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To the Editor of the Monthly Magazine.

SIR,

The practical inference, which every attentive reader cannot fail to draw from

HE public have been deeply inte- these statements, is the total inadequacy Trested by the sets of Financial Reso- of the means, hitherto employed, to keep lutions lately submitted to the House of pace with the rapid progression of milCommons, relative to our incumbrances lions exhibited in the expenditure of the and resources, as exhibiting striking facts Government. which are of the highest importance to the welfare of the British empire.

The public expenses of this empire, within fifty years, have forined a regularly increasing series of 8, 10, 15, 18, 24, 32, 45, 69, 75, 97, and 104 millions! Nor does there appear any reason why the series will not proceed in future in the same proportion! It will therefore aug

fourth, or fifth ratio; consequently it is not difficult to foresee, that, in an ascertainable number of years, cateris paribus, the figures expressing the national expen diture must become 120, 150, 180, 220, 260, and 300 millions. Similar effects must result from the operation of similar causes!

By these several documents, it appears, that the funded debt, in February 1812, was nearly 772 millions; that the various other suns for which the government stood pledged, amounted to other 150 millions; making the total of the public engagement in every four or five years, in a ments, 922 millions! That against this, the sinking fund has redeemed a sum of (since the time when the debt itself was but 230 millions,) 215 millions, leaving an existing unliquidated debt of 707 millions! It appears also, that the annual charges of the debt are nearly 35 millions, that the other outgoings are nearly 70 millions more, making a total charge on the revenue of upwards of 104 millions; while the consolidated fund, or permanent taxes, are less than 36 millions, (that is, no more than the amount of the interest of the debt,) and the war taxes produce but 22 millions, leaving a deficiency below the expenditure of above 48 millions, to be provided by loans, issues of Exchequer bills, &c. The figures, in truth, have become so extravagant, that our nominal exports of 40, and imports of SO millions, which used to seem vast arnounts, dwindle into insignificance, when placed beside our debts and expenditure!

Nor is much consolation afforded by considerations arising out of the augmented income of the country from lands, houses, and capital. These, at the present value of currency, according to the Income Tax, may be taken at nearly 120 millions. Supposing, however, that a fourth is concealed, it will be 160 millions; of which the fixed property in land and houses are about 30 millions, nearly half of which stands pledged for the interest of the debt. Deducting the sum redeemed, the net interest remains a fourth of the rentals; conse quently a fourth of all the land and houses stand pledged or mortgaged at this moment to the public creditors, whose right to indemnity can never be disputed. The present annual expenses of the Govern. ment outstrip, however, all these considerations; for it far exceeds the rentals of the whole kingdom, and nearly equals all the ascertained income from land, houses, and capital!

The following table of the monies raised for the public service in various periods from James II. in 1688, to the year 1812, is taken from official documents, and will better illustrate the operation of the existing system than any reasoning. It must be evident that the series will go on in the same ratio as long as the same causes operate, and therefore it cannot be difficult to fill up the amounts for any future years :

In the reign of James II. the re

venue was

William III.

-Anne
-George I.

-George II.

2,000,000

3,900,000

5,700,000

6,700,000

8,500,000

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All exhibiting a regular and invariably increasing series, indicative of the rise in the nominal price of commodities and labour, and by consequence of a corresponding diminution of the value of money.

As this position is absolutely TRUE, NECESSARY, and INCONTROVERTIBLE, how is it possible that such a system can last? And is there not evident danger that, during its paroxysms and violent convulsions, the constitution and the country itself may be overwhelmed and destroyed?

Do any rational statesmen suppose it possible that, by any hocus pocus of currency, or conversion of figures, such an accumulated expenditure can be met by the present, or any, system of taxation? Do they suppose that hundreds of millions are to be raised out of chandler's shops; by assessments on petty articles of luxury; by taxes on industry; or by the excise system?

I hope, however, that, after due and mature reflection on the miseries which impend over the country by the probable, (I might say, inevitable,) failure of the present system, that a new one will be resorted to, more consistent with equity, and fully equal to the exigencies of the state. Evil has accumulated on evil in this branch of government, like absurdity on absurdity in our legal code; but, unhappily, as the latter is not measured by pounds, shillings, and pence, it may last longer than the former. It is, however, the duty of good subjects, to aid their government in the hour of difficulty, by their advice and observations; I shall therefore, on this occasion, freely and honestly interpose mine. But, I wish I could, like our ancient parliaments, couple grants of wealth to the state, with stipulations which should rescue the people from the grinding oppressions of legal practice, and of the myrmidons of our well-intentioned, but abused and imperfect laws! How glorious would be that day, which rescued England from the inquisitions of the Excise and the Property.Tax; which also rendered it impossible to pack Juries; and which disabled pettifogging attornies from commencing civil suits, without the previous sanction of civil grand juries!

