Notescontaining anExplanationandHistoryof the different Articles in the foregoing Account.
Note(1)—Bank Old Capital. SeePage 119.—TheBankwas established in 1694. Their original capital was 1.200,000l.bearing 8per cent.interest, charged on 5/7ths. of 9d.perbarrel excise, with 4000l.per ann.for management.—In 1709, they lent to government 400,000l.without interest, which increased their old capital to 1.600,000l.bearing 6per cent.interest. In 1742, they again lent to government 1.600,000l. without interest; and thereby increased this capital to its present amount, or to 3.200,000l.bearing 3per cent.with the same annual sum for management.—It is of particular importance to observe with respect to the sums of 400,000l.and of 1.600,000l.just mentioned, that they were properly a compensation from theBankto the public for continuing their exclusive privileges; and would have been advanced, or at least the greatest part of them, though government had not bound itself to return the purchase money, by making it a part of the principal due to theBank, provided the same interest had been continued for some time on their former principal, and the same liberty granted to increase theirstock.—The like is true of 1.200,000l.advanced by theIndiaCompany without interest in 1708.—In these instances, therefore, a needless addition was made to the public debt of 3.200,000l.which, had it been avoided, the public would have had not only a principal so much less to pay; but it would have saved in interest at least 96000l.per ann.for the old capital of theBankand the capital of theEast IndiaCompany would have formed, in this case, between them, a debt of only 3.200,000l.(instead of 6.400,000l.) the interest of which might long ago have been reduced at least one half; or from 8per cent.the original interest, to 4per cent.
Note(2)—Half a million, part of theBank Capital. SeePage 119.—This part of the Bank capital consisted originally of two millions inExchequerbills, cancelled for government by an act of the 3d ofGeo.I. But half a million was discharged in 1729; and a million in 1738.
Note(3)—Four millionspurchased of theSouth-Sea Company; part of theBankCapital. SeePage 119.—In order to procure this money, theBanksold new stock at 18per cent.premium. This produced a saving of 610,169l.the sale of 3.389,831l.stockhaving produced four millions inmoney. And, consequently, though by this transaction the capital for which they received interest was increased four millions, yet thestockon which they made their dividends was increased only 3.389,831l.
Note(4)—Bank StockandDividend.—Thestockon which theBankdivides is only 10,780,000l.This dividend varies as their profits vary; but for several years it has been 5½per cent.payable half-yearly atLady-dayandMichaelmas. Their whole annual dividend is, therefore, 592,900l.which subtracted from 350,604l.the interest paid by government, makes their clear annual profit 242,296l.—Besides interest, they receive for management of their capital 4000l.per ann.on account of their old capital, and 1,898l.per ann.on account of four millions purchased of the South Sea Company; in all, 5,898l.per ann.—TheBankreceives farther the sums specified in the foregoing account, towards bearing the expences of managing the annuities commonly calledBank Annuities. All these expences, including the sums granted for managing their capital, amount to 54,645l.per ann.
Note(5)—Consolidated4per cent.Bank Annuities. SeePage 120.—The capital of these Annuities consists of two loans, one in 1760, and the other in 1762, consolidatedinto one stock, and charged on the additional duty of 3d.per bushel on malt, the surplus of the duties on spirituous liquors, and the additional duties on windows; all which duties were ordered by 2d Geo. III. to be carried to the Sinking Fund, and the interest with which they were charged to be paid out of that fund.—I have made some remarks on these loans inpage 96, andpage 99. They amounted to 20.240,000l.But 1.253,700l.of this capital was changed in 1770, from an interest of 4 to 3per cent.and the capital reduced to the present sum.—A more full account of these annuities may be found in Mr.Ashmore’s Analysis of the several Bank Annuities, p. 17.
Note(6)—Consolidated3per cent.Bank Annuities. Seepage 121.—The capital of these annuities is made a distinct stock from that of the annuities calledReduced, because it never bore a higher interest than 3per cent.—It consisted originally of the following loans—37,821l.remaining in 1727, of 3per cent.annuities, granted in lieu of St.Christopher’s andNevisdebentures—800,000l.borrowed in 1731—600,000l.borrowed in 1736—300,000l. in 1738—6.400,000l. in 1742, 1743, 1744 and 1745, and charged on additional duties on spirituous liquors, wines, vinegar, &c.—1.000,000l.borrowed in 1750—24.490,000l.borrowed in the course of the last war, and funded on the additional duties on beer, houses, stamps, &c.—4.900,000l.borrowed in 1766, 1767 and 1768—And 1.253,700l.of the 4per cent.annuities, subscribed into the 3per cent.annuities in 1770.
