§ Mr. Hume,in bringing forward his resolutions, assured the house, that if he had not been strongly impressed with the absolute necessity of calling their immediate attention 1741 to the subject, he should have abstained from addressing them at this late period of the session. He considered the subject of vital importance, and was anxious to avert the ruinous consequences which he foresaw would ensue, by persevering in the present system: and, he thought the House would not do its duty if it separated without inquiring how the finances of the country had been managed, or rather mismanaged for the last 29 years. He intreated their indulgence while, as shortly as possible, he entered into such details as were necessary to render his statements and opinions intelligible. In the resolutions he had stated the facts as correctly as he was able and the inferences from them as distinctly as possible.
The resolutions were in the hands of members and they could refer to the documents from which he had formed the opinions he was about to offer to the House. It was, doubtless, a bold measure on his part, to impugn a system begun by Mr. Pitt, pursued for 36 years, and approved by so many financiers in this and other countries.
But he (Mr. Hume) disputed the principles on which the sinking fund was established, and should prove, on the clearest evidence, that these principles were erroneous, and that the public mind, both at home and abroad, had been led astray on that subject. Much difficulty often arose in discussions by not agreeing upon the precise meaning of the terms to be used; he would, therefore, set out by stating that he meant, by a sinking fund a sum of money set aside to accumulate at compound interest for the purpose of forming a fund to pay off debts. As this definition would prevent any mistake, he would inquire what expectations were formed from the sinking fund at its establishment, and how far they had been realized. It was obvious, that Mr. Pitt when he established it, thought that it would ensure the salvation of the country by discharging the national debt.
In his address to the House on the 29th March 1786 he said, "This plan which I have now the honour to bring forward, for the purpose of paying off the national debt, has long been the wish and hope of all men, and, I am proud to flatter myself that my name may be inscribed upon that firm monument now to be raised to national faith and national prosperity."
He (Mr. Hume) differed wholly from Mr. Pitt both in the principle and possible 1742 results of that plan. It was his opinion that no government could have a sum of money at compound interest beneficially employed as a sinking fund within itself—he meant—by "within itself"—that no state, taking a portion of its surplus revenue and purchasing its own stock, or debt, could create any accumulation or aggregate sum with more beneficial effects towards the reduction of the debt than if the money, set aside for the sinking fund, had been employed from year to purchase a portion of the debt and immediately to cancel it. In pecuniary transactions between individuals no advantage could accrue to the one, but at the expense of the other; and, if the sinking fund accumulated at compound interest by receiving the dividends on the stock, it was evident that whatever the sinking fund had gained, the public must have lost. He would endeavour to illustrate this point by stating a case. If he had a debt of 1,000l. bearing interest, say 5 per cent, and laid aside from his income 10l.a year to accumulate at the same rate of compound interest to pay off that debt, it must be evident, that at the end of 5 or 10 years the reduction of the debt would only be as great as if he had paid off 10l. in each year of the principal, the interest of which would then have ceased. He would most confidently state, that no sinking fund, whether applied from surplus revenue, or raised by loan, in this, or in any other country, had ever paid off so much debt, as might have been paid off, if the sum, set aside for the sinking fund, had been applied to pay off the principal of the debt yearly, and immediately to cancel the interest on the same. It was not in the power of figures, he contended, to show a gain of a single farthing, by any operation of a sinking fund. But, on the contrary, all the expenses attending its management must be an immediate loss. Besides which, he would show, that, by the operations of the sinking fund during the last 29 years, a great loss had been incurred by borrowing for the sinking fund on more disadvantageous terms than those on which the debt had been redeemed; but no person could know the real extent of that loss, or believe its magnitude, except by a laborious calculation of the interest and charges of loans and purchases in each year.
The rate of interest of money, like every thing else, depended on the demand and supply and if, instead of borrowing 600 millions in 29 years, the government had 1743 only borrowed 300 millions, it was fair to infer that they would have procured the smaller amount on better terms than they obtained the larger. There was another and a greater error in the financial transactions of the country; it ruinous system of borrowing annually for the public expenditure, instead of raising the supply for the year, within the year. The House would be Surprised to learn, by a reference to his 15th resolution, that during the whole 29 years (keeping out of view the charges for new debt, and sinking fund), the total expence of the civil list, the military and naval services, and every other charge of government, on precisely the same scale as had been carried on, would have been defrayed by raising an additional sum of only 5 or 6 millions by taxes in each year, instead of borrowing, as had been done, 25 millions in each year, on an average of these years. If the course to which he alluded, had been adopted, the interest of the national debt would now have been between 7 and 8 millions instead of about 32 millions, its present amount. The whole expense of the state for these 29 years might thus have been covered by 138 millions additional raised by taxes within these years, instead of saddling ourselves with a permanent charge on loans to the amount of 609 millions. It was to be regretted that wiser measures had not been pursued; and, although it was now impossible to recall the past, the knowledge of these facts might be of use to guard against similar errors in future. In drawing up the resolutions, he had had recourse to all the printed documents he could procure, and also to the manuscript papers in the Journal office: but, it was probably known to those members who attended to the finance accounts, that a paper was laid before parliament in 1815* stating that no correct accounts of the actual expenditure of the country from 1793 to 1797, had ever been made up. He had, therefore, in calculating the amount of 138 millions as the excess of expenditure beyond the income from taxes for the 29 years, from 1793, taken the first 5 years on estimate: But, since his resolutions were printed, he had received correct accounts from the Treasury, of the expenditure for those years. By which it appeared that he had allowed 15 mil-
*Parliamentary Paper, No. 412, of 1815.1744 lions more for the expense of those dears than he ought to have done; and, that consequently 123 millions of additional taxes would have sufficed, instead of the 138 millions, to cover the expense from 1793 to 1822, if the system of borrowing had not been acted upon.Having made these general observations he should now proceed to explain his views in submitting these resolutions to the House. These were, first to show the national debt as it stood in January 1793, and in January 1822: 2ndly, what it would have been if supplies had been raised, to the amount of between 5 and 6 millions a year, on the average of the 29 years: and 3rdly, what it would have been, if there had been no sinking fund operations carried on during that time.
He had, in the first resolution, stated the capital of the debt funded and unfunded, and unredeemed on the 5th of January 1793, at 239,350,148l.; and, by the 35th resolution, at 836,312,767l.on the 5th January 1822. This he did to make himself intelligible to those who were in the habit of considering only the capital of the debt. He did not himself consider the amount of the capital of the debt of much importance; but it was very necessary to distinguish between the amount of the capital of the debt, and the amount of annual charge payable for the same, because the chancellor of the exchequer had, in former years, stated to the House that he had reduced the debt 27 or 28 millions, although it was proved by the annual accounts, that the charge to the country for the debt, had regularly increased. There were many financial operations that might reduce the nominal amount of the capital, whilst at the same time, the annuity charge was increased, as took place in 1818, in converting the 27 millions of 3 into 3½per cents.
To render the subject more intelligible he had divided the 29 Years which his view embraced, into two periods—the first from 1793 to 1817, and the second from 1817 to 1822.—He had done so, because during the whole of the first period, there was an excess of expenditure over income, and during the latter, there was an excess of income over expenditure. The union of the Exchequers took place also on the 1st of January 1817, and the accounts of Ireland are only included in the latter period. Between 1793 and 1817, the debt, funded and unfounded, had 1745 been increased 618,163,857l., as stated in the 2nd resolution; and of that sum, 584,874,557l. was raised by loans, and by the funding of navy, victualling, transport and Exchequer bills; and 33,289,300l. of the unfunded debt by the issue of Exchequer bills. For the funded debt thus contracted, there was paid into the Treasury in cash, as stated in the 3rd resolution, 579,791,388l., leaving a difference between the sum funded and the receipt of cash, of no less than 5,083,169l., which amount never reached the Treasury, and was a loss by discounts for prompt payment, and for management of the same at the Bank of England. Besides that loss by discount, it was to be observed, that from the very day on which the contract took place, and frequently for months before the instalments were actually paid, the stock created bore interest, which he would denominate anticipatory payments. Thus, if a loan were contracted for in March, the bargain was often so made, that the contractors should receive discount on prompt payment, and also the dividends on the whole amount from the preceding January. He had made out an account current of each loan, in which he had debited the interest on all dividends paid before the instalments were made, and had also credited the interest on the instalments; and these accounts annually made up with compound interest at the average rate of 5 per cent, which the loans bore, showed that the public had lost, by these transactions, 30 or 40 millions sterling. This was an account that had been overlooked in all former financial statements, and he had not introduced it in the resolutions before the House, because his account was not then quite finished. He ought not to omit another bonus to the contractor, and loss to the public, by the exemption of the first dividends of every loan from the income tax, during its existence. He had a statement of the financial transactions of each year, from 1793, in preparation, showing the total amount of charge of every kind on each loan, and stating the gain or loss, and the amount of interest, up to the period when the account of each was settled. These calculations would bear out the statement in his 24th resolution, that during a period of 29 years the public had sustained a loss by the operations of the sinking fund, of 38,146,262l., of 3 per cent capital, arising from the different terms on 1746 which money was borrowed and redeemed. He did not produce the calculations contained in his resolutions merely on his own authority, he had availed himself of the assistance of persons who had devoted their time and labour gratuitously, in furthering the object he had in view. He was particularly indebted to a gentleman of the name of Marshall, who had devoted his time to the subject, with an assiduity worthy of its importance But, though that gentleman was an excellent arithmetician, every one of the calculations had been checked by other persons to make them as correct as possible.
