what they pay in those taxes, might, no doubt
have been accumulated into capital, and consequently 
employed in maintaining productive 
labour; but the greater part would probably 
have been spent, and consequently employed 
in maintaining unproductive labour
The public expense, however, when defrayed 
in this manner, no doubt hinders, more or less, 
the further accumulation of new capital; but 
it does not necessarily occasion the destruction 
of any actually-existing capital
When the public expense is defrayed by 
funding, it is defrayed by the annual destruction 
of some capital which had before existed 
in the country; by the perversion of some 
portion of the annual produce which had before 
been destined for the maintenance of productive 
labour, towards that of unproductive 
labour. As in this case, however, the taxes 
are lighter than they would have been, had a 
revenue sufficient for defraying the same expense 
been raised within the year; the private 
revenue of individuals is necessarily less burdened
and consequently their ability to save 
and accumulate some part of that revenue into 
capital, is a good deal less impaired. If the 
method of funding destroys more old capital
it, at the same time, hinders less the accumulation 
or acquisition of new capital, than that 
of defraying the public expense by a revenue 
raised within the year. Under the system of 
funding, the frugality and industry of private 
people can more easily repair the breaches 
which the waste and extravagance of government 
may occasionally make in the general 
capital of the society
It is only during the continuance of war
however, that the system of funding has this 
advantage over the other system. Were the 
expense of war to be defrayed always by a revenue 
raised within the year, the taxes from 
which that extraordinary revenue was drawn 
would last no longer than the war. The ability 
of private people to accumulate, though 
less during the war, would have been greater 
during the peace, than under the system of 
funding. War would not necessarily have 
occasioned the destruction of any old capitals
and peace would have occasioned the accumulation 
of many more new. Wars would, 
in general, be more speedily concluded, and 
less wantonly undertaken. The people feeling
during continuance of war, the complete 
burden of it, would soon grow weary of it; 
and government, in order to humour them, 
would not be under the necessity of carrying 
it on longer than it was necessary to do so. 
The foresight of the heavy and unavoidable 
burdens of war would hinder the people from 
wantonly calling for it when there was no 
real or solid interest to fight for. The seasons 
during which the ability of private people 
to accumulate was somewhat impaired
would occur more rarely, and be of shorter 
continuance. Those, on the contrary, during 
which that ability was in the highest vigour, 
would be of much longer duration than they 
can well be under the system of funding
When funding, besides, has made a certain 
progress, the multiplication of taxes which it 
brings along with it, sometimes impairs as 
much the ability of private people to accumulate
even in time of peace, as the other system 
would in time of war. The peace revenue 
of Great Britain amounts at present to 
more than ten millions a year. If free and 
unmortgaged, it might be sufficient, with proper 
management, and without contracting
shilling of new debt, to carry on the most vigorous 
war. The private revenue of the inhabitants 
of Great Britain is at present as 
much incumbered in time of peace, their ability 
to accumulate is as much impaired, as it 
would have been in the time of the most expensive 
war, had the pernicious system of 
funding never been adopted. 
In the payment of the interest of the public 
debt, it has been said, it is the right hand 
which pays the left. The money does not go 
out of the country. It is only a part of the 
revenue of one set of the inhabitants which is 
transferred to another; and the nation is not 
a farthing the poorer. This apology is founded 
altogether in the sophistry of the mercantile 
system; and, after the long examinatior, 
which I have already bestowed upon that system, 
it may, perhaps, be unnecessary to say 
any thing further about it. It supposes, besides, 
that the whole public debt is owing to 
the inhabitants of the country, which happens 
not to be true; the Dutch, as well as several 
other foreign nations, having a very considerable 
share in our public funds. But though 
the whole debt were owing to the inhabitants 
of the country, it would not, upon that account, 
be less pernicious
Land and capital stock are the two original 
sources of all revenue, both private and public
Capital stock pays the wages of productive 
labour, whether employed in agriculture, 
manufactures, or commerce. The management 
of those two original sources of revenue 
belongs to two different sets of people; the 
proprietors of land, and the owners or employers 
of capital stock. 
The proprietor of land is interested, for the 
sake of his own revenue, to keep his estate in 
as good condition as he can, by building and 
repairing his tenants houses, by making and 
maintaining the necessary drains and inclosures, 
and all those other expensive improvements 
which it properly belongs to the landlord 
to make and maintain. But, by different 
land taxes, the revenue of the landlord may 
be so much diminished, and, by different duties 
upon the necessaries and conveniencies of 
life, that diminished revenue maybe rendered 
of so little real value, that he may find himself 
altogether unable to make or maintain 
those expensive improvements. When the