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land； or in the good management of any particular portion of
capital stock。 As a creditor of the public he has no knowledge of
any such particular portion。 He has no inspection of it。 He can
have no care about it。 Its ruin may in some cases be unknown to
him； and cannot directly affect him。
The practice of funding has gradually enfeebled every state
which has adopted it。 The Italian republics seem to have begun
it。 Genoa and Venice； the only two remaining which can pretend to
an independent existence； have both been enfeebled by it。 Spain
seems to have learned the practice from the Italian republics；
and （its taxes being probably less judicious than theirs） it has；
in proportion to its natural strength； been still more enfeebled。
The debts of Spain are of very old standing。 It was deeply in
debt before the end of the sixteenth century； about a hundred
years before England owed a shilling。 France； notwithstanding all
its natural resources； languishes under an oppressive load of the
same kind。 The republic of the United Provinces is as much
enfeebled by its debts as either Genoa or Venice。 Is it likely
that in Great Britain alone a practice which has brought either
weakness or desolation into every other country should prove
altogether innocent？
The system of taxation established in those different
countries； it may be said； is inferior to that of England。 I
believe it is so。 But it ought to be remembered that； when the
wisest government has exhausted all the proper subjects of
taxation； it must； in cases of urgent necessity； have recourse to
improper ones。 The wise republic of Holland has upon some
occasions been obliged to have recourse to taxes as inconvenient
as the greater part of those of Spain。 Another war begun before
any considerable liberation of the public revenue had been
brought about； and growing in its progress as expensive as the
last war； may； from irresistible necessity； render the British
system of taxation as oppressive as that of Holland； or even as
that of Spain。 To the honour of our present system of taxation；
indeed； it has hitherto given so little embarrassment to industry
that； during the course even of the most expensive wars； the
frugality and good conduct of individuals seem to have been able；
by saving and accumulation； to repair all the breaches which the
waste and extravagance of government had made in the general
capital of the society。 At the conclusion of the late war； the
most expensive that Great Britain ever waged； her agriculture was
as flourishing； her manufacturers as numerous and as fully
employed； and her commerce as extensive as they had ever been
before。 The capital； therefore； which supported all those
different branches of industry must have been equal to what it
had ever been before。 Since the peace； agriculture has been still
further improved； the rents of houses have risen in every town
and village of the country… a proof of the increasing wealth and
revenue of the people； and the annual amount the greater part of
the old taxes； of the principal branches of the excise and
customs in particular； has been continually increasing… an
equally clear proof of an increasing consumption； and
consequently of an increasing produce which could alone support
that consumption。 Great Britain seems to support with ease a
burden which； half a century ago； nobody believed her capable of
supporting。 Let us not； however； upon this account rashly
conclude that she is capable of supporting any burden； nor even
be too confident that she could support； without great distress；
a burden a little greater than what has already been laid upon
her。
When national debts have once been accumulated to a certain
degree； there is scarce； I believe； a single instance of their
having been fairly and completely paid。 The liberation of the
public revenue； if it has ever been brought about by bankruptcy；
sometimes by an avowed one； but always by a real one； though
frequently by a pretended payment。
The raising of the denomination of the coin has been the
most usual expedient by which a real public bankruptcy has been
disguised under the appearance of a pretended payment。 If a
sixpence； for example； should either by Act of Parliament or
Royal Proclamation be raised to the denomination of a shilling；
and twenty sixpences to that of a pound sterling； the person who
under the old denomination had borrowed twenty shillings； or near
four ounces of silver； would； under the new； pay with twenty
sixpences； or with something less than two ounces。 A national
debt of about a hundred and twenty…eight millions； nearly the
capital of the funded and unfunded debt of Great Britain； might
in this manner be paid with about sixty…four millions of our
present money。 It would indeed be a pretended payment only； and
the creditors of the public would really be defrauded of ten
shillings in the pound of what was due to them。 The calamity；
too； would extend much further than to the creditors of the
public； and those of every private person would suffer a
proportionable loss； and this without any advantage； but in most
cases with a great additional loss； to the creditors of the
public。 If the creditors of the public； indeed； were generally
much in debt to other people； they might in some measure
compensate their loss by paying their creditors in the same coin
in which the public had paid them。 But in most countries the
creditors of the public are； the greater part of them； wealthy
people； who stand more in the relation of creditors than in that
of debtors towards the rest of their fellow…citizens。 A pretended
payment of this kind； therefore； instead of alleviating；
aggravates in most cases the loss of the creditors of the public；
and without any advantage to the public； extends the calamity to
a great number of other innocent people。 It occasions a general
and most pernicious subversion of the fortunes of private people；
enriching in most cases the idle and profuse debtor at the
expense of the industrious and frugal creditor； and transporting
a great part of the national capital from the hands which were
likely to increase and improve it to those which are likely to
dissipate and destroy it。 When it becomes necessary for a state
to declare itself bankrupt； in the same manner as when it becomes
necessary for an individual to do so； a fair； open； and avowed
bankruptcy is always the measure which is both least
dishonourable to the debtor and least hurtful to the creditor。
The honour of a state is surely very poorly provided for when； in
order to cover the disgrace of a real bankruptcy； it has recourse
to a juggling trick of this kind； so easily seen through； and at
the same time so extremely pernicious。
Almost all states； however； ancient as well as modern； when
reduced to this necessity have； upon some occasions； played this
very juggling trick。 The Romans； at the end of the first Punic
war； reduced the As； the coin or denomination by which they
computed the value of all their other coins； from containing
twelve ounces of copper to contain only two ounces； that is； they
raised two ounces of copper to a denomination which had always
before expressed the value of twelve ounces。 The republic was； in
this manner； enabled to pay the great debts which it had
contracted with the sixth part of what it really owed。 So sudden
and so great a bankruptcy； we should in the present times be apt
to imagine； must have occasioned a very violent popular clamour。
It does not appear to have occasioned any。 The law which enacted
it was； like all other laws relating to the coin； introduced and
carried through the assembly of the people by a tribune； and was
probably a very popular law。 In Rome； as in all the other ancient
republics； the poor people were constantly in debt to the rich
and the great； who in order to secure their votes at the annual
elections； used to lend them money at exorbitant interest； which；
being never paid； soon accumulated into a sum too great either
for the debtor to pay； or for anybody else to pay for him。 The
debtor； for fear of a very severe execution； was obliged； without
any further gratuity； to vote for the candidate whom the creditor
recommended。 In spite of all the laws against bribery and
corruption； the bounty of the candidates； together with the
occasional distributions of corn which were ordered by the
senate； were the principal funds from which； during the latter
times of the Roman republic； the poorer citizens derived their
subsistence。 To deliver themselves from this subjection to their
creditors； the poorer citizens were continually calling out
either for an entire abolition of debts； or for what they called
New Tables； that is； for a law which should entitle them to a
complete acquittance upon paying only a certain proportion of
their accumulated debts。 The law which reduced the coin of all
d