FOOTNOTES

FOOTNOTES[48]See Observations on Civil Liberty, page 74.[49]Of all the writers against this war, the learned Dr.Tuckeris the severest. For if, as he maintains, contrary to repeated declarations from the throne, a separation from the Colonies would be an advantage to us, the attempt to keep them, by invasion and bloodshed, deserves a harsher censure than words can convey.[50]See Observations on Civil Liberty, Part I. sect. 1.[51]See Observations, Part I. sect. 2.[52]The greatest part of Mr.Goodricke’s remarks are founded on this misunderstanding. He is so candid that I know he did not mean to misrepresent me; and yet I cannot help thinking it hard, after repeated declarations of my preference of such a constitution as our own, to be considered as an advocate for a pure Democracy. SeeObservations on Dr. Price’s Theory and Principles of Civil Liberty and Government, by Mr.Goodricke.[53]One of the best plans of this kind has been with much ability, described by Mr.De Lolme, in his account of the Constitution of England.[54]“As in a free state, every man who is supposed a free agent, ought to be his own governor; so the legislative power should reside in the whole body of the people.”Spirit of Laws, Book XI. chap. vi. See likewise Justice Blackstone’s Commentaries on the Laws of England, page 158. 1st Vol. oct. edition.—Demosthenesspeaking in his first Philippic, sect. 3d. of certain free states, calls themtheir own legislators, αυτονομουμηνα καὶ ελευθερα.[55]SeeRemarks, printed for Mr. Cadell,on a pamphlet published by Dr. Price. In a letter from a gentleman in the country to a member of parliament, page 10.[56]Rom. vii.[57]Dr.Priestly, in his Essay on thefirst principles of Government, makes a distinction betweencivilLiberty andpoliticalLiberty; the former of which he defines to be “the power which the members of a state ought to enjoy over their actions;” and the latter, “their power of arriving at public offices, or, at least, of having votes in the nomination of those who fill them.”—This distinction forms a very proper subdivision ofthe liberty of the citizenhere mentioned; and it may be accommodated to all I have said on this subject, by only giving some less general name to that which Dr. Priestly callscivilLiberty.[58]See on this Subject an excellent Sermon entitled,The Principles of theRevolutionvindicated. By Dr. Watson, Regius Professor of Divinity, at Cambridge.[59]Some who maintain this doctrine concerning government, overthrow their own system by acknowledging the right of resistance in certain cases. For, if there is such a right, the people must be judgeswhenit ought to be exercised; a right to resist only when civil governorsthinkthere is reason, being a gross absurdity and nullity.—The right of resistance, therefore, cannot mean less than a right in the people, whenever they think it necessary, to change their governors, and to limit their power. And from the moment this is done, government becomes the work of the people, and governors become their trustees or agents.[60]It has been commonly reckoned, that it is the end of civil government and civil laws to protect thepropertyandrightsof men; but, according to this writer, civil government and civil laws createpropertyandrights. It follows therefore, that, antecedently to civil laws, men could have nopropertyorrights; and that civil governors, being the makers of civil laws, it is a contradiction to suppose, that mankind can have any property or rights which are valid against the claims of their governors. See Three Letters to Dr.Price, p. 21, &c. And Remarks on the principal Acts of the 13th Parliament of Great-Britain, p. 58, &c. and p. 191.[61]This has been done in a lower instance. Parents have been furnished with a particular affection for their children, in order to prevent any abuse of their power over them.[62]“In ages of darkness, and too often also in those of greater knowledge, by the perfidious arts of designing princes, and by the base servility of too many ecclesiastics, who managed the superstition of the populace, by the violent restraints put upon divulging any juster sentiments about the rights of mankind, the natural notions of polity were erased out of the minds of men; and they were filled with some confused imaginations of something adorable in monarchs, some representation of the Divinity; and that even in the worst of them; and of some certain Divine claims in certain families.—No wonder this! that millions thus look upon themselves as a piece of property to one of their fellows as silly and worthless as the meanest of them; when the like arts of superstition have made millions, nay the very artificers themselves, fall down before the block or stone they had set up; or adore monkies, cats, and crocodiles, as the sovereign disposers of their fortunes.” See Dr.Hutcheson’sSystem of Moral Philosophy. Vol. ii. p. 280.[63]“Let not, therefore, thesepretended mastersof the people be allowed even to do good against the general consent.—Let it be considered, that the condition of rulers is exactly the same as that of the Cacique, who being asked whether he had any slaves, answered;Slaves? I know but one slave in all my district, and that is myself.” See the Philosophical and Political History of the Settlements and Trade of theEuropeansin theEast and West Indies. Translated from the French of the AbbeRaynal, by Mr.Justamond. Vol. v. page 414.[64]See Obs. p. 25. “The rights of mankind are so sacred that no prescription of tyranny or arbitrary power can have authority enough to abolish them.” Mr.Hume’s Essays, vol. iii. Essay on the Coalition of Parties.[65]“Mankind have been generally a great deal too tractable; and hence so many wretched forms of power have always enslaved nine tenths of the nations of the world, where they have the fullest right to make all efforts for a change.” Dr.Hutcheson’s Moral Philosophy. Vol. ii. p. 280.[66]See Remarks on the Acts of the Thirteenth Parliament ofGreat Britain. P. 34, &c.—“Is not the same reasoning applicable to taxes paid for the support of civil government? Are not these too the property of the civil magistrate?” Ibid. p. 56.—If I understand this writer, his meaning is, not only that the taxes which the civil magistratehasimposed are his property; but also,anywhich he shall please to impose.[67]Matth. xxiii. 8-12.—John xiii. 14.[68]Luke xxii. 25, &c.[69]1 Pet. v. 3.—2 Cor. i. 24.[70]He who wants to be convinced of thepracticability, even in this country, of a complete representation, should read a pamphlet lately published, the title of which is,Take your Choice.[71]“Afreesubject of a free state” is a contradiction in terms. See the Proclamation for a Fast.[72]Mr. Hume’s Essays. Vol. i. Essay iv. p. 31.[73]Spirit of Laws. Book xix. ch. 27.[74]Introduction to the Commentaries on the Laws of England, p. 48. See also Book i. ch. 8.[75]In 1692 King William rejected a bill for triennial Parliaments, after it had passed both Houses. But in a following year he thought proper to give his assent to it.[76]Spirit of Laws. Book xix. ch. 27.[77]History of Civil Society. Part vi. sect. 5.[78]PoliticalDiscourses. Essay xii. p. 301.[79]History of Civil Society. Part iv. sect. 5.[80]See Mr. Hume’s Essays. Vol. i. p. 91.[81]See the conclusion of the Third Part.[82]This was confirmed by the account of the noble Lord at opening the last Budget.[83]I have mentioned this sum at random. It is not of great consequence whether it is half a million too little or half a million too much.[84]The quantity of coin within all equal degrees of deficiency would be equal, were equal quantities issued every year, and were there also no cause which diminished or destroyed it, except theuniformoperation of time in wearing it. Any cause, therefore, which destroys it more, or diminishes it faster at first than at last, must render the quantity less in the first degrees of deficiency. And the same must be the consequence of a greater proportion issued formerly, in any given time, than of late.—The causes of diminution never probably operated so much on the gold coin as they did for about twelve years before 1773; and this will balance the greater proportion coined during that time. The very reason of the increase of coinage in those years was, a necessity created by the loss of the new coin, and never before felt in an equal degree. The coinage, however, in those years, was not so much more than usual as some may imagine. In ten years before 1770, eight millions and a half were coined; and in twelve years after theAccession, the same quantity was coined; and in twenty-seven years after theAccession, more was coined than in twenty-seven years before 1770. SeeConsiderations on Money, Bullion, &c. p. 2.—The whole quantity of gold coined from the Accession to 1770, was near 29 millions; more than one half of which must have been melted and exported; and, the greatest part of the remainder must have been precipitated in its progress towards deficiency by being clipped and sweated.[85]When the silverspeciewas recoined in King William’s time, it appeared, that a great treasure had been hoarded before theRevolution, in consequence of the danger of public liberty at that time. See Davenant’s Works, Vol. I. p. 439, &c.InRussiait is reckoned, that as much money lies buried under ground, as exists above ground.[86]In these sums is included all the coin which the late Proclamations have brought in fromHollandand other foreign countries; and which, I think, ought not to be deemed a part of the resting stock of the kingdom.[87]Or deducting a million for theIrishcoin, seventeen or eighteen millions.[88]This is said on the supposition, that the last call would bring in no more than was expected, or about three millions. Its having brought in above double this sum makes little difference. For it proves, that the whole quantity of gold coin must have been (according to LordNorth’s method of computing) 21 or 22 millions; and the quantity deficient more than a grain about 15 millions; and, consequently, six or seven millions (that is, near athird) will still remain to be the quantity deficient less than a grain.[89]It has been thought very strange, that a piece of metal should bear a higher price, merely because it wants the stamp of the mint. But the reason is, that bullion alone being exportable in any considerable quantity, the price of it must vary as the demand for it varies; or, in other words, as thebalance of paymentbetween us and the rest of the world is favourable or unfavourable.—This will be explained at the beginning of the Third Part, where it will appear that, in consequence of the increase of luxury and the national debt, this balance has been generally against us ever since the end of the last war.[90]The coin brought in last Summer, added to near 14 millions coined from the beginning of 1772 to the time of the last call, amounts to about 20 millions and a half; but only 16 millions and a half have been brought in, including the coin fromIrelandand foreign countries.[91]OrEIGHTEEN MILLIONS AND A HALF. See Dr.Davenant’s Works, Vol. i. p. 363, &c. 443, &c. A great part of this specie was carried out of the nation in KingWilliam’s wars; and the consequence was, that the taxes became unproductive; and that Government fell under great difficulties, from which it was afterwards relieved by the establishment of theBankand the increase of trade. See the beginning of the Third Part.[92]The paper currency of the Colonies is one of the greatest disadvantages under which they labour; but it is of a more safe and permanent nature than ours. Were it not so, it could not have been of the least use to them for the last year and a half. He who doubts this, need only consider what our paper would be worth were we now invaded as they are.This difference depends chiefly, on the following circumstances.—Their paper is not payable on demand.—It is a legal tender.—It represents fixed property which is mortgaged for it.—It does not support such a monstrous debt as ours.—And when public emergencies require any extraordinary emissions, they are generally sunk by taxes in four or five years.—It is the first of these circumstances that gives our paper its currency; and it is also this circumstance that creates the danger attending it, by rendering it incapable of sustaining any great shock or panic.—The possession of securities equal in nominal value to the amount of the paper emitted, or the debts contracted, is of little consequence when the value of these securities depends on the paper, and is created by it; that is, in other words, when the debts themselves are the very cash which must pay the debts.—Nothing can be more unnatural than such a state of things; and it may hereafter be a curious object of enquiry, how it could be ever possible that it should subsist any long time.In page 78 of theObservations on Civil Liberty, I have said, “that the kingdom ofFrancehas no such dependence as we have on paper-credit; and that its specie amounts to 67 millions sterling.” In mentioning this sum I took the lowest of different accounts which I had then received from different authorities. I have since received accounts which make it 87 millions and a half; or 2000 millions oflivres. This, in particular, is the account of an author whom all know to be likely to be well informed on this subject; I mean the author of the Treatise on theLegislationandCommerce of Corn, Part I. chap. v.—In the same treatise it is said, (Part I. chap. viii,) that it appears, from the returns made by the intendants of the different Provinces, that the number ofannualdeaths in the whole kingdom of France, for three years ended in 1772, was 780,040. I have been informed by the ingenious author, that this account may be depended on; and if so,Francemust contain 26 millions of inhabitants; for the best observations prove, that no more than a thirty-third part of a whole kingdom dies annually. See Observations on Reversionary Payments, page 200.—InSweden, though a nineteenth part die in the capital every year, only a thirty-fifth part die in the whole kingdom. See Philosophical Transactions, Vol. lxv. for 1775, p. 426. The particulars now mentioned, added to the nature of the debts ofFranceas mentioned in page 78 of theObservations on Civil Liberty, form a striking contrast between the state of that kingdom and ours. Nothing gives us our superiority but the advantages we derive from ourReligionand ourLiberty. Even in these respects, however, they seem to be improving, while we are declining.Montesquieu,Abbe Raynal, and others of their most admired writers, inculcate principles of government, and breathe a spirit of Liberty, which, to the shame of this country, are become offensive in it.