years took from it. At the commence ment of the American war in 1776, the national debt of Great Britain amounted to £135,943,051; and at the conclusion of the same war in 1783, the debt amounted to £238, 484,870, being an increase, during these seven years, of £102,541,819. The peace of ten years which followed, only caused a reduction of £4,751,261. At the commencement of the revolutionary war in 1793, the public debt of this country was £233,733,609, and before the peace of 1801, it had much more than doubled, being £561,203, 274. The short peace, instead of diminishing the public debt, added upwards of 40 millions to it; and the increase during the late war was so great, that on the 1st February. 1813, the funded and unfunded debt of Great Britain amounted to £943,195,951, of which £236,801,742, had been redeemed, and transferred to the national commissioners. Since that period the debt has been still farther increased; for in the course of the very next year two loans were negotiated for the services of 1813 and 1814, amounting together to the almost incredible sum of £64,755,700. It is obvious, therefore, that no length of peace which we can expect to enjoy, will enable us to reduce, in any considerable degree, the enormous sum of our national debt, if no more effective means are resorted to for that purpose than the operations of the sinking fund, and the savings that may be effected within the year. It is not intended at present to examine into the effects, good or bad, likely to result from the discharge of the national debt, should such a measure be accomplished. Opposite opinions on that subject have been entertained by persons of great political wisdom. On the one hand it has been contended, that although it might have been better not to have contracted the debt, yet the extinction of it now, by any means, would be productive of real evil. That the debt attaches to the government, in times of danger, a great proportion of the monied interest of the country, that the public funds are a secure and convenient place of deposite for the capital of individuals who do not wish to embark in trade or speculation of any kind,-that the money borrowed by government does not remove capital from the kingdom, while the regular circulation of dividends is beneficial to the state,-that if the nation were freed from debt, ministers would be less economical, and less averse to enter into war, and would in all probability involve the nation in a new debt. On the other hand, it has been contended with much reason, that debt is as injurious to the state as to an individual, or more so, that it is the cause of increased taxation, which necessarily diminishes the profits of stock,-that by getting rid of the debt, the people would not only be relieved of the taxes necessary to pay the interest of that debt, but also of the great expense incurred in collecting them; and that the increase in the profits of stock, and diminution in the expense of living, would stimulate commerce and agriculture. Mr Heathfield, influenced by the latter of those opinions, has published a pamphlet, pointing out the advantages which would result from the liquidation of the national debt, and proposing what he conceives to be a "practicable and safe" plan for accomplishing that object. The plan by which Mr Heathfield proposes to liquidate or pay off the national debt, is by a contribution of 15 per cent. on the value of all private property within Great Britain and Ireland, with the exception of the property belonging to non-resident foreigners, vested in the British funds. The effect of applying this contribution to the payment of the national creditors would be, according to Mr Heathfield's calculations, to reduce the national debt from £1161,803,292: 4:3, to £350,000,000, and to reduce the annual charges on account of that debt from £47,859 987: 15: 11, to £13,000,000. This result would be brought about as follows:-The national debt at present, converting the sum annually applied to the operations of the sinking fund into a capital, is, as above, £1161,803, 292: 4:3, but if the debt was paid off, the sinking fund would cease, and the amount of the funded debt, after deducting the sum vested in the government commissioners, is £797,401, 1190: 101, whereof Mr Heathfield estimates as held by foreigners, perhaps too small a sum, viz. £15,000, 000, leaving of property belonging to British subjects vested in government security £782,401,119:0: 101; the unfunded debt is £51,992,095; 14: 2; the rest of the private property in Great Britain and Ireland is stated by Mr Heathfield, upon the authority of Dr Colquhoun's estimate, at £2,500,000, 000, making in all a property of £3, 334,393,214: 15: 1 liable to the proposed contribution of 15 per cent, which contribution would amount to £500,158,982: 4: 2, and when deducted from the funded and unfunded debt, amounting together to £849,393,214: 15: 1, would leave of the national debt unpaid £349,234,232: 10:11, or in round numbers, £350,000,000. This balance Mr Heathfield proposes to pay off, in the meantime, by contracting a new debt on more advantageous terms, which he thinks might easily be done; and the new debt might eventually be paid off from various sources, such as a contribution from the property in the British colonies, the surplus of certain taxes,a new tax upon net income, after deduction of expenditure, &c. In regard to the levying of the 15 per cent