more cogent reasons for the building of railways; by the state (rather than by private enterprise) is the considera tion that under the actually existing circumstances there is a necessary period of transition during which the receipts of the business cannot be expected to cover the expenses. The grad ual development of the transportation system to such a position as to afford adequate receipts is a main part of the end to be sought by the public control of the means of communication.
Or it may be that the possibility of covering expenses is intentionally made subsidiary to the remoter object of favoring certain branches of industry, of goods, or of passenger traffic.
Deficiencies which may arise in this way will have to be made good from other sources. The nature of the causes to which such deficits are due indicates a difference in economic ability on part of the different sections and classes of the population ; and, indeed, it indicates a difference in ability of such a character as not to admit of its being compensated for within the limits of this branch of the administration, but which calls for remedy from with out.
On the other hand, it may happen (quite acceptably) that a surplus comes in from an undertaking which is primarily carried on for administrative purposes alone. A striking instance of this is afforded by the letter-post. If the administrative purpose in ques tion admitted of no aim beyond the covering of its own expenses, such a surplus would have no meaning, or at any rate no other meaning than that of a surplus in the hands of a consumers' club, which is returned to the members on the closing of the accounts for the year, in the proportion in which they have contributed to it.
The fact that the postal service not only retains any such surplus, but even (with due regard to its primarily administrative func tion) consciously seeks it, is to be explained on the ground that, without hindrance to the administrative function, the different abilities of the citizens to contribute to public purposes may be drawn on by this means, with desirable results which are not attainable in any other way.
In this way the "price" of everyday industrial life becomes, in the service of the public administration, a means of levying a contribution of a different kind. .
§ 95. This is more particularly the case when the " price " is not intended to serve the purposes of a department which partly or entirely covers its own expenses, but is with conscious purpose made the form under which, as a matter of expediency, a con tribution is levied for other administrative purposes.
This happens in the case of those fiscal monopolies which make the enjoyment of such things as tobacco, salt, spirits, games of chance, a subject of traffic by selling the means to these enjoy ments to the citizens after the manner of a private business. The purpose here is not (at least not primarily) the supply ing of the public with tobacco, salt, etc., consciously adopted as a distinct administrative function on account of the advantage possessed by public as compared with private enterprise, but is adopted primarily, or even aclusively, because of the relative ease or convenience of this means of obtaining a revenue which is to be applied to ends that have nothing to do with the method of obtaining it.
§ 96. There is yet another form of compensation by means of which an administrative establishment may find the means it requires. This method also, significantly enough, has become familiar to us from its use in the intercourse of private life quite as much as from its employment for the purposes of the public administration.
This is the method of "contributions." In its everyday use the word suggests the method by which the members of a club or association balance their accounts. Such a club or association may be of a permanent character, or it may have been organized for a temporary purpose only ; it may exist simply for purposes of gain or of generosity, from motives of public expediency or of benevolence. It will be seen that in this everyday use of the word the various motives which go to constitute the specific char acters of these clubs and associations are lumped together under the one term.
But for the purposes of the science it is necessary to system atically analyze this diversity of character, as we are endeavoring to do in the present chapter. In practical, everyday life we apply the term " contribution " [Beitrag] indiscriminately to payments made by members towards the expenses of a charitable organization, a clubhouse, or a dike ; but science has of late properly appropriated this term to designate a particular class of payments. To my mind very appropriately it has been restricted to such payments as approach to the character of a " price " in the respect that in the case of the contribution just as in that of the price, it is possible as well as desirable that the individual benefit should be distributed by measure. The only respect in which these payments differ from the " price " is this, that there is a technical difference in the form in which settlement is made for the benefit received. While in the case of a " price " the measuring of individual benefit is carried to the extent of measurement by the piece, the unit of quantity of service—of which a great number and variety are turned out by a single establishment ; the " contribution," on the other hand, serves for the creation of a common, comprehensive establishment which turns out an undivided product and answers the purposes of the members only if employed as a whole. A contrivance of this kind may benefit the contributors in varying degrees, and it may accordingly be paid for by them in contributions of various amounts to correspond with the varying measure of the benefit enjoyed.
