Blackwood's Edinburgh Magazine, Volume 66, No. 410, December 1849

Blackwood's Edinburgh Magazine, Volume 66, No. 410, December 1849
Various

Various

Blackwood's Edinburgh Magazine, Volume 66, No. 410, December 1849

THE NATIONAL DEBT AND THE STOCK EXCHANGE.[1 - A Financial, Monetary, and Statistical History of England, from the Revolution of 1688 to the present time. By Thomas Doubleday, Esq. London: 1847.Chronicles and Characters of the Stock Exchange. By John Francis, Esq. London: 1849.]

The idea of associating history with some specific locality or institution, has long ago occurred to the skilful fabricators of romance. If old walls could speak, what strange secrets might they not reveal! The thought suggests itself spontaneously even to the mind of the boy; and though it is incapable of realisation, writers – good, bad, and indifferent – have seriously applied themselves to the task of extracting sermons from the stones, and have feigned to reproduce an audible voice from the vaults of the dreary ruin. Such was at least the primary idea of Scott, incomparably the greatest master of modern fiction, whilst preparing his materials for the construction of the Heart of Mid-Lothian. Victor Hugo has made the Cathedral of Paris the title and centre-point of his most stirring and animated tale. Harrison Ainsworth, who seems to think that the world can never have too much of a good thing, has assumed the office of historiographer of antiquity, and has treated us in succession to Chronicles of Windsor Castle, the Tower, and Old St Paul's. Those of the Bastile have lately been written by an author of no common power, whose modesty, rarely imitated in these days, has left us ignorant of his name; and we believe that it would be possible to augment the list to a considerable extent. In all those works, however, history was the subsidiary, while romance was the principal ingredient; we have now to deal with a book which professes to abstain from romance, though, in reality, no romance whatever has yet been constructed from materials of deeper interest. We allude, of course, to the work of Mr Francis; Mr Doubleday's treatise is of a graver and a sterner nature.

We dare say, that no inconsiderable portion of those who derive their literary nutriment from Maga, may be at a loss to understand what element of romance can lie in the history of the Stock Exchange. With all our boasted education, we are, in so far as money-matters are concerned, a singularly ignorant people. That which ought to be the study of every citizen, which must be the study of every politician, and without a competent knowledge of which the exercise of the electoral franchise is a blind vote given in the dark, is as unintelligible as the Talmud to many persons of more than ordinary accomplishment and refinement. The learned expounder of Thucydides would be sorely puzzled, if called upon to give an explanation of the present funding system of Great Britain. The man in easy circumstances, who draws his dividend at the Bank, knows little more about the funds than that they mysteriously yield him a certain return for capital previously invested, and that the interest he receives comes, in some shape or other, from the general pocket of the nation. He is aware that consols oscillate, but he does not very well understand why, though he attributes their rise or fall to foreign news. It never occurs to him to inquire for what reason that which yields a certain return, is yet liable to such surprising and violent fluctuations; he shakes his head in despair at the mention of foreign exchanges, and is not ashamed to avow his incapacity to grapple with the recondite question of the currency. And yet it may not only be safely, but it ought to be most broadly averred, that without a due comprehension of the monetary system of this country, and the general commercial principles which regulate the affairs of the world, history is nothing more than a tissue of barren facts and perpetual contradictions, which it is profitless to contemplate, and utterly impossible to reconcile. Nay more, all history which is written by authors, who have failed to acknowledge the tremendous potency of the monetary power in directing the destinies of nations, and who have neglected to scrutinise closely the source and operation of that power, must necessarily be fallacious, and can only mislead the reader, by false pictures of the condition of the present as contrasted with that of a former age. No eloquence, no genius, will avail to compensate for that radical defect, with which some most popular writers are justly chargeable, and a glaring instance of which we propose to examine in the course of the present paper.

The study is said to be a dry one. Certainly, until we have mastered the details, it does look forbidding enough; but, these once mastered, our eyes appear to be touched with fairy ointment. What formerly was confusion, worse than Babel, assumes a definite order. We behold, in tangible form, a power so terribly strong that with a touch it can paralyse armies. We behold it gradually weaving around us a net, from which it is impossible to escape, and claiming with a stern accent, which brooks no denial, a right of property in ourselves, our soil, our earnings, our industry, and our children. To its influence we can trace most of the political changes which perplex mankind, and which seem to baffle explanation. Like the small reptile of the old Northumbrian legend, it has grown into a monstrous dragon, capable of swallowing up both herd and herdsman together. The wisest of our statesmen have tried to check its advance and failed; the worst of them have encouraged its growth, and almost declared it harmless; the most adroit have yielded to its power. Interest after interest has gone down in the vain struggle to oppose it, and yet its appetite still remains as keen and insatiable as ever.

