Thesamedispositiontosaveandtohoardprevailedinthesovereignaswellasinthesubjects。Amongnationstowhomcommerceandmanufacturesarelittleknown，thesovereign，ithasalreadybeenobservedinthefourthbook，isinasituationwhichnaturallydisposeshimtotheparsimonyrequisiteforaccumulation。Inthatsituationtheexpenseevenofasovereigncannotbedirectedbythatvanitywhichdelightsinthegaudyfineryofacourt。Theignoranceofthetimesaffordsbutfewofthetrinketsinwhichthatfineryconsists。Standingarmiesarenotthennecessary，sothattheexpenseevenofasovereign，likethatofanyothergreatlord，canbeemployedinscarceanythingbutbountytohistenantsandhospitalitytohisretainers。Butbountyandhospitalityveryseldomleadtoextravagance;thoughvanityalmostalwaysdoes。AlltheancientsovereignsofEuropeaccordingly，ithasalreadybeenobserved，hadtreasures。EveryTartarchiefinthepresenttimesissaidtohaveone。
　　Inacommercialcountryaboundingwitheverysortofexpensiveluxury，thesovereign，inthesamemannerasalmostallthegreatproprietorsinhisdominions，naturallyspendsagreatpartofhisrevenueinpurchasingthoseluxuries。Hisownandtheneighbouringcountriessupplyhimabundantlywithallthecostlytrinketswhichcomposethesplendidbutinsignificantpageantryofacourt。Forthesakeofaninferiorpageantryofthesamekind，hisnoblesdismisstheirretainers，maketheirtenantsindependent，andbecomegraduallythemselvesasinsignificantasthegreaterpartofthewealthyburghersinhisdominions。Thesamefrivolouspassionswhichinfluencetheirconductinfluencehis。Howcanitbesupposedthatheshouldbetheonlyrichmaninhisdominionswhoisinsensibletopleasuresofthiskind？Ifhedoesnot，whatheisverylikelytodo，spenduponthosepleasuressogreatapartofhisrevenueastodebilitateverymuchthedefensivepowerofthestate，itcannotwellbeexpectedthatheshouldnotspenduponthemallthatpartofitwhichisoverandabovewhatisnecessaryforsupportingthatdefensivepower。Hisordinaryexpensebecomesequaltohisordinaryrevenue，anditiswellifitdoesnotfrequentlyexceedit。Theamassingoftreasurecannolongerbeexpected，andwhenextraordinaryexigenciesrequireextraordinaryexpenses，hemustnecessarilycalluponhissubjectsforanextraordinaryaid。ThepresentandthelatekingofPrussiaaretheonlygreatprincesofEuropewho，sincethedeathofHenryIVofFrancein1610，aresupposedtohaveamassedanyconsiderabletreasure。Theparsimonywhichleadstoaccumulationhasbecomealmostasrareinrepublicanasinmonarchicalgovernments。TheItalianrepublics，theUnitedProvincesoftheNetherlands，areallindebt。ThecantonofBerneisthesinglerepublicinEuropewhichhasamassedanyconsiderabletreasure。TheotherSwissrepublicshavenot。Thetasteforsomesortofpageantry，forsplendidbuildings，atleast，andotherpublicornaments，frequentlyprevailsasmuchintheapparentlysobersenate—houseofalittlerepublicasinthedissipatedcourtofthegreatestking。
　　Thewantofparsimonyintimeofpeaceimposesthenecessityofcontractingdebtintimeofwar。Whenwarcomes，thereisnomoneyinthetreasurybutwhatisnecessaryforcarryingontheordinaryexpenseofthepeaceestablishment。Inwaranestablishmentofthreeoffourtimesthatexpensebecomesnecessaryforthedefenceofthestate，andconsequentlyarevenuethreeorfourtimesgreaterthanthepeacerevenue。
　　Supposingthatthesovereignshouldhave，whathescarceeverhas，theimmediatemeansofaugmentinghisrevenueinproportiontotheaugmentationofhisexpense，yetstilltheproduceofthetaxes，fromwhichthisincreaseofrevenuemustbedrawn，willnotbegintocomeintothetreasurytillperhapstenortwelvemonthsaftertheyareimposed。Butthemomentinwhichwarbegins，orratherthemomentinwhichitappearslikelytobegin，thearmymustbeaugmented，thefleetmustbefittedout，thegarrisonedtownsmustbeputintoapostureofdefence;thatarmy，thatfleet，thosegarrisonedtownsmustbefurnishedwitharms，ammunition，andprovisions。Animmediateandgreatexpensemustbeincurredinthatmomentofimmediatedanger，whichwillnotwaitforthegradualandslowreturnsofthenewtaxes。Inthisexigencygovernmentcanhavenootherresourcebutinborrowing。
