Appendix A

September 30, 2015

A Table, Showing the Result of Value Lent to the State.

A bankruptcy would probably obviate the necessity of fresh loans; but would not release an atom of the former taxation, where the interest of the debt is habitually paid, not with the proceeds of taxation, but with new loans. Thus, the burthens of the people would not be alleviated, 114 nor the charges of production reduced= consequently there would be no sensible reduction in the price of commodities; nor would British products find a readier market either at home or abroad. General Fund, whence all Revenue is derivable; consisting of the Total Natural Agency, Capital and Industry, at the command of the Nation, divided into four equal portions, whereof respectively each individual is supposed to possess a share, proportionate to his Wealth. Of this stock, the only part applicable to the purpose of a National Loan, is the transferable or floating value, capable of acting as capital.

The classes liable to taxation would be diminished in numerical strength, by the whole of the suppressed stockholders; and taxation less productive, although not lower in ratio. The 40 millions of revenue, withdrawn from the public creditors, would pay taxes only upon the annual profit or revenue, they might yield in the character of productive capital. The ruin of the public creditors would be attended with abundance of collateral distress; with private failures and insolvency without end; with the loss of employment to all their tradesmen and servants, and the utter destitution of all their dependants.

I. yielding revenue consumable by the proprietor himself

II. yielding nothing; being lend to, and consumed by the state revenue

III. yielding revenue transferred to, and consumed by, the lend- ers of Portion II These three portions yield but two of revenue; portion II be- ing absolutely extinct. IV. yielding revenue applicable to any purpose. On the other hand, if she persevere in borrowing to pay the interest of the former loans, that interest and with it taxation also, must go on increasing to infinity. It is impossible to avoid a precipice, when one follows a road that leads nowhere else. Appendix B. A table, showing the comparative condition of France, Great Britain and Ireland, and the United States of America, in re- spect to Population, Debt, and Taxation, at the close of the year 1831. The potentates of Asia, and all sovereigns, who have no hopes of establishing a credit, have recourse to the accumulation of treasure. Treasure is the reserve of past, whereas a loan is the anticipation of future revenue. They are both serviceable ex- pedients in case of emergency. Population. France 32,560,000 Britain and Ireland. 24,304,000 United States 13,200,000 A treasure does not always contribute to the political security of its possessors. It rather invites attack, and very seldom is faithfully applied to the purpose for which it was destined. The accumulation of Charles V of France fell into the hands of his brother, the duke of Anjou; those which pope Paul II destined to oppose the Turkish arms, and drive them out of Europe, supplied the extravagancies of Sixtus IV and his neph- ews. The treasures amassed by Henry IV, for the humiliation of the house of Austria, were lavished upon the favourites of the queen-mother= and, at a later period, we have seen the Debt. $1,036,800,000 3,756,802,723 24,322,235* Revenue. $187,200,000 247,075,200 28,526,820*

  • These two sums only include the public debt and revenue of the Federal Government, at the period referred to, and not the debts and revenue of the different States of the Union. To show the comparative condition of the people of the United States, with those of France and Britain, in respect to debt and taxation, at the time mentioned, it would be necessary to add the debts and revenue of the respective States, which, 256Book III= On Consumption however, at this time. we have no means of doing. American Editor. purchase would yield a revenue of 6000 dollars only. The cultivation by metayers, the very lowest descrip- tion of farmers, gives to them, and their subordinate labourers’ industry, a revenue equal to that of the land jointly with the capital, which is advanced by the propri- etor.
  1. Book II. chap. 14.
  2. This may be illustrated by the burning of fuel in a grate or furnace. The fuel burnt, serves either to give warmth, or to cook victuals, boil dyeing ingredients, and the like, and thereby to increase their value. There is no utility in the mere gratuitous act of burning, except inasmuch as it tends to satisfy some human want, that of warmth for instance; in which case, the consumption is unproductive; or inas- much as it confers upon a substance submitted to its ac- tion, a value, that may replace the value of the fuel con- sumed; in which case the consumption is productive. If the fuel, burnt for the sake of warmth, produce either no warmth at all, of very little= or that burnt to give value to a substance, give it no value, or a less value than the value consumed in fuel, the consumption will be ill- judged and improvident.
  3. There is unquestionably a sort of talent requisite in the expenditure of a large income with credit to the propri- etor, so as to gratify personal taste, without awakening the self-love of others; to oblige without the sense of humilia- tion; to labour for the public good, without alarming indi- vidual interests. But this kind of talent is referable rather to the head of practical, whilst its influence upon the rest of mankind falls within the province of theoretical, moral- ity.
  4. The raw materials of manufacture and commerce are, the products bought with a view to the communication to them of further value. Calicoes are raw material to the calico- printer, and printed calicoes to the dealer who buys them For re-sale or export. In commerce, every act of purchase is an act of consumption and every act of re-sale, an act of production.
  5. One of the suite of Lord Macartney estimated the saving of grain in China, by this method alone, to be equal to the supply of the whole population of Great Britain.
  6. There is almost insuperable difficulty in estimating with precision the consumption and production of value; and individuals have no other means of knowing, whether their fortune be increased or diminished, except by keeping regu- lar accounts of their receipt and expenditure; indeed, all prudent persons are careful to do so, and it is a duty im- posed by law in the case of traders. An adventurer could otherwise scarcely know whether his concern were gain- ful or losing, and might be involving himself and his credi- tors in ruin. Besides keeping regular accounts, a prudent manager will make previous estimates of the value that will be absorbed in the concern, and of its probable pro- ceeds; the use of which, like that of a plan or design in Notes
  7. Some materials are capable of receiving and discharging the same kind of value many times over; as linen, which will undergo repeated washing. The cleanliness given it by the laundress, is a value wholly consumed on each oc- casion, along with a part of that of the linen itself.
  8. The values not consumed sooner or later in a useful way are of little moment; such are provisions spoiled by keep- ing, products lost accidentally, and those whose use has become obsolete, or which have never been used at all, owing to the failure of the demand for them, wherein value originates. Values buried, or concealed, are commonly withdrawn but for a time from consumption; when found, it is always the interest of the finder to turn them to ac- count, which he cannot do without submitting them to con- sumption. In this case, the only loss is that of the profit derivable from them during the period of their disappear- ance, and may be reckoned equivalent to the interest for that time. The same observation applies to the minute savings, successively laid by until the moment of investment, the aggregate of which is, doubtless, considerable. The loss, resulting from this inertness of capital, may be partially remedied by moderating the duties on transfer, by extend- ing to the utmost the facility of circulation, and by the establishment of banks of deposit, in which capital may be safely vested, and whence it may readily be withdrawn. In times of political confusion, and under an arbitrary gov- ernment, many will prefer to keep their capital inactive, concealed, and unproductive, either of profit or gratifica- tion, rather than run the risk of its display. This latter evil is never felt under a good government.
  9. For the distinction between the gross and the net product, vide supra, Book II. chap. 5.
  10. It is probable, that, in all countries, anywise advanced in industry. the revenues of industry exceed those of capital and land united, and, consequently, that the consumption of those deriving income solely from industry, and wholly dependent for subsistence upon their personal faculties, exceeds that of both capitalists and landlords together. It is not uncommon to meet with a manufactory, that, with a capital, say of 120,000 dollars, will pay daily in wages to its people, 60 dollars, which, with the deduction of Sun- days and holidays, makes 18,000 dollars per annum; if to this be added, 4000 dollars more for the net profits of per- sonal superintendence and management, it will give a to- tal of 22,000 dollars per annum, for the revenue of indus- try alone. The same capital, vested in land at bu 20 years’ 257Jean-Baptise Say, A Treatise on Political Economy building, is to give an approximation though it can afford no certainty.