Accordingly, in the case of the post, where the service per formed naturally subdivides itself into hundreds of thousands of distinct items, which are, moreover, of many diverse kinds, the participation enjoyed by each individual can be equitably paid for only on the plan of paying a fixed " price " by the piece. A dike, on the other hand, which is built to protect adjacent lands against an encroaching stream, or a common drainage system serving to drain a connected group of estates, can and ought to be paid for only by apportioning the expenses among the pro prietors in proportion to the benefit conferred upon the several estates. But this is precisely what is meant by " contribution." § 97. Neither "price" nor " contribution " are available forms of public income when the question is as to state institutions the advantage of which to the individual members of the common wealth can not be measured and apportioned (secs. 83 et seg.).
This of course does not set aside the fact of a difference in the benefits enjoyed by different individuals as a result of this class of institutions ; neither does it remove the necessity of seeking a method of defraying the expenses which shall take account of this difference in the advantage enjoyed.
The enjoyment of peace and civil liberty is unquestionably a privilege of very unequal value to different members of the com monwealth. The fact that these advantages cannot be measured or apportioned by no means prevents the rich and the poor deriving very widely different benefits from them. One who is able to call his own not only a bare existence but also an exten sive estate, who may be exposed to the violence of foreign armies or domestic malefactors not only in his person but also in his property, is entitled or rather he is in duty bound to look upon the institutions which secure him against these dangers as being contrivances of the same kind with those coparcenary dikes which are constructed to protect his own and his neigh bors' estates against destructive floods. He is bound to pay in due proportion for this peculiar advantage which accrues to his property above what other. less well-to-do, or propertyless members of the commonwealth enjoy. The thought readily suggests itself, too, that it would be an equitable plan to gradu ate the payment in proportion to the greatness of the property possessed, in a manner analogous to what we find in the case of "contributions." It is also to be remarked that the greatness itself of these public institutions with which we are here dealing, and their far reaching consequences, are the source of difficulties.
But while it is not to be overlooked that these institutions do, in addition to their other purposes, also serve this particular purpose, yet this is never true in such a sense that this special purpose— the securing of property against dangers from within and without—can be treated as their exclusive function, nor even as a function distinct and independent of their other pur poses. Rather it is characteristic of a highly developed com monwealth that such an intimate connection prevails between the interests of the individual and those of the aggregate, with respect to every class of interest, that it would appear impossible to bring any one special interest—as here the interest of prop erty—into a distinct and exceptional relation, in virtue of which it would be practicable to compute how much this particular interest owes to the national institutions.
§ 98. The absurdity of a computation of advantages, based on tl}e assumption that the national organization is nothing but an insurance-office for property, and unmindful of the security afforded at the same time for human interests of a higher order, —the absurdity of this view comes out glaringly when we reflect that the means necessary to this security comprise not property alone, but also goods of a higher order. For it will not be questioned that demand is made upon such goods of a higher order, in view of the ever wider acceptance by civilized nations of the maxim that every citizen is bound, to the, best of his ability, to guarantee the national security even at the risk of his person and his life, at the same time that the culture of our time ascribes to human life an infinitely high value—a value such as is simply incapable of being measured by any industrial standard.
Clearly, when sacrifices such as these are demanded, the end to be attained by their means must be conceived to lie beyond the range of calculable economic advantage. Interests must be at stake which are of such importance as to justify the demand, if need be, upon the citizens' life as security for them. It would be absurd to stake one's life for the maintenance of one's owner ship of economic goods.
If we are in search of a single word by which to denote the aggregate of these higher goods, the word Fatherland prob ably is the one word that symbolizes to the modern citizen all those higher interests which, apart from economic goods, are what the national organization conserves. The citizen of the German Empire of today, who backs up the hard-won national union with an expensive armament and a universal liability to military service, is very well aware that these sacrifices by no means stand for the security of property alone, but that above all else their purpose is to secure the conservation and independent development of national characteristics in usage and law, in state and church, in science and art.
§ 99. In this way we come to what is the essential charader istic of the Tax proper.
The tax is a payment made by members of a political com munity toward its expenses, simply in virtue of their being mem bens and without its being possible to balance accounts as regards particular expenditures and the particular benefits accru ing to individual members (vol. i. sec. 397).
