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its share of the charges incurred to protect from foreign conquest the England of our fathers. The same author likewise says, that the working classes do not earn more wages in consequence of the wars in which we were formerly engaged. They are, however, spared the inconvenience of having to learn French, which would have been necessary had Napoleon succeeded in his schemes.
It is certain, however, that this reasoning would in no way justify our borrowing to carry on the war in which we are now engaged. The war with Russia is not to England a war of existence. It is so to Turkey; but almost all the present generation of Englishmen might have gone down in peace to their graves without feeling any material inconvenience. The danger to ourselves is future and contingent.
But, perhaps, exactly on this very account we are peculiarly justified in throwing on posterity a portion of the outlay which is now required. The war is one for the benefit of posterity. We, as we have said, might have died in peace, but the presence of the Russians at Constantinople would be, to our children, and still more to our children's children, a source of frequent danger and neverceasing disquietude. The war is by acknowledgment, a statesman's war-that is, it is the suggestion of a far-seeing mind endeavouring to provide for distant dangers. It may be likened to an anticipated charge, made by the owner of property to provide for difficulties and dangers which would leave him nearly untouched, but would have otherwise overwhelmed his successors. In this case, it is evident that those successors might fairly be charged with a portion of the cost.
Another moral objection to Loans-though it is not often considered so is the danger of bankruptcy. This the author of Loans and Taxes" rates very highly.
"Now, although the amount of revenue which a nation can afford may be very great, yet there is a limit beyond which it cannot be extended; as we approach this limit there must be a great pressure upon all, but especially upon the labouring class; and when we pass it, then sooner or later bankruptcy will ensue. Such an act will relieve the country, but will cause, at the same time, great misery and suffering among the creditors of the Government."
But when the wealth of countries is rapidly increasing, this danger becomes chimerical; and there is, perhaps, no mode of satisfactorily providing, in almost any respect, for the welfare of a civilized nation, whose daily industry is not prosperous enough continually to augment its wealth.
On the economical side, Mr. Newmarch is of opinion that Loans are commonly beneficial. He holds with Mr. John Mill, that
"So far as actual researches have been carried, by the most competent enquirers, there is good reason to believe that the accumulation of capital in this country is so vast and so rapid as to lead to an annual waste and destruction of capital, the amount of which when expressed in figures sounds almost fabulous; and it is from these overflowings-from this constant current of leakage--that the loans would be obtained."
And it cannot be denied that there are conjunctures in the money
markets of many countries, in which the amount of capital, which inactive lenders are desirous to lend, materially exceeds that which the active producers-the common borrowers-are at the moment able judiciously to employ. Probably, a large loan taken for a public object, just before the railway mania, might have saved us at least from the worst features of that mania. But it is likewise true, that there is no Act of Parliament compelling our enemies to go to war with us exactly at those particular moments. They have contracted the habit of choosing their time. If the loan had been required in November, 1847, we should have had a practical proof, that we have not always money enough to spare for anything.
Mr. Newmarch likewise seems to have an idea, that the system of Loans leaves money, which would otherwise be unprofitably expended, in the hands of persons-by whom it can be invested profitably. He thus reasons with respect to the loans of the last war. He sets forth a table giving the amounts by which the expenditure of the different years exceeds respectively the income of those years, and then argues "that the amount of that excess was allowed by the system of loans to remain in the pockets of the public, to be employed by them in the pursuit of profit." And, supposing them to make 6 per cent. compound interest of their money-which seems to us a high rate-he brings out a balance of seventeen millions "in favour of the loan method." But it seems to us wholly without ground, to suppose that the money of the tax-payer is at all more profitable to the nation, than the money of the persons who lend to the Government. It is so, doubtless, in France, where it is only confidence in the Government that can extract their contents from idle hoards and aged stockings. But in this country, the money which is lent to the Government would be lent to the industrial classes, and forthwith employed by them. If it were not lent by the owner himself to the producer, it would be deposited in a bank, and distributed by the banker's loans and discounts throughout the active and borrowing community. The foundation of Mr. Newmarch's argument, therefore, falls to the ground.
