No More Learning

The faults of the French founded my glory:
the corruption of the Russian generals kept it
up for some time, and the divisions between the
Austrian generals have nourished it to the end.
When you are lucky, the arms which are opposed
to you turn to your profit.
Without the armies of the Empire and Sweden
' The German army still levies contributions in kind as at
Ghent.
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? 92 Confessions of Frederick the Great
I should never have been able to shew mine. It
was a real God-send for me. I had thrown such
ridicule on these two nations that the soldiers who
had any feeling felt themselves dishonoured by-
serving them.
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? MORNING THE SEVENTH
CONCERNING FINANCE
NOTHING is so easy, my dear nephew, as to
put finance on an honest footing, and no-
thing renders it tolerable, except the tone which one
gives to it. It is in this that I find that my pre-
decessors have conceived very well in creating
the Land Courts. There you have a jurisdiction
which appears to have no other function than that
of adjusting the interests of the King and of his
subjects, whereas, in reaHty, it thinks only of the
former. For this reason, all the offices in any way
appertaining to it are regarded as necessary, and
it appears as if the financier had been overlooked
in favour of the man who is useful to the King.
My kingdom pays as much, in proportion, as
any other, and the taxes on it are very numerous,
since my revenues are derived from Crown Lands,
Woods, Mills, Subsidies, Tithes, Ferry-dues, Tolls,
Salt, Fisheries, Game-Hcences, Stamped-paper,
Stamp-Office and Registration of Deeds, Great and
Little Seals, Forfeiture of Estate, Taxes on Em-
ployment, Excise -- which includes the rights over
every kind of commodity in general, coming into
the towns, whether necessaries or luxuries, and
93
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? 94 The Confessions of
over all merchandise -- the duty of billeting soldiers,
the money for recruits, and finally, the men and
horses for the artillery.
In spite of this multiplication of taxes, which
are exacted with the utmost rigour, my subjects
do not complain, because everything is done in
my name, and care is taken to give to my repre-
sentatives a certain social position.
There are authors who have advanced the theory
that it is a part of kingly policy to farm out all
sources of revenue, because, by this means, the
hatred of the people is diverted to the collectors
(farmers) alone. But these authors have not
considered that the hatred recoils little by little
upon the protector of these agents.
For a true comprehension of finance, you should
read the Memorial prepared by the Royal Council
of my father, upon the demise of my grandfather.
The Memorial of the Council
The King enquires how, without overburdening his
subjects, he can extinguish a debt of thirty millions?
Finance is the Monster of the fable. In every State
contempt of it is a point of honour, yet in every State
it is the object of the greatest courtship and flattery.
This contradiction inflicts considerable wrong upon
the governing Princes.
We must discover the truth in everything, and to
this end let us examine this Monster.
What is Finance?
It is the collection of the revenues of a State, or else
the expenditure of these same revenues.
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? Frederick the Great 95
In whose name are these revenues collected or ex-
pended?
In the King's name.
Whom does the King employ for the raising or
expending the revenues?
His subjects.
What sort of subjects has the King to choose for this
work?
Honest men.
Are honest men to be despised?
No.
Why then are financiers despised?
Because they are not honest.
Whose fault is this?
That is the great problem which certainly will em-
barrass your Ministers.
What results from all this?
That you have need of revenues and of men to raise
them, and that it behoves Your Majesty to choose
them well.
Two points of view in general regulate the conduct of
men: honour and interest. On all the occasions when
it is possible to pay them with honour, it is so much
gain over interest. This is therefore a coinage of
which a prince should make as much use as possible.
But since in a well-regulated State the different cur-
rencies ought not to be confused, it is essential to give
to this coinage the degrees of valuation proper to it.
For the money of this metal bestowed upon a General
must not be the same in form as that presented to the
premier merchant of the realm.
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? 96 The Confessions of
In order to carry out this project, we have formu-
lated the following plan :
We desire that there shall no longer be any forms of
tax-farming in our kingdom :
(i) Because they are useless to us, and utterly
opposed to our interests.
(2) Because they come with too much authority
between us and our subjects.
(3) Because they prevent us from knowing the true
condition of things with regard to our revenues and to
our subjects themselves.
(4) Because the gains brought about by them in-
crease luxury, and corrupt manners; excite the great
to indignation, and vex the populace.
