Note 92 — PART II. CONTAINING Remarks on some Particulars in a Speech at opening the Budget in April 1776.

The paper currency of the Colonies is one of the greatest disadvantages under which they labour; but it is of a more safe and permanent nature than ours. Were it not so, it could not have been of the least use to them for the last year and a half. He who doubts this, need only consider what our paper would be worth were we now invaded as they are.

This difference depends chiefly, on the following circumstances.—Their paper is not payable on demand.—It is a legal tender.—It represents fixed property which is mortgaged for it.—It does not support such a monstrous debt as ours.—And when public emergencies require any extraordinary emissions, they are generally sunk by taxes in four or five years.—It is the first of these circumstances that gives our paper its currency; and it is also this circumstance that creates the danger attending it, by rendering it incapable of sustaining any great shock or panic.—The possession of securities equal in nominal value to the amount of the paper emitted, or the debts contracted, is of little consequence when the value of these securities depends on the paper, and is created by it; that is, in other words, when the debts themselves are the very cash which must pay the debts.—Nothing can be more unnatural than such a state of things; and it may hereafter be a curious object of enquiry, how it could be ever possible that it should subsist any long time.

In page 78 of the Observations on Civil Liberty, I have said, “that the kingdom of France has no such dependence as we have on paper-credit; and that its specie amounts to 67 millions sterling.” In mentioning this sum I took the lowest of different accounts which I had then received from different authorities. I have since received accounts which make it 87 millions and a half; or 2000 millions of livres. This, in particular, is the account of an author whom all know to be likely to be well informed on this subject; I mean the author of the Treatise on the Legislation and Commerce of Corn, Part I. chap. v.—In the same treatise it is said, (Part I. chap. viii,) that it appears, from the returns made by the intendants of the different Provinces, that the number of annual deaths in the whole kingdom of France, for three years ended in 1772, was 780,040. I have been informed by the ingenious author, that this account may be depended on; and if so, France must contain 26 millions of inhabitants; for the best observations prove, that no more than a thirty-third part of a whole kingdom dies annually. See Observations on Reversionary Payments, page 200.—In Sweden, though a nineteenth part die in the capital every year, only a thirty-fifth part die in the whole kingdom. See Philosophical Transactions, Vol. lxv. for 1775, p. 426. The particulars now mentioned, added to the nature of the debts of France as mentioned in page 78 of the Observations on Civil Liberty, form a striking contrast between the state of that kingdom and ours. Nothing gives us our superiority but the advantages we derive from our Religion and our Liberty. Even in these respects, however, they seem to be improving, while we are declining. Montesquieu, Abbe Raynal, and others of their most admired writers, inculcate principles of government, and breathe a spirit of Liberty, which, to the shame of this country, are become offensive in it.