date

8 Sept. 1801 Polit. Economy
8 Sept. 1801

Polit. Economy

Method

Finance

110

10

The support given to this opinion is given in two ways. One is by thinking

nothing of what becomes of the money taken /drawn/ in taxes and made over to the

Annuitants in discharge pro tanto of the national debt, but /or/ considering it

as annihilated or thrown away.

The other is by considering the labour paid for by the money when spent by the

proprietor as it would have been had there been no /instead of being taken from

him in/ taxes as being employ'd all of it in the shape of pecuniary capital, in

making a correspondent addition to real capital, just as would have really been

the case with the labour paid for by that money had it been made over to

annuitants in discharge of so much of the debt.

That a part of it would really have been so employ'd does not admitt of doubt:

the error consists in supposing /considering/ what is true only of this part as

/as if it were/ true of the whole. Let us observe the difference between this

part and the whole.

Admitting an encrease of wealth - and that a gradual and regular one the

productive capital of the country taken together with the growing mass of

consumed[?] & reproduced wealth continually produced by it must be

considered as encreasing at compound interest The rate of interest can scarcely

be taken as so high as 2 per Cent: for at two per Cent compound upon the capital

taken as it stands /whatever it may amount to/ in any year, the quantity of it

would be rather more than doubled in 351/2 years.+ The most sanguine estimator

will not

+ Smarts Annuities Table 1. p.54.
Similar Items
  • Title: [8 Sept. 1801 Polit. Economy]
    Description: 8 Sept. 1801

    Polit. Economy

    Method

    Finance

    109

    9

    As to the other opinion - the ground of it is - that if the money taken in taxes

    to be applied in discharge of the debt, had not been so taken but had been left

    in the pockets of those to whom it belonged, it would have been spent by them,

    each in his own way, and by that expenditure an addition would have been made to

    the mass of national wealth. But supposing it taken from them to be applied in

    discharge of debt, whatever is so applied is given to them and received by them

    and employ'd by them - the whole of it in the shape of capital, whereas had it

    been left with the parties by whom it is paid in taxes it would have been spent

    /employ'd/ more or less of it as income is employ'd when it is said to be spent

    {without return or hope of return} What the proportion may be /amount to/

    between the part spent /employ'd/ as income and the part employ'd as capital,

    and thereby employ'd in adding /making/ a growing addition to the mass of

    national wealth will be /has been/ considered presently. For the present it is

    something not to say sufficient that in one case it is only the /a/ part that is

    employ'd in making an addition /additions/ /goes in augmentation/ to the mass of

    wealth, and in the other case the whole.
  • Title: [8 Sept. 1801 Polit. Economy]
    Description: 8 Sept. 1801

    Polit. Economy

    Method

    Finance

    101

    1

    Chapter 6.

    Operation of the Sinking Fund in the Production of Wealth

    The establishment of an effective and undivestible Sinking Fund has been

    productive of effects in respect of encrease of wealth, such as (to judge from

    any indications I have met with) had not presented themselves to those by whom

    the plan was adopted or by any of those by whom it had been proposed.

    Money borrowed for, and applied to war-expences as so much taken from production

    capital and encreasing /growing/ wealth: money employ'd in discharge of such

    debt, {whether by paying it off at par or by buying it in at an under price} is

    so much given to productive capital and encreasing wealth.

    If in a time /season/ of reimbursement, viz: peace, the space of time employ'd

    in the discharge of the debt were no longer than the time /space/ employ'd in

    the contracting of it, and the money employ'd in the reimbursement were no

    greater than the money borrowed, the quantity added to wealth would be equal to

    the quantity taken from it, bating only the loss of the interest at compound

    interest upon the several years instalments during the expenditure of it: as if

    ten millions were borrowed every year for four years of war, and ten millions

    paid off every
  • Title: [23 June 1801 Polit. Economy]
    Description: 23 June 1801

    Polit. Economy

    Analysis

    Taxes

    2

    31

    {7}

    The amount of taxes imposed in discharge of debt of itself neither adds to nor

    takes from the amount /mass/ of national wealth: that is of itself: but it is

    the necessary result of measures of expence, necessary or unnecessary, avoidable

    or unavoidable, beneficial or pernicious - by which in former mass a decrease in

    the mass of national wealth was produced.(a)

    But when and in so far as the money produced by those taxes is actually employ'd

    in discharge of debt it adds to capital, and thereby to growing wealth.

    ( ) D'Yvarnas[?] and Bukes[?] errors.

    The quantity of wealth