Both these writers, the anonymous pamphleteer especially, have some ingenious remarks on the effect of loans on different classinterests, but on these we must not enter.
The particular object of Mr. Newmarch's book is to defend the practice of borrowing in 3 per Cent. Consols, in preference to a stock of higher nominal interest:
"Whether for good or evil ends, but certainly on the whole for good ends, the Stock Exchange is a vast market where men employ masses of capital in dealing backwards and forwards in the different Stocks; and, like all other great markets, custom, convenience, and self-interest have gradually set up certain conditions which govern in a great measure the movements of the whole body of operators. One of the best established of these conditions is, that any new kind of stock, attempted to be introduced with success, must be marketable at all times and to any extent."
On this ground he justly rejects the proposal, which is at first sight very plausible, of borrowing at par, as it is called, that is, at the actual interest of the day. This would require the annual creations of new stocks, differing from one another by shillings and
sixpences, as the rate of interest current in each year differed, and differed but slightly from that of its predecessor. No one who knows the difficulty of making the actual fundholder comprehend the difference between the few different species of stock that now exist, would ever propose or countenance such a scheme as this. It would make the Stock market a perfect Babel.
The main argument in favour of preferring a high nominal stock to a low one is, that it enables you to borrow at lower rate. This arises from the liability to redemption :
"It is allowed that all the funds are redeemable at par, and that if the 3 per cents. rose to 75, the 4 per cents. should rise to 100, and the 5 per cents. to 125; and, therefore, the actual price of the 4's or 5's could never much exceed par. So soon as the 5 per cents. rise above par, the financier will offer payment, and by doing so induce the creditors to submit to a reduction of interest. The holders of a 3 or 5 per cent. fund, have thus a prospect of gain by the rise of value, in which the 5 per cent. stockholders do not participate; and in like manner when the 3 per cents. rise above 75, the holders of that stock have a further gain, in which the 4 per cent stockholders do not participate. In consequence of these expectations, the price of 4 per cents. is higher compared with that of the 5 per cents.; and the price of the 3 per cents. higher than that of either of the others; than the proportion of the rates of interest;-and loans are transacted in 3 per cents. on easier terms. The lender expects to gain by the rise of the stock, and what he gains the public loses at repayment or redemption."'"
Mr. Newmarch accordingly adds up the accumulations of interest which have been saved by adopting the lower rate, and brings out a balance (as the account would stand on the 1st Jan. 1826,) of £27,256,000, in favour of the lower stock. One obvious defect of this reasoning, however, is that it takes no notice of the advantage which it might have been possible to obtain by guaranteeing the higher rates against reduction for a considerable period. If it had been impossible to reduce the Five per Cents., or even the Four per Cents. before the 1st Jan. 1826, the rate at which it would have been possible to borrow by means of them would probably have been very different. But there is likewise a more essential objection. Mr. Newmarch has no right to consider the diminished interest, and the supposed accumulations of it at compound interest, as new creations of national wealth, which would not have existed, except from the selection of the 3 per Cent. method. This is the same error as we noticed in his former calculation, viz., the assumption that the money of the tax-payer was more lucrative to the nation than that of the lender to the Government. If the loans of England were like the loans of Russia, principally raised from foreign capitalists, it would be true that any diminution of the interest to be paid would be equivalent to a corresponding augmentation of the national capital. But the case is obviously different when the money is raised within the realm. If the English Government paid £10,000 more in interest to English capitalists, this would only mean that £10,000 was annually transferred from Englishman B to Englishman C. It is just as likely that C will employ it profitably as that B would employ it profitably. The only real saving is the expense of the transfer, the cost
of collecting that sum from the tax-payers, and paying it over to the national creditors. The ingenious defence, therefore, which Mr. Newmarch has advanced for the system adopted by Mr. Pitt has, in our judgment, broken down; and though he has certainly done good service by calling our attention to the singular political and economical difficulties under which some of those loans were negotiated, he has done nothing to shake the previously established belief, that those loans were contracted on an erroneous system, and that especially at a time when the 3 per Cents. were a much less overwhelming portion of the National Debt than they now are, it would have been better to borrow the moneys needed for the public service at a rate more nearly approaching to that of the market.
