Part 13

Though a resolution should be formed by the legislature never to impose any tax which hurts commerce and discourages industry, it will be impossible for men, in subjects of such extreme delicacy, to reason so justly as never to be mistaken, or amidst difficulties so urgent, never to be seduced from their resolution. The continual fluctuations in commerce require continual alterations in the nature of the taxes, which exposes the legislature every moment to the danger both of wilful and involuntary error; and any great blow given to trade, whether by injudicious taxes or by other accidents, throws the whole system of the government into confusion.

But what expedient is the public now to fall upon, even supposing trade to continue in the most flourishing condition, to support its foreign wars and enterprises, and to defend its own honour and interests or those of its allies? I do not ask how the public is to exert such a prodigious power as it has maintained during our late wars, where we have so much exceeded, not only our own natural strength, but even that of the greatest empires. This extravagance is the abuse complained of, as the source of all the dangers to which we are at present exposed. But since we must still suppose great commerce and opulence to remain even after every fund is mortgaged, those riches must be defended by proportionable power, and whence is the public to derive the revenue which supports it? It must plainly be from a continual taxation of the annuitants, or, which is the same thing, from mortgaging anew on every exigency a certain part of their annuity, and thus making them contribute to their own defence and to that of the nation; but the difficulties attending this system of policy will easily appear, whether we suppose the king to have become absolute master or to be still controlled by national councils, in which the annuitants themselves must necessarily bear the principal sway.

If the prince has become absolute, as may naturally be expected from this situation of affairs, it is so easy for him to increase his exactions upon the annuitants, which amount only to the retaining money in his own hands, that this species of property will soon lose all its credit, and the whole income of every individual in the state must lie entirely at the mercy of the sovereign—a degree of despotism which no oriental monarchy has ever yet attained. If, on the contrary, the consent of the annuitants be requisite for every taxation, they will never be persuaded to contribute sufficiently even to the support of government, as the diminution of their revenue must in that case be very sensible, would not be disguised under the appearance of a branch of excise or customs, and would not be shared by any other order of the state, who are already supposed to be taxed to the utmost. There are instances in some republics of a hundredth penny, and sometimes of the fiftieth, being given to the support of the state; but this is always an extraordinary exertion of power, and can never become the foundation of a constant national defence. We have always found, where a government has mortgaged all its revenues, that it necessarily sinks into a state of languor, inactivity, and impotence.

Such are the inconveniences which may reasonably be foreseen of this situation to which Great Britain is visibly tending, not to mention the numberless inconveniences which cannot be foreseen, and which must result from so monstrous a situation as that of making the public the sole proprietor of land, besides investing it with every branch of customs and excise which the fertile imagination of ministers and projectors have been able to invent.

I must confess that there is a strange supineness, from long custom, crept into all ranks of men with regard to public debts, not unlike what divines so vehemently complain of with regard to their religious doctrines. We all own that the most sanguine imagination cannot hope either that this or any future ministry will be possessed of such rigid and steady frugality as to make any considerable progress in the payment of our debts, or that the situation of foreign affairs will, for any long time, allow them leisure and tranquillity for such an undertaking.​ What then is to become of us? Were we ever so good Christians and ever so resigned to Providence, this, methinks, were a curious question, even considered as a speculative one, and what it might not be altogether impossible to form some conjectural solution of. The events here will depend little upon the contingencies of battles, negotiations, intrigues, and factions. There seems to be a natural progress of things which may guide our reasoning. As it would have required but a moderate share of prudence when we first began this practice of mortgaging to have foretold, from the nature of men and of ministers, that things would necessarily be carried to the length we see, so now that they have at last happily reached it, it may not be difficult to guess at the consequences. It must, indeed, be one of these two events—either the nation must destroy public credit, or public credit will destroy the nation. It is impossible they can both subsist after the manner they have been hitherto managed, in this as well as in some other nations.

There was indeed a scheme for the payment of our debts which was proposed by an excellent citizen, Mr. Hutchinson, above thirty years ago, and which was much approved of by some men of sense, but never was likely to take effect. He asserted that there was a fallacy in imagining that the public owed this debt, for that really every individual owed a proportional share of it, and paid, in his taxes, a proportional share of the interest, beside the expenses of levying these taxes. Had we not better, then, says he, make a proportional distribution of the debt among us, and each of us contribute a sum suitable to his property, and by that means discharge at once all our funds and public mortgages? He seems not to have considered that the laborious poor pay a considerable part of the taxes by their annual consumptions, though they could not advance at once a proportional part of the sum required; not to mention that property in money and stock in trade might easily be concealed or disguised, and that visible property in lands and houses would really at last answer for the whole—an inequality and oppression which never would be submitted to. But though this project is never likely to take place, it is not altogether improbable that when the nation become heartily sick of their debts, and are cruelly oppressed by them, some daring projector may arise with visionary schemes for their discharge. And as public credit will begin, by that time, to be a little frail, the least touch will destroy it, as happened in France; and in this manner it will die of the doctor.​

