Page:Encyclopædia Britannica, Ninth Edition, v. 9.djvu/195

FINANCE 185 project. Walpole s life was threatened in the streets, and, what he feared more, his majority was imperilled in the House, The warehousing scheme was abandoned, and not revived till 1803. The elder Pitt, when, being in the ascendant, he could afford to criticize his own conduct, said that he regretted nothing so much as his opposition to Walpole s excise. It is singular that the principal works on commerce and finance which were published before the adoption of the bonded warehouses system pass over Walpole s plan in silence. The public debt was increased between 1739 and 1748, the date of the peace of Aix-la-Chapelle, by about 28 millions, the interest on this sum being principally provided by duties on spirits, though during the whole period the land tax was put at 4s. In 1750 it was reduced to 3s. But the old customs and excises were continued and increased. In 1731 a duty of 20s. a gallon had been imposed on gin, with a view to checking its use. It is well known that this prohibitory duty led to extensive smuggling, and to illicit distillation on a large scale. Hence in 1743, when the Government was on the look-out for means, it was proposed to repeal the Act of 1731, and impose remunerative duties in the place of the prohibitive tax. The proposal was resisted on grounds of health and morals, but was carried. Early in 1750 the plan suggested in Walpole s time of reducing the rate of interest on public securities, with the option of receiving the principal, was revived, as the three per cents, had been above par in the autumn of 1746. The amount to be treated in this way was nearly 58 millions. The holders of the stock were offered 4 per cent, for 1750, 3^ till the end of 1757, and 3 afterwards. In the course of the year the terms were, except for about 3 millions, agreed to. In the next year the consolidated stock was first formed by merging nine separate loans into a common 3 per cent, fund, and subsequently other stocks were consolidated in the same manner. The project was not only highly successful, but the new three per cents, rose in June of the same year to 10GJ. In 1753-4 the land tax was reduced to 2s. In 1755, when the Seven Years War was imminent, the land tax was raised to 4s., at which sum it continued, except in 1767, 1768, 1769, 1770, 1772, 1773, 1774, 1775, till 1798, when, being made perpetual, the ceremony of its being granted annually was abandoned. During the Seven Years War and onwards, it became the practice of English financiers to invite loans upon one of three principles. They either offered such a variable sum of three per cent, annuities as represented the difference between the value of this security and the same amount actually lent, as, for example, XI 20 stock for 100 borrowed ; or a fixed amount of stock for a variable percentage, as 100 stock for (say) 80 lent; or gave 100 stock, and a variable sum in long or life annuities, as (say) 100 stock and 22s. 6d. per cent, per 100 subscribed for ninety-nine years. The loans raised during the Seven Years War were far in excess of any that had been negotiated before. That, for instance, of 1760 was twelve millions, and the same sum was raised in the next year. When the peace of Paris was signed in February 1763, the nominal capital of the English funded debt was in amount nearly double that which had been incurred up to the treaty of Aix-la-Chapelle. The loser in the Seven Years War was France. It was prostrated, was stripped of its colonies, and wholly im poverished. No war in the world s history had such im portant results on the remote future as this has had. From this time France ceased to be a colonizing nation, and England occupied its place, as well as extended the settle ments which it had already founded. At the beginning of the Seven Years War, France was the determined rival of England in the East, and had occupied the south and north of the English plantations in the West. At the conclusion of the Seven Years War, it had lost both its colonial centres. By this loss it was also deprived of one among those outlets for discontent which have been so serviceable to the Governments of Western Europe. Emigration does not relieve a country of its population so much as it does of its dissatisfied and disaffected members. The destruc tion of French colonial enterprise had no little indirect effect on the passions of the Revolution. The supremacy of England in the northern part of the New World led the Protestant inhabitants of Ireland, bowed down and im poverished by the oppressive revenue laws of England, to emigrate westwards, and so give at home an opportunity for tho Irish Catholics to reassert themselves, and for the Americans to strengthen or recruit themselves in the War of Independence. Again, the charges of the Seven Years War were so great that the British parliament tried to help itself by taxing the colonies ; the colonies met this project, after various acts of resistance, by the Declaration of Independence ; the war of American independence found an ally in France, which was eager to blot out the memories of the Seven Years War ; the reaction of repub lican America on monarchical France aided those theories which developed the French Revolution. On the Revolu tion followed the Empire ; the Empire induced the reaction of the Holy Alliance ; from this came the western rising of 1830, the general rising of 1848, and ultimately the doctrine of modern European politics, that, namely, of the nationalities. We are concerned, however, with the financial conse quences of the Seven Years War. It was in no slight degree provoked by the hostility of the French and English settlers in America, and it had been carried on at an enormous expense. The result was to secure the ascendency of the English race on the American continent. It ap peared to deserve the gratitude and the sacrifices of the colonists. There is little doubt that the inhabitants of the plantations would have recognized these facts, and have responded according to their means to an appeal made to them by the ministry. In an evil hour the ministry attempted to impose taxes on them by the authority of the English parliament. No one, not even the colonists them selves, doubted that the English parliament could enact laws for the colonies, could regulate their trade, could dictate the course of their industry, and thus as effectually bring them within the financial arrangements of the British empire as though it collected a revenue from them. In fact the colonial system was really a department of finance, though its details were defended on those mercantile principles which Adam Smith expounded and refuted. The imposition of the Stamp Act was resented on political principles, and was resented successfully. Passed in 1765 r it was repealed in 1766, though at the same time the House of Commons passed an Act asserting, in the broadest manner, the right of the English parliament to tax its dependencies. The Americans answered by refusing to- consume British goods. As is well known, the ultimate cause of the revolt of the colonies was the despatch of the East India Company s tea ships to Boston, the tax on tea imposed on the colonists being nominally retained in order to serve the interests of the company, whose finances were seriously affected at the time, but really in order to affirm the right, on which king, ministry, and parliament insisted, of taxing the colonies through the machinery of the English House of Commons. From the outbreak of the War of American Independence the land tax was annually granted at 4s. in the pound, though of course on the old assessment. It formed the basis on which an annual issue of two millions in exchequer IX. 24