The nominal amount of a loan which nothing obliges us to repay, is a matter of a very little importance; the interest agreed upon for the borrowed sum, is the only thing that deserves attention. The total of the interest in England is now about nine millions, three millions of which could not be procured but by laying taxes on those objects which had hitherto escaped the penetrating eye of the financiers, and by doubling or trebling the impost on those which appeared less liable to the inconveniences attending such an additional increase.
Before I examine in what mode the taxes operate, I shall suppose, for the satisfaction of the sensible and benevolent mind, that this formidable burden falls only on the consumer of such objects as are taxed. The only plausible aim of a reimbursement, is a diminution of the taxes which lie so heavy on that consumer; but the misfortune is, that the only means of refunding, is to devise new taxes, or increase the former ones. Besides, if this increase be trifling, the reimbursement cannot be effected in less than a century. I freely confess, that in this case, the proprietors of the public funds would be less aggrieved, having then sufficient time to think on the less disadvantageous modes of replacing their stock; yet, I repeat it, not less than a century would suffice to discharge that very debt; and the public being a little more burdened annually, than they would have been had not the project of paying off the debt been started, would have no other compensation for the additional burden, than the distant prospect of a general release in a hundred years.—If the intention is, to bring about that release within a period which, to the fiftieth part of the present generation, gives the hope of enjoying the effect of it, I agree, that by means of one million of additional taxes, and some financiering tricks, the whole debt may be liquidated within the space of 40 or 50 years; and then, that part of the present generation which may exist at that most gracious period, will, perhaps, bless the hand by which it shall have been relieved. But would that same hand be, till then, entitled to the like blessings from the unfortunate who should be reimbursed, and from those at whose expence this operation would be effected?
A first difficulty attending the objects under examination, is, that on every head requiring an explanation, a multitude of questions occur, which must be previously discussed; yet, with the utmost candour I confess, that there is not one among them which is not above the extent of my abilities. I shall therefore offer my thoughts on the subject with all that diffidence which results from such a consciousness. Partly by chance, partly from some other circumstance, as little glorious almost, or as little humiliating, I have been so often in the right, and so often in the wrong, that I should not be now more surprised at the one than proud of the other.
Another inconvenience is, that a picture, which, in its ensemble, might hold out, through a thousand incorrections and as many essential defects, a grand subject which, to become generally interesting, seems to wait only for the pencil of a skilful artist, viewed, unfortunately, by pieces, (and indeed it cannot be viewed otherwise,) presents at each time, nothing but a singularity, an oddity, which will cease to be so only when brought near to another; and this last, nevertheless, will require the same indulgence in order to its being rightly understood. The picture which I have presumed to take in hand is, I think, nearly of this kind. My wish, and a bold one it is, would be, that no judgement be pronounced on any of the particular parts, till they have been seen all together; for there are but few of them which, till another has been examined, is not liable to very just objections: and under each head I have answered to those only which it was essential to refute, that the reader might be able to go through the whole of the exhibition, which, had the plan of it been presented in the first page, might have subjected the book to be committed to the flames without mercy, and, indeed, without much apparent injustice.
I now resume my subject, after a digression that may be looked upon as a preface, which the reader may perhaps think might have been spared.
In the age we live in, to justify a necessary impost, by the pretence of paying off the debt, would be, of all state manœuvres, the most unpardonable. To lay heavy burdens on the people now, so as to liberate them in the space of a century, is, independent of a great many more improbabilities, to suppose, in the plan of administration, an immutability which it cannot give itself, and which does not, nor ever can exist. To leave the individuals of a nation in possession of all, that it is not indispensable to take away from them, in order that, with what they have left, they may acquire that which it will be perhaps necessary to deprive them of, is a principle, the absurdity of which it would be no easy matter to evince; but, to crush them under such an additional weight of taxes as would be necessary to exonerate them forty or fifty years hence, would be, in my opinion, attempting a measure, some of the consequences of which have no doubt escaped the attention of the proposers.