[93]See the proposals and observations in a pamphlet lately published by Lord ViscountMahonon this subject.[94]“There is something (says a great writer) so unnatural in supposing a large society, sufficient for all the good purposes of an independent political union, remaining subject to the direction and government of a distant body of men who know not sufficiently the circumstances and exigencies of this society; or in supposing this society obliged to be governed solely for the benefit of a distant country; that it is not easy to imagine there can be any foundation for it in justice or equity. The insisting onold claimsandtacit conventions, to extend civil power over distant nations, and form grand unwieldy empires, without regard to the obvious maxims of humanity, has been one great source of human misery.”System of Moral Philosophy, by Dr.Hutcheson, vol. ii. p. 309. In the section from whence this quotation is taken, Dr.Hutchesondiscusses the question, “When colonies have a right to be released from the dominion of the parent state?” And his general sentiment seems to be, that they acquire such a right, “Whenever they are so increased in numbers and strength, as to be sufficient by themselves for all the good ends of a political union.”—Such a decision given by a wise man, long before we had any disputes with the colonies, deserves, I think, particular notice.[95]SeeCommon Sense, andPlain Truth, p. 44. Published for Mr.Almon.[96]The Colonies, I am assured, were not perfectly unanimous till they saw this answer.[97]I am sorry to differ from those respectable persons who have proposed placingAmericaon the same ground withIreland. If the same ground ofLawis meant, it is already done; for our laws give us the same power overIreland, that we claim overAmerica. If the same ground ofPracticeis meant; it has been most unfortunate forIreland, and would be equally so forAmerica.[98]See the AbbeRaynal’s Reflections on this subject at the end of the 18th book of his History of theEuropean Settlementsin the East and West-Indies.—“Is it not likely, says this writer, that the distrust and hatred which have of late taken place of that regard and attachment which theEnglishColonies felt for the parent country, may hasten their separation from one another? Every thing conspires to produce this great disruption; the æra of which it is impossible to know.—Every thing tends to this point: The progress of good in the new hemisphere, and the progress of evil in the old.—In proportion as our people are weakened, and resign themselves to each other’s dominion, population and agriculture will flourish inAmerica; and the arts make a rapid progress: And that country rising out nothing, will be fired with the ambition of appearing with glory in its turn on the face of the globe—O posterity! ye, peradventure, will be more happy than your unfortunate and contemptible ancestors.”—Mr.Justamond’s Translation.[99]Had this interest been insufficient, it might have been increased a 16th or even an 8thper cent.without any material difference; or, (which would have been better) 3½per cent.might have been offered forfour fifthsof the sum borrowed, and 4per cent.for the remainder; in which case, the annuity payable by the public would have been 65,790l.[100]It should be remembered here, that tho’ Government, when its debts are at a discount, may be able, with the consent of the creditors, to redeem a given capital by paying a less sum than that capital; yet it can never be obliged to paymore.—In other words; a 100l. capital in the 3per cents; 3½per cents; or 4, or 5per cents, Government is always at liberty to redeem by paying 100l. whatever the market price of it may be, and whether the creditors will consent or not.[101]There is another very great advantage which would attend these annuities.—One and the samesurpluswould discharge a given capital in less time. For example. A surplus of a millionper ann.invariably applied, and the first payment to be made immediately, would discharge a capital of ahundred millionsbearing 3per cent.interest in 46 years. But if the same capital bore 3½per cent.interest, it would be discharged in 43½ years; if 4per cent.in 40 years; if 5per cent.in 37¼ years.—A capitallessthan a 100 millions, in the same proportion that the interest ismorethan 3per cent.and for which, therefore, the same annuity is paid, (as in the present case) the same surplus would discharge in 39 years, if the interest is 3½; in 34¼ years, if the interest is 4per cent.in 27¼ years if the interest is 5per cent.—Supposing, therefore, 75 millions borrowed in the manner of our Government, by creating a capital of a 100 millions bearing 3per cent.(that is, by selling 3per cent.stock for 75l. in money) which might have been borrowed by creating a capital of only 75 millions bearing 4per cent.(that is by selling 4per cent.stock at 100) there will not only be a loss of 25 millions by a needless increase of the capital; but also a loss of 14 millions, by an increase of the time in which one and the same saving will discharge the two capitals.—This may be proved in the following manner.—A million,per ann.will, in 34 years and a quarter, very nearly discharge a debt of 75 millions bearing interest at 4per cent.; but the same saving will, in the same time, discharge only a capital of 61 millions, if it bears interest at 3per cent.When, therefore, such a saving has compleated the redemption of theonecapital, there will remain unpaid of the other, 39 millions.—What has been now applied to a large sum holds true in proportion of any smaller sums.It appears from hence to be a very wrong observation which some have made; “that provided the annual charge is the same, it signifies little what theprincipalof the public debt is.”—As there is no way of removing the annual charge but by paying theprincipal, it is of just as much consequence what it is, as whether it is practicable or impracticable, to remove a burden which weakens and cripples, and must in time sink the public. An annuity ofSix Millions, if the principal isHundred Millionsborrowed at 6per cent.might be redeemed in 33 years with a millionper ann.surplus. But if the principal isTwo Hundred Millionsbearing 3per cent.the same surplus would, in the same time, pay off only 56 millions; and but little more than aquarterof the annuity would be redeemed. If, therefore, the same sum might as well have been obtained by creating a principal of a hundred millions bearing 6per cent.as by creating a capital of two hundred millions bearing 3per cent.there will be a needless expence, in discharging the debt, of 144 millions.[102]The price of the 3per centsat the time of this loan (in the beginning of Feb. 1759) was 88½ and 89.[103]The 3per centsjust before this loan were at 69l. and, consequently, 5per cent.interest, (or 3l.per ann.for 60l.) would have afforded subscribers a profit of 9l. for every 60l. advanced. The long annuity was worth, as the stocks then stood, 21 years purchase, and the short annuity, 13 years purchase. Upon the whole loan, therefore, the profit would have been 3per cent.[104]That is, the difference between 12 millions, and the sum bearing interest at 3per cent.which a millionper ann.would pay off, in five years and a quarter.[105]The 3per centsbeing at this time at 80l. an annuity of 3l. purchased for 75l. would have produced a profit of 5l. Therefore these schemes are of exactly the same value. But they are too narrow; and the subscription this year fell immediately to oneper cent.discount. But in the scheme I have proposed this might have been prevented by only offering 4per cent.for 77l. or 78l. (instead of 75l.) of every 100l.[106]It is plain, that this capital, as well as the former, might have been a quarter (or 60,000l.) less, which would have made the whole saving of capital 2.060,000l.[107]At the time of this loan, the 3per cents.were above 75; and, therefore, a perpetual annuity of 3l.could not be purchased for 75l.and an annuity of 1l.2s.6d.for 99 years, was worth at least 27l.This, therefore, would have been a scheme very profitable to subscribers.[108]The life-annuity granted in this case could not have been worth so little as 16l.or 14 years purchase; and, therefore, a capital of 100l.in the 3per centswas sold for 84l; or a capital of three millions, for 2.520,000l.—A premium, therefore, was granted of 480,000l; and this was done without the least reason. For the 3per centsbeing at that time at 87 and 88, 2.520,000l.would undoubtedly have been lent at 3½per cent.interest; and the remaining 480,000l.necessary to make up three millions, would have been given for the life annuities; in which case, the annual charge occasioned by the new capital would have been somewhat less; and 480,000l.would have been saved, together with the additional expence occasioned by the longer time which a given surplus would require to discharge a debt bearing 3per cent.interest, as explained in the note,p. 94.[109]It is a general and certain maxim “that whenever money is borrowed by a lottery which gives a right tostockequal to the sum advanced, there is a loss equal to the sum which might have been received for the profits of the lottery.”—When the 3per cents.are at 76 or 77, half a million might be borrowed by a lottery, consisting of 50,000 tickets, each of the same value with 10l. threeper cent.stock: and hitherto such a method of borrowing has been reckoned advantageous. But it only gives a fallacious appearance of borrowing at 3per cent.It is the same with selling the profits of a lottery, and at the same time absurdly converting the purchase-money into a debt due to the purchaser.—Since the last war we have had seven of these lotteries, including two in 1763; and above a million has been lost by them.In QueenAnne’s time, there were several lotteries, consisting of allprizesand noblanks. This is so curious, and most persons may be so much at a loss to conceive of the possibility of it, that I cannot help explaining it.A capital, equal to the whole money advanced, was distributedequallyamong all the tickets in the lottery; and, in order to make them prizes of different values, there was farther distributed among them different shares of an additional capital, to which a right was given, though no money had been paid for it.—For example—In 1711, two millions were raised by a lottery of this kind, called a class lottery. The whole sum advanced was divided into 20,000 tickets, each 100l.stock bearing 6per cent.interest. This capital was increased by a gratuitous capital of 602,200l.bearing the same interest, and divided into shares which were added to the tickets, in order to form prizes.—This was the same with giving near 8per cent.for money, besides apremiumof 30per cent.—As the interest of money was at this time 6per cent.the sum borrowed would most certainly have been advanced at 8per cent.without anypremium; but it was, I suppose, reckoned necessary that government should notseemto give such high interest.—In the same year, 1.500,000l.was borrowed by another such lottery, and creating a capital of 1.928,570l.And in 1712, 3.600,000l.was borrowed by two more such lotteries, and creating a capital of 4.683,080l.—The greatest part of the debts contracted by these lotteries (amounting to 9.213,850l.though only 7.100,000l.was advanced) remains at this hour an incumbrance on the public; and the duties constituting thegeneral fundare charged with the interest of it.In 1714, the national interest was reduced to 5per cent.But in that very year 1.400,000l.was borrowed by a lottery, which gave a right to a capital of 1.876,000l.bearing 4per cent.that is, by giving near 5½per cent.interest, besides apremiumof 34per cent.—Thus have our debts been increased. But even worse has been done. The taxes charged with the interest of the public debts proving often deficient, the shortest way of discharging the arrears has been often taken, by adding them to the principal, and payingcompoundinterest for money.—Is it a wonder, that a nation which has been so careless in contracting debts, should have done so little towards discharging them?[110]That is, in other words; there is no one who would not be glad to lend to government on any higher interest than that which he can make in the funds. There is no one, for instance, who would not be glad to lend 75l.at 4per cent.when the 3per cents.are at 76, and when, therefore, he cannot make 4per cent.by purchasing them.[111]The expectation of receiving back some time or other the purchase-money would probably, in private loans, influence a purchaser. But in the cases to which I allude, this certainly was not considered, and did not at all influence. And if it had influenced, the observations I have made as I have gone along, demonstrate that the same loans would have been made without any such expectation.[112]See the Postscript.[113]Sixteen Millionshave been specified. It will come in my way to mention aboveFour Millionsmore in the second section of the next part. Notes 1, 12, 14.—No notice has been here taken of the loans of the war before the last; but losses of the same kind to a great amount were incurred by them.[114]In the exports, as delivered to theHouse of Commons, is included bullion exported. If this, as well as the other sums I have mentioned, is deducted, there will be still a balance left in favour ofBritainduring this period. Since 1764, it does not appear, from the accounts laid before theHouse of Commons, as published by SirCharles Whitworth, that any bullion has been entered for exportation.[115]The 3per cent.annuities were then at 105; and, during the first five years of the war which began in 1755, they were higher than they have generally beensincethe war.[116]These duties were appropriated to the payment of the interest at 4per cent.of a capital of 4.400,000l. created in 1747, for which four millions only had been advanced. It is now a part of the capital of the reduced 3per cent.annuities.[117]The whole of this sum, (except 16.437,821l. consisting of the old Bank capital, the consolidated 3per cents, the South-Sea 3per cent.annuities 1751, the Civil List million, and the East-India annuity) that is, 54.413,433l. was reduced by 23 Geo. II. 1749. from an interest of 4per cent.to 3½ till 1757, and afterwards to 3per cent.