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National debt, then, so far as it increases the taxes of a country, is like any other national expenditure; and, in maintaining unproductive and idle people, it is also the same; but it has, in another point of view, a different effect, and that effect is an advantageous one.

In every nation, the greatest part of the capital is employed, or, as it is called, sunk.  Land, houses, machines, merchandize, &c. are the principal employments of capital.  As those are transferred from one to another, or as the use or produce of them is paid for, by one to another, money is wanted occasionally; and, if there were no other employments, money must either be lying idle in some persons =sic= hands, till an employment could be found for it, or the possessor of it must begin some enterprise, and sink it himself.

But, when money is thus employed, it is no longer in the power of the proprietor; and, though money may be borrowed on such sort of security, it is slowly, and with difficulty.  The expense, the inconveniency =sic=, and time necessary, prevent the lenders of money from lending any for occasional purposes on such sort of security; but when a nation borrows, and the stock is divisible and transferable at will, money can always be realized when it is wanted for any purpose that affords a greater advantage than the stock affords. {190}

Without this had been one of the effects of national debt, how could the facility of borrowing have increased, {191} as it has done? or how could merchants and individuals raise the sums they now do? {192}

—–­ {190} In 1793, 5,000,000 L. was lent to merchants on exchequer-bills.  The property, on which the money was secured, was really merchandize, but the lenders would have nothing to do with the goods; government stepped in, and took the goods as a security, creating a stock transferrable, that represented the same goods, and, as if by magic, the money was found in a moment.  I know of no operation so fit for elucidating the advantage of national debt as this.

{191} Borrowing on life rents is bad, for this reason; where there is no employment of this sort, all money is constantly employed in some sort of trade or enterprise that will produce profit, but cannot be realised.  Example, Paris, &c.

{192} When money was wanted, in Queen Anne’s time, the Chancellor of the Exchequer, (Mr. Montague,) attended by the Lord Mayor and Sheriffs, went about, from shop to shop, to borrow it, much in the way that is occasionally practised by the beadles for a public charity!!  Yet England’s credit was good, it owed little, the war was popular, and the country rich. -=-

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It must be allowed that one hundred millions, or at least a much smaller sum than our debts amount to now, would have produced this effect, and might answer every purpose of this sort, but there is still a consideration arising from the fluctuations in a stock, when it is small, and also from the number of persons possessed of it.  People buy in and sell out with total indifference when the quantity is great, and the fluctuations small; but, the moment the funds are agitated, whether in rising or falling, money becomes scarce for those who want it for other purposes.