years, commencing 5th January, 1797, and ending 5th January, 1817, amounted to the almost incredible sun of 1,290,180,5927, But, besides the enormous levies thus compulsorily wrung from the necessities of the poor, and the overburdened revenue of the rich, an additional sum of about 450 millions of real capital was borrowed by Government, and added to our funded and floating debts: And taxation being increased, less with a view to equalize the revenue with the expenditure, than to provide the means of paying the interest of the new loans, it became impossible to make any great reduction in its amount on the return of peace. There have, it must be confessed, been rea❤ soners, and, what is more extraordinary, the race is not yet extinct, who contend, that the debts of the nation are in no way burdensome; because the general wealth is not diminished by the payment of the dividends. But, admitting this to be true, what does it establish? We are inclined to think, that even Mr Justice Bayley and Mr Spence would pause before they ventured to maintain, that there is no difference between an individual who lives by his own industry, and one who lives by the industry of others! Society, we admit, is not deprived of the interest which is paid on the public debt; but it has been deprived of the means of paying that interest,-or, in other words, of THE PRINCIPAL of the debt itself. Had the capital which has been borrowed by the State, and expended on the maintenance of those who, if they were annihilated at any given moment, would leave nothing behind them-nothing to represent the immense sums lavished on their support-been retained by its original owners, it would have yielded them a revenue, equal, perhaps superior, to what the stockholders now derive from the dividends; but that revenue, instead of being drawn, as at present, from the earnings of others, would have been furnished by the productive energies of their own stock.

In order to exhibit the effect of loans in diminishing national wealth in a still clearer point of view, let us suppose that a country with two millions of inhabitants, and 400 millions of capital, is engaged in hostilities, and that the Government borrows and expends 50 millions of the public stock in military stores, in the embroidery of Hussar jackets, building Kremlins, and such like national objects-If the ordinary rate of profit were 10 per cent., the annual income of this State previous to the commencement of the war would be 40 millions, and at its close 35 millions. It is plain, however, that this reduced income would in future have to furnish the means of subsistence to the whole two millions of inhabitants. And, although it is true that the country is not deprived of the interest of the debt, for that is

merely transferred from one class to another, it is no less true that it is deprived of the income derived from 50 millions of capital; and that the productive power which had formerly fed and clothed an eighth part of the inhabitants being for ever lost to the State, they must now depend for subsistence entirely on the exertions of those who, it is probable, could previously with difficulty maintain themselves.

How ridiculous then to contend, that, because the dividends are paid by one class of society to another, the national debt is not disadvantageous! Is it a matter of indifference that the sum of THIRTY-Two millions-a sum greater than the entire rental of all the land in the empire-must be annually drawn from the pockets of the industrious classes, to support that numerous class of persons whose capitals having been lent to the State are, in consequence, destitute of any other means of subsistence? And, is it at all wonderful that, by thus diminishing the funds which would otherwise have been applicable for the maintenance of labour, idleness and want are multiplied in a tenfold proportion? Far, indeed, from feeling any surprise at the paralysis which is now felt in every branch of industry-at the inadequacy of the wages of labour, and the consequent increase of pauperism and crime-our only wonder is that these evils have not been experienced in a far greater degree. The most sanguine could not have supposed it possible, that about 1700 millions of real capital could have been dissipated in warlike pursuits in the short space of 20 years, without involving all classes in the abyss of bankruptcy and misery, and occasioning infinitely more ruin and mischief than has actually ensued.

That such would have been the consequence had a similar perversion of the funds destined for the support of productive industry occurred in any former period of our history, is abundantly certain. But during the late war, various circumstances, many of which were in a great degree fortuitous, conspired to prevent our feeling the full extent of the sacrifices we were called on to make, and to enable us to sustain, without any great inconvenience, a conflict with the combined force of almost all Europe. The most prominent of these circumstances may be classed under the following heads,

In the first place, the last thirty or forty years have been distinguished, above all others, by those stupendous discoveries which have so much facilitated the great work of production, and extended the empire of mind over matter. In 1767, the value of the Cotton goods manufactured in Great Britain did not exceed 200,000!. But Sir Richard Arkwright having very

soon after (1769) contrived to perform the business of spinning by means of machinery, the consumption, owing to the fall of prices, was so prodigiously augmented, that, in 1787, the value of the manufactured goods was increased to about 7 millions. Since 1787, the progress of this manufacture has been equally rapid; and the entire value of the various descriptions of cotton goods annually produced cannot now be estimated at less than from 35 to 40 millions! Here then was an immense field for the profitable employment of capital and industry, created as if by enchantment, and which, more than any other circumstance, enabled this country to sustain the burdens imposed during the late contest, and to bring it to a successful termination. It is, however, worthy of remark, that the extensive employment of children of both sexes in one of the great departments of the cotton manufacture, has in no inconsiderable degree counterbalanced the benefits of which it was, in the first instance, so productive. We indeed strongly suspect, that the present redundancy of labour has been in no inconsiderable degree owing to this cause. The fall in the real price of labour, occasioned by the increase of taxation, must have been felt as early as 1795 and 1796; but it does not appear, either then or subscquently, to have had any effect in checking the increase of population. That this must have been partly owing to the influence of the Poor-Laws, cannot be doubted; but we suspect it was owing still more to the demand for children in cotton factories. From 1787 down to 1808, a large family in a manufacturing town, instead of being felt as a burden, was rather reckoned an advantage: And the reduction in the wages of the parents, which, in a different state of society, would most probably have induced them to postpone entering into matrimonial connexions, being in some measure compensated by the greater demand for the labour of their families, the population went on increasing with its former rapidity.

