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that our North

American and West Indian colonies, taken together, contain no

more than three millions ; or that the whole British empire, in

Europe and America, contains no more than thirteen millions of

inhabitants. If, upon less than eight millions of inhabitants,

this system of taxation raises a revenue of more than ten

millions sterling; it ought, upon thirteen millions of

inhabitants, to raise a revenue of more than sixteen millions two

hundred and fifty thousand pounds sterling. From this revenue,

supposing that this system could produce it, must be deducted the

revenue usually raised in Ireland and the plantations, for

defraying the expense of the respective civil governments. The

expense of the civil and military establishment of Ireland,

together with the interest of the public debt, amounts, at a

medium of the two years which ended March 1775, to something less

than seven hundred and fifty thousand pounds ayear. By a very

exact account of the revenue of the principal colonies of America

and the West Indies, it amounted, before the commencement of the

present disturbances, to a hundred and forty-one thousand eight

hundred pounds. In this account, however, the revenue of

Maryland, of North Carolina, and of all our late acquisitions,

both upon the continent, and in the islands, is omitted; which

may, perhaps, make a difference of thirty or forty thousand

pounds. For the sake of even numbers, therefore, let us suppose

that the revenue necessary for supporting the civil government of

Ireland and the plantations may amount to a million. There would

remain, consequently, a revenue of fifteen millions two hundred

and fifty thousand pounds, to be applied towards defraying the

general expense of the empire, and towards paying the public

debt. But if, from the present revenue of Great Britain, a

million could, in peaceable times, be spared towards the payment

of that debt, six millions two hundred and fifty thousand pounds

could very well be spared from this improved revenue. This great

sinking fund, too, might be augmented every year by the interest

of the debt which had been discharged the year before ; and

might, in this manner, increase so very rapidly, as to be

sufficient in a few years to discharge the whole debt, and thus

to restore completely the at-present debilitated and languishing

vigour of the empire. In the meantime, the people might be

relieved from some of the most burdensome taxes; from those which

are imposed either upon the necessaries of life, or upon the

materials of manufacture. The labouring poor would thus be

enabled to live better, to work cheaper, and to send their goods

cheaper to market. The cheapness of their goods would increase

the demand for them, and consequently for the labour of those who

produced them. This increase in the demand for labour would both

increase the numbers, and improve the circumstances of the

labouring poor. Their consumption would increase, and, together

with it, the revenue arising from all those articles of their

consumption upon which the taxes might be allowed to remain.

 

The revenue arising from this system of taxation, however, might

not immediately increase in proportion to the number of people

who were subjected to it. Great indulgence would for some time be

due to those provinces of the empire which were thus subjected to

burdens to which they had not before been accustomed; and even

when the same taxes came to be levied everywhere as exactly as

possible, they would not everywhere produce a revenue

proportioned to the numbers of the people. In a poor country, the

consumption of the principal commodities subject to the duties of

customs and excise, is very small; and in a thinly inhabited

country, the opportunities of smuggling are very great. The

consumption of malt liquors among the inferior ranks of people in

Scotland is very small ; and the excise upon malt, beer, and ale,

produces less there than in England, in proportion to the numbers

of the people and the rate of the duties, which upon malt is

different, on account of a supposed difference of quality. In

these particular branches of the excise, there is not, I

apprehend, much more smuggling in the one country than in the

other. The duties upon the distillery, and the greater part of

the duties of customs, in proportion to the numbers of people in

the respective countries, produce less in Scotland than in

England, not only on account of the smaller consumption of the

taxed commodities, but of the much greater facility of smuggling.

