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Les diagrammes suivants iliustrent ia mAthode. ata tlure, ft 3 2X 1 2 3 1 2 3 4 5 6 fi-V-TT-' i^'-'VT'W^Tl A N E S S A* Y ON THE ' ACTUAL RESOURCES, FOR REESTABLISHING THE FINANCES O F GREAT BRITAIN, B V GEORGE CRAUFURD, Esij Truths 'would you teacl, or favt a finking land? All f tar, none aid you, and fenu underfiand. Pope's Eflay on Man» LONDON: PRINTED FOR J. DE3RETT, OPPOSITE BURLINGTON -HOUSE, PICCADILLY. M PCC LXXXV. [ Entered at ScatJoners-HalT. ] '•-'** ft.; ,«'J' ■* V,'> Jl^'i ■A^f^- '-"' ^■:v :^:."f%'i1$ ■-, '*->'-W.,«^js,es*->f*:rri^«i^^^ ..\:':-4-,|^tfe^,a.; - **»W*w4'(f^,V,.'. ;v-=-^i ni .•J"> :1 Vti'. '.»• 1 1'-^^i: ^^Hia ri^ rf V ■ , S/^ -> iii • ?ffv i >' ; *; ^li .i: INTRODUCTION. '{H>-r ' I', CT-. i^ "*'\ i'. / ,' *• The fubjefl of the following (heets has already exercifed the minds of many en- lightened individuals* ^M^n vr ^^^ I (hall, however^ wander froni the beaten tracks and announce a fyftem, diametrically oppofed to the received opinions, I may even fay prejudices of mankind* .^^ r, ^r fr^: I am fenflble to what cenfurcs I expofe myfelf by this feeming temerity, but, knowing the fituation of my country's finances, I (hould be wanting in duty to ,-^.mu ;^ f. a her, her, anJ to my own feelings, were I to fupprefs ideas, which may eventually prove ufeful. * T i i i If my ardour for the public fervice could have been cooled by the reception, which the firft iketch of this work met with from feveral of thofe perfons, to whom it was communicated, I (hould inftantly have laid down my pen, and have renounced every idea of the talk, which I. now impofe upon myfelf. . * ' Feeling, however, invariably, and in the ftrongeft manner, the truth of thofe prin- ciples in iinance, which I then announced, I attribute my want of fuccefs to the man- ner of ftatirig them, and think it incum- bent on me to eXert my powers of render- ing them more clear, and conclufive.. • ! ' r If I am fortunate enough to be approved of by the enlightened part of mankind, and if I fucceed in being ultimately of fer- vice to that community, of which I am a member. C 3 ] a member, I ihall feel myfelf amply, re* warded for my labour, and fully indemnified for the temporary vexations, which 1 muft naturally encounter. t^OVtj To Great- Britain alone I dedicate the refultof my enquiries. • ,- .* ' * i::> The fyilem which I am about to unfold, cannot be efFedtual, but under fuch a go- vernment as (he poffelTes. In defpotic States the private Intcreft of the Sovereign, or of liis Minifter, is too frequently different from that of the Pub- lic ; but in a free country, particularly in one, for which I write, individuals of every clafs promote their own prosperity, and contribute to that of the nation by the credit, which they grant, and by the taxes, which they fubmit to. J !U Hitherto it has been thought, that the moft effeflual means of encreafing the credit of Great-Britain, of ultimately promoting ' A 2 her her induftry, and extending her commerce. confifled in eftablifhing a fuiking fund by a furplus of taxes, and paying off gradually an incurred debt. • . , ,, ,,-.■■ ..,..■. ' '-■■ . ■. . y ' x I maintain on the contrary, that this tpinion is founded on error, and cannot be too foou renounced. The critical fituatipn, in which Great? Britain at prefent ftands, will indeed comr pel her to abandon all thoughts of a iinking fund : recourfe even to annual loans for the peace eftablifl- ment is become ne- ceflary, and will, in my opinion, contintie to be at all times expedient, notwithftand- ing that an incteafe of induftry, of internal confumption, and external commerce, (to be procured by making ufe of Iqans with* out new taxes, and by relieving the circu- lation of money,) may raife the produce of the exifting contributions to a level with ^hc annual exigencies of the flatc, v [ 5 ] ■ -■ '^ This Idea may at firft fight be thought paradoxical, but the probability of its being well-founded is apparent from a contrary iyftem having proved inefficient ; and it follows, that the adoption of another is now become indifpenfable. Some confolation will, however, te derived from knowing, that it is not the reimburfement of a capital borrowed, which obtains the confidence of monied men, and fecures public credit in a Nation like Great ]^ritain, but the increafe of faculty to pay the intereft, and the re- gularity obferved in the terms of its pay- ment. ':■ -fii- \.f'' .a ;*iv,' >,n..^: r-.ffv '4>- . .r* When a free people have a moral cer- tainty, that the intereft of the fums, fub- fcribed to the public fervicc, will never be dimini/hed, unlefs accompanied with an offer of reimburfement, ond that this inte- reft will always be forthcoming at the ftated periods, an unbounded confidence in the Public muft nati^rally enfue, be- cau(b # .m. ":..■ i ■?':'&'. \i:' 'S. ..:: .\:''!\ A'--^^ -y'.'^-).-' ^ -',.''■ .' •■ ,■ > • • ■ 1 1} ^''''^'^- caufe the (lability pf the annual revenue V^ill filway^ Support t^e intrinfic value of %\\e capital. I confider the national debt' as an exr crefcence on the body politic, and fo in** herent to the conftitution from its nature, thjat its growth even has prevented worfe diforders fron) taking place ; a» operation therefore to feduce it is impolitic, and dangerous, virhile cutting it off would at-r tack the principles of life. . 'V " ■•I-' <-. . Thie Remedy, which I fhajl propofe for putting a flop to the dangers, that threaten Great Britain, will no doubt have the effe£t of augmenting the (ize of this excre- fce^ce, but the body, to which it adheres, . will receive a much greater increafe of flreqgth for fupporting it, and finally be required to give a lefs quantity of nou- riihment for its exiftence, which can only terjninate yfith their mutual diilblution. , '^T ? J ' IS. ;- *i ^. f "i- '■ " * .i« #* > '•>-')'' . <•' I repeat, r t-r- [ 7 1 I repeat, therefore, that it is not the reimburfement of a capital, but the foli- dity, and regularity in the payment of the intereft, which produces public credit ia .Great' Britain, and that the ulb of this credit may, and ought to be fubftituted in- ftead of taxes, in order to pay the peace eftablifhment. I aflert moreover, that this fubftitution will increafe population, confumption, iu- duftry, and trade ; and of courfe aug- t ment the annuJkl produce of the remaining taxes to a much greater degree, than is necefiary on account of thefe additional loans. V \* ..*v^n:**5^«f' But thefe general ideas require to be fully inveftigated, and proved, which is the objed of the following fedions. f' ^ , '-^-'-^-Ji- r Parts, March lo, 1785. •«,.«•'•: ■*■ a-*.' ■ .'p'.g'-t'- AN I . ->"•:< . \} \ \ ... ' J|. V- 5» «' ^V) \^ Jl ..vi::.rr. r ., \ ,^•1 .'U t'.r '\'i; ':Cl\ ( -I*. f3wi b^liri ' ^ ?4*/'f- *<^^«lNl*^^^vi^i *?-i«*»*D^,j,#ib«ts. I Oflf, ' # ,J1 7;':\ 4 i i k .':- ^ f. felh>>ii bri.v . , *•'>,'•' / • f^ .i * l^'uS .♦l ,*. >'V !*^JllJi'j^i' 'f/'t? ■':"^':v' ^ n ! >. ,i*s -"« "»i> s, « ;?"f^'t ^^i". r' ^>V^i ' j^\av.1 • f /./t .\ K ^^ ' Z'' A »>, ■- : E S Sni A Y, ^r. (W ! <■ ^ft ■V'flSsl:.. fi ;f«v ;.. \t..'.;ji. . ' SECTION I. '" J-,. 1 , i- -.J -»l Cn i^ i?/VAe5 ^d State, and on Nationalf and' ,,. ; .^ Private Induftry, ,,^,.^.^,i ,, X H E true riches of a State confill in its greateft degree of ilidependance for every neceflary object, and in the dependance of other nations on it, for J)rocuring what their exigencies may require. ^ The fortunate aflembjage^ and proper combi- iiation of three fotts of riches, can alone produce the true riches of a State* Thefe three forts coHfifl: in the produflions 6f its foil, which are natural riches; in national in- duftry, which produces artificial riches; and in the quantity of exifting money, which confolidates the whole, and may be called riches of Convention, B The 1)1! i 'i;'t [ I^, ] The extent of true riches creates the political faculties or ftrength of a nation. This confifts principally in » the number of its inhabitants, who are fupported, and encreafed by Agriculture and Commerce. ' -^-^^■■*. -iVTJ»4v,->/V»l ^ CsJrtrtW'wv*'' •*-"'-.»^- '«;1 " Agriculture takes precedency, becaufe it affords the means of fubfiftence to more people, than thofe who cultivate, and of courfe encreafes po- pulation, the foundation of political (Irength. It requires, however, to be affifted by Com- merce, or that interchange of various articles which arifes from mutual wants, and which is promoted by Indullry. ' .; >'rj.:,:; ^^ •^:/| -rn :i4?>, .: jj; ,?^i:^^- fl.> ., s:*ciiii,.:i- li; gent, and fpur to commerce is the aflemblage of exertions, by which an indivi- dual fecures to himfclf whatever his wants ray re- quire, and multiplies his own enjoyments, by lay- ing other perfons under contribution* for thofe, which he procures to them. ,: That perfon, who combines with moll judg- ment his exertions, who is the mo(t fortunate in furnifhing the obje^s of enjoyments required by fociety, and who feizes with moll addrefs every ;.:; . circumdance, M clrcuiihftanrc, vhich time, place, and opinion may offer, pofTeflfes of courCe the mofl produf^ive fpe* ties of Induftry. "It owes its origin to Genius, flimulated by ne«* ctllity, and i« to trade what agility is to ftrength. , » The colle£lion of the induftrious exertioni of Individuals forms national induftry. i*;»i«4 W' ■"*'' *• The groundwork of both confiHs in the re* fources, which arife from the produflions of the Toil by means of their general ufe in fupplying the wants of all cciintries; in the local advantages, which- admit of thofe produftions being tranfport- ed with cafe from one place to another; in the more or lefs aptitude of the inhabitants to profit by thefe circumftances, and finally in the degree of forefight, which the government of a country dif- plays, and in tht protedlion, which it grants to individuals. — j\ v»il f i '' This forefight and proteQion confifl; in the knowledge of thofe objefts, which merit the molt tncn: agement, in the generous . manner of be- ftowing fuch fiimulus to produce them, and in ^he inviolable fecurity of all property. B2 Every I!; [ I? ] Evcty Rdtion ihould encourage induftiy to «i5rert itfelf principally on the produflions of its otvn , foil, and in giving the nioft ufeful^ and the moft variegated forms, becaufe that nation, which has the art of giving the greateft variety to its own produdtions, is no doubt the mod profitably i^i;« duftrious, and tht^ moft independent. ]i V' In no country is property more facredly iiccurcd, or every fpecies of indpllry more encouraged than in Qreat-Britain : nor are greater abilities to be found for the purpofe of difcuffing the intereil of the Nation, and for fuperintending public, and private induftry, than in both Houfcs of Parlia- xncnt, compofed of Men of every profeffion. < .,/ Nc Hilloify, like that of Great-Britain, afford^ examples of fuch generous encouragements, an^ of fuel? ^pj^ ^^^^f4f g^v?" to genius and abilities^ The exertions of individuals muft naturally be in proportion, and Great-Britain is amply repaid, by ^he excellence of her povernment, and by th« patriotic zeal, which animates the whole Empiie, for what Nature has refufed her in point of fitua- ^on, or produdipps, and bellowed on other countries. .vr-:^r? r; i\, ;o .v'i;;; :.; 5, Ji-UnVfli :>.i3 The m w r «3 ] . The encouragement given to Induftry (hould particularly have in view the means of improving the quality of every neceffary article of confump- tion, as alfo of facilitaning their produClion, and the mode of manufafluring them, for the purpofe of decreafing their price. h!5- The diminution of price will of courfe permit the purchafe of them by a greater number of In- dividuals, and increafe the national flrength ; be- CAufe the advantages derived to a State coniift in the greater confumption, which augments its ac- tual refources in finance, and, by encouraging greater produdlion, iticreafes t^e ftimulus to fur- ther population., ;- ,,;^ u.^. Jnv^aur:..,],^ |.^:^;^ Thofc people, who arc of opinion, that, by laying luxury only under contribution, an equi«. valent refource to ♦hat levi'.d on aiiicles of nc- ^cHity is to be procured, are much deceived. Fiftitious i^ants have certain bounds, which difcretion regulates, and which the generality of mankind do not pafs. They even renounce every idea of tliem, when iucompatibloi with their faculty of indulging in them. »;<, - ,... .. , ; .' ',;-. ., . , ; . ,....., Additional mr" !l 1'^ ;i '^ Additional contributions mud infallibly increa(« thdr price, and, caufing lefs confumption, de^T creafe the annual amount of tbofe, which alread)f ^ exifted. ..-.ft .. ..J' No refource is then left for the deficiency, but (hat of reverting to the objed jf neceffity. *• This only alternative is the more alarming, if thofe obje£ls of neceflity are overburthened with contfibutions, and may be compared to the opera- tion of bleeding a hnxiian body, already enervated. ' ■ ^Tt- * \/' •■ \ •'■■i ";i> ^l'?'^••V•. ->' sj;*>j;;r*v K >.