taxes; i. e. taxes drawn in the way of custom-house and excises, where the consumer pays the whole in the ultimate price, without being aware of it.

His arguments appear to me not very satisfactory. The case of England occurs to him; his expressions are remarkable. "Cite not to me," he says, "the case of England, as you are continually doing; for not to mention the terrible consequences with which these indirect taxes threaten her prosperity and her liberties, are you not aware that the civil freedom which every man enjoys in that country, remedies, atones for, and bears up against every evil and disadvantage? That England (thanks to her situation and constitution) is no example on this occasion. Can you, will you, give your own subjects the immense advantages which England enjoys?" Such are the words of Mirabeau. Our civil freedom, he evidently supposes, is the vital principle which enables the state to bear up against all its infirmities and diseases.

Frederic's own ideas on taxes are justly considered by Mirabeau as not very distinct or profound. He created monopolies, the worst of all taxes, and then used to say, towards the close of his life, "Why should any one complain? I have never, through the whole of my reign, imposed a

new tax." Again: a terrible sort of board, consisting of French financiers, was formed for managing the excises. Every evil followed. After considering these evils, "Such," says Mirabeau, "have been the fruits of the administration of the rights and claims of Frederic; and who can survey this melancholy picture,” he continues, “without being overpowered by compassion for the people of Prussia? without being overcome with indignation at the writers who have dared to vaunt and hold up to admiration the system of Frederic? Let them not profane, with their unworthy incense, the tomb of a hero,one who was great enough to admit of our allowing him to have been deceived without any diminution of his glory; and who was too great not to make it necessary to unveil his faults, lest they should acquire an authority under the shadow of his great name."

Mirabeau's remarks on the military force and resources of Prussia were very striking, and might have taught us, as I have already mentioned, in later times, important lessons. There is a sort of prophecy of the movement of Bonaparte before the battle of Austerlitz.

LECTURE XXX.

GEORGE THE THIRD.

IN a late lecture, I endeavoured to conduct you through the history of the remaining part of the reign of George the Second, the intrigues that took place on the fall of Sir Robert Walpole, the merits of the Pelham administration, and of the ministry of Lord Chatham. And I more particularly proposed to you such subjects (the rebellion of 1745 and others, drawn partly from the events of the time, and partly from Debrett's Debates), as I thought best fitted to supply your minds with proper materials of philosophic and political reflection.

But before I proceed to our next subject, the Reign of his present Majesty, I must observe that as you read our history down from the Revolution to the present time, more especially as you read the debates in parliament, you will be repeatedly called upon to exercise your opinion upon reasonings and public measures, that relate to our national debt, to taxes, excises, and topics of this nature; and it is desirable, as a preparation for such reading, that you should acquire some notion, as soon as possible, of the nature of a national debt and its consequences; in short, become acquainted with the great subjects of political economy.

I should therefore be well pleased, if I could refer you to some book or treatise, where elementary explanations respecting such subjects might be found; but I know of no such book or treatise. The great work of A. Smith is not an elementary book, very far from it; and your best chance of understanding it, is to read of each chapter as much as you can, then go to the next chapter, and so on; and when you have got to the end of the book, begin the book again; and you will at length comprehend the whole sufficiently for any general purpose. I have lately seen a treatise by Mr. Boileau, which I hoped

I might have recommended to you on this occasion; but I do not think that it will be found either more simple, or more intelligible, than A. Smith's original work, from which it is avowedly borrowed.

Since I wrote what I am now delivering, I have met with a book lately published, ― Conversations on Political Economy. This appeared to me the elementary book that was wanted; and though there is a doubtful point or two in the more profound parts of the science, which is, I believe, rather mistaken, still the work seemed to me a work of merit, and fitted for your instruction. In this opinion I found Mr. Malthus, and Mr. Pryme, our own lecturer on Political Economy, concurring, and therefore I think myself authorized to recommend it to you.