All these loans were by 25 Geo. II. 1751, and several subsequent Acts of Parliament, consolidated into one joint stock; and carried, with the duties for paying the interest, to theSinking Fund. And in 1770, they formed a capital of 39.781,521l.which has been since reduced, by the payments mentioned in thePostscriptat the end of this tract, to the sum specified in the account to which this note refers.—See a morefull account in Mr. Ashmore’s Analysis, &c. from page 5 to page 11.
Note(7)—Reduced3per cent.Bank Annuities. Seepage 121.—The capital of these annuities consisted, in 1749, of loans in 1746, 1747, and 1748, and navy, ordnance and transport debts funded in 1749, amounting to 18.402,472l.and all bearing 4per cent.interest.—By the 23d of Geo. II. 1749, these loans were reduced to an interest of 3per cent.and by the great consolidating Act in 1751, they were converted into one stock, and carried into the Sinking Fund with the duties on carriages, and the additional duties on glass, spirituous liquors, houses, windows, stamps, merchandize imported, &c. which had been granted for paying the interest.—In 1751, certain exchequer tallies and orders, amounting to 129,750l.were subscribed into this stock; and in 1765, navy bills to the amount of 1,482,000l.were subscribed into it, which made its whole original amount 20.014.222l.—In 1751, there was paid off 830,898l.being stock which had not been subscribed agreeably to the Act in 1749 for reducing interest; and in 1772, 1774, and 1775, so much more of this stock was paid off as reduced it to its present amount.—See Mr. Ashmore’s Analysis, p. 12-16.
Note(8)—Civil List million. Seepage 121.—The income settled upon King George I. for his civil list, was 700,000l.—In 1720, there had been granted him besides, from theRoyal ExchangeandLondonAssurance companies, 300,000l.And in 1726, this million was farther granted towards paying off his debts.
Note(9)—Bank Long Annuity. Seepage 122.—This annuity consists of 128,250l.per ann.for 99 years, given in 1761, as apremiumto the subscribers of 11.400,000l.at 3per cent; and of 120,000l.per ann.for 98 years, given in 1762, as a premium to the lenders of twelve millions at 4percent.Seepage 95and100. It is charged, together with the loans to which it was annexed, on theSinking Fund.—Its value in the Alley is about 25 years purchase; but the remaining term is really worth 27 years purchase, reckoning interest at 3½, (or the 3per cents.being at 85¾.) But when interest is at 4per cent.or the 3per cents.are at 75, it is worth only 24 years purchase.—When this annuity is called apremium, it must not be imagined, that no compensation was given for it. Government received the value of it; but, at the same time, made itself a debtor for that value. And, what is very surprizing, this has been uniformly practised with respect to all the premiums or douceurs granted by government; and the consequence has been, that great and needless increase of the public debt explained in the 3d section of the 2d Part.
Note(10).—South-Sea Stock and Annuities. Seepage 122.—These four capitals amounting to 25.984,684l.13s.consist almost entirely of the remainder of debts contracted in the reigns ofKing Williamand QueenAnne. The following account will probably give sufficient information concerning them.