< I conclude therefore, that private Induftry ihould be encouraged, and directed towards im- proving, as well as reducing in price every article of neceflity, and giving more comforts to a greatwr number of Individuals. £ V The increafe of population by thefe means is the fureft fign of perfe£lion in the meafures of every government, and a certain pledge of the accumulat- ing riches and profperity of a ftate. < .. ^ :■' • .'.,''•( .v». t-V U"'"; '"rtfilli^^i The import and export trades of a country are fo much conne6lcd with internal Induftry, that the inveflig*^t • ■ ■ ■ 1 \. v»i^. ' f ■ i ■"••* *5i. y •jl : . . . ■■'^';, -'-■V'X fe'*i; ''■*■ "'■'^ "*"•,'■•' ^i,i';;.. •>. ■■■•■« •*. ii.t,' ' ;-J»i * . f> '• -^^M y/ _l^^/ii .i.p,l r ^' '■; ' ^;,'"3.t JJ i"^^?. ■'..; . 1 ,'(!y ;.-;.<, /ri;iyi- r'j:-' :.^o.! - -luvy.' ,, 5 ^^..u^lCi ,ic -r" ■' ; ' • >i ! ^. • ..■ •>i,'ij..,j y oT. - .f, ■ ■ ,_,';-'K-. 'T* .■ .-- ^' 5Ai-n -atfe '> '', '■"!'- ■ •;:«it t i . V Li'i.i - t . ■-■- *-i ' . ^-^ : ,■ t. r . *" f^ ■" *^ ' i." ■.'' ,. ■ ■ , ■! - ^' 7" - SE ,, '■ \ "1 _ TlOX *-■?. :| 1 ,0n pUHe credit in generalt and tliM of^ Greot-^ '^•;mi!f'y^'^t'^^^^^^ in particular,. ^t, ••i'^''^l5»Si:i V oLil Kj credit may De conncierea as an eflential part of the political flrength of a nation, and is a flandard of the confidence, which indivi- duals have in the riches, and refources of a State* ■1 " ■ ■ ■ -"^ ^ «i.. This confequence is more or lefs extcnfive ac* cording to the abilities, and integrity of thofe, who direct the application of thefe refources, and what watc^ over the ititerefts of the public creditors. That Government, therefore, which unites pru- dence and foredght in its deliberations, where good~fatih is held moft facred, and where the public is of courfe moft fecured in their property, muft naturally obtain the greateft degree of credits tj'jvr :>.^,.t « ^-^ f SVrv ^ . ^ r.r J-.* : , The Bntiih Conftitution infures in a very emi- nent degree thefe advantages, becaufe the reins of Government are not held by one Pcrfon, or II [ '7 1 ■ , hy the fervants of his choice, but the whole Nation participates in the adminiflration of public afTairs through their reprefentatives in Parliament, over whom it watches, and to whom each indivi- dual may afpire to fucceed. By this fyftem private intereft, intrigue, party rage, and oppreffion, have lefs power, and pro- duce lefs bad confequences, while patriotifm, which {Simulates to public fervice, has a moil powerful afcendency ,]j^.l fir •'<•■„■ i" « «(,.> .■< Whenever the events of war, or national efta- blilhments, which create great expences, and pro- duce flow advantages, increafe the exigencies of a f^ate beyond its ufual revenue, the refources made ufe of for procuring the necefTary funds, are public loans. Thefe loans are preceded, accompanied, or fol- lowed, by taxes, or annual contributions, whofe produce is calculated to give the lenders fecurity for their intereft, and, in fome cafes, for the gra- dual repayment of their capital. ' " While thefe taxes, in addition to thofe levied for the ufual exigencies of the Rate, are ip propor-. tion to the number, and activity of the inhabitants^ t if '^^ w HI Ml Hi III' ■ I [ >8 1 as alfo to the exifting tnafs of ti^oney, and to the extent of its power in reprefenting In-^ iflry, and commerce, the foundation, on which the fccuricy of the lenders is built, becomes folid ; public con- fidence muft flourifb, and credit is certain, be- caufe the junflioo of the ^bove'm,entione4 c^.v^i^m- flances can alone facilitate every exchange, and, fix at a proper value every fpecies of property. The principle of contribution arifes from a power in each individual of gaiaing more by his indudry, than is necelTary (ox bis exigencies, ' The proteftion, which he receives from Govern- tnent, engages him to fubfcribe a part of fuch fur- plus to the fervice of the public, through whofe. means that is obtained. M Mi * II! i»l';|ni ii:il 'I 111!:! But the manner, in which fuch part ii at pre- fent levied, not only checks the accumulation of every individual's riches, but hurts alfo that of the whole community by the introduClioh of a forced circulation of money. v;j.' r 5 A too great extenfion of this forced circula- tion muft inevitably flrike at the root of popula- tion and induftry, while public credit will be fliaken to its foundation. ,^,, ^ . -T • •" ■ Th(^ I [ '9 ] . The adoption of principles which produce a contrary e(Fe£l will always create, and fecure, public confidence, the parent of credit, j^^j/nrnw^ The many wars fupportcd by Great Britain fincfi the revolution, have forced her to a repeated ufe of the expedient, which public loans ofl^r in every cafe of emergency. 4." Thefe accumulated loans form the prefent o^ tionaldebt. ,^t^;:M**^^■J «♦• • »i ■;<•■' wcm' .i.',^f>) a ti. •«(•;,•, Though the prodigious amount of this debt proves the excellence of her conflitution, and the extent of her refources, there can be no doubt, that the annual contributions for paying (he in- tereli, and for providing fuch a peace eftablifli* ment, as is necedfary for her defence, glory, and profperity, are increafed beyond her power of fupporting them, and that (he may foon lofe her credit from an unperceived error in its foundatioO, anr! a violation of the principles^ on which it cxifts. 't ''-'.»!,' .' '.>'; J(i,> I cannot here avoid announcing a truth, which I have difcovered in tue courfe of my inveftiga- tions, and which experience will perhaps too foon coqfirm, _, ■' ••'■-..i/i rv' ■."■ r-.J. -'• G 2 The i I: -U. \m M '! ;iNi I ill I, r • ''1 ! !!^ 2b [ 20 j The credit of Great Britain mufl: infallibly on* the firft outfet of a war receive a nioft violent ' ihock if her prefent fyftem of finance is per- (evered in. . i ;- The a£lual ambiint of interefl to ht paid oti the exifting debt is fo gt"eat, as to render it nc- r* cefTary to adopt a new one, for the peace eifla- ^" bliihmeiit. ■m^- "v ».».y.i»»i> if»K* -f■ :-^ ii^J'?' ',i{T Shall a nation, hovrever, be flopped in its pro- ' grefs to farther profperity by combaitirig with, or defending a phantom ? Paying off the national deljt is one of thofe proje£ls, which every perfon thinks cither im- prafticable, or itnprobable, bat they flill wifh to flatter themfelves, and vainly imagine, that the charm, [ 21 ] charm, by which this debt is fupported* c'ihGfts in the belief of a powM to extiugmfh it^:^^,)^' :^^^, Where is the man, who, having meditated on the amount of the national debt, the population of the country, and the quantity of exifting money, believes, that this debt can be much di- miniftied during the courfe of a long peace ? . » ^ ,, :^iiiyn,y • 1 may even add, Wh^rc is thfi mdnied man, who, having an intereft in the public funds, will demand, or wifh for a reimburfement, when the ftability of the annual revenue gives him the power of receiving his capital by a fale at the higheft poflible rate ? . ,; . f ? - ■- ■ = - The certainty of the annual income will always fupport the intrinlic value of the capital. The intrinfic value being preferved, the pro- prietor will always have the faculty of felling the revenue, and receiving the capital. ...,., What therefore can Intimidate a monied man^ from confiding his property to the ftate ? His private interefit will be gratified, while he has f ■ the fame time the fatisfaftioa of contri-_ buting to the public ^»»-vice. I 'I lii . ill '''i[i It would be an infult to the underfianding of tny re'xders were I to expatiate further on this idea, which prefents fuch advantageous cOnfe- quences. . •.'j .>• !il > i III ^Ti \ ■f ' I! ;i.: I If ; 1 infift therefore, and repeat, that, in the pre- fent lituation of Great Britain, her credit mud be fupported and regenerated by ftrengthening the faculty of paying the intcreft on the incurred debts, and on thofe intended to be made, the ne- ceffary confidence in which cannot be wanting, as the fequrity of the leaders will be made con- (picuOUS* ;■" " •.'•'^■•-•'♦«-' f '••■•-"-• -'-^^:^ ^^ 4*->»l •I ^: 1»<7=- » -''■■ i. -.4:;. . •: '■.;,, ;^^! i '., f ' " ■».'*■ ' •. J ■ ■ ( - * ■ ■ . \ . ^1 i SECTION n- .'.> '■;'■<;*. ':ao:> -;:uof, SECTION iiri 1,1* . :'i Jlu On real prop&ty, or capital and income. A CAPITAJ- h the aggregation of fcveral pro* ipertics. ,.. ^j^ii,: '■ ,-•- (>- ;'nr;;.v) , An income is the produftion of this aggrega- If ion in a limited time. • The earth, the fea, and ^heir produce, form the fubftance of ail real property. The induftry of mankind is the fpring, which gives the neccfliary motion to, and regulates thefe produ6tions. Money is the reprefentative fign, which confo- lidates every property by eflimating its value. The intrinfic value of thefe three parts requires their union, and they are even dependent on one another for producing an annual income. TJic It; [ U ] The facility of cftimating real property by the medium of money has occafioned the denomina- tion of capital being chiefly given to a certain number of thefe reprefentative figns, as anfwering to a certain quantity of other property, and for the fame reafon an income is eftimated by the greater or leffer quantity of money received in re- turn for, or as reprefenting any produ£lions in the fpace of a yean 5 A > ' The revolution of the four feafons, bringing to perfe6lion whatever the earth produces, has no doubt given rife to the limits of a year for fixing the income of every capital. This annual income forms the value of each fort of real property. 1 :■ a Mankind have indeed eflablifhed a tarif, or table of what each kind ought to produce in propoilion to the time employed, the care it demands, the rifle it runs, and the enjoyment it procures, as alfo in proportion to the exifting quantity of money in a Hate; but this tarif tho' founded on rational principles is fubjeft to great variations. Every property, when regulated by iadu flry, produces an annual augmentation or income ; but this this income bein^ defttned in p^rt for (,he exigencies of individuals, the fupcrfluity only t« converted into capital, which afterwards pro4uces another income. .Jl'Ji'-.} '■ All property noay therefore be wnMered as f perpetually growing chain of c$^pit?^l ar** incocry:. forged, and linked together with the lubftanti^l quality.of moqey, ft«d by the i^daC^riov^s eJ^fitjpn* of iudividu^U* National induftry has been reprefentcd as a part of the riches of a (late, and confidered in the ab- ilra£l it forms the artificial riches of an individual, being to him a capital, which produces an income in proportion to hjs exertions. The income of induilry is always dependent on the interelt of money, as is alfo that of natural riches, or pto^udioni of the foil, Thefe are however entitled to lefs income than the artificial riches of an individual, which require more care, are lefs foUd, ^r^d termii^ate with the life of the poirelTor. : Mankind therefore by their induftry augment, and^modify* every produdion turning therrr fuc- ceflively into income, and capital. D Thi» [ ^6 -i This oceafions a perpetual expanfion, and con- tra6lion, in the property of individuals, which i^ performed by the reprefentative fign. ' ' ' ' The agency of this lign conftitutes its circula- tion, whofe operations, effe€ts, and refources re* quire to be explained. , *' ■'■ .. *4 ■ «f This is the fubjeO; of the following feClion; i.-j i< A 'if*.' en* 'i.»r >;>,]; ; ji.' '-'<.' r : 1o >•; .— 1-, • ' ;• ."'^ ■ , = •■<"; i. , , j -. , •^'^ 11 ( -^i^'V::': : '4'- ' "■' '■ ^ .t-j;v..|^..: .,:^.;_ "'• t-u^j ivn;- .-3 ; < .1 . ■• . •• f I J ». . . SECTION ^: [ *7 31 i SECTION IV, • •'■■' ^ ■._._•.., ... . '^ •■ ■ 1 On the circulation of money* ^. : . ■ ! ■ ■ . ' ' • ...■ ^ ■,'-■*• '.f HE embarrafTments, and the Ibfs of time, to vrhich trade by barter was expofed, induced all nations to adopt a medium of exchange, for fa- cilitating every transfer of property, by ftating its valt|e, and paying its amount. < This medium of exchange was accordingly placed in the precious metals, to which forms were given, for the purpofe of facilitating their circulation, Each fovereign, and each ftate, put their par- ticular {lamp on thefe forms, and thereby certified their value. The precious metals fo formed, and fo ilamped, are called coins« D2 The If ' I i8 ] The intereft of every nation demands, that the value of thefe coins ihould approach to that, tmiverfally allowed to the metals in their natural (late, in order to prevent a lofs in their tranfadlions with other countries. T, It mufl: alfo be obferred, that thefe coins have no other value than by their currency in going from hand to hand, becaufe having been edablilhed asf a ndediuhi of exchange, the not applying them to that ufe annihilates their faculty, and reduces them to a (late of nature* !