The Sun.
London, England, 1870-10-25 00:00:00

BRITISH INTERVENTION.

The Manchester Exanuner,referring to the rumoured inter-
vention of theßritish Government, asks, Will they succeed
in persuading the belligerents to agree upon a suspension
of hostilities? and after reviewing the probabilities of such
a result, says: As far as appears the diplomatic conditions
set up by the two parties are irreconcileable, and until
some form is agreed upon the proposed armistice
must remain in the category of benevolent dreams.
We confess our inability to see upon what ground
it can be put forward as reasonable to offer as
a scheme resting its claims upon its advantageousness to
both parties—it is possible that both sides are prepared to
make substantial concessions, and we trust the action of
Government may be regarded as proof that they possess
better reasons than we are aware of for believing in the
existence of such despotism.
The Manchester Courier thinks the negotiations which
England has instituted can do no good. If the neutrals
chose to inform Prussia that if she insists upon the sur-
render of Alsace and Lorraine, she will have to look
forward to their united hostility • or to indicate to France
requitable conditions, and then let France understand that
ifkintdiheyy nieoe, a durableteacceptedshe needp no longer look for
eforbuttheinir
this, and in no other way. The period when words could
do anything has gone.

FARMING IN IRELAND.—A fact mentioned in the
Clonmel Chronicle which proves the comfortable circum-
stances in which the farmers of that county are now
placed. The rate collector had a sum of £4,000 to collect,
extending over thirty electoral divisions. He had received
the whole amount, with the exception of the trifling arrear
of £l7. Another fact is not less significant. A few days
ago the interest in a leasehold farm of twenty-six acres,
held at a rent of 30s. per acre, and with au unex-
pired term of only sixteen years to run, was offered
to public competition by the owner of the pro-
perty, Mrs. Michael Green, of Tipperary. The
tenant's interest alone brought no less a sum than £6OO.
It has been stated (says a correspondent) by the Tinics
and other journals, in error, that the Irish judges have
completed their code of rules for the working of the new
Land Act. They have held repeated meetings, but as
yet have not.been able to arrive at an agreement upon
them. It ittr:OloughtffittkintiWill*All9.-14914ulgated until
the.open

