Chapter II: Part 2

The reflections which I have hitherto laid before the reader, suppose that the refunded 238 millions would irrevocably be transferred from the Exchequer into the hands of those unfortunate individuals who might have been forced to receive their reimbursement. But one must live. Government could not carry injustice so far as to compel them to bury, or cast into the deep, that precious metal, ripped up at so great an expence from the bowels of the earth. What consequence would then ensue, if that immense sum put into circulation, not in _England_ alone, where such an addition of specie would, in less than six months, occasion a six-fold rise of prices, but over all _Europe_, where probably treble that stock never was in circulation?—The price of every commodity would treble, or at best double, perhaps universally.—What advantage could the State, or individuals, derive from such unavoidable, general, and proportionable rise?—Were the reimbursement practicable, instead of effecting it, I should vote for laying out the 238 millions in erecting a colossus of gold and silver, to be a standing monument of public gratitude towards those whose œconomy and confidence have served the State in its needful circumstances.

The absurdity which might be imputed to such an idea I shall partly do away, by stating the effects of laying up treasures, as has been the fancy of several princes, and which is supposed profitable by Mr. _David Hume_, who, methinks, ought to have been one of the first to rest assured of its inutility, after his excellent observations on money.

I shall suppose that the _English_ government had preserved, seven years ago, the 60 millions and upwards, expended during the last war; and that, instead of laying those taxes so highly complained of, they had annually laid out of the Exchequer, the 12, 15, 20,000,000 sterling, which successively produced the last debt: what might have been the result?

First, If the very useless prohibition of the exportation of specie, however it _might_ be profitable to those who could export it, could have possibly been put in force, 60 millions of real cash added, in a country where 20 millions perhaps are sufficient for circulation, must have doubled at least the price of every thing; a consequence diametrically opposite to what it was intended to effect. Would it not, in some respect, have ruined the Bank, by rendering useless its nominal stock, in lowering the interest of its real one, and reducing, in fine, its abilities so much below the level of public wants, when the general prices, two-fold increased, would have raised, in the same proportion, that of every engagement?

Secondly, The evil would have been less fatal than I describe it, if the prohibitory law, as all those that militate against justice and common sense, had been evaded; but the gold hoarded up heretofore, and now supposed to be circulated over _England_, would, by succession, have passed into _France_: and the latter, in order to continue the war, would have borrowed, even of the _English_, at four, and presently at three _per cent._ the monies which she could not procure at less than seven or eight _per cent._ Now money growing more common in _France_, the prices would be, as in _England_, and soon after every where else, increased in the same proportion; for it is essential to observe, that those two nations are too rich, their correspondence too extensive, their activity kept up by too many branches of industry, for them not to regulate the markets all over _Europe_: it is probable that both are now too enlightened any longer to refuse receiving it, not one from the other, but from Nature herself, who, constantly provident, ever above the reach of untoward regulation, at all times unbiassed in bestowing her favours, or equipoising one by the other, would settle, only a little later, notwithstanding all efforts to the contrary, that equilibrium necessary to the general good of Society, of which it is glorious enough for those two countries to constitute the preponderant parts.

Thirdly, Independent of this general and inevitable repartition of the 60 millions laid up heretofore, the 10, 15, and 20 millions, which _England_ has found yearly, during the last war, in the purse of her subjects, were, beyond doubt, that portion of capitals, which the circumstances of such a war as the last was, would have rendered useless in the hands of the lenders, had government found in the Exchequer those sums which were obtained by way of a loan. Can it be doubted but that this portion, useless in _England_, in the supposition of a prior accumulation of money, would equally have been sent into _France_, on the first prospect of placing it to advantage?—It would have been carried there, just as the _Dutch_ had formerly sent into _England_ the dormant part of their capitals, and would send it any where, at all times when sure of benefiting by it, were it even against the interest of the _United Provinces_, saying with _Camilla_, in _Corneille_’s Tragedy of the _Horatii_,

“Rome, si tu te plains que c’est-là te trahir,
“Fais toi des ennemis que je puisse haïr.”

It will appear by the sequel, that I am as far from cutting off such resources, as are deemed infallible, and dictated by prudence, in order to support with vigour a necessary war, as I am from raising the least doubt concerning the right of waging war, be it ever so unprofitable and unjust. My only intention was to prove, that treasures hoarded up in time of peace, and scattered afterwards during a war, in order to avoid taxation, would raise much higher the prices of everything, than taxes of any kind whatever could raise them. And I do now say—make war as long as you please, but do not accumulate for the purpose of waging it. Your monies, locked up in your strong chests, could not be sheltered from every kind of accidents; and whilst you can boast of subjects equally brave and industrious, you will never want money, nor means to carry on any war you may undertake: but then you must submit to that augmentation of prices, which must naturally follow. I flatter myself I shall be able to prove, that this very increase is subject to no manner of inconvenience.

