time. If the expense of paper and printing, and of persons to attend the press while the sheets are striking off, signers, &c., be five per cent., it is evident, that in the course of twenty years' emissions, the one hundred thousand dollars will cost the country two hundred thousand dollars: because the paper-maker's and printer's bills, and the expense of supervisors and signers, and other attendant charges, will in that time amount to as much as the money amounts to; for the successive emissions are but a recoinage of the same sum. But gold and silver require to be coined but once, and will last a hundred years, better than paper will one year, and at the end of that time be still gold and silver. Therefore the saving to government in combining its aid and security with that of the Bank in procuring hard money, will be an advantage to both, and to the whole community.-Idem.

Bank paper is no more national wealth than newspapers are; because an increase of promissory notes, the capital remaining unincreasing in the same proportion, is no inerease of wealth. It serves to raise false ideas which the judicious soon discover, and the ignorant experience to their cost.-Idem.

CHAPTER IV.

OF THE FUNDING SYSTEM.

ALTHOUGH the feudal system was a barbarous social institution, it possessed the advantage of entailing on the fomenters of war its unavoidable cost and calamities. The old barons used to arm themselves and vassals at their own expense, and support them during the contest. There was then no standing army nor permanent revenue,—those who tilled the land fought the battles of the country. Under such a system, wars could neither be very long in their duration, nor very remote in their objects. Foreign expeditions were suited as little to the national resources as to the avocations of the people. The only time that could be spared to settle public quarrels was between seed-time and harvest, and the only treasure they could be provided

with beforehand, was the surplus produce of the preceding year. Hence, wars were generally either carried on languidly, or were of short duration. Their operations were frequently interrupted by truces, and sometimes discontinued through mere feebleness. A warlike leader was often stopped short in his victorious career, either from the want of resources, or the necessity of allowing his followers to return home to provide subsistence for the following

season.

The state of the sovereign was as little favourable to protracted contests as the condition of his lieges. His revenue was derived partly from lands reserved as a royal demesne, and partly from feudal casualties, and afforded a slender provision for maintaining the royal dignity, and defraying the ordinary expenses of government, but was altogether inadequate to the support of numerous and permanent armies. Supplies from the people were obtained to a certain extent; but the people neither possessed the means, nor, happily, had acquired the habit, of granting liberal supplies. Princes, under any emergency, real or supposed, or actuated by any scheme of ambition, had recourse either to borrowing or pauning. The loans which they raised were partly compulsory, and, as the payment was ill secured, the rate of interest was high. Sometimes the jewels of the crown were pledged, and sometimes the crown-lands were mortgaged. In this manner the revenues of most of the powers of Europe were anticipated and encumbered.

A new state of society introduced a new mode of supporting war. Instead of borrowing on their own credit, sovereigns learnt to borrow on the credit of posterity. The issue of war no longer depended on a single battle or successful irruption, but on the length of the public purse. It was not money, however, that formed the sinews of war, but credit. Credit superseded money, and modern policy found out the expedient of supporting wars for temporary objects, and entailing the burden of them on future generations. This system possessed too many facilities to be abandoned, or not to be carried to the utmost extent of which it was capable. And, accordingly, we find, wherever the system of borrowing and funding has been introduced, it has gone on with an accelerated velocity, till the payment of the princi

pal became quite chimerical, and government were obliged to compound with their creditors for the interest.-Black

Book.

Alas! the funds are no place at all! and, indeed, how should they, seeing that they are, in fact, one and the same thing with the National Debt? But, to remove, from the mind of every creature all doubt upon this point, to dissipate the mists in which we have so long being wandering, to the infinite amusement of those who invented these terms, let us take a plain common-sense view of these loaning transactions. Let us suppose, then, that the government wants a loan, that is, wants to borrow money, to the amount of a million of pounds. Its gives out its wishes to this effect, and, after the usual ceremony upon such occasions, the loan is made, that is, the money is lent by Messrs. Muckworm and Company. We shall see by-andby, when we come to talk more fully upon the subject of loans, what sort of a way it is, in which Muckworm pays in the money so lent, and in what sort of money it is that he pays. But, for the sake of simplicity in our illustration, we will suppose him to pay in real good money, and to pay the whole million himself at once. Well: what does Muckworm get in return? Why, his name is written in a book against his name is written, that he is entitled to receive interest for a million of money; which book is kept at the Bank Company's house, or shop, in Threadneedle Street, London. And, thus it is that Muckworm "puts a million of money into the funds." " "Well," you will say, "but what becomes of the money?" Why, the government expends it, to be sure: what should become of it? Very few people borrow money for the purpose of locking it up in their drawers or chests. "What? then the money all vanishes; and nothing remains in lieu of it but the lender's name written in a book?" Even so and this, my good neighbours, is the way that "money is put into the funds."

