PART 1. The great Advantages of the National Debt, to a certain Amount. How the Commerce or Gaming in the Stocks contributes to the Credit and Circulation of the Public Funds; and what Advan⯑tages England has derived from thence.

THE national debt of England, and the funds that com⯑poſe it, known under the name of Annuities, ^* have for ſome time attracted the attention of princes, and the ſpeculation of individuals. Many perſons, in France and elſewhere, rely⯑ing [2] on their correſpondents, have engaged in the traffic of the ſtocks, without being thoroughly acquainted with the nature or object of it. I have been often conſulted, and have [3] ſeen with aſtoniſhment, that people of the beſt underſtanding were the moſt at a loſs to comprehend the detail of a traffic, which in Holland and England is perfectly underſtood by heads the moſt deſtitute of ſagacity. It has been obſerved that, in the execution of a ſubaltern poſt, men, born for great em⯑ployment, are frequently inferior to the moſt ordinary capaci⯑ties. [4] Beſides this, there are things which can never be well underſtood in theory. Practice alone gives us a thorough inſight into affairs. To know all the windings of the ſera⯑glio, one muſt be educated within-ſide of it. Yet, if I can engage the reader's attention, I hope to ſpeak plainly enough to make myſelf underſtood. I myſelf have been ſurpriſed at the detail which this object requires, and how abſtracted it ſeems even to ſome who have been accuſtomed to ſtudies infinitely more ſo. A robuſt ſtomach, accuſtomed to digeſt a ſolid food, is often cloyed with a light nouriſhment that ſeems to be of the eaſieſt digeſtion. Another difficulty ariſes from the terms appropriated to this traffic: ſome of them are unknown; others muſt be taken in an acceptation different from the vulgar ſenſe; and this circumſtance requires particular attention. The draught of this picture has engaged me in a diſſertation upon credit and circulation, more important than the traffic of the ſtocks. It will flatter me, if they, who ſearch for information upon ſo important a ſubject, ſhould find it in this paper; and if my ideas of circulation and credit in general ſhould be of any ſervice to the public. I may be deceived; but it is not my intention to miſlead. With reſpect to facts, I cannot be miſtaken, becauſe I advance none which are not certain, and almoſt of public notoriety.

Strictly ſpeaking, there is nothing, but the metals ² gold, ſilver, and copper, reduced to money, that is really, and by general agreement, the common meaſure and univerſal medium of exchange. Money is the key and inſtrument by which all [5] our wants are ſupplied. The real circulation of money, in the daily and domeſtic expence, which we call Buſineſs, is prodi⯑gious. The ſame crown piece may have circulated through fifty different hands in the ſpace of twenty-four hours, and repre⯑ſented fifty different things in the courſe of its circulation. If the fifty perſons were to meet at night, they would find, that they had expended and paid fifty crowns, though ^† in fact there had exiſted but one piece of money. Let it only be obſerved, that there is not in the whole univerſe half the money which the expences of the ſingle city of Paris amount to in one year, rec⯑koning all the expences incurred and paid in money from the firſt day of January to the laſt day of December; in all the orders [6] of the ſtate, from the king's houſehold to the beggar, who conſumes a pennyworth of bread every day.

This minute circulation is immenſe, from the multiplicity of ſimultaneous operations repeated in all quarters, and at every minute. But there is another circulation in groſs, ſupported by credit and paper ſecurity, which repreſents money, as money repreſents things. The example of the crown piece ſhows, that a private merchant, ⁴ whoſe credit is good, inde⯑pendently of the reſpite allowed him for the payment of his purchaſes, may circulate his own paper, avail himſelf of that of others, and multiply the ſprings of his commerce in proportion to the facility of circulation. There are oftentimes ten endorſe⯑ments upon the ſame bill of exchange, which repreſents the ſame value to ten different perſons. Theſe are important truths: though ſufficiently known, they do not deſerve to be called trivial. There is another ſubject leſs underſtood, and, perhaps, never thoroughly examined: I mean the analyſis of the public funds, and of the ſtock of trading companies, in that political view in which they ought to be conſidered by a ſtateſman. I mean to enquire how far circulation and nume⯑rary ⁵ wealth is augmented by the funds, and to weigh the arguments for and againſt creating them, with reſpect to the [7] intereſt of the ſtate; that is, whether debts are of any ſervice to the ſtate; and afterwards to conſider the uſe and abuſe made of them in that traffic, which we call Stockjobbing.

I know there have been great men, who have ſpoken vaguely upon the ſubject, and, I may venture to ſay, without under⯑ſtanding the merits of the queſtion. My Lord Bolingbroke, and the Preſident de Monteſquieu, have conſidered annuitants, whom they ſuppoſed to live in idleneſs upon the funds, at the expence of the induſtrious part of the people, as ſo many hurt⯑ful members to the ſtate, which, already overwhelmed by the facility of running into debt, is weakened and enervated by ſup⯑porting its creditors.

Whatever truth there may be in ſuch reflexions, I ſhall demonſtrate that great advantages have reſulted from the crea⯑tion of loans, and even from the traffic or game carried on in the funds, when once the nature of it is underſtood, and the whole ſubject, combined with all its conſequences, ſhall be thoroughly diſcuſſed. The looſe and imperfect ideas, which ſome perſons have conceived on this point, have given riſe to a number of works, in which the authors have miſtaken the nature, circulation, and credit of the Engliſh funds, and have done a diſſervice to France, by leading her into an error upon a moſt important article. People have been too ready to believe what they ardently wiſhed might be true. When once we ſet out upon a falſe principle, the whole ſyſtem is affected by it.

Who is there that might not be ſeduced at finding it advanced as a certain fact, in a ^* book much eſteemed and very well written, that the Bank of England unites within itſelf, as in a ſingle point, all the public credit of the nation and all the [8] private credit of individuals? The ⁶ Bank of England has nothing to do with the national debt: it is a bank of circulation, which bears no other relation to government, than a rich indi⯑vidual bears to the ſtate. A Mount of Piety, a Lombard well eſtabliſhed, might perhaps, in time and under a good direc⯑tion, do very near as much in France as the Bank does in England.

Government is ſo far from conſidering the Bank, that, at the beginning of the laſt war, they did entirely without its aſſiſtance. Exchequer bills performed the office of the Bank. The terms, in which the author exaggerates the alarm and diſtreſs of the Bank in the year 1745, are no better founded.

[9] ⁷ It is a common miſtaken notion that, when ſtocks fall, it is owing to want of credit. It is abſurd and ridiculous to ſay that credit fails, while government can borrow ſeveral millions [10] ſterling; but it is natural enough that ſtocks ſhould fall at a time when very conſiderable ſums are demanded for new loans, and when it appears that, from the continuance of the war, the ſame operation muſt be repeated for ſeveral years. As money becomes ſcarce, it becomes more valuable, and riſes in price, like any other commodity, in proportion to the demand. The ſtate, having occaſion for money, is obliged to give a greater intereſt. This, for a moment, ſinks the old ſtocks, becauſe every man finds his account in ſelling out, in order to inveſt his capital in the new loan, or ſubſcription, which offers him a higher rate of intereſt. Other accidents make money ſcarce for a time, and ſink the ſtocks, without its being any way a ſign of a defect of credit. When credit really fails, it is impoſſible to borrow large ſums upon any terms; and then, the more we [11] offer, the leſs we find. England was never in this ſituation in the laſt, or the preceding war. An intereſt of half per cent. more or leſs, made all the difference. Credit, that is the power of finding funds, however exorbitant, to ſupport the expence of the campaign, never wavered a moment, neither in the year 1744, nor in the laſt war. ⁸

The Bank, on the other hand, had formerly the precaution to give little premiums to moneyed men, who, upon preſſing occa⯑ſions, undertook to furniſh ſpecie to be circulated by the Bank in other quarters. The Bank then was always ſure of finding funds to pay the bills which poured in upon it; and, even ſuppoſing the Bank to have gone to the bottom, which is impoſſible, ⁹ [12] it has no concern with the national debt, which is not demandable, and never can be reclaimed, as all France, and many writers upon this ſubject, have very falſely conceived. As long as the intereſt is paid, there is no other demand. As to the reſt, Bank ſtock is very different from Bank bills. India and South Sea ſtock are again of a different nature; although theſe three corporations (the name appropriated in England ¹⁰ to ſuch eſtabliſhments) have all a credit upon government of many millions ſterling in annuities, the capital of which makes part of the national debt, and never can be demanded. ¹¹ The pretended bankruptcy of England has therefore always been [13] imaginary: her debts, never becoming due, and having no critical period to dread, are as if they did not exiſt. The intereſt may be a burthen to the ſtate, but never can be the diſtreſs of a particular point of time.

Beſides, there is annexed to each loan a ſolid, ſeparate, and diſtinct ſecurity for paying the intereſt, for which the whole nation in a body is reſponſible and guarantée, every thing being done with the ſanction of parliament. All the different orders of the ſtate are intereſted in the funds, which conſtitute one part of their property, and give value to the other. The nobility, who have a large portion of the land, have alſo a ſhare in the annuities. The proprietors of land have a great concern in the annuities. Tradeſmen, merchants, and even mechanics, are all of them annuitants. It is mere declamation to repreſent the proprietors of the public funds ^* ‘"as men who carry their fortunes in their pocket-books; as drones that devour the honey made by the bees; a race of men, enemies to the plough, and to the landed intereſt; and, in ſhort, a public peſt in every ſtate, where they live in ſordid avarice, and labor night and day to accumulate money, to ſwell their accounts, and to increaſe the burthen of the ſtate."’ ^†

[14] This whole picture is not only loaded, but entirely falſe and chimerical. If there exiſted ſuch a race of men, diſtinct from the reſt of the nation, and able to ſupply the ſtate, year after year, with twelve millions ſterling at four per cent. firſt, and afterwards for a little more, ¹² they would be intitled to reſpect rather than inſult. But in fact it is the whole Engliſh nation in a body, ſupported by their credit with foreigners, and by a few dealers in the ſtocks, who contribute not a little to maintain the circulation and credit of this immenſe volume of annuities. I ſhall explain this point in the ſequel. At preſent I mean only to conſider the annuities of England as a maſs of the largeſt volume, in which there has been the greateſt traffic, and which has lately been the ſubject of great ſpeculation, as it affects the intereſt of individuals as well as of nations. I ſhall begin by explaining, more particularly, what theſe annuities are.

^* Almoſt all the national debt of England, as I have already obſerved, conſiſts of annuities ariſing from different loans made [15] to government. We have ſeen that this debt is not demandable; that government has fixed no term for diſcharging it; that a ſolid and permanent fund is engaged to pay the intereſt without interruption, the moment it becomes due; and that every thing is done with the ſanction of parliament; ſo that the whole nation may be ſaid to have concurred in creating theſe annuities, and to have become guarantée and ſecurity for the intereſt. We muſt not forget, that the ſtate is at liberty to diſcharge its debts whenever it thinks proper, ¹³ except the laſt loans, which cannot be redeemed for ſome years. No embarraſſment then can ever ariſe from being obliged to pay or reimburſe at a certain period, as many foreigners have falſely conceived.

The ſcrupulous and inviolable exactneſs, with which the intereſt has conſtantly been paid, and the idea we have formed of parliamentary faith, have enabled the credit of England to negotiate loans which have aſtoniſhed Europe. The ſinking fund contributes greatly to the ſupport of credit; but credit alone could never have worked the miracle, if it were not for a [16] ſpring and power of faculty and contribution, by which credit is ſupplied. It is this power of faculty, this ſpring, that I mean to explain. The explanation, if I am not miſtaken, will throw a new light upon the ſubject, and correct a number of confuſed notions, which people of the beſt underſtanding have formed upon this important point.

It is not foreigners only who are unacquainted with the nature of the national debt of England; the natives themſelves miſtake the matter. Many Engliſhmen, as well as foreigners, conſider the debt as a counterpoiſe to all their ſucceſſes. Supported by the authority of Lord Bolingbroke, Sir Robert Walpole, Sir John Barnard, and other great men, they look upon the national debt as an unwieldy burthen, that oppreſſes the kingdom and enervates the power of the ſtate. Their apprehenſions, I believe, are founded upon the following principles.—The more a government is indebted, the more the nation muſt be loaded with taxes to ſatisfy the intereſt only; this of itſelf is a great inconvenience. The ſecond, reſulting from the firſt, is, that increaſe of taxes raiſes the price of labour, and injures manu⯑factures. The third is the tribute paid to foreigners who have property in the funds. The fourth, which has been much and long inſiſted on, is the ſpirit of idleneſs, gaming, and ſtock⯑jobbing, introduced into the nation by the traffic carried on in the funds. Theſe four objections ſeem, at firſt ſight, to juſtify every declamation againſt the national debt: yet I think I can demonſtrate, from ſpeculation and experience, that what has been ſaid upon this ſubject is more ſpecious than ſolid; and that people have talked, without entering thoroughly into the queſtion.

I ſhall firſt prove, that the national debt has increaſed the numerary wealth of the nation; that it is neceſſary to the [17] ſupport of circulation, by which it was produced, and of the excentric commerce which Europe, and particularly of that which England carries on in the other quarters of the world; in ſhort, that it is highly uſeful, up to a certain point; that taxes, in a great meaſure, return into the hand that pays them, and, inſtead of injuring, are favorable to induſtry; that the advantages ariſing from ſtockjobbing are far ſuperior to the miſchief it occaſions; that, without the game carried on in the ſtocks, England would not have had the means of making the efforts ſhe has done; and that this laſt article has never been well underſtood by thoſe who have treated of it. They have ſeen the effects, and have always been ignorant of the cauſes. Theſe I mean to explain. England is in the ſituation of a man who finds himſelf extremely well, breathes freely, and enjoys the moſt ruddy health; but who is not ſufficiently verſed in anatomy to know the principles of the health he enjoys. If he be told, that poſſibly ſome lurking diſorder may be concealed under this florid appearance, he at once takes the alarm, perplexes himſelf with apprehenſions, and is a prey to uneaſineſs.

Let us come to the fact. I affirm that the national debt has enriched the nation, and I prove it thus. On every new loan the government of England mortgages a portion of taxes to pay the intereſt, and creates a new artificial capital, which did not exiſt before, which becomes permanent, fixed and ſolid, and by means of credit circulates to the advantage of the public, as if it were in effect ſo much real treaſure, that had enriched the kingdom. Let us take for an example the twelve millions borrowed in the year 1760, and ſee what became of them. Is it not true, that the greateſt part of that money was ſpent within the nation? Nothing but the ſubſidies, and a part of the ſums expended in Germany, can be conſidered as loſt. I ſay a part, [18] for, even in a war upon the continent, the nation profits by furniſhing a variety of articles, as well as by the individuals who are employed there. When they water Germany, they only fertiliſe a ſoil, of which their commerce reaps the benefit. The riches of Germany always turn to the account of trading nations. But I content myſelf with obſerving, that it is indiſputable that a great part of the above loan was employed and circulated within the nation. England then will have preſerved a conſi⯑derable ſhare of theſe twelve millions, diſperſed and abſorbed in the nation itſelf; at the ſame time that the numerary riches of her creditors, who are chiefly Engliſh, are augmented by twelve millions, which did not exiſt before. ^*

If another ſtill more ſenſible proof be required, that the numerary of about a hundred and thirty millions ſterling, which the Engliſh nation poſſeſſes in annuities, and other factitious funds, would, in a great meaſure, not have exiſted, without the creation of theſe funds, one need only imagine in what would this numerary wealth have conſiſted, if the funds had never been in being? ¹⁴ Could it have been in money? Excluſive [19] of plate, there is not ſo much ſpecie in Europe. Could it have been in land? The limits of Great-Britain are not to be extended. Land has already riſen greatly in value, and, without an increaſe of population, will not admit of farther improvement. Could it have been in ſhips and commerce? Theſe two objects alſo have their limits, relative to the number of inhabitants. You cannot amaſs commodities beyond your conſumption; and too many merchants are frequently a prejudice to commerce. When once there is as much money employed as the demands of trade call for, the reſt is uſeleſs. It is not in the nature of things that the commerce of a nation ſhould enlarge continually, and introduce greater and greater ſums in a perpetual progreſſion. Where then would theſe millions have exiſted, which conſtitute ſo great a part of the wealth of the nation? If at all, they muſt have exiſted in foreign countries, which would be dangerous, even if it were poſſible. But no man will maintain ſuch a propoſition; eſpecially ſince it is demonſtrated, that the ſpecie, which produced theſe funds, remained partly in the kingdom, and have ſucceſſively been employed in every loan.

[20] If it were poſſible to add theſe hundred millions (to which nothing but the loans have given an exiſtence) to the current coin, the ſtate would ſuffer a real repletion of ſpecie, by which its oeconomy would be overturned. For this money, if it were poſſible for it to exiſt, would be ſcattered over the nation, not collected in the Exchequer; it would then entirely loſe its quality of a ſign; commodities would riſe to treble their preſent price, and all commercial proportion be deſtroyed. But the ſuppoſition is abſurd. The principles I lay down reſolve the difficulty.

The enormous ſum, of which the national debt is compoſed, never exiſted at once. This maſs of wealth has been ſucceſſively produced with the ſame ſpecie, by the magic of credit and circulation, which ſaves the inconvenience of having ſo large a ſum in ſpecie. The quantity that really exiſts is ſufficient to give an intrinſic value to every portion of the public funds in its turn, without exceeding the limits of an eaſy and uſeful circu⯑lation. The public funds have literally a magnetic virtue with reſpect to money.

When the proprietors of the old funds undertook to furniſh new loans to government, they proceeded thus. They not only found money within the nation by ſelling their conſolidated annuities ſomething per cent. lower, but they mortgaged thoſe annuities to foreigners, and ſo were enabled to avail themſelves of much larger ſums, by draughts, than could have been borrowed upon private credit. By theſe means they for a time ſwept away almoſt all the money belonging to foreigners, until circulation had time to recover its level, and the new loans could be divided into a greater number of hands. This is the ſolution of the great problem, or phaenomenon, in finance. The world has been aſtoniſhed at ſeeing eight or twelve millions borrowed for [21] ſeveral years ſucceſſively. It could not poſſibly have been done, but by the countenance and aſſiſtance of the ancient funds, under the auſpices of credit and circulation.

Specie communicates its quality to the funds by means of the revenue they produce, but is not increaſed. The numerary wealth is augmented by the funds acquiring a conſiſtency, and, if I may be permitted to uſe the term, a fixation, of which money is incapable. It rolls, is diſſipated, and paſſes from one hand to another. It is the Proteus of wealth, or rather wealth is the Proteus of money. But when once a fund is created, the numerary remains, and the contributive faculty increaſes as well as circulation, and without too great an increaſe of ſpecie. Current coin is the univerſal medium of expence. It is only when it communicates its quality to a fixed ſtock, that the numerary augments and is preſerved. This augmentation ariſes from the credit created by mortgaging a portion of the public revenue. A light tax is drawn from the nation, into whoſe hands it returns again, with a general benefit to the whole. The reader is requeſted to conſider this principle attentively. It contains a truth demonſtrated, palpable, and inconteſtable, though at firſt ſight not eaſily conceived. It is equally evident, and of the ſame nature with the principle already eſlabliſhed, that the ſame piece of money may in one day paſs through twenty different hands, and repreſent twenty times ſucceſſively its numerary value as a ſign. All my reaſoning turns upon theſe two principles. The important truths, which I maintain in oppoſition to received prejudices, are derived from them.

To make the former principle ſtill more apparent by another example, let us conſider Europe collectively. It will appear that the real money expended by the powers at war muſt remain, for certainly it is not annihilated; and that the ſums they borrow [22] upon credit are an addition of numerary wealth, which did not exiſt before. This addition, created by credit, acquires, by means of credit and opinion, a value both real and artificial, intrinſic as well as of convention; ¹⁵ that it circulates as long as credit ſubſiſts, and performs by parts the office of real ſpecie, however chimerical or impoſſible it may be to realiſe the whole. May not this be the reaſon, why the ruin and deva⯑ſtation of war is ſometimes ſo ſoon repaired?

Take one example more. It is certain that there are a hundred lords in France and England, whoſe united property exceeds, in numerary value, the current coin of the kingdom. It nevertheleſs obtains its value by circulation, and the fortune of every individual, taken ſeparately, is real and ſolid, although the whole together, that is, the equivalent for it in money, does not appear to exiſt. Succeſſive loans then are always made with the ſame identical ſpecie, which, through the medium of theſe loans, communicates its own value to the new funds or paper created by credit, and returning into general circulation in⯑creaſes the power of lending again.

All the millions paid to the king of France, are poured back into the gulph of the nation. The ocean, from whence they ſprung, receives them in return, although there may be ſome baſons in the caſcade, which, not being in their proper place, may prevent a more uſeful diſtribution. But if they were to ſtagnate at their ſource, a beneficial circulation would be loſt to the public.

[23] The man who cultivates the ſoil, is he who really ſuffers by taxes. ¹⁶ Statute labor, ^* impoſed upon the peaſant, deſtroys one ſource of the opulence of France; for it is this part of the nation that in fact nouriſhes the reſt, that gives value to the ſoil, and increaſes the numerary wealth. Population is the real riches of the ſtate. The other orders are indemnified for the taxes they pay. Luxury reſtores what luxury takes away, for [24] vice is tributary from its birth. It is a homage which it owes to virtue.

If we conſider the truth of theſe principles, with the nature, eſſence, and effect of loans made and applied with judgment, it will be found that, inſtead of impoveriſhing, they really enrich the ſtate; that they double the numerary wealth, and of courſe the power of increaſing them. Taxes, for the moſt part, return into the hand that gives them. It is always the rich, or thoſe who ſpend money, that pay the taxes in the laſt reſort, as well from their own expences, as by enabling others. They pay ſo much the dearer for the ſervice and labor of the induſtrious in the inferior ranks, who frequently make taxes a pretence for greater demands. This circulation neceſſarily turns to the ad⯑vantage of induſtry, which always finds itſelf indemnified for the pretended burthen laid upon it. The truth of this aſſertion may be demonſtrated thus. ^* The four millions ſterling, [25] annually raiſed by taxes to pay the intereſt of the funds belonging to the Engliſh, produce at leaſt fifteen or twenty millions in circulation, which are laid out for the benefit of induſtry. That this is true, may eaſily be conceived from the example of the crown piece, which may change hands twenty times a day, and perform the ſame daily operation three hundred and ſixty-five times a year; and therefore, in the account of that part of the four millions which comes into conſtant circulation, large allowance is made for that part which may be ſuppoſed not to circulate. The revenues, expended by the rich, undoubtedly enable the inferior ranks to engage in other leſs conſiderable expences with the ſame money. To ſuppreſs one million of revenue, would therefore deſtroy a circulation of ſeveral millions, and diminiſh the contributive power of the inferior ranks, by at leaſt twenty millions in the courſe of the year. I take a year for the general computation, although the ex⯑ample, already quoted and proved, might poſſibly exiſt within the compaſs of a day, perhaps in leſs. Upon this footing, the argument is unanſwerable, and beyond the reach of all objection. They, who do not thoroughly comprehend the principle, will be unable to follow me through the ſyſtem.

In conſidering the ſecond inconvenience, we ſhall be led to reflections which reduce the firſt to nothing, and ſtrengthen my ſyſtem. I affirm, that an advance in the price of labor, and of commodities of the firſt neceſſity, is not owing to taxes, but to other cauſes. This advantage, and even taxes themſelves, are a neceſſary conſequence of having a heap of people collected in the [26] great cities by commerce, luxury, and opulence. The true cauſe of it lies in the nature of that immenſe commerce produced by the diſcovery of America. The gold imported from that country neceſſarily continues the pretended inconvenience. It would be ſtill greater if it did not find a remedy in the augmen⯑tation of the numerary wealth, and in the circulation of the national debt. Effects, attributed to other cauſes, have in fact ariſen, on one ſide, from the debaſement of the metals in their quality of ſigns; on the other, from the immenſe tribute of commodities which America demands from Europe. The mines of Peru have produced two effects, which at firſt ſight appear contradictory. Gold and ſilver becoming very abundant, and lowering of courſe in their quality of ſigns, have given birth to a multitude of new wants, and to a moſt extenſive commerce. But to ſupply the new demands, which the lowering of the value of money had itſelf created, it was neceſſary that the quantity of it ſhould be prodigiouſly increaſed. Money then, in its turn, had occaſion to be repreſented by new ſigns, in order to quicken its own circulation; and the advantages, ariſing from the multiplicity of ſigns, are ſuperior to the inconveniences produced by a diminution in the value of the metals.

I affirm, that the poſitive reſources, or metallic wealth of the Engliſh nation, would be inſufficient to anſwer the demands gradually produced by the diſcovery of America, and that the Engliſh government could never have borrowed ſuch immenſe ſums, if it had not been for the circulation ariſing from the creation of theſe very funds. Credit is protected by credit. Circulation favors circulation; paper and public funds ſupport new paper and new funds, by ſupplying different loans ſucceſ⯑ſively with the ſame ſpecie, through the medium of circulation, [27] and the traffic in the ſtocks. As the numerary wealth multiplies continually, the national debt gives nouriſhment to commerce, and becomes the ſupport and remedy of that luxury, to which, in ſome inſtances, it gives birth. It has enriched the nation, and enabled her to pay her taxes. From theſe principles it follows, that former debts have enabled the nation to contract new ones. The effect of power becomes the cauſe of it. It is the debaſe⯑ment of gold and ſilver, in their quality of ſigns, that has trebled the nominal price of commodities. When we ſay that every thing is dearer, we mean that money is leſs valuable; and it loſes its value, becauſe there is more of it. It may be ſaid that a man, who has an income of three thouſand crowns, is not richer now than his anceſtor was formerly with a thou⯑ſand; but there are twenty people in Europe, who have three thouſand crowns a year, for one who, two hundred and fifty years ago, had a thouſand.

The increaſe of ſpecie was the cauſe of the firſt advance in the price of labor, and of commodities of the firſt neceſſity. On the other hand, gold and ſilver, though prodigiouſly augmented, and become ſo much more common in Europe, have never⯑theleſs ſtood in need of being repreſented by new ſigns, in order to anſwer the multitude of new demands, which the firſt abundance of ſpecie gave birth to. Such, in all probability, is the true origin of banks, actions, paper credit, and public funds, and of the facility with which they have been created. ¹⁷ They all ſerve to augment the numerary wealth, and to fix [28] and collect the riches of individuals, which, in a great meaſure, would not exiſt, if it were not for the creation of the funds that compoſe the national debt, bank ſtock, and other public ſecurities. I ſay, they fix and collect the riches of individuals. In effect, money in ſpecie is diſſipated and loſt; but having communicated its own quality to the ſigns that repreſent it, it goes away to perform its office elſewhere, and, ſupported by credit, ſtill preſerves that communicative quality, of which ſo many experiments have been made in England, without any proportionate increaſe in the quantity of coin, notwithſtanding the prodigious increaſe of wealth, or of the ſigns that repreſent it.

