ARTES
LIBRARY
1837
SCIENTIA
VERITAS
OF THE
UNIVERSITY OF MICHIGAN
E. PLURIBUS UNUM
SI QUAERIS PENINSULAM AMOENAM
CIRCUMSPICE
THIS BOOK
FORMS PART OF THE
ORIGINAL Library
OF THE
UNIVERSITY OF MICHIGAN
BOUGHT IN EUROPE
1838 TO 1839
BY
ASA GRAY
THE
HISTORY
OF THE
NATIONAL DEBT.
}
Galabin and Marchant, Printers,
Ingram-Court, London.
I
THE
HISTORY
OF THE
NATIONAL DEBT,
FROM
THE REVOLUTION IN 1688
TO
THE BEGINNING OF THE YEAR 1800;
WITH A
PRELIMINARY ACCOUNT
OF THE
DEBTS CONTRACTED PREVIOUS TO THAT ÆRA.
BY THE LATE
J. J. GRELLIER,
CASHIER TO THE ROYAL EXCHANGE ASSURANCE-COMPANY,
LONDON:
PRINTED FOR JOHN RICHARDSON, ROYAL EXCHANGE,
AND J. JOHNSON & CO. ST. PAUL'S-CHURCH YARD.
*
г
1810.
ļ
سمجھو
}
TABLE OF CONTENTS.
Chap.
1. An Account of Debts contracted previous to the
Revolution in 1688
Page
1
2. History of the National Debt, from 1688 to 1702
17
3.
1702 to 1713
55
A.
1713 to 1720
84
5.
South-Sea Bubble
118
6.
National Debt, from 1720 to 1739
133
7.
1739 to 1748
191
8.
1748 to 1756
213
9,
1756 to 1763
•
233
10.
1763 to 1775
262
11.
1775 to 1783
294
12.
1783 to 1793
325
13.
1793 to 1800
369
Z
J
Page 20, line 9, for ton,
34,
96,
ERRATA.
21, after assessment,
11, for £572,000,
28, for 3,177,144:11: 54,
29, for 48,364,501:8: 4,
13, after 50,000,
282,
293,
8, for commencement,
read tun.
insert *.
read £57,200.
read 3,187,144:11:51.
read 48,374,501 : 8 : 4.
insert tickets.
read conclusion.
I
}
THE
HISTORY
OF THE
NATIONAL DEBT.
CHAPTER I.
Containing an Account of Debts contracted previous
to the Revolution in 1688.
THE ancient revenue of the kings of England,
arising from land and various arbitrary impositions,
was not only sufficient to enable them to support
the splendour of royalty and defray the national
expenses, which under the feudal system were
comparatively small, but also to furnish the means,
to such as were of provident dispositions, of hoard-
ing up what were then thought considerable sums.
The wealth of WILLIAM the Conqueror was chiefly
divided among the churches, the clergy, and the poor;
his dominions being bequeathed to his sons Robert
and William, he left to his youngest son Henry
£5000 of silver.
B
10
DEBT CONTRACTED
HENRY I. left at his death £100,000, besides
plate and jewels of considerable value; and HENRY
II. lent out money to the poor religious houses,
and is said to have left in his treasury £900,000 ;
a very great sum at that period. Extraordinary
exertions, or great losses, however, frequently re-
duced them to the necessity of contracting occa-
sional debts. Thus, RICHARD I. in order to obtain
money for the crusades, mortgaged and farmed the
customs and other revenues of the crown.
HENRY III. having exhausted the resources of
this country, contracted debts in France to a con-
siderable amount. This prince went even beyond
his predecessors in extortions from the Jews; and,
after having obtained very considerable sums from
these devoted victims of avarice and false policy,
mortgaged the whole sect to his brother, the Earl
of Cornwall, for £5000, with power of distraining
their bodies in case of default in the payment of
the money at the time stipulated. A court, deno-
minated the Exchequer of the Jews, had been in-
stituted for the sole purpose of managing the re-
venue of Judaism, as it was called, which remained
unabolished until the year 1290, when the Jews
were expelled from England by Edward I.* In
1255, this prince owed near 300,000 marks, of
which 135,541 marks was a debt to the pope, at
very high inrerest; and the parliament, disappro-
ving of the manner in which this debt had been
* Sinclair's Hist. of the Pub. Rev. vol. i. page 41.
PRIOR TO 1688.
Co
incurred, refused to grant any supply towards its
discharge.
66
(C
In the fourth year of RICHARD II. the com-
mons petitioned the king to order the payment of
the debts of his grandfather, Edward III. which
they justly observed, would be "good inducement
"to the subjects of our lord the king to be the
more ready to lend to the king in aid of his ina-
jesty and the whole kingdom, if a sudden case of
necessity should come." Although this was in
some measure complied with, yet this prince was
driven to the necessity of extorting (under the pre-
tence of borrowing) great sums of money, which
were never repaid. This is particularly insisted upon
among the articles for which he was deposed.*
The credit of the crown, when not sanctioned
by parliament, was by no means great, and the diffi-
culty of borrowing any large sum may, perhaps,
have been often the cause of adopting arbitrary
modes of raising it. A striking instance of the dis-
inclination of such as had money to advance it
upon royal security occurred in 1392, when the
citizens of London refused to lend the king the
small sum of £1000; in which it cannot be supposed
that their refusal proceeded from any inability to
furnish it, as they afterwards paid ten times the
sum to accommodate the dispute which it occa-
sioned.
In the sixth year of HENRY IV. the commons
Rot. Parl, vol. iii. page 96.
B 2
4
DEBT CONTRACTED
+
petitioned the king, that all tallies given for his ma-
jesty, for money lent to him by his subjects, might
be satisfied, according to the true purport of the
said securities.*
65
This king: being much engaged in war, had little
opportunity of acquiring wealth. By his will, made
in 1408, he ordered all his debts to be paid as soon
as possible:-
:-" Also, I will, that all those that in
any wise be bound in any debt that I owe in any
"wise, or have undertaken to any man for any
"debt that I owe, or that they can duly shew it,
"that all such persons be kept harmless." He also,
orders all arrears of fees and wages to be paid; and
that all annuities, fees, and donations, which he
had granted by letters patent, should continue to
be paid according to the tenor of the grant.
HENRY VI. seems to have had much less concern
for the payment of his debts than his grandfather,
bequeathing the principal part of his property for
the expiation of his sins by the foundation of two
colleges, the orders concerning which were to be
specially and principally accomplished before all
other things, after which the revenues and profits of
the royal possessions were to remain in the hands of
trustees till his debts were satisfied.
In the first year of his reign provision was made
by parliament, (1 Hen. VI. c. 5.) for the redemption
of the jewels, including the crown, which had been
mortgaged by the king's predecessor; and this reign
affords the first instance of debt contracted upon
parliamentary security.
*Case of the Bankers, &c. page 5.
}
PRIOR TO 1688.
5
The mode of borrowing money with the sanction
of parliament was also adopted by HENRY VII. who
died richer than any king of England before him
or perhaps since. All historians agree, that he left
£1,800,000 sterling in specie.* In 1508, the em-
peror Maximilian, as guardian of his grandson, af-
terwards Charles V. being hard pressed for money,
sent over to England a famous jewel, belonging to
the dukes of Burgundy, to be pawned to Henry VII.
(then known by all men to be the richest prince in
Christendom) for fifty thousand crowns of gold, of four
shillings sterling each. It is recorded by lord Bacon,
in his history, that this prince often borrowed money
of his subjects, but punctually paid it back the very
day it became due; it being a constant maxim with
him rather to borrow too soon than pay too late.
HENRY VIII. in 1522, required a general loan
of 10 per cent. upon the value of all property from
£20 to £300, and above this sum at a higher
rate: though this contribution, exacted upon the
authority of prerogative only, was called a loan, it
does not appear that any interest was ever paid for
* The system of hoarding, which was pursued in the earlier
ages of society, however prudent it may appear at first sight, will,
perhaps, upon inquiry, be found to rest on erroneous principles.
Suffering money to remain for a length of time in an unproductive
state at the Exchequer must have been extremely prejudicial to
the industry and commerce of the nation, especially at a time when
the want of capital was severely felt. When it came to be dispersed
in a season of emergency, the same unpleasant consequences would
be likely to arise as from an over-issue of Bank-notes in the present
day.
}
6
DEBT CONTRACTED
the money advanced; and, with regard to the prin
cipal, the parliament, about seven years after, ac-
quitted the king of all obligation to repay the money
he had thus obtained. The merchants of Antwerp,
from whom he borrowed money, alarmed no doubt
by this royal manœuvre, required that the city of
London should be bound with him. Another act
of this nature was passed in the 35th year of
his reign, when the parliament not only cancelled
all the debts which the king had contracted, but
enacted, that those lenders who had been before re-
paid by him should refund all such sums into the
Exchequer, judging it a reasonable punishment to
make them forfeit the money they lent, since they
had gone about to introduce so dangerous a prece-
dent.*
His successor, EDWARD V. in the first year of his
reign, borrowed of the merchants at Antwerp
129,750 Caroline florins, on the security of the city
of London, for which the king granted the city his
indemnification. His debts within the realm amount-
ed at his death to £108,807 4 10+
In the last year of Queen MARY, 1558, according
to Stowe's Chronicle, page 632, "a prest (i. e. loan)
"was granted to the Queen by the Citizens of Lon-
"don, of £20,000, which was levied on the compan-
"6
ies; for the which sum to be repaid again, the
Queen bound certain lands, and also allowed for
Appendix to a Collection of the Parl. Debates, from 1668 to 1739.
Sinclair's Hist of the Pub. Rer. vol. i. p. 390.
PRIOR TO 1688.
༑
"interest of the money £12 of every £100 for a
((
year." This was at a time when the taking any
interest whatever for money lent, had been prohibited
by 5 and 6 Edward VI. c. 20.
Queen ELIZABETH, in 1559, borrowed £200,000
in the city of Antwerp, and in 1563 and 1576 con-
siderable sums were borrowed of the merchants of
Cologne and Hamburgh, upon the joint security of
the queen and the city of London. A circumstance
which happened in 1751 deserves here to be men-
tioned, not only on account of its singularity, but
also on account of the important consequences at-
tending it. So often do we find that events the most
glorious and important to mankind have been produ-
ced by causes, which, considered abstractedly, are
scarcely worthy of notice:-Some Genoese mer-
chants had contracted with Philip to convey to the
Netherlands 400,000 crowns for the use of his army
stationed there; but the vessels in which the money
was embarked, being attacked by some French pri-
vateers, were obliged to take shelter in Portsmouth
and Southampton. The queen, hearing of this, ordered
the treasure to be seized; alleging, that, being in
want of money herself, she would receive it as a loan
from the merchants. The duke of Alva, at that
time governor of the Netherlands, deprived of this
resource, and dreading a mutiny in his troops, to
whom large arrears were due, was obliged to have
recourse to the most tyrannical measures in order to
raise money, which so incensed the Dutch that they
flew to arms, resisted his authority, and eventually
3
DEBT CONTRACTED
}
}
{
established their independence.* The company of
merchant-adventurers advanced money to the queen,
which was regularly repaid, and £400,000, which
she owed at the time of her death, † was repaid in
the succeeding reign.
