Star.
London, England, 1829-09-11 00:00:00

The Loans williestted in the ins Revels*. war With France were . .
DlBl6 list war. mill the 300 of May, 1814 . . . .
Add debentures subscribed is 1813, 53 Gee. cap. 41.53

That we may derive Instruction from the above document, width
'tidbits the the and progress of the national debt dwelt to the con.
elision of the war in 11114, many remarks, aid a &mouth U.
amhution of our system of finance, both past and present, will be
necessity.

From this document, and the Information we derive from other:
0011111111, it appears-
1. That the total debt at the end of the war in 11114, was
1,054,046,1841.; but this sum includes the redeemed debt stand-
frig In the names of the Commissioners of the Minting Pund, and
leaves out exchequer bills, life annuities. and annuities for tenite
of years.

2. That the net public revenue in 1814 was 814213,2421. ; but
then It must be remembered that the average puke of gold through.
out the years 1813 and 1814 was 101. 3s. I Id. per ounce; and
therefore the value of the Bank note was only 14s 1141., and there.
fore the 81,213,2421. raiNd by tares in the year 1814, kid I real
value of only 45,656,3691.; whereas the sum raised by taxes dur-
ing the year 1823 amounted to 52,104,1421.
S. That in the year 1814 thn lime* tax produced 14,000.8001.,
and the assessed taxes about 7,000,0001. but since that period the
income tax has been wholly repealed, and the assessed taxes have
been reduced, and produce now only about 4,000,0001. ; and so
that whereas in 1914 the proportion which the direct taxes hiiie
to the whole sem of taxation was as about 34 to 100; so in 1828
was the same proportion but as about 8 to 100.
4. That the two wars with France (the last ending in 1814)
added 807,823,7921. to the national debt, vs deck ; and that the
money received for this stock was 506,917,1291. ; but part of
the money so raised by loan was applied to the operations of the
Sinking Fond. . .

Sur& immense sums of money having been raised in this country
by means of public loans, and the fact also being (however extra-
ordinary It may appear) that the deeper we got into debt the
greater facity we found in borrowing. I will now make a few ob-
servations ors this mode of raising motley by. loan ' • and then, If we
coolly end carefully consider the matter, I believe we shall find
that a loan is a voluntary tax, that is, a certain sum is furnished by
the people voluntarily, and free of expense, which must otherwise
have been exacted from them (and this at considerable expense) by
the ordinary mode of taxation. And that this definition is correct,
may very easily be made to appear • for when a tax is imposed, what
ir the result? Why, that a certain sum of money is collected at a
certain expense, and which money is paid into the Zmesury. What
afterwuds becomes of the money? It is spent by the Government.
So again, when a loan is negotiated. what is the result? Why,
that, voluntarily and free of all expense, a cereals sum of money is
paid by the people themselves into the Treasury. What becomes
of this money? As in the former case, it is spent by the Govern-
ment ; and therefore in both cases the thing raised is the sante,
and it receives the same application, and the only difference is this,
that in the one case the money is furnished willingly and free of
expense. whereas in the other it is collected at considerable ex-
pense, and gives rise to no little grumbling.
Bia then it is said that all loans carry interest. Now this would
certa!nly he • very serious objection if the Government were to
spend the interest as well as the principal ; but this is nut done, and
the fa: imposed for the payment of the interest is regularly re-
turned to the community in the shape of dividend, and throughout
the whole affair of tax and dividend. the Government merely acts
iv the capacity of trustee to the public for the purposes of assess-
ment and distribution, and its business is so to order matters that
the man who has subscribed more to a loan than his quota would
have amounted ro it the money bad been raised by a tau shall be
indemnified by him who has either subscribed nothing, or lesathan
hi. quota would have amounted to if the money bad been raised
by a tax. Ard to say that this is injurious to the community, is
to say that tun man ought to he allowed to lend money at interest
to another, when the purposes tow hkh the money is to be applied
is the payment of a tax imposed by the Government.
Now, that I reason right in this particular may, I think, be
proved without mu h difficulty. For let A have an income of
1,0001. per annum, and B al.o hive an income of 1,0001. per an-
num, and then let there be an income tax imposed of 10 per cent.
the quota of .1 to this tax will be 1001. and the quota of B will
also be 1001.

Then let A (finding an opportunity to emph.y his capital in an
advantageous manner) borrow 1001. (his quota of the tax) of 11
at four per cent. interest, and then it is clear that Ii will have
paid the income tax of A, and the whole matter will stand in this
way—that B will have parted with a capital of 1001. for which he
will receive an annuity of four pounds ■s an equivalent, and A
wi'l retain a capital of 1001. which he must otherwise have parted
with, and for the use of which capital he will pay four pounds per
annum to B.