  11. It is strange, that so acute a writer should not have per- ceived, that the mischief of pure individual vanity can never be very formidable, because the pleasure it affords loses in intensity, in proportion to its diffusion. Indeed= as far as individual consumption is concerned, attacks upon luxury are mere idle declamations; for the productive energies of mankind will always be directed towards an object, with a force and in a degree proportionate to the intensity of the want for it. It is the extravagance of public luxury alone that can ever be formidable; this, as well as public con- sumption of every kind, it is always the interest of the com- munity at large to contract, and that of public functionar- ies to expand, to the utmost. Tr.
  12. The lending at interest what might have been spent in frivolity is of this latter class; for interest can not be paid, unless the loan be productively employed; in which case it will go in part to the maintenance of the labouring classes.
  13. By knowledge, I would always be understood to mean, acquaintance with the true state of things, or generally with truth in every branch.
  14. In a wholesome state of society, when public institutions are not needlessly multiplied, and all tend to the common purpose of public good, this very impatience and anxiety is conducive to the welfare, and not to the injury, of soci- ety. Indeed, great inequality of fortune seems to be a nec- essary accompaniment to social wealth and great national productive power. It is the prospect of great prizes only, that can stimulate to the extreme of intellectual and corpo- real industry; and there is no instance on record of a na- tion far advanced in industry, in which great inequality of fortune has not existed. One bishopric of Durham will tempt more clerical adventurers, than five hundred mod- erate benefices and the example of a single Arkwright or Peel will stimulate manufacturing science and activity more. than a whole Manchester of moderate cotton spin- ning concerns. Tr.
  15. On this ground sumptuary laws are superfluous and un- just. The indulgence proscribed is either within the means of the individual or not= in the former case, it is an act of oppression to prohibit a gratification involving no injury to others, equally unjustifiable as prohibition in any other particular; in the latter, it is at all events nugatory to do so; for there is no occasion for legal interference, where pe- cuniary circumstances alone are an effectual bar. Every irregularity of this kind works its own punishment. It has been said, that it is the duty of the government to check those habits, which have a tendency to lead people into expenses exceeding their means; but it will be found, that such habits can only be introduced by the example and encouragement of the public authorities themselves. In all other circumstances, neither custom nor fashion will ever lead the different classes of society into any expenses, but what are suitable to their respective means.
  16. The weaker sex is, from the very circumstance of inferi- ority in strength of mind, exposed to greater excess both of avarice and prodigality.
  17. I remember being once in the country a witness of the numberless minute losses that neglectful housekeeping entails. For want of a trumpery latch, the gate of the poul- try-yard was forever open= there being no means of clos- ing it, Externally, it was on the swing every time a person went out; and many of the poultry were lost in consequence. One day a fine young porker made his escape into the woods, and the whole family, gardener, cook, milk-maid, &c., presently turned out in quest of the fugitive. The gar- dener was the first to discover the object of pursuit, and in leaping a ditch to cut off his further escape, got a sprain that confined him to his bed for the next fortnight= the cook found the linen burnt that she had left hung up before the fire to dry; and the milkmaid, having forgotten in her haste to tie up the cattle properly in the cow-house, one of the loose cows had broken the leg of a colt that happened to be kept in the same shed. The linen burnt and the gardener’s work lost, were worth full twenty crowns; and the colt about as much more= so that here was a loss in a few minutes of forty crowns, purely for want of a latch that might have cost a few sous at the utmost; and this in a household where the strictest economy was necessary, to say nothing of the suffering of the poor man, or the anxiety and other trouble- some incidents. The misfortune was to be sure not very serious, nor the loss very heavy; yet when it is considered, that similar neglect was the occasion of repeated disasters of the same kind, and ultimately of the ruin of r worthy family, it was deserving of some little attention.
  18. Stewart, Essay on Pol. Econ. book ii. c. 20. The same writer has in an other passage observed, that every thing not absolutely necessary to fire existence is a superfluity.
  19. The English term luxury has a much more sensual mean- ing than the French luxe, and seems to comprise both luxe and luxure, the luxus, or luxuria, and luxuries of the Latin writers.
  20. Though it is not every subject that allows equal scope to poetical genius, it does not seem, that error affords a finer field than truth. The lines of Voltaire on the system of the world, and on the discoveries of Newton regarding the properties of light, are strictly conformable to the rules of science, and nowise inferior in beauty to those of Lucretius on the fanciful dogmas of the Epicurean school. But if Voltaire had been better acquainted with the principles of political economy, he would never have given utterance to such sentiments as the following: Sachez surtout que le luxe enrichit Un grand itat, s’il en perd un petit. Cette splendeur, cette pompe mondaine, D’un regne heureux est la marque certain. Le riche est ne pour beaucoup depenser…. 258Book III= On Consumption has been advanced; for what is too ridiculous to be hazarded in such a cause. “That since luxury consumes superfluities only, the objects it destroys are of little real utility, and therefore the loss to society can be but small.” There is this ready answer= the value of the objects con- sumed by luxury must have been reduced by the competi- tion of producers to a level with the charges of produc- tion, wherein are comprised the profits of the producers. Objects of luxury are equally the product of land, capital, and industry, which might have been employed in raising objects of real utility, had the demand taken that direction; for production invariably accommodates itself to the taste of the consumers.
  21. Although the capitalist and landholder receive their inter- est and rent originally in the shape of money, and have, therefore, no occasion to go through any previous act of exchange, to obtain wherewithal to pay the tax, yet such a previous exchange must have been effected by the adven- turer, who turns the land or capital to account. The effect is precisely the same, as if the rent or interest had been paid in kind; that is, in the immediate products of the land or capital; and the landholder or capitalist had paid the tax either by the direct transfer of part of those products, or by first selling them, and afterwards paying over the proceeds. On this subject, vide supra, Book II. chap. 5, for the mode in which revenue is distributed amongst the community.
  22. Dr. Hamilton, in his valuable tract upon The National Debt of Great Britain, illustrates the absurdity of the posi- tion here attacked, by comparing it to the “forcible entry of a robber into a merchant’s house, who should take away his money, and tell him he did him no injury, for the money, or part of it, would be employed in purchasing the com- modities he dealt in, upon which he would receive a profit.” The encouragement afforded by the public expenditure is precisely analogous.
  23. It is mere usurpation in a government, to pretend to a right over the property of individuals, or to act as if pos- sessing such a right; and usurpation can never constitute right; although it may confer possession. Were it other- wise, a thief, who had once, by force or fraud, obtained possession of another man’s property, could never be called upon to make restitution, when overpowered and taken prisoner, for he might set up the plea of legitimate owner- ship.
  24. The reader will readily perceive, that this and many other passages, were written under the pressure of a military des- potism, which had assumed the absolute disposal of the national resources, and suffered no one to express a doubt of the justice and policy of its acts.
  25. Fenelon, Vauban, and a very few more, of the most dis- tinguished talent, had a confused idea of the ruinous ten- dency of this System; but they failed in impressing the rest of the world with the same conviction; for want of just notions on the subject of the production and consumption The progress of science compels those who covet literary fame, to make themselves acquainted with general prin- ciples at the least; without a close adherence to truth and nature, there is little chance of permanent reputation, even in the poetical department.
  26. There are other circumstances that contribute to veil the residence of the court in an atmosphere of human misery. It is there, that personal service is consumed by whole- sale; and that is of all things the most rapidly consumed, being, indeed, consumed as fast as produced. Under this denomination, is to be comprised, the agency of the sol- diery, of menial servants, of public functionaries, whether useful or not, of clerks, lawyers, judges, civilians, ecclesi- astics, actors, musicians, drolls, and numerous other hang- ers-on, who all crowd towards the focus of power and oc- cupation, civil, judicial, military, or religious. It is there also, that material products seem, to be more wantonly consumed. The choicest viands, the most beautiful and costly stuffs, the rarest works of art and fashion, all seem emulous to reach this general sink, whence little or noth- ing ever emerges. Yet, if the accumulated values, that are drained from every quarter of the national territory to feed the consump- tion of the seat of royalty, were distributed with any re- gard to equity, they would probably suffice to maintain all classes in comfort and plenty. Though such drains must always be calamitous, because they absorb value, and yield no return, at any rate the local population might be pretty well off; but it is notorious that wealth is nowhere less equally diffused. The prince, the favourite, a mistress, or a bloated peculator, takes the lion’s share, leaving to the sub- ordinate drones the pittance assigned to them by the gen- erosity or caprice of their superiors. The residence of an overgrown proprietor upon his estate then only tends to diffuse abundance and cheerful- ness around him, when his expenditure is directed to ob- jects of utility, rather than of pomp; in which case he is really an adventure in agriculture, and an accumulator of capital in the shape of improvements and ameliorations.
