Lord Castlereaghsaid, that in the whole course of his parliamentary experience, he had never felt more difficulty in rising to address the house than he felt on the present occasion. He had to review the new and extended Plan of Finance proposed by the noble lord opposite (lord Henry Petty), and to compare it in all its parts, and all its bearings, with the present system. When he considered with what deliberation the noble lord must have prepared his plan, and what able assistance he had to complete it, it was so disagreeable a thing for an individual like himself to state any thing in opposition to it, that nothing but an imperious sense of duty could warrant or induce him to offer himself to the house with that view. But the difference between his opinions and those maintained by the noble lord was so great, that there must be some material errors on one side or the other. Considering the advantages the noble lord had with respect to the means of viewing the subject, the errors were probably on his own side: but such was the conviction in his own mind of the truth of his own views of the subject, that he felt it a paramount duty to give the house an opportunity of comparing his opinions and calculations with those of the noble lord. He by no means wished to depreciate the noble lord's plan on any general grounds. The facts and the reasons upon which his opinions were formed he would state specifically to the house; and as he had felt it impossible to follow the noble lord opposite in the statement he had made on a former night, in a manner so creditable to him, from its clearness, it was his wish to follow the example of the noble lord and to leave his opinions open to the 726 examination of those who possessed the best means of correcting any errors they might contain, and to give an opportunity to them to come to parliament on the further consideration of this great subject, with the most correct views, formed upon the most deliberate and extensive examination. He hoped that, from these considerations, the house would grant him its indulgent construction, to aid him in the task he had to perform in calling upon parliament to weigh the grounds upon which he was led to doubt of the solidity of the system proposed by the noble lord. He was anxious that the difference between him and the noble lord should not be taken to be greater than it was. There were many views and many general principles in the noble lord's statement, which he was not disposed to question: no principle was more clear than the propriety of considering at what time, consistently with equity towards the Stockholder, the produce of the sinking fund in a certain proportion, might be diverted from its original destination, and applied to the current service. If the Sinking Fund were allowed to proceed in its operation to the extinction of the whole public debt, a new order of things would be created, and the relative value of every thing as it stood now would be destroyed. He therefore agreed with the noble lord, that at some time parliament would be called upon to consider what ought to be the maximum of the Sinking Fund to be applied to the extinction of the debt. He was ready also to allow that the time might come when the principle of raising the expences of war within the year might become oppressive, and proper to be got rid of. He was therefore prepared to say, that a maximum might be put to the Sinking Fund in time of peace, and that even in time of war it might be proper at some period to limit it, and to apply the surplus to prevent war taxes, from being pushed to the extreme. It was difficult to say at what point all the bearings of this question might be made to meet. That was too nice a question for him to discuss here. But the noble lord having built his system upon calculations involving that principle, it became the duty of every man to examine the point, and to state his motive for differing with the noble lord, or for supporting him. He was actuated, not by a wish to differ from the noble lord, but by a fear, that the su- 727 perstructure which the noble lord's plan went to rear, was not built upon any solid foundation. Any one who looked to such an extended system of warfare as the present, must be convinced, that it would be unwise not to prepare ourselves to follow it to an indefinite length. He was not displeased that the noble lord had thought it right to go the length of calculation, upon a probable duration of 20 years. But it was too much to incorporate the calculation of the expences of such a length of time into arrangements to be adopted at present. It was impossible that parliament could now provide for occasions so distant, and events so uncertain, without involving itself in infinite contradictions and embarrassments. He therefore owned, he wished the arrangements for the present year had been built on an extensive view without calling upon parliament to adopt arrangements of the same extent, which it was impossible it could do with information or judgment. He admitted that unless data were assumed, it was impossible to reason, or to arrive at any determination. But what he feared was, that by the assumption of fallacious data, far from being enabled to proceed consistently, through a series of 20 years, we should be led into continual errors. The noble lord, in looking to so small an expenditure as 32,000,000l. hoped not only to be able to cover that expenditure, but to provide for its incidental excesses. But the expenditure of 32,000,000l. was an expenditure cut down from 41,000,000l. and in putting it forward as the probable amount of our war expenditure, the noble lord should take care not to mislead the country as to the amount of the burthens it would have to bear. He was sure the noble lord must have derived from the source with which he was so honourably connected, principles which would be very far from disposing him from rendering his countrymen the "Penitus toto divisos orbe Britannos." He was sure the noble lord would be sorry to think that we should be prevented from cooperating, even by money, to the exertions which might still be made for the deliverance of the world from the common enemy. If the noble lord had looked to the average expence of the last war under this head; if he had looked to the average expences of the last four years in particular, he would have found that there was an annual contingent charge of 3,700,000l. for expences, 728 which he had left wholly out of his calculation; and therefore, on this ground, he was sorry, without entering into the prospect of 20 years, that the noble lord had calculated for the present circumstances only. There were at the present time very strong motives for calculating on a different plan. He thought it too much to calculate, that we could hold out for a war of 20 years duration