SECT. II.
Of the State of the Nation; and the War with America.

At the beginning of the preceding section, I have taken notice of the flattering account which was given, at opening the Budget in April last, of the state of the kingdom with respect to its commerce, revenue, and opulence. On that account I shall beg leave to offer the following reflections.

First. The observations in the last section prove, I think, that it is not so well supported by facts, as there is reason to wish. I am sensible, indeed, that we never made a more gay and splendid appearance. But no considerate person will draw much encouragement from hence. That pride and security; that luxury, venality and dissipation which give us this appearance, are melancholy symptoms; and have hitherto been the forerunners of distress and calamity.

Secondly. When this account was given there was a particular end to be answered by it. Additional taxes were to be imposed; and it was necessary to reconcile the public to the prospect of a great increase of its burthens, in order to carry on the war with America.—On other occasions, different accounts had been given. In order to prove the justice of taxing the Americans, the weight of our own taxes had been often insisted upon; and the difficulty of raising a sufficient force among ourselves to reduce them, had been urged as a reason for seeking and employing, at a great expence, the assistance of foreign powers. On such occasions, I have heard our unhappy and embarrassed situation mentioned; and, at the end of the last session of Parliament, one of our greatest men, whose opinion in favour of coercion, had contributed to bring us into our present situation, acknowledged the distress attending it, and represented the vessel of the state as having never before rode in so dangerous a storm.—This is, without doubt, the truth. But, if the account on which I am remarking was just, we were then safe and happy; nor was the vessel of the state ever wafted by more gentle and prosperous gales.

But the reflection which, on this occasion, has given me most pain is the following.

If, without America, we can be in a state so flourishing, a war to reduce America must be totally inexcuseable. I wish I could engage attention to this. War is a dreadful evil; and those who involve a people in it needlessly, will find they have much to answer for. Nothing can ever justify it, but the necessity of it to secure some essential interest against unjust attacks. But, it seems, there is no interest to be secured by the present war. The revenue has never flourished so much, as since America has been rendered hostile to us; and it is now reckoned by many a decided point, that little depends on the American trade. It follows then, that if the end of the present war is to “obtain a revenue,” it is a revenue we do not want; if “to maintain authority,” it is an authority of no use to us.—Must not humanity shudder at such a war?—Why not let America alone, if we can subsist without it?—Why carry fire and sword into a happy country to do ourselves no good?

Some of the very persons who depreciate the value of the colonies, as a support to our revenue and finances, yet say, that we are now under a necessity of reducing them, or perishing. I wish such persons would give an account of the causes which, according to their ideas, create this dreadful necessity. Is it the same that led Haman of old to reckon all his honours and treasures nothing to him, while Mordecai the Jew would not bow to him?—Or, are we become so luxurious, that luxury even in the revenue is become necessary to us; and so depraved, that, like many individuals in private life, having lost self-dominion, we cannot subsist without dominion over others?

It must not be forgotten, that I speak here on the supposition, that it is possible for this country to be as safe and prosperous without America as some have asserted, and as was implied in what was said at opening the last Budget.—This is far from being my own opinion.—Some time or other we shall, in all probability, feel severely, in our commerce and finances, the loss of the colonies. As a source of revenue they are, I think, of great importance to us; but they are still more important as supports to our navy, and an aid to us in our wars. It appears now, that there is a force among them so formidable and so growing, that, with its assistance, any of the great European powers may soon make themselves masters of all the West-Indies and North-America; and nothing ought to be more alarming to us than that our natural enemies see this, and are influenced by it.—With the colonies united to us, we might be the greatest and happiest nation that ever existed. But with the colonies separated from us, and in alliance with France and Spain, we are no more a people.—They appear, therefore, to be indeed worth any price.—Our existence depends on keeping them.—But HOW are they to be kept?—Most certainly, not by forcing them to unconditional submission at the expence of many millions of money and rivers of blood. The resolution to attempt this, is a melancholy instance of that infatuation, which sometimes influences the councils of kingdoms. It is attempting to keep them by a method, which, if it succeeds, will destroy their use, and make them not worth the having; and which, if it does not succeed, will throw them into the scale of rival powers, kindle a general war, and undo the empire.

The extension of our territories in America, during the last war, increased the expence of our peace-establishment, from 2.400,000l. per ann. to four millions per ann.—Almost all the provinces in America, which used to be ours, are now to be conquered. Let the expence of this be stated at 25 or 30 millions; or, at a capital bearing a million per annum interest.—America recovered by the sword must be kept by the sword, and forts and garrisons must be maintained in every province to awe the wretched inhabitants, and to hold them in subjection. This will create another addition of expence; and both together cannot, I suppose, be stated at less than two millions per annum.—But how is such an increase of revenue to be procured?—The colonies, desolated and impoverished, will yield no revenue.—The surplusses of the sinking fund have, for many years, formed a necessary part of the current and ordinary supplies.—It must, therefore, be drawn from new taxes.—But can the kingdom bear such an increase of taxes? Or, if it can, where shall we find a surplus for discharging an enormous debt of above 160 millions? And what will be our condition, when the next foreign war shall add two millions per annum more to our expences?—Indeed this is a frightful prospect. But it will be rendered infinitely more frightful by carrying our views to that increase of the power of the Crown which will arise from the increase of the army, from the disposal of new places without number, and the patronage of the whole continent of North-America.

