The Simplified Wealth of Nations of Adam Smith, Book 5, Chap. 2a, Part 1: Government Revenue Sources

Chapter 2a, Part 1: The sources of the public revenue

1 The revenue which pays for national defense and supporting the dignity of the chief magistrate may be drawn:
  1. from some fund of the commonwealth, independent of the revenue of the people; or
  2. from the revenue of the people

Part 1 The funds which belong to the sovereign or commonwealth

2 The funds which belong to the sovereign must consist in stock or land. 3 The sovereign, like any other owner of stock, may derive a revenue from it: 4 The revenue of a Mongol or Arab chief consists in profit. 5 Small republics sometimes derived a big revenue from the profit of mercantile projects. 6 "The post office is properly a mercantile project." 7 Princes have frequently engaged in many other mercantile projects. 8 The character of the trader is very incompatible with the character of a sovereign. 9 A state may sometimes derive some of its public revenue from interest and profits. 10 Berne derives a big revenue by lending some of its treasure to foreign states. 11 Hamburgh established a public pawnshop which lends money on pledges at 6% interest. 12 The government of Pennsylvania, without amassing any treasure, invented a method of lending something equivalent to money to its citizens. 13 Stock and credit are naturally unstable and perishable.

Next: Chapter 2b: Revenue from state lands