who paid income-tax in 1922, 592,000 paid on incomes of less than 20,000 francs (about £220) and 272,000 of these paid on incomes of less than 10,000 francs (about 110). Barely 5,000 people paid on incomes over 200,000 francs (£2,200) and of these less than 200 paid on incomes over 1,000,000 francs (£11,000).

The centre of the whole situation is the fact that France remains mainly an agricultural country. The ironworks of the east, the cloth mills of the north, the silk looms of Lyons and the general manufactures of Rouen and the lower Seine valley get themselves talked about, but in reality they represent a comparatively small part of the wealth of the nation, which depends upon the wine of the south and agriculture everywhere. Outside of Paris there are only seven towns which would rank as towns of any importance in England, and all the others are little more than market centres for agricultural districts. The rich man of France is only moderately rich, but there are many of him, and he is a peasant.

From these facts several results arise. The peasant is not only prosperous but politically powerful. He is therefore able to divert the burden of taxation to the inhabitants of such towns as there are. There is little doubt that the townsman is taxed about as heavily as he can bear. There is equally little doubt— and no well informed and sincere Frenchman will deny it-that the peasant not only pays relatively less than his fair share but gets off very lightly in an absolute sense. The difficulty is to discover how he is to be made to pay. He is naturally secretive, and even when he does not actually hoard—and thus incidentally add to the financial difficulties of the country by withdrawing currency from circulation-he generally manages to conceal his investments. He is even prepared to justify his secretiveness. He regards himself as performing a national service by keeping the land in cultivation-and when so much of it is untilled for want of labour he is perhaps right. Consequently, he argues that his capital is as fully entitled to be free from taxation when employed in this way as if he had placed it in Government loans, which, to tempt the investor, have been very unwisely and quite illogically exempted from income-tax. But whatever excuses he may put forward to justify his secretiveness the fact remains that it is very difficult to discover his income.

Several suggestions have been made, one of which is to tax

the farmer according to the number of workers whom he employs, a tax which would naturally extend to industrial employers as well. The argument is that if a man employs labour he is withdrawing a pair of hands from the independent service of the community and should pay the community for the privilege. The practical justification as far as the peasant is concerned is that even if the tax induces him to dismiss his hired labour and work his land himself with the aid of his family, the State is still the gainer by having liberated labour for use in other directions. But this suggestion, which was made by M. Loucheur, has not yet taken any practical form, and the problem of how to make the peasant pay remains unsolved.

The distribution of the general yield of revenue between direct and indirect taxation shows 75 per cent. of the whole to be furnished by the latter. This 75 per cent. may roughly be divided into the following proportions of the total revenue yield :PERCENTAGES OF TOTAL REVENUE.

Registration and stamp duty.

Wine and spirit duties...

Tax on commercial turnover.....

Government monopoly of manufacture and sale of

The remaining 25 per cent. is drawn from direct taxation, the greater part coming from the income-tax, although a certain but constantly diminishing proportion is still produced by deferred payments on account of the tax on war profits.

The skill of the peasant in escaping direct taxation helps to explain the continuance of methods of indirect taxation which are certainly not economically justifiable. It can hardly be pretended for example that the State manufacture of tobacco and matches is economically sound. The net revenue of these State industries

is probably less than would be obtained from a tax levied on the private manufacture of the same product. The same difficulty of drawing direct taxes from the peasant is no doubt accountable for the survival in local taxation of the octroi, or tax on consumable produce entering a town. It is a wasteful tax, vexatious and disturbing to trade. Its cost of collection is never less than 10 per cent, and sometimes as much as 18 per cent. of the gross receipts; it has touched the latter figure, for instance, in the town of Rouen. The more advanced and practical minds, alike among those interested in local government and among men of business, have long agitated for its abolition, as they have agitated for the abolition of the Government manufacture of tobaccco and matches. The town of Lyons, whose reputation as a well organized municipality has largely been created by the fact that M. Herriot has been for many years its maire, has abolished the octroi, as have almost a third of the 1,550 communes in which it remained established in 1913. It has also been abolished in the whole of Belgium. And yet the octroi remains the chief source of the local revenue of most of the towns of France. Their theory apparently is that the octroi enables them to tax the peasants of the surrounding country-a theory evidently based on the old assumption that the foreigner pays the tax. In actual fact the octroi has not prevented the peasant growing rich, and that is perhaps why the French peasant does not object to it, while the Belgian industrial worker has abolished it.

