CONTENTS OF NO. LXXVIII. Art. I. 1. Remarks on the Declarations of the Allied Powers from Verona. By an Englishman. 2. Britannia's Letters to a British Prince, on the 3. The Domestic Policy of the British Empire, view- ed in connexion with its Foreign Interests II. 1. A Letter to the Right Honourable Robert Peel, one of his Majesty's Principal Secretaries of State, &c. &c. &c. on Prison Labour. By John Head- 2. Information and Observations, respecting the pro- posed Improvements at York Castle. (Printed by Order of the Committee of Magistrates, III. 1. Draft of proposed Bill for repealing several Acts relating to Combinations of Workmen, and for more effectually protecting Trade, and for set- people. Ordered by the House of Commons to 2. Considerations on Emigration IV. A Critical Inquiry into Ancient Armour, as it existed in Europe, but particularly in England, from the Norman Conquest to the Reign of King Charles II. ; with a Glossary of Military Terms, &c. By Samuel Rush Meyrick, LL.D. 346 V. Essays on Constitutional Law and the Forms of Pro- cess; containing Suggestions for shortening the Duration, and lessening the Offence, of Judicial Procedure in the different Courts in Scotland. VI. 1. Silva de Viejos Romances. Publicada por Jacobo 2. Sammlung der besten Alten Spanischen, Historis- chen, Řitter und Maurischen Romanzen. Von. ART.VII. 1. The Jurisdiction of the Lords' House of Par- liament considered, according to Ancient Re- cords. By Sir Matthew Hale : To which is pre- fixed, by the Editor, F. Hargrave, Esq., an In- troductory Preface, including a Narrative of the same Jurisdiction, from the Accession of James I. 2. Observations on the Delays complained of in the Court of Chancery and House of Lords VIII. Observations on the Trade with China IX, The Holy Alliance versus Spain; containing the Notes and Declarations of the Allied Powers, with the Replies of the Spanish Cortes. By a Constitu- X. An Elementary Introduction to the knowledge of Mi- neralogy ; comprising some Account of the Charac- ters and Elements of Minerals ; Explanations of the Terms in common use; Descriptions of Mi- nerals, with Accounts of the Places and Circum. stances in which they are found, and especially the Localities of British Minerals. By William Phil- lips, F. L. S. M. G. S. L. &c. Page 202, l. 6, from bottom, for ' vehicles' read' vesicles.' 204, 1. 3, for easily' read rarely.' idation.' tain proportion.' THE EDINBURGH REVIEW, OCTOBER, 1823. No. LXXVII. Art. I. Finance Accounts of the United Kingdom for the year ; ended 5th January, 1823. Printed by order of the House of Commons, 25th March, 1823. The expenses necessarily incurred in conducting the govern, ment of a civilized nation in time of peace, rarely exceed the amount of its ordinary revenue. In time of war, however, the case is extremely different. When the independence and honour of a nation are at stake, proportional sacrifices must be made to maintain them. Hostile aggression and insult mu't be opposed and avenged. But to do this, extraordinary funds are necessary; and the inquiry, how they may be most advantageously provided, is plainly one of the highest importance to every people. It was the common practice of antiquity to make provision in times of peace for the necessities of war, and to hoard up treasures beforehand as the instruments either of conquest or defence; without trusting to extraordinary imposts, much less to borrowing, in times of disorder and confusion. This practice has been commended by Mr Hume. But he has wholly overlooked the circumstance of its being necessary, in order to form such a treasure, to withdraw capital from productive employments ;-a circumstance which shows that its effect must be to diminish the industry, and, consequently, the wealth and population of every country in which it is accumulated, and to render it less able to resist the attacks of an enemy. For these and other reasons, this practice is now very generally admitted to have been founded on erroneous principles: and modern politicians and economists seem to be universally of VOL. XXXIX. NO. 77. А opinion, that the increased expenditure occasioned by a war, ought either to be entirely defrayed by a proportional increase of taxation, or partly by that means, and partly by loans. The question, which of these modes should be adoptedy has been long and vehemently discussed; and has given rise to the most opposite and contradictory statements. We do not, however, think that there really was, at any time, much room for these differences of opinion; though, if there was, the financial operations of the last thirty years have furnished