on an expenditure of 32 millions, without any increase. But he was more inclined to close with the noble lord's data, and to come to issue upon his principles, leaving the particulars to be discussed in the committee, where some friends of his, better acquainted with the details of these subjects than he was, would make some observations upon them. He thought he had the means of proving, that the noble lord's plan, if acted upon and carried fully into execution, would be the means of involving the country in great embarrassments, if not in compleat ruin, and what was still worse, in unnecessary and gratuitous ruin. He was sensible of the difficulty of the task he had undertaken. But he trusted that the arguments with which he would endeavour to establish his opinions, would be received with indulgence and liberality, from the consideration that the points to which they referred deserved the fullest attention. In examining the system of the noble lord, he hoped he should he permitted to separate two questions, and that those who heard him would keep them distinct. First, Whether it was wise that any measures should now be adopted with respect to the Sinking Fund? and, secondly, If it was consistent that such measures should now be adopted, whether it was consistent that they should be adopted with a view to their taking place 20 years hence? With respect to the appropriation at the present time, he would not question the fact; that the Sinking Fund would afford in 1826, a surplus applicable as the noble lord stated, The noble lord must allow, that the sum of 1,200,000l. to the charge of which, divested from the War Taxes, this surplus would be then applicable, was in itself a fund on which parliament might raise and might charge loans, and on which any system of finance might be built, either the present actual system, or that proposed by the noble lord. The written explanation of the noble lord's plan stated, that, conformably to the mode in which the noble lord wished to raise the loans, the Property Tax of 11,500,000l. 729 was as liable to those loans as any other part of the War Taxes, but that was a fallacy. In charging War Loans, amounting to a capital of 210 million, the noble lord had assumed that the War Taxes were applicable to the discharge of it. But parliament was pledged to the country to repeal the War Taxes in the event of peace. Thus, the pledge of parliament was to be violated in order to cover with all these absorptions of the War Taxes, a principle which must involve in ruin any individual or any country that had recourse to it, borrowing the interest of loans, and constituting that interest so borrowed into a permanent funded debt. He would ask the noble lord if he had considered the consequences of borrowing any given sum in that way, and compared them with the consequences of borrowing the same sum under the usual system. One of the resolutions he should have to submit would be founded on the principle of this comparison. If the abstract principle of the system had a disadvantage in this respect, the mischievous influence of the principle would extend to every part of the superstructure he had raised upon it. It was a grateful and a proud question for the house, if it could go into the consideration of the propriety of releasing the country from any part of its present burthens. But he wished the noble lord in that view also to consider his own system comparatively with that which he now proposed to substitute. The noble lord proposed to raise 12 millions by Loan, on an appropriation of ten per cent. and 1,200,000l. at 6 per cent. He wished to compare the effect of this with the effect of an operation of the same amount under the old system. The ultimate result would be, under the new system, a charge of 60,144,000l. before the period of extinction, while under the old system, the charge would be only 30,960,000l. Thus there would be a loss to public of 29,184,000l. This manner of comparative consideration would prove the difference of the advantages with which the war could be carried on, on the old plan or on the new; and those points of comparison which he was about to submit were the only points he could discover. The complicated and extended scale of the noble lord could not be well comprehended without looking at its ultimate results. It would, therefore, be necessary to consider, first, the relative amount of the capital borrowed according to the new system and the 730 old; 2dly, the relative amount of the public debt, and the effect of the operations of the old and the new plan upon it; 3dly, the relative qualities of both systems with respect to the charges they would create in a period of 20 years; 4thly, the relative facility with which they would admit of mitigations of the present burthens; and 5thly, what relative state they would leave the finances in at the conclusion of their operations. By a comparison of the quantity of capital to be borrowed, the noble lord would feel how he would be best enabled to provide for a war expenditure of 32,000,000l. and if it could be shewn that by any means a loan of 11,000,000l. could be raised, without materially adding to our present burthens, which loan, in addition to 21,000,000l. of war taxes, would make the desired sum of 32,000,000l. the advantages of such a plan would be obvious, He would compare the amount of capital borrowed, at this rate, of eleven millions annually, with the amount of capital, at the same time under the noble lord's plan. At the rate of 11,000,000l. annually, only 210,000,000l. would be borrowed on the whole period of 20 years, without any of the embarrassing machinery of the noble lord's plan. According to the noble lord's plan, there would be raised in the same period by war-loans 210,000,000l.; and in Supplementary Loans, 204,200,000l. making a total of 416,200,000l. There was thus an excess of capital, by the operation of the new plan, of no less amount than 190,200,000l. exclusive of 82,000,000l borrowed on the war taxes, and redeemed within the period. Certainly it was not a matter of indefinite importance and policy, whether such an immense sum should be raised beyond what would be necessary under accustomed and more simple arrangements, while the whole of the war-taxes would be absorbed at the end of 14 years, and the whole 32 millions would be to be raised without any aid from them. There was little room to doubt that a necessity for going into the market for a loan of such vast amount would in a few years have as great an effect destroying credit and capital as that anticipated by the noble lord from the unlimited operations of the Sinking Fund, and the extinction of the whole public debt. Thus the new plan was injurious, not only in respect to the great accumulation of capital borrowed, but also in respect to the vast change it was