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

just right that their bank notes should be paid first. Boyd has been very sly in France, in changing his paper into cash. He will be just as sly in doing the same thing in London, for he has learned to calculate; and then it is probable he will set off for America.

A stoppage of payment at the bank is not a new thing. Smith in his Wealth of Nations, book ii chap. 2, says, that in the year 1696, exchequer bills fell forty, fifty, and sixty percent; bank notes twenty percent; and the bank stopped payment. That which happened in 1696 may happen again in 1796. The period in which it happened was the last year of the war of King William. It necessarily put a stop to the further emissions of exchequer and navy bills, and to the raising of new loans; and the peace which took place the next year was probably hurried on by this circumstance, and saved the bank from bankruptcy. Smith in speaking from the circumstances of the bank, upon another occasion, says (book ii chap. 2) “This great company had been reduced to the necessity of paying in sixpences.” When a bank adopts the expedient of paying in sixpences, it is a confession of insolvency.

It is worthy of observation, that every case of failure in finances, since the system of paper began, has produced a revolution in governments, either total or partial. A failure in the finances of France produced the French revolution. A failure in the finance of the assignats broke up the revolutionary government, and produced the present French Constitution. A failure in the finances of the Old Congress of America, and the embarrassments it brought upon commerce, broke up the system of the old confederation, and produced the federal Constitution. If, then, we admit of reasoning by comparison of causes and events, the failure of the English finances will produce some change in the government of that country.

As to Mr. Pitt’s project of paying off the national debt by applying a million a-year for that purpose, while he continues adding more than twenty millions a-year to it, it is like setting a man with a wooden leg to run after a hare. The longer he runs the farther he is off.

When I said that the funding system had entered the last twenty years of its existence, I certainly did not mean that it would continue twenty years, and then expire as a lease would do. I meant to describe that age of decrepitude in which death is every day to be expected, and life cannot continue long. But the death of credit, or that state that is called bankruptcy, is not always marked by those progressive stages of visible decline that marked the decline of natural life. In the progression of natural life age cannot counterfeit youth, nor conceal the departure of juvenile abilities. But it is otherwise with respect to the death of credit; for though all the approaches to bankruptcy may actually exist in circumstances, they admit of being concealed by appearances. Nothing is more common than to see the bankrupt of today a man in credit but the day before; yet no sooner is the real state of his affairs known, than everybody can see he had been insolvent long before. In London, the greatest theatre of bankruptcy in Europe, this part of the subject will be well and feelingly understood.

Mr. Pitt continually talks of credit, and the national resources. These are two of the feigned appearances by which the approaches to bankruptcy are concealed. That which he calls credit may exist, as I have just shown, in a state of insolvency, and is always what I have before described it to be, suspicion asleep.

As to national resources, Mr. Pitt, like all English financiers that preceded him since the funding system began, has uniformly mistaken the nature of a resource; that is, they have mistaken it consistently with the delusion of the funding system; but time is explaining the delusion. That which he calls, and which they call, a resource, is not a resource, but is the anticipation of a resource. They have anticipated what would have been a resource in another generation, had not the use of it been so anticipated. The funding system is a system of anticipation. Those who established it an hundred years ago anticipated the resources of those who were to live an hundred years after; for the people of the present day have to pay the interest of the debts contracted at that time, and all debts contracted since. But it is the last feather that breaks the horse’s back. Had the system begun an hundred years before, the amount of taxes at this time to pay the annual interest at four percent (could we suppose such a system of insanity could have continued) would be two hundred and twenty millions annually: for the capital of the debt would be 5,486 millions, according to the ratio that ascertains the expense of the wars for the hundred years that are past. But long before it could have reached this period, the value of bank notes, from the immense quantity of them, (for it is in paper only that such a nominal revenue could be collected,) would have been as low or lower than continental paper has been in America, or assignats in France; and as to the idea of exchanging them for gold and silver, it is too absurd to be contradicted.

Do we not see that nature, in all her operations, disowns the visionary basis upon which the funding system is built? She acts always by renewed successions, and never by accumulating additions perpetually progressing. Animals and vegetables, men and trees, have existed since the world began: but that existence has been carried on by succession of generations, and not by continuing the same men and the same trees in existence that existed first; and to make room for the new she