  27. [About 140,000 dollars. Some English ladies wear jew- els of greater value; but some read the passage in Pliny Quadringenties, instead of Quadragies Sestertium. This would make the jewels of Paulina worth 1,400,000 dol- lars; the more probable sum.] American Editor.
  28. In favour of luxury, the following paradoxical argument 259Jean-Baptise Say, A Treatise on Political Economy of wealth. Thus Vauban, in his Dixme royale, says, ‘the present misery of France is attributable, not to the rigour of the climate, the character of the inhabitants, or the bar- renness of the soil= for the climate is most favourable, the people active, diligent, dexterous, and numerous= but to the frequency and long continuance of war, and the igno- rance and neglect of economy.’ Fenelon had expressed the same sentiments in several admirable passages of his Telemaque, but they passed for mere declamation, as well they might; for he was not qualified to prove their truth and accuracy.
  29. When Voltaire tells us, speaking of the superb edifices of Louis XIV, that they were by no means burthensome to the nation, but served to circulate money in the commu- nity, he gives a decisive proof of the utter ignorance of the most celebrated French writers of his day upon these mat- ters. He looked no further than the money employed on the occasion; and, when the view is limited to that alone, the extreme of prodigality exhibits no appearance of loss; for money is, in fact, an item, neither of revenue, nor of annual consumption. But a little closer attention will con- vince us of the fallacy of this position, which would lead us to the absurd inference, that no consumption whatever has occurred within the year, whenever the amount of specie at the end of it is found to be nowise diminished. The vigilance of the historian should have traced the 167 millions of dollars expended on the chateau of Versailles alone, from the original production by the laborious ef- forts of the productive classes of the nation, to the first exchange into money, wherewith to pay the taxes, through the second exchange into building materials, painting, gild- ing, &c. to the ultimate consumption in that shape, for the personal gratification of the vanity of the monarch. The money acted as a mere means of facilitating the transfers of value in the course of the transaction; and the winding up of the account will show, a destruction of value to the amount of 167 millions of dollars, balanced by the pro- duction of a palace, in need of constant repair, and of the splendid promenade of the gardens. Even land, though imperishable, may be consumed in the shape of the value received for it. It has been as- serted, that France lost nothing by the sale of her national domains after the revolution, because they were all sold and transferred to French subjects; but what became of the capital paid in the shape of purchase-money, when it left the pockets of the purchasers? Was it not consumed and lost.
  30. In the execution of the national military enterprise, two different values pass through the hands of the government or its agents= 1. The value paid in taxes by the public at large= 2. The value received in supplies and services from the parties affording them. For the first of these no return whatever is made; for the second, an equivalent is paid in wages or purchase-money. Wherefore, there it has no ground for saying that the government refunds with one hand what is received with the other; that the whole trans- action is a mere circulation of value, and causes no loss to the nation; for the government returns but one, where it receives two; the loss of the other half falls upon the com- munity at large. Thus, the national, being but the aggre- gate of individual wealth, is diminished to the extent of the total consumption of the government, minus the prod- uct of the public establishment; as we shall presently see more in detail.
  31. It has been seen in the concluding chapter of Book II that, inasmuch as population is always commensurate with pro- duction, the obstruction of the progressive multiplication of products is a preventive check to the further multiplica- tion of the human race; and that the waste of capital, the extinction of industry, and the exhaustion of the sources of production, amount to positive decimation of those in actual existence. A wicked or ignorant administration may, in this way, be a far more destructive scourge, than war with all its atrocities.
  32. By government, I mean, the ruling power in all its branches, and under whatever constitutional form; it would be wrong to limit the term to the executive branch alone; the first enactment of a law is as much an act of authority, das its subsequent enforcement.
  33. The consumption of a nation may undoubtedly exceed its aggregate annual revenue; but we can hardly suppose that of Great Britain to have done so; for she has evidently been advancing in opulence, up to the present time, whence it may be inferred, that her consumption, at the very ut- most, only equals her revenue. Gentz, who will hardly be accused of underrating the financial resources of that coun- try, estimated her total annual revenue at no more than two hundred millions sterling; Dr. Beeke at two hundred and eighteen millions, inclusive of one hundred millions for the revenues of industry. Granting her to have made some further progress since those estimates were made, and that her total revenue in 1813 had advanced to two hundred and twenty-four millions, we are told by Colquhoun, in his Wealth, Power, and Resources of the British Empire, that her public expenditure in that year amounted to one hundred and twelve millions. By this state- ment it should seem, that her public expenditure then amounted to the half of the total expenditure of the nation! Moreover, the expenses of her central government do not include all her public charges; there are to be added, county and parish rates, poor rates, &c. &c. The business of gov- ernment might be conducted, even in extensive empires, at a charge of not more than one per cent. upon the aggre- gate of individual revenue; but, to attain this degree of perfection, a vast improvement is still requisite in the de- partment of practical policy. [We copy from a Treatise on the Taxation of the British Empire, by R. Montgomery Martin, published in London, in 1833, the following note: 260Book III= On Consumption — “Lord Liverpool said, in 1822, that the annual income of Great Britain, after making allowances for the reduc- tion of rents, and the diminution of the profits of trade since the war, may be stated to be from £250,000,000 to £280,000,000 sterling. Now if the population of Great Britain in 1833 be taken in round numbers at 16 millions, and the average expenditure for each individual be so low as one shilling per day, or £18 5s. a-year, the annual in- come would be £452,000,000 and double that sum if the average expenditure of each individual were taken at two shillings per day, which would not be an unreasonable cal- culation= applying the same rule to Ireland, but giving the average expenditure of each individual so low as sixpence a-day, on a population of eight millions, the annual in- come of Ireland would be £73,000,000. Thus the annual income of the United Kingdom in 1833, is upwards of £500,000,000 sterling on the lowest computation.” Esti- mating, on such authority, the annual income of Great Brit- ain and Ireland at 500 millions sterling, we perceive that this income, even after the payment of the taxes, enor- mous as they have been, is much greater now than at any former period of her history; and there therefore can be no doubt that a continued augmentation of the national capi- tal must take place, even in defiance of many obstructions. The public expenditure, too, of the same kingdom, is in course of gradual reduction. During the late war, as has been observed by our author, on the authority of Colquhoun, the public expenditure of the year 1813 amounted to 112 millions, whereas in 1830 it was about 34 millions, in 1831, 33 millions, and in 1832 not so much by £100,000 sterling. American Editor.
  34. Esprit des Lois, liv. xxxi. c. 18.
  35. Memoires du Prince Eugene par luimème, p. 187. The authenticity of this work has been contested, as well as the Testament Politique of Richelieu. If not themselves the authors, they must at least have been men of equal capac- ity, of which there is still less probability.
  36. He contrived to meet the charges of the American war, without the imposition of any additional taxes. He has been reproached, indeed, with having incurred heavy loans; but it is obvious, that, so long as he found means to pay the interest upon them without fresh taxation, they were now- ise burthensome upon the nation; and that the interest must have been defrayed by retrenchment of the expenditure.