But, the most interesting part of the transaction remains to be described. Muckworm, who is as wise as he is rich, takes special care not to be fund-holder himself; and, as is always the case, he loses no time in selling his stock, that is to say, his right to receive the interest of the million of pounds. These funds, or stock, as we have seen, have no bodily existence, either in the shape of money or of XIII.

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bonds or of certificates or of any thing else that can be seen or touched. They have a being merely in name. They mean, in fact, a right to receive interest; and a man who is said to possess, or to have a thousand pounds' worth of stock, possesses, in reality, nothing but the right of receiving the interest of a thousand pounds. When, therefore, Muckworm sells his million's worth of stock, he sells the right of receiving the interest upon the million of pounds which he lent to the government. But, the way in which sales of this sort are effected is by parcelling the stock out to little purchasers, every one of whom buys as much as he likes; he has his name written in the book for so much, instead of the name of Muckworm and Company; and, when Muckworm has sold the whole, his name is crossed out, and the names of the persons to whom he has sold remain in the book.

And here it is that the thing comes home to our very bosoms; for, our neighbour farmer Greenhorn, who has all his life being working like a horse, in order to secure his children from the perils of poverty, having first bequeathed his farm to his son, sells the rest of his property (amounting to a couple of thousands of pounds), and, with the real good money, the fruit of his incessant toil and care, purchases two thousand pounds' worth of Muckworm's funds, or stocks, and leaves the said purchase to his daughter. And why does he do so? The reason is, that, as he believes his daughter will always receive the interest of the two thousand pounds, without any of the risk or trouble belonging to the rents of house or land. Thus neighbour Greenhorn is said to have "put two thousand pounds in the funds;" and thus his daughter (poor girl!) is said to have her money in the funds;" when the plain fact is, that Muckworm's money has been spent by the government, that Muckworm has now the two thousand pounds of poor Grizzle Greenhorn, and that she, in return for it, has her name written in a book, at the Bank Company's house in Threadneedle Street, in London, in consequence of which she is entitled to receive the interest of two thousand pounds; which brings us back to the point whence we started, and explains the whole art and mystery of making loans and funds and stocks and national debts.-Cobbett's Paper against Gold, pp. 16-18.

By this means [the funding system] the quantity of pro

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perty in the kingdom is greatly increased in idea, compared with former times: yet, if we coolly examine it, not at all increased in reality. It exists only in name, in paper, in public faith, in parliamentary security: and this is undoubtedly sufficient for the creditors of the public to rely But then, what is the pledge which the public faith has pawned for the security of these debts? The land, the trade, and the personal industry of the subject; from which the money must arise that supplies the several taxes. In these, therefore, and in these only, the property of the public creditors does really and intrinsically exist and of course, the land, the trade, and the personal industry of individuals, are diminished in their true value, just so much as they are pledged to answer. If A's income amounts to 100%. per annum, and he is so far indebted to B, that he pays him 50%. per annum for his interest, one half of the value of A's property is transferred to B, the creditor. The creditor's property consists in the demand which he has upon the debtor, and nowhere else; and the debtor is only a trustee to his creditor for one half of the value of his income. short, the property of a creditor of the public consists in a certain portion of national taxes: by how much, therefore, he is the richer, by so much the nation, which pays the taxes, is the poorer.

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Thus much is indisputably certain, that the present magnitude of our national encumbrances very far exceeds all calculations of commercial benefit, and is productive of the greatest inconveniences. For, first, the enormous taxes, that are raised upon the necessaries of life, for the payment of the interest of this debt, are a hurt both to trade and manufactures, by raising the price as well of the artificer's subsistence as of the raw material, and of course, in a much greater proportion, the price of the commodity itself. Nay, the very increase of paper circulation itself, when extended beyond what is requisite for commerce or foreign exchange, has a natural tendency to increase the price of provisions, as well as of all other merchandise. For, as its effect is to multiply the cash of the kingdom, and this to such an extent that much must remain unemployed, that cash (which is the universal measure of the respective values of all other commodities) must necessarily sink in its own value, and every thing