We have already found in the discussion of first principles (vol. i. secs. 38o, 398) that when the terms of the relation are in this way made to consist of the aggregate advantage of the commonwealth as such on the one side and the collective per sonality of the several citizens on the other, no method of reck oning is admissible in assessing the public expenses which does not provide that each citizen must contribute toward the com mon expense according to his ability. This forms the correlate, in the domain of economic means, of the now-a-days well accepted principle of personal responsibility exemplified in the requirement of universal liability to military service. As in the one case solidarity of responsibility for the independence of the common country leads to the principle that every member of the community is held answerable for the welfare of the whole, in his person and his life, to the extent of his ability, as condi tioned by sex, age and health,—so also in the matter of eco nomic ability.
It is a problem devolving on the general theory of taxation to investigate the nature of these various kinds of economic ability which constitute the basis of the ability to pay taxes.
§ loo. In the case of the term "tax," as in the case of any of the terms used technically in the political sciences, it will be diffi cult to bring any precise definition of it into complete accord with the usage of every day life and the changes which this usage has undergone in the course of history.
If a definition of the tax is fixed upon in the manner above indicated, a considerable portion of existing tax legislation will be left unprovided for. There are taxes which are indefen sible from the standpoint of this definition, but which it may be desirable to maintain on other grounds, and these not only occupy a large space in tax legislation, but have been growing in importance, or have even been introduced within the period of development of Political Economy and of the Science of Finance. Taxes which are levied without regard to the economic ability of the owner, and simply on the basis of the market value of a piece of land, a house, and the like, must either be regarded as very inadequately corresponding to the economic ability of the tax-payer, or they must be justified on other grounds, basing the plea for their retention on facts characteristic of these taxes alone.
But this kind of a justification brings us out upon that middle ground which lies between the " contribution " and the "tax," in the narrower sense above defined.
§ 101. There are, for example, certain special cases of gain resulting from expenditures incurred by the commonwealth, which are on the one hand so intimately dependent on the public functions of the establishments in question as not to admit of their being paid for by means of Contributions, while they are on the other hand so obvious and so considerable as in all justice to demand some special compensation.
We need only call to mind the close dependence of real prop erty and its value on the expenditures required by the great, fun damental institutions of the State. And this relation holds in two different respects. First, there is no form of property that is so closely identified with the country as is real property, which constitutes, in fact, the physical substratum of any community.
Every contrivance which furthers the security and welfare of the state, therefore, is first of all of advantage to real property. Other kinds of property, so far as they are movable, can sever their fortune from that of the country; which real property never can do. So that even in virtue of this fact alone its special interest will in a peculiar degree bind it to the support of the national establishment. But in the second place, the same conclusion is even more strongly enforced by the phenomenon of which the law of rent is an explanation (vol. i. secs. 455 et seg.). As the origin and growth of rent is due to the activities of the aggregate and not to the efforts of the individual owner, real property is in justice bound to bear a specially heavy burden in the appor tionment of the aggregate expenditure. The justice of this demand is also borne out by the history of our science. The earliest constructed system (that of the Physiocrats) put the recognition of this claim in the most unqualified form, in the demand that real property alone should be made to bear the public burdens; and the science has ever since, in spite of all its progress and purification of the physiocratic teaching, held steadfastly by the essential substance of this claim.
§ 102. But even apart from this, there is a great number of cases where there exists a special relation of dependence between private interest and public institutions.
On comparing the expenditures which any great modern city, such, e.g., as Berlin, has incurred in the course of the past genera tion for the comfort of its inhabitants, with the simultaneous advance which shows itself in as striking a manner in enhanced values of building-lots as in any other one fact, we shall not find ground for assuming that a direct relation of cause and effect exists between the two facts in the sense that the enhanced value of building-lots is due solely to these communal expenditures.
At the same time it is not to be denied that the effects of these expenditures have very distinctly helped the value of build ing-ground. Improved streets, lighting, water supply, canaliza tion, sanitation, police, schools, charities, etc., have in a very appreciable degree increased the attractiveness of the city as a whole, and of certain quarters of the city in particular, and have thereby increased the value of building-ground. The fact that apart from and independent of these expenditures such an increase of values would follow from the well-known nature of land, need not stand in the way of the effect of which we are speaking; the advance in values has been considerable enough to admit of a concurrence of several causes. Some of the improve ments which have been undertaken at public expense are of such a kind as might have been undertaken directly by the owners of the property, or at any rate could have been carried out in a way by levying proportional "contributions" on the property owners interested. Such are thoroughfares, lighting, water supply, canals, and the like. Defective appliances for these and like purposes are felt by the occupants,—by the occupants of the particular pieces of property in the first place, and therefore also, and immediately, by the owners. In the absence of an adequate police provision for the streets and precincts in question a more effective and therefore more costly provision for security (in the way of area walls, manner of building, watchmen, etc.) will have to be made for each particular house. As soon as an adequate police force is present these provisions at private cost become superfluous, and the indebtedness of the private owner to the community on account of the provisions made then becomes obvious.