These instances of punctuality and good faith en-
couraged individuals to entertain a better opinion of
the security of money advanced for the use of go-
vernment; and, had the credit thus acquired becn
carefully maintained, little difficulty would have
been found in raising such sums by occasional loans
as might have rendered the illegal means of procu-
ring money, which were afterwards resorted to, to-
tally unnecessary.
JAMES I. finding his expenses exceed his regular
revenue, and experiencing some difficulty in obtain-
ing extraordinary supplies, had recourse to the sale.
of titles and other similar expedients. He also tried
the experiment of a benevolence, or free gift, by
which only the small sum of £52,909 was obtained,
as many persons began to doubt the legality of such
modes of raising money. At his decease he left a
debt of about £500,000. In this reign the house
of commons began to see the necessity of establish-
ing some check upon the expenditure of the sums
granted by parliament; and, accordingly, upon the
grant of three entire subsidies, with three fifteenths
and tenths, in 1623, (21 James I. c.34.) eight citizens
Hume's Hist. of Eng. vol. iv. page 133.
† Sinclair's Hist. of the Pub. Rev. vol. i. page 220.
PRIOR TO 1688.
9
of London were appointed treasurers, and were sworn
not to issue any of the money without warrant from
the council of war, who were in like manner bound
to make no warrants for payment except for the
purposes for which the money was granted, and
were accountable to parliament for its distribution.
CHARLES I. on his disagreement with the parlia
ment, procured very considerable sums under the
name of loans, in anticipation of the public revenues,
though this appellation was sometimes very impro-
perly given to forced contributions, on which there
was probably no intention of paying interest or re-
turning the principal; at least, no provision appears.
to have been made for either. The celebrated mer-
chant, Sir Paul Pindar, advanced this king £130,000,
on the joint security of several branches of the king's
revenue. And, in 1625, he was indebted to another
famous merchant, Sir William Courten, £27,000,
half of which sum had been lent to king James and
the other half to himself: the interest allowed on
this loan was at the rate of 8 per cent.
In this year
he employed the duke of Buckingham to borrow
£300,000 sterling in Holland, upon pawn, or pledge,
of a great number of valuable jewels belonging to
the crown. He mortgaged part of the crown-lands
to the city of London, and sold others. Yet, not-
withstanding all these discreditable expedients, he
was continually in debt.
So pressed was he for money during the Scotch
war, and so averse to calling a parliament, that he
seized £200,000 from the mint, which had hitherto
1
10
DEBT CONTRACTED
}
maintained the credit of a bank, and had for seve-
ral years been the treasury of all the vast payments.
transmitted from Spain to Flanders.*
During the time of the PROTECTORATE, the greatest
economy and order were observed in the public fi-
nances. The revenues of the crown, the lands of
the bishops, and a tax, upon an average, of £77,000
cach month, supplied all the wants of a frugal govern-
In such a flourishing state was the commerce
of the nation, and so firm was individual credit, that,
by an ordinance of the Rump Parliament in 1651,
the legal rate of interest was reduced from 8 to 6
per cent.; this was afterwards confirmed by 12
Charles II. c. 13.
Happy would it have been for the nation had
CHARLES II. pursued the same prudent course: but,
nursed in the lap of voluptuousness, he knew of no
duty but pleasure,-no God but dissipation! His
own prodigality and that of his mistresses continually
exhausted his revenue and obliged him to be con-
stantly borrowing of the London bankers at 8, 10,
and even higher rates of interest. These sums were
considered a fit object of taxation, and accordingly
(by 22 Charles II. c. 3) 15 shillings per cent. per
annum was levied on all money advanced to the king
at a higher rate of interest than 6 per cent.
In this reign a final stop was put to raising money
upon prerogative, on passing an act (13 Charles II.
c. 4) to sanction "a free and voluntary present to
* Macpherson's Annals of Commerce, vol. ii. p. 562.
PRIOR TO 1688.
11
"his majesty," in which a clause was inserted, de-
claring that no commissions or aids of this nature
could be levied but by the authority of parliament,
and prohibiting the supply thus granted from being
considered as a precedent in time to come.
This precaution was the more necessary as free
gifts had been long before declared illegal. In 1483,
an act was passed for this purpose, by which it is
ordained, that the exactions "called benevolences,
"before this time taken, be taken for no example to
"make such or any like charge of any of the subjects
"of this realm hereafter, but it shall be damned and
"annulled for ever." (1 Richard III. c. 2.)
t
The foundation of the present controul of parlia-
ment over public loans was afterwards more firmly
laid, by the following resolution of the house of
commons, in 1681: "That whosoever shall hereafter
lend, or cause to be lent, by way of advance, any
money upon the branches of the king's revenue,
"arising by customs, excise, or hearth-money, shall be
'judged to hinder the sitting of parliaments, and
"shall be responsible for the same in parliament;" and,
“That whosoever shall accept or buy any tally,or
((
66
66
anticipation, upon any part of the king's revenue,
"or whoever shall pay such tally hereafter to be
"struck, shall be adjudged to hinder the sitting of
"parliaments, and be responsible therefore in par-
"liament."
The tide of popular favour at first ran very strongly
in favour of the young king, notwithstanding his in-
discretions. The city of London, in 1664, in order to
12
DEBT CONTRACTED
1
shew their patriotism, assisted him with a loan of
£100,000 towards the equipment of the fleet; for
which, through emulation, the two houses of par-
liament passed a vote of thanks, and ordered it to be
communicated to the city by a deputation of six lords
and twelve commoners. In the following year, the
city also supplied the king with a loan of £200,000,
on the credit of the supply voted by the house of
commons.*
The repeated demands of the king, notwithstanding
the unprecedented largeness of the grants to him,
compelled the commons, in 1666, to think of appoint-
ing commissioners to examine the accounts of those
through whose hands the money granted for the war
had passed. Several persons then in office were much
alarmed at this measure, and the king is said to have
been equally displeased with it, and to have declared,
that, if the bill should pass and be brought to him, he
was resolved never to give it the royal assent.
however, was not necessary, as means were found to
delay the bill in the house of lords till the prorogation
of parliament. Commissioners, were however, ap-
pointed about two years after; and, in consequence of
their report, the treasurer of the navy was expelled
the house of commons, but the farther proceedings
of the house thereon were again stopped by a pro-
rogation.
This,
The profuseness of the commons in their grants,
* Secret History of Charles II.
+ Secret History of Charles II. vol. ii. թ. 260.
PRIOR TO 1688.
13
during the Dutch war, was strongly animadverted on
even in the house of lords, particularly by lord Lucas,
on the reading of the subsidy-bill, 22d February,
1671, whose speech on this occasion gave such offence
to the ministry, that it was ordered to be burnt by
the hands of the common hanginan; and, though this
bill passed soon after, the lords judged it absolutely
necessary to make some alterations in a bill for an
additional imposition on several foreign commodities,
which had been sent them from the commons, which
occasioned a remarkable controversy between the two
houses, respecting the sole privilege which the com-
mons claimed in regard to money-bills.
The house of commons themselves at length began
to see the necessity of presenting some check to the
rapacity of the monarch; accordingly, in 1675, a
supply was refused the king to take off the antici-
pations on his own proper revenue, notwithstanding
he promised, in his speech, that for the future he
would husband their grants much better than be-
fore.*
Nothing has contributed so much to the establish-
ment of public credit upon a firm basis as parliament
taking the management of the national finances into
their own hands, and superintending the application of
the supplies granted; for, previously to this, the secu-
rity of the public creditors was very precarious. A
striking instance of which occured 6th January, 1672,
* Chandler's Parliamentary Debates.
1
14
DEBT CONTRACTED
when the Exchequer was suddenly shut, and the suni
of £1,328,526 detained, which the bankers and
others had advanced to the king in anticipation of
the revenues, although only five years before, in 1667,
on a run upon the London bankers, the king, to re-
move the apprehensions of the public, issued a de-
claration for preserving inviolably the course of pay-
ments in his exchequer, both with regard to principal
and interest. A general astonishment and confusion
seized the public, and the credit and commerce of the
whole kingdom were affected by it. In the declar-
ation published to quiet the minds of the nation, the
decay of the navy and the immediate necessity of
large equipments were urged as an excuse for such a
flagrant breach of faith, and a promise was made to
the bankers, that interest, at the rate of 6 per cent.
should be paid them during the detainment of their
money. But this not being sufficient to satisfy the
bankers, or to restore the necessary circulation of
cash, the king convened his creditors before him at
the treasury, when he gave them positive assurances,
that he would punctually discharge his debts, either
out of the next parliamentary grants or his own
revenue. Having amused them with these promises,
he kept the Exchequer shut, on the same plea of ne-
cessity, for almost a year and a half;* nor did he, during
*This must allude to the time of paying the interest; for, as to the
principal, that was never repaid, but still forms part of the public
debt, as will be seen hereafter.
PRIOR TO 1688.
15
that period, convene the parliament, out of whose
next grants the public creditors were led to hope for
satisfaction.*
Letters patent were afterwards granted for securing
interest on this sum out of the hereditary excise, but
no provision was made for it by parliament till 1701,
(12 William III. c. 12.) when, in discharge of the an-
nual payments on the letters patent, and of the arrears
thereon, the same excise was charged with the pay-
ment of 3 per cent. per annum on the principal sums
for ever, but redeemable upon payment of half the
principal. The actual debt was thus reduced to
£664,263, nearly the whole of which was subscribed
into the South Sea Company's Stock in 1720; it may
therefore be considered as still forming a part of the
national debt, and is the only part thereof that was
incurred before the revolution.
The revenue of JAMES II. considerably exceeded
that of his predecessors, notwithstanding which, he
left at the time of his abdication a debt of £1,054,925;
£300,000 of which was arrears due to the army, and
£280,000 money advanced in anticipation of the
revenue. To answer this debt, there was the princi-
pal part of the year's taxes, only about one quarter
of the produce of which had been paid into the Ex-
chequer, and about £214,000 upon the hearth-money;
also the sum of £80,138: 18: 3, in cash, remaining
in the treasury on the 5th of November, 1688.
* Supplement to the Secret History of Charles II.
ཏིསྶ
16
DEBT CONTRACTED, ETC.
!