　　Thesamecommercialstateofsocietywhich，bytheoperationofmoralcauses，bringsgovernmentinthismannerintothenecessityofborrowing，producesinthesubjectsbothanabilityandaninclinationtolend。Ifitcommonlybringsalongwithitthenecessityofborrowing，itlikewisebringsalongwithitthefacilityofdoingso。
　　Acountryaboundingwithmerchantsandmanufacturersnecessarilyaboundswithasetofpeoplethroughwhosehandsnotonlytheirowncapitals，butthecapitalsofallthosewhoeitherlendthemmoney，ortrustthemwithgoods，passasfrequently，ormorefrequently，thantherevenueofaprivateman，who，withouttradeorbusiness，livesuponhisincome，passesthroughhishands。Therevenueofsuchamancanregularlypassthroughhishandsonlyonceinayear。Butthewholeamountofthecapitalandcreditofamerchant，whodealsinatradeofwhichthereturnsareveryquick，maysometimespassthroughhishandstwo，three，orfourtimesayear。Acountryaboundingwithmerchantsandmanufacturers，therefore，necessarilyaboundswithasetofpeoplewhohaveitatalltimesintheirpowertoadvance，iftheychoosetodoso，averylargesumofmoneytogovernment。
　　Hencetheabilityinthesubjectsofacommercialstatetolend。
　　Commerceandmanufacturescanseldomflourishlonginanystatewhichdoesnotenjoyaregularadministrationofjustice，inwhichthepeopledonotfeelthemselvessecureinthepossessionoftheirproperty，inwhichthefaithofcontractsisnotsupportedbylaw，andinwhichtheauthorityofthestateisnotsupposedtoberegularlyemployedinenforcingthepaymentofdebtsfromallthosewhoareabletopay。Commerceandmanufactures，inshort，canseldomflourishinanystateinwhichthereisnotacertaindegreeofconfidenceinthejusticeofgovernment。Thesameconfidencewhichdisposesgreatmerchantsandmanufacturers，uponordinaryoccasions，totrusttheirpropertytotheprotectionofaparticulargovernment，disposesthem，uponextraordinaryoccasions，totrustthatgovernmentwiththeuseoftheirproperty。Bylendingmoneytogovernment，theydonotevenforamomentdiminishtheirabilitytocarryontheirtradeandmanufactures。Onthecontrary，theycommonlyaugmentit。Thenecessitiesofthestaterendergovernmentuponmostoccasionswillingtoborrowupontermsextremelyadvantageoustothelender。Thesecuritywhichitgrantstotheoriginalcreditorismadetransferabletoanyothercreditor，and，fromtheuniversalconfidenceinthejusticeofthestate，generallysellsinthemarketformorethanwasoriginallypaidforit。Themerchantormoniedmanmakesmoneybylendingmoneytogovernment，andinsteadofdiminishing，increaseshistradingcapital。Hegenerallyconsidersitasafavour，therefore，whentheadministrationadmitshimtoashareinthefirstsubscriptionforanewloan。Hencetheinclinationorwillingnessinthesubjectsofacommercialstatetolend。
　　Thegovernmentofsuchastateisveryapttoreposeitselfuponthisabilityandwillingnessofitssubjectstolendittheirmoneyonextraordinaryoccasions。Itforeseesthefacilityofborrowing，andthereforedispensesitselffromthedutyofsaving。
　　Inarudestateofsocietytherearenogreatmercantileormanufacturingcapitals。Theindividualswhohoardwhatevermoneytheycansave，andwhoconcealtheirhoard，dosofromadistrustofthejusticeofgovernment，fromafearthatifitwasknownthattheyhadahoard，andwherethathoardwastobefound，theywouldquicklybeplundered。Insuchastateofthingsfewpeoplewouldbeable，andnobodywouldbewilling，tolendtheirmoneytogovernmentonextraordinaryexigencies。Thesovereignfeelsthathemustprovideforsuchexigenciesbysavingbecauseheforeseestheabsoluteimpossibilityofborrowing。Thisforesightincreasesstillfurtherhisnaturaldispositiontosave。
　　Theprogressoftheenormousdebtswhichatpresentoppress，andwillinthelong—runprobablyruin，allthegreatnationsofEuropehasbeenprettyuniform。Nations，likeprivatemen，havegenerallybeguntoborrowuponwhatmaybecalledpersonalcredit，withoutassigningormortgaginganyparticularfundforthepaymentofthedebt;andwhenthisresourcehasfailedthem，theyhavegoneontoborrowuponassignmentsormortgagesofparticularfunds。