To comprehend the connection of theſe ſeveral truths, we muſt go back a little, and conſider with attention the revolutions, which have gradually taken place in Europe, ſince the compaſs enlarged our univerſe by the diſcovery of America. The quan⯑tity of gold and ſilver increaſed ſo rapidly from that period, that it ſoon lowered their value as ſigns. Induſtry found employment on all ſides. The external luxury of America indemnified the trading nations of Europe for their own internal luxury now carried to exceſs, and raiſed the price of labor in two ways; firſt, by lowering the value of money, and afterwards by the quantity of manufactures exported to America. This external commerce has at the ſame time obviated the fatal effect of the advance upon the prince of things. It were to be wiſhed, that we had an equal compenſation in point of morals, which ſince that period have loſt more than they have acquired. It is ſaid that there is leſs ſimplicity, leſs truth, in each particular ſociety, though ſociety in general be improved. ¹⁸ Is it poſſible [29] that political virtue ſhould grow from the extenſion of moral vice? Be that as it may, the diſcovery of the new world has certainly cauſed a notorious revolution, both phyſical and moral, in the old one. New diſorders, new remedies, and new intereſts, have given, as it were, a new form to the paſſions. A taſte for commerce, colonies, marine, navigation, and freſh diſcoveries, is become the univerſal ſyſtem. The cultivation of arts and ſciences is connected with a taſte for commerce, and has added a new varniſh to the politeneſs of Europe. The eaſe, with which a fortune may be acquired, has eſtabliſhed a kind of liberty and equality, that brings the different ranks nearer together, and baniſhes that ſlavery and debaſement, in which a general poverty, compared with the wealth of a very few indi⯑viduals, ſeemed to plunge the people. This perhaps is the greateſt benefit derived to Europe from the diſcovery of America. The fortune of the Medicis was excluſive and immenſe. From a private ſtation, they became ſovereigns, and enſlaved their country. The ſubjects of Charles V. and Philip II. on the contrary, drew the means of freedom from the reſources of commerce. The world ſeemed to enlarge under the power of the Spaniſh monarchy, and in many reſpects altered its form. A general opulence introduced by the gold and ſilver of the new world, the multitude of hands employed to ſupply the new wants and [30] luxury of America, have created new means of ſubſiſtence. ^* When the political machines, like the elements of commerce, grew more extenſive, vaſt and complicated, they required ſprings ſtronger and more numerous. It became neceſſary to multiply the circulation of paper, by which the numerary wealth was increaſed. This was done as it were by inſtinct, but with fear and trembling. We ſcarce knew what we were doing, or for what reaſon. Gold and ſilver having loſt three fourths of their value, a great quantity was required to repreſent ſo many things, and to keep the ſame machines going which money had ſet in motion. Means of all ſorts were to be trebled. Without an augmentation of the ſigns of value, which form an artificial wealth, neither commerce nor luxury could have ſubſiſted. It is the diſcovery of America, which, by an extraordinary increaſe in the maſs of gold and ſilver, has extended commerce, luxury, navigation, and manufactures. There required a greater rapidity of circulation; and by a ſingular paradox, as money multiplied and grew common, it required ſo many more ſigns to repreſent it. Public funds, paper and ſtocks, became neceſſary, ſometimes to abſorb an exceſs of ſpecie, and ſome⯑times, like a ſpunge, to be preſſed and give it back again. They fix, increaſe, and collect the numerary in one quarter, while the ſpecie itſelf circulates in another. The nation is really richer, becauſe it appears ſo, and furniſhes government with greater ſupplies upon critical and deciſive occaſions; without precluding, however, the uſe of proper expedients to relieve the diſtreſs that muſt reſult from too great a ſwell of the national debt.

[31] It has been already proved, that every loan increaſes the numerary wealth. Different loans are always advanced with the ſame money; the numerary is doubled by the creation of an artificial property, and the ſtate is enriched. The Engliſh government, by gradually giving up four millions ſterling a year to their own ſubjects and to foreigners, in return for eſſential aſſiſtance, has enriched the kingdom with more than a hundred millions ſterling; whereas not a tenth part of this numerary would have exiſted, without the creation of the funds. The taxes, drawn from the public to pay the intereſt, and aſſigned or mortgaged for this purpoſe, are poured back again with uſury. It may well be ſaid, that the right hand pays the left. It is exactly as if government remitted to the nation a part of the taxes levied upon the nation. Inequality in the diſtribution does not leſſen the profit in the total. ^* This inequality is ſtill corrected by the money which the proprietors of the funds ſpend themſelves, and enable others to ſpend. A great part of their revenue is employed in favor of induſtry. Thus every account is balanced, the numerary phantom of artificial riches continues to ſubſiſt, produces its effect, ſupports the proprietors, and is beneficial to others. The maſs of repreſentative ſigns ſupplies the place of a real, ſolid property. Every individual may upon occaſion convert it into ſpecie, although it would be ¹⁹ impracticable for them all to do it at once; a caſe that [32] never exiſts. The ſame might be ſaid of lands, houſes, and all kinds of chattels, which have by no means ſo ready and quick a circulation as the public funds.

‘"Among commercial nations," ſays Monteſquieu, "that, which poſſeſſes the moſt money, is not the richeſt and the ſtrongeſt; but that which has the moſt money circulating in property and real commodities, by means of repreſentative ſigns."’ Real money being repreſented by ſomething elſe, its numerary quantity increaſes. This ſurplus, favored by cir⯑culation, occaſions a kind of overflow, but is ſoon collected again by the magnetic virtue of commerce and credit, and returns into the ſame hands, with an increaſe of power to repeat a like operation every year. The diſtributive faculty does not wear out, but, inſtead of being enervated, acquires ſtrength by exertion. It is probable then, and indeed I am thoroughly convinced, that, without the circulation of the old debt, the Engliſh government could never have borrowed ſuch large ſums as they did in the laſt war. The more theſe principles are conſidered, the more the truth of them will be felt. ^*

[33] ²⁰ Let us proceed to the third and greateſt inconvenience of the debt. It is certain, that the powers who borrow become tributary to the foreigner who lends. Yet this inconvenience, [34] real as it is, is nothing in compariſon with the advantages of which we have been ſpeaking. Every thing has its inconve⯑nience. This one however (inferior in itſelf to the advantages [35] it produces) is ſtill farther extenuated by thoſe derived from the foreigner, who furniſhes on demand the ſums wanted, part of which are frequently ſpent in the kingdom. But the point, that moſt deſerves to be conſidered, is that, without this foreign ſupplement, by which the meaſure of power is filled up, which keeps the game alive, and of courſe promotes cir⯑culation, England could not have found ſuch extenſive reſources. The want of this ſupplement might perhaps have checked and enfeebled all her operations. I ſhall explain this point in my anſwer to the fourth objection, touching the ſpirit of jobbing and traffic in the ſtocks. The ſame ſolution applies to both objections.

I have already obſerved, that the proprietors of the funds are commonly looked upon as mere book-keepers, who live in idleneſs at the expence of the induſtrious. ^* This is a falſe notion; for the national debt is ſo voluminous, that it is [36] diſperſed all over the nation. Every order of the ſtate has a ſhare in it. There ²¹ is no diſtinct body of men to do that buſineſs, which in another country is called finance. So far is this intereſt from making them bad ſubjects, that it attaches them to their country. Every man is bound by an equal [37] obligation to ſupport and favor credit. As for ſtockjobbers, they are certainly the levers that move the machine. ²² Circulation could not be carried on without them, nor could [38] government have borrowed ſuch large ſums, without the traffic in the ſtocks. The univerſal turn ²³ for gaming, which ſtockjobbers have introduced, greatly facilitates the borrowing of money. In Holland, the Eaſt India company have actions in ſome chambers or departments, where there is no traffic, or where there is nothing done. The actions in that department are of the ſame nature with thoſe of the chamber of Amſterdam, yet bear a much lower price. The ſame thing happens to a ſtock called the Million bank, in London. The fact is unqueſtionable. ²⁴ Whenever a new loan is in agitation in [39] England, the brokers, or dealers in the ſtocks, draw forth all the money hoarded by individuals, and make it circulate for the ſervice of government. Firſt, the facility of ſelling ſtock for time, and of giving and taking premiums upon the ſame ſtock, induces many people to employ their money, who would not do it without ſuch advantages. Secondly, there is a great number of moneyed men, both in England and Holland, who are unwilling to run the riſques of a war, and therefore will not veſt their money definitively in the new funds. Their method is then to lay out ten, fifteen, or twenty thouſand pounds ſterling in annuities, which they ſell, for a ſtated time, to the dealers in the ſtocks. By theſe means they receive good intereſt for their money, without being ſubject to variations in the price of the principal, which go to the account of the jobber; and the negociation is continued for years, to the amount of millions. Aſſiſted by this practice, the Engliſh government has borrowed ſums, which, without the traffic in the ſtocks, and the ingenious contrivances of ſtockjobbers, could never have been raiſed. By ſuch management the Engliſh government has not only ſwept up the money of thoſe who were inclined to veſt their money in the ſtocks, but alſo of thoſe who had no ſuch inclination. This, I believe, is a ſecret which government itſelf was not acquainted with.

The benefit then, derived by government from the dealers in the ſtocks, is unqueſtionably immenſe. If after that I ſhould be aſked what I thought of the employment, I ſhould frankly confeſs, that I would diſſuade my children, friends, and relations, from meddling with it. It is a dangerous trade, and has of late [40] been groſly perverted. It requires a man of great knowledge in the buſineſs, and who makes it his only occupation. When people engage in it, as it often happens, to repair a broken fortune, or to make one rapidly, they find it a more dangerous game than any other. Many a man, who is ſuppoſed to be ruined by ſtockjobbing, had recourſe to it only when he was already, from other cauſes, in the road to ruin, and, in many caſes, might have avoided it, if, inſtead of employing a method ſo full of danger and ſeduction, he had at once cut the miſchief to the quick, by a prudent oeconomy, by lowering his eſtabliſh⯑ment, by overcoming the vain opinion of the world, and ſetting himſelf above it. This point would furniſh materials for a long train of reaſoning, and a ſeparate treatiſe.

The traffic in the ſtocks divides into various branches, and forms a very complicated ſubject. It may be carried on with prudence, and with a certain profit, where a man only means to make the moſt of his property without any of the riſques of play. If ſpeculations in the funds do not exceed the abilities of the perſon who ſpeculates, and if he does not ſuffer himſelf to be governed by his broker, there is leſs hazard in this game than any other. I have touched this matter lightly in a ſeparate Eſſay on Stockjobbing. ²⁵

If, without the traffic in the ſtocks, the power of the Engliſh to raiſe money had only amounted to two thirds of what the ſervices demanded, thoſe two thirds would probably have been [41] thrown away. The advantages they gained would not have taken place, and their loſſes would have been as great as their ſucceſſes have been. When a power is wanted equal to ten, and we poſſeſs but five, the proportion is not as two to one, but very often as ten to nothing. We loſe all that we employ, becauſe feeble efforts are not only ineffectual, but dangerous, and turn againſt the party that uſes them. Slowneſs in one degree is the cauſe of it in a greater, and feebleneſs produces feebleneſs. If the Engliſh had ſent a fleet and army, weaker by one third than it was, to conquer the Havanna, the expedition would have miſcarried. Not only the whole expence would have been loſt, but that loſs would have occaſioned many others. Inſtead of the treaſure, and other advantages produced by their ſucceſs, every circumſtance would have been inverted. I do not, there⯑fore, exaggerate in what I ſay of the inequality in the proportion. In politics, the effect of doing all that is wanted, compared with doing two thirds of it, inſtead of being as three to two, is ſome⯑times as all to nothing. The whole ſucceſs depends upon ſome little ſupplement of power, to which if ſtockjobbing and foreigners contribute, or if they are neceſſary to obtain it, they cannot be too much conſidered and encouraged. Now it is demonſtrated, that, if it were not for the circulation which this gaming excites among foreigners and in the kingdom, moneyed men would never venture to engage ſo deeply in a new loan, or would not find ſupplies, with that aſtoniſhing and requiſite celerity, at the moment they are demanded. It is the ready market that encourages to enterpriſe, and favors circulation. That produced by gaming is prodigious. It is inconceivable how much it facilitates the means of diſpoſing of funded property at every inſtant, and for very conſiderable ſums. To this facility, which individuals find in diſpoſing of their property, England is [42] indebted in part for the eaſe with which ſuch enormous loans have been made, and for the ſignal ſucceſſes that have attended them. The benefit therefore is far ſuperior to the inconvenience reſulting from ſtockjobbers and ſoreign creditors. Both one and the other have been eſſentially uſeful to England, and con⯑tributed not a little to the ſucceſs of her military operations. This was the point to be proved.

It appears then, that the national debt, far from being an oppreſſive burthen, has enriched the kingdom, and encouraged commerce; and that the miſchief of taxes and impoſts is in part fallacious. We have ſeen the true cauſes of advance in the price of labor, and commodities of the firſt neceſſity. It has been ſhown how much ſtockjobbing, and the concern which foreigners have in the funds, contribute to credit and circulation. Particular inconveniencies, which I readily admit, can never balance ſuch ſignal advantages.

Theſe principles, however, are not to be carried too far. It is poſſible to accumulate the national debt to a point that would greatly diſtreſs the kingdom. There is a maximum of two ſorts to be equally avoided. One is the amount of the intereſt provided for by taxes. The other concerns the maſs of paper in circu⯑lation. I believe we are at a greater diſtance from the firſt than the ſecond. It will appear in the courſe of this work, that all the reſources of England, with reſpect to taxation, are not yet exhauſted; whereas it has been believed, that repreſentative ſigns in paper could not circulate beyond a certain proportion with the current ſpecie. Speculative calculators have limited this proportion to three to one. ²⁰ But uniform experience in [43] England has proved to a demonſtration that it may be carried much farther. Still, however, it demands a limitation. One inconvenience occaſioned by the enormous maſs of paper ^* is, that the price of ſtocks is more ſenſibly affected now, than [44] formerly, at the leaſt apprehenſion of political events. Theſe convulſions are greater than they uſed to be, and at all times injurious to the public. It is no failure of credit; ²⁷ but the maſs being ſo great, and in ſo many hands, there are a greater number of ſellers, who ſpeculate upon the ſame event. This is one of the chief inconveniencies of the volume of the national debt. In circulation there is a maximum of power, which cannot be exceeded. The public funds are a realiſed alchemy; but we muſt not pierce the crucible. Every thing has its bounds; every thing requires limitation. What the limits of the national debt ſhould be, is more than I can ſay. Perhaps we already touch the border; ²⁸ perhaps we are ſtill [45] at a diſtance from it. Yet we wiſh to aſcertain this maximum, this point, which cannot be paſſed without danger. It is, I think, a difficult problem. The following principles may however lead to the ſolution of it.

A variety of principles muſt be combined with exactneſs, and the reſult of them conſidered. I ſpeak of England only. The application may afterwards be made to other powers. ²⁹ We ſhould firſt compare the maſs of gold and ſilver, with which America annually enriches Europe, with the quantity ſunk in Aſia. If, by an augmentation of ſpecie, the balance inclines in favor of Europe, we are ſo much the farther from the maximum. The progreſs of commerce forms the ſecond combination; [46] particularly that with America, in the conſumption of European manufactures and commodities. The more the Engliſh improve this branch, the leſs their debt will be a burthen to them. The third eſſential article is population and agriculture, which form the natural ſtrength of every ſtate. We all know what phyſical ^* [47] and moral advantages the Engliſh enjoy, to encourage population. The reſult of theſe combinations determines whether England be ſtill able to ſupport an augmentation of the public revenue by taxation, without overwhelming the nation, or going beyond its intrinſic power, ſo that the harmony of credit and circulation may ſubſiſt. This equilibrium is not ſo ſtrictly exact, but that it may bear a conſiderable weight before it gives way. Notwithſtanding all the declamations in France and England on the ſubject of taxes, they pay much heavier in Holland. Not to reckon other articles, even bread, ³⁰ though [48] of the firſt neceſſity and moſt univerſal conſumption, pays an exorbitant duty; yet it has not much diſcompoſed the ſprings of commerce and manufactures. I would never adviſe any other power to have recourſe to ſuch an expedient. I mean only to ſhow, that the maximum, which we ſometimes appear to touch, may ſtill be conſidered as in a very diſtant point of view; ſince England, with this tax alone, upon the ſame footing with Holland, might borrow many millions ſterling; that is, there [49] would be a fund to pay the intereſt. It is alſo certain, that part of the annuities, or intereſt of the funds, is annually re-inveſted in the ſame funds. It follows then, contrary to the common opinion, that the augmentation of the abſolute maſs of debt is a ſupport, ³¹ rather than a prejudice, to the relative price. ^* No man now hoards his money in a cheſt, as in former times. All the money circulates. The miſer is as uſeful to the ſtate, as the man of expence. It is only the prodigal, or rather an exceſs of luxury, that does miſchief. The advantage it produces is momentary. It is exactly cutting the tree at the root. The miſer, no leſs than the oeconomiſt, in ſowing for poſterity, circulates his fortune, and ſupports public credit, paper, and the ſtocks. The exceſs of ſpecie, beyond what is neceſſary for daily expence, trade and commerce, flows back upon the funds; and this ſupply is perpetuated by a circulation of the ſame ſpecie, which returns periodically, with an increaſe received from the treaſures of the new world. For this reaſon ³² it [50] is to be preſumed, that the rate of intereſt will be lowered both in England and Holland; and as ſo moderate an intereſt will not generally agree with the luxury of individuals, people will endeavour to diſpoſe elſewhere of the overplus of American treaſure, ſavings upon their annuities, and profits in trade. France might have availed herſelf of this diſpoſition, if ſhe had taken ever ſo little care to ſupport her credit in the operations of her finances. ³³

I think it however eſſential to England (and to every other ſtate) to profit by peace, and to make a good uſe of their ſinking fund, by diſcharging one third of the national debt, and relieving the nation from a part of the taxes. A ſinking fund increaſes as faſt as it is applied, and, with the addition of the growing intereſt multiplied for ſome years, conſtitutes a great power for the diſcharge of debt. But equity requires that there ſhould be a period, at which thoſe taxes ſhould ceaſe, which [51] were only raiſed to pay the intereſt of loans that are diſcharged. I do not know whether this point has ever been much attended to in England; yet it deſerves the attention of every power that is in debt to its own ſubjects. The ſinking fund of England, being compoſed of the ſurpluses of taxes mortgaged to pay the intereſt of different loans, muſt be applied to general reductions, and cannot relieve the nation from the tax imme⯑diately relative to each loan. Yet when once the diſcharge of the debt is accompliſhed, it is both juſt and neceſſary to take off the tax created to anſwer the loan. It would be unjuſt to continue it.

³⁴ I affirm then that, admitting the hard neceſſity of ſometimes engaging in war, it is indiſpenſably neceſſary to lighten, as much as poſſible, the debts of the ſtate in time of peace; though too extenſive a diſcharge of debt would be uſeleſs and dangerous, eſpecially when credit is built upon a ſolid foun⯑dation. ³⁵ The unſhaken ſtability of public credit in England, proves the truth of theſe principles. They have the actual evidence of three wars, ſupported, ſince the beginning of the preſent century, with glory and vigor. It is not the ſplendor of a day, that glitters and is extinguiſhed in the ſame inſtant. The ſtate of public credit has always been progreſſive. Like fire, [52] if not fed, it diminiſhes. In countries wealthy, and full of reſources, ſuch as France and England, every thing may con⯑tribute to entertain and ſupport it. On the other hand, as trifles ſupport, ſo a trifle may overturn. Little matters are not to be neglected. The contempt of them may be of the greateſt conſequence. The moſt inconſiderable cauſe may produce the moſt conſiderable events. Dealers, jobbers, and gameſters, may contribute to the ſucceſs of thoſe great operations of finance, by which the fate of nations is frequently determined. It is not the lading that ſinks the veſſel, but perhaps a little defect in the equilibrium, ſome trifling exceſs in the diſpoſition of the weight. A great veſſel can no more be built without nails, than without beams. We do not always know what kind of nails are moſt wanted. We deſpiſe or neglect, and do not even ſuſpect that they are neceſſary.

Experience, a combination of facts, in a word, the actions performed by the Engliſh, ſince the beginning of the preſent century, and the means they employed, unite in proving, beyond diſpute, the truth of theſe ſpeculative ideas. The obſervations, made upon this nation by the author of the Bilan, are at beſt no more than paradoxes, which require a ſolution. His con⯑cluſions are contradicted by facts. The ſpeculation and conjec⯑tures of theory can never overturn manifeſt facts and viſible practice. I ſhould alſo obſerve, that this author and others, who have followed Engliſh writers, are very ill founded in appealing to their authority. ³⁶ The opponents of govern⯑ment [53] in England are more violent and partial than in any other nation. Their partiality hurries them into the moſt ridiculous exceſſes. Their authority therefore, with reſpect to the ſtrength and revenue of the kingdom, is very equivocal. I agree, that there are defects in the ſyſtem of adminiſtration. Every thing that glitters is not gold. Their advantages perhaps are not ſo conſiderable as they appear to be; but, to repreſent England in the preſent moment as a declining, enfeebled ſtate, and upon the verge of ruin, is a paradox palpably abſurd, and not to be ſupported.

There is one eſſential point which I ought not to omit. In order to favor the circulation of the funds, to maintain their value, ³⁷ and of courſe to reduce the rate of intereſt, which is the object of finance and the ſign of a flouriſhing credit, one thing is abſolutely and indiſpenſably neceſſary. We have already explained the advantage which England derives from the traffic carried on in the funds. It could never ſubſiſt, but for the facility of mortgaging funded property. This operation ſeems to be for⯑bidden in France by an extenſion of the law, which forbids lend⯑ing upon pledges. This law therefore, the ſpirit of which never could extend to the funds, ſhould be explained and confined. I do not now enquire whether a Mount of Piety, or a Lombard, might not be of great uſe to France, and the moſt effectual means of preventing that ſhameful uſury, by which ſo many indi⯑viduals [54] are undone. It is ſufficient to remark, that the inconveniencies, apprehended by the legiſlature, have no relation to the mortgaging of funded property. Neither domeſtic robberies, nor the diſorder which the facility of lending upon pledges may occaſion in families, have any reference to this caſe. Large ſums are lent in Holland, at a moderate intereſt, by men of the ſtricteſt honor, and by the richeſt magiſtrates, on the ſecurity of the funds; and the lenders thereby contribute to keep up the price, as much as if they themſelves were buyers. We all know, that when a man is forced to ſell property of any kind at a moment's warning, the buyer takes his advantage and lowers the price; whereas the facility of pledging waves the neceſſity of ſelling. The owners of ſtock have time to turn themſelves, and are ſeldom, if ever, obliged to ſell at a ſhort notice; by which the price of ſtocks is frequently ſunk for a trifling, inconſiderable object. ^* On the other hand, there are many people who would be willing to buy large quantities of ſtock upon ſpeculation; but whoſe money not being come in, or not being able to employ it in this way, they give up all thoughts [55] of dealing in the French funds; whereas, in thoſe of Holland and England, twenty thouſand livres in ready money are ſufficient to purchaſe a hundred thouſand livres in ſtock, becauſe it can always be pledged at a moderate intereſt; ſo that, inſtead of paying uſurious intereſt, the ſtock itſelf produces a revenue ariſing from the ſurplus of twenty per cent. which the borrower had beyond what he borrowed. Some people pledge their ſtock for a time, having occaſion for their money elſewhere ³⁸; others merely and ſimply to receive a great intereſt from the ſurplus, ſelling their ſtock to deliver at a ſtated time, and run⯑ning no riſque. Theſe three numerous claſſes of men draw a quantity of money into the funds, which would not come in without them. Thus the pledging of ſtock prevents a large quantity of it from appearing in the market. A great inconve⯑nience is obviated, or a ſignal benefit obtained. The number of buyers increaſes prodigiouſly, and the number of ſellers dimi⯑niſhes. From hence we may conceive the utility of the operation. For the public good, for the good of commerce, credit, and circulation, the laws in France, touching loans upon pledges, cannot be too much ſoftened.

[56] Let us ſay a word of the Dutch funds. It is to be obſerved, in the firſt place, that in France all the funds are confounded under the name of Paper. It is common to ſay, Paper riſes or falls in England. The expreſſion is improper. The funds in England are not in paper, any more than the actions in Holland. For this reaſon, no man can loſe his actions in Holland, nor his funded property in England, as people in France loſe their actions in the funds, or India company. Yet in Holland one may loſe the obligations, or contracts for which the ſtate is ſecurity. Theſe are in paper, ſome payable to the bearer, but the greateſt number to the laſt owner, with certain deeds annexed to prove the title. There are ſome obliga⯑tions ſecured by the generality, that is, the Seven United Provinces, bearing an intereſt of three per cent. Particular provinces have borrowed money at a higher intereſt; but, excepting Holland, they have no great credit. The province of Holland is accountable for the greateſt number of obligations, to the amount of many hundred millions of florins. Yet this paper, though it bears but two and a half per cent. intereſt, is at par, and above it. Many circumſtances concur to ſupport this enormous credit. The firſt is, that the great riches of the Dutch are in money. It is the country, next to England, where there is the quickeſt circulation both in ſpecie and paper. They have more than the moſt extenſive commerce can employ. The ſpices, with which they alone furniſh all Europe, America, and Africa, maintain and give a periodical increaſe to this abundant circulation. No other nation has lent ſo much as the Dutch to England, France, Saxony, and other powers.

The ſecond reaſon why the paper called Obligation is ſo much ſought after, is that there is a law in Holland, by which the guardians or adminiſtrators of the effects of minors, are obliged [57] to lay out the whole produce in obligations, for which the ſtate is ſecurity. There is in Amſterdam, and other cities of Holland, a chamber called the Chamber of Orphans. The principal ma⯑giſtrates are at the head of it. When any perſon dies without a will, they take the direction of the ſucceſſion, and veſt all the produce in obligations. There is much good and much evil in this practice. But it is always a leaven that contributes to ſupport the value and credit of that paper. There are alſo ſome Hollanders of the old ſtock, who have no faith in funds, which they do not ſee, and who will have all their property in their cheſts, in paper ſecured by the ſtate, which they honeſtly think is the moſt ſolid ſecurity in the univerſe. Brokers and notaries have a ſort of brokerage upon ſettling the titles in the different transfers; but this operation is too complicated to admit of a detail.

