Lincoln's loan and the British loans during the wars of the French Revolution.
--In an article which we re-published a few days ago, from the London Times
, the writer took occasion to remark that when the Lincoln
Government had once commenced its system of borrowing it would be apt to borrow each succeeding year more than it had borrowed the year before.
It founded this dictum
upon the experience of the British Government
during the wars with the French Republic
, and with the Consulate and Empire.
We had some little curiosity to investigate the truth of this assertion, and we turned to a synopsis showing the annual increase of the British
revenue and expenditure, and the amount of the public loans from the year 1790 to the beginning of the year 1816, for information.
The result of our investigation will be found below:
The first four years of the period indicated the Government
contracted no loans.
The revenue averaged about $30,000,000, and the expenditure each year fell short of that amount. (N. B.
--Though in the table the values are expressed in pounds, we shall use the equivalent expression in dollars.--We shall use round numbers only.
In 1794, the revenue which was $85,000,000, failed to meet the expenditure by $14,000,000, and then began the system of loans.
, however, was much more modest than Abraham, for he only asked a loan of $23,000,000 to cover deficiencies.
The next year (1795) no extraordinary taxes having been imposed, the revenue remained nearly stationary, but the expenditure had increased $10,000,000, and $65,000,000 were borrowed to cover the deficiency.
In 1796 they had begun to lay on the taxes.
The revenue had increased $5,000,000 and the expenses exceeded those of the former year by $85,000,000. It now had reached the sum of $225,000,000, and the Government
borrowed $100,000,000 to cover deficiencies and have something to start upon next year.--
The next year, the revenue remaining nearly stationary, and the expenses having been reduced about $10,000,000, the Government
borrowed $155,000,000, and in 1798, when the revenue had gone up to $100,000,000 and the expenditure did not exceed that of the preceding year, it was found necessary, nevertheless, to borrow $196,000,000. This was the largest loan ever contracted by the British Government
during that long period of unprecedented extravagance and profligacy, with a single exception, to be hereafter noticed.
In 1799, the revenue reached $118,000,000, while the expenditure remained nearly the same, and that year the loans amounted to only $85,000,000. In 1800, while the revenue stood at $145,000,000 and the expenditures remained nearly stationary, it was found necessary, nevertheless, to borrow $92,000,000. In 1801, the revenue had fallen off about $3,000,000, but the expenditure had increased about $5,000,000.
From 1793 to 1801 Great Britain
was engaged in war. The latter part of 1801, and the whole of 1802, there was profound peace.
During that first war, the public debt, which at its commencement was about $1,200,000,000 had increased to $2,800,000. The revenue of the year 1802 was $140,000,000, the expenditure $235,000,000, and the loans $146,000,000, being equal to the entire revenue.
In the year 1803, the revenue was $50,000,000 more than it had ever been before.
It now amounted to $190,000,000. England
began to experience the benefit of the war in earnest, by the heavy weight of taxation, laid on to cover the enormous expenditure of the Government
This year that expenditure reached the figure of $240,000,000, while the loan was $125,000,000.
In 1804 the war was again in full blast; the revenue at a single bound leaped up to $245,000,000, the expenditure swelled to $265,000,000, while the loan contracted amounted only to the modest little sum of $70,000,000. In 1805, when England
to fight against Bonaparte
, the expenditures reached the enormous sum of the $305,000,000, while the revenue continued to be $245,000,000, no fresh taxes having been laid, and the borrowings only reached the mark of the former year — that is, $70,000,000. This was the last year of Pitt
's reign, for a reign it virtually was. His successors were for peace, but do not appear to have been any the less urgent in exacting money from the people, or borrowing it from the capitalists; for this year the revenue reached $265,000,000, the expenditure ran up to $365,000,000, (a million a day — old Abe's figure now,) while the loan contracted amounted to $110,000,000 --a little more than enough to cover the difference.
The next year (1807) witnessed another upward bound in the revenue, which now amounted to $205,000,000, while the expenditure continued as it was the year before, and the loan was represented by $100,000,000. In 1808, while the revenue was $305,000,000, the expenditure was $380,000,000 and the loan contracted only $60,000,000.--In 1809, England
to take the field, and sent vast sums to Spain
The revenue reached $315,000,000, the expenditure was $440,000,000, the loan only $50,000,000. In 1810, the revenue stood at $330,000,000, the expenditure was $425,000,000, and the loan was $74,000,000. In 1811, the revenue had fallen off to $320,000,000, but the expenditure exceeded $450,000,000, and the loan was $60,000,000. In 1812, there was a
still further reduction of revenue.
It now only reached the figure of $315,000,000, while the expenditure was $475,000,000, and the loan $85,000,000. In 1813, now takes were laid on, and the revenue again reached $330,000,000, while the expenditure swelled into $500,000,000 and the loans reached $135,000,000. In 1814, the revenue was $355,000,000, the expenditure $600,000,000, the loan $175,000,000. In 1815, the expenditure was $630,000,000, and the loan $180,000,000.
At the end of this war, in spite of the enormously increased taxation to which it subjected the property of the United Kingdoms — a taxation which, in twenty-three years, ran up the revenue from $75,000,000 to $450,000,000--England
stood indebted to her creditors in the almost fabulous sum of $5,000,000,000, (round numbers.) The increase of taxation was never able to keep pace with the increase of expenditure, and the loan of one year only brought on the loan of the next.--After the war had continued ten or twelve years, the loans were, for a time, lighter, because holders had become timid, and the taxes became heavier.
But throughout the whole period the lenders to the Government
were so nearly all British subjects, that out of the whole public debt there were but $90,000,000 due to foreigners.
The great landholders were the aristocrats, who felt the greatest interest in the success of the war, and would have sacrificed their estates to a man to insure it — From them the principal part of the money came — from them and the great capitalists, who felt that failure was to them entire destruction.
They felt entire confidence in the Government
They knew that its credit was perfectly good, and that it had at command a sure means of raising the money to pay the interest on this enormous debt.
The property upon which it could levy taxes for this purpose amounted in value to twenty-five thousand millions of dollars, exclusive of incomes, which exceeded in value two thousand millions of dollars, while the interest on the debt but a little exceeded $200,000,000. Still the people of Great Britain
had always been held up as an example of the most heavily taxed people that ever existed.
When we look over this table in connexion with the system of loans proposed by the Lincoln
Government, we fail not to find food for the amplest reflection.
While the British Government
inaugurated its enormous loans by borrowing twenty-two millions, Lincoln
. at one dash, as a first experiment, starts with a proposal for five hundred millions.
The largest English loan did not exceed two hundred millions.
The largest expenditure
of the British Government
prior to 1812 never reached the sum which Lincoln
proposes to borrow.
The English loans were all from English subjects.
loan has been hawked about from one country to another, and has been kicked out of all. The English loans were based upon taxation to pay the interest, laid upon twenty-five thousand millions worth of property.
loan is based upon nothing whatever.
From this table we may learn that when a Government begins to raise money for war purposes by means of loans, it must continue it or stop military operations altogether.--With all its heavy taxes and enormous revenue, England
could never stop.
She resembled a boy who seizes hold of a cow's tail as she is running down a bill.
She would willingly have let go, but she could not. So must it be with old Abe. Once in for it, he cannot stop.
He has no revenue but that derived from customs, and that will not pay the ordinary expenses of Government.
If he borrow five hundred millions this year, he must borrow at least that sum next year.
If the war should last six years, he will have borrowed at least three thousand millions, at 7½ per cent. Where is the money to come from that is to pay the interest on three thousand millions?