THOUGHTS
ON THE
MECHANISM
OF
SOCIETIES.

By the Marquis de CASAUX,
FELLOW OF THE ROYAL SOCIETY.

TRANSLATED FROM THE FRENCH
(Under the Inspection of the Author)
By Parkyns Mac Mahon.

If Men would be content to graft upon Nature, and assist her operations, what mighty effects might we expect!

Spectator.

LONDON,
Printed by T. Spilsbury, Snowhill.

Sold by G. G. J. and J. Robinson, in Pater-noster Row; W. Richardson, under the Royal Exchange; and J. Debrett, Piccadilly.

M,DCC,LXXXVI.

PREFACE
BY THE
EDITOR.

It is not a treatise that the Author announces; it is nothing more than Thoughts on the Mechanism of Societies. Such a title does not confine a Writer to a regular plan; it saves him even the risk of preparing his Readers for a chain of ideas which cannot escape their sagacity if it exist, and on which they cannot be deceived if it do not. But in a picture consecrated to the world at large as well as to his own Country, to the People as well as to their Rulers, it was necessary that the most striking object, the object to which their first attention was called, should be of so general an interest, as to entice them progressively to an investigation of all those details which deserve most to be scrutinised, and of which the different relations are either little known, or greatly mistaken.

The object which at present fixes the attention of all the States in Europe, (all of them either debtors or creditors), is the National Debt of England, and the measures which will be taken on that subject by the Assembly the most clear-sighted of any in the world to every thing that concerns the interests of the people, the most jealous of its rights, and the most free, at least in its debates. It is by considering that formidable debt, and its influence on the wealth of the State and the ease of the People, that the Author dares to begin. But before he proceeds to unfold the mechanism of the national debt, the result of which developement presents some ideas too opposite to the received opinion, he endeavours by degrees to familiarise his Readers with his own, by some general reflexions on the present situation of England: these reflexions leave him no room to doubt, that England was in 1779, notwithstanding the national debt, richer than she was at the beginning of this century;—richer, either in a fourfold, or in a double proportion, as the Reader is disposed to adopt the one or the other rate of population: whence it appears that the Author, in respect to his plan, does not affix any importance to the difference of opinions on this article.

A more particular view of the subject furnishes him with fresh reasons, which seem to him sufficient to quiet the mind of the most suspicious creditor. It is, indeed, only by means of the savings made, or daily to be made, upon eight pence (the exact proportion each individual is entitled to in the general revenue), that it has been possible to reach the summit of opulence, and that it is possible to be fixed there: but the Author seeks for such savings in agriculture and industry, as cannot be misunderstood; he observes that the savings made in agriculture, have proved sufficient, in the course of a century, not only to discharge all the public burdens, but even to double the landed revenue; and he then enters into a detail of several objects, (all easy to be ascertained,) which seem to demonstrate a similar progress in industry.

Here our Author, beginning to feel himself on ground sufficiently firm, confesses that he sees nothing in the present situation of England, tending to justify the idea of a national bankruptcy, although the public news-papers often hint at the convenience of such a measure. The author even so far forgets himself, as to examine seriously, whether it would be profitable or unprofitable to effect the so much recommended reimbursement, even on the supposition that the 238 millions which have been borrowed, and have disappeared, could find their way back to the Exchequer.

After having presented the question under several points of view, our Author hesitates not to declare for the negative, and then endeavours to prove that a previous thesaurisation which might have enabled the nation to go through the last war without laying any additional tax, would have done more harm than the new taxes can possibly have done.

The Author, become bolder because he meets with no contradiction when he is alone, (and indeed he is alone very often) undertakes to reconcile mankind to the taxes by means of a first decomposition of the impost; he gives up, it is true, one part of it as burdensome, (it is truly to be lamented that this part cannot be dispensed with; luckily it is the least); but he contends boldly for the other part, as a very precious resource for that portion of the people which best deserves to engage the cares of Government.

Notwithstanding all the precautions taken by the Author not to frighten his readers, there remains such a leap for him to clear, that he is seen, as it were on his knees, begging he may be permitted to try twenty times, if he cannot clear it in ten: in other words, he earnestly wishes that his work may not receive its final judgement before it has been perused to the end; and in fact, it is not impossible but that a detached proposition, the absurdity of which is striking when considered singly, may be found conclusive when successively brought near to all those that are to follow it.

An Editor owes more to the Public, than to any work, even such as he could wish to bring into some trifling repute: I think then, it is my duty (in foro conscientiæ) to declare, that it will not be till the Reader has perused fifty pages or more, that he will suspect the reason why the Writer has not announced in the very first, some singular opinion, which he meant insidiously to establish as it were step by step in his pamphlet; but, at length, we begin to have some notion of what we are to expect from a man who has been trying to wheedle us into a belief, that taxes are a trifling evil;—that thesaurisation would be a very great one;—that a reimbursement is at best useless;—and who afterwards modestly intimates, that some singularities may perhaps escape him in the sequel; as if it were possible to imagine any thing more singular than the three propositions I have just quoted.

Yet too much severity should not be used. Has the Reader been but amused with the part of the picture hitherto exposed to his view? Let him humour the Author in his little conceits. Who would exhibit for public entertainment, if he were not at liberty to draw up the curtain in his own way; if he had not a right to display, at every shifting of the scene, that part only of his curiosities upon which he meant for that instant to fix the eyes of the spectator?

But if the Reader, in spite of the different positions into which he has been attracted, has not observed the least alteration in the compass; if he has not been moved by the arguments with which he has been lured before he came to that part of the work—let him throw the piece into the fire; for the Author, of whom I do not pretend to imitate the circumspection, or adopt the fears, or justify the temerity, or share in the guilt, aims at nothing less than to induce all Europe (all Europe!) to investigate,

1st,

Whether it could possibly cost England more than 5 millions sterling, (found once for all) to secure for ever, in the most solid manner, the payment of the interest on a debt of 238 millions, that interest rated at 9 millions, of the same currency?

2dly,

Whether there be not, (without its being suspected), in the system of finance in England, some of those imperfections so well remarked, so fully, so bitterly criticised in that of France; and whether a national reimbursement be not the easiest of all the sports a Minister of finance can think of, to amuse society without serving it?

3dly,

Whether the possibility of a balance of trade, always favourable, be not as doubtful as the necessity of a national bankruptcy, and the advantage of a national reimbursement?

4thly,

Whether an equilibrium in all things (and every where), be not indispensable; and whether, to maintain or restore it, any great effort of imagination be required on the part of those who fancy they hold the balance?

5thly,

Whether the difference of prices be something or nothing; and whether more has been wanted by the French than 66 millions Tournois (found once for all), to secure for ever, the interest at 5 per cent. on a national loan of 1,500 millions Tournois?

6thly,

Whether the monster of a competition (in point of trade) supposed unconquerable on account of the low prices with which it should be armed, be not as fantastical as that of a balance always favourable?

7thly,

Whether the most justifiable premium for exportation be any thing more than one piece of injustice, become necessary to counterbalance a great many others?

8thly,

Whether it do not result from the ever infallible and merely mechanical restoration of an equilibrium in all the prices, that the taxes are in themselves completely innocent;—whether there be more than one kind of taxation, which increases only by the exact amount of the tax, the whole mass of prices;—whether the effect of taxation be not trebled by all other imposts;—whether the most pernicious of them, (after the poll-tax), be not the tax on luxury;—and whether from the instant that all kinds of taxes, either judiciously or injudiciously contrived, have re-acted on every thing, the burthen of the national debt is not literally null in all countries?

9thly,

Whether, after monopoly, credit be not that effect of wealth which increases most the price of every production, both of agriculture and industry?

10thly,

Whether a certain country, where smuggling has been prohibited under pain of the galleys, be not indebted to smuggling itself for one fifth of the products of her agriculture, which the merchant and trader turn to their advantage with as little scruple, as if they had not petitioned for the detestable law against the smuggler?

11thly,

Whether the absurdity of the general opinion, on the most efficacious means of establishing a profitable competition, in point of trade, be not clearly evinced, by the account of a strange revolution in France—a revolution, as indubitable as the two wars in 1755 and 1779?

12thly,

Whether the impossibility of the two supposed balances, constantly at the disposal of England and France, be not proved, by the very facts adduced in both countries to establish the existence of those two monsters?—Whether that impossibility be not demonstrated by other facts as little equivocal; and whether it be not the interest of England and France to renounce the Idol, and solemnly abjure both its works and its pomps?

13thly,

Whether imports and exports be not a mere sport, as innocent as the game of tennis? A sport, nevertheless, which all Governments might turn to great profit, all Subjects to great advantage, and all States to an increase of power and wealth.

14thly,

Whether the generality of exports from England, at different periods, considered with regard to her foreign correspondence, do not demonstrate a kind of electricity, unthought of hitherto, though not unworthy of amusing the greatest politicians at their leisure moments?

15thly,

Whether the trifling jest of luxury be not equally as innocent as the diversion of exporting and importing; and how much the most fastuous, the most profuse, the most sensual of all monarchs, consumes, above the most avaricious of all his subjects?

16thly,

How much (not counting shillings and pence) England has lost, when her right-arm, as her colonies were called, was lopped off; and how much (not counting shillings and pence) Europe might lose by losing her sovereignty over both the Americas?

17thly,

Whether all that had appeared to the Author, as founded in reason and equity, do not finally prove (in spite of the general conspiracy of all Nations and all Ministers) to be strictly conformable to the most stubborn facts;—and whether it do not result from that mass of facts and reasons, that the Author’s assertion, the most interesting to mankind, (that is, to all Princes and their People) is not of the most irrefragable truth, and a truth the most easily brought within the reach of all the parts interested therein?

I, though merely Editor, shall venture still further;—I shall suppose the result of this combination of facts and reasons to be, that the means hitherto devised as the most proper to alleviate the burdens of the people, were the best devised to oppress them: What matters it to the people, provided they are to be oppressed no longer? What is the time past, but the baseless fabric of a vision?

I shall likewise suppose, that from those facts and reasons it should result also, that never was a decrease in the Prince’s revenue more effectually secured, than by the contrivances devised to increase it: What is it to the Prince, provided it be no longer possible to mistake the true means of enriching him?—Is it not the time to come, that should, above all, engross the attention of a Great Prince?