There are some observations. respecting terminable annuities and other matters, which are tempting to the economist, but which the limits of this summary-limits which we have already exceeded -compel us to leave unnoticed.
Mr. Ricardo has published a pamphlet on the "War Policy of Commerce," a subject of great interest, but which must be discussed at more length than we can here devote to it. His object is to show that commerce ought to be as unimpeded in blockades or otherwise, in time of war as in time of peace.
The publications on politics unconnected with the war are neither many nor important.
Mr. Carey has sent us from the other side of the Atlantic, a most absurd book, entitled "The Slave Trade, Domestic and Foreign; Why it Exists, and How it may be Extinguished;"* the object of which is to prove that England is the great upholder and practiser of slavery in the world. His notion is that England, by the excellence of her manufactures, drives all other nations out of the market; destroys their competition; reduces them to dependence upon, or (as he calls it) slavery to her. The idea, therefore, is, that a good shopkeeper enslaves his customers.
Mr. Locke King has published a pamphlet on "The Injustice of the Law of Succession to the Real Property of Intestates," designed to show the real grounds of his well-known proposal to assimilate the law of descent on intestacy in real, to that now in force respecting personal, property. So far as the theory of English law goes, there is no measure which would so much simplify its theory as the abolition of the small remnant now left of the feudal notions respecting land. Mr. King justly argues, also, that this is not a merely theoretical improvement. A case of intestacy in small landed properties-and nothing is so rare as intestacy in large landed estates-is always attended with a hardship. middle class donor rarely, if ever, intends to give an exclusive preference to the eldest son. Very often he does not know, and does not care, whether he has a term of a thousand years, or perpetuity in a piece of land. He knows it is his property, and is unaware of the immense importance our law attaches to a purely technical, and, so to speak, historical distinction. Mr. King has Philadelphia. A. Hart. Ridgway. Third Edition.
stated his case very ably the defect of the book is that he has stated other cases as well.
Mr. Rickards, Professor of Political Economy at Oxford, has published three lectures in conformity with the statute there, which requires a professor to print something on his science every year. Like all lectures published under that statute, they state, that "labour, though essential to man's existence, is repugnant to his inclination." In other respects they are unusually good. The style is elegant and clear, and the chief subject treated of, the effects of competition, is well and consecutively discussed. The idea of the book is, that the real interest of buyers and sellers is the same. novelty is out of the question.
LIST OF RECENT WORKS SUITABLE FOR BOOK
1. Whitelock's Embassy to Sweden. 2 vols. Longman.
4. Peard's Campaign in the Crimea. 1 vol. Bentley. 5. Conybeare's Essays. Reprinted from the Edinburgh Review. 1 vol. Longman.
6. Wild's Tour in Canada. 1 vol. Longman.
7. Curran's Sketches of the Irish Bar. 2 vols. Hurst and Blackett.
8. Glaucus; or, the Wonders of the Shore. By the Rev. C. Kingsley. 1 vol. Bell and Daldy.
9. Memoirs of Sydney Smith. 2 vols. Longman.
[A storehouse of the best English fun and wit.]
10. Sir David Brewster's Life of Newton. Hamilton and Co.
[A clumsy but valuable biography.]
11. Howitt's Two Years in Victoria. 2 vols. Longman.
12. Pictures from the Battle-fields. By the Roving Englishman. 1 vol. Routledge.
18. North and South. By Mrs. Gaskell. 2 vols. Chapman and
[The masterly conception of this tale has suffered much from its
14. Thornton's Monarchs of the Main. 3 vols.
[A most amusing book, excellently translated.]