■; It I fi I Money, however, confidered as a compoHtion of the precious metals, is an object of commerce, ^hich has its price. ' ' -'■ This price is regulated by the quantity confumcd through luxury, and by what is put into a flate of circulation. .S ■ • r ^'^ '■ -; , :vt ;.:;,.; . . The price of each kind, as rcprefenting one ano- ther, d^ends on their comparative quantities over and above the price as merchandize. -' If there exifts more gold than filver, the latter Tifes in proportion ; if on the contrary the former is in Ms abundance, it becomes dearer* Money, m .1 .1 '.I [ 29 ] Money, confidered as a reprefentative lign, is a mercenary agent, to whom a recompenfe mud be given. .' ' '■' r^ ■ . v"^^'-""-';^' ''■■•' - ' ■ "■■ ' This recompenfe is called intereft or annual in- come. ■ .♦ ..-i . The abundance and competition between thefc mercenary agents occafion their procuring lefs in- come, and of courfe intereftofmoney rifes in pro- portion to their fcarcity. There cxifts in every country a certain quantity ofthefe coins irregularly, and difproportionably, difperiied amongll the inhabitants. Labor and induftry re£l;fy this unequal diflri- bution, and procure to all the objeds of ne* ceffity. '<'' ■,'■ iU ..^ Thefe wants being fatisfied, thofe individuals who have a fuperfluity exchange it for enjoy- ments, while thofe who have none endeavour to draw it to themfelves by producing, and pro- curing, through their indudry, the comforts de- manded. The [ 3° ]. The fteceflary wants, therefore, and the mutual dependance of individuals for fatisfying them, create a continual interchange of properly. . Thefe exchanges occafion the perpetual transfet of the reprefentative figns from one hand to ano* ther^ which is called circulation. Nature, the parent of all earthly things, in eftablifhing this mutual dependance, founded the circulation of money. Every wife government, therefore, ought to follow, and fccond thefe parental proceedings, by facilitating, as much as polfible, its natural pro- penfity. The circulating coin, which is difperfed amohgtl the individuals of a ftate, fervcs for the purpofe of buying, and felling real property, and for pro- ducing, arid procuring, every objefl of confump- tion. Commerce and induflry arc kept in motion, by thefe two operations, and ar^ the refervoir, and condudors of the circiilalins; mafs of reprcfcnta- tive figns. Their ^'•li ■ [ 3« 3 Their free, and regular paflage through diDPcrcnt channels, as well as the prcfervation of their re* produftive quality, caufe an incieafc of flrength in every part of the body politic. This vivifying circulation of money may be juHly compared to that of the blood in the hu,* man frame. :.c. The purchafc and fale, or expanfion and con- traftion of rr.al property, refemble the operations of the heart, from which the blood takes its depar- ture, and to which, after pervading every part of the animal ceconomy it inceffantly returns. ^''^'• ^•».'* -• To complete this fimile, which muft offer a very ftriking refemblance to every refle£ling mind, I have to obferve, that intereft of money is the pulfe, wbofe beating announces either health or diforder. -■M-^.^i t'^i-'^'r^-fl r'-n''^iTy: /. > - ■m r/f * "Whenever the regularity in the circulation of money is deftroyed by the interference of govern- ment, a more powerful agent reflores it, but the political frame receives at the fame time a fliock, and a diminutipn of flrength muft infatlibJy cnfue. Thus, !'F # li ;ii N ^:. 'v-* f ;. ! I m I 3^' 1 « Thus, therefore, when by an ill combined opcr^ ation in finance the circulating medium is carried in too great quantities to one part of the body, the other part mud naturally fuffer from its aMence| and the whole become* difordered..*^ The cjnfequence of this is viHble in the in* creafed interefl of money, which demands every attention from governments The intereft of money, however, becoming higher, nature points out the remedy to be in leGi production and lefs confumption, and unlefs the derangement is carried beyond the pQwer$ pf re* covery, Che will always prevail. -r Jf it be fuppofed that the quicker civculation in ^^ne part, produces an equivalent for the languor ,jlu anqtjher part, I have to obferve that this would M taking, for a iign of healthj^ the temporary, 9nd eonvul Ave exertions, which a fever produces, and which are the forerunners of cnfuiog weak- * ^^SThcnever the intereft of mopey increaies, a chain of inconveniences is produced^ which I (hall ]iereafter fully explain, and whli^ ends in the di- minilhed .n' >>• 'J^:.J^r. --A V.:- -ifV' II 33 ] minlllied confumption of every article of neceHity, attacking thus the fource of future population and profpcrity. »u ^.<'r ^t.-x^jiwuvm ^f ^-ty^jv^t (_« : ». - It becomes therefore an eflenttal principle in finance to avoid every thing which can contribute to the rifing of intered, and to fupport as much as pofiible the natural circulation of money as well as its generative quality. » Ji- lt follows alfo from thefe principles, that th* circulatic g coin of a country (hould be kept in conftant motion through the channels, which com- merce and indudry furniOi ; that fuffering any part of it to be hoarded up in the national treafury is the Ggn of an ill-informed government, and tliat fuch part well deferves the namt of Dead-Jlock, which is generally bedowed upon it. ' M It mud further be acknowledged a faife prin- ciple to accelerate its circulation in one part, and to check it in another, and finally, that the care oC every government Ihould be direfied towards mak- ing it flow regularly through every part of the body, for the purpofe of giving a due proportion of its falutary influence. t 3^ } I have already tnCAttoncd, that (;he natural cirr qulati^n of money augments (be pxofperky «f a Hate by increafing induftry a$ writ as coofumption, and population i but as it might be feared that bad eGfed;s would eveprerplt frbm this eircum- ftance, without a propoi^tionable increafe in the reprej^nt^tiye ligns, it .becomes nec^lTary . to ob- fei^vei ti^t tbff balanc^e of foreign Commerce, pro- duces not only the p incipal fpur to increafing induftry, but gives alfo the faculty of fupport- Enlightened government^ add to thofe means by working their mines, or by the introdudion of paper monejr*;,. t ji^-j -i c^-'b^^, ;?$.•:- :? ■ oj .* ^ ■ -■•■■] This la(l refource is no doubt very ingenious, but the permanency of its ufe depends on the foli- dity of its principles, and in proportion as it is ex- tended, its fecurity is weakened, and it is eafily deftio^d, in the fame manner as the phyfical mat- ter, of which that money is compofed. , . . . r, . Fiance in the time of Law, and America during the late revolution, experienced the bad cffefts of its immoderate ufe. *:::^ri.i.':i -'-^i^'. :i^i-iu ■■■'. f»-i J' "';»'; •«»•' ; > ' ■ ■V • " V •, On annual Citntrihviions, or taxes, * " ' A i, ■ A N N U A L contribution? are to be conGdered f:€>llc€livclyi and particularly. ^ vi? a;*'^^ ^i^^ ■ Jn the firfl point of view, they may be defined as the means through whi^ government makes each individual contribute to the expences of a ftate, by raifing money on cyery article produced and conlumed. ' '^''■'- ^!^'>^^^>^ y:'^ori .V J\^ H ' 4 . ) i V-' 5 ■ ' This manner of making each individual contri- t)ute to the exigenries of a date may be traced to "" 1:1 [ 37 ] • It is a natural right of governors, in confe- quence of the expences incurred by protefling the governed, and mud originally have been coiliefled in kind.^ah i^:f.' •■• 3J^^i-ti^i'f^;f#v4#t:>y -{dh I .fi./> fi'-f" ifs.i •*{ (. ffyi iCjri I. ~ f«4f'rt 'V* f Its principle was then fimple and juft, while it was at the fame time founded in wlfdom, and lalutary in its effe6ls. ''')'') fD'l i. .;i: J/- .jsr-Vi,: This claufe in the focial contrail made amongfl: mankind would llill have merited the appellation of a durable fupport to all nations, had not an u.bafe which vitiates the mod prudent e(labli(h' ments crept into the whole fyllem, and converted this falutary and beneficent refource into a mod violent and corrofive poifon both for a ftate, and tor individuals. r!-'i?M- ,*Hi<:r;;V ct -v-VvvJl '/.-^w'-vt I fhall hereafter Osew by what chain of event^ this change in its quality took place, and in what manner it ikras deprived of the advantage, which becrn* natural to it, of forming a bafis of fup»> pc r ^j being made ufe of as the fupport itfelf. , ?)7 ^.r.i.u^,^ ,>■ ' J:it', • uTliis unfortunate error has been propagated to this .moment, by mankind's having attended to fome dcfultory good effecis, without enquiring into their origin, and how rrtuch they were cur- tailed « ( iliiiiii \ [ 38 J tailed in iheir extent by the adoption of thii im* perfefi (yftem. 'r '^'l >•»' ?.T,:vi:\-'-> m!! io ^on^ .". Any government therefore, which applies taxes as a remedy to annihilate thofe, which exiH*, is nouriftiing a fatal error, and it is evidently be- come expedient for the recovery of every depreffed ilate not only to defift from iaying on any more, but alfo if pofTible, to fupprefs a part of thofe which are adlually levied, in the fame manner as humanity requires, that a man, bending under too great a weight . elieved from a part of his burthen^ in order to i> duce in him the faculty of fupporting the remainder with eafe, a sq5»t» ^tia^ii The truth, which I here difclofe is applicable to many ftates in Europe, but having' principally confidered it with refpeft to Great-Biitain, thele pages are intended for her convidtion;*' • 'HM^r^ 5i I U in difcovering fuch 2 truth, I had tmt at the fame time enjoyed the fatisfa6lion of perceiving the means to remedy the inconveniences, and to avoid the dangers, which I am going to unveil, my thoughts on the fubjed; ^ould have remained con- cealed from the public eye; but the fignal, which 1 piojxDfe to hold out, as a warning of being on the • «• • - — •■ .-■ 1H, t 39 ] brink of a. precipice, will ilfo poiot out the path for avoiding it. .«■;:.>. ' . ; -r ■■-.■. ) The progreffive aggrandifement of the Hate, and the increafed price of every fervice, (from the adoption of an erroneous principle in finance,) having multiplied the annual wants of the public, fuch contributions, as the obje«fts of i|ece(lity pre-^ fented, became douMy infufficient. |^,.^ H' vitJ)^ iwi ' The governors of the Exch -quer cxercifed there- fore their power, and their genius, on every article of confumption, whether of neceffity, of com* merce, or of luxury.' a^^H.* t4^!?,ij:i*^.«,\;.^f?!'s;'i^u4-;qrr A fallacious mode therefore of railing what was wanted for the public fervice, as well as the man- - ner in which it has often been fquandered, render^* ed it conflantly neceflary to apply for new ex- pedients : and in this manner has been perpetuated through every fucceffive adminiftratioo, the erro- neous, the de(lru6live principle, that every new* want demanded a new contribution, -j,. ft >'. 4/>r{*^fn ? I *^ * r-r I Yet in fpite of the great variety, atid the trou- blefome form of many taxes, which are deemed neceflary, thofe perfons, who from time to time arc cntmfted with the adminiftration of public affairs. i'!/'J r i'l ii f.^i atfatrs, 'do not appear fufficiently alarmtd, either by the knowledge of their efiefls, or by the doubt of a poffibility to create any more. .<*^w*t>j;? -^it^ >!i(^ ^ i^^^'Af -^ * Every thing taxable is at prefent taxed, beyond its proper bounds. -^„ .. .. . y- ^ -M ^■y(i'i,fffx^4" ,^x,n The neceflary objcfts of confumption cannot be further toached without attacking population; ihofe of comir<<:rce without difcouraging induftry ; and thofe of luxury, which are tr -, preferred as belonging to the ricji> are burtk aed as much as they will admit of. ' ^.i '^iii^ww, ^'^'^'-''^mc^-' v •^• - •f " ■' ' • , , ■ • Luxury requires to be treated with delicacy, and, when purfued by the Exchequer, like Pro- teus in the fable, endeavours by taking various forms to effectuate anefcape. I (late therefore, and have proved, that it would be difficult to invent new taxes ; I add alfo, that it wquld be dangerous to adopt them on account of rii)'»Ba the [ 41 ] the effects, which naturallv refult in the prefent {late of Great Britain. as as In order to feel with more force, the truth of this alTertion, my readers mud take into confider- ation the (late of the nation, as reported to the Houfe of Commons. They muft alfo be fully convinced of the prin- ciplc> that tvtry new tax infallibly viciates the cir- culation of money, and (if not relieved by a pro- portionable augmentation of figns from induftry, or from the purchafe of public funds by foreigners,) turns it out of its ufual ceurfe, raifes the intereft, and occafions a dimini(hed produ£lion and con- fumption. ... In faA, the moment a new tax is ellabliflied» the contributing article is raifed in price above the fum levied. The money circulating for that'purpofe cannot of courfe procure, or reprefent, the fame quantity^ and whatever is wanted muH be taken from thofe figns, which tranfa6l the bufinefs of purchafe and fale of fuch property as gives an annual income. V ., 'I . . .