Part 7

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

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

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

On the grievous, but necessary part of the Impost.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Objections of another kind against paying off the National Debt.

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

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

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

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

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

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