The actions of the Eaſt and Weſt India companies in Holland, and all the royal funds and other actions in England, are transferable, in the reſpective offices, under the name and to the account of the purchaſer, ſo that he has no paper given him to keep. The books of the office are evidence of the pro⯑perty. A foreigner truſts nothing to his correſpondent. ³⁹ There are even printed liſts in England, in which the names of the proprietors of Bank, India, and South-Sea ſtock, are marked, with one ſtar if they have a capital of five hundred pounds, with two for a thouſand, and three for fifteen hundred; [58] but no farther. This we know is a ſpur to ſome people to be concerned in theſe funds, which in England are called Corpo⯑rations. Such contrivances ſeparately appear of no moment; yet, taken together, contribute more than we are aware of to promote circulation, and of courſe to the greatneſs and ſplendor of the ſtate. What contributes to it much more is the exactneſs with which the intereſt, and even life annuities, ⁴⁰ are paid on the day they become due. The delay which people are expoſed to in France, under pretence of being paid in alphabe⯑tical order, has given great diſguſt to foreigners, to the prejudice of French credit. This method is not practiſed in London, and I do not know that it is abſolutely neceſſary in France. I ſee no reaſon why a thing, ſo eaſily done upon the banks of the Thames, ſhould not be done upon the banks of the Seine, in parallel circumſtances. It is known beyond a doubt, that the funds are provided at the appointed time as ſcrupulouſly as in London. The delay ſo prejudicial to credit can only ariſe from the clerks who are employed to pay the money. ⁴¹

The author of the Bilan is miſtaken in ſuppoſing, that the Engliſh Eaſt-India company, or any other, ſends annually twenty millions of French livres in ſpecie to India in time of peace. In the year 1762 the Engliſh company ſent no ſpecie to India. They may have ſent ſome during the war they main⯑tained upon the coaſt of Coromandel, and in Bengal; yet ſtill I [59] cannot perſuade myſelf that it amounted to ſo large a ſum. This muſt be exaggerated by at leaſt half. It will be found, that in time of peace, the company, one year with another, does not ſend above ſix millions of livres ^* in bullion to India. All that has been ſaid upon this ſubject, from the time of the Romans to this day, proves too much. I much queſtion whether the India trade was the ruin of the Romans, as the author of the Bilan ſuppoſes. Monſieur de Monteſquieu, in his excellent treatiſe upon the cauſes of the greatneſs and decline of that people, mentions this circumſtance but very lightly, and only as an acceſſary to others of greater importance. It is ſufficient to obſerve, firſt, that, even according to Monteſquieu, the Romans did not extract ſuch quantities of gold and ſilver from their mines, as we do from America. With us theſe metals are commodity as well as ſign. To preſerve their value as ſign, they muſt be exported as commodity. Secondly, the Romans had no eſtabliſhments in India, where individuals make immenſe fortunes, and return with them to Europe. Thirdly, the Romans hoarded their money. Every thing with them contri⯑buted to choak circulation, of which they had not the ſmalleſt idea. They knew nothing of bills of exchange, nor annuities, nor government-paper bearing intereſt. All buſineſs was tranſ⯑acted with ſpecie. Taxes returned with difficulty into the hand that paid them; and therefore, with a multitude of reſources, they had none when they were moſt wanted. Loans upon critical occaſions were unknown, and would have been impracti⯑cable. The Barbarians ranſomed, or plundered, the empire. They had no expedients of credit to reſiſt unforeſeen accidents. Theſe were the reaſons of their decline; and my ſyſtem is [60] ſupported by them. I do not deny that the India trade may be a commerce of mere luxury to certain powers; but it has been demonſtrated, that it is a ſource of riches to England, and the brighteſt jewel in the crown. ⁴² The ruinous exportation of ſpecie muſt, in the firſt place, be reduced to half the ſum ſtated by the author of the Bilan; the Engliſh company recovers from foreigners infinitely more than he admits; and there is a third circumſtance, which he does not attend to, and which makes good a part of the loſs the nation may ſuffer by the export of money to India; I mean the immenſe fortunes acquired by individuals, and by all the perſons employed by the company in that country. ⁴³ Theſe Aſiatic ſpunges, per fas et nefas, bring home periodically a part of the treaſures of India, without which, Aſia, from the time of the Romans to ours, muſt have exhauſted not only all the money of Europe and Africa, but even of America. The truth of this propoſition requires no other evidence, but to be expreſſed. If the author's aſſertion were [61] true, the money of all the univerſe muſt already be in Aſia. His ſyſtem leads to an abſurdity; and every ſyſtem that does ſo is falſe. The Dutch Eaſt-India company enriches the ſtate, while it impoveriſhes the proprietors; a paradox that cannot be accounted for but upon the principle which I have juſt explained. The prodigious and rapid fortunes, acquired by individuals in India, repair the breaches which a commerce, ruinous in itſelf from the money it exports, may occaſion in the ſtate, and even in Europe. We ſhould be happier perhaps if it were poſſible to do without tea, and other exotic drugs of India, as well as without muſlins, and all the uſeleſs articles of an exceſſive and dangerous luxury. But this luxury being once eſtabliſhed, it would be ſtill more deſtructive to purchaſe the materials of it from foreigners. I believe that Europe, ſooner or later, will recover part of the money, which, after wreſting it with ſo much difficulty from America by the hands of Africans, we have waſted upon Aſia. Before this great event takes place, I affirm, that the individuals eſtabliſhed in India have at all times gleaned a part of the treaſure ſent thither by the merchants of Europe. It is alſo true, that the multiplicity of India compa⯑nies in Europe has produced various inconveniences. The firſt is, that a greater quantity of ſpecie is exported than is neceſſary to maintain its value here as a ſign, which yet, without the export to Aſia, would be too much reduced. ⁴⁴ The ſecond is, that [62] a competition in the purchaſe of India manufactures, and other exotic commodities, raiſes the price in Aſia; that is, there is more money wanted to buy the ſame quantity of goods. On the other hand, the ſame competition ſubſiſting in the ſales in Europe, lowers the price of what coſts ſo dear at the fountain head. For this reaſon the companies no longer make the ſame profit they did formerly; whereas the perſons they employ have the cream of the trade, and ſucceed better than ever.

⁴⁵ The author of the Bilan pretends that the Engliſh buy more than they ſell, and have done ſo for a conſiderable time. [63] If this were true, the nation would not be in a condition to face ſo extenſive a commerce, which yet is ſupported with admirable facility. The expedition with which they equip, the number [64] of their veſſels, the rapidity of their voyages, and the opulence of their cargoes, contradict every thing he advances, from partial or ill-informed Engliſh writers. I ſtill think I ſee a man of a [65] robuſt conſtitution, whom they endeavour to perſuade that he is ſick.

The author founds his aſſertions upon the courſe of ex⯑change, which ſeems to be to the diſadvantage of the Engliſh [66] trade. ^{* 46} But, to make the exchange an exact barometer of the balance of trade between nations, all their commodities [67] muſt be bartered one againſt the other, and, after this operation, the difference muſt be remitted to the winning party. But this is a chimera, and can only be executed in theory. There are a multitude of temporary circumſtances and events, that render the exchange an equivocal ſign. The ſtrongeſt proof that it is ſo, would be the falſehood of the author's own concluſions, even where his obſervations might be ſuppoſed to have been verified. Every man, who has the ſlighteſt political knowledge of Europe, muſt perceive how much he is miſtaken. Metaphyſics, ſup⯑ported by calculation, are the moſt plauſible and the moſt fallacious. We loſe our underſtanding by having too much of it, and, by knowing too many things, at laſt know nothing. Commerce is a game, and it is vain to play with people who have nothing to loſe. To win always, with excluſion of every body elſe, is impoſſible. Univerſal commerce is there⯑fore a mere chimera. Every induſtrious nation, ſituated conveniently for trade, has a proportionate ſhare of it. Their opulence is no more durable than a gameſter's luck, unleſs the riches of the ſoil, and the political adminiſtration, contribute to encourage induſtry, and to ſupport the national commerce. In the natural order of things, the advantage may lie on the ſide of France. But, as it is the nature of ſilver and gold to circulate, riches, which give birth to luxury, fre⯑quently [68] turn to the account of indigent nations, and always to the account of trading nations. This ſon of Opulence is the father of Poverty. Exceſs of wealth may one day make the ſources of it neglected in England, and pervert the uſe of it. The kingdom may fall, but the preſent does not appear to be the moment of its decline.

^* The ſcarcity of ſpecie on the Royal Exchange, mentioned by the author of the Bilan, frequently proceeds from temporary [69] accidents, which are ſoon corrected. As the coin is heavier, and of better allay, it is exported by all ſorts of means. The Engliſh introduce a great quantity of Spaniſh dollars, and export them again with a ſmall drawback. This has an in⯑fluence upon the courſe of exchange. But, as an individual, immenſely rich, may find himſelf ſhort of money, (his current caſh being exhauſted, perhaps in lucrative undertakings) the ſame thing may happen to a trading nation. The diſtreſs does not laſt long. A remedy is ſoon applied by bills of exchange, ſupported by real property; and it commonly happens that a ſcarcity is ſucceeded by a great abundance of ſpecie. This has been conſtantly obſerved. Let us hear what Monſieur de Mon⯑teſquieu ſays upon the ſubject.

‘"In the country of commerce, the money that diſappeared ſuddenly, returns, becauſe the ſtates that received it owe it. The ſcarcity or abundance, which varies the courſe of exchange, is not a real, but a relative ſcarcity or abundance. When France, for example, has more need of a fund in Hol⯑land, [70] than the Dutch have of a fund in France, money is then called cheap in France and ſcarce in Holland, and vice verſâ." He ſays, that "money is one merchandiſe more, which Europe receives by way of barter from America, and exports to India. Conſidering the metals as merchandiſe, a great quantity of gold and ſilver is advantageous. It is not ſo, conſidering them as ſigns, becauſe a plenty of them lowers their quality of ſigns, which is in a great meaſure founded upon their ſcarcity."’—‘"The exchange," he obſerves in another place, having given men a ſingular facility in con⯑veying money from one country to another, money is no ſooner ſcarce in one place, but it flows in, on all quarters, from the places where it was plentiful. The fixing the rate depends upon a compound ratio of the total of things com⯑pared with the total of ſigns, and varies as the accidents of commerce incline the balance one way or the other."’

According to Monteſquieu, all moveables, ſuch as money, notes, bills of exchange, actions in public companies, ſhips, &c. are merchandiſes that belong to the whole world; the nation that poſſeſſes the greateſt ſhare of theſe moveables is the richeſt. That great man knew the principle, but did not perceive the conſequences. When he ſpeaks of public funds, he miſtakes the nature of them. The object was beneath him, and eſcaped his attention. He ſays in another place, ‘"As money is the ſign of a thing, and repreſents it, ſo every thing is the ſign of money, and repreſents it; and the ſtate proſpers, in proportion as, on one ſide, money is a true repreſentative of things, and as things in return are true repreſentatives of money; that is, when, according to their relative value, a man may have the one as ſoon as he has the other."’ This [71] is preciſely the caſe of the public debts, of which he ſpeaks ſo differently in many parts of his works.

If the whole produce of commerce was contained in the amount of the territorial revenue, as the author of the Bilan ſuppoſes, ^* what would become of Holland, whoſe territorial revenue is almoſt all exhauſted in ſupporting the territory?

It coſts the ſtate more to keep the dykes and high roads in repair, than the revenue of the lands amounts to. Yet the produce of commerce and conſumption is immenſe, notwith⯑ſtanding the parcimonious ſpirit of the mechanic, who improves upon French ſobriety, without the ſame good effect, for labor is dearer there than in France. Holland is another proof that an excluſive advantage in commerce is a chimera. Her profits ariſe from the opulence of her neighbours, who would ſuffer in their turn, if any unhappy revolution were to annihilate the republic. It is the bridge of communication, the common mart, the ſup⯑port of which is eſſential to the trade of other powers. Whoever is in poſſeſſion of actions, obligations ſecured by the ſtate, annui⯑ties, or other ſtock in England, converts them into money at one per cent. more or leſs, according to the market-price at Amſter⯑dam or London. It is a great advantage to the Engliſh, that their ſtocks are current on the exchange of both countries. It is to be wiſhed, that the ſame commerce were eſtabliſhed in favor of the French funds. Perhaps it might not be impracticable. ^†

I have wandered a little from my ſubject to correct ſome miſtakes, into which the ingenious author of the Bilan has been led by Engliſh writers and others, whom I do not reſpect [72] the leſs, although they are deceived. No man need bluſh at miſtaking a road, in which Monſieur de Monteſquieu has ſo often ſtumbled. Theſe excurſions do not appear quite foreign from my ſubject, to which I now return. The ſeveral con⯑cluſions of my ſyſtem unite in this corollary.

I think I have proved on one ſide, that the gold and ſilver with which Europe has been overflown ſince the diſcovery of America, and on the other, that the augmentation of com⯑merce, by which the new world is ſupplied with ſo many commodities and manufactures of the old one, have occaſioned a revolution in the political, moral, and civil ſyſtem of Europe; that theſe metals again require new repreſentatives in their quality of ſigns, becauſe the abundance of them has multiplied the things they repreſent; that nothing contributes to ſupport circulation more than the national debt of England; that it has increaſed the numerary, and co-operated in the fixation of riches; that, without the creation of theſe funds, the three commercial powers would have leſs numerary wealth, and could not circulate money enough to anſwer the triple demand of commerce, finance, and luxury; that taxes return in part into the hand that pays them, and circulate with benefit to the public; that of courſe they are not ſo miſchievous as it is pretended; that the debts of the ſtate are very uſeful, up to a certain point; that they have their limits, beyond which they might become equally dangerous; that a ſinking fund is eſſential to credit, and neceſſary to the ſtate; that in time of peace there cannot be too much care taken to diſcharge a part of the debt, but that it might be dangerous to pay it off entirely. (I think that a proportionate maſs of paper ſhould always be kept in circulation, on terms the leaſt burthenſome to the ſtate). That the greateſt operations depend upon credit. To be uſeful, it [73] muſt flouriſh extremely; if not, it draws no more than the bucket of the Danaides. (Experience ſhows that the traffic in the ſtocks contributes greatly to ſupport the credit and circula⯑tion of the public funds, and that without this traffic England never could have negotiated thoſe conſiderable loans, to which ſhe owes her aſtoniſhing ſucceſſes). That, to arrive at the ſame point, we ought, as much as poſſible, to model our conduct upon theirs; conforming however, in the execution, to the reſpective principles of government. I have ſhown that, if it were not for the India trade, money would have ſunk ſtill lower in its quality of ſign; that a great part of it is recovered by individuals, who acquire riches in India, and bring them back to Europe; that the obſervations of the author of the Bilan upon the courſe of exchange are not ſolid; that the exchange is a falſe barometer, a deceitful compaſs, unleſs attention be paid to all the circumſtances obſerved by Monſieur de Monteſquieu; and that, in a word, the national debt has enriched the king⯑dom, increaſed its numerary wealth, encouraged circulation, commerce, and induſtry, and procured the moſt important ſucceſſes in war; that nothing but its being carried to exceſs can annihilate all theſe advantages; and that ſuch exceſs may be prevented by means of the ſinking fund, the reſources of which ſhall be more particularly explained in the Second Part.

PART II. New Means of increaſing the Sinking Fund of England, and paying off Part of the National Debt.

SINCE there has been a general improvement in knowledge, ſince all the world has taken a ſhare in commerce, and ſince the principles of finance are no longer myſterious, nor confined to the adept, every thing may be reduced to calculation. Credit, which was formerly no more than a creature of the mind, ¹ an idol worſhipped through habit, has obtained a real exiſtence, may be acquired by ſyſtem, loſt by accident, and recovered by principle. But there are prejudices in all our opinions. They are the alloy of reaſon, and muſt be reſpected or deſtroyed.

England, with fewer apparent reſources than France, poſ⯑ſeſſes a more ſplendid credit. ² The form of government [76] contributes to it. Yet, if France had purſued the ſame princi⯑ples in the operations of her finances, the prejudice againſt her would have been partly removed. At the beginning of the war in 1755 the French funds wore a better appearance than the Engliſh. Far from ſinking or giving way, the whole maſs of paper ſupported itſelf ſurpriſingly. The bare creation of a ſinking fund had given a conſiſtence as well as a colouring to paper, and ſubdued the old prejudices, by which credit had been deſtroyed. But the plan was not ſufficiently conſidered; the principles were not ſufficiently combined; accidents were not foreſeen. I am perſuaded, that credit would have ſupported itſelf longer, if, when the ſinking fund was created, care had been taken to appriſe the public, that the diſcharge of debt was to be ſuſpended in time of war, with an aſſurance that this fund ſhould then ſerve as a collateral ſecurity for paying the intereſt; the exactneſs and punctuality of which ſhould be inviolable, as it is in England. Every thing ſhould have been done with the concurrence, and under the ſanction, of the parliament. From a want of theſe formalities and precautions, they were ſtopped by rivulets when they had rivers to paſs. In England the uſe of the ſinking fund was more extenſive. This machine of wax yielded to the impreſſion of government, and was applied to the current expences of the war. The funds, by which the intereſt of the debt was ſecured, proceeded without interruption; they were ſolid, ſufficient, and inviolable; no part of the principal could be demanded. In the midſt of a ſtorm, government glided upon a ſmooth river, while in France they were carried, away by a torrent. The French ſinking fund diſappeared like a phantom, and credit was annihilated at the moment it was moſt wanted. This could not have happened if a ſolid, inviolable ſecurity had been aſſigned for the ſeparate [77] intereſt of each loan by a particular tax created, as in England, at the time the loan was made. In France the intereſt upon all the loans is confounded, and charged upon the Aides, Gabelles, ³ [78] and five great Farms, which the people conſider as a ſea without a ſhore.

After theſe facts, ſhall it be ſaid that the operation of a ſinking fund muſt be ſuſpended in time of war, as contradictory to, and incompatible with, the new loans which the ſervice may require? I am far from thinking ſo. The principle may be ſoftened, and greater advantages drawn from it. In France, it was only the form that was defective, and this defect prevailed through all the operations of her finances. In France I have often inſiſted upon the utility of a permanent ſinking fund, both in peace and war. The principles I went upon were not entirely rejected. Some uſe was made of them; but they were neither carried to their extent, nor, in ſome inſtances, ſtrictly adhered to. I am of opinion, that all appearances might have been [79] ſaved, and an equal quantity of debt extinguiſhed, by reducing the intereſt of the redeemable annuities, or paying off thoſe who might not ſubmit to the reduction.

In the year 1750, the Engliſh government, ſupported by peace, by an abundance of money, by credit, and a good adminiſ⯑tration, was able to reduce all the four per cent. annuities, of which there was an immenſe quantity, ^* to three, offering at the ſame time to pay off thoſe who ſhould refuſe their conſent to this arrangement. Government even puniſhed thoſe perſons who refuſed, or heſitated, by declaring that they, who did not come in within a ſhort limited time, ſhould be immediately paid off; whereas the ſubſcribers ſhould enjoy an intereſt of three and a half per cent. for ſeven years longer. By theſe means few people deſired to be paid off. The opportunity was favorable, meaſures were well taken, and there were ſome millions in reſerve. The Bank, India, and South-Sea com⯑panies, had been appriſed of the ſcheme, and gained over by government, together with ſome moneyed men, who had nothing better to do with their money. So that an operation, which in theory ſeemed difficult, if not impoſſible, was com⯑pleted with eaſe, and wonderful ſucceſs. In ſome caſes it is eaſier to execute than to conceive. It is certain that, with five millions only, when credit is well managed, the intereſt of fifty may be reduced, yet without compelling any body, paying off ſome few, and offering to pay off the reſt. Every thing depends upon the opportunity, and method of uſing it. France was upon the point of being able to ſeiſe a like opportunity; but having neglected to make uſe of it, they have ſince been obliged to have recourſe to leſs plauſible and leſs honorable expedients. The example I refer to, is a diſtinguiſhed fact known by the [80] whole world, and might have been followed with advantage. But the moment is paſt, and cannot be recalled.

Let us turn to England, where the fire of Veſta has never been extinguiſhed. The public ſaith, with regard to the credit of the funds, has never been violated, or ſuffered the leaſt diminution. I have ſhown by what means credit has been ſo long ſupported, and proved that the national debt has enriched the nation by increaſing its numerary. I have unfolded the prin⯑ciples of circulation, together with the utility and the neceſſity of the funds; acknowledging at the ſame time, that there was a maximum which muſt be avoided, and that, if wars were to ſucceed each other, without a conſiderable diſcharge of debt in the intervals of peace, the machine might give way, and draw the ruin of the kingdom along with it. For this rea⯑ſon, I affirm, that England ſtands in need of an auxiliary, per⯑manent, ſinking fund, to operate in time of war, as well as peace. Great advantages would reſult from it, both to the public and to government. Let us ſuppoſe for a moment, that, after ſome years of peace, the maſs of the national debt ſhould be diminiſhed by ſeveral millions; that when it was reduced, for example, to ſeventy or eighty millions only, which is very practicable, a war ſhould commence; and that government, during the war, ſhould continue to pay off ⁴ annually a [81] million and a half at par; is it not evident that this would ſupport the current intereſt, and prevent its riſing? An opera⯑tion of this kind would give elaſticity to circulation. The [82] ſprings of credit would preſerve their activity, and the new loans be raiſed with ſo much the greater eaſe, and upon leſs burthenſome terms. The reader is requeſted to conſider that, [83] ſince the produce of the ſinking fund is not ſufficient to anſwer the extraordinary ſervices in time of war, and ſince it cannot prevent new loans, it is much better to apply it to its true [84] object, by which the price of the old funds is forcibly kept up, the intereſt of money of courſe kept under, and a much greater aſſiſtance given to the new loans, than if, by applying the [85] ſinking fund to the current ſervice, a million leſs ſhould be borrowed. This is a reflection, not to ſay a truth, which I ſubmit to the judgment of thoſe who are acquainted with the magic of circulation and credit. They will be able to unfold the infinite advantages, that might reſult from it to the Engliſh nation. Perhaps it may be no more than a chimera of theory. Let us try whether it might not be realiſed in practice.

To proceed methodically, let us, once again, conſider the national debt and ſinking fund analytically. Let us weigh the two objects, and reduce them to their exact dimenſions. It has been ſhown that, properly ſpeaking, it is only the intereſt that can be a burthen to government. The principal is not de⯑mandable. With reſpect to government, it may almoſt be ſaid not to exiſt, though it has ſerved and enriched the public. Yet, if this principle were abuſed, taxes would be perpetuated, and multiply; the weight of the funds would break the ſprings of [86] circulation; credit might fail, and the whole edifice fall to the ground. I affirm that this period is ſtill very diſtant. If it were near at hand, the miſchief perhaps would admit of no remedy. Conſidering the debt as it ſtands, it is evident that, notwithſtanding the immenſe increaſe of capital debt ſince the death of Queen Anne, the burthen immediately falling on the public has not increaſed in the ſame proportion. The nation has continued to borrow ſums, the intereſt of which ſhe would have been unable to diſcharge, if means had not been taken, conſiſtently with juſtice and good faith, to reduce the rate of intereſt; and, although the ſinking ſund (compoſed of the ſurpluses of taxes appropriated to pay the intereſt, and aſſiſted by voluntary reductions of intereſt, to which the creditors con⯑ſented rather than be paid off) has not produced all the effect that might have been expected from ſo wiſe and neceſſary an inſtitution, yet it is certain that conſiderable ſums have been paid off, and that public credit has been ſupported by the expectation of a conſtant annual reimburſement. A ſinking fund increaſes in proportion as it is employed. The progreſſive accumulation of annual intereſt ſaved by every diſcharge of debt, and united to the growing capital, in a few years pro⯑duces a prodigious fund, let the commencement of it, or ſavings upon the firſt payments, have been ever ſo inconſiderable. The geometrical progreſſion of ſuch a fund is immenſe, and aſtoniſhes the imagination. It is a ſhallow ſtream that becomes a river as it flows. It is true however that, to avail themſelves of this progreſſion, the Engliſh have been obliged to continue the taxes, appropriated to pay the intereſt of old loans, after the principal was diſcharged. I ſhall ſpeak hereafter of the means of leſſening this inconvenience.

[87] The ſinking fund was much more conſiderable than it is, and amounted to above three millions ſterling. But it has been charged with eight hundred thouſand pounds a year to ſup⯑port the civil liſt, ⁵ and to make good the deficiencies of all the appropriated taxes, as well as to ſecure the intereſt and principal of the unfunded debt; which is but juſt. I leave it to the Engliſh to calculate to what ſum the clear applicable pro⯑duce of their ſinking fund, as it ſtands at preſent, may amount. It is certain that if, after the firſt year, it were every year ſucceſſively augmented with the intereſt of the debt paid off, conformably to the nature of its inſtitution, we ſhould ſee a prodigious increaſe of its power at the end of a dozen years. If at that time (I ſpeak always hypothetically) the diſcharge of the old debt was continued in proportion to the power of the fund, the price of ſtocks could never fall, becauſe the quantity being diminiſhed, and conſined to fewer hands, every creditor would have a chance of being ſoon paid at par. New loans might then with eaſe be negotiated on moderate terms, and with a trifling douceur to the ſubſcriber. But an operation of this kind, in the preſent enfeebled ſtate of the ſinking fund, would be too tedious. The uncertain continuance of peace, the clamour of oppoſition, and the enormous maſs of the debt, con⯑ſtantly repreſented as a bugbear, make an impreſſion too ſtrong to agree with ſo ſlow a remedy. Some operation like that of the [88] year 1750 is wanted, brilliant in appearance, and rapid in its effect, by which all the phantoms, that undermine public credit, and ſpread uneaſineſs among the people, might at once be put to flight.

The following, for inſtance, is an operation, by which I con⯑ceive twelve millions and a half of the maſs of the national debt might be cancelled, that is, they might be converted into a fund ſo conſtituted as to diſcharge itſelf, by applying 527, 500l. a year out of the ſinking fund for a certain number of years, part of which ſum would be gradually recovered every year. The method I propoſe, would be to open a ſubſcription for creating life annuities ⁶ at ſeven and a half per cent. and [89] to receive at par, either the four per cents. redeemable in 1761, ^* or any of the three per cents. or money, without diſtinction. As the three per cents. are ſtill at ten per cent. diſcount, ^† a [90] life annuity at ſeven and a half per cent. is more advantageous. The confidence repoſed in government, and in the good faith of parliament; that extended luxury, which invites almoſt every man to increaſe his income; the great maſs of the annuities; the wiſh that poſſeſſes many fathers of families to ſecure ſome [91] little life annuity to their children, as a reſource in caſe of need; all theſe motives united would, I am perſuaded, in a little time have the effect of converting twelve millions and a half of annuities into life annuities, with the loſs of the prin⯑cipal, and greatly diminiſh the phantom of the national debt. The intereſt of the twelve millions and a half thus diſcharged, viz. of three millions and a half at four per cent. and nine millions at three per cent. would increaſe the ſinking fund in the ſum of £.410,000 a year, and with the help of £.527,500 taken from the ſinking fund, would pay the life annuities without a new tax. The ſinking fund would ſtill remain ſtrong enough to make ſome farther annual reduction of debt. It would every year acquire new ſtrength by the growing intereſt of debt ſo reduced, and by the life annuities gradually falling in by the death of the annuitants. The ſurplus of intereſt diſperſed through the public would in part return into the old funds, where the annuitants veſt their ſavings. As the maſs of ſtock diminiſhes, the price riſes. Credit acquires new ſtrength, and the formidable body of the old debt being reduced, the circulation of it would be ſo much the leſs liable to be embarraſſed.

This operation, I ſhould think, might be repeated with ſucceſs a year or two after the firſt converſion of principal debt into life annuity, and the moſt obſtinate unbelievers be con⯑vinced, that it is poſſible to overcome the coloſſus of the national debt, and to reduce it to a ſize which it would be imprudent and dangerous to leſſen; for I have demonſtrated, that it is abſolutely neceſſary to maintain a conſiderable circulation of theſe factitious riches, which were created and are ſupported by credit, and which credit itſelf ſtands in ſo much need of.

