for instance, quite commonly held that France is insufficiently taxed, and that her people cannot be induced to make the sacrifices necessary to enable their Government to balance the budgets. Mr Peel's book, and the facts supplied by even a cursory study of the official figures, make it possible to assert that the very opposite is the case, and that France is suffering not only from taxation which is not properly adjusted to the shoulders which have to bear it, but also from over-taxation. The difficulty of comparing the burden of taxation in this country and in France is notorious. How can we compare the figures of English and French Budgets? A comparison based on the exchange value of the franc must be fallacious when the difference between prices based on exchange value and internal prices is considered. It is true that internal prices tend to rise as the franc falls, but the process is never rapid enough to equalise the price levels of international and imported staple goods and of home products and services, and the two levels can never be actually assimilated while the exchange continues to fluctuate. It would certainly be misleading to convert an income of 100,000 francs into its exchange equivalent at 130 frs. to the £ at 7601.-it is much more likely to be something between 1000l. and 13507., i.e. at some figure based on an exchange of 100 or 80 frs. to the £. The only possible method of calculation is that adopted by Mr Peel and Mr Moulton, to compare the percentage of taxation to national income in each case. But national income can never be more than a matter of approximate estimate, and all that can be done is to accept the figures arrived at by competent statisticians on lines which have stood the test of criticism. Mr Peel, making use of such estimates, quotes figures which confirm the statement made in the 'Economist' of Jan. 31, 1925, that France's burden of taxation is rising to, if it had not equalled, that of Great Britain.' Mr Moulton, p. 191, reaches a similar conclusion in words which may here be quoted:

'There is no truth whatever in the prevalent assumption abroad that the French people do not and will not pay taxes. The facts completely contradict this contention, which has been repeated so often that it has come to be almost universally believed. The French tax burden was relatively heavy

before the War as compared with other countries, and it has been very heavily increased since 1913. We refer to collections and not merely to the rates that are levied. The revenues derived by the National Government in 1922 from taxes and fiscal monopolies equalled 27.1 billion francs (or milliards) and the taxes of the departments and communes amounted to about 3 billion francs, making a total of 30 billion francs. Since the national income in that year was only 145 billion francs, it will be seen that the French people paid in taxes fully 20 per cent. of their income. National taxes alone represent nearly 19 per cent. of the national income. This compares not unfavourably with Great Britain where taxes of the central government are estimated to take roughly 18.5 per cent. of the national income' ('London Economist,' April 5, 1924).

Mr Peel, like most writers on the subject, is impressed by the current talk of extensive evasion. Mr Moulton, however, while agreeing that evasion is all too common an evil in France, as in all countries where the burden of taxation is heavy, considers that the figures of actual collection of taxes in France constitute the best proof that the evasion evil has been very greatly magnified in public discussions. Let it be repeated,' he adds, 'that the actual collections equal 20 per cent. of the national income.'

These allegations have produced so bad an impression in this country-statements, for instance, such as that the French income tax is a 'farce' being quite common in our press-that some further comment may not be out of place. Mr Peel's many quotations on this question from French sources show pretty clearly that the French have largely themselves to thank for the bad impression thus created. To some extent the evidence may be discounted on political grounds. Much of it consists in the assertions of radical and socialist orators who, unable to contend any longer that the rates of income tax and death duties are not sufficiently onerous or progressive in character, fall back on the cry that the rich escape by defrauding the revenue. M. Dumesnil, for instance, in the debate in the Chamber of Deputies, on Jan. 28 last, made use of a comparison between English and French income-tax payers which has been widely quoted here to the disadvantage of the latter.

He stated that the French impôt sur le revenu produced last year 3 milliard francs, while the British income and super tax produced (at 80 frs. to the £) 26 milliards. His comparison was unchallenged either here or in his own country; but the fact remains that, as a comparison, his statement of the French receipts is seriously misleading owing apparently to his omission of large items of taxation corresponding to tax collected from British income-tax payers, namely, that derived from the schedules of the French tax and that derived from the tax on valeurs mobilières which is not technically a part of the income tax. If he had included what should have been included for a comparison with the British income tax, his figure for the French yield would have been nearly doubled.