These consequences have been stated moderately on the supposition, that we shall succeed in subduing America; and that, while we are doing it, our natural enemies will neglect the opportunity offered them, and continue to satisfy themselves with assisting America indirectly.—But should the contrary happen.—I need not say what will follow.

Some time ago this horrid danger might have been avoided, and the colonies kept by the easiest means.—By a prudent lenity and moderation.—By receiving their petitions.—By giving up the right we claim to dispose of their property, and to alter their governments.—By guarantying to them, in these respects, a legislative independence;[94] and establishing them in the possession of equal liberty with ourselves.—This a great and magnanimous nation should have done. This, since the commencement of hostilities, would have brought them back to their former habits of respect and subordination; and might have bound them to us for ever.

Montesquieu has observed, that England, in planting colonies, should have commerce, not dominion, in view; the increase of dominion being incompatible with the security of public liberty.—Every advantage that could arise from commerce they have offered us without reserve; and their language to us has been—“Restrict us, as much as you please, in acquiring property by regulating our trade for your advantage; but claim not the disposal of that property after it has been acquired.—Be satisfied with the authority you exercised over us before the present reign.—Place us where we were in 1763.”—On these terms they have repeatedly sued for a reconciliation. In return, we have denounced them Rebels; and with our fleets in their ports, and our bayonets at their breasts, have left them no other alternative than to acknowledge our supremacy, and give up rights they think most sacred; or stand on the defensive, and appeal to heaven.—They have chosen the latter.

In this situation, if our feelings for others do not make us tremble, our feelings for ourselves soon may.—Should we suffer the consequences I have intimated, our pride will be humbled.—We shall admire the plans of moderation and equity which, without bloodshed or danger, would have kept America.—We shall wish for the happiness of former times; and remember, with anguish, the measures which many of us lately offered their lives and fortunes to support.

I must not conclude these observations, without taking particular notice of a charge against the colonies, which has been much insisted on.—“They have, it is said, always had independency in view; and it is this, chiefly, that has produced their present resistance.”—It is scarcely possible there should be a more unreasonable charge. Without all doubt, our connexion with them might have been preserved for ages to come, (perhaps for ever) by wise and liberal treatment. Let any one read a pamphlet published in 1761, by Dr. Franklin, and entitled, The interest of Great Britain with respect to her Colonies; and let him deny this if he can.—Before the present quarrel, there prevailed among them the purest affection for this country, and the warmest attachment to the House of Hanover. And since the present quarrel begun, and not longer ago than the beginning of last winter, independency was generally dreaded among them. There is the fullest evidence for this; and all who are best acquainted with America, must know it to be true. As a specimen of this evidence, and of the temper of America till the period I have mentioned, I will just recite the following facts.

In the resolutions of the Assembly, which met at Philadelphia, July 15, 1774, after making the strongest professions of affection to Britain, and duty to their sovereign, they declare their abhorrence of every idea of an unconstitutional independence on the parent state.—An assembly of delegates from all the towns of the county of Suffolk (of which Boston is the capital) delivered in September 1774, to General Gage, a remonstrance against fortifying Boston-neck. In this remonstrance, they totally disclaim every wish of independence.—The same is done in the instructions given by the several colonies to the first deputies chosen for a general Congress.—In the petition of the first Congress to the King, they declare they shall always, carefully and zealously, endeavour to support and maintain their connexion with Great Britain. In the memorial of the same Congress to the people of this country, they repeat this assurance.—In the order of the Congress, which met in May 1775, for a general fast, they call upon all America to unite in beseeching the Almighty to avert the judgments with which they were threatened, and to bless their rightful Sovereign, that so a reconciliation might be brought about with the parent state.—And in their declaration setting forth the causes of their taking arms, they warn us, “that, should they find it necessary, foreign assistance was undoubtedly attainable;” but at the same time declare, “that they did not mean to dissolve the union which had so long and so happily subsisted between them and this country; that necessity had not yet driven them to that desperate measure, or induced them to excite any other nation to war against us; and that they had not raised armies with ambitious designs of forming independent states, but solely for the protection of their property against violence, and the defence of that freedom which was their birth-right.”—In the instructions, delivered Nov. 9, 1775, by a committee of the representatives of the province of Pensylvania, to their delegates in the third general congress; they enjoin them, in behalf of the province, “utterly to reject any propositions, should such be made, that might lead to a separation from the mother country.”

What reason can there be for thinking the colonies not sincere in all these declarations?—In truth; it was not possible they should be otherwise than sincere; for so little did they think of war, at the time when most of these declarations were made, that they were totally unprepared for it: And, even when hostilities were begun at Lexington in April 1775, they were so destitute of every instrument of defence, particularly ammunition, that half the force which is now invading them, would have been sufficient to conquer them at once.

I will beg leave to add on this occasion, the following extracts from letters, written by some leading persons at New-York, the genuineness of which may be depended on.