—The proprietors of a capital of 3.290,042l. refused to consent to this reduction, which, therefore, was paid off; 1.190,042l. withExchequerBills (afterwards cancelled); and 2.100,000l. with money borrowed at 3per cent.and added to the capital of theSouth-Seaannuities. The whole sum, therefore, reduced and paid off, was 57.703,475l. which produced a saving to the public, and an addition to the Sinking Fund after 1757, of 612,735l.per ann.TheSalt Dutiesin 1753 had been for some time mortgaged to pay the principal and interest of a million borrowed in 1745. In 1757, after clearing the mortgage, they became free, and were carried into the Sinking Fund, of which they have ever since formed a part. This produced a farther addition to theSinking Fund, after 1757, of about 220,000l.per ann.I have not included the million now mentioned in the account given above of the public debts in 1753, because it was in a fixed course of redemption; nor have I included 499,600l. in Exchequer Bills charged on the duty on sweets, because these Exchequer Bills were paid off in 1754.[118]Having met with no account of the Navy Debt at this time, I have chosen, rather than omit it, to suppose it nearly the same that it was at the commencement of the last war; which, probably, is reckoning it too high.[119]In this account I have omitted a million borrowed in 1734, because the redemption of it was near being completed by the Salt Duties. I have also omittedShort Annuitiesamounting to 24,334l. being the remainder of 9per cent.annuities for 32 years created in 1710, because the term for which they were created was near expiring.[120]The author of theConsiderations on the Trade and Finances of this Kingdommakes this debt 1.318,000l. more than the sum at which I have here stated it. See page 22; andState of the Nationby the same author, page 15, quarto editions.—The reason of this difference is, that this writer has included in the unfunded debt left by the war the deficiencies of grants and funds in 1763 and 1764, and thewholearmy debt not provided for in those years; whereas I have excluded the former entirely; and admitted only as much of the latter as exceeded the army debts common in subsequent years. See the Postscript.[121]In 1751 there was applied to the payment of Navy debts 200,000l. and in 1752, the sum of 900,000l. But I have not reckoned these sums, because they did little more than make up the constant deficiency in thePeace Establishmentfor the Navy.[122]See the Postscript.[123]“Either the nation (Mr. Hume says) must destroy public credit, or public credit will destroy the nation.” Political Essays, page 135.[124]The number of inhabitants inFranceis 26 millions. InBritainit cannot exceed six or seven millions. Seep. 66. AndObservations on Reversionary Payments, page 185, third edition.[125]Near one half of all this importation is made intoBourdeauxonly; and the rest intoRochelle,Marseilles,Nantz,Havre, andHonfleur.[126]In order to defray the expence of coinage, a duty of 10s.perton has been laid on wines imported; and, as far as this duty happens to fall short of 15,000 l. the deficiency is made good out of the supplies.[127]I am not able to give the exact amount of this part of the appropriated revenue. I have, therefore, reckoned it at such a round sum, as, I think, cannot much exceed or fall short of it.[128]The Land-tax at 3s. is given by Parliament for 1.500,000l.; and the Malt-tax for 750,000l. but they are always greatly deficient.—Both these taxes (and also sometimes the income of the Sinking Fund) are borrowed of theBank, and spent long before they come into the Exchequer; and therefore, are debts constantly due to the Bank, for which interest is paid.[129]The account given by Lord North at opening the Budget in 1775, was, that the public debt had been diminished since 1763, near nine millions and a half. The grounds on which I have stated this diminution at 10.639,793l. may be seen in thePostscript, (p. 171).[130]Four of these lotteries have been annexed to annuities; but it would be a great mistake to think that they have not been equally profitable with the other lotteries. For instance; in 1767, a million and a half was borrowed on an annuity of 45,000l. with a lottery of 60,000 tickets annexed. In the same year, 2.616,777l. was paid off; but, had it not been for the lottery, only 1.350,000l. could have been raised on the annuity; and 150,000l. less must have been paid off.[131]The discounts on a million and a half paid off in 1772, and two millions paid off in 1774 and 1775, amounted nearly to this sum.[132]The particular sums may be found in a pamphlet, entitled,The Present State of the Nation, p. 28, quarto edition. But I have not included all the sums there enumerated; nor have I admitted the Army savings in 1772, and some other smaller sums.[133]This surplus, being the medium for the whole 12 years of peace, is less than that inp. 160, which is the medium at the end of this period, when the Sinking-Fund produced above a quarter more than it did at the beginning of it.[134]I have here taken the average of two years before and after 1766.[135]The annual medium of the payments into the Exchequer from theCustomsinEngland, for the last five years, has been 2.521,769l.—In 1774 the payment into the Exchequer was 2.547,717l.—In 1775, it was 2.476,302l.—The produce of theCustoms, therefore, has been given rather too high.The produce of theExcisesin England has been higher, in 1772 and 1775, than in any two years before 1776; but the average of any three successive years, or of all the five years since 1770, will not differ much from the sum I have given.—In 1754, or the year before the last war, theCustomsproduced only 1.558,254l.—The Excises, exclusive of the Malt-tax, produced 2.819,702l,—And the whole revenue, exclusive of the Malt-tax and Land-tax at 2s. was 5.097,617l.—In 1753 the whole revenue was 5.189,745l. And the appropriation or annual charge upon it, (consisting of the Civil List, 834,443l. interest of the national debt, exclusive of navy debt, 2.628,087l. expences of management, 43,691l. 4½per cent.from the Leeward Islands 27,378l. annuity to the late Duke of Cumberland 25,000l. first-fruits and tenths of the Clergy 13,597l. &c. &c.) was 3.733,713l. The Sinking-Fund, therefore, produced 1.456,000l.; which, added to 1.500,000l. (the neat produce, at that time, of Land at 2s. and Malt-tax) made the unappropriated revenue 2.956,032l.—The expence of the peace establishment, consisting of 10,000 seamen, and 18,857 landmen, was, in 1753 and 1754, (including an allowance for the increase of the Navy-debt) 2.400,000l. nearly; which left an annual surplus in the national income of 556,000l.withoutlotteries, and land at 2s. This surplus (with land at 3s.) has of late scarcely exceeded 300,000l.; and, therefore, has not been aTHIRDof what it was in the last peace, and before the reduction of interest to 3per cent.was compleated.[136]This article was omitted in the former editions of thisPostscript; and its insertion here makes the diminution of the public debts, since 1763, half a million less than the sum at which it is taken inp. 104and108.—It might have been proper also to add, the excess of Navy debtscontractedabove the Navy debtsdischarged, from 1763 to 1775; and had this been done, the surplus inp. 165, would have been reduced to 150,000l.[137]SeeThe Present State of the Nation, page 26.[138]This article was omitted in the first editions of thisPostscript.—It might have been proper to add, the excess of Navy debtscontractedabove the Navy debtsdischarged, from 1763 to 1775; and had this been done, the surplus inp. 166, would have been reduced to 150,000l.per ann.[139]Or, for every 105l. contributed, 100l.STOCKirredeemable for 10 years might have been given, carrying 4¼per cent.interest, with the same short annuity and a lottery ticket annexed; and then the new capital would have been 4.762,000l. carrying (at 4¼per cent.) 202,385l.per ann.interest. The amount of the short annuity would have been 23,810l. and the number of lottery tickets 47,620.[140]211,375l. the interest at 4½ of 4.750,000l. and 12,500l. a short annuity of aQUARTERper cent.annexed to every 100l. contributed, make 223,875l. This last sum, therefore, would have been the annual charge for 10 years; and the first sum the annual charge after ten years till redemption.[141]Ten payments of 9,650l. and seventeen payments of 34,375l. make 680,875l.[142]It may be worth observing, that during this whole war they never fell below 82, except for a few months during the rebellion in 1745; that after thePeacein 1748 they rose to 105, and in the succeeding war never fell so low as they are now, except in the two last years; that after thePeacein 1763 it was expected they would again rise abovepar; but that, instead of this, they have in general during the whole peace kept 12 or 13per cent.belowpar, and 15 or 16per cent.below the price they bore before the two last wars.—One of the reasons of the great alteration which has taken place since the last war is, I think, pointed out in the 3d Section of the 3d Part of this Tract.[143]Since the reduction in 1749 there has been noFOURper cent.capital created except that of the last year.[144]What is here said has been verified, in the particular instance of amillion and a halfborrowed in 1756, which was to carry 3½per cent.interest till 1771, and then to become redeemable.—During the last war, and for about three years after the commencement of peace, there was a general expectation that theTHREEper cents.would rise aboveparas they had done in the former peace; and while this expectation continued, this stock reckoned no better than aTHREEper cent.stock with a short annuity of ahalf per cent.annexed; and for this reason it bore, during that period, a lower price than another stock of 4 millions and a half which was to bear the same interest till 1782, and then to become redeemable, and to sink to an interest of 3per cent.—In the latter end of 1767 and beginning of 1768 the price of the former stock rose above that of the latter, and continued not far fromparfrom that time to the time of its redemption in 1771. The reason must have been, that being a small stock bearing a higher interest than the other stocks, it was expected, that it would be paid off atpar, and therefore with a considerable profit, as soon as it became redeemable; which accordingly happened. See Postscript, (page 177).[145]Nothing has been more undervalued in theAlleythanAnnuities on lives. They have been always granted, very unreasonably, without any limitation of age; and their value has been taken at no more than 12 or 13 years purchase; tho’ really worth one with another 16 or 17 years purchase. This is a strong reason for preferring short annuities to them in all schemes for raising money. Short annuities for 21 years will be taken for as much as life-annuities; and yet experience has proved that in this time not aquarterof the life-annuities will drop; and the whole expence brought by them on the public will not be removed in less than 70 or 80 years. See Note 15, (Page 134).[146]I would except here the first reduction in 1717. This was then necessary to gain a fund for sinking the public debts; and had the fund thus gained been applied, as the laws required, invariably to this purpose, and all farther reductions been avoided, we should now have been burthened with no debts.[147]That is; never capable of being redeemed by substituting one debt for another; or of being saved from redemption by accepting lower interest.[148]Supposing the 3per cents.sold at 76½, the capital necessary to produce 4.850,000l. in money would be 6.339,869l. the interest of which at 3per cent.is 190,195l.[149]When the amount of interest, payable for a sum obtained by selling a 4per cent.capital, is the same with the amount of interest, payable for an equal sum obtained by selling a 3per cent.capital, which is nearly the present case, postponing, in the manner I have proposed, the redemption of the former, becomes as indifferent as it would be to postpone in the same manner the redemption of any 3per cents.[150]In this case only aFIFTHof thesurplusto be at any time employed in redeeming debts could be applied to the redemption of thisparticularloan. The rest after nine years might be employed in redeeming the 4per cent.stock created last year; or jointly with it, such parts of future loans bearing high interest, as, in borrowing on the same plan, might be left redeemable. And thus no obligation would arise from this mode of borrowing to prefer the redemption of 3per cents.to the redemption of capitals bearing higher interest. In particular; had this been the plan of borrowing through the last war, all surplus monies might have been ever since employed intirely in paying off 4, 4½ and 5per cent.capitals preferably to any others; and at the same time, nodouceurswould have been granted in order to procure the loans, no artificial debt contracted, or extraordinary charge incurred.[151]Should this be disregarded, and a long annuity offered, as adouceur, of 1½per cent.for 90 or 100 years,eight millionsmight perhaps be borrowed at an interest, including the long annuity, of 4½per cent.even though the 3per cents.should fall as low as 73.—And this, probably, would be the very scheme a minister would prefer, who, minding chiefly present ease, did not care how much he burdened the nation hereafter.[152]In 1774, a million of the 3per cents.was redeemed at this price; and in 1772, a million and a half at 90.[153]I mean such a course of redemption as should not be liable to interruption by aWAR; or, as would be the effect of the establishment of such an unalienablesinkingfund as has been described in theAppeal to the Public on the Subject of the National Debt, and theObservations on reversionary Payments.—Nothing can save us from bankruptcy but such a fund; and were it established, the 3per cents., when they came to be redeemed, would soon rise topar; and, consequently, the obligation implied in this scheme to pay a part of them atparwould occasion no additional expence. It is, however, so little to be expected, that such a fund will be ever established, that it would have been folly to have made the calculation given above, on any supposition less favourable, than that the 3per cents.will bear the same price after the present war, that they bore after the last; and that we shall go on as we have hitherto done, paying off amillion, or amillion and a half, now and then in a time of peace.[154]The conversion of a 3per cent.stock into a 3½per cent.stock gives the same advantage in redeeming it, that the power of redeeming it at 85¾ for every 100l. would give.—A millionper ann.surplus would redeem 114 millions and a quarter of the latter stock in the same time, and therefore at the same expence, that it would redeem 100 millions of the former. I suppose here the 3per cents.paid atpar; and this I have before observed will be found to be necessary should a time (scarcely the object of hope) ever come when government will set itself in earnest and with any effect to pay the public debts.

