a797-) 
To the Editor of the Monthly Magazme. 
SG SIE go oho 
rPHE prefent critical ftate of public 
credit, naturally excites general at- 
_ tention; many have already exp¢rienc- 
ed confiderable inconvenience from it, 
and the mere poffibility that the evil 
may increafe, would be fuificient tq prefs 
it on the thought of every individual, 
from motives of perfonal intereft, as 
well as a regard to the general good. 
Phe crifis.to which we are arrived, 
though it may jufily alarm and afio- 
nifh fuch as have beentin the habit of 
forming their opinion of. public concerns 
from the reprefentations of thofe who 
were interefted in drawing a Hattering 
portrait, has been long feared and ex- 
pected by all who are throughly ac- 
quainted. with the influence and ten- 
dency of the Britifh fyftem of finance ; 
and the only rea! fubject of wonder is, 
that the {pirit of induttry and enter- 
prife, fhackled and impeded as it has 
been by a fyftem, of accumulating taxa- 
tion, fhould have fo long fupported and 
preferved that fiction of opinion, called 
public credit, whofe ruin appeared the 
inevitable confequence of the folly and 
extravagance of its appointed guardians. 
Almoft every perfon who has confidered 
the funding fyftem, has admitted that its 
natural confequence muft, fooner or 
later, be its own deftruction ; even its 
moft zealous defenders allow, that bor- 
rowing money on repeated mortgages of 
the public <evenue, mufi, ultimately, ruin 
any nation, unlfs an adequate fund 
is afligned for paying off the debt by 
degrees, and thus preventing its conftant 
accumulation; in fact, no truth can be 
more evident, than that there muft be a 
Jimit, beyond which the public reyenue 
cannot be increafed, thongh it may be 
difficult to fix, with precifion, the utmoft 
poflible extent to which this appropria- 
tion of a part of the general income of 
any nation may be carried. 
Upon the funding fyftem, every war 
muft, if the exertions are equal to thofe 
in the preceding, inevitably exceed it in 
expence ; and ae may be the cafe, even 
if the exertions are lefs, for every loan 
being attended with additional taxes to 
‘pay the annual intereft ; thefe taxes muft 
. direé&tly tend to increafe the price of 
fome particular article, or indirectly in- 
fluenge that of many : in either cafe, the 
fubfequent expences of government, 
which, in fome fhape or other, include 
thefe articles, muft be increafed, even on 
the peace etablifhment, but much more 
Ox the Back, Public Credit, ec. 
191 
in a future extenfive war. The dimi- 
nution of the produce of our taxes, up- 
on the conclufion of the American war, 
arifing from the ceflation of the demand 
for a variety of articles, upon which go- 
vernment actually paid the taxes they re- 
‘ceived, aftords a ftrong proof how much 
the expence of war is affected by taxation; 
and as this muft increafe in a greater 
proportion in each fuccellive war, it js 
evident, that the loans required muft 
lisewife increafe in amount, and, confe- 
quently, the debt be perpetually ang- 
menting, till iidividuals become fearful 
of advancing money to the government, 
from an apparent impotlibility of raifing 
the revenue required to pay the intereft, 
and fupply the other expences of the 
ftate. 
Our prefent fituation, however, does 
not immediately refult' fo mucn from the 
deficiency of the public revenues, or the 
amount of the debt, great as it is, as 
from the enormous increafe of our paper 
money, and the want of a fufficiency of 
coin to fupport it. Gold and filver be- 
ing the gencral reprefentatives of the 
value of labour and commodities, and 
paper-money, merely an engagement to 
pay acertain quantity of thefe. metals, 
the value of the latter will always de- 
pend upon the certainty and facility 
with which it procures the former; for 
the expectation of being able to convert 
paper fecuritieés into money, is the only 
ground upon which individuals will pur- 
chafe them, and whenever a difficulty 
arifes in this refpeét, they muft fall in 
value ; on the firft introduction of loans 
to government, under the fanétion of 
parliament, an engagement was gene- 
rally made to repay she principal; but 
about the year 1696, when the deficiency 
of the revenues frequently caufed the 
intereft due to the public creditors to be 
long in arrear, and delayed the repay- 
ment of the principal, exchequer-tal- 
hes and malt-tickets, were fold at not 
lefs than from 30 to §0 per cent. dif- 
count, the confequence not of an appre- 
henfion that pariiament would neglect to 
fulfil the conditions of the loans, but of 
the difficulty of procuring. money for 
thefe fecurities. The fcarcity of cath 
during the recoinage then found necef- 
fary, continued this depreciation of paper- 
money, and in the following year, bank- 
notes were at a difcount from 15 to 20 
per cent. though it had appeared, by an 
account delivered to parliament, that the 
company were capable of anfwering all 
demands upon them. Several inftances 
could 
