It is only during the continuance of war, however, that the system of funding has this advantage over the other system.Were the expense of war to be defrayed always by a revenue raised within the year, the taxes from which that extraordinary revenue was drawn would last no longer than the war.The ability of private people to accumulate, though less during the war, would have been greater during the peace than under the system of funding.War would not necessarily have occasioned the destruction of any old capitals, and peace would have occasioned the accumulation of many more new.Wars would in general be more speedily concluded, and less wantonly undertaken.The people feeling, during the continuance of the war, the complete burden of it, would soon grow weary of it, and government, in order to humour them, would not be under the necessity of carrying it on longer than it was necessary to do so.The foresight of the heavy and unavoidable burdens of war would hinder the people from wantonly calling for it when there was no real or solid interest to fight for.The seasons during which the ability of private people to accumulate was somewhat impaired would occur more rarely, and be of shorter continuance.Those, on the contrary, during which the ability was in the highest vigour would be of much longer duration than they can well be under the system of funding.
When funding, besides, has made a certain progress, the multiplication of taxes which it brings along with it sometimes impairs as much the ability of private people to accumulate even in time of peace as the other system would in time of war.The peace revenue of Great Britain amounts at present to more than ten millions a year.If free and unmortgaged, it might be sufficient, with proper management and without contracting a shilling of new debt, to carry on the most vigorous war.The private revenue of the inhabitants of Great Britain is at present as much encumbered in time of peace, their ability to accumulate is as much impaired as it would have been in the time of the most expensive war had the pernicious system of funding never been adopted.
In the payment of the interest of the public debt, it has been said, it is the right hand which pays the left.The money does not go out of the country.It is only a part of the revenue of one set of the inhabitants which is transferred to another, and the nation is not a farthing the poorer.This apology is founded altogether in the sophistry of the mercantile system, and after the long examination which I have already bestowed upon that system, it may perhaps be unnecessary to say anything further about it.It supposes, besides, that the whole public debt is owing to the inhabitants of the country, which happens not to be true; the Dutch, as well as several other foreign nations, having a very considerable share in our public funds.
But though the whole debt were owing to the inhabitants of the country, it would not upon that account be less pernicious.
Land and capital stock are the two original sources of all revenue both private and public.Capital stock pays the wages of productive labour, whether employed in agriculture, manufactures, or commerce.The management of those two original sources of revenue belong to two different sets of people; the proprietors of land, and the owners or employers of capital stock.
The proprietor of land is interested for the sake of his own revenue to keep his estate in as good condition as he can, by building and repairing his tenants' houses, by making and maintaining the necessary drains and enclosures, and all those other expensive improvements which it properly belongs to the landlord to make and maintain.But by different land-taxes the revenue of the landlord may be so much diminished, and by different duties upon the necessaries and conveniences of life that diminished revenue may be rendered of so little real value, that he may find himself altogether unable to make or maintain those expensive improvements.When the landlord, however, ceases to do his part, it is altogether impossible that the tenant should continue to do his.As the distress of the landlord increases, the agriculture of the country must necessarily decline.
When, by different taxes upon the necessaries and conveniences of life, the owners and employers of capital stock find that whatever revenue they derive from it will not, in a particular country, purchase the same quantity of those necessaries and conveniences which an equal revenue would in almost any other, they will be disposed to remove to some other.
And when, in order to raise those taxes, all or the greater part of merchants and manufacturers, that is, all or the greater part of the employers of great capitals, come to be continually exposed to the mortifying and vexatious visits of the tax-gatherers, the disposition to remove will soon be changed into an actual removal.The industry of the country will necessarily fall with the removal of the capital which supported it, and the ruin of trade and manufactures will follow the declension of agriculture.
To transfer from the owners of those two great sources of revenue, land and capital stock, from the persons immediately interested in the good condition of every particular portion of land, and in the good management of every particular portion of capital stock, to another set of persons (the creditors of the public, who have no such particular interest), the greater part of the revenue arising from either must, in the long-run, occasion both the neglect of land, and the waste or removal of capital stock.A creditor of the public has no doubt a general interest in the prosperity of the agriculture, manufactures, and commerce of the country, and consequently in the good condition of its lands, and in the good management of its capital stock.
