II. Fiscal Reforms

The administration of the royal treasury also needs care ful reform. It is a great ahuse that treasury officers must 1 Page 17l. l! Qui regia vectigalia administrant, eos frequens fama damnat, quasi foedere cum Pub licanis facto lucri et pecuniae ea conducentibus pactae partem multo maximam ad se derivent; quod ad rectores singularum urbium promanat, eo pejori exemplo quod leges provineiales seu pragmaticas vendunt po pulis quotannis iis obtemperare recusantibus: publica iis addicunt palam a quibus ex arcano pecuniam acceperunt. DI~ Monetae Muta tione, cap. 13, p. 219. 219 MARIANA:-POLITICAL ECONOMY pay a large sum to obtain their desirable positions, so that once they have succeeded they naturally try to reimburse themselves. They do not meet the royal bills for several years, and in the meantime make profit with the king's money, by investing it in business. They can easily pay their debts in four or eight months and, moreover, receive from the creditors a substantial reduction.

1 People also say that all of them have friends in the royal courts with whom they share their spoil. Another grievous abuse is the corruption of practically all royal officers. Any office can be had for money, not merit but sordid bribery opens up prospects to candidates. Mariana realizes that it is dangerous to make these discov eries, and therefore insists that he is simply stating what is the general talk. Although it may not be so, it is a pity that it is being said. Another indication of the dishonesty of royal officers is the fact that many go into office as beg gars and within a short time grow wealthy from the blood of the poor and the bribes of applicants for public offices. 2 The only remedy against these terrible abuses will be to demand a etrict accounting of all royal officers. All they cannot definitely account for should be entered in the royal treasury. Mariana feels sure that in this way large sums would be recovered and the king's financial stress disap pear. As it is now, the public revenues are passing through numberless hands all of which keep a portion of them just 1 Quae.stores eam functionem cum magno compararint, (quae nova corruptela est argu mentum inversae reipublicae) iidem vendant necesse est, atque ex aliena miseria lucrum captent. Pecuniam rev,iam ad mercimonia convertunt, sic regiis litteris uno et duobus annis non satisfaciunt. Qui commodissime post quattuor aut octo menses debita solvunt parte etiam aliqua expensione detracta, uncia nempe et duabus unciis ex universa summa, ut cum creditore convenerunt. De Monetae Mutatione, cap. 13, p. 220.

2 Verum quod vulgo fama est, plane est miserabile; nullum hoc tempore in provincia magistratum, nulJam procurationem, ne sacerdotia quidem et Episcopatus meritis dari, cuncta esse vaenalia, neque sine pretio concedi, conficta haec fortassis, esto certe aueta: sed ita dici calamitosum est. Omnino regios ministros videre est terrae plane filios exuccos ad publicas procurationes accedere, puncto mox temporis beatos evadere, multa aureorum millta annua numerare. Un de haec nisi ex pauperum sanguine, ex medullis litigantium publicasque procurationes ambientium. Ibid., p. 219. 220 FISCAL REFORMS as some residue liquid poured from one vessel into another is left in each. Not even half of the tax returns find their way to the royal treasury.! Mariana also suggests saving. The royal household could very well be conducted with considerably more economy than at present. To prove this our author again resorts to history. lie has seen the accounts of John II for the year 1429, which show an expenditure of only about 30,000 gold pieces for the royal household. If some allege that times have changed, that prices are much higher, that the country has grown in power and demands a more magnificent repre sentation of its sovereign, Mariana will answer that Philip II, one of Spain's most powerful kings, did not layout more than 40,000 gold pieces for himself, his son Don Carlos and Prince Juan d'Austria. These figures in no way compare with the enormous expenditures of the present, which run up as high as 1,200,000 pieces.

But how shall the king save? ~lariana sarcastically re plies that he is not in a position to know, hut that the wise men who surround the king will surely know. He merely repeats what people say: that the royal stewards waste a great deal of precious food. The king should remember that royal splendor and majesty will gain more by prudent nloderation and parsimony than by reckless extravagance. Another point is the question of royal donations. The king of Spain has so many offices to distribute that a sound policy regarding appointments would render further pres ents to favorites unnecessary. Mariana does not want to say that the king should he stingy or that great deeds on behalf of the national honor should not he generously re warded; but he maintains that it is not good policy to bestow 1 Ante omnia regia vectigalia censusque dilig:enter et ex fide curari debent, ut modo res sunt vix dimidium in regios usus convertitur. Per multos ministros traducta pecunia liquoris instar semper aliquid in vase relinquit. De Monetae Mutatione, cap. 13, p. 220.

