England owes a debt not much short: of which about thirty millions is likewise due in the United Provinces.
The United Provinces, themselves, owe a debt of the generality, of fifty millions sterling besides the particular debts of each province. Russia, Prussia, Denmark, Sweden, all owe money to the United Provinces, notwithstanding the assistance of their mines. These Governments, too, are patterns of economy. Sweden receives a constant supply from France. The House of Austria is also to be included in the catalogue. Spain is almost the only considerable European power to be excepted; but this is to be attributed to that inexhaustible fund of treasure which she possesses in the mines of South America.
The King of Prussia is one of those potentates the least in debt; notwithstanding he has a long time made a figure in Europe, much above what the comparative strength and resources of his kingdom entitled him to expect. This his superior genius has effected. By a wise administration, he maintains an army of one hundred and fifty thousand men, nearly equal to that of France, with one-third of its people, and less than a third of its riches. This he does by judicious arrangements; by a rigid economy; and by a species of commerce, which is carried on, on account of the State. There are several public manufactories, from which the army is supplied; and by the help of which, the money paid out with one hand is taken in by the other.
[4] This will appear, by recurring to our expenses in the commencement of the war, before the money was depreciated. In ’75, which was only three-fourths of a year, the emissions amounted to seven millions of dollars: in ’76, to fourteen millions. The war did not begin, in earnest, till ’76.
[5] This is meant, without employing the assistance of a foreign loan, and of other expedients beside borrowing and taxing.
[6] This will appear from the plan which will be proposed.
[7] To form an idea of the effect of this plan, let it be supposed that the goods imported amount to two millions of pounds sterling, and that these sell at one hundred and fifty pounds in paper, for each pound sterling. The whole proceeds will be eight hundred millions of dollars: to these add two hundred millions, raised in taxes. There will then be in the hands of the public, one thousand millions of dollars; which, at sixty to one, gives sixteen millions six hundred and sixty-six thousand six hundred and sixty-six and two-thirds of real dollars. Take the year ’76 for a standard, and suppose fourteen millions of dollars to be the proper annual expense of the war, which is only two millions six hundred and sixty-six thousand six hundred and sixty-six and two-thirds less than the whole amount of the goods and taxes. At this rate, the plan would do little more than defray the expenses of the war for one year. But this calculation is not exactly true; because the money would certainly appreciate, in some degree, by the reduction of its quantity: yet, as this reduction would not last, at least in the same extent, to preserve the appreciation; and as, in proportion to the appreciation, the price of goods must fall, and bring less money in, it is difficult to say whether it would not ultimately come to the same thing.
[8] The taxes are made to increase every year, for the three years; because the money in circulation increases, and, consequently, the people can afford to pay more.
[9] This is sixty paper dollars to one dollar of four shillings and sixpence sterling; which is the real value of the money. But if it is apprehended that this may meet with opposition, let the valuation of the bank notes be the same as the price of European Bills of Exchange. Other operations must be regulated accordingly.
[10] The reason of this is, to preserve the idea of a Stock, and make it seem that the old paper is still in existence. But there is danger, notwithstanding the reasons to the contrary, that there may be a run upon the bank, from particular causes, which may embarrass it. It is not probable the old paper will be entirely, though nearly, called out of circulation: what remains, will appreciate: this may tempt those who have bank notes, to demand payment on the terms of the original deposit; without considering that, by bringing too great a quantity again into circulation, it will again depreciate. The Bank may be pushed to a very disagreeable extremity by this means. I do not know whether it may not be advisable to confine the privilege of repayment to the lenders to the Bank, and make the bills bear interest, payable every three months, without making the principal demandable. Much may be said for and against. It is well worth consideration.