  37. Raynal. Histoire des Etab. des Europ. dans les Indes, tom. ii. p. 36.
  38. The expressions, credit is declining, credit is reviving, are common in the mouths of the generality, who are, for the most part, ignorant of the precise meaning of credit. It does not imply confidence in the government exclusively; for the bulk of the community have no concern with gov- ernment, in respect to their private affairs. Neither is it exclusively applied to the mutual confidence of individu- als; for a person in good repute and circumstances, does not forfeit them all at once; and, even in times of general distress, the forfeiture of individual character is by no means so universal, as to justify the assertion, that credit is at an end. It would rather seem to imply, confidence in future events. The temporary dread of taxation, arbitrary exaction, or violence, will deter numbers from exposing their persons or their property; undertakings, however promising and well-planned, become too hazardous; new ones are altogether discouraged, old ones feel a diminu- tion of profit; merchants contract their operations; and con- sumption in general falls off, in consequence of the de- cline and the uncertainty of individual revenue. There can be no confidence in future events, either under an enter- prising, ambitious, or unjust government, or under one, that is wanting in strength, decision, or method. Credit, like crystallization, can only take place in a state of quies- cence.
  39. A mere sketch is all that can be expected in a work like the present= a complete treatise on government would be equally appropriate with a survey of the arts, when it be- came incidentally necessary to touch upon the processes of manufacture. Yet, either would be a valuable addition to literary wealth.
  40. This rule must be taken with some qualification. The habitual largesses of corn, distributed by the emperors to the people of ancient Rome, were material objects of pub- lic consumption. So likewise the provisions of all kinds consumed in hospitals and prisons, and the fireworks used on occasions of public display or rejoicing, for the amuse- ment of the people at large.
  41. It should be recollected, however, that they were at no charge of defence from external attack, except in respect to the savage tribes of the interior. From the official ac- count of the receipts and disbursements of the United States, in the year 1806, presented by Mr. Gallatin, then Secretary of the Treasury, it appears that the total expen- diture fell short of twelve millions of dollars. of which eight millions went to pay the interest of the public debt; leaving a sum of four millions only for the charge of gov- ernment, that is to say, the civil, judicial, military, and other public functions of a population of twelve millions= which is wholly defrayed by taxes on imports. [At the period to which our author here refers, namely, the year 1806, the actual expenditure by the gov- ernment of the United States, for that year, according to the report of the Secretary of the Treasury, was 15,070,093 dollars 97 cents, and of this amount, according to the same authority, 8,989,884 dollars 61 cents, was on account of the extinguishment of the principal and interest of the public debt. The population of the United States, for the same year, was only about 6 millions; for, according to the offi- cial enumerations, the population, in the year 1800, was 5,305,925, and in the year 1810, was 7,239,814. Now the charges of the government, exclusive of the payment of 261Jean-Baptise Say, A Treatise on Political Economy 1820 1821 1822 1823 1824 1825 1826 1827 1828 1829 1830 1831 1832 1833 the public debt, it will be seen, amounted then to 6,080,209 dollars 36 cents, or an expenditure equal to more than treble the amount given by our author. The whole public expenditure of the people of the United States necessarily embraces the local disbursements of the different states, as well as the expenditure of the general government. Of the former, we have, as yet, no means of presenting our readers with any accurate or offi- cial account, and we will not venture to indulge in any loose estimates. Of the latter, however, we are enabled to furnish a tabular view, extracted from the letter of the Sec- retary of the Treasury to the Chairman of the Committee of the House of Representatives on Retrenchment, April 9, 1830, and from the subsequent annual Treasury Reports, which will exhibit an authentic and accurate view of the receipts and expenditures of the Federal Government, from the 4th of March, 1789, the period of its commencement, to the 31st of December, 1832, the last date to which the accounts have been all made up. We also subjoin the last official revision of the popu- lation returns of the several states and territories, accord- ing to the five enumerations of the years 1790, 1800, 1810, 1820, and 1830. 15,005,612 13,004,447 17,589,761 19,088,433 17,878,325 20,098,713 23,341,331 19,712,283 23,205,523 22,681,965 21,922,391 24,224,441 28,465,237 29,032,508 $623,941,576 15 15 94 44 71 45 77 29 64 91 39 97 21 91 17 20,881,493 68 19,573,703 72 20,232,427 94 20,540,666 26 24,381,212 79 26,840,858 02 25,260,434 21 22,966,363 96 24,763,629 23 24,767,122 22 24,844,116 51 28,526,820 82 31,865,561 16 33,948,426 25 $878,150,589 52 Expenditures From March 4, 1789, to December 31, 1833. Years. Public Debt. Total. From March 4, 1789, to Dec. 31, 1791 $5,287,949 50 $7,207,539 08 1792 7,263,665 99 9,141,569 67 1793 5,819,505 29 7,529,575 55 1794 5,801,578 09 9,302,124 74 1795 6,084,411 61 10,435,069 65 1796 5,835,846 44 8,367,776 84 1797 5,792,421 82 8,626,012 78 1798 3,990,294 14 8,613,517 68 1799 4,596,876 78 11,077,043,50 1800 4,578,369 95 11,989,739 92 1801 7,291,707 04 12,273,376 94 1802 9,539,004 76 13,276,084 67 1803 7,256,159 43 11,258,983 67 1804 8,171,787 45 12,624,646 36 1805 7,369,889 79 13,727,124 41 1806 8,989,884 61 15,070,093 97 1807 6,307,720 10 11,292,292 99 1808 10,260,245 35 16,764,584 20 1809 6,452,554 16 13,867,226 30 1810 8,008,904 46 13,319,986 74 1811 8,009,204 05 13,601,808 91 1812 4,449,622 45 22,279,121 15 1813 11,108,128 44 39,190,520 36 1814 7,900,543 94 38,028,230 32 1815 12,628,922 35 39,582,493 35 1816 24,871,062 93 48,244,495 51 1817 25,423,036 12 40,877,646 04 1818 21,296,201 62 35,104,875 40 1819 7,703,926 29 24,004,199 73 1820 8,628,494 28 21,763,024 85 1821 8,367,093 62 19,090,572 69 1822 7,848,949 12 17,676,592 63 1823 5,530,016 41 15,314,171 00 1824 16,568,393 76 31,898,538 47 1825 12,095,344 78 23,585,804 72 1826 11,041,032 19 24,103,398 46 1827 10,003,668 39 22,656,765 04 1828 12,163,438 07 25,459,479 52 Receipts From March 4, 1789, to December 31, 1833. Years. Customs. Total. From March 4, 1789, to Dec. 31, 1791 $4,399,473 09 $10,210,025 75 1792 3,443,070 85 8,740,766 77 1793 4,255,606 56 5,720,624 28 1794 4,801,065 28 10,041,101 65 1795 5,588,461 26 9,419,802 79 1796 6,567,987 94 8,740,329 65 1797 7,549,649 65 8,758,916 40 1798 7,106,061 93 8,209,070 07 1799 6,610,449 31 12,621,459 84 1800 9,080,932 73 12,451,184 14 1801 10,750,778 93 12,945,455 95 1802 12,438,235 74 15,001,391 31 1803 10,479,417 61 11,064,097 63 1804 11,098,565 33 11,835,840 02 1805 12,936,487 04 13,689,508 14 1806 14,667,698 17 15,608,823 78 1807 15,845,521 61 16,398,019 26 1808 16,363,550 58 17,062,544 09 1809 7,296,020 58 7,773,473 12 1810 8,583,309 31 12,144,206 53 1811 13,313,222 73 14,431,838 14 1812 8,958,777 53 22,639,032 76 1813 13,224,623 25 40,524,844 95 1814 5,998,772 08 34,559,536 95 1815 7,282,942 22 50,961,237 60 1816 36,306,874 88 57,171,421 82 1817 26,283,348 49 33,833,592 33 1818 17,176,385 00 21,593,936 66 1819 20,283,608 76 24,605,665 37 262Book III= On Consumption 1829 1830 1831 1832 1833 12,383,800 77 11,355,748 22 16,174,378 22 17,840,309 29 1,543,543 38 $409,633,680 45 25,071,017 59 24,585,281 55 30,038,446 12 34,356,698 06 24,257,298 49 $866,534,848 56 ing the benefit of division of labour. Tr.]