[92] By this ſcheme it is poſſible to extinguiſh twenty-five millions of principal debt, converting them into annuities, which gra⯑dually diſcharge themſelves, and applying only a part of the ſinking fund. The root of this fund would ſtill be preſerved, with a new produce from year to year, and ſoon recover its original condition by the falling-in of the life annuities. It is alſo to be obſerved, that as ſoon as the maſs of life annuities is annihilated, the ſum of £.527,500 is reſtored to the ſinking fund. The recovery of this ſum would begin to be felt even in the firſt few years, conſidering the multitude of annuitants, and the great maſs of the ſubſcription. Yet there is no fear of the whole ſubſcription's being too great to ſucceed, as well for the reaſons already ſtated, as becauſe in the firſt inſtance it is but ten per cent. upon the national debt. This is certainly very far from being a tenth part of the fortune of in⯑dividuals, and every man is glad to lay out a ſmall portion of his property in a life annuity. The ſame operation might pro⯑bably be repeated twice or thrice after the firſt attempt had ſucceeded. The eagerneſs, with which people in France veſted their money in life annuities in tickliſh circumſtances, confirms me in my conjectures.

When theſe operations have taken place, ſome meaſures ſhould be fallen upon to increaſe the ſinking fund, and to divide it; appropriating one part to a perpetual and permanent ex⯑tinction of debt, not to be interrupted in time of war; the other, incorporated with the ſavings on the life annuities as they fell in, not to be applied, nor to ſubſiſt beyond the diſcharge of a certain number of millions; when theſe are paid off, the nation to be relieved from a proportionate quantity of taxes. There would then be ſome periods at which taxes would be taken off; an eſſential point never thought of in England. It belongs to [93] the profound genius of the Engliſh, to quicken theſe principles, and bring them into practice.

Nothing in my opinion could be more effectual, nor leſs bur⯑thenſome, towards creating an auxiliary and permanent ſink⯑ing fund, than a tax upon collateral ſucceſſions. ⁷ It may be objected that, as this would be taxing the funds, there would be a violation of public faith. The objection I think is not well founded; this collateral tax, in the firſt place, has been univer⯑ſally adopted ever ſince the time of the Romans. It is the mildeſt, and the leaſt unjuſt. When once impoſed with the concurrence and conſent of the nation, under the ſanction of parliament, there is nothing to be ſaid againſt it. It ſhould be ſoftened in degree, and not take place at all with reſpect to foreigners who have money in the funds; for this would be an [94] injuſtice, and credit might be affected by it. A tax upon collateral ſucceſſions, applied ſtrictly to the uſe of the ſinking fund, would conſiderably diminiſh the coloſſus of the debt. It might be continued no longer than till the debt ſhould be reduced to ſeventy millions ſterling; or it might be continued for ever, and the reſpective taxes, raiſed to pay the intereſt of loans, might be aboliſhed as faſt as the ſeveral loans were paid off. A meaſure of this kind would gratify the nation, relieve the lower orders of the ſtate, and favor manufactures. We ſhould then have a pleaſing proſpect before us. ^*

I know there is ſtill a more ſimple method to create a new ſinking fund, or to give a conſiderable increaſe to the old one; I mean by an equal land tax. It is admitted in England that, if the land tax were upon a juſt and equal footing, it would produce double what it does. But is there patriotiſm enough to ſubmit to a new aſſeſſment? I queſtion it. Yet neceſſity, fear, [95] and policy, may have an influence upon hearts the leaſt patriotic. To ſupport the ſtrength of my aſſertions it is ſufficient to have ſhown, that reſources are not wanting, and that with a wiſe adminiſtration, a well-conſidered ſyſtem, and a careful oeconomy, (the moſt important, though in England the moſt neglected article of all) this national debt, which is the ſubject of ſo much clamor, is in its own nature very different from what it has been repreſented, and capable, in point of quantity, of a con⯑ſiderable diminution; that it depends upon the Engliſh nation, not only to obviate the bad conſequences of their debt, but to render it ſtill more uſeful to credit and circulation, by preventing an exceſſive accumulation, which in time might be fatal.

The ſtrong remonſtrances made by the French parliaments on the ſubject of taxes during the war, though filled with ſublime reflections worthy of thoſe venerable bodies, contributed not a little to the diminution of public credit, and to the low price to which all the royal funds were reduced. This could not fail of greatly embarraſſing every meaſure of finance, and perplexing the miniſtry in their military operations. The writings of perſons, who oppoſe government in England, on the ſubject of the national debt, have contributed to ſink the price of ſtocks ten per cent. below par, and laid a conſtant check on every operation of finance. Yet theſe writings are of a nature widely different from the remonſtrances of the parliaments. The authors are, for the moſt part, apoſtles without miſſion; and for one paper written in good earneſt to inform the nation, and charitably to warn it againſt real danger, there are ten that proceed from mere ill humor. The former are excuſeable at leaſt, if not praiſeworthy. The others have no pleaſure, but in diſcovering the pretended weakneſs of their country. They [96] make no ſcruple of proſtituting that country which is their common mother, without any uſe, and merely for their amuſement.

Anti-miniſterial writers have clamored loudly againſt the miſapplication of the ſinking fund, and at government's having lately departed, in ſome inſtances, from the invariable rule of appropriating ſeparate funds for the intereſt of new loans, and having charged the intereſt of the unfunded debt againſt the ſinking fund. The reproach is not without foundation; but as the inſtances are of no great importance, the conſequences of them have been maliciouſly exaggerated. The arrears of the war amounted to a conſiderable ſum. The laſt loan, in 1761, though not ſufficient to clear them off, met with ſo much con⯑tradiction in the article of the cyder tax, and the oppoſition was ſo powerful, that the miniſtry thought that, in time of peace, the ſinking fund might gradually diſcharge the unfunded debt, as it has done in effect from year to year. ^*

An objection has alſo been raiſed againſt making the ſinking fund anſwerable for the civil liſt, and for all deficiencies in the given produce of the other funds; but, according to the preſent ſyſtem, I do not think the objection founded; eſpecially as, on the other hand, ſome beneficial articles have been incorpo⯑rated [97] with the ſinking fund, by which, in a little time, it may expect to be augmented.

Yet the clamors of the oppoſition appear to deſerve ſome attention. No poſſible method ſhould be neglected to make the ſinking fund more effectual, and to give it conſiſtence. The means I have pointed out ſeem to me not to be neglected. I inſiſt upon the neceſſity of creating an auxiliary permanent fund of redemption, that may operate equally in peace and war.

A permanent fund of redemption, conſtantly improving by the intereſt of the debt it diſcharges, a tax upon collateral ſucceſſions, a tax upon the transfer of funded property, ⁸ [98] and periods fixed for lightening the burthen of taxes, are effectual methods to ſupport public credit. The ſyſtem I propoſed in France was not purſued. The reduction of intereſt ſhould have been made without a direct diminution of the capital, and apparently with the free conſent of the proprietors. This, after the peace, was practicable, if a right plan had been purſued. When once the original contracts were violated, there was no remedy. Yet I confeſs the tax upon transfers, attempted in France, might have been of ſervice, if precautions had been taken not to check circulation. In their preſent form, they are too heavy, and produce leſs than a more moderate tax would do, becauſe the transfers are leſs frequent than they would be. No man regards one per cent. more or leſs; but five per cent is an object, and fetters all dealings in the ſtocks. ^*

[99] The quantum of the tax upon collateral ſucceſſions might be proportioned to the degrees of relation in families, as they are more or leſs removed. There are powerful reaſons, why foreigners ſhould not be ſubject to it. The ſame reaſons do not hold with reſpect to the tax upon transfers.

The French government would have done right in exempting the tontines from the dixieme, or tenth penny; becauſe life annuities and tontines have always been conſidered as an in⯑violable ſecurity; ſo much ſo, that when credit gave way, and money was not to be had upon any terms, every body ſub⯑ſcribed to the life annuities and tontines, and ſunk their capital almoſt at as low a rate of intereſt, as they might have received from the other funds already in the market, on which a conſi⯑derable profit might have been expected at the peace, and [100] has in effect been made. A prejudice of this ſort ſhould have been reſpected and encouraged, as a reſource againſt an extra⯑ordinary emergency. The exiſtence of a ſtate is not momentary. Some care ſhould have been taken of poſterity. It is not merely removing a ſymptom. We ſhould go back to the ſource of the diſorder, and endeavour to preſerve the vital principles of exiſtence. Empiriciſm in politics is as dangerous as in medicine.

In the French edicts of the year 1763 it was inſinuated, that the plan of diſcharging the debts of the ſtate was ſo ſerious, that it was propoſed to extend it to the life annuities and tontines. The intention was excellent, but it produced a contrary effect. Life annuities are not of a redeemable nature. ⁹ To redeem them is, in the firſt place, againſt the intereſt of the ſtate; and, ſecondly, againſt the intention and intereſt of the proprietors. This is leſs a paradox than it may ſeem. Redeeming life annuities is againſt the intereſt of the ſtate, becauſe the burthen of itſelf diminiſhes every year. The fates are inexorable financiers. It was obſerved to me by a man of character, that life annuities make the pot boil at Paris. The increaſed income of individuals circulates to the advantage of the revenue. [101] Beſides, when this ſtring is touched, the ſtate gives up the only reſource it has left in the midſt of failing credit and diſtreſs. To redeem the life annuities is alſo contrary to the intereſt and intention of the proprietors, who purchaſed them with the ſacrifice of their capital. They ſunk their money upon theſe annuities in the heat of the war, when they might have made double the intereſt of it that they could in time of peace, beſides the great chance of the value of their ſtock riſing at the end of the war; whereas they have no opportunity of making the ſame advantage, in caſe they ſhould be paid off. They ſunk their capital with no other view, but to have an in⯑violable revenue, which their ſituation required, on which ſome have regulated their expences, and many their exiſtence. Others prudently intended to ſecure ſome little reſource to their children againſt a moment of diſtreſs. To redeem theſe annui⯑ties would overturn the principle on which they were created. It would make a prodigious alteration to individuals in the means of their ſubſiſtence, and the public would feel the bad effect of it. I know what has been ſaid to the diſadvantage of life annuities. There is ſomething ſpecious in the argument, that they are prejudicial to poſterity. ^* Every thing has its inconve⯑niencies. [102] Good cannot exiſt without evil. But the world, ſuch as it is, the ſtyle of the age we live in, our luxury, habits, and cuſtoms, make all theſe evils inevitable. Let us become Spartans, let us remove to Lacedaemon, let us new-model our manners, and adopt thoſe of ancient Greece; I ſhall then admit the reality of principles contradictory to thoſe I now eſtabliſh. But, to return to the Engliſh.

For the preſent it is ſufficient to obſerve, that, if in England the neceſſities of the ſtate ſhould be ever ſo preſſing, yet, before a national bankruptcy, with which the public is unreaſonably threatened, could take place, recourſe would certainly be had to the expedients I have pointed out, viz. An application of the preſent ſinking fund, a new aſſeſſment of the land-tax, a tax upon collateral ſucceſſions, a light tax upon transfers, a capi⯑tation, ¹⁰ a ſmall duty upon articles of conſumption, upon offices and employments, and an operation of finance, by which, with the aſſiſtance of the ſinking fund, a portion of capital debt might be converted into life annuities. None of theſe reſources have yet been touched, but all of them will probably be [103] exhauſted before the kingdom is reduced to that ſituation which was prognoſticated at the death of king William, when it owed no more than twenty millions ſterling. Diogenes, to prove the reality of motion againſt the ſophiſtry of Zeno, got up and walked. We need only follow the hiſtory of facts, to refute by experience every thing that has been ſaid concerning the national debt, ſince the beginning of the preſent century. My ſyſtem is proved by a concurrence of unqueſtionable facts, which ſhow how much we have been miſled and alarmed by phantoms of our own creating. If this Treatiſe on Circulation had been written ſeventy years ago, the theory of it would have been every year confirmed by practical evidence. The principles, on which it reſts, are demonſtrated by experiment concurring with ſpeculation.

Of all the writers, who have been deceived with regard to the national debt, none ſurpriſed me more than the celebrated Mr. Hume. I had the honor of knowing him at Paris, and obſerved with infinite pleaſure, that his diſpoſition was ſuperior to his underſtanding. It is to truth that he is indebted for this elogium. ^* This great man, before the laſt peace, had written an Eſſay on Public Credit, which I had not ſeen when I drew up the firſt part of my Eſſay on Circulation. It was mentioned to me afterwards, and I was concerned to find that my own Treatiſe ſeemed exactly a refutation of his. He read it ſome time after at Paris, together with the Letter in which I have endeavoured to prove that the jealouſy of commerce is ill underſtood, and that the true intereſts of princes are not at variance; and he was pleaſed to expreſs his approbation of the two eſſays in terms which I [104] cannot venture to repeat. That ſublime genius had alſo touched the ſubject of the jealouſy of commerce. If he had unfolded the principles of his ſyſtem more at large, I ſhould have ſup⯑preſſed my letter. The hope that he will do it one day or other, and the approbation with which he honored that little treatiſe, determined me to publiſh it. I flatter myſelf, that Mr. Hume will alſo correct ſome of his ideas on circulation and public credit. He may be right in a certain ſenſe, when he foretells, that either the nation muſt deſtroy public credit, or public credit will deſtroy the nation. It muſt undoubtedly happen ſo, if precautions were not taken. I believe I have made him eaſy upon that point; yet I cannot refrain from ſug⯑geſting to him, with all the ſubmiſſion due to his underſtanding, that he advances another propoſition, the conſequences of which might be as dangerous, as the principles on which it reſts appear to me to be queſtionable. Mr. Hume ſays, that, if a ſpunge were applied to the national debt, thouſands would be ſacrificed to the ſafety of millions. Without enquiring whether honor is, in any caſe, to be ſacrificed to advantage, I affirm only, that the millions would for a long time feel the ſacrifice of the thou⯑ſands. Mr. Hume did not conſider, that if three millions ſterling, paid in annuities within the kingdom, were ſuppreſſed, the ſuppreſſion of thoſe three millions would ſtop a circulation that repreſents perhaps thirty millions in expence; that every order of the ſtate, even to the beggar, would feel the effects of it; and that the ſource of taxation would be dried up. Conſider the example of the circulation of a ſingle crown piece, ſtated in the Firſt Part of this Work. If ſuch an event ſhould ever take place, people would kneel at the ſight of a guinea. We have ſeen an inſtance of this diſtreſs in France, where things were never carried to that extremity; yet the French funds never [105] had an eaſy circulation. The conſtitutions of the two kingdoms are very different. The reſources of France are infinite; yet, upon the fall of Law's ſyſtem, the deſolation was almoſt univer⯑ſal, although the ſpunge was very far from extending to the whole national debt. In that caſe commerce would be at a ſtand; a public bankruptcy would draw along with it the bankruptcy of a great part of the merchants, whoſe means and credit would be annihilated; induſtry, for a time, would ceaſe to exiſt, or be compelled to quit the country; agriculture would feel the con⯑ſequences. The fire would extend far and near, and the confuſion become univerſal. The ſtate, the government, would be without reſources. So dangerous a convulſion would bring us to that fatal period, at which the breath of an infant might overturn the ſtate. We might then ſay, with Monteſquieu, that there would be nothing left of the picture of the ſtate except the frame, liable to be broken by the leaſt external effort.

I am perſuaded that, when Mr. Hume wrote the above eſſay, he had not yet made an exact and commercial analyſis of circu⯑lation, of the nature of the funds, and of the effects of annuities. He had been ſtruck with ſome truths diſadvantageous to paper and credit, and which had interrupted the ſight of others, calculated to correct the inconveniences attending it. Thus it often happens, that truth leads to error, and error to truth. To arrive at truth, we muſt ſeparate deluſions, and ſift falſehood to the bottom. Mr. Hume obſerved, that multiplying the repreſentative ſigns lowered the value of ſpecie. But he did not conſider the neceſſity of having ſuch ſigns to repreſent the multitude of things, which the abundance of gold and ſilver has in ſome meaſure rendered neceſſary. Let us new model our manners; let us go twenty centuries back; let us reduce human nature to its primitive condition; let us baniſh thoſe factitious [106] wants which we have changed into neceſſities; let us be philo⯑ſophers, and with Diogenes reject the earthen veſſel, and drink out of the hollow of the hand; let us be poor and virtuous, and Mr. Hume's principles may then be applied. But ſince there is no likelihood of ſuch an alteration ſor ſome centuries, we may as well purſue our courſe, and endeavour to correct abuſes. Let us imitate Solon, who gave the Athenians the beſt laws they were capable of receiving. We muſt often live with our enemies, and compound with our infirmities. Imperfection is our inhe⯑ritance, and little inconveniences muſt be preferred to great ones. Though we may be aſſured that death will come, let us not kill ourſelves for fear of dying. Every ſtate, let its political conſtitution be ever ſo well deviſed, carries within itſelf the principle of its diſſolution. If Rome and Sparta periſhed, what ſtate can hope to endure for ever? We muſt not attempt to govern a corrupted people by the ſame laws which ſuit a virtuous people. The expreſſion is ſevere; but the principle of that auſtere philoſopher may be applied to the queſtion before us. England, in all appearance, will ſuffer the fate of other ſtates that have gone before her. But let us not encroach upon providence. The period ſeems yet at a great diſtance.

They, who have undertaken to apologiſe for luxury, have run into another extreme. Their view of that multiplied circu⯑lation, which encourages induſtry and commerce, has not been complete. They did not conſider, that circulation is maintained by a daily expence, permanent, ſolid, and conſtantly kept up; [107] whereas exceſſive luxury, by diſordering the various ſprings on which the fortunes of individuals are balanced, and exhauſting their reſources, is injurious to induſtry and circulation. The numerary wealth of a great number of individuals is annihilated by a forced luxury, and is not diſperſed through the public, as hath been falſely imagined. This is the great point of the queſtion. I do not condemn that expence, or relative luxury, which is proportioned to the means and rank of the individual; but that which confounds all ranks, which renders ſo many perſons the victims of opinion ill underſtood, makes them glitter for a moment, then baniſhes them to obſcurity, from which they never emerge. This is the luxury which I affirm is deſtructive.

Exceſſive luxury in England has given birth to another vice, to which the enormous increaſe of the debt may truly be aſcribed. The character of the nation is to carry every thing to exceſs; virtue, vice, every quality is puſhed to an extreme. The Engliſh have no oeconomy in their expences in time of war. They do that with more, which might be done with leſs. No man, I preſume, will venture to deny, that they might have done as much with one third leſs expence. The immenſe and rapid fortunes, made by their contractors in Germany, exceed all that we have heard of by the financiers in France. Plunder, waſte, and rapine, as we are told, were carried to the higheſt pitch; and how could it be otherwiſe, when the annual expence amounted to near three times as much as in the war of 1744? The annual loans were then from three millions to three and a half; in the laſt years of the late war they were carried to twelve. The efforts, I confeſs, were more vigorous, and the ſucceſſes more brilliant; but by no means in that proportion. [108] A prudent oeconomy is the moſt eſſential method of all to recover the finances. ^*

The frugality and manners of the Swiſs have made the canton of Berne very rich, in ſpite of a barren ſoil, and a territory with⯑out ſea-ports, mines, or manufactures. A Venetian ambaſſador once obſerved to cardinal Richelieu, that France, in order to be rich and eaſy, wanted nothing but to know how to ſpend the money ſhe loſt in waſte and diſſipation. The obſervation might equally be applied to England.

The Engliſh are naturally prodigal. They readily give into extremes, and know nothing of moderation. The legiſlature will find it ſo much the more difficult to ſet bounds to avarice, and to re-eſtabliſh an oeconomy ſo neceſſary to the well-being of their affairs. Sooner or later they will be compelled to have recourſe to the means I point out to increaſe their preſent ſinking fund, and to create another of an auxiliary and permanent nature; to eſtabliſh a more oeconomical adminiſtration, and to adopt a pacific ſyſtem for the future.

PART III. Of Finances, Taxes, and Agriculture, conſidered principally with reſpect to France. Refutation of the Principle, which reduces every thing to the Territorial Produce.

MONSIEUR de Mirabeau, in his Theory of Taxation, affirms, that it would be the philoſopher's ſtone to the ſtate, to make the machine of finance move in regular tracks, not only without exaction, without rigor, or expence, but from a ſpirit of emulation. He thinks he has diſcovered the ſecret, but I fear he is deceived. His heart has miſled his underſtanding. The works of this virtuous citizen, this amiable philoſopher, are replete with genius, ſublime ideas, and views equally new and profound. True patriotiſm, humanity, and the friend of mankind, appear in every part of them. Yet, in his Theory of Taxation, I think he has deluded himſelf with an impracticable ſyſtem. He firſt of all thought he ſaw devouring monſters, and ruin near and inevitable, where at the worſt there were only inconveniences, and grievous abuſes. The principles he ſets out with are ſometimes true. In the application to practice, and deduction of conſequences, I think he loſes his way. Other principles, which he lays down as axioms, are contradicted by experience. Nobody will diſpute with him, for inſtance, that agriculture is the organical action of a ſtate, whoſe riches belong to the ſoil; or that reſtraints upon agriculture debilitate the [110] powers of the ſtate, and retard that action which gives life to its proſperity. It will be admitted that the collection of taxes in France is too complicated, too expenſive and ſevere, and by that means too heavy, and in ſome articles oppreſſive. It ſhould certainly be reduced to greater ſimplicity in the mode; it ſhould be alleviated, and ſoftened in degree; and abuſes ſhould be corrected. But to repreſent France as on the brink of ruin, or to conceive that the taxes, in their preſent ſtate, far exceed the ſphere of the contributive faculty, is an exaggeration, which experience does, and will long, contradict.

The reſult of the Theory of Taxation amounts to this. Firſt, that a ſtate like France, whoſe riches belong to the ſoil, has no real revenue but its territorial produce. Secondly, that taxes ſhould be laid at the ſource of production. Thirdly, that there ſhould be an entire exemption in favor of labor and induſtry; that all the preſent taxes and duties ſhould be aboliſhed, and the very name of finance and farm be proſcribed. Fourthly, that a general capitation tax ſhould be eſtabliſhed, which, by ſup⯑preſſing the expence of collection, may produce more, and coſt leſs. This expence, according to him, abſorbs a third of the taxes, and is the cauſe of general deſtruction. Fifthly, that this office ſhould be intruſted to the municipal magiſtrates. Sixthly, the author affirms, that the real revenue of France does not at preſent amount to any thing near the taxes that are levied, and that loans are ruinous.

This ſyſtem is almoſt the ſame with that of the author of the Bilan with reſpect to England. I ſhall therefore confine myſelf to one general argument on the ſubject, and examine in a ſummary way ſome of Monſieur de Mirabeau's detached maxims, in order to confirm the principles I have already laid [111] down, and throw a new light upon the preceding parts of this work.

The Theory of Taxation dwells much upon the high price of articles of conſumption. We have already obſerved, that the quantity of the metals has lowered the value of money in its quality of ſign. A man now, with a much greater numerary wealth, is not richer in proportion than he was a century ago. But it is in vain to ſay that the mark of ſilver is nominally worth double what it was in the time of Harry IV. and that Lewis XV. with a greater numerary, is not ſo rich as his pre⯑deceſſors. ¹ There muſt be ſome fallacy in the aſſertion; for [112] every thing is not doubled. The ſoldier's pay ſtands as it did in the time of Harry IV. and bread, as well as many other important articles, are nearly at the ſame rate they were then. Beſides, as Voltaire obſerved, it coſts no more at preſent to be well and agreeably lodged, than it did under Harry IV. A houſe may be adorned with beautiful glaſſes of modern manu⯑facture, [113] at a much lower price than it could have been formerly with the little glaſſes imported from Venice. Our fine ſhowy ſilks are not ſo dear, yet much better than thoſe which we uſed to purchaſe of foreigners. Beſides this, it cannot be denied, that the number of people, rich and at their eaſe, is much greater than in the time of Harry IV. nor that the income of many perſons is doubled and trebled, which cannot fail of increa⯑ſing the revenue of the prince in the ſame proportion.

It is alſo to be obſerved, that if the firſt wants, being the moſt urgent, are ſupplied out of the firſt half of a man's income, the power of contribution ariſing from the other half may not only be double, but quadruple what it would be if he had only half his income. Let me explain myſelf by an example. A man, whoſe annual income is fifty thouſand crowns, is twice as rich, in point of numerary, as one who has only twenty-five thouſand with the ſame eſtabliſhment; but his power of faculty and contribution is in a much higher proportion, as well with reſpect to articles of fancy, as to works of charity, and expences of ornament and vanity; whereas he who has only twenty-five thouſand crowns, finds his revenue abſorbed in the [114] firſt wants annexed to his ſtation, ſuppoſing him to figure in the world, and to maintain a certain rank or eſtabliſhment. He has but little left to gratify his fancy. If, therefore, Lewis XV. be not quite twice as rich, nor twice as powerful, as Harry IV. yet, ſince the numerary of his revenue is doubled, and ſince he has a greater number of wealthy ſubjects, he muſt at all events be conſiderably ſuperior both in wealth and power. As for thoſe fiſcal abuſes, imputed to the preſent age, they have prevailed at all times, and, with a weak adminiſtration, enervated, in ſome degree, the contributive faculty of the ſubject. It is a fever incident to great ſtates. The ſeeds of ſuch diſorders are as inevi⯑table as thoſe which undermine the human conſtitution. Yet the remedy ſhould be ſought, and where ſpecifics cannot be found, palliatives may be applied. But I affirm boldly, on a train of reaſoning confirmed by experience, that the project, which has ſo long ſeduced the world, of reducing all taxes to a ſingle one, by way of capitation, and of aboliſhing all other taxes whatſoever with the expences of collection, is a chimera in ſuch countries as France, England, and Holland. The attempt was made in Holland in the year 1749, and the fallacy was ſoon perceived. It was found to be utterly impoſſible to levy thoſe ſums upon the public, which the ſtate had occaſion for, by any other means but duties upon articles of conſumption, where the tax is confounded with the price. This method is the leaſt felt, and the only one feaſible. The inconveniences reſulting from it, how great ſoever they may appear, are far from being ſo dangerous as they are repreſented. I have ſhown the truth of this poſition in the Firſt Part of this Eſſay, and in the ſequel ſhall offer freſh proofs in ſupport of it.