But it is more probable that the breach of national faith will be the necessary effect of wars, defeats, misfortunes, and public calamities, or even perhaps of victories and conquests. I must confess, when I see princes and states fighting and quarrelling, amidst their debts, funds, and public mortgages, it always brings to my mind a match of cudgel-playing fought in a china-shop. How can it be expected that sovereigns will spare a species of property which is pernicious to themselves and to the public, when they have so little compassion on lives and properties which are useful to both? Let the time come (and surely it will come) when the new funds created for the exigencies of the year are not subscribed to, and raise not the money projected. Suppose either that the cash of the nation is exhausted, or that our faith, which has hitherto been so ample, begins to fail us; suppose that in this distress the nation is threatened with an invasion; a rebellion is suspected or broken out at home; a squadron cannot be equipped for want of pay, victuals, or repairs; or even a foreign subsidy cannot be advanced—what must a prince or minister do in such an emergence? The right of self-preservation is unalienable in every individual, much more in every community; and the folly of our statesmen must then be greater than the folly of those who first contracted debt, or, what is more, than that of those who trusted, or continue to trust this security, if these statesmen have the means of safety in their hands and do not employ them. The funds, created and mortgaged, will by that time bring in a large yearly revenue, sufficient for the defence and security of the nation. Money is perhaps lying in the exchequer, ready for the discharge of the quarterly interest. Necessity calls, fear urges, reason exhorts, compassion alone exclaims; the money will immediately be seized for the current service—under the most solemn protestations, perhaps, of being immediately replaced. But no more is requisite; the whole fabric, already tottering, falls to the ground, and buries thousands in its ruins. And this, I think, may be called the natural death of public credit; for to this period it tends as naturally as an animal body to its dissolution and destruction.​

These two events supposed above are calamitous, but not the most calamitous. Thousands are hereby sacrificed to the safety of millions; but we are not without danger that the contrary event may take place, and that millions may be sacrificed for ever to the temporary safety of thousands.​ Our popular government perhaps will render it difficult or dangerous for a minister to venture on so desperate an expedient as that of a voluntary bankruptcy; and though the House of Lords be altogether composed of the proprietors of lands, and the House of Commons chiefly, and consequently neither of them can be supposed to have great property in the funds, yet the connections of the members may be so great with the proprietors as to render them more tenacious of public faith than prudence, policy, or even justice, strictly speaking, requires. And perhaps, too, our foreign enemies, or rather enemy (for we have but one to dread) may be so politic as to discover that our safety lies in despair, and may not therefore show the danger open and barefaced till it be inevitable. The balance of power in Europe, our grandfathers, our fathers, and we, have all justly esteemed too unequal to be preserved without our attention and assistance. But our children, weary with the struggle, and fettered with encumbrances, may sit down secure and see their neighbours oppressed and conquered, till at last they themselves and their creditors lie both at the mercy of the conqueror. And this may properly enough be denominated the violent death of our public credit.

These seem to be the events which are not very remote, and which reason foresees as clearly almost as she can do anything that lies in the womb of time. And though the ancients maintained that, in order to reach the gift of prophecy, a certain divine fury or madness was requisite, one may safely affirm that, in order to deliver such prophecies as these, no more is necessary than merely to be in one’s senses, free from the influence of popular madness and delusion.

NOTES, OF PUBLIC CREDIT.

Essay Of the Balance of Trade.

Plut. in Vita Alex. He makes these treasures amount to 80,000 talents, or about 15 millions sterling. Quintus Curtius (lib. 5, cap. 2) says that Alexander found in Susa above 50,000 talents.

Melon, Du Tot, Law, in the pamphlets published in France.

In times of peace and security, when alone it is possible to pay debt, the moneyed interest are averse to receive partial payments, which they know not how to dispose of to advantage, and the landed interest are averse to continue the taxes requisite for that purpose. Why therefore should a minister persevere in a measure so disagreeable to all parties? For the sake, I suppose, of a posterity which he will never see, or of a few reasonable, reflecting people whose united interest perhaps will not be able to secure him the smallest borough in England. It is not likely we shall ever find any minister so bad a politician. With regard to these narrow, destructive maxims of politics all ministers are expert enough.

