The richest country in Europe is yet far distant from that degree of improvement, but if any had ar rived at it, by the aid of foreign commerce, even such a country could go on for an indefinite time in. creasing in wealth and population, for the only ob stacle to this increase would be the scarcity, and consequent high value, of food and other raw pro duce. Let these be supplied from abroad in ex change for manufactured goods, and it is difficult to say where the limit is at which you would cease to accumulate wealth and to derive profit from its em ployment. This is a question of the utmost import ance in political economy. We hope that the little we have said on the subject will be sufficient to in duce those who wish clearly to understand the prin ciple, to consult the works of the able authors whom we have named, to which we acknowledge ourselves so much indebted. If these views are correct, there is then no danger that the accumulated capital which a sinking fund, under particular circumstances, might occasion, would not find employment, or that the commodities which it might be made to produce would not be beneficially sold, so as to afford an adequate profit to the producers. On this part of the subject it is only necessary to add, that there would be no necessity for stockholders to become farmers or manufacturers. There are always to be found in a great country, a sufficient number of re sponsible persons, with the requisite skill, ready to employ the accumulated capital of others, and to pay to them a share of the profits, and which, in all countries, is known by the name of interest for bor rowed money. • The second objection to the indefinite increase of the sinking fund remains now to be noticed. By the remission of taxes suddenly to the amount probably of thirty millions per annum, a great effect would be produced on the price of goods. " The fate of mer chants, manufacturers, mechanics, and every descrip tion of dealers, in such an event, must be contem plated by every thinking man with alarm ; for should the national debt be discharged, and such a weight of taxation taken off at once, all the goods remain ing on hand would be, cordpamtively speaking, of no value to the holders, because having been pur chased or manufactured while such taxation pre vailed, they must be undersold by all those who might manufacture the same kind of goods after such taxation had ceased." It is only then on the supposition that merchants, manufacturers, and deal ers, would be affected as above described, that any evil would result from the largest remission of taxes. It would not of course be said, that, by remitting a tax of L. 5 to A, L. 10 to B, L.100 to C, and so on, any injury would be done to them. If they added these different sums to their respective capi tals they would augment their permanent annual re venue, and would be contributing to the increase of the mass of commodities, thereby adding to the general abundance. We have already, we hope, suc cessfully shown, that an augmentation of capital is neither injurious to the individual by whom it is saved, nor to the community at large,--its tendency is to increase the demand for labour, and conse quently the population, and to add to the power and strength of the country. But they will not add these respective sums to their capitals,—they will expend them as revenue! The measure cannot be said to be either injurious to themselves or to the community on that account. They annually con tributed a portion of their produce to the stock ' holder in payment of debt, who immediately em ployed it as capital ; that portion of produce is now at their own disposal; they may consume it them selves if they please. A farmer who used to sell a portion of his corn for the particular purpose of fur nishing this tax, may consume this corn himself,— he may get the distiller to make gin of it, or the brewer to turn it into beer, or he may exchange it for a portion of the cloth which the clothier, who is now released from the tax, as well as the farmer, is at liberty to dispose of for any commodity which he may desire. It may indeed be said, where is all this cloth, beer, gin, &c. to come from ; there were no more than necessary for the general demand before this remission of taxes ; if every man is now to con sume more, from whence is this supply to be ob tained? This is an objection of quite an opposite nature to that which was before urged. Now it is said there would be too much demand and no addi tional supply; before, it was contended that the sup ply would be so great that no demand would exist for the quantity supplied. One objection is no bet ter founded than the other. The stockholders, by previously receiving the payment of their debt, and employing the funds they received productively, or lending them to some other persons who would so employ them, would produce the very additional commodities which the society at large would have it ih their power to consume. There would be a general augmentation of revenue, and a general augmentation of enjoyment, and it must not, for a moment, be supposed that the increased consump tion of one part of the people would be at the ex pence of another part. The good would be unmix
ed, and without alloy. It remains then only to con sider the injury to traders from the fall in the price of goods, and the remedy against this appears to be so very simple, that it surprises as that it should ever have been urged as an objection. In laying on a new tax, the stock in hand of the article taxed is commonly ascertained, and, as a measure of justice, the dealer in such article is required to pay the im posed tax on his stock. Why may not the reverse of this be done ? Why may not the tax be returned to each individual on his stock in hand, whenever it shall be thought expedient to take off the tax from the article which he manufactures, or in which he deals ? It would only be necessary to continue the taxes for a very short time for this purpose. On no view of this question can we see any validity in the arguments which we have quoted, and which have been so particularly insisted on by Mr Vansittart.
There are some persons who think that a sinking fund, even when strictly applied to its object, is of no national benefit whatever. The money which is contributed, they say, would be more productively employed by the payers of the taxes, than by the Commissioners of the Sinking Fund. The latter purchase stock with it, which probably does not yield 5 per cent. the former would obtain from the employment of the same capital much more than 5 per cent. consequently the country would be en riched by the difference. There would be in the latter case a larger nett supply of the produce of our land and labour, and that is the fund from which ultimately all our expenditure must be drawn. Those who maintain this opinion, do not see that the com missioners merely receive money from one class of the community and pay it to another class, and that the real question is, Which of these two classes will employ it most productively ? Forty millions per an num are raised by taxes, of which twenty millions, we will suppose, is paid for sinking fund, and twenty millions for interest of debt. After a year's purchase is made by the commissioners, this forty millions will be divided differently, nineteen millions will be paid for interest, and twenty-one millions for sinking fund, and so from year to year, though forty millions is always paid the whole, a less and less portion of it will be paid for interest, and a larger portion for sinking fund, till the commissioners have purchased the whole amount of stock, and then the whole forty millions will be in the hands of the commissioners. The sole question then with regard to profits is, Whether those who pay this forty millions, or those who receive it, will employ it most productively ? the commissioners, in fact, never employing it at all, their business being to transfer it to those who will employ it. Now, of this we are quite certain, that all the money received by the stockholder, in return for his stock, must be employed as capital, for if it were not so employed, he would be deprived of his revenue on which he had habitually depended. If then the taxes which are paid towards the sinking fund be derived from the revenue of the country, and not from its capital, by this operation a portion of revenue is yearly realized into capital, and con sequently the whole revenue of the society is in creased; but it might have been realized into capi tal by the payer of the tax, if there bad been no sinking fund, and he had been allowed to retain the money to his own use! It might so, and if it had been so disposed of, there can be no advantage in respect to the accumulation of the wealth of the whole society by the establishment of the sinking fund, but it is not so probable that the payer of the tax would make this use of it as the receiver. The 'receiver when he gets paid for his stock, only,substi tutes one capital for another,—and he is accustomed to look to his capital for all his yearly income. The payer will have all that he paid in addition to his former revenue; if the sinking fund be discontinued he may indeed realize it into capital, but he may also use it as revenue, increasing his expenditure on wine, houses, horses, clothes, &c. The payer might too have paid it from his capital, and, therefore, the employment of one capital might be substituted for another. In this case too, no advantage arises from the sinking fund, as the national wealth would ac cumulate as rapidly without it as with it, but if any portion of the taxes paid expressly for the sinking fund be paid from revenue, and which, if not so paid, would have been expended as revenue, then there is a manifest advantage in the sinking fund, as it tends to increase the annual produce of our land and la bour, and as we cannot but think that this would be its operation, we are clearly of opinion that a sink ing fund, honestly applied, is favourable to the ac cumulation of wealth.