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THE NATURE AND CAUSES OF

is a tax of this kind. During the Mahometan government ofBengal , instead of the payment in kind of the fifth part of theproduce, a modus, and, it is said, a very moderate one, wasestablished in the greater part of the districts or zemindariesof the country. Some of the servants of the East India Com-pany , under pretence of restoring the public revenue to itsproper value, have, in some provinces, exchanged this modusfor a payment in kind. Under their management this changeis likely both to discourage cultivation, and to give new op-portunities for abuse in the collection of the public revenue,which has fallen very much below what it was said to havebeen, when it first fell under the management of the company.The servants of the company may, perhaps, have profited bythis change, but at the expense, it is probable, both of theirmasters and of the country.

Taxes upon the Rent of Houses.

The rent of a house may be distinguished into two parts,of which the one may very properly be called the Buildingrent; the other is commonly called the Ground rent.

The building rent is the interest or profit of the capitalexpended in building the house. In order to put the trade ofa builder upon a level with other trades, it is necessary thatthis rent should be sufficient, first, to pay him the same in-terest which he would have got for his capital if he had lentit upon good security; and, secondly, to keep the house inconstant repair, or, what comes to the same thing, to replace,within a certain term of years, the capital which had beenemployed in building it. The building rent, or the ordinaryprofit of building, is, therefore, everywhere regulated by theordinary interest of money. Where the market rate of inte-rest is four per cent., the rent of a house which, over andabove paying the ground-rent, affords six or six and a halfper cent, upon the whole expense of building, may perhapsafford a sufficient profit to the builder. Where the marketrate of interest is five per cent, it may perhaps requireseven or seven and a half per cent. If, in proportion to theinterest of money, the trade of the builder affords at any timea much greater profit than this, it will soon draw so muchcapital from other trades, as will reduce the profit to itsproper level. If it affords at any time much less than this,other trades will soon draw so much capital from it as willagain raise that profit.