The 4th resolution was one of considerable importance, to which he wished particularly to draw their attention, as it showed the total amount of money borrowed in the 24 years from 1793 to 1817; the total amount of debt contracted, and the several denominations of 3, 4, and 5 per cent stock and terminable annuities; the rates at which the same were borrowed and the permanent charge thereby incurred. There is much difference of opinion, as to the advantage of borrowing money; by funding in the 3, the 4, or 5 per cents; and an hon. member had, a few nights ago, pronounced his unqualified disapprobation of ever borrowing in any other than 5 per cent stock. But, as the benefit or loss is a question of account, he (Mr. Hume) had thought it right to show the actual charge, by borrowing and the relative value of each of these stocks; and, it would be seen, by the 5th resolution, that, if the conversion of the 4 and 5 per cent capitals and terminable annuities was made at the average relative money prices they bore to 3 per cents at the time they were funded, the total amount in 3 per cent capital, would have been only 975,784,592l., instead of 1,001,348,166l., the amount of 3 per cent capital calculated by the amount of annuities paid. By that statement there was a difference of 25,563,574l.of 3 per cent capital less, contracted, than at the par price of 100 stock for every 3l. dividend; and that difference of capital was an equivalent for paying a higher rate of interest on the 4, and 5 per cents. To explain this, he would suppose the price of the 5 per cents, at the time they were funded, to be 90l., the contractor would have received 100l. of 5 per cents for his 90l. sterling, yielding him 5l.a year of dividend; but, 1747 if he had purchased 3 per cents at 60l., which was their relative price at the time, he would, for his 90l. have received 150l. stock, bearing an interest of only 4l. 10s.; or 10s. less for the 3 than for the 5 per cents, which ten shillings, if suffered to accumulate for thirty seven years, would amount to a sum sufficient to pay off the increased amount of capital created by funding in the 3 instead of the 5 per cents.—The conclusion was, that if they borrowed in 5 per cents, and continued to pay the dividend longer than 37 years, a loss was suffered after that time; but, if the 5 per cents were paid off before the end of that period, there was a gain in proportion to the number of years that remained unexpired of the 37. He noticed this to show that he was aware of the relative advantage of funding in each kind of stock; and, at the same time, to satisfy those who might have doubts on the subject, as well as to obviate any objection that might be urged against him for not having, in his conversion of the several capitals into 3 per cents for the purpose of comparison, met the subject fairly.
The 6th 7th and 8th resolutions showed, that during the 24 years, from 1793 to 1817, the commissioners of the sinking fund had received in money from the Treasury the sum of 388,585,038l., which had been borrowed in that time. That in raising that sum, an annuity charge in perpetuity, at the rate of 5l. 3s. 7½d. interest per cent, had been incurred by the Treasury: and, if the commissioners had redeemed with that money an equivalent annuity, no loss would have been sustained, except for discount, anticipatory payments, and charge of management: but it appeared, that they had only redeemed stock yielding an annuity at the rate of 4l. 17s. 2d. per cent, thereby incurring an annual loss of 602,830l. of annuity charge, equal to 20,094,333l. of 3 per cent capital.
As it was important to show the diminution of capital and annual charge of the public debt by operations independent of those of the sinking fund, he had, in the 9th resolution, brought into one view all the sums that had fallen in, and been applicable to, the reduction of the national debt, and which would have been equally effective for that purpose if there had been no sinking fund. The amount of these various items, together with the charges of management on the capitals can- 1748 celled, showed a diminution in the annual charge (in the 24 years) of 1,538,365l.; but as 225,254l. of life annuities were created by cancelling the 3,449,995l. of 3 per cent capitals, under the act 48th Geo. 3rd, c. 142, the immediate diminution of annual charge for the year 1817, would have been only 1,313,111l. if there had been no sinking fund, with the subsequent reduction of the difference of 215,254l. of annuities, as the lives fell in.
The 10th resolution stated the total revenue of Great Britain, in the 24 years between 1793 and 1817, from taxes alone (including the small branches of hereditary revenues, but excluding loans), at 1,114,318,563l. sterling.
The expenditure for the same period, as set forth in the 11th resolution, was 1,235,982,479l. sterling, making the excess of expenditure over income, in that time, 121,663,916l. as stated in the 12th resolution.—During these 24 years, there were remitted to and from Ireland large sums, as stated in the 13th resolution, leaving a balance on the remittances, of 16,685,124l. to be added to the expenditure of Great Britain, and thereby increasing the excess of expenditure of Great Britain to 138,349,040l., which, by the more correct subsequent account received from the Treasury, would be reduced to about 123 millions.
The 14th and 15th resolutions showed, that, if that excess of expenditure had been met by about 5 millions of additional taxes raised within each year, instead of by loans, the total amount of capital of debt unredeemed on the 5th of January, 1817, would have been only 207,706,535l. at an annual charge, including management, of only 7,890,863l. instead of being 817,415,237l. of capital, and 30,628,234l. of annual charge.—A revenue of 35 millions a year would then have sufficed to pay the interest of the debt, and to keep up all the establishments of the country, even on their present extravagant scale, instead of 58 millions which we were obliged to pay.—The union of the Irish and English Exchequers had imposed an additional charge on Great Britain, as stated in the 16th resolution; and it was necessary, before proceeding farther, to bring that into view. The total amount of the funded and unfunded debt of Ireland, on the 5th of January 1817, was 28,739,869l. at the annual charge of 1,323,775l.; which, added to the debt of Great Britain, made the 1749 whole debt funded and unfunded, of the United Kingdom, on the 6th January 1817, 846,155,106l., and the annual charge 31,952,009l.
Having thus separately explained the resolutions respecting the first 24 years, and traced the progress of the sinking fund and debt, from 1793 to 1817, he proceeded to the second period, from Jan. 1817 to January 1822. It appeared, by the 17th resolution, that during these 5 years there was raised by taxes, in the United Kingdom of Great Britain and Ireland, the sum of 296,454,538l., and the whole expenditure, exclusive of the sinking fund, during the same period, was 288,925,669l., leaving an excess of income over expenditure, in these 5 years, of 7,528,869l. What he (Mr. Hume) must consider a most extraordinary part of the financial transactions was, that, although there had been a surplus of upwards of 7½millions; yet in that period, they had borrowed the enormous of 90,761,921l., as appeared by 18th resolution. The purposes to which this money was applied were set forth in the 19th and 20th resolutions. The sum of 82,053,758l., borrowed at an charge of 3,418,818l., and paid to the commissioners of the sinking fund, had been applied to redeem an annual charge of only 3,388,857l., occasioning thereby a loss of 3l. 4s. of 3 per cent capital on every 100l. of money expended by them: or, in gross, a loss of interest in perpetuity of 7,998,618l.per annum, equal to 2,665,376l. of 3 per cent capital—a lamentable result of the sinking fund operations for 5 years!
Having shown the operations of the sinking fund in the first and second periods, he would now state the result of both, as explained fully in the 21st, 22nd, 23rd, and 24th resolutions.
In 29 years, from January 1793 to January 1822, the sum of 675,636,477l. was funded at an annual charge of 33,813,799l., being an average interest of 5l. 0s. 10d. per cent. Of that sum, 270,638,796l. in money, at an annual interest 13,651,477l. was paid to the commissioners of the sinking fund, who applied it to redeem stock, yielding an annual dividend of only 12,507,090l., being at the rate of 4l. 12s. 5½per cent interest, thereby occasioning a loss of 14l. of 3 per cent capital on every 100l. of money expended by the commissioners, equal to 8s. 4½d. per cent interest per annum on the whole amount; or in gross, an aggregate loss of 1750 annual interest of 1,144,387l., equal to a, capital or 38,146,262l. of 3 per cent stock.—This loss, although great, was, as he should show, only a small part of the loss which the public had suffered by the erroneous system of finance which had been so long acted upon. It had been shown by the 9th resolution, that capitals equal to 31,643,613l. of 3 per cents, paying an annual interest of 1,538,365l. had been cancelled in 24 years from 1793; and, by the 25th resolution, that capitals equal to 3,583,197l. of 3 per cents, paying an annual interest of 211,222l. had, in the same manner, been cancelled in the five years, from 1817 to 1822. As the capital of the funded debt of the United Kingdom, in January 1817, was 796,200,191l, at the annual interest of 29,870,852l., it would have been reduced in January 1822, by the amount of capital cancelled in these 5 years, to 792,616,69.5l., at the annual interest of 29,659,630l., instead of its standing at 795,312,767l., at an annual interest of 30,015,786l., as stated in the Annual Finance account for 1822, showing an additional charge to the country of 356,156l. of perpetual annuity for increase of funded debt.
There was, by the 26th resolution, an apparent reduction of 17,283,184l. in the unfunded debt of the United Kingdom, in the 5 years, from January 1817 to 1822; but, as in that time, there was an excess of 7,528,870l. of revenue from taxes, over the expenditure, and 8,232,458l. charged in the expenditure of the consolidated, fund, entered as paid, in the expenditure stated in the 17th resolution, but not paid, making together the sum of 15,761,328l. The actual reduction of the capital of the unfunded debt was thus only 1,521,856l. to meet the increase of the interest in the funded debt of 356,156l., equal to 11,871,766l. of 3 per cent capital, as shown in the 25th resolution.—The whole of that deficiency of the consolidated fund had taken place since January 1817; and the Exchequer bills issued each quarter to make it up, were not included in the amount of the unfunded debt, though equally a debt incurred in that time.
The 27th Resolution contained a conclusion fairly deducible from the facts stated in the foregoing ones, and affirmed that no reduction, whatever, of the debt had been effected by the operations of the sinking fund; but, on the contrary, a loss of six shillings and 4¾d. per cent in- 1751 terest on the whole amount, had been incurred by borrowing at 57l. 18s. money for every 100l. of 3 per cents, whilst they redeemed at 61l. 14s. money for every 100l. of 3 per cents.
The 28th and 29th Resolutions were very important, as they stated the results he was most desirous to establish.
The total amount required for the service of the country, beyond the amount of revenue by taxes, in 24 years, had been, shown to be only 138 or l23 millions, whilst 618 millions had actually been borrowed to pay that amount:—And, by the system that had been pursued, the sum of 479,814,817l. had been incurred as a debt to pay that excess of expenditure, in the proportion of 291,229,779l. for interest and charges, and 188,585,038l. to the commissioners of the sinking fund. In the 29th resolution, the deduction he drew was, that the system of borrowing, either for excess of expenditure, or for the sinking fund, created a necessity for borrowing progressively increasing in proportion to the sum borrowed: and that the borrowing only the sum of 188,585,038l. for the commissioners of the sinking fund, had entailed a burthen considerably exceeding the loss of the 20,094,333l., as stated in the 8th resolution, to have been incurred by redeeming stock on worse terms than those on which it was created,—It was not easy in a speech to explain the manner in which these complex transactions had operated to increase the debt so enormously; but, the calculation of the loss on every loan, from year to year, would, he was confident, prove the foregoing statement to be much underrated.
If there had been no sinking fund, the sum requisite to have been borrowed, to pay the 138 millions of excess of expenditure with compound interest, would have been, as stated in the 30th Resolution; only 360 millions, instead of 584 millions, which had been required for both.
It had been shown, by the note to the 16th Resolution, that by borrowing 584 millions in 24 years, the annual charge for the debt was 29,870,852l. on the 5th Jan. 1817; and, by the 31st resolution, it was shown, that, if there had been no money borrowed for the sinking fund in that time, there would have been 2,433,310l. less of annual charge, because 300 millions would have sufficed for the excess of expenditure will all its interest—and the annual 1752 charge would then have been only 27,437,542l. instead of 29,870,852l.