I shall again suppose, as another result, that it has been a mistaken notion, to imagine that the revenue of the People must be lessened, in order to increase that of the Prince:—What is that to the Prince—what is it to the People—provided both be now convinced, that it is not possible to enrich the one, either really or nominally, without enriching the other in the same manner, and in the same proportion?

I shall further suppose, that it should evidently result also, that in the Administration of the finances of any country, there is not, there has not been a single principle, nay, not a single idea worthy of the name: What is this to the Ministers who now hold that department?—Can they command what is past? And is it not the redressing of abuses, when discovered, that constitutes the true glory of a Ministry?

To crown the whole, I shall even suppose, that thence also should result, to a very insignificant individual of America, a little sprig of that European shrub called Bay-tree:—What would that signify to all the Ministers, all the People, and all the Princes in Europe?—Will America consume less European goods, or will she produce less gold and silver, for having produced an idea?

ERRATA.

Transcriber’s Note: The errata have been corrected, along with a few minor typographical errors.

CONTENTS.

THOUGHTS
ON THE
MECHANISM of SOCIETIES.

The first step that led to civilisation was, probably, some kind of slavery, whatever might be its nature. It seems impossible that the strongest and most industrious, following no other impulse than that of a consciousness of his superiority, should have come to the noble resolution of sharing generously, with the weak and idle, the fruits of his own labours and industry; nor can it be supposed that he could suffer any one, but himself, to pronounce on the prerogatives due to his courage and his abilities. But the most consummate knowledge of the means which may have paved the way to despotism, would throw but a faint light on the various subjects which I propose to take under consideration. The Epoch which it may be useful to dwell upon, is that, wherein the chiefs of the different states, being in no anxiety for an authority which is no longer contested, are the first to acknowledge its limits, and begin at last to be solicitous for the happiness of their subjects.

Such, in my opinion, is now the prevailing system all over Europe. The advantage of true freedom is fully felt, and its influence over all-commanding wealth universally acknowledged. But, in order to compare the inferences with the principles, to appreciate the measures by their effects, I shall fix upon that Nation whose avowed maxims, and best known circumstances, are most likely to furnish me with a train of arguments, without having recourse to any further suppositions but such as may appear necessary to clear up the facts that will be adduced in support of those arguments, and to render the consequences, to be deduced from them, more lucid and pointed.

I shall begin with the most interesting article in the present situation of affairs, namely, how far the wealth of a State, and the affluence of the Subject, may be affected by a national debt?

A general View of the present State of Great Britain.

Mr. Arthur Young’s valuation of the Revenue, in his Political Arithmetic, is the result of his own private observations. Nothing ever occurred to me on the subject, that can come up with the minute accounts he gives us of the different provinces which he has visited in the north, south, and east of England.

I am ready to suppose, with that gentleman, that the joint revenue of England and Scotland may be computed, the landed produce and commercial profits included, at 110 millions sterling.

Mr. Chalmers has published a work on the comparative resources of this country at different periods; a subject, it seems, difficult to touch upon without examining the state of population. This publication, according to my judgement, unites to such solid principles as the matter will admit, a great deal of propriety in the manner of applying them, and of drawing the inferences.

I willingly acquiesce, taking it for granted, with the author, that Great Britain contains 9,350,000 inhabitants: but, at the same time, I apprise the reader, that I do not mean to take any advantage of a population more or less numerous; nor of a larger or smaller amount of the revenue. Data I require; but such I will prefer as most nearly border on reality. There is not a State to which, with a difference in the numbers, one may not apply what I have to say concerning England, in those which I have adopted.

It appears from the estimates of Mr. King, who, in the reign of William and Mary, proved himself as exact an observer as Mr. Young has done in our days, that the produce of Land alone amounted then to 32,000,000; the latter calculator nearly doubles it, by rating it at 63,000,000. The Custom House books, the exactness of which cannot be disputed in one of the two facts they vouch to, (the Burthen of the Shipping, and the Produce of Exportation,) will shew that the former, from the year 1709 to 1773, progressively increased from 289,318, to 775,078 tons; and the years 1697, 1698, 1699, taken upon a medium and compared with 1771, 1772, and 1773, tend to prove that the gradual rise of the Exports has been still more considerable, being from 5,612,058l. to 16,027,937l. (Vide Sir Charles Whitworth’s State of Trade).

The foreign trade of England seems therefore to have trebled since the beginning of the present century. We shall, in the sequel, state the reasons for supposing the commerce of other nations to have experienced the same progression.

The annual sum of 110,000,000, divided amongst 9,350,000 inhabitants, will produce daily little less than 8 pence per head, from the Monarch down to the meanest subject.

The observations I have made in several parts of France, from documents, it is true, no ways comparable to those of Mr. Young, could not justify my allowing so large a revenue to each individual in that kingdom. Yet France and England are the two richest and most flourishing countries in Europe.

Mr. Young rates the clear profits of the Manufactories and Trade of England alone at 37 millions; but as these two objects have apparently been trebled in regard to the exports, they cannot be supposed to have exceeded 12 millions in the reign of William and Mary. To this let us add, in a proportion rather exaggerated, 5 millions for the landed and commercial revenues of Scotland; and it will appear, that, including the 32 millions of landed produce, as computed by Mr. King, the total amount of the revenue, land and trade of both countries included, could hardly be equal to 49 millions in the beginning of the present century. Now, from the same author, both kingdoms contained at that period 7,200,000 inhabitants, who, if admitted to a brotherly share, would have claimed only 4½d. each per day. I do not confine myself to a nicer exactness in the fractions: the object is not to calculate the precise instant of an eclipse; or at least, that of English prosperity appearing to me no ways probable, I think myself justified in neglecting every thing that might impede my operations, without influencing, in the least, my arguments.

Yet the wages of a journeyman were nevertheless rated then at 8d. per day: but let it be observed, that the number of working-days, when balanced with the holidays, sickness, and want of employment, those eight pence, distributed in the journeyman’s family, were often reduced to two; just as the sixteen pence, the present price of labour, according to Mr. Young’s Estimate, commonly amount to 4d. only, although the brotherly share of each man nearly amounts to 8d. If any one should be inclined to call this, injustice, let him consider that this very multitude of reductions from 4d. to 2d. and from 8d. to 4d. from William III. to this present time, has been the only means of accumulating by degrees that immense stock of 600 millions and upwards, manifestly laid out by the State in less than a century, and of which the National Debt makes a part. It is evident that if each individual, from William III. had only spent at the rate of 5d. per day, there would be no National Debt; but as each man of the nation could, generally speaking, and upon an equal proportion, lay out only 4½d. per day, the exceeding halfpenny must have long ago swallowed up the whole principal, the produce of former reductions.

Not one of the monuments erected since that period would now exist, nor would a single trace be left of the stocks to which the nation owes its present wealth: each portion of the national stock, every monument posterior to that era, prove as many persons reduced in the origin from 4d. to 2d. and then from 8d. to 4d. as either of the above two sums are oftener told in the value of such monument, or such stock as might be made the subject of inquiry. No country in the world can boast of a more respectable source of its opulence.⸺This opulence must either be given up, or the inconveniences that attend it be submitted to. In all parts of the world the labourer earns a livelihood, and very little above that: yet this very trifle is sufficient to make him happy, wherever he cannot be compelled to work without pay. He feels little, never takes the trouble of thinking, and leaves off work only to eat, make merry, or go to rest.—Is our lot better, with that fatal degree of reflection by which our whole life so often centers within a single point?

But is the nation in general as happy in our days as it was in those of William III? Have those causes, which tend to produce a decrease in the population, no manner of influence on the people’s happiness? And is not the reality of such causes more self-evident, than the pretended proofs adduced universally in favour of its increase?

Without entering into any dispute on the merits of the researches concerning population, which would lead to some truths perhaps unthought of hitherto; here follow the arguments which will occur to any man who stands not in need of a fixed and precise number of thinking heads, laborious hands, and well-digesting stomachs.

1st. It is not easy to conceive how, the landed revenue being nearly double, there should be a less number of husbandmen; for it is not with agriculture as we find it in several manufactories, where the invention of engines, and an alteration in the mode of working, can so advantageously supply the supposed decrease in the number of hands to work after the primitive manner. The valuable number of husbandmen seems therefore, in my opinion, placed beyond even the idea of a decrease.

2dly. It is no less impossible to imagine, that the number of sailors being nearly in a triple proportion to what it was, and the quantity of exports probably augmented on account of the burden of the outward-bound ships, a diminution should have taken place among that class of people, equally precious to the State, for establishing and ascertaining its wealth and strength, as the cultivation is indispensable to secure and support its very existence.

3dly. If, notwithstanding the acknowledged impossibility of proving a real decrease in the population, any one should obstinately admit of it, without positive proofs, it cannot at least be denied, that the produce of land and industry being nearly doubled, some means must have been devised, to do that with one hand which required two before. In this case it would be an easy matter to prove, that at the rate of the supposed depopulation, the few elect, who have escaped its causes, can boast of enjoyments in a threefold proportion to what they were before, notwithstanding the difference between the present impost and that which was paid in the beginning of this century: for, after all, the taxes under William III. amounted to four millions and a half and upwards, to be deducted from forty-nine millions standing revenue; the balance was therefore forty-four millions and a half, to be shared amongst 7,200,000 inhabitants, acknowledged by Mr. King; that is, very little above 4d. per day for each individual. Now, in the year 1779, for I have not yet exceeded that period, the impost was of about nine millions, which, taken from an income of 110 millions, left a surplusage of 101,000,000l. to be divided. If we adopt the supposed depopulation at its highest rate, the number of souls in England is reduced to 4,500,000, each of whom has 1s. 3d. instead of 4d. allowed in the reign of William. It is then incontestible that the Nation is richer, but, I must own, not more happy; for they complain and are alarmed at this time, as was then the case.

It would be necessary to allow the supposition of an increase, if the intention were to shew that the people are now in a worse condition: nor could even this be deemed sufficient; for, admitting the existence of 9,350,000 inhabitants, it will appear, that, by the surplusage of 101 millions left, after the discharge of the taxes in 1779, each individual would be entitled to 7d. instead of the groat, in William’s reign.

