which, at only four per cent. will require taxes to the nominal amount of one hundred and twenty-eight millions to pay the annual interest, besides the interest of the present debt, and the expenses of government, which are not included in this account. Is there a man so mad, so stupid, as to sup-pose this system can continue?
When I first conceived the idea of seeking for some common ratio that should apply as a rule of measurement to all the cases of the funding system, so far as to ascertain the several stages of its approach to dissolution, I had no expectation that any ratio could be found that would apply with so much exactness as this does. I was led to the idea merely by observing that the funding system was a thing in continual progression, and that whatever was in a state of progression might be supposed to admit of, at least, some general ratio of measurement, that would apply without any very great variation. But who could have supposed that falling systems, or falling opinions, admitted of a ratio apparently as true as the descent of falling bodies? I have not made the ratio any more than Newton made the ratio of gravitation. I have only discovered it, and explained the mode of applying it.
To shew at one view the rapid progression of the funding system to destruction, and to expose the folly of those who blindly believe in its continuance, and who artfully endeavour to impose that belief upon others, I exhibit in the annexed table, the expense of each of the six wars since the funding system began, as ascertained by ratio, and the expense of the six wars yet to come, ascertained by the same ratio.
* The actual expense of the war of 1739 did not come up to
the sum ascertained by the ratio. But as that which is the
natural disposition of a thing, as it is the natural
disposition of a stream of water to descend, will, if
impeded in its course, overcome by a new effort what it had
lost by that impediment, so it was with respect to this war
and the next (1756) taken collectively; for the expense of
the war of 1756 restored the equilibrium of the ratio, as
fully as if it had not been impeded. A circumstance that
serves to prove the truth of the ratio more folly than if
the interruption had not taken place. The war of 1739 ***
languid; the efforts were below the value of money et that
time; for the ratio is the measure of the depreciation of
money in consequence of the funding system; or what comes
to the same end, it is the measure of the increase of paper.
Every additional quantity of it, whether in bank notes or
otherwise, diminishes the real, though not the nominal value
of the former quantity.—Author
Those who are acquainted with the power with which even a small ratio, acting in progression, multiplies in a long series, will see nothing to wonder at in this table. Those who are not acquainted with that subject, and not knowing what else to say, may be inclined to deny it. But it is not their opinion one way, nor mine the other, that can influence the event. The table exhibits the natural march of the funding system to its irredeemable dissolution. Supposing the present government of England to continue, and to go on as it has gone on since the funding system began, I would not give twenty shillings for one hundred pounds in the funds to be paid twenty years hence. I do not speak this predictively; I produce the data upon which that belief is founded; and which data it is every body's interest to know, who have any thing to do with the funds, or who are going to bequeath property to their descendants to be paid at a future day.
Perhaps it may be asked, that as governments or ministers proceeded by no ratio in making loans or incurring debts, and nobody intended any ratio, or thought of any, how does it happen that there is one? I answer, that the ratio is founded in necessity; and I now go to explain what that necessity is.
It will always happen, that the price of labour, or of the produce of labour, be that produce what it may, will be in proportion to the quantity of money in a country, admitting things to take their natural course. Before the invention of the funding system, there was no other money than gold and silver; and as nature gives out those metals with a sparing hand, and in regular annual quantities from the mines, the several prices of things were proportioned to the quantity of money at that time, and so nearly stationary as to vary but little in any fifty or sixty years of that period.
When the funding system began, a substitute for gold and silver began also. That substitute was paper; and the quantity increased as the quantity of interest increased upon accumulated loans. This appearance of a new and additional species of money in the nation soon began to break the relative value which money and the things it will purchase bore to each other before. Every thing rose in price; but the rise at first was little and slow, like the difference in units between two first numbers, 8 and 12, compared with the two last numbers 90 and 135, in the table. It was however sufficient to make itself considerably felt in a large transaction. When therefore government, by engaging in a new war, required a new loan, it was obliged to make a higher loan than the former loan, to balance the increased price to which things had risen; and as that new loan increased the quantity of paper in proportion to the new quantity of interest, it carried the price of things still higher than before. The next loan was again higher, to balance that further increased price; and all this in the same manner, though not in the same degree, that every new emission of continental money in America, or of assignats in France, was greater than the preceding emission, to make head against the advance of prices, till the combat could be maintained no longer. Herein is founded the necessity of which I have just spoken. That necessity proceeds with accelerating velocity, and the ratio I have laid down is the measure of that acceleration; or, to speak the technical language of the subject, it is the measure of the increasing depreciation of funded paper money, which it is impossible to prevent while the quantity of that money and of bank notes continues to multiply. What else but this can account for the difference between one war costing 21 millions, and another war costing 160 millions?