A case of a still more special and immediate connection between public expenditure and private gain occurs where partic ular industrial pursuits on part of private individuals are the cause of some peculiar expense to the community ; as, for example, the damage done to streets by heavy wagons, the damage to rivers from discharge of wastage, the burdening of public charitable establishments and the public schools (which are either entirely or prevailingly gratis) by the proletariat of the factory.
It will be made plain later on that these peculiar special rela tions seriously affect the system of taxation.
§ 103. A special benefit enjoyed by property in general as an effect of the public establishments will hardly give rise to a special compensation by means of a peculiar tax. For a taxa tion proportioned to the economic ability of the tax payers will of itself effect this purpose. Indeed it effects it so thoroughly that as a result of the distaste of property owners for a propor tional taxation and the desire for greater leniency in the burden ing of property for public purposes, the contrary principle, of pecuniary benefit as contrasted with pecuniary ability, has been made to serve as an argument for a less than proportionate obli gation.
The result of applying the principle of pecuniary ability is such a gradation of the sacrifices undergone for the good of the community as will discard the apportionment of the public bur dens according to pecuniary interest and allot the expenses according to differences of economic strength. Further, this difference in economic strength has the consequence (as will appear farther on, in the theory of taxation) that the majority, consisting of the weaker members, will pay at a relatively lower rate than the minority of stronger members.
§ 104. A matter to be considered in connection with the question of what the community may equitably require of a member, is the varying size of the individual households that are the units with which the commonwealth has to do, and with which it usually deals through the father of the family. It is also a matter on which the most divergent and even contradictory views are held.
Now, as a matter of equity, it is evident that, counting the person as unity, the obligation due on account of advantages accruing from the institutions of society increases in the same proportion as the number of individuals deriving such advan tages. The father of a family, whose domestic life comprises a numerous flock of children, owes correspondingly more to the community for the peace and security enjoyed by so many of his dear ones, than is due from the single man, the childless couple, or the man with a less numerous household.
This fact would seem less doubtful if it were not thrown into the background by considerations of quite another kind.
There is in the first place the undecided population question, which of itself gives rise to diverse and contradictory views.
The one view—and this is perhaps the most widely prevalent one, as it is also the traditional one—sees in the procreation and rearing of a numerous flock of children a virtuous action, whereby the head of the household merits the gratitude of the community. This view will of course lead to a very extreme position, unless it is tacitly assumed to proceed on the premise that the house hold in question is possessed of the means necessary for such rearing of children. The mere procreation of offspring regard less of the pecuniary means required for rearing them is scarce looked upon today as a work meriting the gratitude of society.
Herewith we come to the point of transition from this first view to the second, which likewise makes this important function of domestic life a matter o£ serious interest to the community, though by no means in the sense that the end in view is the sup plying of the greatest possible population and that the extent of participation in the accomplishment of this office is the measure of desert. The meaning of this second view is rather the posi tion dictated by a scientific insight into the true significance of the movement of population (cf. vol. i. secs. 163 et seg.). This scientific insight into the question of population will not permit us to regard an increase of population as desirable on any such general grounds. It is, in truth, the standing fundamental prob lem which chronically and persistently obtrudes itself on society for a solution simply in consequence of certain fundamental instincts, and is a persistent cause, in all classes of society, of a discomfort to which society as a whole is at least as sensitive as the individual household.
-It may also be remarked that even in case of an increase of population which is desirable from the point of view of the com monwealth, the state has no call to express gratitude. There can be ground for gratitude only in case the useful deed was done with a view to its usefulness. But of this there can be no question in the case in hand. The entering upon married life and the procreation and rearing of children are occurrences which, as moral facts, begin and end within the scope of self interest and its peculiar instincts and inclinations ; and if it happens that, by exception, these instincts and inclinations are sometimes accompanied by a conscious purpose of accomplishing what is for the public advantage, there are to be offset against this the much greater number of instances in which an increase of the family signifies nothing but a yielding to a self-interest which is harshly at variance with the interest of the community.
to5. If the discussion so far may seem to favor the view which insists on the recognition and compensation of those special pub lic advantages which result from the size of the individual house hold, the whole matter assumes a somewhat different aspect as soon as the element of economic ability is also taken into account.
