Year: 1865

The government of Great Britain has debt
of about four thousand millions Of dollars
which was contracted for the prosecution Of
war. individuals in the nation delivered to
the government beef, wheat, iron, horses, sui
phur leather. and other articles needed in mill
tary operations, and received the government
bonds in exchange. The articles were destroy
ed or consumed in war the value that was in
them was annihilated. In the place of $4,000
100000 of property in material wealth, the
capitalists of the nation found themselves in
possession Of government bonds 10 that amount.
These bonds are simply pledge on the part of
the government to exact the interest on the
amount from the nation by taxation.


Mr. Jay Cooke has recently Used pamph-
let in which he takes the ground that nation
al debt is an addition TO the capital of the ma
ton, and the argument is based wholly on the
fact that the bonds are saleable for cash. II
nation is able to pay the interest on its bonds,
and if the government has the ability and the
will to make it pay. of course its bonds, in mod
crate sums, will sell at some price, but their
value depends on the continued ability OF the
nation to produce wealth. The principal differ
ence between an individual debt and govern
ment debt is that one is an obligation to return
property already in existence, and the other is
pledge to deliver property hereafter TO be
created.


When an individual contracts debt, prop
erty, which has been accumulated by working
and saving, is passed from The hands of one
man to those of another and remains in exis-
tence the total wealth of the community is not
changed. On the other hand when govern
ment contracts debt for war purposes, prop
erty which has been aboriousy accumulated is
passed over to the army, and consumed or de-
stroyed; in this case the capital of the nation
is deminshed to the extent of the value ami
hiated. The idea that the capital OF the nation
is increased by the transaction is absurd.


We quote from Mr.. Cookies pamphlet:


The Englishman who has 100000 in three
per cent. consols at his bankers, and only ten
guineas in his pocket, and who gives assent to
a proposal made to him to go mine for coal on
Vsncouver's Island, has got 100000 in cash to
go into the operation. He knows that posi-
tieely. The world knows it. British consols
are cash capital. This cannot be controverted.
And the S4,O00,O000O of British debt is ma
tinnal cash capital to the industry and COM
merce of Great Britain. For half century
this seemingly and nominally huge and burden
some debt has served to vitalize the manuiac-
turing and trading genius of the English peo-
pie, and as money has enabled the British to
do for that long time the marine carrying for
the world, and to make for the world cloth,
iron, steel, tin and hardware. This enormous
mass of capital infused into the business of
England at the close of her twenty-five years
war with the French Republic and Empire
almost always of par with gcld-accepted as
gold in all transactions--was the source of that
prodigious development of mechanical industry
and accumulation of wealth which so suddenly
bore upward the English after the battle Of
Waterloo to the command of the trade and f.
nances of the globe.


1t is astonishing that a man with sufficient
brains to do large brokerage business should
sign his name to such nonsense as this. Eng
land has accumulated wealth by the efforts OF
individuals to improve their condition. Why
she has outstripped other nations in the race
may be open to discussion; for our own part
we suppose it to be attributable mainly to her
comparatively free institutions--tn the fact that
her industry has been less trammeed than theirs
by meddlesom legislation. However this may
be, there can be no doubt that it has been done
in spite Of the burden OF her national debt, and
not in consequence Of II.


II makes no material difference to the sever.
ity of this burden, whether the debt is held by
native citizens or by foreigners. If farmer
who owns 40 acres of land, but has no personal
property, can hire $3.50 to buy horse and
ploH, he can, by the use of that capital, increase
several fold the amount of his crop. The man
who loans his money, though he lives in idle
ness on his interest, is no burden to the COM
munity, for the employment of his capital in.
creases the product of the national wealth to
an extent greater than the amount of his inter-
est. But if the government hires his capital
and destroys it in war, then the support of the
capitalist in ideness is burden upon the rest
of the community, and the payment of taxes
for his interest diminishes TO just that amour,
the sums which they can use for their own en-.
joyment.


If this war had cost the whole $4,000 OOO0,'
900 of the national wealth, it would have beer
cheap price to pay for the preservation of the
national integrity and our free institutions
Let the men who contributed their savings tc
the country in the hour of its need, be paid
their interest punctually every six months, and
their principal in full to the last dollar but lei
Us make no effort 10 argue ourselves into the
transparent delusion, that the capital of the
nation can be increased by the process of con.
suming or destroying it in military operations
Scientific american.