Holland itſelf conſtitutes a demonſtration, that Monſieur de Mirabeau's principles are not well founded. If taxes were not to [115] be collected, but immediately at the ſource of the ſubject's revenue, as Monſieur de Mirabeau ſuppoſes, and if nothing were to be exacted but a portion of the territorial produce, Hol⯑land long ago muſt have ceaſed to exiſt. Her alimentary productions are but few; ſhe has ſcarce any arable land, vine⯑yards, or woods. On this ſide all her reſources conſiſt in a few meadows; yet the republic pays troops, maintains a marine, and has often figured on a level with the firſt powers of Europe. Taxes of every kind are heavier than in France or England; yet the ſtate is not ruined by them, but ſubſiſts with opulence. If the jealouſy of her commerce had not excited ſuch a number of competitors, the ſtate would ſcarce have felt the effect of the exorbitant taxes levied upon the ſubject. Bread, an object of the firſt neceſſity, pays a duty that nearly doubles the price. Every article of conſumption pays more than in France. Capital ſtock of all kinds, ſuch as houſes, actions, contracts, lands, are ſtill more loaded. Yet Holland flouriſhes, and the machine of finance preſerves its courſe. It is the magic of credit and circu⯑lation that produces theſe ſalutary effects. This credit and circulation are not therefore ſo miſchievous in practice as Mon⯑ſieur de Mirabeau ſuſpects. We muſt yield to the evidence of a conſtant, uniform, deciſive experience. The opulence of the rich man, through the medium of circulation, ſupplies the poor man and the beggar wherewithal to pay a tax to the ſtate, in the conſumption of the edibles on which he ſubſiſts. The beggar obtains the mere phyſical neceſſaries of life more eaſily at Paris, London, or Amſterdam, than at Montauban, York, or Overyſſel. Circulation and credit are two ſprings, the play of which is not thoroughly underſtood. All the gold and ſilver of Europe and America, that is waſted in Indoſtan, does not enrich the inhabitants of that country. The Indians are poor; their [116] princes amaſs treaſures and ſtop circulation, which has no credit to ſupport it. Taxes upon conſumption not only make the beggar, but even animals, beneficial to the revenue, and conſe⯑quently to the ſtate. They, who have been ſeduce by the idea of a ſingle tax, and of ſuppreſſing the various ramifications of taxation, do not know that, in the richeſt and moſt opulent ſtates, the number of perſons who poſſeſs a real fortune (I mean, of thoſe who would be ſubject to a capitation, and who, in Holland, are called the Capitaliſts) is very ſmall in compariſon with the other inhabitants; whereas the number of thoſe who, without any real fortune, live at their eaſe, and at a higher expence than common houſekeepers, is very conſiderable. It is their induſtry, employments, and various talents, that conſtitute their reſources. They are not rich, yet they live as expenſively as if they were ſo. They cannot poſſibly be taxed in that high proportion, which would be neceſſary to form an equivalent for the ſuppreſſion of all other taxes. It has been found impoſſible. I ſpeak from fact. This point has been thoroughly examined by the ableſt financiers in Holland. When the tax is charged upon edibles, the circulating money returns in part into the public treaſury, from which it iſſued. It multiplies as it runs, and cir⯑culating ſucceſſively through twenty different hands, enables each of them to continue the expence of the preceding year, and always with the ſame ſpecie. A great man, who ſpends a hundred thouſand florins a year, at once returns twenty thouſand to the public treaſury on the head of his firſt expence; but this is nothing compared to the reverberation of expences, which the inferior ranks, and theſe again ſubdivided into ſtill lower orders of men, are, by his magnificence, enabled to engage in; ſo that, at the end of the year, it is poſſible that the whole hundred thouſand florins may have paſſed with benefit [117] through the public treaſury, and iſſued out again to ſupply the various channels of circulation. In ſpite of all that has been ſaid to the contrary, the annuitants contribute greatly to maintain this happy circulation. Taxes are, in reality, no more than a momentary reverſion of certain portions of property, which individuals ſuffer to paſs annually through the treaſury, for their own preſervation, and which return wholly, or in part, into the hand that pays them. There is a perpetual circle of retribution from the ſovereign to the ſubect, and from the ſubject to the ſovereign. All the declamations, that contradict this definition, prove too much, and lead to the abſurd.

We are for ever told, that France and England are undone, though experience ſhows us that the two kingdoms are ſtill in a flouriſhing condition. There are enormous abuſes, I confeſs; yet even theſe abuſes prove the vigor of the conſtitution. The ſubſtance ſaves the form. They will never be corrected by the means of an univerſal tax, much leſs by a land tax to be paid in kind; another chimera in our European conſtitutions. Such modes of taxation might anſwer in a ſacerdotal government. Among a people collected into a ſmall territory, a tithe in kind of the productions of the earth, with the aſſiſtance of a ſmall capi⯑tation, might be ſufficient to anſwer all purpoſes. But ſince the powers of Europe have thought it neceſſary to their tran⯑quillity at home, and ſecurity abroad, to maintain armies and fleets in time of peace, ſuch a plan would be ineffectual. Beſides, there is no ſtate now in Europe, except Poland, that conſiſts merely of farmers. Commerce, the fiſheries, luxury, paper ſecurity, the public funds, various manufactures mul⯑tiplied in every branch, factitious riches, now conſtitute the maſs of property. In the general ſyſtem, the ſecret of adminiſtration conſiſts in combining theſe different objects, without ſuffering [118] them to interfere with each other. To proſcribe, to aboliſh, or decry them, would be overturning the edifice. But, as the ſyſtem itſelf is, in ſome degree, a new ſcience, ^* we have yet got no farther than the elements of it, and are ſtill groping our way. From hence have ariſen the miſtakes of ſo many ingenious people, who have diſcourſed upon the public funds, credit, and circulation, applying obſolete principles to the preſent ſtate of taxation, finance, population, and agriculture. Some great genius will, one day or other, diſcover the true proportion of the new ſyſtem of policy, by analyſing the ſprings that give it motion, and explaining the internal play of the wheels. In the mean time it will happen, as Monſieur de Mirabeau obſerves, that, while we endeavour to accelerate the motion of the wheel, the impreſſion will be too heavy upon ſome parts, and diſcompoſe the reſt, by which the progreſs of the machine will ſometimes be ſtopped. In the preſent ſtate of things, the moſt important object of all political ſcience is the mode of collecting the revenue; for on this point, undoubtedly, the whole effect of it depends, as well as the harmony of the ſtate. The queſtion is to find out rules clear, exact, and certain; hoc opus, hic labor eſt.

There is one great inconvenience, attending an univerſal tax by capitation, which, if in itſelf it were a practicable meaſure, would ſtill make it a dangerous one. Such a tax would take too great a quantity of money out of circulation at once, and make ſpecie extremely ſcarce at every period of collection; which can never happen, as long as it paſſes through the multiplied channels of conſumption. The intervals between receipt and diſtribution are kept in equilibrium; and this is ſo true, that [119] in Holland, where the plenty of money has made it a kind of merchandiſe, ſpecie became extremely ſcarce, from an accident of the above nature, in the year 1747. To anſwer the demands of the war, a method had been thought of to raiſe a large ſum of money, without borrowing. All the ſubjects of the republic were induced to contribute, ² by way of free gift, the fiftieth penny of their whole property at four periods. The amount muſt of courſe be conſiderable. To prevent the inconvenience above mentioned, the treaſury were obliged to make out receipts, which they diſtributed among a number of private perſons for the reſpective periods of paying in the fiftieth penny, in order to prevent that ſtagnation, or ſtop of circulation, which muſt have happened, if ſo large a ſum had been depoſited in the treaſury at one payment. This paper facilitated circulation, and brought forth ſpecie, which would not have appeared without it.

To amaſs at once, for any given time, let it be ever ſo ſhort, a great quantity of money in the public treaſury, muſt neceſſarily choak circulation, and produce the heavieſt inconveniences. [120] This can never happen in the mode of laying the tax upon con⯑ſumption, where the collection is inſenſible, ſucceſſive and gradual, and thereby gives time for the money to iſſue out of the public treaſury, and circulate again through the public. A hundred obſervations, confirmed by experience, prove the truth of what I advance.

Nothing is more changeable than the fortune of individuals. Some are enriched while others are impoveriſhed. A capitation, or univerſal tax, muſt be rectified every year; and in the firſt inſtance it muſt be a heavy tax that is an equivalent for all the reſt. The machine would be for ever out of order. What an embar⯑raſſment! The impoſſibility of the project ſtrikes in every view. A capitation can never be any thing but a ſupplemental meaſure; it never can produce a tenth part of the tax upon conſumption. The utmoſt uſe that could be made of it would be to redeem the taxes which interrupt and retard the labor of the plough. In this ſingle view it might perhaps be practicable and beneficial. As for the reſt, experience muſt be our guide. It is certain, that formerly the farmers general in France amaſſed fortunes with an indecent rapidity; but this abuſe is now greatly dimi⯑niſhed. We no longer ſee that opulent quarantine, ³ nor thoſe armies of one part of the nation employed to ruin the other. Among the number of financiers, there are true patriots, men of ſenſe, and virtuous citizens. Their occupation is odious, but it appears to be neceſſary. Their ſubalterns ſometimes commit acts of atrocious violence. But abuſes of this kind exiſt in armies commanded by the beſt generals. Many of theſe financiers and their adherents, when they do not ruin themſelves by an ex⯑ceſſive, inſulting luxury, are, without doubt, highly ſerviceable [121] to the ſtate. They are enabled to aſſiſt circulation and credit, and in ſpite of all that can be ſaid by people who do not under⯑ſtand the principles of finance, it is the combination of thoſe two agents that ſupports the machine. In Holland, the farms ſubſiſt, although the farmers are aboliſhed. Collectors have been ſubſtituted in their room. The change of name was intended to ſatisfy the people, who never can be ſatisfied. The wiſdom and patriotiſm of the ſtadtholder, ſupported by the zeal of the magiſtrates, have improved the finances, and corrected in part the abuſes they were ſubject to, yet without aboliſhing the farms. The ſame thing ought to have been done in France, where the abuſes are more conſiderable, and perhaps more difficult to correct, from the complication of laws and privileges in every province, and their diſtance from the centre of adminiſtration. I have endeavoured to make myſelf maſter of the management of the farms in France. It appears to me that misfortunes are often imputed to the farmers general, which it is not in their power to remedy, and which are always exaggerated. Yet, for the welfare of the kingdom, it were to be wiſhed, that proper meaſures might be taken to remedy theſe inconveniences, which are not the leſs dreadful becauſe they appear unavoidable. Heavy taxes are collected in England upon a more ſimple and leſs expenſive plan. Their method perhaps may be aſſiſted by the conſtitution and local circumſtances of the country. Whether or no it be practicable in France, or whether it be poſſible to inſtitute that regiſter which all the world talks of, and nobody underſtands, is a queſtion yet undetermined.

Monſieur de Mirabeau affirms, that the magiſtrates and municipal officers are the natural collectors of the tribute, which the ſubjects, in their reſpective juriſdictions, owe to their ſovereign. The idea is ſeducing, and perhaps the meaſure may [122] be right. Yet I do not know whether it would not meet with inſurmountable difficulties in practice, and whether, after a certain interval, the ſame things would not be ſaid of them, that are ſaid of the perſons now employed in the collection of the revenue. It is not generally admitted that the provinces of France, which remain en pays d'Etat, have any advantage over the reſt. I am not ſufficiently acquainted with the fact to pro⯑nounce upon that mode of collection. The miniſter un⯑doubtedly perceives the effect of it, and probably knows what to truſt to. He will adopt it, if it be ſuch as it is repreſented. The ſucceſſion of ſteps and hierarchical juriſdictions, which Monſieur de Mirabeau would fain proſcribe, ſeem in ſome degree indiſpenſable in every mode of collection. The increaſe of expence, ariſing from them, will be a ſtumbling-block in every ſyſtem. As for the reſt, I confeſs, that in the Theory of Taxation there are ſome ſublime ideas, which I admire and reſpect. All that the author ſays upon the ſubject of ſalt and tobacco ſeems to deſerve the attention of the French miniſtry. It has often been obſerved, before Monſieur de Mirabeau, that the produce of duties is in proportion to their lightneſs. A moderate duty ſhould naturally put a ſtop to contraband, and ſave the waſteful expences of management. The over burthen of theſe expences falls upon the ſale of the commodity, and leſſens the conſumption. Theſe truths appear inconteſtable; yet in Holland we have often ſeen, that the diminution of duties at the cuſtom-houſe has not taken effect, nor prevented contraband. European nations, though Chriſtians, do not always follow the goſpel; they do not always give unto Caeſar the things that are Caeſar's. Every tax, every duty, every cuſtom, is paid with reluctance. We ſhould endeavour to prevent this abuſe; for the principles above mentioned appear to me eſſential. The ſame [123] thing cannot, in my opinion, be ſaid of his other principles. Such is the neceſſity, he ſuppoſes, of conſtituting a public treaſure. I ſhall hereafter prove it to be a hurtful, dan⯑gerous, and uſeleſs meaſure. I have the ſame notion of his project of aboliſhing every impoſition upon barren property, on ſtocks, houſes, ſubſiſtence, employments, deeds, and luxury. It is a patriotic enthuſiaſm, founded upon metaphyſical ideas, which never can be applied to the actual conſtitution of things. His declamation againſt the public funds, credit, and circulation, is of the ſame nature, and has been already refuted. Another obſervation occurs to me. The ſovereigns of Spain and Portugal, with all their treaſures of Peru, Mexico, and the Brazils, never conceived the idea of creating theſe public funds, to which the value of ſpecie might be com⯑municated, which might collect and give fixation to money, while it circulated elſewhere, and call it in again, in caſe of need, by the magic of circulation, and the credit imparted to thoſe funds. Who knows whether this may not be preciſely the reaſon why thoſe kingdoms have not been enriched by their mines? There was no prop to ſupport the building, while they were working upon the repairs. Spain and Portugal, depopulated by moral cauſes, might, I believe, in ſome degree, have recovered their population and agriculture, if the numerary riches of conven⯑tion had realiſed the momentary paſſage of the gold and ſilver of their mines. Factitious property would have produced induſtry, and ſupplied a fund for improving the ſoil, with all thoſe natural productions, which, in ſo fortunate a climate, are ripened by the ſun. Commerce, opulence, and circulation, might perhaps have invited a number of new inhabitants of the religion of the country, ſince the want of a toleration does not admit others to ſettle there. Even this odious difficulty might have been ſur⯑mounted [124] by intereſt; whereas, at preſent, the inhabitants, notwithſtanding they pay fewer taxes, are poorer than thoſe of France or England. I do not ſtate this conjecture as the only cauſe of the diſproportion between the actual condition of Spain and Portugal, and the ſources of metallic wealth, which both of them poſſeſs. I mean only to mark the advantage produced by circulation in countries where the metals are not ſo plentiful. The miſerable ſtate of the Spaniards in Peru and Mexico is a ſtill ſtronger proof that gold and ſilver are nothing of themſelves, but ſo far as they readily paſs in exchange for articles of neceſſity and convenience. Monſieur de la Condamine aſſures us, that the people, who ſhowed him the mines of Peru, were wretches without ſhoes to their feet.

Spain and Portugal are not in that condition. If, added to the fertility of the ſoil, and happineſs of the climate, the two kingdoms were as well peopled as they ought to be, the pro⯑ductions of nature and induſtry, independent of their mines, would make them the moſt plentiful countries in the world. The exchange of their commodities might even create a com⯑mercial balance in their favor beyond the produce of their mines. But as this neither is, nor for a long time can be, the caſe, we muſt for the preſent conſider the metals as a merchandiſe of their own growth, and the extraction thereof, to a certain degree, as neceſſary and uſeful. I am even inclined to think, that if all the advantages of agriculture, commerce, and manufactures, exiſted with activity in Spain and Portugal; and if at the ſame time they were to continue in poſſeſſion of the gold and ſilver of Peru, Mexico, and the Brazils; the metals then, by reaſon of their abundance, might almoſt always perform their office in perſon, without factitious ſigns, or the circulation of paper credit. I am nevertheleſs perſuaded, that ſuch a repletion of [125] ſpecie would produce inconveniences eventually fatal to the manners, and even to the commerce and proſperity of the two nations, and that providence has not undeſignedly given them the cuſtody, or rather the diſtribution, of the treaſures of America.

If Portugal had preſerved the Moluccas and Ceylon, which it was in poſſeſſion of before the mines of Brazil were diſcovered, the harmony of the commerce of Europe muſt have been deſtroyed. But if Holland had kept the Brazils, that harmony would ſtill have been maintained. Holland, as we have fre⯑quently obſerved, has nothing to give in exchange. Induſtry, commerce, and ſpice trade, conſtitute all her opulence, and are ſupported by thoſe factitious funds, to which credit gives circu⯑lation, and which enlarge the contributive faculty of the people to pay the taxes impoſed upon them. Taxes follow opulence and eaſe. Competition in the market, and a greater conſump⯑tion, of courſe raiſe the price of proviſions. Yet taxes are not to be multiplied without urgent neceſſity, and every prudent meaſure of police ſhould be employed to prevent the exorbitant price of proviſions. But, to return to my ſubject.

Many attempts have been made to calculate the proportion that ought to be preſerved between ſpecie and paper. It has been a long time fixed at the rate of three to one; that is, that there may ſafely be three times as much paper in circulation as money. Yet experience has evidently ſhown, that the quantity of paper may be conſiderably enlarged, and yet ſupport itſelf without difficulty. To call this a diſproportion is creating monſters on purpoſe to fight with them. It is contradicting experience, eſpecially as the ſame pretended diſproportion will be found to ſubſiſt between money and riches of every ſort, ſuch as land, houſes, ſhips, jewels, &c. Yet we are not to con⯑found bank notes, or bills of credit repreſenting money, with [126] that paper which conſtitutes the public ſunds, and bears intereſt; although, in ſome reſpects, there is a great analogy between them. A much greater quantity of ſtock may be created than of bank notes. The public funds do not exactly repreſent ſpecie, though the creation of them augments the numerary wealth. They form a ſolid property, as much as land or houſes, and yield a revenue without repairs or cultivation. The greateſt advantage attending them is, that they make money, and that which repreſents it, circulate with more rapidity. Taken by parts, they may, in a certain ſenſe, be conſidered as ſo much ready money, the office of which they frequently perform. A hundred thouſand pounds in annuities may be converted into ſpecie in 'Change Alley within four and twenty hours, with ſcarce any alteration in the price, and millions may be ſold for time. Theſe are facts not to be diſputed. Of all kinds of pro⯑perty, this is the only one that partakes, as it were, of the quality of money, at the ſame time that, by the eſſence of its nature, it is a ſolid property. The obſervation is important, and I believe has not been made before. I ſhall add but one reflection more; that gold and ſilver coin has an arbitrary value of convention, and that there is no phyſical reaſon why it ſhould repreſent all commodities, as well as the articles of firſt neceſſity, in preference to paper, by which itſelf is repreſented. The Indians make the ſame uſe of ſhells; and all the plauſible objec⯑tions to the creation of artificial ſigns in paper may be applied equally to the metals, which we can neither eat nor drink. But as in the preſent ſyſtem a barter of commodities is impracticable, ſome general medium of exchange is wanted to be the meaſure of every thing; and this quality no more belongs to metal than it does to ſtocks and paper, when the circulation of them is [127] ſupported by credit and good faith, and by the intereſt they produce.

Monſieur de Mirabeau's principles are much the ſame with thoſe of the author of the Bilan, to reduce every thing to the territorial produce. Yet I think the fallacy of them appears even from his own ſtatements of the territorial revenue of France compared with experience. His ſyſtem is open to objections, becauſe it is contradicted by facts. How would it have been poſſible for France to have exceeded her ſtrength in the article of taxation during ſo long a period, without having been expoſed to ſome more fatal, and as it were more palpable, political con⯑vulſions? I ſhall hereafter make it appear, that the diſorders in France have not ſo much proceeded from taxes, as from the long wars, and the want of credit in borrowing money. I have already proved, that credit and circulation are the only means to correct and ſoften the ſeverity of taxes, and ſhall ſupport my opinion by farther evidence. Obſervation, enquiries, and cal⯑culations of the territorial revenue, may be of ſervice, if they are properly applied without exaggeration, and if they do not lead to conſequences inconſiſtent with known facts, or to mea⯑ſures either impoſſible in practice, or whoſe ſuppoſed effect is not juſtified by experience. Yet, as it is poſſible that, without Galileo and Kepler, Newton might never have analyſed the rays of light, or thoroughly diſcuſſed the principles of gravitation, it is to be hoped, that the works of ſpeculative politicians will in like manner aſſiſt others in explaining the true principles, on which the ſinances ſhould be adminiſtered for the welfare and happineſs of mankind.

We are children ſtill. Our children perhaps may be men. I cannot comprehend how Monſieur de Mirabeau can lay the whole burthen of taxation upon the territorial produce, after [128] having ſo clearly demonſtrated, that the vexations heaped upon the huſbandman deſtroy thoſe riches which, without ſuch vexations, would be annually renewed; that large tracts of land lie fallow and deſerted; that decay of population of courſe diminiſhes conſumption, which he ought to conſider as the ſource of the ſovereign's revenue; that ſpoliation withers up the ſoil; that the arbitrary land tax, repairs of the roads, and other vexations, ought to be aboliſhed. Yet he ſubſtitutes the ſame burthen under another denomination, and gives no relief to that part of the nation. He ſeems to me to contradict him⯑ſelf, when he propoſes to lay the whole tax at the ſource of production; yet this is his favorite principle. Perhaps it may be my own fault; but I confeſs my ignorance; I do not underſtand his ſyſtem; it appears to me to involve a contradiction. He advances another principle, which, in the abſtract, ſeems nearer to truth, and more important; that no province, or city, or perſon, ſhall pretend, by virtue of any privilege or immunity, to be exempted from a general contribution. This is juſt. But to confine it to a capitation, or perſonal tax, proportioned to the rent of houſes or lodgings, would be inſufficient to anſwer the ſervice, even if it were poſſible for the tax to be ſtrictly collected. A capitation can be no more than a ſupplementary meaſure. He proſcribes the only taxes that can ever anſwer the demands of government, viz. thoſe upon edibles, luxury, and objects of conſtant uſe. The reader will find freſh proofs of this aſſertion in the ſequel. All theſe ſchemes have been already attempted in Holland, in the year 1748, with a view to ſubſtitute one general tax in the room of all the duties upon conſumption. Specula⯑tions of this kind embarraſs the finances. They amuſe the people with hopes, and make them pay with more reluctance the taxes on which their own welfare and preſervation depend. [129] The firſt principle laid down in the Theory of Taxation, and in the Bilan of England, is, that a cultivating ſtate has no revenue but the produce of the earth, and that the whole is collected within the territorial revenue. This might be true, if there were any ſtate in Europe that confined itſelf merely to the cultivation of the ſoil. The ſtate of France, as well as of England, is compoſed of farmers, ſhepherds, fiſhermen, hunters, merchants, manufacturers, artiſts, and ſoldiers. Why then ſhould we reduce the various produce of all the branches to the annual return of territorial revenue? Is it not repreſenting the coloſſus of France under the figure of a ſkeleton? The principle, that the territorial produce is to be conſidered as the only ſource of revenue, has ſeduced many people; yet it is abſolutely falſe, as well as the conſequence drawn from it, that taxes ſhould be laid at the ſource of production; a maxim de⯑ſtructive to cultivation, and that counteracts the author's purpoſe. To prove, with ſtill ſtronger evidence, that it does ſo, let us draw a ſhort analytical picture of all the kinds of property, of which a ſtate is compoſed. We ſhall then diſcover from what ſources an exact account of the finances of a kingdom is to be collected, and ſee at once upon what articles taxes may be impoſed with the leaſt degree of inconvenience, and in what claſs each ſtate is to be reckoned.

Landed property is the firſt. This is incapable of being deſtroyed; but its value, more or leſs, depends upon cultivation, and without labor it makes no return. Its productions are neither voluntary, nor gratuitous. They require not only care, but expence; and before they nouriſh, they employ. But the annual fruits of the earth are conſumed, and at the end of the year ceaſe to exiſt; or, if conſumption fails, they putrify, and are loſt. The ſtate can only be enriched by the internal con⯑ſumption, [130] and by the ſurplus exported to foreigners. In this firſt claſs I reckon arable lands, woods, and vineyards.

The ſecond kind of property, which Monſieur de Mirabeau has almoſt forgotten, and yet is very conſiderable, conſiſts of cattle, and the fields where they are fed. Cattle return more to the earth than they take from it. Some give milk twice a day, which ſupplies us with cheeſe. The ox not only con⯑tributes his labor to our ſervice, but even his fleſh and his ſkin. The ſheep furniſhes the firſt elements of the moſt uſeful manu⯑factures. Wool is a ſource of riches to England and Spain.

The fiſheries are a third kind of property. The ſea con⯑tributes to nouriſh the inhabitants of the earth, as much as the earth itſelf, with ſtill leſs expence. The great fiſheries form an article of conſiderable importance in commerce, yet omitted in the Theory of Taxation.

Houſes are the fourth. The rent, or the occupation, is ſo much real revenue. The object itſelf is periſhable, but neceſſity and luxury keep it in conſtant repair. The laborer, the mechanic, and the artiſt, are employed.

The fifth kind of property conſiſts of ſhips, wares, maga⯑zines, and in ſhort of that innumerable detail of commercial articles, which furniſh ſubſiſtence to a prodigious multitude of people, and produce immenſe ſums every year, at the ſame time that the offices performed by money are multiplied by circulation. The revenue of this branch is of far different importance from that of the territorial produce, to which we are told that every thing ſhould be reduced.

The ſixth kind conſiſts of notes, public funds, actions, royal ſecurities bearing intereſt, the fruits or intereſt of which are not deſtroyed by conſumption, like thoſe of the earth, but are permanent and unperiſhable, and multiply in every hand they [131] paſs through, yet, under the auſpices of credit and circulation, preſerve their fertility. This (with ſubmiſſion to thoſe who are unacquainted with the true principles of finance) is the reaſon why a numerary, exceeding all the money in Europe, is an⯑nually expended in Paris and London, and why the ſtate can levy ſo many taxes without ruin to the nation; a paradox, which ſpeculative financiers are unable to comprehend, becauſe they have no true idea of circulation and credit. Theſe are the powers that create and multiply, that give life and activity, that produce and reproduce. They ſuffer nothing to ſtop or ſtag⯑nate, but remove all obſtructions, and circulate the blood through every vein.

The ſeventh kind of property conſiſts of places of honor, offices and employments. From this ſource a number of perſons are ſupplied with the means of expence, from which others again derive their ſubſiſtence. Induſtry and circulation are encouraged, and the public revenue improved, even by thoſe who live at the expence of it.

The eighth kind conſiſts of magazines of all ſorts, fixtures, jewelry, trinkets, diamonds, gold and ſilver plate, curioſities, pictures, and books; all which augment the numerary, and, notwithſtanding their ſlow circulation, contribute to ſupport credit, and to prop the building.

The ninth conſiſts of manufactures, principally thoſe for exportation, by which foreigners are laid under contribution, and the ſubject enriched. Thoſe of Lyons, and other places in France, far from deſtroying agriculture, encourage it. But this might be the ſubject of another diſſertation, and would lead me too far. In the Elogium of Sully, one of the maſter-pieces of Monſieur Thomas, there is an argument upon this point, which appears to me too bold.

[132] The tenth is a ſupernumerary to France. I mean the multitude of foreigners, whom curioſity attracts to Paris, and pleaſure detains there. Their expence is a real nume⯑rary, which not only augments that of the kingdom, but at the ſame time increaſes the materials and circulation of ſpecie. Combined with the expences of thoſe, through whom their money circulates, it improves the ſovereign's revenue, which, though never ſtationary in his hands, always exiſts within the nation. The exorbitant price of furniſhed lodgings at Paris and upon the road, and the hire of carriages for the uſe of foreigners, is a kind of territorial produce, created by foreigners, without the charges of exportation.