_On the grievous, but necessary part of the Impost._

Which part of the impost is truly hurtful to the wealth of nations? A standing army of 50,000 men in time of peace, both for the sea and land-service, and 50,000 more employed, either upon the different objects relating to those services, or to maintain good order and public tranquillity, or intrusted with the collection of the revenue, are evidently 100,000 men, taken in _England_ from that last class which, though _last_ in point of rank, is nevertheless the sole instrument of the national riches. Now, out of the _given_ number of 9 millions of inhabitants, 6 millions only constitute this precious, this productive class; the other 3 millions consist merely of consumers: from the 6 millions, allowed in the productive class, deduct 4 millions of children, old people, and women, half of whose life is taken up with the cares and incumbrances of a domestic nature; of this truly profitable class 3 millions only will then remain. A hundred thousand men, all stout, vigorous and skilful, constantly withdrawn from that class, occasion a vacuum of about a twentieth in the productions of the land, and of the arts, that is to say, (for there should be no illusion in the case) the twentieth part of the possible wealth. That portion of the impost, which is set apart for the subsistence of those 100,000 men, is therefore, in some manner, burdensome; since society is thus deprived, not only of the produce of their industry, but also of that part of other people’s labour which they consume without contributing towards it: but amends are amply made for those indispensable privations, by the property being better secured, and enjoyed in full tranquillity. Besides, that part of Society, which suffers most thereby, does not belong to the productive class; the latter, as has been already observed, is, in the richest as well as in the poorest countries, ever reduced to that pittance which is but just necessary to keep up industry. Nations the most free differ in this point from those who groan under the most slavish despotism, only by the insolence with which this scanty pittance, if refused, is insisted upon in a free country, and the humble manner in which it is sued for in the others. The difference of natural talents, displayed in their utmost energy, suffices to establish, sooner or later, amongst the freest people, that enormous disproportion of wealth which gives offence elsewhere, only because it is not always the proof or reward of labour, abilities, and œconomy.

Let any circumstance whatever, either well or ill judged, occur, which may determine the nation to complete to 200,000 the 50,000 sailors and landsmen that are sufficient in time of peace; 150,000 more men will be taken from the productive class, which must, of course, occasion a second vacuum, viz. the productions with which they would have enriched or amused their country. But the loss will not end here; other 300,000 men, many more perhaps, from the same class, constantly busy, during the war, in preparing the intended destructive plans, will unavoidably occasion a farther loss of four or five other twentieths in the other enjoyments of peaceable times, to which, had not other occupations interfered, they would have contributed: and if the war should last for 3, 4, or 10 years, it is evident that, in the latter supposition, the nation must lose all that increase of wealth which would have been effected, had the principal, swallowed up by the war, been differently employed. This loss is considerable, immense, and never can be retrieved; for what was then omitted, will never be done; what will be effected, might equally have been so, without preventing the productions which would already have taken place.

All these _deficits_ in wealth, occasioned by the war, are a substantial loss; and the prospect would be dispiriting indeed, were not the rival nation in the very same predicament. But will this grievous loss be after the peace active, as it were, and felt by the community longer than the time required for the 2, 3, or 400,000 men, employed during the war in forwarding the destructive schemes, to resume their peaceable occupations; or till the number of them, who shall have died in _America_, the _Indies_, of the scurvy, or at the fatal tree, be replaced by the ordinary course of population?—This I cannot conceive by any means: some of the reasons, which I have to adduce, will be found in the reflections I am about to present on the second part of the impost, which seems to me not less useful than the first is necessary: all my other arguments will appear in the other parts of this work. If it can be concluded from the _ensemble_, that all the evils brought about by a bad or ill-fated administration, are naturally, and without expence, compensated under a wise ministry, and that the most barbarous and most extravagant of them all could have no other means of ruining the nation than by destroying the people; then, made easy on the effects of the national debt, we shall have courage enough to acknowledge, that it is as sacred in the hands of those, who, having furnished the value, are in possession of the vouchers, as the crown on the head of the monarch; and we shall enjoy the freedom of mind necessary to infer, that although Providence often seems to leave to chance the destiny of some individuals, yet it is very far from being indifferent to all that concerns the whole species[2].

_Of that part of the Impost, which is more useful than grievous._

The part of taxation, which now remains to be considered, is that which, at every instant, presents to any one, a secure and useful employ of all the capitals at his disposal, and of all the savings which prudence hath induced him to make. The utility of the public funds, which are nothing else but the national debt, might seem established by these few words; but further details are necessary.

I have adopted the estimate by which _England_ is supposed to contain 9,300,000 inhabitants; one-third cultivates the land, one-third is engaged in manufactures, and of the remaining third, 600,000 at most share among them the neat produce of cultivation and the arts, in proportion to the capitals with which they keep in play those two engines of opulence. All the remaining part of the people, as dependents under whatever denomination, look, for their subsistence, to the friendship, humour, pride, or wants of the 600,000 proprietors.