Hence it appears, that, at the revolution, there' ex-
isted little or no debt, except the banker's debt before
mentioned, and about £60,000 due to the servants
of CHARLES II. for wages, to the time of his decease,
the payment of which last was provided for in 1689;
and, as these debts had been contracted without the
consent of parliament, who at that time made no
provision for them, there certainly existed none that
could with any propriety be termed national debts.
$
1
17
·
CHAPTER II.
The History of the National Debt, from its Com-
mencement at the Revolution in 1688 to the War
in 1702.
FROM the period of the revolution may be dated
the existence of the National Debt. We have seen
that previously to this time the engagements of the
several monarchs were merely temporary anticipa-
tions of the revenue; but now the plan of mortga-
ging the resources of futurity became a regular sys-
tem, and was universally followed as an easy method
of providing for the public services. The wars, which
William, from motives of safety, was obliged to pro-
secute in the very commencement of his reign, in-
volved him in prodigious expenses, and prevented
his introducing that order and regularity in the pub-
lic revenue which is so particularly demanded after a
season of civil contention. In consequence, the se-
veral funds became every year less productive, and
he was under the necessity, in order to carry on the
war with effect, to raise money on the credit of fu-
ture receipts. Political motives, indeed, are said to
have influenced his conduct in this respect. Bolin-
broke* asserts, that the money necessary for the
* Reflections on the present State of the Nation.
C
*
18
NATIONAL DEBT
1
public expenditure might have been raised within the
year; and that a plan for this purpose was absolutely
submitted to the king, but was rejected, for a reason
which appeared plausible in political refinement.
It was said, "that a new government, established
against the ancient principles and actual engage-
"ments of many, could not be so effectually secured
any way as it would be if the private fortunes of
great numbers were made to depend on the preser-
"vation of it; and that it could not be done unless
'
"
<c
they were induced to lend their money to the pub-
lic, and accept securities under the present estab-
"lishment." Whether this was the real motive, or
whether it was an invention of the tories, in order to
cast a stain upon their political opponents, it would
perhaps be difficult now to decide.
That a clear idea may be formed of the extent of
the funds, upon which public debts were first con-
tracted, it is necessary to state the produce of the
different branches of the public revenue, according
to a computation delivered to the house of commons
at the beginning of the revolution.
The subsidy of tunnage and pound-
age, &c.
Hereditary and temporary excise
A
Hearth-money, about
Post-office,* about.
£600,000
666,383
245,000
65,000
Carried forward . . £1,576,383
*The gross produce for one year, ending 25th March, 1688,
was £76,317; 18: 10.
FROM 1688 TO 1702.
19
Brought forward .. £1,576,383
Wine-licences, about. .
10,000
New duties on wine and vinegar
172,901
Duty on tobacco and sugar
148,861
Duty on French linen, brandy, silk, &c.
93,710
2,001 855
Charge of management
280,000
Gross produce
£2,281,855
:
The above account is given by Dr. Davenant, in
his celebrated Essay upon Ways and Means, but se-
veral of the articles are certainly taken too high.
The produce of the subsidy of tunnage and pound-
age for the year, ending Michaelmas 1688, was only
£510,769 13: 0, and the average of five years af-
ter was considerably less. The produce of the he-
reditary and temporary excise is given for the year
ending Midsummer 1689, which appears to be much
greater than even the gross produce on an aver-
age of five years either preceding or following.
Upon the whole, the following account, being formed
upon the average of four years, will be found á
much more correct statement of the actual amount
of the public revenue at the time of the revolution.
Subsidy of tunnage and poundage.
Hereditary and temporary excise
Hearth-money, about
£.
S. d.
577,507 12 10
610,486 10 9
200,000 0 0
Carried forward.... 1,387,994 3 71
c 2
20
NATIONAL DEBT
Brought forward £1,387,994 3 7
H2
Post-office, about. . .
55,000 0 0
Duties on wines and vinegar
172,900 11 8
Duties on tobacco and sugar
148,861 8 0
Ditto on French linens, brandies, &c. 93,710 8 1
Wine-licences, seizures, &c.
56,969 4 4
£1,915,435 15 9
This was the whole of the public revenue, except
the small duties of 10s. per ton on wine, &c. first
granted in 1666, and appropriated for defraying the
expenses of coinage, and a duty of 1s. 6d. per chal-
dron on coals, appropriated for completing St. Paul's
cathedral. This revenue, small as it now appears,
must have been at least fully adequate to all the na-
tional expenses, if an account laid before parliament
can be depended upon; according to which the an-
nual expenditure of James II. amounted to only
£1,609,365 : 29.
1689. In the very first money-act passed after the
revolution, by which the sum of £412,925: 14:6
was to be raised by a monthly assessment, there
was a clause permitting £370,000 to be borrow-
ed at 6 per cent. per annum upon credit of this
grant. In the same session a much more perni-
* The actual produce of this tax was £400,914 7: 33 (Sce
Appendix to Sir John Sinclair's History of the Public Revenue.)
April 8th, 1689, Viscount Mordaunt was appointed first Lord
of the Treasury, and Lord Delamer Chancellor of the Exchequer.
1
FROM 1688 TO 1702.
21
*
cious practice was introduced, (1 W. & M. sess. 1.
c. 28.) by mortgaging the additional duties on to-
bacco and sugar for the payment of £60,000 to the
servants of Charles II. in three years; and the re-
sidue of the produce of these duties was, with se-
veral other duties, charged with the payment of
£600,000 for the Dutch bill of costs for fitting out
an armament to support king William, and bringing
him over the expenses of which were stated at
£ 686,500.
1690. The precedent, thus established, was soon
followed, and the money advanced upon credit of
the acts of the next session may be considered as
* It is probable that only a small part of this sum was paid
since there was a clause in the act, disallowing all claims from such
as did not take the oath of allegiance to the new government before
1st Feb. 1690. As many of the servants of Charles II.were imme-
diately connected with his successor, it is supposed that few com-
plied with the terms of the act.
+ In the king's speech to the new parliament, 20th March, he desires
them to make a settlement of the revenue; and, being in immediate
want of money for the reduction of Ireland, adds: "I have so
((
،،
great a confidence in you, that, if no quicker or more convenient
way can be found for the raising of ready money, (without which
"the service cannot be performed,) I shall be very well content, for
"the present, to have it made such a fund of credit as may be
"useful to yourselves, as well as to me, in this conjuncture; not
(C
having the least apprehensions but that you will provide for the
"taking off all such anticipations as it shall happen to fall under."
-Collection of the Parliamentary Debates, vol. ii.
March 18th, 1690, Sir John Lowther was made first Lord of the
Treasury, and Richard Hampden, Esq. Chancellor of the Exchequer.
22
NATIONAL DEBT
I
the first regular loans upon parliamentary security.
One of these acts (2 W. & M. sess. 1. c. 3.) was for
granting to William and Mary, for their lives, and
the life of the survivor of them, certain impositions
upon beer, ale, and other liquors, called the heredi-
tary excise; upon the credit of which any sum not
exceeding £250,000 might be advanced, and the
lenders were to have interest at 8 per cent. for such
part of the sum as should be advanced before the
10th June, 1690, and, for the part advanced after
the 10th June, 7 per cent. For the repayment of
this money, the above-mentioned excise was mort-
gaged to the 24th December, 1693, by which time
it was presumed both principal and interest would
be discharged. The sum actually borrowed upon
this act appears, from an account delivered to the
house of commons, to have been £551,633 : 7 : 3.
By another act, (2 W. & M. sess. 1. c. 4.) the sub-
sidy of tunnage and poundage, which had been
granted to Charles II. and James II. for life, was
now granted for a term of four years only, and was
made a fund for borrowing half a million upon the
same terms as the former. * The whole sum bor-
rowed upon this act was £547,223 13:4; so
that we see, in both these cases, the ministry at that
time were not very strict in their adherence to the
restrictions of an act of parliament.
As the war in which the country engaged soon
*The interest on these loans, as well as on most of the subse-
quent ones, was payable quarterly at the Exchequer.
t
FROM 1688 тo 1702.
23
after the accession of William proved very expen-
sive, and as obtaining money upon credit was found
easier than raising it immediately by new taxes,
which must have been very heavy to have produced
the sums necessary for such large supplies, the for-
mer expedient was of course preferred. In the ses-
sion* which began 2d October, 1690, an act was
passed for granting additional impositions on all East
India goods and manufactures, and upon various
other goods and merchandizes imported after 25th
Dec. 1690; upon the credit† of which the sum of
£ 300,550 : 9 : 10 was borrowed at 8 per cent.
which, it was supposed, would be paid off by the
10th Nov. 1695, the term for which the duties were
granted. Upon an act for continuing several duties
upon wines, vinegar, and tobacco, from 23d June,
1693, to 24th June, 1696, the sum borrowed was
£700,100; and, upon an act for granting several
additional excise-duties for four years, the sum al-
lowed to be raised by loan was £1,000,000 at 7 per
cent. nearly the whole of which was advanced, the
actual sum being £ 999,815:08.
* In the king's speech he recommends to parliament the clearing
of the revenue, so as to enable him to subsist and to maintain the
charge of the civil list, the revenue being so engaged that it must be
wholly applied, after 1st Nov. to pay off the debts already charged
upon it.
+ The clause of credit in this act was unlimited, authorising
government to borrow upon it " any sum or sums of money.”
Nov. 15, 1690, Lord Godolphin was appointed first Lord of the
Treasury, and Richard Hampden, Esq. Chancellor of the Exchequer.
24
NATIONAL DEBT.
!
<
In the course of this session, an act was passed for
appointing commissioners to examine and state the
public accounts of the money granted and raised for
the support of government and the war, from the
5th November, 1688, "to the intent that their Ma-
"jesties and this kingdom may be satisfied and truly
"informed, whether all the same revenues, moneys,
"and provisions, have been faithfully issued out,
disposed, ordered, and expended, for the ends and
purposes aforesaid; and that their Majesties loyal
'subjects may thereby be encouraged more chear-
66
==
CC
fully to undergo the like burthens for the support
"of their Majesties government, and the farther
"prosecution of the war." The commissioners were
nine members of the house of commons, chosen by
ballot; but they were not invested with sufficient
powers for a thorough investigation, and many per-
sons, who had great accounts to pass, possessed such
power and influence in the house of commons as
enabled them, by throwing difficulties in the way
of the commissioners, to defeat the end for which
they were appointed.
1691.-The supplies of the next session were
raised by excise-duties, a monthly assessment, and
a quarterly poll-tax, which, being each granted for
one year only, could not be made funds for borrow-
ing upon for any greater time. Two bills were pass-
ed, by the house of commons, for appropriating
the forfeited estates in England and Ireland to the
service of the war, which, however, was not carried
into effect, as they were both dropped by the lords.
FROM 1688 тo 1702.