　　WhatiscalledtheunfundeddebtofGreatBritainiscontractedintheformerofthosetwoways。Itconsistspartlyinadebtwhichbears，orissupposedtobear，nointerest，andwhichresemblesthedebtsthataprivatemancontractsuponaccount，andpartlyinadebtwhichbearsinterest，andwhichresembleswhataprivatemancontractsuponhisbillorpromissorynote。Thedebtswhicharedueeitherforextraordinaryservices，orforserviceseithernotprovidedfor，ornotpaidatthetimewhentheyareperformed，partoftheextrordinariesofthearmy，navy，andordnance，thearrearsofsubsidiestoforeignprinces，thoseofseamen’swages，etc。，usuallyconstituteadebtofthefirstkind，sometimesinpaymentofapartofsuchNavyandexchequerbills，whichareissuedsometimesinpaymentofapartofsuchdebtsandsometimesforotherpurposes，constituteadebtofthesecondkind—exchequerbillsbearinginterestfromthedayonwhichtheyareissued，andnavybillssixmonthsaftertheyareissued。TheBankofEngland，eitherbyvoluntarilydiscountingthosebillsattheircurrentvalue，orbyagreeingwithgovernmentforcertainconsiderationstocirculateexchequerbills，thatis，toreceivethematpar，payingtheinterestwhichhappenstobedueuponthem，keepsuptheirvalueandfacilitatestheircirculation，andtherebyfrequentlyenablesgovernmenttocontractaverylargedebtofthiskind。InFrance，wherethereisnobank，thestatebills（billetsd’etat）havesometimessoldatsixtyandseventypercentdiscount。DuringthegreatrecoinageinKingWilliam’stime，whentheBankofEnglandthoughtpropertoputastoptoitsusualtransactions，exchequerbillsandtalliesaresaidtohavesoldfromtwenty—fivetosixtypercentdiscount;owingpartly，nodoubt，tothesupposedinstabilityofthenewgovernmentestablishedbytheRevolution，butpartly，too，tothewantofthesupportoftheBankofEngland。
　　Whenthisresourceisexhausted，anditbecomesnecessary，inordertoraisemoney，toassignormortgagesomeparticularbranchofthepublicrevenueforthepaymentofthedebt，governmenthasupondifferentoccasionsdonethisintwodifferentways。Sometimesithasmadethisassignmentormortgageforashortperiodoftimeonly，ayear，orafewyears，forexample;andsometimesforperpetuity。Intheonecasethefundwassupposedsufficienttopay，withinthelimitedtime，bothprincipalandinterestofthemoneyborrowed。Intheotheritwassupposedsufficienttopaytheinterestonly，oraperpetualannuityequivalenttotheinterest，governmentbeingatlibertytoredeematanytimethisannuityuponpayingbacktheprincipalsumborrowed。Whenmoneywasraisedintheoneway，itwassaidtoberaisedbyanticipation;whenintheother，byperpetualfunding，or，moreshortly，byfunding。
　　InGreatBritainthelandandmalttaxesareregularlyanticipatedeveryyear，byvirtueofaborrowingclauseconstantlyinsertedintotheactswhichimposethem。TheBankofEnglandgenerallyadvancesataninterest，whichsincetheRevolutionhasvariedfromeighttothreepercent，thesumsforwhichthosetaxesaregranted，andreceivespaymentastheirproducegraduallycomesin。Ifthereisadeficiency，whichtherealwaysis，itisprovidedforinthesuppliesoftheensuingyear。Theonlyconsiderablebranchofthepublicrevenuewhichyetremainsunmortgagedisthusregularlyspentbeforeitcomesin。Likeanimprovidentspendthrift，whosepressingoccasionswillnotallowhimtowaitfortheregularpaymentofhisrevenue，thestateisintheconstantpracticeofborrowingofitsownfactorsandagents，andofpayinginterestfortheuseofitsownmoney。
　　InthereignofKingWilliam，andduringagreatpartofthatofQueenAnne，beforewehadbecomesofamiliaraswearenowwiththepracticeofperpetualfunding，thegreaterpartofthenewtaxeswereimposedbutforashortperiodoftime（forfour，five，six，orsevenyearsonly），andagreatpartofthegrantsofeveryyearconsistedinloansuponanticipationsoftheproduceofthosetaxes。Theproducebeingfrequentlyinsufficientforpayingwithinthelimitedtermtheprincipalandinterestofthemoneyborrowed，deficienciesarose，tomakegoodwhichitbecamenecessarytoprolongtheterm。
　　In1697，bythe8thofWilliamIII，c。20，thedeficienciesofseveraltaxeswerechargeduponwhatwasthencalledthefirstgeneralmortgageorfund，consistingofaprolongationtothefirstofAugust1706ofseveraldifferenttaxeswhichwouldhaveexpiredwithinashorterterm，andofwhichtheproducewasaccumulatedintoonegeneralfund。ThedeficiencieschargeduponthisprolongedtermamountedtoL5，160，45914s。91/4d。