I cannot detain you with observations on political economy; I do not lecture on political economy, and there is one of the members of our university who does; and who, I am sure, from the purest motives of endeavouring to do good to his fellow-creatures, has been, for some time, soliciting your attention to these most important, but grave and somewhat repulsive subjects. Still, as the plan of my lectures is to assist you, if I can, in reading history for yourselves; and as it is quite necessary to the proper comprehension of history from the time of the Revolution, that you should have some proper notion, of at least the nature of a funded debt and of loans, and that immediately, I will begin this lecture by a few observations on the subject; and by securing your minds, as far as I am able, from some of those mistakes and misapprehensions, that are to be met with in conversation, and even in books and pamphlets, which undertake to instruct the public. I shall be well employed indeed, if I thus apprize you of the importance of what may be considered as a new science in the world, the science of political economy. I will begin with the most

common misapprehension of all.

Property in the stocks being continually bought and sold, and passed from one to another, a continual circulation, as it is called, of money is kept up; and by the practice of funding it is supposed that we have, in fact, fabricated to ourselves a species of factitious wealth, which answers all the purposes, and procures to us all the advantages of so much real wealth.

The easiest reply I can make to this popular error is, by shortly stating, what the nature of the funds really is. The whole mystery is no more than this: A minister wishes to borrow a million, we will say, for the equipment of an armament; he borrows it, therefore, from those who have the money unoccupied, and he engages that the nation shall give them a proper interest for their money for ever. Their names are therefore written in public books, with the sums they have lent; and these records of the transactions are the funds. The books are kept at the Bank, where the interest is paid by the government; and these records give each person who belongs to them a right to receive such and such sums of interest from the public for ever; and these records may be broken into pieces, and transferred from one to another. But this, and nothing more is done, when stock (as it is called) is bought or sold.

Money is brought out of society, if I may so speak, and given by the person who buys stock, to the person who holds it; i. e. who holds one of these rights or records; and he, after parting with his record, returns with the money into society and so far the money has eirculated, it has been given from one man to another; but there is no fabrication of money, or of fictitious wealth. The funds are not money, they only represent money, they represent money that has been long ago spent ; but being the records of these original loans, and therefore giving to their owners a claim on the nation to receive interest for ever, they have no doubt in themselves a value, and may be therefore continually bought and sold; and this has given occasion to all the mystery and confusion that has been noticed.

A more dangerous error is this: It is continually affirmed that the greatest part of the money which is borrowed for a war is paid away to our artisans, our soldiers, and sailors, at our dock-yards or manufactories, head-quarters, &c. &c. That it never travels out of the island; that it is never lost by the state; that it only passes from one hand to another; and that except when the money is paid out of the kingdom to our soldiers abroad, or our allies, we are as rich as before. This mistake, indeed, the writers on political economy will enable you to avoid; for you will see them make a distinction be

tween productive laborers and nonproductive laborers, which you will of course have to consider. There are certain diffi

culties introduced into this part of the subject by a particular school of reasoners; but the distinction is sufficiently sound for our present purpose, and for all intelligible purposes. I shall proceed upon it.

It

Suppose we were all soldiers and sailors, i. e. nonproductive laborers, there would evidently be no one to feed and clothe us. To this preposterous state of ruin we therefore approach, the more soldiers and sailors we raise. The money that is given to them, and for them, is the only medium by means of which food and clothing, arms and accoutrements, are transferred to them from those who produce these articles. is not meant to say that soldiers and sailors are useless, for they defend us; or that they deserve not what they receive, for they receive but little. All that is urged is, that they can produce nothing themselves, and that they must necessarily consume part of the produce of those who do; and that consequently, the more of them we are obliged to maintain for any purpose, whether of offence or defence, the poorer we shall be, and the less able to become rich. It is not therefore true, because the money is paid away to our soldiers, sailors, public officers, &c., and never goes out of the island, that therefore we are not the poorer. And in the former case, that of subsidies, loans, &c., when the money obviously does go out of the island, then indeed it is allowed by all, that we are poorer.

In these two cases, therefore, the matter is clear, and I shall dismiss them.

Still some further explanation must be given of the manner in which we bear our extraordinary loads of taxation. Certainly there must be some truth in the popular notion, however vague, that the money raised by taxes never goes out of the kingdom, and that therefore we are not poorer.

I must, therefore, now propose to your thoughts a distinction which you must recollect; it is this: the money originally lent from time to time by different moneyed men to government, is always to be carefully set apart in your minds from the money that is afterwards paid every year by the nation as the interest of it. The money originally lent, which the funds are the records of, is money that has been taken from the capital