The Land Taxation and the Economists. 1 79 



all started to meet the wants of those who at the end of their 

 financial year found themselves the lucky possessors of super- 

 fluous funds. The close of the seventeenth century must have 

 been indeed a golden age for the stock-broker and jobber, but, 

 as we learn later on, by the bursting of the South Sea Bubble, 

 it was the beginning of a disastrous one for commercial credit. 

 By a happy inspiration the finance minister of the age associ- 

 ated his own wants with those of the money-making class. 

 Insufficient taxation was supplemented by the institution of 

 the National Debt, and a security guaranteed by Government 

 afforded a boundless source of absolutely unassailable invest- 

 ments for the unemployed capital of the merchant. We laugh 

 now at the alarm created by this measure. It was no laugh- 

 ing matter to those who thought that each additional hundred 

 thousand pounds would bring about national bankruptcy. Up 

 to the year 1700, when there was a possibility of a successful 

 revolution and consequent repudiation of the funded debt, the 

 public creditor had to be offered the large bait of 10 per cent, 

 for his risk. The landed gentry, who hated the scheme, would 

 have as soon thrown their spare capital into the sea as invest 

 it thus. Equally reluctant were the bankers and merchants 

 whose firms had been robbed of some millions by Charles II. ; 

 whose claim of 6 per cent, interest had been repudiated by 

 later kings, and whose memories recalled this circumstance 

 all the more vividly because a portion of the old debt was to 

 form the nucleus of the new fund. It would have indeed 

 astounded Hume, Grenville, and the other croakers, it would 

 even have astounded Adam Smith, could they have been 

 shown that not much more than a century later the debt 

 would have mounted to close on a thousand millions, and the 

 interest per cent, have dropped to nearly one-quarter of what 

 it had been at the outset. 



But the National Debt, though for a time it relieved the 

 pressure on taxation, did not eventually prevent the necessity 

 of further calls on the country's purse. The funds became 

 depressed by the accumulated weight of new loans,' and the 



' Notwithstanding tlie establishment of the Sinking Fund in 1716, th© 