The eleventh kind of property, conſiſting of mines of coal, tin, and iron, where there are any, has eſcaped Monſieur de Mirabeau.

Such is the true picture of the riches of a country, widely different from that impoveriſhed ſtate preſented to us in the Theory of Taxation. In this picture the apparent con⯑tradictions between the objects and the produce of taxes, as well as between the faculties of the ſubject and the de⯑mands of the ſtate, are reconciled. The gradation of taxes, according to this faithful repreſentation, ſhould proceed in the inverſe ratio to that of Monſieur de Mirabeau's ſyſtem. The ſources of production, the earth and its firſt harveſt, ſhould be loaded leaſt of all. The progreſs of taxes ſhould follow the detail of conſumption, and multiply upon every article of luxury. The mode of collection is another object, the abuſes of which I am not qualified to diſcuſs. But taxes return for the moſt part into the hand that pays them; and this, I preſume, is the line of direction upon which the whole myſtery of finance dep [...]nds. In time it may be carried to perfection. For the preſent it is ſufficient to obſerve, that by the aſſiſtance of circu⯑lation [133] the revenues of France amount to at leaſt ten times the ſum ſtated in the Theory of Taxation; and that it is abſurd to ſay, that a man, whoſe income is but four hundred millions, pays ſix. If, as it is ſaid, the collection coſts near a third of the produce, it is certainly a ſhameful depredation; but quaere, whether Monſieur de Mirabeau be not again miſtaken in his aſſertion. The principles I adhere to are founded upon facts, and on the uniform experience of England, France, and Hol⯑land. They do not therefore involve ſuch contradictions as appear upon the face of ſpeculative writings, which flatter the people without giving them any real conſolation or aſſiſtance, and promiſe them a relief not to be realiſed in practice, and which they never can receive. It is the univerſal remedy, or philoſopher's ſtone, perpetually ſought after, and never to be diſcovered. A nation that would ſubmit to pay heavy taxes without reluctance, and that, as the author ſuppoſes, would pay them from a ſpirit of emulation, and where the application of the revenue ſhould be conſtantly directed to the public good, without any part of it being diverted, would be a nation of angels, or rather of gods, and ſuch a one as never will exiſt upon this maſs of earth. My own ſyſtem is reducible to this con⯑cluſion. 1^o. That the pretended principle, of confining the whole contributive faculty of taxes entirely to the territorial produce, is fallacious; for, though the landed revenue forms an important article, it is ſtill the ſmalleſt portion of the facul⯑ties of the ſubject. ^* 2^o. That to lay taxes at the ſource of [134] production would injure agriculture, which ought to be pro⯑tected and encouraged at its ſource by every privilege and recom⯑pence imaginable. 3^o. That nothing but articles of conſumption and luxury can produce a revenue proportioned to the neceſſities of the ſtate; and that it is proved by practice and experience, that circulation in a great meaſure repairs the inconveniences that may be occaſioned by taxes. 4^o. That the mode of col⯑lection ſhould be the leaſt expenſive or burthenſome to the nation, taking particular care not to oppreſs the farmer; but this is a difficult point. Let me add, 5^o. That the ſtate of ex⯑ports at the cuſtom-houſe is the thermometer of a flouriſhing commerce, in a farming and manufacturing nation; that duties upon exports ſhould be moderate; and that exportation, in ſome caſes, ſhould be encouraged by bounties.

Importation is of a different nature. It is a tribute paid to foreigners. In France and England it may be loaded without inconvenience, except the firſt elements of manufactures, which ought to be free. It is not the ſame with a power entirely commercial, ſuch as Holland, that buys in order to ſell, and to which the carrying trade is eſſentially neceſſary. The con⯑ſtitution of Holland is ſingular and peculiar, and the country muſt be governed by rules that are an exception to all others. It is a phenomenon in politics. Hiſtory gives us no model of ſuch a conſtitution. The thermometer of import and export at the cuſtom-houſe in Holland, is ſometimes in an inverſe ratio [135] to what it is in other countries. In this place it may be proper to inſert a fine obſervation, which I lately met with in an Engliſh author. It is ſuppoſed that the bounty, granted by government upon the exportation of corn, is an expence to the ſtate, or that the revenue ſuffers a diminution of £. 150,000 which the bounty amounts to. But this, ſays the author, is a miſtake; for the cuſtom-houſe recovers that ſum with intereſt, by that increaſe in the duties on imports, which ariſes from a large exportation of corn. A conſiderable part of this export is exchanged for articles of luxury, which the nation is fond of, and which pay heavy duties at the cuſtom-houſe. So that the encouragement given to agriculture turns to the profit of the cuſtoms. There is another obſervation equally curious, that the price of corn has not riſen in England, ſince the inſtitution of the bounty, nor even ſo far back as ſince the time of Ed⯑ward III. making allowance for the different value of the mark of ſilver at the different periods. I have ſhown that France might follow this example, and encourage agriculture, yet without any diminution of the opulence of England.

Monſieur de Monteſquieu obſerves, that a tax upon perſons is the moſt natural to ſlavery, and a tax upon merchandiſes the moſt natural to liberty, becauſe it does not refer ſo directly to the perſon. A capitation can never ſupply the place of every other tax, on account of the ſmall number of perſons on whom it would fall, in proportion to the multitude who, through the medium of conſumption, inſenſibly ſwell the revenue, at the ſame time that the very money they pay is furniſhed in the laſt reſort by the wealthy, on whom alone it is meant that the weight of the capitation ſhould fall. Natural conſumption, and even that of luxury, by means of a circulation multiplied [136] through various channels, can alone ſupply ſuch conſiderable ſums, without exhauſting the ſources, or ſtopping the current of circulation.

From what I have ſaid it follows, 6^o. That the treaſury re⯑ſtores to the public the money it receives, increaſing the con⯑tributive faculty by the annuities and penſions it pays. The retribution, however, is not always exactly equal, with reſpect to individuals, but muſt be taken in groſs. 7^o. That the pub⯑lic funds increaſe riches, commerce, induſtry, conſumption, and the contributive faculty. They are neceſſary in themſelves, and differ widely from the idea hitherto conceived of them. 8^o. That nevertheleſs the public debt ſhould be redeemed to a certain point, in order to diminiſh taxes, which always appear to be an evil, conſtantly magnified by opinion; otherwiſe, if they were multiplied too far, ſome great difficulties would ariſe in the courſe of thoſe fatal wars, which recur too often. 9^o. That the true and exact diſtribution of all the branches of finance is a ſcience, all the principles of which are not yet underſtood.

10^o. That good order is not deſtroyed by exacting a con⯑tribution to the public ſtock, from all thoſe who poſſeſs no capital, but live upon the retribution yielded to their labor. They receive it from the rich, from people in eaſy circumſtances, and even from the ſtate. Their labor becomes a little dearer, but the inconvenience ſtill falls upon thoſe who, it is meant, ſhould bear this portion upon the plan of a ſingle tax. The effect is the ſame. You only endeavour to alter the form, and the form you wiſh to ſubſtitute can never be adhered to in prac⯑tice. It is the multitude of little ſtreams that conſtitute the river. It is the number of ſubdiviſions of claſſes that alone can [137] ſupply heavy taxes. The addition of the duty ⁴ is con⯑founded with the price of the commodity, and in effect is paid by the thing, not by the perſon. This is order itſelf, not the confuſion of order.

‘""Power," ſays Monſieur de Mirabeau, "cannot be exerted beyond the natural ſtrength. Efforts that exceed our ſtrength produce weakneſs."’ This is true; but the prin⯑ciples themſelves ſhow how ill they are applied. France, Eng⯑land, and Holland more particularly, ſubſiſt ſtill, and have ſubſiſted for a conſiderable time, upon the very ſyſtem now ſo much decried. In ſpite of the dreams of melancholy, they ſubſiſt and flouriſh. Yet this, I muſt repeat, is no reaſon why we ſhould not labor, with conſtant attention, zeal, and ardor, to relieve the people by every poſſible method, and to proſcribe for ever the deteſtable maxim, current in France in the laſt century, that vexation and oppreſſion made the people work, and that eaſe made them indolent and lazy. Nothing but the civil wars, which were but lately ended, could have dictated ſo barbarous a maxim.

11^o. That manufactories ſhould be conſidered as one of the principal arteries of the public revenue. The exemption granted to raw materials increaſes the return they make to the treaſury.

[138] 12^o. To deny, as Monſieur de Mirabeau does, the reality of that ſucceſſive enjoyment, which credit and circulation procure to every individual with the ſame ſpecie, and to treat this truth as a plauſible fallacious hypotheſis, is as much as to affirm, that there is nothing intrinſically valuable but bread and water, and that every thing elſe is a ſuperfluity of mere convention and opinion. At this rate one might affirm, that the landlord of a thouſand acres in fact poſſeſſes but two feet when he ſtands up, and ſix when he lies down, becauſe this is all the ſpace he occupies. The ſophiſtry is the ſame. Gold and ſilver, as ſigns, have no real intrinſic advantage over the objects, which multiply ſpecie through the medium of circula⯑tion, and repreſent it through the medium of credit.

13^o. The capital, in every country, is the central focus of conſumption and luxury. Some benefits ariſe from it. The country round the capital is improved. Still however it is ſaid to produce a number of miſchiefs. If the population of the metropolis bears no proportion to the reſt of the kingdom, the provinces may languiſh, the limbs of the political body may decay. The reader will ſee my opinion of the matter in the Fourth Chapter. An adminiſtration, that ſhould correct the bad effects of this diſproportion, and give life to the provinces, would render an eſſential ſervice to the ſtate.

14^o. The accumulated expence, which the ſprings of cir⯑culation enable every individual to ſupport, is the ſource of taxa⯑tion. If, as Monſieur de Mirabeau affirms, the total amounts to ſix hundred and twenty-five millions that circulate through the ſtate, this is the block out of which taxes are cut. He ſays, he has proved in another place, that the maſs of coined ⁵ [139] money in a ſtate ought never to be higher than the level of the total revenue, and that this is a truth long ſince admitted by every man, who underſtands the ſubject. Every thing elſe, ſays he, is only circulation. I am not ſufficiently acquainted with this great principle, which, after all, may be a falſe one. But it has been proved that the total revenue conſiderably exceeds the territorial produce; that the return of circulation, from which he collects his ſtate of expence, is infinitely greater than the maſs of ſpecie. Its exiſtence in the public treaſury is tranſitory and ſucceſſive, but not the leſs real. The ſpecie does not ſtagnate in the exchequer, but returns into circulation, and diſſipates all the gloomy conſequences created by the imagination.

15^o. From what has been ſaid, I would not have it un⯑derſtood that I any way deny the importance of agriculture, or the neceſſity of protecting it. What I affirm is, that to make it the only object, the univerſal inſtrument, the general agent, is a mere whim, ⁶ or madneſs, an ideal being, an abſtraction [140] of the mind, produced by patriotiſm ill underſtood, and dege⯑nerating into enthuſiaſm. It tends to deſtroy the true principle of finance; and though finance may be an evil, it is as neceſſary [141] to the ſtate, as eating is to the body. By eating too much, we contract crudities and indigeſtions.

16^o. A continued peace, united with a prudent oeconomy in the collection and application of the revenue, is the only way to relieve the people. Peace removes all impediments, creates plenty, encourages population, increaſes conſumption, extends commerce, and quickens cultivation; while theſe, in their turn, augment the revenue. Taxes might then be leſſened, without diminiſhing the public revenue, at the ſame time that the demands of the ſtate would decreaſe.

17^o. A capitation can never be any thing, in practice, but a ſupplementary meaſure.

18^o. The ſpecious principle of the Theory of Taxation, ‘"That idleneſs is the loſs, and labor the profit of the ſtate,"’ is an axiom without meaning; pompous words, that promiſe much, and ſignify nothing. An idle man, whoſe expence is decent, who pays taxes, who gives wages, whoſe money cir⯑culates, who cauſes a uſeful conſumption, and ſupplies others with the means of doing the ſame, is not a burthen to the ſtate. It is mere ſophiſtry under the maſk of a ſentence. Labor is uſeful and neceſſary, but it is not always a profit to the ſtate, unleſs it be a kind of labor that bears ſome analogy to the public welfare. The golden mine to the ſtate is honeſt induſtry, not mere labor. Many a man labors to his own ruin, as well as to that of the ſtate. So true it is that ſpecious ſentences, when thoroughly examined, are frequently no more than ſounding expreſſions. We may reckon in the ſame claſs another apothegm of Monſieur de Mirabeau, ‘"That all labor is receipt, and that all idleneſs is expence, to the exchequer."’ Fine words without reality.

[142] 19^o. I muſt again repeat that, as things are now con⯑ſtituted, circulation and credit muſt be rckoned in the firſt rank among the means of proſperity.

20^o. The eternal oppoſition, to which the moſt neceſſary taxes are expoſed, make them at once more burthenſome, and leſs beneficial.

21^o. Of all the kinds of property in a kingdom, manu⯑factures ſuffer the moſt by taxes. If the price of labor, or of raw materials, be ever ſo little raiſed, it becomes impoſ⯑ſible to export in competition with foreigners. Yet there are eaſes, in which a cultivating nation, with a great extent of territory, may flouriſh, and become as powerful as its condition admits, by the mere induſtry of an internal commerce, with⯑out any conſiderable intercourſe with foreigners.

22^o. Independent of taxes, wherever there is moſt wealth, there every thing will be the deareſt. From hence I conjecture, that France is not ſo wealthy as England. The gentry in England, I believe, are much richer than in France; whereas the higher nobility, including the princes of the blood, are richer in France. The middle rank in England undoubtedly has the advantage. The peaſant, the laborer, and mechanic, are much more at their eaſe. Riches in general are much more equally diſperſed through the Engliſh than through the French people; yet, in particular inſtances, there may always be exceptions. A ſingle branch of manufacture may decline. Two hundred workmen, diſtreſſed and out of employment, make as much clamor with their diſtreſs, as if the whole world were periſhing with hunger. The echo is repeated on all ſides; the enemies of government join the chorus; and they, who liſten to their clamors, think every thing is loſt. To judge truly, we ſhould extend our view to the whole maſs.

[143] 23^o. ‘"Political oeconomy," ſays Monſieur de Mirabeau, "conſiſts in making the people pay as much as poſſible, yet think they pay as little."’ This can only be effected by taxing articles of conſumption, where the tax is confounded with the price.

24^o. ‘""To ruin the farmer," ſays he,is deſtruction to the alimentary police. The rights of the plough-ſhare ſhould be as ſacred as thoſe of the church, and never touched without reſpect."’ Sed eſt modus in rebus.

25^o. Certainly nothing can be more deſtructive than the devaſtation which ariſes from the oppreſſion of the farmer, and perſecution in matter of religion. The ravages of war are tranſitory, and the ſoil by degrees recovers from its own ruins. The value of it may be annihilated by the rapine of finance, and I believe it has ſometimes happened ſo in France; but the wiſdom of government is employed in correcting this abuſe.

26^o. Another of Monſieur de Mirabeau's great maxims is, ‘"That it is better to ſell the raw materials, than to abate any thing of the firſt price, in favor of manufactures, which, with reſpect to profit, have no other object but the price of the labor; a profit which, in fact, is only a return of the money it coſts."’ This obſervation deſerves to be conſidered.

27^o. He ſays, that an unlimited power of impoſing taxes would deſtroy all the rights of property, and, after ruining the nation, lay fetters upon itſelf. The ſubject cannot pay beyond his ſtrength. An arbitrary tax could not fail of defeating its own purpoſe. There muſt be a proportion between the tax, on one ſide, and the nature of the thing on which it falls, and the perſons who pay it (whether for luxury or neceſſity) on the other. The produce of the earth undoubtedly ariſes from a combination of two agents, the labor of man, and the bounty [144] of nature. To ſeparate them, ſays Monſieur de Mirabeau, is the great object of finance. He thinks that, by his method, he can diſtinguiſh between the ſheaf that belongs to cultivation, and that which belongs to revenue. But his metaphyſics in finance can never be reduced to practice.

28^o. He ſays, that war is the moſt ſevere and fatal accident to a ſtate. The revenue of the nation diminiſhes, while its expences increaſe. The greateſt contribution is demanded when there is the leaſt ability to pay it. To avoid war as much as poſſible, is the only remedy. The expedient, pointed out by the author, of providing a public treaſure againſt unforeſeen accidents, would increaſe the evil, becauſe a conſiderable quan⯑tity of ſpecie locked up would obſtruct circulation, the effect of which is proportioned not to the ſum, but to its current activity. The treaſure muſt either be very conſiderable or uſeleſs. If it were ſufficient to ſupport a war for two years only, it would do the nation incomparably greater miſchief, than the evil we endea⯑vour to avoid. Hiſtory proves that the reign of diſſipation, which uſually ſucceeds the reign of oeconomy, does infinite prejudice to the ſtate. Monſieur de Mirabeau gives no ſatisfactory anſwer to theſe objections. He pretends that the fortunes made, and depredations committed, by the farmers general, are incon⯑veniences without any mixture of benefit. It is not ſo; theſe pretended fortunes circulate through the public.

29^o. The indirect channels and ſtrainers, through which taxes are drawn, ſhould be made as ſimple as poſſible, in order to reduce the expence of collection. But pulling down the houſe is not the way to ſtrengthen the foundation.

30^o. It is not credit that has ruined the finances of France, as Monſieur de Mirabeau pretends. On the contrary, it was the failure of credit in time of need, that did the miſchief, and [145] probably was the chief cauſe of the late diſaſters. If credit had been ſupported as it might have been, France would have been leſs in debt. At the beginning of the year 1715, the king was obliged to negotiate thirty-two millions in bills, in order to raiſe eight in ſpecie. ^{* 7} If faith had been kept to the public creditor as inviolably in France, as it has been in England, half the preſent debt might have been avoided; the rate of intereſt would have been leſs than half what it is, and the ſtate have gained infinitely more than it has done by thoſe violent operations, which have annihilated credit. Expenſive operations of finance, together with exorbitant intereſt, ariſing from nothing but want of credit, have cauſed debts to be contracted without value received. On one ſide, the funds to ſupport the war were borrowed at a higher intereſt; on the other, failure of credit raiſed the price of every article purchaſed for the ſervice. In this view the inconvenience is double; not to reckon loſs of time, which follows want of credit, and makes every operation ineffectual. To find the ſupplies at the exact moment, or at the moment afterwards, determines the ſucceſs of a campaign. Superior credit undoubtedly was the principal cauſe of the other advantages, which England had over France in the laſt war, [146] becauſe it enabled the nation to exert and avail itſelf of the reſt. The fact has been confirmed by other proofs in the firſt Chapter. It depended only upon France herſelf to have re-eſtabliſhed her credit, if peace, ſo neceſſary to Europe, could have been firmly ſecured.

It may be laid down as certain, that the eſtabliſhment of public funds depends upon the following regulations and cir⯑cumſtances. 1^o. That the loans be national; that is, that the body of the nation ſhall be anſwerable for them, as in England; and although the French parliament is far from having the ſame weight in the conſtitution with that of England, yet the par⯑liamentary creation of funds, and the ſecurity of that auguſt body, would contribute not a little to ſupport the credit of them. 2^o. That funds to pay the intereſt ſhould be ſecured, without the poſſibility of interruption; and that every loan ſhould have its ſeparate ſecurity. 3^o. That the ſinking fund be faithfully applied to the diſcharge of debt, and that its operation be uniform and uninterrupted. 4^o. That, in order to gain the confidence of the public, every meaſure of finance be laid open, and all appearance of myſtery baniſhed. 5^o. That with the ſame view an aſſurance be given to the nation, and to foreigners, with reſpect to future operations, that their intereſt ſhall never be reduced under any pretence whatſoever, without offering to repay the principal; and that the principal ſhall, at no time hereafter, be ſubject to any tax or defalcation, as it has happened heretofore; that in this reſpect the example of the Engliſh ſhall be followed, and that a loan of a hundred ſhall be always paid off at par, notwithſtanding any ſpecious arguments to the contrary; that this eſſential article ſhall no longer depend upon the miniſter's way of thinking. When the ſecurity offered [147] by government is intimately united with that of the parliament, the public confidence may then be recovered.

Credit and confidence being reſtored upon this ſolid founda⯑tion, the French government will gain infinitely more by following the ſame plan inviolably, than they have hitherto gained by operations of a different nature. The rate of intereſt will be lowered, and when money is wanted, it will be raiſed without difficulty upon moderate terms. I ſpeak of the future; but what I ſay is founded upon experience, not upon theory or ſpeculation. It is the hiſtory of credit, ſtated with ſimplicity, zeal, and honeſt intentions. There are other meaſures, by which it is poſſible to diſcharge a conſiderable portion of debt, and to recover credit for a time; but it will fail when the occa⯑ſion is moſt critical and important. I believe that France might have had ſome advantages over England, that would in part have compenſated for the difference of the two conſtitutions, and given her a credit and circulation almoſt as extenſive as that of the Engliſh, if proper meaſures had been ſeriouſly taken, and the peace had laſted long enough to have carried them into execution. But after all the confuſion that has happened, this is not the buſineſs of a day.

31^o. I have already ſhown, that exceſſive luxury is as ruinous to a nation, as an expence, proportioned to the wealth of indi⯑viduals and their rank in life, is beneficial to it. A man ruined is a fruitful plant withered up, with reſpect to the public; his numerary wealth does not exiſt within the nation, as many people think, who do not underſtand the laws of circu⯑lation, and the nature of factitious property. Exceſſive luxury ſeems to encourage induſtry for a moment, and abandons it for ever. At the ſame time it corrupts the manners, enervates the ſtrength, and has always been one of the principal cauſes of the ruin of a ſtate. It would be an important ſecret in legiſlation to [148] find the middle term, at which exceſſive luxury might be ſtopped, yet without enacting ſumptuary laws to reſtrain that decent expence, which is allowed to every ſubject, in proportion to his rank and fortune.

The following quotation from the Spirit of the Laws may alſo be conſidered as a general rule. ‘"Taxes may be increaſed in proportion to the liberty of the ſubject. As ſlavery gains ground, they muſt of neceſſity be reduced. The rule is taken from nature, and never varies. It operates in every country, from England and Holland, through the various degradations of liberty, until it ends in Turkey. Switzerland ſeems to be an exception. The Swiſs pay no taxes. But there is a particular reaſon for it, which confirms the rule. In thoſe barren mountains proviſions are ſo dear, and the country ſo populous, that a Swiſs pays four times as much to nature, as a Turk does to the ſultan."’ If this principle be as evident as the author affirms, the conſequences to be drawn from it would confirm my ſyſtem of taxation.

If it were poſſible for England, by means of a continued peace, by the application of the ſinking fund, and an increaſe of commerce, to diſcharge almoſt all the national debt, it ought not to be done. It would be highly prejudicial to the kingdom not to preſerve ſixty millions at leaſt of theſe fictitious trea⯑ſures. The uſe and neceſſity of it has been already proved. If once the debt were reduced to this ſum, parliament ſhould relieve the nation from whatever taxes appeared the moſt bur⯑thenſome, and employ the reſidue of the ſinking fund in the encouragement of manufactures, the ſettlement of colonies, and in other uſeful enterpriſes. A total diſcharge of the debt would be abſolutely againſt the intereſt of the nation. I ſhall be of the ſame opinion with reſpect to France, whenever the govern⯑ment [149] ſhall have ſucceeded in giving currency to the royal ſecurities, and in reſtoring the faith and credit of thoſe ſecurities at a lower rate of intereſt. This might eaſily happen in a few years, if, in their future operations of finance, they would follow the ſyſtem I propoſe. The French miniſtry are too well informed not to know the intrinſic contributive powers of the kingdom, and too humane to exact more than its ſtrength can ſupport.

There ſeems to be an eaſy way, as far as the nature of the thing will admit, to form a picture or barometer of theſe powers, by executing the plan laid down by Lewis XIV. in the year 1698, for the information of the duke of Burgundy.

^* ‘"He ordered each of the intendants to draw up a parti⯑cular deſcription of his province. By this means an exact account of the kingdom might have been obtained, and a juſt enumeration of the inhabitants. It was a uſeful work; though all the intendants had not the capacity and attention of Monſieur de Lamoignan de Baville. Had what the king directed been as well executed, in regard to every province, as it was by this magiſtrate in his account of Languedoc, the collection would have been one of the moſt valuable monuments of the age. Some of them are well done; but the plan was imperfect, becauſe all the intendants were not confined to the ſame rules. It were to be wiſhed, that each of them had given, in columns, the number of inhabitants in each election; the nobles, citizens, laborers, artiſans, and mechanics; the cattle of every kind; the good, the indifferent, and the bad lands; all the clergy, regular and ſecular; their revenues, thoſe of the towns, and thoſe of the communities."’

[150] ‘"All theſe heads, in moſt of their accounts, are confounded; the ſeveral articles are not ſufficiently examined, nor ſtated with exactneſs, and it is often neceſſary to ſearch with great care and pains to find what is wanted; though a miniſter ought to have theſe things ſo diſpoſed, as to be able inſtantly to diſcover the ſtrength, the neceſſities, and the reſources, of his country. The deſign was excellent, and would have been of the greateſt ſervice, had it been executed with judgment and uniformity."’

I agree with Mr. Voltaire in thinking that ſuch a plan, well executed, would be of conſiderable aſſiſtance. But we are not to flatter ourſelves, that it would be poſſible to aſcertain the for⯑tunes of wealthy individuals reſident in cities. The fortune of the merchant, and of the citizen, ſhould always be a myſtery with reſpect to the public. ^* The regiſter which has been ſo much talked of can never be complete, and in its nature muſt be ſubject to a variety of reſtrictions.

As we have travelled through the whole region of finance, it may be proper to ſay a word of the clergy. I cannot do better than inſert what Mr. Voltaire has ſaid upon the ſubject.

^† ‘"It is matter of aſtoniſhment to all Europe, as well as to France, that the clergy ſhould pay ſo little, ſeeing they are ſuppoſed to poſſeſs a third of the revenue of the whole kingdom. Were this the caſe, it is paſt diſpute that they ought to bear likewiſe a third of the public charge, which, one year with another, would come to near thirty millions, independent of the duties on periſhable commodities, which they pay in common with the reſt of the ſubjects. But error and prejudice prevail in almoſt every thing. The church is ſuppoſed to poſſeſs a third of the whole annual revenue of the kingdom; juſt as we ſay at random that Paris contains a [151] million of inhabitants. Were we but to take the trouble of computing the revenues of the biſhopricks, it would appear, by the leaſes granted about fifty years ago, that their whole annual amount at that time was not ſuppoſed to exceed four millions, and the commendatory abbies were rated at four million five hundred thouſand livres. It is true, the declared eſtimate of the leaſes was about a third below the real value; and if to this we add the increaſe of the landed revenue ſince, the total ſum of the rents of all the conſiſtorial benefices will make about ſixteen millions; but we ought to remember, that a confiderable part of this ſum goes yearly to Rome, and is ſo much abſolutely loſt to the nation. It muſt be allowed a great inſtance of liberality in the king towards the holy ſee, to ſuffer it to plunder the ſtate of more than four hundred thouſand marks of ſilver in the ſpace of a century; which, in time, could not fail to impoveriſh the kingdom, did not commerce abundantly repair the loſs.’

