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!!!!隆堋響頼��紗秘慕禰厮宴和肝写偬堋響��
deficiency was made good by borrowing upon annuities for lives at
fourteen per cent�察�or at little more than seven years' purchase。
In 1695�察�the persons who had purchased those annuities were
allowed to exchange them for others of ninety´six years upon
paying into the Exchequer sixty´three pounds in the hundred�察�that
is�察�the difference between fourteen per cent for life�察�and
fourteen per cent for ninety´six years�察�was sold for sixty´three
pounds�察�or for four and a half years' purchase。 Such was the
supposed instability of government that even these terms procured
few purchasers。 In the reign of Queen Anne money was upon
different occasions borrowed both upon annuities for lives�察�and
upon annuities for terms of thirty´two�察�of eighty´nine�察�of
ninety´eight�察�and of ninety´nine years。 In 1719�察�the proprietors
of the annuities for thirty´two years were induced to accept in
lieu of them South Sea stock to the amount of eleven and a half
years' purchase of the annuities�察�together with an additional
quantity of stock equal to the arrears which happened then to be
due upon them。 In 1720�察�the greater part of the other annuities
for terms of years both long and short were subscribed into the
same fund。 The long annuities at that time amounted to L666��821
8s。 3 1/2d。 a year。 On the 5th of January 1775�察�the remainder of
them�察�or what was not subscribed at that time�察�amounted only to
L136��453 12s。 8d。
During the two wars which began in 1739 and in 1755�察�little
money was borrowed either upon annuities for terms of years�察�or
upon those for lives。 An annuity for ninety´eight or ninety´nine
years�察�however�察�is worth nearly as much money as a perpetuity��
and should�察�therefore�察�one might think�察�be a fund for borrowing
nearly as much。 But those who�察�in order to make family
settlements�察�and to provide for remote futurity�察�buy into the
public stocks�察�would not care to purchase into one of which the
value was continually diminishing�察�and such people make a very
considerable proportion both of the proprietors and purchasers of
stock。 An annuity for a long term of years�察�therefore�察�though its
intrinsic value may be very nearly the same with that of a
perpetual annuity�察�will not find nearly the same number of
purchasers。 The subscribers to a new loan�察�who mean generally to
sell their subscriptions as soon as possible�察�prefer greatly a
perpetual annuity redeemable by Parliament to an irredeemable
annuity for a long term of years of only equal amount。 The value
of the former may be supposed always the same�察�or very nearly the
same�察�and it makes�察�therefore�察�a more convenient transferable
stock than the latter。
During the two last´mentioned wars�察�annuities�察�either for
terms of years or for lives�察�were seldom granted but as premiums
to the subscribers to a new loan over and above the redeemable
annuity or interest upon the credit of which the loan was
supposed to be made。 They were granted�察�not as the proper fund
upon which the money was borrowed�察�but as an additional
encouragement to the lender。
Annuities for lives have occasionally been granted in two
different ways�察�either upon separate lives�察�or upon lots of
lives�察�which in French are called Tontines�察�from the name of
their inventor。 When annuities are granted upon separate lives��
the death of every individual annuitant disburthens the public
revenue so far as it was affected by his annuity。 When annuities
are granted upon tontines�察�the liberation of the public revenue
does not commence till the death of all annuitants comprehended
in one lot�察�which may sometimes consist of twenty or thirty
persons�察�of whom the survivors succeed to the annuities of all
those who die before them�察�the last survivor succeeding to the
annuities of the whole lot。 Upon the same revenue more money can
always be raised by tontines than by annuities for separate
lives。 An annuity�察�with a right of survivorship�察�is really worth
more than an equal annuity for a separate life�察�and from the
confidence which every man naturally has in his own good fortune��
the principle upon which is founded the success of all lotteries��
such an annuity generally sells for something more than it is
worth。 In countries where it is usual for government to raise
money by granting annuities�察�tontines are upon this account
generally preferred to annuities for separate lives。 The
expedient which will raise most money is almost always preferred
to that which is likely to bring about in the speediest manner
the liberation of the public revenue。
In France a much greater proportion of the public debts
consists in annuities for lives than in England。 According to a
memoir presented by the Parliament of Bordeaux to the king in
1764�察�the whole public debt of France is estimated at twenty´four
hundred millions of livres�察�of which the capital for which
annuities for lives had been granted is supposed to amount to
three hundred millions�察�the eighth part of the whole public debt。
The annuities themselves are computed to amount to thirty
millions a year�察�the fourth part of one hundred and twenty
millions�察�the supposed interest of that whole debt。 These
estimations�察�I know very well�察�are not exact�察�but having been
presented by so very respectable a body as approximations to the
truth�察�they may�察�I apprehend�察�be considered as such。 It is not
the different degrees of anxiety in the two governments of France