It would be seen by the 32nd resolution, that the reduction of 2,433,310l. of annual charge of interest in Jan. 1817, if only 360 millions had been borrowed, as stated in the preceding resolution, would have made the surplus revenue, in the 5 years from 1817, to 1822, to amount to 21, instead of 7½millions, and if that amount had been applied to the redemption of 28 millions of debt, would have still further reduced the interest of the debt in Jan. 1822 (if there had been no sinking fund), to 26,386,320l. instead of being 30,015,786l., and produced a saving of 3,629,466l. of annual interest.—And, if only 340 millions had been borrowed, the saving would have been 4½ millions of perpetual yearly charge.
It was fair to conclude that, if the sum of 360 only, instead of 584 millions had been borrowed in these 24 years, the loans would have been procured at a lower rate, and, if at the rate of only ¼ per cent less, there would have been a saving of 1,800,000l. of annual interest; and if, at¾per cent less, a saving of 5,133,310l., as stated in the 33rd resolution. And, calculating on the principle laid dawn in the 32nd resolution, the actual saving to., the public would have been 6,749,466l. of annual charge; and the annual charge t of 1822, would then have been 23 instead of 30 millions, equal to 225 millions of 3 per cent capital, as stated in the 34th Resolution.
Whether the rate of interest on smaller loans, would have been as low as he had estimated, could not now be ascertained; but, we might judge by experience in parallel cases; and, in support of his opinion, he would state one instance out of several that might be adduced.—The chancellor of the exchequer gave notice for a loan of 24 millions to be contracted for on the 5th or 6th of June, 1819, and preparations were accordingly made by the contractors; on the 4th of June, however, the chancellor intimated that he should only require a loan of 12 millions from the public, and that 12 millions would be taken from the sinking fund. This reduction of the amount of loan had an immediate effect on the funds, which, on the 4th of June, were at 65½ in expectation of the loan of 24 millions, and rose the next day to 71⅝ It was the reduction in the amount of the loan that had alone raised the price, and a loss 1753 of 8s. and 4d. per cent on the 24 millions, equal to 3,334,000l. of 3 per cent capital, was thus prevented to the country. He (Mr. H.) considered that example decisive in support of his opinion. It was well known that the preparation by the contractors for taking every loan was in proportion to the amount of the proposed loan. If large, they sold out stock largely to be prepared for it, and the price of the stocks fell accordingly.—As the terms of the loan depended on the price of stock in the market on the morning of the day of contract, it was evident, that the more extensive the sales were to be proposed for the large loans, the lower the price would be, and the worse the terms to the public.
The change of plan on that occasion was owing to the exertions of his hon. friend near him (Mr. Grenfell), to whom, therefore, the country was mainly indebted for that saving. If so great a saving had been effected in one instance, the same principle ought to have regulated the whole of the loans, and the terms of each loan, would have been raised in proportion to the diminished quantity in the market. The amount of 36 millions had been, since that time, taken from the sinking fund for the public loans, according to the plan of his hon. friend; and the amount of 10 millions of 3 per cent capital, had, thereby, in his (Mr. H.'s) opinion, been saved to the country.
The 35th resolution was a summary of the whole, and clearly proved, that instead of having made any reduction since 1793, by the operation of the sinking fund, 603 millions of capital had been added to the debt, and upwards of 22 millions to the annual interest. A considerable portion of that debt was clearly proved to have been incurred by the sinking fund operations, and it was equally evident that it was founded in fallacy, and had been maintained by delusion.
The 36th resolution showed that, whether the loss to the public, by the sinking; fund was to the extent that he (Mr. H.) had stated, or not, the loss was sufficiently large to call for the immediate abolition of that fund.
The 37th and 38th resolutions show, in prospective, the comparative effects of a surplus fund of five millions annually for 10 years, whether employed as a sinking fund, or to cancel, from year to year, part of the debt. He had prepared these calcula- 1754 tions to point out the relative advantages and disadvantages plan, as the honourable member for Corfe Castle.(Mr. Bankes) had intimated his intention of pressing on the House the continuance of the ruinous plan of sinking fund to that amount. Mr. Pitt in 1786, said, that the want of care to prevent the sinking fund from being broken in upon, had been the bane of this country, and that hitherto it had been in vain to attempt to prevent in by acts of parliament. "The minister," he said, when it suited his convenience has uniformly gotten hold of this sum, which, ought to have been regarded as most sacred." Mr. Pitt then stated, that no minister could afterwards break in upon a system so beneficial to the credit and finances of the country. His words were, "A minister could not henceforth have the confidence to come to this House, and desire the repeal of so beneficial a law, which tended so directly to relieve the burthens of the people." How much Mr. Pitt was mistaken, the present chancellor could tell, as he and his predecessors had, notwithstanding the provisions made to prevent them, so effectually broken in upon it, that it ought, he thought, to be denominated a system for increasing, instead of reducing the public debt.
Having thus explained his several resolutions, he would now shortly notice some of the arguments advanced for and against the sinking fund. The right hon. gentleman talked of public faith; but, of all men in the country, he had the least right to talk of a breach of public faith having taken away 3 or 400 millions of capital from the sinking fund, and, in effect, made it a nominal fund, With the examples during the past century, of the manner in which sinking funds had been, laid hold of by the, ministers of the day; and the more recent glaring example off the breach of public faith, by the right hon. gentleman opposite; it was in vain to hope, that any future chancellor of the exchequer would keep better faith.
The only sound principle of it sinking fund was, a surplus; of revenue and the application of that surplus every year to the cancelling of debt, and the reductions of interest. The best securities for public, credit were, a wise direction of the resources of the country, and of the means of acquiring and preserving wealth; expenditure less than the income; a real and not a nominal sinking fund; a repre- 1755 sentative government, which prevented arbitrary power, and gave a confident assurance, that nothing so monstrous as an interference with the rights of the public creditor, would ever be entertained, and far lees attempted; a House of Commons which controlled the minister, and obliged him to reduce all unnecessary expenditure, so as to keep a full Treasury ready to answer all just demands upon it, these were the best supporters of public credit the stock-holder could have.
The advocates of the sinking fund assert, that it has given confidence to the public creditor, and that it would be a dangerous innovation, and an injury to the public to abolish it now. Those who make this assertion, must apply it only to an efficient sinking fund, from surplus revenue; but as it had been shown most clearly, that there was no real sinking fund for 24 years, it was evident, that little confidence could have been produced by a nominal or sham fund. The price of stocks, equally as every other article, depend upon the demand and supply. It was not the contractor who ultimately held the loans, he was only the wholesale dealer, it was the surplus capital of productive industry that was permanently invested in the stock, and a sham sinking fund could not, therefore, affect the holders of such capital.
Some assert that a sinking fund provides a regular customer for the stock, and keeps its price steady and high; but the loans to supply that sinking fund, create also that stock, and thus render the whole a superfluous transaction. He (Mr. H.) asserted, that every loan larger than the actual surplus capital of the country can permanently hold, tended rather to lower than to raise prices; and, by increasing purchases and speculation amongst contractors and jobbers, actually subjected the market to more and greater variations than would have occurred with smaller loans. It was asserted, that, if there had not been a sinking fund, the debt would have been greater than it now is; he (Mr. H.) hoped, the facts stated in the resolutions had sufficiently exposed that fallacy, by showing the enormous loss the sinking fund had occasioned. What then, he might be asked, would you allow the debt to remain as it is, which you must do, if you have no sinking fund? No: but he would reduce it by other and better means, which he proposed hereafter to submit to 1756 the House. It was alleged, that it would be unjust to the fundholder to take away the sinking fund. But all that the public creditors had a right to expect, was the punctual payment of their dividend; and, it was evident, that the system hitherto pursued, had been productive of constant loss to the public, and consequently rendered the Treasury less able to answer the demands of the fundholder upon it. Some stress had been laid on the advantage to the country, by reducing the interest of the 5 and 4, to 3 per cents, and that this could not be done without the sinking fund; but, if the statement of the immense losses, alleged by him to have been produced by that fund, were correct, he contended, that these results had been delayed, rather than promoted by the sinking fund.
Some considered the sinking fund as a means of taxation, and, under some circumstances it might be so; but, if the taxes required to support that fund were paid more from capital than from profits, as they were at the present time, by-several classes of the community, it became an engine of great mischief, and ought not to be continued.
It was the original intention, and at this time the professed object that the sinking fund, accumulate to a given sum, which should then be applied to pay off debts: but he would assert, that there was no security whatever, that the minister of the day would not, on any temporary exigency, lay his rapacious hands upon the accumulated fund, as all former chancellors had done, and as the present chancellor of the exchequer had so lately done, and leave the country as much in debt as ever, after years of privation by taxes, to raise this professedly inviolate fund.
If there were no other objection to the sinking fund but this one, he should consider it a sufficient one for its abolition.
He would observe, what was not perhaps generally known, that previous to the year 1817, the public were not called upon to pay, by taxation, any part of the interest of the debt contracted during the war; as it had been the practice of ministers, when a loan was raised in one year, to borrow, in the succeeding one, an additional sum to pay the interest of that loan: and, in that manner, they continued, year after year, borrowing to pay the interest of all preceding loans. The burthen of the debt was thereby not felt, 1757 until loans ceased in 1817; and then its pressure became so heavy, when we expected to have been relieved.
It had been long foreseen by every reflecting man, that the day of reckoning must arrive—it had come, and brought with it severe distress to many classes of the community, and to none more than to the agriculturists, many of whom he could not much compassionate as they had almost uniformly supported the misrule and extravagance which had so long been carried on, and in which they could see no evil whilst it made no inroads on their personal enjoyments. They were the life and fortune men to support ministers and their measures, regardless of the sufferings of the people, and of repeated warnings of the impending evils from this side of the House.
§ They began now, too late he feared, to
§ RESOLUTIONS relative to the National Debt, and the Operations of the Sinking Fund.