There is another reason for the difficulty in suppressing such institutions as the octroi and the State tobacco and matches manufactures. Each has created a great vested interest, which it is very difficult to dislodge. In the administration of both there are a large number of modestly paid but not exacting jobs. Many people in France are constantly on the look-out for work of this kind and the privilege of allotting these jobs constitutes a valuable patronage which deputies and other public men would not willingly sacrifice. By long tradition the bureaux de tabac (or retail Government shops for the sale of tobacco and postage stamps) are given to the widows of army officers, who do not sit at the counter themselves but farm the appointments at a profit. There are similar perquisites all through both administrations, and it will be seen that there is therefore a considerable force of resistance to any effective reform.

Much the same force of resistance bars the way to all attempts to introduce increased efficiency into the Government service by a reduction of the excessive personnel. There are many Frenchmen of modest ambitions, regular habits and simple tastes, who ask for nothing better than the career of a fonctionnaire. The pay may be small but the work is not heavy, the hours are not long and there is a comfortable little pension at the end. The number of Frenchmen whose ambitions are thus limited used to be even greater than it now is. For two things have happened: the war has so reduced French man-power that in the active open market there are beginning to be situations whose immediate rewards are more tempting than even the security and the pension of a Government appointment; while the war itself, the introduction of athletic sports and other causes have tended to make the young Frenchman more adventurous than he was. Nevertheless the number of Government servants continues to block the efficiency of the machine, while the machine itself is so complicated and highly centralised that it is difficult to see how the number of employees could be reduced without reconstructing the whole organization.

In 1922, M. Bokanowski, the Rapporteur Général of the Budget Commission of the Chamber, presented a report showing the number of Government employees in that year. The total was 691,000 as compared with 543,000 in 1914, and their total salaries were 4,618 millions of francs, as compared with 1,154 millions in 1914, showing an average annual salary of 6,684 francs at present worth not quite £75, taking the exchange at 90 francs to the £, as against 2,125 francs in 1914, equal to £85 at the then exchange rate of 25. It should be noted that not only has the real value of the average salary diminished, but even the apparent increase as calculated in francs is much less among the higher officials, and even for the clerks, than it is for the many workmen who are included in the return.

Of the increase of 148,000 persons, 26,000 are accounted for by such exceptional war services as the Ministries of Pensions and the Liberated Regions and by the liquidation of war stocks. The Ministry of War and the aviation service show an increase of 35,000 between them. There is a staff of 1,000 in the Ministry of Health, which did not exist before the war. There are 26,000 more persons employed by the Ministry of Finance, largely in

connection with the still young and growing organization of income tax collection, while the figures for the Post Office have gone up by 35,000 and those of the State Railways by 21,000. In addition the municipal authorities employ very large staffs. In Paris for example the octroi officials alone number 2,667.

It cannot be said that any of these officials are overpaid. Perhaps there would be more chance of reducing their numbers if they were more generously remunerated. In no country have Government servants the reputation of being very industrious or energetic, but the reasons for a low standard of activity are not the same in France as in England. In England if the civil servant leads an easy life it is because he is comfortable; in France, if he does as little work as he can, and sometimes cultivates to a fine point the art of making acte de presence and then getting away an hour later, it is because he feels that he is underpaid, and he adopts the practice of ca-canny partly from resentment—one often hears the expression, giving the State no more than its due pour son argent-and partly from a desire to find more time to do private work to eke out his salary.

Every person who draws a salary in France is underpaid, whether he draws it from a private employer or from the State. "In France there are no salaries, there are only pourboires," was once said to me by a Frenchman, and the remark shows one aspect of the question. There is much petty bribery, there are many small dishonesties, there are constant mean little commissions which probably would not exist if the employee concerned were drawing a decent and honourable salary. Besides, apart from dishonesty, there is the haunting pre-occupation to make a few francs here and save a few francs there which produces much the same mentality as that of the waiter on the look-out for his tips, and is distinct from the amazingly thrifty habit of the French people as a whole, although no doubt one helps the other. There are other reasons for low salaries. One is that France is in spirit a Peasant State, and the peasant neither in his public nor in his private capacity has the generosity of imagination to conceive that it pays to give good salaries. At the same time there are reasons for low salaries being accepted. For one thing, the Frenchman quite rightly insists on having his leisure. He may be exceedingly industrious while he is working and will rise early to begin work; but he wants to be free for certain hours of the day, especially in