Book
Five:
OF
THE REVENUE OF THE SOVEREIGN OR COMMONWEALTH.
CHAPTER
III
Of Public
Debts
In that rude state of society which precedes the extension of commerce
and the improvement of manufactures, when those expensive luxuries
which commerce and manufactures can alone introduce are altogether
unknown, the person who possesses a large revenue, I have endeavoured
to show in the third book of this Inquiry, can spend or enjoy that
revenue in no other way than by maintaining nearly as many people
as it can maintain. A large revenue may at all times be said to
consist in the command of a large quantity of the necessaries of
life. In that rude state of things it is commonly paid in a large
quantity of those necessaries, in the materials of plain food and
coarse clothing, in corn and cattle, in wool and raw hides. When
neither commerce nor manufactures furnish anything for which the
owner can exchange the greater part of those materials which are
over and above his own consumption, he can do nothing with the
surplus but feed and clothe nearly as many people as it will feed
and clothe. A hospitality in which there is no luxury, and a liberality
in which there is no ostentation, occasion, in this situation of
things, the principal expenses of the rich and the great. But these,
I have likewise endeavoured to show in the same book, are expenses
by which people are not very apt to ruin themselves. There is not,
perhaps, any selfish pleasure so frivolous of which the pursuit
has not sometimes ruined even sensible men. A passion for cock-fighting
has ruined many. But the instances, I believe, are not very numerous
of people who have been ruined by a hospitality or liberality of
this kind, though the hospitality of luxury and the liberality
of ostentation have ruined many. Among our feudal ancestors, the
long time during which estates used to continue in the same family
sufficiently demonstrates the general disposition of people to
live within their income. Though the rustic hospitality constantly
exercised by the great land-holders may not, to us in the present
times, seem consistent with that order which we are apt to consider
as inseparably connected with good economy, yet we must certainly
allow them to have been at least so far frugal as not commonly
to have spent their whole income. A part of their wool and raw
hides they had generally an opportunity of selling for money. Some
part of this money, perhaps, they spent in purchasing the few objects
of vanity and luxury with which the circumstances of the times
could furnish them; but some part of it they seem commonly to have
hoarded. They could not well, indeed, do anything else but hoard
whatever money they saved. To trade was disgraceful to a gentleman,
and to lend money at interest, which at that time was considered
as usury and prohibited by law, would have been still more so.
In those times of violence and disorder, besides, it was convenient
to have a hoard of money at hand, that in case they should be driven
from their own home they might have something of known value to
carry with them to some place of safety. The same violence which
made it convenient to hoard made it equally convenient to conceal
the hoard. The frequency of treasure-trove, or of treasure found
of which no owner was known, sufficiently demonstrates the frequency
in those times both of hoarding and of concealing the board. Treasure-trove
was then considered as an important branch of the revenue of the
sovereign. All the treasure-trove of the kingdom would scarce perhaps
in the present times make an important branch of the revenue of
a private gentleman of a good estate.
The same disposition to save and to hoard prevailed in the sovereign
as well as in the subjects. Among nations to whom commerce and
manufactures are little known, the sovereign, it has already
been observed in the fourth book, is in a situation which naturally
disposes him to the parsimony requisite for accumulation. In
that situation the expense even of a sovereign cannot be directed
by that vanity which delights in the gaudy finery of a court.
The ignorance of the times affords but few of the trinkets in
which that finery consists. Standing armies are not then necessary,
so that the expense even of a sovereign, like that of any other
great lord, can be employed in scarce anything but bounty to
his tenants and hospitality to his retainers. But bounty and
hospitality very seldom lead to extravagance; though vanity almost
always does. All the ancient sovereigns of Europe accordingly,
it has already been observed, had treasures. Every Tartar chief
in the present times is said to have one.
In a commercial country abounding with every sort of expensive
luxury, the sovereign, in the same manner as almost all the great
proprietors in his dominions, naturally spends a great part of
his revenue in purchasing those luxuries. His own and the neighbouring
countries supply him abundantly with all the costly trinkets
which compose the splendid but insignificant pageantry of a court.
For the sake of an inferior pageantry of the same kind, his nobles
dismiss their retainers, make their tenants independent, and
become gradually themselves as insignificant as the greater part
of the wealthy burghers in his dominions. The same frivolous
passions which influence their conduct influence his. How can
it be supposed that he should be the only rich man in his dominions
who is insensible to pleasures of this kind? If he does not,
what he is very likely to do, spend upon those pleasures so great
a part of his revenue as to debilitate very much the defensive
power of the state, it cannot well be expected that he should
not spend upon them all that part of it which is over and above
what is necessary for supporting that defensive power. His ordinary
expense becomes equal to his ordinary revenue, and it is well
if it does not frequently exceed it. The amassing of treasure
can no longer be expected, and when extraordinary exigencies
require extraordinary expenses, he must necessarily call upon
his subjects for an extraordinary aid. The present and the late
king of Prussia are the only great princes of Europe who, since
the death of Henry IV of France in 1610, are supposed to have
amassed any considerable treasure. The parsimony which leads
to accumulation has become almost as rare in republican as in
monarchical governments. The Italian republics, the United Provinces
of the Netherlands, are all in debt. The canton of Berne is the
single republic in Europe which has amassed any considerable
treasure. The other Swiss republics have not. The taste for some
sort of pageantry, for splendid buildings, at least, and other
public ornaments, frequently prevails as much in the apparently
sober senate-house of a little republic as in the dissipated
court of the greatest king.
The want of parsimony in time of peace imposes the necessity
of contracting debt in time of war. When war comes, there is
no money in the treasury but what is necessary for carrying on
the ordinary expense of the peace establishment. In war an establishment
of three of four times that expense becomes necessary for the
defence of the state, and consequently a revenue three or four
times greater than the peace revenue. Supposing that the sovereign
should have, what he scarce ever has, the immediate means of
augmenting his revenue in proportion to the augmentation of his
expense, yet still the produce of the taxes, from which this
increase of revenue must be drawn, will not begin to come into
the treasury till perhaps ten or twelve months after they are
imposed. But the moment in which war begins, or rather the moment
in which it appears likely to begin, the army must be augmented,
the fleet must be fitted out, the garrisoned towns must be put
into a posture of defence; that army, that fleet, those garrisoned
towns must be furnished with arms, ammunition, and provisions.
An immediate and great expense must be incurred in that moment
of immediate danger, which will not wait for the gradual and
slow returns of the new taxes. In this exigency government can
have no other resource but in borrowing.
The same commercial state of society which, by the operation
of moral causes, brings government in this manner into the necessity
of borrowing, produces in the subjects both an ability and an
inclination to lend. If it commonly brings along with it the
necessity of borrowing, it likewise brings along with it the
facility of doing so.
A country abounding with merchants and manufacturers necessarily
abounds with a set of people through whose hands not only their
own capitals, but the capitals of all those who either lend them
money, or trust them with goods, pass as frequently, or more
frequently, than the revenue of a private man, who, without trade
or business, lives upon his income, passes through his hands.
The revenue of such a man can regularly pass through his hands
only once in a year. But the whole amount of the capital and
credit of a merchant, who deals in a trade of which the returns
are very quick, may sometimes pass through his hands two, three,
or four times a year. A country abounding with merchants and
manufacturers, therefore, necessarily abounds with a set of people
who have it at all times in their power to advance, if they choose
to do so, a very large sum of money to government. Hence the
ability in the subjects of a commercial state to lend.
Commerce and manufactures can seldom flourish long in any state
which does not enjoy a regular administration of justice, in
which the people do not feel themselves secure in the possession
of their property, in which the faith of contracts is not supported
by law, and in which the authority of the state is not supposed
to be regularly employed in enforcing the payment of debts from
all those who are able to pay. Commerce and manufactures, in
short, can seldom flourish in any state in which there is not
a certain degree of confidence in the justice of government.
The same confidence which disposes great merchants and manufacturers,
upon ordinary occasions, to trust their property to the protection
of a particular government, disposes them, upon extraordinary
occasions, to trust that government with the use of their property.
By lending money to government, they do not even for a moment
diminish their ability to carry on their trade and manufactures.
On the contrary, they commonly augment it. The necessities of
the state render government upon most occasions willing to borrow
upon terms extremely advantageous to the lender. The security
which it grants to the original creditor is made transferable
to any other creditor, and, from the universal confidence in
the justice of the state, generally sells in the market for more
than was originally paid for it. The merchant or monied man makes
money by lending money to government, and instead of diminishing,
increases his trading capital. He generally considers it as a
favour, therefore, when the administration admits him to a share
in the first subscription for a new loan. Hence the inclination
or willingness in the subjects of a commercial state to lend.
The government of such a state is very apt to repose itself
upon this ability and willingness of its subjects to lend it
their money on extraordinary occasions. It foresees the facility
of borrowing, and therefore dispenses itself from the duty of
saving.
In a rude state of society there are no great mercantile or
manufacturing capitals. The individuals who hoard whatever money
they can save, and who conceal their hoard, do so from a distrust
of the justice of government, from a fear that if it was known
that they had a hoard, and where that hoard was to be found,
they would quickly be plundered. In such a state of things few
people would be able, and nobody would be willing, to lend their
money to government on extraordinary exigencies. The sovereign
feels that he must provide for such exigencies by saving because
he foresees the absolute impossibility of borrowing. This foresight
increases still further his natural disposition to save.
The progress of the enormous debts which at present oppress,
and will in the long-run probably ruin, all the great nations
of Europe has been pretty uniform. Nations, like private men,
have generally begun to borrow upon what may be called personal
credit, without assigning or mortgaging any particular fund for
the payment of the debt; and when this resource has failed them,
they have gone on to borrow upon assignments or mortgages of
particular funds.
What is called the unfunded debt of Great Britain is contracted
in the former of those two ways. It consists partly in a debt
which bears, or is supposed to bear, no interest, and which resembles
the debts that a private man contracts upon account, and partly
in a debt which bears interest, and which resembles what a private
man contracts upon his bill or promissory note. The debts which
are due either for extraordinary services, or for services either
not provided for, or not paid at the time when they are performed,
part of the extrordinaries of the army, navy, and ordnance, the
arrears of subsidies to foreign princes, those of seamen's wages,
etc., usually constitute a debt of the first kind, sometimes
in payment of a part of such Navy and exchequer bills, which
are issued sometimes in payment of a part of such debts and sometimes
for other purposes, constitute a debt of the second kind- exchequer
bills bearing interest from the day on which they are issued,
and navy bills six months after they are issued. The Bank of
England, either by voluntarily discounting those bills at their
current value, or by agreeing with government for certain considerations
to circulate exchequer bills, that is, to receive them at par,
paying the interest which happens to be due upon them, keeps
up their value and facilitates their circulation, and thereby
frequently enables government to contract a very large debt of
this kind. In France, where there is no bank, the state bills
(billets d'etat) have sometimes sold at sixty and seventy per
cent discount. During the great recoinage in King William's time,
when the Bank of England thought proper to put a stop to its
usual transactions, exchequer bills and tallies are said to have
sold from twenty-five to sixty per cent discount; owing partly,
no doubt, to the supposed instability of the new government established
by the Revolution, but partly, too, to the want of the support
of the Bank of England.