calcu- 731 lated to make in the market. Another point of comparison was the state of both plans at the end of 20 years; and also the comparative state of the Sinking Fund; for he was ready to allow that an increase of debt night be compensated by an amelioration in the Sinking Fund, and therefore the comparison of the debt alone would not suffice. If 11 millions were to be borrowed every year for 20 years, the amount of the Public Debt at that time, according to the calculations in the noble lord's tables, would be in money value, 270,443,305l. The present amount in money value, was 363,793,722l. Thus there would be a decrease of debt according to the old system, to so considerable an amount as 93,350,417l. According to the new system of the noble lord, the money value of the debt would be in the present year 364,993,722l. The amount in 1826, would be 455,537,932l. This would be an increase of debt in money value of 90,544,210l which, added to 93,350,417l. the diminution that might be effected by adhering to the old system, would make a total disadvantage of 183,894,667l. in amount of debt in money value, together with 196,000,000l. increase of capital borrowed from the adoption of the new plan—He would now proceed to compare the effect of the two plans with respect to the Sinking Fund. According to the old system, the present amount of the Fund was 8,515,042l. In 1826 it would be, following still the calculations in the noble lord's tables, 27,115,881l. being an increase in 20 years of 18,610,839l. According to the plan of the noble lord the amount of the Sinking Fund in the present year would be 8,935,942l. In 1826 it would be 26,901,360l. affording an increase of 17,966,318l. in 20 years; but falling short of the improvement by the old system in 644,421l. According to the new plan there would be but a sinking fund of 26,901,360l. on an increased debt of 455,537,932l. while the present system would, if followed, give a sinking fund of 27,115,881l. on the reduced debt of 270,443,305l. The proportion of the sinking fund to the debt, under the present plan, would be in 1826, above 1–10th; according to the noble lord's plan, it would be but 1–17th. According to the present system, the interest on the Sinking Fund would go on accumulating at compound interest till the debt would be extinguished. According to the new Plan, having reached 732 its maximum of 28,155,358l. in the year 1820, would have descended to 26,901,360l. in the year 1825, and would continue to decline so long as the excesses would be applied to pay the interest of Supplementary Loans. He wished the noble lord to continue the calculations of four of his own tables, from years beyond the year 1826. Nothing further would be requisite to prove to him the fallacy of his plan.—The next point of comparison was, the charge of borrowing 11,000,000l.—The charge for Interest and Sinking Fund for this loan would be, according to the present system, 733,333l. The amount of charges for these Loans for 20 years, or 220,000,000l. would be 14,666,660l. According to the new Plan, the charge for Supplementary Loans, amounting in 20 years to 204,000,000l. would be 14,266,388l. And the loss by War Taxes mortgaged for 14 years, till liberated, in successive portions, according to the series in which they had been appropriated, 21,000l. The charges of the Supplementary Loans, only under the new plan, would amount to within 370,272l. of the whole charges under the present system; with the additional loss of the whole of the war taxes mortgaged away for war loans, for 14 years; under these circumstances the house would not be at a loss to decide to which of the two systems the preference was due.—The next point of comparison was the relative means of relieving the country from taxes, and he admitted that if this could be done without injury to those who had advanced their property for the service of their country, the people who had so manfully borne up against the difficulties and dangers of the present time, were justly entitled to that relief, and it was highly desirable to the legislature to be able to afford it. With reference to this object, he would compare the state of the Sinking Fund according to the effect of its own inherent principles under the present system, and according to the application of the noble lord's plan to it. Could the period be fixed, at which we might look to an applicable success upon the sinking fund above what onght to be applied to its special purpose; and if that period could be ascertained to be at the end of ten years, the 11,122,809l. which it was proposed to take from it at that time, for the charge of supplementary loans, might as well be appropriated to the payment of interest of loans, raised 733 according to the present system, or applied to the mitigation of the public burthens, in any other manner. So might the 683,092l. of annnities likely to fall in in the 20 years. So might the new taxes of 292,000l. annually on an average, or 2,051,000l. on the whole proposed to be raised by the noble lord's plan, between the third and the tenth year of his series. These sums altogether making 13,856,861l. were equally applicable to the present system, or to any other, as they were to that of the noble lord. As applied to the charges of the Supplementary Loans, amounting to 14,296,388l. this amount of Ways and Means of 13,856,000l. left a deficiency of 440,388l. As applied to the charges of annual loans of 11,000,000l. for 20 years under the present system, being 14,656,660l. it left a deficiency of 809,799l. Deducting from this deficiency Of 809,799l. the deficiency, under the new plan in the application of the same Ways and Means to the Supplementary Loans only, there would remain a difference of only 369,411l.; and that was the whole consideration for which our taxes were mortgaged and alienated. It was an insult to the country, which had so manfully borne up against the difficulties of the time, and had burthened itself with war taxes in order to prevent any accumulation of debt in war time; it reproach to it to imagine for a moment, that, however desirous it may be to be relieved from the rigour of its present hardships, it would seek such a pitiful relief at the expence of so great an ultimate sacrifice; it was an insult to suppose, that the, country would rather suffer their war taxes to be cosumed by war loans, rather than prevent that evil, rather than charge itself with additional taxes, to the amount of 369,411l. which with the Ways and Means appropriated by the noble lord's plan to the Supplementary Loans merely, would enable the country to sustain a War Expenditure of 32 millions. It had never been considered as part of the duty of those who sat on that side of the house, to propose Financial Plans, and those who ventured to propose such plans wandered from their