[48]See Observations on Civil Liberty, page 74.

[49]Of all the writers against this war, the learned Dr.Tuckeris the severest. For if, as he maintains, contrary to repeated declarations from the throne, a separation from the Colonies would be an advantage to us, the attempt to keep them, by invasion and bloodshed, deserves a harsher censure than words can convey.

[50]See Observations on Civil Liberty, Part I. sect. 1.

[51]See Observations, Part I. sect. 2.

[52]The greatest part of Mr.Goodricke’s remarks are founded on this misunderstanding. He is so candid that I know he did not mean to misrepresent me; and yet I cannot help thinking it hard, after repeated declarations of my preference of such a constitution as our own, to be considered as an advocate for a pure Democracy. SeeObservations on Dr. Price’s Theory and Principles of Civil Liberty and Government, by Mr.Goodricke.

[53]One of the best plans of this kind has been with much ability, described by Mr.De Lolme, in his account of the Constitution of England.

[54]“As in a free state, every man who is supposed a free agent, ought to be his own governor; so the legislative power should reside in the whole body of the people.”Spirit of Laws, Book XI. chap. vi. See likewise Justice Blackstone’s Commentaries on the Laws of England, page 158. 1st Vol. oct. edition.—Demosthenesspeaking in his first Philippic, sect. 3d. of certain free states, calls themtheir own legislators, αυτονομουμηνα καὶ ελευθερα.

[55]SeeRemarks, printed for Mr. Cadell,on a pamphlet published by Dr. Price. In a letter from a gentleman in the country to a member of parliament, page 10.

[56]Rom. vii.

[57]Dr.Priestly, in his Essay on thefirst principles of Government, makes a distinction betweencivilLiberty andpoliticalLiberty; the former of which he defines to be “the power which the members of a state ought to enjoy over their actions;” and the latter, “their power of arriving at public offices, or, at least, of having votes in the nomination of those who fill them.”—This distinction forms a very proper subdivision ofthe liberty of the citizenhere mentioned; and it may be accommodated to all I have said on this subject, by only giving some less general name to that which Dr. Priestly callscivilLiberty.

[58]See on this Subject an excellent Sermon entitled,The Principles of theRevolutionvindicated. By Dr. Watson, Regius Professor of Divinity, at Cambridge.

[59]Some who maintain this doctrine concerning government, overthrow their own system by acknowledging the right of resistance in certain cases. For, if there is such a right, the people must be judgeswhenit ought to be exercised; a right to resist only when civil governorsthinkthere is reason, being a gross absurdity and nullity.—The right of resistance, therefore, cannot mean less than a right in the people, whenever they think it necessary, to change their governors, and to limit their power. And from the moment this is done, government becomes the work of the people, and governors become their trustees or agents.

[60]It has been commonly reckoned, that it is the end of civil government and civil laws to protect thepropertyandrightsof men; but, according to this writer, civil government and civil laws createpropertyandrights. It follows therefore, that, antecedently to civil laws, men could have nopropertyorrights; and that civil governors, being the makers of civil laws, it is a contradiction to suppose, that mankind can have any property or rights which are valid against the claims of their governors. See Three Letters to Dr.Price, p. 21, &c. And Remarks on the principal Acts of the 13th Parliament of Great-Britain, p. 58, &c. and p. 191.

[61]This has been done in a lower instance. Parents have been furnished with a particular affection for their children, in order to prevent any abuse of their power over them.