(5) Finally, because they are opposed to the project
we have formed of imparting a certain lustre to every-
thing connected, directly or indirectly, with our
finances.
In order to prove to you the more completely the
uselessness of these farmers-general, we will show you
that three-fourths of them are not, and never could
be, useful people, not only because they are without
credit of themselves, but also because their funds are
the property of the public. As to their abilities, the
only skill allowed them by their state is that of stoutly
maintaining their rights.
As for scruples, we have not yet been fortunate
enough to find a company which has said to us: "We
were mistaken when we made such and such an
agreement with Your Majesty. We were reckoning
for a gain of 20 per cent. , and we have found that
it amounted to 72 per cent. "
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? Frederick the Great 97
If our farmers-general were only useless to us, it
would yet be possible at a pinch to make use of their
services, but, unfortunately, they are absolutely op-
posed to our interests, not only on account of the gains
they make off us, but chiefly because they are the cause
of our paying a huge interest. We will explain this
to you in a few words.
We have calculated the amount of interest which we
have paid to various companies for the past ten years,
and we have found that the sum total amounts to
sixty millions of livres. These companies were pos-
sessed of little or no capital, in consequence of which
they have been obliged to borrow the funds for the
advances which they have made to us at different
times.
From whom have they borrowed?
From the public.
Why did the public lend to them?
Because they paid five to six per cent.
Why did they pay five to six per cent. ?
Because the King gave ten per cent. , and the same
money brought them in a further fifteen per cent, of
profit.
Why did the King give them ten per cent. ?
Because they came between the King and his sub-
jects, and by this means drew all the money to them-
selves.
Why did they draw all the money to themselves?
Because the public prefers to do business with indi-
viduals who are making big profits rather than with
the King.
It is certain, therefore, that when there is no middle-
man, the King will be the recipient of the interest on
the money?
7
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? 98 The Confessions of
Yes, without doubt, and we may conclude with
certainty that the King has paid at least thirty mil-
lions too much on these sixty millions.
We have no need to strengthen our case with further
arguments; you know its soundness, and you will
admit that the Ministers of the King my father have
been much more than foolish. In effect, they have
not been content with abandoning large profits on the
revenues of the King, but they have further paid
interest as if they had not had the smallest resources.
One might say that they permitted the financiers to
treat their master much in the same way that money-
lenders treat minors of good family, with this difference
only, that the King has been obliged to enrich those
from whom he wished to borrow, whereas the minors
of good family have not altogether the same vigilance
as the usurers.
Here is a scheme for execution in every part of our
revenue, the administration of which has appeared to
us injurious to our interests.
Subsidies
This tax cannot be further extended, since in
reality we take more than a third of the revenue.
Neither could it be assessed with greater justice, since
it has been settled according to the register of the
general survey of lands; the only question, therefore,
is as to its collection.
This impost was originally regarded as a voluntary
contribution, one at the same time necessary for the
maintenance of the State. It was money which was
not destined for the coffers of the King, but only for
those of the Government; for which reason the State
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? Frederick the Great 99
itself had sought the least costly methods of raising
the tax.
Then came the creation of the offices of Receivers-
General and of Local Receivers. These were given
rights of commission on the funds, they were allowed
to charge collection expenses, and in some measure
they received absolute authority over this section.
To remedy the abuses which have followed the
changes, we have enquired of every province what
subsidies and tithes it contributed, including costs,
and we have verified the amounts paid into our trea-
sury. The province of Minden has sent us the sub-
joined Memorandum.
MEMORANDUM
The Province of Minden has paid to the King: --
livres. livres.
In Subsidy 550,000
Expenses 15,000
565,000
Costs to the King upon this: --
Paid to Receiver-General of the Province:
(i) In Appointments 6,000
(2) In Commission at one-half per cent. 8,250*
To four Local Receivers of the Pro-
vince :
(3) In Appointments at 1,500 livres
each 6,000
(4) In Commission at one-half per
cent 8,250*
(5) In Expenses on account of de-
layed payments 15,000
43. 500
Net Remainder for the King 521,500
'The king's arithmetic in this memorandum is absolutely
unintelligible.
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? icx) The Confessions of
Thus far the evil does not appear great, but this is
what renders it considerable. The four Receivers
have a year in which to pay the Receiver-General, and
the Receiver-General has eighteen months in which to
pay the King. During this time they are continuing
to receive, and are putting out their money to interest.