New-York, August 3d. 1775.—“I am sensible of the many artifices and falshoods which have been used to biass the minds of your countrymen, who believe evil reports of us; and, particularly, that we are aiming at independence.—Of this be assured, that even Hancock and Adams are averse to independence. There was a lye current last week, that the congress had finally agreed upon independence to take place the 10th of March next, should not our grievances be redressed before that time. I wrote to one of our delegates, to enquire whether this report was true. In his answer he declares, upon his honour, that he believed there was not one man in the Congress who would dare to make a motion tending to independence; or, that if any one did, two could not be found to support the motion.—None but those who are on the spot can conceive what a spirit is gone forth among all ranks and degrees of men.—We deserve to be free. It is a heavy sacrifice we are making. Trade is at an end. We expect our city to be knocked about our ears. But I declare solemnly, I will submit to all, and die in a log-house in the wilds of America, and be free; rather than flourish in servitude.”—In a subsequent letter, dated New-York, Jan. 3d. 1776, the same person writes as follows:—“It is in the power of the ministry to annihilate all our disputes, by restoring us to the situation we were in at the conclusion of the last war. If this is done, we shall immediately return to our allegiance. But if not, be assured, that an awful scene will be opened in the spring. Let me repeat a caution to you; believe not the insinuations of our enemies, who would make you all believe that independence is what America aims at. It is an insidious falshood. Madmen will be found in all large societies. It would be singular, were there none such to be found in a body of three millions of people and upwards. But they are like a grain of sand on the sea shore.”

Another person writes thus.—New-York, Nov. 2d. 1775. “We love and honour our King. He has no subjects in all his dominions more attached to his person, family and government, notwithstanding the epithet of rebels bestowed upon us. No charge is more unjust than the charge that we desire an independence on Great Britain. Ninety-nine in a hundred of the inhabitants of this country deprecate this as the heaviest of evils. But if administration will persist in their present measures, this will and must inevitably be the event; for submit to the present claims of the British parliament, while unrepresented in it, you may be assured they never will. And what deserves notice is, that all the violence of Britain only unites the Americans still more firmly together, and renders them more determined to be free or die. This spirit is unconquerable by violence; but they may be easily won by kindness.—Serious people of all denominations among us, episcopal and non-episcopal, are much employed in prayer to God for the success of the present struggles of America. They consider their cause as the cause of God; and as such, they humbly commit it to him, confident of success in the end, whatever blood or treasure it may cost them.”

Since these letters were written, the sentiments of America, with respect to independence, have been much altered. But it should be remembered, that this alteration has been owing entirely to OURSELVES; I mean, to the measures of the last winter and summer, and particularly the following.

First. The rejection of the petition from the Congress brought over by Governor Penn. In this petition they professed, in strong language, that they still retained their loyalty to the King and attachment to this country; and only prayed, “that they might be directed to some mode by which the united applications of the Colonies might be improved into a happy reconciliation; and that, in the mean time, some measures might be taken for preventing their farther destruction, and for repealing such statutes as more immediately distressed them.”—The Colonies had often petitioned before without being heard. They had, therefore, little hope from this application; and meant that, if rejected, it should be their last.

Secondly. The last prohibitory bill, by which our protection of them was withdrawn; their ships and effects confiscated; and open war declared against them.

Thirdly. Employing foreign troops to subdue them. This produced a greater effect in America than is commonly imagined. And it is remarkable, that even the writers in America who answered the pamphlet entitled Common Sense, acknowledge, that should the British ministry have recourse to foreign aid, it might become[95] proper to follow their example, and to embrace the necessity of resolving upon independence.

I have, further, reason to believe, that the answer to the last petition of the City of London, presented in March 1776,[96] had no small share in producing the same effect.