proper line; but when he came forward to dispute the System of Finance proposed by the noble lord, he thought he could do no less than point out another plan, which would enable the noble lord to meet the difficulties of the time without any of the embarrassments 734 and intanglements into which his own plan led him. It would upon more mature consideration appear to the noble lord a strange option to have prefered borrowing upon a double system, rather than to pursue the simple one that had been hitherto used. It would be satisfactory, he hoped, to the noble lord to find, the country might be relieved without embarrassing the war taxes, and that the 13,800,00l. which he proposed to appropriate to the Supplementary Loans to that object. This Supplementary Loan began at so low an amount as 200,000l. It seemed to be intended as a sort of small charge for the War Taxes; but when it would have reached its 14th year, this little gentleman would have out grown its parent, and would have amounted to 20,000,000l. The whole amount of the average want at the end of ten years, would be but 7,733,000l. There were to meet this Ways and Means to the amount of 3,200,000l. Thus there would be to be provided only a Loan of 4,500,000l. It would be madness, after the facility of provision he had shewn, to go to the Jews to borrow, and to find the interest of the Loans. In 1816, the Sinking Fund would not only be capable of furnishing the aid now looked for from it, but also a large sum in addition. Adding, therefore the average annual want of 400,000l. to the loan of the year, and carrying the interest and Sinking Fund of it, amounting to 33,000l. to be advanced out of the Consolidated Fund to be replaced by the Sinking Fund as soon as it should afford surplus applicable to this purpose, the whole difficulty would be met. Thus instead of 204,000,000l. of Supplementary loan, only 4,500,000l. would be added to the gross amount of the permanent debt, and only an amount of 33,000l. interest and Sinking Fund, to the permanent charge. The whole of the complicated machinery of the noble lord's plan, raised story after story, and crowned with cumbrous scaffolding, which threatened to fall and crush the country with its ruins, would thus be dispensed with. There was another principle, which might, as it appeared to him, be applied to the object of the noble lord, namely, that when the amount of the Sinking Fund should exceed the interest of the unredeemed debt, no provision should be made by new taxes for the interest of the loan, but that it should be provided for out of the interest of the 735 debt redeemed in that year. This arrangement would not interfere with the commissioners for the Redemption of the Debt, because they would still have a large sum to bring into the market; which would keep up the price of stocks. It was one thing to divert the fund in the hands of the commissioners to this purpose, and another to apply the interest of the sums redeemed in the year to the same end. The effect of such a system would be, that the debt would remain stationary during a war, but that the Sinking Fund would again be progressive towards the final redemption of the debt on the conclusion of peace, whilst the system of the noble lord would produce a declining Sinking Fund after it had arrived at its maximum. By the tables of the noble lord it appeared that the Sinking Fund was in the present year 8,515,042l. and that it would be in the year 1811, 11,140,274l. or 140,000l. more than the loan of that year. If this principle, therefore, of which he was not the parent, though he felt it his duty to mention it as one mode of proceeding, were to be acted upon, and the government would go on for four years, it would exhibit the country to the enemy in that proud situation in which it might carry on the war for any number of years without increasing its debt, and at the end of such war might revert 21 millions of War Taxes to the country, which would be available to any future war. According to the tables of the noble lord it appeared, that taking credit for the annuities that would fall in of 496,006l. and including the taxes proposed by the noble lord, amounting to 2,051,000l. there would be wanted but the sum of 496,810l. to provide for the loans of 18 millions in each of these four years, and as the noble lord had stated, that it was not from any inability to discover new sources of taxation, that he brought forward his system, there could be no difficulty in making a provision to that amount. These two plans were not of his production; but as that of the noble lord seemed to him to be fraught with ruin to the country, he had thought it his duty to point out how he could escape from the difficulties of his system in pledging the war taxes. The noble lord's tables stated, that the excesses of the Sinking Fund at the close of the war, which would amount to 9,900,000l. might be applied to setting free so much of the war taxes. This he admitted; but the ef- 736 fect of such an arrangement would be to consolidate the remainder of the war taxes with the general Debt, and to incorporate the Sinking Fund upon it with the old Sinking Fund. There would be then no fund by which they should be enabled to equalize the Peace Establishment with the Expenditure. The Surplus of the Consolidated Fund would be 3,500,000l. the Land and Malt Tax, 2,750,000l. and the Lottery 450,000l. so that taking the Peace Expenditure at fifteen millions, at the lowest, or at twenty millions, the sum to be provided would in the first case be 8,300,000l. and in the latter 13,300,000l. The system of raising money by double Loans, resembled the usurious terms upon which a distressed man raised money to defray the interest of sums borrowed antecedently. When the noble lord erected his superstructure of two stories on such a basis, he might as well have reared his castle to as many more, like the Indian Pagoda, and by borrowing the interest of the interest of his Supplemental Loans have carried his principle to its ultimate point. It was certainly a most satisfactory consideration, that the noble lord and those who acted with him, now admitted that war might be maintained for twenty years, without adding greatly to the existing burthens of the country. What he had already stated, would save him the necessity of examining the fifth head of comparison, upon which he had proposed to state his sentiments, namely, the comparative state in which the country would be placed by the noble lord's and the present system. He had made out a good case, that the system by single Loan, with the ordinary Sinking Fund of one per cent. on the capital borrowed, would answer every object proposed by the noble lord in the course of 20 years, and that the system of double loans was in the last degree usurious. The noble lord had dwelt much on