The nation therefore in that year, in spite of its public debt, had almost doubled its wealth, rating the population at 9,350,000; and raised it four-fold, supposing the number reduced to 4,500,000 souls: and in either case, the riches of the State, as well as the national debt, arose and increased from the daily reductions of 4d. to 2d. and of 8d. to 4d. which, since the reign of William to this day, have escaped from that all-devouring canker, commonly called Luxury.

A more particular View of the same Subject.

I wish to inquire more minutely, whether such facts as are known do not cast a sufficient light over all the others in general, to induce the most anxious and pressing creditor, and the nicest in point of proofs, to sleep in the utmost security, till some particular discovery pleads in justification of his alarms.

The present revenue of England is stated at 63 millions; that of Scotland, at about 7 millions; collectively, 70,000,000l. It will be seen hereafter, that 65 or 75 millions would give the same essential results: I must however add, if any thing more should be wanted, that, in his estimate, Mr. Young does not include the horses, hemp, flax, vegetables, fruit, nor hops, &c. all of which are reproduced annually, and augment considerably the number of exchanges held out to industry.

This landed revenue is produced by somewhat more than one third of the inhabitants.

It remains for us now to compute, at the lowest, the income produced by a second class of people, probably as numerous as the former, since not less than 1,500,000 persons of both sexes, and of all ages, are employed solely in preparing and working the wool. (See Chalmers’s Estimates.) But if the labour of 3,000,000 of husbandmen brings in 70 millions annually, why should that of an equal number of mechanics and handicraftsmen stand for less in the computation? To this reason let the following remarks be added.

Out of the 70 millions, 20 come to the share of the cultivators, either as the price of their labour, or for poor’s rates; 12, of these 20 millions, at least, are laid out for the produce of industry: bread, it may be observed, is comprised in the remaining 8 millions.

Let us state the number of proprietors at 2,000,000, including all their dependents, under any denomination whatever, women, children, chaplains, farmers, physicians, strollers, servants, &c. and their annual expenditure, in the rough produce of the land, at 18 millions, there remains only 32,000,000, which must be paid by the industry, already in advance, of the 12,000,000 exchange granted to the cultivator. It is obvious that I speak here only of that kind of industry which may be productive of exchangeable commodities, even against those of foreign produce.

Three millions of mechanics do not live more soberly, nor are they worse clothed, than the husbandmen: it may therefore be inferred, that out of the 20 millions, which they likewise receive for their labour, they lay out in the produce of industry, 12 millions, which, added to the 44 millions I have just mentioned, make, all together, 56 millions.

The manufacturers and principal traders, under every denomination, with their dependents of all kinds, complete the necessary number of the supposed population of 9,350,000 inhabitants, that is, 1,100,000 souls, themselves, the idle people supported by them, and their household included. Supposing their consumption of the rough produce to be proportionable to that of the proprietor, their expenditure will be 10,000,000; but then we must square by the same rule what they lay out for the produce of industry: 18 millions will be the sum, which, together with the other 56 millions, makes a mass of 74, instead of the 70,000,000 acknowledged in agriculture. Even this would not be sufficient, for reasons which I shall give in the sequel; but I shall observe, in the first instance, that were the population less numerous than we have supposed it to be, the same consumption of the rough produce is certainly inadmissible: but the landed revenue remaining the same, though procured by a less number of hands, it would then become necessary to estimate the amount of the labours of industry, effected by a number of handicraftsmen, equal to that of the cultivators, from the ascertained value of the latter’s productive labour.

I now return to the deficit wanted for the security of a constant increase of wealth, which may at all times supply all the exigencies of the State.

The 18,000,000 consumed on the produce of industry, as granted to the principal traders, seem to raise them to 4,000,000 above their real value; I mean, that which is acknowledged in the produce of agriculture. It is not under colour of the supposed interest of the enormous principal, which gives motion to the manufactures and to the inland trade; it is necessary that industry should contribute its stock, as well as agriculture. The principals laid out, by the one or the other, are a matter of indifference to the state; it can speculate but on their produce, and pays exactly the interests, when it rates at the same value the result of the labours of both; but, to the 70 millions assigned as the indisputable produce of industry, (supposing a laborious man to be as good as any other equally industrious) we must add the intrinsic value of the rough materials on which industry hath wrought: This accession, which is also fair and equitable, will furnish, not only the 4,000,000, which annually exceed the home consumption just mentioned, but likewise all the millions necessary to secure, and mean while explain, this gradual increase, which it would be difficult not to trace in trade, as it is observable in the landed property. The latter is doubled within the space of 90 years; from whence we are forced to conclude, that the annual savings of the farmers, and owners living on the spot and cultivating their estates on the true principles of husbandry, have sufficed to discharge, not only the public burdens, and to defray the manuring expences, but also to double the produce and the general means in the most important article. It remains now to examine, whether the savings of the manufacturers, traders, and other supporters of industry, are as indisputable as those made by the cultivators.

Clear Savings of the Manufactories, Trade, and other Branches of Industry.

The riches of a country, and its progress, are established and confirmed by its savings. Let us consider cursorily such as, from their self-evidence, admit of no dispute.

Ninety years ago the landed revenue of Great-Britain was computed at about 35 millions. Let us suppose that 10 millions of specie were then required to give an effectual circulation to property of all kinds, (many people will think this by far too little[1]): but the revenue of landed estates, being now 70 millions, 20 millions at least, instead of the 10 millions requisite in the times of William and Mary, should be allowed; and consequently a first clear stock of savings amounts to—10,000,000l.

The consumer in those days was probably allowed, as is still the custom, a twelve-month’s credit upon half the articles purchased. Some of them took a longer time, if others a shorter one; but the stock of credit being then equal only to 35 millions, and now raised to 70 millions, we have clearly another mass of savings of—35,000,000.

Then, as in the present time, the preparing, manufacturing, and delivering, required six, twelve, or eighteen months. Let us suppose the year, upon an average of the slowness of one operation, and the celerity with which another was performed, we shall find again, in the difference of the flock, a third saving of 35,000,000.

If we suppose the value of manufactories, dwellings, warehouses, and all kinds of establishments, necessary to answer all the exigencies of a stock of industry and commerce of 35,000,000, to have amounted then to 25,000,000, we must admit that the objects in the same manner necessary to a stock of 70,000,000, do likewise present us with a fourth clear saving of—25,000,000.

In order to employ those hands by whose labour the annual sum of 35,000,000 was produced, 10,000,000 were probably sufficient; whereas 20,000,000 are now required. This shews a fifth clear saving of—10,000,000.

The annual returns from the American islands was computed, 90 years ago, at about 330,000, (Sir Charles Whitworth’s State of Trade). Half of this produce was, in all likelihood, mortgaged to commerce; but it only supposed a stock of 3,000,000 at most lent, it matters not at what interest. The yearly produce of those colonies, added to that of the ceded islands, amounts, at present, to more than 2,900,000; more than one-third of which belongs to the trader, either as purchaser or mortgagee, and exhibits a sum of about 20,000,000, from which we shall substract the former 3,000,000; and considering (for a moment) those colonies as being foreign to the State, we shall find a sixth clear saving of—17,000,000, (the petition of the merchants in 1775, supposes it to be 30,000,000.)

The English might perhaps be out of humour with me, were I to suppose that the continent of America, stands on the debtor side, for no more than 4,000,000; I shall therefore set down this article as—Memorandum.

Eighty years ago the amount of exportation from England, was estimated at 5,612,085l. In 1773, upon a medium of three years, the same was increased to 16,027,937: of the exceeding 9 or 10 millions, one part appropriated to the commerce in Europe, another to the American, a third to the East-India trade, remain one, two, and sometimes three years, before they can be applied to the same objects. These 10,000,000 therefore suppose a stock more than double the same sum, and ought, in consequence, to be set down as a seventh clear saving of—10,000,000.

The English ships, employed eighty years ago in carrying on the national trade, presented only a sum of 289,318 tons burden; the number of tons is now rated at 775,078. This increase of 485,760, together with the expence attending the fitting out, going and coming, produce a stock of 5,000,000, which must be doubled, by compensating the voyages of six and eight months, by those which require two or three years: here, therefore, appears an eighth clear saving of—10,000,000.

The proprietor of lands should not be considered in this light, in the use he makes of his yearly profits, but with respect to that part of his said profits which he lays out in cultivation: In regard to that share of his income which he invests in the funds, we must consider him as member, agent, and usufructuary of industry and commerce. Now, if we divide into three parts the whole of the national debt, one-third of which, if agreeable, we shall set down as foreign property, and the other two as belonging to the natives, we must of course acknowledge in the nation a new sum of clear savings, amounting to 180,000,000. This, in fact, should not be considered as a real increase of wealth, which it is at all times easy to appreciate, but as a proof that there exists, in the nation, an inestimable number of men, who are capable, in the space of ninety years, to effect a saving of 180,000,000, which government will have it in its power, within the same space of time, to appropriate to the exigencies of war, if potentates should continue in a warlike humour; or to lay out in objects of industry and cultivation, supposing an improvement of the revenue should be preferred to a state of warfare.

I shall not speak either of the difference which may be observed between the present state of the Royal navy, and the situation it was in at the beginning of this century, nor of the public monuments erected from that period, nor of the India territories, nor of the Colonies remaining to England; provided the objection concerning the money due to foreigners is not repeated against me, as I am in hopes, by and by, to find some kind of compensation for it. I shall therefore confine myself here, to observe, that the above savings of all kinds of industry, some of them active, the others passive, all equally necessary, assisting each other mutually, no doubt, and finally amounting to 332 millions, have been effected in the course of 90 years; not with any sensible detriment to the landed property, since its revenue is doubled, nor to the disadvantage of the lower class of people, whose day-work brings in 1s. 4d. instead of 8d. nor to the prejudice of the fine arts, the rewards of which are perhaps fourfold, comparatively speaking; but solely according to the common course of things, restrained, nevertheless, by a war of 30 years and upwards, out of the 90, and by all the prejudices which the present generation begins to shake off, and which probably will be entirely abolished in the next.