Taking the matter from this point of view, the heads of fam ilies may confidently count on a ready assent to their demand for a reduction of the burden of taxes on the plea that the man who is blessed with a flock of children is thereby rendered less able to pay the tax. It is not to be doubted that the. economic ability of the taxpayer is lessened by the expense of supporting a numerous family, and that he is in consequence less able to contribute to the support of the public establishment than is another taxpayer, who, under otherwise equivalent economic cir cumstances, has no such family and consequently possesses a larger residue from which to contribute to the public purse.
This reasoning las. repeatedly influenced legislation, and espe cially it seems of lite, along with the ever-growing insistence on economic ability as the basis of tax apportionment, to be gaining an ever wider acceptance.
The limits of its application are indicated by the considera tions mentioned in the foregoing paragraphs. These are, first, that for the benefits conferred by the state the greater number of human beings included in the household unit and so deriving benefit are properly chargeable in a proportionally increased amount ; and second, there are the scruples due to a recognition of the principle underlying the growth of population, the appre hension being that legislation framed on these lines may unduly foster the already sufficiently prevalent misconception that the procreation of children is always and everywhere a meritorious service and that the community is much beholden for what is in point of fact the improvidence of individuals.
§ 106. But if it is true that the consideration of this personal factor, of the number of persons comprised in the family repre sented by the taxpayer, affords no decided result, or at least none that has been clearly recognized in legislation hitherto, and if, further, the preferential benefit derived by the property owner in general from the public institutions .(sec. 103) affords no suf ficient occasion for varying the form of taxation from what would be adopted on other grounds, we shall find, on the other hand, that another factor above spoken of (secs. 101, 102) has a decided effect on the form which legislation takes. This factor is that enjoyment of peculiar advantages which attaches to the posses sion of particular kinds of property.
These peculiar forms of taxation accordingly occupy a middle ground lying between the territory of the. Contribution proper and the Tax (in the narrower sense as defined above—sec. oo), for the reason that the advantages for which it is sought to collect payment are so intimately dependent upon and bound up with the general purposes of public institutions as not to admit of an equitable employment of the Contribution.
The result is a compromise with which we are familiar under the name of a Tax on Produce or on Proceeds [Ertragssteuer], or an Objective Tax.
The development of those sentiments, in the course of history, to which this kind of tax owes its origin, discloses a gradual prog ress, both as regards apprehension of the nature of the tax and as regards apprehension of the relation subsisting between the indi vidual citizen and the national organization. As to the point first mentioned, the course of development has been this : At the out set the taxation of " proceeds " or of "objects" was regarded as conforming to the principle that each citizen should contribute proportionally toward the whole of the necessary national estab lishment, while at a later stage it came to be the accepted view that the imposition of this class of taxes is expedient only within the narrower field which we have assigned them. As regards the second point, a growth of national sentiment is to be noted, in consequence of which the Income Tax came to be regarded as (in point of principle) a relatively less adequate means of bal ancing accounts between citizen and commonwealth, and has been relegated to a more modest sphere. The narrow self which was the determining factor in the earlier public sentiment has retreated within a more restricted field, within which it has better been able to hold its own.
§ 107. This is perhaps the proper place for some consideration of a form of public exaction which, since the time of K. H. Rau, has been distinguished from the rest of the national income under the head of Fees (GebUltren).
Fees have this in common with the Tax on Proceeds (Ertrags steuer) as discussed above, that they consist of a special payment for some special benefit which individual members of the corn munity derive from the public institutions, beyond what falls to the share of the other members ; or (what comes to the same thing as regards the matter of equitable compensation) the pri vate interest of individual members occasions the commonwealth some special detriment (costs) which is to be made good by the members in question.
The difference between Fees and the Tax on Profits is this, that while it is intended that the latter, by means of annual pay ments, shall pay for effects wrought by the public establishment continuously through considerable periods of time, Fees on the other hand are payments rendered for isolated. acts by which special advantages are offered or special expenses incurred for the benefit of individual citizens.