§ 1. "That the National Debt of Great Britain, unredeemed on the 5th Jan. 1793, was 239,350,148l.; consisting of 227,989,148l.1 of funded, and of 11,361,000l. of Exchequer Bills, 2 at an annual charge of 9,203,974l.3
| 1 Parliamentary Paper, No. 35, of 1819; page 3—page 9. | |||
| 2 Vide Vol. 12, Finance Reports, folio edition, page 1. | |||
| Interest in perpetuity on Funded Debt | 7,831,837 | 6 | 2 |
| Terminable Annuities (various) £704,740, terminable in 1860 | 1,373,751 | 2 | 6 |
| Charges of Management | 120,277 | 15 | 7 |
| Making a Total of | £.9,325,866 | 4 | 3 |
| Interest on Unfunded Exchequer Bills, Appendix 7, of No. 35 | 297,445 | 16 | 1 |
| 9,623,312 | 0 | 4 | |
| Deduct Redeemed and expired Annuities, as per col. 5, of Parliamentary Paper, No. 35, of 1819, page 3 | 419,338 | 0 | 0 |
| Net Charge for the year 1793 | £.9,203,974 | 0 | 4 |
§ The Funded and Unfunded Debt of Ireland, at that time, was £,2,252,677, at an Annual charge of £130,920 for interest, as appears by Parliamentary Paper, No. 35, of 1819, but that amount is not included in this Resolution.
§ 2. "That from the 1st Feb. 1793 to the 5th Jan. 1817, including 600,000l. for the service of Portugal, 6,220,000l. for the service of Austria, and 69,250,000l.* for the service of Ireland, and guaranteed by England (and exclusive of 2,500,000l. for the service of the East India Company in 1812), there has been raised by Loans and the funding of Navy, Victualling, Transport, and Exchequer Bills in Great Britain, the sum of 584,874,557l.;1 and that during the same period, there has been an increase in the issue of Exchequer Bills unfunded, and outstanding on the, 5th Jan. 1817, to the amount of 33,289,200l.;2 making a total sum raised in the 24 years of no
| *Vide page. 8, No. 145, of 1822 | 64,750,000 |
| In 1811 raised for Ireland, but not charged | 4,500,000 |
| £69,250,000 | |
| 1 Sum funded as per col. 1, of Parliamentary Paper 145, of 1822 | 584,874,557 |
| Excess of Exchequer Bills | 33,289,300 |
| Total Sum raised | £618,163,857 |
| 2 Vide Parliamentary Paper, No. 55, of 1819, page 9: | |
| Amount of Exchequer Bills, on 5th Jan. 1817 | 44,650,300 |
| Amount of Exchequer Bills, on 5th Jan. 1793 | 11,361,000 |
| Excess of Exchequer Bills, issued and Outstanding on the 5thJan. 1817 | £.35,289,300 |
§ perceive, that in so doing, they had bartered permanent prosperity for temporary advantage, and had, in fact, been voting away their own estates.
§ He had to apologize to the House, for trespassing so long, upon their attention, but the ruinous consequences which had been produced by the erroneous system of finance so long carried on, had impressed his mind so strongly with the absolute necessity of an immediate change, that he could not, consistent with his sense of duty to the public, refrain from stating what he had done.
§ He was fearful he had not made himself perfectly intelligible on all the branches of this intricate subject, but, he could assure the House, he had not spared any labour, to do so.— The hon. gentleman concluded with moving the following
1759§ less than 618,163,857l. funded and unfunded, independently of advances made by the Bank, and remaining unsettled on the 5th Jan. 1817.
§ 3. "That there was paid into the Treasury, on account of the 584,874,557l., as stated in the preceding resolution, the sum Of 484,359,480l.,1 in money; that the Bills funded amounted to 86,183,176l.; that the Loan of 4,600,000l., raised for the service of Austria in 1795, is stated not to have been directed to be paid into the Exchequer; and that the Bank of England retained out of the subscriptions to the Loans of 14,500,000l., and 1,620,000l. in 1797, the sum of 4,646,731l. 16s 3d. making the total sum of money received and accounted for, on account of the 584,874,557l. to amount to 579,791,388l.,2 leaving a deficit of 5,083,169l. retained for discount on prompt payment, and for expenses of receiving at the Bank.
| 1 Vide col. 2, of No. 145, Parliamentary Paper, of 1822. | ||
| Cash paid to the Treasury | 487,646,178 | |
| From which deduct debentures, 1813 | £.786,698 | |
| —Loan of E. I. C. 1812 | 2,500,000 | |
| Amount for Public. | 434,359,480 | |
| Add Amount | ||
| Bills funded (vide col. 1) | 86,183,176 | |
| Austrian Loan of 1795 not paid into the Exchequer | 4,600,000 | |
| Retained by the Bank, 1797, part of Loans of £.1,620,000 | 4 648,732 | |
| 579,791,383 | ||
| Amount retained for Discount, &c. | 5,083,169 | |
| £.584,874,557 | ||
| *Vide page 144 of Vol. 13 of Com. Reports, folio edition. | ||
| *Vide col. 2, of No. 145, of 1822. |
§ 4. "That for the sum of 579,791,388l., of money received and accounted for, as stated in the preceding resolution, from the 1st Feb. 1793 to the 5th Jan. 1817, there has been created Capital in Stocks of various denominations, to the amount of 879,289,943l.,1 at an annual charge for interest in perpetuity to the amount of 29,289,668l.; and of 230,000l. of Annuities from May 1795 to May 1819; and of 654,695l. Annuities from various dates, all terminable in 1860, making a total annual charge for Interest and Annuities of 30,174,363l.2 (exclusive of about 160,000l. per annum for management) which sum of 30,174,363l., equal to 30,040,445l.3 in perpetuity, converted into a 3 per cent Capital, is equal to 1,001,348,166l., being at the rate of 172l. 14s. of 3 per cent Capital for every 100l. of the 579,791,388l. money received, or 100l. 3 per cent Capital, for every 57l. 18s. in money.
| 1 Vide col. 3 of 145; viz. | £.708,750,353 | of 3 per cents. |
| 49,982,119 | of 4 per cents. | |
| 120,557,471 | of 4 per cents. | |
| Various Capitals | £.879,289,943 | Total |
§ 5. "That, if the conversion of the 4 and 5 per cent Capitals is made at the average relative prices they bore to 3 percents, at the time they were funded, the total amount in 3 per cent Capital will be 975,784,592l. instead of 1,001,348,166l.; as stated in the preceding resolution.
§ The 49;982,119l. of 4 per cents, were funded at an average of 100l. Capital for 82l. money, 1760 1761
| the relative current value of the 3 per cents being 67l. which gives of 3 per cent. | £.61,172,133 |
| The 120,557,471l. of 5 per cents were funded at an average of 100l.Capital for 90l. money, the relative current value of the 3 per cents being 60l., which gives of 3 per cents. | 180,836,206 |
| The amount of 3 per cents funded | 708,750,353 |
| The 884,695l. of terminable Annuities, reduced into a perpetual Annuity of 750,777l.,* equal to 3 per cent Capital | 25,025,900 |
| Total 3 per cent Capital | £.975,734,592 |
| Making a difference of | .£.25,563,574 |
*In 1808, the 3 per cents £.67, the 4 per cents £.82.
*Vide 4th Resolution.
§ 6. "That, during the 24 years from the 1st Feb. 1793 to the 5th Jan. 1817, in which the 579,791,388l., as stated in the 3rd Resolution, was received and accounted for, there was paid to the Commissioners of the Sinking Fund in money, the sum of 188,522,340l.,1 and the expense of the office of the said Commissioners during the same period, was 62,698l.,2 making the amount paid to the said Commissioners, 188,585,038l.,3 in money, by raising of which, an annual charge in perpetuity of 9,771,063l.,4 was created, equal to 325,702,116l.,5 of 3 per cent capital.
| 1 Vide col. 8, of No. 145, of 1822. | 2 Vide Parliamentary Paper, No. 39, of 1821. |
| 3 Cash paid to Commissioners | 188,522,340 |
| Expense of Office | 62,698 |
| Total Cash | £.188,585,038 |
| £ | £ | £ | £ |
| 4 If 579,791,388 | 30,040,445 | 188,585,038 | 9,171,063 |
| 5 If 579,791,388 | 1,001,348,166 | 188,535,038 | 325,102,116 |
§ 7. "That, with the 188,585,038l., as stated in the preceding Resolution, the said commissioners have purchased capitals of various denominations, to the amount of 302,911,955l.,1 the annual dividends on which are 9,168,233l.,2 which sum, converted into a 3 per cent capital, is equal to 305,607,766l., being at the rate of 162l. 1s. of 3 per cent capital for every 100l. of the 188,585,038l. money paid to the said Commissioners, or 100l. of 3 per cent capital, for every 61l. 14s.3 in money.
| Vide col. 9 of No. 145, of 1822. | Vide col. 11, of 1822. | 3 Equal to £.4 11 2¾ per cent Interest |
§ 8. "That the amount of annual charge created in perpetuity, by raising the 188,585,038l. money, was 9,771,063l., whilst the annual charge redeemed by the Commissioners of the Sinking Fund with that amount, was only 9,168,233l., being 602,830l.1 of annual charge in perpetuity less redeemed than created, equal to 20,094,333l.,2 of 3 per cent capital; showing that the debt was created between 1793 and 1817, at the rate of 172l. 14s. of 3 per cent capital for every 100l. in cash; and that the amount redeemed in the same time, was at the rate of 162l. 1s. of 3 per cent capital for every 100l. cash, being a loss of 10l. 13s. of 3 per cent capital on every 100l. of money expended by the Commissioners.
