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On Public Credit


by David Hume





    It appears to have been the common practice of antiquity
make provision察during peace察for the necessities of war察and to
hoard up treasures before´hand察as the instruments either of
conquest or defence察without trusting to extraordinary
impositions察much less to borrowing察in times of disorder and
confusion。 Besides the immense sums above mentioned察which were
amassed by ATHENS察and by the PTOLEMIES察and other successors of
ALEXANDER察we learn from PLATO察that the frugal LACEDEMONIANS had
also collected a great treasure察and ARRIAN and PLUTARCH take
notice of the riches which ALEXANDER got possession of on the
conquest of SUSA and ECBATANA察and which were reserved察some of
them察from the time of CYRUS。 If I remember right察the scripture
also mentions the treasure of HEZEKIAH and the JEWISH princes察as
profane history does that of PHILIP and PERSEUS察kings of
MACEDON。 The ancient republics of GAUL had commonly large sums in
reserve。 Every one knows the treasure seized in ROME by JULIUS
CAESAR察during the civil wars此and we find afterwards察that the
wiser emperors察AUGUSTUS察TIBERIUS察VESPASIAN察SEVERUS察etc。
always discovered the prudent foresight察of saving great sums
against any public exigency。
    On the contrary察our modern expedient察which has become very
general察is to mortgage the public revenues察and to trust that
posterity will pay off the incumbrances contracted by their
ancestors此And they察having before their eyes察so good an example
of their wise fathers察have the same prudent reliance on their
posterity察who察at last察from necessity more than choice察are
obliged to place the same confidence in a new posterity。 But not
to waste time in declaiming against a practice which appears
ruinous察beyond all controversy察it seems pretty apparent察that
the ancient maxims are察in this respect察more prudent than the
modern察even though the latter had been confined within some
reasonable bounds察and had ever察in any instance察been attended
with such frugality察in time of peace察as to discharge the debts
incurred by an expensive war。 For why should the case be so
different between the public and an individual察as to make us
establish different maxims of conduct for each拭If the funds of
the former be greater察its necessary expences are proportionably
larger察if its resources be more numerous察they are not infinite
and as its frame should be calculated for a much longer duration
than the date of a single life察or even of a family察it should
embrace maxims察large察durable察and generous察agreeably to the
supposed extent of its existence。 To trust to chances and
temporary expedients察is察indeed察what the necessity of human
affairs frequently renders unavoidable察but whoever voluntarily
depend on such resources察have not necessity察but their own
folly察to accuse for their misfortunes察when any such befal them。
    If the abuses of treasures be dangerous察either by engaging
the state in rash enterprizes察or making it neglect military
discipline察in confidence of its riches察the abuses of mortgaging
are more certain and inevitable察poverty察impotence察and
subjection to foreign powers。
    According to modern policy war is attended with every
destructive circumstance察loss of men察encrease of taxes察decay
of commerce察dissipation of money察devastation by sea and land。
According to ancient maxims察the opening of the public treasure
as it produced an uncommon affluence of gold and silver察served
as a temporary encouragement to industry察and atoned察in some
degree察for the inevitable calamities of war。
    It is very tempting to a minister to employ such an
expedient察as enables him to make a great figure during his
administration察without overburthening the people with taxes察or
exciting any immediate clamours against himself。 The practice
therefore察of contracting debt will almost infallibly be abused
in every government。 It would scarcely be more imprudent to give
a prodigal son a credit in every banker's shop in London察than to
impower a statesman to draw bills察in this manner察upon
posterity。
    What then shall we say to the new paradox察that public
incumbrances察are察of themselves察advantageous察independent of
the necessity of contracting them察and that any state察even
though it were not pressed by a foreign enemy察could not possibly
have embraced a wiser expedient for promoting commerce and
riches察than to create funds察and debts察and taxes察without
limitation拭Reasonings察such as these察might naturally have
passed for trials of wit among rhetoricians察like the panegyrics
on folly and a fever察on BISIRIS and NERO察had we not seen such
absurd maxims patronized by great ministers察and by a whole party
among us。
    Let us examine the consequences of public debts察both in our
domestic management察by their influence on commerce and industry
and in our foreign transactions察by their effect on wars and
negociations。
    Public securities are with us become a kind of money察and
pass as readily at the current price as gold or silver。 Wherever
any profitable undertaking offers itself察how expensive soever
there are never wanting hands enow to embrace it察nor need a
trader察who has sums in the public stocks察fear to launch out
into the most extensive trade察since he is possessed of funds
which will answer the most sudden demand that can be made upon
him。 No merchant thinks it necessary to keep by him any
considerable cash。 Bank´stock察or India´bonds察especially the
latter察serve all the same purposes察because he can dispose of
them察or pledge them to a banker察in a quarter of an hour察and at
the same time they are not idle察even when in his scritoire察but
bring him in a constant revenue。 In short察our national debts
furnish merchants with a species of money察that is continually
multiplying in their hands察and produces sure gain察besides the
profits of their commerce。 This must enable them to trade upon
less profit。 The small profit of the merchant renders the
commodity cheaper察causes a greater consumption察quickens the
labour of the common people察and helps to spread arts and
industry throughout the whole society。
    There are also察we may observe察in ENGLAND and in all states
which have both commerce and public debts察a set of men察who are
half merchants察half stock´holders察and may be supposed willing
to trade for small profits察because commerce is not their
principal or sole support察and their revenues in the funds are a
sure resource for themselves and their families。 Were there no
funds察great merchants would have no expedient for realizing or
securing any part of their profit察but by making purchases of
land察and land has many disadvantages in comparison of funds。
Requiring more care and inspection察it divides the time and
attention of the merchant察upon any tempting offer or
extraordinary accident in trade察it is not so easily converted
into money。 and as it attracts too much察both by the many natural
pleasures it affords察and the authority it gives察it soon
converts the citizen into the country gentleman。 More men
therefore察with large stocks and incomes察may naturally be
supposed to continue in trade察where there are public debts察and
this察it must be owned察is of some advantage to commerce察by
diminishing its profits察promoting circulation察and encouraging
industry。
    But察in opposition to these two favourable circumstances
perhaps of no very great importance察weigh the many disadvantages
which attend our public debts察in the whole interior oeconomy of
the state此You will find no comparison between the ill and the
good which result from them。
    First察It is certain察that national debts cause a mighty
confluence of people and riches to the capital察by the great
sums察levied in the provinces to pay the interest察and perhaps
too察by the advantages in trade above mentioned察which they give
the merchants in the capital above the rest of the kingdom。 The
question is察whether察in our case察it be for the public interest
that so many privileges should be conferred on LONDON察which has
already arrived at such an enormous size察and seems still
encreasing拭Some men are apprehensive of the consequences。 For my
own part察I cannot forbear thinking察that察though the head is
undoubtedly too large for the body察yet that great city is so
happily situated察that its excessive bulk causes less
inconvenience than even a smaller capital to a greater kingdom。
There is more difference between the prices of all provisions in
PARIS and LANGUEDOC察than between those in LONDON and YORKSHIRE。
The immense greatness察indeed察of LONDON察under a government
which admits not of discretionary power察renders the people
factious察mutinous察seditious察and even perhaps rebellious。 But
to this evil the national debts themselves tend to provide a
remedy。 The first visible eruption察or even immediate danger察of
public disorders must alarm all the stockholders察whose property
is the most precarious of any。 and will make them fly to the
support of government察whether menaced by Jacobitish violence or
democratical frenzy。
    Secondly察Public stocks察being a kind of pape

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