on all capital, he divides the community into two classes;-The 1st class comprehends the proprietors of lands, dwelling-houses, mines, and canals;-The 2d class comprehends manufacturers, ship-owners, merchants, traders, farmers, and others. It is proposed, that the term of ten years to pay the principal sum should be allowed to such of the 1st class as might not find it convenient to pay immediately; interest to be payable in the mean time on the principal unpaid, at the rate of 5 per cent-and if not paid at the end of ten years, the rate of interest to be increased to 6 per cent. The assessment on the 2d class is to be levied by half-yearly instalments, and to bear interest at 5 per cent till paid-the whole to be levied in five years. Such is the outline of the plan now proposed by Mr Heathfield for paying off the national debt, and which, from the importance of the subject, and the distinct and able manner in which it is treated by him, has ex a cited considerable interest-There is nothing invidious, however, in remarking, that the plan which Mr Heathfield has the merit of now urging on the attention of the public, is by no means new-but is substantially the same as was proposed in the year 1717. At that time the public debt amounted to about 50 millions, which was looked upon as an overwhelming load, not likely ever to be discharged-But Mr Hutchison,* gentleman deeply skilled in political arithmetic, proposed several financial measures for the relief of the state, and in one of his treatises he says"The public debts may be then speedily paid off by applying thereto so much as shall be sufficient of the estates real and personal, of all the inhabitants of Great Britain, in the most equal and just proportions that can be come at." Mr Hutchison points out the beneficial consequences which would follow from the measure, and which may be thus abridged, 1st, The revenues of the crown would be disencumbered, and the people freed from the land and malt tax. 2d, The new impositions of customs and excise would cease, "" which would greatly improve trade, and thereby the wealth of the nation, and enable the people to live at least 20 per cent cheaper than they at present do." 3d, The nation would be freed from the expense of supporting army of tax-gatherers," a class of people of whom Mr Hutchison talks in terms of no great respect. "This kind of gentry do at present, like locusts, overspread our land, and eat up a great deal of the good and fatness thereof." 4th, The rate of interest would fall, and trade and agriculture improve. 5th, Foreigners, fundholders, would be paid off, and cease to drain the country of the dividends. * 66 an 6th, The nation would be so formidable an enemy, that foreign states would be anxious to be at amity with her. Mr Hutchison's suggestion of paying off the public debt, by applying to that purpose so much of the property within the kingdom as should be ne Archibald Hutchison of the Middle Temple, Esq. member of Parliament for Hasting, and author of several learned treatises on the subject of the national debt and funds, and also on the subject of the South Sea stock and scheme. VOL. VI. 3 K cessary, was not acted upon.-The government was at that time in an unsettled state, and the public mind considerably agitated by the pretensions of the representative of the house of Stuart. It was, therefore, not likely that any such proposal, as a general contribution of capital, would meet with a dispassionate examination; and we ought not to condemn the measure as impracticable or unsafe, merely because it was not then adopted. Mr Heathfield has revived the plan, as applicable to the present state of things, and it is in relation to existing circumstances that it should now be considered. Notwithstanding the ability with which Mr Heathfield has urged the safety and practicability of his plan, several difficulties and doubts occur on perusing his pamphlet, which a more attentive examination of the principle of the plan, and the most careful consideration of his arguments, in support of it are not calculated to remove. It is possible that these may be ill founded, and that Mr Heathfield could, by a more full exposition of his plan, solve the doubts and remove the diffi market, for it would not answer the purpose to assign a part of the land itself to government, as government could not keep the land, but would be obliged to bring it into the market. The necessary consequence, therefore, would be, that the market would be overstocked with land, and the value would consequently decline. It may be said, and in fact has been said, by Mr Ricardo, in answer to this objection, that a like quantity of money would be brought into the market, and that those who are now stock-holders would become purchasers of land. But that is not a satisfactory answer to the objection. The payment of the national creditors would not increase the quantity of money in the country, and the stock-holder would not be put in a condition to buy until he was paid by government, and he would not be paid by government until the land-holder sent in his contribution, which he could not do until he sold his land. The relief, therefore, would not come until too late; but independent of that consideration, it is plain that the land would be brought to a disadvantageous market, for that must always be culties. For that very reason we the case when the land-holder is forcthink it proper to state