it may however be, and I believe is, a useful establishment; thus: the natural depreciation of value of money all over Europe, by the annual importations of gold and silver,-by the increased circulation of bank paper,-by the increase of the public debt itself, makes the sum payable every year in interest represent less, and become in fact a lighter burthen upon the people. The people are enabled to pay each year a little more nominally than this interest, without paying, in reality, more; and this nominal surplus may very naturally be applied to the repayment of part of the principal of the debt; and should the surplus even exceed the depreciation, it would be right to equalize the burthen, between present and future generations. The sinking-fund may be the best means of this equalization, but is nothing more, and there is no gain that I can see; it is a harness well-fitted to the back and shoulders of the beast; and by means of which its strength is applied to most advantage; the burthen is better placed thereby, but is not specifically lighter. A loan is, in political economy, what the lever is in mechanics, compensating power by space.

sinking-fund has had the effect of calling forth exertions.HAMILTON'S National Debt, pages 136 and 158.-Note to Second Edition.

The sinking-fund, on the contrary, shortens the long arm of the lever.

Dr Price surprises his readers with the assertion (undeniable in an arithmetical point of view) that, by means of the sinking-fund, it matters not at what rate the nation borrows; the higher, indeed, the better. If the lender asks four per cent. give him eight, and the nation will be the gainer! Take, for instance, a loan of 100,000,000 at eight per cent. do but raise on the people, besides the 8,000,000 of interest, 100,000l. ayear, by way of sinking-fund, accumulating the yearly interest thereon, and in 56 years the state will be liberated; but this liberation will require 94 years, if the loan was made at four per cent. Again, raise one per cent. more than the interest of a loan, as a sinking-fund, the loan will be all redeemed in 37 years, if at five per cent. ; in 41 years, if at four; in 47 years, if at three.

Most of what has been said and written for a century past, on the natural limitation of taxation, and the national debt, has proved manifestly erroneous; and, after so many false predictions, it really would not be safe to predict any more. The government gropes on through the unknown regions of finance, advancing every year a few steps through their obscure immensity; feeling all the time the pulse of the people, as the criminal on the rack has a physician by him, to watch

the instant when a turn of the wheel more might kill him. "Il faut pousser contre une porte," says Charron," pour savoir qu'elle est fermée;" hitherto the door has always yielded to the pressure, whenever government has tried it.*

* That there are natural limits to taxation, needs no demonstration. Government cannot take away the whole crop of the farmer, for instance; and however near the maximum can be approached, we are sure it cannot be exceeded. Direct taxes are not levied in kind, and the natural limits of taxation in money cannot be determined by the same absolute rule.

Every additional tax on the produce of labour, or on the labourer himself, occasions a proportionate rise on the price of that produce; a new tax on land, for instance, adds to the price of corn, of meat, and of all other agricultural produce; this rise operates on the wages of labour of any kind, and every article of expenditure; thus coming round on the farmer, he would be compelled to add a second time to the price of his produce; a third, a fourth time, and so on in an indefinite progression, if it were not stopped by the body of non-labouring consumers living on a fixed money-income: they bear the whole additional taxes, both those on themselves and on other classes of people, and as they are forced by degrees to enter the ranks of labouring consumers, it appears that the number of non-labouring consumers, and the sum of their revenue, afford the best scale by which to estimate the capacity of a nation to pay taxes, and to raise men for military purposes.

An obvious consequence of this high system of taxation and consequent high prices being a direct encouragement to importation and discouragement to exportation, it would become impossible to maintain a gold and silver circulation, and paper. money would become absolutely necessary. The only remedy to this is to countervail the high prices by high duties on im

I have ascertained, by inquiries made with some care, respecting the nominal increase of

portations of foreign produce and manufactures, the quantum of which would be ascertained by the price of bullion, which, as well as exchange, must be maintained at par.

A late writer of high reputation (Mr Hamilton on the National Debt, pages 17 to 19) observes on this subject of the natural limits of taxation, that as the property-tax of 10 per cent. produces 13 millions, while the average taxes of all sorts produce 65 millions, it follows that the whole taxation is 50 per cent. or one half: Therefore it is impracticable, in the present state of public wealth, to double our present revenue by taxation. But he adds, "we do not affirm that the nominal or even the real amount of our revenue can never at any future period be double its present magnitude."

Any increase of real taxation beyond the present supposed half of the absolute produce of the land and industry of the country, appears certainly very difficult; but I see no limits to the increase of money taxation, as long as the farmer is not called upon for a greater number of bushels of wheat per acre, or as long as there are non-labouring consumers in the country.

A system of finance so complex and artificial as that of England requires extraordinary means of protection; and as import duties are required to maintain a gold circulation and avoid paper money, a tax on income may not be less necessary to prevent non-labouring consumers exempting themselves from any share in the public burthen by living out of the country. Individuals who choose to invest their property under the safeguard of any particular country or institution may fairly be called upon for their proportion of the cost; the remedy is to sell out, and withdraw their property as well as their person. Note to Second Edition.

*

prices of all things, that the rent of land trebled in the last fifty years. The rise is not uniform, and depends materially on adventitious circumstances, such as canals, roads, and capital. In Lincolnshire, for instance, pasturage, which, by its nature, has received no other increase of nominal value, than that occasioned by the depreciation of specie, rents now at 40 or 45 shillings an acre, which 40 or 50 years ago produced only 15 or 20 shillings. In other places, the increase is much greater. The pay of labourers was, 50 years ago, something less than a shilling a-day, now 2s. 6d. or 3s. a-day. Country wages, by the year L.8, or L. 10, and the labourer fed; now L.20 or L.22, for men; and for women they have risen from L.3 or L.4, to L.8 or L.9. In the same interval of time, the price of wheat has quadrupled, having risen from 3s. 9d. to about 15s.† Farmers pay their high rents now with greater ease than they did their low ones formerly, partly from the greater consumption, readier

*The late Mr Kent, Craig's Court, Charing Cross, who, by his profession, was likely to be well informed, confirmed this.

+ I have annexed the table of depreciation of Sir George Shuckburgh Evelyn, taken from the Philosophical Transac tions, vol. LXXXVIII. p. 176; which it may prove interesting to compare with the depreciation of other countries.