In Ireland, the inferior ranks of people are still poorer than in

Scotland, and many parts of the country are almost as thinly

inhabited. In Ireland, therefore, the consumption of the taxed

commodities might, in proportion to the number of the people, be

still less than in Scotland, and the facility of smuggling nearly

the same. In America and the West Indies, the white people, even

of the lowest rank, are in much better circumstances than those

of the same rank in England ; and their consumption of all the

luxuries in which they usually indulge themselves, is probably

much greater. The blacks, indeed, who make the greater part of

the inhabitants, both of the southern colonies upon the continent

and of the West India islands, as they are in a state of slavery,

are, no doubt, in a worse condition than the poorest people

either in Scotland or Ireland. We must not, however, upon that

account, imagine that they are worse fed, or that their

consumption of articles which might be subjected to moderate

duties, is less than that even of the lower ranks of people in

England. In order that they may work well, it is the interest of

their master that they should be fed well, and kept in good

heart, in the same manner as it is his interest that his working

cattle should be so. The blacks, accordingly, have almost

everywhere their allowance of rum, and of molasses or

spruce-beer, in the same manner as the white servants ; and this

allowance would not probably be withdrawn, though those articles

should be subjected to moderate duties. The consumption of the

taxed commodities, therefore, in proportion to the number of

inhabitants, would probably be as great in America and the West

Indies as in any part of the British empire. The opportunities of

smuggling, indeed, would be much greater ; America, in proportion

to the extent of the country, being much more thinly inhabited

than either Scotland or Ireland. If the revenue, however, which

is at present raised by the different duties upon malt and malt

liquors, were to be levied by a single duty upon malt, the

opportunity of smuggling in the most important branch of the

excise would be almost entirely taken away ; and if the duties of

customs, instead of being imposed upon almost all the different

articles of importation, were confined to a few of the most

general use and consumption, and if the levying of those duties

were subjected to the excise laws, the opportunity of smuggling,

though not so entirely taken away, would be very much diminished.

In consequence of those two apparently very simple and easy

alterations, the duties of customs and excise might probably

produce a revenue as great, in proportion to the consumption of

the most thinly inhabited province, as they do at present, in

proportion to that of the most populous.

 

The Americans, it has been said, indeed, have no gold or silver

money, the interior commerce of the country being carried on by a

paper currency; and the gold and silver, which occasionally come

among them, being all sent to Great Britain, in return for the

commodities which they receive from us. But without gold and

silver, it is added, there is no possibility of paying taxes. We

already get all the gold and silver which they have. How is it

possible to draw from them what they have not ?

 

The present scarcity of gold and silver money in America, is not

the effect of the poverty of that country, or of the inability of

the people there to purchase those metals. In a country where the

wages of labour are so much higher, and the price of provisions

so much lower than in England, the greater part of the people

must surely have wherewithal to purchase a greater quantity, if

it were either necessary or convenient for them to do so. The

scarcity of those metals, therefore, must be the effect of

choice, and not of necessity.

 

It is for transacting either domestic or foreign business, that

gold or silver money is either necessary or convenient.

 

The domestic business of every country, it has been shewn in the

second book of this Inquiry, may, at least in peaceable times, be

transacted by means of a paper currency, with nearly the same

degree of conveniency as by gold and silver money. It is

convenient for the Americans, who could always employ with

profit, in the improvement of their lands, a greater stock than

they can easily get, to save as much as possible the expense of

so costly an instrument of commerce as gold and silver; and

rather to employ that part of their surplus produce which would

be necessary for purchasing those metals, in purchasing the

instruments of trade, the materials of clothing, several parts of

household furniture, and the iron work necessary for building and

extending their settlements and plantations ; in purchasing not

dead stock, but active and productive stock. The colony

governments find it for their interest to supply the people with

such a quantity of paper money as is fully sufficient, and

generally more than sufficient, for transacting their domestic

business. Some of those governments, that of Pennsylvania,

particularly, derive a revenue from lending this paper money to

their subjects, at an interest of so much per cent. Others, like

that of Massachusetts Bay, advance, upon extraordinary

emergencies, a paper money of this kind for defraying the public

expense; and afterwards, when it suits the conveniency of the

colony, redeem it at the depreciated value to which it gradually

falls. In 1747, {See Hutchinson’s History of Massachusetts Bay

vol. ii. page 436 et seq.} that colony paid in this manner the

greater part of its public debts, with the tenth part of the

money for which its bills had been granted. It suits the

conveniency of the planters, to save the expense of employing

gold and silver money in their domestic transactions; and it

suits the conveniency of the colony governments, to supply them

with a medium, which, though attended with some very considerable

disadvantages, enables them to save that expense. The redundancy

of paper money necessarily banishes gold and silver from the

domestic transactions of the colonies, for the same reason that

it has banished those metals from the greater part of the

domestic transactions in Scotland ; and in both countries, it is

not the poverty, but the enterprizing and projecting spirit of

the people, their desire of employing all the stock which they

can get, as active and productive stock, which has occasioned

this redundancy of paper money.

 

In the exterior commerce which the different colonies carry on

with Great Britain, gold and silver are more or less employed,

exactly in proportion as they are more or less necessary. Where

those metals are not necessary, they seldom appear. Where they

are necessary, they are generally found.

 

In the commerce between Great Britain and the tobacco colonies,

the British goods are generally advanced to the colonists at a

pretty long credit, and are afterwards paid for in tobacco, rated

at a certain price. It is more convenient for the colonists to

pay in tobacco than in gold and silver. It would be more

convenient for any merchant to pay for the goods which his

correspondents had sold to him, in some other

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