　　In1701，thoseduties，withsomeothers，werestillfurtherprolongedforthelikepurposestillthefirstofAugust1710，andwerecalledthesecondgeneralmortgageorfund。ThedeficiencieschargeduponitamountedtoL2，055，9997s。111/2d。
　　In1707，thosedutieswerestillfurtherprolonged，asafundfornewloans，tothefirstofAugust1712，andwerecalledthethirdgeneralmortgageorfund。ThesumborroweduponitwasL983，25411s。91/4d。
　　In1708，thosedutieswereall（excepttheOldSubsidyofTonnageandPoundage，ofwhichonemoietyonlywasmadeapartofthisfund，andadutyupontheimportationofScotchlinen，whichhadbeentakenoffbytheArticlesofUnion）stillfurthercontinued，asafundfornewloans，tothefirstofAugust1714，andwerecalledthefourthgeneralmortgageorfund。ThesumborroweduponitwasL925，1769s。21/4d。
　　In1709，thosecitieswereall（excepttheOldSubsidyofTonnageandPoundage，whichwasnowleftoutofthisfundaltogether）stillfurthercontinuedforthesamepurposetothefirstofAugust1716，andwerecalledthefifthgeneralmortgageorfund。ThesumborroweduponitwasL922，0296s。
　　In1710，thosedutieswereagainprolongedtothefirstofAugust1720，andwerecalledthesixthgeneralmortgageorfund。
　　ThesumborroweduponitwasL1，296，5529s。113/4d。
　　In1711，thesameduties（whichatthistimewerethussubjecttofourdifferentanticipations）togetherwithseveralotherswerecontinuedforever，andmadeafundforpayingtheinterestofthecapitaloftheSouthSeaCompany，whichhadthatyearadvancedtogovernment，forpayingdebtsandmakinggooddeficiencies，thesumofL9，177，96715s。4d。;thegreatestloanwhichatthattimehadeverbeenmade。
　　Beforethisperiod，theprincipal，sofarasIhavebeenabletoobserve，theonlytaxeswhichinordertopaytheinterestofadebthadbeenimposedforperpetuity，werethoseforpayingtheinterestofthemoneywhichhadbeenadvancedtogovernmentbytheBankandtheEastIndiaCompany，andofwhatitwasexpectedwouldbeadvanced，butwhichwasneveradvanced，byaprojectedlandbank。ThebankfundatthistimeamountedtoL3，375，02717s。101/2d。，forwhichwaspaidanannuityorinterestofL206，50113s。5d。TheEastIndiafundamountedtoL3，200，000，forwhichwaspaidanannuityorinterestofL160，000—thebankfundbeingatsixpercent，theEastIndiafundatfivepercentinterest。
　　In1715，bythe1stofGeorgeI，c。12，thedifferenttaxeswhichhadbeenmortgagedforpayingthebankannuity，togetherwithseveralotherswhichbythisactwerelikewiserenderedperpetual，wereaccumulatedintoonecommonfundcalledTheAggregateFund，whichwaschargednotonlywiththepaymentsofthebankannuity，butwithseveralotherannuitiesandburdensofdifferentkinds。Thisfundwasafterwardsaugmentedbythe3rdofGeorgeI，c。8，andbythe5thofGeorgeI，c。3，andthedifferentdutieswhichwerethenaddedtoitwerelikewiserenderedperpetual。
　　In1717，bythe3rdofGeorgeI，c。7，severalothertaxeswererenderedperpetual，andaccumulatedintoanothercommonfund，calledTheGeneralFund，forthepaymentofcertainannuities，amountinginthewholetoL724，8496s。101/2d。
　　Inconsequenceofthosedifferentacts，thegreaterpartofthetaxeswhichbeforehadbeenanticipatedonlyforashorttermofyearswererenderedperpetualasafundforpaying，notthecapital，buttheinterestonly，ofthemoneywhichhadbeenborroweduponthembydifferentsuccessiveanticipations。
　　Hadmoneyneverbeenraisedbutbyanticipation，thecourseofafewyearswouldhaveliberatedthepublicrevenuewithoutanyotherattentionofgovernmentbesidesthatofnotoverloadingthefundbychargingitwithmoredebtthanitcouldpaywithinthelimitedterm，andofnotanticipatingasecondtimebeforetheexpirationofthefirstanticipation。ButthegreaterpartofEuropeangovernmentshavebeenincapableofthoseattentions。
　　Theyhavefrequentlyoverloadedthefundevenuponthefirstanticipation，andwhenthishappenednottobethecase，theyhavegenerallytakencaretooverloaditbyanticipatingasecondandathirdtimebeforetheexpirationofthefirstanticipation。