25
The resolution of the house of commons, on the
19th January, 1692, at present appears so extraor-
dinary, that it would be unpardonable to pass it over
unnoticed.
(C
(C
CC
Resolved,
"That the salaries, fees, and perquisites, of all
"offices under the crown, (except £ 500 per ann. to
"be allowed to such respective officers), except the
"salaries to the Speaker of the house of commons,
"the Lords Commissioners of the Great Seal, the
Judges, foreign Ministers, and the Commission
"Officers serving in the fleet and army; and also
"all pensions granted by the crown, except the
pensions payable to the Queen Dowager and the
"Princess Anne of Denmark, and such other pen-
"sions as should be excepted by the House; be ap-
plied towards carrying on a vigorous war against
"France." As ministers of late years have become
so fond of appealing to precedents, every true friend
to the country must sincerely lament that such a
patriotic measure never amounted to any thing more
than a resolution.
CC
1692. In the session which began 4th Nov. the
practice of burthening posterity was revived, and its
evil consequences much extended. Certain addi-
tional excise-duties upon beer, ale, and other li-
quors, were granted for the term of ninety-nine
*
* These duties, unlike most of the funds established during this
war, were not charged to the full amount of their produce, of course
a surplus remained, which was appropriated by 5 Anne, c. 19.
26
NATIONAL DEBT
per-
years, from 20th January, 1693, and were appro-
priated for the payment of the interest of
£1,000,000 to be advanced on a tontine scheme.
This is the first instance of money being raised in
this country, for the public service, upon this un-
certain species of annuity, for which
very few
sons are disposed to give the real value, and, in con-
sequence, is an improper mode to be adopted by
any state. The annuity, in this instance, was, how-
ever, more determinate than upon the generality of
such plans, the subscribers being certain of 10 per
cent. for their money till 24th June, 1700; after
which time the sum of £70,000 per annum was to
be divided among the surviving nominees till there
should be only seven left, and, then, upon the death
of each, his annuity to be available for public ser-
vices. Only the sum of £108,100 was advanced
upon this scheme, which was partly owing to a
clause, that, if the whole was not subscribed by a
certain time, the remainder might be subscribed for
14 per cent. on any life the subscribers chose to no-
minate. This was selling annuities at about half
their real value to such as chose to nominate healthy
young lives. Notwithstanding the terms were so
* Interest being at 6 per cent. (which was then the legal rate,) an
annuity for a life, at any age, from four to twenty, was worth, ac-
cording to M. de Parcieux's tables, at least 13 years purchase, and
at some ages`more than 14 years purchase; consequently, an an-
nuity of £14, which was sold for £100, was worth from £189 to
£196; and, at all ages under sixty-four, was worth considerably more
than what it was then sold for. All life-estates were, however, at this
FROM 1688 TO 1702.
27
advantageous, the sum advanced on both was only
£881,493 14: 2. By another act of this session,
additional duties were granted on a great variety of
goods imported, with a clause for borrowing any
sum not exceeding £510,000, at 8 per cent. upon
the credit of these duties. The duties upon wine,
vinegar, and tobacco, on which money had been
borrowed two years before, and which were already
granted till 24th June, 1696, were farther continued
to 24th June, 1698: the duties on East India goods
and other merchandize imported were all continued
to 10th Nov, 1697; upon both which, with a tax
upon the stock of public companies, any sum not
exceeding £500,000 might be borrowed, at 5 per
cent. per annum. An act was also passed, (4 W.
& M. c. 1.) for raising four shillings in the pound
on the annual profits arising from land and perso-
nal estates. The legal rate of interest being
6
per cent. this was considered as the standard
of profit on personal property: so that for a capital
of £100 a tax was levied of 24 shillings. This act
time, much under-rated, but the real value of them was beginning to be
estimated on more rational data, from the observations of Dr. Halley
on the Breslaw bills of mortality. The subject was afterwards con-
siderably elucidated by the successive labours of De Moivre, Dodson,
and Simpson. The works, however, of these eminent mathemati-
cians have been in a great measure superseded by later writers;
more particularly by an ingenious treatise on the Doctrine of Life
Annuities and Assurances, lately published by Mr. Francis Baily; in
which the different branches of the science are investigated with the
greatest simplicity and elegance.
28
NATIONAL DEBT
was charged with the payment of £735,391; 18 : 5½,
raised on the credit of the quarterly poll-tax granted
in last sessions.
1693. In the next session* an act (5 W. & M.
c. 5.)† was passed for making good the deficiency of
£118,506 : 5 : 10 unsubscribed on the tontine act,
by allowing the persons subscribing before 1st May,
1694, life-annuities at 14 per cent. being the same
excessive terms as by the act of last session.
Another mode of raising money, somewhat less
extravagant, though in its consequences much more
pernicious, was, at this time, introduced. This was,
borrowing money on lotteries; for which purpose
additional duties upon salt were granted for three
years, and additional excise-duties on beer, ale, and
other liquors, for sixteen years, on which £1,000,000
In the king's speech, 22d March, he particularly recommends
to parliament to enable him to discharge the debt incurred for
transport-ships employed in the reduction of Ireland.
† As the tax on the stock of public companies, in the last ses-
sion, had, probably, induced many persons to think that it might
hereafter be extended to the loans to government, it was enacted,
that the annuities upon this act should be free from all rates, duties,
and impositions, whatever. This was enacted by every subsequent
loan-bill; and so blindly has the precedent been followed, that it
even forms a part of every act of the like nature which has passed
since the public annuities have been rendered liable to the income-
tax.
The first lottery in this country, of which we have any account,
was in 1569, the proposals for which were published in 1567 and
1568. It consisted of 40,000 lots at ten shillings each; there were
no blanks, and the prizes consisted chiefly of plate; there were then
1
FROM 1688 TO 1702.
29
cent. *
was to be raised by lottery, at £10 a ticket, at-
tended with annuities for sixteen years, at £ 14 per
The sum of £300,000 was also to be raised
before 29th Sept. 1694, by granting life-annuities, at
14 per cent. for one life, 12 per cent. for two lives,
and 10 per cent. for three lives, which was thus
advanced :
Annuity.
£15,098 13 6
Principal.
On one life, £ 107,847 13 9..
two lives,
three lives,
170,917 2
3.
20,510 1 0
21,235 4 0..
2,123 10 4
300,000 0 0
37,732 4 10
£330,000 was likewise borrowed, at 8 per cent.
only three lottery-offices in London. It was drawn at the west door
of St. Paul's cathedral, and the profits were intended for the repair
of the havens of the kingdom, and other public works.
The number of lots seems here to be much under-rated: it pro-
bably consisted of 400,000; the drawing being represented as
continuing incessantly, both day and night, from the 11th of January
to the 6th of May following. (See Maitland's Hist. of London,
vol. i. page 257.)
In 1612, king James granted permission for a lottery, to be held
at the west end of St. Paul's, of which the highest prize was of the
value of four thousand crowns in plate: this was for the assistance
of the Virginia planters. The Virginia company were licensed to
open lotteries in any part of England; and they raised by this
means £29,000. At length, being considered as a national evil,
they attracted the attention of parliament, were presented by the
commons as a grievance, and, in March, 1620, were suspended
by an order of council. (Winterbottom's View of America.)
*The real value of an annuity for 16 years is 10,1 years pur-
chase; the annuity of £14 sold for £100 was therefore worth
£ 141.
3
30
NATIONAL DEBT
upon the stamp-duties, now first introduced, and
granted for the term of four years.
But the most important financial transaction was
the establishment of the Bank of England. An in-
stitution which, being under the direction of men
more intimately conversant in money-transactions
than public ministers usually are, and more strongly
impressed with a sense of the necessity of maintain-
ing an inviolable punctuality in such transactions,
has contributed more than any other measure towards
the establishment and support of public credit. The
sum advanced by the company to government was
£1,200,000, for which they were to receive interest
at 8 per cent. per ann. with £4000 per annum for
management: and, for making good these payments,
new duties upon the tonnage of ships were granted
for four years: one half of the additional excise-du-
ties (2 W. & M. sess. 2. c. 10.) were also granted
without any limitation of time; which is the first
instance of a grant of the kind, although it has since
become the usual mode, and taxes for a limited
time are now seldom thought of. Thus a consider-
able debt was contracted, without any provision for
its redemption or extinction, and probably without
any expectation that it would ever be redeemed.
It was stipulated in their charter that, at any time
after 1st Aug. 1705, upon twelve months notice be-
ing given, and upon re-payment of the £1,200,000,
with all arrears of interest, the corporation should
cease and determine. And that no person or cor-
FROM 1688 To 1702.
31
porate body should subscribe more than £20,000; *
one-fourth part to be paid at the time of subscribing.
It was also provided, that if they advanced any mo-
ney to Government upon credit of the public reve-
nues, without the authority of parliament, they
should forfeit treble the value of the sum so ad-
vanced.
The establishment of the Bank was a measure of
great convenience to government, who had hitherto
been generally under the necessity of allowing 8 per
cent. on advances on the land-tax, besides additional
premiums; and on other anticipations much more.
1694. In the session, † which began 12th Nov.
the subsidy of tunnage and poundage was granted
for five years, and again mortgaged for the payment
of £1,250,000, borrowed on the credit thereof. A
sum was borrowed on the land-tax act, considerably
exceeding what was afterwards discharged by the
(6
* His Majesty subscribed £ 10,000.
+ In the king's speech he reminds the house of commons, that
the act of tunnage and poundage would expire at Christmas, and
hopes they will think fit to continue it, "which is the more necessa-
ry at this time, in regard that the several branches of the revenue
"are under great anticipations, for extraordinary expenses of the
war, and subject to many demands upon other accounts." He
also mentions to them again the debt for the transport-ships employ-
ed in the reduction of Ireland," which is a case of compassion and
"deserves relief."
26
Lord Godolphin was at this time first Lord of the Treasury
and Chancellor of the Exchequer.
32
NATIONAL DEBT
produce of the tax, which was occasioned, in a great
measure, by a debt of £622,096 13:0, having
been transferred to this year's tax.*
The proprietors of annuities on single lives, granted
under three former acts, amounting to £981,619:1:9,
part of the £1,300,000 intended to have been raised,
were offered the liberty of converting the same into
annuities for the certain term of 96 years, from 25th
January, 1695, upon payment of four and a half years
purchase and, if the persons holding the annuities
did not subscribe by the 24th July, 1695, then any
other person, upon payment of five years purchase,
might become entitled to the annuities for the re-
maining part of the term of 96 years, from the de-
cease of the lives already nominated. These terms
were by no means so advantageous to the subscri-
bers as those upon which the annuities were origi-
nally granted, and, instead of £ 618,420: 0:6 in-
tended to have been raised by this means, only the
sum of £235,951:0:6 was actually advanced;
the remainder government were authorised to borrow
at 5 per cent. per ann. The other loans of this ses-
sion were £650,000, at an interest not exceeding
8 per cent. upon the act for granting duties upon
marriages, births, and burials, and upon bachelors
and widowers, for the term of five years;† and
* Report, 1703.
