Essays, Thomas Paine [digital book reader .txt] 📗

The difference cannot be accounted for on the score of extraordinary efforts or extraordinary achievements. The war that cost twenty-one millions was the war of the confederates, historically called the grand alliance, consisting of England, Austria, and Holland in the time of William III against Louis XIV and in which the confederates were victorious. The present is a war of a much greater confederacy⁠—a confederacy of England, Austria, Prussia, the German Empire, Spain, Holland, Naples, and Sardinia, eight powers, against the French Republic singly, and the Republic has beaten the whole confederacy.⁠—But to return to my subject.

It is said in England, that the value of paper keeps equal with the value of gold and silver. But the case is not rightly stated; for the fact is, that the paper has pulled down the value of gold and silver to a level with itself. Gold and silver will not purchase so much of any purchasable article at this day as if no paper had appeared, nor so much as it will in any country in Europe where there is no paper. How long this hanging together of money and paper will continue, makes a new case; because it daily exposes the system to sudden death, independent of the natural death it would otherwise suffer.

I consider the funding system as being now advanced into the last twenty years of its existence. The single circumstance, were there no other, that a war should now cost nominally one hundred and sixty millions, which when the system began cost but twenty-one millions, or that the loan for one year only (including the loan to the Emperor) should now be nominally greater than the whole expense of that war, shows the state of depreciation to which the funding system has arrived. Its depreciation is in the proportion of eight for one, compared with the value of its money when the system began; which is the state the French assignats stood a year ago (March 1795) compared with gold and silver. It is therefore that I say, that the English funding system has entered on the last twenty years of its existence, comparing each twenty years of the English system with every single year of the American and French systems, as before stated.

Again, supposing the present war to close as former wars have done, and without producing either revolution or reform in England, another war at least must be looked for in the space of the twenty years I allude to; for it has never yet happened that twenty years have passed off without a war, and that more especially since the English government has dabbled in German politics, and shown a disposition to insult the world, and the world of commerce, with her navy. The next war will carry the national debt to very nearly seven hundred millions, the interest of which, at four percent, will be twenty-eight millions besides the taxes for the (then) expenses of government, which will increase in the same proportion, and which will carry the taxes to at least forty millions; and if another war only begins, it will quickly carry them to above fifty; for it is in the last twenty years of the funding system, as in the last year of the American and French systems without funding, that all the great shocks begin to operate.

I have just mentioned that, paper in England has pulled down the value of gold and silver to a level with itself; and that this pulling dawn of gold and silver money has created the appearance of paper money keeping up. The same thing, and the same mistake, took place in America and in France, and continued for a considerable time after the commencement of their system of paper; and the actual depreciation of money was hidden under that mistake.

It was said in America, at that time, that everything was becoming dear; but gold and silver could then buy those dear articles no cheaper than paper could; and therefore it was not called depreciation. The idea of dearness established itself for the idea of depreciation. The same was the case in France. Though everything rose in price soon after assignats appeared, yet those dear articles could be purchased no cheaper with gold and silver, than with paper, and it was only said that things were dear. The same is still the language in England. They call it deariness. But they will soon find that it is an actual depreciation, and that this depreciation is the effect of the funding system; which, by crowding such a continually increasing mass of paper into circulation, carries down the value of gold and silver with it. But gold and silver, will, in the long run, revolt against depreciation, and separate from the value of paper; for the progress of all such systems appears to be, that the paper will take the command in the beginning, and gold and silver in the end.

But this succession in the command of gold and silver over paper, makes a crisis far more eventful to the funding system than to any other system upon which paper can be issued; for, strictly speaking, it is not a crisis of danger but a symptom of death. It is a death-stroke to the funding system. It is a revolution in the whole of its affairs.

If paper be issued without being funded upon interest, emissions of it can be continued after the value of it separates from gold and silver, as we have seen in the two cases of America and France. But the funding system rests altogether upon the value of paper being equal to gold and silver; which will be as long as the paper can continue carrying down the value of gold and silver to the same level to which itself descends, and no longer. But even in this state, that of descending equally together, the minister, whoever he may