the necessity of preserving faith with the Stockholder, and he agreed with him that, though the Stockholder had no right that considerations for him should fetter the decisions of parliament, he yet had a considerable claim on the attention of that house. But the plan of the noble lord was unsecured both with respect to the Stockholder and the public, because, by his own statement, there would be a defalcation in his Sinking Fund in the last ten years. The relief would be given to the Stockholder in the first ten years, ra- 737 ther than in the last, as, after the year 1820, his Sinking Fund would be declining; and in the year 1826, the amount of the debt would exceed the aggregate of his Sinking Fund by 6 millions. The Stockholder would prefer a Sinking Fund of 11 millions, and a loan of 12 millions, to a Sinking Fund of 26 millions, and a loan of 32 millions, which would create a capital of from 50 to 60 millions. However the noble lord might mask his principles under the machinery of this bill, the machinery was calculated to take the money out of the pockets of the country, and to dilapidate its resources—He had thought it his duty to submit his views on this subject to the house, not with any intention of derogating from the merit of the noble lord's plan, for he felt a sincere respect for that noble lord, and he felt the reverse of any wish to detract from the value of his proposition. But though he had explained at some length his objections to the plan of the noble lord, he was still anxious to submit them in a more precise form to the house, in the shape of Resolutions. He had as high an opinion of the resources of the country as the noble lord; and he was happy to receive from the noble lord on a former night, his liberal testimony, not only to the extent of the resources of the country, but to the transcendent merits of the great statesman who had laid the foundation of the system which had been so strongly fortified by the vigorous financial measures adopted by the noble lord last session, as well as by the efficient operation of the measures instituted by a noble member of another house (lord Sidmouth) at the conclusion of the late war, and at the commencement of the present. With this system the brightest hopes, and best future prospects of the country were intimately connected. He had said in a former session, that, as far as a powerful navy, a powerful army, though not so powerful as under better and wiser regulations it might have been; and as far as legitimate, steady, and unbounded resources were concerned, no country had ever been handed over by any ministers to their successors in a more triumphant situation than this country at the late change. Whatever might be the want of authenticity in the statement, as coming from him, he had met with a considerable personal rebuke. But he had to express his gratitude to the noble lord for bearing out all his statements, 738 which were rather below than over the truth. If he had then stated what the noble lord did now, that the war might be carried on by the system of double loans without any great increase of the public burthens, he might have been open to animadversion, but certainly his nerves were not equal to that statement. He had then only to submit his Resolutions to the house, which he hoped they would receive with the same indulgence with which they had heard him. He offered them rather as his objections to the system of the noble lord, than as principles upon which he should be disposed to found any system. If they were incorrect, the noble lord would be able to expose the fallacy of them.—Tbe noble lord then concluded with moving his first Resolution, proposing that the debate should be adjourned to Monday next.—The following is a copy of the said Resolutions.
§ No. I.
§ "That it is proposed by the New Plan of Finance, that the annual excesses of the present Sinking Fund, above the interest of the debt charged upon it in every given year, should be declared to be at the disposal of parliament, and applicable to the public service. And it appears that the aggregate produce of the said excesses, between the years 1816 and 1826, will amount in the whole to 11,121,938l. That annuities to the amount of 685,515l. will fall in between the years 1807 and 1826. That it is proposed by the New Plan of Finance to charges on the aggregate produce of the said excesses of the sinking Fund, and upon the said annuities the interest and Sinking Fund of 201,200,000l. Supplementary Loans, and to impose in aid of the said aggregate produce, between the years 1810 and 1816, new Taxes to the amount of 2,051,000l. That in addition to the Supplementary Loans so to be provided for, it is proposed by the New Plan to raise War Loans to the amount of 210,000,000l. on the credit of the War Taxes, amounting to 21,000,000l. That the War and Supplementary Loans of each year added to so much of the War Taxes as may remain unmortgaged, will produce in each year respectively the sum of thirty two millions. That in order to raise the said Sum of 32 Millions in each year, without mortgaging the War Taxes, there would be required, in addition to the 21 Millions of War Taxes, an annual Loan of 11 Millions only. That without any mortgage upon the War Taxes, an annual Loan of 11 millions might be provided for, for nearly 19 years, by the 739 application of the same funds, viz. the annuities, amounting to 685,515l. the excesses of the Sinking Fund, amounting to 11,140,274l. and the New Taxes intended to be imposed by the New Plan, amounting to 2,051,000l. on which the Supplementary Loans are to be charged."
§ No. II.
§ That the proposed System of Finance proceeds gradually to mortgage for 14 years the whole of the War Taxes for the Interest of Loans in War. That these Taxes are not generally of a nature which can with propriety be so pledged, as several of them such as the Tax on Exports, the Duties on Tea and on Spirits must probably either be modified or reduced on a peace, whilst it is proposed by the said Plan that the Property Tax, amounting to 11,500,000l. should in that event be entirely remitted; in which case (exclusively of any mortgage at the time affecting the residue of the War Taxes) the portion of them which might be continued without material prejudice to the Public Revenue beyond the war, must be wholly insufficient to equalize the Revenue with the Peace Expenditure.
§ Suppose a Peace Establishment at 15,000,000li>.
§ If the War Taxes were mortgaged, then there would remain—
| Land and Malt | 2,750,000 |
| Surplus of Consold. Fund | 3,500,000 |
| Lottery | 450,000 |
| 6,700,000 |
§ Annual Deficiency to be provided for by new Loans
| Taxes | 8,300,000 |
| Supposing the Peace Establishment to amount to | 20,000,000 |
| The Deficiency to be provided for in like manner would be | 13,300,000 |
§ No. III.