†The duty on burials was 4s. for every person whatever, with
additional duties according to the rank or condition of the person;
the additional duty for a duke or duchess being £50. The duty
}
FROM 1688 TO 1702.
33
£564,700, at 7 per cent. upon the act for granting
duties upon glass wares, stone and earthen bottles,
coals, and culm.
While the commons were considering of these
modes of raising money, they also began an in-
quiry into the disposal of former grants, and dis-
covered many improper practices of several of the
agents and officers of the army, for which some of
the delinquents were punished; and the commit-
tee, who were appointed for pursuing the inquiry,
soon brought to light many other gross abuses and
corruptions.
Previously to this time, very serious inconvenience
had been felt, on account of the debased state of the
silver coin: but the evil had now arrived at such an
alarming pitch, that it was thought necessary for the
legislature to take some measure to remedy the evil.
Accordingly, the house of commons, on 8th January,
1695, appointed a committee to receive proposals how
to prevent clipping of the coin of the kingdom for
the future, and the exportation of silver. After
many plans had been discussed, it was finally resolved
to re-coin the diminished silver money by calling it
into the mint; so that every person had good new
silver coin returned to him in exchange. The loss
on births was 2s. for every child whatever, with similar additional
duties, the highest being for the child of a duke and duchess £30.
The duty on marriages was 2s. 6d. with £ 50 additional for a duke,
&c. Every bachelor or widower was to pay 1s. per annum; dukes
to pay £12: 10: 0 per ann. additional, and subordinate degrees
in proportion.
D
34
T
NATIONAL DEBT
1
1
arising from this (which is estimated at nearly three
million) was sustained by the nation at large.
Some idea may be formed of the depreciated
state of the currency, by the following account.
There were brought in, promiscuously, in the months
of May, June, and July 1695, 572 bags, each con-
taining £100, which, according to the standard,
should have weighed each 32lbs. 3oz. 1dwt. 22gr. troy:
Making in the whole
+
But, upon examination, they weighed only
Deficiency on £572,000
lb. oz. dwt. gr.
- 18451 6 16 8
9480 11 5 0
8970 7 11 8
}
For the purpose of the re-coinage, besides the mint
in the Tower, where six presses were wrought, there
were other mints erected in the principal trading
cities; viz. York, Chester, Norwich, Bristol, and Exe-
ter, to prevent the inconveniences that might happen
to trade in the mean time: and, from the year 1695
to 14th August, 1697, there was no less than
£8,400,000 of this clipped and hammered money
brought to the several mints in London and the
country.
The execution of this measure reflects the greatest
credit upon the Chancellor of the Exchequer, (Mr.
Montagu,) who had the chief management of it.
#
1695.-In the next session, * the time for con-
In the king's speech, 22d Nov. he not only informs them, that
there will be at least as great supplies requisite for carrying on the
1
}
FROM 1688 TO 1702.
35
verting the life annuities into annuities for 96 years,
was extended, at four years and a half's purchase, to
the proprietors, till the 24th June, 1696, and upon
their default any other person might subscribe at
five years purchase, till the 29th September following.
The sum advanced upon the former act of this kind
was £235,951 0 6, and upon this act (7 and 8
W. and M. c. 10.) £15,847 13 11; but the sum
intended to have been raised by it, was £382,469.
The deficiency government was empowered to borrow,
upon
the credit of the act, at 6 per cent. per annum.
£1,500,000 was also borrowed on an act for con-
tinuing several duties granted by former acts, and the
lenders were to have tallies, and orders for re-payment,
with interest, at 5 per cent. for the first £400,000,
6 per cent. for the second £400,000, 7 per cent. for
the third £400,000, and 8 per cent. for the remaining
£300,000.
The cause of this difference in the interest on many
of the loans, at this period, was, that the orders for
re-payment were discharged according to the date of
the subscription: consequently, as those who subscrib-
ed last were obliged to wait longest for the re-payment
war, as were granted in the last session; but that "the funds which
"have been given have proved very deficient,” and “the condition
"of the civil list is such, that it will not be possible for me to sub-
"sist, unless that matter be taken into your care.”
Nov. 1, 1695, Charles Montagu, Esq. was appointed Chancellor
of the Exchequer, Lord Godolphin continuing first Lord of the
Treasury.
D 2
36
NATIONAL DEBT
}
of their principal, and as the whole inconvenience
would fall on them if the fund proved deficient, they
were allowed a larger interest for their money.-Per-
haps at this time there might have been a greater
dread of a deficiency than usual, as (either from the
pressure of the war, or from the system of mismanage-
ment, which prevailed in the finances during a great
part of this reign) the old revenue, which at the revo-
lution produced £1,915,435, had fallen, in 1695, to
£811,949.*
CC
CC
K
By
An Act, (7 and 8 W. III. c. i8.) for grant-
ing to his majesty several rates, or duties, upon
houses, for making good the deficiency of the
clipped money," the window-tax was first estab-
lished, which may be considered as a revival of
the obnoxious hearth-tax in a different shape; and
upon the credit of these duties, which were granted
for seven years, from 25th March, 1696, £1,200,000
might be advanced; the first £600,000 advanced,
to have interest not exceeding 7 per cent. and the
remainder 8 per cent. Government were also en-
abled to borrow £515,000 upon another act: of which
sum £500,000 was for civil-list expenses, and
£15,000 for the relief of poor French protes-
tants, who had been recommended to the attention
of parliament, by the king, at the beginning of the
session. A clause of loan was likewise inserted in
* Davenant's Discourses, page 165.
+ The duties were, every inhabited house to pay 2s.; a house with
ten windows, 6s. per annum; and every house having twenty win-
dows 10s. per annum.
1
FROM 1688 To 1702.
37
Į
in
an act for regulating the coinage of silver money,
favour of such as would advance money on credit of
the Exchequer in general, transferrable to such
funds as should be settled by parliament.
1696. The extent of the above loans, was ge-
nerally regulated by the former produce of the taxes
upon which they were to be advanced; and, as the
several branches of the public revenue had fallen
off very considerably, almost every year since the
revolution, the several funds, thus appropriated,
of course proved deficient, and the high interest, at
which most of the loans were obtained, increased
the difficulty of paying off the principal. New loans
were found necessary every year; and, as from the
effects of the war, ill-management, the deplorable
state of the coin, and other unfavourable circum-
stances, there was a strong probability that the old
revenue would continue to decline: many persons be-
gan to entertain an unfavourable opinion of govern-
ment security; and public credit, then in its infancy,
was generally considered as having been already
extended too far. Exchequer-tallies were sold at
a discount of from 30 to 40, and even to 50 or
60* per cent; bank notes, or bills, were at 20 per
cent. discount; and all public securities, of what-
ever kind, were likewise at a considerable dis-
count.
* Collection of Parliamentary Debates, from 1668 to. 1739, vol. iii
1
NATIONAL DEBT
38
In consequence of this state of things, the house
of commons, at the commencement of the next
session, 20th October, 1696,* immediately passed a
resolution, "That they would make good all par-
(C
liamentary funds, since his majesty's accession
"to the crown, that had been made credits for
"loan from the subject." For this
For this purpose, a bill
(8 and 9 W. III. c. 20.) was afterwards passed,
continuing the various old duties upon which
these debts were charged to 1st August, 1706.
The money arising from any of these taxes, from
the day on which they were otherwise to expire
to the said 1st August, 1706, together with some
new duties upon salt, were appropriated as a ge-
neral fund for making good the principal and
interest due, or becoming due, on the following
deficiencies; viz.
i
*The king, in his speech, mentions great disappointment in the
funds given in the last session, and the difficulties which have
arisen upon the recoining of the money; and earnestly recom
mends, to the house of commons, to consider of raising the ne-
cessary supplies, as well for maintaining the honour of parliament,
in making good the funds already granted, as for carrying on the
war the next year: which, notwithstanding some overtures had
been made for entering into a negociation for peace, he thinks
ought not to be less than what was intended to be raised for that
purpose in the last session. He puts them in mind of the civil list,
which cannot be supported without their help; and mentions
the miserable condition of the French protestan s to them again.
-Collection of Parliamentary Debates, vol. iii.
1
FROM 1688 TO 1702.
On the first aid of 4s. in the pound (4 W.
and M. c. 1.)
On the third aid of 4s. (6 W. and M. c. 3.)
On the 4th aid of 4s. (7 W. III. c. 5.)
On the quarterly poll (5 and 6 W. and M.
c. 14.)
On the three-fourth parts of customs
(2 W. and M. sess. i. c. 4.)
On the act charging salt and other things
(7 and 8 W. III. c. 31.)
On the two-third additional excise (2 W.
and M. sess. 2. c. 10.-and 5 and 6
W. and M. c. 7.)
On additional impositions on goods and
merchandise (4 and 5 W. and M.
c. 5.)
39
£.
S. d.
55,622 10 5
407,372 0 3
917,101 13 2
89,275 13 4
213,417 15 9
1,711,500 00
t
160,000 0 0
445,177 7 4
On the duties on vellum, parchment, &c.
(5 and 6 W. and M. c. 21.)
224,114 7 83
On the duties on marriages, births, &c.
(6 and 7 W. III. c. 6.)
648,000 0 0
On continued duties on wines, vinegar,
&c. (7 and 8 W. III. c. 10.)
On the yearly sum of £300,000 out of
the subsidy of tunnage and poun-
dage (6 W. and M. c. 1.)
146,181 19 51
142,666 7 32
£5,160,459 14 91
These sums, with £840,000, intended to have
been provided for by an act of the last session, on
a project which was never carried into execution,
made the whole of the deficiencies; amounting
together, to £6,000,459: 14: 94, agreeably to a
statement laid before the house of commons,
40
NATIONAL DEBT
by the commissioners for stating the public ac-
counts.
The annual produce of the several funds
continued, as the provision for these debts, is es-
timated by Dr. Davenant, as follows; viz.
•
£
New customs, produced, 1695
44,847
Continued acts and joint stocks, produced, 1695
394,907
Duties on marriages, births, &c. produced, 1695
54,310
Stamped paper, about
48,000
Customs, about
370,909
Duties on windows, about
50,000
Duty on glass ware, &c. about
*42,400
Eight-pence per bushel on salt, applied to this
fund till 1699
70,000
Total, per annum,
£1,075,373
The Bank of England were to enlarge their ca-
pital by taking subscriptions on the following
terms; viz. four-fifths of each subscription to be
made by assigning to them the tallies and orders
for the principal and interest of the above debts
and deficiencies, and the other fifth to be made
good by bank-notes.
