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Subject Area: Political Theory
Subject Area: War and Peace
Topic: The American Revolution and Constitution

APPENDIX. - Richard Price, Observations on the Nature of Civil Liberty, the Principles of Government, and the Justice and Policy of the War with America [1776]

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Observations on the Nature of Civil Liberty, the Principles of Government, and the Justice and Policy of the War with America. To which is added, an Appendix and Postscript, containing, a State of the National Debt, an Estimate of the Money drawn from the Public by the Taxes, and an Account of the National Income and Expenditure since the last War. The 9th edition. (London: Edward and Charles Dilly and Thomas Cadell, 1776).

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APPENDIX.

Amount of the NATIONAL DEBT,and APPROPRIATED REVENUE,at Midsummer 1775.
Principal.Interest.
£.£.
(a)This deduction was not made in the former editions of this work. I should have thanked the writer who has pointed out this omission to me, had he done it in a handsomer manner. But nothing depends on this omission; nor does it affect the conclusion with a view to which I have chosen to state the national debt.
(a)Being charges of management at the Bank, South-Sea House and India Houses; Fees, Salaries and other Expences at the Exchequer; Interest of loans on the Sinking Fund; Annuities payable to the Dukes of Gloucester and Cumberland, and the Representatives of Arthur Onflow, Esq; Sheriffs of England; expence of coinage; first fruits of the clergy, &c.—These Articles were omitted in the former Editions, and served to balance the overcharges of interest on the Bank and India capitals. I have probably under-rated them; but it cannot be expected that I should be able to give their exact amount. I leave, therefore, this part of the appropriated revenue to be corrected by those who are better informed.
The amount of the capitals at the Bank, South Sea, and India Houses was (in January 1775) 125,056,454 l. See the particulars in an account by R. Helm, at the Stock Exchange, corrected for January 5th, 1775.
Deduct 2 millions Capital of India Annuit.; deduct also 424,500 l. Consol. Annuit. 246,300 l. Reduced; 161,650 l. Old S. S. Annuit. 124,200 l. New S. S. Annuit. and 43,350 l. Annuit. 1751, making in all a million of the 3 per cents, paid off in 1775; and the remainder will be122.056,4543.874,057
Deduct farther, from the annual interest in Mr. Helm’s account, (besides the Long Annuity, and the interest of three millions at 3 per cent.) 383,814 l. being the amount of the excesses of the Dividend,(a) paid by the three companies above the interest they receive from government:
Undivided Capital of the Bank, making up the whole to 11,6 6,800 l.906,80027,204
Annuities for 99, 96, and 89 years, from various dates in King William’s and Queen Ann’s time. Supposing 18 years to come of these Annuities, their value will be (reckoning interest at 3½ per cent.) 13⅕ years purchase, or nearly1.801,179136,453
Annuities for lives, with benefit of survivorship, in King William’s time, supposed worth Four years purchase.—N. B. The benefit of survivorship is to be continued till the Annuitants are reduced to Seven30,2687,567
Annuities on lives, with benefit of Survivorship, granted Anno 1765—valued at 20 years purchase10,800540
Carried over124.805,5014.045,821
Brought over124.805,5014.045,821
Annuities for two or three lives granted in 1693. Also annuities on single lives 1745, 1746, 1757. The original amount of these annuities, taken all together, was 123,883 l. They are now reduced by deaths to about 80,000 l. I have valued them at 10 years purchase800,00080,000
Long annuity for 99 years 1761—The value of this annuity is in the Alley about 25½ years purchase; but the remaining term is really worth 27 years purchase6.702,750248,250
UNFUNDED DEBT, consisting of Exchequer Bills (1,250,000 l.) Navy debt (1,850,000 l.) and Civil List debt, supposed 500,000 l. The interest is reckoned at no more than 2½ per cent.3.600,00090,000
Total of the National debt in 1775135.908,2514.464,071
Add(a)200,000
Civil List800,000
Total of the appropriated Revenue5.494,071

I have given the Navy Debt as it was about a year ago. It must be now greatly increased.—The Civil List Debt has been given by guess. It is generally reckoned not to be more than the sum I have specified; and it is also expected that the Civil List income will be raised to 900,000 l. or 1.000,0000 per ann.—In 1769 the sum of 513,511 l. was granted by parliament towards discharging the arrears and debts then due on the Civil List.