[62]“In ages of darkness, and too often also in those of greater knowledge, by the perfidious arts of designing princes, and by the base servility of too many ecclesiastics, who managed the superstition of the populace, by the violent restraints put upon divulging any juster sentiments about the rights of mankind, the natural notions of polity were erased out of the minds of men; and they were filled with some confused imaginations of something adorable in monarchs, some representation of the Divinity; and that even in the worst of them; and of some certain Divine claims in certain families.—No wonder this! that millions thus look upon themselves as a piece of property to one of their fellows as silly and worthless as the meanest of them; when the like arts of superstition have made millions, nay the very artificers themselves, fall down before the block or stone they had set up; or adore monkies, cats, and crocodiles, as the sovereign disposers of their fortunes.” See Dr.Hutcheson’sSystem of Moral Philosophy. Vol. ii. p. 280.

[63]“Let not, therefore, thesepretended mastersof the people be allowed even to do good against the general consent.—Let it be considered, that the condition of rulers is exactly the same as that of the Cacique, who being asked whether he had any slaves, answered;Slaves? I know but one slave in all my district, and that is myself.” See the Philosophical and Political History of the Settlements and Trade of theEuropeansin theEast and West Indies. Translated from the French of the AbbeRaynal, by Mr.Justamond. Vol. v. page 414.

[64]See Obs. p. 25. “The rights of mankind are so sacred that no prescription of tyranny or arbitrary power can have authority enough to abolish them.” Mr.Hume’s Essays, vol. iii. Essay on the Coalition of Parties.

[65]“Mankind have been generally a great deal too tractable; and hence so many wretched forms of power have always enslaved nine tenths of the nations of the world, where they have the fullest right to make all efforts for a change.” Dr.Hutcheson’s Moral Philosophy. Vol. ii. p. 280.

[66]See Remarks on the Acts of the Thirteenth Parliament ofGreat Britain. P. 34, &c.—“Is not the same reasoning applicable to taxes paid for the support of civil government? Are not these too the property of the civil magistrate?” Ibid. p. 56.—If I understand this writer, his meaning is, not only that the taxes which the civil magistratehasimposed are his property; but also,anywhich he shall please to impose.

[67]Matth. xxiii. 8-12.—John xiii. 14.

[68]Luke xxii. 25, &c.

[69]1 Pet. v. 3.—2 Cor. i. 24.

[70]He who wants to be convinced of thepracticability, even in this country, of a complete representation, should read a pamphlet lately published, the title of which is,Take your Choice.

[71]“Afreesubject of a free state” is a contradiction in terms. See the Proclamation for a Fast.

[72]Mr. Hume’s Essays. Vol. i. Essay iv. p. 31.

[73]Spirit of Laws. Book xix. ch. 27.

[74]Introduction to the Commentaries on the Laws of England, p. 48. See also Book i. ch. 8.

[75]In 1692 King William rejected a bill for triennial Parliaments, after it had passed both Houses. But in a following year he thought proper to give his assent to it.

[76]Spirit of Laws. Book xix. ch. 27.

[77]History of Civil Society. Part vi. sect. 5.

[78]PoliticalDiscourses. Essay xii. p. 301.

[79]History of Civil Society. Part iv. sect. 5.

[80]See Mr. Hume’s Essays. Vol. i. p. 91.

[81]See the conclusion of the Third Part.

[82]This was confirmed by the account of the noble Lord at opening the last Budget.

[83]I have mentioned this sum at random. It is not of great consequence whether it is half a million too little or half a million too much.

[84]The quantity of coin within all equal degrees of deficiency would be equal, were equal quantities issued every year, and were there also no cause which diminished or destroyed it, except theuniformoperation of time in wearing it. Any cause, therefore, which destroys it more, or diminishes it faster at first than at last, must render the quantity less in the first degrees of deficiency. And the same must be the consequence of a greater proportion issued formerly, in any given time, than of late.—The causes of diminution never probably operated so much on the gold coin as they did for about twelve years before 1773; and this will balance the greater proportion coined during that time. The very reason of the increase of coinage in those years was, a necessity created by the loss of the new coin, and never before felt in an equal degree. The coinage, however, in those years, was not so much more than usual as some may imagine. In ten years before 1770, eight millions and a half were coined; and in twelve years after theAccession, the same quantity was coined; and in twenty-seven years after theAccession, more was coined than in twenty-seven years before 1770. SeeConsiderations on Money, Bullion, &c. p. 2.—The whole quantity of gold coined from the Accession to 1770, was near 29 millions; more than one half of which must have been melted and exported; and, the greatest part of the remainder must have been precipitated in its progress towards deficiency by being clipped and sweated.

[85]When the silverspeciewas recoined in King William’s time, it appeared, that a great treasure had been hoarded before theRevolution, in consequence of the danger of public liberty at that time. See Davenant’s Works, Vol. I. p. 439, &c.InRussiait is reckoned, that as much money lies buried under ground, as exists above ground.

InRussiait is reckoned, that as much money lies buried under ground, as exists above ground.

[86]In these sums is included all the coin which the late Proclamations have brought in fromHollandand other foreign countries; and which, I think, ought not to be deemed a part of the resting stock of the kingdom.

[87]Or deducting a million for theIrishcoin, seventeen or eighteen millions.

[88]This is said on the supposition, that the last call would bring in no more than was expected, or about three millions. Its having brought in above double this sum makes little difference. For it proves, that the whole quantity of gold coin must have been (according to LordNorth’s method of computing) 21 or 22 millions; and the quantity deficient more than a grain about 15 millions; and, consequently, six or seven millions (that is, near athird) will still remain to be the quantity deficient less than a grain.

[89]It has been thought very strange, that a piece of metal should bear a higher price, merely because it wants the stamp of the mint. But the reason is, that bullion alone being exportable in any considerable quantity, the price of it must vary as the demand for it varies; or, in other words, as thebalance of paymentbetween us and the rest of the world is favourable or unfavourable.—This will be explained at the beginning of the Third Part, where it will appear that, in consequence of the increase of luxury and the national debt, this balance has been generally against us ever since the end of the last war.

[90]The coin brought in last Summer, added to near 14 millions coined from the beginning of 1772 to the time of the last call, amounts to about 20 millions and a half; but only 16 millions and a half have been brought in, including the coin fromIrelandand foreign countries.

[91]OrEIGHTEEN MILLIONS AND A HALF. See Dr.Davenant’s Works, Vol. i. p. 363, &c. 443, &c. A great part of this specie was carried out of the nation in KingWilliam’s wars; and the consequence was, that the taxes became unproductive; and that Government fell under great difficulties, from which it was afterwards relieved by the establishment of theBankand the increase of trade. See the beginning of the Third Part.

[92]The paper currency of the Colonies is one of the greatest disadvantages under which they labour; but it is of a more safe and permanent nature than ours. Were it not so, it could not have been of the least use to them for the last year and a half. He who doubts this, need only consider what our paper would be worth were we now invaded as they are.This difference depends chiefly, on the following circumstances.—Their paper is not payable on demand.—It is a legal tender.—It represents fixed property which is mortgaged for it.—It does not support such a monstrous debt as ours.—And when public emergencies require any extraordinary emissions, they are generally sunk by taxes in four or five years.—It is the first of these circumstances that gives our paper its currency; and it is also this circumstance that creates the danger attending it, by rendering it incapable of sustaining any great shock or panic.—The possession of securities equal in nominal value to the amount of the paper emitted, or the debts contracted, is of little consequence when the value of these securities depends on the paper, and is created by it; that is, in other words, when the debts themselves are the very cash which must pay the debts.—Nothing can be more unnatural than such a state of things; and it may hereafter be a curious object of enquiry, how it could be ever possible that it should subsist any long time.In page 78 of theObservations on Civil Liberty, I have said, “that the kingdom ofFrancehas no such dependence as we have on paper-credit; and that its specie amounts to 67 millions sterling.” In mentioning this sum I took the lowest of different accounts which I had then received from different authorities. I have since received accounts which make it 87 millions and a half; or 2000 millions oflivres. This, in particular, is the account of an author whom all know to be likely to be well informed on this subject; I mean the author of the Treatise on theLegislationandCommerce of Corn, Part I. chap. v.—In the same treatise it is said, (Part I. chap. viii,) that it appears, from the returns made by the intendants of the different Provinces, that the number ofannualdeaths in the whole kingdom of France, for three years ended in 1772, was 780,040. I have been informed by the ingenious author, that this account may be depended on; and if so,Francemust contain 26 millions of inhabitants; for the best observations prove, that no more than a thirty-third part of a whole kingdom dies annually. See Observations on Reversionary Payments, page 200.—InSweden, though a nineteenth part die in the capital every year, only a thirty-fifth part die in the whole kingdom. See Philosophical Transactions, Vol. lxv. for 1775, p. 426. The particulars now mentioned, added to the nature of the debts ofFranceas mentioned in page 78 of theObservations on Civil Liberty, form a striking contrast between the state of that kingdom and ours. Nothing gives us our superiority but the advantages we derive from ourReligionand ourLiberty. Even in these respects, however, they seem to be improving, while we are declining.Montesquieu,Abbe Raynal, and others of their most admired writers, inculcate principles of government, and breathe a spirit of Liberty, which, to the shame of this country, are become offensive in it.

This difference depends chiefly, on the following circumstances.—Their paper is not payable on demand.—It is a legal tender.—It represents fixed property which is mortgaged for it.—It does not support such a monstrous debt as ours.—And when public emergencies require any extraordinary emissions, they are generally sunk by taxes in four or five years.—It is the first of these circumstances that gives our paper its currency; and it is also this circumstance that creates the danger attending it, by rendering it incapable of sustaining any great shock or panic.—The possession of securities equal in nominal value to the amount of the paper emitted, or the debts contracted, is of little consequence when the value of these securities depends on the paper, and is created by it; that is, in other words, when the debts themselves are the very cash which must pay the debts.—Nothing can be more unnatural than such a state of things; and it may hereafter be a curious object of enquiry, how it could be ever possible that it should subsist any long time.