  42. The Greeks, until the second Persian war, and the Ro- mans, until the siege of Veii, regularly made their military campaigns in that interval. Nations of hunters or shepherds, that pay little attention to the arts, and none to agriculture, like the Tartars and Arabs, are less circumscribed in time, and can prosecute their warlike enterprises in any quarter, that promises booty, and furnishes pasturage Hence the vast area of the conquests of Attila, Genghis Khan, and Tamerlane and of the Moors and the Turks.
  43. It has been calculated that every soldier, brought into the field by Great Britain, during her last war with America, cost her twice as much as one on the continent of Europe. And the other charges of warfare must of course be aggra- vated by the distance in an equal ratio.
  44. This is too generally expressed. Where security from ex- ternal attack it only to be had by means of a professional soldiery; the soldier is a productive agent — productive of the immaterial product, security from external attack, than which, under certain circumstances, none can be more valuable. Tr.
  45. Those who deny the progressive influence of human rea- son must have studied history to very little purpose. The perfidy and cruelty of war have considerably abated, in Europe, more than in Asia or America, and most of all amongst the most polished of the European nations. The ungenerous character of some recent military enterprises roused so much public indignation, as to make them recoil upon the projectors with ruinous violence.
  46. am here speaking of the only sure reliance in an enlight- ened age. A people, that has nothing to lose by a change of domination, may defend itself with the most determined gallantry. The Mussulman will rush on certain destruction, in defence of a prince and a faith, that are neither of them worth defending. But political and religious prejudice will sooner or later fall to the ground; and leave mankind to seek for some more reasonable object of devotion.
  47. Should the expected success attend the attempt to naturalise in Europe the flax of New Zealand, which is greatly superior to that of Europe in the length and deli- cacy of the fibre, as well as in the abundance of the crop, it is possibly that fine linen may be produced at the rate now paid for the coarsest quality; which would greatly improve the cleanliness and health of the lower classes.
  48. Book II. chap. 7. sect. 2.
  49. What was denominated an University, under the reign of Napoleon, was a still more mischievous institution; being, in fact, but a most expensive and vexatious contrivance, for depraving the intellectual faculties of the rising gen- eration, by substituting, in the place of just and correct notions of things, opinions calculated to perpetuate the political slavery of their country. [“It is chiefly,” observes Dugald Stewart, “in judg- ing of question coming home to their business and bo- Population of the United States, According to Five Enumerations; from the Official Revision. States.
  50. An example occurs to me of a city of France, whose mu- nicipal administration was both mildly and efficiently con- ducted before 1789, at a charge of 1000 crowns per an- num only, but under the imperial government, though it Most 30,000 fr. (5,580 dollars) afforded no security against the caprice and arbitrary will of the sovereign.
  51. Several times during the last century the Molinist priest- hood refused tu execute their clerical duties in favour of the Jansenists, in spite of all the government could do; on the pretence, that it was better to obey the divine com- mand as conveyed by the voice of the Pope, than that of any human authority. [This inconvenience can arise only in countries, where there is an exclusive national church, subjected, in matters of doctrine and discipline, to an in- dependent or external superior= as in countries embracing the faith of Rome. But there is another inconvenience, that has been much dwelt upon by an eminent divine of the Scottish church; viz., the inconvenience of directing the attention of the priesthood from its clerical to civil func- tions, and, by a confusion of such different duties, abridg- 263Jean-Baptise Say, A Treatise on Political Economy soms, that casual associations lead mankind astray; and of such associations, how incalculable is the number arising from false systems of religion, oppressive forms of gov- ernment, and absurd plans of education. The consequence is, that while the physical and mathematical discoveries of former ages present themselves to the hand of the histo- rian, like masses of pure and native gold, the truths which we are here in quest of may be compared to iron, which although at once the most necessary and the most widely diffused of all the metals, commonly requires a discrimi- nating eye to detect its existence, and a tedious as well as nice process, to extract it from the ore.” “To the same circumstance it is owing, that improve- ments in Moral and in Political Science do not strike the imagination with nearly so great force as the discoveries of the Mathematician or of the Chemist. When an inveter- ate prejudice is destroyed by extirpating the casual asso- ciations on which it was grafted, how powerful is the new impulse given to the intellectual faculties of man! Yet how slow and silent the process by which the effect is accom- plished! Were it not, indeed, for a certain class of learned authors, who, from time to time, heave the log into the deep, we should hardly believe that the reason of the spe- cies is progressive. In this respect, the religious and academical establishments in some parts of Europe are not without their use to the historian of the human mind. Immovably moored to the same station by the strength of their cables, and the weight of their anchors, they enable him to measure the rapidity of the current by which the rest of the world are borne along.” Vide Preface to Stewart’s Dissertations, p. 28, Bos- ton edition.] American Editor.
  52. Under this head, I would include, the fundamental parts of knowledge in every department, and the familiar in- struction adapted to each specific calling, respectively; such as would impart at a cheap rate to the hatter, the metal- founder, the potter, the dyer, &c., the general principles of their respective arts. Works of this kind keep up a constant channel of communication between the practical and theo- retical branches, and enable them to profit mutually by each other’s experience.
  53. This can only be true where the demand for such works is limited. In England, works of instruction are probably amongst the most profitable to the authors. Tr.
  54. According to the new method, introduced by Lancaster, and perfected by subsequent teachers, a single master with very little aid of books, pens, or paper, can rapidly and effectually teach reading, writing, and vulgar arithmetic, to five or six hundred scholars at a time. This truly eco- nomical result is produced, by taking advantage of the slightest superiority of intelligence of one above another, and directing the motive of emulation, natural to the hu- man breast, towards an useful object. A large school is commonly divided into forms, consisting each of eight children, as nearly equal in advancement as possible, and instructed by a child somewhat more advanced, called the Monitor. These forms again are divided into eight classes; of which the lowest learns to pronounce the letters of the alphabet, and to trace their figures rudely with the finger upon sand spread out upon a flat board; and the highest is able to write upon paper, and to practise the four rules of arithmetic. The children of each form are ranged accord- ing to their progress; and whoever cannot give the answer, is immediately superseded by a more apt scholar. As soon as a child is perfected in one class, he is transferred to the next in degree. The lessons are received, sometimes in a sitting posture, and sometimes upright, with slates affixed to the walls. The instruction is thus always accommodated to the age and faculties of the child; it necessarily arrests and rewards his attention; and involves that personal ac- tivity, essential to the infant frame. The whole is conducted in a single apartment, and usually under the superinten- dence of a single master or mistress. The general adoption of this method will probably be for some time, opposed by custom and prejudice; but its utility and conformity to the order or nature will ensure its ultimate and universal prevalence.
  55. I am strongly disposed to say the same of logic. Were nothing taught, but that is consistent with truth and good sense, logic would follow of itself as a matter of course: all the teaching in the world will never make a man a good reasoner, whose notions and ideas of things are unsound and erroneous; and, with the foundation of just notions, he will require no teaching to make him reason well. Just ideas of things are only to be acquired by attentive examination; by taking account of every particular concerning them, and of nothing but what concerns them; which is the object of all knowledge in general, and by no means of logic alone.
  56. The bad example of a vicious prince is of the most fatal tendency; it is notorious to all the world, and protected and abetted by public authority; and it is sure to be re- flected by the subservience of courtiers to the extreme point of imitative servility.
  57. At Paris, the limitation of relief afforded by the Hospice des Incurables, and those of Petites Maisons, of St. Louis, of Charite, and many others, is of the former kind; the admissions to the Hotel-Dieu, Bicetre, Saltpetriere, and Enfans-Trouves, are subject to a limitation of the latter kind. As the number of applicants duly qualified for ad- mission in the establishment first mentioned always ex- ceeds their capacity, the choice must ultimately be decided by favour or interest.
  58. Yet it is well worth consideration, whether it be not more to the advantage, both of the state and of its pensioners, to maintain them at their own homes upon a fixed income, or to board them out with individuals. The Abbé de St. Pierre, whose mind was ever actively at work for the public good, 264Book III= On Consumption has estimated the charge of maintaining the invalids in their sumptuous establishment at Paris, to be three times as much as that of their maintenance at their respective homes, Annales Polit. p. 209.