Let the Government now resolve to raise the money it requires
by loan at 4 per cent. interest. and impose an income tax for the
payment of the interest; and then A being in the receipt of 1,000/.
per annum, and B being also in the receipt of 1,0001. per annum,
the quota of each to this income tax will be 41. per annum. I say
this will he the quota of A and B, because 1001. per annum being
the quota of each if the money had been raised as in the first case
by an income tax alone, and this money being raised by loan at 4
per cent. interest, and a small income tax being imposed for the
payment of this interest ; the quota of A and B must be according
to the rate of interest on the sum borrowed, and this bring 4 per
cent. the quota of each must consequently be 41. per annum.
Now let A and B each subscribe 1001. to the loan, and they
will be precisely in the same situation as if the money had been
taken from them, as in the first case by an income tax alone ; be-
cause though they will each be taxed to the extent of 41 per annual,
yet precisely this sum will be returned to them in dividend. And
here take tlis observation, that nothing can be an evil in finance
against which a man may guard himself ; and that he may protect
hinisell here is evident, for he has merely to subscribe that sum to
a loan (or to purchase stock) which would have been exacted from
hem if the money bad been raised by a tax : and as in that case.,
the tax which he pays on the one hand, and the dividend which he
receives on the other, will be of equal amount, whether the money
be raised by tax or by Man is (or ought to be) to hint a matter of
indifference. And yet shall he jump at the loan, but growl most
confoundedly it the rune money for exacted from hint by a tax.
And this shows the benefit of allowing people to assess themselves,
and to hr their own tau-gatherers ; and this is done when money
is raised by loan.
Now let B subscribe !Cato the loan, and A nothing; and then
11 will pay 41. per annum in tax, and revise al. per annum In di.
Indeed, and A will pay 11 per annum in tax, and receive nothing.
And thirsts just, fur 11, having sunscribed 2001. to the loan, while
his quota if the money had been raised by a tax was also
100. and A having sibscribed nothing, while his quota,
is the tottery bad tern nixed by a tax was also 1001. it
is plaits that A must indemnity Li; and the position of things will
be this—that II parts with a capital in the purchase ot an annuity;
and that A pays an annuity in order to retain a capital. And title
is precisely the stare ot thing. which obtained, whets is a money
was raised by an inc,me t.% alone, and when we suppu-ed Bto
lend A 1001. at 4 pt.r cent. this .em of 1001. being the quota of A
to the income tits.

Take now the law cage, and then 1. t 13 •utwcribe 1301. to the
W n, and A 501. and then U. w It ply 41. per annum hi tax. and re-
ceive 81. per annum in divideutl, anu A will pay 41. per annum in