Some neighbouring states practise an easy expedient, by which they lighten their public debts. The French have a custom (as the Romans formerly had) of augmenting their money, and this the nation has been so much familiarized to that it hurts not public credit, though it be really cutting off at once, by an edict, so much of their debts. The Dutch diminish the interest without the consent of their creditors; or, which is the same thing, they arbitrarily tax the funds as well as other property. Could we practise either of these methods, we need never be oppressed by the national debt; and it is not impossible but one of these, or some other method, may, at all adventures, be tried, on the augmentation of our encumbrances and difficulties. But people in this country are so good reasoners upon whatever regards their interest, that such a practice will deceive nobody, and public credit will probably tumble at once by so dangerous a trial.

So great dupes are the generality of mankind, that notwithstanding such a violent shock to public credit as a voluntary bankruptcy in England would occasion, it would not probably be long ere credit would again revive in as flourishing a condition as before. The present King of France, during the late war, borrowed money at lower interest than ever his grandfather did, and as low as the British Parliament, comparing the natural rate of interest in both kingdoms. And though men are commonly more governed by what they have seen than by what they foresee, with whatever certainty, yet promises, protestations, fair appearances, with the allurements of present interest, have such powerful influence as few are able to resist. Mankind are, in all ages, caught by the same baits. The same tricks, played over and over again, still trepan them. The heights of popularity and patriotism are still the beaten road to power and tyranny; flattery to treachery; standing armies to arbitrary government; and the glory of God to the temporal interest of the clergy. The fear of an everlasting destruction of credit, allowing it to be an evil, is a needless bugbear. A prudent man, in reality, would rather lend to the public immediately after they had taken a sponge to their debts, than at present; as much as an opulent knave, even though one could not force him to pay, is a preferable debtor to an honest bankrupt; for the former, in order to carry on business, may find it his interest to discharge his debts, where they are not exorbitant. The latter has it not in his power. The reasoning of Tacitus (Hist. lib. 3), as it is eternally true, is very applicable to our present case: “Sed vulgus ad magnitudinem beneficiorum aderat: Stultissimus quisque pecuniis mercabatur: Apud sapientes cassa habebantur, quæ neque dari neque accipi, salva republica, poterant.” The public is a debtor, whom no man can oblige to pay. The only check which the creditors have on it is the interest of preserving credit; an interest which may easily be overbalanced by a very great debt, and by a difficult and extraordinary emergence, even supposing that credit irrecoverable. Not to mention that a present necessity often forces states into measures which are, strictly speaking, against their interest.

I have heard it has been computed that all the creditors of the public, natives and foreigners, amount only to 17,000. These make a figure at present on their income; but in case of a public bankruptcy would in an instant become the lowest, as well as the most wretched of the people. The dignity and authority of the landed gentry and nobility is much better rooted, and would render the contention very unequal, if ever we come to that extremity. One would incline to assign to this event a very near period, such as half a century, had not our fathers’ prophecies of this kind been already found fallacious by the duration of our public credit so much beyond all reasonable expectation. When the astrologers in France were every year foretelling the death of Henry IV., “These fellows,” says he, “must be right at last.” We shall therefore be more cautious than to assign any precise date, and shall content ourselves with pointing out the event in general.

OF SOME REMARKABLE CUSTOMS.

I shall observe three remarkable customs in three celebrated governments, and shall conclude from the whole that all general maxims in politics ought to be established with great reserve, and that irregular and extraordinary appearances are frequently discovered in the moral as well as in the physical world. The former perhaps can we better account for after they happen, from springs and principles of which every one has within himself, or from obvious observation, the strongest assurance and conviction; but it is often fully as impossible for human prudence beforehand to foresee and foretell them.

I. One would think it essential to every supreme council or assembly which debates, that entire liberty of speech should be granted to every member, and that all motions or reasonings should be received which can any way tend to illustrate the point under deliberation. One would conclude, with still greater assurance, that after a motion was made, which was voted and approved by that assembly in which the legislative power is lodged, the member who made the motion must for ever be exempted from further trial or inquiry. But no political maxim can at first sight appear more undisputable than that he must at least be secured from all inferior jurisdiction, and that nothing less than the same supreme legislative assembly, in their subsequent meetings, could render him accountable for those motions and harangues which they had before approved of. But these axioms, however irrefragable they may appear, have all failed in the Athenian government, from causes, and principles too, which appear almost inevitable.

By the γραφη παρανομων, or “indictment of illegality” (though it has not been remarked by antiquaries or commentators), any man was tried and punished by any common court of judicature for any law which had passed upon his motion in the assembly of the people, if that law appeared to the court unjust or prejudicial to the public. Thus Demosthenes, finding that ship-money was levied irregularly, and that the poor bore the same burden as the rich in equipping the galleys, corrected this inequality by a very useful law, which proportioned the expense to the revenue and income of each individual. He moved for this law in the assembly, he proved its advantages,​ he convinced the people, the only legislature in Athens, the law passed and was carried into execution; and yet he was tried in a criminal court for that law upon the complaint of the rich, who resented the alteration he had introduced into the finances. He was indeed acquitted upon proving anew the usefulness of his law.