When, in future years, the history of this great nation and its dependencies shall be adequately written, the annalist must, perforce, give due prominence to that power which we weakly and foolishly overlook. He will then see, that the matchless industry displayed by Great Britain is far less the spontaneous result of bold and honest exertion, than the struggle of a dire necessity which compels us to go on, because it is death and ruin to stand still. He will understand the true source of all our marvellous machinery, of that skill in arts which the world never witnessed before, of our powers of production pushed to the utmost possible extent. And he will understand more. He will be able to comprehend why, within the circuit of one island, the most colossal fortunes and the most abject misery should have existed together; why Britain, admitted to be the richest of the European states, and in one sense imagined to be the strongest, should at this moment exercise less influence in the councils of the world than she did in the days of Cromwell, and, though well weaponed, be terrified to strike a blow, lest the recoil should prove fatal to herself. The knowledge of such things is not too difficult for our attainment; and attain it we must, if, like sensible men, we are desirous to ascertain the security or the precariousness of our own position.

The history of the Stock Exchange involves, as a matter of necessity, the history of our national debt. From that debt the whole fabric arose; and, interesting as are many of the details connected with stock-jobbing, state-loans, lotteries, and speculative manias, the origin of the mystery appears to us of far higher import. It involves political considerations which ought to be pondered at the present time, because it has lately been averred, by a writer of the very highest talent, that the Revolution of 1688 was the cause of unmingled good to this country. That position we totally deny. Whatever may be thought of the folly of James II., in attempting to force his own religion down the throats of his subjects – however we may brand him as a bigot, or denounce him for an undue exercise of the royal prerogative – he cannot be taxed with financial oppression, or general state extravagance. On the contrary, it is a fact that the revenue levied by the last of the reigning Stuarts was exceedingly moderate in amount, and exceedingly well applied for the public service. It was far less than that levied by the Long Parliament, which has been estimated at the sum of £4,862,700 a-year. The revenue of James, in 1688, amounted only to £2,001,855; and at this charge he kept together a strong and well-appointed fleet, and an army of very nearly twenty thousand men. The nation was neither ground by taxes, nor impoverished by wars; and whatever discontent might have been excited by religious bickerings, and even persecution, it is clear that the great body of the people could not be otherwise than happy, since they were left in undisturbed possession of their own earnings, and at full liberty to enjoy the fruits of their own industry and skill. As very brilliant pictures have been drawn of the improved state of England now, contrasted with its former position under the administration of James, we think it right to exhibit another, which may, possibly, surprise our readers. It is taken, from Mr Doubleday's Financial History of England, a work of absorbing interest and uncommon research: we have tested it minutely, by reference to documents of the time, and we believe it to be strictly true, as it is unquestionably clear in its statements.

"The state of the country," says Mr Doubleday, "was, at the close of the reign of James II., very prosperous. The whole annual revenue required from his subjects, by this king, amounted to only a couple of millions of pounds sterling, – these pounds being, in value, equal to about thirty shillings of the money of the present moment. So well off and easy, in their circumstances, were the mass of the people, that the poor-rates, which were in those days liberally distributed, only amounted to £300,000 yearly. The population, being rich and well fed, was moderate in numbers. No such thing as 'surplus population' was even dreamed of. Every man had constant employment, at good wages; bankruptcy was a thing scarcely known; and nothing short of sheer and great misfortune, or culpable and undeniable imprudence, could drive men into the Gazette bankrupt-list, or upon the parish-books. In trade, profits were great and competition small. Six per cent was commonly given for money when it was really wanted. Prudent men, after being twenty years in business, generally retired with a comfortable competence: and thus competition was lessened, because men went out of business almost as fast as others went into it; and the eldest apprentice was frequently the active successor of his retired master, sometimes as the partner of the son, and sometimes as the husband of the daughter. In the intercourse of ordinary life, a hospitality was kept up, at which modern times choose to mock, because they are too poverty-stricken to imitate it. Servants had presents made to them by guests, under the title of 'vails,' which often enabled them to realise a comfortable sum for old age. The dress of the times was as rich, and as indicative of real wealth, as the modes of living. Gold and silver lace was commonly worn, and liveries were equally costly. With less pretence of taste and show, the dwellings were more substantially built; and the furniture was solid and serviceable, as well as ornamental – in short all that it seemed to be."

