Page:The New Protectionism.djvu/135

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FREE TRADE AS A POLICY
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ordinary peace expenditure as well." The same story is true of the other belligerent countries, and for the same reason. Tariffs are broken reeds for war emergencies. Countries that trust to them for revenue in war-time are foredoomed to failure. For just when more money is wanted less is supplied. In most belligerent countries import trade is heavily diminished, and with this diminution the yield of import duties falls. The rates cannot be increased at a time when restricted supplies are raising prices. On the contrary, duties upon necessaries must be reduced or repealed, as we see has actually happened. This financial defect, perilous to national defence, is inherent in a protective system. It is no mere chance that has imparted so much elasticity of revenue to our national finance. The simple reason is that, whereas in war Germany, France, Russia, Italy, rely upon indirect taxes for the great bulk of their current revenue, this country is raising 72 per cent. of her revenue by direct taxation.

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