All the interest due on those tallies which
should be subscribed (to the end of the last
preceeding quarter on each tally) to be allow-
ed as principal. The subscribers were incor-
porated with the old bank proprietors, and were
to be allowed 8 per cent. per annum on the tallies
thus subscribed, till the principal should be paid
off; which was done in the course of a few years,
and the bank capital reduced to its original sum.
}
FROM 1688 TO 1702.
41
This was a very judicious measure, and it may
be considered as the origin of several funding
schemes adopted at subsequent periods. It had
great effect in restoring the credit of government
securities, which were at a large discount; and also
in relieving the Bank, who were at this time la-
bouring under considerable difficulties.
In the same session, it was found necessary to
make a farther provision for arrears due upon the
life-annuities granted in 1692 and 1693; and, for
this purpose, the proprietors of the annuities
for single lives were again offered the liberty of
converting them into annuities for 96 years, from
25th of January, 1695, at four years purchase:
and, if the proprietors did not subscribe before the
24th June, 1697, any other person might, till the
29th September following, purchase upon the same
terms, the remainder of the 96 years from the
extinction of the life.
In this year, the annual malt-tax was first grant-
ed, upon which £1,400,000 was to be raised by
way of lottery; every £10 advanced to have a
farthing a day interest, except the fortunate tickets,
which were not entitled to any interest.
Some debts contracted upon 7 W. III. c. 2. were
transferred to the land-tax-act of this session, upon
which his majesty was authorised to borrow
£1,500,000, at 8 per cent, and upon the general ca-
pitation, or poll-tax, (8 and 9 W. III. c. 6.) granted
at the same time for one year, the like sum of
£1,500,000 was to be raised on exchequer-bills.
42
NATIONAL DEBT
These were the first exchequer-bills that were
issued, and were made out for small sums; a great
number of them being as low as £5 and £10, in-
tended partly to supply the want of money during
the re-coinage. At first they bore no interest, but,
upon the second issuing of them from the Exche-
quer, after having been paid in on any of the taxes,
they carried interest at 5d. a day per cent. being
£7: 12:1 1 per cent. per annum. If they were
not paid and cancelled out of the produce of the
taxes, upon which they were issued, by 25th
March, 1698, they were to be paid out of the
arrears of the said taxes then outstanding: or, in
default thereof, out of the money which should
arise by any aid granted in the next session of
parliament. Exchequer-bills, on the same terms,
were also issued for £1,200,000 on the credit
of a farther subsidy of tunnage and poundage,
and on an additional shilling in the pound on land.
The deficiency arising from re-coining the ham-
mered money, and the recompense to be given for
bringing plate into the mint, to be converted into
coin, were to be made good by several additional
duties granted upon paper, vellum, and parchment;
upon the credit of which, his majesty was enabled
to borrow £125,000, at 8 per cent.
As the war was now ended, which had been the
occasion of contracting these various debts, by
which a new system was established of providing
$
FROM 1688 TO 1702:
43
for the necessary expenses, by throwing the bur-
then upon suceeding years, it may not be improper
to state the total amount of these debts. With res-
pect to which it must however be observed, that
a considerable part differed from our present na-
tional debts, in being charged upon funds that
not only paid the interest, but also discharged an-
nually a part of the principal; this at least was
the case since the acts of the last session, for
making good the deficient funds: previous to
which, it must be allowed, that some of the funds
did not produce sufficient to pay even the interest
of the loan charged upon them.
Amount of the National Debt, in 1697.
Tallies upon several parliamentary funds
£. S. d.
out-standing on the 23d Sept. 1697 - 8,882,544 15 1
Tallies on the hereditary and temporary
excise and post-office, outstanding on
the 23d September, 1697
Malt-tickets, on the act of last session
Annuities
On the million lottery
Bank stock
Deficiencies in the new funds since the last
were made good, computed at
Arrears to the army
700,000 0 0
1,270,000 0 0.
1,300,000 0 0
1,000,000 0 0
1,200,000 0 0
£14,352,544 15 1
1,493,000 0 0
2,556,825 13 1
Ditto
Ditto
navy
1,522,523 0 0
ordnance
26,052 11 5
Total Debt £19,950,945 19 82
44
NATIONAL DEBT
The frequent anticipations of the different funds,
and their general deficiency, from the diminution
of the revenue, (in consequence of which, the in-
terest due upon money lent to government was
often long in arrear,) reduced public credit, previous
to the conclusion of the war, to a very low ebb,
and rendered monied persons very reluctant in ad-
vancing to government, though paid what would
now be called an exorbitant interest. There ap-
pears to have been a general mismanagement of
the public revenue; by which the officers of the
treasury, and the receivers of the taxes, made un-
reasonable advantages to themselves, while the
public was forced to pay great interest and large
premiums, not only for the want of their own
money, but as there is great reason to believe of-
tentimes for the loan of it; besides the loss arising
from the failure of several receivers, who retained.
considerable sums in their hands.
The accumulation of the public debts caused
serious apprehensions among people of property of
all descriptions; and to propose proper means of
reducing them and of augmenting the revenue
was the principal object of Dr. Davenant in his
Discourses, published in 1698: in one of which he
justly observes, "It will be better thrift to
66
exert ourselves strongly in the beginning, to
pay off the principal debt, than to leave it a
"constant burthen upon the land and trade of Eng-
"land." Happy had it been for the country had.
* On the Public Debts and Engagements.
FROM 1688 TO 1702.
45
the government followed such measures as might
have effected this desirable object, and preserved
posterity from a heavy burthen, and a worse ex-
ample.
In January, 1698,* £2,700,000, including the
funds already settled for that purpose, was granted
for paying off the exchequer-bills of the preceding
year: and, as the land-taxes and other provisions of the
last session had produced considerably less than the
sums at which they were estimated, £1,476,000 was
granted for making good the deficiencies; viz.
For deficiency of the aid of 3s. in the pound, granted
in the last session
For deficiency of the subsidies and other duties, granted
at the same time
For deficiency of the aid of 1s. in the pound
£ 407,000
940,000
129,000
£ 1,476,000
* In the king's speech, 3d December, 1697, he observes, that "the
"funds, intended for the last year's service, have fallen short of answer-
ing the sums for which they were given; so that there remain con-
“siderable deficiencies to be provided for." He also observes that
there is a debt upon the account of the fleet and the army; and
that the revenues of the crown had been anticipated, by his con-
sent, for public uses; so that he was wholly destitute of means to
support the civil list. In consequence of this information, the
commons, on 20th December, resolved, that a sum, not exceeding
£700,000, be granted to his majesty during his life, for the sup-
port of the civil list. And, in the course of the session, the new ad-
ditional subsidy of tunnage and poundage, before granted to st
February, 1699, was continued, during the king's life, for making up
this sum.
The surplus to be disposed of as parliament should
direct.
✡
46
NATIONAL DEBT
1
A select committee was appointed to examine
the public accounts, who found very considerable
sums in arrear for pay to the army and navy, and to
several German princes, for the hire of troops em-
ployed in the late war: but, as the whole was thought
too great to be discharged at once, only £981,288
13 9 was granted for part of the arrears due to
the army, and £1,259,922: 4 4 for part of the
navy arrears They also discovered a considerable
fraud respecting the exchequer-bills; which, not bear-
ing interest till re-issued from the Exchequer, several
persons in the Excise, Customs, and Exchequer,
contrived to get great sums of money by false en-
dorsements on the bills, before they had been circu-
lated and paid in upon the revenue; for which, two
members of the house of commons were expelled,
and committed to the Tower.
The new debts contracted, were as follows:-The
annuities on single lives, being considerably in arrear,
were again offered to be converted into annuities for
96 years, from January, 1695, at four years purchase,
and the time for making these purchases was extended,
by another act, to December 1st, 1698. Upon ad-
ditional duties on coals and culm imported or carried
coastwise, £500,000 was borrowed, at 7 per cent.
for the first £100,000, and 8 per cent. for the re-
mainder. On a quarterly poll-tax, granted for one
year, £ 500,000; a considerable part of which, it
will be found, remained undischarged in 1702. From
the new East-India Company, established this year,
FROM 1688 TO 1702.
47
£2,000,000, at 8 per cent.* for the payment of which
interest, additional duties on stamped paper and salt
were granted for ever. The old East-India Company
had offered to advance £700,000, at only 4 per cent.
bút, as a considerable sum was wanting to make good
the large supplies that had been voted, the greater
sum was preferred, though at double the interest, and
the new company was established. † The whole of the
£2,000,000 might have been taken up at an interest
of 8 per cent. but the Treasury levied tallies of an-
ticipation without interest upon it; and the public
was put to no other charge of interest than for the
sum of £62,000 struck in tallies, for a very pressing
service of the navy, at an interest of 6 per cent. only.‡
It may also be proper to notice, a resolution of the
committee of Ways and Means, though the bill
brought in upon it was afterwards dropped; it was
for granting an imposition, amounting to one-fourth
of the real value upon all beneficial grants from
the crown in England or Ireland, and upon all for-
feited estates restored by the crown since the 29th
May, 1660.
1698.-§By the land tax act, £1,400,000 might be
* The company was to cease upon re-payment of the principal,
and receiving three years notice after Michaelmas, 1711. This term
was extended to March 25th, 1726, (6 Anne, c. 17.)
+ £16,000 was paid for receiving the contributions, besides an
allowance of 1 per cent. or £20,000 to the subscribers.
↑ Report of the Committee of the House of Lords in 1730.
§ King's speech, 6th December, "The second thing I shall men-
tion to you, as of great consequence, is the making some farther pro-
48
NATIONAL DEBT
borrowed, at 7 per cent. and the commissioners of the
Treasury were empowered to issue malt-tickets and
tallies upon several funds, then in the hands of the
treasurer of the navy, amounting to £287,727: 13:11
at a discount not exceeding 10 per cent. and to
allow £40,000 by way of premium to contractors,
for circulating exchequer-bills; from which an idea
may be formed of the usual current price of those
securities.
In January, 1700,* a strong contest took place
between the ministry and the house of commons,
in consequence of a determination of the latter to
appropriate the forfeited estates in Ireland to the
public use; in which, after several spirited resolutions
of the house, they at length succeeded, from having
'
gress toward discharging the debts, which the nation has contracted,
by reason of the long and expensive war. In this the public
“interest as well as justice is concerned; and, I think, an English
parliament can never make such a mistake as not to hold sacred
"all parliamentary engagements."
CC
The king's speech, on 16th November, 1699, contains the follow-
ing passage: "I cannot omit to put you in mind of another matter,
"in which so great a number of my subjects is concerned, and
"wherein the honour of the kingdom, and the faith of parlia-
"ment are so far engaged, that our future security seems to depend
upon it; I mean, the making good the deficiencies of the funds, and
"the discharging the debts contracted by reason of the war; and,
"till we may be so happy as to see the public debts paid, I shall
"hope that no session will end, without something done towards
lessening them."