When this resource is exhausted, and it becomes necessary, in
order to raise money, to assign or mortgage some particular branch
of the public revenue for the payment of the debt, government
has upon different occasions done this in two different ways.
Sometimes it has made this assignment or mortgage for a short
period of time only, a year, or a few years, for example; and
sometimes for perpetuity. In the one case the fund was supposed
sufficient to pay, within the limited time, both principal and
interest of the money borrowed. In the other it was supposed
sufficient to pay the interest only, or a perpetual annuity equivalent
to the interest, government being at liberty to redeem at any
time this annuity upon paying back the principal sum borrowed.
When money was raised in the one way, it was said to be raised
by anticipation; when in the other, by perpetual funding, or,
more shortly, by funding.
In Great Britain the land and malt taxes are regularly anticipated
every year, by virtue of a borrowing clause constantly inserted
into the acts which impose them. The Bank of England generally
advances at an interest, which since the Revolution has varied
from eight to three per cent, the sums for which those taxes
are granted, and receives payment as their produce gradually
comes in. If there is a deficiency, which there always is, it
is provided for in the supplies of the ensuing year. The only
considerable branch of the public revenue which yet remains unmortgaged
is thus regularly spent before it comes in. Like an improvident
spendthrift, whose pressing occasions will not allow him to wait
for the regular payment of his revenue, the state is in the constant
practice of borrowing of its own factors and agents, and of paying
interest for the use of its own money.
In
the reign of King William, and during a great part of that
of Queen Anne, before we had become
so familiar as we are now
with the practice of perpetual funding, the greater part of the
new taxes were imposed but for a short period of time (for four,
five, six, or seven years only), and a great part of the grants
of every year consisted in loans upon anticipations of the produce
of those taxes. The produce being frequently insufficient for
paying within the limited term the principal and interest of
the money borrowed, deficiencies arose, to make good which it
becam proportion to the number of people who were subjected to
it. Great indulgence would for some time be due to those provinces
of the empire which were thus subjected to burdens to which they
had not before been accustomed, and even when the same taxes
came to be levied everywhere as exactly as possible, they would
not everywhere produce a revenue proportioned to the numbers
of the people. In a poor country the consumption of the principal
commodities subject to the duties of customs and excise is very
small, and in a thinly inhabited country the opportunities of
smuggling are very great. The consumption of malt liquors among
the inferior ranks of people in Scotland is very small, and the
excise upon malt, beer, and ale produces less there than in England
in proportion to the numbers of the people and the rate of the
duties, which upon malt is different on account of a supposed
difference of quality. In these particular branches of the excise
there is not, I apprehend, much more smuggling in the one country
than in the other. The duties upon the distillery, and the greater
part of the duties of customs, in proportion to the numbers of
people in the respective countries, produce less in Scotland
than in England, not only on account of the smaller consumption
of the taxed commodities, but of the much greater facility of
smuggling. In Ireland the inferior ranks of people are still
poorer than in Scotland, and many parts of the country are almost
as thinly inhabited. In Ireland, therefore, the consumption of
the taxed commodities might, in proportion to the number of the
people, be still less than Scotland, and the facility of smuggling
nearly the same. In America and the West Indies the white people
even of the lowest rank are in much better circumstances than
those of the same rank in England, and their consumption of all
the luxuries in which they usually indulge themselves is probably
much greater. The blacks, indeed, who make the greater part of
the inhabitants both of the southern colonies upon the continent
and of the West India islands, as they are in a state of slavery,
are, no doubt, in a worse condition than the poorest people either
in Scotland or Ireland. We must not, however, upon that account,
imagine that they are worse fed, or that their consumption of
articles which might be subjected to moderate duties is less
than that even of the lower ranks of people in England. In order
that they may work well, it is the interest of their master that
they should be fed well and kept in good heart in the same manner
as it is his interest that his working cattle should be so. The
blacks accordingly have almost everywhere their allowance of
rum and molasses or spruce beer in the same manner as the white
servants, and this allowance would not probably be withdrawn
though those articles should be subjected to moderate duties.
The consumption of the taxed commodities, therefore, in proportion
to the number of inhabitants, would probably be as great in America
and the West Indies as in any part of the British empire. The
opportunities of smuggling, indeed, would be much greater; America,
in proportion to the extent of the country, being much more thinly
inhabited than either Scotland or Ireland. If the revenue, however,
which is at present raised by the different duties upon malt
and malt liquors were to be levied by a single duty upon malt,
the opportunity of smuggling in the most important branch of
the excise would be almost entirely taken away: and if the duties
of customs, instead of being imposed upon almost all the different
articles of importation, were confined to a few of the most general
use and consumption, and if the levying of those duties were
subjected to the excise laws, the opportunity of smuggling, though
not so entirely taken away, would be very much diminished. In
consequence of those two, apparently, very simple and easy alterations,
the duties of customs and excise might probably produce a revenue
as great in proportion to the consumption of the most thinly
inhabited province as they do at present in proportion to that
of the most populous.
The Americans, it has been said, indeed, have no gold or silver
money; the interior commerce of the country being carried on
by a paper currency, and the gold and silver which occasionally
come among them being all sent to Great Britain in return for
the commodities which they receive from us. But without gold
and silver, it is added, there is no possibility of paying taxes.
We already get all the gold and silver which they have. How is
it possible to draw from them what they have not?
The present scarcity of gold and silver money in America is
not the effect of the poverty of that country, or of the inability
of the people there to purchase those metals. In a country where
the wages of labour are so much higher, and the price of provisions
so much lower than in England, the greater part of the people
must surely have wherewithal to purchase a greater quantity if
it were either necessary or convenient for them to do so. The
scarcity of those metals, therefore, must be the effect of choice,
and not of necessity.
It is for transacting either domestic or foreign business that
gold and silver money is either necessary or convenient.
The domestic business of every country, it has been shown in
the second book of this Inquiry, may, at least in peaceable times,
be transacted by means of a paper currency with nearly the same
degree of conveniency as by gold and silver money. It is convenient
for the Americans, who could always employ with profit in the
improvement of their lands a greater stock than they can easily
get, to save as much as possible the expense of so costly an
instrument of commerce as gold and silver, and rather to employ
that part of their surplus produce which would be necessary for
purchasing those metals in purchasing the instruments of trade,
the materials of clothing, several parts of household furniture,
and the ironwork necessary for building and extending their settlements
and plantations; in purchasing, not dead stock, but active and
productive stock. The colony governments find it for their interest
to supply the people with such a quantity of papermoney as is
fully sufficient and generally more than sufficient for transacting
their domestic business. Some of those governments, that of Pennsylvania
particularly, derive a revenue from lending this paper-money
to their subjects at an interest of so much per cent. Others,
like that of Massachusetts Bay, advance upon extraordinary emergencies
a paper-money of this kind for defraying the public expense,
and afterwards, when it suits the conveniency of the colony,
redeem it at the depreciated value to which it gradually falls.
In 1747, that colony paid, in this manner, the greater part of
its public debts with the tenth part of the money for which its
bills had been granted. It suits the conveniency of the planters
to save the expense of employing gold and silver money in their
domestic transactions, and it suits the conveniency of the colony
governments to supply them with a medium which, though attended
with some very considerable disadvantages, enables them to save
that expense. The redundancy of paper-money necessarily banishes
gold and silver from the domestic transactions of the colonies,
for the same reason that it has banished those metals from the
greater part of the domestic transactions in Scotland; and in
both countries it is not the poverty, but the enterprising and
projecting spirit of the people, their desire of employing all
the stock which they can get as active and productive stock,
which has occasioned this redundancy of paper-money. In the exterior
commerce which the different colonies carry on with Great Britain,
gold and silver are more or less employed exactly in proportion
as they are more or less necessary. Where those metals are not
necessary they seldom appear. Where they are necessary they are
generally found.
In the commerce between Great Britain and the tobacco colonies
the British goods are generally advanced to the colonists at
a pretty long credit, and are afterwards paid for in tobacco,
rated at a certain price. It is more convenient for the colonists
to pay in tobacco than in gold and silver. It would be more convenient
for any merchant to pay for the goods which his correspondents
had sold to him in some other sort of goods which he might happen
to deal in than in money. Such a merchant would have no occasion
to keep any part of his stock by him unemployed, and in ready
money, for answering occasional demands. He could have, at all
times, a larger quantity of goods in his shop or warehouse, and
he could deal to a greater extent. But it seldom happens to be
convenient for all the correspondents of a merchant to receive
payment for the goods which they sell to him in goods of some
other kind which he happens to deal in. The British merchants
who trade to Virginia and Maryland happen to be a particular
set of correspondents, to whom it is more convenient to receive
payment for the goods which they sell to those colonies in tobacco
than in gold and silver. They expect to make a profit by the
sale of the tobacco. They could make none by that of the gold
and silver. Gold and silver, therefore, very seldom appear in
the commerce between Great Britain and the tobacco colonies.
Maryland and Virginia have as little occasion for those metals
in their foreign as in their domestic commerce. They are said,
accordingly, to have less gold and silver money than any other
colonies in America. They are reckoned, however, as thriving,
and consequently as rich, as any of their neighbours.
In the northern colonies, Pennsylvania, New York, New Jersey,
the four governments of New England, etc., the value of their
own produce which they export to Great Britain is not equal to
that of the manufactures which they import for their own use,
and for that of some of the other colonies to which they are
the carriers. A balance, therefore, must be paid to the mother
country in gold and silver, and this balance they generally find.
In the sugar colonies the value of the produce annually exported
to Great Britain is much greater than that of all the goods imported
from thence. If the sugar and rum annually sent to the mother
country were paid for in those colonies, Great Britain would
be obliged to send out every year a very large balance in money,
and the trade to the West Indies would, by a certain species
of politicians, be considered as extremely disadvantageous. But
it so happens that many of the principal proprietors of the sugar
plantations reside in Great Britain. Their rents are remitted
to them in sugar and rum, the produce of their estates. The sugar
and rum which the West India merchants purchase in those colonies
upon their own account are not equal in value to the goods which
they annually sell there. A balance, therefore, must necessarily
be paid to them in gold and silver, and this balance, too, is
generally found.