It is no ways natural that the same causes will not be productive of the same effects. It may therefore, in my judgement, be reasonably concluded, that, within 90 years from this day, the landed revenue may be increased to double its actual value, and the population, trade, and industry, augmented in the like proportion, were even the national debt to amount then to 476,000,000, instead of the present 238,000,000, which excites so many complaints and loud murmurings.

In fact, let us suppose the debt arrived at a height so apparently formidable, and the price of every thing proportionably increased; would the former be less firmly established? Methinks that the very contrary is demonstrated by calculation, and that imagination cannot frame any rational objection thereto; at least I am free to confess, that all my efforts have not been able to produce any combination of probable circumstances, which might, in any supposition, justify the dread of that application of the sponge which is so often held out as a resource that sooner or later must be adopted. Setting aside the infamy of such a measure, what advantage would accrue from it? Let it be adopted this moment in London, within three days the same step must inevitably be taken at Paris. A manœuvre of this kind would manifestly indicate either the most hostile intentions on the part of the English government, or the project of overturning the constitution: the latter concerns England alone; but in the former, France is deeply interested. That power would be compelled to put itself in a situation to oppose an immense and free revenue, to a revenue equally immense without appropriation. Were, on the other hand, the French to lead the way, England must inevitably follow; and the unprofitable disgrace would be the portion of either of the two nations that should have set up the precedent.

But who will see without grief, 2,000,000 interest due to foreign States! 2,000,000 in specie carried out every year from England! England yearly stript of 2,000,000 of her money!!! It will be seen hereafter in what that money consists. Yet with personal stocks so real, so considerable, so clear, what can prevent Great Britain wresting from the foreigner, the share he claims in the national debt? The reason is obvious: the owner of landed property, or the farmer, who hopes to get six per cent. of the stock which he lays out upon his lands, instead of vesting them in the funds, envies not the foreigner who is glad to get 5, 4, or even 3 per cent. On the other hand, the merchant who trades by commission, and who has an opportunity of placing in the colonies his money at 5 per cent. interest, which is raised to 8 and 9 by his commissions for sale and purchase procured therewith, cannot wish himself in the situation of a stranger, whose stock in the English funds brings him in, not above one half of that sum. It is still less an object of envy for the manufacturers, or owners of ships, who, from their manufactories or shipping, clear 10 or 12 per cent. of the monies laid out by them: the projectors of all kinds likewise flatter themselves, that the stock employed in their undertakings will produce 15 per cent. To sum up the whole in much fewer words, the prospect of 3 or 4 per cent. is not likely to tempt any one, who is in hopes of getting a two, three, or even four-fold interest. And in fine, the public funds, in any country whatever, will never be more or less than a lucky, or rather a providential, resource for those who have neither talent, power, nor leisure, to place their money to better advantage.

Now, would the abolishing of such a resource turn to the profit of the State, even supposing it to be effected by the justifiable means of a general reimbursement, were the case possible? I have too often reflected on the subject, too often revolved it over and over, I have viewed it under too many points, not to be sensible how far above my strength it is to discuss the matter in all its parts; I shall nevertheless venture to throw out some thoughts, which to me seem likely to render somewhat problematical a question which, at first sight, does not appear anyways difficult to resolve.

This question is not, whether it would be more advantageous to the State, not to have contracted a debt of 238 millions; but whether, since it is incurred, it would be profitable to discharge it. To doubt of the former, would be absurd: 238 millions thrown away almost entirely, within the space of 90 years, to forward destructive schemes, now no otherwise compensated than by a double devastation of the same kind, in a neighbouring kingdom, which by a treble population was able to support it, would certainly have been better bestowed, in both countries, either on the lands, whose revenues and number of cultivators would have increased, or in the improvement of the trade and arts, the stock and chef-d’œuvres of which would thus have been multiplied. But the debt being once incurred, let us suppose that the 238 millions, which are vanished, should return into the Exchequer, would it be proper or not to pay it off? Thus stands the question.

Thoughts on Imposts and Reimbursements.—The Accumulation of public Treasure considered as the Means of preventing Taxation.

The present impost in England, as the case is almost every where, consists of two parts widely different from each other: the one is certainly burdensome, but necessary;—of this hereafter. Might not the other, which concerns the national debt, however grievous it may appear, be considered as an useful establishment, so long as it shall be presumed that the increase of the national wealth, and its being divided amongst a greater number of individuals, is an advantage to the State; “or, in other words, until it shall appear evidently, that the welfare of the State requires that each of its members should lay out annually all that he is able to spend?” Before I attempt to deliver my opinion on these two subjects, I shall suppose the reimbursement possible, and resolved upon.

Nine millions of taxes, to pay off the annual interest of the debt, compose nearly one seventh of the landed revenue. These taxes, gradually laid on such objects of consumption as are supposed most likely to bear them, must have raised their price by one seventh, or something more; and that really, justly, and I think necessarily. The reader will perceive that I speak of the objects of taxation collectively, since some of them bring to the Exchequer twice their intrinsic value. The reimbursement being effected, would they fall back to their primitive value?—Yet this must be, in order to reap the pretended advantage; and this, in my opinion, would be of no manner of service. I shall endeavour to prove it; and then we shall examine whether the effect would not be more than doubtful.

It would be no easy matter to assign, for certain general facts, any other cause than the force of Nature; who, in the end, gets the better of all the regulations that thwart her. But let any one examine whether there be a single untaxed object, which, from 90 years back, or, to speak more to the purpose, from the origin of the national debt, is not raised more than one seventh, above the nominal value it had at that period. It is therefore sufficiently probable that the taxes have been felt, not only by the consumer of the taxed commodities, (according to the laudable intentions of Government) but also by the whole nation, by all the individuals that compose it:—And this, in my opinion, is equally just and unexceptionable.

Yet, it may be urged, that this increase in price is to be ascribed to the greater quantity of specie in circulation. Granted. In this case, a falling-off in the prices, accruing, as it is supposed, from a decrease in the taxes, which is represented as the effect of a reimbursement, cannot then take place:—besides, as the sequel will show, the taxes unavoidably bring in, one way or the other, even in the first year, the whole money required to pay the same. I shall argue on both suppositions. Is the increase in the prices owing to the taxation? It appears, evidently, that the taxes bring in the sums necessary to pay them, since they are actually and annually paid:—This money, then, must be withdrawn from the circulation, in order to lower the prices. Is this increase the effect of an augmentation of the specie? Then it will be necessary, in order to ascertain the primitive price, to recall from the circulation all the money which has been introduced since, and in spite of the taxes. Now if, in spite of the taxes, a country abounds with money, how should it not be so, supposing no duties had been laid?—How can the abolition of the taxes prevent the introduction of cash?—How will it come to pass, that the mass of specie being increased, the prices shall not be raised?—And if all of them augment, in a fair proportion, who will gain by it, who will suffer?

Be it supposed, nevertheless, for this is my main object, that the abolition of the taxes will lower the price of the mass of taxed commodities.—The same force of nature, which, without the intervention of any one, had raised the generality of untaxed objects up to the rate necessary to balance the imaginary value, which the tax added to the others, would operate in a contrary sense, and diminish, insensibly, the price of those articles which might have been overlooked:—What would be the advantage accruing to the State from a general and proportionable decrease?—Let us not think yet of the pretended profit that would result therefrom, in favour of trade, with relation to foreign competition: this matter requires a particular article. The only business now in hand, is to examine, whether, in case the reimbursement should be effected, this general decrease of prices, which I have just granted, could be effectually obtained.

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! 500l. 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 64,234,595l. 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.

The state-creditor stands in a far more disagreeable predicament; he cannot even suppose, on his part, an intention hostile to the general good. Whoever lends to the State, knows that the latter cannot pay the interest it submits to, but by taxes, which, in the long-run, affect every thing alike; and that one must cease to be a consumer, if he would forbear coming in for his share. Now, whilst the exigency of the State requires fresh loans, and course additional taxes, whoever advances of the stock, the interest of which is paid by means of those very taxes, cannot entertain any hopes of avoiding their effect, unless it be for a short period, which depends entirely on the adopted scheme of finance. Some of these schemes extend, others shorten the round such taxes must go through, before the burden falls equally on every shoulder, and becomes null by its universality. I say null, all injustice set aside, which is inseparable from some sorts of taxes, of which I shall speak hereafter; but, I add, strictly null, even in regard to the lender, although the price of every article be raised, whilst his revenue alone continues on the same standard. And I ground my opinion on the following reason, which appears to me unanswerable: The difference between the interest of money, and that of landed property, is always a sufficient indemnity to the monied man for the rise, occasioned by the taxes, on the prices of the produce of land and industry; but nothing can compensate the landed proprietor for that pretended increase of wealth called Money, or that supposed poverty known by the name of Taxes, but a proportionable increase in the price of his goods[3]. A word more on the lender. One may take the part of that important individual, who accumulates those savings by which the State is to profit. It is allowed, I say, to support such a man even against the State, when the State attempts to reduce him by an useless reimbursement, by an unnatural operation; but he should be assigned his real rank in the State, that he may not complain of the natural reductions. In this case, I think, we should be more just, more humane, and more equitable, than Mr. Hume, when, in the continuation of the scheme of national loans, he offers to the posterity of the present owners of landed estates, no other prospect than that of serving, as coachmen, the descendents of their footmen, and no other means of averting the prophecy—but a bankruptcy. (Vide Hume’s Public Credit, Essay IX.)

Reflections on the two foregoing Articles.

If it were very true, though upon the first blush rather strange, that after an operation so simple as that of increasing the price of the whole mass of commodities, or rather suffering it naturally to increase, in proportion as the taxes and the effects produced by them enhance the price of all the products of industry, which are to bear those taxes—were it true, I say, that after so plain, so simple an operation, it would suffice, in order to secure for ever, in the most efficacious manner, the payment of the interest on any given national debt whatever, to find, once for all, in cash and paper, a sum which would exactly be, to the mass of the specie and paper already in circulation, as the interest of the debt, and the reactions of which I shall speak in the sequel, are to the mass of the two revenues—were it equally true, that those who are to be paid that interest, should, after these two previous data, have nothing in the world to dread but the reimbursement of a principal, the interest of which should appear so oddly secured, it would then be impossible not to confess, that England has hitherto been a prey to great uneasiness, with very little foundation.

