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already paid too much.” A royal octavo volume, of 400 pages, arrives at the following conclusion :
“ Thus, then, it seems evident, almost to a demonstration, that one measure alone can avert the violent destruction of the system; and that is, the sweeping away of the debt, and the reduction of the taxes to about one fifth of the present amount."
This is repudiation in its broadest,-its Mississippi sense, and is the doctrine of a large, influential and growing party. The debt has hitherto been maintained by taxes levied upon consumable goods, a mode by which the whole has been thrown upon the working classes, and, as a consequence, the landed and funded interests, and the church, were united in its support. When Sir Robert Peel came into power, in 1844, he found a deficit of £10,000,000 in the revenues. Unless this could be repaired, it was evidently fatal to public credit. He declared that indirect taxation had reached its limit, and levied taxes upon property; that is to say, he declared war between the landed and funded interests. He placed the former in collusion with the people in hostility to the stockholders. As long as industry paid all the taxes, the landed interests favored the stockholders; the moment that property was taxed for debts, the rights of the latter came in question. The February number of Blackwood, the high tory organ, has an article on “ direct taxation," with this ominous commencement:
" • Free trade,' say the Americans, .is another word for direct taxation, and direct taxation is another word for repudiation of state debts.' The Americans are right; it is so."
The article, then, in admitting the necessity for direct taxes, advises their extension to embrace all classes, as well as Ireland, and tells us that the “public credit and the existence of the nation depends on the question.” Such a position of the finances vetoes forever England's wars. Austria may annex Cracow, or Russia, Constantinople. England cannot help it; although Chatham did say, that
should hereafter be fired in Europe without England knew the reason why ?" The importance of this separation of interests becomes more manifest, when we consider that out of 27,000,000 people that inhabit Great Britain, but 830,000 are electors, while in the United States there are 2,600,000 out of 17,000,000 people. The 830,000 electors of Great Britain embrace the interests of the church, of property and stocks. These have supported public credit," "tithes,” the whole expensive hierarchy, and the exemption of property from taxation. The great mass of the people are opposed to the public debt and in favor of direct taxation. Alison, in his History of Europe, page 436, vol. 4, states :
"If Great Britain wants to shake off its national debt, it has only to extend the suffrage in any considerable degree, and the burden will not stand three months."
These are the words of the mouth-piece of aristocracy, and are meant to excite horror of democracy. They, however, are true, and strongly illustrate the taxation without representation which exists in England. The minister has relieved the people of taxes to a considerable extent, and imposed a portion of the interest upon property; that is to say, of £30,000,000 which the debt costs, £5,300,000 are drawn from the income tax. Events have abolished the corn laws which are a protection to lands, and raised the poor rates. The people have therefore a powerful ally in that interest ; and the moment the debt is too irksome to property holders, an extension of the right of suffrage will send both that and tithes to the "tomb of the Capulets."