The difficulty and irregularity of payment from the different
colonies to Great Britain have not been at all in proportion
to the greatness or smallness of the balances which were respectively
due from them. Payments have in general been more regular from
the northern than from the tobacco colonies, though the former
have generally paid a pretty large balance in money, while the
latter have either paid no balance, or a much smaller one. The
difficulty of getting payment from our different sugar colonies
has been greater or less in proportion, not so much to the extent
of the balances respectively due from them, as to the quantity
of uncultivated land which they contained; that is, to the greater
or smaller temptation which the planters have been under of overtrading,
or of undertaking the settlement and plantation of greater quantities
of waste land than suited the extent of their capitals. The returns
from the great island of Jamaica, where there is still much uncultivated
land, have, upon this account, been in general more irregular
and uncertain than those from the smaller islands of Barbadoes,
Antigua, and St. Christophers, which have for these many years
been completely cultivated, and have, upon that account, afforded
less field for the speculations of the planter. The new acquisitions
of Grenada, Tobago, St. Vincents, and Dominica have opened a
new field for speculations of this kind, and the returns from
those islands have of late been as irregular and uncertain as
those from the great island of Jamaica.
It is not, therefore, the poverty of the colonies which occasions,
in the greater part of them, the present scarcity of gold and
silver money. Their great demand for active and productive stock
makes it convenient for them to have as little dead stock as
possible, and disposes them upon that account to content themselves
with a cheaper though less commodious instrument of commerce
than gold and silver. They are thereby enabled to convert the
value of that gold and silver into the instruments of trade,
into the materials of clothing, into household furniture, and
into the ironwork necessary for building and extending their
settlements and plantations. In those branches of business which
cannot be transacted without gold and silver money, it appears
that they can always find the necessary quantity of those metals;
and if they frequently do not find it, their failure is generally
the effect, not of their necessary poverty, but of their unnecessary
and excessive enterprise. It is not because they are poor that
their payments are irregular and uncertain, but because they
are too eager to become excessively rich. Though all that part
of the produce of the colony taxes which was over and above what
was necessary for defraying the expense of their own civil and
military establishments were to be remitted to Great Britain
in gold and silver, the colonies have abundantly wherewithal
to purchase the requisite quantity of those metals. They would
in this case be obliged, indeed, to exchange a part of their
surplus produce, with which they now purchase active and productive
stock, for dead stock. In transacting their domestic business
they would be obliged to employ a costly instead of a cheap instrument
of commerce, and the expense of purchasing this costly instrument
might damp somewhat the vivacity and ardour of their excessive
enterprise in the improvement of land. It might not, however,
be necessary to remit any part of the American revenue in gold
and silver. It might be remitted in bills drawn upon and accepted
by particular merchants or companies in Great Britain to whom
a part of the surplus produce of America had been consigned,
who would pay into the treasury the American revenue in money,
after having themselves received the value of it in goods; and
the whole business might frequently be transacted without exporting
a single ounce of gold or silver from America.
It is not contrary to justice that both Ireland and America
should contribute towards the discharge of the public debt of
Great Britain. That debt has been contracted in support of the
government established by the Revolution, a government to which
the Protestants of Ireland owe, not only the whole authority
which they at present enjoy in their own country, but every security
which they possess for their liberty, their property, and their
religion; a government to which several of the colonies of America
owe their present charters, and consequently their present constitution,
and to which all the colonies of America owe the liberty, security,
and property which they have ever since enjoyed. That public
debt has been contracted in the defence, not of Great Britain
alone, but of all the different provinces of the empire; the
immense debt contracted in the late war in particular, and a
great part of that contracted in the war before, were both properly
contracted in defence of America.
By a union with Great Britain, Ireland would gain, besides the
freedom of trade, other advantages much more important, and which
would much more than compensate any increase of taxes that might
accompany that union. By the union with England the middling
and inferior ranks of people in Scotland gained a complete deliverance
from the power of an aristocracy which had always before oppressed
them. By a union with Great Britain the greater part of the people
of all ranks in Ireland would gain an equally complete deliverance
from a much more oppressive aristocracy; an aristocracy not founded,
like that of Scotland, in the natural and respectable distinctions
of birth and fortune, but in the most odious of all distinctions,
those of religious and political prejudices; distinctions which,
more than any other, animate both the insolence of the oppressors
and the hatred and indignation of the oppressed, and which commonly
render the inhabitants of the same country more hostile to one
another than those of different countries ever are. Without a
union with Great Britain the inhabitants of Ireland are not likely
for many ages to consider themselves as one people.
No oppressive aristocracy has ever prevailed in the colonies.
Even they, however, would, in point of happiness and tranquility,
gain considerably by a union with Great Britain. It would, at
least, deliver them from those rancorous and virulent factions
which are inseparable from small democracies, and which have
so frequently divided the affections of their people, and disturbed
the tranquillity of their governments, in their form so nearly
democratical. In the case of a total separation from Great Britain,
which, unless prevented by a union of this kind, seems very likely
to take place, those factions would be ten times more virulent
than ever. Before the commencement of the present disturbances,
the coercive power of the mother country had always been able
to restrain those factions from breaking out into anything worse
than gross brutality and insult. If that coercive power were
entirely taken away, they would probably soon break out into
open violence and bloodshed. In all great countries which are
united under one uniform government, the spirit of party commonly
prevails less in the remote provinces than in the centre of the
empire. The distance of those provinces from the capital, from
the principal seat of the great scramble of faction and ambition,
makes them enter less into the views of any of the contending
parties, and renders them more indifferent and impartial spectators
of the conduct of all. The spirit of party prevails less in Scotland
than in England. In the case of a union it would probably prevail
less in Ireland than in Scotland, and the colonies would probably
soon enjoy a degree of concord and unanimity at present unknown
in any part of the British empire. Both Ireland and the colonies,
indeed, would be subjected to heavier taxes than any which they
at present pay. In consequence, however, of a diligent and faithful
application of the public revenue towards the discharge of the
national debt, the greater part of those taxes might not be of
long continuance, and the public revenue of Great Britain might
soon be reduced to what was necessary for maintaining a moderate
peace establishment.
The territorial acquisitions of the East India Company, the
undoubted right of the crown, that is, of the state and people
of Great Britain, might be rendered another source of revenue
more abundant, perhaps, than all those already mentioned. Those
countries are represented as more fertile, more extensive, and,
in proportion to their extent, much richer and more populous
than Great Britain. In order to draw a great revenue from them,
it would not probably be necessary to introduce any new system
of taxation into countries which are already sufficiently and
more than sufficiently taxed. It might, perhaps, be more proper
to lighten than to aggravate the burden of those unfortunate
countries, and to endeavour to draw a revenue from them, not
by imposing new taxes, but by preventing the embezzlement and
misapplication of the greater part of those which they already
pay.
If it should be found impracticable for Great Britain to draw
any considerable augmentation of revenue from any of the resources
above mentioned, the only resource which can remain to her is
a diminution of her expense. In the mode of collecting and in
that of expending the public revenue, though in both there may
be still room for improvement, Great Britain seems to be at least
as economical as any of her neighbours. The military establishment
which she maintains for her own defence in time of peace is more
moderate than that of any European state which can pretend to
rival her either in wealth or in power. None of those articles,
therefore, seem to admit of any considerable reduction of expense.
The expense of the peace establishment of the colonies was, before
the commencement of the present disturbances, very considerable,
and is an expense which may, and if no revenue can be drawn from
them ought certainly to be saved altogether. This constant expense
in time of peace, though very great, is insignificant in comparison
with what the defence of the colonies has cost us in time of
war. The last war, which was undertaken altogether on account
of the colonies, cost Great Britain, it has already been observed,
upwards of ninety millions. The Spanish war of 1739 was principally
undertaken on their account, in which, and in the French war
that was the consequence of it, Great Britain spent upwards of
forty millions, a great part of which ought justly to be charged
to the colonies. In those two wars the colonies cost Great Britain
much more than double the sum which the national debt amounted
to before the commencement of the first of them. Had it not been
for those wars that debt might, and probably would by this time,
have been completely paid; anater reduction of the public debt
than has ever since been brought about in so short a period of
time. The remaining debt, therefore, amounted only to L16,394,701
1s. 7 1/4d.
In the war which began in 1709., and which was concluded by
the Treaty of Utrecht, the public debts were still more accumulated.
On the 31st of December 1714, they amounted to L53,681,076 5s.
6 1/2d. The subscription into the South Sea fund of the short
and long annuities increased the capital of the public debts,
so that on the 31st of December 1722 it amounted to L55,282,978
1s. 3 5/6d. The reduction of the debt began in 1723, and went
on so slowly that, on the 31st of December 1739, during seventeen
years of profound peace, the whole sum paid off was no more than
L8,328,354 17s. 11 3/12d., the capital of the public debt at
that time amounting to L46,954,623 3s. 4 7/12d.
The Spanish war, which began in 1739, and the French war which
soon followed it occasioned further increase of the debt, which,
on the 31st of December 1748, after the war had been concluded
by the Treaty of Aix-la-Chapelle, amounted to L78,293,313 1s.
10 3/4d. The most profound peace of seventeen years continuance
had taken no more than L8,328,354 17s. 11 3/12d. from it. A war
of less than nine years' continuance added L31,338,689 18s. 6
1/6d. to it.
During the administration of Mr. Pelham, the interest of the
public debt was reduced, or at least measures were taken for
reducing it, from four to three per cent; the sinking fund was
increased, and some part of the public debt was paid off. In
1755, before the breaking out of the late war, the funded debt
of Great Britain amounted to L72,289,673. On the 5th of January
1763, at the conclusion of the peace, the funded debt amounted
to L122,603,336 8s. 2 1/4d. The unfunded debt has been stated
at L13,927,589 2s. 2d. But the expense occasioned by the war
did not end with the conclusion of the peace, so that though,
on the 5th of January 1764, the funded debt was increased (partly
by a new loan, and partly by funding a part of the unfunded debt)
to L129,586,789 10s. 1 3/4d., there still remained (according
to the very well informed author of the Considerations on the
Trade and Finances of Great Britain) an unfunded debt which was
brought to account in that and the following year of L9,975,017
12s. 2 15/44d. In 1764, therefore, the public debt of Great Britain,
funded and unfunded together, amounted, according to this author,
to L139,516,807 2s. 4d. The annuities for lives, too, which had
been granted as premiums to the subscribers to the new loans
in 1757, estimated at fourteen years' purchase, were valued at
L472,500; and the annuities for long terms of years, granted
as premiums likewise in 1761 and 1762, estimated at twenty-seven
and a half years' purchase, were valued at L6,826,875. During
a peace of about seven years' continuance, the prudent and truly
patriot administration of Mr. Pelham was not able to pay off
an old debt of six millions. During a war of nearly the same
continuance, a new debt of more than seventy-five millions was
contracted.