What is the result? We find ourselves always a year
and a half behindhand; we are obliged to borrow at
least a year's amount, in order to meet necessary
expenses. To whom do we apply? To these very
Receivers-General, who lend us our own money at
ten per cent. Therefore,
livres
From the sum of 521,500
we must take further, the sum of 55,000^
You will see that there will finally remain
to us only the sum of 466,500
After very careful consideration, we have proposed
to the Province of Minden that it should raise a mean
amount of 20,000 livres, to be received by us direct at
Berlin, in two equal payments, to be made, the first in
the month of August, and the second in the month of
February of the following year. This proposal the
Province has accepted.
The following are the advantages which will accrue
to the Province and to us.
The Province will gain: --
livres.
Upon the Charges of 15,000 livres, at least 7, 500
Upon the sum of 20,000 livres, a Grant for
Expenses of Collection amounting to 5,ooo
Total Gain for the Province 12,500
' The king's arithmetic in this memorandum is absolutely
unintelligible.
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? Frederick the Great loi
We shall gain : -- livres.
(i) On the Expenses of Collection and of Com-
missions 8,500
(2) Being paid every six months, we shall, at
the lowest calculation, have to borrow half
the amount only. Thus on the 55,000
livres interest formerly paid to the Receivers,
we will gain the half, which leaves to the
King 27,500
Total Gain for the King 36,000
Excise Dues
We have established the general levying of
Excise, and we have found that it amounts to. . . . 4,500,000
On which the Tax-farmers pay out: -- livres.
(1) To the King 1,500,000
(2) On advances of 1,500,000 five
per cent 75iOOO
(3) In Expenses of Administration. . . 2,225,000
3,800,000
Consequently, there remains a net profit to the
Tax-farmers of 700,000
After having established the general system of col-
lection, we have sent to each province the details of its
payments in subsidies, and we have enquired of them
what would be the most certain and the least costly
method of collecting them. We cite you the reply of
the Province of Magdeburg, because it appears to us
to be the clearest and the most satisfactory.
The Reply of the Province of Magdeburg
We have not been surprised by the enormous ex-
penses entailed on the Province by the administration
of the Excise Dues, but we should be much astonished
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? 102 The Confessions of
if the King did not accord us the Hberty of paying him
the subsidies by subscription, and above all, after the
Report which we are about to lay before him.
In the Province of Magdeburg the amount livres,
actually collected comes to 450,000
The Expenses of Administration are
as follows:
livres.
(i) For Four Directors at 6,000 livres. . . 24,000
(2) For Four Travelling Inspectors
at 2,400 livres 9,600
(3) For Twenty Town Receivers at
1,200 livres 24,000
(4) For 120 Travelling Agents at 800
livres 96,000
(5) Compensations and Expenses of
Official Reports 20,000
(6) Expenses and Salaries of the Court
of Excise 30,000
(7) Remittance of monies to the General
Pay-Office 10,000
213,600
Consequently, there remains for the Tax-farmers . . 236,400
of which 236,400 livres the King receives about 120,000
livres. Of what then is it a question ? It is to give to
the King 120,000 Hvres of Excise Dues. But we do far
more than this; we give him 170,000 livres, and this is
how we do so.
We have made two taxes, one for the towns, and the
other for the country, and we have made a general cal-
culation upon the different returns sent in by the
burgomasters of the towns and villages, and we have
found that every year the sales throughout the pro-
vince have been as follows: --
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? Frederick the Great 103
Flagons Flagons Flagons
of Wine. of Beer, of Spirits.
In the Boroughs and Towns . . 400,000 1,500,000 30,000
In the Villages and Hamlets . . 100,000 800,000 12,000
500,000 2,300,000 42,000
Totals:--
Beer 2,300,000
Wine 500,000
Spirits 42,000
Total Amount 2,842,000
According to the Two taxes which we impose:
FOR THE towns:
livres. livres.