‘"To theſe benefices, which pay annates to Rome, we muſt join the curacies, convents, collegiate churches, and all the other eccleſiaſtical eſtabliſhments in the kingdom. If we compute them at fifty millions yearly upon the whole, I believe we ſhall come pretty near the truth.’

‘"Thoſe, who have examined this matter with the utmoſt ſeverity and attention, have not been able to extend the revenues of the whole Gallican church, ſecular and regular, beyond eighty million of livres. The ſum is far from being exorbitant, when we conſider it as deſtined to ſupport ninety thouſand monks and nuns, and about an hundred and ſixty thouſand eccleſiaſtics, which was the number in 1700. And of theſe ninety thouſand monks one third is maintained by alms and maſſes. There are many conventual monks, who do not coſt their monaſtery two hundred livres a year; there are [152] regular abbots, whoſe income exceeds two hundred thouſand livres. It is this enormous diſproportion that occaſions ſo many complaints and murmurs. We are concerned for a country curate, whoſe laborious diſcharge of the duties of his profeſſion entitles him only to a ſcanty income of three, four, or five hundred livres, while a lazy monk, not the leſs lazy for being made an abbot, enjoys an immenſe fortune, and exacts pompous titles from thoſe under his juriſdiction. Theſe abuſes are much more glaring in Flanders, in Spain, and eſpecially in the catholic circles of Germany, where we ſometimes meet with monks who are princes.’

‘"Abuſes, by degrees, paſs into laws in almoſt all countries. Were a number of the wifeſt men to aſſemble with deſign to compoſe a body of laws, what ſtate would be ſuffered to ſubſiſt exactly in its preſent form?"’

The ſketch I have laid before the reader will, I hope, con⯑vince him that the abuſes, which in every country attend the collection of taxes, are frequently exaggerated, and that the means of correcting them are not what the public may conceive. In the Fourth Chapter I ſhall again inſiſt upon the multitude of claſſes which form the picture of the ſtate, and upon the frequent wars which have depopulated Europe. It is in vain to take re⯑ſtoratives, if the convaleſcent continues to bleed every day. His health and vigor will never be recovered by jellies or cordials. This is exactly the caſe of Europe with reſpect to population. Modern writers upon population, commerce and taxes, lament the evil, and preſcribe analeptics; but they forget the regimen, without which no medicine can ſucceed. The regimen is peace. A truth ſo important cannot be too clearly illuſtrated, nor repeated too often.

PART IV. New Conſiderations upon the ſame Subjects.

IT has long been affirmed, that the kingdom of France, though enlarged by the acquiſition of Franche Comté, Alſace, Lor⯑raine and French Flanders, has not more inhabitants than before thoſe acquiſitions were made. We are alſo told that the unequal diſtribution of taxes, the confuſion occaſioned by the Aides and Gabelles, the arbitrary land tax, and repair of the high roads, are the true and only cauſes of the depopulation of France; and that, in conſequence of taxes and oppreſſion, large tracts of land, from which a conſiderable return was collected before the reign of Lewis XIV. are actually uncultivated. The general cry of the nation cannot be entirely without foundation. Reaſon, common ſenſe, and experience, tell us, that, when the huſ⯑bandman is oppreſſed, and the cultivation of the ſoil coſts ſo much that the produce is hardly ſufficient to maintain him, he is compelled to abandon it. It is a general complaint, that all the duties impoſed upon the tranſportation of commodities from one province to another, as well as upon exportation at the cuſtom-houſe, are ſo many fetters laid upon ſale and con⯑ſumption, and muſt diminiſh the revenue by the very means employed to improve it.

Without doubt there is a great deal of truth in theſe com⯑plaints. The vexations they refer to muſt have contributed in part to the waſte of ſo much land; but I cannot perſuade [154] myſelf that they were the principal cauſe of it. It muſt rather be attributed to a ſudden failure of conſumption, ariſing from a violent and continued depopulation. This depopulation has proceeded chiefly from the long wars which Lewis XIV. carried on with armies much more numerous than ever were kept up by any of his predeceſſors. Since that period, a ſingle campaign deſtroys more men than three campaigns in the time of Harry IV. The marine, navigation, and the colonies, prevent the progreſs of population. The revocation of the edict of Nantz, want of toleration, the multitude of religious of both ſexes, and exceſſive luxury, have done the reſt. Wars and colonies have alſo depopulated England, but not in the ſame proportion. 1^o. Becauſe the refugees have in ſome mea⯑ſure repaired the breach. 2^o. Becauſe there are fewer unmarried perſons. 3^o. Becauſe their armies, beſides being leſs numerous, have been compoſed of foreigners. In ſpite of theſe advantages depopulation begins to be felt in England. Projects to prevent it ſignify nothing. The great miſchief is not to be repaired but by time and a continued peace, without which every other expedient will be found inſufficient, uſeleſs, or impracticable.

France and England are as rich in land and money as they can be. Their wealth and power can receive no addition, but by collecting their ſtrength towards the centre of the ſtate. Con⯑ſumption increaſes circulation. A greater circulation creates new property, and gives life to all the riches of the ſtate. A million of ſubjects more, ſettled in Great Britain, would add more to the revenue of the nation, and of the exchequer, and to the power of the ſovereign, than all the produce of Canada and the colonies. France could maintain three or four millions more inhabitants. The circulation, produced by this increaſe of conſumption, would be more profitable to the ſovereign than [155] the poſſeſſion of Mexico and Peru. The circulation of ſpecie quickens rapidly as it paſſes through the inferior ranks. It is the great conſumption of the multitude that enlarges the revenue. That part of the people in France has been dimi⯑niſhed by wars, and want of toleration. Taxes have height⯑ened the miſchief, and made it more ſenſibly felt; but they were not the cauſe of it. The wars of Lewis XIV. and the revocation of the edict of Nantz, have coſt more men than all the wars of the two preceding centuries. The depopulation of Germany will be felt in France and England, as well with reſpect to commerce, as to manufactures. Theſe are loſſes which a whole century cannot repair. Monſieur Voltaire has obſerved upon this ſubject, ‘"That Sir William Petty had proved, that for a nation to increaſe one twentieth in a hundred years requires the moſt favorable circumſtances. His calculation ſhows the folly of writers who people the earth with a ſtroke of their pen, and in a century or two cover the globe with inha⯑bitants. If it be aſked, Why there is a third more people in England now, than in the time of Queen Elizabeth? the anſwer is exactly, Becauſe England has been in the moſt favorable circumſtances; becauſe multitudes of Germans, Flemiſh, and French, have eſtabliſhed themſelves in the country; becauſe it is computed, that ſixty thouſand monks, ten thouſand nuns, and ten thouſand ſecular prieſts, have been reſtored to propagation, and to the ſtate; and becauſe popu⯑lation has been encouraged by plenty. The reverſe of what we obſerve in the pope's territory and Portugal has happened in England. Govern your farm-yard ill, and you will have no poultry. Govern it well, and you will have poultry in abundance."’

[156] Population is not the work of a day. It may be encouraged in time of peace; but continual wars, in the modern ſtyle, will defeat every meaſure that the wiſeſt adminiſtration can poſſibly employ for this important purpoſe.

I have lately ſeen a very ſcarce and curious book, called A Detail of France under the preſent Reign, printed at Bruſſels in 1712. It was written about the end of the laſt century, and printed at Rouen in 1698. ^* This work is attributed to Bois Guillebert, attorney-general in the parliament of Rouen. It contains the ſubſtance of Monſieur de Mirabeau's Theory of Taxation, the remonſtrances made by the parlia⯑ments, and all the viſionary projects of finance, with which France has been over-run, upon the ſubject of taxes, duties, cuſtoms, agriculture, &c. I ſhall begin my remarks upon it with one preliminary obſervation. Though written before thoſe calamities, which attended the latter part of Lewis the XIVth's reign, it repreſents the kingdom as then upon the verge of deſtruction. Seventy years have ſince elapſed, and in the courſe of that time there has been a period, under the admi⯑niſtration of Cardinal Fleury, at which commerce was carried to its greateſt extent, and every thing flouriſhed in the king⯑dom. Of three wars, which have happened within the laſt ſeventy years, the ſecond was ruinous, though accompanied with brilliant ſucceſſes; the third was very unfortunate. And yet I am convinced that France, after all her diſaſters, is not in a worſe condition than in the year 1698, when the book was firſt publiſhed; though (ſetting aſide the conqueſts) the ſtate of the kingdom may perhaps be worſe than it was in the year 1660. [157] Part of the abuſes, particularly the arbitrary land-tax, have been corrected; though it is but lately that the miniſtry have been ſeriouſly employed in going to the bottom of thoſe vexations, which ſtop the progreſs of agriculture and commerce. The meaſures they are now taking will, I believe, in time, produce conſiderable advantages; but I affirm that, without a laſting peace to encourage population, which of itſelf increaſes conſumption, and of courſe muſt quicken circulation, all the expedients they can adopt will only give a momentary coloring to the ſurface. The deſtructive ſyſtem, on which war has been carried on both by ſea and land, ſince the end of the laſt century, is the true primordial ſource of depopulation. The loſs of conſumption, that follows it, leſſens the relative revenue of the ſovereign, and the ſtrength of the nation. If it were not for the factitious cir⯑culation created by loans, the ravages of war, and religious perſecution, which have done ſo much miſchief to population and agriculture, would have been ſtill more ſenſibly felt. Let us conſider this important queſtion again, and turn it in every poſſible ſhape. We cannot examine it with too much attention.

We vie with each other in praiſing the Duke of Sully; and God forbid I ſhould undervalue the diſtinguiſhed merit of that great man. Yet it ought to be conſidered, that his upright in⯑tentions were aſſiſted by circumſtances, of which the miniſters who ſucceeded him had not the advantage.

France, juſt relieved from the horrors of a civil war, was in the ſituation of a robuſt and vigorous young man, who, after a violent fit of ſickneſs, eſcapes from the jaws of death with new ſtrength, and a healthier conſtitution. The kingdom had not been impoveriſhed, becauſe the wars had been carried on chiefly within the country, or immediately upon the frontiers, and with ſmall armies. Spain, in order to ſupport the league, had [158] ſpent money enough in France to enrich the kingdom. The Huguenots had drawn large quantities of plate out of the churches and monaſteries, which was coined and circulated. The ſeeds of opulence exiſted every where. To unfold and bring them forward, required nothing but peace and a prudent adminiſtration. Sully corrected the abuſes which oppoſed this ſalutary work, and gave life to every branch of adminiſtration. The wants were inconſiderable, the reſources were copious, and he availed himſelf of them all. The ſplendor of his adminiſ⯑tration glitters to this day, and will never be eclipſed in the eyes of poſterity. But it would be unjuſt to expect that his ſuc⯑ceſſors, under circumſtances of greater difficulty, ſhould make an equal progreſs in the ſame time. France was like a beautiful woman ill dreſſed, who wanted nothing but a better habit to appear with diſtinction. Harry IV. had none of that pomp which now is thought eſſential to the luſtre of the crown. Verſailles, Marli, Bellevue, which have ſwallowed up ſo much money, were not then in exiſtence. The wants of government are multiplied ſince that time. When ſickneſs and frequent bleeding have weakened the conſtitution, it is with difficulty the convaleſcent recovers.

It is alſo to be obſerved that, according to the Detail of France, Cardinal Richelieu, who ſoon ſucceeded Sully, made an equal pro⯑greſs in improving the finances; the king's revenue having doubled under the Cardinal's adminiſtration. He was far from poſſeſſing the merit of Sully, but the nerve of the ſtate was ſtill in its vigor. Sully had ſhown what it was capable of performing. We ſhould apply to him what Monteſquieu ſays of Richelieu, ‘"He drew the principles of the monarchy out of chaos, taught France the ſecret of her ſtrength, and Spain the ſecret of her weakneſs."’ In ſpite of abuſes of adminiſtration, the progreſs of improvement [159] appeared more and more, until the work was completed by Colbert. This was the period of the higheſt proſperity to France. From that time, the kingdom inſenſibly loſt its ſtrength by abuſing it, in the midſt, and even in conſequence, of the moſt brilliant ſucceſſes. They were purchaſed with the loſs of ſo many men, that the ſovereign, though conſtantly enlarging his dominion, and extending his frontiers, did not increaſe the number of his ſubjects. Land loſt its value more and more, for want of cultivation and conſumption. In theſe circumſtances every tax upon land had a fatal effect; and if commerce and the circulation of government ſecurities had not, in ſome meaſure, repaired the miſchief, the kingdom would really have been reduced to that deplorable con⯑dition in which it has been deſcribed. The picture, now too much loaded, would then have been true. The fact is, that France has not increaſed her power in proportion to her conqueſts; that the oppreſſion of the huſbandman, and the difficulties impoſed upon commerce, both foreign and domeſtic, augment the evil; that failure of credit, in borrowing money, has made the matter worſe; that the circulation, which ſtill ſubſiſts, in ſome degree repairs the miſchief; that theſe abuſes may and ought to be corrected; but that, without a continued peace, no remedy can be effectual.

I find, in the Detail of France, the ſame principle which I have already refuted; that all revenue is reduced to the territorial produce. This work however contains many excellent obſerva⯑tions, though disfigured by exaggeration, or improperly applied. The author ſees every object with a microſcopic eye, and by conſtantly mixing error with truth, deſtroys the utility of his work. It may be true, that the mode of levying a tax (whe⯑ther land tax, wine duty, or cuſtoms) may be more grievous than the tax itſelf; and theſe oppreſſions may be conſidered as [160] one reaſon why large tracts of land, which formerly made a great return, are now left uncultivated. The conſequences extend to conſumption and commerce, and even to population.

The author pretends that, in the year 1696, France had already loſt half her wealth, and that the national revenue was leſs by five hundred millions than it was forty years before. He obſerves that, from the death of Charles VII. in 1461 to the year 1660, the revenues of the kingdom had gradually doubled every thirty years; whereas it would appear that, ſince the year 1660, the king's revenue had only increaſed about a third, (even including the conqueſts, all which pay a complete tithe to government) and that the national revenue had not quite increaſed in the proportion of one half. He affirms, that any diminution in the revenue of land always occaſions a diminution in the revenue of induſtry. The cauſe of the ruin of conſump⯑tion, ſays he, is the only point we need enquire into. Two things eſſentially contribute to it; the uncertainty of the land tax, and the duties paid not only upon exportation at the cuſtom-houſe, but upon conveyance from one province to another within the kingdom. Internal conſumption diminiſhes, exporta⯑tion is impoſſible, and the produce of the earth periſhes on the ſpot where it grew. They, who by their employment are exempt from land tax, fling the whole burthen upon the mer⯑chant and mechanic, who have no fund but their induſtry. The author proves, by arguments equally ſolid and ingenious, that the loſs reverts even upon the perſons who are exempted. He does not blame the taxes ſo much as the mode of collecting them. He lays it down as a principle, that conſumption and revenue are the ſame, conſequently that any check to conſump⯑tion is loſs of revenue. The principle is true; but his applica⯑tion of it is defective, becauſe he conſiders nothing but the ſoil. [161] In his eyes nothing elſe has an exiſtence. 'Bating a few exag⯑gerations, all that he ſays is literally true with reſpect to cultivation, the produce of which might however be reduced to one half, without the whole kingdom's declining in the ſame proportion. He is deceived in thinking, that abuſes are the only cauſe of depopulation. Long wars are the principal occaſion of it. I believe he exaggerates in ſaying, that a duty, which only produces a hundred thouſand livres to the king, deſtroys a conſumption equal to two millions upon the price or the quan⯑tity. This, in fact, means a diminution of two millions in revenue. ‘"All the provinces (ſays he) loſe for want of a commercial intercourſe with each other, and conſumption becomes impracticable."’ This abuſe undoubtedly was of a moſt grievous nature; his whole argument upon the ſubject is clear and ſatisfactory.

Some of his principles are not ſo evident. He ſays, for inſtance, that it is beyond contradiction, that a diminution in the revenue of land has diminiſhed the revenue of induſtry. The principle is not univerſally true. In Holland and Switzerland the barrenneſs of the ſoil has improved the induſtry and reve⯑nue of the inhabitants. I make this obſervation, by the bye, to ſhow the fallacy of general rules. The author ſaw that, from a concurrence of various circumſtances, the province of Normandy and the election of Mantes were fallen to decay; and that taxes, provincial duties, and other exactions, were the principal cauſe of it. He was ſtruck with ſeveral abſtract truths reſpecting circulation, conſumption, the connection of intereſts, and ſocial harmony of all the orders of the ſtate. He compared the hiſtory of the preceding century with that of his own; and all theſe ideas, ſeparately true in themſelves, mixed with the zeal of patriotiſm, and fermented in his mind. The [162] volume of every object ſwelled in his view beyond its ſolid ſubſtance. He exaggerates every thing, and with the ſureſt principles and deepeſt knowledge miſleads the underſtanding. His idea of the general ſtate of the kingdom was collected from what he ſaw in Normandy, and the election of Mantes. He ſays, that the difficulty of communication between one pro⯑vince and another has ſunk the value of their reſpective produce, at the ſame time that duties upon exportation have annihilated commerce, and impoveriſhed the kingdom. All this may, in ſome degree, be true; but to pretend that it has diminiſhed the revenue of the kingdom one half, that it has occaſioned an annual loſs of fifteen hundred millions, beſides deſtroying millions of ſubjects, and that all this may be recovered in four-and-twenty hours, and with a few days labor, is to the laſt degree extravagant. Writers, who have followed him in treating the ſame ſubject, have ſoftened his exaggerations, which time had confuted; yet ſtill they almoſt all go too far, not being able to renounce their firſt falſe principle, that every thing is compre⯑hended in the territorial produce; nor conſidering, that ſucceſſive wars have been the chief cauſe of depopulation, and that con⯑ſumption of courſe diminiſhed for want of conſumers. Yet there are a number of fine and uſeful remarks in this work, provided we confine them to their true value. The author had a tolerably clear idea of circulation; yet even this he carries too far. He ſays, for inſtance, that a hundred crowns, taken from the laborer for the expence of collection, create a loſs of five or ſix thouſand livres to the body of the ſtate. He repeatedly aſſerts, that in his time the revenues of France had ſunk above fifteen hundred millions in the ſpace of forty years; whereas the increaſe of revenue to the ſovereign, which occaſioned that loſs, was not more than a hundred millions. All this proves too [163] much. If in fact there be ſuch quantities of land in France entirely deſerted becauſe the produce does not anſwer the expence of cultivation, I believe that means might be found to cultivate it on the king's account. I am ſurpriſed, that nobody has yet ſeriouſly thought of carrying ſuch a project into execution. It would appear perhaps to be the moſt beneficial and practicable ſcheme that has yet been imagined. The operation of a few millions employed by the king in reinſtating his own ſubjects, who are reduced to miſery, and in ſecuring a portion of property to foreigners, would ſhortly be felt. Aſſiſted by peace and commerce, it would ſoon reſtore population, conſumption, and circulation, revive the paralytic branches of the ſtate, and in a few years conſiderably increaſe the revenue of the ſovereign, yet leſſen the burthen of taxes. Such a plan of agriculture might be executed in England with ſtill greater eaſe and expedition. In France there are more obſtacles to be removed. The rubbiſh of old ruins would at firſt retard the conſtruction of a new building. All difficulties of communication between the provinces, all checks upon exportation, ſhould be previouſly removed. The oppreſſions heaped upon the farmer ſhould ceaſe. The privileges, as well as the property granted to foreigners, ſhould be firmly ſecured. A plan of this nature may be reckoned among the number of political viſions. Yet ſome of my readers may be ſenſible of the value of it, eſpecially when they obſerve the ſucceſs it has already had in the following example. Fre⯑derick William of Pruſſia formed the project, and had the good fortune to carry it into execution. His country was a vaſt deſert. With an expence of only twelve millions of florins he cleared the land, built villages, and filled them with inhabitants. He brought whole families from Suabia and Franconia. He invited emigrants from Saltzbourg, and ſupplied them with the means [164] of ſettling, and with implements of labor. He formed a new ſtate, which gave him a new power. Europe has felt the weight of it, without profiting by the example. Such an inſtance is worth more than a hundred treatiſes upon agriculture and finance. The Engliſh have done the ſame, in many parts of America, that Frederick William did in Europe, with ſingular advantages to the nation. The premature population of the colonies has not much weakened Great Britain, becauſe the Engliſh have had accidents in their favor. The multitude of refugees who ſettled in England after the revocation of the edict of Nantz, as well as of emigrants from Germany and elſewhere, enabled them to people their colonies without depopulating the mother country. Yet if, on the Pruſſian plan, they had begun by improving the whole of their ſoil in Europe, and encouraged population as far as the extent of their territory and commercial advantages might admit, I believe their power would have been fixed upon a more ſolid foundation. The ſubſequent ſettlement of colonies would have proceeded with ſo much the more rapidity, as the kingdom would then have men to ſpare, and wanted a vent for the ſurplus of its ſubjects. England and France may yet be in this ſituation, if the divine ſyſtem of peace ſhould pre⯑vail through the principal courts of Europe. In the mean time it is abſurd to deny, that the Engliſh derive eſſential advantages from their colonies. The apprehenſion, that the American colonies may one day become independent of the mother coun⯑try, is, for the preſent, a mere chimera. That event at leaſt can only be looked forward to in a very diſtant perſpective. Excluſive of the example of the Spaniards, who have long been the ſubject of theſe gratuitous predictions, it is certain that the Engliſh colonies can never enter into alliances dangerous to the mother country, as well from the connection of their intereſt [165] with Great Britain, as from the ſpirit of jealouſy and rivalſhip which prevails among themſelves. None of theſe countries ſeparately can ever arrive at independence, and to unite them is impoſſible. With a moderate degree of conſiſtency in the adminiſtration at home, Great Britain will long preſerve her authority over theſe vaſt eſtabliſhments. In theory they may perplex the politician, but the management of them in fact will eaſily be compaſſed by a prudent government. From this di⯑greſſion, which I thought material, I now return to the attorney general of Rouen.

His account of the finances of France is extremely curious. He ſays that, after the death of Francis I. Catharine of Medicis, who loved pomp and luxury, ſent for Italians to adminiſter the king's revenues, and that the ſcience of finance and raiſing money by loans was taught by thoſe people. They were ba⯑niſhed by Sully, recalled by Mary of Medicis, ſet aſide by Richelieu, and after his death appeared upon the ſtage again. The parallels drawn by the author between different periods preceding the reign of the financiers, and particularly ſome hiſtorical re⯑marks upon the time of Francis I. are plauſible and ſeducing. He attributes every thing to a ſingle cauſe, as Deſcartes ex⯑plains all difficulties with the help of ſubtle matter. Yet he condeſcends to admit that Francis I. had not quite ſuch nume⯑rous armies as are maintained at preſent. Is it not ridiculous and extravagant to compare the neceſſities of the ſtate and the luſtre of the crown, in the reign of that monarch, with the preſent condition of the kingdom? ¹

[166] Nothing can be more judicious, nor profound, than his remarks upon the exportation of corn. He proves that, the more corn is carried out of France, the leſs reaſon there will ever be to apprehend any extreme ſcarcity; and that the very low price of corn is a ſign of indigeſtion in the ſtate, ari⯑ſing from too great an abundance, and prejudicial to every rank of life. It is a worm that gnaws, and gradually under⯑mines the ſtate. What he ſays on this article is deep in itſelf, and has been confirmed by the experience of France and England. The ſubject now engages the whole attention of the French miniſtry, and I believe would have done ſo long ago, if truth had been repreſented with leſs heat, and not puſhed to an abſurdity; as, for inſtance, where he ſays that abuſes in theſe branches, in the firſt inſtance, occaſioned a real loſs to the kingdom of five hundred millions, and that the loſs now is treble what it was at firſt. Exaggerations of this nature have ſpoiled a picture in itſelf true and affecting. The ſame defect prevails through all the writings that have been copied [167] upon this work. An empirical way of repreſenting the diſorder has probably retarded the application of a remedy. They aſſign only one cauſe for an evil, that ſprings from a complication of diſorders. The chief of theſe are frequent wars, and the new method of conducting them. By this kind of empiriciſm, in⯑ſtead of healing the wound, they only encourage the patient to expoſe himſelf to the ſame dangers; they inflame the diſorder, and make the cure of it impoſſible. The true cure conſiſts in a regimen, without which no other remedy can operate; and that regimen is peace.

Violent exaggerations being always contradicted by experience, even truth itſelf at laſt is ſuſpected, and paſſes for ſpeculation. If a Spaniſh or Portugueſe Jew, ſettled at Conſtantinople or Amſterdam, ſhould affirm, that the unjuſt expulſion of the people of his religion out of Spain had done great miſchief to that kingdom as well as to Portugal, he certainly would have reaſon on his ſide. The Jews in Spain and Portugal were a very innocent ſet of people, quiet ſubjects, and uſeful citizens to the ſtate. They were very numerous, and kept induſtry and com⯑merce alive. Many of them were men of learning, and much reſpected. They had even been admitted to a ſhare in the adminiſtration. Alphonſus the Fifth of Portugal truſted Abar⯑banel with the moſt important employment, and was ſerved by him with zeal, honor, and ability. Our Jew might add, with ſtrict truth, that the expulſion of theſe people contributed to depopulate Spain and Portugal. He might even obſerve, that particular cities were ruined by it. All this is very poſſible; but if his enthuſiaſm carried him ſo far beyond the line of truth as to affirm, that the violence offered to the Jews was the ſingle and only cauſe of the depopulation of Spain, the aſſertion would be too abſurd to be ſupported. This is exactly the way of rea⯑ſoning [168] of the attorney-general of Rouen. He judged of the whole kingdom of France from what he ſaw in a particular pro⯑vince, where the effect of fiſcal abuſes might perhaps have been more ſenſibly obſerved. His enthuſiaſm has carried him as far beyond the truth as our honeſt Iſraelite's reaſoning about Spain. The prodigious devaſtation of that kingdom ariſes from the baniſhment of the Jews, the diſcovery of America, the expul⯑ſion of the Moors, the multitude of religious orders, and the frequent wars carried on by Charles V. and his ſucceſſors. To reduce all theſe cauſes to one, is falſe and ridiculous. A refugee might truly affirm, that the maſſacre of St. Bartholomew, and the revocation of the edict of Nantes, have been very prejudicial to population, commerce, and induſtry, in France. The fact is unqueſtionable; but it would be equally falſe and ridiculous to pretend, that theſe events alone occaſioned the decline of the kingdom. The vexations heaped upon the farmer may have contributed to it in ſome meaſure, though not ſo much as the revocation of the edict of Nantes, nor any thing like ſo much as the author pretends. Exceſſive luxury does its part, and monaſtic orders contribute not a little. But it is the continued ſucceſſion of bloody wars that has been the immediate, efficient cauſe of the depopulation of France. Spain, from a number of peculiar circumſtances, is ſtill more depopulated. A variety of cauſes may concur in producing the ſame effect. A man, who obſerves only one of them, is dazzled by the ſingle object before him. With one general ſolution he accounts for every appear⯑ance, and leads himſelf inſenſibly to the moſt abſurd con⯑cluſions.

