Treasury of England

“ From the twelfth century wool had been the one great export of England, and the one great source of wealth for nobles, churchmen, farmers, even kings. So important was its sale that statesmen very early saw the necessity of securing for the national Exchequer a share in the profits of the main national trade; and in aid of the royal treasury they devised in the first half of the thirteenth century a system which was quite peculiar to England, the organization of the Staple. ”

“ Being issued on the security of government, they supplied the place of coin, and were found a great convenience, acting as state counters, which passed as money, because the people knew that the government would receive them at full value. The Lords of the Treasury were authorized to contract with moneyed men to supply cash; and though these bills were at one time at a discount, their credit rose daily, until they reached 1 per cent. premium. They at first bore no interest; but when they were reissued, £7 12s. per cent. per annum was paid, and they became a favorite investment. ”

“ Parliament desired to make the right of granting taxes a genuine reality, and henceforward to fix the duties in detail. The first reading of the bill brought forward by the government was rejected, on the formal ground that tonnage and poundage were subsidies, for granting which a resolution must be taken before a bill on the subject could be brought in. [495] Parliament espoused the cause of the London merchants, who had certainly suffered in support of its claims, and demanded that the proceedings of the Treasury should be reversed. ”

“ Let us begin with the word treasury. In the fourteenth century treasury meant simply a storehouse, or at its narrowest a storehouse of valuables. To us the “treasury” is the government department of finance, but under Edward I the state office of finance was the Exchequer, which, as we saw, was located normally at Westminster, but since 1298 at York. When at Westminster the Exchequer had a “treasury” or storehouse there also, yet in its absence it is not likely that it kept either valuables or money at Westminster. ”

“ Three millions was indeed a considerable charge upon a revenue amounting to about £8,523,540. This was derived from four principal sources;—more than £3,800,000 from Excise and Malt Tax, £1,900,000 and over from the customs; £1,637,608 from the Land Tax, and the rest from the stamp duties and other small sources. The late war had cost the nation upwards of £30,000,000, and many financiers, not foreseeing the enormous development of the national resources which the next half century would produce, took a gloomy view of the financial position of England. ”

“ The steadily growing importance of Westminster and the concurrent decadence of Winchester led, of course, eventually, to the shifting of the central Treasury, but at the time of the ‘Dialogus,’ in the days of Henry II., it is clear that the Exchequer was not looked on as the seat of a permanent Treasury. For the storage of treasure is always implied by the payment for the light of the night watchman; and as to the watchman and his light, the evidence of the ‘Dialogue’ is clear ”

“ And since a Plentiful Currency will be so great a Cause of advancing this Province in Trade and Riches, and increasing the Number of its People; which, tho' it will not sensibly lessen the Inhabitants of Great Britain, will occasion a much greater Vent and Demand for their Commodities here; and allowing that the Crown is the more powerful for its Subjects increasing in Wealth and Number, I cannot think it the Interest of England to oppose us in making as great a Sum of Paper Money here, as we, who are the best Judges of our own Necessities, find convenient. ”

“ It is, therefore, possible to trace the normal growth and expansion of British finance as one of the aspects of the nation’s history.
The primitive financial institutions of England centre round the king’s household, or, in other words, the royal economy precedes the national one. Revenue dues collected by the king’s agents, rents, or rather returns of produce, from land, and special levies for emergencies form the elements of the royal income, which gradually acquired greater regularity and consistency. ”

“ There was a deficiency, too, in the ways and means of the government: money was never plentiful enough in the imperial coffers. At last, to get out of the difficulty, it was determined to try the effect of a paper-currency, and an issue was made of assignats or treasury-warrants, which, being based on the credit of the highest authorities, were regarded as secure; which fact, with their facility of transfer, soon brought them into circulation. ”

“ The severe shock so extensively sustained by the commercial and manufacturing interests in Great Britain has not been without a perceptible recoil upon ourselves. A reduced importation from abroad is necessarily succeeded by a reduced return to the Treasury at home. The net revenue of the present year will not equal that of the last, and the receipts of that which is to come will fall short of those in the current year. ”

“ The king wished the out-goings for the government to be kept quite distinct from the private expenditure for the court and royal family. Factories, which, owing to their nature and the circumstances of the country, could not exist without assistance, would no longer be supported by the Treasury, and the support of others would be given in the shape of premiums, as the king wished to have no partnership in them ”

“ In Great Britain, the annual land and malt taxes are regularly anticipated every year, by virtue of a borrowing clause constantly inserted into the acts which impose them. The bank of England generally advances at an interest, which, since the Revolution, has varied from eight to three per cent., the sums of which those taxes are granted, and receives payment as their produce gradually comes in. ”

“ This great revenue allows Great Britain to constitute an efficient sinking fund of five millions sterling, being an excess of actual income beyond expenditure, and amounting to more than the entire revenue of the United States.
If we look at the commerce of England, we shall perceive that its prosperous condition no less denotes the immensity of her riches. The average of three years’ exports, ending in 1789, was between thirteen and fourteen millions. ”

“ It might be remitted in bills drawn upon, and accepted by, particular merchants or companies in Great Britain, to whom a part of the surplus produce of America had been consigned, who would pay into the treasury the American revenue in money, after having themselves received the value of it in goods; and the whole business might frequently be transacted without exporting a single ounce of gold or silver from America. ”

“ France owes a debt of near two hundred millions of pounds sterling; of which about twenty-eight millions is due to Governments and individuals in the United Provinces.
England owes a debt not much short: of which about thirty millions is likewise due in the United Provinces.
The United Provinces, themselves, owe a debt of the generality, of fifty millions sterling besides the particular debts of each province. Russia, Prussia, Denmark, Sweden, all owe money to the United Provinces, notwithstanding the assistance of their mines. These Governments, too, are patterns of economy. ”