them. A sub-ed to sell. He must convert his land ject of so much national importance should be fully discussed and canvassed in all its bearings, and not silently rejected, perhaps, on account of the prevalence of a popular error, which the author could have corrected had he been aware of its existence. With these impressions we proceed to state our objections to Mr Heathfield's plan -some of which relate to the expediency and justice of the principle upon which the capital sum to be applied towards the extinction of the debt is proposed to be raised and applied others relate to the detail of levying the assessment. The first objection which occurs is in regard to the manner in which the proposed assessment would affect the holders of land and other immoveable property. Comparatively few of the proprietors of land have any floating capital, and a very great proportion of the properties are mortgaged, or burdened to a considerable extent. To enable such persons to contribute 15, per cent of their capital, it would be necessary for them to dispose of part of their land, by bringing it into the into money, but the money-holder would be under no necessity to convert his money into land-he might employ it in trade, or in various ways, or he might remove it to another country-and by even holding off for a time, the land-holder who could not remove his subject to a foreign market, would be under the necessity of selling at whatever price he could get, to avoid the ruinous consequences of paying five or six per cent interest to government, when, according to Mr Heathfield's theory, the current value of money would be much lower. The disadvantages under which the landholder would thus be placed, would be still further increased by the circumstance, that persons of large capital would not be inclined to purchase the small detached pieces of land which would be forced into the market to pay the contributions of the landed proprietors, while that class of persons, and it is a numerous class, who hold government security for small sums, on the interest of which they depend for their subsistence, could not afford to invest their capital in land. The same remarks apply, in a great measure, to the proprietors of various other kinds of property. A man, who receives £5000 in discharge of his claim against the nation, will not be inclined to go forthwith and purchase a ship or a steam-engine things in which he has no skill-yet the proprietor of those articles is under the necessity of selling, and while that necessity exists, and purchasers are not simultaneously reared up, but rather destroyed, by taking 15 per cent. from the capital of those persons who would otherwise have been able and willing to purchase, he must sell at a disadvantage. But if Mr Heathfield's plan is objectionable, because it would bring an unfair pressure on the landholder, it is equally objectionable in respect it creates that pressure for the purpose of giving a great advantage to the fundholder. By adopting the proposed plan, the fundholder might not be contributing 15 per cent out of his present capital, but might have that capital entire, nay increased. Persons, for instance, who have bought into the funds at 70, would be paid off at £100, deducting 15 per cent for their contribution, that is, they would receive from the nation 85. They would, therefore, be gainers to the amount of upwards of 15 per cent, instead of contributors to that amount. Mr Heathfield is aware of this objection, and he says that it applies to the prin ciple on which the debt was created, not to the plan for paying it off. But if the system of contribution of capital be gone into at all, there seems to be no injustice in paying off the fundholders at the price at which they purchased. No man, at present holding property in the funds, purchased in the belief that government would ever pay him or his heirs £100 sterling for his £100 stock. He invested his money in the funds as a place of temporary deposit, to draw the interest in the mean time, and sell out again when convenient. Parliament frequently compels individuals to surrender their property for the public good, upon receiving a fair compensation, and there is no reason why the fundholder should be exempted from the rule. As to any supposed impropriety in the nation purchasing up the claims against itself at a lower price than its obligement to pay, it may be answered, that this is daily done, if the sinking fund does any thing-for the object of that fund is to purchase up, at the marketprice, for behoof of the nation, the claims of the national creditors. In short, there is an inequality in the effects to be produced from Mr Heathfield's plan the advantage of which is all on the side of the fundholders. The justice of the principle of taxing capital for the purpose of paying off the whole of the national debt, appears to be, in every point of view, extremely questionable. That debt has been contracted in defence of the rights and liberties of all classes of the community. It cannot be pretended that the capitalists alone are liable in the payment of the interest of that debt, nor in practice have they alone been assessed for the payment of the interest-it is paid by all classes. But a very large proportion of the community is composed of individuals who are not capitalists-all persons of professional income-annuitants--holders of public offices-incumbents of benefices-clerks