The above remarks apply principally to the condition of the middle classes. If they be true, as we see no reason to doubt, it will at once be evident that things have altered for the worse, notwithstanding the enormous spread of our manufactures, the creation of our machinery, and the constant and continuous labour of more than a century and a half. But there are other considerations which we must not keep out of view, if we wish to arrive at a thorough understanding of this matter. Mr Macaulay has devoted the most interesting chapter of his history to an investigation of the social state of England under the Stuarts. Many of his assertions have, as we observe, been challenged; but there is one which, so far as we are aware, has not yet been touched. That is, his picture of the condition of the labouring man. We do not think it necessary to combat his theory, as to the delusion which he maintains to be so common, when we contemplate the times which have gone by, and compare them with our own. There are many kinds of delusion, and we suspect that Mr Macaulay himself is by no means free from the practice of using coloured glasses to assist his natural vision. But there are certain facts which cannot, or ought not, to be perverted, and from those facts we may draw inferences which are almost next to certainty. Mr Macaulay, in estimating the condition of the labouring man in the reign of King James, very properly selects the rate of wages as a sound criterion. Founding upon data which are neither numerous nor distinct, he arrives at the conclusion, that the wages of the agricultural labourer of that time, or rather of the time of Charles II., were about half the amount of the present ordinary rates. At least so we understand him, though he admits that, in some parts of the kingdom, wages were as high as six, or even seven shillings. The value, however, of these shillings – that is, the amount of commodities which they could purchase – must, as Mr Macaulay well knows, be taken into consideration; and here we apprehend that he is utterly wrong in his facts. The following is his summary: —

"It seems clear, therefore, that the wages of labour, estimated in money, were, in 1685, not more than half of what they now are; and there were few articles important to the working man of which the price was not, in 1685, more than half of what it now is. Beer was undoubtedly much cheaper in that age than at present. Meat was also cheaper, but was still so dear that hundreds of thousands of families scarcely knew the taste of it. In the cost of wheat there has been very little change. The average price of the quarter, during the last twelve years of Charles II., was fifty shillings. Bread, therefore, such as is now given to the inmates of a workhouse, was then seldom seen, even on the trencher of a yeoman or of a shopkeeper. The great majority of the nation lived almost entirely on rye, barley, and oats."

If this be true, there must be a vast mistake somewhere – a delusion which most assuredly ought to be dispelled, if any amount of examination can serve that purpose. No fact, we believe, has been so well ascertained, or so frequently commented on, as the almost total disappearance of the once national estate of yeomen from the face of the land. How this could have happened, if Mr Macaulay is right, we cannot understand; neither can we account for the phenomenon presented to us, by the exceedingly small amount of the poor-rates levied during the reign of King James. One thing we know, for certain, that, in his calculation of the price of wheat, Mr Macaulay is decidedly wrong – wrong in this way, that the average which he quotes is the highest that he could possibly select during two reigns. Our authority is Adam Smith, and it will be seen that his statement differs most materially from that of the accomplished historian.

"In 1688, Mr Gregory King, a man famous for his knowledge of matters of this kind, estimated the average price of wheat, in years of moderate plenty, to be to the grower 3s. 6d. the bushel, or eight-and-twenty shillings the quarter. The grower's price I understand to be the same with what is sometimes called the contract price, or the price at which a farmer contracts for a certain number of years to deliver a certain quantity of corn to a dealer. As a contract of this kind saves the farmer the expense and trouble of marketing, the contract price is generally lower than what is supposed to be the average market price. Mr King had judged eight-and-twenty shillings the quarter to be, at that time, the ordinary contract price in years of moderate plenty." – Smith's Wealth of Nations.

In corroboration of this view, if so eminent an authority as Adam Smith requires any corroboration, we subjoin the market prices of wheat at Oxford for the four years of James's reign. The averages are struck from the highest and lowest prices calculated at Lady-day and Michaelmas.

But the Oxford returns are always higher than those of Mark Lane, which latter again are above the average of the whole country. So that, in forming an estimate from such data, of the general price over England, we may be fairly entitled to deduct two shillings a quarter, which will give a result closely approximating to that of Gregory King. We may add, that this calculation was approved of and repeated by Dr Davenant, who is admitted even by Mr Macaulay to be a competent authority.