•..,,■ ;fVf, ,i./-- ' Tfae 1:1 r 4i 1 The diminution of their number naturally aug- tnents their pay, and this increafe in the intered of mor^v i-iCi in i«:s turn the price of every kind of i^d'Mtry, v ^lieh muft again be provided for, by ac i'tional reprefentative figns. In this manner do thefc two never failing prin- ciples, excite one another by emulation, and ferve as a mutual vehicFe for railing their value, which would be carried to an indefinable length, if the etjuihbrium was not reftored by the violence of the difdrder. The >remcdy, which reftores this equilibrium, is a dirninifhed prodtt6iion and confumption, to which mankind are coinpelled by the high intereft of money, and which returns a certain quafitity of figns to their original duty. This confequencc reduces the produce of the new tax to little more than what would have been found by the natural increafe, as well as by what is loft in the old. . The new tax therefore does not procure the rc- fource wanted, and exterminates alfo what a con- trary fyftem would have produced, giving at the fame time a vioknt fliock to the ft ate. This [ 43 ] This Ihock and its cffe£ls muft naturally derange the powers of the political body, as well as its organifation, and by frequent repetition, comploat *t laft its dertru6lion. To this erroneous mode of calculating the na- tural powers of exertion in a (late, by not con- fidering the influence of taxes on the circulation of money, may be added the charge of colle£lion, b^ which the Exchequer is no ways benefited, as aKb the frauds committed, which neither relieves the (late, nor the confumers'of the article taxed, and is only profitable to fome daring adventurers. ' • - ■'-.."'■*',■ ' ';; -i-.i ill, ■■■■■■ , : . .; I mufi alfo obferve, that frauds increafe with taxes, and are encouraged in proportion as taxes are high. The confequences of all thefe principles are, that exterior commerce muft fuffer and decay, while internal induftry over-burthened, and weighed down in its faculties, muft languifli, and be checked in its fprings, and in its combinations. j^fl The great machine, which inceflTantly turns in- come into capital, and capital into income, will mov^ more heavily, the indigent clafs of people F « will ■■■ I i [ U ] will augment, and a more general emigration muft cnfue. Thcfe dreadful fymptoms have always been the forerunners, and have ever indicated the approach- ing diflblution of a ilate. < •" ^- ..-;-. •■ • . It appears therefore incontrovertibly, that the levying of new taxes is an unneceffary, as wall as a dangerous expedient, and that if any deficiency in the wanted revenue exiQs another refource mud be adopted. Public loans prefent, themfelves naturally in place of taxes, but their quality muft bie enquired intOj before their fuperiority is acknowledged. SECTION [ 45 ] ")'. I , SECTION VI. 'f >i \t K- { ' :. On public leans. V -,' ?'.a'' Jx. Public loan is the anticipation of the future revenues of a ftate, which is rendered neceflary by its immediate exigencies. yj n »> * The fubfcribers to thefe loans confcnt to wait their reimburfement in confideration of an annual allowance, and often alienate the fum wanted on the aifurance of a limited or perpetual annuity, founded on good grounds of fecurity, and regular rity in the terms of its payment. . Confidence is the eflential 1: : ■ft 11 ii. 11 [ 48 ] Thefe confequences could not be hid from the eyci of money lenders, and their confidence in ;he public dimilhed, NecefTUy then called for the adoption of life rents, of annuities for a fixed term of years, and of lotteries, in order to attradt the avarice of man- kind by offering a fuperior chance to each fortu- nate individual. The two fcrrrer modes of raifing money, how- ever conflitutc in fadt expenfive reimburfements, and are not fo advantageous to a ftate as repre- fented by tbofe, who adopt them ; they indeed fatisfy for a time the public wants, bat they pre- pare a/; the fame time an increafing expence. In reading the hiftory of the national debt of Great Britain, I perceive Ihc underwent the com- mon fate of all nations in her firfl anticipa- tions ; but the fuperior form of her government furniounted every inconvenience, and (he at laft adopted wifer principles in finance- than any other nation. The moH; mater-al, though imperfeft, improve- ment was that of creating taxes for the intereft of publie t 49 1 publfc loans only, without any view to their reim- burfement* . re I muO: at lead prefume, that this principle was intended by the name i^f perpetual annuities, -which was then given to them. I am ho<(rever ignorant, if the idea of pJlying oflT the national debt was conKidered as chimerical, un- neccffary, and impolitic, and if the Phantom only was allowed to fubfill out of refpefl to z: icient pre- judices, or whether from not invefligating this mat- ter the projeft was ferioufly intended. But I fee that in the year 1716 Parliament cn- a6led, that the aggregate and accumulating fur- pluir>is fhould be confecrated to tnat purpofe. An attempt to carry this plan into execution has alfb been tried during each interval of peace. The infufficiency of the means, procured by this refource, might, however, have demonftrated the abfurdity of the projeft, and we have to lament the infatuation of thofe, who could not read its fentence of condemnation in the (latement of ifs progrefs. G It rr/"^nr*v>fi^ — -^ - i 50 ] It is not a part of my duty to explain by what fort of reafoning the nation Hill amufes itfelf in be- lieving, and attempting, what experience in al- ternate periods of peace, and war, renders incre- dible and impradlicable. i I beg leave therefore to refer my readers to what I have faid on that fubjefl in the introduction to this work, and Ihall proceed to ihew how public loans may yet fupply the urgent wants, and in- creafing exnences of Great Britain from the nature of her government, and in defiance of the adtuat flate of her finances. I think it fuperfluous to obferve, that the in- tered of public loans fhould be lower than the in- come from any other objeft, to which money is employed, becaufe the folidity ©f the intereft, and the certainty, as well as facility to obtain it, when due, muft fecure an eHential preference. The indications, of the credit, and the profperltr, oF a Hate may be found in its public loans by at- tending to the intereft granted, as well as to the natural, and eafy manner of providing it. V ' In acniitting this principle, which I confider as incontrov*. )le, the dread and anxiety, with which [ 5' 1 which government opens every budget, and the very high intereft paid on every loan, muft con- firm the fad truth already announced, that the ftate is declining, and that the profperity of the nation is attacked in its vital parts. The prefent apparent inefficacy of public loans muft, however, be afcribed to the original error of thofe perfons, who adopted them, and who by unneceffarily joining thetn at firft with a tax for the repayment of the capital, and afterwards for their intereft only, viciated not only their nature, but rendered them alfo precarious in their utility, and alarming in their effe^s. To this ill combined junflion may be attributed the deficiencies, which Parliament is conftantly called upon to provide for, the augmentation of the public expences, the confequently morr apid increafe of the national debt, and the gradL ai rife of intereft, which have been the general, and im- mediate, confcquences of al| public loans. Minifters have alfo been in fome degree unjuHly charged with want of oeconoTiy, and with negle£t in their duty, as the evils, attributed to their con- ckx£l, arofe chiefly from the general opinion, that }t v^as neceifary to levy new contributions, and not C 2 from i I < i I m4 , iii ^. [ 5* ] from the particular quality of the refource de- manded. The choice of proper objeSs for taxation pro^ duces no doubt fecondary confequences by making their cfFetls. more or lefs fenfibly felt, in rhe fame manner as different kinds of food, taken by a fick perfon, raife or keep under the fev^er, which at- tends the diforder. , * '. ■ . - - . ' - ; i ? . * . . i -. - If any man accufes me of placing the finances of Great Britain in too gloomy a fitualion, and flat- ters himfclf with the dangers being exaggerated, I mult refer him to the reports of the commiflioners of accounts. The truth of the aflertions, and the folidity of the reafoning, contained in thofe reports, created in my mind the firft idea of attempting to difcover a radical cure for the diforders, which they de» {bribe* -,.... .".; •.• The unaccountable indifference, with which the public receives fuch alarming truths, ftrikes me vith aftonifhment, but I am not difcou raged from hoping, that any plan, which appears calculated to benefit the nation, will meet with a fair, and liberal, dilcuflion. By [ S3 ] By comparing the (ituatlon of our finances la the year 1776 with that arifing after the budget of 1783, and, which appears by the fums voted in the year 1784, the fatal efiFe£lsof new taxes on the pre-exifting revenue, as well as the mediocrity of the produce of thofe ne^ taxes, will be feniibly felt, and occafion infinite regret for the enormous Ipad v.'ith which the nation has been opprefled. - The fupplies of 1 784 fhow, that at that period the taxes created before the year 1776 produced jC.i,4CO,ooo per annum lefs. . , , They alfo difcover, that thofe created during the war, including the augmentation in the malt and land taxes, ought to have produced /'.4,8oo,ooo per annum, while their real amount did not ex- ceed £.3,400,000. .-^.,-^, :,,,.,; ,n u By dedu£ling therefore from this lad reality the diminution of ;£.i;400,00Q in the old revenue, theadditional refource arifing to the ftate is only two millions. ).lyV. Thefe two millions have alfo been purchafed by very great facrifices, and no perfon can on mature confideration heiitate to conclude, that the value obtained wjTfwrm^^^nf^r-^n'^^mir C 54 1 obtained is by mucb too fm^U to juAify tbe incon- vcmences. ,/'.." What will however be faid ? when further re- flection points out, that thefe new taxes occafioned the intereft of the loans, #hich were made, to rife gradually above two per cent per annum: that they alfo increafed very confiderably every year the public expences, and that independent of the j£. 1,400,000 lofl in thn old revenue, an annual in- creafe of £.150,000, which arofe in the finking fund from accumulating indufl;ry before the war was, by means of this fyftem of railing new con- tributions, cut oflF at its fource. ■ u / Had they been deHfied from we may prefume,^ that the accumulating quality of induftry by repro- duction, during eight years, would have confider- ably augmented that progreffive increafe ; but in Hating it only at jf. 150,000 per annum, an addi- tional force of ;f. 1,200,000 has been deftroyed, and may with juftice be added to t{ie chapter of our lofles. I ma/ alfo add the check given to public credit by the notorious infufficiency of the means adopt- 4:d{ the injury done to induftry and to interior, as well a exterior, commerce by deranging the circulatioq T!?T ^fffmfim'r'nrT^fmmrir [ 55 ] circulation of money, and by diminifliing the pro* dudion, and the confumption of every article. ;< .Hi.' i:-'- o The bad confequences evidently exceed the good e(Fe£ls produced, which mud remove all doubts, and confirm in the ftronged manner that the lydem purfued was erroneous. But let us not deceive ourfelves by imagining, that the progrcfs of the evil is ftopt. The aflual ftate of peace may prevent all the bad effefts from being felt, but this fituation can only be compared to the flumbers of the lick, which deaden their pains, while the firfl; extraor- dinary event, which difturbs that tranquihty, will produce a violent commotion, and caufe the evil to augment more rapidly, until that fatal period, when the poifon, which the ftate has from time to time been imbibing, Ihall have fo far corrupted the whole mafs, as to deftroy the neceffary functions of the body, and produce the mod dreadful fitu- ation. m m After having thus ftated the fatal quality of public loans, when accompanied by new taxes, I muft in order to comfirm my opinion on this fub- je6l, as well as to dilTipate every doubt, and, to carry [ r 56 ] pxny further convi£lion into the mind of every unprejudiced man, exauJne the quality of public loans, when difencumbered from this dreadful companion, and Ihow the enlivening pi£iure of that refource in this new point of view. I mud admit, that they are evils, which the wants of a ftate render neceffary ; but they may be fo combined as not to give rife to an additional burthen. To produce the greateft advantages, ••'hich loans are capable of, they ought to give au additional force for vivifying, and increafing that, which al- ready exilled in the ftate. This additional force may be propagated through public, as wetl as private loans, if employed in promoting induftry, becaufe induftry gives more income than intereft of money. f ublic loans therefore, when made ufe of for the fupport of a ftate, without a new tax being levied, do not raife the price of any objeft of con- fumption, further than is neceflary for the encour- agement to produce more ; nor do they tend to a general increafe in the price of labor, or in a di- minifhed coxifumption of various articles, which are TM [ 57 3 are the confequences of raiting a contribution on any objeft of neceffity. The money obtained is on the contrary difperfed without diflBculty through every channel, which induAry, and commerce, offer ; aflids in creating new incomes, as well as new capitals ; and being fuppoited therein by the annual balance, or in- creafe of reprefentative figns, its value receives no material augmentation, its power invigorates every neceflary fundion, and each part of the body fruc- tifies, while the dreary fymptoms of diftrefs, arifing to individuals from a flate of war, are in fome degree mitigated by national abundance, and pro* fperity. But thefc efFefls will be further explained in the following fe£lion, in which the influence of loans, and of taxes, on the circulation of money will be more amply treated of, and the natural as well as forced paffage of the reprefentative C^ is through induftry explained. n SECTION [ 58 ] '.