§ "That the new plan will require Loans to a greater amount to be raised in each year than would be required if the usual system of borrowing were persevered in.
| By the present system, in order to cover a War Expenditure of | 32,000,000 |
| There would be wanted in each year in aid of the 21 Millions War Taxes, a Loan of | 11,000,000 |
| mounting in 20 years to | 220,000,000 |
| NEW PLAN. | |
| Amount of the War Loans for 20 years | 210,000,000 |
| Ditto of Supplementary Loans for ditto | 204,200,000 |
| Total | 416,200,000 |
| Total Excess by the New Plan, exclusive of 82,000,000l. borrowed on the War Taxes, and redeemed within the period | 190,200,000 |
| The Average Capitals to be annually raised by the New Plan are— | |
| Annual amount of Loans by the new plan on a 20 Years Average |
| War Loan | 10,500,000 |
| Supplementary ditto | 10,200,000–20,700,000 |
| Annual Amount of Loans by the present Plan | 11,000,000 |
| Average Annual Excess of Loans by new Plan | 9,700,000 |
§ No. IV.
§ "That the comparative Increase of the Public Debt which will be produced by the two Plans, and the effect this will have on the proportionate amount of the Sinking Fund, by their operation in 28 years, is as follows:—
§ EFFECT OF THE PRESENT SYSTEM.
| The Amount of the Money Capital of the Public Debt is, in the year 1807 | 383,793,722 |
| The Amount of ditto will be in the year 1826, supposing Eleven Millions raised in each year | 270,443,305 |
| Decrease of Debt in 20 years, raising Eleven Millions in each year | 93,350,471 |
§ EFFECT OF THE NEW PLAN.
| Amount of the Money Capital of the Public Debt under the New Plan is, in 1807 | 364,993,722 |
| The amount of ditto will be in 1826. | 455,537,932 |
| Increase by New Plan in twenty years | 90,544,210 |
| Decrease of Debt by the present System, as above | 93,350,417 |
| Increase of ditto by the New Plan | 90,544,210 |
| Total Increase of Debt by New System | 183,894,667 |
§ EFFECT OF PRESENT PLAN ON THE SINKING FUND.
| Amount of Sinking Fund under the present System on the Public Debt is in 1807 | 8,515,042 |
| Amount of Ditto will be in 1826 | 27,115,881 |
| Increase of Sinking Fund in twenty years | 18,610,839 |
§ EFFECT OF NEW PLAN ON THE SINKING FUND.
| Amount of Sinking Fund under the New System is stated to be, in 1807. | 8,935,642 |
| Amount of ditto under New System will be, in 1826 | 26,901,360 |
| Increase in twenty years | 17,966,318 |
| Difference in favour of present System | 644,421 |
| So that the New Plan gives only | 26,901,360 |
§ Sinking Fund on a Debt of 455,537,932, whilst the present System would give the larger Sinking Fund of 27,115,881, on the smaller Debt of 270,443,305.
§ The proportion of the Sinking Fund to the whole Debt will be under the present plan is 1826 above one-tenth.
§ The proportion of the Sinking Fund to the whole Debt under the New Plan will be in 1826 about one-seventeenth.
§ The Sinking Fund under the present plan above stated, at 27,115,881l. continues to increase at compound interest alter the year 1826 till the whole Debt is redeemed.
741§ The Sinking Fund under the New Plan having obtained its maximum of 28,155,358l. in the year 1820, descends to 26,901,360l. in the year 1826, and must continue to decline after that period, so long as the excesses shall be deducted.
§ No. V.
§ "That an Increase of Charges for the Interest and Sinking Fund of Loans for the twenty years must take place under the New Plan, compared with the like charge, which would take place, were the present System persevered in.
§ EFFECTS OF THE PRESENT SYSTEM.
| Annual Loan 11,000,000l. charge for interest and Sinking Fund | 733,333 |
| Amount of Loans for twenty years 220,000l. a charge for ditto | 14,666,680 |
§ EFFECT OF THE NEW PLAN.
| Charge of Suppl. Loans amounting in twenty years to 204,200,000l. expiring annuities deducted | 14,266,388 |
| War Taxes mortgaged at the end of twenty years, which are to be liberated successively in the next fourteen years, after the year 1826 | 21,000,000 |
| Charge as above under the present System | 14,666,660 |
| Charge under the New Plan for the Supplementary Loans only | 14,299,388 |
| Difference | 370,272 |
| War Taxes mortgaged as above for War Loans, according to the New Plan. | 21,000,000 |
| Ditto according to the present system | Nil |
§ No. VI.
§ "That the Ways and Means proposed by the New Plan to prevent the necessity of imposing new Taxes to any considerable Amount, viz. the expiring Annuities, together with the excesses of the Sinking Fund, above the interest of the unredeemed Debt, are equally applicable pro tanto, to mitigate their increase under any other mode of raising Loans which may be decided on. The means proposed by the New Plan of defraying the Interest and Sinking Fund of the Supplementary Loans are as follows;
| Produce of the Excess of the Sinking Fund between 1816 and 1826, above the interest of the unredeemed Debt | 11,122,809 |
| Applicable by the falling in of Annuities | 683,092 |
| New permanent Taxes, proposed by the New Plan to be raised between 1810 and 1817, to the Amount of | 2,051,000 |
| Total | 13,856,861 |
| Charge of Supplementary Loans, Annuities not deducted | 14,296,388 |
| Ways and Means as above | 13,856,000 |
| Remains to be provided for | 440,388 |
| Charge for the total amount of Loans, at the rate of 11,000,000l. a year, under the present system, at 733,333l. for interest and Sinking |
| Fund, the expiring annuities not deducted | 14,656,660 |
| As a Fund to supply this charge, the Ways and Means as above for raising the interest and Sinking Fund of the Supplementary Loans may be applied | 13,856,861 |
| Remains to be provided for in order to cover the charge | 809,799 |
§ That it therefore appears, that the means to be applied under the New System to defray the charge for interest and Sinking Fund of the Supplementary Loans alone, would (exclusive of any mortgage on the War Loans), with the addition of Taxes to the amount of 369,411l. defray the total charges of the Loans required to complete the Fund of 32,000,000l. annually for War Expenditure, without the necessity of any incumbrance whatever upon the War Taxes.