| 1 Charge in perpetuity incurred | 9,771,063 |
| Charge in perpetuity redeemed | 9,163,233 |
| Less redeemed thin created | £.602,830 |
| 2 Money £.100: 3 per cent Stock £.10.13::Money. £.188,565,038: 3 per cent Stock £.20,094,333 |
§ 9. "That, independent of the operations of the Commissioners of the Sinking Fund, the following Reductions of the National Debt and Annual Charge have taken place between the 5th Jan. 1793, and the 5th Jan. 1817; viz. that 25,290,994l.1 of 3 per cent capitals have been
| 1 Vide Annual Finance Account, 5th Jan. 1815, page 224 and 5. | ||||||
| Up to that date the Stock for land tax redeemed stood in the names of the Commissioners, but from that time it has been cancelled annually; viz. | ||||||
| 1st Feb. 1815 | £.24,960,313 | 10 | 7 | at Interest 1.758,809 | 8 | 1 |
| 1st Feb. 1816, 3 per cents. | 194,743 | 8 | 8 | Do. | 5,842 | 6 | 0 |
| 1st Feb. 1817, 3 per cents. | 135,937 | 4 | 11 | Do. | 4,078 | 2 | 0 |
| Totals | £.25,290,994 | 4 | 2 | Do. | £.758,729 | 16 | 1 |
| 5 per cents, of 1797, paid off | 2,363,420 | 0 | 0 | Do. | £.118,171 | 0 | 0 |
| 2 Vide Parliamentary Papers, No. 162, of 1822. | |||||||
| 3 3 per cents Capitals, cancelled for Annuities, by 48 Geo. 3 o. 142 | 3,449,955 | 0 | 0 | Do. | 103,498 | 13 | 0 |
| Vide Finance Accounts, 1817. | |||||||
| 4 Unclaimed Dividends on 5th Jan, 1817, Finance Accounts | 539,244 | 0 | 0 | Do. | 17235 | 0 | 0 |
| 6 Annuities expired and unclaimed, up to 5th Jan. 1817 | Do. | 523,493 | 19 | 5 | |||
| Charges of Management, at £562 10 per million on Capitals cancelled as below | Do. | 17,237 | 0 | 0 | |||
| 6 Total Capitals cancelled | £.31,643,613 | 4 | 2 | *£.1,538,365 | 9 | 0 | |
| Deduct Amount of Annuities, created by 43 Geo 3, up to 5th Jan. 1817 | 225,254 | 0 | 0 | ||||
| 7 Total Diminution of Annual Charge on 5th Jan. 1817 | £.1,313,111 | 9 | 0 | ||||
| Unclaimed Exchequer Annuities, page 225 of Finance Accounts, 5th Jan. 1817 | 28,838 | 7 | 0 | ||||
| Expired on 5th April, 1803, and to 5th Jan. 1808, page 229 | 494,655 | 12 | 5 | ||||
| Total | £.523,493 | 19 | 5 |
§
10. "That the total Revenue of Great Britain in the 24 years between the 5th Jan. 1793, and the 5th Jan. 1817, from taxes alone, including the small branches of Hereditary Revenue, and incidental resources, amounted to the sum of 1,114,318,563l.1 sterling.
1 Vide Commons Reports of 1797, vol. 12, folio edition, for 1793, 4, 5, and 6.
Vide Vol. 13, page 2, for 1797.
Vide Accounts in the Journal Office, for 1798 and 9.
Vide Annual Finance Accounts for 1800 to 1817.
§
11. "That the total Expenditure of Great Britain, for the same period, viz. from the 5th Jan. 1793 to the 5th Jan. 1817, for interest on the debt as it stood on the 5th Jan. 1793 (but excluding all charge for Loans since 1793), and for expenses of Civil Government, for the Navy, Ordnance, Army (ordinary and extraordinary), Miscellaneous Services and Charges of Management, and including 58,164,716l.1 for subsidies to Foreign Powers, amounted together to the sum of 1,240,480,963l. But as the sum of 3,711,786l.2 is charged in the Miscellaneous Expen-
1. Vide Parliamentary Paper, No. 412, of 1815, the specific Accounts for 1793 to 1786, therefore assumed equal to Taxes and Loans for that period.
For 1797, 8, and 9, as in 10th Resolution.
Vide Annual Finance Accounts, from 1800.
| 2 Vide Parliamentary Paper, No. 293, of 1822. | |
| In this Sum is included; | |
| Paid to the Bank for discount on Loans | 3,335,512 |
| Paid to the Bank for receiving Loans—Vide Parliamentary Paper, No. 298, of 1818. | 397,006 |
| £.3,732,598 | |
| Principal of Debentures paid off by 53 Geo. 3, c. 41 and 53, in 1815 and 1816. | 786,698 |
| £.4,519,296 |
§ 12. "That, as the Revenue of Great Britain, was 1,114,318,563l.as stated in the 10th Resolution, and the expenditure 1,235,982,479l., as stated in the 11th Resolution, the excess of Expenditure in that period was 121,663,916l.1
| 1 Expenditure | 1,235,982,479 | –11th Resolution. |
| Revenue | 1,114,318,563 | –10th Resolution. |
| Excess of Expenditure | £.121,663,916 |
§ 13. "That, in addition to the Expenditure of 1,235,982,479l. for Great Britain, as per 11th Resolution, there was remitted from England to Ireland, between the 5th Jan. 1797 and the 5th Jan. 1817, the sum of 68,930,595l., making the total Expenditure for Great Britain, 1,304,913,074;1 and that in addition to the Revenue of Great Britain, of 1,114,318,563l., as stated in the 10th Resolution, there was received from Ireland the sum of 52,245,471l., making (exclusive of Loans) the total income of Great Britain, 1,166,564,034l., and by the addition of 16,685,124l.,2 being the difference between the sums remitted to and from Ireland, makes a total excess of Expenditure over Income of 138,349,040l.
| 1 Vide Annual Finance Accounts. | ||
| Expenditure | £.1,235,982,479 | |
| Remitted to Ireland for Loans and Allowances | 68,930,595 | |
| = 1,304,913,074 | ||
| Revenue of Great Britain | 1,114,318,563 | |
| Received from Ireland | 52,245,471 | |
| = 1,166,564,034 | ||
| Excess of Expenditure | £.138,349,040 | |
| 2 Remitted from England to Ireland.—Vide Annual Finance Accounts | 68,930,595 | |
| Remitted from Ireland to England. | 52,245,471 | |
| £.16,685,124 |
§ 14. "That as the reduction of 1,313,111l. of Annual Charge, as Stated in the 9th Resolution, was effected without any aid of the Sinking Fund, the same reduction might have taken place from the Annual Charge of 9,203,974l.1 as it stood on the 5th Jan. 1793; and that, had the 138,349,040l., the excess of expenditure in these 24 years, as stated in the 13th Resolution, been raised by taxes within these years, instead of by loans, the total amount of Capital of Debt unredeemed on the 5th Jan. 1817, would have been only 207,706,535l.2 and the Annual Charge, including Management, only 7,890,863l., instead of being 817,415,237l.3 of Capital, and 30,628,234l. of Annual Charge, as it stood on the 5th Jan 1817.
| 1 Annual Charge, 5th Jan. 1793 | 9,203,974 | —Vide 1st Resolution. | ||||
| Reduction as per 9th Resolution, up to 51h Jan. 1317 | 1,313,111 | |||||
| Charge as it would have been in 1817, if no Loans had been raised | £.7,890,863 | |||||
| 2 Capital, Funded and Unfunded, 1793. | 239,350,148 | |||||
| Capitals cancelled up to 1817 | 31,643,613 | —Vide 9th Resolution. | ||||
| Capital as it would bare been | £.207,706,535 | |||||
| 3 Vide Finance Accounts, pp. 224 and 5, ending 5th Jan. 1817: | £28,812,307—Vide note to 25th Resolut. | |||||
| Capitals various | 772,764,937 | at an Annual charge of | 26,650,959 | 4 | 5 | |
| Terminable Annuities of various denominations | 1,657,904 | 6 | 10 | |||
| Life do. 48 Geo. 3, c. 142 | 225,254 | 13 | 0 | |||
| Charges of Management of the Bank | 278,189 | 2 | 3 | |||
| Unfunded Debt | 44,650,300 | charge | 1,815,926 | 17 | 8 | |
| Total Capital | £.817,415,237 | at an Annual charge of | £.30,628,234 | 4 | 2 |
§ 15. "That it appears by the preceding Resolutions, that, in consequence of not raising the Supplies within the year, by taxes, to the amount of 138,349,040l. in the 24 years, being an 1766 1767 average of 5,764,543l. per annum; a debt of 609,708,702l.1 of Capital has been incurred, at an increased Annual Charge of 22,737,37l,2 thereby occasioning taxation to the extent of upwards of 58 millions, per annum, whilst from the 5th Jan. 1817, about 33 millions only would have sufficed.
| 1 Capital of Debt as it stood on 5th Jan. 1817, Funded and Unfunded | 817,415,237 | at charge of | 30,628,254 | 4 | 9 |
| Capital of Debt as it would have been, as per 14th Resolution | 207,706,535 | at charge of | 7,890,363 | 0 | 0 |
| £.609,708,702 | charge | 2£.22,737,371 | 4 | 3 | |
| Increase of Charge by Loans, since 1793, to pay the actual excess of Expenditure of 138 millions. |
§ 16. "That, by the union of the Exchequer of Ireland with that of Great Britain, on the 5th Jan. 1817, a farther Annual Charge of 1,323,775l. 15s. 4d. was added to the annual charge of Great Britain, then amounting to 30,628,234l.1 (as stated in the 14th Resolution), by the incorporation of 28,739,869l.2 of capital funded and unfunded, created in Ireland, making the total amount of Debt, funded and unfunded, of the United Kingdom, on the 6th Jan. 1817, to amount to 846,155,106l.,3 and the Annual Charge to 31,952,009l.
| 1 Charge on the Debt of Great Britain | 30,628,234 | as per 14th Resolution. |
| Charge on the Debt of Great Ireland | 1,323,775 | |
| Total Charge of United Kingdom on 5th Jan. 1817 | £.31,952,009 | Sterling. |
| Proportion of Charge on Unfunded | 2,031,157 | |
| Proportion of Charge on Funded | £.29,870,852 |
| 2 Vide Parliamentary Paper, No. 35, of 1819: | |||||
| Funded Debt, unredeemed, Ireland, in British Currency, on 5th Jan. 1817 | 23,435,254 | 5 | 3 | at an Annual charge of | 1,058,545 |
| Unfunded | 5,304,615 | 0 | 0 | at a charge of | 265,230 |
| Funded and Unfunded | £.28,739,869 | 5 | 3 | at an Annual charge of | £.1,323,775 |
| * By Irish Finance Accounts on 5th Jan. 1817, page 94. | ||||
| The Total Capital of Irish Debt is stated at | 34,017,870 | 15 | 5 | |
| Redeemed | 8,812,662 | 12 | 7 | |
| Unredeemed Capital in Irish Currency | £.25,235,208 | 2 | 10 | |
| Equivalent in British Currency | 23,293,992 | 0 | 0 | |
| 3 Capital of Great Britain, on 5th Jan. 1817, Funded and Unfunded | 817,415,237. | –14th Resolution | ||
| Capital of Ireland, Funded and Unfunded | 28,739,869 | - | ||
| Total of the United Kingdom | £.846,135,106 | |||
| *Vide Annual Finance Accounts, 1817 to 1821, both inclusive. |
§ 17. "That, from the 5th Jan. 1817 to the 5th Jan. 1822, there was raised, by taxes, in the United Kingdom of Great Britain and Ireland, the sum of 296,454,538l.; 1 and the Expenditure (Sinking Fund included), during the same period, for Civil list, pensions, and other charges on the Consolidated fund, and for expenses of the Navy, Ordnance, Army (Ordinary and Extraordinary) Miscellaneous services, and charges of Collection, and for interest and management of Debt, as stated in the preceding resolution, amounted (including 2,155,468l.2 paid for Russian loan and to Holland), to 288,925,669l.,3 leaving an Excess of income over expenditure, in the 5 years, of 7,528,869l. 14s.