In 1711, Lord Oxford being minister, the proprietors of certain navy, army, ordnance and transport debts, to the amount of 9.177,968l.including arrears of interest, and half a million for the current supplies, were incorporated into a company for trading to theSouth-seas. They were allowed 6per cent.interest for this debt, with 8000l.per ann.for management; and the duties on wine, tobacco,East-Indiagoods, candles, &c. were made perpetual, and granted as aFund(ever since called theSouth-sea Company’s Fund) for paying the interest. This kept up public credit at the time, and has been called theEarl of Oxford’s master-piece.—By the 1st of Geo. I. 822,032l.consisting chiefly of interest payable on the Company’s capital, was added to the capital, in consequence of which it was increased toTEN MILLIONS, (ever since called theiroriginal capital) bearing 6per cent.interest.—In 1717, they agreed to take 5per cent; and this was the first great reduction of interest, which in conjunction with the same reduction of the other redeemable debts almost all carrying 6per cent.laid the foundation of theSinking Fundestablished in this year. But it is remarkable, that so fast did interest fall at this time, that the price ofSouth-sea stock, notwithstanding this reduction, rose from 101 to 111.—In 1719, theSouth-seacapital was increased to 11.746,844l.bearing 5per cent.interest (with an addition of 1,397l.9s.to their former allowance for management) by advancing to government 544,142l.and by the proprietors of 94,329l.12s.lottery annuities for 32 years granted in 1710, accepting in lieu of them 1.202,702l.South Sea stock.—In 1720, the agreement was made by government with the South Sea Company, which produced the greatSouth Sea bubble.—There existed at that timelongannuities to the amount of 666,821l.8s.andshortannuities, for 32 years from 1710, to the amount of 127,260l.6s.The proprietors of these annuities were allowed to subscribe them into theSouth Seatrading stock; and the Company, for every 100l.of thelongannuity which should be subscribed, were to receive from government an addition to their capital of 2000l.bearing 5per cent.interest till 1727, and afterwards 4per cent.till redeemed: and for every 100l.of theshortannuities, they were to receive an addition to their capital of 1400l.bearing the same interest.—They were besides to take in the redeemable debts to the amount of 16.546,482l. and to receive an addition to their capital of 100l.for every 100l.subscribed.—By the subscription of thelongandshortannuities which followed this agreement, a capital due from government to the Company was created, which was greater by 3.034,769l.than the original sum advanced for the annuities subscribed. And as much of these annuities and of the redeemable debts were subscribed, as increased theSouth Seatrading capital to 37.802,203l.—In 1722, four millions of this capital waspurchased by theBank, (See Note 3.) which reduced it to 33.802,203l.—By 9 Geo. I. 1723, this remaining capital was divided into two equal parts, one of which alone (or 16.901,101l.) was ordered to be the trading capital of the Company, and the other part was directed to be calledSouth Sea Annuities.—In 1733, theSouth Seatrading capital had been reduced by payments at different times to 14.651,137l.12s.By an Act of Parliament in that year, this remaining stock received a farther division; and only a fourth part, or 3.662,784l.was allowed to be the Company’s stock; and the other three parts, or 10.988,353l.were directed to be calledNewSouth Sea Annuities, in order to distinguish them from the former annuities, which have ever since gone under the name ofOldSouth Sea annuities.—From 1733, to the present time,South Sea Stockhas continued the same; but the capital of theOldSouth Sea annuities has been reduced, by redemptions, to 11,907,470l.and of theNewSouth Sea annuities, to 8.494,830l.And of the wholeSouth Seadebt, which in 1722 was 33.802,203l.there has, since that year, been paid off in all 9.737,119l.This should have reduced it to 24.065,081l.but it is in reality 25.984,685l.The reason of this is, that the diminution just mentioned of theSouth Seadebt was made in part with money borrowed in 1751, to pay off such proprietors of South Sea annuities as had refused to consent to the reduction of interest proposed to them in 1749. The sum borrowed for this purpose was 2.100,000l.bearing 3per cent.with 1181l.5s.for management. This debt is now reduced by redemptions to the sum specified in the preceding account; or to 1.919,600l.
Note(11).—East-India Stock. Seepage 123.—In 1698, a company of merchants, in consideration of two millions lent to government at 8per cent.were incorporated, and entitled to the sole privilege of trading to theEast-Indies.—These two millions formed the first capital of the presentEast-IndiaCompany.—In 1702, an old company of traders to theEast-Indieswas united to this company; and in1708, these united companies lent to government 1.200,000l.without additional interest, which made their capital 3.200,000l.bearing 5per cent.—In 1730, this interest was reduced to 4per cent.and by the 23d Geo. II. 1749, to 3per cent.—The salt duties, and some additional stamp duties, were at first charged with the annuity due on this capital; but at present the duties constituting the aggregate fund are charged with it.
Note(12).—East-India Annuity. Seepage 123.—The capital of this annuity was advanced to government in 1744, at 3per cent.and, in consideration of this loan, the exclusive charter of the Company was continued to Lady-day 1783, at which time it is to cease, provided three years notice has been given, and the debt due from government discharged.
An observation here forces itself upon me, which I have often had occasion to make.—Part of this loan was a compensation from theEast-IndiaCompany for prolonging the term of its charter; and, therefore, ought not to have been included in the loan. The Company would have lent 750,000l.on the interest common at the time, or 4per cent.and the remainder would have been advanced as a gratuity.—It is a pity those who managed these contracts for the public, did not attend to the absurdity and extravagance of making adebtof purchase money, andborrowingin the very act ofselling.