By these measures, and others of the same kind, those Colonists who had all along most dreaded and abhorred independence, were at last reconciled to it.—I can, however, say from particular information, that even so lately as the month of June last, an accommodation might have been obtained with the Colonies, on a reasonable and moderate plan; without giving up any one of the rights claimed by this country, except that of altering their charters and disposing of their property.—And, as it would have restored peace and prevented the desolating calamities into which America and Britain are now plunged, no friend to humanity can avoid regretting that such a plan, when offered, was not adopted. But our rulers preferred coercion and conquest: And the consequence has been, that the Colonies, after being goaded and irritated to the utmost, resolved to disengage themselves, and directed the Congress to declare them Independent States; which was accordingly done, as is well-known, on the 4th of July last. Since that time, they have, probably, been making applications to foreign powers; and it is to be feared, that now we may in vain offer them the very terms for which they once sued.—All this is the necessary consequence of the principles by which human nature is governed.—There was a time when, perhaps, we should ourselves have acted with more violence; and, instead of remonstrating and praying, as America has done, have refused the most advantageous terms when offered with defiance, and under an awe from a military force. Had King William, instead of coming over by invitation to deliver us, invaded us; and, at the head of an army, offered us the Bill of Rights; we should, perhaps, have spurned at it; and considered Liberty itself as no better than Slavery, when enjoyed as a boon from an insolent conqueror.—But we have all along acted as if we thought the people of America did not possess the feelings and passions of men, much less of Englishmen.—It is indeed strange our ministers did not long ago see, that they had mistaken the proper method of treating the Colonies; and that though they might be gradually influenced to any thing, they could be dragooned to nothing.—Had King James the Second avoided violence; and been a little more patient and secret in pursuing his views, he might have gained all he wished for. But an eager haste and an open avowal of the odious claims of prerogative ruined him.—This has been since considered; and a plan both here and in Ireland,[97] less expeditious indeed, but more sure, has been pursued. And had the same plan been pursued in America, the whole empire might in time have been brought, without a struggle, to rest itself quietly in the lap of corruption and slavery. It may, therefore, in the issue prove happy to the Colonies, that they have not been thought worthy of any such cautious treatment. Our coercive measures have done all for them that their warmest patriots could have desired. They have united them among themselves, and bound them together under one government. They have checked them in the career of vicious luxury; guarded them against any farther infection from hence; taught them to seek all their resources within themselves; instructed them in the use of arms; and led them to form a naval and military power which may, perhaps, in time, become superior to any force that can attack them, and prove the means of preserving from invasion and violence, a government of justice and virtue, to which the oppressed in every quarter of the globe may fly, and find peace, protection, and liberty.—In short. These measures have, in all probability, hastened that disruption of the new from the old world, which will begin a new æra in the annals of mankind;[98] and produce a revolution more important, perhaps, than any that has happened in human affairs.—As a friend, therefore, to the general interest of mankind, I ought, probably, to rejoice in these measures; and to bless that all-governing Providence, which, often, out of the evil intended by wretched mortals, brings the greatest good.—But when I consider the present sufferings which these measures must occasion, and the catastrophe with which they threaten Great-Britain; I am shocked; and feel myself incapable of looking forward, without distress, to the fate of an empire, once united and happy, but now torn to pieces, and falling a sacrifice to despotic violence and blindness. Under the impressions of these sentiments, and dreading the awful crisis before us, I cannot help, however impotent my voice, crying out to this country—“Make no longer war against yourselves. Withdraw your armies from your Colonies. Offer your power to them as a protecting, not a destroying power. Grant the security they desire to their property and charters; and renounce those notions of dignity, which lead you to prefer the exactions of force to the offerings of gratitude, and to hazard every thing to gain nothing.—By such wisdom and equity America may, perhaps, be still preserved; and that dreadful breach healed, which your enemies are viewing with triumph, and all Europe with astonishment.”

But what am I doing?—At the moment I am writing this, the possibility of a reconciliation may be lost.—America may have formed an alliance with France—And the die may be cast.

SECT. III.
Of Schemes for raising Money by Public Loans.

The following observations were occasioned by the scheme for the public loan of last year, proposed to the House of Commons at opening the Budget, and afterwards agreed to. I have thought proper, therefore, to introduce these observations here; and, as they appear to me of some importance, I shall endeavour to explain them with as much care and perspicuity as possible.

In order to raise two millions, the Legislature created last year a new capital in the 3 per cent. consolidated annuities, of 2.150,000l. Every share of 77l. 10s. in this new capital was valued at 65l. 17s. 6d. or every 100l. stock at 85l. For the whole new capital, therefore, Government has received in money, 1.827,500l.—The remaining sum, necessary to make up two millions, was a compensation advanced to Government for relinquishing the profits of a Lottery, consisting of 60,000 tickets, each of the same value with 10l. three per cent. stock; and might have been obtained, without annexing the Lottery to the annuities.—This new capital the public may be obliged to redeem at par; in which case, 322,500l. (being the difference between 1.827,500 and 2.150,000l.) that is 17½ per cent. will be paid by the public more than it has received.—In this transaction, therefore, Government has acted as a private person would act, who, in order to raise 850l. on a mortgage, should promise for it 30l. per ann. (or 3½ per cent. interest) and 150l. (that is 17½ per cent. nearly) over and above the principal, when the mortgage came to be discharged.—Such a premium (should the mortgage be discharged soon) would be very extravagant; but, if never to be discharged, would be insignificant: Nor would it be possible to account for such a bargain, except by supposing, that the borrower, instead of meaning to repay the sum he borrowed, chose to continue always paying interest for it, or returning 30l. annually for 850l. once advanced; and to subject his estate, for that purpose, to an eternal incumbrance.

The public, I have said, may be obliged to discharge the new capital, lately created, at par; and, consequently, to suffer a loss by this year’s loan of 322,500l. This will, undoubtedly, happen, should the nation prosper, and the public debts be put into a regular and fixed course of redemption; for the 3 per cents. would then soon rise to par.

The extravagance I have pointed out is the more to be regretted, because it was entirely needless; for the same sum might as well have been borrowed by schemes, which would not have subjected the public to the necessity of paying, when the loan came to be discharged, more money than had been received.—For instance. The sum advanced for the new capital of 2.150,000l. three per cent. annuities, might have been procured by offering 3½ per cent. on a capital equal to the sum advanced; or on 1.827,500l. And the remainder, necessary to make up two millions, might have been obtained by the profits of a Lottery, consisting of 60,000 tickets each worth 10l. in Money. This scheme would have differed but little in value from the other; and the interest, or the annuity payable by the public, would have been 63,962l. at 3½ per cent. on a capital of 1.827,500l.;[99] instead of 64,500l. at 3 per cent. on a capital of 2.150,000l.

