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Page 45
4. _The Tariff Question considered in regard to the Policy of England
and the Interests of the United States. With Statistical and Comparative
Tables._ By ERASTES B. BIGELOW. Boston: Little, Brown & Co. 4to, pp. 103
and 242.
5. _The Bankers' Magazine and Statistical Register._ New York, monthly,
1861-2. Edited by J. SMITH HOMANS, jr.
The Bank of England was created during the urgent necessities of
national finance. It was a concession of a valuable privilege to a few
rich men, in consideration of their loaning the capital to the treasury.
'The estimates of Government expenditure in the year 1694 were
enormous,' says Macaulay, in his fourth volume. King William asked to
have the army increased to ninety-four thousand, at an annual expense of
about two and a half millions sterling--a small sum compared with what
it costs in the year 1862 to maintain an army of equal numbers.
At the period of the charter of the bank, the minds of men were on the
rack to conceive new sources of revenue with which to meet the increased
expenditures of the nation. The land tax was renewed at four shillings
in the pound, and yielded a revenue of two millions. A poll tax was
established. Stamp duties, which had prevailed in the time of Charles II
had been allowed to expire, but were now revived, and have ever since
been among the most prolific sources of income, yielding to the British
Government in the year 1862 no less than �8,400,000 sterling. Hackney
coaches were taxed, notwithstanding the outcries of the coachmen and the
resistance of their wives, who assembled around Westminster Hall and
mobbed the members. A new duty on salt was imposed, and finally resort
was had to the lottery, whereby one million sterling was raised. All
these resources were not sufficient for the growing wants of the
Government, and the plan of the Bank of England was devised to furnish
immediate relief to the finances. Montague brought the measure forward
in Parliament, and 'he succeeded,' as Macaulay remarks, 'not only in
supplying the wants of the state for twelve months, but in creating a
great institution, which, after the lapse of more than a century and a
half, continues to flourish, and which he lived to see the stronghold,
through all vicissitudes, of the Whig party, and the bulwark, in
dangerous times, of the Protestant succession.'
The birth of the bank and the birth of the English national debt were
both in King William's time. In 1691, when England was at war with
France, the national debt unfunded was �3,130,000, at an annual interest
of �232,000. In 1697, at the Peace of Ryswick, this debt had swollen to
�14,522,000. At the Peace of Utrecht, in 1713, it had reached
�34,000,000. The war with Spain in 1718 brought it up to forty millions
sterling. And here it might have rested, had the advice of Shakspeare
been followed:
'Still in thy right hand carry gentle peace.'
But England went to war with Spain 'on the right of search.' From 1691
to this time the debt had increased on an average about a million
sterling per year. As early as 1745 the credit of the bank was so
identified with that of the state, that during the invasion of the
Pretender, whose forces were at Derby, only one hundred and twenty miles
from London, the creditors of the bank flocked in crowds to its counter
to obtain specie for its notes. The merchants intervened and signed an
agreement to make the bank's notes receivable in all business
transactions.
The war of the Austrian succession followed in 1742, and at the Peace of
Aix-la-Chapelle, in 1748, 'forever to be maintained,' the English were
saddled with a debt of �75,000,000.
'Peace hath her victories,
No less renowned than war.'
It was early in the last century that the abuse of paper money gave a
lasting and unfavorable impression against such issues. The scheme of
John Law and the South Sea Bubble about the same time broke and
scattered their fragments over both England and France. It was in the
latter scheme or folly that Pope lost a large portion of his earnings,
from which we may infer that his temper was not improved. He wrote, in
his Third Epistle, dedicated to Lord Bathurst:
'Statesman and patriot ply alike the stocks;
Peeress and butler share alike the box;
And judges job, and bishops bite the town,
And mighty dukes pack cards for half a crown.'
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