Note(13).—Exchequer Long Annuities. Seepage 123.—These are thelongannuities which, in 1720, remained unsubscribed to the South Sea Company. See Note 10.—They consist first of annuities to the amount of 54,900l.14s.6d.purchased by the 4th, 5th, and 6th ofWilliamandMary, for 96 years, from January 1695, with the addition of 1350l.per ann.for salaries to exchequer officers. These annuities were originally 14per cent.life-annuities. By the 6th and 7th ofWilliamandMary, in order to raise more money, these annuitants, or any otherpersons for them, were offered a reversionary interest in the annuities after the failure of the lives, till the end of 96 years from January 1695, on paying 4½ years purchase, (that is 63l.) for every annuity of 14l.—The predecessors of the present company of theMillion Bank(so called from theMILLIONlottery 1694, in which they were some of the principal adventurers) purchased 30,669l.4s.of these reversionary annuities. The life annuitants being now reduced to a very small number, almost the whole of this annuity is lapsed to thecompany; and though they have divided for several years 5per cent.on a capital of half a million, yet their growing savings, from the falling in of lives, have been such, that, when their annuity ceases in 1791, they will, I am informed, have accumulated a fund considerably larger, than the capital on which they have made their dividends. But to return.
TheseExchequerAnnuities consist farther of
The original sum contributed for these annuities was 1.836,276l.They are even now worth more than this sum. The public has already paid aboveTEN MILLIONS; and by the time they are all extinct, it will have paid aboveTHIRTEEN MILLIONS, on their account. This is great extravagance; but it is nothing to the extravagance constantly practised of borrowing on perpetual annuities, without putting them into a fixed course of redemption.
Note(14).—Tontineby an act of 6 Geo. III. Seepage 124.—The intention of this Act was to raise 300,000l.towards paying off navy bills, by offering to subscribers for every 100l.advanced, an annuity of 3l.for their lives, with benefit of survivorship. But the scheme did not succeed, and only 18000l.was subscribed.
Note(15).—Life Annuities. Seepage 124.—The annuities ontwolives in 1694, were sold at 12l.per ann.duringtwolives, of any ages, and the annuities onthreelives, at 10l.per ann.during three lives, for every 100l.advanced.—This was very extravagant; for, supposing the annuitants in general, about the age of 20 or 30, it was the same, in the case oftwolives, with giving above 10per cent.for money, and in the case ofthreelives, 9per cent.—It is, likewise, extremely absurd in these cases to pay no regard to difference of ages. Asinglelife at the age of 60, supposing money improved at 4per cent.is intitled to 11per cent.but at the age of 10, scarcely to 6per cent.Twolives at 60, are entitled, on the same supposition, to 8½per cent.but at 10, not to 5per cent.—The original amount of these annuities was 22,700l.nearly. In 1762, that is, in 68 years, they were reduced by deaths no lower than 9,215l.
The other life-annuities mentioned in the preceding account weredouceursgranted for loans in 1745, 1746, and 1757. An account of the annuities granted in the last of these years may be seen inpage 101.
The life-annuities in 1745, amounted to 22,500l.and were granted, together with the profits of a lottery, for a loan of two millions at 4per cent.
The life-annuities in 1746, amounted to 45,000l.and were granted, with the profits of another lottery, for a loan of three millions, at the same interest.—The remarks made in the 3d section of the last part, and particularly in the note,p. 101, are applicable to these two loans. The value of the life-annuities, and the profits of the lotteries, were made a part of the public debt. And, supposing the life-annuities worth, one with another, only 14 years purchase, and the profits of the two lotteries worth 300,000l.it will follow, that the capital created by these loans, instead of being 5.000,000l.should have been only 3.755,000l.
But there is another remark, which it is proper to mention here. The life-annuities granted in 1757, amounting to 33,750l.were, in January 1775, that is in 18 years, reduced by deaths to 28,732l.or but a little more than a seventh part. But, supposing the annuitants all in the firmest stage of life, or between the age of 10 and 30, they ought, according to some of the best tables of observations, to have been reduced aquarter. These life-annuities have, therefore, fallen in much more slowly than could have been expected; and I have found the same to be true of all the other life-annuities.—The reason, undoubtedly, is, that the tables exhibit the rate of mortality among all sorts and orders of men taken together; whereas, the lives on which annuities are bought, are a selection of the better sort of lives from the general mass, and therefore must be of greater value.—Indeed I am not acquainted with any table of observations which gives the probabilities of the duration of life high enough to be a guide in this case; except that which was formed by Mr.De Parcieux, from the FrenchTontines.—A calculation, therefore, of the values of lives, agreeably to this table, would be of considerable use.