§ o8. It is well to call to mind at this point what was explained above (secs. 84-88), in the discussion in the course of which the Administration of Justice and Public Instruction were treated of as typical institutions.
In the course of that discussion we came to the conclusion that with respect to the administration of justice it is necessary to adhere to a middle course between the traditional financier ing methods of primitive public economy and the completely gratuitous administration demanded by the radicalism of the past one-hundred years. This middle course finds expression in the employment of the tax on the one hand and the fee on the other, as the proper method of defraying the expenses of the public administration of justice. The tax, in recognition of the incom putable benefit derived by every citizen—the advantage enjoyed in living in the atmosphere of peace and legality of a civilized state ; the fee, in compensation for the palpable special advan tage, or the special expense incurred for the benefit of individual citizens who may require the machinery of the courts to be set in motion.
An institution of a type somewhat different from that exem plified by the courts of justice is the public school. In this case the peculiar structure of the public establishment in question does not make it necessary, in order to comply with the demands of equity, that it should be based primarily on a tax ; on the con trary the advantages offered and the expense incurred in behalf of individual citizens are in this case quite readily computed and apportioned. That this method of apportionment is after all made subsidiary to the principle of the tax is due the conviction, based on social-political considerations, that a helping hand should be extended to the needy majority of those who make use of the schools. But in proportion as these straitened circumstances are not present, in proportion, that is, as the question concerns those grades of instruction which in a preponderating degree serve the purposes of the well-to-do classes alone, the neces sity of apportioning payments to advantages enjoyed by indi viduals makes itself felt, and therefore arises also the expediency of fees.
It is true, the recognition of the indirect effects of public instruction modifies this view of the question to some extent. At the same time the requirement of that equity which is to be pre served as between members of the same social stratum, with respect to their varying pecuniary capacity, demands that this recognition should be allowed but a guarded influence. The out come of all this is that in the middle and higher grades of public instruction a broad field is left open for the fee.
§1o9. We have now passed in review all the different kinds of public exactions, so far as they have hitherto been recognized and adopted in the administrative system of any political organization.
The foregoing analysis of the services rendered by the public administration, which constitute the basis of the corres ponding forms of payments exacted, has brought to light one other important consideration in the way of peculiar motives existing in the relation of the individual to the community, but which does not result in any peculiar adaptation in the form of payments.
This is the difference in ability between the different indi viduals and strata of society already explained above (secs. 85-9o). There is no further peculiar form of payment avail able to meet this difference. The form which we have come to know as a tax in the narrower sense will also have to serve for the equitable satisfaction of the claims represented by this consideration.
If the tax, in the sense above (sec. 99) developed, of itself goes in the direction of apportioning payment to ability, this fur ther consideration, which demands that the stronger should assist the weaker, can only help on in the same direction and bring the tax system into a form that shall still more distinctly graduate payments in proportion to pecuniary ability.
What is exacted in accordance with this view will continue in any case to figure as a sort of "compensation," in the best sense, if the profounder view is taken of the relation in which the life of the individual stands to that of the whole—the view expressed in the old phrase of Montesquieu : "en naissant on contracte envers la patrie une Bette immense dont on ne pent jamais s' acquitter" which has again quite lately been expressed so felicitously by the English philosopher, Huxley'.
As Huxley, in his beautiful essay on the Struggle for Exist ence, says : " If I was not at my birth immediately annihilated I owe it either to the natural affection of those about me, which I had done nothing to deserve, or to fear of the law which had been established centuries before my birth by the society into which I made my entrance. If I was nourished, cared for, edu cated, I know of nothing I had done to deserve those advantages. And if today I possess anything, even if I owe to the sweat of my brow what I do possess, I must not forget that without the organ ization of society, which is the outcome of the struggles of a long series of generations, I should probably possess nothing more than a stone hatchet and a miserable hut, and even these would be mine only so long as no more powerful savage happened to come my way. But from this it follows that if society has done all these things for me gratuitously, and then requires me to pay something toward its support—suppose this something is a con tribution toward the education of children belonging to others— I should be ashamed, in spite of all my individualistic inclina tions, to say no. And in case I were not moved by shame, I believe society would be in the right if it were to convert its moral claim into a legally binding one. It would be thoroughly unjust to let the willing horse draw the whole load."