expended, as revenue drawn from the
subject, is reimbursed to the stockholders, and becomes capital.

This would immediately raise the funds, and thereby would counteract
the sinking fund itself in a very material degree. Money would
become abundant for all the purposes of trade, and it would be
difficult

---
{193} A sort of ridicule has been thrown on the operation of
compound interest, because its effects are so amazing as not to be
capable of being realized; but, on this subject, two things are to be
said,--first of all, it has never been to the operation during the first
hundred years that either incredulity or ridicule have applied, and the
sinking fund was never meant to continue to operate so long.
Secondly, though there are many drawbacks on the employment of
large sums laid out at interest, that diminish, and would at last destroy,
the result of the calculation in accumulating; it is not so in paying off
debt, where the effect calculated is produced with the greatest
certainty.
-=-

[end of page #241]

to find employment for it; and, if the progress continued, part of it
would most undoubtedly be sent to other countries, and so be the
means of impoverishing this.

If, then, we could suppose fifty years of peace, and that the national
debt could be paid off, (as it might be in that time,) the situation of
productive labourers would be worse; of unproductive, better; and,
finally, capital would leave the country, which would be deprived of
that transferable stock, the beneficial effects of which have been
mentioned.

The necessity that creates industry would be diminished, so that
nothing could tend more effectually to bring on the decline of the
nation than if all the debt were to be paid off; an operation which,
though possible in calculation, never certainly would take place; the
evils attending it would be so manifest, so clear, and so palpably felt
before that was accomplished.

To let the national debt continue to increase is, then, certain ruin, at
some period unknown, but perhaps not very distant; to pay it off
would be equally dangerous: what then are we to do?

We must try to raise the resources necessary for war within the year,
by which means we may avoid augmenting the debt. That is not,
however, to be done while the present heavy interest remains, and that
cannot be got rid of, according to any method yet publicly known,
without bankruptcy, breaking faith with creditors, or paying off