It will be remarked, that precisely at the moment when, on the accession
not a gun
of the new minister in 1842, the necessity arose for making property pay a portion of the interest due the public creditors, the repudiation of the debts of several of the United States was announced. Under such circumstances it is not surprising that that event created immense excitement, or that the fund-mongers evinced such alarm and indignation at an example, which went far to encourage the repudiating party in England. The discussion of the subject there would be fatal; hence, unmeasured abuse of “ democratic repudiation" filled all prints and pointed all speeches. Hence the renewed and violent outcry against slavery; the patronising and feasting of drunken negroes by the nobility of England; the employment of emissaries, and the expenditure of money to foment dissensions on this side, in order to divert public attention from the finances there. The crisis in Ireland and the state of the harvests in the last year,
has brought the matter to a focus. On the next harvest depends the salvation of British credit, if it can be sustained till then. The funding-system of England has two separate branches, viz., the direct loans of the government, on which it pays interest annually, and the paper-money in circulation, which is the medium in which taxes are collected and interest paid. It is obvious that the magnitude to which the debt may be raised depends somewhat
the quantity of money in circulation. Hence the direct debt never could be very large, unless there were some means of increasing the circulating medium, to admit of the collection of necessary taxes. That is to say, if England had no debt, the collections and disbursements of the government would be annually £60,000,000 less than they are, and the demand for circulating money to that extent diminished. Hence it is, that the Bank of England and the country banks keep out about £30,000,000, which are constantly passing from the people to the tax collectors, thence to the bank, where they accumulate and are paid out to the national creditors, who pay them away to the people, from whose hands they return through the tax-gatherers to the treasury. For this reason the operations of the Bank of England, originating with the debt, kept pace with its progress. The amount of paper in circulation increased year by year, with the public expenditures, until 1815, when that expenditure reached its maximum; since that time its circulation has been stationary, at about twothirds of the interest on the public debt. We stated that the theft of Charles II. was the origin of the present debt; that is to say,
it amount owed by the government at the date of the Revolution. When James II. abdicated the throne, the revenue of Great Britain was £2,000,000 per annum ; taxes were consequently light, property well-distributed, and the nation prosperous. The precious metals had, during the previous century, flowed freely in frorn America, and favorably influenced business, The expenses of the Revolution were followed by the extravagance of the new king, transplanted from Holland, and the persecution of Ireland required large sums of money, as well as the wars fought to carry out the Dutch policy of the new king. These wars ruined the finances of the country. It became impossible to raise sufficient supplies, and the exchequer bills were taken only at a ruinous discount. At this juncture, Bishop Burnet, of Salisbury, and William Patterson, of Scotland, projected a bank after the Dutch plan. The king caught eagerly at the scheme, and in July, 1794, the present bank received a charter, with the following curious title : For securing certain recompenses and advantages to such persons as shall voluntarily raise £1,500,000 for carrying on the war with France.” The subscribers to the sum to be a corporation, with the title of “The Governor and Company of the Bank of England.” The subscribed capital to be lent to the government at 8 per cent. per annum.
From time to
time, as the government wanted money, the bank capital was raised, until it reached £9,800,000 in 1742. The capital was further increased, until it reached £11,642,400* in 1781, and has so continued. The circulation of the bank always kept pace with the interest on the debt; that is to say, in 1794 the interest on the national debt was £9,890,904, and the circulation of the bank was £9,000,000. This was increased in 1797 to £12,000,000, when the annual interest was £14,270,616. The effect of this large circulation, necessary to the loan operations of the government, was to raise prices, and produce adverse exchanges, so that the bullion in the bank ran down to less than £1,000,000 in 1797. It now became evident that the circulation of the country was as great as trade would bear, to allow of specie payments, and that, therefore, the debts could not be extended; but at that time the aristocracy was engaged in its most insane war to put down the liberties of France; and, as the huge debts were to be paid by the people, who were not represented,—that is to say, by those classes not included in the number of electors, it was determined to prosecute the war at all hazards. This led to a succession of the most atrocious frauds, forgeries and perjuries, that the world ever witnessed. The Bank of England was broken. It could not pay its debts, yet it was necessary that its paper should circulate to support the government. To allow it to fail outright would destroy its credit, and make its bills worthless. Feb. 21, 1797, Mr. Pitt was told of the approaching failure, and he advised sending Mr. Goldschmidt to the continent to buy gold, but was told it was too late. On the 24th Feb. the governor, Thornton, and a director, Bosanquet, were deputed by the directors to wait upon Mr. Pitt, to solicit the interference of the government, and to ask " how far they were to go in paying away gold.” On the 25th the drain continued, and the bank was exhausted. On the 26th, Sunday, an “Order in Council” was signed, which for the true spirit of bank impudence and humbaggery, has been equalled since only by the letter of Mr. Biddle, resigning the presidency of the late National Bank, March, 1839. It was as follows :
“Bank of England, Feb. 27, 1797. "In consequence of an Order of his Majesty's Privy Council, notified to the bank last night, a copy of which is herewith annexed, the governor, deputy-governor, and directors of the bank of England, think it their duty to inform the proprietors of bank stock, as well as the public at large, that the general concerns of the bank are in a most affluent and prosperous situation, and such as to preclude every doubt as to the security of its notes. The direction mean to continue their usual discounts, for the accoinmodation of the commercial interests, paying the amount in bank notes ; and the dividend warrants will be paid in the same man
Francis Martin, Secretary.” The drain of Saturday broke the bank, and this was the manner of announcement on Monday. The next step was deliberate perjury, by Mr. Pitt and the bank officers, who solemnly declared that the bank was able and willing to pay, but was restrained from paying by the government for
* The capital of the Bank of England grew as follows: 1694, Lent Gov't........