On the 5th of January 1775, the funded debt of Great Britain
amounted to L124,996,086 1s. 6 1/4d. The unfunded, exclusive
of a large civil list debt, to L4,150,263 3s. 11 7/8d. Both together,
to L129,146,322 5s. 6d. According to this account the whole debt
paid off during eleven years' profound peace amounted only to
L10,415,474 16s. 9 7/8d. Even this small reduction of debt, however,
has not been all made from the savings out of the ordinary revenue
of the state. Several extraneous sums, altogether independent
of that ordinary revenue, have contributed towards it. Amongst
these we may reckon an additional shilling in the pound land-tax
for three years; the two millions received from the East India
Company as indemnification for their territorial acquisitions;
and the one hundred and ten thousand pounds received from the
bank for the renewal of their charter. To these must be added
several other sums which, as they arose out of the late war,
ought perhaps to be considered as deductions from the expenses
of it. The principal are,
L s. d.
The produce of French prizes 690,449 18 9
Composition for French prisoners 670,000 0 0
What has been received from the sale
of the ceded islands 95,500 0 0
If we add to this sum the balance of the Earl of Chatham's and
Mr. Calcraft's accounts, and other army savings of the same kind,
together with what has been received from the bank, the East
India Company, and the additional shilling in the pound land-tax,
the whole must be a good deal more than five millions. The debt,
therefore, which since the peace has been paid out of the savings
the ordinary revenue of the state, has not, one year with another,
amounted to half a million a year. The sinking fund has, no doubt,
been considerably augmented since the peace, by the debt which
has been paid off, by the reduction of the redeemable four per
cents to three per cents, and by the annuities for lives which
have fallen in, and, if peace were to continue, a million, perhaps,
might now be annually spared out of it towards the discharge
of the debt. Another million, accordingly, was paid in the course
of last year; but, at the same time, a new civil list debt was
left unpaid, and we are now involved in a new war which, in its
progress, may prove as expensive as any of our former wars.*
The new debt which will probably be contracted before the end
of the next campaign may perhaps be nearly equal to all the old
debt which has been paid off from the savings out of the ordinary
revenue of the state. It would be altogether chimerical, therefore,
to expect that the public debt should ever be completely discharged
by any savings which are likely to be made from that ordinary
revenue as it stands at present.
* It has proved more expensive than all of our former wars;
and has involved us in an additional debt of more than one hundred
millions. During a profound peace of eleven years, little more
than ten millions of debt was paid; during a war of seven years,
more than one hundred millions was contracted.
The public funds of the different indebted nations of Europe,
particularly those of England, have by one author been represented
as the accumulation of a great capital superadded to the other
capital of the country, by means of which its trade is extended,
its manufactures multiplied, and its lands cultivated and improved
much beyond what they could have been by means of that other
capital only. He does not consider that the capital which the
first creditors of the public advanced to government was, from
the moment in which they advanced it, a certain portion of the
annual produce turned away from serving in the function of a
capital to serve in that of a revenue; from maintaining productive
labourers to maintain unproductive ones, and to be spent and
wasted, generally in the course of the year, without even the
hope of any future reproduction. In return for the capital which
they advanced they obtained, indeed, an annuity in the public
funds in most cases of more than equal value. This annuity, no
doubt, replaced to them their capital, and enabled them to carry
on their trade and business to the same or perhaps to a greater
extent than before; that is, they were enabled either to borrow
of other people a new capital upon the credit of this annuity,
or by selling it to get from other people a new capital of their
own equal or superior to that which they had advanced to government.
This new capital, however, which they in this manner either bought
or borrowed of other people, must have existed in the country
before, and must have been employed, as all capitals are, in
maintaining productive labour. When it came into the hands of
those who had advanced their money to government, though it was
in some respects a new capital to them, it was not so to the
country, but was only a capital withdrawn from certain employments
in or to be turned towards others. Though it replaced to them
what they had advanced to government, it did not replace it to
the country. Had they not advanced this capital to government,
there would have been in the country two capitals, two portions
of the annual produce, instead of one, employed in maintaining
productive labour.
When for defraying the expense of government a revenue is raised
within the year from the produce of free or unmortgaged taxes,
a certain portion of the revenue of private people is only turned
away from maintaining one species of unproductive labour towards
maintaining another. Some part of what they pay in those taxes
might no doubt have been accumulated into capital, and consequently
employed in maintaining productive labour; but the greater part
would probably have been spent and consequently employed in maintaining
unproductive labour. The public expense, however, when defrayed
in this manner, no doubt hinders more or less the further accumulation
of new capital; but it does not necessarily occasion the destruction
of any actually existing capital.
When the public expense is defrayed by funding, it is defrayed
by the annual destruction of some capital which had before existed
in the country; by the perversion of some portion of the annual
produce which had before been destined for the maintenance of
productive labour towards that of unproductive labour. As in
this case, however, the taxes are lighter than they would have
been had a revenue sufficient for defraying the same expense
been raised within the year, the private revenue of individuals
is necessarily less burdened, and consequently their ability
to save and accumulate some part of that revenue into capital
is a good deal less impaired. If the method of funding destroys
more old capital, it at the same time hinders less the accumulation
or acquisition of new capital than that of defraying the public
expense by a revenue raised within the year. Under the system
of funding, the frugality and industry of private people can
more easily repair the breaches which the waste and extravagance
of government may occasionally make in the general capital of
the society.
It is only during the continuance of war, however, that the
system of funding has this advantage over the other system. Were
the expense of war to be defrayed always by a revenue raised
within the year, the taxes from which that extraordinary revenue
was drawn would last no longer than the war. The ability of private
people to accumulate, though less during the war, would have
been greater during the peace than under the system of funding.
War would not necessarily have occasioned the destruction of
any old capitals, and peace would have occasioned the accumulation
of many more new. Wars would in general be more speedily concluded,
and less wantonly undertaken. The people feeling, during the
continuance of the war, the complete burden of it, would soon
grow weary of it, and government, in order to humour them, would
not be under the necessity of carrying it on longer than it was
necessary to do so. The foresight of the heavy and unavoidable
burdens of war would hinder the people from wantonly calling
for it when there was no real or solid interest to fight for.
The seasons during which the ability of private people to accumulate
was somewhat impaired would occur more rarely, and be of shorter
continuance. Those, on the contrary, during which the ability
was in the highest vigour would be of much longer duration than
they can well be under the system of funding.
When funding, besides, has made a certain progress, the multiplication
of taxes which it brings along with it sometimes impairs as much
the ability of private people to accumulate even in time of peace
as the other system would in time of war. The peace revenue of
Great Britain amounts at present to more than ten millions a
year. If free and unmortgaged, it might be sufficient, with proper
management and without contracting a shilling of new debt, to
carry on the most vigorous war. The private revenue of the inhabitants
of Great Britain is at present as much encumbered in time of
peace, their ability to accumulate is as much impaired as it
would have been in the time of the most expensive war had the
pernicious system of funding never been adopted.
In the payment of the interest of the public debt, it has been
said, it is the right hand which pays the left. The money does
not go out of the country. It is only a part of the revenue of
one set of the inhabitants which is transferred to another, and
the nation is not a farthing the poorer. This apology is founded
altogether in the sophistry of the mercantile system, and after
the long examination which I have already bestowed upon that
system, it may perhaps be unnecessary to say anything further
about it. It supposes, besides, that the whole public debt is
owing to the inhabitants of the country, which happens not to
be true; the Dutch, as well as several other foreign nations,
having a very considerable share in our public funds. But though
the whole debt were owing to the inhabitants of the country,
it would not upon that account be less pernicious.
Land and capital stock are the two original sources of all revenue
both private and public. Capital stock pays the wages of productive
labour, whether employed in agriculture, manufactures, or commerce.
The management of those two original sources of revenue belong
to two different sets of people; the proprietors of land, and
the owners or employers of capital stock.
The proprietor of land is interested for the sake of his own
revenue to keep his estate in as good condition as he can, by
building and repairing his tenants' houses, by making and maintaining
the necessary drains and enclosures, and all those other expensive
improvements which it properly belongs to the landlord to make
and maintain. But by different land-taxes the revenue of the
landlord may be so much diminished, and by different duties upon
the necessaries and conveniences of life that diminished revenue
may be rendered of so little real value, that he may find himself
altogether unable to make or maintain those expensive improvements.
When the landlord, however, ceases to do his part, it is altogether
impossible that the tenant should continue to do his. As the
distress of the landlord increases, the agriculture of the country
must necessarily decline.
When, by different taxes upon the necessaries and conveniences
of life, the owners and employers of capital stock find that
whatever revenue they derive from it will not, in a particular
country, purchase the same quantity of those necessaries and
conveniences which an equal revenue would in almost any other,
they will be disposed to remove to some other. And when, in order
to raise those taxes, all or the greater part of merchants and
manufacturers, that is, all or the greater part of the employers
of great capitals, come to be continually exposed to the mortifying
and vexatious visits of the tax-gatherers, the disposition to
remove will soon be changed into an actual removal. The industry
of the country will necessarily fall with the removal of the
capital which supported it, and the ruin of trade and manufactures
will follow the declension of agriculture.
To transfer from the owners of those two great sources of revenue,
land and capital stock, from the persons immediately interested
in the good condition of every particular portion of land, and
in the good management of every particular portion of capital
stock, to another set of persons (the creditors of the public,
who have no such particular interest), the greater part of the
revenue arising from either must, in the long-run, occasion both
the neglect of land, and the waste or removal of capital stock.
A creditor of the public has no doubt a general interest in the
prosperity of the agriculture, manufactures, and commerce of
the country, and consequently in the good condition of its lands,
and in the good management of its capital stock. Should there
be any general failure or declension in any of these things,
the produce of the different taxes might no longer be sufficient
to pay him the annuity or interest which is due to him. But a
creditor of the public, considered merely as such, has no interest
in the good condition of any particular portion of land, or in
the good management of any particular portion of capital stock.
