The immediate, as well as ultimate, results of the new system are alike remarkable and worthy our attention.

1st, The credit of the government was now firmly established.

It could borrow more money, and at a lower rate of interest, than ever before. Men of small means could now loan money to the government, and with entire confidence. The whole community could be laid under contribution.

2d, Government was enabled to carry on war by borrowing, instead of imposing taxes. War could be waged with credit, instead of cash. Parliament had only to vote a loan. No expenditure need be stopped for want of funds, while the national credit was unimpaired. This was a great change. Many a war had been abruptly closed for want of funds. There was to be no such necessity hereafter.

3d, This course removed the fear of immediate and pressing taxation from the rich, because the greater part was now to fall upon the masses of the people, who pay taxes, not in proportion to property, but to consumption. This was an agreeable consideration to the wealthy classes; and the more so, because, as the public stocks were multiplied, better opportunities were afforded for investments.

4th, Especially was the new policy acceptable to the aristocracy, who, at that time, even more perhaps than now, monopolized the public offices, and whose revenues and patronage were increased by governmental expenditures.

We have said that William became involved in a war with France. In eight years, besides expending all he could raise in taxes, he increased the national debt from 1,200,-000 to ,21,500,000. A peace of five years followed Anne's accession (1701), during which five millions of the debt were paid off. Then came the war of the Spanish succession. The ostensible object was "to humble the Bourbons, and deprive Philip V. of his crown." This lasted eleven years, and added 37,500,000 to the debt, besides consuming 6,500,000 raised in taxes; so that, at the peace of Utrecht, the national debt was 54,000,000.

In 1727, the House of Hanover succeeded to the throne, in the person of George I., and then came a peace of twenty-six years; but, in all this time, the public debt was reduced to the extent of only 7,500,000. Why? Because it was no object with the ruling class to pay off the debt, since the national stocks had become the most eligible investments; so the resources of the nation were squandered upon the court. In 1739, therefore, the debt was 46,500,000, when the war of the Austrian succession took place. Its specific object was to secure the throne of Austria to Maria Theresa; and the debt was carried up to 78,000,000. Then came eight years of peace; but the debt was reduced only three millions.

In 1756 commenced what was known in this country as "the old French War," or "the Seven Years' War." It was caused by a dispute about colonial boundaries, or, as the wags of those days said, "about a few acres of snow in Nova Scotia;" but it eventually involved a great part of Europe, and the American colonies of both France and England.

No.11: Rise and Growth of the British National Debt.

Then followed a peace of twelve years; but only 10,500,000 were paid off. The war of the American Revolution lasted seven years, and carried the debt up to 239,000,000. In the ten years of peace and prosperity which followed that great contest, the public debt was reduced but 5,000,000, notwithstanding that the resources of England were largely increased, and her ability to reduce the national indebtedness was ample, if the disposition to do it had existed.

In 1793 began the war that grew immediately out of the French Revolution. This lasted for nine years, and increased the debt to 526,000,000. Then, in consequence of the Treaty of Amiens, a period of one year's peace intervened; but it was only an armed truce: military preparations were continued, and the public debt was increased 3,000,000.

In 1803 commenced the final struggle with Napoleon, which terminated in 1815, leaving the British debt at 865,000,000 sterling. During the twenty years following, 87,000,000 were paid off. This was from necessity, rather than choice; a measure of policy adopted to secure the credit of the government. In 1835, the debt was but 778,-000,000; but the emancipation of eight hundred thousand slaves in the West Indies added to the debt 20,000,000. It has stood at 800,000,000, very nearly, ever since. We give in Diagram No. 11, inserted here, an illustration of the facts as we have stated them.

We have given this history of the rise and progress of the debt of Great Britain, as exhibiting the natural effects of such a system as she inaugurated during the reign of William and Mary. But we have shown only a part of the system. The history of the national bank is interwoven with that of the national debt. It was incorporated in 1697, with a capital, as we have said, of 1,200,000. As the public debt was enlarged, the capital of the bank was increased; that is, more and more of the debt was incorporated into the bank organization, until it amounts, at the present time, to 14,475,000. This bank, as before stated, has never had a shilling of capital to lend to the people; it has simply held a certain amount of the national stocks, and, upon the credit of these, has issued its own promises to pay; and these promises, having been made a legal tender by Parliament, have circulated as money.

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.