§ No. VII.
§ "That the comparative effects which will be produced on the public income by the two systems, on return of peace, and on the formation of a peace establishment are as follows:—
§ UNDER THE PRESENT PLAN.
§ There would be no charge whatever upon any part of the War Taxes. The whole twenty-one millions would remain free. The Property Tax, or whatever portion of the other War Taxes were not required towards making an adequate provision for the peace establishment might be immediately remitted, leaving that resource unpledged and available on the recurrence of war.
§ UNDER THE NEW SYSTEM.
§ When peace takes place, a considerable part, if not the whole of the War Taxes, will have been mortgaged. In the latter case there will only remain a clear revenue of 6,700,000l. immediately applicable to support the charges of a peace establishment.
§ It appears that in 1806 the excess of the War Sinking Fund will be 9,967,283l. If this sum shall be then preferably applied to liberate a part of the Property Tax mortgaged for the War Debt, the remainder of the Property Tax, and all the War Taxes, will become Permanent Taxes, and Part of the Consolidated Fund, and be mortgaged like the other parts of that Fund, for the redemption of the War Debt, and the present Debt thus consolidated into a Common Debt, and the deficiency on the Peace Establishment must be provided for either by fresh Taxes, or fresh Loans.
743§ No VIII.
§ "That the sum of 11 Millions a year, required in aid of the 21 Millions War Taxes, to complete the War Expenditure of 32 Millions may be raised (should the principle of applying the excesses of the Sinking Fund to the Public Service be decided on) according to the following mode, without mortgaging the War Taxes, or rendering new Taxes of any materially greater amount necessary than it is proposed to lay on by the new System, and without making so considerable an addition to the Debt, as will be made should the new System be carried into execution.
| The Sum required as above to provide for a Loan of Eleven Millions per annum, for 20 years, is | 14,666,660 |
| The Resources available amount to | 13,856,861 |
| Deficiency | 809,799 |
§ This deficiency of 809,799l. exceeding only by 362,431l. the charges for Supplementary Loans would remain an additional Charge to be provided for.
§ As the Charges upon a Loan of Eleven Millions would in each year amount to 733,333l. if it should be thought fit, in aid of the Annuities, to raise only the precise amount of Taxes proposed by the New Plan to be imposed in the first ten years, until the excesses of the Sinking Fund shall arise in 1816, the difference between the above Funds and the Annual Charge of 733,333l. (amounting on an average to 489,682l. a year), must be added, as it arises, to the Loan of the Year, the Interest and Sinking Fund thereon, amounting to about 33,000l. a year, to be defrayed, in the first instance, out of the Consolidated Fund; and to be afterwards replaced out of the Excesses of the Sinking Fund as they accrue.
§ No. IX.
§ That nearly the same results may be produced by determining, that, when the Loan of the Year in war does not exceed the amount of the Sinking Fund in the said Year, instead of making provision for the interest of the said Loan by new Taxes, the same shall be provided for by and out of the interest receivable on the amount of Stock in that year redeemed by the commissioners of the National Debt; in which case the amount of Debt unredeemed will continue stationary during war.
| The Sinking Fund is at present | 8,515,042 |
| It will be in 1811 | 11,140,274 |
§ In four years, therefore, from the present time, no new Taxes will be required (the data remaining the same), however long the War may continue; and the War Taxes will remain free at the close of the War, when the Sinking Fund will resume its progressive operation; the purchase of Stock by the Commissioners being continued in the mean time to the full amount of the Sinking Fund.—That the Charge for four years Loans as above, for 11 Millions in each year, taking credit for 385,515l. Annuities, amounts to 2,547,810l.—Taxes required in each year, for the next four years 623,970l.—The Taxes so to be imposed exceed only by 496,810l. the total amount of New Taxes, proposed by the New Plan, to be imposed between 1810 and 1817, by which Plan the War Taxes are at the same time progressively absorbed and pledged, for the Redemption of the Loans raised upon them.—According to this Plan, the Debt would continue stationary at 369,390,887l. throughout the war.
| Amount of Debt in 1826, by New Plan, taken at | 455,517,932 |
| Ditto, in 1826, by this Plan | 369,390,887 |
| Difference of Debt in favour of this Plan | 86,147,045 |
§ And no War taxes are mortgaged.
§ No. X.