Keeping the above facts in view, let us attend to Mr Doubleday's statement of the condition of the working men, in those despotic days, when national debts were unknown. It is diametrically opposed in every respect to that of Mr Macaulay: and, from the character and research of the writer, is well entitled to examination: —

"The condition of the working classes was proportionably happy. Their wages were good, and their means far above want, where common prudence was joined to ordinary strength. In the towns the dwellings were cramped, by most of the towns being walled; but in the country, the labourers were mostly the owners of their own cottages and gardens, which studded the edges of the common lands that were appended to every township. The working classes, as well as the richer people, kept all the church festivals, saints' days, and holidays. Good Friday, Easter and its week, Whitsuntide, Shrove Tuesday, Ascension-day, Christmas, &c., were all religiously observed. On every festival, good fare abounded from the palace to the cottage; and the poorest wore strong broad-cloth and homespun linen, compared with which the flimsy fabrics of these times are mere worthless gossamers and cobwebs, whether strength or value be looked at. At this time, all the rural population brewed their own beer, which, except on fast-days, was the ordinary beverage of the working man. Flesh meat was commonly eaten by all classes. The potato was little cultivated; oatmeal was hardly used; even bread was neglected where wheat was not ordinarily grown, though wheaten bread (contrary to what is sometimes asserted) was generally consumed. In 1760, a later date, when George III. began to reign, it was computed that the whole people of England (alone) amounted to six millions. Of these, three millions seven hundred and fifty thousand were believed to eat wheaten bread; seven hundred and thirty-nine thousand were computed to use barley bread; eight hundred and eighty-eight thousand, rye bread; and six hundred and twenty-three thousand, oatmeal and oat-cakes. All, however, ate bacon or mutton, and drank beer and cider; tea and coffee being then principally consumed by the middle classes. The very diseases attending this full mode of living were an evidence of the state of national comfort prevailing. Surfeit, apoplexy, scrofula, gout, piles, and hepatitis; agues of all sorts, from the want of drainage; and malignant fevers in the walled towns, from want of ventilation, were the ordinary complaints. But consumption in all its forms, marasmus and atrophy, owing to the better living and clothing, were comparatively unfrequent: and the types of fever, which are caused by want, equally so."

We shall fairly confess that we have been much confounded by the dissimilarity of the two pictures; for they probably furnish the strongest instance on record of two historians flatly contradicting each other. The worst of the matter is, that we have in reality few authentic data which can enable us to decide between them. So long as Gregory King speaks to broad facts and prices, he is, we think, accurate enough; but whenever he gives way, as he does exceedingly often, to his speculative and calculating vein, we dare not trust him. For example, he has entered into an elaborate computation of the probable increase of the people of England in succeeding years, and, after a show of figures which might excite envy in the breast of the Editor of The Economist, he demonstrates that the population in the year 1900 cannot exceed 7,350,000 souls. With half a century to run, England has already more than doubled the prescribed number. Now, though King certainly does attempt to frame an estimate of the number of those who, in his time, did not indulge in butcher meat more than once a week, we cannot trust an assertion which was, in point of fact, neither more nor less than a wide guess; but we may, with perfect safety, accept his prices of provisions, which show that high living was clearly within the reach of the very poorest. Beef sold then at 1

/

d., and mutton at 2-

/

d. per lb.; so that the taste of those viands must have been tolerably well known to the hundreds of thousands of families whom Mr Macaulay has condemned to the coarsest farinaceous diet.

It is unfortunate that we have no clear evidence as to the poor-rates, which can aid us in elucidating this matter. Mr Macaulay, speaking of that impost, says, "It was computed, in the reign of Charles II., at near seven hundred thousand pounds a-year, much more than the produce either of the excise or the customs, and little less than half the entire revenue of the crown. The poor-rate went on increasing rapidly, and appears to have risen in a short time to between eight and nine hundred thousand a-year – that is to say, to one-sixth of what it now is. The population was then less than one-third of what it now is." This view may be correct, but it is certainly not borne out by Mr Porter, who says that, "so recently as the reign of George II., the amount raised within the year for poor-rates and county-rates in England and Wales, was only £730,000. This was the average amount collected in the years 1748, 1749, 1750." To establish anything like a rapid increase, we must assume a much lower figure than that from which Mr Macaulay starts. A rise of £30,000 in some sixty years is no remarkable addition. Mr Doubleday, as we have seen, estimates the amount of the rate at only £300,000.

But even granting that the poor-rate was considered high in the days of James, it bore no proportion to the existing population such as that of the present impost. The population of England has trebled since then, and we have seen the poor-rates rise to the enormous sum of seven millions. Surely that is no token of the superior comfort of our people. We shall not do more than allude to another topic, which, however, might well bear amplification. It is beyond all doubt, that, before the Revolution, the agricultural labourer was the free master of his house and garden, and had, moreover, rights of pasturage and commonty, all which have long ago disappeared. The lesser freeholds, also, have been in a great measure absorbed. When a great national poet put the following lines into the mouth of one of his characters, —