H.— PAYMENT OF THE NATIONAL DEBT,
• (BY THOMAS DE MESCHIN, L.L.D.)
In 1864 the Prime Minister, then Chancellor of the
Exchequer said—" Although it may have been the
opinion of some, the caprice of ...thers, thati consequence
of our great wealth, we might afford to look on the
National Debt as a matter Jf trivial moment I must say
I have never been at all able to acquiesce t that view.
The debt appears to me to be a verY inflea ble and for-
midable burden, grave and serious, ev° in the midst of
our wealth and prosperity, and likely become still more
grave and serious in its pressure ifoa prosperity turned
1
out to be less permanent and less sta., ethan most of us
are disposed to believe." From this it ould appear that
Mr. Gladstone is not in favour of "the ea-bite " theory,
yet for the last six years, with all his gr at abilities, and
still greater opportunities, what has he done? Nothing !
A great minister, if he cannot compel public opinion,
should at least attempt to form it. Mr. Gladstone, with
his great authority and fee,-+d eloquence, might easily have
given a bent to the public mina ... - avour of liquidation.
The same observation applies to the Chancellor of the
Exchequer, who says " as far as I am concerned I should
be very glad if the House would consent to put on a
shilling income-tax for the reduction of the debt." If
this'be so, I want to know why the Crown is not ,advised
to recommend the liquidation of the National Debt to the
attention of Parliament ?
During the debate on Mr. Lam I Mr.
Pollard Urquhart asked, could anyone' deny that the
customs and excise duties operated as a pressure on do-
mestic industry ? And he inferred that we ought not to
pay off our debt because a highly taxed country had great
difficulty in competing with foreign nations. He did not
seem to see that this very fact is one of the strongest
points in the case of those who are in favour of paying off
the debt. The United States will have paid off their
debt in fourteen years. Now, unless we pay off our debt
in the same time that they are paying off thairs, we shall
not have the slightest ,chance of competing with them in the
markets of the world. On the other hand, if we pay off
our debt pari passe with them, when both debts are paid,
we shall start in the race with equal chances ; but if we
commit the monstrous folly of allowing them to get rid of
their debt, while we make no effort to get rid of ours, it
is obvious that we sign the death warrant of our com-
mercial supremacy.
Equally intenable is the remark, that we ought not to
take the money of the people to purchase three per cent.
annuties, upon which they might realize 20 or 30 per
cent. by investing. It is very important to give an ade-
quate and complete answer to this objection, for not only
was it urged by Mr. Pollard Urquhart, in the House of
Commons, and caught a member of Sir John Lubbock's
mark, who said " The hon. member (Mr. P. Urquhart)
was also mistaken in his suppositions that to reduce the
national debt was in fact buying up annuities at 3 per
cent., for although the interest paid to the stockholder
was only 3 per cent., the cost to the country wes consider-
ably more "; but it was reiterated upon both occasions,
when the question was under discussion at the
British Association in Liverpool—First of all, there
is no analogy at all between the case of an
individual who . takes money out of his business
to purchase from some other persons annuities at 3 per
cent., and the case of the nation paying its debt. With
the individual the choice lies between the capital invested
in his business and the 3 per cent. annuities, he can't
have both, if he keeps the capital, he must do without
the annuities, or if he purchases the annuities, he must part
with his capital, "He can't have his cake and eat it."
Not so the nation. The nation asja whole owns both the
capital and the annuities ; it only takes the money from
one set of people to give it to another set of people. It
takes the money from the taxpayer and gives it to the
fund-holder. There is no reason why it should not
produce Mr. Pollard Urquhart's twenty or thirty, per
cent. in the pocket of the paid-off fund-holder as well as
in the pocket of the taxpayer.
If the National Debt were held exclusively by foreigners
there might be some force in this objection ; but almost
the whole of the debt is due to persons resident in Eng-
land. Consequently, so far as the nation as a whole is
concerned, it would be like a man paying money from one
of his pockets into the other.
But we will go further and say that the money would
be much more likely to fructify in the pockets
of the paid-off fund-holder than in the pockets
of the taxpayer. Let us suppose that the debt is in
process of being paid off as Mr. Lambert proposes, by a
sixpence-in-the-pound income tax.
It is said that the great bulk of the people of England
live up to their income, and that some even manage to
live beyond it. How does an income tax act upon this
large portion of the community? It merely takes a por-
tion of their income that would have been expended un-
productively7-on horses, on carriages, on servants, or on
what not. No part of their income so taken would ever
fructify, that is, be employed in producing profit or com-
modities. They regard their income as a thing to be spent
and enjoyed, from year to year, as it comes in. They
save, or lay by, or capitalise no part of it. But when the
Government takes sixpence in the pound from the
income of these people, their unproductive ex-
penditure is diminished pro tanto, and the pro-
duce of the tax is employed in paying off the fund
holder. But the fundholder has always been in the habit
of considering his money in the funds as part of his capi-
tal, and there is no likelihood whate,ver that he would go
and spend the whole sum he has received, upon being
paid off, as part of that year's income. But if the sup-
posed income tax had not been levied upon that portion of
the community who live up to their income, they would
have spent it as part of that year's income. The result
is, that money that would have been expended as part of
the year's income, if left in the pockets of the taxpayers,
is changed into capital by being paid over to the fund-
holder. That is, that money which would not have fruc-
tified in the pockets of the taxpayer, does fructify in the
pockets of the paid-off fundholner, so that this argument
against the payment of the debt, when we come to examine
it by the light of common sense, is an argument in its
favour, viz., that the payment of the National Debt would
increase the capital of the country—it would convert a
bare debt, and nothing more, into real tangible capital.
So far, therefore, from such an income tax proving a tax
upon capital, and driving it from our shores, it would
very largely augment the capital of the country, and
thereby benefit all classes.
The whole drift and tone of the Chancellor of the Ex-
chequer's speech, in reply to Mr. Lambert, implied that
an increase of the burdens of the people, for the purpose
of paying off the debt, would have the same economic
effect as if it were for the purpose of governmental expen.
diture. This I deny in tote. I maintain it is a clear and
transparent fallacy. Governmental expenditure for the
most part represents a complete and total loss; on the
other hand, the payment of the National Debt by means
of an income tax is almost tantamount to the creation of
so much capital. Governmental expenditure impoverishes
the nation pro tanto; the payment of the National Debt
would enhance the wealth of the nation nearly pro tanto.
Governmental expenditure has almost the same economic
effect as the destruction of £70,000,000 worth of railways
per annum —the payment of £70,000,000 of the National
Debt would be almost tantamount to the creation of rail-
ways worth that amount.
If the United States of America desired to recoup them-
selves in respect of the enormous amount of capital that
was wasted and destroyed during their four years' war-
the very best mode they could have adopted was that
which they have done—that is, by paying off their debt at
20 millions a year. If they could have paid off double
that amount per annum, the rehabilitation of their wasted
capital would have been doubly rapid.
If we might venture to say so, it is extremely fortunate
that this question in the House of Commons is in such
able hands as those of Mr. Lambert. His speech this
session told with great effect upon the House. The clear
sonorous voice in which it was delivered rung through the
House. A day or two after a member of the Govern-
ment remarked to me how well it had been done; indeed,
he seemed to think that it quite stamped Mr. Lambert's
reputation. The subject had obviously been well thought
out, for his speech of this session was immeasurably abler,
fuller, and more statesmanlike than that of the previous
session.