  59. With all this waste of space in the great roads of France, there are in none of them either paved or gravelled foot- ways, passable at all seasons, or stone seats, for the travel- lers to rest upon, or places of temporary shelter from the weather, or cisterns to quench the thirst; all which might be added with a very trifling expense.
  60. Book I. chap. 9.
  61. Book II. chap. 3.
  62. To say, that if the road were not in existence, the charge of transport could never be so enormous as here suggested, because the transport would never take place at all, and people would contrive to do without the objects of trans- port, would be a strange way of eluding the argument. Self- denial of this kind, enforced by the want of means to pur- chase, is an instance of poverty, not of wealth. The pov- erty of the consumer is extreme, in respect to every object he is thus made too poor to purchase; and he becomes richer in respect to it, in pro portion as its price or value declines.
  63. In lieu of canals, iron rail-roads from one town to another will probably be one day constructed. The saving in the cost of transport would probably exceed the interest of the very heavy expense in the outset. Besides the additional facility of movement, roads of this kind would remedy the violent jolting of passengers and goods. Undertakings of such magnitude can only be prosecuted in countries where capital is very abundant, and where the government in- spires the adventurers with the firm assurance of reaping themselves the profit of the adventure.
  64. Our author seems in this passage to have become a con- vert to the opinion of Smith, in respect to the civil tribu- nals of a nation, from which he had expressed his dissent, in former editions. Though arbitration may be a very good mode of settling civil suits, where the parties are both anx- ious to come to a settlement, and indeed is frequently re- sorted to, and should always be encouraged; yet it is mani- fest, that there must be a compulsory tribunal for the ob- stinate, or refractory. And, since security of person and property is the main object of social institutions, it is but just, that invasion in a particular instance should be re- pelled and deterred at the public charge. In strict justice, the invader should be held to make good the whole dam- age; and so he is or ought to be, in the shape of costs, fine, damages, or otherwise. But it is not consistent with equity that the sufferer should be deterred from pursuing his claim, by superadding a proportion of the outlay upon the judi- cial establishments to the charge of wit. nesses and agents, which he must necessarily advance, and to the risk of in- ability in the delinquent, even in the event of ultimate suc- cess. Tr.
  65. What avails it, for instance, that taxation is imposed by consent of the people or their representatives, if there ex- ists in the state a power, that by its acts can leave the people no alternative but consent De Lolme, in his Essay on the English Constitution, says that the right of the Crown to make war is nugatory, while the people have the right of refusing the supplies for carrying it on. May it not be said, with much more truth, that the right of the people to deny the supplies is nugatory, when the crown has involved them in a predicament that makes consent a matter of neces- sity? The liberties of Great Britain have no real security, except in the freedom of the press, which rests itself, rather upon the habits and opinions of the nation, than upon le- gal enactments or judicial decisions. A nation is free, when it is bent on freedom; and the most formidable obstacle to the establishment of civil liberty is the absence of the de- sire for it.
  66. By the, same reasoning it has been attempted to prove, that luxury and barren consumption operate as a stimulus to production. Yet they are less mischievous than taxa- tion; inasmuch as they redound to the personal gratifica- tion of the party himself= whereas, to use the expedient of taxation as a stimulative to increased production, is to re- double the exertions of the community, for the sole pur- pose of multiplying its privations, rather than its enjoy- ments. For, if increased taxation be applied to the support of a complex, overgrown, and ostentatious internal admin- istration, or of a superfluous and disproportionate mili- tary establishment, that may act as a drain of individual wealth, and of the flower of the national youth, and an aggressor upon the peace and happiness of domestic life, will not this be paying as dearly for a grievous public nui- sance, as if it were a benefit of the first magnitude?
  67. Memoires, liv. xx.
  68. It is hardly necessary to Controvert an opinion, enter- tained by sovereigns in times past, respecting the property of their subjects. We find Louis XIV writing in these terms, professedly for the instruction of his son in matters of gov- ernment= “Kings are absolute lords naturally possessing the entire and uncontrolled disposal of all property, whether belonging to the church or to the laity, to be exercised at all times with due regard to economy, and to the general interests of the state.” Œuvres de Louis XIV, Memoires Hist. A. D. 1666.
  69. In France, before 1789, the average annual consumption of salt was estimated at 9 lbs. per head in the districts sub- ject to the gabelle, and at 18 lbs. per head in those exempt from that impost. De Monthieu, Influence des diver Impots, p. 141 Thus, taxation in this form obstructed the produc- tion of ½ of this article in the districts subjected to it, and reduced to ½ the enjoyment it was capable of affording; to say nothing of the other mischiefs resulting from it; the injury to tillage, to the feeding of cattle, and to the prepa- ration of salted goods; the popular animosity against the 265Jean-Baptise Say, A Treatise on Political Economy collectors of tax, the consequent increase of crime and conviction, and the consignment to the galleys of numer- ous individuals, whose industry and courage might have been made available to the increase of national opulence. In 1804, the English government raised the duties on sugar 20 per cent. It might have been expected, that their average product to the public exchequer would have been advanced in the same ratio; i.e., from £2,778,000 the former amount, to £3,330,000= instead of which the in- creased duties produced but £2,537,000; exhibiting an absolute deficit. Speech of Henry Brougham, Esq., M. P., March 13, 1817. The people of Great Britain might consume French wines at a very little advance upon the prices of France, and have the enjoyment of an unadulterated, wholesome, and exhilarating beverage, costing perhaps a shilling a bottle. But the exorbitant duty upon this article has re- duced its import and the product of the duty to a very trifle; and thus, the sole benefit resulting from the tax to the Brit- ish nation is, the total privation of a cheap and wholesome object of consumption. The two last examples are a sufficient answer to the objection taken by Ricardo to this passage of my text; on the ground that taxation is not injurious to production ir the aggregate, inasmuch as the consumption of the state itself replaces that of individuals, which is annihilated by the tax. A tax, that robs the individual, without benefit to the exchequer, substitutes no public consumption what- ever. in place of the private consumption it extinguishes.
  70. Of this, a striking instance is given in a work entitled, Diverses Idées sur la Legislation et l’Administration, par M. C. St. Paul. One of the principal bankers of Paris hav- ing died in 1817, the duty on legacies and inheritance was levied upon the aggregate of his credit-account, and not upon the balance, after deducting the debits; and this by virtue of a proviso in the revenue laws, which charges the duty upon the gross estate of a defunct, and not upon the residue after the discharge of the outstanding claims. The danger of fraud upon the revenue in stating the account, is not sufficient to justify the exaction of more than is fairly due. The same department is in the habit of giving no notice to the executors or other parties, of the payments falling due, until after the legal time has expired, in the hope of incurring the penalty of default. The revolution had abolished this official and fiscal severity; but it was revived by the imperial government, and has been acted upon ever since. A clerk or officer has no chance of pro- motion, unless he shows a disposition on all occasions to postpone the interests of the public to those of the exche- quer.
  71. Œuvres de Turgot, tom. i. p. 170. The accounts of the farmers-general were minutely stated, and rigidly investi- gated, because the crown participated in their profits.
  72. Essai Pol. sur la Nouvelle Espagne, liv. v. c. 12.
  73. This position is further confirmed by an instance men- tioned in a letter, addressed in 1785, by the then Marquis of Lansdowne to the Abbé Morellet, stating, that in re- spect to the article of tea, the good effect of the reduction of duty had surpassed all expectation. The amount of sale had advanced from 5,000,000 lbs to 12,000,000 lbs., in spite of many unfavourable circumstances. besides which, smuggling had been so much crippled, that the public rev- enue had been increased to a degree that astonished every body.