Out of 70 millions, at which the landed revenue throughout _Great Britain_ is computed, 33 millions are absorbed by the unavoidable expences, and accessary charges attending cultivation, or annexed to the property. The proprietors share among themselves 20 or 25 millions; the other 12 millions go through the hands of farmers, as a very equitable recompence for their trouble, and as a liberal interest for a personal stock of 120 millions necessary to the produce of the revenue. (Vide Mr. _Arthur Young_.) On the best use possible of these last 120 millions, solely depends the increase of landed profits: but it is only by degrees, and the concurrence of favourable circumstances, that the landed property can effectually receive the increase of the capital, which is calculated to augment that produce.—Does it conduce to the interest of the State, that, till then, the farmer should keep inactive the capital appropriated to so material an object, or that he should lay it out to improve the lands before it is wanted, or that, waiting for the instant of need, he should employ it in such manner as not to have it at command when the needful time is arrived?—This question cannot be answered, I think, but in the negative; and it appears to me, that, on this point at least, I may assert positively, that an establishment, which puts into the hands of the farmer, at the very juncture when he wants it, that portion of his capital which had hitherto been useless, _and which however was, till then, (owing to such an establishment) advantageous to some one else_, is, of all others, the most profitable, wherever the object is, to give to every capital that degree of activity and utility of which it is susceptible. Therefore, a reimbursement which would deprive the _capitalists_, farmers, and active proprietors, of a resource equally safe and profitable, would not only prove fatal to the order of citizens especially interested in the landed revenue, but to all those who, whilst the money intended for the improvement of land, is unapplied, make use of it in some advantageous speculation, which becomes important to the arts, and to commerce.

We have already observed, that out of the three last millions of inhabitants, 600,000 _capitalists_ only share among themselves the neat profits of the arts, and of cultivation. There remain therefore 2 millions 400,000 dependents, who look up, for their subsistence, to the caprice, the pride, or wants of those opulent men. Now out of that number of dependents under every denomination, servants, clerks, lawyers, physicians, &c. several thousands are to be reckoned, who, tired of their situation, put by constantly, part of the wages of servitude, in order to secure to themselves and their posterity a more free and less equivocal existence.—Would the State be benefited, were this class of men, as essential as any other parts of society, to bury, as it were, the surplus of their layings-out, till they should have amassed the sum they might think sufficient for their intended purpose?—Would not the money, thus lying idle, occasion a chasm in circulation, which would turn to the prejudice of trade, thereby deprived of part of its resources?—Besides, if the want of a chest, safe from the attempt of robbers, and other inconveniences, a chest which is not only a security for them, but affords an interest for the money therein deposited, should necessitate them prematurely to embark in some scheme foreign to their occupation, which must be either abandoned or neglected: would not that knowledge, which they have derived from experience in all matters relating to their primitive avocation, be entirely lost to the public?—A reimbursement therefore which would deprive that part of society, much more wretched and dependent than either the mechanic or the cultivator, of a resource which, from its certainty, induces the former to fulfill with more zeal and exactness, the duties they have imposed on themselves, would prove a measure as hostile to humanity, as it would be contrary to sound policy.

In the immensity of commercial operations, how many capitals to a considerable amount, unemployed during two, three, four, and six months, are indispensably wanted at the precise period! Would it turn out to the advantage of the State, if a considerable capital, useless for six months to the holders, and for the like space of time essentially wanted by those who possess none, should lie dormant in the proprietor’s chest, till time should give it life, and make it useful?

But it may be urged, a man buying stock in the public funds, would lend to the seller (were no such funds established) the sum which he gives for his purchase.—That he might do so, there is not the least doubt: But could he depend on receiving the money at the time appointed for the repayment? May not the best man to-day, be a bankrupt to-morrow, and break for a million; and if the enterprise, to the execution of which a merchant appropriates, to be paid in six months, that portion of his capital, which till then has been to him unprofitable, should require that punctuality which alone could insure its success, will not prudence compel him to give up six months interest, that his undertaking may not be left entirely to chance?—Will not the public have lost the fruit which might have been reaped from that dormant capital, had the owner been at liberty to dispose of it?—And, will the same public flatter themselves that the six months interest which the merchant was obliged to sacrifice, in order to secure the execution of his plan, will not be reckoned in the expenditure?

Some will say, with no small degree of acrimony, “How many drones are supported at the expence of the public funds! These are only an encouragement to idleness.”

But do the persons before spoken of, come within this description? And, if the man who has laboured in his youth, chooses to repose himself in his old-age, is this pretended idleness any thing more than that _otium_, that leisure, so justifiable, and so sweet, after a toilsome life, when the state of the mind, and of the heart, cease to make labour necessary?—And, supposing, that after his death his wealth devolves to an ideot, must the son of an industrious father, who has served the State both by his œconomy and labour, be deprived of his resource?