One of the most remarkable things in these discussions
is the discrepancies that are continually cropping up in the
statistics quoted ; thus when Mr. Lambert was rating the
Chancellor of the Exchequer for making a blunder of
above eight millions and a half in overstating the reduc-
tion of the debt during the ten years ending 1868, Mr.
Lambert stated that "the total amount of the National
Debt, including capital of terminable annuities and un
funded debt was in 1858 £826,134,640, and in 1868
£797,031,650." [202 Hansard 14961 The difference of the
two years being £29,102,990, the amount paid off. The
Chancellor of the Exchequer had stated on a previous
occasion that the amount was £37,819,000. Now, it will
scarcely be believed that both the
Chancellor of the Ex_
chequer and Mr. Lambert are wrong, and that both enor-
mously overstated the actual reduction, at least if we may
trust the 17th number of the statistical abstract presented
by her Majesty's command to both Houses. The abstract
states the debt in 1858 to have been £829,634,258, which
includes capital of unredeemed •funded debt, estimated
capital of terminable annuities (computed at 3 per cent.
stock) and amount of unfunded debt. And in 1868 the
debt to have been £605,918,231, thus spewing the actual

r-,,u.,cion of the debt during this period to have been not
.29,102,990, as stated by Mr. Lambert, nor £37,819,000,
as stated by the Chancellor of the Exchequer, but only
£21716,027. Here is a blunder by the Chancellor of the
Exchequer of above £14,000,000. This is a very serious
_natter. Is Parliament and the country to be misled by
misstatements of this sort ? Are members bringing for-
ward questions of the most transcendent and vital moment
to be turned aside by the quotation of incorrect
statistics
It is th ' duty of the Government to see that statistics
printed un ler its sanction are correct—incorrect statistics
are very m •eh worse than useless—no informationis better
than wrong Information.
Speaking of the statistical abstract it would be a great
convenience if, alongside the capital of the debt of each
year were placed the gross annual charge, and the annual
charge in respect of each species of debt. It is also to be
) regretted that the estimated capital on terminable an-
nuities is not carried back from 1854 to 1840 in the dupli-
cate reprinted abstract, as without this and the annual
charge, it is impossible to compare the state of the debt
at the various periods.
Another reason why it is desirable to pay off the debt
is that we should be better prepared for war. These are
critical times, and no man knows when England may be
called upon to buckle on her armour. Doubtless war is a
great crime, but we are liable to have this crime com-
mitted upon us. How immeasurably better prepared for
war should we be were we quit of the necessity of paying
£26,000,000 in respect of the debt. From 1815 to 1834 an
unreformed Parliament reduced the annual charge by four
millions ; from that period to the present we have reduced
it by only two-and-a-half millions. Had we, with more
than doubly-augmented resources, gone on at the same
rate, we might and ought to have further reduced the
annual charge by ten or twelve millions.
The fact of the debt being, in comparison with our re-
sources, less burdensome than it was fifty years ago, is in
itself a strong reason way we should set about manfully
to pay it off.
Strenuous and decisive efforts to pay the debt would
result in raising the credit of the nation still higher,
which would tell most materially in its favour if we were
compelled again to have recourse to loans during war.
Another advantage that would attend decisive efforts
to reduce the National Debt would be that the unpaid-off
portion would quickly rise above par, whereupon, the
annual charge of the whole might be reduced, by striking
down the rate of interest. This occurred on several occa-
sions during the last century when the obligation to pay
the Debt was acknowledged and acted upon. A large
proportion of the Debt is held by persons, who purchase