　　Thefundbecominginthismanneraltogetherinsufficientforpayingbothprincipalandinterestofthemoneyborroweduponit，itbecamenecessarytochargeitwiththeinterestonly，oraperpetualannuityequaltotheinterest，andsuchunprovidentanticipationsnecessarilygavebirthtothemoreruinouspracticeofperpetualfunding。Butthoughthispracticenecessarilyputsofftheliberationofthepublicrevenuefromafixedperiodtoonesoindefinitethatitisnotverylikelyevertoarrive，yetasagreatersumcaninallcasesberaisedbythisnewpracticethanbytheoldoneofanticipations，theformer，whenmenhaveoncebecomefamiliarwithit，hasinthegreatexigenciesofthestatebeenuniversallypreferredtothelatter。Torelievethepresentexigencyisalwaystheobjectwhichprincipallyintereststhoseimmediatelyconcernedintheadministrationofpublicaffairs。Thefutureliberationofthepublicrevenuetheyleavetothecareofposterity。
　　DuringthereignofQueenAnne，themarketrateofinteresthadfallenfromsixtofivepercent，andinthetwelfthyearofherreignfivepercentwasdeclaredtobethehighestratewhichcouldlawfullybetakenformoneyborroweduponprivatesecurity。
　　SoonafterthegreaterpartofthetemporarytaxesofGreatBritainhadbeenrenderedperpetual，anddistributedintotheAggregate，SouthSea，andGeneralFunds，thecreditorsofthepublic，likethoseofprivatepersons，wereinducedtoacceptoffivepercentfortheinterestoftheirmoney，whichoccasionedasavingofonepercentuponthecapitalofthegreaterpartofthedebtswhichhadbeenthusfundedforperpetuity，orofone—sixthofthegreaterpartoftheannuitieswhichwerepaidoutofthethreegreatfundsabovementioned。Thissavingleftaconsiderablesurplusintheproduceofthedifferenttaxeswhichhadbeenaccumulatedintothosefundsoverandabovewhatwasnecessaryforpayingtheannuitieswhichwerenowchargeduponthem，andlaidthefoundationofwhathassincebeencalledtheSinkingFund。In1717，itamountedtoL323，4347s。71/2d。In1727，theinterestofthegreaterpartofthepublicdebtswasstillfurtherreducedtofourpercent;andin1753and1757，tothreeandahalfandthreepercent;whichreductionsstillfurtheraugmentedthesinkingfund。
　　Asinkingfund，thoughinstitutedforthepaymentofold，facilitatesverymuchthecontractingofnewdebts。Itisasubsidiaryfundalwaysathandtobemortgagedinaidofanyotherdoubtfulfunduponwhichmoneyisproposedtoberaisedinanexigencyofthestate。WhetherthesinkingfundofGreatBritainhasbeenmorefrequentlyappliedtotheoneortotheotherofthosetwopurposeswillsufficientlyappearbyandby。
　　Besidesthosetwomethodsofborrowing，byanticipationsandbyperpetualfunding，therearetwoothermethodswhichholdasortofmiddleplacebetweenthem。Theseare，thatofborrowinguponannuitiesfortermsofyears，andthatofborrowinguponannuitiesforlives。
　　DuringthereignsofKingWilliamandQueenAnne，largesumswerefrequentlyborroweduponannuitiesfortermsofyears，whichweresometimeslongerandsometimesshorter。In1693，anactwaspassedforborrowingonemillionuponanannuityoffourteenpercent，orofL140，000ayearforsixteenyears。In1691，anactwaspassedforborrowingamillionuponannuitiesforlives，upontermswhichinthepresenttimeswouldappearveryadvantageous。
　　Butthesubscriptionwasnotfilledup。Inthefollowingyearthedeficiencywasmadegoodbyborrowinguponannuitiesforlivesatfourteenpercent，oratlittlemorethansevenyears’purchase。
　　In1695，thepersonswhohadpurchasedthoseannuitieswereallowedtoexchangethemforothersofninety—sixyearsuponpayingintotheExchequersixty—threepoundsinthehundred;thatis，thedifferencebetweenfourteenpercentforlife，andfourteenpercentforninety—sixyears，wassoldforsixty—threepounds，orforfourandahalfyears’purchase。Suchwasthesupposedinstabilityofgovernmentthateventhesetermsprocuredfewpurchasers。InthereignofQueenAnnemoneywasupondifferentoccasionsborrowedbothuponannuitiesforlives，anduponannuitiesfortermsofthirty—two，ofeighty—nine，ofninety—eight，andofninety—nineyears。In1719，theproprietorsoftheannuitiesforthirty—twoyearswereinducedtoacceptinlieuofthemSouthSeastocktotheamountofelevenandahalfyears’purchaseoftheannuities，togetherwithanadditionalquantityofstockequaltothearrearswhichhappenedthentobedueuponthem。In1720，thegreaterpartoftheotherannuitiesfortermsofyearsbothlongandshortweresubscribedintothesamefund。ThelongannuitiesatthattimeamountedtoL666，821