It might be objected, that my reasoning derives its force from the bare supposition of a total reimbursement, the possibility of which no one can admit; but were it subjoined, that, by acknowledging the impracticability of the measure, we suppose its expediency;—were it farther said, that the public papers have often spoken of, and do still point out as the readiest and surest way to effect it, _the application of the sponge_;—were it added, that the first geniuses of _England_, _France_, nay, of all _Europe_, have advanced, and do still maintain, that such a measure will one day or other become unavoidable;—then we should be forced to acknowledge, that it would be no inconsiderable service to humanity, to spare no endeavours to convince the people, that no greater ease, power, or happiness, would accrue to them, were the nation to resolve upon its own disgrace.

Nor would it, in my opinion, be a more difficult talk to prove, that from a real and gradual reimbursement, no other advantage could result, than bringing about by degrees and more imperceptibly, an evil which would prove equally unprofitable to all.

I set aside the outcry against the interest yearly paid to foreigners, as the produce of the sums vested by them in the funds, because I think ruin impossible, where the money borrowed at 4 or 5, is laid out at an interest of 6, 7, or even 10 _per cent._ I likewise overlook the declamatory complaints on the fate of the handicraft and husbandman; because the laws of _Lycurgus_ should be revived, or the government must confine itself to protect those two classes of men against every sort of private vexation, and to secure to them the trifling salary to which they are every where and forever doomed. In spite of avarice the salary must be raised, if the prices of every necessary should increase; and were these to fall in their value, mutiny itself could not prevent a diminution of wages.

That part of the people which truly deserves, and should engage the attention of government, is that crowd of dependents, in the other class, of which I have already spoken: like the cultivator and artificer, they have no other stock than the passions and wants of the _capitalists_. These would be much more wretched than the others, if the education they have received, carrying their thoughts constantly and in spite of themselves beyond the present moment, government should in a manner compel them to center them all within that narrow space. The merchant never has more in the funds than that portion of his capital, which, for the moment, is useless to his trade. The farmer, and the proprietor who manages his own estate, _considered under these two heads_, have at no time in the funds more than that portion of their capitals, the actual use of which upon the lands they cultivate, might turn rather to their prejudice than profit. The annihilating of the public funds, or, in other words, a partial reimbursement, a gradual discharge of the debt, could therefore affect those three orders of stockholders no farther than to deprive them of this way of increasing their capitals, without running any risk; and those are, undoubtedly, the smallest part of the sums which constitute the national debt. Which is, then, the order of citizens that receives the larger share of the interest funded for that debt? It is that multitude of dependents whom the political œconomy of society has doomed to toilsome occupations useful to that society, or to laborious studies, of which that very society daily reaps the benefit: it is to that multitude of widows and orphans of both sexes, whose future support the unfortunate class above-mentioned thought to have secured by means of the present privations which they had imposed on themselves: it is to those children whose elder brothers are in possession of all the family real estate, and whose parents hoped to have fixed their condition and settled their fortune by the only means that can effectually obviate, not the injustice of an unequal division, since it is admitted, but the inconvenience resulting from the indivisibility of the landed property, which devolves to the eldest.

Yet if, in a State, we must be father, brother, sister, widow, orphan, _capitalist_, in fine, or without a capital, but with the faculty of acquiring one; which, then, is the class of citizens interested in paying off, either totally, or in part and by degrees, the national debt, when once it is incurred? Besides, if the reimbursement cannot be effected but at the public expence, what advantage will the public derive from this operation?

_Objections of another kind against paying off the National Debt._

The nominal amount of a loan which nothing obliges us to repay, is a matter of a very little importance; the interest agreed upon for the borrowed sum, is the only thing that deserves attention. The total of the interest in _England_ is now about nine millions, three millions of which could not be procured but by laying taxes on those objects which had hitherto escaped the penetrating eye of the financiers, and by doubling or trebling the impost on those which appeared less liable to the inconveniences attending such an additional increase.

Before I examine in what mode the taxes operate, I shall suppose, for the satisfaction of the sensible and benevolent mind, that this formidable burden falls only on the consumer of such objects as are taxed. The only plausible aim of a reimbursement, is a diminution of the taxes which lie so heavy on that consumer; but the misfortune is, that the only means of refunding, is to devise new taxes, or increase the former ones. Besides, if this increase be trifling, the reimbursement cannot be effected in less than a century. I freely confess, that in this case, the proprietors of the public funds would be less aggrieved, having then sufficient time to think on the less disadvantageous modes of replacing their stock; yet, I repeat it, not less than a century would suffice to discharge that very debt; and the public being a little more burdened annually, than they would have been had not the project of paying off the debt been started, would have no other compensation for the additional burden, than the distant prospect of a general release in a hundred years.—If the intention is, to bring about that release within a period which, to the fiftieth part of the present generation, gives the hope of enjoying the effect of it, I agree, that by means of one million of additional taxes, and some financiering tricks, the whole debt may be liquidated within the space of 40 or 50 years; and then, that part of the present generation which may exist at that _most gracious_ period, will, perhaps, bless the hand by which it shall have been relieved. But would that same hand be, till then, entitled to the like blessings from the unfortunate who should be reimbursed, and from those at whose expence this operation would be effected?