"Even therefore grieve I for those yeomen,
England's peculiar and appropriate sons,
Known in no other land. Each boasts his hearth
And field as free, as the best lord his barony,
Owing subjection to no human vassalage,
Save to their king and law. Hence are they resolute,
Leading the van on every day of battle,
As men who know the blessings they defend;
Hence are they frank and generous in peace,
As men who have their portion in its plenty.
No other kingdom shows such worth and happiness
Veiled in such low estate – therefore I mourn them,"

we doubt not that he intended to refer to the virtual extirpation of a race, which has long ago been compelled to part with its birthright, in order to satisfy the demands of inexorable Mammon. Even whilst we are writing, a strong and unexpected corroboration of the correctness of our views has appeared in the public prints. Towards the commencement of the present month, November, a deputation from the agricultural labourers of Wiltshire waited upon the Hon. Sidney Herbert, to represent the misery of their present condition. Their wages, they said, were from six to seven shillings a-week, and they asked, with much reason, how, upon such a pittance, they could be expected to maintain their families. This is precisely the same amount of nominal wage which Mr Macaulay assigns to the labourer of the time of King James. But, in order to equalise the values, we must add a third more to the latter, which is at once decisive of the question. Perhaps Mr Macaulay, in a future edition, will condescend to explain how it is possible that the labourer of our times can be in a better condition than his ancestor, seeing that the price of wheat is nearly doubled, and that of butcher-meat fully quadrupled? We are content to take his own authorities, King and Davenant, as to prices; and the results are now before the reader.

These remarks we have felt ourselves compelled to make, because it is necessary that, before touching upon the institution of the national debt, we should clearly understand what was the true condition of the people. We believe it possible to condense the leading features within the compass of a single sentence. There were few colossal fortunes, because there was no stock gambling; there was little poverty, because taxation was extremely light, the means of labour within the reach of all, prices moderate, and provisions plentiful: there was less luxury, but more comfort, and that comfort was far more equally distributed than now. It is quite true, that if a man breaks his arm at the present day, he can have it better set; but rags and an empty belly are worse evils than indifferent surgical treatment.

We are very far from wishing to attribute this state of national comfort – for we think that is the fittest word – to the personal exertions of James. We give him no credit for it whatever. His bigotry was far greater than his prudence; and he forfeited his throne, and lost the allegiance of the gentlemen of England, in consequence of his insane attempt to thrust Popery upon the nation. But if we regard him simply as a financial monarch, we must admit that he taxed his subjects lightly, used the taxes which he drew judiciously for the public service and establishment, and imposed no burden upon posterity.

The peculiar, and, to them, fatal policy of the Stuart family was this, that they sought to reign as much as possible independent of the control of parliaments. Had they not been blinded by old traditions, they must have seen that, in attempting to do so, they were grasping at the shadow without the possibility of attaining the substance. They came to the English throne too late to command the public purse, and at a period of time when voluntary subsidies were visionary. They looked upon parliaments with an eye of extreme jealousy; and parliaments, in return, were exceedingly chary of voting them the necessary supplies. Corruption, as it afterwards crept into the senate, was never used by the Stuarts as a direct engine of power. The sales of dignities by the first James, detrimental as they proved to the dignity of the crown, were in substitution of direct taxation from the people. When supplies were withheld, or only granted with a niggardly hand, it was but natural in the monarch to attempt to recruit his exchequer by means of extraordinary and often most questionable expedients. The second James, had he chosen to bribe the Commons, might have been utterly too strong for any combination of the nobles. William III. was troubled with no scruples on the score of prerogative. He saw clearly the intimate and indissoluble connexion between power and money: he secured both by acquiescing in a violent change of the constitution as it had hitherto existed; held them during his life, and used them for the furtherance of his own designs; and left us as his legacy, the nucleus of a debt constructed on such a scheme that its influence must be felt to the remotest range of posterity.

That the exigencies of every state must be met by loans, is a proposition which it would be useless to question. Such loans are, however, strictly speaking, merely an anticipation of taxes to be raised from the country and generation which reaps the benefit of the expenditure. Such was the old principle, founded upon law, equity, and reason; and it signifies nothing how many instances of forced loans, and breach of repayment, may be called from our earlier history. Mr Macaulay says, "From a period of immemorial antiquity, it had been the practice of every English government to contract debts. What the Revolution introduced was the practise of honestly paying them." This is epigrammatic, but not sound. From the time when the Commons had the power of granting or withholding supplies, they became the arbiters of what was and what was not properly a state obligation. In order to ascertain the actual value of a debt, and the measure of the creditor's claim, we must necessarily look to the nature of the security granted at the time of borrowing. Forced extortions by kings are not properly debts of the state. The sanction of the people, through its representatives, is required to make repayment binding upon the people. The practice which the Revolution introduced was the contraction of debt, not intended to be liquidated by the borrowing generation, but to be carried over so as to affect the industry of generations unborn; not to make the debtor pay, but to leave the payment to his posterity.

