there must have been some great fallacy
in the notions of those who uttered and of those who believed that long
succession of confident predictions, so signally falsified by a long
succession of indisputable facts. To point out that fallacy is the
office rather of the political economist than of the historian. Here
it is sufficient to say that the prophets of evil were under a double
delusion. They erroneously imagined that there was an exact analogy
between the case of an individual who is in debt to another individual
and the case of a society which is in debt to a part of itself; and this
analogy led them into endless mistakes about the effect of the system
of funding. They were under an error not less serious touching the
resources of the country. They made no allowance for the effect produced
by the incessant progress of every experimental science, and by the
incessant efforts of every man to get on in life. They saw that the debt
grew; and they forgot that other things grew as well as the debt.

A long experience justifies us in believing that England may, in the
twentieth century, be better able to bear a debt of sixteen hundred
millions than she is at the present time to bear her present load. But
be this as it may, those who so confidently predicted that she must
sink, first under a debt of fifty millions, then under a debt of eighty
millions then under a debt of a hundred and forty millions, then under a
debt of two hundred and forty millions, and lastly under a debt of eight
hundred millions, were beyond all doubt under a twofold mistake. They
greatly overrated the pressure of the burden; they greatly underrated
the strength by which the burden was to be borne.

It may be desirable to add a few words touching the way in which the
system of funding has affected the interests of the great commonwealth
of nations. If it be true that whatever gives to intelligence an
advantage over brute force and to honesty an advantage over dishonesty
has a tendency to promote the happiness and virtue of our race, it can
scarcely be denied that, in the largest view, the effect of this system
has been salutary. For it is manifest that all credit depends on two
things, on the power of a debtor to pay debts, and on his inclination
to pay them. The power of a society to pay debts is proportioned to the
progress which that society has made in industry, in commerce, and in
all the arts and sciences which flourish under the benignant