paid by salary-servants, and all persons in like circumstances, who are consumers of taxed commodities-these persons form an immense proportion of the community, and they annually pay their share of the interest of the debt; yet they have no capital or property of any kind. Is it just that the capitalists alone should be compelled to pay off the whole debt, to relieve the other classes of the community from the burden of paying the interest of it?In the year 1812, the income of persons holding offices of state and revenue, exclusive of royalty, was estimated, by Dr Colquhoun, at £8,830,000 the army, £14,000,000-the navy, £9,299,680-the half-pay, £856,600 pensioners, £1,050,000--clergy, £4,580,000-law, £7,600,000-physic, £5,400,000-fine arts, £1,400,000 universities and schools, 7,664,400. These incomes are not drawn from any property or capital belonging to the persons who enjoy them; and a great many other classes of the community are in the same situation, for instance, clerks, overseers, ship-masters, sailors, farm-servants, colliers, &c. Yet all these persons are bound to contribute to the payment of the interest of the debt, which it is now required of the capitalists to purchase up at their own expense. Such a measure would be evidently unjust. Another evil to be dreaded from Mr Heathfield's plan, is the embarrassment which would, in the first instance, result to trade, from causing merchants and traders to cede so great a proportion of their trading capital. When the mutual reliance of merchants, even those living under different governments, upon the engagements of each other is considered, it must appear scarcely possible by any arrangement to prevent serious embarrassments from following the sudden diminution of trading capital. A great number of persons, too, depend for employment on the extent of the capital embarked by others in trade; and when that capital is taken away, or suddenly diverted from its natural course, the consequence must be, that a vast number of persons will be thrown idle. No doubt the capital would only be placed in other hands, but still it would, in the first instance, be diverted from its natural course, and the new capitalists would not be inclined immediately to enter into trade, and the less so from seeing the existing embarrassments. Another serious obstacle to the accomplishment of Mr Heathfield's plan presents itself, in the quantity of circulating medium which would be required. The arrangements of trade and commerce may be conducted without any great quantity of circulating medium, for barter, facilitated by the temporary intervention of bills and promissory notes, is substantially the nature of all great commercial dealings. Neither was the national debt contracted by one great operation of money advanced to the government. Its growth was gradual, and the money advanced, was soon reissued, and formed, in the hands of other persons, the capital for a new loan. But where it is proposed to levy £500,000,000 for the purpose of paying off the public creditors, it is obvious, that a great quantity of money or circulating medium would be necessary for carrying the operation into effect. Government must levy from the holders of property, and then it must pay the public creditors. That operation cannot be performed otherwise than by a medium of exchange. Government cannot take a conveyance to a piece of land, and wait until, in the course of paying off its creditors, some one appears who is willing to take a conveyance to that piece of land in lieu of his money. The expense, difficulty, and inconvenience of such a process, render it impracticable. When the creditors of the nation come forward to receive sums, varying from one hundred pounds to hundreds of thousands of pounds, government must be prepared with circulating medium to pay them, otherwise the debts cannot be completely and finally discharged. Now it appears from the report of the secret committee, * that the average amount of the notes of the bank of England in circulation, at any period during the three months preceding March 1819, was £25,794,160. The notes in circulation belonging to country banks, amounted to about 20 millions. The amount of specie in circulation before the late war, appears to have been variously estimated by different persons, but it seems to have been generally agreed, that it was about 30 millions. The greater part, however, of that sum was exported; for Mr Colquhoun estimates the whole specie in Great Britain and Ireland, in circulation and hoarded in 1813, at only 15 millions, and by the evidence laid before the secret committee in 1819, it appeared that scarcely any part of the specie which was in circulation before the bank restriction act then remained in the country. The new issue has been very limited, and the whole circulating medium of the nation, including the notes of country banks, cannot be estimated at more than 55 millions. But if £500,000,000 is required for the purpose of paying off and discharging the national creditors, by what medium is it to be passed from the contributors into the hands of government, and from thence into the pockets of the public creditors? No doubt the operation is intended to last for five or six years, and the amount levied and paid to creditors, the first year would find its way into circula 2d Report of the secret committee on the expediency of the bank resuming cash payments, dated 6th May, 1819. |