When William and Mary were proclaimed, there was no such thing as a national debt. We may indeed except a comparatively small sum, amounting to above half a million, which had been detained in exchequer by the profligate Charles II., and applied to his own uses. But this was not properly a state debt, nor was it acknowledged as such till a later period.

To those who are capable of appreciating that genius which is never so strongly shown as in connexion with political affairs, the conduct of William is a most interesting study. It would be impossible to exaggerate his qualities of clear-sightedness and decision; or to select a more forcible instance of that ascendency which a man of consummate discernment and forethought may attain, in spite of every opposition. He had, in truth, very difficult cards to play. The different parties, both religious and political, throughout the nation, were so strongly opposed to each other, that it seemed impossible to adopt any line of conduct, which should not, by favouring one, give mortal umbrage to the others. It was reserved for William, by a master-stroke of policy, to create a new party by new means, which in time should absorb the others; and to strengthen his government by attaching to it the commercial classes, by a tie which is ever the strongest – that of deep pecuniary interest in the stability of existing affairs. At the same time he was most desirous, without materially increasing the taxation of England, to raise such sums of money as might enable him to prosecute his darling object of striking a death-blow at the ascendency of France. The scheme answered well – possibly beyond his most sanguine expectation. Nor was it altogether without a precedent.

"In Holland," says Mr Doubleday, "the country of his birth, the Dutch king and his advisers found both a precedent to quote, and an example to follow. By its position and circumstances, this country, inconsiderable in size and population, and not naturally defensible, had been compelled to act the part, for a series of years, of a leading power in Europe; and this it had only been enabled to do, by that novel arm which a very extensive foreign trade is sure to create, and by the money drawn together by successful trading. Venice had at an earlier period played a similar part; but a series of struggles at last led the huckstering genius of the Dutch into a system at which the Venetian public had not arrived: and this was the fabrication of paper money, the erection of a bank to issue it, and the systematic borrowing of that money, and the creation of debt on the part of government, for only the interest of which taxes were demanded of the people. Here was machinery set up and at work; and, in the opinion of interested and superficial observers, working successfully. It was, accordingly, soon proposed to set up a copy of this machinery in England, and in 1694, the blow was struck which was destined to have effects so monstrous, so long continued, and so marvellous, on the fortunes of England and her people; and the establishment, since known as the Bank of England, was erected under the sanction of the government."

The worst and most dangerous feature of a permanent national debt is, that, during the earlier stages of its existence, an appearance of factitious prosperity is generated, and the nation consequently blinded to its remote but necessary results. The tendency to such a delusion is inherent in human nature. Après nous le deluge! is a sorry maxim, which has been often acted on, if not quoted by statesmen, who, like a certain notable Scottish provost, being unable to discover anything that posterity has done for them, have thought themselves entitled to deal as they pleased with posterity. The proceeds of the earlier loans enabled William to carry on his wars; and the nation, puffed up with pride, looked upon the new discovery as something far more important and valuable than the opening of another Indies. Nor did William confine himself merely to loans. Lotteries, tontines, long and short annuities, and every species of device for raising money, were patronised and urged on by the former Stadtholder, and the rage for public gambling became uncontrollable and universal. As we have just emerged from one of those periodical fits of speculation which seem epidemical in Great Britain, and which, in fact, have been so ever since the Revolution, it may be interesting to the reader to know, that the introduction of the new system was marked by precisely the same social phenomena which were observable four years ago, when the shares in every bubble railway scheme commanded a ridiculous premium. We quote from the work of Mr Francis: —

"The moneyed interest – a title familiar to the reader of the present day – was unknown until 1692. It was then arrogated by those who saw the great advantage of entering into transactions in the funds for the aid of government. The title claimed by them in pride was employed by others in derision; and the purse-proud importance of men grown suddenly rich was a common source of ridicule. Wealth rapidly acquired has been invariably detrimental to the manners and the morals of the nation, and in 1692 the rule was as absolute as now. The moneyed interest, intoxicated by the possession of wealth, which their wildest dreams had never imagined, and incensed by the cold contempt with which the landed interest treated them, endeavoured to rival the latter in that magnificence which was one characteristic of the landed families. Their carriages were radiant with gold; their persons were radiant with gems; they married the poorer branches of the nobility; they eagerly purchased the princely mansions of the old aristocracy. The brush of Sir Godfrey Kneller, and the chisel of Caius Cibber, were employed in perpetuating their features. Their wealth was rarely grudged to humble the pride of a Howard or a Cavendish; and the money gained by the father was spent by the son in acquiring a distinction at the expense of decency."