When a 100l. stock in the 3 per cent. annuities is sold at 85¾, purchasers get 3½ per cent. interest for their money. When, therefore, the 3 per cents are at this price, 3½ per cents would be at par; and a capital of 1.827,500l. might be redeemed by the public, (without losing any advantage arising from its debts being at a discount,) by paying this sum; or by returning the money borrowed[100]. But in the same circumstances, a capital of 2.150,000l. in the 3 per cent. annuities, for which 85l. per cent. or, in the whole, 1.827,500l. had been received, could not be redeemed without offering 86 or 87 per cent. for it; nor, therefore, without paying more than the original sum borrowed.—When the 3 per cents are near par, there would be a loss of 322,500l. in redeeming the same capital; whereas, the former annuities, for which the same sum had been advanced, might be always discharged by either paying the very sum[101] advanced, or a less sum.—In all possible circumstances, therefore, these annuities would have the advantage.—But we never, when contracting debts, carry our views to the discharge of the principal; and the consequences must prove fatal.

It is necessary I should observe, in justice to our present ministers, that in adapting the scheme on which I have made these remarks, they have only followed the example of former ministers; and that, however needless a waste it occasions of public money, there is reason to fear it will be followed by future ministers; for the increase of difficulty and expence in redeeming the public debts, which such schemes create, being to be felt hereafter, it makes no impression, and is little regarded.

In 1759, the fifth year of the last war, the lenders of 6.600,000l. were granted a capital in the 3 per cents of 7.590,000l. together with the profits of the Lottery. Subtract from the sum advanced, 150,000l. for the profits of the Lottery; and it will appear, that, in this instance, 1.140,000l. was needlessly added to the capital; there being no reason to doubt, but that lenders would then have readily advanced 6.600,000l. for a capital of 6.450,000l. bearing 3½ per cent.[102] interest, provided the profits of a Lottery were annexed; instead of advancing the same sum for a nominal capital near 18 per cent. greater, but bearing 3 per cent. interest.

Again. In 1762, in order to raise 12 millions, every contributor of 80l. was entitled to a capital of 100l. to bear 4 per cent. interest for 19 years; and afterwards to become redeemable, and to bear interest at 3 per cent. And for the remaining 20l. necessary to make up a 100l. contributors were entitled to an annuity of 1l. for 98 years.—This was the same with promising, for every 60l. advanced, a 100l. capital in the 3 per cent. annuities, not redeemable for 19 years; and, for the remaining 40l. necessary to make up 100l. an annuity of 2l. for 19 years; and, after that, of 1l. for 79 years.

By this scheme no less a sum than 4.800,000l. was needlessly added to the capital of the public debts. For, had 5 per cent. been offered for every 60l. advanced;[103] and, for the remaining 40l. an annuity of 2l. during 19 years, and afterwards of 1l. for 79 years; equal encouragement would have been given to contributors; the annuity payable by the public would have been the same; and the new capital would have been 7.200,000l. bearing 5 per cent. interest; which might, at any time, have been redeemed with a saving of a million per ann. (the first payment to be made immediately) in five years and a quarter: Whereas now, this debt will not become redeemable till 1781; and then, it will form a capital of 12 millions, not capable of being redeemed with the same saving, in less than nine years and a half. Five millions and a quarter,[104] therefore, will be wasted.

The capital of 12 millions four per cent. annuities created this year, were made irredeemable for 19 years, to guard against the effects of an apprehension then unavoidable, that an interest of 4 per cent. would, if the capitals were redeemable, be reduced, whenever peace came, to 3 per cent. as had been done in the preceding peace.—But this end would have been answered, with equal effect and more advantage to the public, by pledging the faith of Parliament, that whatever interest was promised on any capital, should not be reduced for 19 years; or (which comes to the same) that the capital should not be redeemed, during that term, by borrowing money, and creating a new capital bearing lower interest. This would have placed capitals bearing any interest on the same footing nearly with the 3 per cent. annuities; and an assurance, that no part of them should be discharged, without at the same time discharging an equal capital in the 3 per cents, would have placed them entirely on the same footing.—Had it, however, been necessary, on account of the fear of a reduction of interest, to make the capital here proposed bearing 5 per cent, and the capitals to be mentioned presently bearing 4 per cent. irredeemable, (and therefore the interest irreducible) for any term (suppose till 1781); had, I say, even this been necessary (and more could not have been necessary) no advantage of great consequence would have been lost. These capitals would, during that term, have been exactly the same burden on the public with the capitals which were actually created; and after that term, they would have been a much less burden, as will be shewn at the end of this section.

Again. In January 1760, eight millions were borrowed by offering for this sum a capital of eight millions to carry 4 per cent. interest for 21 years, and afterwards 3 per cent, together with a premium of 240,000l. stock carrying the same interest, and divided into 80,000l. lottery tickets, each 3l. stock.—This was the same with offering, for 80l. of every 100l. advanced, a capital of 100l. in the 3 per cent. annuities,[105] not redeemable for 21 years; and for the remainder besides a lottery ticket an annuity of 1l. for 21 years.—The same sum might have been raised by offering 4 per cent, irreducible during 21 years, or 3l. per ann. for 75l. of every 100l. advanced, and for the remaining 25l. an annuity of 1l. for 21 years, together with a lottery ticket.—In this case, the new capital, instead of 8.240,000l. bearing 3 per cent. not subject to redemption, and having an annuity of 82,400l. annexed to it, for 21 years; would have been 6.000,000l. bearing 4 per cent. with the same annuity annexed, but redeemable at any time; and 240,000l.[106] bearing 4 per cent. for 21 years, and afterwards 3 per cent.