consols, because they are the safest and surest investment.
A diminution of the rate of interest would scarcely affect
the demand of persons for them.
If I might venture to say so, the principles enunciated

by the Chancellor of the Exchequer, in replying to Mr.
Lambert, are surely opposed to the common sense
and common honesty of the community. The
right hon. gentleman actually took credit for the
£9,000,000 spent on the Abyssinian expedition, £5,755,000
on fortifications, and £7,000,000 for the purchase of tele-
graphs, as payments made in " reduction of the amount
of the Debt," implying, of course, that we might fairly
have added these sums to the permanent Debt, and that,
with justice, we might have burdened posterity with the
payment of these amounts. Now, the Abyssinian expe-
dition was undertaken to accomplish a temporary,
not a permanent object. The fortifications may, and
probably will, be useless ten years hence, inasmuch as the
art of war is varying and advancing every year. In any
case they will doubtless need to be supplemented, and as
to the telegraphs, some of the money is said to represent a
job, and the plant will need constant renewal. To reckon
such payments as payments made in reduction of the
National Debt is what Sir John Lubbock calls " throw-
ing dust in the eyes of the nation." I venture to think
that no English finance Minister ever before laid down a
proposition so utterly indefensible. I happened to be
sitting. underneath the gallery, and I felt that Mr. Pitt
must be turning in hiegrave. My indignation knew
no bounds, and I do not know to what lengths it
might have transported me, but:suddenlyl was wrapt in a
vision, and saw, as it.were, "gods ascending out of the earth.''
An old man came up, covered with a mantle, which I
recognised to be the ancient mantle of the Finance Minis-
ters of England ; it shone with resplendent patriotism.
The old man appeared to bear the lofty and severe fea-
tures of Pitt ; his lip curled with haughty and immea-
surable scorn, but the contempt expressed in his eyes
was tempered by that pity which the Celestials feel for
mere mortals. And the vision appeared to address the
Chancellor of the Exchequer in winged accents, and said,
" Why had thou disquieted me to bring me up ? " And
the Chancellor of the Exchequer answered, " I am sore
distressed, for this uncircumcised Philistine makes war
against me. Therefore I have called -thee, that thou
mayst make known unto me what I shall do." And the

vision replied, "Thou art weighed in the balance, and
found wanting. Return to thy ' Cave,' from whence thou
camest out, or teach not the English people to forget
that they are the sons of men whose heroic self-sacrifice
and devotion to posterity maintained a contest against the
world." I was astonished. The vision faded. I was
again in the flesh, and lo 1 a London alderman was ad-
dressing the House.