November 15th, 1699, The Earl of Tankerville was appointed
first Lord of the Treasury, and John Smith, Esq. Chancellor of the
Exchequer.
FROM 1688 TO 1702.
49
joined the bill with that for granting the land-tax.
The money thus raised was appropriated to the pay-
ment of army arrears; and debentures, malt-tickets,
exchequer-bills, and tallies or orders, upon several
'former acts, were to be taken as sterling money in
the purchase of the forfeited estates: a provision well
calculated to raise the value of government-securities
and diminish the amount of the unfunded debt, which
was at that time considerable. By another act, the
reversionary annuities undisposed of were once more
offered, either to persons having the life-annuity or
others, at five years purchase, till the 2d November,
1700; on which £59,580 was advanced, although
they had been offered the year before at one year's
purchase less. The total supplies for this year were
considerably less than have ever been voted since; viz.
Supplies.
7000 seamen
Bounty to sea-officers
Ordinary of the navy
Extraordinaries ditto
Ways and Means.
£
£
364,000 Land-tax
1,000,000
18,000 Reversionary annuities 59,580
-
184,342
-
90,000
Guards and garrisons
Ordnance
Half-pay officers
300,000
25,000
53,000
£ 1,034,342
£ 1,059,580
* The whole of the annuities thus converted from life-annuities
into the certain term of 96 years, under this and former acts,
amounted to £139,964 : 13 : 6 per annum.
December 9th, 1700, Lord Godolphin was made first Lord of the
Treasury, Mr. Smith remaining Chancellor of the Exchequer.
E
50
NATIONAL DEBT
1
In November and December, 1700, the ambitious
designs of the French king occasioned considerable
alarm in England, and the prices of her national funds
and public stocks were so deeply affected by it as
to sink so low as 50 per cent.
1701.-There being so great a probability of soon
incurring new debts, induced ministers, in the next
session, which began February 10th,* to pay more
attention to those already contracted: the following
sums were accordingly granted; viz.
For cancelling old exchequer-bills, by which the in-
terest due was converted into principal bearing
interest
L.
s. d.
100,000 0 0
For 7 quarters interest on the malt-tickets to Lady
Day, 1699
37,788 1 0
For one year's interest on the loans on the first 3s.
aid
33,847 18 j
For one year's interest on the loans on the vellum-
duties
1,232 0 0
For ditto of the money remaining due on the third
quarterly bill
18,381 12 0
4
For ditto of the loans on the third 3s; aid
1,738 0 7
52,966 Q 0
For eighteen months interest on the leather-act
For completing the 66th payment upon malt-tickets 10,000 0 0
*
By an act for continuing various duties granted by
former acts, his majesty was empowered to borrow
£300,000, at 6 per cent. for the first £150,000, and
7 per cent, for the remainder; and, by another act,
* The king again particularly reminds the commons of the de-
ficiencies and public debts occasioned by the late war, that were yet
unprovided for.
FROM 1688 to 1702.
51
£820,000, at the same rates, upon an appropriation
of £3700 per week, out of the revenues charged with
the civil-list income. A provision was also now made
for the bankers' debt, contracted in the reign of
Charles II.* by charging the hereditary excise, grant-
ed in 12 Charles II. from 26th December, 1705,
with the interest, at 3 per cent. per annum, payable
quarterly, on the principal for ever.
A bill was brought in for appointing commissioners
to examine the public accounts, with more exten-
sive powers than the former commission: and the
persons named being men of sense, honour, and cou-
rage, there were some hopes that the object would
be effectually accomplished. But, as many persons of
considerable influence had little inclination to see
a measure of this kind carried into effect, such
amendments were made in the house of lords as
were evidently partial; and could not be agreed to
by the commons, without relinquishing their parti-
cular privileges. The commons saw the intention of
these amendments, and appointed a committee to
draw up their reasons why they could not agree to
them; which they intended to offer to the lords at a
conference, and afterwards ordered to be printed for
the satisfaction of the people. The 1st is
(24th March, 1701.)
"Because it is notorious, that many millions of
* See page 13.
1
E 2
52
NATIONAL DEBT
<<
money have been given to his Majesty, King Wil
liam, by the commons, for the service of the public,
"which remain yet unaccounted for, to the great dis-
"satisfaction of the good people of England, who
<<
chearfully contributed towards those supplies: and
"their lordships first amendment prevents any ac-
count being taken of those moneys, by the com-
"missioners appointed by the commons for that
purpose.”*
As the king died, and a new war began before the
end of the next session, it may be proper to ob-
serve, that the total capital of the National Debt,
on the 31st December, 1701, has been stated at
£16,394,701 1: 74, on which the interest paid
was £1,109,123 per annum. And, although the
following account is evidently incomplete, it may
serve to give an idea of the increase and diminution
of the public debts, from the revolution to the death
of King William.
*A Letter to a New Member, &c. also Collection of Parliamentary
Debates, v. iii.
+ The king, in his speech, 30th December, 1701, presses the
house of commons to take care of the public credit, "which" (be
says)" cannot be preserved but by keeping sacred that maxim, that
"they shall never be losers, who trust to a parliamentary security."
It is, however, corroborated by Chalmers in his Estimate, &c.
page 56, from a transcript of the exchequer-books, which gives the
totals borrowed and re-paid, and the sum remaining due Lady-
Day, 1702, as above.
*
FROM 1688 TO 1702.
53
Account of Money borrowed and re-paid between 5th
November, 1688, and Lady Day, 1702; with the
Debt remaining in each Year.
Borrowed.
Re-paid.
Rem. due.
3,126,672
3,378,022
4,300,221
3,915,854
5,593,188
8,846,114
5th Nov. 1688 to Mich. 1691 7,882,079 4,755,407
Mich. 1691 to Mich. 1692 3,058,291 2,806,941
1693 4,300,427 3,378,228
1694 3,188,801 3,573,169
1695 5,521,826 3,844,492
1696 4,931,104 1,678,177
1697 6,647,453 2,569,256 12,924,310
1698 2,191,171 2,992,155 12,123,326
1699 1,878,400 2,526,009 11,475,718
1700 1,028,178 2,121,130 10,382,766
1701 2,064,937 2,250,506 10,197,197
Mich. 1701 to LadyDay 1702 1,408,128 1,538,548 10,066,777
44,100,795 34,034,018
Abstract of the Receipts and Payments, from the 5th
of November, 1688, to Lady-Day, 1702.*
Receipts.
£.
S. d.
Remaining in the Exchequer, November 5, 1688
80,138 18 0
Customs
13,296,833 14 6
Excise
13,649,328 0 51
Hearth and letter money
2,008,597 7 81
Land-taxes
19,174,059 8 31
Polls
2,557,649 7 7
Promiscuous taxes
7,531,305 18 11
Divers receipts
480,915 2 2
Borrowed more than repaid
13,348,680 5 101
Error.
+
£72,127,508 3 63
Appendix to Sir J. Sinclair's History Pub. Rev.
1
54
NATIONAL DEBT, ETC.
Navy
Army
Ordnance
Civil-list
Issues.
£.
S.
d.
19,822,141 461
22,017,706 15 08
Divers issues, including £3,341,903 8 84
re-paid more than borrowed, and balance
remaining of 619,159: 13: 61
3,008,535 16 101
8,880,506 2 9.
•
18,398,618 4 43
£72,127,508 3 63
55
#
CHAPTER III.
The History of the National Debt, from the Com-
mencement of the War in 1702 to the Peace of
Utrecht in 1713.
}
As the nation was now burthened with a debt
that was thought very considerable, and engaging
in a war by which it was likely to be augmented, the
sentiments expressed by their new sovereign, in her
speech to the houses of parliament, on the 30th
March, 1702, must have afforded some satisfaction
to the people. Upon giving the royal assent (among
other bills) to "An Act for the better support of
"her Majesty's household, and of the honour and
66
dignity of the crown," by which the civil-list re-
venue of £700,000 per annum was granted for life,
the queen, after returning her thanks, assured them,
CC
that, while her subjects remained under the bur-
"then of such great taxes, she would straighten
"herself in her own expenses, rather than not con-
"tribute all she could to their ease and relief, with
"a just regard to the support of the honour and
dignity of the crown: that it was probable the re-
"venue might fall very short of what it had formerly
produced; however, she would give directions, that
(C
""
56
NATIONAL DEBT
£100,000 should be applied to the public service
"in that year, out of the revenue they had so unani-
"mously given her." This voluntary contribution
appears to have been continued for four years.*
The civil-list income being settled, commissioners
were appointed for examining and stating the public
accounts of the kingdom, that both her Majesty and
the whole kingdom might be satisfied and truly in-
formed therein:† a measure that had been too much
neglected in the preceding reign; in which, from a
want of regularity in the public accounts, and the
parliament not paying sufficient attention to the sub-
ject, they had been frequently led to charge loans
upon very inadequate funds, or which were some-
times already overcharged by former loans. Hence
arose great and frequent deficiencies, for which a con-
siderable provision had been made in 1696; and which
having again accumulated, and having been suffered
to remain undischarged during a period of peace, were
now to be provided for in the first year of a war,
when money was much wanted for other purposes.
An act was accordingly passed, for making good the
following deficiencies, " and preserving public credit."
*
It is very doubtful whether it was any proof of the economy or
patriotism of the queen, since, at the end of the war, the sum of
£ 500,000 was raised for paying off the arrears of the civil-list. The
author of Anecdotes of the Life of Earl Chatham, vol. ii. page 316,
calls it a manifest and gross cheat upon the public, and one of the
most scandalous actions that the crown ever committed by any ad-
ministration.
+ Preamble to 1 Anne, c. 10,
FROM 1702 TO 1713.
57
t
To discharge all exchequer-bills outstanding,
with interest
Deficiency of land-tax-act (8 W. III. c. 6.)
Ditto of duties on paper, pasteboard, &c. (8 W.
III. c. 7.) :
Ditto of duties on malt (8 W. III. c. 22.)
Ditto of duties on leather (8 W. III. c. 21.)
Ditto of the quarterly poll (9 W. III. c. 38.)
Upon the land-tax-act for 1699 (10 W. III. c. 9.)
To complete payments to Michaelmas 1701 on
9 W. III. c. 44.
£. S. d.
515,165 4 71
415,099 0 0
15,400 0 0
579,060 0 0
504,438 0 0
212,770 17 0
25,823 2 9
70,872 11 1}
£ 2,338,628 15 53
Provision for this sum, with the interest due and
growing due thereon, was made by continuing to the
1st of August, 1710, the duties of tunnage and pound-
age, and various others already mortgaged for four
years to come.