“ Whether it would not very much increase Trading, and be highly advantageous to the King’s Majesty, to have money plentiful in the Land, and greatly benefit the Common-Weale, if money in England was in some measure made sutable or equal, to the weight and fineness of money in other Lands, and whether this would not be a great means of bringing in money from other Lands, and then keep it in the Kingdome being brought in ”

“ At the restoration of peace in 1815, the national debt of England amounted in Federal currency to $4,305,000,000. It is impossible as yet to say what will be the ultimate amount of our national debt. It amounts now to rather more than one half of the debt of Great Britain, and, at its present ratio of increase, it will take nearly four years more to make our debt equal to hers. ”

“ England, in a great measure, by means of that credit or paper system, now so much denounced, has become the centre of the commerce, the exchanges, and the moneyed operations of the world. By the extent, variety, and perfection of her manufactures, she lays most nations that admit them freely, under contribution to her. And if we had no currency but specie, we should be just as much exposed to the moneyed power of London, or, which is the true state of the case, to the effects of an unfavorable balance of trade, as we now are. ”

“ The first foreign loan was negotiated in ’Change Alley in 1706. The victories of the Duke of Marlborough had raised the pride of the English people; and even ’Change Alley possessed a somewhat similar feeling. When, therefore, his Grace proposed a loan of £500,000 to the Emperor, for eight years, at 8 per cent., on the security of the Silesian revenue, it was received with acclamation, and was filled in a few days by the first commercial names of England. ”

“ To secure the latter I see but one way, and that is to authorize the Treasury to redeem its own paper, at a fixed price, whenever presented, and to withhold from circulation all currency so redeemed until sold again for gold.
The vast resources of the nation, both developed and undeveloped, ought to make our credit the best on earth. With a less burden of taxation than the citizen has endured for six years past, the entire public debt could be paid in ten years. ”

“ The British board was to have no deposit of government stocks: ours are to have a deposit of five millions, to be converted into money when needed, and to constitute another permanent debt to that amount. 6. The British gave a true title to their exchequer act: we give a false one to ours. They entitled theirs, "An act for regulating the issuing and paying off, of exchequer bills:" we entitle ours, "A bill amendatory of the several acts establishing the Treasury department." ”

“ When issued in the discount of bills, they stand upon the principles of mercantile credit, and depend upon the goodness of the bills discounted. When issued upon the faith of taxes to be paid within the year, they stand upon the security of that payment, which is of a very complex nature, as any one may perceive. As long as the inhabitants of England consume exciseable goods, the excise will be paid: as long as trade goes on, customs will be paid: and as long as government subsists, the collateral security of the state will serve to make up all deficiencies in the amount of taxes. ”

“ And there was the British Treasury, the talisman of whose power has destroyed the efficacy of title-deeds, and converted the land and houses of the empire into paper-money and stock-debts, for the purpose of carrying on wars and performing deeds, which impartial history will justly characterize, when alas! the truth will be useless to the suffering victims! ”

“ The enormous magnitude of the empire has caused the subordinate departments of customs, the mint, &c., to expand until they have attained an organisation, an individual importance, a history of their own. The different modes of transacting money-business, rendered necessary by its greater amount and more complicated nature, have altered the routine both of the treasury and the exchequer; the changed relations of king and parliament have subjected the treasury and exchequer to new control and superintendence. ”

“ In countries where trade is established, industry flourishing, credit extensive, circulation copious and rapid, as in England, banks upon mortgage, however useful they may prove for other purposes, would not answer the demands of the trade of London, and the service of government, so well as the bank of England. ”

“ Yet, amidst these sacrifices, we had the mortification of finding a debt rapidly increasing, whereof the mere interest far exceeded the ancient revenues of the Crown, to be bequeathed, like an hereditary curse, to unborn ages. Though the supplies had been raised with less difficulty than in the late reign, and the condition of trade was less unsatisfactory, the landed proprietors saw with indignation the silent transfer of their wealth to new men, and hated the glory that was bought by their own degradation. ”

“ A war which greatly increased our yearly imposts would, with the present system, crush the artisan, paralyze the middle class, and scarcely leave the landed proprietor unscathed. The convertibility of the note of the Bank of England would cease; and it would be impossible to preserve the charter of Sir Robert Peel in its entirety, while twenty-eight millions were claimable yearly in specie, and the gold of the country went abroad in subsidies.
In an earlier portion of the volume, the writer briefly advocated annuities as one mode of treating the national debt. ”

“ The more the people traded abroad, the greater were the proceeds of the customs; the more they consumed, the greater the proceeds of the excise; now the chief items of the royal revenue. All the sources of national wealth originated in the Long Parliament and the Commonwealth, for the transfers of the customs and excise were first made then, and only resumed after the Restoration. ”

“ In the sphere of financial policy, it was the Treasury’s own responsibility to plan the appropriate precautions—a programme of taxation without any misjudged mercy in it, and a programme of borrowing to bring in the genuine savings of the people. ”

“ In 1402, we find the parliament enacting, in the spirit of former statutes, that all merchants, whether strangers or denizens, importing commodities from abroad, and selling them in the country for English money, "shall bestow the same money upon other merchandise of England, for to carry the same out of the realm of England, without carrying any gold or silver in coin, plate, or mass, out of the said realm, upon pain of forfeiture of the same, saving always their reasonable costs." ”