If the 3 _per cents._ had been supposed at a greater discount, it is evident that these several values would have been likewise greater; and had the quantity of 4 _per cent._ stock been supposed _double_ or _triple_, the effect would have been the same with a delay of redemption; and had it been supposed thirty or forty millions, the effect (in consequence of our slow progress in redeeming our debts) would not have fallen very short of an eternal delay of redemption.
Before 1749, the amount of the public debts carrying 4 _per cent._ interest was near 58 millions. The expectation, therefore, of the advantage now explained could not _then_ have any effect; and the only cause which could have influenced, in any considerable degree, the comparative prices of these stocks must have been the first I have assigned, or the expectation of their _reduction_; that is, in other words, the expectation of a _sudden redemption_ of them, as soon as the 3 _per cents._ got above _par_, by borrowing money at that interest. Had not this been foreseen, or had there been an act of parliament rendering it impracticable, there is no reason to doubt but the price of the FOUR _per cents._ compared with the THREE _per cents._ would have approached nearly to the proportion of the rates of interest, agreeably to what is said in (page 191).
The state of the public funds has been much changed since the two last wars; but it is an alteration that has increased the comparative value of 4 _per cent._ capitals.
I have already observed, that during the last war there was reason to expect, that, as soon as peace came, the THREE _per cents._ would rise above _par_. No one can now entertain any such expectation. On the contrary; it is most probable, that they will never again rise to that which has been their average price during the last peace from 1763 to 1775, and which, I think, may be stated at 87 or 88.—My reason for this assertion is,
First, that after the present war, should we be so happy as to escape the ruin with which it threatens us, our taxes and expences will be so much increased, and at the same time our resources so much diminished, as necessarily to leave the credit and value of our public securities lower than ever.