In the process of pursuing individual or party prejudices, they injure, weaken, and assault the public good, which every person owns and is consequently obligated to defend against.
When discussing credit, it’s a good idea to include loans as well; Friendly lender without loans, credit is a beautiful flower that’s both beautiful to look at and fragrant to the nose, but it doesn’t produce any fruit or seed, nor does it provide any benefit to the future generations of its species.
A Borrower without Credit is like a guy who works sweats, and toils on a barren land only to see the fruits of his labor rot in sterility and abortion.
To borrow money, you must be able to demonstrate your ability to manage your finances in a timely, fair, and honorable manner; this is the foundation of credit, which I laid out in the previous discussion on credit.
As I go along, I’ll try to explain things as I go, even though this requires very little: Loans are now understood to mean lending money to the current government:
There is a lot more to this discussion than just a few examples, and I’d be wasting your time talking about things like delivering goods by tradesmen to each other and paper credit in cash transactions. But these things aren’t relevant to the current discussion.
His Discourse is limited to the subject of government borrowing money, whether based on Parliament’s established Securities, public Faith, universal credit, or any other means.
A separate discussion of these securities, their purpose, and their foundation will be provided if the author has the time and inclination to do so.
The current conflict, which is already in its 22nd year, has been exceptional in a number of ways, surpassing any other war this country has ever seen. It has been, Duration-wise, it is the longest. Bloodiest and most expensive in blood; the most famous in victories; it has been carried out against the most powerful foes, and it has resulted in the strongest and greatest confederation. And it has a glorious end in sight.
In addition to these things, it has one more unique feature: that it has been carried out at a cost that has beyond not just everything that has come before it, but all that any nation of our size in the world could have supported.
Fr. King has been duped in more ways than one in the war effort; he never could have imagined it was possible, no matter how perceptive he is. It is almost certain that if the Island’s wisest and best Calculator had been told how much the undertaking would have cost, he would have concluded that it would be forty million pounds sterling more than the country could afford and that it would be impossible to complete the undertaking without selling the country itself.
Similarly, if the Enemy had thought that England was capable of sustaining the War at such a prodigious Expense, he would never have started it; as the King of France himself has been heard, in terms very clear, to acknowledge.
When Parliament jumped into the war on the eve of the Revolution, as the enemy had forced it to do by supporting King James’s interests, the first branch of our expenses was funded by taxation as usual, and the money needed to cover each year’s expenses was raised and paid for in the same year.
Paper Credit was at an all-time high, and the Goldsmiths in Lombard-street were charging enormous sums for their services; nevertheless, these lasted just a few months until the money came in and the debts were paid. It was done by land taxes, polls, additional duties on customs and excise, and the like; the year normally supported its own demands; all the loans were assumed to be temporary and would be repaid when the collection was complete.
There were new ways and means needed to meet the ever-increasing demands of the war as it got more and more expensive each year until there were no taxes that could collect enough money to meet the annual expenditure.
In order to raise money, the Commissioners of the Treasury were forced to listen to new taxes and consider all of the ideas put up by the working heads of the age.
As a result, the Treasury was given credit for the sums granted by Parliament, but the collections fell well short of the sums proposed. This resulted in massive debt to lenders, which fueled the Great Loan.
Deficiencies in the previous taxes got so high that our administrators realized that it was futile to continue battling the annual tax burden and that it was almost impossible to collect the sums needed for public events every year.
A new Method to meet the large demands of the war was therefore found which was to establish annual receipts of limited or permanent interests for summaries that might be borrowed against the national credit, with the principal sinking into public hands. FUNDS were the name given to these assets.
Premises for extending the money, enormous interest rates, and other advantages were added to entice people to lend them money, such as 14% per year on annuities with survival, the chance of winning prizes in lotteries, and 7% on treasury bills.
First came the art and mystery of Stock-Jobbing, which was born in the wake of deficiency of taxes in previous years, as well as the great stumbling block of running cash by calling in old coins, as a result. Regardless of its good or bad consequences to public affairs, it is irrelevant to discuss at this time.
Since that time, the vast majority of our annual taxes have been generated by this method; the Parliament creates funds to pay interest, and the people take out loans to repay those funds.
To a certain extent, it’s not inappropriate for some people to consider that some people have grown to such a high level of power with their own money, banks, and credit that they’re able to talk about influencing public affairs and even putting pressure on the government, as if they were afraid of their Lendin’s looming threat to the country’s future.
By the Gradations mentioned above, loans to the government were found essential, but the first steps to a new method were found to be fatally cumbersome; the high Premio given, the great Advantages proposed, and the large Interests paid to the Lender were all found to be prohibitively expensive for the government. Lender’s exorbitant greed was squeezing the Government to death every day; the Citizens began to decline trade and become usurers of their own money; Foreign Commerce, which was threatened by war, had infinite Discouragements; and the People, in general, drew home their wealth to take advantage of the Government’s interest-free loans.
Following this, a second Subscription to the Bank, which was founded on Parliamentary Security, for making good the deficient Tallies; and which was formed by receiving those Tallies at Par, which cost the Subscribers only 55 to 65 percent; by which the greatest Estates were raised in the shortest period, and the most in any Age, or anywhere on Earth.