By the scheme likewise in 1761, for borrowing 11.400,000l. a capital of 100l. bearing 3 per cent. interest, was given for part of every 100l. advanced; and for the other part, an annuity of 1l. 2s. 6d. for 99 years. Had, in this case, 75l. FOUR per cent. Stock, been offered for 75l. in money; and, for the remaining 25l. necessary to make up 100l. the said annuity of 1l. 2s. 6d. for 99 years;[107] the whole annual charge would have been the same; subscribers could not have been sensible of any difference in the encouragement offered them; and the public, in paying its debts, would have saved 2.850,000l.

There was also this year 600,000l. received by government for 600,000l. stock, carrying 3 per cent. interest, and divided into 60,000 lottery tickets, each worth 10l. in stock.—As 150,000l. of this sum was paid for the profits of the lottery; and as 4 per cent. could not at this time be made of money laid out in the funds, it is out of doubt, that the same sum (or 600,000l.) would have been given for 450,000l. stock, carrying 4 per cent. and divided into 60,000 lottery tickets, each of the same value with 7l. 10s. four per cent. stock; and thus 150,000l. more would have been saved.

In like manner; it will appear, that three millions, raised in 1757, by creating a capital of three millions bearing 3 per cent. interest,[108] with a life annuity annexed of 1l. 2s. 6d. for every 100l. advanced; and also, four millions and a half raised in 1758, by creating a capital of four millions and a half, bearing 3 per cent. with an annuity of a half per cent. annexed for 24 years; might have been raised by creating, in the former case, a capital of two millions and a half, and, in the latter, a capital of four millions, bearing 3½ per cent. interest, with the same annuities annexed.

In 1758, the additional sum of half a million was borrowed at 3 per cent. by a lottery, consisting of 50,000 tickets, each of the same real value with 10l. stock, but sold to the subscribers for 10l. in money[109]. As the 3 per cents. were now at 94, 3¼ per cent. could not be made of money laid out in the funds. Therefore, 350,000l. of this half million might have been raised at 3½ per cent. interest, and the remaining 150,000l. might have been procured for the profits of the lottery. Or (which is the same) 10l. each would have been given for 50,000 tickets, of the same value taken all together, with 350,000l. carrying 3½ per cent. interest; and a capital of 150,000l. would have been saved.

The same is true of the lottery, by which half a million was borrowed in 1756.—A million and a half also borrowed in this year, by creating a capital of a million and a half, bearing 3½ per cent. for 15 years, and afterwards 3 per cent. might have been procured, by creating a capital of only 1.400,000l. bearing 3¼ per cent. interest. But I will not examine any more of these loans. Let us next consider how detrimental they have been to the public.

All the savings and surplus monies of the kingdom from 1763 to 1775, have amounted (deducting 400,000l. gained by debts discharged at a discount) to 10.739,793l. and with this sum 11.139,793l. of the national debt has been paid off. (See the Postscript at the end of this work.)—The needless addition which was made to the capital of the national debt, by injudicious schemes for raising money during the last war, exceeded this sum; and it follows, therefore, that the whole surplus of the revenue for twelve years, has not been sufficient to discharge the capital, to which in the last war a right was given, without receiving any money for it, or obtaining the least advantage by it.

The attentive reader must have observed, as I have gone along, that the extravagance on which I have insisted, has been the consequence of not separating, in the schemes for raising money, the premiums (consisting of short and long and life-annuities) from the perpetual annuities, and requiring them to be distinctly paid for; and also, of not attending to the difference between selling an annuity, and selling the stock for which that annuity is paid. When a 100l. stock in the 3 per cents. is at any given price, there is no one who would not be glad to purchase from government a perpetual annuity of 3l. at any lower price[110]. But when government sells the stock, instead of the annuity, at that price, the public is injured in the manner I have represented.

Would any one, in selling any part of his property, offer to make the purchase-money an outstanding principal which he shall be bound to return?[111] This is what government has uniformly done in its proposals for raising money.—Were I to desire any sum to be lent me without interest, offering as a compensation or premium an annuity for a given term, or an advantageous contract; the proposal would not be accepted, unless the annuity or the contract was worth the sum to be lent; and I should make myself a debtor to the purchaser for the very thing which I sold to him.—The absurdity would be the same, if instead of borrowing without interest, I should in the same way borrow at a low interest. In every such bargain, I should bring upon myself a needless debt, equal to the value of the premium.

I am afraid I have tired my reader’s attention on this subject. But as much depends upon a right understanding of it, I am anxious about shewing it in every possible light. In hopes, therefore, of being attended to a little longer, I shall endeavour to give a yet fuller view of this subject, and to prove its importance, by recapitulating some of the foregoing remarks, and comparing the present state of our public debts, with that which would have been their state, had the errors I have pointed out, in the schemes of the public loans during the last war, been avoided.