A judicious reader, who corrects the errors of exaggeration, will find in this work a number of curious, uſeful, and ſolid obſervations. It is a pity that an author, who ſets out with true [169] principles, and the moſt ſublime ideas, ſhould be led aſtray by enthuſiaſm. I am inclined to think, that ſucceeding writers upon the ſame ſubject have ſaid nothing material, that may not be found in his treatiſe. It is true, that, in the diſcuſſion of exactly the ſame queſtions, it is hardly poſſible that the ideas of different authors ſhould not ſometimes concur. Of all the writings I have ſeen, no one comes ſo near as this to my own ideas of circulation. In truth, he is the only author who ſeems to me to have had a clear conception of the ſubject. All the other writers, I have ſeen, wander from the mark. Yet it is poſſible there may be many excellent performances, which have not come to my knowledge. I have always confined myſelf to an attentive obſervation of facts, and to my own meditations. After I had committed my firſt ideas to writing, I looked for farther inſtruction from books. My labors, I hope, will not be wholly unprofitable. The welfare of mankind is my object. I have no view to intereſt or reputation. My career is almoſt ended, and the world has loſt its charms. All I wiſh, is to leave it with tranquillity. But to return to my ſubject.

The moſt exact juſtice in the diſtribution of taxes in the interior of the kingdom, and the care to be taken not to eſtabliſh expenſive offices of collection for the ſake of a trifling revenue, are objects of ſuch importance, that I perſuade myſelf ſome remedy muſt have been thought of in all the time ſince abuſes in theſe matters have been complained of. We have ſeen a wretch, who had nothing but his hands to ſupport himſelf and his family, reduced to ſuch miſery as to be obliged to ſell even the tools with which he earned his ſubſiſtence. The author of the Detail of France affirms, that it was matter of public noto⯑riety, that theſe abuſes occaſioned the annual loſs of three hun⯑dred thouſand ſouls, that periſhed in miſery, particularly infants; [170] that there was not ſubſiſtence for half the children of the poor at that age. The mother extenuated with labor and want of nouriſhment, the infant periſhing at the breaſt for want of milk, and even thoſe of a more advanced age, having nothing to live on but bread and water, without bedding, clothes, or medicine in caſe of ſickneſs, were all involved in the ſame wretchedneſs, and ſunk under it. If, inſtead of three hundred thouſand, only twenty thouſand ſouls were annually loſt, what glory would it be to a ſovereign, what pleaſure, what happineſs, to be able to relieve ſo many complicated diſtreſſes!—To be the father, the tutelar god of the unfortunate, and to reſtore them to happineſs; this is the only real charm that can alleviate the burthen of a crown. I ſhould think as I do, if all the expence were to be loſt to the ſovereign, without any return to his revenue, but the happineſs of his people; how much more ſo, when his own intereſt equally invites him to it! The ſame operation, that relieved the ſubject, would give wealth and power to the crown.

The author, ſenſible of the effect of circulation, judiciouſly obſerves that a crown, taken from a man of fortune, is never (he ſhould have ſaid ſeldom) any more than a crown, as well with reſpect to the individual, as to the body of the ſtate; whereas, if taken from the indigent laborer, or little tradeſman, it anni⯑hilates at one ſtroke a conſumption equal to a hundred crowns in the courſe of a year. Among that claſs of people, every thing perhaps turns upon the ſingle crown. This little ſum, conſtantly reviving from one hand to another, conſtitutes all their circula⯑tion. If all his calculations were as exact as this, he would not have computed the annual loſs of the ſtate at fifteen hundred millions. Notwithſtanding all the corrections added to it, the ſum is too extravagant. If the tenth part of the money, ſpent [171] by ſovereign princes in deſtroying mankind, (out of which a hundred, or two hundred individuals, may perhaps make their fortunes) were applied, for ten years together, in pro⯑moting the happineſs of their own ſubjects, and of foreign ſettlers, who might be willing to employ their ſtrength and induſtry in the improvement of the ſoil, population would ſenſibly recover, the earth would be cultivated, and manufactures encouraged. The king's revenue, even with a diminution of taxes, could not fail of improving conſiderably from the pro⯑digious increaſe of conſumption, and the quickening of circu⯑lation through every order of the ſtate.

As long as the ſtate of Europe bears any reſemblance to its fabulous origin, depopulation will continue to be felt. In vain may Cadmus ſow the dragon's teeth, if the children of the earth are to riſe in arms, and employ them in deſtroying one another. Princes, as well as individuals, look for happineſs and advancement at a diſtance, when perhaps they might find both one and the other at home. Real power is only to be acquired by living in peace with our neighbours, and preſerving order and tranquillity among ourſelves.

A new work has lately appeared, called the Rural Philoſopher, in which there are ſome very fine obſervations, though clouded by the enthuſiaſm of agriculture. The author's whole argument turns upon the ſame falſe principle, which I have already refuted in the other Treatiſe. Every thing is confined to the territorial produce. This is his motto, and the burthen of his ſong. In his opinion all the reſt is fallacy and ruin. Annuitants are nothing but devouring wolves. He does them the honor of placing them in the rank of beggars. Manufactures are per⯑nicious. Money is a chimera. In ſhort, it is a mere enthu⯑ſiaſm, borrowing enchanting colors from calculation. Theſe ar⯑bitrary calculations, on ſubjects no way ſuſceptible of them, [172] are enough to make reaſon itſelf run mad. When Monſieur de Mirabeau, for inſtance, in ſupporting his ſyſtem, finds himſelf embarraſſed by facts, and by the experience of ſuch a nation as Holland, he tells us that that country, which ſome people call a nation, is only an open factory, where money tranſactions are carried on upon momentary credit. This is a ſtrange way of treating a people, who formerly defended their liberty againſt the firſt power in Europe; who were powerful enough to conquer almoſt all the Spaniſh poſſeſſions in the Eaſt Indies as well as the Brazils, and upon whoſe reſolutions the fate of Europe has frequently depended. Without the aſſiſtance of loans and fictitious riches, neither England nor the republic could have carried on ſo extenſive a commerce as they have done, nor ſupported ſuch enormous expences abroad. Facts and expe⯑perience are for ever at variance with Monſieur de Mirabeau's general rules. In this new treatiſe he affirms that, if the national debt were carried to ſuch an extreme, that the ſtate of the annuitant ſhould be choſen in preference to any other, we might then bid adieu to all expence; annuities, commerce, lands, every thing would be alienated, every thing would be overthrown, and fall to ruin. Yet it is to be obſerved, that land in England is better cultivated, and has riſen conſiderably in value, ſince the national debt has increaſed the number of annuitants, or rather of thoſe who have part of their property in annuities, and who for the moſt part are either men of rank who improve their eſtates, or capital merchants, or wealthy tradeſmen. The author pretends to prove, upon evidence of fact, that annuities are to the profit of him who receives them, and to the detriment of him who pays them.

‘"What creditable family is there that does not conſider it as the firſt object, in matter of buſineſs, to pay off every mortgage [173] that incumbers their eſtate? Is there a father of a family, who wiſhes for an independent fortune with reſpect to his expences, and for an idle life with reſpect to the place of his reſidence; and do we not hear him affirm, ever ſince this unhappy cuſtom has prevailed, that, to be at his eaſe, he muſt have at leaſt a third of his property placed out at intereſt? The proof then is, that every man thinks it his intereſt to lend, but no man to borrow; that annuities are to the profit of him who receives, and to the prejudice of him who pays; and that money lent at intereſt is ruinous to the borrower. Whatever is inconſiſtent with the intereſt of a ſingle family, muſt be equally inconſiſtent with the intereſt of all the families in a ſtate. The ſtate itſelf is only one great family, formed by the union of ſeveral. The ſeparate ruin of each is the aggregate ruin of the nation. The univerſe is one immenſe ſtate, compoſed of great families under the title of nations. The ſame cauſes, that deſtroy a nation, operate equally to the ruin of the world, and of mankind."’

This is an admirable ſermon, but unluckily it miſſes the mark. The principle is not univerſally true, and the application is defective. Money lent at intereſt, ſo far from injuring the borrower, is of ſervice to the merchant, and promotes trade. In Holland, England, and all commercial countries, many of the wealthieſt merchants borrow money at three or four per cent. and by employing it in trade make double and triple the profit by it. This advantage, which merchants firſt met with in Hol⯑land, has contributed not a little to facilitate commerce, and to the glory and welfare of the ſtate. Monſieur de Mirabeau has no true idea of theſe matters. The liberty of drawing upon a correſpondent, the intereſt paid him for the money he advances, are ſo many loans in effect, infinitely to the advantage of the [174] borrower. When the father of a family veſts all his property in annuities, (which ſeldom happens) he then, and only then, may be ſaid to give up all thoughts of buſineſs, and to aim at nothing but an independent ſubſiſtence. In that caſe it may be his intereſt to pay off every debt that incumbers his family. We ſee then how much the principle muſt be qualified, to make it true with reſpect to individuals. The application of it to the ſtate is abſolutely falſe. That which ruins an individual, does not always ruin the ſtate. The money a man lays out for his ſubſiſtence, or in articles of luxury, does not return again into his family; whereas the internal expences of a monarch, or of the ſtate, return into the nation, encourage and improve it. The nation in a body pays theſe expences, or rather lends the money for its own advantage. With the aſſiſtance of loans a war may be ſupported by moderate taxes, in compariſon with what the nation would otherwiſe be obliged to pay, at the ſame time that the numerary wealth and circulation increaſe with the debt, as we have already demonſtrated. If other obſtacles did not lie in the way, we ſhould find that both population and agriculture would be promoted by that quick and eaſy motion which loans impreſs upon the ſprings of a prudent adminiſtration. Loans judiciouſly made, and wiſely applied, under favor of peace, conſtitute the only means of recovering population, and improving the ſoil.

It is not true that, in the revealed law, God forbids all intereſt on money borrowed, as uſurious. That paſſage in the Holy Scriptures has never been underſtood, and has given occaſion to many atrocious calumnies againſt the Jews, which, inſtead of affecting that people, are ſo many blaſphemies againſt the word of God. In the Hebrew language there are two expreſſions; neſſeg, which ſignifies Intereſt; and tarbit, which ſignifies Uſury. [175] How often has Voltaire affirmed, that, in the maledictions pronounced by Moſes againſt the Jews, he threatens them, that they ſhall borrow on uſury, and not be able to lend on the ſame terms? The charge is falſe and ſcandalous. In the chap⯑ter of Benedictions, the text ſays, Thou ſhalt lend to divers nations, and thou ſhalt not borrow. In the chapter of Curſes, the text ſays, Thou ſhalt borrow of divers nations, and thou ſhalt not lend; without one word of uſury or intereſt. I could not avoid taking notice of ſo groſs a miſtake. It is true, however, that among the Jews the rich are forbidden from taking intereſt of the poor; but Moſes does not extend the prohibition to people of fortune among one another. The Jewiſh government was theocratical, depending merely on the cultivation of the ſoil, which was diſtributed among the people with an exact equality. The legiſlature appointed a jubilee for the abolition of debts, and for the reſtoration of every family to the lands they had alienated; but inſolvent debtors paid for this advantage with the loſs of their liberty, until the period of reſtitution arrived. Their political conſtitution is no way applicable to Europe. In the ſame ſpirit Moſes permits the Jews to take intereſt of ſtrangers; but it is abſurd to ſay, that uſury was ever com⯑manded. Lanochry taſſig. Taſſig comes from neſſig, and can only ſignify Legal Intereſt, which they were permitted to take from ſtrangers. Tarbit ſignifies Augmentation, or Uſury, which God never commanded his people to exact. A reproach of this kind is blaſphemy in the mouth of a Chriſtian, and folly in the mind of a philoſopher. But to return.

An equal diſtribution of property was much in the ſpirit of the Greek and Roman legiſlation. We know what agitation was produced by the agrarian law among the Romans. In our conſtitutions this chimerical ſyſtem is given up. The number [176] of new claſſes created by induſtry, commerce, and abundance, have eſtabliſhed a ſort of diſtribution unknown to the ancients. Through the medium of national loans, the poſſeſſors of this new property become co-uſufructuaries of the ſoil, with ſignal advantage to the ſtate. From the whole of this treatiſe it appears that they multiply the numerary, quicken circulation, and encourage commerce, manufactures, agriculture, revenue, and population.

Gold and ſilver are uſeleſs in a deſert; whereas theſe metals, or whatever repreſents them, in a populous country ſurrounded by poliſhed nations, ſupply every want, and quicken every reſource, by means of a general convention. The wiſe man had reaſon to ſay, "Money anſwers to every thing." To deny theſe propoſitions, is an abuſe of truth, and of the underſtanding, and confounds the ſimpleſt ideas. All men cannot be proprie⯑tors of land. To proſcribe the other claſſes is an inſupportable abſurdity. The anathema, pronounced againſt them by the Rural Philoſopher, is equally unjuſt and ridiculous. The num⯑ber of mere annuitants is very inconſiderable. Their pretended idleneſs is not ſupported by the labor of others. They, on the contrary, ſupport that labor by their expence. But theſe idle annuitants, who have neither land, nor office, nor employment civil or military, are very rare. Intereſt on money is uſeful and neceſſary. Uſury is dangerous and deſtructive. To confound the two objects, is to forbid the uſe of fire, becauſe it burns thoſe who go too cloſe to it.

The Rural Philoſopher is very ſevere upon manufactures. It is true the manufacturer, the artiſt, the merchant, and the banker, can more eaſily remove into another country. Their property is not ſo intimately attached to the ſtate, or rather to the ſoil. ‘"Their wealth," ſays he, is diſperſed and unknown. [177] And all riches that depend upon ſeculation, or are capable of being hoarded, give no hold to the ſovereign power."’ This rule however is not univerſally true. It can only hold with reſpect to individuals, not to the whole claſs. For example, half a dozen manufacturers of Lyons, a few merchants belonging to Marſeilles, or St. Maloe's, and a banker of Paris, may quit their country without difficulty in the courſe of a day, and eſtabliſh themſelves elſewhere. In the ſame manner a landlord may ſell his eſtate, and purchaſe land in another country; but it is abſurd to ſuppoſe that all the manufacturers of Lyons, that all the merchants of Marſeilles or Bourdeaux, or that all the bankers of Paris, can find occupation elſewhere for their trade, induſtry, and abilities.

The landlord would be the firſt to ſuffer, if the merchant, the mechanic, the annuitant, the nobility, and even the artiſt of luxury, did not give a venal value to the ſuperfluous produce of the earth, by quickening circulation and con⯑ſumption. To decide this queſtion, or to ſtate it in rational terms, I ſhould be glad that theſe profound, eternal calculators, who pretend to underſtand the art of agriculture ſo thoroughly, would make a ſimple, exact, and unexaggerated calculation of the number of people neceſſary to cultivate and improve all the ſoil of France; that is, as much of it as is ſuited to the pro⯑duction of corn, or fit to be laid out in vineyards. The woods are neceſſary for various uſes, and occupy but a few hands. The improvement of the heaths at Bourdeaux is not to be reckoned, while ſuch quantities of good land remain uncultivated. It will not eaſily be believed how few hands are neceſſary to make a rich ſoil produce ſufficient nouriſhment for a great number of conſumers. The earth is ſo fertile, and nature is ſo bountiful, [178] that multitudes may ſubſiſt upon the labor of a few. Nothing but commerce, mutual intercourſe, and free exportation, can give a venal value to all the ſuperfluous produce. Every reſtraint upon the vent of it is injurious to the body of the ſtate, and checks population in other branches. As theſe claſſes, ſo ſeverely proſcribed by Monſieur de Mirabeau, multiply in the ſtate, internal conſumption will increaſe, and foreign trade and exportation become ſo much the leſs neceſſary. As manu⯑factures flouriſh, the freedom of commerce will improve. An⯑nuitants, bankers, merchants, and other citizens, will circulate ſo much the more money, and employ ſo many more hands in mercantile occupations, which we are told are ſo unfruitful a ſoil. Population will improve, and agriculture be much more encouraged, by the conſumption of the manufacturer, than population can be encouraged by agriculture. But to return to the calculation. It will be found that, if wars, colonies, and ſome particular moral cauſes had not depopulated Europe, the lands in general would have been better cultivated, and their value improved; and that this conſumption and value would proceed from the multitude of uſeful and induſtrious citizens, whoſe expence and circulation ſet every thing in motion. Eng⯑land in proportion is much better peopled than France, and the ſoil more improved. Yet their exportation of corn is im⯑menſe. The internal conſumption and population of the kingdom might therefore be much greater than they are. But this popu⯑lation, which of courſe would increaſe the claſs of farmers, could not exiſt without a proportionate increaſe in all thoſe claſſes, againſt which the enthuſiaſtic apoſtles of agriculture have pronounced their anathema. I ſhould willingly concur with them in opinion, if they were contented with extolling the [179] immenſe utility of their favorite object, without excluding others equally uſeful, and even neceſſary to the improvement of agri⯑culture itſelf. An able calculator might demonſtrate that, if other nations did not cavil with the Dutch about thoſe branches of induſtry which have fallen to their lot, and which in truth are their only inheritance, Amſterdam, Middleburgh, Dort, and Rotterdam, might contain double their preſent number of inhabitants, with a conſiderable addition to the general opulence of the republic. Population, which in Holland is much greater in proportion than in any part of Europe, would continue to increaſe, with prodigious advantage to thoſe nations that culti⯑vate their ſoil. This ſingle reflection qualifies all exaggerations, and reduces the queſtion to thoſe terms of policy and reaſon, which I am endeavouring to eſtabliſh.

Let us not deceive ourſelves. The harmony of a ſtate ariſes from the agreement of its various parts. They borrow a mutual aſſiſtance from each other. Time, that conſumes every thing, will correct a number of miſtakes. The new world, which now in the philoſopher's eye ſeems uſeleſs, hurtful, and even dangerous to the old one, ſhall one day or other become neceſſary, when the population of Europe ſhall be carried to its higheſt point of improvement. We know that in China the legiſlature are obliged to check population; the example of China and Holland proves the truth of what I advance. If all the arable land in Europe were laid out in the production of corn, a great part of it, I am convinced, would periſh for want of conſumers. To create a conſumption equal to ſo extenſive a cultivation, we muſt multiply the population of great cities, towns and villages. There neither ſhould, nor can be, more than one Paris in France, nor one London in England; but there might be, as in China, [180] fifty cities more populous than Lyons, Nantes, Rochelle, and Bourdeaux; and every village might be better inhabited than it is. This is the way to raiſe the power of the prince, and the value of land; which never can be accompliſhed but by a con⯑tinued peace, and by removing thoſe moral obſtacles that make it difficult for the farmer to ſubſiſt, and counteract population. A free exportation of the produce of the earth is eſſential. The reſt is the work of time, and of a good adminiſtration, under which, commerce, manufactures, circulation, and public credit act their reſpective parts, and all concur in promoting the ſame purpoſe. But every branch has its limits and relative proportion to the reſt. While they preſerve this proportion, they aſſiſt, when they depart from it, they deſtroy one another.

The inhabitants of cities, ſays Monſieur de Monteſquieu, judge of the opulence of a kingdom by the glittering luxury of thoſe who are the ruin of it. They deceive themſelves un⯑doubtedly. At the ſame time we are not to judge of the ſtate of a whole kingdom from the decay of a ſingle province. The metropolis, we are told, with all its barren opulence, is only a magazine, like ancient Rome, in which the ſpoils of the pro⯑vinces are collected; but the difference is very material. Paris and London are inhabited by induſtrious claſſes of men, who promote agriculture, commerce, and conſumption. The extent of the two cities exceeds their due proportion to the ſtate, which is depopulated by other cauſes. For this reaſon, Paris appears, in the philoſopher's eye, a maſs of ſeveral cities tranſplanted, and which might be more advantageouſly ſituated elſewhere. This tranſplantation, ſays Monſieur de Mirabeau, can only have been effected by a ſort of chymical extraction, conſidering the loſs of all the alimentary juices imbibed by the channels through [181] which they paſs, before they reach the capital. The ſurplus, received by the metropolis, may perhaps be ill diſtributed, varīable, precarious, and tranſitory, owing to a concurrence of various effects, which prevent the proportionate population of the kingdom, and the cultivation of the ſoil. But I affirm that France might be more populous, the land better cultivated, and Paris as great, and even better inhabited, than it actually is; and that, if a due harmony and proportion were preſerved in the other parts, the greatneſs of the capital, and multitude of its citizens, would be an encouragement to agriculture, which muſt ſtand ſtill, if it were not for the number of conſumers in the different claſſes of citizens. Such, in ſhort, is my opinion upon this important queſtion.

A number of examples might be quoted, but they would lead me into a detail of the proportions and balance to be preſerved in every claſs. When one claſs invades another, the prejudice they ſuffer is reciprocal. The firſt advantage may ſeem ſpecious, but the loſs of harmony and proportion makes it tranſitory and deſtructive. The many paſſages in hiſtory, which ſhow the political inconvenience of too copious a population, would lead us too far. The eternal laws of providence have implanted the ſeed of generation and perpetuity in every ſubſtance, but they ſeem alſo to have ſet bounds to their multiplication. The works of nature ſubſiſt by devouring one another. Every thing in its turn is paſture and a grave. Final cauſes are placed beyond our reach. The quantity of acorns loſt or conſumed is prodigious. Very few produce oaks. Every thing has its uſe. Out of a thouſand melon-ſeeds ſcarce one perpetuates the plant. The attraction, which the Author of nature has annexed to the act that perpetuates our being, is oftener a dream of pleaſure, than [182] an effort to immortaliſe the ſpecies. If nature, in ſome inſtances, appears too prodigal, it is becauſe we are unacquainted with the immutable laws by which her oeconomy is directed. America perhaps, after depopulating Europe, may ſerve hereafter to relieve us from too abundant a population.

To make it apparent that there is a maximum in agriculture and population, the reader is requeſted to employ his imagination upon the following remarks. Suppoſe, in the firſt place, that all Europe were as well peopled as it might be. By computation it would contain four or five times as many inhabitants, as it has at preſent. In that caſe, it would be indiſpenſably neceſſary to cultivate every foot of land, in order to maintain ſuch a multi⯑tude of people; and let it be admitted that, by a ſuperior ſyſtem of legiſlation and government, the ſeveral claſſes ſhould be diſtributed in due gradations; and, in a word, that an exact proportion and harmony ſhould be preſerved among all the parts of ſo many different ſtates. When Europe had once arrived at this period of agriculture and population, what would be the conſequence? Muſt the farther progreſs of population be ſtopt? By what means could it be done? We ſhould be compelled to ſend colonies to America and elſewhere. Even this reſource would not be ſufficient. The fatal aſſiſtance of war would be called in, to ſupply the office of peſtilence and famine. They too in their turn would ſoon be ſeverely felt. The very population we ſuppoſe would introduce them. The annual produce of the earth would be annually conſumed by the reſpective inhabitants of every country. Now it is certain that, after a few years, the harveſt fails in all countries. All of them then muſt ſucceſſively periſh by famine; becauſe every country would want the whole of its own produce for the internal con⯑ſumption [183] of its inhabitants, and could ſpare nothing for the ſupply of its neighbours.

Some naturaliſts pretend, that our terreſtrial globe is only ſur⯑rounded by a vegetative cruſt, gradually exhauſted by cultivation, until at laſt it becomes dry and unfruitful. They tell us that the deſerts of Arabia were once a fertile country, and the earlieſt habitation of mankind. Without ſifting the queſtion too mi⯑nutely, we all know that the earth recovers its youth, and preſerves its fertility, by repoſe. We know with what eager impatient vegetation a new ſoil rewards the firſt labors of the plough. To promote the order, harmony, and preſervation of the whole, there muſt be an alternate ſucceſſion of cultivation and repoſe; a ſtore of proviſions muſt be reſerved; ſome lands muſt be fallow; ſome countries muſt be uninhabited; it pro⯑bably does not enter into the deſign of Providence, that the earth ſhould be equally peopled and cultivated all over. Such a ſtate of perfection and opulence, if it could exiſt for a moment, would introduce the ſevereſt calamities. We know not what our ſupreme good conſiſts in. Apparent imperfections contribute to the general ſecurity. We only ſee part of the picture, and are dazzled by falſe lights. Perfection cannot belong to the ſingle part before us, but muſt reſult from the whole.

Exceſſive population has conſtantly given birth to war, which, turning againſt its parent, diminiſhes and deſtroys it.

To multiply men, ſays Monſieur de Mirabeau, without mul⯑tiplying ſubſiſtence, is devoting them to the miſery of famine. The phenomenon is rare, and can never happen, but through ſome defect in adminiſtration and police. On the other hand, to multiply ſubſiſtence without multiplying conſumers, is a ruinous chimera, that never can hold above a year. The phy⯑ſical [184] limits of population in any country are not inviolably confined by the produce of its own territory, when trade and navigation proſper, and are aſſiſted by credit, circulation, and fictitious wealth. Let Holland be the example. It is rather true that cultivation is inviolably confined by the internal con⯑ſumption, or precarious foreign exportation. When population exceeds wealth, the defect is inherent in the body of the ſtate. The whole political machine is out of order. Whenever this happens, every part will demand our attention at the ſame moment. The remedy muſt be general, and equally applied to every defect. We muſt then, as Lord Bacon obſerves upon another ſubject, endeavour to imitate the great operations of nature, not thoſe of art, which are always ſlow, feeble, and imperfect. The ſtatuary forms his ſtatue ſucceſſively by parts; ſometimes working upon the head, ſometimes upon the limbs; but it is our buſineſs to follow the conduct of nature in what⯑ever ſhe produces; rudimenta partium omnium ſimul parit et pro⯑ducit. She at once lays the plan of the whole being, and furniſhes all the parts together. Vegetables and animals increaſe in ſize, and improve in their ſtrength; but they are the ſame from the moment they begin to exiſt. There muſt be one coercive power to confine the ſeveral orders of the ſtate, as the key-ſtone of the arch holds the building together. In a great kingdom, to preſerve the harmony of the ſtate, the good order and proſperity of the nation, agriculture, commerce, manufac⯑tures, circulation, public credit, internal police, finance, mili⯑tary eſtabliſhment, colonies, navigation, marine, and moderate luxury, ſhould proceed together in a reciprocal proportion.

Extent of frontier alone does not conſtitute the power of a ſtate; but it is a conſiderable advantage, as it offers a ſubſiſtence [185] to a greater number of ſubjects. Yet number alone, with a mere phyſical ſubſiſtence, is not enough. They muſt ſubſiſt with eaſe; and, to make a great number ſubſiſt with eaſe, they muſt be divided into claſſes. To confine them to the ſingle occupation of agriculture, is impoſſible. If the population of France were complete, the external vent or exportation of corn would be of little or no uſe. As things are circumſtanced, ex⯑portation muſt be conſidered as a ſupplementary conſumption, in favor of agriculture, or as a remedy for the want of population. This vehicle of commerce ſupports agriculture, and increaſes the number of ſubjects. But the increaſe of population is not the true ſecret of government; it conſiſts in maintaining the harmony of parts, and the equilibrium of the whole.