■I ., i ■i/.-t'"'. Jf., ; ; '^ SECTION vir. ■' 0;i ifie e^c^os, which arife in the circulation of nicnfjl .. . , .- from taxes and from toaiu. I'fc^' t Jl HE circulation of money has been reprcfented as the principle of h'fc in a ftate, in the fame man- ner as the circulation of the blood is the principle of human exiftence. The touch-ftone, therefore, for tryiug the means vhich may be propofed towards fupporting, or rc- rovering the vigor of a nation, mud be the con- neclion of thofe means with that circulation, as well as their influence on it. Every ftatefman, who wifhes to be fully afiTured of the efficacy of any plan, mufl of conrfe examine if it tends to facilitate, to turn out of its natural rourfe, or to obQiuCt the circulation of the rcpre- fentativc figns. The [ 59 1 The principle I am edablilhing, and the means I propofe, have not I believe hitherto been (iig- ^uefted by any perfon : but I flatter myfclf that %yhat has preceded this fc6lion will infpire my leaders with fome degree of confidence refpefling the one and the other ; and they cannot with any fort of juftice refuL their concurrence to my fenti- mcnts, if with this principle I explain all thofe phe- jiomena, which have already happened, and which XDAy yet happen to Great Britain ; becaufe the doctrine of her relloration can only arife from a peife6l knowledge of what has been detrimental to her. t, • j — , m I have already explained the general principles of circulation in the reprefentative figns, but I have referved to m-^felf a further examination of them after having treated of taxes, and of loans. The diflPerent parts of this fyftem are fo inti- mately conneded, that the placing of them in one Jingle point of view, 3nd ftiewing at once their general, as well as their particular, conne6li. n with one asother wouH no doubt be very defirablc; but fuch an attempt mull dellroy the riecelTary perfpi- cuity of my worlrby extending, and dividing, the attention on a fubjedr, which in its nature is fufii- citijtly complicated and abllrufe. H 2 IfhaU ifi': %■ I 60 ] 1 Ihall therefore imitate a painter, who is ex- ecuting a grjat pi£luve, and who after flcetching out his defign, works at different parts of it one after the other, alternatively leaving and returning to each in proportion as the general perfe£lion, and the harmony of compofition may require. The reprefentative figns follow naturally im- mutable laws in their a6lion, and readion, by being inceffantly attra6led to the great objcfl o reprefenting real property, and from thence re- pelled into every channel of indudry and com- merce, in the fame manner as the blood, to which it has been compared, returns to the heart, and is again repelled into the arteries, and veins of the human frame. The fame principles of equilibrium, freedom of circulation, and nutritive attra6lion, which are known to exift in the animal ceconomy, reign over thefe reprefentative figns in the moral conftitution of a ftate. While they follow thefe principles their circu- lation is natural ; when they deviate from* them, it becomes forced ; and in this cafe the ftate is ne* coiarily afFeQed with a diforder in fome part* The 'fi ' Ut [ 6i ] . The natural circulation of money may be faid to confifl in its free and fpontaneous communica* tiun for exchanging every thing wanted towards produQion, and reprodu£lion, of income, and of capital, as well as in its regular motion througb . ' I (hall therefore only mention, that the conffi- quences are. numberlefs, but I muft at the fame lime not emit to obferve, that the augmentation uf price is never in the exact proportion of the lax levied, but always fuperior to it, becaufe in- vludry, in retaliating on the confumers the injury done to it hy the Exchequer, exatts mjre than it; pays, .[ 63 ] pnys, as an Indemnification for di/burfing the con- tiibution. • •- '- ' ■ ' i This manjier of CJ^lTulating is afterwards pro- pagated through every obje6l, which that tax raifes in price by fecondary means, and adds intereft oti intereft, evil on evil in the g-*nsral diforder. It will be aflced, how a tax viciates the circula* tion of money. I anfwer ; Jbecaufe it increafes Lie natural price of every objeft, and at the fame time extinguiflies the powers of reproduftion in the reprefentativc figns employed to that purpofe. Each obje6l has in the fcale of wants an intrinfic value, which a general agreement gives to it; that value has gradations which particular circumfliances produce, but which are ingrafted with its nature. As long as that value, generally agreed on, i« retained to every obje6t, the circulation of money is natural and Tee ; the road of exchange is always plain arid eafy ; each article goes through its na- tural procefs with facility, and each individual may prevent his being impofed upon in whatever he acquires or difpofcs of. But r 6* J But when government interferes by taxing any article, an ideal as well as an exaggerated price it added to it by authority, and it receives at that moment an indelible ftain, with whif:h it circu- lates. :-. . This ftain, which is imprinted with force, generates the virulent matter that attacks the con- «.ributing objef):, and viciates at the fame time thofe articles which it touches in its paffage, becaufe every object participates according to its degree of coa- ta6l with the infefled one; and in this manner is propogated the epidemical diftemper, which produces fuch alarming and terrible confequences. But to return to the language of finance, let me obferve, that if the increafing intereft of money, occafioned by this derangement, Ihould be checked through an efiFort of nature to reftore the equili- brium by lefs produftion and lefs confumption, or by an increafe of the reprefentative iigns, the value, at which the taxed article and all its connexions are rated, remains ftill above its natural price. Ifj That furplus value paffes through evcy cha mel without acquiring a procreating faculty, becaufe an ideal price can never be produflivc of a real income to an individual. In x [ 65 ] In vain will induOry and commerce augment the reprefentative figns, and produce fgme addi- tional (Irength. The greater appearance of profperity will con- fid chiefly in exterior form, and the itate may in fuch a cafe be compared to a dropfical man, whoiie blood is gradually turning into water. In bringing thus the efFedis of taxation to a faif and public trial, I expe£l to be accufed of anni- hilating the refources of a (late, and of producing a chimerical fyllem, which pulls duwu, and dues not rebuild. It will be aflced how I prefume to charge taxes as inefficient, and the caufe of certain deftruflion, when I have admitted them to be a primitive re- fource for fatisfying the wants of a Hate, and for granting protedlion to focieiy ? Their ancient utility, and their having been the nuifes of every ftate, plead no doubt vt^y ruuch in their favour ; but fuch kind of re'«funing will neither furprife nor intimidate ine ; becaule thefe plaufible arguments are fo many ignes faiui, which have gradually brought Great Britain to the brink of a precipice. 1 When [ 66 ] When taxes were firfl; colIe6led in kind they produced no bad confequences. What was taken from one individual was given to another. " >"A r Annual contributions even on induftry, when firfl levied in money, were very much circuni- fcribcd in their extent, and the good confequences which refuhed from them to fociety, exceeded by much their bad tendency. 'i :»fJ This fuperiority in their good effe£ls (when con- trafled) kept under their deftruftive principle, and they exifted without any alarming fympcoms, in the fame manner as a well conftituted body may have lurking about it a principle of deflruclior:, which will carry it one time or other to the grave, but which allows it in the mean time to enjoy a good Hate of health. It is evident that all dates have exifted with and by means of taxes, and that their vifible effedls went originally no further than to fhow the marks of imperfe6lion, which arc ftamped on all the works of man. , The [ «7 ] , The abufe of them is, however, what we have to complain of, as well as the neglefl to increafe their produce, inftead of multiplying their number. A new contribution has at all times been confi- dercd as an eflential and as a vital power in a ftate, and this erroneous idea has produced fuch contra- di6lory and fuch fatal confequences as to threaten approaching deQrudion. Thofe perfons, who adopted from principle this fyftem of extending taxes, (hould indeed have felt their ultimate bad confequences by that neceflity, which impelled them to make temporary loans, in order to correft the bad eflFetls which they pro- duced, and the caufes of which they did not fuffici- ently inveftigufe, I fuppofe the firfl: man who conceived the idea of a loan, and its aflbciation with taxes, plumed himfelf much on the difcovery and never dreamt of the imperfe6lion in his ideas. He was no doubt anxious to find out the means of making the people fupport with patience the new burthens laid on, and held out a public loan to their view as a plant, which if cultivated with care would produce a fruit equally ufcful in its ,: I 2 immediate m ■ In [ 68 i immediate e^Te^l as new taxes, and purified of the poifon, which ihey conrained. > Had this plant been left to its ow^n care, fuch fruit as he expe£led would no doubt have fprung from it ; but in laying it down he watered it with the venomous juice of taxes, and, by checking in- duUry, made it miibarry in its natural productions. I dare therefore affirm, that annual contribu- tions, which as a bafis of fupport were originally juft as well a^ ufefui, are at prefent cariied beyond the neceflary bounds, and cannot even henceforth be made ufe of with fafety. I add alfo that if the prefent iituation of Great Britain requires any further annual fupport loans will fupply her wants. But it is neceffary that thefe loans be called upon to a£l fingly, becaufe if left to themfelves they will produce the neceHary and expelled fruit, and will be an additional force, whofe efforts cannot be counteracted or weakened. They will augment induflry and confequently (he produdion of the exiting taxes in a greater degree than is neceflary for the payment of their intciett 1 [ 69 ) intered, and the increafed value of the public eflate will in time of peace be greater than the an- nual mortgage granted, , :l The natural augmentation of reprefencative figns will not be checked in fo great a degree as by a contrary fyftem, and fuch augmentation will in- creafe the ftrength of the whole body, and coun- tera6l in fome degree the debilitated date of its generative faculties, i , Having now eftabliflied the fuperiority of loans over taxes, by comparing the cfFefts of the one and the other on the circulation of money, I pro- pofe to confirm the preference, which is due to this fpecific, by giving it a new title, and proving that it will always anfwer to what may be required of it. This is the fubjed of th6 following feftian, in which the means of rendering that refource perpe- tual will be explained. ill SECTION [ 7= ) •. i ■', ( SECTION VIII. . .3 Hi Jl On the means of rendering perpetual the efficacy ef public loam without additional taxes, JL Have already fufficiently eftablilhed the pre* ference due to public loans by combating againft ihe fatal prediledion for taxes, and by ftating the dreadful confequences, which their abufe, and their junction with public loans, have occafioncd. But, in cutting off this unftable and deHrudlive r^fource, it is incumbent on me not only to infure the exiftence, but alfo the duration of thofe means, v/hich I propofe to have recourfe to. Before I proceed however to this taflc, I muft return to fome points, which I could not fuffici* cntly unfold, when employed in explaining them, and which is neceffary to be done in order to com- pleat my fyftem. I have already proved, that the projcdl of pay- ing off the national debt is chimerical, and the principle erroneous. A public •' -.