A first difficulty attending the objects under examination, is, that on every head requiring an explanation, a multitude of questions occur, which must be previously discussed; yet, with the utmost candour I confess, that there is not one among them which is not above the extent of my abilities. I shall therefore offer my thoughts on the subject with all that diffidence which results from such a consciousness. Partly by chance, partly from some other circumstance, as little glorious almost, or as little humiliating, I have been so often in the right, and so often in the wrong, that I should not be now more surprised at the one than proud of the other.

Another inconvenience is, that a picture, which, in its _ensemble_, might hold out, through a thousand incorrections and as many essential defects, a grand subject which, to become generally interesting, seems to wait only for the pencil of a skilful artist, viewed, unfortunately, by pieces, (and indeed it cannot be viewed otherwise,) presents at each time, nothing but a singularity, an oddity, which will cease to be so only when brought near to another; and this last, nevertheless, will require the same indulgence in order to its being rightly understood. The picture which I have presumed to take in hand is, I think, nearly of this kind. My wish, and a bold one it is, would be, that no judgement be pronounced on any of the particular parts, till they have been seen all together; for there are but few of them which, till another has been examined, is not liable to very just objections: and under each head I have answered to those only which it was essential to refute, that the reader might be able to go through the whole of the exhibition, which, had the plan of it been presented in the first page, might have subjected the book to be committed to the flames without mercy, and, indeed, without much apparent injustice.

I now resume my subject, after a digression that may be looked upon as a preface, which the reader may perhaps think might have been spared.

In the age we live in, to justify a necessary impost, by the pretence of paying off the debt, would be, of all state manœuvres, the most unpardonable. To lay heavy burdens on the people now, so as to liberate them in the space of a century, is, independent of a great many more improbabilities, to suppose, in the plan of administration, an immutability which it cannot give itself, and which does not, nor ever can exist. To leave the individuals of a nation in possession of all, that it is not indispensable to take away from them, in order that, with what they have left, they may acquire that which it will be perhaps necessary to deprive them of, is a principle, the absurdity of which it would be no easy matter to evince; but, to crush them under such an additional weight of taxes as would be necessary to exonerate them forty or fifty years hence, would be, in my opinion, attempting a measure, some of the consequences of which have no doubt escaped the attention of the proposers.

What may be the immediate effect of a considerable reimbursement, which even solely depends on the produce of taxation, and by no means of a real increase of specie in the nation? It consists in refunding to the lenders a sum which must cease to be useful to them, till it is replaced somewhere else; and obliging them to vest it, without loss of time, on that portion of the debt which is not yet acquitted.—But this privileged portion, which, previous to the reimbursement, was supposed only worth 80, and produced four, (it may be observed that, in the numbers, which I fix upon, I only look for terms to explain my meaning) will be worth 90, and presently 100, yet will not bring in more than _four_. It may be answered, the stocks rise, public credit increases.—We are not yet come to this point; but the fortune of the repaid stockholders, which does not consist in a nominal capital, but in the revenue it produces, will therefore, in fact, suffer a diminution of one whole fifth. What will then become of that fifth of the taxed objects consumed by them, and which they can no longer purchase?—It will, in my opinion, be necessary either to put a stop to the manufacturing of that fifth, and throw so many hands out of employment, or else lower the prices, yet continue to levy the tax, and then the manufacturer will complain of the burden; or, in fine, this fifth, now useless to the nation, must be exported, and this adds to the first inconvenience resulting from the tax imposed for the reimbursement: for, after all, if taxation operates in the manner it appears at first sight to do, that is, if it diminishes the means of consumption, then, by laying 1,000,000 of taxes appropriated to the liquidation of the debt, you have diminished your home-consumption, it matters not of what articles; you have diminished it, and still more so by the incapacity, to which the creditors paid off are reduced, of consuming that which they did consume previous to the reimbursement. Your exportation, it may be said, is by so much more increased, and enriched.—Granted;—but at whose expence? Who is to profit by it? In what manner are the returns to be made?⸺When foreign trade augments in proportion to the increase of the produce and home-consumption, it is easily conceived, that if the money imported does not exceed the proportion necessary to answer that double increase, the progression being equal every way, each article (money among the rest) will keep up to its value; but if the number of representatives is increased without any addition being made to the objects represented, is not the price of representation thereby diminished? Or, in other words, if you add to the real stock of money in the nation, at the expence of part of your own consumption, (which is the object in question) will not the price of the other parts of that same consumption rise in spite of you?

