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lefs of a compulfory character, the property-tax levies a contribution of one-tenth on all income above rcol. a-year. Having nearly exhaufted the taxes on confumption, we have had recourfe to direct taxation; but, if direct taxation fails, we have no other refource. If, however, we are of opinion, that taxes on confumption will not admit of any confiderable augmentation, we are ftill more decidedly convinced, when we confider the extreme feverity with which the property-tax already preffes on the middling claffes of fociety, that direct taxation cannot be carried further without materially encroaching on the refources of future wealth.

Although it would therefore be, in our opinion, very inexpedient, with the profpect before us of a tedious and expenfive war, to add very confiderably to our permanent taxes, and thus rafhly to push taxation to its utmoft limit, yet it would furely not be very confolatory to reflect, that while we were relieving ourfelves from prefent burdens by throwing proportionally a greater load on futurity, we were at the fame time providing no fure refource for meeting the accumulated demands which, in that cafe, would too furely await us. If it were certain, indeed, that peace would be procured in a few years, or at any time before the loans for intereft, or the fupplementary loans, rofe to a very great amount, in that cafe it would be only neceffary to continue fuch a portion of the war-taxes as would be required either for paying the intereft of the debt contracted, or for its final difcharge. The nature of the arrangements adopted for this purpofe would of courfe be determined by the ftate of the finances at the clofe of the war. We are aware that the continuance of war-taxes, after the peace, would be made a handle to excite popular clamour and difcontent; but the burden of thefe taxes, for a limited period, is comparatively a very light evil, when it is confidered, that by improvidently adding to the load of permanent taxes, we might derange our finances, and ultimately be compelled to adopt that as a measure of neceffity, which we now adopt as a measure of prudence. We are, befides, at a lofs to difcover, what peculiar objections can be urged against the continuance of the war-taxes: if, at the conclufion of the war, it be neceffary either to continue the old taxes, or to impofe new ones, it would furely be better to allow thofe taxes to remain, of which the effects are known, and to which the habits of the people are accommodated, than to refort to what is wholly new and untried.

As it is impoffible, however, to fix any certain limit to the duration of the war, it is neceffary to provide against the most unfavourable contingence which can happen. The plan of finance now before us, confifts, as we have already had occafion to obferve, in an extenfion of the funding fyftem, by borrowing both principal and intereft, and in funding only the intereft. But if


the war were to continue for ten or twelve years, the loans for intereft would nearly equal the fum required for the fervices of the current year. In order, therefore, to attain the great object of the meaître, namely, to limit the amount of the permanent taxes, it becomes neceflary to provide for the payment of the interest due on thofe loans, without impofing new duties. For this purpofe the linking fund, which, in the courfe of ten years, will have increased from 8,555,ocol. to 22,720,000l., will afford ample refources.

When this fund was first established, the evils of its exceffive increase were forefeen end provided againft. By a fubfequent arrangement, however, the linking funds of 1785 and 1792 were confolidated, and no limit was fixed for their accumulation. The mifchief, it was thought, could be guarded against when it was near; and the great acceflion of debt, occafioned by the enormous expenditure of the lalt war, had unfortunately removed to a diftant period the dangers which were to be apprehended from the future increafe of the finking fund. When we confider, however, not only its prefent amount, but how rapidly it must ac cumulate, independent of the ftrong claims of the prefent generation for relief from their almoft intolerable burdens, it appears to us that the period may well be looked to, when it will be expedient to limit its operation, and thus, by rendering the reduction of the debt more gradual, to guard against the effects of too fudden a change. The collecting of that immenfe revenue, which is at prefent required for the payment of the public creditors, and for the fervice of the itate, together with the whole body of laws, regulations, and complicated eftablishments neceflary for this purpose, has effected a great, though gradual, change in the structure of fociety in Britain. To this artificial ftate of fociety, however, mens' views, habits, fchemes, aud commercial arrangements, are accommodated; and any great, or fudden alteration, even although it might remove one evil, would undoubtedly produce extenfive mifchief. The abftraction of a certain portion of the revenue of a country, though a great evil, is not the only evil of taxation. The increase in the value of the commodity taxed, the consequent diminution of its consumption, and perhaps the stagnation of the manufacture, produce fully as much confusion and inconvenience as the mere privation of revenue occasioned by the tax. But when the change is fairly accomplished, the business of society adapts itself to it, and goes on with the same regularity as before. In these circumstances, if things were suddenly reinstated in their original condition, the evil of taxation would no doubt be removed; but this benefit would be accompanied by all those incidental evils which the sudden reformation even of acknow




ledged grievances never fails to produce. These considerations, though sufficiently obvious, do not seem to be generally attended The redemption of the debt is considered (and it no doubt is so) as the mere prelude to relief from taxation; but it never seems to be imagined, that the repealing of taxes to the enormous annual amount of 32,000,000l. will be a work either of difficulty or delicacy. It appears to us, however, that the same skill and contrivance which was called forth when those taxes were imposed, will be required to guard against the evils which may be produced by their repeal. We do not know, indeed, any business of finance, in which a departure from the line of considerate caution would produce such extensive evil.