-a ■,•» m\, C 7' J ' A public Ir- a tbereforvi in Great Britain muft be confidered as the grant of a perpetual annuiry, whofe payment muft be re<3:ularly attended to, and wbofe redemption is unneceffary,'^^ '" ^'^r. Ov, .nq I muft, however, allow, that under the influ- ence of favourable circumftances a praftice has been adopted in Great Britain of obtaining a voluntary redudion of intereft from the public creditors ; but this redu6libn can only be called an advantageous commutation, founded on the lower intereft of money, and the hberty referved to government of redeeming the perpetual annuities, which were granted. - . . .-..i^:. ,;../..,... iJfrt tf. ;l> This praiflice cannot of courfe deftroy my doc- trine, and I do not conceive that by the prefent fydem of finance fuch a commutation will foon take place. 11. ,» . V f?'- r,,r(i -5 il > . f ...■ ■ I ■.■ C The fyftem, which I propofe, w'll, however, give rife to thofe favourable circumftances, and fuch public funds as bear 4 and 5 per cent intereft will be fubjeft to this operation ; while a collateral plan of finance which I have to fuggeft, will im- mediately bring a confiderable part of the 3 per cents into the fame predicament. I have if [ 7» 1 ' I have admitted, that taxes, were necefTary as '^^'well as ufeful on the foundation of every Hate, but that they imbibed a poiCon, which grew up in proportion as they extended. « The feeds of thi? poifon were fown when taxes were firft cdlefled in money, becaufe at that rao^ ment a forced circulation took place. ;^»^M'*'"»^^ Government then defifted from receiving its (hare of each individual's induftry in kind, as a return for the prote6lion it granted them ; but it infe£led every produftion with a price above its in- trinfic and generally agreed on value, in order to receive the fame portion in reprefentatiN gns. -M' \ By thic pra6licc the fovereign power demanded (Ifhall fuppofe) a tenth of the reprefentative dgns, at which each bufhel of wheat was valued, ini^ead of receiving one bufhel on a crop of ten, and or- dered the reprefentative value of each bulQiel to cir- < culate in the channels of induQry and commerce with fuch tenth added to it. r •!..'-M This ideal value could never be reprodu6live, and overcharged equally every objeft, which bad a conne£lion with it, viciating in this manner the natural of one and of all. The [ 73 ] The fuppoTt therefore granted to a ftatc became at that time founded on bad principles, and by its impurity forfeited the appellation of a falutary 7 id beneficent refource. Unfortunately, however, it was within the reach of every man's capacity, and was applied to on all feccafions. Every adminiClration was fatlsfied with the mo- mentary good efFe6ts of that refource, and, ne- gle£ling to calculate thofe which would ultimately refult from it, they rapidly yet unintentionally pro- pagated the evil. If a flatefman had at that time laid afide the general prejudices, and ftudied this matter in every point of view, many difficulties and lofles would have been faved to Great Britain. He would have difcovered the innate vice, with which that refource was impregnated, as well as th« dangerous confequences of its extenfion, and would have propofed to make ufe of it only as far as ne- ceffity required for eltablifhing a bafis of fupport. Impreffed with the idea, that the materials of fuch bafis were of themfelves weak, and infuffi- K cient. X 74 ] cicnt, he would have avoided them with the mofl fcrupulous attention, and confined himfelf to mak- ing ufe of loans, unalloyed with other matter, aa a manure for improving the quality of the exifting ground work, and fertilifing its nature. .ji'( ,i..ij(d<... ' That Providence which watches over this world and whofe bountiful hand generally gives the re*, medy with the evil, by no means deviated from this rule on the introdudion of the reprefentative figns. . , .. ■■— -'^ ' The antidote became engendered with the poifon at the time thefe figns were firft made ufe of, for the purpofe of levying annual contributions. It coniiQed in the facility of converting annual incomes into capitals, and capitals into a certain number of the reprefentative figns, by alienating the former. ..i-v ,, ' f'. . .' ;. /iff ■■ ir.;it n, ;;,;.); ):iOii . This operation for the public fervice would have atJmitled of more reprefentative figns retaining their reprodu6live quality in the channels of induftry and commerce, becaufe a conGderable number of them might have been obtained by alienating only a fmall perpetual income, and the circulation of thefe figns lb procured would have fcrved to increafe that in- come. [ 75 J ^ come, from which the perpetual annuity \yas to be Hi^^^fiLiu \,i{)nib!-tf h'iioiUnui -ni.ol "-Jo 'tlijf jjn< The owner of a houfe, or indeed any other objeft, yielding an annual income, could in a mo- ment exchange his property for a certain number '.yt")it h'i]iwr^' ■"I:, ;v i. Ni-j f.'i. jL-^u-y ,^ The perfon who pofleflcd them reafoned with himlelf thus. " The owner of that houfe receives annually fuch and fuch produdions. • . ' M n''.* " They are valued at fuch a number of the rc- prefentative ligns. vr** By giving therefore a certain number of them for that houfe I Ihall receive annually fuch pro- dudions or their reprefentative value." In this manner originated intereft of money, and the fundamental or capital value of every income. : f Thefe aflive agents who reprefented the value of all things, had not only in themfelves the value of every objeft, but alfo a particular price called in- tercft, which arofe from their happy faculty of uni- K 2 verfal ii^ [ 76 ] ■ . verfal reprcfeolation, and which varied in propor- tion to their number, and 'he nature of their ap- propriation. ^l?uU U U .1 , The intereft of money therefore being eftabliflied . as well as the fundamental or capital value of every poffible income according to the nature of its fecu- jity, alienations of every kind enfued, and intro- duced public and private loans. ;. .'.,;/l,a'l Their immediate and permanently good effeCls were felt to the greatell degree under the bell con- fliluted governments. ,..,,.. It is always a fubjeft of furprife to me, when I confider, that in thofe days no perfon difcovertd the immenfity of the refources, which were to be procured by granting a perpetual annuity, redeem- able only at pleafure. The enlightened part of mankind ought to have felt, that by alienating a fmall part of the public revenue, which was colleded at any particular period, and by defifting frori levying the re- mainder, a confideri-ble fum of money was not Ouly procured to the Hate, but alfo a faving in ilsf expences; and that the returning that furi into the channels of induftiy and commerce would necelTi- rily '" 'i i'ioii m C 77 ] li'y have Increated the remaining reveHns,' ancl'\.at '/only have pvovided for, but even exceeded the fum to be paid annually as interclt. .-^ -•'-:. .\ '■^^■^t (ball fuppofc a flatefman, penetrated with the ( jul^nefs of thefe principles, to have been called at that time to the m^inasement of public affairs, / . . - . . .-. ... -v .. ;. Infl'^ad of levying taxes for the whole amount of what was wanted towards the exigencies of the (late, as was pradlifed, he would inllantly have made a loan upon a perpetual annuity, and laid a contri- bution for P'^ying the intereft only. He would annually have continued this mode of proceeding, until *he number of exilling taxes afforded, by their natural increafe, a fum, equal to the mtciell necell'ary for the continuation of loans. New taxes would then have been no more wanted in time of peace, and thofe required in time of war would have been iafiniteiy lefs, Thefe advantages would alpj have produced va- rious additional ones. The ^^.The natural circulation of the rcprefentative Cgns would have been very httle diminilhed to this day. ..^..^^ .,, .,.,...:^ .^Ij ,^^ ,^.,-j j^,.,^,,,. r;^.,; The incrcafe of induftry arid population would have been rapid. i a .^ji cJi^yK » h i. T he amount of the peace eftablifliment, as well as the public CApences during war, would have been much lefs, and intereft of money always low. I cannot indeed fufliiciently repeat, that the aug- mented price of indtiitry and intereft of money, from the accumulation of taxes, increafe the ex- pences of the public, and that while government ftrikes individuals with the weapon of contribu- tions, a deep and dangerous wound is jdvtn ta itielf. , . , . ,, ' ' The national credit would then have been fup- ported, and the neceflfary funis would have been procured on every emergency without difficulty or increafe of intereft. : < Unfortunately the inverfe of this fyftem has been pradifed. ' vU ...s Taxes r 79 ] Taxes for the whole amount of the p'^bllc wants were eftablilhed, and the forced circulation of mo- ney conliderably extended, until the ufe of them had almoft dried up the fource of benefit, Which might have fprung from them. IfOVi* r:;j/!%4Hr:>!"r f-Ci '■l.J 'C ':^i'T- >.'; il Loans were then reforted to, and by an incon- ceivable infatuation contributions were ftill acded to them for the payment of the capital, although the experience of their infufficieiacy, and fatal con- fcquences, created a general alarm. - .-' mn zi In this manner did taxes, for the repayment of a capital procured, give rife to all the embarraff- ments of finance in Great Britain, by increafin(T her expences, and mutilating her natural refoufces of increafing indufiry and population ; while thefc confeqnences have been further accumulated to an alarming height, by an injudicious ufe of new con* tributions for the interell of new loans. The knowledge, however, of thofe principles, which have occafioned the evil, indicate the nature of the remedy to be applied, — - - ->»; The firfl; objeft, to be taken into confideration, is that of renouncing every idea of further taxes with loans. But r So ], '•" But tljis renunciation will be of little jK'aii, if the interior fire, which is con(uming the body, and which is fufficient to nourifli itfelf, ftiall continue to exift. It is therefore neceflary to attack the catife even in its effefts, and at lead to diminiili k, if it can- not be eradicated. * - The fatal confequences then of the forced circu- lation may be confiderably diminifaed, by fublli- tuting loans for fome of the exi fling taxes, and par- ticularly for thofe, which moil a(Fe6l the natural circulation of the reprefentative "gns. • < My readers would no doubt wifli me to fix how far, and on which of the exifting taxes, this fup- preffion might take place. ^ It would hoiyever be neceflfary to examine pre- vioufly the tendency of each tax, and to confider maturely what degree of extent fo important a re- volution in finance would admit of, without cre- ating a convulfion in the ftate, to which inveftiga- toon I would with pleafure facrifice my time if my fyftem is approved of by the nation. Every [ 8' 3 . ' .■ - ■ I'- \ . , ..." 1 Every attentive reader may nbw with fome de- gree of precifion draw the confequences, naturally refulting from the premifes, which I have cfta* blilhed. \i i The fuppreffion of a part of the cxifting taxes mud on one fide augment induftry, and on the other fide decreafe the public expences. " The incrcafe of induftry will produce greater abundance to the revenue in the remaining taxes. This greater produce will in the courfe of time be equivalent to the amount of the fupprefled taxes, and by a natural reprodudion, in proportion to If' the number of reprefentative fighs reftored to their generative quality, give fufficient means to defray the annual expences, without further loans, if my fyftem did not demand, that they fhould not be defifted from at any time, becaufe it wr»-' ' be checking the greateft good eflFe6l^ which ' .6»^ be procured from them. Every increafe in the exifting taxes muft there- fore be turned into further fupprellions, until they fhall amount to little more than what is neceffary for the payment of the public annuities, and for the eftabllQiment of the civil lift. L The ii I' [ 8z ] The care of every adminiftratfon will then btj confined to retaining annual contributions at that point, without any regard to the perpetual increafd of annuities granted, becaufe a natural increafe of riches will provide for every neceflary effort. The future refources of Great Britain will then be founded on a fure and folid bafis. . . .^ ^ Her credit will alfo be regenerated as well as preferved in its greateft degree of perfe£lion, and will arife out of that confidence, which her vilible reftoration by fimple and falutary means muft in • fallibly create, and which a natural increafe of riches will fecure. I ; ■•■I rJU--. -:.