and England for the liberation of the public revenue which
occasions this difference in their respective modes of borrowing。
It arises altogether from the different views and interests of
the lenders。
In England�察�the seat of government being in the greatest
mercantile city in the world�察�the merchants are generally the
people who advance money to government。 By advancing it they do
not mean to diminish�察�but�察�on the contrary�察�to increase their
mercantile capitals�察�and unless they expected to sell with some
profit their share in the subscription for a new loan�察�they never
would subscribe。 But if by advancing their money they were to
purchase�察�instead of perpetual annuities�察�annuities for lives
only�察�whether their own or those of other people�察�they would not
always be so likely to sell them with a profit。 Annuities upon
their own lives they would always sell with loss�察�because no man
will give for an annuity upon the life of another�察�whose age and
state of health are nearly the same with his own�察�the same price
which he would give for one upon his own。 An annuity upon the
life of a third person�察�indeed�察�is�察�no doubt�察�of equal value to
the buyer and the seller�察�but its real value begins to diminish
from the moment it is granted�察�and continues to do so more and
more as long as it subsists。 It can never�察�therefore�察�make so
convenient a transferable stock as a perpetual annuity�察�of which
the real value may be supposed always the same�察�or very nearly
the same。
In France�察�the seat of government not being in a great
mercantile city�察�merchants do not make so great a proportion of
the people who advance money to government。 The people concerned
in the finances�察�the farmers general�察�the receivers of the taxes
which are not in farm�察�the court bankers�察�etc。�察�make the greater
part of those who advance their money in all public exigencies。
Such people are commonly men of mean birth�察�but of great wealth��
and frequently of great pride。 They are too proud to marry their
equals�察�and women of quality disdain to marry them。 They
frequently resolve�察�therefore�察�to live bachelors�察�and having
neither any families of their own�察�nor much regard for those of
their relations�察�whom they are not always very fond of
acknowledging�察�they desire only to live in splendour during their
own time�察�and are not unwilling that their fortune should end
with themselves。 The number of rich people�察�besides�察�who are
either averse to marry�察�or whose condition of life renders it
either improper or inconvenient for them to do so�察�is much
greater in France than in England。 To such people�察�who have
little or no care for posterity�察�nothing can be more convenient
than to exchange their capital for a revenue which is to last
just as long�察�and no longer�察�than they wish it to do。
The ordinary expense of the greater part of modern
governments in time of peace being equal or nearly equal to their
ordinary revenue�察�when war comes they are both unwilling and
unable to increase their revenue in proportion to the increase of
their expense。 They are unwilling for fear of offending the
people�察�who�察�by so great and so sudden an increase of taxes��
would soon be disgusted with the war�察�and they are unable from
not well knowing what taxes would be sufficient to produce the
revenue wanted。 The facility of borrowing delivers them from the
embarrassment which this fear and inability would otherwise
occasion。 By means of borrowing they are enabled�察�with a very
moderate increase of taxes�察�to raise�察�from year to year�察�money
sufficient for carrying on the war�察�and by the practice of
perpetually funding they are enabled�察�with the smallest possible
increase of taxes�察�to raise annually the largest possible sum of
money。 In great empires the people who live in the capital�察�and
in the provinces remote from the scene of action�察�feel�察�many of
them�察�scarce any inconveniency from the war�察�but enjoy�察�at their
ease�察�the amusement of reading in the newspapers the exploits of
their own fleets and armies。 To them this amusement compensates
the small difference between the taxes which they pay on account
of the war�察�and those which they had been accustomed to pay in
time of peace。 They are commonly dissatisfied with the return of
peace�察�which puts an end to their amusement�察�and to a thousand
visionary hopes of conquest and national glory from a longer
continuance of the war。
The return of peace�察�indeed�察�seldom relieves them from the
greater part of the taxes imposed during the war。 These are
mortgaged for the interest of the debt contracted in order to
carry it on。 If�察�over and above paying the interest of this debt��
and defraying the ordinary expense of government�察�the old
revenue�察�together with the new taxes�察�produce some surplus
revenue�察�it may perhaps be converted into a sinking fund for
paying off the debt。 But�察�in the first place�察�this sinking fund��
even supposing it should be applied to no other purpose�察�is
generally altogether inadequate for paying�察�in the course of any
period during which it can reasonably be expected that peace
should continue�察�the whole debt contracted during the war�察�and��
in the second place�察�this fund is almost always applied to other
purposes。
The new taxes were imposed for the sole purpose of paying
the interest of the money borrowed upon them。 If they produce
more�察�it is generally something which was neither intended nor
expected�察�and is therefore seldom very considerable。 Sinking
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