The canton of Berne derives a considerable revenue by lending a part of its treasure to foreign states; that is, by placing it in the public funds of the different indebted nations of Europe, chiefly in those of France and England.The security of this revenue must depend, first, upon the security of the funds in which it is placed, or upon the good faith of the government which has the management of them; and, secondly, upon the certainty or probability of the continuance of peace with the debtor nation.In the case of a war, the very first act of hostility, on the part of the debtor nation, might be the forfeiture of the funds of its creditor.This policy of lending money to foreign states is, so far as I know, peculiar to the canton of Berne.
The city of Hamburg has established a sort of public pawnshop, which lends money to the subjects of the state upon pledges at six per cent interest.This pawnshop or Lombard, as it is called, affords a revenue, it is pretended, to the state of a hundred and fifty thousand crowns, which, at four and sixpence the crown, amounts to L33,750 sterling.
The government of Pennsylvania, without amassing any treasure, invented a method of lending, not money indeed, but what is equivalent to money, to its subjects.By advancing to private people at interest, and upon land security to double the value, paper bills of credit to be redeemed fifteen years after their date, and in the meantime made transferable from hand to hand like bank notes, and declared by act of assembly to be a legal tender in all payments from one inhabitant of the province to another, it raised a moderate revenue, which went a considerable way towards defraying an annual expense of about L4500, the whole ordinary expense of that frugal and orderly government.The success of an expedient of this kind must have depended upon three different circumstances; first, upon the demand for some other instrument of commerce besides gold and silver money; or upon the demand for such a quantity of consumable stock as could not be had without sending abroad the greater part of their gold and silver money in order to purchase it; secondly, upon the good credit of the government which made use of this expedient; and, thirdly, upon the moderation with which it was used, the whole value of the paper bills of credit never exceeding that of the gold and silver money which would have been necessary for carrying on their circulation had there been no paper bills of credit.The same expedient was upon different occasions adopted by several other American colonies:
but, from want of this moderation, it produced, in the greater part of them, much more disorder than conveniency.
The unstable and perishable nature of stock and credit, however, render them unfit to be trusted to as the principal funds of that sure, steady, and permanent revenue which can alone give security and dignity to government.The government of no great nation that was advanced beyond the shepherd state seems ever to have derived the greater part of its public revenue from such sources.
Land is a fund of a more stable and permanent nature; and the rent of public lands, accordingly, has been the principal source of the public revenue of many a great nation that was much advanced beyond the shepherd state.From the produce or rent of the public lands, the ancient republics of Greece and Italy derived, for a long time, the greater part of that revenue which defrayed the necessary expenses of the commonwealth.The rent of the crown lands constituted for a long time the greater part of the revenue of the ancient sovereigns of Europe.
War and the preparation for war are the two circumstances which in modern times occasion the greater part of the necessary expense of all great states.But in the ancient republics of Greece and Italy every citizen was a soldier, who both served and prepared himself for service at his own expense.Neither of those two circumstances, therefore, could occasion any very considerable expense to the state.The rent of a very moderate landed estate might be fully sufficient for defraying all the other necessary expenses of government.
In the ancient monarchies of Europe, the manners and customs of the times sufficiently Prepared the great body of the people for war; and when they took the field, they were, by the condition of their feudal tenures, to be maintained either at their own expense, or at that of their immediate lords, without bringing any new charge upon the sovereign.The other expenses of government were, the greater part of them, very moderate.The administration of justice, it has been shown, instead of being a cause of expense, was a source of revenue.The labour of the country people, for three days before and for three days after harvest, was thought a fund sufficient for ****** and maintaining all the bridges, highways, and other public works which the commerce of the country was supposed to require.In those days the principal expense of the sovereign seems to have consisted in the maintenance of his own family and household.The officers of his household, accordingly, were then the great officers of state.The lord treasurer received his rents.The lord steward and lord chamberlain looked after the expense of his family.The care of his stables was committed to the lord constable and the lord marshal.His houses were all built in the form of castles, and seem to have been the principal fortresses which he possessed.The keepers of those houses or castles might be considered as a sort of military governors.They seem to have been the only military officers whom it was necessary to maintain in time of peace.In these circumstances the rent of a great landed estate might, upon ordinary occasions, very well defray all the necessary expenses of government.