It is curious to remark that the Stock Exchange cannot be said to have had any period of minority. It leaped out at once full-armed, like Minerva from the brain of Jupiter. All the arts of bulling and bearing, of false rumours, of expresses, combinations, squeezings – all that constitute the mystery of Mammon, were known as well to the fathers of the Alley, as they are to their remote representatives. Nay, it would almost appear that the patriarchal jobber had more genius than has since been inherited. William's retinue did not consist only of mercenaries and refugees. Hovering on the skirts of his army came the sons of Israel, with beaks whetted for the prey, and appetites which never can be sated. Vixere fortes ante Agamemnona– there were earlier vultures than Nathan Rothschild. The principal negotiators of the first British loan were Jews. They assisted the Stadtholder with their counsel, and a Mephistopheles of the money-making race attached himself even to the side of Marlborough. According to Mr Francis: – "The wealthy Hebrew, Medina, accompanied Marlborough in all his campaigns; administered to the avarice of the great captain by an annuity of six thousand pounds per annum; repaid himself by expresses containing intelligence of those great battles which fire the English blood to hear them named; and Ramilies, Oudenarde, and Blenheim, administered as much to the purse of the Hebrew as they did to the glory of England."

It has been estimated, upon good authority, that from fifteen to twenty per cent of every loan raised in England, has, directly or indirectly, found its way to the coffers of those unconscionable Shylocks; so that it is small wonder if we hear of colossal fortunes coexisting with extreme national depreciation and distress. We might, indeed, estimate their profits at a much higher rate. Dr Charles Davenant, in his essay on the Balance of Trade, written in the earlier part of the last century, remarked – "While these immense debts remain, the necessities of the government will continue, interest must be high, and large premiums will be given. And what encouragement is there for men to think of foreign traffic (whose returns for those commodities that enrich England must bring no great profit to the private adventurers) when they can sit at home, and, without any care or hazard, get from the state, by dealing with the exchequer, fifteen, and sometimes twenty, thirty, forty, and fifty per cent? Is there any commerce abroad so constantly advantageous?" We apprehend not. Capital is defined by the economists as the accumulation of the savings of industry. Such men as Rothschild have no doubt been industrious, but not according to the ordinary acceptation of the term. Their industry is of a wholesale kind. It is confined to a resolute and systematic endeavour to avail themselves of the savings of others; and we need hardly state that, in this pursuit, they have shown themselves most eminently successful.

The remarkable change which took place in the monetary system of England, under the auspices of William, could not, of course, have been effected without the concurrence of parliament. That body had certainly no reason to charge him with neglect of their interests. The representatives of the people for the first time began to understand, that there might be certain perquisites arising from their situation as men of trust, which could be made available to them, provided they were not too scrupulous as to the requirements of the crown. The mastiff which had bayed so formidably at James and his predecessors, because none of them would deign to cajole him, became at once amenable to a sop. Mr Macaulay should have written: "The revolution of 1688 did not introduce the practice of regularly summoning parliaments; what it introduced was the practice of regularly bribing them." Mr Francis, though an apologist of King William, who, as he thinks, was compelled to act thus from imperious necessity, is not blind to this stigma on his memory. He also believes that the settled animosity between England and France, which has caused so many wars, and led to such an extravagant expenditure of blood and treasure, is mainly to be attributed to the persevering efforts of William of Orange. The following summary is of much interest: —

"The parliamentary records of William's reign are curious. The demands which he made for money, the hatred to France which he encouraged, and the frequent supplies he received, are remarkable features in his history. Every art was employed; at one time a mild remonstrance, at another a haughty menace, at a third the reproach that he had ventured his life for the benefit of the country. The bribery, during this reign, was the commencement of a system which has been very injurious to the credit and character of England. The support of the members was purchased with places, with contracts, with titles, with promises, with portions of the loans, and with tickets in the lottery. The famous axiom of Sir Robert Walpole was a practice and a principle with William; he found that custom could not stale the infinite variety of its effect, and that, so long as bribes continued, so long would supplies be free. Exorbitant premiums were given for money; and so low was public credit, that of five millions granted to carry on the war, only two and a half millions reach the Exchequer. Long annuities and short annuities, lottery tickets and irredeemable debts, made their frequent appearance; and the duties, which principally date from this period, were most pernicious."