There is not the same risk in imposing taxes, because an unexceptionable tax may be repealed; and the imposition of a new tax raises the price of the commodity on hand, and must in this respect be an advantage to the dealers; but by rashly repealing a tax on any commodity to a great amount, the dealers might be all ruined by the fall which would take place in the value of their stock in hand. By relieving one particular article from a tax, its consumption might be greatly increased, and it might drive from the market all other rival commodities, on which the taxes were still continued. The repeal of one tax might thus render various taxes unproductive, and, what would be still a greater evil, it might diminish the demand for other commodities, and produce a stagnation in their respective manufactures. It would be impossible, we should imagine, without great inconvenience, to repeal, in one year, taxes to the amount of more than 2,000,000l., in which case, even supposing the debt to be redeemed, it would be sixteen years before the country could be released from its burdens. It must be confessed, however, that as long as the war continues, there is not much reason to apprehend any inconvenient increase in the sinking fund; and that the present scheme of finance, though it no doubt guards against this evil, yet originates in the necessity of limiting the increasing amount of our permanent taxes. This is the principal object of the plan, which we cannot help thinking both wise and reasonable, and well calculated to guard against those financial embarrassments into which we might be involved by blindly adhering to a system, and pushing it to an extreme, under circumstances totally different from those which rendered it originally expedient. Highly approving, therefore, of the principle of the measure, we shall now give a short view of its details, which we think however of less consequence, as being in some degree matters of arbitrary arrangement. The war expenditure of Britain, to be provided for by the present plan, exclusive of subsidies, or any other unforeseen con


tingencies, is taken at 32,000,0001. Towards defraying this hea vy expenditure, we have already war taxes to the annual amount of 21,000,0001. It is proposed to make up the deficiency by means of loans, and to take annually from the war taxes as much as will amount to 10 per cent. on the sum borrowed; 5' per cent. for the payment of interest, and 5 per cent. to be set apart as a sinking fund for the redemption of the principal. The war taxes are to be charged with the interest and sinking fund of the loan of each year until they be exhausted. This will take place in fourteen years, in which time it is calculated that the first loan will be redeemed, and will be again available for the service of the state. In the same manner in each succeeding year, a new loan will be redeemed; so that the plan presents a series of loans and redemptions which is inexhaustible.

For the first three years, the loans will amount to twelve millions in the fourth year fourteen millious, and in the last ten years sixteen millions will be borrowed. As the war taxes, however, are all required to make up the necessary supplies of the year, whatever portion of them may be taken away for the interest and the sinking fund of the war loans, must necessarily be replaced. In addition, therefore, to the principal loan, another loan must be borrowed for this purpose. In the first year, the war loan will consist of 12,000,000l. to pay the interest of which, and to constitute a fund for its redemption, 1,200,000l. will be detached from the war taxes. The sum taken from the war taxes will be made up by 1,000,0001. taken from the war loan, and 200,000l. raised by a supplementary loan. To the interest of the supplementary loans, a sinking fund of 1 per cent. is to be added for the redemption of the principal. This charge is to be defrayed by new taxes. As the plan continues to operate, the war taxes must be gradually decreasing, and the supplementary loans must proportionally increase. Their increase, however, cannot occasion, during the first ten years, any very great addition to the existing taxes, as in the years 1807 and 1808 annuities will expire to the amount of 385,5151. The charge of the first three years is to be defrayed wholly from these annuities; and what remains is to be equally distributed over the next seven years; so that in each year taxes to the amount only of 293,0001. will be required. If the war should unfortunately last till this resource should fail, another arrangement presents itself for the next ten years. It is proposed, when the interest of the sinking fund shall have accumulated, so as to exceed the interest of the present unredeemed debt, to appropriate such part of the excess as shall be required, to the payment of the interest of the supplementary loans; never, however, so far encroaching on the sinking fund, as either to


prevent the redemption of the whole debt which existed previous to the year 1802, within forty-five years from that period, or to postpone the redemption of any future loan longer than fortyfive years from the period when it was first contracted. By limiting, therefore, the operation of the sinking fund, the war expenditure of Britain, amounting to 32,000,000l., will be provided for during the second ten years of the war, without materially adding to her burdens; and the great object of the plan will thus be completely attained.

Such being our opinion, it may perhaps appear unnecessary to enter into any further discussion respecting the merits of this measure. We cannot help observing, however, (although with great deference to the talents of the author), that it rather appears to us to be too complicated, and that some of its provisions are even superfluous. We do not, in the first place, see what end is answered by interfering with the war taxes. As the war taxes are all required for the supplies of the year, whatever portion of them is detached for the interest and sinking fund of the war loans, must be replaced by means of supplementary loans. It appears to us, therefore, that it would be a more direct and simple method, to apply thofe fupplementary loans at once to the purpote for which portions of the war taxes are detached. In which cafe, the intervention of the war taxes would be quite unneceffary. This will appear more evident by an example. To make up the fum of 32,000,000l., 11,000,ocol. is wanted in addition to the war taxes. L. 12,000,000 are borrowed, together with a fupplementary loan of 200,000l., for which taxes are impofed. For the intereft and finking fund of this war loan, the sum of 1,200,000l. is required; 1,000,cool. of which being deducted from the war loan, and 200,000l. being made up by the fupplementary loan, leaves 11,000,0col., the fum wanted for the fervice of the ftate; the war taxes being all applied as they are at this moment, and neither broken in upon nor replaced.

It appears to us, alfo, that the operation of the finking fund is quite nugatory. When nations or individuals fet apart a portion of their annual revenue to accumulate at compound intereft, this is no doubt the fure way to grow rich. But we do not well fee how they can improve their circumstances, by borrowing money, and allowing it to accumulate at compound intereft. If a fum of money be borrowed, and 10 per cent. be annually borrowed along with it, 5 per cent. for the payment of intereft, and sper cent. for a ûnking lund, the borrower will always be precifely in the fame fituation as if nothing had been borrowed for a finking fund; becaufe, as he can only add to the finking fund by borrowing, the more he adds to it, the more he adds to his debt. It may be


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