But if, by advancing their money
they were to purchase, instead of perpetual annuities
annuities for lives only, whether their 
own or those of other people, they would not 
always be so likely to sell them with a profit. 
Annuities upon their own lives they would 
always sell with loss; because no man will 
give for an annuity upon the life of another, 
whose age and state of health are nearly the 
same with his own, the same price which he 
would give for one upon his own. An annuity 
upon the life of a third person, indeed, 
is, no doubt, of equal value to the buyer and 
the seller; but its real value begins to diminish 
from the moment it is granted, and continues 
to do so, more and more, as long as it 
subsists. It can never, therefore, make so 
convenient a transferable stock as a perpetual 
annuity, of which the real value may be 
supposed always the same, or very nearly the 
In France, the seat of government not being 
in a great mercantile city, merchants do 
not make so great a proportion of the people 
who advance money to government. The 
people concerned in the finances, the farmers-general
the receivers of the taxes which are 
not in farm, the court-bankers, &c. make the 
greater part of those who advance their money 
in all public exigencies. Such people are 
commonly men of mean birth, but of great 
wealth, and frequently of great pride. They 
are too proud to marry their equals, and women 
of quality disdain to marry them. They 
frequently resolve, therefore, to live bachelors
and having neither any families of their 
own, nor much regard for those of their relations
whom they are not always very fond of 
acknowledging, they desire only to live in 
splendour during their own time, and are not 
unwilling that their fortune should end with 
themselves. The number of rich people, besides, 
who are either averse to marry, or whose 
condition of life renders it either improper or 
inconvenient for them to do so, is much greater 
in France than in England. To such people
who have little or no care for posterity
nothing can be more convenient than to exchange 
their capital for a revenue, which is to 
last just as long, and no longer, than they 
wish it to do. 
The ordinary expense of the greater part 
of modern governments, in time of peace, being 
equal, or nearly equal, to their ordinary 
revenue, when war comes, they are both unwilling 
and unable to increase their revenue 
in proportion to the increase of their expense
They are unwilling, for fear of offending the 
people, who, by so great and so sudden an 
increase of taxes, would soon be disgusted 
with the war; and they are unable, from not 
well knowing what taxes would be sufficient 
to produce the revenue wanted. The facility 
of borrowing delivers them from the embarrassment 
which this fear and inability would 
otherwise occasion. By means of borrowing
they are enabled, with a very moderate increase 
of taxes, to raise, from year to year
money sufficient for carrying on the war
and by the practice of perpetual funding, they 
are enabled, with the smallest possible increase 
of taxes, to raise annually the largest possible 
sum of money. In great empires, the people 
who live in the capital, and in the provinces 
remote from the scene of action, feel, many 
of them, scarce any inconveniency from the 
war, but enjoy, at their ease, the amusement 
of reading in the newspapers the exploits of 
their own fleets and armies. To them this 
amusement compensates the small difference 
between the taxes which they pay on account 
of the war, and those which they had been 
accustomed to pay in time of peace. They 
are commonly dissatisfied with the return of 
peace, which puts an end to their amusement
and to a thousand visionary hopes of 
conquest and national glory, from a longer 
continuance of the war
The return of peace, indeed, seldom relieves 
them from the greater part of the taxes imposed 
during the war. These are mortgaged 
for the interest of the debt contracted, in order 
to carry it on. If, over and above paying 
the interest of this debt, and defraying the 
ordinary expense of government, the old revenue
together with the new taxes, produce 
some surplus revenue, it may, perhaps, be 
converted into a sinking fund for paying off 
the debt. But, in the first place, this sinking 
fund, even supposing it should be applied to 
no other purpose, is generally altogether inadequate 
for paying, in the course of any period 
during which it can reasonably be expected 
that peace should continue, the whole 
debt contracted during the war; and, in the 
second place, this fund is almost always applied 
to other purposes
The new taxes were imposed for the sole 
purpose of paying the interest of the money 
borrowed upon them. If they produce more, 
it is generally something which was neither 
intended nor expected, and is, therefore, seldom 
very considerable. Sinking funds have 
generally arisen, not so much from any surplus 
of the taxes which was over and above 
what was necessary for paying the interest or 
annuity originally charged upon them, as 
from a subsequent reduction of that interest; 
that of Holland in 1655, and that of the ecclesiastical 
state in 1685, were both formed in 
this manner. Hence the usual insufficiency 
of such funds
During the most profound peace, various 
events occur, which require an extraordinary 
expense; and government finds it always more 
convenient to defray this expense by misapplying 
the sinking fund, than by imposing a 
new tax. Every new tax is immediately felt 
more or less by the people. It occasions always 
some murmur, and meets with some