It would then be necessary to conclude, that all other nations were greatly in the wrong to think that England had any reason to be alarmed.

It must, in this case also, be acknowledged, that France, in 1720, very unreasonably cut asunder the Gordian knot of her difficulties, by declaring in substance that she owed no longer 15 millions Tournois of the debts which she had contracted; since, without so barbarously cutting the knot, and thereby effecting the ruin of thousands of wretched beings, she would have secured their fortune by imposing without mercy, or rather with judgement, a tax of 75 millions on all the produce of industry, which this tax would not have raised by one twentieth part; whilst an Arrêt from the council, permitting then the exportation of grain, which was not allowed till 50 years after, would have proved more than sufficient to enhance, as it must have done, the price of commodities, in order to make amends to the landed proprietors for the increase which they would have found in the products of industry.

Above all, it would be necessary to admit, that no minister, in any country, could, for the future, without a horrid perverseness, without a want of judgement bordering upon insanity, propose, neither all together nor separately, expedients as shameful as they would prove useless; and that no individual could hereafter dread such measures, without being guilty of folly. What a security, then, for the Subject! what an advantage to the State! what a facility for Administration!

Under this point of view, the idea I start deserves to be examined; but I once more entreat the reader not to pronounce finally upon it, until it has undergone the full exposition which I propose to give it. Nor shall I think I have written in vain, if I succeed only in making it appear so feasible, as to induce some abler hand more deeply to investigate it. Where is the man who would not wish to find it true? where is the man who could have an interest in finding it otherwise? I confess, perhaps to my shame, that it has engrossed my attention for a long series of years; I apply it to every thing, I square it with every thing; and the more I consider it under all the suppositions which my fancy suggests, the more I compare these suppositions with all the facts which it is possible to ascertain, and which seem to bear any relation to the subject, the more am I convinced, not only that the matter stands thus, but even that it is impossible it should be otherwise.

In fact, if I return to Great-Britain⸺

It would be absurd to suppose, that the taxes necessary to discharge the debt incurred during the late war, exceed the twentieth part of the value of the products both of foreign and national industry, consumed within the country. In this case, is it not impossible that the additional tax of a twentieth, in whatever manner it may be assessed on the mass of those products, should not enhance, by a twentieth, the value of this very mass? Let us call it a fifteenth; all kind of reaction included.

Is it not impossible that this additional fifteenth on the price of the products of industry, be not followed, sooner or later, by an equal augmentation on the productions of the earth, unless the proprietors of land should submit to diminish, by one fifteenth, their own consumption,—the home consumption (the only one that secures the prosperity of the State) and diminish it, in order to increase, by so much, the exportation, according to the ideas commonly adopted which would be as contrary to the facts that I shall adduce hereafter, as it would prove hostile to the interest of the State, to the interest of the proprietors, and would operate in direct opposition to the spirit of the tax, which is certainly to produce its own amount, without taking the trouble, every year, of going in search of it to Lisbon.

Is it not impossible that the augmentation of one fifteenth, upon the price of every produce in circulation, should require any thing above an additional fifteenth, in the sums which had been hitherto sufficient for brokerage, and the transports of all kinds of property?

Is it not impossible that this fifteenth, both in new specie and paper currency, once obtained, the interest of the latter part of the debt should not be very firmly established, funded, without any one being the worse for it, if the price of labour increases like that of its produce?

Such, I repeat it, such will be, in the last analysis, the result of the underworkings of nature; of nature, ever more slow, but ever more skilful in repairing evil than men are in creating it; of nature, who, as good at all times as the bread which she breaks to her children, fills up without intermission, incessantly levels, behind them, and unknown to them, whilst they are amusing themselves or playing tricks upon each other, all those little furrows which they imagine will be left to the care of their posterity.

Some one, no doubt, will exclaim against this additional fifteenth upon the prices of every commodity; an augmentation which I have represented as the only remaining trace of a war, which, for five years, attracted in both hemispheres, the eyes of all whose brains were not heated by it. I shall grant therefore that it was necessary to add thereto,

First, the trifling difference which must result from the impossibility of a thorough good understanding between the interested parties, together with the intention, not very liberal, but natural enough to each of them, of gaining more than they can lose.

Secondly, the difference, perhaps more sensible, which must follow the method so much boasted, of taxing in preference, those objects which are consumed by the rich; as if it were possible to apply to any object, an extraordinary portion of a given revenue, without taking off that very portion from some other article, the consumption of which is equally necessary to the subsistence of artizans of another kind.

Thirdly, and in fine, the far more considerable difference which must be produced, especially in England, by another kind of taxation, of which I shall speak hereafter.

Nothing contributes so much to render a question undeterminable, as to perplex it with a multitude of accessaries, each of which would require a separate dissertation; consequently, nothing can render the solution easier than to reduce it to the smallest compass. Some other person will, no doubt, do much better, what I can do only according to the extent of my abilities; nor did ever an author peruse his own work with more pleasure than I shall read the production of any one who shall throw the light of evidence where I can only form surmises. But if it be true, that after a short space of time, without any other assistance than the natural clashing of one interest with another, taxes, judiciously laid, are hurtful neither to individuals nor to the State,—would it not be better to labour with care to lay them judiciously, than to think of a reimbursement, the only effect of which will be to diminish, for a short time, amongst some individuals, the power of paying those very taxes?

I beg permission to add a word more on this fatal reimbursement.

A Thought substituted to that of a Reimbursement.

To write in England, nay, to write with obstinacy against the plan of a reimbursement, the necessity of which is acknowledged by the whole nation, who expect wonders from its execution; to write for the purpose of persuading that such a step would equally militate against the interest of the State, and that of the subject; and especially to hazard such visionary ideas at the moment when France, so clear-sighted on her own interests, is herself busy in effecting a like reimbursement ... must surely be the attempt of a man hired by the French, to excite, if possible, some ferment in those heads which are all wound up to calculation; and to raise, during the little time the calculations will require, some plausible doubts, in order at least to delay the effect, of so salutary, so essential an operation; for, France is so interested in the ruin of England, that she ought to spare no means to stop her, were it but for an instant, at that point which it has not been possible to prevent her from attaining.

On the other hand, to write in French, and endeavour to introduce into France, a pamphlet in which the author does not profess himself an admirer of a reimbursement, the possibility of which, now clearly demonstrated, has excited there a general enthusiasm, a kind of rapture the more excusable, as the most evident disorder in all parts of the finances, during the space of 80 years, did not permit even the humane and sensible mind to form a single wish for that very measure of which the execution is so certain, and the advantages pretended to be so positive.... It is suing with impudence for the good graces of a nation, to which I have, as it were, been turned over by the cession made to it of the country where my fortune lies: it is ridiculously flattering myself that I shall justify by a trait of unbridled licence, the title of Englishman, conferred on me by the treaty of peace.

It is certain, that more than once a man has been most secretly accused, tried with the greatest expedition, condemned without being heard, and punished with merciless severity, in consequence of charges much less specious than the above; for I confess that there is a faint glimmer of plausibility in the heads of accusation which I have brought. But, in the end, justice must be done; and, thank heaven, my present trial is on the very first instance, brought to its last stage; the public shall be my judge; they shall be put in possession of all the documents relating to the trial; and I presume to hope, that no one of those who shall be able to bear the perusal of them, will suspect my sincerity when I protest, that, without any other motive but that which has at all times invariably guided me through life, I would burn this paper, if I could find therein a single word that might be hurtful to France—I would burn it, were I to find therein a single word that might be hurtful to England—I would burn it, were I to find therein a single word that might give offence to any individual of either of the two kingdoms.—But I freely own, that my ambition would be far from receiving its full gratification, were this work to prove useful only to those two parts of the world, however brilliant the part they act therein.—URBI ET ORBI.—Shakespear says that the Warrior seeks “the bubble glory in the cannon’s mouth:” a man who presumes to think, looks for it in the bottom of his inkstand: their hope is not always crowned with success; nay, very often, the one meets only death, and the other contempt. Yet there are some lucky chances: sometimes the former saves his country, the latter is sometimes serviceable to all mankind.

Be it as it may, I intreat the reader to observe, that the principles I lay down do not tend, by any means, to lessen the public credit, to spread any doubt on the faculties which France and England have of effecting the reimbursement which both these nations have in contemplation; I maintain, on the contrary, with the simplicity of a child, that it is a childish play, for the one as well as for the other. I say, that the one who appears the most distressed of the two, and is the most taken up with her pretended distress, has only to take from the pocket of one, what he will be very averse to give, and put it into the hands of another, who will be equally averse to receive. I say, with respect to the nation, which now acts the most brilliant part, that all she has to do, is to give, to those who do not ask for it, a sum of money which she receives, and has no occasion for; to give it, I say, for fear of being solicited, importuned, and teazed, to make a bad use of it, or else be obliged to hoard it up, to the very great detriment of circulation. I shall add now, that a business, which to me, does not appear a childish one, but really that of a man, would be to examine, whether the 40 or 50 millions of livres annuity, which are about to expire by degrees in France, and the million, or million and half sterling of taxes to be levied in England, over and above the sum necessary to pay the interest of the national debt, and other state expenditures, will be better employed in the diminution of some private revenue than in the increase of the general wealth in both States; that is to say, whether it is most advantageous to pay off the creditors, who, by such a reimbursement, will be compelled to place at 4 and at 3, what brought them in 5 and 4 per cent. than to lay out the money, for the purpose of increasing, perhaps by one fourth, the products of agriculture and industry, by a faithful and judicious repartition of those sums upon the cultivation of some millions of acres, which now yield nothing but brambles, or yield only the half of what they ought to produce.—How many of this description are to be found both in England and France!⸺This is not all: how many kinds of taxes, the effects of which have not been sufficiently searched into! How many more, whose pernicious consequences are fully known! How many more, the levying of which can be justified only by reason of their produce being wanted, or by the supposed impossibility of a commutation!—Ought the State to reimburse, before those have been scrutinized, these repealed, and all commuted which shall appear evidently to militate against sound principles?