| 1 Total Gross Income of the United Kingdom (Drawbacks excepted). | 3 Expenditure of the United Kingdom. | |
| 1817 | £.57,650,589 | ?.58,544,049 |
| 1818 | 59,657,941 | 57,872,428 |
| 1819 | 58,680,252 | 57,392,544 |
| 1820 | 59,759,680 | 57,476,755 |
| 1821 | 60,686,076 | 57,639,893 |
| Income | £.296,454,538 | Expenditure £.288,925,669 |
| Expenditure | 288,925,669 | |
| 7,528,869 | Excess of Income in 5 years. | |
| 2 Vide Parliamentary Paper, No. 295, of 1820. |
§ 18. "That, notwithstanding the Excess of Income of 7,528,869l. as, stated in the preceding resolution, a further funding of 90,761,920l.,1 has taken place, for which an additional Capital of debt has been created between the 5th Jan. 1817 and the 5th,Jan. 1822, of 116,600,235l.,2 at an annual Interest in perpetuity of 3,773,354l.,3 and that the said Capital of 116,600,235l.; has been created by 19,999,920l., raised by Loans in money, by 34,262,000l. Exchequer Bills issued, and afterwards funded; and by 36,500,000l. borrowed from the Commissioners of the Sinking Fund; and that for the 19,999,920l. raised by Loans, the sum of 19,814,944l.4 was paid into the Treasury, leaving a deficit of 184,976l., retained by the Bank for discount on prompt payment, and for receiving the same; and that there is also charged 14,109l., under the head of Miscellaneous Services, in the Finance Accounts of 1819, as paid to the Bank of England for transferring 27 millions of 3 per cents to 3½ per cents; making the nett amount of Money received and accounted for to be only 90,562,835l.,1 creating an annual charge for interest in perpetuity of 3,773,354l., which sum converted into a 3 per cent Capital, is equal to 125,778,466l. or 138l. 17s. of 3 per cent Capital for every 100l. of money, or 100l. of 3 per cent Capital for every 72l. of money.
| 1 Vide col. 1, of 145, of 1822. | ||
| By Loans in money | 19,999,920 | |
| By Exchequer Bills | 34,262,000 | |
| By Commissioners of Sinking Fund | 36,500,000 | |
| £.90,761,920 | ||
| Deficit retained by the Bank | £.184,976 | |
| For Transfer | 14,109 | 199,085 |
| Nett Amount of Cash | £.90,562,835 |
| 2 Vide col. 3, of Parliamentary Paper, No. 145, of 1822. | |||||
| Vide col. 5, of Parliamentary Paper, No. 145, of 1822. | |||||
| 1818, for transfer of 27 Millions, 3 per cents to | |||||
| 3½ per cents | £.2,999,920 | Cash £.2,971,819 | 19 | 4 | |
| 1819 Capital | 12,000,000 | 11,862,340 | 7 | 6 | |
| 1820 | 5,000,000 | 4,980,783 | 15 | 1 | |
| £.19,999,920 | Received | £.19,814,944 | 1 | 11 | |
| Short credit | 184,976 | 0 | 0 | ||
| Nett | £.19,999 |
§ 19. "That, during the period of 5 years, from 5th Jan. 1822, in which 3,773,354l. New Annuities, were created for 90,562,835l. money, there has been paid to the Commissioners of the Sinking Fund, the sum of 82,021,555l.;1 and the expense of their office, during the same period, was 32,203l. 2s. 2d.2 making the total amount of 82,053,758l.; with which the said Commissioners have purchased 110,489,252l.3 of various stock, the dividends on which amount to 3,338,857l.;4 which sum, converted into a 3 per cent capital, is equal to 111,295,232l. or 135l. 13s. of 3 per cent capital for every 100l. of money, or 100l. of per gent capital for every 73l. 14s. 6d. of money paid to the said Commissioners.
| 1 Vide col. No. 8, of 145, of 1822. | |
| Paid to the Commissioners of Sinking Fund | 82,021,555 |
| Expense of Office | 32,203 |
| Total of money paid to them | £.82,053,758 |
| 2 In 1817 | 4,853 | 17 | 11 | |
| 1818 | 6,399 | 12 | 10 | |
| 1819 | 7,240 | 4 | 8 | |
| 1820 | 7,108 | 6 | 9¾ | |
| 1821 | 6,601 | 0 | 0 | |
| £.32,203. | 2 | 2¾ | —Vide No. 39, of 1821 | |
| 62,698. | 0 | 0 | From 1793 to 1816 | |
| Expense of | £.94,901. | 2 | 2¾ | in 29 years |
| 3 Vide col. 9, No. 145. | ||||
| 4 Vide col. 11, No, 145. |
§ 20. "That, in borrowing the sum of 82,053,758l. paid to the Commissioners of the Sinking Fund, there were created, and added to the debt, capitals equal to 113,960,608l.1 of 3 per cent, at an annual charge in perpetuity of 3,418,818l.,2 whilst the Commissioners redeemed, during the same period, with that sum, dividends or Annuities in perpetuity, to the amount of only 3,338,857l.,3 equal to 111,295,232l. of 3 per cent capital; occasioning thus, by the operations of the Sinking Fund, a loss of 79,961l.4 of perpetual Annuity, equal to 2,665,376l. of 3 per cent capital, showing that the debt created, between the 5th Jan. 1817 and the 5th Jan. 1822, was at the rate of 138l. 17s. of 3 per cent capital for every 100l. of money; and that the amount redeemed in the same period was at the rate of 135l. 13s. of 3 per cent capital for every 100l. of money, being a loss of 3l. 4s. of 3 per cent capital on every 100l. of money expended by the Commissioners.
| Money. | 3 per cents. | Money. | 3 per cents. | |
| 1 | If £.90,562,835 | £.125,778,466 | £.82,053,758 | £.113,960,608 |
| But £.82,053,758 | has redeemed only | 111,295,232 | ||
| Occasioning a Loss of 3 per cents Capital and a Dividend of £.79,961. | £.2,665,376 |
| Money. | Dividend. | Money. | Dividend. | ||
| 2 | If £.90,562,835 | £.3,773,354 | £.82,053,758 | £.3,418,818 | |
| 3 | Vide col. 11. | ||||
| Dividend on borrowing | 3,418,818 | ||||
| 4 | Dividend on redeeming | 3,338,857 | |||
| Difference in Dividend | £.79,961 |
§ 21. "That the total sum funded in Great Britain in the 29 years from the 5th Jan. 1793 to the 5th Jan. 1822, amounted to 675,636,477;1 that the total sum received in money, and accounted for, was 670,354,223l.,2 at an annual aggregate charge of 33,813,799l.;3 viz. of 33,063,022l., for interest in perpetuity; for 884,696l. of terminable Annuities, Converted into 750,777l. of perpetual Annuities; the 230,000l. on the same terms as perpetual annuities were created in 1795; and 654,696l. at 18.86 years purchase, and the whole into a 3 per cent capital, equal to 1,127,126,633l., being at the rate of 168l. 1s. of 3 per cent capital for every 100l. of money received; or 100l. of 3 per cent capital for every 59l. 10s. of money, equal to 5l.0s. 10d. per cent interest.
| 1 | Vide col. 1, No. 145, of 1822. | ||
| 2 | Vide col. 2, No. 145, of 1822. | ||
| 3 | Col. 5 | £.33,063,022 | perpetuity. |
| Col. 6 | 133,400 | of perpetuity. for £.230,000 of 25 years | |
| Col. 6 | 617,377 5 | of Perpetuity. for £.654,695 terminable in 1860 | |
| £.33,813,799 | |||
| Equal to 3 per cent Capital or £,1,127,126,633. |
§ 22. "That the total sum paid to the Commissioners of the Sinking Fund, during the said period of 29 years, from the 5th Jan. 1793 to the 5th Jan. 1822, amounted to 270,543,895l.,1 and the expenses of their office during the same period were 94,901l.,2 making a total charge in money paid to the said Commissioners, of 270,638,796l.,3 by raising of which an annual charge in perpetuity of 13,651,477l., was created, equal to 455,049,262l.,5 of 3 per cent capital.
| 1 Vide col. 8, of No. 14.5. Cash paid | 270,543,895 |
| 2 Vide No. 39, of 1822. Expenses of Office | 94,901 |
| Total Sum paid to Commissioners S. F. | £.270,638,7963 |
| Money received. | 3 per cents. | Money paid to Commis. | 3 per cents. | |
| If | £.670,334,222 | £.1,127,126,633 | £.270,638,796 3 | £.455,049,262 4 |
| £.670,354,222 | Dividend, £.33,813,799 | £.270,638,796 | Dividend, £.13,651,477 |
§
23. "That, with the 270,638,796l., as stated in the preceding resolution, the said Commissioners have purchased Capital, of various denominations, to the amount of 413,402,207l.,1 the Annual Dividends on which are 12,507,090l.;2 which sum, converted into a 3 per cent Capital,
Vide col. 9, of No. 145, 1822.*
Vide col. 11, of No. 145, 1822.