In page 78 of theObservations on Civil Liberty, I have said, “that the kingdom ofFrancehas no such dependence as we have on paper-credit; and that its specie amounts to 67 millions sterling.” In mentioning this sum I took the lowest of different accounts which I had then received from different authorities. I have since received accounts which make it 87 millions and a half; or 2000 millions oflivres. This, in particular, is the account of an author whom all know to be likely to be well informed on this subject; I mean the author of the Treatise on theLegislationandCommerce of Corn, Part I. chap. v.—In the same treatise it is said, (Part I. chap. viii,) that it appears, from the returns made by the intendants of the different Provinces, that the number ofannualdeaths in the whole kingdom of France, for three years ended in 1772, was 780,040. I have been informed by the ingenious author, that this account may be depended on; and if so,Francemust contain 26 millions of inhabitants; for the best observations prove, that no more than a thirty-third part of a whole kingdom dies annually. See Observations on Reversionary Payments, page 200.—InSweden, though a nineteenth part die in the capital every year, only a thirty-fifth part die in the whole kingdom. See Philosophical Transactions, Vol. lxv. for 1775, p. 426. The particulars now mentioned, added to the nature of the debts ofFranceas mentioned in page 78 of theObservations on Civil Liberty, form a striking contrast between the state of that kingdom and ours. Nothing gives us our superiority but the advantages we derive from ourReligionand ourLiberty. Even in these respects, however, they seem to be improving, while we are declining.Montesquieu,Abbe Raynal, and others of their most admired writers, inculcate principles of government, and breathe a spirit of Liberty, which, to the shame of this country, are become offensive in it.

[93]See the proposals and observations in a pamphlet lately published by Lord ViscountMahonon this subject.

[94]“There is something (says a great writer) so unnatural in supposing a large society, sufficient for all the good purposes of an independent political union, remaining subject to the direction and government of a distant body of men who know not sufficiently the circumstances and exigencies of this society; or in supposing this society obliged to be governed solely for the benefit of a distant country; that it is not easy to imagine there can be any foundation for it in justice or equity. The insisting onold claimsandtacit conventions, to extend civil power over distant nations, and form grand unwieldy empires, without regard to the obvious maxims of humanity, has been one great source of human misery.”System of Moral Philosophy, by Dr.Hutcheson, vol. ii. p. 309. In the section from whence this quotation is taken, Dr.Hutchesondiscusses the question, “When colonies have a right to be released from the dominion of the parent state?” And his general sentiment seems to be, that they acquire such a right, “Whenever they are so increased in numbers and strength, as to be sufficient by themselves for all the good ends of a political union.”—Such a decision given by a wise man, long before we had any disputes with the colonies, deserves, I think, particular notice.

[95]SeeCommon Sense, andPlain Truth, p. 44. Published for Mr.Almon.

[96]The Colonies, I am assured, were not perfectly unanimous till they saw this answer.

[97]I am sorry to differ from those respectable persons who have proposed placingAmericaon the same ground withIreland. If the same ground ofLawis meant, it is already done; for our laws give us the same power overIreland, that we claim overAmerica. If the same ground ofPracticeis meant; it has been most unfortunate forIreland, and would be equally so forAmerica.

[98]See the AbbeRaynal’s Reflections on this subject at the end of the 18th book of his History of theEuropean Settlementsin the East and West-Indies.—“Is it not likely, says this writer, that the distrust and hatred which have of late taken place of that regard and attachment which theEnglishColonies felt for the parent country, may hasten their separation from one another? Every thing conspires to produce this great disruption; the æra of which it is impossible to know.—Every thing tends to this point: The progress of good in the new hemisphere, and the progress of evil in the old.—In proportion as our people are weakened, and resign themselves to each other’s dominion, population and agriculture will flourish inAmerica; and the arts make a rapid progress: And that country rising out nothing, will be fired with the ambition of appearing with glory in its turn on the face of the globe—O posterity! ye, peradventure, will be more happy than your unfortunate and contemptible ancestors.”—Mr.Justamond’s Translation.

[99]Had this interest been insufficient, it might have been increased a 16th or even an 8thper cent.without any material difference; or, (which would have been better) 3½per cent.might have been offered forfour fifthsof the sum borrowed, and 4per cent.for the remainder; in which case, the annuity payable by the public would have been 65,790l.

[100]It should be remembered here, that tho’ Government, when its debts are at a discount, may be able, with the consent of the creditors, to redeem a given capital by paying a less sum than that capital; yet it can never be obliged to paymore.—In other words; a 100l. capital in the 3per cents; 3½per cents; or 4, or 5per cents, Government is always at liberty to redeem by paying 100l. whatever the market price of it may be, and whether the creditors will consent or not.

[101]There is another very great advantage which would attend these annuities.—One and the samesurpluswould discharge a given capital in less time. For example. A surplus of a millionper ann.invariably applied, and the first payment to be made immediately, would discharge a capital of ahundred millionsbearing 3per cent.interest in 46 years. But if the same capital bore 3½per cent.interest, it would be discharged in 43½ years; if 4per cent.in 40 years; if 5per cent.in 37¼ years.—A capitallessthan a 100 millions, in the same proportion that the interest ismorethan 3per cent.and for which, therefore, the same annuity is paid, (as in the present case) the same surplus would discharge in 39 years, if the interest is 3½; in 34¼ years, if the interest is 4per cent.in 27¼ years if the interest is 5per cent.—Supposing, therefore, 75 millions borrowed in the manner of our Government, by creating a capital of a 100 millions bearing 3per cent.(that is, by selling 3per cent.stock for 75l. in money) which might have been borrowed by creating a capital of only 75 millions bearing 4per cent.(that is by selling 4per cent.stock at 100) there will not only be a loss of 25 millions by a needless increase of the capital; but also a loss of 14 millions, by an increase of the time in which one and the same saving will discharge the two capitals.—This may be proved in the following manner.—A million,per ann.will, in 34 years and a quarter, very nearly discharge a debt of 75 millions bearing interest at 4per cent.; but the same saving will, in the same time, discharge only a capital of 61 millions, if it bears interest at 3per cent.When, therefore, such a saving has compleated the redemption of theonecapital, there will remain unpaid of the other, 39 millions.—What has been now applied to a large sum holds true in proportion of any smaller sums.It appears from hence to be a very wrong observation which some have made; “that provided the annual charge is the same, it signifies little what theprincipalof the public debt is.”—As there is no way of removing the annual charge but by paying theprincipal, it is of just as much consequence what it is, as whether it is practicable or impracticable, to remove a burden which weakens and cripples, and must in time sink the public. An annuity ofSix Millions, if the principal isHundred Millionsborrowed at 6per cent.might be redeemed in 33 years with a millionper ann.surplus. But if the principal isTwo Hundred Millionsbearing 3per cent.the same surplus would, in the same time, pay off only 56 millions; and but little more than aquarterof the annuity would be redeemed. If, therefore, the same sum might as well have been obtained by creating a principal of a hundred millions bearing 6per cent.as by creating a capital of two hundred millions bearing 3per cent.there will be a needless expence, in discharging the debt, of 144 millions.

It appears from hence to be a very wrong observation which some have made; “that provided the annual charge is the same, it signifies little what theprincipalof the public debt is.”—As there is no way of removing the annual charge but by paying theprincipal, it is of just as much consequence what it is, as whether it is practicable or impracticable, to remove a burden which weakens and cripples, and must in time sink the public. An annuity ofSix Millions, if the principal isHundred Millionsborrowed at 6per cent.might be redeemed in 33 years with a millionper ann.surplus. But if the principal isTwo Hundred Millionsbearing 3per cent.the same surplus would, in the same time, pay off only 56 millions; and but little more than aquarterof the annuity would be redeemed. If, therefore, the same sum might as well have been obtained by creating a principal of a hundred millions bearing 6per cent.as by creating a capital of two hundred millions bearing 3per cent.there will be a needless expence, in discharging the debt, of 144 millions.

[102]The price of the 3per centsat the time of this loan (in the beginning of Feb. 1759) was 88½ and 89.

[103]The 3per centsjust before this loan were at 69l. and, consequently, 5per cent.interest, (or 3l.per ann.for 60l.) would have afforded subscribers a profit of 9l. for every 60l. advanced. The long annuity was worth, as the stocks then stood, 21 years purchase, and the short annuity, 13 years purchase. Upon the whole loan, therefore, the profit would have been 3per cent.

[104]That is, the difference between 12 millions, and the sum bearing interest at 3per cent.which a millionper ann.would pay off, in five years and a quarter.

[105]The 3per centsbeing at this time at 80l. an annuity of 3l. purchased for 75l. would have produced a profit of 5l. Therefore these schemes are of exactly the same value. But they are too narrow; and the subscription this year fell immediately to oneper cent.discount. But in the scheme I have proposed this might have been prevented by only offering 4per cent.for 77l. or 78l. (instead of 75l.) of every 100l.

[106]It is plain, that this capital, as well as the former, might have been a quarter (or 60,000l.) less, which would have made the whole saving of capital 2.060,000l.

[107]At the time of this loan, the 3per cents.were above 75; and, therefore, a perpetual annuity of 3l.could not be purchased for 75l.and an annuity of 1l.2s.6d.for 99 years, was worth at least 27l.This, therefore, would have been a scheme very profitable to subscribers.

[108]The life-annuity granted in this case could not have been worth so little as 16l.or 14 years purchase; and, therefore, a capital of 100l.in the 3per centswas sold for 84l; or a capital of three millions, for 2.520,000l.—A premium, therefore, was granted of 480,000l; and this was done without the least reason. For the 3per centsbeing at that time at 87 and 88, 2.520,000l.would undoubtedly have been lent at 3½per cent.interest; and the remaining 480,000l.necessary to make up three millions, would have been given for the life annuities; in which case, the annual charge occasioned by the new capital would have been somewhat less; and 480,000l.would have been saved, together with the additional expence occasioned by the longer time which a given surplus would require to discharge a debt bearing 3per cent.interest, as explained in the note,p. 94.