£1,200,000 1728, Lent Gov't £1,750,000 1742, Lent.. ...1,600,000 1708, ..2,175,027 Do. on lottery 1,250,000 1746,
986,800 1717, ..2,000,000
3,000,000 1722, Do. for S. Sea St'k.. 4,000,000
1835, Rec'd Stock £3,671,700 1727, Rec. fr. sink'g fund 1,775,027
Total Lent...£11,015,100 £7,600,000
"great state reasons." Hence, the breaking of the bank was called the “ Bank restriction act." The time fixed for resumption was postponed, from time to time, and although it was at first for 52 days, it lasted 22 years. During this suspension it was that the larger portion of the present debt was contracted. The paper in circulation continued rapidly to depreciate, and prices of food and goods to rise, while stocks were kept low under the excessive loans, which were taken at low prices, and paid for in depreciated paper. The following table shows the revenue of England, the annual interest on the debt, the circulation of the bank, the price of gold, and of wheat, in several years :
Gold. Wheat. Price Sug'r. Hops. Ir. Bf. Revenue. Interest. Circulation. per oz.
per gr. 3 pct. cwt.
B. d. Stock. 1792... 19,258,814.....9,767.333....9,000,000....77 6....47 10.... .38....80....75 1797......53,483,813....14,270,616....9,674,000....77 6....52 2....1800......57,176,113....17,381,561.. 15,047,180...85 0...110 5....63p ct.32... 206... 120
..71.831,400....23,006,006...17,871,170.... 1809......76,017,779....24,813,624...21,019,600....99 9... 103 3....68" ..50....88...152 1813..... 108,397,645....28,030,229...23,210,930...110 0...122 8....58" ..56...314... 160 1814.....105,698,106....30,051,365...27,261,650...108 0...106 6....58“..92...160...178 1819......52,648.847....30,807,249...25,126,700....83 0....72 3....72" ..45...514...125
..54,282,985....31,157,846...24,553,160....77 10....65 10....68"..32....80...125 1845......53,060,354....28,257,872... 20,130,120....77 10....50 0....93“ ..45
The rate of depreciation for the currency is marked in the advancing prices of gold and wheat, as well as other articles. In 1813 the depreciation of the paper was 41 per cent., and in that year £65,640,000 3 per cent. stock, and £3,600,000 4 per cent was sold for £35,689,803 of paper money, depreciating 41 per cent. That is to say, the stock issued for what was equal to 6,497,157 oz. of gold in 1813, is now worth 14,530,000 oz. of gold, or the stock given_for 7,000,000 qrs. of wheat in 1813, is worth 24,000,000 qrs. in 1845. The actual amount of taxes levied in 1813 was £74,000,000, equal to 13,874,385 qrs. of wheat. In 1845 the taxes were £53,060,354, equal to 21,000,000 qrs. of wheat, the prices of that year being a fair average. Hence the taxes were, actually, as represented by labor, 75 per cent. more in 1845 than in the midst of war. Again, the value of taxes in manufactured goods, shows a still greater increase. The returns of British exports are made in two values, official,” fixed in 1666, and indicates quantities, the other is the actual invoice value at the time of shipment. In 1814 the official value of exports was £34,207,253, and the actual value £45,494,218; showing that £100 of official value was worth £133 in money; and the taxes of that year being £77,315,455, were consequently worth £58,131,921 in manufactures. The money value of manufactures has continued to decrease; and in 1845 the official value was £134,599,116, and the real value £60,111,081, or £100 official value was worth £40 in money. Hence, £53,060,354 of taxes was worth £126,591,713 of manufactures. As guaged by the value of the products of manufacturing industry, the taxes in 1845 were 117 per cent. higher than in 1814! The manifest ruin that must result from the progress of this state of things requires no comment. An end must come; and repudiation in England takes three forms: 1st, that advocated in the book under review, viz. “sweeping away the debt ;" 2d, inconvertible paper money, to pay creditors in the same medium in which they bought the stock ; 3d, lowering the standard of the coin : that is to say, to reduce the quantity of gold in a sovereign one-half, by calling in all the gold currency, and coining it into double the number of pieces, still calling them sovereigns.