  74. This doctrine has been combated by Ricardo, in his Prin- ciples of Political Economy and Taxation. That writer maintains, that since the amount and the product of indus- try are always proportionate to the quantum of the capital engaged in it, the extinction of one branch by taxation must needs be compensated by the product of some other, to- wards which the industry and capital, thrown out of em- ploy, will naturally be diverted. I answer, that whenever taxation diverts capital from one mode of employment to another, it annihilates the profits of all who are thrown out of employ by the change, and diminishes those of the rest of the community; for industry may be presumed to have chosen the most profitable channel. I will go further, and say, that a forcible diversion of the current of production annihilates many additional sources of profit to industry. Besides, it makes a vast difference to the public prosper- ity, whether the individual or the state be the consumer. A thriving and lucrative branch of industry promotes the cre- ation and accumulation of new capital; whereas, under the pressure of taxation, and accumulation of new capital, it ceases to be lucrative; capital diminishes gradually instead of increasing; wealth and production decline in conse- quence, and prosperity vanishes, leaving behind the pres- sure of unremitting taxation. Ricardo has endeavoured to introduce the unbending maxims of geometrical demon- stration; in the science of political economy, there ir. no method less worthy of reliance.
  75. Chap. V. sect. I.
  76. Liv. xx. Page 453.
  77. Under the system of Napoleon, which made civilization retrograde to this, as well as in most other particulars, the charges of collection in which must be included the charge of privation and the irrecoverable arrears, were much more considerable; but the full extent of the mischief he caused is not yet ascertained.
  78. Necker reckons the corvee at four millions of dollars only; but probably he takes account of nothing, but the value the day-labour exacted; and does not notice the injury re- sulting from this method of supplying the public necessi- ties.
  79. Wealth of Nations, book v. c. 2. It has been objected, that a progressive scale of taxation presents the disadvantage of operating as a penalty to deter activity and frugality 266Book III= On Consumption from the accumulation of capital. But it must be obvious, that taxation of all kinds subtracts a portion only, and gen- erally a very moderate portion, of the addition made to the fortune of an individual; so that every one has a much stron- ger inducement to invite, than penalty to deter, accumula- tion. If a person had to pay 40 dollars more in taxes, upon every addition of 200 dollars to his revenue, still he would multiply his enjoyments in a larger ratio than his sacri- fices. Vide what is said in Sect. 4 of the same Chapter, on the subject of the land-tax of England. Ibid.
  80. This is the reason, why it has been found practicable to raise the duty on registration to its present high scale. Were it reduced, the product to the exchequer would probably be equally great; and the nation would enjoy the benefit of greater freedom of circulation, besides experiencing less encroachment upon its capital.
  81. Taxes upon law proceedings are the most grievous and oppressive that have ever been resorted to, and since the appearance of Mr. Bentham’s work on Law taxes, no one, who has read it, can doubt their impolicy. It is said in the Edinburgh Review (vol. 27, page 358.), “that one day Mr. Rose, in Mr. Pitt’s presence, took Mr. Bentham aside, and informed him that they had read the pamphlet-that its rea- soning was unanswerable-and that it was resolved there should he no more such taxes.” “Yet Budget after Bud- get,” remarks the reviewer, “has since been formed, in which those duties have made a part; and Mr. Pitt himself was found to patronize them upon his return to office in 1804.” All the arguments ever brought forward in support of this objectionable impost, have been triumphantly re- futed by Mr Bentham, in this work, which it is said in the same Review, “for closeness of reasoning, has not per- haps been equalled,!nd for excellence of style, has cer- tainly never been surpassed.” American Editor.
  82. In both England and France, premiums are given upon the importation of specific raw materials, with a view to encourage manufacture. This is an error on the opposite side. Upon this principle, instead of a tax on the product of land, a bounty should be given to all who would take the trouble to cultivate, for domestic agriculture furnishes the raw material of most manufactures; as grain in par- ticular, which is transformed, through the mediation of human exertion, into value of various kinds, exceeding that consumed in the process. Customs or duties of import upon any article whatever are equally equitable with di- rect taxes upon land; both are positive evils; but the lighter the tax, the matter the injury.
  83. When it is absolutely necessary to lay a tax upon a par- ticular kind of consumption or industry, which it is desir- able not to extinguish altogether, the burthen must be light in the commencement, and increased gradually and cau- tiously. But if it be desired to repress or annihilate a mis- chievous class of consumption or industry, the full weight of the tax should be thrown upon it at once.
  84. The efficacy of the characteristics of punishment has been placed beyond all doubt by Beccaria, in his tract, Dei delitti e delle pene.
  85. This species of tax is still more iniquitous, because it must fall either upon orphans. or upon parents, who are dis- posed to submit to personal privations, for the purpose of rearing valuable citizens; because it is heavier in propor- tion to the number of children, and the degree of privation of the parent; and because it is disproportionate to the means of the individual, poor and rich being taxed alike. A parent of moderate fortune, with one son only, pays as much to the university as all the rest of his taxes together: if he have more sons than one, he is still worse off. Thus was this institution converted by the usurper into an in- strument of fiscal extortion, sufficient of itself to have in- sured the relapse into barbarism, even had it never been made the medium of instilling false ideas or habits of ser- vility. The pretext, of making the profits of private estab- lishments contribute to the expense of compulsory tuition, is by no means satisfactory. Supposing the tuition of the public Lycées to be, of all others, the best calculated to train up useful citizens; and, admitting the justice of com- pelling a father, or a teacher to his choice, to bring his pupil to the lectures of the authorized professors, still the parties, least in need of this instruction, are those already placed in private establishments of education, and entrusted to teachers of their own selection. It may be for the inter- est of the community at large, to dispense particular classes of learning gratuitously; but it is the greatest oppression to force learning upon individuals, and make them pay dear for it into the bargain. If any one class in particular ought to defray the charge of moderate gratuitous tuition, it is that, which has no children of its own, and is in the/recep- tion of all the benefits of social life, without being subject to all its burthens.
  86. Lotteries and games of hazard, besides occupying capital unprofitably, involve the waste of a vast deal of time, that might be turned to useful account, and this item of expen- diture can never redound to the profit of the exchequer. They have the further mischievous effect of accustoming mankind to look to chance alone for what their own tal- ents or enterprise might attain; and to seek for personal gain, rather in the loss of others, than in the original sources of wealth. The reward of active energy appears paltry be- side the bait of a capital prize. Moreover, lotteries are a sort of tax, that, however voluntarily incurred, falls almost wholly upon the necessitous; for nothing, but the pressure of want can drive mankind to adventure, with the chances manifestly against them. The sums thus embarked are, for the most part, the portion of misery, or. what is worse, the fruit of actual crime.
  87. Not because they affect the tax-payer indirectly; for this circumstance is equally applicable to many items of direct 267Jean-Baptise Say, A Treatise on Political Economy taxation; as, for instance, to the license-tax (patentes) part of which falls indirectly upon the consumer, who buys of he licensed dealer.
  88. Vide Examination of B. Franklin, at the bar of the House of Commons, 1767. Memoirs, vol. i. Appendix 6. [The denial went to the whole of what is called internal taxa- tion; the admission, which appears on the part of the Ameri- can agents to have been a concession for the sake of peace, went no farther than to external taxes for the regulation of trade. And even this concession on the part of some of the agents was very soon retracted, and the right of taxation denied in toto. Ibid. vol. i. passim Tr.]
  89. Garnier, Traduction de Smith, tom. iv. p. 438. According to Arthur Young, the stamp-duties in his time cost but £5,691 in the collection, upon the receipt of £1,330,000; which is less than a per cent.
  90. Supra, Book II. chap. I.
  91. The position, that the interest of the capitalist and the rent of the landlord are thereby lowered, however paradoxical it may appear, is nevertheless quite true. It may be asked, why should the capitalist, who makes the advance to the manufacturer, or the landlord, whose land he occupies, lower their demands, in consequence of a portion of the product being subtracted by taxation? But is no allowance to be made for consequent delay of payment, claims of allowances, failures, and legal expenses? All, or at least a portion, of which must fall upon the landlord and capital- ist= and often without any suspicion on their part, that they are thus made to participate in the burthen. In a complex social organization the pressure of taxation is often im- perceptible. This shows the danger of adherence to invariable principle; and of abandoning the experimental method of Smith, and constructing a system of theoretical deduction, as some recent English writers have done, in imitation of the econo- mists of the last century.