§ That the expence of raising any given amount of Loan on the present system, viz. by a single Loan with a Sinking Fund of one per cent. as compared with the principle of the New Plan of raising the same amount by double and concurrent Loans: the one raised upon a Fund of ten per Cent. for Interest and Sinking Fund; the other raised upon a Fund of six per cent. for Interest and Sinking Fund, calculating the payments on account thereof from the commencement to the final liquidation of the said Loan, is as follows, the Sinking Fund, in both cases, being taken on the money instead of the nominal capital. Suppose 12,000,000l. to be raised,
§ NEW PLAN.
| 10 per Cent. Interest and Sinking Fund on | 12,000,000l. |
| for one year | 1,200,000 |
| A like Charge for 13 years more, at which time the Principal is redeemed | 15,600,000 |
| Total Payments | 16,000,000 |
| To cover the Interest and Sinking Fund of 1,200,000l. at six per Cent, a Fund of 72,000l. must be provided in each of the fourteen years, the amount thereof is | 1,008,000l. |
| The latter sum being raised on a One |
| per Cent. Sinking Fund, may be considered as an Annuity of forty-three years. | |
| Payments on account thereof. | 43,344,000 |
| Payments as above | 16,800,000 |
| Total Payments | 60,144,000 |
§ PRESENT SYSTEM.
| The Interest and Sinking Fund, on a loan of 12,000,000l. at six per cent. amounts per ann. to 720,000l. This Charge being raised on a One per Cent. Sinking Fund, may be considered as an Annuity of forty-three years. | |
| Payments to be made on acct. thereof till its Redemption 30,960,000l. | |
| Payments on new system upon a loan of 12,000,000l | 60,144,000 |
| Ditto, on present system | 30,960,000 |
| Excess of the Charge of Redemption by new system | 29,184,000l." |
§ Lord Henry Pettydid not feel it necessary to say more than a few words on the present occasion, because it was neither desirable for the house nor for himself that he should follow the noble lord through his very able seeech, and the clear view he had given of his objections to the New Financial System that had been submitted to the house on a former night. It was, however, necessary for him to make a few observations upon one point, which had been touched upon by the noble lord, in order to prevent any misconception of what had fallen from himself on a former night from going further. The great objection of the noble lord to the system that had been submitted to the house was, that it went to legislate for the future. Though the noble lord admitted that it would be right to look to the future in the arrangement of any system, he did not think it desirable that any legislative enactment should be resorted to for that purpose. He had himself stated, that it would be necessary for the house to look prospectively to the situation of the country, in the adoption of any system; but that it would not be desirable to make any legislative enactment on an assumption of future events, which might prove contrary to all calculation, and were solely under the controul of Providence. He had expressly asserted, that if any essential alteration were to take place in the plan, it would not arise from any such alteration of events, or of the circumstances of the country. What were the changes that were likely to take place? An increase of expenditure, from the demand for foreign subsidies from with- 746 out, or from the rise of labour, or of the price of stores within. He had particularly adverted to contingent circumstances, and stated, that in proportion as any increase took place in the expenditure from either of these causes, that increase was to be provided for by an increase of the supplemental loans, and an increase of the interest thereon. Another change which he had adverted to was one which might arise from the failure of any of the duties imposed; but for this there was a provision in the plan, because parliament was pledged to make good such deficiency by other duties. He begged to call the attention of the house to this fact, that neither he with his feeble powers, nor those who were much wiser than him, had ever had the presumption to state to the house that they could anticipate the future, or prepare any plan which would cover all the exigencies of a war for 20 years without any change. The noble lord had observed in the same way upon what he termed the narrow view taken by him of the expenditure of the country. But in taking that view, he had no certain criterion to go by but the expenditure of the present year: every other criterion would have been loose and uncertain. The noble lord had said, that he should have taken the average of an extraordinary War Expenditure, but had stated, that it would be unsafe for him, looking to what had happened on the continent, considering the change that had taken place in Europe, to deceive himself by taking any standard of expenditure from such a source. It was rather extraordinary, that, when the noble lord objected to any legislature for the future, he wished to take the possible future expenditure, in the event of a British army being employed to co-operate with the powers of the continent, in the course of 3 or 4 years, in which time they might be wholly subjugated, or, what they all most desired, might have re-established their independence, as the criterion of expenditure. Having stated this, he had only to request of the house and of the country, that they would receive his proposition such as it was, and as it candidly professed to be, and not look upon him as responsible for any alteration that might take place. If he continued to fill the situation which he then held, it would be his duty to explain the cause of the change when it occurred. He could not but remark, that, in the plan that had been 747 submitted by the noble lord, he had availed himself of what had never been laid down by him as a single or separate principle. The noble lord had taken advantage of the excess of the Sinking Fund, without adverting to the concurrent principle of adding to that Fund, which was a leading feature of his system. He had himself, however, proposed to equalise the operation of the Sinking Fund by adding to it now with a view to take from it hereafter; but the noble lord had taken all the beneficial result, and left out of his plan the operating cause. He should not then enter farther into the consideration of the plan of the noble lord, but trusted that the adjourned debate would take place on the most convenient day, which he supposed would be Monday next, the day of the discussion of his own Resolutions, beyond which day he could not consent to have the discussion deferred, in consideration of the effect that the delay might have on the Ways and Means of the year. He was ready to give the noble lord all the assistance in his power, and assured him that he would, not only in this instance, but at all times, be ready to attend to any suggestions from him, or from any of the hon. gentlemen near him.
Mr. Rosedid not propose to enter then into the discussion of the Resolutions that had been submitted. He wished merely to state, that he was not satisfied with the data of the noble lord opposite, or of his noble friend, though he thought those of his noble friend less liable to objection. On Monday he should state his opinions on the subject, though he should not throw any obstacle in the way of the ways and means of the year. The plan of the noble lord, however appeared to him a permanent one; and, if once adopted, it would not be possible to make any alteration in it for 20 years, without convulsing the whole system.—The debate was then adjourned to Monday.