[109]It is a general and certain maxim “that whenever money is borrowed by a lottery which gives a right tostockequal to the sum advanced, there is a loss equal to the sum which might have been received for the profits of the lottery.”—When the 3per cents.are at 76 or 77, half a million might be borrowed by a lottery, consisting of 50,000 tickets, each of the same value with 10l. threeper cent.stock: and hitherto such a method of borrowing has been reckoned advantageous. But it only gives a fallacious appearance of borrowing at 3per cent.It is the same with selling the profits of a lottery, and at the same time absurdly converting the purchase-money into a debt due to the purchaser.—Since the last war we have had seven of these lotteries, including two in 1763; and above a million has been lost by them.In QueenAnne’s time, there were several lotteries, consisting of allprizesand noblanks. This is so curious, and most persons may be so much at a loss to conceive of the possibility of it, that I cannot help explaining it.A capital, equal to the whole money advanced, was distributedequallyamong all the tickets in the lottery; and, in order to make them prizes of different values, there was farther distributed among them different shares of an additional capital, to which a right was given, though no money had been paid for it.—For example—In 1711, two millions were raised by a lottery of this kind, called a class lottery. The whole sum advanced was divided into 20,000 tickets, each 100l.stock bearing 6per cent.interest. This capital was increased by a gratuitous capital of 602,200l.bearing the same interest, and divided into shares which were added to the tickets, in order to form prizes.—This was the same with giving near 8per cent.for money, besides apremiumof 30per cent.—As the interest of money was at this time 6per cent.the sum borrowed would most certainly have been advanced at 8per cent.without anypremium; but it was, I suppose, reckoned necessary that government should notseemto give such high interest.—In the same year, 1.500,000l.was borrowed by another such lottery, and creating a capital of 1.928,570l.And in 1712, 3.600,000l.was borrowed by two more such lotteries, and creating a capital of 4.683,080l.—The greatest part of the debts contracted by these lotteries (amounting to 9.213,850l.though only 7.100,000l.was advanced) remains at this hour an incumbrance on the public; and the duties constituting thegeneral fundare charged with the interest of it.In 1714, the national interest was reduced to 5per cent.But in that very year 1.400,000l.was borrowed by a lottery, which gave a right to a capital of 1.876,000l.bearing 4per cent.that is, by giving near 5½per cent.interest, besides apremiumof 34per cent.—Thus have our debts been increased. But even worse has been done. The taxes charged with the interest of the public debts proving often deficient, the shortest way of discharging the arrears has been often taken, by adding them to the principal, and payingcompoundinterest for money.—Is it a wonder, that a nation which has been so careless in contracting debts, should have done so little towards discharging them?

In QueenAnne’s time, there were several lotteries, consisting of allprizesand noblanks. This is so curious, and most persons may be so much at a loss to conceive of the possibility of it, that I cannot help explaining it.

A capital, equal to the whole money advanced, was distributedequallyamong all the tickets in the lottery; and, in order to make them prizes of different values, there was farther distributed among them different shares of an additional capital, to which a right was given, though no money had been paid for it.—For example—In 1711, two millions were raised by a lottery of this kind, called a class lottery. The whole sum advanced was divided into 20,000 tickets, each 100l.stock bearing 6per cent.interest. This capital was increased by a gratuitous capital of 602,200l.bearing the same interest, and divided into shares which were added to the tickets, in order to form prizes.—This was the same with giving near 8per cent.for money, besides apremiumof 30per cent.—As the interest of money was at this time 6per cent.the sum borrowed would most certainly have been advanced at 8per cent.without anypremium; but it was, I suppose, reckoned necessary that government should notseemto give such high interest.—In the same year, 1.500,000l.was borrowed by another such lottery, and creating a capital of 1.928,570l.And in 1712, 3.600,000l.was borrowed by two more such lotteries, and creating a capital of 4.683,080l.—The greatest part of the debts contracted by these lotteries (amounting to 9.213,850l.though only 7.100,000l.was advanced) remains at this hour an incumbrance on the public; and the duties constituting thegeneral fundare charged with the interest of it.

In 1714, the national interest was reduced to 5per cent.But in that very year 1.400,000l.was borrowed by a lottery, which gave a right to a capital of 1.876,000l.bearing 4per cent.that is, by giving near 5½per cent.interest, besides apremiumof 34per cent.—Thus have our debts been increased. But even worse has been done. The taxes charged with the interest of the public debts proving often deficient, the shortest way of discharging the arrears has been often taken, by adding them to the principal, and payingcompoundinterest for money.—Is it a wonder, that a nation which has been so careless in contracting debts, should have done so little towards discharging them?

[110]That is, in other words; there is no one who would not be glad to lend to government on any higher interest than that which he can make in the funds. There is no one, for instance, who would not be glad to lend 75l.at 4per cent.when the 3per cents.are at 76, and when, therefore, he cannot make 4per cent.by purchasing them.

[111]The expectation of receiving back some time or other the purchase-money would probably, in private loans, influence a purchaser. But in the cases to which I allude, this certainly was not considered, and did not at all influence. And if it had influenced, the observations I have made as I have gone along, demonstrate that the same loans would have been made without any such expectation.

[112]See the Postscript.

[113]Sixteen Millionshave been specified. It will come in my way to mention aboveFour Millionsmore in the second section of the next part. Notes 1, 12, 14.—No notice has been here taken of the loans of the war before the last; but losses of the same kind to a great amount were incurred by them.

[114]In the exports, as delivered to theHouse of Commons, is included bullion exported. If this, as well as the other sums I have mentioned, is deducted, there will be still a balance left in favour ofBritainduring this period. Since 1764, it does not appear, from the accounts laid before theHouse of Commons, as published by SirCharles Whitworth, that any bullion has been entered for exportation.

[115]The 3per cent.annuities were then at 105; and, during the first five years of the war which began in 1755, they were higher than they have generally beensincethe war.

[116]These duties were appropriated to the payment of the interest at 4per cent.of a capital of 4.400,000l. created in 1747, for which four millions only had been advanced. It is now a part of the capital of the reduced 3per cent.annuities.

[117]The whole of this sum, (except 16.437,821l. consisting of the old Bank capital, the consolidated 3per cents, the South-Sea 3per cent.annuities 1751, the Civil List million, and the East-India annuity) that is, 54.413,433l. was reduced by 23 Geo. II. 1749. from an interest of 4per cent.to 3½ till 1757, and afterwards to 3per cent.—The proprietors of a capital of 3.290,042l. refused to consent to this reduction, which, therefore, was paid off; 1.190,042l. withExchequerBills (afterwards cancelled); and 2.100,000l. with money borrowed at 3per cent.and added to the capital of theSouth-Seaannuities. The whole sum, therefore, reduced and paid off, was 57.703,475l. which produced a saving to the public, and an addition to the Sinking Fund after 1757, of 612,735l.per ann.TheSalt Dutiesin 1753 had been for some time mortgaged to pay the principal and interest of a million borrowed in 1745. In 1757, after clearing the mortgage, they became free, and were carried into the Sinking Fund, of which they have ever since formed a part. This produced a farther addition to theSinking Fund, after 1757, of about 220,000l.per ann.I have not included the million now mentioned in the account given above of the public debts in 1753, because it was in a fixed course of redemption; nor have I included 499,600l. in Exchequer Bills charged on the duty on sweets, because these Exchequer Bills were paid off in 1754.

TheSalt Dutiesin 1753 had been for some time mortgaged to pay the principal and interest of a million borrowed in 1745. In 1757, after clearing the mortgage, they became free, and were carried into the Sinking Fund, of which they have ever since formed a part. This produced a farther addition to theSinking Fund, after 1757, of about 220,000l.per ann.

I have not included the million now mentioned in the account given above of the public debts in 1753, because it was in a fixed course of redemption; nor have I included 499,600l. in Exchequer Bills charged on the duty on sweets, because these Exchequer Bills were paid off in 1754.

[118]Having met with no account of the Navy Debt at this time, I have chosen, rather than omit it, to suppose it nearly the same that it was at the commencement of the last war; which, probably, is reckoning it too high.

[119]In this account I have omitted a million borrowed in 1734, because the redemption of it was near being completed by the Salt Duties. I have also omittedShort Annuitiesamounting to 24,334l. being the remainder of 9per cent.annuities for 32 years created in 1710, because the term for which they were created was near expiring.

[120]The author of theConsiderations on the Trade and Finances of this Kingdommakes this debt 1.318,000l. more than the sum at which I have here stated it. See page 22; andState of the Nationby the same author, page 15, quarto editions.—The reason of this difference is, that this writer has included in the unfunded debt left by the war the deficiencies of grants and funds in 1763 and 1764, and thewholearmy debt not provided for in those years; whereas I have excluded the former entirely; and admitted only as much of the latter as exceeded the army debts common in subsequent years. See the Postscript.

[121]In 1751 there was applied to the payment of Navy debts 200,000l. and in 1752, the sum of 900,000l. But I have not reckoned these sums, because they did little more than make up the constant deficiency in thePeace Establishmentfor the Navy.

[122]See the Postscript.

[123]“Either the nation (Mr. Hume says) must destroy public credit, or public credit will destroy the nation.” Political Essays, page 135.

[124]The number of inhabitants inFranceis 26 millions. InBritainit cannot exceed six or seven millions. Seep. 66. AndObservations on Reversionary Payments, page 185, third edition.

[125]Near one half of all this importation is made intoBourdeauxonly; and the rest intoRochelle,Marseilles,Nantz,Havre, andHonfleur.

[126]In order to defray the expence of coinage, a duty of 10s.perton has been laid on wines imported; and, as far as this duty happens to fall short of 15,000 l. the deficiency is made good out of the supplies.

[127]I am not able to give the exact amount of this part of the appropriated revenue. I have, therefore, reckoned it at such a round sum, as, I think, cannot much exceed or fall short of it.

[128]The Land-tax at 3s. is given by Parliament for 1.500,000l.; and the Malt-tax for 750,000l. but they are always greatly deficient.—Both these taxes (and also sometimes the income of the Sinking Fund) are borrowed of theBank, and spent long before they come into the Exchequer; and therefore, are debts constantly due to the Bank, for which interest is paid.

[129]The account given by Lord North at opening the Budget in 1775, was, that the public debt had been diminished since 1763, near nine millions and a half. The grounds on which I have stated this diminution at 10.639,793l. may be seen in thePostscript, (p. 171).

[130]Four of these lotteries have been annexed to annuities; but it would be a great mistake to think that they have not been equally profitable with the other lotteries. For instance; in 1767, a million and a half was borrowed on an annuity of 45,000l. with a lottery of 60,000 tickets annexed. In the same year, 2.616,777l. was paid off; but, had it not been for the lottery, only 1.350,000l. could have been raised on the annuity; and 150,000l. less must have been paid off.

[131]The discounts on a million and a half paid off in 1772, and two millions paid off in 1774 and 1775, amounted nearly to this sum.

[132]The particular sums may be found in a pamphlet, entitled,The Present State of the Nation, p. 28, quarto edition. But I have not included all the sums there enumerated; nor have I admitted the Army savings in 1772, and some other smaller sums.