400,000 flagons of wine at 10 sous
make 200,000
' 1,500,000 flagons of beer at 4 deniers
make 25,000
30,000 flagons of spirits at 20 sous
make 30,000
255,000
FOR THE villages:
100,000 flagons of wine at 5 sous make. . 25,000
800,000 flagons of beer at 3 deniers make. 12,000
12,000 flagons of spirits at 10 sous make . 6,000
43,000
298,000
We have sent circular instructions to the Burgo-
masters of the towns, and others to those of the villages
to the following effect : --
instructions to the burgomasters of magdeburg^
Gentlemen,
By the returns which you have forwarded to us,
'The king's arithmetic is unintelligible.
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? 104 The Confessions of
it is an established fact that the dealers in wine, beer,
and spirits sell each year in your town
133,000 pots of wine
800,000 " " beer
15,000 " " spirits.
We charge you, Gentlemen, to collect, in whatever
way suits you best, the sum of 93,833 livres, 6 sous,
8 deniers, to wit : --
livres. s. d.
For the 133,000 flagons of wine, at 10 sous. . . 66,500 - -
For the 800,000 flagons of beer at 4 deniers' . 13,333 6 8
For the 15,000 flagons of spirits, at i livre. . . 15,000 - -
Equal to the Imposition 94,833 6 8
We give the Town, for Expenses of Collection,
as making very nearly the consumption of a third
of the
livres. s. d.
Province 20,000 - -
This will not yield to the coffers of the
King more than 74,833 6 8
94,833 6 8
And by this arrangement the Eling will not collect
further taxes from your town. You will have the
satisfaction of giving him 16,000 livres more than the
Tax-farmers, and the privilege of adjusting the tax
on yourselves as you desire, and you will gain about
43,000 livres a year.
^ The king's arithmetic is unintelligible.
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? Frederick the Great 105
instructions to the burgomasters of villages^
Sir,
Following the Schedule which you have sent
us, it is obvious that the average sale per annum in
your Village amounts to --
400 flagons of wine
2000 " " beer
150 " " spirits.
We charge you, Sir, on your Village, by whatever
method appears most suitable to the Villagers in
Council for this purpose, to collect the sum of 425
livres.
livres.
For 400 flagons of wine at 5 sous 100
For 2000 flagons of beer at 3 sous 250
For 150 flagons of spirits at 10 sous 75
425
We give to the Village, for Expenses of Administra-
tion, 85 livres, in consequence of which it will only be
reported to yield 340 livres. By this payment the
King holds you exempt from further Customs dues,
and you will have the advantage of giving him about
40 livres a year more than the Tax-farmers, and the
privilege of taxing yourselves, and of gaining about
180 livres.
Concerning Salt^
The Tax-farmers give us yearly for Salt 900,000
livres. In virtue of this sum, we grant them the ex-
clusive right of working the Salt-mines and of manu-
' The arithmetic is again unintelligible.
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? io6 The Confessions of
facturing Salt, throughout our Kingdom, of charging
our subjects 5 sous a pound for Salt, and of forcing
them to take so much Salt per annum. According to
the returns and the consumption of Salt during the
past year, the Tax-farmers have disposed of 18,000,000
pounds of Salt at 5 sous
livres.
a pound, which amounts to 4,500,000
on which they have paid
Hvres.
To the King 900,000
For working the Salt at 6 deniers the
pound 350,000
Interest on advances at about 5 per
cent 350,000
Expenses of Distribution and Salaries. 900,000 3,270,000
Consequently the Tax-farmers retain 1,230,000
METHOD OF WORKING
We have devised a simple method of working, which
the cupidity of the Tax-farmers has rendered extremely
simple. It is as follows: --
We have required in each Province a Statement of
the amount of Salt which it was obliged to take into
store, and having collated all the different Statements,
we have drawn up a rule of division for the 900,000
hvres which the King draws from this farming; that
is to say, we have applied to the Province that por-
tion of this sum which corresponded to the amount
of Salt taken, taking everything into consideration,
and then we have sent to each Province the following
Memorandum : --
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? Frederick the Great 107
MEMORANDUM SENT TO THE PROVINCE OF MINDEN'
Gentlemen,
By the Report which you have sent, we see that
your Province is obHged to purchase from the depots
of the Farmers-General a milHon pounds of Salt per
annum, and to pay them, at the rate of 5 sous the
pound, 250,000 livres.
