on capital would be possible, much less compound interest, unless the capital were productively employed, escaped the intelligence of the time. A surplus of revenue may be employed in the purchase of public debt. This purchase may be retained in the hands of a body of trustees, and the interest added to it, so as in course of time to absorb a large amount of the debt. But such a process necessitates the continuous maintenance of revenue over expenditure; the only way in which, as I have said already, debts can be extinguished. The annual purchases of stock, the annual interest on stock, must be derived from the proceeds of taxation. But to retain stock in the hands of a body of trustees, in place of extinguishing debt by purchasing stock, as a surplus can be employed for the purpose, is to saddle the operation of extinction with the costs of an office.

But it is desirable to extinguish the public debt for various reasons. As I have already said, taxation is either a burden on the capital of those who pay it, or a curtailment of their enjoyments. If it be the former, they who are liable to such an impost are likely, in the production of comparative wealth, to fall behind other countries, behind such at least as are less weighted in the race. If it be the latter, the emigration of labour and capital to regions where it can escape from such diminutions of its resources, is a mere question of time. Men save to spend, and even if they save for profit, they contemplate subsistence or enjoyment on that profit. The day in which this impulse will stimulate emigration to seek places in which taxation is less oppressive, may be distant. It is apparently farther off than it was, when at the close of the great Continental war, the load of debt was enormous,

and the distress which it caused was general. But on the other hand, though the resources of the nation, and by implication its power of bearing taxation, have greatly increased, it must be remembered that the power of transferring capital and labour from heavily to lightly taxed regions, has increased in greater proportion; the intelligence which understands the escape from financial burdens is more general. As the conditions under which society is constituted, and wealth is distributed, become more and more plain, the distribution of society itself will be effected with increasing rapidity.

Again, it has been alleged, and with great show of reason, that the industrial powers of this country are the chief source of its wealth, and that these industrial powers depend upon the continued supply of a particular mineral, the quantity of which is limited. It does not indeed follow that the wealth of the United Kingdom would be seriously or at least fatally compromised, if it were to fall behind. other nations in consequence of the increasing dearness of this raw material of motion. At present it is true, heat is the most familiar motive power, but it does not follow that other forces may not be discovered. The cheapness of any object is constantly a bar to the substitution of any equivalent, and it has happened more than once, that extraordinary scarcity or dearness has been a spur to very active discovery or invention. Even if Great Britain lost her manufacturing supremacy, she might compensate these losses by increasing mercantile activity.

In effect however, even if Great Britain depended absolutely on her coal supplies for her economical position, it is easy to anticipate the steps by which much

saving would be made in consumption. Already the economy of fuel has been carried to great lengths, in certain branches of industry. It is said, for example, that it does not take one tenth part of the amount of coal once used in the process, in order to smelt cast iron, and we may be quite sure, that as coal gets dearer, every effort will be made to diminish the cost of production, and that ultimately, as the scarcity increases, some of those coarser operations, which consume great quantities of coal, as the smelting of the common metals, will be transferred to other regions where coal is cheaper. The conditions of holding a place in the market of the world are so closely related to the costs of production and the competition of purchasers, that due warning must needs be given before the dearness of coal affects British industry, by making it impossible to satisfy demand more cheaply than other nations can.

It is another question whether an artificial dearness should not be put upon the supply of the mineral, either by prohibiting its exportation, and limiting the quantity which is extracted from the earth, or by taxing the rents of mines; the proceeds of such taxation being employed in liquidating portions of the public debt. Where corporations hold mines, it is a rule of law, that a certain portion of the rent derivable from such mines must be saved from annual income, because the income itself is terminable. It may be urged, that the nation should check the exhaustion of its resources; not by denying the usufruct of the soil to the private owner, but by providing that a part of these limited and separable properties of land should be devoted to extinguishing that, on whose behalf all the land is pledged; that the capital

value of the soil should not be exhausted, nor in the language of law, waste committed, except compensation be made in some shape or the other, for the depreciation of the national resources. The question however, whether such a tax should be levied in order to cover permanent loss, lies more in the province of the jurist than in that of the economist.

There yet remains a question. What is the security of national debts? What is the real pledge which a government gives when it borrows? Unless it placed an embargo on the exportation of capital, an expedient which no one would dream of, at least in these days, it has not pledged any portion of that wealth which can be carried out of the country. Unless it similarly prohibited emigration, it could not pledge the labour of the country to the liquidation of permanent obligations. It may put upon the profits of capital and the wages of labour the condition of contributing towards the satisfaction of the public faith, as long as capital and labour reside in the country, just as fairly as it may levy a tax for those working expenses of government, the benefit of which reverts, or is supposed to revert, immediately to the taxpayer. It remains then that the ultimate pledge given as a security for public debts is land, and capital fixed upon land, and that the repayment of the principal of the public debt would be the release of land from an obligation, to which it is none the less liable, because the annual incidence of the obligation has been shifted to other kinds of property.

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