By an act of the first of George II, the income of the Civil List was to be made up to 800,000 l. whenever, in any year, the duties and revenues appropriated to it fell short of that sum. The clear produce of these duties for 33 years, or from Midsummer 1727, to Midsummer 1760, was, according to a particular account in my possession, 26.182,981 l. 17 s. 6 d. or 793,423 l. per ann. They fell short, therefore, taking one year with another, more than they exceeded.—In 1747, they had been deficient for seven years together; and the whole deficiency amounted to 456,733 l. 16 s.—which, in conformity to the act I have mentioned, was made good to his majesty out of the supplies for that year.—In 1729 also, 115,000 l. was granted out of the supplies for the like reason.—This is all the money, received by his late majesty from parliament, towards supporting his houshold and the dignity of his civil government; or 810,749 l. per ann.—I have thought proper to state this matter to particularly here; because accounts grossly wrong have been given of it.

The amount of the National Debt, it has appeared, was last year 136 millions—The great deficiencies of last year, added to the extraordinary expences of the present year, will increase this debt considerably.—Drawing out, embodying, and maintaining the militia in the last war, cost the nation near half a million per ann.—We cannot reckon upon a less expence in doing this now. Add to it, pay for foreign troops, and all the extraordinary expences of our increased Navy and Army, transport service, recruiting service, ordnance, &c. and it will be evident that the whole expence of this unhappy year must be enormous.—But I expect that care will be taken to hide it, by funding as little as possible, and that for this reason it will not be known in its full magnitude, till it comes to appear another year under the articles of Navy debt, extraordinaries of the army, transport bills, ordnance debentures, &c. making up a vast unsunded debt which may bear down all public credit.

State of the SURPLUSof the REVENUEfor 11 years ended at 1775. UNAPPROPRIATED REVENUE.
£.
(a)The greatest part of this Revenue is borrowed of the Bank, and spent before it comes into the Exchequer. And therefore, is a debt constantly due to the Bank, for which interest is paid.—One of my answerers has denied this assertion; but at the same time has confirmed it, by saying that only 2.250,000 l. was borrowed in 1775 on the unappropriated Revenue.—The same writer has asserted, that there are THREE MILLIONS of India Annuities created by the company itself, and that this makes TWO MILLIONS difference in the amount of the national debt.—The truth is, that in consequence of taking Mr. Helm’s paper (a paper perfectly adapted to the purpose for which it is intended) without examining it; I had made the capital of the perpetual Annuities to be 124.056,454 l.; whereas, if two millions India Annuities are rejected, and 906,800 l. undivided capital of the Bank admitted, it comes out to be 122.963,254 l. See p. 41.—The writer who has given to the public this information, received it, I understand, from the great ministe who directs our Finances, to whose Authority on this subject I am very ready to submit. Pity it is, that he did not choose to communicate it by a person possess’d of more of his own ability and candour.
NETT PRODUCE of the Sinking Fund for the last five years, including casual surplusses, reckoning to Christmas in every year; being the annual medium, after deducing from it about 45,000 l. always carried to it from the supplies, in order to replace so much taken from it every year to make good a deficiency in a Fund established in 17582.610,759
Nett annual produce of Land Tax at 3 s. militia deducted; and of the Malt Tax1.800,000
(N. B. These two taxes in 1773, brought in only 1.665,475 l.
There are some casual Receipts, not included in the Sinking Fund, such as duties on Gum Senega, American Revenue, &c. But they are so uncertain and inconsiderable, that it is scarcely proper to give them as a part of the permanent Revenue. Add however on this account50,000
Total of unappropriated (a) Revenue£. 4.460,759
Produce of the SINKING FUND,reckoned to Christmas in every Year.
£.
17702.486,836
17712.553,505
17722.603,831
17732.823,150
17742.731,476