Ctesiphon moved in the assembly of the people that particular honours should be conferred on Demosthenes, as on a citizen affectionate and useful to the commonwealth. The people, convinced of this truth, voted those honours; yet was Ctesiphon tried by the γραφη παρανομων. It was asserted, among other topics, that Demosthenes was not a good citizen, nor affectionate to the commonwealth, and the orator was called upon to defend his friend, and consequently himself, which he executed by that sublime piece of eloquence that has ever since been the admiration of mankind.

After the battle of Chæronea a law was passed, upon the motion of Hyperides, giving liberty to slaves and enrolling them in the troops.​ On account of this law the orator was afterwards tried by the indictment above mentioned, and defended himself, among other topics, by that stroke celebrated by Plutarch and Longinus. “It was not I,” said he, “that moved for this law: it was the necessities of war; it was the battle of Chæronea.” The orations of Demosthenes abound with many instances of trials of this nature, and prove clearly that nothing was more commonly practised.

The Athenian Democracy was such a tumultuary government as we can scarce form a notion of in the present age of the world. The whole collective body of the people voted in every law without any limitation of property, without any distinction of rank, without control of any magistracy or senate;​ and consequently without regard to order, justice, or prudence. The Athenians soon became sensible of the mischiefs attending this constitution, but being averse to the checking themselves by any rule or restriction, they resolved at least to check their demagogues or counsellors by the fear of future punishment and inquiry. They accordingly instituted this remarkable law, a law esteemed so essential to their government that Æschines insists on it as a known truth, that were it abolished or neglected it were impossible for the Democracy to subsist.​

The people feared not any ill consequence to liberty from the authority of the criminal courts, because these were nothing but very numerous juries, chosen by lot from among the people; and they considered themselves justly as in a state of perpetual pupilage, where they had an authority, after they came to the use of reason, not only to retract and control whatever had been determined, but to punish any guardian for measures which they had embraced by his persuasion. The same law had place in Thebes, and for the same reason.

It appears to have been a usual practice in Athens, on the establishment of any law esteemed very useful or popular, to prohibit for ever its abrogation and repeal. Thus the demagogue who diverted all the public revenues to the support of shows and spectacles, made it criminal so much as to move for a repeal of this law; thus Leptines moved for a law, not only to recall all the immunities formerly granted, but to deprive the people for the future of the power of granting any more; thus all bills of attainder were forbid, or laws that affected one Athenian without extending to the whole commonwealth. These absurd clauses, by which the legislature vainly attempted to bind itself for ever, proceeded from a universal sense of the levity and inconstancy of the people.

II. A wheel within a wheel, such as we observe in the German Empire, is considered by Lord Shaftesbury​ as an absurdity in politics; but what must we say to two equal wheels which govern the same political machine without any mutual check, control, or subordination, and yet preserve the greatest harmony and concord? To establish two distinct legislatures, each of which possesses full and absolute authority within itself, and stands in no need of the other’s assistance, in order to give validity to its acts, this may appear beforehand altogether impracticable as long as men are actuated by the passions of ambition, emulation, and avarice, which have been hitherto their chief governing principles. And should I assert that the state I have in my eye was divided into two distinct factions, each of which predominated in a distinct legislature, and yet produced no clashing in these independent powers, the supposition may appear almost incredible; and if, to augment the paradox, I should affirm that this disjointed, irregular government was the most active, triumphant, and illustrious commonwealth that ever yet appeared on the stage of the world, I should certainly be told that such a political chimera was as absurd as any vision of the poets. But there is no need for searching long in order to prove the reality of the foregoing suppositions, for this was actually the case with the Roman republic.

The legislative power was there lodged in the comitia centuriata and comitia tributa. In the former, it is well known, the people voted according to their census; so that when the first class was unanimous, though it contained not perhaps the hundredth part of the commonwealth, it determined the whole, and, with the authority of the senate, established a law. In the latter, every vote was alike; and as the authority of the senate was not there requisite, the lower people entirely prevailed and gave law to the whole state. In all party divisions, at first between the Patricians and Plebeians, afterwards between the nobles and the people, the interest of the aristocracy was predominant in the first legislature, that of the democracy in the second. The one could always destroy what the other had established; nay, the one by a sudden and unforeseen motion might take the start of the other and totally annihilate its rival by a vote, which, from the nature of the constitution, had the full authority of a law. But no such contest or struggle is observed in the history of Rome: no instance of a quarrel between these two legislatures, though many between the parties that governed in each. Whence arose this concord, which may seem so extraordinary?