The government has no interest whatever in the bank, so far as its profits are concerned; but it has always stood by it, sustained it by its influence and legislation, besides allowing a large annual sum for its services, in paying the dividends on the public debt. When the bank was obliged to suspend payment, in 1797, the government came to its rescue, by legalizing the act; and the bank went on issuing its notes during the twenty-three years that followed, and sometimes to an amount so excessive, that gold was carried up to a premium of twenty-five to forty per cent: generally, however, during this period, the difference was small,—some ten to fifteen per cent. The last feature to be noticed in this connection is that system of INDIRECT TAXATION which became so general and efficient under the new financial policy. Duties, as we have said, were laid upon every description of foreign merchandise, and excise upon all articles of home production. This measure was indispensable to the full development of the system. When the masses of the people can be taxed in such a manner that they are almost unconscious at the moment that they are taxed at all; when the amount taken is in very small sums, so that, if the fact were understood, it would hardly be appreciated; when the aggregate amount for a month or a year cannot be ascertained, except approximately, and then only by long and intricate calculation,-taxation may be carried to its utmost possible limit, so far as to leave to the poorer classes only the bare necessaries of life. Such a people may feel that they are very poor, but they will regard this as the consequence of their low wages; they may feel that they are oppressed, but will naturally attribute it to the want of justice or generosity on the part of their employers. The true cause of their poverty and suffering they do not perceive. The gross taxes imposed in Great Britain in 1859 amounted to seventy-three millions sterling, equal to $14 per head, through the whole population, or $70 for a family of five persons. Such a taxation, if collected at

all, must be taken, as it is taken, imperceptibly, as it were a penny at a time. This grand system of currency and finance, so fully established in Great Britain, has at this time become the policy of all civilized, and to some extent even of uncivilized countries,-funding, indirect taxation, paper-money banking.

RESULTS OF THIS FINANCIAL SYSTEM.

1st, An immense extension of the war system. Prior to the introduction of this policy, standing armies and armaments were exceedingly limited. Now all Christendom is armed, by land and sea. France leads the van, with an army of some 700,000; and each nation is struggling to create and support the largest possible military and naval establishment and all this can be done of credit, if need be; there is no limit to these prepartions, while national credit holds out.

2d, Universal and constantly increasing indebtedness. This is true of nearly every country in the world. England, indeed, has not increased her debt for the last thirty years; but almost every other government has been borrowing money from year to year, until many of them are as much burdened by their indebtedness as England, because, in proportion to their wealth and resources, they are as deeply involved. France, we suppose, is really more oppressed by taxation than England. France is a great nation of poor people, compared with England or the United States. She has but a small margin for taxation. The same, indeed, may be said of many other European nationalities.

3d, Impoverishment of the masses. This is especially apparent in England. What has become of that YEOMANRY, once the pride of the country? Their little estates have disappeared, have been swallowed up by the terrible system of taxation to which they have been subjected. The pleasant hedges which still surround the small enclosures, once

constituting the freeholds of her yeomanry, may yet be seen in all parts of the country. They are the monuments of an industrious, brave, and independent class of men, now extinct. These lands are indeed tilled by the hands of their descendants, no longer yeomanry, but peasants, almost the paupers of the nation. How strikingly true this is, may be seen in the fact that there are but one-third as many "holdings" at the present time as one hundred and fifty years ago, while the wealth and population of England have doubled many times. How this has been accomplished,. may be seen from statements made by Professor Levi of the whole taxation of Great Britain for the year 1858.*

From this analysis, it appears that the amount paid by the middle and working classes is equal to five-sevenths of the entire revenue, while those who monopolized the landed estates of the country, and an enormous proportion of its public stocks and circulating capital, paid but two-sevenths.

We have said that no large national debt has ever been paid or discharged, except by repudiation; nor does it appear that such debts are likely ever to be paid, unless the war policy of the world is changed. All have been created by war, and are perpetuated by constant demand for additional armaments.

The economy of a national debt, under the modern financial system, must always impoverish the productive classes. Its entire influence on them is oppressive. It deprives them of their honest reward, by a false currency, which robs them of a large share of their nominal wages; it imposes upon them, through indirect taxation, an undue proportion of the public burdens, and is, in fact, a stupendous enginery for depressing them, though perhaps not so

*Levi on Taxation, p. 32, London edition.

intended. Hitherto we have known little of its effects in the United States. Until the present time, we have felt little pressure from public indebtedness and consequent taxation; but the case is now altered. We have an immense debt, and a larger amount of annual interest than any other people on the face of the earth. Hence the great importance of understanding the whole subject of modern finance by the people themselves; for without such an understanding of it, however much they may suffer, they .cannot hope for relief. They must know the cause of their sufferings, or they cannot apply the remedy.

CHAPTER XV.

ON THE LAWS OF INHERITANCE AND BEQUEST.

MEN die, and the property they have acquired or held during their lives must pass into the possession of others. May the person who is about to leave the world say to whom his wealth shall immediately descend? May he go farther, and say to whom it shall descend for all coming time? May he go farther still, and determine what specific use shall be made of his wealth for ever? Or shall the laws of the State decide the questions, to whom, for what purposes, and for how long, the wealth of deceased persons shall descend? Does the world and its wealth belong to the living or the dead, or to both in common? If to both, what portion should belong to each? If the dead are allowed to control a part, why not all? Which party, the living or the dead, will most intelligently decide how wealth can be advantageously employed in production, or in any other mode, for the benefit of the living?

These are the points involved in the subject of Inheritance and the testamentary disposal of property, and are

important in an economical point of view, irrespective of all other considerations. These questions have been practically decided by the laws and institutions of society in different ages and countries. Governments have always interfered in regard to the estates of deceased persons, to such an extent as to prescribe limitations and conditions. So far as these have been in harmony with instincts of humanity, and the laws of value, they have been beneficent in their operation. But all the wealth, all the institutions, all the interests of society, should ever be regarded as fully under the control of the existing generation of men. This should be a fundamental principle in civil polity; and, if law may interfere in this matter at all, it may do so to any extent the public interest shall demand.

Mr. McCulloch,* in his "Principles of Political Economy" (page 267), says: "Every man should have such a reasonable power over the disposal of his property as may be necessary to excite his industry, and to inspire him with a desire of accumulating. But if, in order to carry this principle to the furthest extent, individuals are allowed to chalk out an endless series of heirs, and to prescribe the conditions under which they shall successively hold the property, it would be taken entirely out of the market; it might be prevented from ever coming into the hands of those who would turn it to the best account; and it could neither be farmed nor managed in any way, however advantageous, that happened to be inconsistent with the will."

Mr. McCulloch here recognizes the correct principle; viz., that the interests of those who are laboring and suffering now, are paramount to the whims and caprices of those who have passed from the stage of action; in other words, that the earth belongs to the living, and not to the dead. To exhibit the enormous abuses and perversions to which these mortmain holdings must lead, we need only refer to the old

*Author of the "Commercial Dictionary," and one of the best writers of his time upon Political Economy.