TAXATION itself has a direct tendency to raise the price of every commodity, and is, on that account, the prime cause of our financial distresses. A government requires money, or the power of purchasing the means of carrying on wars, and gra tifying its revenge or foolish ambition. MONTHLY MAG. No. 232.

Its method of augmenting its own power is to withdraw from individuals certain pro portions of their wealth; from a landproprietor, it exacts four shillings in the pound; from a house-owner, as much; and from a trader, a fifth of his gains. It thus combines a fifth of the means, which is possessed by the whole population, of purchasing the service of others; and it takes away, or would take away, as much of those means from all the individuals of the population. But at this point every system of taxation commences those peculiar operations by which it counteracts itself, and changes the entire fabric of the money system.

If those who lose a fifth of their income, were satisfied to part with a fifth, the government would enjoy a fifth, and no further result would take place. No individual of the population is however content to forego any portion of his income; and, looking only to himself, his own fortune and family, he seeks for the means of indemnity, and raises his rentals, the price of his commodities, or the value of his labour.*

In the course then of an ascertainable

period,

As the increased nominal value of property and labor is the chief cause of the financial difficulties of the government, it may be which advances may be ascribed, and which causes, therefore, aggravate and accelerate the mischief.

worth while to trace the minor causes to

1. There exists 1 regular inclination of labour and skill to advance their price, particularly during any general rise from other causes. A has more skill and gets more than B and C. These contrive, however, to advance to the wages of A; when A makes a further advance; and this is the practice of all the members of a settled community, and has doubtless, in our case, tended to give an accelerated impetus to the effects of our system of taxation.

2. The pernicious system of discounting manufactured bills by the Bank of England, throws capital into the hands of few besides mere speculators, who are thus enabled to buy up all the floating stocks, and sell on their own terms. Such a mode of issuing currency to the public never before existed in any nation, and its effects evince their singular character in the ruinous state of our

finances.

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period, individuals counteract the im- dent, that the powers of the Govern

posts of Government, by a proportionate enhancement of their own incomes; first in rentals, then in produce; which advancing to the consumers of produce, creates, in fine, a proportionate advance in the relative value of labour. The labourer, being, however, the last to obtain indemnity, is the person who suffers the longest and the most by the system. Such are the necessary effects on society of any permanent and sensible impost of the Government.

Observe, however, in the mean time, the re-action of the system on the Public Finances. In the outset, the Government had occasion for a fifth of all the powers of the population, and it levied a certain annual sum in taxes, amounting at that time to a fifth of the whole social revenue. For the sake of precision, let us suppose, that at such period the revenues of the population equalled 50 millions, the Government collecting a revenue of 10 millions. The income of the population would thus be reduced to 40 millions, but on the system of universal indemnification, practised by all the individuals of the population, the net income would soon be raised again to 50 millions, and the gross income to 60 millions; the nominal price of commodities and labour advancing in an equal proportion. It is, however, evi

pelling the issuers to give good security for all they issue; and they will then lend with

due caution.

4. The wholesale purchases of government tend also to raise the price of all commodities which it consumes, more than would a similar consumption by private hands. A crisis might be deferred, and millions saved, if Governnient made its purchases with more attention to the state of the markets, divided its orders more, and gave them with greater restriction. Fortunes are not only given away by illtimed contracts, but the value of the article is mischievously enhanced for the future. This improvidence too is the more effective and pernicious, because at present the government expends in purchases a full halt of the total revenue of the community!

5. A fifth great operating cause of these national difficulties, is the monopoly, equally cruel and impolitic, of land and farms, by which the produce of the soil is indefinitely kept from market, till its price satisfies an overgrown capitalist or speculator. By allowing this practice, the government is instrumental in devouring its own children, but retribution is obtained by the consequent rise in the price of all produce; which, in its turn, if not checked by a better and more aumane policy, will devour the government.

ment, purchaseable by its revenue of 10 millions, would now be but a sixth of the public strength, instead of a fifth; and that, to attain its former ratio and powers, the imposts must be raised from 10 to 12 millions.