The King does not wish to use compulsion with his
subjects in the matter of any commodity which is
indispensably necessary to them, and from this
moment he takes over the control of the Salt Mines,
and will manufacture the Salt at his own expense, for
sale to all alike and without distinction. He merely
requires from you that you should send him yearly,
direct and free of charges, the sum of 50,000 livres,
making the i8th part of that of 900,000 livres given
him by the Farmers-General, and which you your-
selves pay since you take a million pounds of Salt,
making also the eighteenth part of the consumption
for one year.
But as by his project the King increases his revenue,
and at the same time confers an advantage upon you,
we propose to go into the matter with you in greater
detail (more minutely).
livres.
You take a million pounds of Salt every year, and
you pay for it 5 sous per pound, which makes 250,000
On this 250,000 livres the King receives only. . . . 50,000
Consequently there remains for the farmers 200,000
Through the enquiries which we have made,
we know that the Tax-Farmers disburse on the 200,000
^ The arithmetic is again unintelligible.
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? io8 The Confessions of
(i) For the production of a million livres.
pounds of Salt at i sou the pound 75,ooo
(2) Interest on advances both for the
75,000 livres and for the 50,000 livres
given to the King, about 6,800
(3) Expenses of Distribution at I sou
per pound 50,000
131,800
Leaving for the Tax-Farmers 68,000
It is this 68,200 livres which the King proposes to
divide with you and your Province, by giving the
dealer for right of sale the 50,000 livres which it costs
the Tax-Farmers in salaries for distribution of this
commodity in your Province. We imagine that your
dealers will be well satisfied.
Tobacco
sous.
We allow our tax-farmers to sell tobacco to the public
at the rate per pound of 45
It costs them the following: --
sous.
(i) Payment to Your Majesty 10
(2) Purchase in leaf 12
(3) Carriage 2
(4) Manufacture 3
(5) Packing (or making up) and waste 2
(6) Extraordinary expense and interest on ad-
vances 3
(7) Wages and expense of distribution 4
- 36
There consequently remains as net gain to the tax-
farmers on every pound 9
According to the total of the past year, this con-
sumption has amounted to eight million pounds.
Thus, our Tax-farmers have made 3,600,000 livres.
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? Frederick the Great 109
In order to secure for ourselves a portion of these
profits, we are establishing a General Depot in each
Province, to which the Tobacco is brought in the first
instance in leaf, to be then manufactured, and finally
sold at a fixed price to whoever wants it.
According to the calculation we have ourselves
made, based upon that of the Farmers-General, each
sous,
pound should cost us not more than 20
(1) For the purchase in leaf 12
(2) Carriage i
(3) Manufacture 3
(4) Packing and waste 2
(5) Interest and advances , 2
-- 20
We shall sell it to the public at 35
Consequently, we shall gain 15
which makes a gain of 2,000,000 livres for us.
There remains 10 sous, which will be re-absorbed in
commerce, and which will be shared, naturally, be-
tween the public and the dealer, for the latter will
certainly be content to make four or five sous per
pound.
Forestry
livres.
This Department is farmed for 2,500,000
Upon this sum we pay 800,000
to an endless number of officials, created formerly for
the purpose of keeping order, exclusive of the cost of
their oflficial reports, which are made at our expense,
and which amount to more than 400,000 livres per
annum.
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? no The Confessions of
livres.
Therefore, from the sum of 2,500,000
we must deduct 1,200,000
Consequently there only remains to
ourselves i ,300,000
In order thoroughly to understand the value of this
source of revenue, we have sent Surveyors into each
Province, who have drawn plans of all our forests, have
produced specimens of them, have analysed the quali-
ties of the woods, have noted the price of each, and
have observed the best method of selling them.
One can judge by the Report on one of our Pro-
vinces the result of their investigations throughout
the Kingdom.
Province of Minden
Report Sent to the Council by the Surveyor
There are in this Province 8,000 acres of Wood.
These 8,000 acres consist of three forests, to wit : --
acres.
That of 4,000
That of. 2,000
And that of 2,000
The forest of is composed of ,
2,000 acres of firs
1,000 " " oaks
and 1,000 " " beeches.
Its situation, close to the Weser, enables all the wood
to be sold at a reasonable price, to wit : --
? ? Generated for (University of Chicago) on 2014-08-05 01:02 GMT / http://hdl. handle. net/2027/loc. ark:/13960/t5h99vc8g Public Domain in the United States / http://www. hathitrust. org/access_use#pd-us
? Frederick the Great iii
livres.