Note(16).—Unfunded Debt. Seepage 124.—I have given the navy debt, as it was in January, 1775.—The civil list debt in 1775, was probably more than the sum at which I have reckoned it. LordStair, in his account of the national debt, income, and expenditure, reckons it at 800,000l.
Much the greatest part of the foregoing debts, with the taxes for paying the interest, including the duties composing theAggregate,South-Sea, andGeneralFunds, have, by the 25th ofGeorgethe Second, 1751, and several subsequent acts of Parliament, been thrown into one general account; and thesurplusof the whole, after deducting the interest, 800,000l.per ann.to the civil list, and a few other payments, forms theSinking Fund.—The debts not brought to this account are about seven millions and a half in theSouth-SeaHouse; 11.186,800l. of theBankcapital; the Civil List million; four millions and a half borrowed at 3½per cent.in 1758; the capital of the East-India annuity; and the Exchequer long and life annuities, except those granted in 1758. But thesurplussesof the duties which pay the interest of these debts are either carriedimmediatelyinto theSinking Fundaccount; or broughtfirstto theAggregateFund, and from thence carried into that account.—On the contrary. Deficiencies in these duties when they happen, are made good out of the Sinking Fund; and afterwards replaced from the supplies.
For example. Three old nine-penny excises on beer, with an additional three-pence per barrel, producing above half a million annually; also, 3,700l.perweek out of the hereditary excise onbeer, together with some duties on paper, coals, &c. and ⅓ additional subsidy of tonnage and poundage, are appropriated to the payment of the Banker’s Annuity; the Life Annuities granted in 1693 and 1694; the Exchequer Long Annuities; and annuities on various sums subscribed to the South-Sea Company in 1720. The surplusses make a part of theAggregate Fund; and after contributing to satisfy the charge on that fund, are carried into theSinking Fund.—Again. Certain additional duties on soap, parchment, coals, &c. are appropriated to pay the interest of 1.250,000l. and of 1.750,000l. parts of the Bank capital.—The surplusses are carrieddirectlyto theSinking Fund.—In like manner. The duties on houses and windows imposed by an act of the 20th ofGeorgethe Second, 1747,[116]after deducting from them 91,485l.per ann.to satisfy certain charges on old house-duties in theAggregate Fund; and, also, other duties on houses and windows imposed by the 2d and 6th ofGeorgethe Third, amounting in all to about 205,000l.per ann.are carried into the Sinking Fund, together with the capitals, the interestof which has been charged upon them. But the addition to these duties (with a tax on pensions) granted in 1758, and charged with the interest (at 3½per cent.) of the loan in that year, having not been carried into theSinking Fund, and proving deficient; the deficiency is constantly made good out of this fund, and afterwards replaced from the supplies.
State and Amount of theNational Debtat Christmas 1753; with the Charges of Management.
Bank of England.
StateandAmountof theNational Debtin 1739.
Bank of England.
From the account in thePostscript, at the end of this tract, it will appear, that 10.639,793l. of the public debt was discharged between the years 1763 and 1775; and also that thefundeddebt was, in 1775, 1.400,000l. greater than it was at the end of the last war. From hence, and from the amount of the public debt in 1775, as stated inpage 124, it follows, that the funded debt at the end of the war was 130.943,051l. and the whole debt 146.582,844l. and, consequently, that the war left upon the nation anunfunded debtamounting to[120]15.639,793l. This unfunded debt consisted of the following particulars—Of 3.500,000l. borrowed after the peace in 1763, and applied towards bearing such expences of the war as could not immediately cease with its operations.—Of neareight millionsin navy, victualling, ordnance, and transport debts.—Of 1.800,000l.Exchequer bills; and the remainder, of subsidies to foreign princes, extraordinaries of the army, and German demands.
In the interval of peace between 1748 and 1755 the following debts were paid off.
From the whole, the following account of the progress of the National Debt, from 1739 to 1775, may be deduced.
We are now involved in another war, and the public debts are increasing again fast.ExchequerBills have been increased from 1.250,000l. to 1.500,000l. A new capital of 2.150,000l. has been added to the 3per cent.Consolidated Annuities.And a vote of credit was given in the last session of Parliament for a million. The last year, therefore, has added 3.400,000l. to our debts, besides a vast sum not yet provided for, consisting of navy, ordnance, victualling, transport and army debts.—The present year (1777) must make another great addition to them; and what they will be at the end of these troubles, no one can tell.—The union of aforeignwar to the presentcivilwar might perhaps raise them toTwo Hundred Millions; but, more probably, it would sink them to—Nothing.
