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of this financial policy is afforded by a national debt, larger than the aggregate amount of the debts of all other European nations. Mr. Gladstone in his budget-speech of 1854 evoked the enthusiasm of the House of Commons by the declaration that in future the financial policy of England was to be reversed. The expenses of the Russian War were to be defrayed entirely by increased taxation, and thus posterity would inherit the assumed advantages of that contest, unencumbered by the penalties of augmented pecuniary burdens. The virtuous resolution of Parliament was not maintained, and the Russian War added 50,000,000l. to our permanent debt. It would be foreign to our immediate subject to discuss to what an extent the present generation is justified in burdening future generations; there can however be no doubt that the whole of the money required for the Russian War might have been raised by taxation.

A loan may be obtained from two sources; it may be taken from the capital of the country, or it may be provided from increased savings. If capitalists consider that the terms offered by the Government afford an eligible investment, they may be induced to take some of the capital employed in various commercial undertakings, and lend it to the Government. Now let us trace the consequences of such a diversion of capital from reproductive industry. It may be thought that if the Government spends the loan at home, the loan has not diminished the capital of the country; it has merely caused a portion of it to be diverted to other purposes. The Government, however, will ordinarily spend the loan in warlike materials. Cannon-balls, gunpowder, and mortars are commodities which cannot be appropriated to assist the future production of wealth, labourers cannot be fed by them, and therefore, when the loan is converted into such commodities, it cannot form a Rh