.2506,927,129
tax, and retie, IL per annum in dividend ; and as all our peeved.
pent kg bier n=ine apply equallyto this case, it is quite melees to re-
Awns.
- Aid new, link( considered the whole matter, it is phis to me
time whelleatiseary be raised by an income tax alone, or by leen,
with an ire me as for the-payment alb' interest, mast in the east
conk to the same thing; and that to raise any given sum annual
deekg a certain eseMber of years, it will be necessary in both cases
Addle country should have precisely the same wealth and re-
mime. And thee, as far as regards the mode of raising money by
• Inkrviak in sunk the position of things :
•Us than saleentlbes that sum to a loan which would have been
his If thelkeney had been raised by a tag, receives jes=t as
divided as be pays in tax ; and to him it is all a ease,
whether there is or is not a national debt.
' He that subscribes less to a loan than his .quota would have
amounted to lithe money bad been raised by a tax, pays more in
tax than be receives in dividend; bat for this he Is indemnified by
retaining a capital which he may apply to other purposes.
He that subscribes nothing to a loan pays an annual tas which
is equal to the interest on that sum which would have been his
quota, if the money, instead of being raised by loan, had been
raised by taus ; and for this he is indemnified by retaining a
capital which he may apply to other purposes.
Aod, finally, be that subscribes more to a loan. than his quota
would have amounted to if the money had been raised by a tax,
receives more in dividend than he pays in tax • and it is this man
alone which, in the strict sense of the word, is a landholder ;
and therefore a fandlookier is one who, when money was required
for the State, subscribed more to a loan than his quota would have
amounted toll' the money had been raised by an income at;, and
in consideration of this he receives an annuity which must be paid
by ethers • and that he shield be placed in this situation, not by
subscribing to a loan, but by the purchase of stock, or by the
bequest or devise of stock subsequent to the loan, makes its
manner of difference, because. in that case, he only purchases or
succeeds to the tights of others.
With respect to what Is called a National Debt (which Is the
malt of socceseive 'loans), my definition of it is this—that it is the '
record or evidence of large sums of money which have been fur-
nished voluntarily and free of expense by the people themselves,
and which money has been spent by the Government. Bet if this
money bad been levied on the people by the usual and ordinary
modes of taxation it would also have Iven Tent ; ami therefore
the evil (If anyyls, that the Gimernment should spend money ;
but when money is absobarely required for the service of the State,
it is quite impossible that any harm can result from tildes it by
loan with an income tar for the payment of the interest : on the
contrary, by no other mode can it he railed with so much facility
end at so little expense, nor is there any other mode which so
effectually provides for an equal, sound, wholesome di%trlbutlon of
the public wealth.
But is not our present distress to be traced In part to the ruinous
system of public loans? No; but to the abandonment of this
system. As long as we continued to rain. money in this Manner,
we pro, red ; but by leaving it off, we have declined, as We shall
show hereafter.
We have seen that a loan is a voluntary tax, and then comas
the &dimple, 'kat whereat the money raised by taxes on commodl.
ties must necessarily come out of the pockets of the lower clines
of the community. because they are the great consumers; so when
money is railed by loan. must it es necessarily come out of the
pockets of the rich—(by rich, I understand all who have a surphis,
however small ; beyond what is requited for the serenades mil
conveniencies of life); and this is evident, because be that Oki'
barely obtain the necessaries of life has but small means' and
less inclination, to subscribe to a lean, or purchase stork.
This is my exposition of the matter. Let or now apply what
has been said, and endeavour to convert it to some useful purpose.
We have seen that the taxes at the end of the war iota amounted
to 6,448,4741. less than at the present period.
We have also seen that of the amount raised by taxation to
1814, the sum of 21.000,000/ was the produce of direct MN.
and therefore came out of the pockets of the rich ; whereas, °Mr
amount of taxation in 1828, only about 4,000,000 f. was the pro-
duce of direct taxes.
And, finally, we have seen that in the two wars with Frame,
from 1793 to 1814, there was raised by public loan the 41111•0119
suns of 508.927,1291. being at the average rate of about 24,0211.2011 L
per annum, anal which sum was expended in consumable ammo.
dicks, an the pay of soldiers and sailors, and in the wages of every
description of labour. Add this to the 21,000,0001. of direct taxes,
and you will have a sum of 45,000,40001. which was annually levied
on the rich, to be expended on the poor.
And then the conclusion from all this is im-sistlble, and it will
follow that a war conducted upon so large a scale, and under seek
a system of finance, must necessarily be a period of prosperity to
the lower classes of the community, and that they could not by
possibility heel the pressure of taxation, because though commodi-
ties were taxed then as well as at present, yet this was amply com-
pensated by a tarp Government expendinue. the Money to deny.
which expenditure was extracted from the pockets of the rich by
means of pub.lcloans and direct taxes.

Things standing in this condition, what Is the remedy? It is
very simple : we must return to our former system of loans, or is.
come-tax, or both. And this is just, for the capital to carry on
the war having been raised by this means, the annuity which is now
become the equivalent of this capital ought to be raised in the
same manner, and therefore this is my proposition.
That we repeal the whole of the excise duties on malt, beer,
and hops, and the whole of the customs' duty on sugar, and that
we supply the deficiency of revenue which will be thereby occa-
sioned, one half by a tax on all income derived from funded and
real property, and the remaining half by in' lic loans.
As an increased produce of the remaining taxes would be a sign
that the system worked well, and as by means of this increased
produce there would be a surplus revenue, we might rh-n deter-
mine whether we would reduce the rate of the income.tax, or the
amount of the annual loan, or whether, changing nothing in this
respect, we would not, in proportion to this surplus revenue, take
off further taxes on commodities. The last would be the best and
most consistent with reason, because, having proofs that a reduc-
tion in the taxes on commodities was productive of good effect.,
we might be pretty certain that the farther we proceeded to this
reduct.on, the greater would he the advantage : but all this would
be matter for future consideration, and we must be guided by
circumstances.
But we want no argument where we have plain matter of fact
to guide us. The slaty on salt was 15s. per bushel, and when this
duty existed the price of salt in London was 20s. per bushel; hut
the duty bring repealed. the price of salt fell to 3.. per bushel ; and
so that the public gained the whole of the du:y, and Ss. per bushel
beyond it.
And therefore, hyltlbat't•itinit an income tax .41,11.httsi tor money
tale. on commodities. there would not only he a great annual gain
to the community, 1.4... ;he money raised by this mode would
come irom a very different 'class of persons, there would imme-
diately ensue a much more equal and judicious distribution of pro.
petty ; and this above all others is the object which we should en-
deavour td accomplish ; and whether this be done by an income
tax or by loans, or by t.oupling the two modes together, is to me a
matter of indifference; ..nd I would merely premise that wherever
large sums are or have 1, een raised by public loan, it is nekeenry
there should be an income tax, as otherwise the itnerestim the
loans must be provided tor by taxes on commodities; and then; as a
have purchased an- anbuity of the
halal malt, the rich Will merely
pool ; et grand bien Intrigue.
HERMES.