Notes in 1810; and suppose the whole income in 1790, 100 millions, and in 1810 about 250 millions; the whole circulation in proportion to the whole income in 1790, was 45 millions to 100 millions; in 1810, 52 millions to 250 millions.
Now if the Committee of 1810 had gone into these views and comparisons, the result of the facts would have appeared so glaringly contradictory to their assumed principle—that the high price of Gold was created by the excessive issue of paper—that they could not have faced the public, in venturing such an assertion.
I am induced therefore most firmly to believe, that the increase of prices generally, and of Bullion in particular, is owing, by no means solely to an excess of Paper Circulation, which in fact has never taken place, but to the great increase of taxation, which every man feels and laments.
Taxes increase prices always,—and, as every person on whom a tax falls, endeavours to shift the burthen of it from himself on others, and to live as well after paying the tax as he did before, taxes increase prices in a double ratio to the amount of the taxes. If then we pay a revenue of above 56 millions a year, including the expenses of collection, instead of 19 millions, and if these 56 millions act upon prices in a double ratio, will not this circumstance as fully account for the increase of prices alone, as the excess of issues alone, had it been proved? And yet the Reporters of 1810 were satisfied to treat the point of taxation with entire indifference, as if it was totally foreign and irrelevant to the subject of their inquiry, and had no connexion at all whatever with the rise of prices.
The omission of investigating the effect of taxation upon prices, was injurious to the character of the Report of 1810. But it would be much more to belamented