As a creditor of the public he has no knowledge of any such particular
portion. He has no inspection of it. He can have no care about
it. Its ruin may in some cases be unknown to him, and cannot
directly affect him.
The practice of funding has gradually enfeebled every state
which has adopted it. The Italian republics seem to have begun
it. Genoa and Venice, the only two remaining which can pretend
to an independent existence, have both been enfeebled by it.
Spain seems to have learned the practice from the Italian republics,
and (its taxes being probably less judicious than theirs) it
has, in proportion to its natural strength, been still more enfeebled.
The debts of Spain are of very old standing. It was deeply in
debt before the end of the sixteenth century, about a hundred
years before England owed a shilling. France, notwithstanding
all its natural resources, languishes under an oppressive load
of the same kind. The republic of the United Provinces is as
much enfeebled by its debts as either Genoa or Venice. Is it
likely that in Great Britain alone a practice which has brought
either weakness or desolation into every other country should
prove altogether innocent?
The system of taxation established in those different countries,
it may be said, is inferior to that of England. I believe it
is so. But it ought to be remembered that, when the wisest government
has exhausted all the proper subjects of taxation, it must, in
cases of urgent necessity, have recourse to improper ones. The
wise republic of Holland has upon some occasions been obliged
to have recourse to taxes as inconvenient as the greater part
of those of Spain. Another war begun before any considerable
liberation of the public revenue had been brought about, and
growing in its progress as expensive as the last war, may, from
irresistible necessity, render the British system of taxation
as oppressive as that of Holland, or even as that of Spain. To
the honour of our present system of taxation, indeed, it has
hitherto given so little embarrassment to industry that, during
the course even of the most expensive wars, the frugality and
good conduct of individuals seem to have been able, by saving
and accumulation, to repair all the breaches which the waste
and extravagance of government had made in the general capital
of the society. At the conclusion of the late war, the most expensive
that Great Britain ever waged, her agriculture was as flourishing,
her manufacturers as numerous and as fully employed, and her
commerce as extensive as they had ever been before. The capital,
therefore, which supported all those different branches of industry
must have been equal to what it had ever been before. Since the
peace, agriculture has been still further improved, the rents
of houses have risen in every town and village of the country-
a proof of the increasing wealth and revenue of the people; and
the annual amount the greater part of the old taxes, of the principal
branches of the excise and customs in particular, has been continually
increasing- an equally clear proof of an increasing consumption,
and consequently of an increasing produce which could alone support
that consumption. Great Britain seems to support with ease a
burden which, half a century ago, nobody believed her capable
of supporting. Let us not, however, upon this account rashly
conclude that she is capable of supporting any burden, nor even
be too confident that she could support, without great distress,
a burden a little greater than what has already been laid upon
her.
When national debts have once been accumulated to a certain
degree, there is scarce, I believe, a single instance of their
having been fairly and completely paid. The liberation of the
public revenue, if it has ever been brought about by bankruptcy;
sometimes by an avowed one, but always by a real one, though
frequently by a pretended payment.
The raising of the denomination of the coin has been the most
usual expedient by which a real public bankruptcy has been disguised
under the appearance of a pretended payment. If a sixpence, for
example, should either by Act of Parliament or Royal Proclamation
be raised to the denomination of a shilling, and twenty sixpences
to that of a pound sterling, the person who under the old denomination
had borrowed twenty shillings, or near four ounces of silver,
would, under the new, pay with twenty sixpences, or with something
less than two ounces. A national debt of about a hundred and
twenty-eight millions, nearly the capital of the funded and unfunded
debt of Great Britain, might in this manner be paid with about
sixty-four millions of our present money. It would indeed be
a pretended payment only, and the creditors of the public would
really be defrauded of ten shillings in the pound of what was
due to them. The calamity, too, would extend much further than
to the creditors of the public, and those of every private person
would suffer a proportionable loss; and this without any advantage,
but in most cases with a great additional loss, to the creditors
of the public. If the creditors of the public, indeed, were generally
much in debt to other people, they might in some measure compensate
their loss by paying their creditors in the same coin in which
the public had paid them. But in most countries the creditors
of the public are, the greater part of them, wealthy people,
who stand more in the relation of creditors than in that of debtors
towards the rest of their fellow-citizens. A pretended payment
of this kind, therefore, instead of alleviating, aggravates in
most cases the loss of the creditors of the public, and without
any advantage to the public, extends the calamity to a great
number of other innocent people. It occasions a general and most
pernicious subversion of the fortunes of private people, enriching
in most cases the idle and profuse debtor at the expense of the
industrious and frugal creditor, and transporting a great part
of the national capital from the hands which were likely to increase
and improve it to those which are likely to dissipate and destroy
it. When it becomes necessary for a state to declare itself bankrupt,
in the same manner as when it becomes necessary for an individual
to do so, a fair, open, and avowed bankruptcy is always the measure
which is both least dishonourable to the debtor and least hurtful
to the creditor. The honour of a state is surely very poorly
provided for when, in order to cover the disgrace of a real bankruptcy,
it has recourse to a juggling trick of this kind, so easily seen
through, and at the same time so extremely pernicious.
Almost all states, however, ancient as well as modern, when
reduced to this necessity have, upon some occasions, played this
very juggling trick. The Romans, at the end of the first Punic
war, reduced the As, the coin or denomination by which they computed
the value of all their other coins, from containing twelve ounces
of copper to contain only two ounces; that is, they raised two
ounces of copper to a denomination which had always before expressed
the value of twelve ounces. The republic was, in this manner,
enabled to pay the great debts which it had contracted with the
sixth part of what it really owed. So sudden and so great a bankruptcy,
we should in the present times be apt to imagine, must have occasioned
a very violent popular clamour. It does not appear to have occasioned
any. The law which enacted it was, like all other laws relating
to the coin, introduced and carried through the assembly of the
people by a tribune, and was probably a very popular law. In
Rome, as in all the other ancient republics, the poor people
were constantly in debt to the rich and the great, who in order
to secure their votes at the annual elections, used to lend them
money at exorbitant interest, which, being never paid, soon accumulated
into a sum too great either for the debtor to pay, or for anybody
else to pay for him. The debtor, for fear of a very severe execution,
was obliged, without any further gratuity, to vote for the candidate
whom the creditor recommended. In spite of all the laws against
bribery and corruption, the bounty of the candidates, together
with the occasional distributions of corn which were ordered
by the senate, were the princf its former value, as it enabled
them to pay their debts with a sixth part of what they really
owed, was equivalent to the most advantageous New Tables. In
order to satisfy the people, the rich and the great were, upon
several different occasions, obliged to consent to laws both
for abolishing debts, and for introducing New Tables; and they
probably were induced to consent to this law partly for the same
reason, and partly that, by liberating the public revenue, they
might restore vigour to that government of which they themselves
had the principal direction. An operation of this kind would
at once reduce a debt of a hundred and twenty-eight millions
to twenty-one millions three hundred and thirty-three thousand
three hundred and thirty-three pounds six shillings and eightpence.
In the course of the second Punic war the As was still further
reduced, first, from two ounces of copper to one ounce, and afterwards
from one ounce to half an ounce; that is, to the twenty-fourth
part of its original value. By combining the three Roman operations
into one, a debt of a hundred and twenty-eight millions of our
present money might in this manner be reduced all at once to
a debt of five millions three hundred and thirty-three thousand
three hundred and thirty-three pounds six shillings and eightpence.
Even the enormous debts of Great Britain might in this manner
soon be paid.
By means of such expedients the coin of, I believe, all nations
has been gradually reduced more and more below its original value,
and the same nominal sum has been gradually brought to contain
a smaller and a smaller quantity of silver.
Nations have sometimes, for the same purpose, adulterated the
standard of their coin; that is, have mixed a greater quantity
of alloy in it. If in the pound weight of our silver coin, for
example, instead of eighteen pennyweight, according to the present
standard, there was mixed eight ounces of alloy, a pound sterling,
or twenty shillings of such coin, would be worth little more
than six shillings and eightpence of our present money. The quantity
of silver contained in six shillings and eightpence of our present
money would thus be raised very nearly to the denomination of
a pound sterling. The adulteration of the standard has exactly
the same effect with what the French call an augmentation, or
a direct raising of the denomination of the coin.
An augmentation, or a direct raising of the coin, always is,
and from its nature must be, an open and avowed operation. By
means of it pieces of a smaller weight and bulk are called by
the same name which had before been given to pieces of a greater
weight and bulk. The adulteration of the standard, on the contrary,
has generally been a concealed operation. By means of it pieces
were issued from the mint of the same denominations, and, as
nearly as could be contrived, of the same weight, bulk, and appearance
with pieces which had been current before of much greater value.
When King John of France, in order to pay his debts, adulterated
his coin, all the officers of his mint were sworn to secrecy.
Both operations are unjust. But a simple augmentation is an injustice
of open violence, whereas the adulteration is an injustice of
treacherous fraud. This latter operation, therefore, as soon
as it has been discovered, and it could never be concealed very
long, has always excited much greater indignation than the former.
The coin after any considerable augmentation has very seldom
been brought back to its former weight; but after the greater
adulterations it has almost always been brought back to its former
fineness. It has scarce ever happened that the fury and indignation
of the people could otherwise be appeased.
In the end of the reign of Henry VIII and in the beginning of
that of Edward VI the English coin was not only raised in its
denomination, but adulterated in its standard. The like frauds
were practised in Scotland during the minority of James VI. They
have occasionally been practised in most other countries.
That the public revenue of Great Britain can never be completely
liberated, or even that any considerable progress can ever be
made towards that liberation, while the surplus of that revenue,
or what is over and above defraying the annual expense of the
peace establishment, is so very small, it seems altogether in
vain to expect. That liberation, it is evident, can never be
brought about without either some very considerable augmentation
of the public revenue, or some equally considerable reduction
of the public expense.
A more equal land-tax, a more equal tax upon the rent of houses,
and such alterations in the present system of customs and excise
as those which have been mentioned in the foregoing chapter might,
perhaps, without increasing the burden of the greater part of
the people, but only distributing the weight of it more equally
upon the whole, produce a considerable augmentation of revenue.
The most sanguine projector, however, could scarce flatter himself
that any augmentation of this kind would be such as could give
any reasonable hopes either of liberating the public revenue
altogether, or even of making such progress towards that liberation
in time of peace as either to prevent or to compensate the further
accumulation of the public debt in the next war.