　　8s。31/2d。ayear。Onthe5thofJanuary1775，theremainderofthem，orwhatwasnotsubscribedatthattime，amountedonlytoL136，45312s。8d。
　　Duringthetwowarswhichbeganin1739andin1755，littlemoneywasborrowedeitheruponannuitiesfortermsofyears，oruponthoseforlives。Anannuityforninety—eightorninety—nineyears，however，isworthnearlyasmuchmoneyasaperpetuity，andshould，therefore，onemightthink，beafundforborrowingnearlyasmuch。Butthosewho，inordertomakefamilysettlements，andtoprovideforremotefuturity，buyintothepublicstocks，wouldnotcaretopurchaseintooneofwhichthevaluewascontinuallydiminishing;andsuchpeoplemakeaveryconsiderableproportionbothoftheproprietorsandpurchasersofstock。Anannuityforalongtermofyears，therefore，thoughitsintrinsicvaluemaybeverynearlythesamewiththatofaperpetualannuity，willnotfindnearlythesamenumberofpurchasers。Thesubscriberstoanewloan，whomeangenerallytoselltheirsubscriptionsassoonaspossible，prefergreatlyaperpetualannuityredeemablebyParliamenttoanirredeemableannuityforalongtermofyearsofonlyequalamount。Thevalueoftheformermaybesupposedalwaysthesame，orverynearlythesame，anditmakes，therefore，amoreconvenienttransferablestockthanthelatter。
　　Duringthetwolast—mentionedwars，annuities，eitherfortermsofyearsorforlives，wereseldomgrantedbutaspremiumstothesubscriberstoanewloanoverandabovetheredeemableannuityorinterestuponthecreditofwhichtheloanwassupposedtobemade。Theyweregranted，notastheproperfunduponwhichthemoneywasborrowed，butasanadditionalencouragementtothelender。
　　Annuitiesforliveshaveoccasionallybeengrantedintwodifferentways;eitheruponseparatelives，oruponlotsoflives，whichinFrencharecalledTontines，fromthenameoftheirinventor。Whenannuitiesaregranteduponseparatelives，thedeathofeveryindividualannuitantdisburthensthepublicrevenuesofarasitwasaffectedbyhisannuity。Whenannuitiesaregrantedupontontines，theliberationofthepublicrevenuedoesnotcommencetillthedeathofallannuitantscomprehendedinonelot，whichmaysometimesconsistoftwentyorthirtypersons，ofwhomthesurvivorssucceedtotheannuitiesofallthosewhodiebeforethem，thelastsurvivorsucceedingtotheannuitiesofthewholelot。Uponthesamerevenuemoremoneycanalwaysberaisedbytontinesthanbyannuitiesforseparatelives。Anannuity，witharightofsurvivorship，isreallyworthmorethananequalannuityforaseparatelife，andfromtheconfidencewhicheverymannaturallyhasinhisowngoodfortune，theprincipleuponwhichisfoundedthesuccessofalllotteries，suchanannuitygenerallysellsforsomethingmorethanitisworth。Incountrieswhereitisusualforgovernmenttoraisemoneybygrantingannuities，tontinesareuponthisaccountgenerallypreferredtoannuitiesforseparatelives。Theexpedientwhichwillraisemostmoneyisalmostalwayspreferredtothatwhichislikelytobringaboutinthespeediestmannertheliberationofthepublicrevenue。
　　InFranceamuchgreaterproportionofthepublicdebtsconsistsinannuitiesforlivesthaninEngland。AccordingtoamemoirpresentedbytheParliamentofBordeauxtothekingin1764，thewholepublicdebtofFranceisestimatedattwenty—fourhundredmillionsoflivres，ofwhichthecapitalforwhichannuitiesforliveshadbeengrantedissupposedtoamounttothreehundredmillions，theeighthpartofthewholepublicdebt。
　　Theannuitiesthemselvesarecomputedtoamounttothirtymillionsayear，thefourthpartofonehundredandtwentymillions，thesupposedinterestofthatwholedebt。Theseestimations，Iknowverywell，arenotexact，buthavingbeenpresentedbysoveryrespectableabodyasapproximationstothetruth，theymay，Iapprehend，beconsideredassuch。ItisnotthedifferentdegreesofanxietyinthetwogovernmentsofFranceandEnglandfortheliberationofthepublicrevenuewhichoccasionsthisdifferenceintheirrespectivemodesofborrowing。
　　Itarisesaltogetherfromthedifferentviewsandinterestsofthelenders。