The prodigious tendency of the National Debt to expand
and accumulate is perhaps its most alarming feature. If
it should augment at the rate it has done during the last
century, although we have had no lengthier periods of
peace, a century hence it will amount to £1,500,000,000 ;
but if future wars are to be carried on by loans, having
regard to the experience of the United States and of
Prussia and France, it is much more likely to amount to
three or four thousand millions. The expenses of war
each generation rise with fearful rapidity. The first year
of the French war Mr. Pitt asked for 4lj millions, the.next
year for 11 millions, and the next for 18 millions, and
thus it went on year after year until the end of the war
found the debt augmented by £569,000,000.
Let us glance for a moment at what may be called the
capacity of increase of the National Debt. During
the nine years war terminated by the treaty
of Ryswick in 1679 the average annual amount
added to the debt was £2,606,455. During
the eleven years of war ending with the Treaty of
Utrecht, in 1713, the debt incurred annually was
£3,250,060. In the nine years' war, closed by the Treaty
of Aix la Chapelle in 1748, the yearly increase in the debt
was £3,482,120. In the seven years' war, horn 1756 to the
Peace of Paris in 1763, the annual addition to the debt
was £9,129,039. During the disastrous seven years' war,
ending with the loss of America by the Treaty of
Versailles in 1783, the debt was annually augmented by
£15,155,499; and, lastly, the twenty-two years through
which the French war raged terminated by the Treaty of
Vienna in 1815, the annual increase was £25,880,954.
A glance at the calamitous catalogue will shew with what
fatal rapidity rose the expense of each successive struggle.
Thus, a century might touch the periods of two wars, the
one conducted by the genius of a Marlborough, the other
by the abilities of a Wellington. The one resplendent
with the glories of Blenheim, the other illustrious with
the splendour of Waterloo, in which the lofty valour of
the sons emulated the heroic courage of the sires,
and Phcenix like, the indomitable spirit of the father,
awoke with redoubled ardour in the breasts of the children.
But the picture has another aspect. The dignity of your
honour increased, the brilliancy of your glory brightened ;
but the price was a more extravagant expenditure of
blood, and a debt augmented sixteenfold. Should we
proceed at this rate, by the light of experience looking
forward through the "vista of time, a century hence while
rushing to victory, we may be increasing our debt by two
hundred millions a year.
Let us now see the progress that:has been made in

liquidation. In the peace of 1697 the debt paid off
amounted to £5,121,041, at the rate of £1,220,260 per
annum. In the twenty-six years of peace from 1713 the
the sum liquidated was £4,190,734 giving a yearly average
of £161,128. In the peace of eight years from 1748 ac-
cording to Adam Smith, Mr. Pelham paid off £6,000,000,
being at the yearly rate of £857,000. During the peace
of 1763, which lasted twelve years, £10,281,796 was paid,
giving an annual rate of £856,816. During the peace of
1783, which lasted ten years the amount liquidated was
£5,732,993, being an annual average of £573,299. From
1815 to 1834 £88,000,000 being nearly £5,000,000 a year,
and from 1834 to the present period the sum paid off has
been nothing, as the debt in 1834 stood at £773,000,000,
whereas it is now £800,681,428, shewing an increase and
not a diminution. Thus it appears that the progress of
liquidation has been as slow as the accumulation has been
rapid. This consideration adds the utmost force to the
warning uttered by the select committee of 1828, and
which was adverted to in the former article.

Adam Smith says : " The practice of funding has
gradually enfeebled every State which has adopted it.
The Italian Republics seem to have begun it. Genoa and
Venice, the only two remaining which can pretend to an
independent existence, have both been enfeebled by it.
Spain seems to have learned the practice from the Italian
Republics, and it has in proportion to its natural strength
been still more enfeebled. The debts of Spain are of very
old standing. It was deeply in debt before the end of the
sixteenth century, about 100 years before England owed a
shilling. France, notwithstanding all its natural re-
sources, languishes under an oppreskive load of the same
kind. The Republics of the United Provinces are as

much enfeebled by its debts as either Greece or Venice. "
" Is it likely that in Great Britain alone a practice which
has brought either weakness or dissolution into every
other country, should prove altogether innocent ?"
The wisdom of Adam Smith seems justified by the sub-
sequent events—before that century closed the Italian
Republics, the dazzling lights of the dark ages, were ex-
tinguished for ever. The Queen of the Adriatic sunk
without the semblance of a struggle into insignificant
servitude—the French Revolution was precipitated by
financial embarrassment—Spain totters on with increased
debility—Holland has sank into utter insignificance,
although she once disputed the Empire of the Ocean with
England. The debt of Holland is enormous. A few
years ago she owed 100 millions which, with the exception
of our own debt and that of France and Austria, was the
largest in Europe. The heavy taxation necessary to pay
the interest of this debt has diminished the rate of profit,
driven capital abroad, and reduced Holland to that sta-
tionary state which is the real cause of its decline. But
of late Holland has been making the most strenuous efforts
to pay her debt, and has made a very considerable im-
pression upon it.
Such has been the injurious influence exerted by debt on
other countries. What disastrous destiny her debt may
accomplish for England, remains in the womb of time.