abundant materials for settling them, and for enabling us to come to a satisfactory conclusion on the subject. This, therefore, has appeared to as as a peculiarly fit period for endeavouring to revive the discussion of this question; not only because we are now in a situation to try the deductions of theory by the results of the most enlarged experience, but because there are several circumstances which render it extremely desirable that the public mind should be well informed on this point. Without being previously acquainted with the principles of the funding system, it is impossible to obtain any accurate knowledge of the financial situation of the country, or to judge of the expediency of the important measures lately adopted with respect to the sinking fund, and the annuities or dead weight. Neither should it be forgotten, that we have no security for the continuance of peace; and that, considering the avowed pretensions of the Holy Leaguers, it is impossible to say how soon we may be reduced to the necessity of choosing between these opposite systems, and of deciding whether we shall raise the supplies for a war within the year by an equivalent increase of taxation, or continue the system of borrowing. But it would be impossible to institute a calm and dispassionate inquiry into the comparative merits of these plans during the bustle and excitement of warlike preparations. A period of peace is the proper period for making such investigations; and we ought not to neglect the opportunity now afforded for considering this important question, and for digesting and maturing whatever measures may be necessary to enable us, on any future emergency, to raise the supplies in the best possible manner. Promovere, says Count Verri, i lumi e la curiosità nelle materie di Finanza e di Commercio, sara sempre la preparazione migliore di tutti per comminciar le riforme. Before entering on the discussion of the merits of the Funding System, as a plan for providing for the extraordinary expenses of a state, we may shortly observe, that in its infancy, its nature and effects were very generally misunderstood; and several unfounded opinions were then advanced respecting it, which are not yet entirely relinquished. Bishop Berkeley pretty plainly insinuates, that he considered the public funds as a mine of gold.' (Querist, No. 233.) Melon, the author of the Essai Politique sur le Commerce, published in 1735, does not go quite so far as Berkeley; but he contends, and his opinion has had many supporters, that the debts of a nation are debts of the right hand to the left; and that they have no tendency either to increase or diminish national wealth. (p. 296, ed. 1736.) At length, M. Pinto, a Jew merchant, resident in Holland, and the author of an otherwise ingenious work, De la Circulation et du Credit, published in 1771, undertook to demonstrate that the public debt, far from being a burden, was just so much added to the national wealth, by the magical influence of credit! (p. 44.) This ridiculous paradox has since been advocated by Mr Hope of Amsterdam, Mr Gale, and Mr Spence; and, what is still more extraordinary, Mr Justice Bayley was so much captivated by it, that, in an unlucky moment, he left Blackstone for Pinto, and harangued the Grand Jury of Yorkshire on the enriching quality of a large national debt! • Discourses such as these,' says Hume, in his Essay on Public Credit, "might naturally have passed for trials of . wit among rhetoricians, like the panegyrics on folly and a fe * Meditazioni Sulla Economia Publica, p. 214, ed. 1772. ver, on Busiris and Nero, had we not seen such absurd mea• sures patronized by great ministers, and even by a whole party amongst us.' The fallacy of these opinions is indeed so glaring and obvious, that it is astonishing they could ever have been entertained. We concede to M. Melon, for it is unnecessary again to notice M. Pinto, that the interest of the public debt is a debt of the right hand to the left, or so much wealth transferred from one class of society to another; but the question does not regard the interest, but the PRINCIPAL for which the interest is paid. Now, it is certain, that this principal was not made over by one set of individuals to another, but to the Government by whom it has been spent as revenue. The capital lent by the stockholders to Government has been annihilated; and, instead of deriving a revenue from it, the revenue of the stockholders is exclusively derived from the capital and industry of others. * * It is due to M. Gentz, the ablest defender of the Funding System, to state, that he fully admits the truth of this principle. |