Every person bearing the title of
esquire, or reputed, or owning, or
writing himself such, shall pay£5
Every gentleman, or reputed gentleman,
or owning himself such,
shall pay£1

These, however, were by no means the most burdensome forms of taxation. A man would willingly pay for the distinction of writing himself an esquire, who would grumble with dissatisfaction at the duty on his salt. But to meet the increasing expense of the state, and 'carrying on the war with vigor in France and Ireland' (the propitiating clause with which nearly all the acts of taxation of the period close), the most minute articles, both of necessity and luxury, were required to bear a portion of the common burden. The nation bore its unaccustomed load with singular patience. A license duty on hackney coaches, imposed in 1693, called forth, however, opposition from an unexpected quarter. The outraged wives of the hackmen assembled, and, to express their indignation at the tax, mobbed the offending members of Parliament on their way from the House. It should be mentioned, as showing the intrepidity of that body, or, more probably, the great necessities of the state, that the tax remained unchanged. In spite of all these taxes, the greatest difficulty was experienced in procuring funds to carry on the war. A general lack of confidence in the stability of the Government prevented men from taking up readily the loans which the Government was forced to call for. Various expedients were adopted to attract the cupidity of capitalists. Among these the most successful was the custom of receiving loans upon tontines. This was a species of annuity. Twenty or thirty persons united in the purchase from Government of an annuity upon the joint lives of their whole number. At the death of each his share went to those who remained, and was distributed equally among them. The final survivor took the whole annuity. No inducements, however, were sufficient to overcome the popular distrust. The national debt had already begun to accumulate. Exchequer bills sold on the street at forty per cent. discount; while, at the same time, a wild spirit of speculation and adventure, such as is too apt to be produced by the unnatural excitements of a state of war, had seized upon the popular mind, and threatened, in its reaction, to bring the whole nation to ruin.

It was at this time of excitement and danger that the National Bank was established. It was not at first favorably received. But the effect of its steadying influence soon began to be felt in the whole financial condition of the state. It even checked for a time the frenzied spirit of stock jobbing, which was absorbing the strength of the nation, and with which a few years later, when the whole country ran wild with the South Sea Bubble, it was so nearly involved in a mortal struggle. Under the influence of the Bank, the business of the nation gradually acquired an evenness and stability which was unknown to any former age.

But while the establishment of this National Bank supplied the Government with a ready and economical method of procuring funds, it did not do away with the necessity of taxes. A new form of taxation was now furnished by the Dutch. This small and ingenious people, in the defence of their liberty, had been early forced into extraordinary expenditures, and were in advance of every other nation in the perfection of their system of taxation. The English Parliament had, in the preceding age, borrowed from them the excise. They now took from the same source the idea of stamp duties. This species of tax had been invented in a competition for a prize offered by the Dutch Government for the discovery of a new form of tax, which should press lightly on the people, and, at the same time, produce a large revenue to the state. Stamps were introduced in England in the year 1693. The nation was now in possession of the four most important methods of taxation: customs, excise, licenses, and stamps. The first had existed in the island from a period of immemorial antiquity. The second was introduced by the Great Rebellion. The third and fourth came in with the wars attendant upon the accession of William and Mary.

Of these different forms it may be said, that the second is most obnoxious to the people, and the third most unequal. We should add, perhaps, to this list the land tax, which, founded on the new assessment made by William, became from this time a regular source of revenue. In this period, we see, was laid the foundation of the whole system of taxation now in use in this country and in Great Britain. The hundred years that followed produced no new species of tax. The five forms which we have mentioned, however, were diligently cultivated. In the nine years which immediately followed the accession of William and Mary, about forty distinct acts of taxation were passed by Parliament. Still it was impossible for a nation counting less than six million inhabitants to pay the expenses of a vast and protracted war by immediate taxation. In 1697 a debt existed of about one hundred million dollars. This is the foundation of that national debt which, with trifling exceptions, has been constantly increasing for more than two centuries, and which now occupies a position of influence not second to that of the throne itself. The importance of the Bank increased with the growth of the debt, and the effects of their combined influence appeared on every hand. They were the national pledges for the stability of the Government.

Every fresh rumor of preparation on the part of the exiled Stuarts to enter England, filled the people with alarm for the safety of the Bank. And when, in 1745, Charles Edward landed in Scotland, and made his romantic advance into the kingdom, an enormous run was begun on the Bank. It was prevented from doing harm only by the patriotism of the London merchants. In this brief rebellion the people realized the important financial interest which each citizen had acquired in the permanency of the existing Government and the stability of the reigning house.

At first Parliament had proceeded in the imposition of its taxes on the principle that a tax, to be equitable and easy, should be distributed over a great variety of articles. It was argued that a man would pay a small duty on a large number of things with less inconvenience and consciousness of burden than if the same tax was levied upon a few prominent articles. The pettiness of the tax would keep him in a kind of deception as to the total amount he was paying, which not even the frequency with which he was called upon to pay it would entirely remove. This theory, together with a condition of state in which the wants of Government were constantly increasing, produced, in the time of William and Mary, a constant multiplication of petty taxes. In the early part of the following reign many of these were consolidated in separate funds, which were designated to pay specific parts of the national debt.

But the number of articles subject to taxation was not reduced. The restlessness of the people under the numerous exactions of the excise soon, however, suggested the necessity of a change. Government now passed to one of those extremes which were only too common in an age when political economy had not yet risen into a science, and legislation was only an art of shifts and expedients. In 1736 a tax of five dollars upon the gallon was imposed on all English-made spirits, with a corresponding protective tariff on those of foreign manufacture. The result of this extraordinary tax proved the folly of its originators. It failed as a source of revenue, and, so far from removing these articles beyond the reach of the poor, which had been one of the designs of the bill, it was estimated that the business of smuggling was so stimulated by the enormous bounty offered upon its labors, that the amount of spirits consumed in the kingdom during the existence of this tax was not sensibly diminished. After a short trial the tax was removed.

The work of reducing the list of excisable articles was nevertheless begun, and from this time it went slowly, and, except as interrupted by extraordinary demands upon the state, steadily forward. Stamps, however, were governed by a different law. Its inoffensiveness, the economy of its mode of collection, together with its ready availability, caused this species of tax to be brought into more and more extensive use. In fact, a constant increase of taxation in some form had become necessary in order to meet the increasing expenses of the state. After the close of the war in 1697, strong efforts were made to pay off the national debt, the rising greatness of which filled all classes with alarm. No corresponding efforts since have been rewarded with similar results. In the brief period of peace that followed, the national debt was reduced one fifth. Four expensive wars, following each other in rapid succession, overwhelmed the petty labors of the sinking fund, put an end to the work of diminution, and left the nation, at the beginning of the war with her colonies in this country, oppressed with a debt of $600,000,000. It came out from this struggle with $500,000,000 added to the burden of the state. This point of time may be fixed as the close of the second epoch. A new class of changes now begin, which have had, if possible, a greater influence on the financial condition of England, as it exists at the present, than those we have already described.

In 1793, notwithstanding its enormous debt, the country boldly entered upon its great conflict with France. It is impossible to look without admiration upon the obstinate energy displayed by the English nation during this conflict, which lasted, with slight intermissions, for more than twenty years, and by which the annual tax was quadrupled, and the national debt increased beyond a chance of final extinction. In the astonishing revolution which it wrought in the financial condition of the state, as well as in much of the social phenomena with which it was accompanied, this conflict strongly resembles that in which the States of the North are engaged against the South. The first effects of the war appeared in the tax system.