The great art does not consist in finding, at pleasure, one million sterling more in France as well as in England, or vice versâ. Heavens! what kind of minister would that man be, whose genius could not discover, in either kingdom, in the multitude of objects truly susceptible of taxation, a number of articles capable of furnishing that million annually, without injuring the general consumption, beyond the first year at the worst? The only difference which, in this respect, I might point out between the two nations, is, that in France the impost would be registered, and paid after the usual remonstrances; and that in England, were the tax to have been devised, even by Supreme Wisdom, on the actual system, all those who might think themselves directly or indirectly interested in the operation of the tax, would not fail to clamour as loud as possible, and not without reason; for, after all, if the objects taxed, are equitably taxed, and in a due proportion with all the rest, why, out of 160 objects and upwards, already charged with equity, should ten be picked out to be overloaded with a new burden?—Has at least a rotation been established for the future?—On what principles? Or does it evidently appear that there can be no fixed one adopted on so important a matter?—If a tax is offered to be laid on such articles as have paid none hitherto, then Opposition stands on firmer ground; for, are not those objects, by their nature, evidently as sacred as the ark of the Lord? Did ever the least scrupulous, the boldest Minister of the finances, dare, to this day, to lay his hand upon it?—Would he have respected it, if he had not trembled for his head; that is, in plain English, for his place? For, thank Heaven, there is no necessity, now, for the English to be more hot-headed than any other nation in Europe. It is generally acknowledged among themselves, with true English sang-froid, that, on the part of those champions of patriotism, who, according to the interest of the day, charge each other by turns with selling the people, and betraying the sacred constitution, all terminates now in the most exact change of admirable sarcasms, and exquisite railleries. The pleasure of being a Minister because the minister alone can do what is good, and the concern at not being a Minister, because the minister alone can do what is good, are now productive of nothing more in England; and the People, as well as the King, are not worse served for it, nor are they worse informed: witness the speeches on both sides.

Amongst the questions which I have mentioned, and many others always appropriated to the subject, there are some sufficiently weighty to puzzle, in England as well as in France, the respondent who should be obliged, before a tax is laid, to answer them in a satisfactory manner. Luckily, as I have already mentioned, in France, thanks to the monarchical constitution, the King commands, the Parliament remonstrates, registers, and the People pay: and, as is known to all the world, thanks to the free constitution of England, there the King demands, the parliament debates, grants, and the People pay. With that facility which exists every where, of doing what is not palpably absurd, I think it might be possible now, without bringing credit or authority in question, to renounce the little vanity of devising a productive tax; and that a man of common abilities ought to confine himself to the establishing or maintaining order and clearness in the accounts, to the diminution of expences in collecting the revenues, and to fidelity in the use of them.—But the true, the unacquired glory to be obtained by a financier, would be, I think, to hit upon a simple scheme, the application of which might be obvious in all cases, a scheme productive of no fruitless evil, permitting all possible good, and which might, by degrees, be substituted to those vague taxations, to those taxations founded on false principles, to those wild notions, which, by adding five to an article not worth three, raise nevertheless that object to eight, and leave the trader at liberty to sell that for fifteen, which he sold formerly at four. It is true that, on the first exigency of the State, they pretend to remedy the abuse by an additional tax called licence, or by any other name which answers the same purpose, and compels the peculator to refund part of his extortion. But what does this licence come to, after all?—To sell to a man the right of ransoming more severely the public, after having previously furnished him with the means and pretence for doing it.

No one doubts, in England, but that the system of French taxation is a very bad one; nothing so self-evident as the reasons adduced in proof; every thinking man in France approves of those reasons:—but does it clearly appear, that in England some parts of that system are not adopted?—Is it not true, on the contrary, that it has prevailed, for a long time, in one point truly essential, in regard to which they have but diminished its inconveniencies, without thinking perhaps of the injustice, which is as inseparable from it, as it is from those wherein it appears more evidently?—The advantage of taxing the consumption is generally acknowledged; it is as generally believed that the way of bringing this system to perfection is by taxing, above all, the consumption of the rich:—yet, were it to happen that the poor should be more injured, and that for a longer time, by a natural effect of the very operation devised for their release, than he could be aggrieved if nothing should escape the tax....

I shall venture to throw out some thoughts on these different objects, after I have examined whether the necessity of a balance of trade, constantly favourable, be not as doubtful as that of a reimbursement, and a bankruptcy; and whether that balance is really such as many people imagine it.

General Balance of Trade in England.

When the proprietor of a considerable sum in the English funds examines Sir Charles Whitworth’s truly valuable work, State of the Trade of Great-Britain; he thanks his stars, and says, “I have nothing to fear whilst the balance of trade continues in favour of this kingdom; but the moment it shall turn against her, recourse must inevitably be had to the expedient so long postponed: the application of the sponge is inevitable.”—

I have perhaps already said enough to animate the greater part of those, who are concerned in the public funds of every enlightened nation, against every other fear but that of a reimbursement; but, as it may be believed, with regard to the public funds in England, that I have reasoned on the supposition, generally admitted, of that balance in their favour, of which the English are so jealous, I would wish doubly to strengthen the mind of the parties concerned, by proving to them that their fortune rests on a basis much more solid than that of a pretended favour, which the private interest of every merchant, vigilantly repels, whilst the fancy of the body at large happily confines them to believe in the idol, and to invoke it.

I am indebted to the details contained in Sir Charles Whitworth’s work, for the advantage of applying to real facts, many reflexions which I had digested before I had read that work; but I was, till then, reasoning on hypotheses; I now reason on what so nearly approaches reality, that it is necessary to controvert my arguments, instead of consigning their foundation to the system of chimeras.

By means of that valuable work, I see, from the year 1700 to 1775, and that in the greatest detail, strengthened by all the proofs that the nature of the subject can admit of, a constant superiority of exports, which, in the space of 75 years, amounts to the enormous sum of 267,774,769l. (I have overlooked the fractions of each article.) This is, in the total amount, much more than one half of the gold and silver imported into Europe from America, during the same lapse of time; but, of this period of 75 years, 30 must be attended to, wherein the superiority of English exports comes up very nearly to five-sixths of the general importation of those two precious metals, which were to make good so many other balances. We should also observe, amongst those years, a most flourishing one, wherein that English favour absorbs, as it were, all the silver imported into Europe; and five other years still more wonderful, where it surpasses that general importation by 10, 12, and even 1,300,000l.; for, in 1750 the general exportation of English goods exceeded the importation of foreign produce, by 7,359,964l. and yet all that product of the mines, belonging to Spain and Portugal, is estimated only at 6,000,000l. sterling per annum.

I shall suppose, for a moment, that, during the space of time I have just mentioned, the balance of trade did, in reality, produce to England an importation of money, to the amount of 267,774,769l. (for the reports of the Custom-House, as stated by Sir Charles Whitworth, brought in as a proof of that pretended, uninterrupted balance, in favour of the nation, mean what I have said, or mean nothing at all, in regard to this matter; they do not prove one penny if they do not prove the whole sum). It is true that, according to the same reports, we must deduct for the money exported from England, during the course of those 75 years, about 105 millions, by which the nation at least got rid of a surplus which would have strangely disparaged the price of that which was preserved in the country: but is it very certain that the 162,774,969l. the precious nett of the pretended balance, was actually preserved? This appears to me impossible, for the following reasons, which may perhaps furnish us with the means of knowing, precisely enough, in what the true balance consists.

Since the beginning of this century, the real and nominal value of the revenue in the other parts of Europe, has doubled, as well as in England. Now this augmentation, in the products and prices, has required, every where, a proportionable increase of the means of circulation; and Spain and Portugal are nearly the only two sources from whence that increase of means could be procured.

In the supposition that the revenue of England constitutes one tenth of that of Europe (it is a great deal), the other nations composing that part of the world were of course obliged to endeavour to secure the nine tenths of the money necessary for their own circulation; and their success in this is the less questionable, as, in case any one of them should be short of money for the circulation of its property, the English themselves would eagerly supply that part of the precious balance, which it might want, because, in this case, the importation of money into such country would prove more profitable than an importation of fresh goods, whilst the old ones, carried there already, waited for money to circulate them. Hence it may be concluded, that the English never had, or at least have not preserved, more than their tenth, twelfth, or rather, more than their natural portion in that absolute mass of gold and silver necessary to the circulation.

I shall now say, that it is not even probable that they have preserved that quota, necessary every where else for the circulation of a revenue similar to theirs, because England is, of all known nations, the one where the circulation of property of all kinds, requires a less quantity of real cash: the merciless severity of the laws against debtors, the general credit which it encourages, the use and indubitable value of paper currency, which are derived equally from both, are three objects which, in this respect, set England far above par, in comparison with all the other nations who have neglected to secure to themselves the same advantages.

Might we not further say, that England evidently has not thought proper to get that quota, which she might have claimed, since one third, and perhaps half of her circulation, is effected by paper-money with more dispatch, with more facility, and with as much solidity as if it were effected by cash?

It will be asked, perhaps, if I pretend to infer at last, that the exportation has not been so considerable as it ought to be supposed from the statements of Sir Charles Whitworth? I shall answer to this, as to many other queries; it may now be seen that a few millions more or less, are a matter of perfect indifference, in regard to my main object. The exportation from England is clearly prodigious; its immensity is proved by that of the tonnage of the shipping employed for her trade, 775,624 tons in the years 1771, 1772, and 1773, (see Chalmers’s Estimate); this point is established beyond all equivocation. What I refuse therefore to the imagination of the trader, is solely what appears to me chimerical and useless in that favourable balance of money; and this I refuse, because I cannot possibly but acknowledge, that every trader has too much good sense to act against the general interest of trade, when such operation must, at the same time, prove contrary to his own interest. Nay, is much more than plain instinct wanted, not to import money which yields a very trifling benefit when there is no demand for it, whilst one may take up foreign goods, on which there is a certain gain of 10 or 12 per cent. because they are eagerly sought after? and when, besides, the nation, on a certainty, will not finally pay for them but with national goods, since she has no mines of her own? I must observe, indeed, that this very trader, guilty of such an act of impatriotism, of this national crime of importing merchandize instead of gold and silver, cries up, as loud as any other, the necessity of striking a favourable balance; but private wisdom gets the better of public folly; every one imports such goods as he is in hopes to sell to advantage, and leaves to his neighbour the care of importing that favour on which no profit can be got.

