is to mortgage the public revenues, and to trust that posterity during
peace will pay off the encumbrances contracted during the preceding
war; and they, having before their eyes so good an example of their
wise fathers, have the same prudent reliance on their posterity, who at
last, from necessity more than choice, are obliged to place the same
confidence in a new posterity. But not to waste time in declaiming
against a practice which appears ruinous beyond the evidence of a
hundred demonstrations, it seems pretty apparent that the ancient
maxims are in this respect much more prudent than the modern; even
though the latter had been confined within some reasonable bounds, and
had ever, in any one instance, been attended with such frugality in
time of peace as to discharge the debts incurred by an expensive war.
For why should the case be so very different between the public and
an individual as to make us establish such different maxims of
conduct for each? If the funds of the former be greater, its necessary
expenses are proportionably larger; if its resources be more numerous,
they are not infinite; and as its frame should be calculated for a much
longer duration than the date of a single life, or even of a family,
it should embrace maxims, large, durable, and generous, agreeable to
the supposed extent of its existence. To trust to chances and temporary
expedients is indeed what the necessity of human affairs frequently
reduces it to, but whoever voluntarily depend on such resources have
not necessity but their own folly to accuse for their misfortunes when
any such befall them.
If the abuses of treasures be dangerous, either by engaging the state
in rash enterprises or making it neglect military discipline in
confidence of its riches, the abuses of mortgaging are more certain and
inevitable—poverty, impotence, and subjection to foreign powers.
According to modern policy, war is attended with every destructive
circumstance: loss of men, increase of taxes, decay of commerce,
dissipation of money, devastation by sea and land. According to ancient
maxims, the opening of the public treasure, as it produced an uncommon
affluence of gold and silver, served as a temporary encouragement to
industry, and atoned in some degree for the inevitable calamities of
war.
What then shall we say to the new paradox, that public encumbrances
are, of themselves, advantageous, independent of the necessity of
contracting them; and that any state, even though it were not pressed
by a foreign enemy, could not possibly have embraced a wiser expedient
for promoting commerce and riches than to create funds, and debts, and
taxes without limitation? Discourses such as these might naturally
have passed for trials of wit among rhetoricians, like the panegyrics
on folly and a fever, on Busiris and Nero, had we not seen such absurd
maxims patronized by great ministers and by a whole party among us; and
these puzzling arguments (for they deserve not the name of specious),
though they could not be the foundation of Lord Orford’s
conduct, for he had more sense, served at least to keep his partisans
in countenance and perplex the understanding of the nation.
Let us examine the consequences of public debts, both in our domestic
management by their influence on commerce and industry, and in our
foreign transactions by their effect on wars and negotiations.
There is a word which is here in the mouth of everybody, and which I
find has also got abroad and is much employed by foreign writers[29]
in imitation of the English—and this is “circulation.” This word serves
as an account of everything, and though I confess that I have sought
for its meaning in the present subject ever since I was a schoolboy,
I have never yet been able to discover it. What possible advantage is
there which the nation can reap by the easy transference of stock from
hand to hand? Or is there any parallel to be drawn from the circulation
of other commodities to that of chequer notes and India bonds? Where
a manufacturer has a quick sale of his goods to the merchant, the
merchant to the shopkeeper, the shopkeeper to his customers, this
enlivens industry and gives new encouragement to the first dealer or
the manufacturer and all his tradesmen, and makes them produce more
and better commodities of the same species. A stagnation is here
pernicious, wherever it happens, because it operates backwards, and
stops or benumbs the industrious hand in its production of what is
useful to human life. But what production we owe to Change-alley, or
even what consumption, except that of coffee, and pen, ink, and paper,
I have not yet learned; nor can one foresee the loss or decay of any
one beneficial commerce or commodity, though that place and all its
inhabitants were for ever buried in the ocean.
But though this term has never been explained by those who insist
so much on the advantages that result from a circulation, there
seems, however, to be some benefit of a similar kind arising from our
encumbrances—as, indeed, what human evil is there which is not
attended with some advantage? This we shall endeavour to explain, that
we may estimate the weight which we ought to allow it.
