ured on the lines OY and O'Y' in the two diagrams, the curves YDX andY'D'X' representing the declining utility of successive units purchased as increasing units of money, say dimes, are spent for each. If the purchaser spends so much for Commodity A as is represented by the line OC and so little for Commodity B as is represented by the line O'C', it is apparent that he is not spending his money wisely. If he had saved the last dime which he spent for Commodity A, he would have lost very little benefit or satisfaction,-only as much as is represented by the line CD, or by a very small surface whose height is approximately CD. If that dime were spent for Commodity B it would give him a larger benefit or satisfaction, as represented by the line C'D', or by a surface whose height is approximately line C'D' and whose base is the same as that of the surface representing the loss when a dime less is spent on Commodity A. It is scarcely necessary to add that wise consumption includes also the elimination of injurious articles of consumption and the cultivation of a liking for those that are beneficial. COLLATERAL READING MARSHALL, ALFRED. Principles of Economics (fifth edition), Book III. New York, 1907. WICKSTEED, PHILIP. The Common Sense of Political Economy, Book I, chap. ii; Book II, chap. iii. London, 1910. CHAPTER XLVI TAXATION Classification of revenues. The government as distinct from the people has needs of its own and must have revenue out of which to supply those needs. There are various sources of public revenue, but in modern times the chief source has been taxation. Henry C. Adams, in his work on finance,1 gives the following classification of public revenue: PUBLIC Direct revenue 'Public domains Public industries Gratuities or gifts, or treasure-trove REVENUE Derivative revenue Anticipatory revenue (Taxes Fees Assessments Fines and penalties Sale of bonds or other forms of commercial In former times the public domain was made to supply a large part of the revenue for the government. In fact, under the feudal system, property in land and something resembling public office went together. The king had his own demesne; so likewise did his retainers and all members of the nobility. The nobility formed the chief fighting class and likewise the administrators of local government, each deriving his income from the lands which were granted to him. Public industries have not figured very largely as sources of public revenue, unless royalties from mines could be put in this class. A number of European cities have derived portions of 1 The Science of Finance, p. 227. New York, 1899. |