Besides, by diminishing, in any quantity whatever, the general mass of home-consumption, (and in the present supposition you may well think that it has decreased, both by the tax imposed and the reimbursement made) have the sums appropriated to that part of the consumption, annihilated by you, been withdrawn from the circulation? If not, then by adding thereto the increase of that balance in your favour, which you pretend to receive from abroad, by what means can you prevent a general rise in the prices, in proportion, not only to the quantity of that fatal money imported, but also to that cash, which ought to have been buried under ground, that it might, at least, only prove useless, after the home-consumption has undergone the diminution occasioned by the reimbursement and taxes? This is not all; the unfortunate creditors who have been paid off, already reduced from five parts of what they enjoyed, to four only, will certainly, soon after you shall have put the said balance into circulation, become unable, with the _four_ that remain, to purchase more articles than they could have procured with _three_, previous to the tax and reimbursement.

Will you pretend to say, that this money does not circulate within the nation? that it becomes the source of a new trade? and that the exporters, instead of over-loading _England_ with that specie, send or carry abroad the value thereof from _Spain_ into _France_, _Germany_, and _Russia_?—that is to say, after having reduced the home-consumption, the exporters, who, rightly enough, are not willing to lose, will contribute to extend the internal consumption of _Spain_, _France_, _Germany_ and _Russia_, and of course _the ways and means_ of these different nations, as well as the produce of their taxes, in the same proportion as those objects have decreased amongst you.—Could this seriously be your intention?

But if it clearly appear, that the execution of the refunding plan would prove equally pernicious in its immediate tendency, both to the creditors who would be compelled to accept of it, and those at whose expence it must be effected, what then might be the case, if the interest of that debt, which ingrosses so much the public attention, being paid by _all_, were, in fact, paid by _no one_, but for so long a time as nature, assisted by all the calculations of individuals, may require to correct the errors of those upon a larger scale, _made by administration, when administration is capable of making any_.

_In what manner the Interest of the National Debt will be probably paid off._

It is the most generally received and best respected opinion, that taxes should in preference be laid on the articles of luxury. There is not a man possessed of the least feeling and honesty, who does not approve of this maxim, and whose wish has not often been that the wealthy only should pay the taxes. Canting enthusiasts further add, that the expence and luxury of the rich, prove the ruin of the nation. Be it so. But when the question is, to define what is luxury, in order to subject it to a tax, every individual exclaims, that it begins precisely with those articles which the mediocrity of his means, places above his reach. Instead of laying a tax on beer, would it not be better to increase that on hackney-coaches? says a porter who is stopped at a crossing, by one of the above vehicles; whilst the supposed idler who sits in the coach, and pays for it, exclaims, at the sight of a gilt carriage, that crosses and stops his way: What! 500_l._ laid out on a single article of luxury! Would it not be better to tax the owner by so much, and apply the produce to the maintenance of fifty poor objects during six months? But, my dear Sir, the manufacturing of this very carriage has maintained a far greater number. If you begin with the man who extracted from the mine, that gold, which, with indignation, you see glittering on the wheels; if it is not beneath you to notice the child employed in driving away the flies that might have hurt the gloss of the varnish when first laid on; and if you end your list only with those who, instead of horses, dragged the carriage into the coach-house of that stately man, whose pomp gives you so much offence; would it have pleased you more if all those hands had been paid for doing nothing? The rich man alone, say you, ought to pay the taxes: but it is impossible that they should be paid by others, “_if it be true, that every man, destitute of a capital, can pay nothing but at the expence of the capitalist_.”

It would be a difficult matter to trace out, with exactness, the progress of the taxes; but it appears to me, that whatever be the mode of establishing them, there is not a subject who does not contribute his share sooner or later, unless nature should annul the burden, even before the clashing of private interests should have succeeded in settling the division upon equitable principles.

The downfall of _England_ was foretold at her very first loan. This prophecy did not destroy the means of funding, on a very solid basis, in the year 1762, that part of the national debt, till then unfunded. Now I would ask the man, whom I should know to be most intimately persuaded of the dreadful effect that must be produced by a debt of 64,234,595_l._ incurred from 1754 to 1762, in addition to a still heavier one, contracted since the time when the total amount of the landed revenue was rated at 32,000,000, and the value of the lands only at 320 millions, that is to say, at about double the value of the whole national debt as it stands at present: I would ask that man, I say, whether, between the years 1763 and 1775, he has been able to discover in any parts of _England_, one single symptom of decay, either in agriculture or commerce, any diminution of public or private enjoyments, or less insolence amongst the common people, by which one may surely judge of the alterations which may happen in their circumstances. This general observation may suffice to make us look on the period of 1775, as presenting a state of things, which, supposing it had been prolonged, could not have held out any alarming prospect. Every one worked or enjoyed, and every body was paid. All this, methinks, might have continued on the same footing to the end of the world, without any alteration on the former or subsequent fortune of any one, such only excepted, as industry, activity, imprudence, and foresight, must occasion in all countries where justice is blind, and has but one scale.