These three are plans, advocated for the same object, viz. to get rid of the debt; and this question it is, on which the debates between the bullionists
and paper money men turn in England; and although the former triumphed in 1822 at the passage of the so-called "Peel's Bill,” by which resumption was forced upon the bank, and again in 1844, when, by the new charter, the currency was further restricted, yet that evidence of strength is seemingly but a prelude to the final overthrow of the paper system, through the triumph of the paper party. The reduction of the standard of coins, and the return to irredeemable paper, are nearly the same in principle, except that the former is more unjust, while the latter is more sweeping in its effects. The reduction of the coin was practiced to the greatest extent by Henry VIII., under whose monstrous tyranny the circulation lost more than half its value. It was the only plan of indirect repudiation in those days, when there were no paper promises to be dishonored and depreciate. The immediate effect of a reduction of standard, as now proposed in England, is not only to relieve the government from one-half its debts, but also to deprive all private creditors of one-half that is due them. All rents and outstanding accounts will be immediately reduced one-half, but prices will be immediately doubled, because a person holding produce will not sell it for less than its value, although he may have due to him a certain number of sovereigns, and be compelled to take them of half weight. The holder of a barrel of flour worth £2, or 246 grs. of gold, will not sell it for 123 grs., because the pieces weighs less. The mint of England now coins 1 lb. Troy of fine gold into 461 sovereigns, consequently each weighs 123 grs. If the government should order it to be coined into 93 sovereigns, each one would weigh 61.5 grs., one half the gold would suffice to pay existing debts. Thus, if the bank holds £9,000,000 of gold, this would suffice to pay £18,000,000 of debts ; but it would not be allowed to retain it; as soon as such a movement became probable, a simultaneous rush, by all classes, to profit by its possession, would cause it to disappear for a time, and ruin and discredit would result. Such a plan can never be ventured upon again. A return to irredeemable paper is practicable only, as a prelude to its final destruction.
In the present state of commerce, no nation can sustain for any length of time a depreciated paper currency. Two prices must immediately take place; and while all external trade is done for specie, the money of the world, internal trade will be carried on in a constantly depreciating paper that must ultimately cease to circulate. The “ assignats' of France, tinental” money of the old federation, as well as the issues of the old colonial governments, and the tendency of bank paper during the suspension of the banks of the Union, from 1837 to 1839, and of the Bank of England during the twenty-two years of its suspension, sufficiently show the inevitable consequences of inconvertible paper money. The suspension of the Bank of England will involve its entire discredit
, and its paper will cease to circulate altogether. The circulation of its paper, after the suspension of 1797, was aided by the grossest frauds, as well as the most blood-thirsty oppression—at a time when general war isolated the commerce of England, gave her command of the ocean, and kept exchanges always in her favor. Yet, under all these circumstances, it fell to 41 per cent. discount for money. In the early years of the French Revolution, the vast issues of “ assignats" by the revolutionary government, and the general discredit attending the wars, drove property and the precious metals to England; and as the wars progressed, large sums owned on the continent were invested in the English funds for safety. These circumstances aided the views of the English government. The assignats of France were based on the best security for paper money, viz., lands; but from the quantity of genuine issues, and large quantities fraudulently put out, they speedily fell to nothing. These assignats were the chief resource of the French government, and Mr. Pitt's