In 1775 the sinking Fund was taken for 2.900,000 l. including an extraordinary charge of 100,000 l. on the Aggregate Fund. If it has not produced so much, the deficiency is a debt contracted last year, which must be added to other debts (referred to in Page 43) arising from deficiencies in the provision made for the expences of last year. This provision amounted to 3.703,476 l.; but it has fallen short above a million and a half.(a)

ANNUAL EXPENDITURE.
£.
Peace Establishment, for the Navy and Army, including all miscellaneous and incidental expences3.700,000
Annual Increase of the Navy and Civil List Debts350,000
Interest at 2 1/2 [Editor?] of 3,600,000 l. unfunded debt, which must be paid out of the unappropriated Revenue90,000
Total4.140,000
ANNUAL SURPLUS of the Revenue320,759
Annual income£. 4.460,759

The estimate for the peace establishment, including miscellaneous expences, amounted, I have said, in 1775 to 3.703,476 l.—In 1774 it amounted to 3.804,452 l. exclusive of 250,000 l. raised by Exchequer Bills, towards defraying the expence of calling in the gold coin. And the medium for eleven years, from 1765, has been nearly 3.700,000 l.—According to the accounts which I have collected, the expence of the peace establishment (including miscellaneous expences) was in 1765, 1766, and 1767, 3.540,000 l. per ann.—In 1768, 1769, and 1770, it was 3.354,000 l. per ann.—In 1771, 1772, 1773, 1774, and 1775, the average has been nearly four millions per ann. exclusive of the expence of calling in the coin.

The parliament votes for the sea service 4 l. per month per man, including wages, wear and tear, victuals and ordnance. This allowance is insufficient, and falls short every year more or less, in proportion to the number of men voted. From hence, in a great measure, arises that annual increase of the navy debt, mentioned in the second article of the National Expenditure. This increase in 1772 and 1773 was 669,996 l. or 335,000 l. per ann. The number of men voted in those two years, was 20,000. I have supposed them reduced to 16,000, and the annual increase of the Navy Debt to be only 250,000 l.—Add 100,000 l. for the annual increase of the Civil List Debt (see p. 42.) and the total will be 350,000 l.

There is another method of proving that the permanent surplus of the revenue cannot exceed the sum now stated.

I have learnt from the highest authority, that the national debt, about a year ago, had been diminished near 9 millions and a half,(b) since the peace in 1763; including a million of the 3 per cents discharged last year.—The money employed in making this reduction, must have been derived from the surplus of the ordinary and stated revenue, added to the extraordinary receipts. These extraordinary receipts have consisted of the following articles.—1. The Land Tax at 4 s. in the pound in 1764, 1765, 1766, and 1771; or 1 s. in the pound extraordinary for four years, making 1.750,000 l.—2. The profits of Ten Lotteries, making (at 150,000 l. each Lottery) 1.500,000 l.—3. A contribution of 400,000 l. per ann. from the India company for five years, making 2.000,000 l.—4. 110,000 l. Paid by the Bank in 1764 for the privilege of exclusive banking. Also the money Paid by France for maintaining their prisoners; and the money arising from the sale of French prizes, taken before the declaration of war; from savings on particular grants at the end of the war, &c. &c.—which(a) I will take at no more than 300,000 l. Add 3.600,000 l. arising from a surplus of 300,000 l. for twelve years; and the total will be 9.260,000 l. which is a sum more than sufficient to discharge 9 millions and a half of the public debt.