The sum of 12 millions, borrowed in 1762, would have left, at the end of the war, a redeemable capital of 7.200,000l. carrying 5 per cent. interest, with an annuity added of 120,000l. for 18 years from January 1763, instead of an ir-redeemable capital of 12 millions carrying 4 per cent. for 18 years, and afterwards 3 per cent. See page 95, &c.

The sum of 12 millions, borrowed in 1761, would have left a redeemable capital of 9 millions bearing 4 per cent. interest, with a long annuity annexed; instead of 12 millions with the same annuity annexed. Page 100.

The sum of 8 millions, borrowed in 1760, would have left a redeemable capital of 6.180,000l. carrying 4 per cent. with an annuity of 82,400l. for 18 years from January 1763; instead of 8.240,000l. ir-redeemable, and carrying 4 per cent. for 18 years, and afterwards 3 per cent. Page 99.

The sum of 6.600,000l. borrowed in 1759, would have left a capital of 6.450,000l. carrying 3½ per cent; instead of a capital of 7.590,000l. carrying 3 per cent. Page 95.

The sum of five millions, borrowed in 1758, would have left a redeemable capital of 4.350,000l. bearing 3½ per cent. interest, with an annuity added of 22,500l. for 19 years from Midsummer 1763; instead of a capital of five millions irredeemable, and carrying 3½ per cent. for 19 years, and afterwards 3 per cent. Page 101, 102, &c.

The sum of three millions, borrowed in 1757, would have left a capital of two millions and a half bearing 3½ per cent. interest, instead of three millions bearing 3 per cent. interest.—And two millions, borrowed in 1756, instead of leaving a capital of two millions, would have left a capital of only 1.750,000l. Page 104.

The result, therefore, is, that the whole capital of the public debts would have been, at the end of the last war, near Twelve Millions and a Half less than it was; and at the same time, the annual charge not greater.—In 1775, the difference would have been much more considerable. For,

Supposing all the same sums applied since the last war to the discharge of the public debts that we know have been so applied, not only the capital but the annual charge would have been considerably less.—This will be demonstrated by the following account.

It may be learnt from the Postscript at the end of this Tract, that 11.139,793l. of the public debts has been discharged with 10.739,793l. of the public money, derived from various savings and surplusses. All this money might have been employed, and without doubt would have been employed, in redeeming first the capital I have mentioned in Page 107, of 7.200,000l. bearing 5 per cent. interest; and afterwards, the two other capitals there mentioned of 9 millions, and of 6.180,000l. bearing 4 per cent. interest. It would have been sufficient to redeem the whole of the former capital, and also 3.539,793l. of the two last capitals; which would have set free for the public an annual charge of 501,591l.—To this sum must be added an annual charge of 256,000l. saved in 1765, 1766, 1767 and 1768, by redeeming, with 6.400,000l. borrowed in those years, so much of a debt unfunded at the end of the war, but afterwards funded, and carrying 4 per cent. interest. And also 12,537l. per ann. gained by changing 1.253,700l. from an interest of 4 to 3 per cent. and 7,500l. per ann. gained in 1771, by the ceasing of an annuity of a ½ per cent. annexed for 15 years to 1.500,000l. borrowed in 1756.—The total decrease, therefore, of the annual charge would have been 777,628l.—But at the same time there would have been the following additions to it.—First. There would have been the addition of 199,500l. per ann. being the interest of 6.650,000l. borrowed since 1763.—Secondly. Of 69,187l. per ann. being the interest of 2.306,240l. applied, in 1764 and 1765, to the discharge of German and army debts derived from the war, and which might have been converted into a funded capital bearing 3 per cent. interest, by borrowing money to pay them off, in order to avoid diverting money employed in redeeming capitals bearing 5 per cent.

These two sums make 268,687l. which deducted from 777,628l. leaves 508,941l. And this is the clear annual charge which would have been saved to the public, exclusive of the savings which have arisen from the falling in of life-annuities.

But the annual charge that has in fact been saved is only 382,129[112].—The difference is 126,812l.—With this additional saving, as it fell in and increased from time to time during the course of 12 years, a million more of the public debts bearing 4 per cent. might have been redeemed; and this would have made a farther saving of 40,000l. per ann. It appears, therefore, upon the whole, that had the mistakes I have pointed out, in the loans of the last war, been avoided, (all other public measures remaining the same) the nation would now have had 13 millions and a half less to pay, in order to redeem its debts; and also an annual charge upon it 166,812l. less.

All this supposes that the capitals of the 5 per cent. and 4 per cent. annuities in the improved schemes were redeemable.—But had they been made irredeemable till 1781, as mentioned in page 98, the public would not have been much less benefited: For, soon after 1781, these 5 and 4 per cents. (the former 7.200,000l. and the latter 15.180,000l.) might have been easily reduced to 3½ per cent. and this would have occasioned an annual saving of 183,900l. over and above the savings, which would have arisen in that year, from the extinction of the short annuities.