The extraordinary progress of the Cotton Manufacture, therefore, and the demand for youthful labour which it occasioned during the greater part of the war, however it may have contributed to aggravate the public distresses since the restoration of tranquillity, was unquestionably one of the main causes which prevented the bulk of the people from feeling the full effect of the burdens and privations caused by the sudden and excessive increase of taxation. But the development of industry was not confined to the cotton manufacture: And it would perhaps be impossible to name any other department in which some very decided and material improvement has not also taken place. In addition, we enjoyed, during the war, a complete monopoly

of the commerce of the world. Our merchants and manufacturers were relieved from all competition. The colonial and manufactured products of England became indispensable to the nations of the Continent: And our exports being in consequence prodigiously augmented, a factitious and extraordinary stimulus was given to the demand for labour.

In the second place, the extraordinary depreciation of the currency, during the latter years of the war, must also, by occasioning a proportionable diminution of the public burdens, have powerfully contributed to render us less sensible of the evils attending the constant increase of taxation. In the interval between 1809 and 1815, bank notes were at a discount of from 14 to 28 per cent.; or, which is the same thing, the real amount of the taxes and loans raised during that period, was so much less than their nominal amount.

The ascendancy of Bonaparte, too, and the continued convulsions of the Continent, not only rendered it impossible to transfer British capital to any country in Europe, but actually occasioned the transfer of a considerable portion of continental capital to this country. Taxation was thus stript of one of its most injurious consequences. The risk attending foreign investments being too great to be balanced by the higher rate of profit, there was no efflux of stock.

In the third place, though it may at first sight appear somewhat paradoxical, it is nevertheless true, that no inconsiderable portion of the factitious and unnatural prosperity we enjoyed during the war, resulted from the excess to which the system of borrowing was then carried. When the wages of labour continue stationary, it is a matter of comparative indifference to a master manufacturer, or capitalist, whether he employs his surplus revenue in making additions to his circulating capital, or the fund for paying the Wages of his workmen; or whether he invests it in fixed capital, or Machinery. But, when Wages rise, whether in consequence of a naturally increased demand for labour,, or of an increase of taxation affecting necessaries, he will have an instant inducement to employ Machinery in preference to workmen. The reason is obvious.-A rise of wages does not affect the proprietor of a machine to the same extent as it affects the employers of labourers.

Suppose, for example, that two manufacturers have each a capital of 10,000l., the one invested in a machine calculated to last one year, which, with the additional labour of ten men, is calculated annually to produce commodities worth 10,500l.; and the other appropriated to the payment of the wages of 400 labourers, at the rate of 251. each, the produce of whose industry also

sells for 10,5007. In this situation, their profits and expenses are equal: But supposing wages to rise one per cent., it is obvious, that while the profits of the proprietor of the machine would be only reduced 50s., those of the employer of the workmen would be reduced to the extent of 100l. But this discrepancy could not continue. Capital would be immediately attracted to the more lucrative employment; and would continue flowing in that direction until the multiplication of machines had obliged the proprietors to sink the price of their commodities, so that they could obtain only the common and ordinary rate of profit. It may perhaps be supposed, that the increased price of labour would prevent machinery from being purchased at its former price; and that, therefore, nothing could be gained by its introduction. it is easy, however, to perceive, that this could not really be the case. The price of a steam-engine or a thrashing-machine, is regulated by precisely the same principles which regulate the price of boots and shoes. A rise of wages will lower the profits of stock employed in their construction, as it will lower that of all other stock; but nothing but an increase in the quantity of labour necessary to their production can raise their price.

This is a very important principle; and, while it serves to account for the rapid introduction of machinery, it also enables us more clearly to appreciate the effect of loans on the demand for labour. We believe it might be safely affirmed, that a considerable portion of the late loans was obtained by the conversion of fixed into circulating capital; but, without insisting on this point, it is certain that the capital lent to the State would, if it had remained in the hands of the subscribers, have followed the direction imparted to the remainder, and been chiefly devoted to the increase of fixed capital, or machinery. But, although it would thus have contributed to the lasting benefit of the country, it would not have occasioned the same immediate demand for labour. An increase of wages is only an indirect and ultimate consequence of an increase of fixed, but it is a direct and instantaneous consequence of an increase of circulating capital. The stock expended in the erection of a cotton-mill, or a steam-engine, would have a much more immediate effect in stimulating the demand for labour, were it, appropriated to the pay of a regiment. The fixed capital invested in a machine, must always displace a considerably greater quantity of circulating capital,-for otherwise there could be no motive to its erection; and hence its first effect is to sink, rather than increase, the rate of wages. But the capital which comes into the possession of Government, being almost entirely devoted to the support of a numerous body of soldiery, lessens

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