* Of this Amount the following Sums, hare been cancelled by Act of 53 Geo. 3, c. 95, and subsequent Acts.
| 53 Geo. 3, o.95 | 1813 | 153.576,500 |
| 1814 | 38,944,561 |
| 1815 | 51,271,467 | |
| 1820 | 47,930,611 | |
| 1821 | 21,729,166 | |
| Total | £.313,452,305 | 3 per cents. |
| 1814 | 7,796,400 | 4 per cents. |
| 1813 | 142,600 | 5 per cents. |
| Total | £.321,391,305 |
§ 24. "That the amount of annual charge created in perpetuity, borrowing the 270,638,796l., was 13,651,477l., whilst the annual charge redeemed by the Commissioners of the Sinking Fund with that amount, was 12,507,090l., being 1,144,387l.1 of annual charge in perpetuity, less redeemed than created, equal to 38,146,262lof 3 per cent Capital; showing that the proportion of the debt raised for the Sinking Fund between 1793 and 1822, was created at the rate of 168l. 1s. of 3 per cent Capital for every 100l. money received; and that the amount redeemed in the same time, was at the rate of 154l. 1s. of 3 per cent Capital for every 100l. money paid, being a loss of 14l. of 3 per cent Capital, on every 100l. money expended by the Commissioners, equal to 0l. 8s. 4½d. per cent per annum.
| In borrowing. | Created 3 per cent Capital. | At an Annual charge of |
| 1 £.270,638,796 | £.455,049,262 | £.13,651,477 |
| But had redeemed only | 416,903,000 | 12,507,090 |
| Less redeemed than created | £.38,146,262 | £.1,144,387 |
§ 25. "That, independent of the operations of the Commissioners of the Sinking Fund, a reduction took place, between the 5th Jan. 1817 and 5th Jan. 1822, of 3,583,497l.1 of Capital, and 211,222l. of Annual Charge, thereby reducing the Funded Debt of 796,200,101l. as it stood on the 5th Jan. 1817, to 792,616,695l.,2 at an annual charge of 29,659,630l.; instead of its being 795,312,767l.,3 at an annual charge of 30,015,786l.2 as it really stood on the 5th Jan, 1822, being 356,156l. increase of perpetual charge per annum, more in,1822 than it would have been if the Sinking Fund had been abolished on the 5th Jan. 1817.
| 1 Cancelled, and expired in 5 years. | ||||||
| Capitals. | Annuities. | |||||
| £.230,000 Annuities expired in 1819 | £.230,000 | 0 | 0 | |||
| For Land Tax, cancelled | £.528,094 | 16 | 8 | 15,842 | 16 | 9 |
| 3 per cent, per 48, Geo. 3, c. cancelled | 2,916,560 | 0 | 0 | 100,143 | 3 | 7 |
| Unclaimed Capital | 138,842 | 0 | 0 | 4,445 | 4 | 0 |
| Exchequer Annuities expired | 15,789 | 1 | 1 | |||
| Exchequer unclaimed for 3 years | 30,710 | 9 | 6 | |||
| Totals | £.3,583,496 | 16 | 8 | £.396,930 | 14 | 11 |
| Deduct increase of Charge, payable for Annuities, by 48 Geo. 3, c. 142 | 185,711 | 0 | 0 | |||
| Actual reduction from the Debt, as it stood on 5th January, 1817 | £.211,221 | 14 | 11 |
| Capital. | Interest. | |||
| 2Funded in 1817, in Great Britain, as per 14th Resolution | £.772,764,937 | £.28,812,307 | 6 | 6 |
| Funded in 1817, in Ireland, as per 16th Resolution | 23,435,254 | 1,058,545 | 0 | 0 |
| United Kingdom | £.796,200,191 | £.29,870,852 | 6 | 6 |
| Decreased as above | 3,583,496 | 211,222 | 0 | 0 |
| Funded Debt, as it would bare been on the 5th Jan. 1822. | £.792,616,695 | £.29,659,630 | 0 | 0 |
| 3 Vide Finance Accounts, 5th Jan. 1822, pages 178–9. | ||||
| Interest in perpetuity | £.27,875,841 | 19 | 1 | |
| Terminable Annuities | 1,451,205 | 13 | 4 | |
| Annuities by 48 Geo. 3 | 410,964 | 19 | 6 | |
| Charges of Management | 277,773 | 0 | 4 | |
| Total Charge of Funded Debt of the United Kingdom, as it really stood on 5th January, 1822 | £.30,015,785 | 12 | 3 |
§ 26. "That the Unfunded Debt of the United Kingdom, in Exchequer and Treasury Bills, on the 5th Jan. 1817, was 49,954,915l.,1 and on the 5th Jan. 1822, it was 32,671,731l., showing an apparent reduction of 17,283,184l.;—But, as the excess of Income, in these 5 years, amounted to 7,528,870l.,2 and the deficiency of the Consolidated Fund was, on the 5th Jan. 1822, 8,232,458l.3 amounting together to 15,761,328l.4, it leaves only a reduction of 1,521,856l.5 to meet the increase in the annual charge of the Funded Debt, of 356,153l., equal to 11,871,766l. in 3 per cent Capital.
| 1 Vide Annual Finance Account: | |
| Unfunded Debt Great Brtiain, 5th January, 1817 | £.44,650,300 |
| Unfunded Debt Great Irish | 5,304,615 |
| Total | £.49,954,915 |
| Unfunded Debt Great Britain and Ireland, on 5th Jan. 1822 (vide page 181, Finance Accounts.) | 32,671,731 |
| Apparent Decrease of Unfunded Debt, as per Finance Accounts | £.17,283,184 |
| 2 Vide 17th Resolution. | |
| 3 Vide Parliamentary Paper 23, of 1821; and Finance Account, 5th Jan. 1822: | |
| Deficiency of the Consolidated Fund on 5th Jan. 1822 | ?.8,842,830 |
| Deficiency of the Consolidated fund on 5th Jan. 1817 | 609,872 |
| Deficiency in the 5 years | £.8,232,458 |
| 4 Excess of Income, as per Resolution, No. 17 | £.7,528,870 |
| Deficiency of Consolidated Fund as above | 8,232,458 |
| 5 Apparent decrease of Unfunded Debt, as note 1 above | £.17,283,184 |
| Accounted for, as per note 4 above | 15,761,328 |
| Decrease of Unfunded Debt | £.1,521,856 |
| Against Increase of £.356,153 of Annual charge of Funded, equal to 3 per cent Capital | 11,871,766 |
§ 27. "That on taking a retrospective view of the Operations of the Sinking Fund, from the 5th Jan. 1793 to the 5th Jan. 1817, it is conclusive, that no Reduction of the debt was effected thereby; because, as the expenditure in each year exceeded the income derived from taxes, the money applied by the Commissioners of the Sinking Fund must have been first borrowed; and, as has been shown by the 4th Resolution, that 100l. of 3 per cent capital was created for every 57l. 18s. of money borrowed, whilst the Commissioners, on an average of that period, paid 61l. 14s. money for every 100l. of 3 per cent capital redeemed, as will be seen by the 7th Resolution; by which it appears, that the Public paid 5l. 3s. 7½d. per cent for all the money borrowed in that period, whilst the Commissioners of the Sinking Fund have been receiving only 4l.17s. 2¾d. making a loss of 6s. 4¾d. per cent on the whole amount expended by them during that period; exclusive of large bonuses, by payments of dividends, and by exemptions from the income tax thereon, before all the instalments on the several loans were paid up.
§ 28 "That as the expenditure for the service of Great Britain, during the 24 years from 5th Jan. 1793 to the 5th Jan. 1815, (including the charge on the debt as it stood on the 5th Jan. 1793) exceeded the income derived from taxes by the sum of only 138,349,040l. as stated in the: 13th Resolution: and, as 618,163,8571 was raised during that period, by loans and by issue of exchequer bills, it is conclusive that, by the system of borrowing that has been pursued, the; sum, of 479,814,817l. has been incurred as a debt during that period, in paying the stun of 138,349,040l.2, in the proportion of 291,229,7793 for interest, annuities and charges, and 188,585,038–4 paid to the Commissioners of the Sinking Fund.
| 1 Funded | 584,214,557 | —Vide 3rd Resolution. |
| Increase of Unfunded | 33,289,300 | —Vide 2nd Resolution. |
| £.618,163,857 | —Vide Note to 2nd Resolution. |
| 3 For Interest, Annuities, and Charges | 291,229,779 |
| 4 To Commissioners of Sinking Fund | 188,585,038 |
| Amount raised | 479,814,817 |
| 2 To cover Excess of Expenditure | 138,349,040 |
| Total Sum raised | £.618,163,857 |
§ 29 "That the system of borrowing, during the said 24 years, created a necessity for borrow- 1776 1777 ing, progressively increasing in proportion to the sum borrowed; and consequently, by having first borrowed the sum of 188,585,038l. for the Commisssioners of the Sinking Fund, it has entailed a burthen in perpetuity, considerably exceeding the 602,830l. of annual charge incurred by purchasing Stock on worse terms, than those at which it was created during that period; as stated in the 8th Resolution.
§ 30. "That the deduction in the preceding Resolution will be confirmed by ascertaining year by year, what sum would have sufficed to have met all the demands of the state in each year, on precisely the same scale of expense with which it has been supported, had not the system of the nominal Sinking Fund been maintained; by which mode of proof it will be seen that about. 360 millions would have sufficed to have been funded, instead of 584,874 557l.; as stated in the 2nd Resolution.
§ 31. "That as the 584,874,557l. funded from the 5th Jan. 1793 to the 5th Jan. 1817, created an annual charge of 30,174,360l.1, whilst the 188,584,038l. paid to the Commissioners of the Sinking Fund redeemed only 9,168,233l.2 of annual charge, the sum of 21,006,130l.3 is left as the annual increase of charge on 396,289,519l.4 applied as stated in the margin; whilst the sum of 360 Millions would have sufficed to have been funded, as stated in the preceding Resolution; and supposing that amount to have been funded at the same rate as the 584,874,557l., instead of 21,006,130l., it would have created an annual charge of only 18,572,673l., being 2,433,310l.5 per annum less, and leaving the annual charge on the funded Debt for the year 1817, at only 27,437,542l., instead of 29,870,852l.
| 1 Vide Resolution 4 | £.30,174,363 |
| 2 Vide Resolution 7 | 9,168,233 |
| 3£.21,006,130 |
| 4 Total Funded | £.584,874,557 | |
| Deduct | 188,585,038 | paid to Commissioners of Sinking Fund.—Vide 6th Resolution. |
| £.396,289,519 | Balance of Amount Funded. | |
| Add | 33,289,300 | Bills Unfunded.—Vide note to–2nd Resolution. |
| £.429,578,819 | applied as follows: | |
| Viz. | £.291,229,779 | for Interest and Charge on new Debt. |
| 133,349,040 | for excess of Expenditure.—Vide 13th Resolution. | |
| £.429,578,819 | Total Increase, on Account of the excess of Expenditure of£.138,349,040 in the 24 years. |
| 5 £.21,006,130 | by | £.396,289;519 |
| 18,572,820 | by | 360,000,000 |
| £.2,433,310 | £.36,289,519 |
§ 32. "That, taking the charge for the Funded Debt as it stood on the 5th Jim. 1817 at 29,870,852l.1, the revenue of the United Kingdom, derived from taxes, from the 5th Jan. 1817 to the 5th of Jan. 1822, actually exceeded every expense of the State (the charge for the Sinking Fund excepted), by the sum of 7,528,870l.2; but had the annual charge for the Funded Debt been only 27,437,542l., as stated in the preceding Resolution, the excess of Revenue would have considerably exceeded 7,528,870l.; and had that excess been applied to the purchase of stock, at the prices which have prevailed during these five years, and the Stock been cancelled as it was purchased, the total excess of Revenue in the five years would have amounted to about 21 Millions of money, redeeming about 28 Millions of 3 per cent Capital, and thereby diminishing the charge by about 840,000l. per annum, and have left the charge for 1822, at only 26,386,320l., instead of 30,015,786l. as stated in the 25th Resolution: making an excess of annual charge, of no less than 3,629,466l., in perpetuity, more than it would have been if there had been no Sinking Fund.
| 1 Vide note to 16th Resolution. | 2 Vide 17th Resolutihn. |
§ 33 "That, as the price of all commodities is uniformly governed by the demand, if 360 Millions only had been borrowed instead of 584 Millions, it is fair to conclude, that the rate of interest at which the lesser amount might have been obtained, would have been considerably lower; and taking it only at the rate of one half per cent lower, it would have made a difference if 1,800,000l., per annum, which, added to the 2,433,310l., as stated iii the 31st Resolution, amounts to 4,233,310l. per annum; and if taken at three quarters per cent lower, it would have made a difference of 5,133,310l. equal to 171,110,333 of 3 per cent capital, and consequently have left the annual charge for 1817, at only 24,737,542l., instead of 29,870,852l.
