FINANCES.
The Engliah colonists," says Adam Smith, "have never yet contributed any thing towards the de fence of the mother country, or towards the support of its civil government. They themselves, on the con trary, have hitherto been defended almost entirely at the expense of the mother country. The ex pense of their own civil government has always been very moderate. It has generally been confined to what was necessary for paying the competent sala ries to the governor, to the judges, and to some other officers of police, and for maintaining a few of the most useful public works. The expense of the civil establiAhment of Massachusetts Bay, before the commencement of the present disturbances, used to be but about X18,000 a year. That of New Hampshire and Rhode Island L3500 each. That of Connecticut ze4000. That of New York and Pennsylvania X4500 each. That of New Jersey £1200. That of Virginia and South Carolina £8000 each. The civil establishments of Nova Scotia and Georgia arc partly supported . by an annual grant of parliament. But Nova Scotia pays, besides, about £7000 a year towards the public ex penses of the colony: and Georgia about £2500 a year. All the different civil establishments in North America, in short, exclusive of those of' Maryland and North Carolina, of which no exact account has been got, did not, before the com mencement of the present disturbances, cost the inhabitants above £64,700 a year; an ever memor able example at how small an expense three millions of people may not only be governed, but well go verned," It is, indeed, an ever memorable example at how small an expense three millions of people may be governed, for the total is less than is now annually levied in Philadelphia for merely municipal pur poses.
Lord Sheffield says, customs from the 5th of January 1768, when the Board was established, to 1775, when the troubles began, amounted to about 3:290,000, in a little more than seven years: out of which the expense of collecting is to be de ducted. The only other revenue was the ground rents, which were never tolerably paid, and hardly defrayed the expense of collecting. Before the war of 1755, the expense of our establishment was From the peace of 1763 to the time of the stamp act, it was If to the amount the Americans paid for the sup port of the civil establishment of the different colonies, be added the amount they paid for duties on goods imported, the total will not in any year exceed 500,000 dollars.
Sir William Keith, in his history of Virginia, gives the following account of the revenue of that colony, as it stood in 1738, and as it was established by acts of assembly, viz.
Massachusetts imposed a tax of eight-pence a hogshead on molasses imported into her territories in ships belonging to other colonies and South Carolina a tax of five pence a gallon on the same commodity when imported from the northern colo nies. But the principal revenue of the colonies was derived from direct taxes on property: and herein is to be found the cause of the economy of the American governments previous to the Revo lution. When .revenue is raised by direct taxation, every man knows what he pays, and even the most stupid need not be told that he has an interest in keeping down the expenses of government. It is by various ingenious modes of indirect taxation, through which the exact amount any one pays is concealed both from himself and others, that go vernments are able to raise and to expend annually their tens and even their hundreds of millions.
But, besides this just and equitable way of raising a revenue, the colonial governments had another, the most pernicious that could possibly be devised. It was in issuing paper money, which in some cases was made a legal tender, and in others had an artificial value imparted to it by political regula tions of a different character.
This expedient was first resorted to by Massa chusetts. In the year 1690, when her troops returned from an unsuccessful attack on Quebec, they were on the point of mutinying for their wages. An act was passed for levying the suns, but the men would not stay till it could be brought into the treasury. The debt was therefore paid by paper notes of from ten shillings to ten pounds' denomination, which the soldiers could not pass except at a discount of thirty or forty per cent. But, by certain political contrivances the notes were, alter a time, raised to par value ; and the public authorities, encouraged by the restoration of the credit of their bills, after wards issued others for defraying the ordinary ex penses of government. ' " This was," says Governor Hutchinson, "au easy way of paying public charges, which, no doubt, they wondered that in so many ages the wisdom of other governments had never discovered." The example set by Massachusetts was quickly imitated by the other colonies. Pennsylvania con trived to keep her paper nearly on a level with silver in value : but the notes of the other colonies depre ciated greatly, and in 1747 Massachusetts paid the greater part of her public debts with the one tenth part of the money for which her paper bills had been granted.