Ministers have of late sought to remove the public apprehensions by general accounts of the weakness of powers, which, from the circumstances of former wars as well as national prejudices, have been felt by the people as jealous rivals or formidable enemies.—I wish it was possible for me to confirm these accounts; and by contrasting the preceding state of our own debts with a similar one of those ofFrance, to shew, that from this power in particular we have nothing to fear. The following particulars, onthe correctness of which I can rely, may give some assistance in judging of this subject.
The whole expence of the last war toFrancewas 1.118.307,047 livres; that is, 49.702,000l. sterling: of which 23.152,000l. (520.926,000 livres) consisted of money procured by the sale of taxes, by free-gifts, and extra-impositions during the war, which left behind them no debts: And 26.550,000l. (597.380,100 livres) consisted of LOANS, or money raised on perpetual annuities, life-annuities, and lotteries.—At the beginning of 1769 the whole amount of the debts ofFrance, including all arrears and capitals advanced on annuities and lotteries, was 128.622,000l. sterling, or 2.894.053,616 livres. The annual charge derived from this debt was 6.707,500l. sterling (150.919,284 livres)—All the appropriations amounted to 8.218,500l. sterling (184.919,284 livres).—The expences of the army, navy, king’s houshold, prince’s houshold, foreign affairs, &c. amounted to 8.947,000l. or 201.307,312 livres. So that the whole annual expence was 17.165,000l. (386.226,596 livres).—The whole revenue had amounted, before 1769, to 13.484,500l. sterling (303.401,696 livres).—The public expence, therefore, had exceeded the revenue 3.681,000l. (82.800,000 livres.)per ann.
From the year 1769 to the present King’s Accession, by forced reductions of interest, and by new taxes, the public revenue was carried to 16.289,000l. sterling (366.508,000 livres) and the public expence was reduced so as not to exceed the revenue above 766,800l.per annum(17.253,000 livres).—The anticipations also of the revenue, which before 1769 had extended toseventeenmonths, were reduced tofivemonths.—Such was the progress of reformation; namely, an increase of revenue amounting to little less thanThree Millionssterlingper ann.in a few years, under an unpopular minister, in the latter days of a reign never characterized by an attention to oeconomy, or a regard to the public interest; and at this time particularly stamped by unprecedented profusion and a general relaxation.
A new reign produced a new minister of finance whose name will be respected by posterity for a set of measures as new to thepoliticalworld, as any late discoveries in the system of nature have been to thephilosophicalworld.—Doubtful in their operation, as all unproved measures must be, but distinguished by their tendency to lay a solid foundation for endless peace, industry, and a general enjoyment of the gifts of nature, arts, and commerce.—The edicts issued during his administration exhibit indeed a phænomenon of the most extraordinary kind. An absolute king renderinga voluntary account to his subjects, and inciting his people tothink; a right which it has been the business of all absolute princes and their ministers to extinguish in the minds of men.—In these edicts the king declared in the most distinct terms against a bankruptcy, an augmentation of taxes, and new loans; while the minister applied himself to increase every public resource by principles more liberal thanFrance, or any part ofEurope, ever had in serious contemplation.—It is much to be regretted, that the opposition he met with, and the intrigues of a court, should have deprived the world of those lights which must have resulted from the example of such an administration.
After a short interval, a nomination, in some respects still more extraordinary, has taken place in the court ofFrance. A court which a few years since was distinguished by its bigotry and intolerance, has raised aProtestant, the subject of a small but virtuous republic, to a decisive lead in the regulation of its finances. It is to be presumed, that so singular a preference will produce an equally singular exertion of integrity and talents. Though differing from MonsieurTurgotin several principles, which regard the larger lines of government, he appears by his first steps, and, particularly, the preamble to a late edictfor raising 24 millions of livres by a lottery, to put his foot on the same great basis of general justice, and a strict conservation of the faith o£ the king; and points more particularly at the surest of all resources in any modern states, a simplification of taxes and a reformation in the collection of them. This administration, making improvements in the Revenue its immediate object, is more capable of present exertion; and, as such, is more formidable.