Public securities are with us become a kind of money, and pass as
readily at the current price as gold or silver. Wherever any profitable
undertaking offers itself, however expensive, there are never wanting
hands enough to embrace it; nor need a trader who has sums in the
public stocks fear to launch out into the most extensive trade, since
he is possessed of funds which will answer the most sudden demand
that can be made upon him. No merchant thinks it necessary to keep by
him any considerable cash. Bank-notes or India bonds, especially the
latter, serve all the same purposes; because he can dispose of them or
pledge them to a banker in a quarter of an hour; and at the same time
they are not idle, even when in his escritoire, but bring him in a
constant revenue. In short, our national debts furnish merchants with
a species of money that is continually multiplying in their hands, and
produces sure gain besides the profits of their commerce. This must
enable them to trade upon less profit. The small profit of the merchant
renders the commodity cheaper, causes a greater consumption, quickens
the labour of the common people, and helps to spread arts and industry
through the whole society.
There are also, we may observe, in England and in all states which have
both commerce and public debts, a set of men who are half merchants,
half stock-holders, and may be supposed willing to trade for small
profits; because commerce is not their principal or sole support, and
their revenues in the funds are a sure resource for themselves and
their families. Were there no funds great merchants would have no
expedient for realizing or securing any part of their profit but by
making purchases of land, and land has many disadvantages in comparison
of funds. Requiring more care and inspection, it divides the time and
attention of the merchant; upon any tempting offer or extraordinary
accident in trade, it is not so easily converted into money; and as it
attracts too much, both by the many natural pleasures it affords
and the authority it gives, it soon converts the citizen into the
country gentleman. More men, therefore, with large stocks and incomes,
may naturally be supposed to continue in trade where there are public
debts; and this, it must be owned, is of some advantage to commerce
by diminishing its profits, promoting circulation, and encouraging
industry.
But, in opposition to these two favourable circumstances, perhaps of no
very great importance, weigh the many disadvantages which attend our
public debts in the whole interior economy of the state; you will find
no comparison between the ill and the good which result from them.
First, it is certain that national debts cause a mighty confluence of
people and riches to the capital, by the great sums which are levied in
the provinces to pay the interest of those debts; and perhaps, too, by
the advantages in trade above mentioned, which they give the merchants
in the capital above the rest of the kingdom. The question is, whether,
in our case, it be for the public interest that so many privileges
should be conferred on London, which has already arrived at such an
enormous size and seems still increasing? Some men are apprehensive of
the consequences. For my part, I cannot forbear thinking that though
the head is undoubtedly too big for the body, yet that great city is so
happily situated that its excessive bulk causes less inconvenience than
even a smaller capital to a greater kingdom. There is more difference
between the prices of all provisions in Paris and Languedoc than
between those in London and Yorkshire.
Secondly, public stocks, being a kind of paper-credit, have all the
disadvantages attending that species of money. They banish gold and
silver from the most considerable commerce of the state, reduce them to
common circulation, and by that means render all provisions and labour
dearer than otherwise they would be.
Thirdly, the taxes which are levied to pay the interests of these debts
are apt to be a check upon industry, to heighten the price of
labour, and to be an oppression on the poorer sort.
Fourthly, as foreigners possess a share of our national funds, they
render the public in a manner tributary to them, and may in time
occasion the transport of our people and our industry.
Fifthly, the greatest part of public stock being always in the hands
of idle people, who live on their revenue, our funds give great
encouragement to a useless and inactive life.
But though the injury which arises to commerce and industry from our
public funds will appear, upon balancing the whole, very considerable,
it is trivial in comparison of the prejudice which results to the
state considered as a body politic, which must support itself in the
society of nations, and have various transactions with other states,
in wars and negotiations. The ill there is pure and unmixed, without
any favourable circumstance to atone for it, and it is an ill too of a
nature the highest and most important.
We have, indeed, been told that the public is no weaker upon account
of its debts, since they are mostly due among ourselves, and bring as
much property to one as they take from another. It is like transferring
money from the right hand to the left, which leaves the person neither
richer nor poorer than before. Such loose reasonings and specious
comparisons will always pass where we judge not upon principles. I ask,
is it possible, in the nature of things, to overburden a nation with
taxes, even where the sovereign resides among them? The very doubt
seems extravagant, since it is requisite in every commonwealth that
there be a certain proportion observed between the laborious and the
idle part of it. But if all our present taxes be mortgaged, must we not
invent new ones? and may not this matter be carried to a length that is
ruinous and destructive?