What is then the quantity of bullion really imported every year into England?

It is incontestably, in the first place, so much of it as is necessary to answer the progressive increase of the prices and products, both of the land and industry; the bank-notes cannot suffice to that augmentation, but in their ordinary proportion to the real specie in circulation; all supplement of bank-notes, which in the needful hour exceeds that proportion, must soon be replaced by real specie; on this exactness stand the credit of the Bank, and the vast advantage accruing therefrom to the public, and to the State; but from thence also results a greater inutility of accumulating money before it is wanted.

It is, in the second place, all the bullion necessary for the labouring gold and silver-smiths, from the first gold-smith in London to the last plated-button maker at Birmingham.

It is, thirdly, all that importation which is required to make good the deficit occasioned by petty stock-jobbing, and the melting down of guineas, which no workman will ever scruple, when there will be a few more pence to be got that way, than by the purchase of bullion, or as often as, having no bullion at hand, he shall find himself in the immediate necessity of working.

It is, fourthly, all that which is wanted to replace the few guineas carried away annually from England by travellers, smugglers, or by means of some inferior transactions in trade, and which cannot always be exactly balanced by the contraband trade carried on elsewhere by the nation.

Ever since the English have acquired the immense landed revenue which they possess in the East-Indies, it is probable they do not carry there so much money; yet some must be sent there. The above five articles are the only ones I know of, which may render necessary an annual importation of money. The first of those articles is absolutely independent of the caprice of any one; it is always subservient to the quantity of effects to be put into circulation, as well as to their price; and can at no time deprive the other parts of Europe of their share in the mines of America. The third and fourth are in a manner included in the first; nor can they, when viewed separately, be very considerable: The second alone is truly prodigious, but is likewise subservient to the demands of that very silver when wrought, that is to say, converted into some articles of luxury: But it is necessary to observe, in regard to this, that great care is taken to find out purchasers for that metal thus improved by the hands of the workman, not only in England, but wherever people can possibly be found willing to take from her, that part of the precious balance, which she had taken upon herself, only in hopes of getting rid of it.

This I think is sufficient to demonstrate the impossibility of that pretended favourable balance, amounting, in the space of 75 years, to 162,774,769l. the existence of which many people imagine to be real, from the statements of Sir Charles Whitworth: for, if they would confine themselves to say, that, in the course of 75 years, England has profited in trade to the amount of 162,774,769l. I have proved much more, since I proved (p. 17 to 22) that all the benefits which have accrued, and might now be spent, form together a solid mass of clear and palpable savings; and that this mass would now be, without doubt, 332 millions, instead of 162, had the 180 millions, lent by the subjects to government, and swallowed up by the war, been laid out in the improvement of lands and industry.

As to the inference that might be drawn from the apparent exportation of 105 millions of money, during the same period, according to the above statement, it is also necessary to make an observation on this matter.

In any grand mercantile operation, where prompt and certain remittances are required, be the motive of such operations what it may; if there goes out of England, we shall suppose, 400,000l. in bullion, this very same bullion, after the bargain is struck and fulfilled, either in goods or in bills of exchange, comes back to London, to resume if necessary, the same course three weeks afterwards: For the space of 40 years, therefore, the same sum may an hundred times be placed in the catalogue of exports, and perfectly answer to a capital of 40 millions, the place of which it has really supplied: This is a well-known resource; nothing then can be concluded in regard to the 105 millions of bullion exported, according to Sir Charles, but, that there ever has been, and probably ever will be, in England all the bullion necessary to answer the exigencies of the most unforeseen and extraordinary negociations of all kinds, and industry enough to recall in time, that bullion which had only been given as a pledge. It is like a jewel worth 100,000 crowns, which, for the space of 20 years, is said to have passed ten times backwards and forwards from Paris to Amsterdam, but finally remained at Amsterdam, by a reason contrary to that which keeps up the commercial shuttle between England and Holland.

In order to come as close to the point as it is necessary, on a matter, besides, of which it is equally useless and impossible to obtain an exact knowledge, here follow some facts, the essential results of which by no means depend on more or less exaggeration in the exposition either of the sale, or of the credit.

The period from 1764 to 1773, must be allowed to have been the most flourishing era of Great Britain. During those ten years the exportation of English merchandises into Spain, has exceeded the importations from Spain into England, by 5,095,998l. In the same space of time, the balance of trade between England and Portugal has been 3,274,133l. in favour of the former. The two favours united, amount all together to 8,370,131l.; add thereto the favourable balances of Madeira, and the Canary Islands, paid probably in Spain and Portugal, amounting, in the same space of time, to 516,863l.—the total presents us with the aggregate sum of 8,886,994l. which, divided by 10 years, proves an annual balance, in favour of England, of 888,699l. real money.

The light of probability now begins to dawn upon me: at least I here find myself at the source of money; and, as I know, first, that England must absolutely be provided with a certain quantity of it, whatever that quantity may be, for the five articles before mentioned:

Secondly, That she exports, of her own goods, fifteen times as much as she need to do for that purpose:

Thirdly, That gold and silver are to Spain and Portugal, what wines are to France, silks to Piedmont, hemp and timber to Russia; and that, in order to procure those different articles at the easiest rates, they must be fetched from France, Piedmont, and Russia:

Fourthly and lastly, that Spain and Portugal stand exactly in the same need of making away with the surplus of their gold and silver, as England does of acquiring it, by getting rid of a surplus of her manufactures: I cannot therefore entertain the least doubt, but that it is at Cadiz and Lisbon that England procures all that gold and silver which is indispensably wanted for the five operations spoken of; and I must positively conclude, that there she has taken the whole quantity which she had occasion for; but I as positively conclude, that she took up only so much of it as was wanted, when I see that it depended entirely upon her to take more, and that she has not done it: A decisive point, which I cannot by any means call in question, when I have convinced myself, by Sir Charles Whitworth’s statements, that this sum of 888,699l. which England, if so disposed, might have procured annually during the ten years above mentioned, is no more than the balance of 1,785,826l. in goods exported there, one year with another, during the same space of time:—For, after all, why should not England have taken in money the amount of 897,157l. of Spanish and Portuguese goods, taken by her ships in return, were it not that the value of money, as that of all other kinds of merchandise, is always tyrannically fixed by the demand?

It seems, therefore, probable enough, that the money annually imported by England, during the period aforesaid, does not exceed the 888,698l. of the balance which appears against Spain, Portugal, Madeira, and the Canary Islands: But here follows a strong conjecture, that it is not so considerable as it appears by those accounts.—It is an uncontroverted fact, that the article of exportation is always exaggerated more or less; the man who first bethought himself of this harmless cunning, fancied that his own importance would appear more conspicuous to the nation, by reason of the quantity of goods which he might seem to export: this is now the secret of the play-house, every body knows it; but this practice is in a manner become necessary: one must unblushingly raise himself above his level, in order to be thought in his real place; the only way of deceiving in this respect, would be to speak the truth; and, in this case, the deceit would fall on the deceiver himself, and that just regard which the exporter has a right to claim, would be lost to him: Add to this necessary artifice, which is no longer a cheat, the usual mode adopted in regard to importation, the value of which is always a little under-rated, but only a little, because there might be some inconvenience in cheating Government to excess. With these trifling modifications, I think England will be found not much above the par of her quota, in the gold and silver imported from America.

Now, out of these 6 or 700,000l. in money, which I believe are really and annually imported into England, what quantity is sent to foreign markets,—not, indeed, before its value is considerably advanced by the workmanship?—But, if this metal be so precious, why part with it when once acquired? Why not employ the workman upon objects, the price of which would have received a ten-fold increase by his labour? Why should these continual prophanations of the sacred metal be permitted? Why give encouragement to that kind of prostitution of gildings of all sorts, which daily consume such quantities of gold? It is said, that in Birmingham alone, they consume 30,000l. worth per annum:—And shall it be on a metal thus lavished away, shall it be on that pretended balance, that England will build her resources, and the security of her creditors?—In what consists, then, the wealth of the nation, that wealth which is truly independent of all circumstances, and which will ever be superior to the national wants?

It consists in any sum whatever, money and paper currency, which is required to keep in the utmost activity, 3,000,000 of cultivators, 3,000,000 of tradesmen, and 3,000,000 of other consumers, as indispensable to realise the value of the objects by them consumed, as the tradesman and cultivator are necessary to produce them:—And if any question should arise on the number of inhabitants,

It consists in the number of men necessary to furnish annually exports to the value of fifteen or sixteen millions:—And if it should be urged that this exportation is over-rated,

It consists in the number of men capable of making up that quantity of exports, which is annually required for a trading navy of 775,024 tons, on the statement of which there cannot arise a single doubt.

It consists in a population necessary (which doth really exist, and could not be dispensed with) to find, without any other inconvenience but a momentary sensation, the 100,000 seamen of the royal navy, the 70,000 national soldiers, and the 3 or 400,000 artificers, and other persons employed in every way, who, by the last war, were for some years taken away, from their daily and useful occupations, some monuments of which would probably have been transmitted to posterity, in order to their being employed in all the accidental operations that were requisite to carry on those destructive plans, which have left nothing but a sad remembrance behind: A remembrance, nevertheless, of which the most allowable pride should allay the bitterness.

It consists also, perhaps, in that revolution, which must have been effected in the mind of every intelligent Briton, by the demonstration grounded on experience, of the impossibility of doing beyond a few minutes, with a given number of men, more than that same number is capable of effecting habitually, and without fatigue.

It consists in the impossibility of not doing, even to the end of ages, with a given number of industrious men, all that which the same number have executed during 80 years, not only without exhausting themselves, but rather, on the contrary, still increasing their strength and wealth.

It consists, in fine, in the demonstration which will become daily more palpable, that labour alone is the source of that wealth; that the more the sum of this labour shall augment, the greater will be the increase of riches; but that this same labour will not reach its last degree of activity in England, till it is nearly in the same state in Siberia; and that there is no great harm in an English mechanic creating a cultivator in Siberia, or even in France, provided a Siberian or French mechanic, create a cultivator or mechanic in England.