　　InEngland，theseatofgovernmentbeinginthegreatestmercantilecityintheworld，themerchantsaregenerallythepeoplewhoadvancemoneytogovernment。Byadvancingittheydonotmeantodiminish，but，onthecontrary，toincreasetheirmercantilecapitals，andunlesstheyexpectedtosellwithsomeprofittheirshareinthesubscriptionforanewloan，theyneverwouldsubscribe。Butifbyadvancingtheirmoneytheyweretopurchase，insteadofperpetualannuities，annuitiesforlivesonly，whethertheirownorthoseofotherpeople，theywouldnotalwaysbesolikelytosellthemwithaprofit。Annuitiesupontheirownlivestheywouldalwayssellwithloss，becausenomanwillgiveforanannuityuponthelifeofanother，whoseageandstateofhealtharenearlythesamewithhisown，thesamepricewhichhewouldgiveforoneuponhisown。Anannuityuponthelifeofathirdperson，indeed，is，nodoubt，ofequalvaluetothebuyerandtheseller;butitsrealvaluebeginstodiminishfromthemomentitisgranted，andcontinuestodosomoreandmoreaslongasitsubsists。Itcannever，therefore，makesoconvenientatransferablestockasaperpetualannuity，ofwhichtherealvaluemaybesupposedalwaysthesame，orverynearlythesame。
　　InFrance，theseatofgovernmentnotbeinginagreatmercantilecity，merchantsdonotmakesogreataproportionofthepeoplewhoadvancemoneytogovernment。Thepeopleconcernedinthefinances，thefarmersgeneral，thereceiversofthetaxeswhicharenotinfarm，thecourtbankers，etc。，makethegreaterpartofthosewhoadvancetheirmoneyinallpublicexigencies。
　　Suchpeoplearecommonlymenofmeanbirth，butofgreatwealth，andfrequentlyofgreatpride。Theyaretooproudtomarrytheirequals，andwomenofqualitydisdaintomarrythem。Theyfrequentlyresolve，therefore，tolivebachelors，andhavingneitheranyfamiliesoftheirown，normuchregardforthoseoftheirrelations，whomtheyarenotalwaysveryfondofacknowledging，theydesireonlytoliveinsplendourduringtheirowntime，andarenotunwillingthattheirfortuneshouldendwiththemselves。Thenumberofrichpeople，besides，whoareeitheraversetomarry，orwhoseconditionofliferendersiteitherimproperorinconvenientforthemtodoso，ismuchgreaterinFrancethaninEngland。Tosuchpeople，whohavelittleornocareforposterity，nothingcanbemoreconvenientthantoexchangetheircapitalforarevenuewhichistolastjustaslong，andnolonger，thantheywishittodo。
　　Theordinaryexpenseofthegreaterpartofmoderngovernmentsintimeofpeacebeingequalornearlyequaltotheirordinaryrevenue，whenwarcomestheyarebothunwillingandunabletoincreasetheirrevenueinproportiontotheincreaseoftheirexpense。Theyareunwillingforfearofoffendingthepeople，who，bysogreatandsosuddenanincreaseoftaxes，wouldsoonbedisgustedwiththewar;andtheyareunablefromnotwellknowingwhattaxeswouldbesufficienttoproducetherevenuewanted。Thefacilityofborrowingdeliversthemfromtheembarrassmentwhichthisfearandinabilitywouldotherwiseoccasion。Bymeansofborrowingtheyareenabled，withaverymoderateincreaseoftaxes，toraise，fromyeartoyear，moneysufficientforcarryingonthewar，andbythepracticeofperpetuallyfundingtheyareenabled，withthesmallestpossibleincreaseoftaxes，toraiseannuallythelargestpossiblesumofmoney。Ingreatempiresthepeoplewholiveinthecapital，andintheprovincesremotefromthesceneofaction，feel，manyofthem，scarceanyinconveniencyfromthewar;butenjoy，attheirease，theamusementofreadinginthenewspaperstheexploitsoftheirownfleetsandarmies。Tothemthisamusementcompensatesthesmalldifferencebetweenthetaxeswhichtheypayonaccountofthewar，andthosewhichtheyhadbeenaccustomedtopayintimeofpeace。Theyarecommonlydissatisfiedwiththereturnofpeace，whichputsanendtotheiramusement，andtoathousandvisionaryhopesofconquestandnationalgloryfromalongercontinuanceofthewar。
　　Thereturnofpeace，indeed，seldomrelievesthemfromthegreaterpartofthetaxesimposedduringthewar。Thesearemortgagedfortheinterestofthedebtcontractedinordertocarryiton。If，overandabovepayingtheinterestofthisdebt，anddefrayingtheordinaryexpenseofgovernment，theoldrevenue，togetherwiththenewtaxes，producesomesurplusrevenue，itmayperhapsbeconvertedintoasinkingfundforpayingoffthedebt。But，inthefirstplace，thissinkingfund，evensupposingitshouldbeappliedtonootherpurpose，isgenerallyaltogetherinadequateforpaying，inthecourseofanyperiodduringwhichitcanreasonablybeexpectedthatpeaceshouldcontinue，thewholedebtcontractedduringthewar;and，inthesecondplace，thisfundisalmostalwaysappliedtootherpurposes。
