Part 6

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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