1779§ 34 "That, if the annual charge of the Funded Debt is taken at 24,737,542l.,1 on the 5 Jan.1817, as stated in the preceding Resolution, the excess of revenue would have been still greater than stated in the 32nd Resolution; and had that excess been applied to the purchase of Stock, at the prices which have prevailed during these 5 years, the total excess of Revenue would have amounted to about 33 Millions of money, redeeming about 42 Millions of 3 per cent capital, and thereby diminishing the charge by about 1,260,000l.2 per annum, and leaving the total charge for 1822 at 23,266,320l.,3 instead of 30,015,786l.4 as stated in the 25th Resolution, making an excess of annual charge in 1822 to the amount of 6,749,466l., equal to 224,982,200l. of 3 per cent capital.
| From | 1£.24,737,542 | |
| Deduct | £.1,260,000 | |
| As per note, 1st, Resolution 25 | 211,222 | |
| 1,471,222 | ||
| Leaving Charge for 1822 | 3£.23,266,320 | |
| Instead of | 4 30,015,786 |
§ 35. "That, as the total amount of Debt unredeemed, Funded and Unfunded, on the 5th Jan. 1793, was only 239,350,148l., at an annual charge of 9,203,977l., as stated in the 1st Resolution, from which reductions have taken place between that date and the 5th Jan. 1822, to the amount of 35,227,109l. of Capital, and 1,524,333l. of annual charge, as stated in the 9th and 25th Resolutions; Whereby the Debt on the 5th Jan. 1822, had the 138,349,040l. as stated in the 15th Resolution; been raised by Taxes between the 5th Jan. 1793, and the 5th Jan. 1817, would have been only 204,129,039l., at an annual charge of 7,679,641l., as far as regards Great Britain; and adding the 28,739,869l. amount of Capital, and 1,323,775l. of annual charge thereon incurred by Ireland, previous to the union of the two Exchequers, on the 5th Jan. 1822, and brought into the general account on that date, as stated in the 16th Resolution, the total amount of Debt for the United Kingdom on the 5th Jan. 1817, would have been 232,862,908l., at an annual charge of 9,003,416l., instead of its being 795,312,767l. of funded debt, at an annual charge of 30,015,786l., as stated in the 25th Resolution, and of unfunded to the amount of about 41 Millions, as stated in the 26th Resolution, at an annual charge of about 1,300,000l.; making the aggregate of Debt, on 5th Jan. 1822, 336,312,767l., and the aggregate annual charge 31,315,786l., being an increase of capital of 603,449,859l., and 22,312,370l. of annual charge; whereby it is conclusive that notwithstanding 270,543,895l. is stated to have been applied towards the Reduction of the National Debt, between the 5th Jan. 1793, and the 5th Jan. 1822, not only has no reduction been effected therein, but on the contrary, it has actually been increased to the amount above stated, of 603,449,859l., at an annual charge of 22,312,370l.; hereby demonstrating that the Sinking Fund system was founded in fallacy, and has been maintained by delusion.
§ 36. "That, whether the Financial System of the Country be regarded, in reference to the increased burthen of 1,144,387l. per annum, occasioned by the Commissioners of the Sinking Fund, in merely purchasing Stock on worse terms than at which it was created, as stated in the 24th Resolution; or in reference to that of 6,749,466l., occasioned by the extension and complication of the accounts, in consequence of the existence of the Sinking Fund system, as stated in the 34th Resolution; or in reference to the increased burthen of 22,312,370l. per annum, which has been inflicted on the Public since 1816, and to continue in perpetuity by not having raised about 138 Millions of additional taxes, in the 24 years, from the 5th Jan. 1793 to the 5th Jan. 1817, and which occasioned taxation in 1821, to upwards of 60 Millions, whilst about 33 Millions only would have sufficed, as previously shewn in the 15th Resolution; either case sufficiently shews that the Financial System of the Country is founded on erroneous principles, portending consequences as ruinous and fatal, as the Sinking Fund system is demonstrated to be fallacious and delusive.
§ 37. "That, on taking a prospective view of the result of a Sinking Fund; if five Millions per annum are applied for 10 years, in the purchase of Stock, at the rate of 81l. money for every 100l. of 3 per cent capital, cancelling the stock as it is purchased, it will afford an annual remission of taxation to the amount of 185,185l. and it will redeem in ten years, 61,728,320l. of 3 per cent capital (as stated in Parliamentary Paper No. 151 of 1822), the dividends on which will be 1,851,851l., affording an aggregate remission of taxation annually to that amount, at the expiration of 10 years, effected at the aggregate expense of 41,666,666l. of taxes;—but, if 5 Millions per annum are employed as a Sinking Fund for 10 years, in the purchase of Stock at the rate of 81l. money for every, 100l. of 3 per cent capital, with the dividends accruing thereon, the aggregate sums will purchase in that time 73,101,437l. of 3 per cents (its stated in the Parliamentary Paper before referred to), the dividends on which will be 2,193,043l., affording at the expiration of that time a remission of taxation to that amount, but no relief whatever in the interval of the 10 years, effected at the aggregate expense of 50,000,000l.of taxes.
§ 38. "That by the preceding Resolution, it is seen, that under the operation of a Sinking Fund of 5 Millions per annum, at Compound Interest, no relief whatever from taxation will be afforded to the Country for 10 years; and without any guarantee that the exaction of so great an 1780 1781 amount of taxes may not, under the present difficulties of the Country, occasion an increase of distress and pauperism, more than equivalent to any advantages that can arise from the remission of 2,193,043l. of taxes per annum, at the expiration of that period:—whilst the immediate remission of taxes, to the amount of 5 Millions per annum, will afford an important and essential relief from those burthens which at present press so heavily on the industry of the Country."
The Chancellor of the Exchequerput it to the candour of the hon. member, whether it would not be better, at this late period of the session, to postpone his resolutions? Whether the principles on which those resolutions were founded were right or not, it was impossible, at the present period, that they could receive a fair or adequate discussion. He would neither admit nor deny the accuracy of the hon. gentleman's calculations; and it was the less necessary to enter into any detailed examination of the resolutions, as the hon. member had himself stated, that they were only preparatory to some future plan, which it was his intention to submit next session. The hon. member's resolutions might all be embraced in three general principles. He attempted to show; first, that immense sums of money had been charged on the public, in consequence of not raising the sums necessary to defray the annual expenses within the year; secondly, that the application of a sinking fund during war had created an unnecessary increase of debt, and of the annual charge; and, thirdly, that as the national debt had been increased, instead of diminished, by the operation of a sinking fund, the system of a sinking fund ought not to be continued. With regard to the first of these points, no man would dispute, that had it been possible to raise the whole supplies of each year within the year, there never would have been any debt. The propriety of raising as much as possible never had been questioned; and resolutions to that effect had been moved on the 27th of July, 1812. If, however, the whole surplus charge of each year had been added to the debt, there would have been, previous to the peace of Amiens, an increase of 40 millions; and, taking the subsequent period of the war, an increase of 210 millions. Every gentleman must be aware that it would not have been possible to raise the whole supplies of each year by war taxes; and if there had been from the commencement of the war as great a taxation as after the peace of Amiens, the probability was, that the burthen upon the country would have been greater. It was but justice to Mr. Addington to say, that vigorous measures 1782 consequent to the peace of Amiens had been made during his administration. With regard to the second point, he could not agree with the hon. gentleman in the opinion which he had stated after Dr. Hamilton, that the operation of the sinking fund during war tended to increase the annual charge to the public; for the coming of the commissioners into the market whenever new stock was to be created, tended to keep up the price, and thus produced an advantage to the country. In the loan of 1819, a reduction from 24 millions to 12 had been effected, but the sum raised had been deficient; and as the greater part of that loan went to the purchase of the unfunded debt, of course the greater part of it was almost immediately returned to the market. With regard to the third and most important point, the conducting of the finance, he would make a few observations. In the first place, the hon. gentleman, in taking the actual amount of the funded debt, had attempted to show that no reduction had taken place in consequence of the operation of the sinking fund; but he had at the same time lost sight of the effect which it had had in, reducing the unfunded debt. In 1816 or 1817 the annual charge on the unfunded debt was about three millions, and now it had been reduced to one million This difference was the saving effected by the sinking fund, just as completely as thou h it had been an immediate reduction of the funded debt of the country to the same difference of annual charge. Even Dr. Hamilton admitted, that when there was an actual surplus of revenue, that could be advantageously applied to the reduction of the funded debt. At present, there was, he trusted, a surplus of 5,000,000l. and if, according to the proposal of the hon. gentleman, 5,000,000l. of taxes were to be given up, the public would be deprived of the means of reducing the debt. The hon. gentleman had stated, indeed, that he had a plan of his own by which the reduction of the debt was to be effected; but, until the hon. gentleman made his proposal to the House, he would abide by that which had been sanctioned by the decision of parliament, by experience, and by common sense. He con- 1783 cluded by moving, "That the debate be adjourned till this day three months."
Mr. Grenfellcomplimented his hon. friend upon the able manner in which he had brought forward the subject, but differed with him as to the propriety of taking away the sinking fund. With every respect for his opinion, he believed the present system for the reduction of debt was the best that could be adopted; but there was no part of his hon. friend's statement in which he more entirely agreed, than that which related to the injurious operation of the sinking fund in time of war.
§ The debate on the said Resolutions was then adjourned till this day three months.