An Inquiry into the Principles of Political Oeconomy (Vol. 1 of 2) / Being an essay on the science of domestic policy in free nations. In which are particularly considered population, agriculture, trade, industry, money, coin, interest, circulation, banks, exchange, public credit, and taxes

by Sir James Steuart

The valuation of the lands of England was made many years ago, and reasonably ought to be supported at the real value of the pound sterling at that time, according to the principles already laid down. The general valuation, therefore, of the whole kingdom will rise according to this scheme. This will be considered as an injustice; and no doubt it would be so, if, for the future, the land tax be imposed as heretofore, without attending to this circumstance; but as that imposition is annual, as it is laid on by the landed interest itself, who compose the parliament, it is to be supposed that this great class will, at least, take care of their own interest.

Were the valuation of the lands to be stated according to the valuation of the pound sterling of 1718.7 grains of silver, which is commonly supposed to be the standard of Elizabeth, there would be no great injury done: this would raise the valuation only 5 per cent. and the land tax in proportion.

There is no class of inhabitants in all England so much at their ease, and so free from taxes, as the class of farmers. By living in the country, and by consuming the fruits of the earth without their suffering any alienation, they avoid the effect of many excises, which, by those who live in corporations, are felt upon many articles of their consumption, as well as on those which are immediately loaded with these impositions. For this reason it will not, perhaps, appear unreasonable, if the additional 5 per cent. on the land tax were thrown upon this class, and not upon the landlords.

With respect to leases, it may be observed, that we have gone upon the supposition that the pound sterling, in the year 1728, was worth 1718.7 grains of fine silver, and 113 grains of fine gold.

There would, I think, be no injustice done the lessees of all the lands in the kingdom, were their rents to be fixed at the mean proportion of these values. We have observed how the pound sterling has been gradually diminishing in its worth from that time, by the gradual rise of the silver. This mean proportion, therefore, will nearly answer to what the value of the pound sterling was seventeen years ago; that is to say, in 1743; supposing the rise of the silver to have been uniform: and seventeen years, I apprehend, is not much above the mean proportion of the time elapsed of all the leases entred into with the landed interest of England.

It may be farther alleged in favour of the landlords, that the gradual debasement of the standard has been more prejudicial to their interest in letting their lands, than to the farmers in disposing of the fruits of them. Proprietors cannot so easily raise their rents upon new leases, as farmers can raise the prices of their grain, according to the debasement of the value of the currency. We have shewn how the operations of trade communicate their influence to country markets; but as the cause of the rise of prices is not rightly understood by country people, and as it is commonly ascribed rather to accident than to any thing permanent, it is easy to perceive how such a circumstance must be prejudicial to the landed interest. These combinations are too complicated to fall under any calculation, and nothing but the wisdom and penetration of the legislature is capable of estimating them at their just value.

The pound sterling, thus regulated at the mean proportion of its worth, as it stands at present, and as it stood in 1728, may be realized in 1678.6 grains of fine silver, and 115.76 grains fine gold; which is 2.4 per cent. above the value of the present currency. No injury, therefore, would be done to lessees, and no unreasonable gain would accrue to the landed interest, in appointing conversions of all land rents at 2½ per cent. above the value of the present currency.

Without a thorough knowledge[knowledge] of every circumstance relating to Great Britain, it is impossible to lay down any plan. It is sufficient, here, briefly to point out the principles upon which it must be regulated.

The interest of the public creditors examined.

The next interest to be considered is that of the nation’s creditors. The right regulation of their concerns will have a considerable influence in establishing public credit upon a solid basis, by making it appear to all the world, that no political operation upon the money of Great Britain can in any respect either benefit or prejudice the interest of those who lend their money upon the faith of the nation. The regulating also the interest of so great a body, will serve as a rule for all creditors who are in the same circumstances, and will, upon other accounts, be productive of greater advantages to the nation in time coming, as we shall presently make appear.