I will add, that had these annuities been made not only irredeemable till 1781; but irreducible for some time beyond that year, in the manner intimated in page 98, the public would still have been greatly benefited. For, the annual charge upon it would not at any time have been greater; but its debts would have been 12 millions and a half less; and, at the same time, they would have been capable of being discharged with more expedition, and at a less expence, than a smaller quantity of its present debts. See the note, page 94.

I cannot doubt but that all who will attentively examine these observations will find them to be just.—I have confined my enquiries to the loans of the last war. Had I extended them to all our loans, it would have appeared, that a greater sum than most persons can think credible,[113] has been such a needless addition to our debts as I have explained; or, “a pure and uncompensated loss, which might have been avoided by only framing differently the schemes of the public loans.”

PART III.

SECT. I.
Abstract of the Exports from and Imports to Great-Britain from 1697 to 1773, with Remarks.

This Abstract has been formed from the accounts delivered annually to the House of Commons, and lately published by Sir Charles Whitworth.

In order to draw just inferences from it, the following particulars should be remembered.—First. The Exports in the Custom-House entries are, for reasons well-known, too high. This excess has, by some of the best judges, been reckoned at a million per ann.—Secondly. The Imports are too low, no smuggled commodities being included in them. This deficiency has been estimated at another million per ann. But, in order to be sure of keeping within bounds, I will take both at a million and a half per ann.—Thirdly. The interest of the national debt paid to foreigners; the money spent in foreign countries by English travellers; the bullion consumed in manufactures; and the wear of the current coin, cannot, perhaps, amount to much less than two millions per ann. I will, however, take them at no more than the annual sum which has been commonly supposed to be due to foreigners from our funds; or, a million and a half.—In order, therefore, to find the Grand Balance of Payment between Britain and the rest of the world since the last war, all these sums (making up Three Millions) must be deducted from the excess of the exports.—But, in order to find the same balance before the end of the last war, less must be deducted, in proportion as the national debt and the foreign trade were then less than they are now.

If the foregoing Abstract is examined with a due regard to this rule, it will be found that, from[114] 1710 to 1764, the Balance of Payment must have been in favour of Britain; and that consequently, there must have been, during that period, an influx of money into the kingdom.—It was this, together with the increase of our paper, that produced the rapid fall of interest which began a few years before the Accession. And it was this also that enabled us to bear the great expence of the two last wars, and the loss of those enormous sums which were sent out of the kingdom to pay foreign subsidies, and to support armies on the continent.

Before 1710 it appears to be doubtful, whether the excess of the exports was such as brought any money into the kingdom; but it seems certain, that it could not have been such as in any degree compensated that drain of the public cash, which was occasioned by the continental wars of King William and Queen Ann. In consequence of this, the quantity of specie in the kingdom must have been greatly diminished; and Dr. Davenant computes that in 1711 it was nine millions less than at the Revolution. Hence proceeded the high rate of interest; the unproductiveness of the taxes; and the difficulties which government met with in raising money during those two wars: And there is reason to believe, these difficulties would have been insurmountable, had not a substitute for specie been provided by the establishment of the Bank.

In the interval of peace between the two last wars, or from 1748 to 1755, the balance in favour of Britain was at the highest; and this contributed to raise the stocks[115] to such a price, as enabled government to reduce the interest of the public debts from 4 to 3 per cent.

But the observation I here intended principally to make is, that the balance, since the year 1764, appears, from the preceding abstract, to have been against Britain; and that this accounts for the high price of bullion, the scarcity of specie, and the distress of the Bank from that year to 1773.

It deserves farther to be observed that, while the exports were decreasing from 1764 to 1773, the Imports appear to have increased faster than ever: And the fact is, that since 1760, a greater addition has been made to them, than had been made during the whole time from the Accession to that year.—This is a striking proof that luxury has been for some years increasing with rapidity among us; and it is worth adding, that the productiveness of the taxes has kept pace, as might have been expected, with this increase of luxury, both the Customs and Excises having brought in lately, near 250,000l. per ann. each, more than they did twelve years ago.—It should be attended to, that this improvement of the revenue must be the effect solely of an increased consumption occasioned by luxury; the taxes, ever since the end of the last war, having been nearly the same.

The exports from 1710 to 1764 went on increasing constantly. I have observed, that from 1764 to 1773 they have decreased. One reason of this has been, the decline of the Portugal trade; the exports to that country having fallen, since 1760, from 1.200,000l. per ann. to 600,000l. per ann.—Another reason has been the check which a wretched policy has been giving, ever since 1763, to our trade with the Colonies. This trade had for many years contributed more than any other trade towards raising our exports; and even in the period between 1763 and 1774, notwithstanding the checks it received, it went on increasing, and produced a balance in our favour of a million and a half per ann. But since 1774 it has been entirely lost. Before this loss, the balance of payment between us and the rest of the world was, according to the account I have given, against us. Undoubtedly then, it was a loss we could by no means have sustained, had it not been for the seasonable interposition of some very particular causes. Time will shew whether these causes are of a permanent nature, or temporary and accidental.

SECT. II.
Historical Deduction and Analysis of the Public Debts.

State and Amount of the National Debt, at Midsummer, 1775, with the Charges of Management.

Capitals and Annuities transferable at the Bank of England.