But the same course would again take place in the public mind; and indemnity would be sought by every one affected by the imposts of the additional two millions, just as in the former instance, in regard to the ten millions. The government would therefore possess less power with the same nominal revenue, and would be compelled in a short period again to increase its assessments from 12 to 15 millions, from 15 to 20, 20 to 30, 30 to 50, and so on, as long as so artificial a system of society could last.*

Such would be the consequences of a steady and unvaried expenditure of goverminent founded on a system of withdrawing from the people a large proportion of their wealth! But, should the expenses of the government be continually extended; should it engage in wars of aggression or ambition; and expend in single years sums equal to the whole social revenue, the deleterious impulse of the system would be greatly accelerated, and confusion, bankruptcy, and ruin, would be the speedy and inevitable consequence.

It might be supposed that economists and statesmen would long ago have reasoned à priori on the effects of such a system; but fallible, prejudiced, and shortsighted human creatures, seldom arrive at truth by reasonings à priori. It will even be a novelty in the history of nations, if any future country should take warning, and reason à posteriori, from the example and errors of Britain. For, in the very hour in which we live, our statesmen seem incapable of reasoning from the past to the future, and continue to drive the machine of the state with accelerated force down a precipice, at the termination of which it must be dashed in pieces!

No assertion has, I confess, been more trite than the maxim that taxation tends to raise the price of commodities—yet it has been founded rather on a supposed experience, than on any ascertained connection, as between a cause and its necessary effect. I conceive, however, that

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I have determined the connection of this cause and its consequence; and the existing facts confirm my conclusions. None will or can contradict me. What then becomes of the reasonings of Price, and hundreds of others who have sagaciously proposed to pay off the national debt by a system of augmented taxes? Their plan involves a solecism; yet it has been persevered in for twenty-six years, and has been the darling system of successive statesmen! Aye, in defiance too of the facts, that, while a sinking-fund has been generating 15 millions, the national expenditure has been augmented from 12 to 100 millions; that the price of every commodity has been trebled; and that the debt has been augmented above 700 millions, while the sinking fund has liquidated but 215 millions !*

On so important a topic I ought to enlarge, that I may be thoroughly understood. I assert then, that the price of commodities will always follow a system of taxation so closely, that, if the taxes are any fixed sum, even for a year, the advances will tend to diminish the ratio of

The closet speculations of the worthy Dr. Price, were arithmetically correct, as far as regarded the relations of different members of the same community towards each other; but they are delusory in regard to a totality which has none of the distinct relations, out of which the accumulation of compound in terest is raised. If we suppose a total society to consist of the twenty-six letters of the alphabet; a, b, c, and d, might effect an harmless accumulation of compound interest, by lending to e, f, g, and the other members of the community, and the advantages would be relative in regard to each other. But the Government, as the representative of the totality, could not work a system of compound interest for the whole, because, with reference to the totality, the borrowers and lenders, are the same. To illustrate this by a familiar example, the government might as well become the purchaser of its own lotteries, and calculate on the benefits of its monopoly of the prizes! The calculations of Dr. Price were well adapted to promote the scheme of the Equitable Assurance Company, because it draws into its coffers the wealth of its co-members in the community; but, with reference to a totality having no co members, a compound-interest project is like a proposal for a man to fatten himself by sucking his own blood. That excellent man, in like

manner, amused himself by calculating the number of solid earths of gold which a farthing would accumulate in 1770 years, but no William Pitt has yet appeared, whose temporizing spirit has led him to delude the public, by attempting to realize the project!

that amount to the general wealth, before the year has expired; consequently, as an increase of prices always attends taxes, and augments the public expenditure in more than an equal amount, an accumulating public fund arising out of any saving of taxes is a solecism. If, therefore, a government attempt to accumulate a fund with one hand, like our sinking fund, by means of taxes; the effect of those taxes themselves will be to augment the expenses of the government, on the other hand, in a higher ratio than that of the sum to be annually saved or accumulated. In consequence, the government will always have to borrow or expend more than it can save, or to expend more on account of its endeavour to save!

The effect of taxation on society, by exciting individual contrivances, which lead to universal indemnity against those taxes, renders it, therefore, necessarily and absolutely impossible, for a government to accumulate an isolated fund by a system of taxation; consequently a national debt can never be paid off by such fund, and all that has been pretended on that subject is a radical inistake and a gross and pernicious delusion!