Reflexions on some private Balances of England, both of the favourable and disadvantageous Kind.

In the small number of disadvantageous balances, the necessity of which is so grievous to England, I distinguish that with Russia, which, in the course of the ten years above mentioned, amounts upon an average to 825,212l. annually. This, in fact, is more than enough to swallow up the 6 or 700,000l. of the favourable balance, during the same period, against Spain and Portugal, the only sources almost of the precious metals; luckily the expence of Russia in gold and silver is ascertained, as it is every where else, first, by the quantity of coin in circulation, a quantity always proportioned to the price, as well as to the number of objects to be circulated; and, secondly, by the degree of ease, riches, and pomp, which the generality of private faculties can admit of, in the articles of furniture, plate, and dress: The introducing of gold and silver, above the quantity necessary to answer those various purposes, would, as the case is every where else, prove entirely useless; for it can hardly be imagined, that so wise a Princess as the Sovereign who now holds the sceptre of Russia, should think of hoarding up, before her 20,000,000 of subjects be as rich, that is, do produce and consume as much as a similar population might produce and consume in France or in England: Now, to hoard up would be the infallible means to prevent it. Let us now suppose, that the annual importation of bullion necessary for the circulation in Russia, amounts to one half, or even to an equality of what is wanted by England for the same object:—It is probable that England contributes thereto no more than her proportion, as the other maritime States, who, like her, are obliged to provide themselves in Russia; and, consequently, the disadvantageous balance of England with Russia, can no more demonstrate that the former exports there annually 825,212l. than the balance in her favour against Flanders, clearly proved by the accounts of Sir Charles Whitworth, can demonstrate that the above province is by her stripped of 521,201l. annually.

A publication truly interesting, would be a work containing a particular account of the trade of each country, were it only such as that which Sir Charles Whitworth has given on the trade of England; but though such a treasure is wanting, yet it appears to me, that to have a clear idea of such a work, would be sufficient to foresee what would be the result of it. All men are alike: one may therefore, without fear of deceit, suppose in the merchants of every country, the same attention to swell up the list of articles which pay no duty, and which give a trader the petty consequence of a more considerable exportation; every where might be found the same exactness, in a contrary sense, in regard to goods liable to an importation duty; consequently the balance struck at last would be in favour of the nation whose accounts should be then inspected: but deduct from all those favourable balances, that which might have been farther declared on the articles which are duty-free; add to the total of the exports, what has been declared short of the true amount on the objects which must pay; it would then be found that (the five articles excepted) all is paid literally without having laid out any cash, and that each nation is wisely reduced to the only real advantage of trade, the exchange of want against fancy, the exchange of one fancy for another, or the exchange of one want against another want.[4]

In fact, how can it be supposed, that a nation who should not sell to one, or to six others, exactly as much as she has purchased from a seventh, should not be, a little sooner or a little later, compelled, either to give up a trade which she must support with real specie, or to sell that at home for five in cash, which fetched ten before? Is it not evident, that a nation which should not purchase from one or six others, as much as she sells to a seventh, must, sooner or later, find herself in the necessity, either to hide her money under ground, or to lower its value, so far as to sell at home successively for 6, 8, 10, and 20, that which was sold before at 5? This would exactly have been the case with Russia, had the annual balance of 825,212l. been effectually paid to her in coin, either by England, or by those who stand on the debtor side with England, and had the former put it into circulation, instead of laying out the surplus of that balance in the purchase of goods from six other countries, to whom the English sold articles to a similar amount: Now the Russian trader does not in Russia charge 20, for that which, 50 years ago, was sold there for 5: the value of money is not debased there, though Russia has annually a claim upon England for a balance of 825,212l. and, probably, demands not less considerable upon the other maritime powers; Russia, therefore, has cautiously avoided receiving those different balances in coin.

Besides, money fetches but its price in Flanders, although, according to Sir Charles, that province is indebted to England in a yearly balance of 521,201l.—Nor is money worth above its price in Germany, though the latter owes likewise to England a balance of 924,709l. annually.—In Ireland it goes for no more than its worth, though there is another balance due by that kingdom to England, to the yearly amount of 770,916l.—Nor is it above its value in France, who owes to England an annual balance of 108,073l.—Now, if money is every where nearly of the same value, we must conclude, that there does not exist a nation which has not found in her annual importations of gold and silver, either considered as money, or as materials for some articles of luxury, all that she stood in need of to keep up circulation, and provide for that degree of luxury, which the actual degree of her industry requires, as much as it allows; in this case the final balance, deemed unexact, that is, in favour of England, has, in fact, been kept perfectly even. Each has sold here or there, as much as he has purchased, and vice versâ; and the prejudice England entertains on the necessity of a favourable balance, has not, in practice, dazzled the eyes of the merchant who carried on her trade: He has rejected the gold tendered to him, when his profit upon it would have been but trifling, with as much judgement as he has, with care, sought after such goods as could then yield him a greater benefit.

State of the Balance between England and Holland.

Sir Charles Whitworth, in his State of the English Trade, rates the annual balance due by Holland to Great Britain, at 1,372,258l. upon an average of 10 years: This is the most considerable. There can be no illusion, in regard to the effect this balance has upon the money in England; it is well known that it does not increase it; nay, it is thought that the debt due to Holland, lessens it annually, not only by the whole amount of the favourable balance which would revert to England were she not indebted to the Dutch, but of one million more, which must be found to pay them off.

I have already said, and repeated, that in every circumstance where it is necessary to borrow or to displace a capital, it is better to borrow, even at 5 per cent. than to remove a capital which returns double that sum; and that, on the other hand, it is more advantageous to lend any sum abroad upon good security at 5, or even at 3 per cent. than to lend the same sum at home, where it would yield only 2 per cent. or to bury it in the abyss of a Bank, whence nothing returns. Now what proves that Great Britain and Holland are in this case with regard to each other, is, that England seldom or never opens a loan, but what the Dutch take a share in. What do they give for the purchase? Nothing more than the surplus of the ordinary profits arising from a trade, which they cannot extend sufficiently to employ the whole amount of their savings. And why has this part of the English loan been given up to the Dutch by the national capitalists? Because the latter could find in their own trade, susceptible of a farther extension, a way of employing their capitals to greater advantage, that is to say, of reaping a benefit superior to the interest offered by the loan: How can this be doubted, when we see that the loan falls into the hands of a small number of merchants, who soon afterwards make over their debt? Would they transfer it to any one, were not the interest it brings in, interest secured by the nation, inferior to the ordinary profits of their commerce?

Therefore, if the balance due to the Dutch is thought burdensome, only in the supposition that it serves to pay burdensome interests, it cannot be looked upon in the same light, when the matter rests upon a debt, by which the borrower clears a benefit superior to the interest that he has to pay.—I shall present this question under another point of view.

In the war which was terminated by the treaty of Paris, the most considerable part of the debt contracted for its support, was acquired by the Dutch: Why so? Because the English, carrying on, without any opposition, an exclusive trade with every part of the world open to them alone, found therein the opportunity of employing their capitals to a far greater advantage, than that held out by government in the interest of the loan. During the last war, on the contrary, the English, being more narrowly circumscribed in regard to their commercial operations, by a navy, the possibility of which they did not even suspect, much less its real existence, and being kept more circumspect by a new system which opened a free navigation to all the powers not involved in war, thought themselves happy to find, in the national loan, an employment for that portion of their capitals, which, from circumstances, was become useless. The interests of the last debt are then due and paid within, and by Great Britain; but will it be said, that England would not be so rich, were the 3 millions additional interest, with which she is burdened, due to Holland, and had the English, instead of employing their capitals, as they have done, in support of the last war, made use of them in the same profitable manner as in the year 1755? had that money, for instance, been laid out in the improvement of their waste lands in Europe, whilst Dutch cash should have fought against French money, to determine how many European nations ought to be permitted to carry to North America, the goods of the other parts of the globe!

As to the full acquittal in money, real and effective, of the 2,000,000l. interest, due to Holland for her previous loan, it is improbable, impossible, and useless.

It is improbable, because Holland, being already overstocked with money, and carefully intent on getting rid of her surplusage in this particular, at the first opportunity of placing it with security, would still lower the price of it at home, were she to increase its mass; and that, on the contrary, whilst Holland takes in goods instead of money, she keeps up the interest of the one, by securing to herself a benefit upon the other.

It is impossible, because England importing bullion from Spain and Portugal, to the amount only of one third, and being very cautious, as observed before, not to import more than one third of what she owes to the Dutch, and this, not to pay them, but because this third answers sufficiently to the five articles of which I have spoken before;—England, then, cannot give to the Dutch what she has not received from another, and which she has not of her own.

It is useless, in fine, because all accounts whatever are balanced with more ease, in the age we live in, by bills of exchange, than with cash, and because the claims of Holland are more naturally paid off, by another debt due to Great Britain, for the produce of her exports to some other parts of Europe, from whence the Dutch carefully avoid, as much as possible, to import any thing but merchandise.

But would it not be better to owe nothing to foreign nations? For to this one point we ought to confine all the lamentations about Dutch creditors.

The above question, so apparently simple, so readily to be resolved in the affirmative, would grow perhaps more intricate, were it ushered in by some previous queries, which might permit us to foresee the effect of the national wish, when accomplished, if it could be obtained by the easiest answer that could be given; for the case, no doubt, is not to examine, whether it would not be better to have borrowed, without being obliged to return, than to pay an interest after the money has been borrowed. In the state of things, the question alluded to, to be fair and within the pale of common sense, must mean nothing more than this: Would it not be better, that the proprietors of the two millions interest, paid to a foreign nation, should make their residence in England? And in this case it leads us, by degrees, to the following query: Would it not be better, if all and every man in the world, who has money to spare, should come to spend it in London? Then indeed London would be a dear place to live in! And this is, methinks, the most dreaded effect arising from taxes. O ye, whose covetousness knows no limits but the bounds of the earth! do ye pretend to be the sole inhabitants thereof? Can ye draw off the capitalists of a country, without completing its ruin? Can ye effect its ruin, without losing both that portion which the produce of your soil secures to you in the produce of that nation’s industry, and the share which the produce of your industry has secured for you in those of her soil?