Leakage, however, there is undoubtedly of a serious kind in the assessment and collection of income tax (and probably also of succession duties), but to attribute it entirely to fraudulent evasion is somewhat misleading if defective administration which facilitates it is the root cause of the evil. When it is borne in mind that, when the new tax which ran counter to all the instincts of the people was first brought into force in 1917, the machinery of collection was practically non-existent, it is not surprising that it should be still unequal to an efficient performance of its unpopular duties. A very considerable increase of official personnel is no doubt required; it is said that two hundred additional contrôleurs throughout the country would not be excessive, but the cost of collection is already unduly high, and it is no easy matter to recruit officials at the usual too low rates of salary in a country where man-power is short and trade booming. In spite of all this both the number of income-tax payers, which is startlingly inadequate compared with the British figures (especially in the higher classes of income) even allowing for the much lower range of incomes in France, and the yield of the tax, increase year by year, and could no doubt be greatly increased if the radical and socialist proposals for compulsory declarations so often discussed in the Chamber could be put into force.

More serious in its effect on the popularity of the tax is the inequality with which different classes of

income-tax payers are treated under the impôts cédulaires (schedules) of the income tax. While clerks and others with emoluments, salaries, and pensions are taxed to the full on the declaration of their employers, the skilled artizan goes scot-free, and members of the liberal professions, doctors, lawyers, and so on, owing to the laxity of the State officials in checking or challenging their returns of income, are thought very largely to evade assessment and payment. It was recently stated in the Chamber that only six doctors in Paris declared incomes of over 100,000 francs, whereas a deputy asserted that there were over 500 earning that amount. But the greatest disproportion occurs in the taxation of the profits of industry and commerce as compared with that of agricultural profits. A significant incident occurred on Feb. 4 last when 250 shopkeepers of the Rue St Honoré closed their premises for two hours in the afternoon by way of protest against this fiscal inequality, placarding their shutters with the statement that while three million tradespeople, including merchants and manufacturers, contribute 8200 million francs in taxes, eight million peasants pay only 82 million francs. We do not profess to be able to verify these figures, nor the further statement that the department of the Seine alone pays 48 per cent. of the total French taxation; but, according to the latest official return (for 1924), the schedule taxing agricultural profits (apart from the land tax and the general income tax) showed only 309,700 persons assessed and contributing the insignificant total of 42,724,000 francs! Mr Peel in this connexion quotes some remarkable statements made, apparently without contradiction, by a socialist deputy, M. Compère Morel, in the Chamber in February last year. Taking the years from 1918 to 1923, commercial and industrial taxpayers contributed about 4284 million francs to the revenue, salary or wage-earners 1035 millions, non-commercial professions 185 millions, and agriculturalists 95 millions. And this,' adds Mr Peel, 'in a country which is one of the great agricultural nations in the world.' M. Compère Morel went on to give an instance of the extremely lenient method of assessment which conduced to this result, that of a wine-grower with 70 acres whose gross income for 1924 was 244,000

francs, his net profit 97,200, his taxable income calculated on the existing basis only 17,175, and his actual payment 1038!

The question of applying some remedy to this apparent injustice in the incidence of taxation is one which is very largely shirked in France. About 50 per cent. of the population live on and from the soil; except for the capital, great cities like those which abound in Great Britain are not found in France; from an electoral point of view the agricultural or peasant interest is predominant in most departments, and all parties pay court to it, including the socialists, who have been gaining support in several departments and who by showing in their propagandist appeals that the Russian peasant has been no loser by the Bolshevik revolution, are trying to disarm the individualist prepossessions of the French peasant and displace the Radical gauche in his affections. Apart, however, from any political considerations, there is an almost insuperable difficulty in assessing to an income tax a mass of landowners mostly small and many very small, making a good living when they can work their farms themselves, but consuming mainly their own produce and keeping no accounts, and, in the case of the larger proprietors, hampered by the scarcity of labour, which is dear and bad.

The yields per acre in France before the War were low as compared with those of other countries; the margin of profit has always been small; and the rural exodus due to the War has caused a decline in acreage in spite of the acquisition of Alsace-Lorraine. Similar conditions would have made the application of incometax methods impossible even in England. It is true that there has been improvement in the lot of the small and middle peasantry and that owners who have remained on the land have taken advantage of the post-war prosperity of 1918-20 to pay off mortgages and increase and round off their holdings. The tendency has been for properties of 15 to 50 acres to gain at the expense of the very small and the very large holdings. But the improvement in their economic position has not made them more amenable to taxation. It has increased restlessness and discontent and inspired incessant demands on the State for assistance in the supply of labour,