- ■■ :•■ • . V. ,; Whatever fums may be wanted on extraordi- nary occafions will be procured by the alienation of the fmalleft poHible annuity, and the increafing produce of the exifting taxes will fhow, that the national refources are unbounded, while the prc- fent conftitution of government exifts, and while any pofiTible increafe in population, or extenfion and improvement in indullry and commerce can take place. The period of their perfection is fo far diftant by reafon ol tlie fituation and the extent of our Ifland, that it becomes unnecelfary for me to com- ment [ 83 j ment on it; but I do not hefitale to fay, that there appears no probable chance from the political ftate of Europe, that Great Britain will be under a ne- cefTity of having recourfe to more extraordinary means of fupport, than fuch as the fyftem pointed out will produce. Thefe refulting confcquences are fo firmly linked together by the force of reafon and of truth, that I flatter myfelf every impartial reader, who has fol- lowed me with attention, will candidly own that I have brgught him to the objed announced in the beginning of this work. I might therefore indulge myfelf with a releafe from my prefent labours by laying down my pen, and leave to dire neceflity or experience to call for the adoption and cftablilh the excelletiCe of my plan. But the moft palpable truths have fon»e times clouded afpeds, which ferve to debafe and calum- niate them. True patriots may alfo wifli me to difiipate every cloud, that can darken a f) (lem. which has futh falutary effe6ls in view. L z I propofe U t 84 ] I propofe therefore to colIe£); all the objeQions, ivhich have been made to my opinions, and ihalJ confecrate the next feflion to their refutation. It may indeed appear lefs important than the former part of this work, but it is equally laborious to me, and becomes an additional facrifice to my zeal for the public good. S£CTION [ 85 ] SECTION IX. A refiUaiien of the ohjeSlions made to thefijlem, which is treated of in this work. jM,Y fubjcft is now compleated, and I truft it is built on the mod folid and permanent prin- ciples. But what ufeful invention has not had its de- tractors ? An author cannot with impunity announce to the public, that he intends to quit the beaten track, and take a new road, in which he offers to ferve as a guide. The vanity and natural indolence of mankind oppofe every bold innovation. The pitiful refources of mifreprefentation, ridi- cule, and intrigue, are often employed in defiance of reafon and of truth. On I ') :i! 1 \h : !■ ■ i \i ii In, I ) [ 86 ] On the firrt intimation of my fyftem many pei** fons criticifed it, inftcad of ftudying its tendency, and general combination. They thought it no doubt more convenient to fuppofe, that I had bewildered my felf in the region of vifionary ideas, than to follow me through the rugged path, which led me to the truths I had difcovered. Every man who eftablifhes a new opinion, meets with two forts of unbelieveis. The firll clafs are thofe, who have, or at leafl affe6l to have, an intereft in difbelievins it. The fecond clafs are thofe, who fihcerely \n(h to difcover truth, but who are too indolent to take the neceffary trouble, are eafily led aftray, and re- quire to be put on their guard againfl; the attacks of others. 1 (ball not wafte my time in anfwering thofej ivho come under the former defcription, but lo thofe of the latter I addrefs myfelf in a particular manner. I (hall alfo colle(5l all I have heard fug- gefted againft my plan, and anfwer every objeftion with becoming candour. Should [ 87 1 Should any other difficulties arife, I undertake to remove them, provided however they are an- nounced with the marks of fincerity, and that the authors of them think proper to avow them » felvts. The necefTary confequence, which arifes from my plan, of borrowing never to repay, has "ap- peared paradoxical to many, and given rife to cri- ticifm by the moral application of fuch a principle to the condud of an Individual. Men pofleT 1 of rigid principles of honefty, as well as thofe, who only decorate themfclves with its exterior appearance, exclaim againft, the im- morality of the dodrine, and do not reflefl on the very wide diOFerence between an individual and a flate. , . , ' A private man would indeed be highly blame- able in bori wing money without a view to its re- payment. His propofed .mprovements may b( fri Jlrated by fecondary caufes, applicable only to individual*, and the (hortnefs of human hie, with the number- lefs alie.iations by inheritance, cannot poITibly ad- mit IMAGE EVALUATION TEST TARGET (MT-3) A ^ // 1.0 I.I I^|2j8 |2.5 ■^ l^i^ 12.2 '-25 1.4 1 1.6 ^ 6" ► V] '^ ^>. ^^ V Hiotographic Sciences Corporation m \ ^\ 4 4^. ^ ;\ 13 WEST MAIN STRUT WrnSTEIt NY. 4S80 (716) «; :J.4503 4f^ (/a [ 88 ] - . tnit of a continued plan of borrowing and im- proving. ' The important and ufeful confequences there* fore, which fuch a plan procures to a nation, can never produce the fame to an individual. *?'>i-f#" "1? ■It I ■?•*(■" But the exiftence of a ftate, and even its govern- ment is extended to a very diftant period, and the public creditor has of courfe always the fame debtor, as well as the fame principle of condu6l, for his fccurity. j'i- The invariable and regular payment of the in- tcreft on public debts produces not only a ufeful employment for every man's money, but each in- dividual has alfo an advantage in the fupport given to that flate of which he is a member ; becaufe in granting it, he exonerates himfelf from further evils, to which he would be expofed, if the ftate declined, and required more annual contributions. Their inconveniences and dangers I have already fhoivn io arife from a forced circulation, which does not take place in (imilar tranfa£lions between individuals, and which muft necelTarily augment whenever a nation (ball attempt to reimburfe. What UPHII ■ffl I »9 ] What poflTible good then can arife from a fink- ing fund, and counterbalance the evil, which ic creates ? Thofe perfons who amu'e themfelves with the important confequences, which refult from the favings on compound intereil by purfuing with fteadinefs the plan of paying oflP a national debt, ihould take into conlideration the counterpart of that fyftem, and refle6i on the lofs of compound profit on indadry which infallibly enfues. Every difficulty indeed centers in the mifappli- cation of words, while the prel'ent practice of in- creafing the debt of Great Britain, in order to avoid gi^eater evils, ought not only to fufpend all further alarms, but dilTipate alfo every doubt of its expediency, .,.,....,v. ^.Uj- -. r::i^) -.l io.^..o' The fiile of a public annuity (a term the moft proper to be applied,) contains no immoral prin- ciple from the nature of our conltitution. , J This principle in finance is alfo juftified bjT theory, as v/ell as by praflice. It can alone produce the greatell good to a (late, aiid retain to it the greatell degree of ftrength and M fplendor. ■H .«,■-*•■ • i 9° y ' fplendbr, which its fituation, and its neccflTary ex'- ' erdons will admit of. I ihall now proceed to anfwer thofe who oppofe my fyftcm on account of its being merely fpecula- ^ tive, and who doubt its eflficacy, becaufe experi- ^ cnce often fliows the fallacy of the moft fpecious 'reafoning. y I am fenfible that the powers of eloquence are often engaged in perverting reafon and that falfe principles are made to appear clear in theory, while they become greatly deficient in praClicc* J'S. A « .v* p^ * *4 ,,. ^, But I maintain that experience has never de« ' iceived reSlfoning, except when the latter was foupd* *ed Oil falfe premifes, becaufe error cannot arife out of a feries of truths dependent on one ano^ ther. i:,,.rr ■' rtJ--'A r-: " ■! flatter my felf that all my aflertions are incon- trovertible. ^ iAy confequences are immediately drawn from my premifes, and I am therefore not apprehenfive of miileading thofe, who follow my reafoning, and adopt the fyftem I propofe, for extricating the na- 1 I*. •ii'^J-'l.':'' iC 1' ,..:t^ic* ij.:. tiun i > L 91 ] iion out of the labyrinth of difficulties, into which Jhe is plunged. . ^ ^ ^ .■ , ., , , I have «iro illuftrated my arguments by the ex- ample of efFedls, which are univerfaily known, as well as acknowledged, and which ai:c applicable to my principltfs. ?, Thefe oie, that the diminution of public ex- pences, the greater abundance of reprefentative figns, and the confequent fall of intereft, mull in- fallibly attend the redu6lion of taxes. I muft hefe call the attention of my readers to two very interefting points, which feem not to be tinderftood by the generality of mankind. The fir (lis, the impoffibility of procuring the fame fervices from i^idividuals, for the defence of Great Britain, or of fUpporting the dignity of the Crown with the fame allowances from the public, as were granted before the laft war, on account of the increafed price of every neceffary of life. ■ /' - 1 : The reduftion of falaries or profits, which are deemed exorbitant, is no doubt very laudable; but the infufficiency of fuch means will foon ap- pear confpicuous, and the number jof thpg; per- , . .;. M 2 perfons iiii iliiiie t $» ] perfons who from the abovementioned dfcum- ilances are entitled to an iucreafe, will more than counterbalance the few, who can contribute to the refource of oeconom)^, '• Thefe favings to be made are not fo confiderablc as are in general believed, and may be carried fo far, as to endanger the fafety of a nation. Creat Britain cannot be accufed of prodigality in her peace eftablifhment, and Qie (hould now lay the foundation for avoiding it in future wars. * i ? The fecond point to be confidered, is the reduced price of induftry, by the increafe of money pro- ducing lower intereftf •1 •»> ■/:; t * "v ^i: sr It is the common opinion of mankind, that the abundance of the metals has te ided to augment the price of all produ6lions, on account of its ufiFording the means of giving more. '■v;i ''^ This argument appears, fpecrous, becaufe it fup- pofes a certain and limited quantity of piodudions and money, which muft reprefent one another. But it muft be confidered that there exifts a level, to which induftry tends, and that this level is . . formed < ) [ 93 ) . formed by the i..iere(l of money, as well as by local circumftances. ' '.- " . \ The price given for induftry is therefore not only in a certain proportion with the intereft of money, but becomes alfo the point of encourage- ment to be induftrious, and the dream mull be more or lefs rapid, as that price fhall be above the natural level. The quantity produced will proportionably in- creafe, and, deprived of that encouragement, it will of courfe diminilh. In either cafe the equilibrium will be rellored, as the greater or lefs quantity produced, either ab- fobrs by reprcfentation the fuperabundance, or re- turns what is not wanted. ■^ The increafed price of property from the abund- ance of the metals is principally confined to the fundamental or capital value of all incomes, and in every ftate where intereft of money falls, and the reprefentative figns increafe, there will be a competition to produce more induftry, which muft naturally lower the price of every article, becaufe a reduced price is the neceffary confequence, after sncouragement (hall have produced competition. ' ' ■ A greater t 94 ] A greater number of reprefenfative figtis canhbt therefore ultimately produce a rife in any income whatever, but only a correfponding number of in- comes, and an increafe in their fundamental or capital value. ;/•;:/ '.'( r ■Vf ■*t'?T l^' -t ■ lU :*<»v*^ . Il; is by not attending to this diftin^ion, an J the progreflTive increafe of taxes in Europe, that many people have been deceived, and have attributed the greater profits or induftry to its dearnefs, while it ^rofe fron^ its extepfi^ii* '?\i(:''^' '( -I .-•>-. .(J ' '<>'? - This difcovery may pofllbly occafion fotne re- gret for that blind infatuation, which by adding tax upon tax, checked an extenfion fo important to the pro{perity and grandeur of a flate. , .^^ ^ > ^.^i .. The only confolatlon 1 can offer arifes from the •onfideration of its being peihaps ufeful to a na* tion, not to arrive too haflily to maturity, apd that it appears to be the lot of human nature to dif« cover truth, by walking in the paths of error, I know that fome people have endeavoured to judify taxes againft the charges which I bring againft them, by quoting the fituation of North America with refpetl to labour and interell of mo- liey, before the late revolution. ^ ' " Both .. ,•» . ., i ■[ 95 ] Both the one and the other wfcre ekdeediuglj' high, notwithdanding that few taxes exifted. ,/( This circumftance, however, pleads in my ti" voiir, becaufe thefe confequences did not arife from the non-exiftcnce of contributions, but from the want of population, and of reprefentative Ggns. j^A-A riiio^x >.mr!i'. ir:. !««J/jf!' "?H:!