  92. Vide Supra, Book I. chap. 4. for the explanation of the mode, in which the land-holder concurs in production by the advance of his land; and must, therefore, be included amongst the productive classes.
  93. The cultivation need never be abandoned altogether, un- til taxation takes more than the whole surplus product ap- plicable to the payment of rent; it is then worth nobody’s while to cultivate at all; for not only could the proprietor receive nothing, the whole being appropriated by the state; but the farmer would be compelled to pay to the state a higher rent, than he could afford.
  94. There is this peculiarity attending the products of agricul- tural industry, viz., that their average price is not raised by growing scarcity, because population is sure to decline co- extensively with the declining supply of human aliment; so that the demand necessarily diminishes equally with the supply. Thus it is not found, that wheat is dearer in those countries where great part of the land is thrown out of tillage, than where it is all in a high state of cultivation. In Spain, wheat is not now dearer, than in the time of Ferdinand and Isabella, though it is there produced in much less abundance; for the number of mouths to be fed is also much less. On the contrary, the lands of both England and France were less cultivated in the middle ages than at the present day; and their product of grain less abundant; yet it does not appear, from a comparison of other values, that it was then much dearer than at present. The product and the population were both greatly inferior; and the slack- ness of demand counterbalanced the slackness of supply.
  95. It is a mistake to suppose, that the tax must bear equally upon the proprietor and the farmer, who finds the requi- site capital and industry; for taxation can have no effect, either in reducing the quantity of land capable of cultiva- tion, or in multiplying the number of farmers, able and willing to undertake it; and, if neither supply nor demand in this branch be varied, the ratio of the rent must needs remain unaltered likewise.
  96. The economists were quite correct in their position, that a land or territorial tax falls wholly upon the net product, and consequently, upon the proprietors; but they were wrong in extending the doctrine so far as to assert, that all other taxes were defrayed out of the same fund.
  97. The French institute, which awarded the prize of merit to an Essay of M Canard, in support of this doctrine.
  98. The duty on the import of cotton into France was, in 1812, as high as 200 dollars per bale, one bale with another. There were several manufactories averaging a consumption of two bales per day; and as the amount of duty was a dead outlay, during the whole interval between the purchase of the raw material and the realization of the manufactured product, which may be taken at twelve months, they must each have required an additional capital of 120,000 dol- lars more than would have been requisite but for the tax; the interest of which they must have charged to the con- sumer, or have paid out of their own profits. The whole of it was so much addition of price to the French consumer, and aggravation of the pressure of taxation, unproductive of a single additional dollar to the public revenue. The heaviest of the national burthens of that period were those that made the least figure in the annual budget of the min- istry’ the people suffered, in very many instances, without knowing the nature of the grievance, as in the example, just cited.
  99. Book II. chap. 3.
  100. For the reason already stated, viz., that purchases, made with the proceeds of taxation, are acts of exchange, and not of restitution.
  101. This ground of apprehension is certainly just. It has been doubted by many political theorists, whether the total re- mission of taxation would operate to improve the condi- tion of the inferior productive classes= inasmuch, as all that is now paid into the public exchequer, would quickly 268Book III= On Consumption be appropriated by the classes, who should happen to be in possession of those sources and means of production, which are capable of exclusive appropriation; and the owners of mere personal agency would nowise benefit. But it should be observed, that private persons have an immediate personal interest in making the most of their property; and will, on their own account, so conduct them- selves, as to promote their own advantage, which is the advantage of the public also, where equality of personal right prevails. Wherefore, the strongest impulse of private cupidity can never operate to retard the advance of pro- ductive power and national wealth, or to make them retro- grade; but just the contrary. Thus, although the present condition of the mere labourer might not be improved, his means of bettering his condition would be enlarged, by the growing increase of wealth, and by greater freedom of personal agency. The extortion of private cupidity, unaided by authority, must, for its own sake, regulate itself by the ability of the object of it= but that of public authority is inexorable, and is restrained by no consideration of im- mediate personal interest. Besides, personal suffering, occasioned by the hard-heartedness of primate task-mas- ters, is not so strong an incentive of odium against public authority, as where that authority is itself the ostensible task-master. Tr.
  102. Taille; for the explanation of this tax, vide Wealth of Nations, book v c 2. art. 2. Tr.
  103. Wealth of Nations, book v. c. 2. art. I.
  104. Forbonnois, Principes et Observ. &c. tom. ii. p. 247.
  105. Vide App. A.
  106. In the next section it will be explained how an unre- deemable debt may be extinguished by purchase at the market price.
  107. Considerations sur les Advantages de l’Existence d’une Dette publique, p. 8.
  108. The transferable nature of these securities does not in- vest them with the properties of money, since they do not act in that capacity. But the use of convertible paper, as money, operates to create a positive addition to the total national capital, because, but for their agency in the trans- fer of value in general It must be executed by specie, or some equally substantial item of capital. Government de- bentures of stock require money to circulate them, instead of acting themselves as money.
  109. In a note, here subjoined, the author stated the amount of the British national debt, in the year 1815, on the au- thority of a speech made in parliament in February, of that year, by the chancellor of the exchequer, Mr. Vansittart. We now have it in our power, in place of the note in ques- tion, to furnish the reader with an exact statement of the British national debt, from its commencement, at the revo- lution of 1688, to the 5th of January, 1832. The abstract we give is extracted from the Tables to Part II of “Pebrer on the Taxation, Debt, Capital, Resources, &c., of the whole British Empire,” a work which we before had occa- sion to refer to, and of the highest statistical authority. Pounds sterling National debt at the revolution, 1688, 664,263 Increase during the reign of William and Mary, 15,730,439 Debt at accession of Anne, 1702, 16,394,702 Increase during reign of Anne, 37,750,661 Debt at accession of George I, 1714, 54,145,363 Decrease during reign of George I, 2,053,128 Debt at accession of George II, 1727, 52,092,235 Decrease during the peace, 5,137,612 Debt at commencement of Spanish war, 1739, 46,954,623 Increase during the war, 31,338,689 Debt at end of Spanish war, 1748, 78,293,312 Decrease during the peace, 3,721,472 Debt at commencement of war, 1755, 74,571,840 Increase during the war, 72,111,004 Debt at conclusion of the peace, 1762, 146,682,844 Decrease during the peace, 10,739,793 Debt at commencement of American war, 1776, 135,943,051 Increase during the war, 102,541,819 Debt at conclusion of American war, 1783, 238,484,870 Decrease during the peace, 4,751,261 Debt at commencement of French revolutionary war, 1793, 233,733,609 Increase during the war, 295,105,668 Debt at peace of Amiens, 1st February, 1801, 528,839,277 Increase during the second war, 335,983,164 Debt at peace of Paris, 1st February, 1816, 864,822,441 Decrease since the peace, 82,155,207 Debt on 5th January, 1832, £782,667,234 Equal to 3,756,802,723 dollars. American Editor
  110. On the National Debt of Great Britain. 8vo., Edinburgh,
  111. In England and the United States they are not nearly so high in proportion, but the ratio is even higher in some states that shall be nameless.
  112. Colquhoun, Wealth, Power, and Resources of the Brit- ish Empire, 4to. London, 1814. Stokes, Revenue and Ex- penditure of Great Britain, London, 1815. Should a con- tinuance of peace enable her to square her income with her annual expenditure, inclusive of the interest of her debt, it would still afford no relief out merely arrest the further progress of the evil.
  113. Economy in the national expenditure is the only thing that can mitigate the pressure of taxation upon the British nation; yet were economy enforced, how is that system of corruption to be upheld, through which the interest of the minister of the day regularly prevails over that of the na- tion?


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