Sketch of an Account of the Money drawn from the Public by the Taxes.
£.
(b)The annual medium of the payments into the Exchequer from the CUSTOMS in ENGLAND, for the last five years, has been 2.521,769 l.—In 1774 this payment was 2.547,717 l. In 1775, it was 2.476,302 l.—The produce of the CUSTOMS, therefore, has been given rather too high.
The produce of the EXCISES in England has been higher in 1772 and 1775 than in any other two years; but the average of any three successive years, or of all the five years since 1770, will not differ much from the sum I have given.—In 1754, or the year before the last war, the CUSTOMS produced only 1.558,254 l.—The Excises produced 2.819,702 l.—And the whole revenue, exclusive of the Malt-tax and Land-tax at 2 s. was 5.097,617 l.
(c)These branches of the revenue produced in 1754 210,243 l. I do not know how much they have produced lately; but I believe I have estimated them at the highest.—In 1754 the Revenue of the Post-Office was 100,710 l. It brought in last year 125,000 l.
CUSTOMS in ENGLAND, being the medium of the payments into the Exchequer, for 3 years ending in 1773(b)2.528,275
Amount of the EXCISES in ENGLAND, including the malt tax, being the medium of 3 years ending in 17734.649,892
Land Tax at 3 s.1.300,000
Land Tax at 1 s. in the pound450,000
SALT DUTIES, being the medium of the years 1765 and 1766218,739
Duties on Stamps, Cards, Dice, Advertisements, Bonds, Leases, Indentures, News-papers, Almanacks, &c.280,788
Duties on houses and windows, being the medium of 3 years ending in 1771385,369
Post-Office, Seizures, Wine Licences, Hackney Coaches,(c) Tenths of the Clergy, &c.250,000
EXCISES in SCOTLAND, being the medium of 3 years ending in 177395,229
CUSTOMS in SCOTLAND, being the medium of 3 years ending in 177368,369
Annual profit from Lotteries150,000
Inland taxes in SCOTLAND, deduction of 6 d. in the pound on all Pensions, Salaries, &c. casual revenues, such as the duties on Gum-Senega, American revenue, &c.150,000
EXPENCE of collecting the EXCISES in ENGLAND, being the average of the years 1767 and 1768, when their produce was 4.531,075 l. per ann. 6 per cent. of the gross produce297,887
EXPENCE of collecting the Excises in SCOTLAND, being the medium of the years 1772 and 1773, and the difference between the gross and nett produce—31 per cent. of the gross produce43,254
EXPENCE of collecting the CUSTOMS in ENGLAND, being the average of 1771 and 1772; bounties included—15 per cent. of the gross produce, exclusive of drawbacks and over-entries468,703
N. B. The bounties for 1771 were 202,840 l. for 1772, 172,468 l.
The charges of management for 1771, were 276,434 l.
For 1772, 285,764 l. or 10 per cent. nearly.
Interest of loans on the land tax at 4 l. expences of collection, militia, &c.250,000
PERQUISITES, &c. to Custom-house officers, &c. supposed250,000
EXPENCE of collecting the Salt Duties in ENGLAND, 10½ per cent.27,000
Bounties on fish exported18,000
EXPENCE of collecting the duties on Stamps, Cards, Advertisements, &c. 5¼ per cent.18,000
Total£. 11.900,505

It must be seen, that this account is imperfect. It is, however, sufficient to prove, that the whole money raised directly by the taxes, cannot be much less than Twelve Millions. But as the increased price of one commodity has a tendency to raise the price of other commodities; and as also dealers generally add more than the value of a tax to the price of a commodity, besides charging interest for the money they advance on the taxes; for these reasons, it seems certain, that the taxes have an indirect effect of great consequence; and that a larger sum is drawn by them from the public, than their gross produce.—It is farther to be considered, that many of the persons who are now supported by collecting the taxes, would have supported themselves by commerce or agriculture; and therefore, instead of taking away from the public stock, would have been employed in increasing it.—Some have reckoned, that on all these accounts the expence of the taxes is doubled; but this must be extravagant. Let us suppose a fourth only added; and it will follow, that the money drawn from the public by the taxes (exclusive of tythes, county-rates, and the taxes which maintain the poor) is near 15 millions per ann.; a sum equal to the whole specie of the kingdom; which, therefore, had we no paper currency, would be totally inadequate to the wants of the kingdom.

