Every one who has writ concerning taxes has endeavoured to contract the object of them as much as possible: more, I imagine, with a view to ease the public than the people. I have followed another course. I have been for multiplying the objects of taxation as much as possible, and for making them more in proportion to expence than to property or income. But that I may conform myself in some measure to the ideas of those who have examined the same subject, I shall propose a tax, which would fill up the place of every other; and could it be levied, would be the best perhaps ever thought of.
It is a tax, at so much per cent. upon the sale of every commodity.
CHAP. XIII.
Recapitulation of the Fourth Book.
Part I. Of the Interest of Money.
Introd.
I introduce the subject of credit and debts, by giving a general idea of its extent. It comprehends the method of establishing a solid security for money borrowed; of extending the object of such security in proportion to circumstances; of supporting the credit of the borrowers, when over-stretched; and of preventing, as far as possible, the fatal consequences of a bankruptcy, when it can be no longer supported.
I shew how all mysteries relating to credit proceed from our ignorance only of its true nature; which is confidence established upon a visible and palpable fund of payment. I observe how delicate a thing credit is, and how gently it must be dealt with; how incompatible the forms of common law are with the discussion of questions which arise between merchants; how necessary it is to form a jurisprudence peculiar to trade, and to support it by manners more than by authority; and when credit is once set upon its true basis, how all aerial schemes, bubbles, and public bankruptcies will be avoided.
Chap. I. Here I shew how impossible it is to establish credit by authority; how inseparably it is connected with liberty and independence; and still how compatible it may be with that supreme power which is vested in every government.
Chap. II. The object of credit is money lent; the basis of loan is the payment of interest. If money be wanting, credit will die; consequently, there must be a method found for augmenting and diminishing the quantity of money in proportion to the demand for it. It is augmented, by converting land into paper-money; it is diminished, by relieving the land of the engagement upon it, and extinguishing the paper-money. This is no more than a contrivance for turning into a circulating value, which is the principal characteristic of money, the obligations of private men, which in all countries are considered to be of an equal value with any coin.