That of Firs, which are cut down every
sixty years, at 800 per acre.
That of Oaks, which may be cut down
every twenty years, at 150 "
That of Beech, which one may cut down
at the same periods, at 180 "
According to my calculations, cutting so regulated,
will bring in : --
livres.
Firs, about 33! acres at 800 Hvres, the sum of 26,666
Oaks, about 50 acres, at 150 livres 7, 500
Beech, about 50 acres, at 180 livres 9,000
Total per annum 43, 166
The Forest of . . . is composed of 2,000 acres,
to wit: --
acres.
Oaks 1,400
Beech 200
Chestnuts 200
And White Wood 200
This Forest is not well situated, because there are
no large rivers or big towns in the neighbourhood,
thus I don't cut the wood for sale, but to make the
following use of it : --
Every year I take 24 acres of Oaks, which I have
made into planks,'^ and I find that after deducting
all expenses each acre brings in 250 livres, making a
total of 6,000 livres.
' Or stave- wood -- merrain in the dictionary.
? ? Generated for (University of Chicago) on 2014-08-05 01:02 GMT / http://hdl. handle. net/2027/loc. ark:/13960/t5h99vc8g Public Domain in the United States / http://www. hathitrust. org/access_use#pd-us
? 112 The Confessions of
Uvres.
Carried forward 6,000
Then I take 13I acres of beech and of white wood,
because I have divided the 400 into thirty parts, and I
make a Hme-kiln, provided I find in the forest itself the
right kind of material for this purpose. By the sale of
the lime I find that each acre is worth, less expenses, 30
livres, which makes 13 1 acres worth 400
Of the 200 acres of Chestnuts, I cut 8 acres every
year, and I have them made into barrel hoops: I
find that each acre brings in 80 livres, which makes
on the 8 acres the sum of 640
7,040
The Forest of is composed of
acres.
Oaks 600
Beeches 1,200
White Wood 200
It is situated in a plain, easy of access, and within
easy reach of three small towns.
I divide the 600 acres of Oak into 100, and I find
that I can cut 6 acres every year. Since these three
small towns must of necessity supply themselves with livres
wood and building material, I sell these six acres for. . 9,000
Carried forward 7,040
9,000
Of the 1,200 acres of Beech trees, I take 800, which
I cut every 25 years, to make firewood, which makes 32
acres every year, which I sell at 160 livres, bringing in 5,120
For the 400 acres remaining of Beechwood, and
the 200 acres of White Wood, I cut them every
13 years, making each year 15 acres, and I make
them into brushwood, which is done up into large
faggots, for the convenience of the poor. I find that
the sale of this brings me in per acre 120 livres, making
in all for the '50 acres 6,000
Total 27,160
* The arithmetic is again unintelligible.
? ? Generated for (University of Chicago) on 2014-08-05 01:02 GMT / http://hdl. handle. net/2027/loc. ark:/13960/t5h99vc8g Public Domain in the United States / http://www. hathitrust. org/access_use#pd-us
? Frederick the Great 113
Schedule of the District of
This District contains two large and enormous
forests, which embrace a considerable extent of
country. These two forests are situated partly on the
plain, and partly on the mountain. They are both of
them far distant from any large rivers, and have,
properly speaking, no outlet, so that the property is
useless to the King.
But the examination which has been made of these
two forests has shown that they can be made use of.
(i) There are districts in which it would be an easy
matter to establish glass and china works, because
there is there plenty of fern and earth, and no lack of
water.
(2) There are large streams, collected or dammed in
good beds for the formation of canals, especially at the
times when the snows are melting, or during the
periods of the heavy rains.
In order that the undertaking may cost us nothing,
a Company might be formed, wherein we would be
represented by an Agent, and to which we would sub-
scribe a quarter of the funds; this Company would
make the necessary advances for the Canals, and for
this purpose it would have the use of the wood for a
period of . . . years.
As there are valleys which are situated at too great
a distance from these canals, the woods there should
be burnt out, and villages built on the clearings, which
would soon be peopled, since the land will be excellent
for pasture, and the inhabitants would find plenty of
occupation in the regular felling of the wood which
will be established, and in the upkeep of all the canals.
We believe this project to be good, Sire, because,
8
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