By extending the British system of taxation to all the different
provinces of the empire inhabited by people of either British
or European extraction, a much greater augmentation of revenue
might be expected. This, however, could scarce, perhaps, be done,
consistently with the principles of the British constitution,
without admitting into the British Parliament, or if you will
into the states general of the British empire, a fair and equal
representation of all those different provinces, that of each
province bearing the same proportion to the produce of its taxes
as the representation of Great Britain might bear to the produce
of the taxes levied upon Great Britain. The private interest
of many powerful individuals, the confirmed prejudices of great
bodies of people seem, indeed, at present, to oppose to so great
a change such obstacles as it may be very difficult, perhaps
altogether impossible, to surmount. Without, however, pretending
to determine whether such a union be practicable or impracticable,
it may not, perhaps, be improper, in a speculative work of this
kind, to consider how far the British system of taxation might
be applicable to all the different provinces of the empire, what
revenue might be expected from it if so applied, and in what
manner a general union of this kind might be likely to affect
the happiness and prosperity of the different provinces comprehended
within it. Such a speculation can at worst be regarded but as
a new Utopia, less amusing certainly, but not more useless and
chimerical than the old one.
The land-tax, the stamp-duties, and the different duties of
customs and excise constitute the four principal branches of
the British taxes.
Ireland is certainly as able, and our American and West Indian
plantations more able to pay a land-tax than Great Britain. Where
the landlord is subject neither to tithe nor poor-rate, he must
certainly be more able to pay such a tax than where he is subject
to both those other burdens. The tithe, where there is no modus,
and where it is levied in kind, diminishes more what would otherwise
be the rent of the landlord than a land-tax which really amounted
to five shillings in the pound. Such a tithe will be found in
most cases to amount to more than a fourth part of the real rent
of the land, or of what remains after replacing completely the
capital of the farmer, together with his reasonable profit. If
all moduses and all impropriations were taken away, the complete
church tithe of Great Britain and Ireland could not well be estimated
at less than six or seven millions. If there was no tithe either
in Great Britain or Ireland, the landlords could afford to pay
six or seven millions additional land-tax without being more
burdened than a very great part of them are at present. America
pays no tithe, and could therefore very well afford to pay a
land-tax. The lands in America and the West Indies, indeed, are
in general not tenanted nor leased out to farmers. They could
not therefore be assessed according to any rent-roll. But neither
were the lands of Great Britain, in the 4th of William and Mary,
assessed according to any rent-roll, but according to a very
loose and inaccurate estimation. The lands in America might be
assessed either in the same manner, or according to an equitable
valuation in consequence of an accurate survey like that which
was lately made in the Milanese, and in the dominions of Austria,
Prussia, and Sardinia.
Stamp-duties, it is evident, might be levied without any variation
in all countries where the forms of law process, and the deeds
by which property both real and personal is transferred, are
the same or nearly the same.
The extension of the custom-house laws of Great Britain to Ireland
and the plantations, provided it was accompanied, as in justice
it ought to be, with an extension of the freedom of trade, would
be in the highest degree advantageous to both. All the invidious
restraints which at present oppress the trade of Ireland, the
distinction between the enumerated and non-enumerated commodities
of America, would be entirely at an end. The countries north
of Cape Finisterre would be as open to every part of the produce
of America as those south of that Cape are to some parts of that
produce at present. The trade between all the different parts
of the British empire would, in consequence of this uniformity
in the custom-house laws, be as free as the coasting trade of
Great Britain is at present. The British empire would thus afford
within itself an immense internal market for every part of the
produce of all its different provinces. So great an extension
of market would soon compensate both to Ireland and the plantations
all that they could suffer from the increase of the duties of
customs.
The excise is the only part of the British system of taxation
which would require to be varied in any respect according as
it was applied to the different provinces of the empire. It might
be applied to Ireland without any variation, the produce and
consumption of that kingdom being exactly of the same nature
with those of Great Britain. In its application to America and
the West Indies, of which the produce and consumption are so
very different from those of Great Britain, some modification
might be necessary in the same manner as in its application to
the cyder and beer counties of England.
A fermented liquor, for example, which is called beer, but which,
as it is made of molasses, bears very little resemblance to our
beer, makes a considerable part of the common drink of the people
in America. This liquor, as it can be kept only for a few days,
cannot, like our beer, be prepared and stored up for sale in
great breweries; but every private family must brew it for their
own use, in the same manner as they cook their victuals. But
to subject every private family to the odious visits and examination
of the tax-gatherers, in the same manner as we subject the keepers
of alehouses and the brewers for public sale, would be altogether
inconsistent with liberty. If for the sake of equality it was
thought necessary to lay a tax upon this liquor, it might be
taxed by taxing the material of which it is made, either at the
place of manufacture, or, if the circumstances of the trade rendered
such an excise improper, by laying a duty upon its importation
into the colony in which it was to be consumed. Besides the duty
of one penny a gallon imposed by the British Parliament upon
the importation of molasses into America, there is a provincial
tax of this kind upon their importation into Massachusetts Bay,
in ships belonging to any other colony, of eightpence the hogshead;
and another upon their importation, from the northern colonies
into South Carolina, of fivepence the gallon. Or if neither of
these methods was found convenient, each family might compound
for its consumption of this liquor, either according to the number
of persons of which it consisted, in the same manner as private
families compound for the malt-tax in England; or according to
the different ages and sexes of those persons, in the same manner
as several different taxes are levied in Holland; or nearly as
Sir Matthew Decker proposes that all taxes upon consumable commodities
should be levied in England. This mode of taxation, it has already
been observed, when applied to objects of a speedy consumption
is not a very convenient one. It might be adopted, however, in
cases where no better could be done.
Sugar, rum, and tobacco are commodities which are nowhere necessaries
of life, which are become objects of almost universal consumption,
and which are therefore extremely proper subjects of taxation.
If a union with the colonies were to take place, those commodities
might be taxed either before they go out of the hands of the
manufacturer or grower, or if this mode of taxation did not suit
the circumstances of those persons, they might be deposited in
public warehouses both at the place of manufacture, and at all
the different ports of the empire to which they might afterwards
be transported, to remain there, under the joint custody of the
owner and the revenue officer, till such time as they should
be delivered out either to the consumer, to the merchant retailer
for home consumption, or to the merchant exporter, the tax not
to be advanced till such delivery. When delivered out for exportation,
to go duty free upon proper security being given that they should
really be exported out of the empire. These are perhaps the principal
commodities with regard to which a union with the colonies might
require some considerable change in the present system of British
taxation.
What might be the amount of the revenue which this system of
taxation extended to all the different provinces of the empire
might produce, it must, no doubt, be altogether impossible to
ascertain with tolerable exactness. By means of this system there
is annually levied in Great Britain, upon less than eight millions
of people, more than ten millions of revenue. Ireland contains
more than two millions of people, and according to the accounts
laid before the congress, the twelve associated provinces of
America contain more than three. Those accounts, however, may
have been exaggerated, in order, perhaps, either to encourage
their own people, or to intimidate those of this country, and
we shall suppose, therefore, that our North American and West
Indian colonies taken together contain no more than three millions;
or that the whole British empire, in Europe and America, contains
no more than thirteen millions of inhabitants. If upon less than
eight millions of inhabitants this system of taxation raises
a revenue of more than ten millions sterling, it ought upon thirteen
millions of inhabitants to raise a revenue of more than sixteen
millions two hundred and fifty thousand pounds sterling. From
this revenue, supposing that this system could produce it, must
be deducted the revenue usually raised in Ireland and the plantations
for defraying the expense of their respective civil governments.
The expense of the civil and military establishment of Ireland,
together with the interest of the public debt, amounts, at a
medium of the two years which ended March 1775, to something
less than seven hundred and fifty thousand pounds a year. By
a very exact account of the revenue of the principal colonies
of America and the West Indies, it amounted, before the commencement
of the present disturbances, to a hundred and forty-one thousand
eight hundred pounds. In this account, however, the revenue of
Maryland, of North Carolina, and of all our late acquisitions
both upon the continent and in the islands is omitted, which
may perhaps make a difference of thirty or forty thousand pounds.
For the sake of even numbers, therefore, let us suppose that
the revenue necessary for supporting the civil government of
Ireland and the plantations may amount to a million. There would
remain consequently a revenue of fifteen millions two hundred
and fifty thousand pounds to be applied towards defraying the
general expense of the empire, and towards paying the public
debt. But if from the present revenue of Great Britain a million
could in peaceable times be spared towards the payment of that
debt, six millions two hundred and fifty thousand pounds could
very well be spared from this improved revenue. This great sinking
fund, too, might be augmented every year by the interest of the
debt which had been discharged the year before, and might in
this manner increase so very rapidly as to be sufficient in a
few years to discharge the whole debt, and thus to restore completely
the at present debilitated and languishing vigour of the empire.
In the meantime the people might be relieved from some of the
most burdensome taxes; from those which are imposed either upon
the necessaries of life, or upon the materials of manufacture.
The labouring poor would thus be enabled to live better, to work
cheaper, and to send their goods cheaper to market. The cheapness
of their goods would increase the demand for them, and consequently
for the labour of those who produced them. This increase in the
demand for labour would both increase the numbers and improve
the circumstances of the labouring poor. Their consumption would
increase, and together with it the revenue arising from all those
articles of their consumption upon which the taxes might be allowed
to remain.