What may be the immediate effect of a considerable reimbursement, which even solely depends on the produce of taxation, and by no means of a real increase of specie in the nation? It consists in refunding to the lenders a sum which must cease to be useful to them, till it is replaced somewhere else; and obliging them to vest it, without loss of time, on that portion of the debt which is not yet acquitted.—But this privileged portion, which, previous to the reimbursement, was supposed only worth 80, and produced four, (it may be observed that, in the numbers, which I fix upon, I only look for terms to explain my meaning) will be worth 90, and presently 100, yet will not bring in more than four. It may be answered, the stocks rise, public credit increases.—We are not yet come to this point; but the fortune of the repaid stockholders, which does not consist in a nominal capital, but in the revenue it produces, will therefore, in fact, suffer a diminution of one whole fifth. What will then become of that fifth of the taxed objects consumed by them, and which they can no longer purchase?—It will, in my opinion, be necessary either to put a stop to the manufacturing of that fifth, and throw so many hands out of employment, or else lower the prices, yet continue to levy the tax, and then the manufacturer will complain of the burden; or, in fine, this fifth, now useless to the nation, must be exported, and this adds to the first inconvenience resulting from the tax imposed for the reimbursement: for, after all, if taxation operates in the manner it appears at first sight to do, that is, if it diminishes the means of consumption, then, by laying 1,000,000 of taxes appropriated to the liquidation of the debt, you have diminished your home-consumption, it matters not of what articles; you have diminished it, and still more so by the incapacity, to which the creditors paid off are reduced, of consuming that which they did consume previous to the reimbursement. Your exportation, it may be said, is by so much more increased, and enriched.—Granted;—but at whose expence? Who is to profit by it? In what manner are the returns to be made?—When foreign trade augments in proportion to the increase of the produce and home-consumption, it is easily conceived, that if the money imported does not exceed the proportion necessary to answer that double increase, the progression being equal every way, each article (money among the rest) will keep up to its value; but if the number of representatives is increased without any addition being made to the objects represented, is not the price of representation thereby diminished? Or, in other words, if you add to the real stock of money in the nation, at the expence of part of your own consumption, (which is the object in question) will not the price of the other parts of that same consumption rise in spite of you?
Besides, by diminishing, in any quantity whatever, the general mass of home-consumption, (and in the present supposition you may well think that it has decreased, both by the tax imposed and the reimbursement made) have the sums appropriated to that part of the consumption, annihilated by you, been withdrawn from the circulation? If not, then by adding thereto the increase of that balance in your favour, which you pretend to receive from abroad, by what means can you prevent a general rise in the prices, in proportion, not only to the quantity of that fatal money imported, but also to that cash, which ought to have been buried under ground, that it might, at least, only prove useless, after the home-consumption has undergone the diminution occasioned by the reimbursement and taxes? This is not all; the unfortunate creditors who have been paid off, already reduced from five parts of what they enjoyed, to four only, will certainly, soon after you shall have put the said balance into circulation, become unable, with the four that remain, to purchase more articles than they could have procured with three, previous to the tax and reimbursement.
Will you pretend to say, that this money does not circulate within the nation? that it becomes the source of a new trade? and that the exporters, instead of over-loading England with that specie, send or carry abroad the value thereof from Spain into France, Germany, and Russia?—that is to say, after having reduced the home-consumption, the exporters, who, rightly enough, are not willing to lose, will contribute to extend the internal consumption of Spain, France, Germany and Russia, and of course the ways and means of these different nations, as well as the produce of their taxes, in the same proportion as those objects have decreased amongst you.—Could this seriously be your intention?
But if it clearly appear, that the execution of the refunding plan would prove equally pernicious in its immediate tendency, both to the creditors who would be compelled to accept of it, and those at whose expence it must be effected, what then might be the case, if the interest of that debt, which ingrosses so much the public attention, being paid by all, were, in fact, paid by no one, but for so long a time as nature, assisted by all the calculations of individuals, may require to correct the errors of those upon a larger scale, made by administration, when administration is capable of making any.