From these facts and observations it is impossible not to conclude, that if we trust our safety to the difficulties ofFrance, we may find ourselves fatally deceived. I will add, that though (like the 3s. land-tax and lotteries among ourselves) some of the extraordinary impositions of the last war have been continued inFrance, there are some which ceased with the war, and which they can renew. It is, particularly, an advantage of unspeakable importance to them, that they can carry on a war, as they did the last, athalfour expence; and that, having no dependence on the flattering delusion of paper, they can, as they did in 1759, bear even a bankruptcy in the middle of a war, and yet carry it on vigorously.—Their debts time itself is sinking fast. Of 3.111,000l. (seventy millions of livres) in annuities on theHotel de VilleatParis, 1.777,000l. (forty millions of livres) consistedin 1774 of Life Annuities, which were falling by deaths at the rate of 71,000l. (1.600,000 livres) every year.—Even their loss of credit, whatever present embarrassment attends it, favours them upon the whole. To this they owe the advantages just mentioned. The facility with which our high credit has enabled us to run in debt ensnares us; and, if a change of measures does not take place,[123]mustruinus. Experience has given them a just horror at borrowing on permanent funds; and were they inclined to do it, they are not able to do it to any great amount; and, consequently, they cannot go on mortgaging one resource after another till none is left.—While we lose sight of the capital in the interest, they carry their views chiefly to the reimbursement of the capital; and after receiving high interest, for some years, can be satisfied with receiving back a part of their capital.—Their debts, being confined in a great measure to theFarmers Generaland others atParis, are not circulated and diffused among the body of the people in the manner ours are: And it is well known, that they can make use of methods to discharge them which our government must never think of. The acts of arbitrary power and unjust expedients to which, on many occasions,they have had recourse for this purpose without producing any tumults, are such as appear to us almost incredible; and should the time ever come, when it will be necessary in this country to make use of any violence of the same kind, all government will probably be at an end.
In point of territory and number of inhabitants, the two countries will bear no comparison[124]. We have hitherto opposedFranceby our free spirit, and our colonies; and to them chiefly we owe our prosperity and victories. Our colonies once separated from us, the islands will soon follow. But should they remain ours, our comparative advantages will best appear from the following authentic account of the imports intoFrancefrom their islands.
In 1774.
In 1775.
Value of the above commodities re-exported fromFrance, taken upon the average price.
The whole importation from theWest IndiesintoBritainis about three millionsper ann.
But I have gone much beyond the views with which I begun this section. The facts which have been stated, and the reflections which they have occasioned, are intended principally to shew that we ought not to suffer ourselves to be drawn into security by any assurances of the weakness ofFrance.—May she, however, find herself the weakest of kingdoms whenever, from motives ofinterest or ambition, she shall attempt to injure any of her neighbours.—MayBritain, hitherto the most favoured spot under heaven, always preserve her distinguished happiness, and escape the danger which now threatens her. And may the time soon come, when all mankind, sensible of the value of the blessings of peace and equal liberty, shall suffer one another to enjoy them, and learn war no more.
Appropriated Revenueat Midsummer, 1775.
State of theSurplusof theRevenuefor 11 years ended at 1775.
Unappropriated Revenue.
Produce of theSinking Fund, reckoned to Christmas in every Year.
The average of these five years is 2.655,759l. or, deducting 45,000l. (as directed in the last page), 2.610,759l.
In 1775, the Sinking Fund was taken for 2.900,000l. including an extraordinary charge of 100,000l. on theAggregateFund; but it produced 2.917,869l. The average of six years, including 1775, was 2.654,443l. The average of five years before 1770, was 2.234,780l.
ANNUAL EXPENDITURE.
The estimate for the peace establishment, including miscellaneous expences, amounted, in 1775, to 3.703,476l.—But the extraordinary expences, occasioned by the war with America, made it fall very short.—In 1774 it amounted to 3.784,452l. exclusive of 250,000l. raised by Exchequer Bills, towards defraying the expence of calling in the gold coin. And the medium for eleven years, from 1765, has been nearly 3.700,000l.—According to the accounts which I have collected, the expence of the peace establishment (including miscellaneous expences) was in 1765, 1766, and 1767, 3.540,000l.per ann.—In 1768, 1769, and 1770, it was 3.354,000l.per ann.—In 1771, 1772, 1773, 1774, and 1775, the average has been nearly four millionsper ann.exclusive of the expence of calling in the coin.
The parliament votes for the sea service 4l.permonthperman, including wages, wear and tear, victuals and ordnance. This allowance is insufficient, and falls short every year more or less, in proportion to the number of men voted. From hence, in a great measure, arises that annual increase of the navy debt, mentioned in the second article of theNational Expenditure. This increase in 1772 and 1773 was 669,996l. or 335,000l.per ann.The number of men voted in those two years, was 20,000. I have supposed them reduced to 16,000, and the annual increase of the NavyDebt to be only 250,000l.—Add 100,000l. for the annual increase of the Civil List Debt, and the total will be 350,000l.