221 MARIANA:-POUTICAL ECONOMY all favors upon one person, or to give too liberal presents. It is far better to grant" smaller favors and to distribute them over a long period; for, if favorites receive too much at once, they will no longer expect new favors and grow loath some in the king's service. Instead of persevering they will wish to withdraw and spend the rest of their lives in idleness. Thereby the royal treasury will be exhausted and the coun try lose the valuable help of capable men. Hope is the best incentive to secure the services of the leaders of the nation and to induce them to do their very best for the national welfare. 1 One of the principal reasons why Spain's finances are in a deplorable condition is the fact that expenditures are not balanced against revenues. If a careful estimate of expen ditures were made beforehand, these could he equalized with the tax returns expected. Ferdinand the Catholic, one of the most c;apable kings, once declared himself unable to pay a comparatively small sum to the Emperor Maximilian because he could not see how the finances of his country would allow of the disbursement. He was in a position to declare the country's inability because he had kept accounts of the expenditures and revenues of his kingdom.

2 At pres ent, the public funds are wasted without any budgeting or accounting, and the result is that the treasury is always in a desperate condition. After pointing out these abuses in Spanish financing, Mariana proposes a number of remedial 1 Deinde regia dona fortassis minora si essent magnum vectigal accederet. Non ea sum mente, ut Regem parci infamiam sub ire velim, aut parum munificum existere in suo rum praecIaris facinoribus et obsequiis. Duo tamen consideranda credebam. Nimirum nullum sub caelo gentem esse, cui majora et plura praemia publice suppetant, procurationes, officia, pensiones, sacerdotia, militaria oppida et census, iis ex ratione et cum delectu tribuendis extraordinaria munera excusari possent ex regio the sauro aliisque vectigalibus. Deinde cogitandum muneribus, cum sunt nimia, homines non reddi promptiores ad obsequia, ne ad benevolelltiam quidem dantis, ut spe magis futurae mercedls quam accepti memoria beneficii ducamur humanum est, usque eo ut qui multum in aula creverunt, continuo cogitent de secessu et tranquilla vita. De Monetae ltlutatione, cap. 13, p. 218.

2 Rex Catholicus id ut concederet adduci non potuit: excusabat aes alienum publice ad quingenta aureorum millia excrevisse. Mirabile plane responsum .... Nimirum prudentia insigni Princeps accepti et expensi rationes comparabat, neque ultra niti volebat. Quae magna sapientia est. De Monetae Mutatione, cap. 13, p. 221. 222 FISCAL REFORMS schemes which, together with conscientious accounting and budgeting, might surmount the financial crisis of the coun try. New Methods of Public Financing The crux of the Spanish tax system was the general sales tax. Almost every writer on taxation could not help finding this burdensome charge hard or even unjust. Molina tried to justify it for fiscal reasons and on account of convenience of payment, but Suarez would have it restricted to luxuries. De Lugo held it inadvisable to restrict it to luxuries because certain classes would then be exempt of all tax burden. It would, however, he very desirable to place a much higher charge on these goods than on ordinary commodities. Lainez as has been seen before 1 openly denounces the sales tax on the necessaries of life. Mariana's plan is similar to de Lugo's: luxuries ought to he taxed very high and necessaries of life very little, so that what would be lost in the one case would be more than made up for in the other. Such a method would have the further advantage that it would discourage the use of commodities which are apt to effemi nate the youth and to spoil the native customs. At the same time Mariana has a social consideration in mind: a high luxury tax would bridge the gap between the rich and the poor in so far as wealthy citizens would not acquire too much power if they had to pay enormous prices £01' luxuries.