The
revenue arising from this system of taxation, however, might
not immediately increase in proportion
to the number of people
who were subjected to it. Great indulgence would for some time
be due to those provinces of the empire which were thus subjected
to burdens to which they had not before been accustomed, and
even when the same taxes came to be levied everywhere as exactly
as possible, they would not everywhere produce a revenue proportioned
to the numbers of the people. In a poor country the consumption
of the principal commodities subject to the duties of customs
and excise is very small, and in a thinly inhabited country the
opportunities of smuggling are very great. The consumption of
malt liquors among the inferior ranks of people in Scotland is
very small, and the excise upon malt, beer, and ale produces
less there than in England in proportion to the numbers of the
people and the rate of the duties, which upon malt is different
on account of a supposed difference of quality. In these particular
branches of the excise there is not, I apprehend, much more smuggling
in the one country than in the other. The duties upon the distillery,
and the greater part of the duties of customs, in proportion
to the numbers of people in the respective countries, produce
less in Scotland than in England, not only on account of the
smaller consumption of the taxed commodities, but of the much
greater facility of smuggling. In Ireland the inferior ranks
of people are still poorer than in Scotland, and many parts of
the country are almost as thinly inhabited. In Ireland, therefore,
the consumption of the taxed commodities might, in proportion
to the number of the people, be still less than Scotland, and
the facility of smuggling nearly the same. In America and the
West Indies the white people even of the lowest rank are in much
better circumstances than those of the same rank in England,
and their consumption of all the luxuries in which they usually
indulge themselves is probably much greater. The blacks, indeed,
who make the greater part of the inhabitants both of the southern
colonies upon the continent and of the West India islands, as
they are in a state of slavery, are, no doubt, in a worse condition
than the poorest people either in Scotland or Ireland. We must
not, however, upon that account, imagine that they are worse
fed, or that their consumption of articles which might be subjected
to moderate duties is less than that even of the lower ranks
of people in England. In order that they may work well, it is
the interest of their master that they should be fed well and
kept in good heart in the same manner as it is his interest that
his working cattle should be so. The blacks accordingly have
almost everywhere their allowance of rum and molasses or spruce
beer in the same manner as the white servants, and this allowance
would not probably be withdrawn though those articles should
be subjected to moderate duties. The consumption of the taxed
commodities, therefore, in proportion to the number of inhabitants,
would probably be as great in America and the West Indies as
in any part of the British empire. The opportunities of smuggling,
indeed, would be much greater; America, in proportion to the
extent of the country, being much more thinly inhabited than
either Scotland or Ireland. If the revenue, however, which is
at present raised by the different duties upon malt and malt
liquors were to be levied by a single duty upon malt, the opportunity
of smuggling in the most important branch of the excise would
be almost entirely taken away: and if the duties of customs,
instead of being imposed upon almost all the different articles
of importation, were confined to a few of the most general use
and consumption, and if the levying of those duties were subjected
to the excise laws, the opportunity of smuggling, though not
so entirely taken away, would be very much diminished. In consequence
of those two, apparently, very simple and easy alterations, the
duties of customs and excise might probably produce a revenue
as great in proportion to the consumption of the most thinly
inhabited province as they do at present in proportion to that
of the most populous.
The Americans, it has been said, indeed, have no gold or silver
money; the interior commerce of the country being carried on
by a paper currency, and the gold and silver which occasionally
come among them being all sent to Great Britain in return for
the commodities which they receive from us. But without gold
and silver, it is added, there is no possibility of paying taxes.
We already get all the gold and silver which they have. How is
it possible to draw from them what they have not?
The present scarcity of gold and silver money in America is
not the effect of the poverty of that country, or of the inability
of the people there to purchase those metals. In a country where
the wages of labour are so much higher, and the price of provisions
so much lower than in England, the greater part of the people
must surely have wherewithal to purchase a greater quantity if
it were either necessary or convenient for them to do so. The
scarcity of those metals, therefore, must be the effect of choice,
and not of necessity.
It is for transacting either domestic or foreign business that
gold and silver money is either necessary or convenient.
The domestic business of every country, it has been shown in
the second book of this Inquiry, may, at least in peaceable times,
be transacted by means of a paper currency with nearly the same
degree of conveniency as by gold and silver money. It is convenient
for the Americans, who could always employ with profit in the
improvement of their lands a greater stock than they can easily
get, to save as much as possible the expense of so costly an
instrument of commerce as gold and silver, and rather to employ
that part of their surplus produce which would be necessary for
purchasing those metals in purchasing the instruments of trade,
the materials of clothing, several parts of household furniture,
and the ironwork necessary for building and extending their settlements
and plantations; in purchasing, not dead stock, but active and
productive stock. The colony governments find it for their interest
to supply the people with such a quantity of papermoney as is
fully sufficient and generally more than sufficient for transacting
their domestic business. Some of those governments, that of Pennsylvania
particularly, derive a revenue from lending this paper-money
to their subjects at an interest of so much per cent. Others,
like that of Massachusetts Bay, advance upon extraordinary emergencies
a paper-money of this kind for defraying the public expense,
and afterwards, when it suits the conveniency of the colony,
redeem it at the depreciated value to which it gradually falls.
In 1747, that colony paid, in this manner, the greater part of
its public debts with the tenth part of the money for which its
bills had been granted. It suits the conveniency of the planters
to save the expense of employing gold and silver money in their
domestic transactions, and it suits the conveniency of the colony
governments to supply them with a medium which, though attended
with some very considerable disadvantages, enables them to save
that expense. The redundancy of paper-money necessarily banishes
gold and silver from the domestic transactions of the colonies,
for the same reason that it has banished those metals from the
greater part of the domestic transactions in Scotland; and in
both countries it is not the poverty, but the enterprising and
projecting spirit of the people, their desire of employing all
the stock which they can get as active and productive stock,
which has occasioned this redundancy of paper-money. In the exterior
commerce which the different colonies carry on with Great Britain,
gold and silver are more or less employed exactly in proportion
as they are more or less necessary. Where those metals are not
necessary they seldom appear. Where they are necessary they are
generally found.
In the commerce between Great Britain and the tobacco colonies
the British goods are generally advanced to the colonists at
a pretty long credit, and are afterwards paid for in tobacco,
rated at a certain price. It is more convenient for the colonists
to pay in tobacco than in gold and silver. It would be more convenient
for any merchant to pay for the goods which his correspondents
had sold to him in some other sort of goods which he might happen
to deal in than in money. Such a merchant would have no occasion
to keep any part of his stock by him unemployed, and in ready
money, for answering occasional demands. He could have, at all
times, a larger quantity of goods in his shop or warehouse, and
he could deal to a greater extent. But it seldom happens to be
convenient for all the correspondents of a merchant to receive
payment for the goods which they sell to him in goods of some
other kind which he happens to deal in. The British merchants
who trade to Virginia and Maryland happen to be a particular
set of correspondents, to whom it is more convenient to receive
payment for the goods which they sell to those colonies in tobacco
than in gold and silver. They expect to make a profit by the
sale of the tobacco. They could make none by that of the gold
and silver. Gold and silver, therefore, very seldom appear in
the commerce between Great Britain and the tobacco colonies.
Maryland and Virginia have as little occasion for those metals
in their foreign as in their domestic commerce. They are said,
accordingly, to have less gold and silver money than any other
colonies in America. They are reckoned, however, as thriving,
and consequently as rich, as any of their neighbours.
In the northern colonies, Pennsylvania, New York, New Jersey,
the four governments of New England, etc., the value of their
own produce which they export to Great Britain is not equal to
that of the manufactures which they import for their own use,
and for that of some of the other colonies to which they are
the carriers. A balance, therefore, must be paid to the mother
country in gold and silver, and this balance they generally find.
In the sugar colonies the value of the produce annually exported
to Great Britain is much greater than that of all the goods imported
from thence. If the sugar and rum annually sent to the mother
country were paid for in those colonies, Great Britain would
be obliged to send out every year a very large balance in money,
and the trade to the West Indies would, by a certain species
of politicians, be considered as extremely disadvantageous. But
it so happens that many of the principal proprietors of the sugar
plantations reside in Great Britain. Their rents are remitted
to them in sugar and rum, the produce of their estates. The sugar
and rum which the West India merchants purchase in those colonies
upon their own account are not equal in value to the goods which
they annually sell there. A balance, therefore, must necessarily
be paid to them in gold and silver, and this balance, too, is
generally found.
The difficulty and irregularity of payment from the different
colonies to Great Britain have not been at all in proportion
to the greatness or smallness of the balances which were respectively
due from them. Payments have in general been more regular from
the northern than from the tobacco colonies, though the former
have generally paid a pretty large balance in money, while the
latter have either paid no balance, or a much smaller one. The
difficulty of getting payment from our different sugar colonies
has been greater or less in proportion, not so much to the extent
of the balances respectively due from them, as to the quantity
of uncultivated land which they contained; that is, to the greater
or smaller temptation which the planters have been under of overtrading,
or of undertaking the settlement and plantation of greater quantities
of waste land than suited the extent of their capitals. The returns
from the great island of Jamaica, where there is still much uncultivated
land, have, upon this account, been in general more irregular
and uncertain than those from the smaller islands of Barbadoes,
Antigua, and St. Christophers, which have for these many years
been completely cultivated, and have, upon that account, afforded
less field for the speculations of the planter. The new acquisitions
of Grenada, Tobago, St. Vincents, and Dominica have opened a
new field for speculations of this kind, and the returns from
those islands have of late been as irregular and uncertain as
those from the great island of Jamaica.
It is not, therefore, the poverty of the colonies which occasions,
in the greater part of them, the present scarcity of gold and
silver money. Their great demand for active and productive stock
makes it convenient for them to have as little dead stock as
possible, and disposes them upon that account to content themselves
with a cheaper though less commodious instrument of commerce
than gold and silver. They are thereby enabled to convert the
value of that gold and silver into the instruments of trade,
into the materials of clothing, into household furniture, and
into the ironwork necessary for building and extending their
settlements and plantations. In those branches of business which
cannot be transacted without gold and silver money, it appears
that they can always find the necessary quantity of those metals;
and if they frequently do not find it, their failure is generally
the effect, not of their necessary poverty, but of their unnecessary
and excessive enterprise. It is not because they are poor that
their payments are irregular and uncertain, but because they
are too eager to become excessively rich. Though all that part
of the produce of the colony taxes which was over and above what
was necessary for defraying the expense of their own civil and
military establishments were to be remitted to Great Britain
in gold and silver, the colonies have abundantly wherewithal
to purchase the requisite quantity of those metals. They would
in this case be obliged, indeed, to exchange a part of their
surplus produce, with which they now purchase active and productive
stock, for dead stock. In transacting their domestic business
they would be obliged to employ a costly instead of a cheap instrument
of commerce, and the expense of purchasing this costly instrument
might damp somewhat the vivacity and ardour of their excessive
enterprise in the improvement of land. It might not, however,
be necessary to remit any part of the American revenue in gold
and silver. It might be remitted in bills drawn upon and accepted
by particular merchants or companies in Great Britain to whom
a part of the surplus produce of America had been consigned,
who would pay into the treasury the American revenue in money,
after having themselves received the value of it in goods; and
the whole business might frequently be transacted without exporting
a single ounce of gold or silver from America.
It is not contrary to justice that both Ireland and America
should contribute towards the discharge of the public debt of
Great Britain. That debt has been contracted in support of the
government established by the Revolution, a government to which
the Protestants of Ireland owe, not only the whole authority
which they at present enjoy in their own country, but every security
which they possess for their liberty, their property, and their
religion; a government to which several of the colonies of America
owe their present charters, and consequently their present constitution,
and to which all the colonies of America owe the liberty, security,
and property which they have ever since enjoyed. That public
debt has been contracted in the defence, not of Great Britain
alone, but of all the different provinces of the empire; the
immense debt contracted in the late war in particular, and a
great part of that contracted in the war before, were both properly
contracted in defence of America.