[133]This surplus, being the medium for the whole 12 years of peace, is less than that inp. 160, which is the medium at the end of this period, when the Sinking-Fund produced above a quarter more than it did at the beginning of it.

[134]I have here taken the average of two years before and after 1766.

[135]The annual medium of the payments into the Exchequer from theCustomsinEngland, for the last five years, has been 2.521,769l.—In 1774 the payment into the Exchequer was 2.547,717l.—In 1775, it was 2.476,302l.—The produce of theCustoms, therefore, has been given rather too high.The produce of theExcisesin England has been higher, in 1772 and 1775, than in any two years before 1776; but the average of any three successive years, or of all the five years since 1770, will not differ much from the sum I have given.—In 1754, or the year before the last war, theCustomsproduced only 1.558,254l.—The Excises, exclusive of the Malt-tax, produced 2.819,702l,—And the whole revenue, exclusive of the Malt-tax and Land-tax at 2s. was 5.097,617l.—In 1753 the whole revenue was 5.189,745l. And the appropriation or annual charge upon it, (consisting of the Civil List, 834,443l. interest of the national debt, exclusive of navy debt, 2.628,087l. expences of management, 43,691l. 4½per cent.from the Leeward Islands 27,378l. annuity to the late Duke of Cumberland 25,000l. first-fruits and tenths of the Clergy 13,597l. &c. &c.) was 3.733,713l. The Sinking-Fund, therefore, produced 1.456,000l.; which, added to 1.500,000l. (the neat produce, at that time, of Land at 2s. and Malt-tax) made the unappropriated revenue 2.956,032l.—The expence of the peace establishment, consisting of 10,000 seamen, and 18,857 landmen, was, in 1753 and 1754, (including an allowance for the increase of the Navy-debt) 2.400,000l. nearly; which left an annual surplus in the national income of 556,000l.withoutlotteries, and land at 2s. This surplus (with land at 3s.) has of late scarcely exceeded 300,000l.; and, therefore, has not been aTHIRDof what it was in the last peace, and before the reduction of interest to 3per cent.was compleated.

The produce of theExcisesin England has been higher, in 1772 and 1775, than in any two years before 1776; but the average of any three successive years, or of all the five years since 1770, will not differ much from the sum I have given.—In 1754, or the year before the last war, theCustomsproduced only 1.558,254l.—The Excises, exclusive of the Malt-tax, produced 2.819,702l,—And the whole revenue, exclusive of the Malt-tax and Land-tax at 2s. was 5.097,617l.—In 1753 the whole revenue was 5.189,745l. And the appropriation or annual charge upon it, (consisting of the Civil List, 834,443l. interest of the national debt, exclusive of navy debt, 2.628,087l. expences of management, 43,691l. 4½per cent.from the Leeward Islands 27,378l. annuity to the late Duke of Cumberland 25,000l. first-fruits and tenths of the Clergy 13,597l. &c. &c.) was 3.733,713l. The Sinking-Fund, therefore, produced 1.456,000l.; which, added to 1.500,000l. (the neat produce, at that time, of Land at 2s. and Malt-tax) made the unappropriated revenue 2.956,032l.—The expence of the peace establishment, consisting of 10,000 seamen, and 18,857 landmen, was, in 1753 and 1754, (including an allowance for the increase of the Navy-debt) 2.400,000l. nearly; which left an annual surplus in the national income of 556,000l.withoutlotteries, and land at 2s. This surplus (with land at 3s.) has of late scarcely exceeded 300,000l.; and, therefore, has not been aTHIRDof what it was in the last peace, and before the reduction of interest to 3per cent.was compleated.

[136]This article was omitted in the former editions of thisPostscript; and its insertion here makes the diminution of the public debts, since 1763, half a million less than the sum at which it is taken inp. 104and108.—It might have been proper also to add, the excess of Navy debtscontractedabove the Navy debtsdischarged, from 1763 to 1775; and had this been done, the surplus inp. 165, would have been reduced to 150,000l.

[137]SeeThe Present State of the Nation, page 26.

[138]This article was omitted in the first editions of thisPostscript.—It might have been proper to add, the excess of Navy debtscontractedabove the Navy debtsdischarged, from 1763 to 1775; and had this been done, the surplus inp. 166, would have been reduced to 150,000l.per ann.

[139]Or, for every 105l. contributed, 100l.STOCKirredeemable for 10 years might have been given, carrying 4¼per cent.interest, with the same short annuity and a lottery ticket annexed; and then the new capital would have been 4.762,000l. carrying (at 4¼per cent.) 202,385l.per ann.interest. The amount of the short annuity would have been 23,810l. and the number of lottery tickets 47,620.

[140]211,375l. the interest at 4½ of 4.750,000l. and 12,500l. a short annuity of aQUARTERper cent.annexed to every 100l. contributed, make 223,875l. This last sum, therefore, would have been the annual charge for 10 years; and the first sum the annual charge after ten years till redemption.

[141]Ten payments of 9,650l. and seventeen payments of 34,375l. make 680,875l.

[142]It may be worth observing, that during this whole war they never fell below 82, except for a few months during the rebellion in 1745; that after thePeacein 1748 they rose to 105, and in the succeeding war never fell so low as they are now, except in the two last years; that after thePeacein 1763 it was expected they would again rise abovepar; but that, instead of this, they have in general during the whole peace kept 12 or 13per cent.belowpar, and 15 or 16per cent.below the price they bore before the two last wars.—One of the reasons of the great alteration which has taken place since the last war is, I think, pointed out in the 3d Section of the 3d Part of this Tract.

[143]Since the reduction in 1749 there has been noFOURper cent.capital created except that of the last year.

[144]What is here said has been verified, in the particular instance of amillion and a halfborrowed in 1756, which was to carry 3½per cent.interest till 1771, and then to become redeemable.—During the last war, and for about three years after the commencement of peace, there was a general expectation that theTHREEper cents.would rise aboveparas they had done in the former peace; and while this expectation continued, this stock reckoned no better than aTHREEper cent.stock with a short annuity of ahalf per cent.annexed; and for this reason it bore, during that period, a lower price than another stock of 4 millions and a half which was to bear the same interest till 1782, and then to become redeemable, and to sink to an interest of 3per cent.—In the latter end of 1767 and beginning of 1768 the price of the former stock rose above that of the latter, and continued not far fromparfrom that time to the time of its redemption in 1771. The reason must have been, that being a small stock bearing a higher interest than the other stocks, it was expected, that it would be paid off atpar, and therefore with a considerable profit, as soon as it became redeemable; which accordingly happened. See Postscript, (page 177).

[145]Nothing has been more undervalued in theAlleythanAnnuities on lives. They have been always granted, very unreasonably, without any limitation of age; and their value has been taken at no more than 12 or 13 years purchase; tho’ really worth one with another 16 or 17 years purchase. This is a strong reason for preferring short annuities to them in all schemes for raising money. Short annuities for 21 years will be taken for as much as life-annuities; and yet experience has proved that in this time not aquarterof the life-annuities will drop; and the whole expence brought by them on the public will not be removed in less than 70 or 80 years. See Note 15, (Page 134).

[146]I would except here the first reduction in 1717. This was then necessary to gain a fund for sinking the public debts; and had the fund thus gained been applied, as the laws required, invariably to this purpose, and all farther reductions been avoided, we should now have been burthened with no debts.

[147]That is; never capable of being redeemed by substituting one debt for another; or of being saved from redemption by accepting lower interest.

[148]Supposing the 3per cents.sold at 76½, the capital necessary to produce 4.850,000l. in money would be 6.339,869l. the interest of which at 3per cent.is 190,195l.

[149]When the amount of interest, payable for a sum obtained by selling a 4per cent.capital, is the same with the amount of interest, payable for an equal sum obtained by selling a 3per cent.capital, which is nearly the present case, postponing, in the manner I have proposed, the redemption of the former, becomes as indifferent as it would be to postpone in the same manner the redemption of any 3per cents.

[150]In this case only aFIFTHof thesurplusto be at any time employed in redeeming debts could be applied to the redemption of thisparticularloan. The rest after nine years might be employed in redeeming the 4per cent.stock created last year; or jointly with it, such parts of future loans bearing high interest, as, in borrowing on the same plan, might be left redeemable. And thus no obligation would arise from this mode of borrowing to prefer the redemption of 3per cents.to the redemption of capitals bearing higher interest. In particular; had this been the plan of borrowing through the last war, all surplus monies might have been ever since employed intirely in paying off 4, 4½ and 5per cent.capitals preferably to any others; and at the same time, nodouceurswould have been granted in order to procure the loans, no artificial debt contracted, or extraordinary charge incurred.

[151]Should this be disregarded, and a long annuity offered, as adouceur, of 1½per cent.for 90 or 100 years,eight millionsmight perhaps be borrowed at an interest, including the long annuity, of 4½per cent.even though the 3per cents.should fall as low as 73.—And this, probably, would be the very scheme a minister would prefer, who, minding chiefly present ease, did not care how much he burdened the nation hereafter.

[152]In 1774, a million of the 3per cents.was redeemed at this price; and in 1772, a million and a half at 90.

[153]I mean such a course of redemption as should not be liable to interruption by aWAR; or, as would be the effect of the establishment of such an unalienablesinkingfund as has been described in theAppeal to the Public on the Subject of the National Debt, and theObservations on reversionary Payments.—Nothing can save us from bankruptcy but such a fund; and were it established, the 3per cents., when they came to be redeemed, would soon rise topar; and, consequently, the obligation implied in this scheme to pay a part of them atparwould occasion no additional expence. It is, however, so little to be expected, that such a fund will be ever established, that it would have been folly to have made the calculation given above, on any supposition less favourable, than that the 3per cents.will bear the same price after the present war, that they bore after the last; and that we shall go on as we have hitherto done, paying off amillion, or amillion and a half, now and then in a time of peace.

[154]The conversion of a 3per cent.stock into a 3½per cent.stock gives the same advantage in redeeming it, that the power of redeeming it at 85¾ for every 100l. would give.—A millionper ann.surplus would redeem 114 millions and a quarter of the latter stock in the same time, and therefore at the same expence, that it would redeem 100 millions of the former. I suppose here the 3per cents.paid atpar; and this I have before observed will be found to be necessary should a time (scarcely the object of hope) ever come when government will set itself in earnest and with any effect to pay the public debts.

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