He writes concerning this tax reform: "Goods which people need for the maintenance of life such as ordinary wine, grain, meat, woolen and linen cloth, especially if it he not elegant-should he sold hearing only a slight tax. What is lost on these may he recovered by a high tax on fancy goods such as perfumes, which Spain 1 Page 201. 223 MARIANA:-POLITICAL ECONOMY might very well do without, sugar, silk, heavy wines, meat of fowl, game and many other things without which a hu man heing may very well exist and which, indeed are very apt to enervate the body and debilitate the mind. In this manner the great mass of the poor would be served, and the luxury of the rich kept in proper check so that they would not recklessly waste their money and cater to their bellies. If, however, they should not wish to he cured, it would he only just that some fruit should accrue to the State from their madness. Coincidentally, the poor would not be so completely exhausted, which oftentimes is the principal cause of numerous uproars. Nor will the rich acquire too much wealth and power when they have to pay extremely high prices for their luxuries. lOne of these evils is equal to the other, as the great philosophers say and as experience shows." 1 Another way of bridging the gap between the social classes would he to make wealthy citizens serve the community at their own expense. The results would be beneficial and salu tary for all. Avaricious men would be kept out of high offices wherein they hope to grow rich at the expense of the poor. The king would save large sums which now he has to disburse for salaries, and the rich would spend a part of their money for the common good and receive as their 1 Sed et alia excogitari ratio potest, ad sublevandum inopiam provincialium. merces quibus ad vitam sutentandam populous opus habet, vinum frumentum, carnes, vestis lanea lineaque, si praesertim nimia elegantia absit, modico vectigali imposito vendantur. quod ex Us rebus detractum fuerit, ex curiosis mercibus suppIeatur. aromatis quibus Hispania carere potuisset, sacharo, bombyce, vino generoso, avium ferarumque carnibus, multisque aliis mercibus, sine quibus humana vita traducitur: et quae potius ad emollienda corpora, debilitandos animos maG"f'am vim habent. Sic enin et inopib'ls consuletur, quorum est magnus numerus, et luxui hominum potentium modus edt, ne facile opes effundant, ventri gulaeque servientes, quod si sanari noluerint, ex eort~m amentia fructum aliquem ad rempublicam redire aequum erit. SimuI continget, ut neque inopes potius exhauriantur, unde novi et graves motus existant: neque divites, qui rebus fere curiosis aueto praesertim earum pretia soli utentur, nimium crescant opibus et potentia. Utrumque enim noxium est, uti maR"ni Philosophi affirmatum reliquerunt, et res ipsa indicat. De Rege, Lib. III, cap. 7, p. 265.

224 FISCAL REFORMS only reward the honor of high offices and the gratitude of the people. By a similar method cities might be improved and beauti fied. Officials with large revenues, churchmen not excepted, should be obliged to disburse a part of their income for the erection of beautiful buildings, the repair of roads and bridges, and the building of charitable institutions. Such a burden would make these offices less desirable and check avaricious ambition-both of which results would greatly benefit the people. 1 Mariana knows very well that the heaviest drain upon public revenues is war. If he can provide ways and means of financing wars, the public expenditures will dwindle down to almost negligible figures. In short he maintains that war should finance itself or as he says : "War must feed itself." 2 Our warlike Jesuit believes that the best means to pre serve peace is to be prepared for war: "Si vis pacem para bellmn." A strong army and navy are, therefore, absolute necessities. Nor will domestic peace endure if there be no war for a long time. Soldiers will grow idle and cowardly if they have no chance to cross swords with the enemy.

3 To forestall both of these dangers, it will be expedient for the navy to engage in brigandage, which the infidels are carry1 Praesertim si qui honores militares suscipient, ecc1esiarum praefecturam, aut omnino alios magistratus, iis necessitas imponatur, venia Pontificum si opus erit, redituum partem et proventuum in ornamenta publica insumendi: pontes instaurandi, inopibus et aegrotis hospitia extruendi, haud leve operaepretium existet. sic fiet ut virorum praestantium tota provincia innumera monimenta extent: honorum ambitus minor sit, multorum cupiditate restincta eo onere imposito. quod alioqui faciendum Aristoteles monuit, ut minori invidia publico commodo honores et magistratus viris copiosis et praestantibus demandentur. De R('qe, Lib. III, cap. 10, p. 286. 2 Prima ergo cura Principi sit, ut bellum seipsum alat. Ibid., cap. 5, p. 246. 3 Non ita sim mente destitutus, ut bellum paci praeferam, qui sciam tum demum bellum recte geri, cum ad pacem refertur, neque bellum in pace quaerendum, sed in bello pacem: idem tamen contendu, pacem domesticam diu stare non posse, nisi arma cum externis exerceantur, neque enim aut causa justa deesse potest, aut militum otio marcescere pati dehemus: sed potius terrae marique praedas agere, in alienos fines irrumpere, urbes praesertim impiorum diripiendas militi tradere: quibus spoliis ditatus haud magnopere militaria stipendia requirat. De Rege, Lib. III; cap. 5, p. 246.