By a union with Great Britain, Ireland would gain, besides the
freedom of trade, other advantages much more important, and which
would much more than compensate any increase of taxes that might
accompany that union. By the union with England the middling
and inferior ranks of people in Scotland gained a complete deliverance
from the power of an aristocracy which had always before oppressed
them. By a union with Great Britain the greater part of the people
of all ranks in Ireland would gain an equally complete deliverance
from a much more oppressive aristocracy; an aristocracy not founded,
like that of Scotland, in the natural and respectable distinctions
of birth and fortune, but in the most odious of all distinctions,
those of religious and political prejudices; distinctions which,
more than any other, animate both the insolence of the oppressors
and the hatred and indignation of the oppressed, and which commonly
render the inhabitants of the same country more hostile to one
another than those of different countries ever are. Without a
union with Great Britain the inhabitants of Ireland are not likely
for many ages to consider themselves as one people.
No oppressive aristocracy has ever prevailed in the colonies.
Even they, however, would, in point of happiness and tranquility,
gain considerably by a union with Great Britain. It would, at
least, deliver them from those rancorous and virulent factions
which are inseparable from small democracies, and which have
so frequently divided the affections of their people, and disturbed
the tranquillity of their governments, in their form so nearly
democratical. In the case of a total separation from Great Britain,
which, unless prevented by a union of this kind, seems very likely
to take place, those factions would be ten times more virulent
than ever. Before the commencement of the present disturbances,
the coercive power of the mother country had always been able
to restrain those factions from breaking out into anything worse
than gross brutality and insult. If that coercive power were
entirely taken away, they would probably soon break out into
open violence and bloodshed. In all great countries which are
united under one uniform government, the spirit of party commonly
prevails less in the remote provinces than in the centre of the
empire. The distance of those provinces from the capital, from
the principal seat of the great scramble of faction and ambition,
makes them enter less into the views of any of the contending
parties, and renders them more indifferent and impartial spectators
of the conduct of all. The spirit of party prevails less in Scotland
than in England. In the case of a union it would probably prevail
less in Ireland than in Scotland, and the colonies would probably
soon enjoy a degree of concord and unanimity at present unknown
in any part of the British empire. Both Ireland and the colonies,
indeed, would be subjected to heavier taxes than any which they
at present pay. In consequence, however, of a diligent and faithful
application of the public revenue towards the discharge of the
national debt, the greater part of those taxes might not be of
long continuance, and the public revenue of Great Britain might
soon be reduced to what was necessary for maintaining a moderate
peace establishment.
The territorial acquisitions of the East India Company, the
undoubted right of the crown, that is, of the state and people
of Great Britain, might be rendered another source of revenue
more abundant, perhaps, than all those already mentioned. Those
countries are represented as more fertile, more extensive, and,
in proportion to their extent, much richer and more populous
than Great Britain. In order to draw a great revenue from them,
it would not probably be necessary to introduce any new system
of taxation into countries which are already sufficiently and
more than sufficiently taxed. It might, perhaps, be more proper
to lighten than to aggravate the burden of those unfortunate
countries, and to endeavour to draw a revenue from them, not
by imposing new taxes, but by preventing the embezzlement and
misapplication of the greater part of those which they already
pay.
If
it should be found impracticable for Great Britain to draw
any considerable augmentation of
revenue from any of the resources
above mentioned, the only resource which can remain to her is
a diminution of her expense. In the mode of collecting and in
that of expending the public revenue, though in both there may
be still room for improvement, Great Britain seems to be at least
as economical as any of her neighbours. The military establishment
which she maintains for her own defence in time of peace is more
moderate than that of any European state which can pretend to
rival her either in wealth or in power. None of those articles,
therefore, seem to admit of any considerable reduction of expense.
The expense of the peace establishment of the colonies was, before
the commencement of the present disturbances, very considerable,
and is an expense which may, and if no revenue can be drawn from
them ought certainly to be saved altogether. This constant expense
in time of peace, though very great, is insignificant in comparison
with what the defence of the colonies has cost us in time of
war. The last war, which was undertaken altogether on account
of the colonies, cost Great Britain, it has already been observed,
upwards of ninety millions. The Spanish war of 1739 was principally
undertaken on their account, in which, and in the French war
that was the consequence of it, Great Britain spent upwards of
forty millions, a great part of which ought justly to be charged
to the colonies. In those two wars the colonies cost Great Britain
much more than double the sum which the national debt amounted
to before the commencement of the first of them. Had it not been
for those wars that debt might, and probably would by this time,
have been completely paid; and had it not been for the colonies,
the former of those wars might not, and the latter certainly
would not have been undertaken. It was because the colonies were
supposed to be provinces of the British empire that this expense
was laid out upon them. But countries which contribute neither
revenue nor military force towards the support of the empire
cannot be considered as provinces. They may perhaps be considered
as appendages, as a sort of splendid and showy equipage of the
empire. But if the empire can no longer support the expense of
keeping up this equipage, it ought certainly to lay it down;
and if it cannot raise its revenue in proportion to its expense,
it ought, at least, to accommodate its expense to its revenue.
If the colonies, notwithstanding their refusal to submit to British
taxes, are still to be considered as provinces of the British
empire, their defence in some future war may cost Great Britain
as great an expense as it ever has done in any former war. The
rulers of Great Britain have, for more than a century past, amused
the people with the imagination that they possessed a great empire
on the west side of the Atlantic. This empire, however, has hitherto
existed in imagination only. It has hitherto been, not an empire,
but the project of an empire; not a gold mine, but the project
of a gold mine; a project which has cost, which continues to
cost, and which, if pursued in the same way as it has been hitherto,
is likely to cost, immense expense, without being likely to bring
any profit; for the effects of the monopoly of the colony trade,
it has been shown, are, to the great body of the people, mere
loss instead of profit. It is surely now time that our rulers
should either realize this golden dream, in which they have been
indulging themselves, perhaps, as well as the people, or that
they should awake from it themselves, and endeavour to awaken
the people. If the project cannot be completed, it ought to be
given up. If any of the provinces of the British empire cannot
be made to contribute towards the support of the whole empire,
it is surely time that Great Britain should free herself from
the expense of defending those provinces in time of war, and
of supporting any part of their civil or military establishments
in time of peace, and endeavour to accommodate her future views
and designs to the real mediocrity of her circumstances.
Appendix
The two following accounts are subjoined in order to illustrate and
confirm what is said in the fifth chapter of the fourth book,
concerning the tonnage bounty to the white-herring fishery. The
reader, I believe, may depend upon the accuracy of both accounts.
An account of Busses fitted out in Scotland for Eleven Years, with
the Number of Empty Barrels carried out, and the Number of Barrels
of Herrings caught; also the Bounty at a Medium on each Barrel of
Seasteeks, and on each Barrel when fully packed.
Empty Barrels
Number of Barrels of Herrings Bounty paid on
Years Busses carried out caught the Busses
L s. d.
1771 29 5948 2832 2085 0 0
1772 168 41316 22237 11055 7 6
1773 190 42333 42055 12510 8 6
1774 248 59303 56365 16952 2 6
1775 275 69144 52879 19315 15 0
1776 294 76329 51863 21290 7 6
1777 240 62679 43313 17592 2 6
1778 220 56390 40958 16316 2 6
1779 206 55194 29367 15287 0 0
1780 181 48315 19885 13445 12 6
1781 135 33992 16593 9613 12 6
---- ------ ------ ------ -- -
Total 2186 550943 378347 155463 11 0
Seasteeks 378,347 Bounty at a medium for each
barrel of seasteeks
L0 8 2 1/4
But a barrel of seasteeks being
only reckoned two-thirds of a
barrel fully packed, one-third is
deducted, which brings the bounty
to L0 12 3 3/4
1/3 deducted 126,115 2/3
-----------
Barrels fully packed 252,231 1/3
And if the herrings are exported, there is, besides,
a premium of 0 2 8
--------------
So that the bounty paid by Government in money for
each barrel is L0 14 11 3/4
But if to this the duty of the salt usually taken
credit for as expended in curing each barrel, which
at a medium is of foreign, one bushel and one-fourth
of a bushel, at 10s. a bushel, be added, viz. 0 12 6
--------------
The bounty on each barrel would amount to L1 7 5 3/4
If the herrings are cured with British salt, it will stand thus,
viz.
Bounty as before L0 14 11 3/4
But if to this bounty the duty on two bushels of
Scots salt at 1s. 6d. per bushel, supposed to be the
quantity at a medium used in curing each barrel is
added, to wit 0 3 0
--------------
The bounty on each barrel will amount to L0 17 11 3/4
And,
When buss herrings are entered for home consumption in Scotland, and
pay the shilling a barrel of duty, the bounty stands thus, to wit as
before L0 12 3 3/4
From which the 1s. a barrel is to be deducted 0 1 0
--------------
0 11 3 3/4
But to that there is to be added again the duty of
the foreign salt used in curing a barrel of herrings,
viz. 0 12 6
--------------
So that the premium allowed for each barrel of
herring entered for home consumption is L1 3 9 3/4
If the herrings are cured with British salt, it will stand as
follows, viz.
Bounty on each barrel brought in by the busses as
above L0 12 3 3/4
From which deduct the 1s. a barrel paid at the time
they are entered for home consumption 0 1 0
--------------
L0 11 3 3/4
But if to the bounty the duty on two bushels of
Scots salt at 1s. 6d. per bushel, supposed to be the
quantity at a medium used in curing each barrel, is
added, to wit 0 3 0
--------------
The premium for each barrel entered for home
consumption will be L0 14 3 3/4
Though the loss of duties upon herrings exported cannot, perhaps
properly be considered as bounty; that upon herrings entered for
home consumption certainly may.
An Account of the Quantity of Foreign Salt imported in Scotland,
and of Scots Salt delivered Duty free from the Works there for the
Fishery, from the 5th of April 1771 to the 5th of April 1782, with
a Medium of both for one Year.
Scots Salt
Foreign Salt delivered from
Period Imported the Works
Bushels Bushels
From the 5th of April 1771
to the 5th of April 1782 936,974 168,226
Medium for one Year 85,179 5/11 15,293 3/11
It is to be observed that the Bushel of Foreign Salt weights
84 lb., that of British Salt 56 lb. only.
THE END
