That the number of persons ready to buy and sell must be proportioned, in some degree, to the quantity of stock, is of itself so evident, that it would be useless to enlarge upon it; but it must be granted that the national debt has long ago passed the sum that was necessary to produce this advantage.

We find, then, that the evils attending the increase of debt are greatly counteracted by the debt itself, and that, to a certain amount, it is productive of a very considerable advantage to a trading nation.  As those who calculated its ill effects, and foretold the ruin it would bring upon the state, did not take into account those circumstances, the result of their enquiries was necessarily wrong, in point of time, though the effect of which they spoke is perfectly certain to take place, if the debt continues to increase.  Their reasoning may be compared to that of an astronomer, who observed the position of a planet, but, in his calculations, made no allowance for the refraction of the atmosphere, who would therefore err as to the place of the star, but not as to its existence.

Let us now consider the natural consequence, supposing that future increase is prevented by means of the sinking fund established for that purpose.  As to the probability of this, it depends on so many circumstances that are concealed in the womb of time, that it would be madness to give any other than a hypothetical solution of the question.

If the war continues, and expenses increase nearly as they have hitherto done, great as is the operation of a sinking fund, it will not have time to counteract the evil.  If the war stops soon, it will dim-[end of page #240] inish the debt with a most prodigious rapidity, {193} if it continues; the question, whether taxes can be found to pay the interest or not? can only be answered as a matter of opinion, which is, in a case of this sort, equivalent to no answer at all.

With respect to the supposed case of the debt augmenting, the observations that apply to that have been made already; they now only remain to be made with respect to the debt being paid off.

It has been observed already, in the chapter on Taxation, that the case of taxes being taken off to a great amount would be a new one of sudden and hurtful operation.  Wages of labour would be diminished, as well as the burthens on those who live on settled income; it would therefore render people of fixed income more affluent, without giving ease to those who want it; in short, as the augmentation of taxes falls most on people with fixed incomes, so the advantages of this would principally be felt by them; and, as the baneful operation carries a sort of counteracting antidote with it, so, likewise, this beneficial operation would be attended with some drawback and inconveniency =sic=.

The diminution of taxes, though the ultimate is not, however, the immediate consequence of the operation of the sinking fund, the efficacy of which depends on the taxes being kept up to their full extent for a considerable time. =sic= The first effect of the fund is, that a large sum, annually expended, as revenue drawn from the subject, is reimbursed to the stockholders, and becomes capital.