In every nation there are always some methods of levying money more
easy than others, agreeable to the way of living of the people and the
commodities they make use of. In Britain the excises upon malt and beer
afford a very large revenue, because the operations of malting
and brewing are very tedious, and are impossible to be concealed; and
at the same time, these commodities are not so absolutely necessary to
life as that the raising their price would very much affect the poorer
sort. These taxes being all mortgaged, what difficulty to find new
ones! what vexation and ruin of the poor!
Duties upon consumptions are more equal and easy than those upon
possessions. What a loss to the public that the former are all
exhausted, and that we must have recourse to the more grievous method
of levying taxes!
Were all the proprietors of land only stewards to the public, must not
necessity force them to practise all the arts of oppression used by
stewards, where the absence or negligence of the proprietor render them
secure against inquiry?
It will scarce be asserted that no bounds ought ever to be set to
national debts, and that the public would be no weaker were twelve or
fifteen shillings in the pound land-tax mortgaged, with the present
customs and excises. There is something therefore in the case beside
the mere transferring of property from one hand to another. In 500
years the posterity of those now in the coaches and of those upon the
boxes will probably have changed places, without affecting the public
by these revolutions.
Suppose the public once fairly brought to that condition to which it
is hastening with such amazing rapidity; suppose the land to be taxed
eighteen or nineteen shillings in the pound (for it can never bear the
whole twenty); suppose all the excises and customs to be screwed up
to the outmost which the nation can bear, without entirely losing its
commerce and industry; and suppose that all those funds are mortgaged
to perpetuity, and that the invention and wit of all our projectors
can find no new imposition which may serve as the foundation of a new
loan; and let us consider the necessary consequences of this situation.
Though the imperfect state of our political knowledge and the narrow
capacities of men make it difficult to foretell the effects
which will result from any untried measure, the seeds of ruin are here
scattered with such profusion as not to escape the eye of the most
careless observer.
In this unnatural state of society, the only persons who possess
any revenue beyond the immediate effects of their industry are the
stockholders, who draw almost all the rent of the land and houses,
besides the produce of all the customs and excises. These are men who
have no connections in the state, who can enjoy their revenue in any
part of the world in which they choose to reside, who will naturally
bury themselves in the capital, or in great cities, and who will sink
into the lethargy of a stupid and pampered luxury, without spirit,
ambition, or enjoyment. Adieu to all ideas of nobility, gentry, and
family. The stocks can be transferred in an instant, and being in
such a fluctuating state, will seldom be transmitted during three
generations from father to son. Or were they to remain ever so long
in one family, they convey no hereditary authority or credit to the
possessors; and by this means, the several ranks of men, which form
a kind of independent magistracy in a state, instituted by the hand
of nature, are entirely lost, and every man in authority derives his
influence from the commission alone of the sovereign. No expedient
remains for preventing or suppressing insurrections but mercenary
armies; no expedient at all remains for resisting tyranny; elections
are swayed by bribery and corruption alone; and the middle power
between king and people being totally removed, a horrible despotism
must infallibly prevail. The landholders, despised for their poverty
and hated for their oppressions, will be utterly unable to make any
opposition to it.
Though a resolution should be formed by the legislature never to impose
any tax which hurts commerce and discourages industry, it will be
impossible for men, in subjects of such extreme delicacy, to reason
so justly as never to be mistaken, or amidst difficulties so urgent,
never to be seduced from their resolution. The continual fluctuations
in commerce require continual alterations in the nature of the taxes,
which exposes the legislature every moment to the danger both
of wilful and involuntary error; and any great blow given to trade,
whether by injudicious taxes or by other accidents, throws the whole
system of the government into confusion.
But what expedient is the public now to fall upon, even supposing trade
to continue in the most flourishing condition, to support its foreign
wars and enterprises, and to defend its own honour and interests or
those of its allies? I do not ask how the public is to exert such a
prodigious power as it has maintained during our late wars, where we
have so much exceeded, not only our own natural strength, but even that
of the greatest empires. This extravagance is the abuse complained of,
as the source of all the dangers to which we are at present exposed.