I readily acknowledge, that at that period a grievous war broke out, which did not conclude till 60 millions, nominally 100, had been added to the old debt, or, to come more directly to the point, till the nation had been loaded, or, if you please, crushed under the enormous weight of three additional millions interest to be paid annually. But in what manner will those three millions, so heavy, so dreadful, affect the interested parties? In my judgement, it will be the same with this additional burden, as it has been with the six millions which the said parties were wont to pay before the last war. It certainly must have been felt at first by every body, except the trading part of the nation, whose first operation ever was to add to the price of the taxed commodities, both the amount of the tax, and the benefit of the advance to the consumer. (AND THIS IS STRICTLY CONSONANT WITH JUSTICE.) Now these consumers are of two sorts, viz. the proprietor of lands, and the proprietor of money: the latter must also be considered under a two-fold point of view, as a capitalist for himself, or as a dependant who receives the money from either of the two proprietors. The proprietor of money, from the nature of this instrument of trade, is a being merely passive; twenty shillings, which he is paid for interest, can _currently_ enable him to purchase such articles only as _currently_ sell for 20 shillings. If the taxes had increased, by one tenth, the price of all the commodities which he used to consume before the war of 1755, it is clear, therefore, that in 1763 he had lost one tenth of all his _possible_ enjoyments: I say possible; for the monied man, I speak in general, saves enough, annually, to strike an advantageous balance against the inconveniences _inseparable_ from his capital; I mean that progressive and unavoidable depreciation of money, so long as there will be mines opened, and taxes to discharge. But he can effect it with the greater ease, as his stock often returns 5 _per cent._ whilst the capital of the landed proprietor brings him in hardly four, and often less.

The _dependent_ proprietor of money had also his resource; he, by degrees, obtained an increase of salary; (AND THIS IS STRICTLY CONSONANT WITH JUSTICE.)

Neither was the landed proprietor without his resource: he gradually raised the price of his goods, and would have increased it to the level of the whole amount of the produce of industry; (AND THIS WOULD HAVE BEEN STRICTLY CONSONANT WITH JUSTICE.) But nature very often anticipates the execution of that very equitable measure, by another operation which is as infallibly the consequence of peace, as taxes are the effect of war, ever since the abolishing of personal service. The 10, 15, 20 millions, which government had borrowed during the war, were nothing more than a part of the capitals which in happier times might have been laid out in the improvement of cultivation and industry. Peace brought them back to their destination; an increase in the quantity of the produce of lands was the consequence; and an equal increase in the demands of the productions of industry, occasioned by the former, kept up the price of every thing, _by facilitating to the one, the means of purchasing what the other wanted to dispose of_, and by presenting an increase of resources to that increase of population, which as certainly results from peace and plenty, as mortality does from war and scarcity.

I now return to the three millions interest brought upon this nation by the last war; and I demand, what reason can prevent similar effects resulting from similar causes?

Yet, in order to obtain a complete idea of the whole burden of this _formidable_ debt, we must suppose that the full amount of it was contracted during the last war; and then we shall see how many millions of guineas it would really cost _England_ to pay off for ever the interest of all her successes and miscarriages from the beginning of this century, if the 9 millions of taxes should be now established in order to supply the interest of the debt of 238 millions.

It will appear hereafter, that 9 millions of taxes laid on the articles of consumption, would increase, by about 14 millions, the price or nominal value of the whole produce of industry, rated upon supposition at 56 millions. Now it seems to me equally unjust and impossible, that the total amount of the produce of agriculture should not thereby be increased in the like proportion: I beg to be allowed this supposition, until I assign my reasons for it, and bring proofs sufficiently positive to ascertain the fact.

Be it supposed, then, that the collective revenue of land and industry do amount to 112 millions, independent of the taxes.

Let us equally suppose that 40 millions sterling, in cash and paper currency, would be necessary and sufficient for the circulation of the said 112 millions.

Fourteen millions, in taxes, and in the advanced prices which must follow, are one eighth of 112 millions revenue, which, by the necessary rise in the price of every thing, is carried to 126 millions. Now, 5 millions in cash and paper currency, are likewise one eighth part of the supposed 40 millions necessary for home circulation.—It would then cost _England_ only 5 millions in cash and paper, once found, to secure for ever, and in the most permanent manner, the interest of a debt of 238 millions, the very idea of which shook the firm nerves of the _Walpoles_, the _Humes_, and of the many experienced men, on whose authority it was no weakness to tremble, before investigating a matter, which nobody, in my judgement, had hitherto attempted to examine.

All the operations of Nature are slow, gradual, imperceptible; and how is it possible to trace her out in her progress, when, in the measures which lead her to the general good, she has recourse only to that multitude of private interests which seemingly tend to destroy it? Yet, in order that we may form some idea of her operations in the point in question, let us execute, in an instant, that which she would effect in half a century, if it were possible within that space of time to incur a debt of 420 millions, without any augmentation or decrease taking place in the landed revenue.