-.':^*«tJ:S *i4;i . The low price of produce owing to the fertility of the foil, and the exigence of few contributions, raifed very rapidly the exterior commerce of that country. _ ,j _ »'* The inhabitants could not fupply all the de- mands, and the exifting quantity of reprefentative . figns could not tranfadl all the bufinefs of ex- change. ;v> K. The fcarcity of the one and the other naturally , augmented their pay. .,.:.,,,,,,:,* , , '; . ^ * . V r-. ^ i ! Jxi I^ad a fuflicient competition however taken place by the increafe of inhabitants, and of repre- fentative figns, the price of both would have di- niinilhed. Trade would then have extended ilfelf ttili far- ther, and made rapid ftrides to maturity. In [ 9« ] In this happy fituation time was only wanting, for the natural increafe of population to have had its full eflPefl, and it would alfo have been afTifted by the arrival of many individuals from thofe countries, which were opprelTed either by de- fpotifm or by taxation. - t ,JU;- i> -t ■ i r,«, J*J*wt ' The greater abundance of Hgns would alfo have fprung from a profitable commerce^ and from the extension of her paper currency, t. It is indeed hardly to be concef^ed to what a degree of profperity that continent might have ■ arrived, if the troubles and expences, occcafioned ■ by the late revolution had not altered her robud f onftltution, by a premature ufe of the European i)ftem of taxation. ^^ I econfider it a very fortunate circumflance for Great Britain, that the feparaion with her colonies took place before their faculties had obtained that ftate of maturity, which their political and local "fituation muft infallibly have produced, and which inftead of confining their views to independence, might have urged them to more daring attempts. It has been objeiSted againft my principles pf finance, that no nation has hitherto adopted them, and C 97 ] and that if they did not anfwrcr the intetided pur« pofes, confufion might enfue, and a difficult iil reverting to (he old plan take place. f I ' I muft in anfwer to this obfierve, that fuch kind of reafoning would check every attempt of reviving credit, lowering intereft of money, increafing the revenue, and keeping the public expenoes within bounds. There can be no doubt that the annual increafe of revenue, by the augmentation of induftry in time of peace, will be greater than the perpetual annuity, which muil be alienated for providing the ufual ellabliihment. Without fuch an ificreafie of riches no fyftem whatever can be effedual, and we need only de* fpair of a further augmentation, when every re- fource for facilitating it ihall be exhaufted. To thofe, who doubt its being fufficient in time of war, I mud obferve that there is at that time a greater influx of money than at any other by reafon of the great loans which are made, and that if^tsmal induftry and population increafe in con- N fequence ..■*t^ » [ 98 j (equence of it, which more than compenfate fot the interruption of feme branches of commerce. The excels of taxci in time of peace CfuppaGiig them not fuppreffed to a certain amount^ might alfo make good thefe expe£led deficiencies, and if that refource^ even fhould not be fufficient for aa extraordinary, and to me inconceiveable exertion, additional taxes may Hill be reforted to, and their "Weight could not polTibly be then of much ma* menu • f ■■■,-r , ■'•■ ■' ■ • . In ihort, what is now the ufual fupport, will equally and at all times offer itfelf, as a laft yefource* No peripn can deny, that Great Britain is zt prefent in a precarious fituation, and that the lead ihock will inf.illibly dcftroy her credit* Her great exertions, and prefent (ydem of finance have produced this iituation, which by the accumulation of taxes grows evidently worfc every day. ■ \ . On this fubje6l I (hall not enlarge, in order to avoid every imputation of giving unneceffary alarms , The r r 1 [ 99 } The adoption of my plan mud foonrr or later take place, and in order to calm the fears of the nation I have Ihcwn its efficacy by various ar- guments. If they are well founded, I flatter myfelf they will be approved of; if I have erred, I ihall be eallly dete6led. It may be urged that taxes promott improvc- nfients in indudry. This may be the cafe with a few individuals, but gradual exertions of every kind are preferabU to fuch violent efforts, in order to fupport a burthen. It will be alked, what limits I affix to this na- tural increafe of reprefentative figns with a cor* refponditng population and induftry. To this I anfwcr, that the human mind cannot eafily form ap idea of the different degrees of profperity to which a nation may arrive, and is only enabled to point oat the moft probable means of obtaining them, while it muff at the fame time feel, that the lofs of a neceflary equilibrium will produce a decay in all things. Ni The [ 100 ] The fynera of finance whfch our forefathers hare handed down to us has certainly retard- ed our tnaturiiy, and the adoption of another "will keep from our view ^ decline of the BritiOi Empire. « I .. '« ;, I :..:J SECTION t «. ] y'-^ SECTION X. RECA P ITU LA T I N. H £ doubts and difficulties, which apparent- ly obftru^l the execution of the plan, contain* ed in the foregoing fedlions, being I hope fatisfa£loriIy removed, I propofe to conclude my work with a recapitulation of the leading prin- ciples, on which it is founded, and, as far as the fubjefl will admit of, prefent to my readers in one point of view the general conne£lion of the whole; The (iiuation of Great Britain, with refpe^l to her revenue and her expences, are too well known to make it neceflary for me to ilate the deficiency, which at prefent exills. It is obvious, that fome plan mud be adopted, not only for fupplying this deficiency, bui alfo for furnifliing eventual means towards carrying on fu- ture wars. The [ 102; ] The general opinion has hitherto been, that nei^ taxes niuft be refortcd to for that purpofe, and that tho credit of Great Britain can only be fup- ported by an exifting furplus in the revenue, and , the appropriation of it to the gradual diminution of her debt, ~ - - - I'his opinion is however erroneous in principle, and, having failed in praQice during more happy periods, has confequently been refuted by ex* |)erience. But the reverfe of this fyftem is entitled to the appellation of a falutary and permanent refoucce, from the conGderation, that the alienation of » perpetual annuity, without creating new taxes,, retains the natural circulation to more reprefenta- tive figns, excites and augments induftry and com* merce, while it increafes at the fame time the pro* duce of the remaining taxes. I make ufe ^f the term, alienating a perpetual annuity^ in the place of the word borrowing, as the latter tends to miQead, by carrying with it the idea of rcimburfing the fums obtained. rt [ »o3 ] It will be univerfally admitted, that the profperity of a (late confifls in its ftrength and in its riches. Thefc two words arc indeed almoft (ynonimouSy becaufe a ftate cannot be powerful without being rich, or rich without being powerful, in the poli- tical fenfe of thefe words, ■ '''it •' -'■ ;. •< ■■ An independent ftate ii of courfe thorcor lc(s yich. Its riches increafe by population, and poptiUtlou by agriculture and commerce. Commerce is excited by induftry, and induftry by money, which is the center from which every obje6l receives an influence. Thefe advantages, when united, form the true riches of a {lat«, and itimulate one another to reproduflion. V They alfo conftitutc the bafis of fiflitious riches, called credit. A free government polTefles the moft powerful rneaiis of creating and making ufe of thefe fi(5litious riches. ^•^f" f i?4 ] . . riches, which in their confequences are equal to ' true riches. A loan is the mode of making ufe of credit. «. - A debt is the confequence, and the alienation o( an income, for paying the intereft, the effe£l; the facility of providing for a momentary and urgent want is the advantage which refuhs from it. Great Britain has been compelled to make ufe of this credit t# an immenfe amount ; but (he founded it on erroneous principles, which have occafioned a greater extention of it than was ne- ceflary v. and her annual expences for the intereft, as well as her peace and war eftabhibments, became gradually more exorbitant. The idea of liquidating a part may indeed be flattering to the nation, but the moft fuccersful attempt, which the prefent circumflances will ad- mit of, can only be compared to a few drops of water taken from the ocean. It is even neccflary to eradicate hopes, which can never be realized^ and which ferve to roiHead. The to le It ' t '05 ] The national faith, however, and the confijenoe of the public demand, that the intereft or income of all fums fubfcribed, or to be fubCcribed, be pro« vided for and regularly paid, becaufe the intereft of this national debt conditutes the claim to a very confiderable property or capital* ' '' ' A capital is the accumulation of incomes, which produces a further annual income, and reprie- fents it in perpetuity. An income is the produ6lion of n««ture com- bined with the induftry of man, and flimulated to aftion by money, which is the reprefentative fign, and which by means of its univerfal power obtains alfo an annual income called mtereft. This focus, to which every obje^ is attraCled, and from which every obje£)r receives an influence, produces abuadar.ce or fcarcity in proportion to its extent. The aftion of this reprefentative fign confi(l« in its circulation through the channels pf induftiy and commerce. It refembles the operation of the blood in the human frame, and, when forced out of its natural courfe, produces diforder and weaknefs. O Money . I 'o6 ] Money in is natural circulation has alfo a repro- du6iive quality, which it is nece flary to preferve as it forms the principle of every increafe in (Irength and in riches. Theiofs of this quality arifes from the num- berlefs contributions,' which are levied on every objeQ of confumption and of commerce for the fervice o^ the public. ,,..;, Originally they were collefled in kind, but lat- terly in money* ^ .: ; , , M<<> ■ >f '" ;ir: Uj The firft mode was (imple and natural, while the latter is complicated in its efiPe6ls, and the evil it creates has neither been invcfligated| nor provided againft. KCl When the falutary tendency of this fyftem be- came overpowed by the bad confequences it pro- dueed, loans were reforted to, in order to remove to a more diftant period the contributions de- manded. They were therefore hot made ufe of at firft ., from principle, but only to temporize, which, as a fundamental error, pltifiged the ftate into various difficulties* i Latterly = viV'fl-' ■> .^t'^A.-.'. •:> t, ,' ;'1>',:T,' - f 'O7 J Latterly they have approached more to their natural utility, by being adopted from principle. - They are however ftill imperfea, and require to be founded on ijew principles to admit of their extention, which can only relieve the nation from the weight of taxes, and the dangers of a forced circulation, The mtrOauaion of this vice in the circulation of money is particularly to be attributed to taxes adding an ideal price to the generally agreed on value of every objefl. ^ This idenl price, wbich never reproduces, is jilfo added to every objeQ jConne£led with the C9ntri{3uting article. ■in itviu fiitXi lOiMiy* - Av/v: ,>4i/«' -.W'T^V. An extenfive lofs therefore of rcproduiflive quality exiHs, and diminiflies the faculties of in- duftry and trade. It mud alfp ultimately crufti them, if further extended. /VV,' T < ■»# f3\»- jl,. -t" The only means of regenerating^ this power is to take away the caufe, which falpcnds its func- tions, and to deliver as many ligns as is poflible O 2 from -. *■ ■^^^^"■iipw«"wp"p"wp J * mm r r io8 ] from the «ffe£ls of this deftruflive qualitv, by fup* preffiDg ? part of the exifting t^xes. ''' *'' '^ ^^ The deficiency occafioned thereby muft be fup-l plied by loans without new taxes. ./^This procefs will of couj"' reftore the generative quality to more rcprefentacivc figns, whofe in- fluence in the general circulation will provide for more than the intereft to be paid, by an increafe in the produce of the remaining taxes, will favour induftry, augment commerce and confumption, ai^ well as population. . ' . ,, . * The riches and the llrength of the ftafe will then increafe prpgrefHvely and naturally. The falutary eflFc6ls will alfo be immediately felt, and will lead to the fuppreffion of every ex- cefs in the exifling taxes, above what is wanted for the intereft of the national debt, and the efta- blifliment of the civil lift, while the continuation 9f fnnual loans will require no new burthens. f The profperity to which Great Britain can at- tain, will then be in its natural courfe, and every thing will concur in producing the grcateft degree of perfeftion in her maturity. The ^ I >. [ JO9 ] **^ * V- r. -f .. -i » -.|_«' .f^*.*A4^'' The MiniHer, who {hall accomplifh tkis objefb, will obtain his recompence in the happinefs of the prefent and future generations, ivhile their admi- ration and gratitude will raife to his memory an cverlafling monument. .. 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