Blackwood's Edinburgh Magazine, Volume 66, No. 410, December 1849. Various
the foundation of all we feel and fear, was not the effect of ignorance, mistake, or what we call chance, but of design and scheme in those who had the sway at the time. I am not so uncharitable, however, as to believe that they intended to bring upon their country all the mischiefs that we who came after them experience and apprehend. No: they saw the measures they took singly and unrelatively, or relatively alone to some immediate object. The notion of attaching men to the new government, by tempting them to embark their fortunes on the same bottom, was a reason of state to some; the notion of creating a new, that is, a moneyed interest, in opposition to the landed interest, or as a balance to it, and of acquiring a superior interest in the city of London at least, by the establishment of great corporations, was a reason of party to others: and I make no doubt that the opportunity of amassing immense estates, by the management of funds, by trafficking in paper, and by all the arts of jobbing, was a reason of private interest to those who supported and improved that scheme of iniquity, if not to those who devised it. They looked no further. Nay, we who came after them, and have long tasted the bitter fruits of the corruption they planted, were far from taking such alarm at our distress and our dangers as they deserved."
In like manner wrote Swift, and Hume, and Smith; nor need we wonder at their vehemence, when we direct our attention to the rapid increase of the charge. William's legacy was £16,400,000 of debt, at an annual charge to the nation of about £1,311,000. At the death of Queen Anne, the debt amounted to fifty-four millions, and the interest to three millions, three hundred and fifty thousand – being nearly double the whole revenue raised by King James! The total amount of the annual revenue under Queen Anne, was more than five millions and a half. Under George I., singular to relate, there was no increase of the debt. At the close of the reign of George II., it amounted to about a hundred and forty millions; and, in 1793, just one hundred years after the introduction of the funding system in Britain, we find it at two hundred and fifty-two millions, with an interest approaching to ten. Twenty-two years later, that amount was more than trebled. These figures may well awaken grave consideration in the bosoms of all of us. The past is irremediable; and it would be a gross and unpardonable error to conclude, that a large portion of the sum thus raised and expended was uselessly thrown away; or that the corruption employed by the founders of the system, to secure the acquiescence of parliament, was of long continuance. On the contrary, it is undeniable that the result of many of the wars in which Britain engaged has been her commercial, territorial, and political aggrandisement; and that bribery, in a direct form, is now most happily unknown. The days have gone by since the parliamentary guests of Walpole could calculate on finding a note for £500, folded up in their dinner napkins – since great companies, applying for a charter, were compelled to purchase support – or when peace could only be obtained, as in the following instance, by means of purchased votes: – "The peace of 1763," said John Ross Mackay, private secretary to the Earl of Bute, and afterwards Treasurer to the Ordnance, "was carried through, and approved, by a pecuniary distribution. Nothing else could have surmounted the difficulty. I was myself the channel through which the money passed. With my own hand I secured above one hundred and twenty votes on that vital question. Eighty thousand pounds was set apart for the purpose. Forty members of the House of Commons received from me a thousand pounds each. To eighty others I paid five hundred pounds a-piece." Still we cannot disguise the fact, that a vast amount of the treasure so levied, and for every shilling of which the industry of the nation was mortgaged, never reached the coffers of the state, but passed in the shape of bonuses, premiums, and exorbitant contracts, to rear up those fortunes which have been the wonder and admiration of the world. Nor is it less palpable that the fortunes so constructed could not have had existence, unless abstracted from the regular industry of the country, to the inevitable detriment of the labourer, whose condition has at all times received by far too little consideration. Add to this the spirit of public gambling, which, since the Revolution, has manifested itself periodically in this country – the sudden fever-fits which seem to possess the middle classes of the community, and, by conjuring up visions of unbounded and unbased wealth, without the necessary preliminary of labour, to extinguish their wonted prudence – and we must conclude that the funding system has been pregnant with social and moral evils which have extended to the whole community. Before we pass from this subject – which we have dwelt upon at considerable length, believing it of deep interest at the present point of our financial history – we would request the attention of our readers to the following extract from the work of Mr Francis, as condemnatory of the policy pursued by recent governments, and as tending to throw light on the ultimate designs of the Financial Reform Associations. It is quite possible that, in matters of detail, we might not agree with the writer – at least, he has given us no means of ascertaining upon what principles he would base an "efficient revision of our taxation;" but we cordially agree with him in thinking that, as we presently stand, the right arm of Great Britain is tied up, and the Bank of England, under its present restrictions, in extreme jeopardy at the first announcement of a war.
"It is one great evil of the present age, that it persists in regarding the debt as perpetual. Immediately the expenditure is exceeded by the revenue, there is a demand for the reduction of taxation. We, a commercial people, brought up at the feet of M'Culloch, with the books of national debt as a constant study, with the interest on the national debt as a constant remembrancer, persist in scoffing at any idea of decreasing the encumbrance: and when a Chancellor of the Exchequer proposes a loan of eight millions, we growl and grumble, call it charitable, trust for better times, and read the Opposition papers with renewed zest.
There is no doubt that the resources of the nation are equal to far more than is now imposed; but it can only be done by an efficient revision of our taxation, and this will never be effected till the wolf is at the door. A war which greatly increased our yearly imposts would, with the present system, crush the artisan, paralyse the middle class, and scarcely leave the landed proprietor unscathed. The convertibility of the note of the Bank of England would cease; and it would be impossible to preserve the charter of Sir Robert Peel in its entirety, while twenty-eight millions were claimable yearly in specie, and the gold of the country went abroad in subsidies.
In an earlier portion of the volume, the writer briefly advocated annuities as one mode of treating the national debt. There would in this be no breach of faith to the present public; there would be no dread of a general bankruptcy; there would be no need of loans; and, had this principle been carried out, the national debt would be yearly diminishing. In ten years, nearly two millions of terminable annuities will expire, and it behoves the government to inquire into the effect which the conversion of the interminable debt into terminable annuities would have on the money market.
It is absolutely idle for the Financial Reform Association to think of effectually lowering the taxation of the country, while twenty-eight millions are paid for interest; and it is to be feared that great evil will accompany whatever good they may achieve. That there are many offices which might be abolished; that it is a rule in England that the least worked should be best paid; that an extravagant system of barbaric grandeur exists; that the army and the navy, the pulpit and the bar, are conducted unwisely; and that great men are paid great salaries for doing nothing, – is indisputable; but it is equally so that great savings have been effected, and that greater efforts are making to economise further. There is a faith pledged to the public servant as much as to the public creditor; and, whether he be a colonel or a clerk, a man of peace or a man of war, it is impracticable, imprudent, and unjust to attempt that which would as much break faith with him, as to cease to pay the dividends on the national debt would be to break faith with the national creditor.
These things are paltry and puerile compared with that which, excepting a total revision of taxation, can alone materially meet the difficulties of England; and the gentlemen of the Reform Association are aware of this. They may cut down salaries; lower the defences of the country; abolish expensive forms and ceremonies; amalgamate a few boards of direction; reduce the civil list; and do away with all sinecures. But the evil is too vast, and the difficulties are too gigantic, to be met in so simple a manner. Nor will these gentlemen be satisfied with it while there are eight hundred millions at which to level their Quixotic spear. Repudiation was darkly alluded to at one meeting of the Association, and, though it has since been denied, it is to be feared that time only is required to ripen the attempt."
Turn we now from the national debt to its eldest offspring, the Exchange.