When, from the effects of borrowing, too great sums are, from time to time, drawn out of circulation, the void must speedily be filled up. If this be neglected, taxes will not be paid, as has been often observed: besides, if money be allowed to become too scarce, in proportion to the demand for it, interest will rise, and borrowing will become proportionally more burdensome to the state in general.
Foreign expence frequently drains the fund of circulation at home: hence a multitude of inconveniences arise. To prevent these, I suggest a new scheme of borrowing, by opening subscriptions in foreign countries where the interest is annually to be paid. This being to be remitted by the country borrowing, a statesman may, with the greater ease, obviate the inconveniences which might arise to circulation from such remittances.
In this chapter, I endeavour to prove by new arguments and illustrations, that national distress is more owing to a scanty circulation, than to circumscribed property; and a statesman who neglects to employ every method for keeping up the circulating equivalent within the state he governs, to the full proportion of all the uses found for it, fails in the most essential requisite for promoting the prosperity of his people, and the establishment of his own credit.
Having pointed out the methods of contracting debts, I proceed to the method of paying them. This may be accomplished in six different ways, by the help of a sinking fund; which,
1mo, May be applied annually, to the discharge of certain capitals, at the option of the state. Or,
2do, According to a certain rule, to determine the preference.
3tio, By appropriating the fund, for the payment of a proportional part of the whole outstanding capital. Or,
4to, By reducing the interest of the capitals. Or,
5to, By converting the whole of the capitals into determinate annuities, proportionate to the extent of the sinking fund. Or,
6to, By the means of lotteries, where the state may gain what gamesters are willing to lose.