_First Hypothesis._

Let us suppose, that, instead of appropriating the capitals that have disappeared, either to undertakings relative to agriculture and industry, (which would have trebled the real revenue,) or to those wars, either successful or grievous, that have left behind them only a frivolous or bitter recollection—let us suppose, I say, that Government should have, till this day, thought of nothing but making public establishments, and that every contributor to the public expence, being permitted at last to live up to the full rate of his means, should find the fruit of his former privations, in a multitude of monuments, such as the most luxuriant fancy can conceive, from the wisest disposal of the capitals, and of the time necessary to incur a national debt, the interest of which, added to the increase resulting from the taxes, should amount to 32 millions, upon an aggregate revenue of 64 millions, in which agriculture and industry should have an equal share. Such, nearly, was the state of the nation, under _William_ and _Mary_, as we have already observed.

The tax laid on the produce of industry would double the 32 millions: this is just; nor can it be doubted; for there is not a manufacturer, whose goods or produce have just been taxed, but will acknowledge this truth. Besides, the _British_ Parliament avows it. What remains now, is to convince the landed proprietors, that by doubling also their 32 millions revenue, they injure no one whatever. It is needless to prove, that if they act otherwise, if they be only passive when the manufacturers are so justly active, they must be reduced to plough those lands that acknowledge them for their lords.

Previous to the tax, the 32 millions landed revenue, used to cost, annually, to the landlord and farmer, 9 or 10 millions, paid to the cultivators, and laid out in other expences. Such is the rate; nearly one third of the revenue, (See _A. Young_’s Political Arithmetic.) Before the tax, industry must have laid out amongst the handicraftsmen, nine or ten of her 32 millions.

By doubling, therefore, the price of labour in agriculture and industry, the labouring people of both, will, under the numbers 18 or 20, have what they had before under those of 9 or 10; and these two great engines of national wealth will no ways be clogged.

As for the two _capitalists_ in land and industry, it is clear that each of them will have exactly the faculty of preparing, buying, selling, consuming, and saving, under the denomination of 30, 40, 60, &c. all that they could prepare, buy, sell, consume, and save, under that of 15, 20, 30, &c.

Before we attend to the lender, let us advert to the State; and let it be observed, that _in the case where 20 millions of cash and paper currency would have sufficed for the circulation and national transactions of all kinds, at a time when both revenues amounted to 64 millions, it is enough to find out 20 millions more, whenever, by the effect of taxation, those said revenues are raised from 64 to 128 millions; and from the instant that those 20 millions in cash and paper currency are obtained, you may flatter yourselves to have established, ~funded~ most firmly and for ever, the interest of a national debt of 420 millions, the interest of which, would at 5 per cent. amount to 21 millions_.

It is not yet time to examine what influence so considerable a rise, in the price of every thing, might have upon the foreign trade; but let us turn our thoughts to the interest of the stockholder, who has so generously lent his money. It will be said, that he is evidently injured: _the interest due to him on account of his loan, was equal to two-thirds of the landed revenue: the land is mortgaged to the creditors of the state: two-thirds of the neat revenue belong therefore in fact to the lender. A few years more, employed in erecting useful buildings, bridges, causeways, &c. the whole landed revenue must have been absorbed, and the lender have entered into possession._

Such is nearly the result of Mr. _Hume_’s reasoning on this pretended _mania_ of supplying the wants of the State, by mortgaging its revenue. Let me be permitted to urge a few words in answer, on behalf of the landed proprietor.

Whatever use the sums borrowed are put to by government, in this respect the nation and the lender stand nearly in the same predicament as two individuals who should have set up an undertaking at a joint expence: when it is completed, each of them first takes back his capital, before they share the profits. In point of national enterprises, is war the object? The profit is existence and glory, if the war has proved successful. Are public establishments in prospect? Then the lender shares in their utility and comfort. Has the employing of the capital been productive neither of glory, nor public establishments? In a word, is the State reduced to its primary and bare existence? The capital lent will not, at least, be lost to the lender, _if administration think fit to observe how little it costs to be just_; and the lender, on his part, will reflect, that he should not have been a greater gainer, had he buried his treasure during the time of national distress and that, had he lent it to individuals, he might have lost it entirely.

What I have just said, will, I think, suffice to refute the extravagant pretensions which Mr. _Hume_ is pleased to suppose in the lender. What I shall add, will also be sufficient, I hope, to quiet the scrupulous minds of those who might entertain some doubts on the injustice of despoiling the landed proprietor; I mean, the injustice of any kind of spoliation, but that which may be the consequence of his own extravagance.

That man who gives up his land for the annual quit-rent of a quarter of wheat, and two shillings when the wheat was at four shillings only, supposed he had entitled himself and his heirs to an income of a quarter and a half of wheat; yet his representatives enjoy, at this day, only one quarter, and the 18th or 20th part of another.—Will these insist, that the meaning of the landlord having been to secure, and that of the tenant to grant, such a portion of the landed revenue, as might be at all times equal to a quarter and a half of wheat, it is unjust to act in direct opposition to the intention of the contracting parties? This objection would appear very forcible, and yet would go no further than to prove, that, when a proprietor gives up his land for an annual consideration, he ought to stipulate that it should be paid in kind, if he means to keep up to the same income; if not, the landlord must be referred to the terms of his contract.