Without all doubt such a state of things, in a great commercial nation, is most dangerous, and frightful; but it admits of no remedy, while the public debt continues what it is.—With a view, therefore, to the quick reduction of this debt, I will throw away, after all I have said on this subject on former occasions, the following proposals.—It has appeared, that, supposing the taxes not to become less productive, and the current national expence to continue the same that it had been for ten years before 1775, a surplus may be expected in the revenue of about 300,000 l. per ann.—With a surplus so trifling, nothing can be done; but it might be increased, first of all; By keeping the Land Tax for the future at 4 s. in the pound.—As rents have been almost doubled, this will not be much more to the present proprietors of land, than 2 s. in the pound was formerly. ’Tis, therefore, equitable; and it will add to the national income near 450,000 l.

Secondly, All the money now spent in maintaining troops in America might be saved.—The Colonies are able to defend themselves. They wish to be allowed to do it. Should they ever want the aid of our troops, they will certainly pay us for them. Indeed I am of opinion, they will never be willing to make peace with us, without stipulating that we shall withdraw our troops from them. Were there any external power that claimed and exercised a right of stationing troops in this country, without our consent, we should certainly think ourselves entirely undone.—I will estimate this saving at no more than 200,000 l. per ann.

Thirdly, I do not see why the peace establishment might not be reduced to what it was, at an average, in 1768, 1769 and 1770. This would produce a saving of 350,000 l. per ann.—I might here propose reducing the peace establishment for the Navy to what it always was before the last war, or from 16,000 to 10,000 men. But it would be infinitely better to reduce the Army; and this might produce a farther saving of great consequence.—But waving this, I shall only mention,

Fourthly, That contributions might be obtained from North-America and other parts of the British Empire, on the principles stated from the Earl of Shelburne’s authority, in page 39.—I will estimate these at no more than 400,000 l. per ann.—(a) Add the Surplus now in our possession; and the total will be 1.700,000.—In the Introduction to the third edition of the Treatise on Reversionary Payments, I have explained a method of paying off, with a sinking Fund of a million per ann.(b) , a hundred millions of the national debt in forty years. What then might not be done with such a Fund as this?

In five years 18.986,300 l. will fall from an interest of 4 per cent. to 3 per cent.—Also, 4.500,000 l. 3 per cent. 1758, will fall, in six years, to an interest of 3 per cent.—The long Annuities granted in King William’s time, will, in 20 years become extinct; as will also the greatest part of the Life Annuities specified in page 41.—All these savings will not amount to much less than 400,000 l. per ann. And were they to be added to the fund as they fall in, its operations would be so much accelerated, that in a few years we should see this country above all its difficulties.—Still more might be done by striking off unnecessary places and pensions; by giving up all the means of corruption; by reducing the pay of the great officers of state; and simplifying the taxes.—A minister who appeared determined to carry into execution such a system, would soon gain the confidence of the public; endear himself to all honest men; and in time come to be blessed as the Saviour of his country.—But what am I doing?—We have no such happy period before us.—Our ministers are active in pursuing measures which must increase our burthens. A horrid civil war is begun; and it may soon leave us nothing to be anxious about.

[(a)]The expences of the army not provided for in 1775 have amounted to 845,000 l. spent chiefly at Boston.—The Navy debt increased, during the course of the same year, from 1.850,000 l. to 2.498,579 l.

[(b)]This was Lord North’s account at opening the budget in 1775. The particulars, as I have been able to collect them, I have stated in the Postscript.

[(a)]My reason for this will be seen in the Postscript, page 48.

[(a)]We drew, some years ago, this contribution from Asia only: and it cannot be unreasonable to expect, that the greatest part of it may be again drawn from thence after the expiration, in 1780, of the charter of the East-India company. At that period also, it is much to be wished that some effectual measures may be established for making amends to the inhabitants of Bengal for the shocking injuries they have suffered; and for skreening them from all farther injuries; and, likewise, for withdrawing from the crown that Patronage of the East India Company, which it has lately acquired, and which has given one of the deepest wounds to the constitution.

[(b)]At the time of writing the introduction here referred to, above three years ago, I thought, or rather hoped, that the surplus of the revenue might be taken at 900,000 l. per ann. But it must be considered, that the nation was then in possession of a contribution of 400,000 l. per ann. from the India Company, which has been since lost—See the Additional Preface to the 2d Edition of the Appeal to the Public on the Subject of the National Debt.