stated, that the Party should annually borrow the Sum of ten Pounds, to pay Part of his Tax of fifteen Pounds, at six per Cent. On this Sum then he would make a Profit of twenty four Shillings, and have to pay an Interest of twelve shillings. The enclosed Calculation will shew that in ten years he would be indebted one hundred Pounds, but his additional Improvements would be worth: near one hundred and fifty, and his net Revenue be increased near twelve after deducting the Interest of his Debt; whereas if he had not borrowed, his Revenue would have continued the same, as has already been observed. This Mode of Reasoning might be pursued farther, but what has been said is sufficient to shew that he would have made a considerable Advantage from the yearly Loan. If it be supposed that every Person in the Community made such [a] Loan, a similar Advantage would arise to the Community. And lastly if it be supposed that the Government were to make a Loan, and ask so much less in Taxes, the same Advantage would be derived. Hence also may be deduced this Position, that in a Society where the Average Profits of Stock are double to the Interest at which Money can be obtained, every public Loan, for necessary Expenditures, provides a Fund in the Agregate of national Wealth equal to the Discharge of it’s own Interest. Were it possible that a Society should exist in which every Member would, of his own accord, industriously pursue the Increase of national Property, without Waste or extravagance, the public Wealth would be impaired by every species of Taxation. But there never was, and unless human Nature should change, there never will be such a Society. In any given Number of men there will always be some who are Idle, and some who are extravagant. In every Society also, there must be some Taxes, because the Necessity of Supporting Government and defending the State always exist. To do these on the cheapest Terms is wise. And when it is considered how much Men are disposed to Indolence and Profusion, It will appear that (even if these Demands did not require the whole of what could be raised) still it would be wise to carry Taxation to a certain Amount, and expend what should remain after providing for the Support of Government and the national Defence, in works of public utility, such as the Opening of Roads and Navigations. For Taxes Operate two Ways towards the increase of national Wealth. First they Stimulate Industry to provide the Means of Payment. Secondly, they encourage Oeconomy so far as to avoid the Purchase of unnecessary Things, and keep Money in Readiness for the Tax Gatherer. Experience Shews that those Exertions of Industry and Oeconomy grow by Degrees into Habit. But in Order that Taxation may have these good Effects, the Sum which every Man is to pay, and the Period of Payment, should be certain and unavoidable.
This Digression opens the way to a comparison between foreign and domestic Loans. If the Loan be domestic, Money must be diverted from those Channels in which it would otherwise have flowed, and therefore, either the Public must give better Terms than Individuals, or there must be Money enough to supply the Wants of both. In the latter Case, if the Public did not borrow, the Quantity of Money would exceed the Demand, and the Interest would be lowered ; borrowing by the Public, therefore, would keep up the Rate of Interest, which brings the latter Case within the Reason of the former. If the Public outbid Individuals, those Individuals are deprived of the Means of extending their Industry. So that no Case of a domestic Loan can well be supposed, where some public Loss will not arise to counterballance the public Gain; except when the Creditor spares from his Consumption to lend to the Government, which Operates a national Oeconomy. It is however an Advantage peculiar to domestic Loans, that they give Stability to Government, by combining together the Interests of moneyed Men for it’s Support; and consequently, in this Country, a domestic Debt would greatly contribute to that Union, which seems not to have been