These things are elements of importance in considering the political history of the country. They explain the reason why the great bulk of the nation never cordially supported the new succession; and why, for the first time in English history, their own representative house lost caste and credit with the commons. Fifty years later, when Charles Edward penetrated into the heart of England, he met with no opposition. If the inhabitants of the counties through which he passed did not join his standard, they thought as little of making tiny active opposition to his advance; thereby exhibiting an apathy totally at variance with the high national and independent spirit which in all times has characterised the English, and to be accounted for on no other ground than their disgust with the new system which, even then, had swollen the amount of taxation to an extent seriously felt by the commonalty, and which had so corrupted parliament that redress seemed hopeless within the peaceful limits of the constitution. The proclamation issued by the prince, from Edinburgh, bore direct reference to the funded debt, and to the notorious ministerial bribery; and it must have found an echo in the hearts of many, who began to perceive that the cry of civil and religious liberty is the standard stalking-horse for every revolution, but that the result of revolutions is too commonly an imperative demand upon the people for a large augmentation of their burdens, backed too by the very demagogues who were the instigators of the violent change. In this crisis, the moneyed interest, which William had so dexterously created, saved the new dynasty – less, certainly, from patriotism, than from the fear of personal ruin.

It is a memorable fact that, from the very first, the Tory party opposed themselves strenuously to the creation and progress of the national debt. It is well that those who, in our own times, bitterly denounce the system which has landed us in such inextricable difficulties, and which has had the effect of rearing up class interests, irreconcilably opposed to each other, in once-united England, should remember that for all this legacy we are specially indebted to the Whigs. Except by Tory ministers, and in one case by Walpole, no attempt has been made to stem the progress of the current; and this consideration is doubly valuable at this moment, when it is proposed, by a vigorous effort, to make head against the monster grievance, and, by the establishment of an inviolable sinking-fund, to commence that work which liberal and juggling politicians have hitherto shamefully evaded. It is more than probable that "the moneyed interest" will throw the whole weight of their influence in opposition to any such movement; unless, indeed, they should begin already to perceive that there may be worse evils in store for them than a just liquidation of their claims. Matters have now gone so far as to be perilous, if no practicable mode of ultimate extrication can be shown. Real property cannot be taxed any higher – indeed, the landowners have claims for relief from peculiar burdens imposed upon them, which in equity can hardly be gainsaid. The property and income-tax, admittedly an impolitic impost in the time of peace, cannot remain long on its present footing. To tax professional earnings at the same rate as the profits of accumulated capital, is a manifest and gross injustice against which people are beginning to rebel. There is no choice left, except between direct taxation and a recurrence to the system which we have abandoned, of raising the greater part of our revenue by duties upon foreign imports. The former method, now openly advocated by the financial reformers, is, in our opinion, a direct step towards repudiation. Let the fundholders look to it in time, and judge for themselves what results are likely to accrue from such a policy. One thing is clear, that if no effort should be made to redeem any portion of the debt – but if, on the contrary, circumstances should arise, the probability of which is before us even now, to call for its augmentation, and for a corresponding increase of the public revenue – the financial reformers will not be slow to discover that the only interest hitherto unassailed must submit to suffer in its turn. The Whigs are now brought to such a pass, that they cannot hope to see their way to a surplus. We shall have no more of those annual remissions of duties, which for years past have been made the boast of every budget, but to which, in reality, the greater part of our present difficulties is owing. Had a sinking fund been established long ago, and rigidly maintained, and at the same time the revenue kept full, the nation would ere now have been reaping the benefit of such a policy. We should have had the satisfaction of seeing our debt annually diminishing, and the interest of it becoming less; whereas, by the wretched system of fiddling popularity which has been pursued, the debt has augmented in time of peace, the annual burdens absolutely increased, ruinous competition been fostered, and internal jealousies excited. The Whigs, who arrogate for themselves, not only now but in former times, the guardianship of the liberties of Britain, have taken especial pains to conceal the fact that they were, in reality, the authors of our funding system, and the bitterest opponents of those who early descried its remote and ruinous consequences. Their motives cannot be concealed, however it may be their interest at the present time to gloss them over. Lord Bolingbroke thus exposes their occult designs, in his "Letters on the Use of History."

"Few men, at the time (1688), looked forward enough to foresee the necessary consequences of the new constitution of the revenue that was soon afterwards formed, nor of the method of funding that immediately took place; which, absurd as they are, have continued ever since, till it is become scarce possible to alter them. Few people, I say, saw how the creation of funds, and the multiplication of taxes, would increase yearly the power of the Crown, and bring our liberties, by a natural and necessary progression, into more real though less apparent danger than they were in before the Revolution! The excessive ill husbandry practised from the very beginning of King William's reign, and which laid 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.