The facts confirm my reasoning, and my solution applies with equal force to all the phenomena. There is consequently no danger of mistake in this very impor tant, and, to the writer, very painful, conclusion. Let us see, however, whether our statesmen will have virtue enough to acknowledge their errors, and sufficient public spirit to apply the necessary correctives! Mr. Vansittart is the only Chancellor of the Exchequer that for many years has had the honesty to declare any thing like the truth; and there is merit in the rare political quality of honesty, though it may fail in its purposes.

Whether he arrive at his conclusions by means of the same premises, I know not; but we both agree in the principle, that, as the lands and other property of the country stand mortgaged to the public creditors as the price of twenty years' gratification in wars, those lands, houses, and property, must now be seized for the benefit of the mortgagee, as it seems impossible for the present possessor to pay the interest and subsist on the overplus! Those who have so often pledged their lives and fortunes will surely not murmur, like Esop's Old Man, when called upon by Death, whom he had invoked with like solemnity; and those who have made no such pledges ought not now to murmur, their indifferGg 2

ence having rendered them culpable, or their silence having made them parties to the public measures of our warlike rulers. In the aphorisms printed in your 230th Number, I have proved that the prosperity of nations depends in a considerable degree on their possessing a sufficient quantity of circulating mediumthat currency is the main spring of intercourse that a diminution of currency deteriorates the value of all property-depresses the energies of trade and the public impetus-and leads to the decay and fall of nations. I conceive, therefore, that a judicious distribution of a valid and well secured currency, among all branches of productive labor, will promote public spirit in like manner as manure invigorates the soil-will repay the state ten-fold-and be the means of renovating our finances, and sustaining the resources and power of the empire. Next to this will be the substitution of a SOLID and PRODUCTIVE, in place of a petty and vexatious, system of taxation; by which capital and fixed property shall be made to contribute their requisite proportions to those necessities of the state which have arisen, or which the proprie tors admit to have arisen, in their defence.

A confiscation of part of every man's estate seems therefore to have become necessary for the security of the remainder; but, before this measure is resorted to, I should hope that, after liberally providing for the church, the church lands, and the tythes; the waste lands; the crown lands; the corporation estates; the feudal rights; and many other reserves on land, may be sold for equivalents of stock, so as to liquidate part, if not the whole, of the debts, out of these genuine and tangible resources of the realm. At any rate, sacrifices must be made, and it is now too late to murmur, or to pay for our errors by mere repentance. We must fully atone for the past; and may the price of our atonement teach us wisdom for the future!

The picture is gloomy, and it ought to be so; for the political sins of the nation, in waging twenty years' wars, merit the wrath of offended justice. I do not, however, conceive our case to be wholly irretrievable; on the contrary, I think that, with some abatement of national pride, some respect to suffering humanity, some deference to truth and reason, and a moderate portion of courage and perseverance, the ricketty machine of the state

may even yet be restored to the vigor in which it was left by Lord Chatham in 1761.

My other plans, taken alone, or in conjunction with the above, are,

1. To remove the present ministers and totally change their system and measures.

2. To accede to the earnest solicitations of France, Europe, and America, for a general Peace.

3. To inquire after and punish the criminal instigators of the late and present wars.

4. To levy an impost of four shillings in the pound on all fixed and funded property, so as to raise from those special sources the sum necessary to pay the net interest of the public debt.

5. To give the parties the option of buying up the same in stock within three years at a maximum, so as to extinguish the Tax and the National Debt in that period.

6. To withdraw the fifteen millions of taxes now raised for the support of the Sinking Fund, viz. the income tax, and various taxes on necessaries.

7. To tux the fixed and funded property in like manner at periods whenever a public debt becomes a public burthen, so as at once to liquidate such debt by the redemption of the tax.

8. To abolish the Excise system, and all means of raising taxes which imfringe on the liberties, comforts, and independence, of the people, and raise the great taxes by imposts on fixed property.

9. To issue no paper currency except on the security of fixed property, specially pledged for its periodicul redemption, subject to the limitations and regulations pointed out in a former paper.

10. The above affords satisfaction for the past;-then, as security for the future, in regard to Justice, Liberty, Property, and Prosperity, let the people be fully and fairly represented in the Commons' House of Parliament.

Pride and power may revolt at these required concessions; but, if the country is to be saved from impending destruction, at least, what is here proposed must be performed with good faith and promptitude! Should the fortunate Genius of Britain direct her councils at this crisis, she may yet maintain for ages her ascendency among the nations. But, should the hearts of her rulers be unhappily hardened by presumption and pride; should they turn a deaf ear to the warnings of patriotism, the voice of truth, and the calls of

justice;

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