But since we must still suppose great commerce and opulence to remain
even after every fund is mortgaged, those riches must be defended by
proportionable power, and whence is the public to derive the revenue
which supports it? It must plainly be from a continual taxation of
the annuitants, or, which is the same thing, from mortgaging anew
on every exigency a certain part of their annuity, and thus making
them contribute to their own defence and to that of the nation; but
the difficulties attending this system of policy will easily appear,
whether we suppose the king to have become absolute master or to
be still controlled by national councils, in which the annuitants
themselves must necessarily bear the principal sway.
If the prince has become absolute, as may naturally be expected from
this situation of affairs, it is so easy for him to increase his
exactions upon the annuitants, which amount only to the retaining
money in his own hands, that this species of property will soon lose
all its credit, and the whole income of every individual in the state
must lie entirely at the mercy of the sovereign—a degree of despotism
which no oriental monarchy has ever yet attained. If, on the contrary,
the consent of the annuitants be requisite for every taxation, they
will never be persuaded to contribute sufficiently even to the support
of government, as the diminution of their revenue must in that
case be very sensible, would not be disguised under the appearance of a
branch of excise or customs, and would not be shared by any other order
of the state, who are already supposed to be taxed to the utmost. There
are instances in some republics of a hundredth penny, and sometimes
of the fiftieth, being given to the support of the state; but this is
always an extraordinary exertion of power, and can never become the
foundation of a constant national defence. We have always found, where
a government has mortgaged all its revenues, that it necessarily sinks
into a state of languor, inactivity, and impotence.
Such are the inconveniences which may reasonably be foreseen of this
situation to which Great Britain is visibly tending, not to mention
the numberless inconveniences which cannot be foreseen, and which must
result from so monstrous a situation as that of making the public
the sole proprietor of land, besides investing it with every branch
of customs and excise which the fertile imagination of ministers and
projectors have been able to invent.
I must confess that there is a strange supineness, from long custom,
crept into all ranks of men with regard to public debts, not unlike
what divines so vehemently complain of with regard to their religious
doctrines. We all own that the most sanguine imagination cannot hope
either that this or any future ministry will be possessed of such
rigid and steady frugality as to make any considerable progress in the
payment of our debts, or that the situation of foreign affairs will,
for any long time, allow them leisure and tranquillity for such an
undertaking.[30] What then is to become of us? Were we ever so good
Christians and ever so resigned to Providence, this, methinks, were
a curious question, even considered as a speculative one, and
what it might not be altogether impossible to form some conjectural
solution of. The events here will depend little upon the contingencies
of battles, negotiations, intrigues, and factions. There seems to be a
natural progress of things which may guide our reasoning. As it would
have required but a moderate share of prudence when we first began this
practice of mortgaging to have foretold, from the nature of men and
of ministers, that things would necessarily be carried to the length
we see, so now that they have at last happily reached it, it may not
be difficult to guess at the consequences. It must, indeed, be one
of these two events—either the nation must destroy public credit, or
public credit will destroy the nation. It is impossible they can both
subsist after the manner they have been hitherto managed, in this as
well as in some other nations.
There was indeed a scheme for the payment of our debts which was
proposed by an excellent citizen, Mr. Hutchinson, above thirty years
ago, and which was much approved of by some men of sense, but never
was likely to take effect. He asserted that there was a fallacy in
imagining that the public owed this debt, for that really every
individual owed a proportional share of it, and paid, in his taxes,
a proportional share of the interest, beside the expenses of levying
these taxes. Had we not better, then, says he, make a proportional
distribution of the debt among us, and each of us contribute a sum
suitable to his property, and by that means discharge at once all our
funds and public mortgages? He seems not to have considered that the
laborious poor pay a considerable part of the taxes by their annual
consumptions, though they could not advance at once a proportional
part of the sum required; not to mention that property in money and
stock in trade might easily be concealed or disguised, and that
visible property in lands and houses would really at last answer for
the whole—an inequality and oppression which never would be submitted
to. But though this project is never likely to take place, it is not
altogether improbable that when the nation become heartily sick of
their debts, and are cruelly oppressed by them, some daring projector
may arise with visionary schemes for their discharge. And as public
credit will begin, by that time, to be a little frail, the least touch
will destroy it, as happened in France; and in this manner it will die
of the doctor.[31]