Soon after the publication of the preceding account inFebruarylast year, theEarl of Stairobliged the public with another account of the same kind, which brings out a conclusion much more unfavourable. According to this account, were lotteries abolished, and the land-tax at 3s. in the pound only, there would be adeficiencyin the revenue, instead of such asurplusas I have stated. The following remarks will shew the reason of this difference.
TheEarl of Stairhas taken the annual produce of theSinkingFund at 2.506,400l. being the average produce ofEIGHTyears ended atLady day1775.—I have taken it at 2.610,759l. being the average ofFIVEyears ended atChristmas1775.—The neat produce of the land and malt taxes has been also taken near 50,000l. higher in my account; and I have besides admitted 50,000l.per ann.for casual supplies, which his Lordship has not charged.
The annual increase of the Navy Debt,Lord Stairstates at 300,000l. and of the Civil List at 200,000l. I have stated the former at 250,000l. and the latter at 100,000l.—In order also to avoid, as much as possible, all exaggeration, I have thrown out the expence of the new coinage. Lord Stair has admitted it, and given an yearlyexpence derived from hence of 100,000l.—He has also taken the Peace Establishment for 1774, as a fair medium for common years of peace, because it was lower in that year than in the three years preceding 1775. I have taken the average ofelevenyears of peace, which is 75,000l. less.
In consequence of these differences, the nationalPEACEexpenditure inLord Stair’s account comes out 325,000l.per ann. higherthan in mine; and the national income comes out 204,359l.lower; from whence it follows, that without lotteries, and the land being at 3s. in the pound, the kingdom must, according to his Lordship’s calculation, run out at the rate of about 200,000l. every year.
In some of the particulars I have mentioned, this account is probably nearest to the truth; but, I hope, it will be considered, that I have studied to give moderate accounts, and aimed at erring always rather on the favourable than the unfavourable side.
Second Method of deducing theSurplusof theRevenue.
From the year 1763 to the year 1775, or during a period of 12 years, 10.639,793l. of the public[129]debt was paid off.—The money employed forthis purpose must have been derived from the surplus of theordinaryrevenue, added to theextraordinaryreceipts. These receipts have consisted of the following articles.—1st. The land-tax at 4s. in the pound in 1764, 1765, 1766, and 1771; or 1s. in the pound extraordinary for four years, making 1.750,000l.—2. The profits of ten lotteries[130]making (at 150,000l. each lottery) 1.500,000l.—3. A contribution of 400,000l.per ann.for five years from theEast IndiaCompany, making 2.000,000l.—4. Savings by debts discharged at a discount,[131]making at least 400,000l.—5. Paid by the Bank in 1764 for the renewal of their charter, 110,000l.—6. Savings on high grants during the war; produce ofFrenchprizes taken before the declaration of war; sale of lands in the ceded islands; and composition for maintainingFrenchprisoners,[132]making2.520,000l.—All these sums amount to 8.280,000l. There remains to make up 10.639,793l. (the whole debt discharged) 2.359,793l. and this, therefore, is the amount of the whole surplus of theordinaryrevenue for twelve years; or 196,000l.per ann.[133]
The Earl ofStairhas also, in this method, calculated thesurplusof the Revenue; and makes the total, for eleven years, to be no more than 2.557,378l. even with the assistance of lotteries, and the land-tax at 4s. in the pound for five years; from whence it follows, thatwithoutthese assistances, there would have been a deficiency of near 60,000l.per ann.—The reason is, that his Lordship has taken the whole debt paid since 1763, at no more than 7.053,855l. or three millions and a half less than I have made it; and he has taken it so much less, chiefly in consequence of including in the amount of the public debt in 1775, the excess of the expences of that year above the common peace expences. This excess is to be charged to the present war; and, in determining the ordinary peacesurplus, which is myobject, it was proper to exclude it, and to terminate the account at the commencement of the war.—I will only add, that LordStairhas also included more in the extraordinary receipts than I have; and, particularly, 700,000l. which he supposes the public gained by theTEA INDEMNITY.—But this was only a compensation made by theEast-IndiaCompany for the loss which the public sustained by taking off, in 1766, a part (or 1s.perpound) of the duty on tea. In 1772 it was restored; and the excise upon tea has since, if I am rightly informed, produced as much as ever.Before1766, it produced annually 474,091l. Immediately[134]after 1766, it produced 341,284l.—But in 1775, it produced near half a million.
Sketch of an Account of the Money drawn from the Public by the Taxes, before the Year 1776.