« AnteriorContinuar »
powerful, able, and ambitious, than the great monarch of that time; and although England may not say altogether the same thing of her so. vereigns of the two respective periods, it possesses now means of defence far greater than it did then; and whatever the gain may be on one side, it is at least as great on the other. I annex a statement of the present national debt of Great Britain, embracing its progress from the begin. ning.*
During the course of the last century, we find every writer on the subject inveighing against the debt. Hume declares, that if the nation does not destroy credit, credit will destroy it. Dr Price says, that the evils and dangers of an exorbitant debt are so great, that it is impossible to exaggerate them.
“ A sinking fund mighť save us in time, but we are come so near the end of our resources, (1790) that there is no time left for us." Since that the debt has quadrupled ! “ An exorbitant debt,” he says again, “ leads to despotism, the natural tendency of all governments, if not arrested by the watchfulness of a permanent opposition, and ultimately by resistance; but resistance is necessarily attended by troubles, confusion, and danger for the public funds, therefore passive submission is preferred. The advance in price of all things destroys commerce and manufactures, and even population; and stock-jobbing corrupts public morals." Lord Kames, Adam Smith, Blackstone, all hold in some degree the same language. Dr Price, however, did not confine himself to pointing out the danger of this fatal progress, but he undertook, at the invitation of Mr Pitt, to devise means to stop it. He suggested several schemes of redemption, one of which was adopted by Mr Pitt, without, as the editor of Dr Price asserts, ever acknowledging the obligation. The first invention of the sinking-fund is not due, however, to Dr Price. He says himself, that Sir Robert Walpole had established one, or rather Earl Stanhope, in 1716. This first institution was, in fact, violated by Walpole himself some years after, in order to give himself the credit of having reduced the taxes. The sinking fund, as organized at present, and proposed by Dr Price, was instituted, by act of Parliament, in 1786. It provided that the sum of L. 250,000 sterling should be paid every three months to certain commissioners, (one million a-year,) to be employed by them in the purchase of stock at the market-price; the interest of the stock thus purchased continuing to be paid to the commissioners, to be applied to new purchases of stock until the interest of this accumulation formed, including the annual million, a revenue of four millions sterling. The interest of their future purchases is then no longer to be paid to them, and their purchases are limited, after that period, to four millions a-year,—this was to happen in 1808. The government added new funds in 1792; and, finally, a late act of Parliament (1802) decreed the continuation of the payment of the interest to the commissioners until the entire redemption of the national debt existing in 1802, (580 millions.) This accumulation amounts already to 160 millions, and is to pay the old debt in 38 years from the beginning. No debt will then be extant but for loans made since 1802, amounting now to about 200 millions; but even these new loans, having each an excess of tax beyond the annual interest, carry in fact with them a principle of extinction, increasing in a geometrical ratio.*
* The sum of gold and silver in circulation under William the Third did not exceed eight millions sterling, including the plate which was carried to the mint, equal to 32 millions now. Dr Price stated in 1793, that the sum of gold in circulation in the kingdom did not exceed 16 millions sterling.
* A sum equal to one per cent. on the principal of each loan is raised annually by taxes, over and above the sum necessary to pay the interest; being a sinking-fund for the redemption of the loan. And as it takes about 45 years for the yearly one per cent. to work the extinguishment of the sum borrowed, therefore the national debt in future will never exceed at any period what may have been borrowed in the preceding 45 years.. Hamilton's National Debt, p. 103.—Note to Second Edition,
It is sufficiently evident, that a nation, or an individual in debt, paying every year, besides interest, something, ever so little, towards the principal, will, in time, clear off incumbrances; but it is not so easy to understand how the end can ever be attained, when larger sums are borrowed every year than are paid. To borrow with one hand, and pay with the other, seems an operation at best useless. The great secret of Dr Price is this, that the debt increases, simply by the capital of each new loan ; the interest being paid annually to the lenders, and extinguished, while the sinking-fund, converting interest into principal by new purchases, increases in a compound ratio. And the more effectually to overcome incredulity, Dr Price tells us, that a penny put out at interest on the day of the nativity of our Saviour, with interest upon interest, to the date of his book (1791), would amount to more gold than 300 millions of times the bulk of our globe ; while at simple interest, this penny would have only produced seven shil. lings and sixpence! This, however, does not apply to the case at all, or proves too much ; for if it is out of the substance of this same globe that the compound interest is to be drawn, it will never be able to supply 300 millions of times its own bulk. In other words, the accumulating interest of the sinking-fund is to be drawn from
the wealth of the people ; and in practice, it matters not how many times it might exceed that wealth, as the abilities of the people do not go beyond it.
By a sort of economical abstraction, Dr Price separates the finances from the people. The finances gain by the sinking-fund, not the people; or rather the people of the present day lose something by it, and the people of future times gain just as much.* In this last point of view,
Not just as much by any means. In time of war, when the expenditure exceeds the revenue, and funds low, money is borrowed on disadvantageous terms, in order to provide a fund to purchase in peace when the funds are high! And even admitting that there is as much purchased by the commissioners in war as in peace, as much at a low as at a high rate, yet as there is more borrowed in war than in peace, more at a high than at a low rate, the difference of rate between the sum of debt added to or redeemed remains undoubtedly unfavourable to government; at any rate, the profits of the loan contractors, and other charges on the management of loans at the Bank, &c. &c. are entirely against government. This appears in a still stronger light, if we suppose the new loans and the purchases of old stock to be transacted with the same persons, with a fee to the agent, and a douceur to the creditors them. selves on the renewal! The cause of the diminution of the debt is not that a certain sinking-fund was established 20 or 30 years ago, but that taxes were established 20 or 30 years ago. The same taxes, and consequent revenue, would have produced the same effect, whether less had been borrowed or more debt had been contracted, and that more redeemed or paid off. The