　　Thenewtaxeswereimposedforthesolepurposeofpayingtheinterestofthemoneyborroweduponthem。Iftheyproducemore，itisgenerallysomethingwhichwasneitherintendednorexpected，andisthereforeseldomveryconsiderable。Sinkingfundshavegenerallyarisennotsomuchfromanysurplusofthetaxeswhichwasoverandabovewhatwasnecessaryforpayingtheinterestorannuityoriginallychargeduponthem，asfromasubsequentreductionofthatinterest。ThatofHollandin1655，andthatoftheecclesiasticalstatein1685，werebothformedinthismanner。Hencetheusualinsufficiencyofsuchfunds。
　　Duringthemostprofoundpeacevariouseventsoccurwhichrequireanextraordinaryexpense，andgovernmentfindsitalwaysmoreconvenienttodefraythisexpensebymisapplyingthesinkingfundthanbyimposinganewtax。Everynewtaxisimmediatelyfeltmoreorlessbythepeople。Itoccasionsalwayssomemurmur，andmeetswithsomeopposition。Themoretaxesmayhavebeenmultiplied，thehighertheymayhavebeenraiseduponeverydifferentsubjectoftaxation;themoreloudlythepeoplecomplainofeverynewtax，themoredifficultitbecomes，too，eithertofindoutnewsubjectsoftaxation，ortoraisemuchhigherthetaxesalreadyimposedupontheold。Amomentarysuspensionofthepaymentofdebtisnotimmediatelyfeltbythepeople，andoccasionsneithermurmurnorcomplaint。Toborrowofthesinkingfundisalwaysanobviousandeasyexpedientforgettingoutofthepresentdifficulty。Themorethepublicdebtsmayhavebeenaccumulated，themorenecessaryitmayhavebecometostudytoreducethem，themoredangerous，themoreruinousitmaybetomisapplyanypartofthesinkingfund;thelesslikelyisthepublicdebttobereducedtoanyconsiderabledegree，themorelikely，themorecertainlyisthesinkingfundtobemisappliedtowardsdefrayingalltheextraordinaryexpenseswhichoccurintimeofpeace。Whenanationisalreadyoverburdenedwithtaxes，nothingbutthenecessitiesofanewwar，nothingbuteithertheanimosityofnationalvengeance，ortheanxietyfornationalsecurity，caninducethepeopletosubmit，withtolerablepatience，toanewtax。Hencetheusualmisapplicationofthesinkingfund。
　　InGreatBritain，fromthetimethatwehadfirstrecoursetotheruinousexpedientofperpetualfunding，thereductionofthepublicdebtintimeofpeacehasneverborneanyproportiontoitsaccumulationintimeofwar。Itwasinthewarwhichbeganin1688，andwasconcludedbytheTreatyofRyswickin1697，thatthefoundationofthepresentenormousdebtofGreatBritainwasfirstlaid。
　　Onthe31stofDecember1697，thepublicdebtsofGreatBritain，fundedandunfunded，amountedtoL21，515，74213s。8
　　1/2d。Agreatpartofthosedebtshadbeencontracteduponshortanticipations，andsomepartuponannuitiesforlives，sothatbeforethe31stofDecember1701，inlessthanfouryears，therehadpartlybeenpaidoff，andpartlyrevertedtothepublic，thesumofL5，121，04112s。03/4d。;agreaterreductionofthepublicdebtthanhaseversincebeenbroughtaboutinsoshortaperiodoftime。Theremainingdebt，therefore，amountedonlytoL16，394，7011s。71/4d。
　　Inthewarwhichbeganin1709。，andwhichwasconcludedbytheTreatyofUtrecht，thepublicdebtswerestillmoreaccumulated。Onthe31stofDecember1714，theyamountedtoL53，681，0765s。61/2d。ThesubscriptionintotheSouthSeafundoftheshortandlongannuitiesincreasedthecapitalofthepublicdebts，sothatonthe31stofDecember1722itamountedtoL55，282，9781s。35/6d。Thereductionofthedebtbeganin1723，andwentonsoslowlythat，onthe31stofDecember1739，duringseventeenyearsofprofoundpeace，thewholesumpaidoffwasnomorethanL8，328，35417s。113/12d。，thecapitalofthepublicdebtatthattimeamountingtoL46，954，6233s。47/12d。
　　TheSpanishwar，whichbeganin1739，andtheFrenchwarwhichsoonfolloweditoccasionedfurtherincreaseofthedebt，which，onthe31stofDecember1748，afterthewarhadbeenconcludedbytheTreatyofAix—la—Chapelle，amountedtoL78，293，3131s。103/4d。ThemostprofoundpeaceofseventeenyearscontinuancehadtakennomorethanL8，328，35417s。11
　　3/12d。fromit。Awaroflessthannineyears’continuanceaddedL31，338，68918s。61/6d。toit。