225 MARIANA:-POUTICAL ECONOMY ing on all the time and to a return dose of which they are clearly entitled. The army should from time to time invade the territory of some enemy, seeing that just reasons for war are never wanting. 1 But the great question is how to finance these wars. As was said hefore, 2 Mariana helieves that war will do this itself, the soldiers receiving booty for their pay and other expenses being met in the same way. Moreover, martial forces should he armed by private citizens or local communities. In time of war the citizen is far more eager to make the greatest sacrifices than he is to spend a single farthing under the head of a tax in times of peace. If people are encouraged to contribute voluntarily toward a civilian war force they will most surely he very generous. 3 Thus the king can re frain from spending large sums to pay foreign mercenaries, an expense which has sometimes proved onerous. The re sult will he another great advantage in that the safety of the country is entrusted to the care of the citizens wlto are most intimately concerned about the national protection whereas mercenary troops care for nothing except good pay.

Unnecessary wars should he avoided. If a province can he maintained only hy constant war it should he given up, for it is hetter to separate an infected member from the hody than to endanger the well-heing or even the life of the whole organism. Therefore Philip IT acted wisely in ahandoning the Netherlands. The same policy was followed by Em1 To understand this war morality of our author we must bear in mind that the war against the Moors was considered by Spaniards a crusade, a holy war. Moreover, in view of the fact that the Moors continually broke their treaties and threatened Spain's trade by brigandage, Mariana thought that his country had the right of retaliation. He writes: Quid enim, cum hostibus facultas libera sit, mareque utrumque infestum piratae omnibus annis reddant, cum bello saepe lacessant, de nostris praedas agant, earn facultatem nostris bominibus penitus esse praecisam velimus? Ibid., p. 247.

2 Page 225. a Quod si proceres et civitates quasi symbolis collatis equos, viros, arma suppeditare contingat, aliaeque rationes instituantur voluntarios milites ad signa bellumque provocandi. quantum de regiis sumptibus detrahatur, res ipsa indicat. Porro molestius contingit quamvis exiguam pecuniam in aerarium tributi nomine conferre, quam mulitiplicem in bello castrisque sua quemque manu suoque arbitrio expendere. De Rege, Lib. III, cap. 7, p. 261. 226 FISCAL REFORMS peror Adrian, who destroyed the hridges across the Danuhe and the Euphrates, because he thought it of no advantage for the Roman Empire to extend its frontiers beyond the territory which could easily he maintained. If the King of Spain had listened to these suggestions he might have saved the country from financial ruin. Instead Mariana, the fearless champion of truth, was sent to jail and made to stand trial for lese-majeste, while flatterers who devised new schemes to oppress the people by additional taxation were always welcome at the royal court.

227 Chapter III Fiscal Contributions O UR investigation of the fiscal ideas of Mariana and the other Spanish Jesuits of the sixteenth and seventeenth centuries has brought to light many significant facts. We have discovered matters not usually looked for in studying scholasticism. We have found that almost all the elements of modern Fiscal Science were applied or, at any rate known, by the Spanish Jesuits. Their definitions enumerate the substantial requisites of a tax. This, they say, is a compulsory payment to the gov ernment without regard to immediate personal benefit. It is thus different from a free contribution. Its purpose is to defray the expenses incurred for the common wants or the general good. All these points the Jesuit definitions touch upon. Even the absence of direct personal benefit is clearly enough indicated, and so a tax is distinguished from fees and special assessments.