2
In order to raise the supplies for the year, the
malt-tax, which had been considered burthensome to
the poor, was revived, and has been regularly con-
tinued ever since. The land-tax was again raised to 4s.
and a duty of 50s. per cent. laid upon the value of
all stock in trade; of 25s. per cent. upon all money at
interest; of 5s. in the pound upon all salaries, fees, and
perquisites, of offices, ecclesiastical, civil, or military;
of 4s. in the pound upon all annuities, pensions, sti-
pends, &c.
1702.-In the session,* which began the 20th Oct.
* The queen, in her speech, desires the commons to inspect the
accounts of the public receipts and payments, that if there had been
58
NATIONAL DEBT
her majesty was authorised to borrow £500,000,
upon an act for continuing the dutics upon coals;
the first £200,000 at 5 per cent. per ann. and at
6 per cent. per ann. for the last £300,000, payable
quarterly also, £600,000, at 5 per cent. per ann.
on a tax upon stock in trade, money lent at intercst,
and all incomes and professions: which, if it could
be strictly levied, would evidently have produced a
very considerable sum, but proved deficient by
£17,384 9: 7.
As the life-annuitics, granted in 1695 and 1694,
had never been all converted into annuities for a
certain term, (though so frequently offered for that
purpose,) and as some of these annuitics, upon
which no farther interest had been purchased, were
determined, amounting to £5842 per ann. the sum
of £87,630 was now raised, by selling annuities for
eighty-nine years, from 25th Jan. 1703, at £210 for
every £14 annuity, or fifteen years purchase; which
were made payable out of the funds formerly charged
with the payment of the annuities determined.
The commissioners of accounts, appointed in the
preceding year, having made their report, the house
any abuses or mismanagements they might detect them, and the
offenders be punished; that others might be deterred by such exam-
ples from the like practices. The queen also observes, that the
funds given by the last parliament had, in some measure, fallen
short of the sums proposed to be raised by them; and, though she
had already paid and applied to the public service the £100,000
promised to the last parliament, yet it had not supplied those de-
ficiencies.
J
FROM 1702 TO 1713.
59
was struck with the consequence of parliamentary
inattention to the national finances, of the want of
order and regularity in the public accounts, and of
the latitude allowed to those intrusted with the
public money. They, accordingly, presented a long
address to the queen, on the 12th of February, in
which they make great complaints against many
persons employed under government; and observe,
that the great increase of the debt did not arise so
much from the inadequacy of the funds as from
want of proper care in the management, and fidelity
in the application of them. They say that great
sums of money have been borrowed, and tallies,
bearing interest, struck unnecessarily upon the
assessments and other parliamentary aids, before
the public occasion required them; and, as many
persons did not advance their money for several
months after the tallies were struck, the public
paid interest for money of which they had not
the use; and, for want of it, were often obliged
to make their contracts at exorbitant rates.
large sums had been diverted out of the aids given
by parliament, under the head of secret services,
and for payments to private persons, which ought
to have been supplied out of the civil list. That,
by the neglect of the officers of the Exchequer,
most of the public accomptants were either far be-
hind in their accounts or had never brought in
any accounts at all; insomuch, that, although
£45,568,725 : 19: 24 had been levied on the peo-
ple, and issued out of the Exchequer, for the service
That
60
NATIONAL DEBT
1
of the late war, between the 5th Nov. 1688, and
8th March, 1702, (besides the several millions of
money raised for other public uses,) yet the far
greater part thereof had not been accounted for to
this day to the great dissatisfaction of the people,
and the great dishonour of the English nation.
1703. Whatever effect this inquiry might have in
convincing the house of commons of a most shame-
ful neglect on the part of those who had superin-
tended the application of the public money, it cer-
tainly did not render them wiser with regard to the
mode of raising it; for, in the next session, they
resolved upon one of the most destructive expedi-
ents that was ever resorted to. In order to raise
£900,000 towards the supplies, annuities were sold
for ninety-nine years, from 25th March, 1704, at
fifteen years purchase, being one year and three-fifths
less than their real value: but, as the £3700 per
week, from the hereditary excise, (by 12 W. III.
c. 12.) upon which they were to be charged, was
already mortgaged till the 25th Dec. 1705, annuities
were to be sold for the sum of £1,018,867 : 18 : 6,
of which £118,867 18 6 was for paying the first
year and three-quarters of these annuities, to the
time when the fund upon which they were charged
would be disengaged. The sum of £300,000 was
also borrowed upon annuities for one life, at nine
years purchase; upon two lives, for eleven years pur-
chase; and, upon three lives, for twelve years pur-
chase; or, for ninety-nine years, from 25th March,
J
}
FROM 1702 TO 1713.
61
1704, at fifteen years purchase:* and, upon an act
for granting an additional subsidy of tunnage and
poundage for three years, the sum of £500,000 was
raised, at 5 per cent. interest.
1704.-In the session, which began 24th October,
£877,930 : 19: 3 was raised upon the plan adopted
in the last session, viz. £690,000 for purchasing
annuities for ninety-nine years, from 25th Dec. 1705,
at fifteen years purchase; and, for the remaining
£ 187,930 19: 3, persons entitled to annuities
for one life, under the act of the last sessions, might,
upon paying six years purchase, or for two lives
four years purchase, or for three lives three years
purchase, (that is, making up in each case, with what
had been paid, fifteen years purchase,) change the
same into an annuity for the term of ninety-nine
years, from 25th March, 1704.
Upon an act for continuing various duties to the
24th June, 1710, and for granting several new im-
positions to the same period, government were em-
* The annuities sold upon this act were
For ninety-nine years
Single lives
On two lives
On three lives
£67,924 10 63
22,313 6 s
10,528 0 0
3,979 13 4
104,745 10 6 3/
Charges of management.
1,200 0 0
£ 105,945 10 6
The annuities commenced from 25th March, and the lives were
to be nominated by the 1st of May.
62
NATIONAL DEBT
powered to raise £700,000, at 6 per cent. per ann.
payable quarterly. Also, on an act for granting a
farther subsidy on wines and merchandize imported,
£636,957: 4: 01, at the same interest.
1705.-The next session* began the 25th Oct.
and the only money borrowed, besides the usual loans
upon the land and malt acts, was £2,855,761:16:2
on annuities for ninety-nine years, from 25th March,
1706, which, from the increase of the national cre-
dit, attendant on the success of our arms, and a bet-
ter management of the public revenue, were now sold
at fifteen years and a half's purchase; of this sum,
£2,575,761: 16:2 was to be applied for carrying
on the war, and £280,000 to be reserved as a part
of the fund for payment of the annuities.
1706.-As the great success in the campaign of
1706 had, instead of affording government an ad-
vantageous opportunity of concluding a peace, ren-
dered them more determined in the prosecution of
the war; and as, in this war, the practice was much
extended of subsidising foreign princes, it is unne-
cessary to say that the expenses were rapidly in-
creasing; and, consequently, the necessity for con-
tracting new debts and imposing new taxes. To-
wards the supplies for 1707, £1,500,000 was raised
on éxchequer-bills, which the Bank undertook to
circulate, upon being allowed from government 4½
"I will con-
The queen in her speech, 25th October, says,
"tinue to add, out of my own revenue, all I can reasonably spare
"beyond the necessary expenses for the honour of the govern-
❝ment."
FROM 1702 TO 1713.
63
per cent. per ann. payable at the Exchequer weekly,
with permission to make the bills carry such interest
as they should please to indorse upon them, and to
make a call upon the proprietors for any sum that
might be thought necessary. The addition made to
the Bank capital, by this call, was £1,001,171: 10:0,
which, with their original capital of £1,200,000,
(for the addition by subscription of £5,160,459:14:9%
in tallies, &c. in 1697, * was now all paid off,)
made their capital amount to £2,201,171 : 10 : 0.
This was the first time the Bank undertook the cir
culation of exchequer-bills, which the government
has since found a great accommodation. As the
fund upon which the interest was charged would not
be free from its former mortgage till 1st Aug. 1710,
and as it was probable there would be little or no
surplus arising from it till that time, the Treasury
were empowered to issue exchequer-bills for the
interest or allowance on the £1,500,000 to be thus
raised.
£1,155,000 was raised by annuities for ninety-
nine years, from 25th March, 1707, which were
now sold at sixteen years purchase; and, out of
the sum thus raised, £35,000 was to be reserved
towards making good the quarterly payments on
these annuities to Michaelmas, 1710: the full sum
being subscribed, the annuities amounted to
£72,187 : 10 : 0 per ann. The sum of £822,381
1564 was likewise borrowed, at 6 per cent. upon
an act for continuing various duties to 1st August,
1712, with permission to borrow likewise such far-
* See page 40.
64
NATIONAL DEBT
ther sum as should be found necessary for paying
the interest quarterly, till the duties appropriated by
this act should become sufficient for that purpose.
The tendency of such ruinous expedients is obvious.
As the union of England and Scotland took place
from 1st May, 1707, it may be proper to observe,
that the land-tax for the next year, at four shillings
in the pound, was divided as follows: £1,995,882 :
0:51, to be raised on England, Wales, and Ber-
wick-upon-Tweed, and on Scotland, £47,954: 16:0,
free of all charges, making together £2,043,836 :
16:5; according to which proportions (with some
inconsiderable alterations,) it has been annually grant-
ed ever since: although it is well known, that, at
four shillings in the pound, it never produced the
sum here stated, the deficiency being always made
good among the grants of the following year. By
the terms of the treaty of union, the people of
Seotland, for preserving an equality of trade through-
out the united kingdom, became liable to several
customs and excises payable in England; which, be-
ing applicable to the payment of the debts of Eng-
land, contracted before the union, it was agreed,
that Scotland should have an equivalent for what
the subjects thereof would be so charged towards
the payment of the said debts of England; which
equivalent was stipulated to be £ 398,085 10: 0,
which was to be applied for indemnifying private
persons for the losses they might sustain by reducing
the coin of Scotland to the standard and value of the
coin of England; for indemnifying the sufferers in
FROM 1702 TO 1713.
65
the late African and Indian company of Scotland;
for discharging the public debts of Scotland; and
for promoting their fisheries and manufactures.
1707. In the session, which began 23d October,
£ 1,920,000 was raised by the sale of long annuities,
´similar to those before granted; viz. £ 640,000, on
annuities for ninety-nine years, from 25th March,
1708, at sixteen years purchase; out of which sum
£540,000 was granted towards the supplies, and
the remaining £100,000 to be reserved for making
good the payments of the annuities, amounting to
£40,000 per ann. for the first two years and a half,
to 30th Sept. 1710. £1,280,000, on annuities for
ninety-nine years, from 24th June, 1708, also at
16 years purchase; and out of this sum £1,020,000
was granted towards the supplies, and £260,000 to
be reserved for making good the payments of the
annuities, amounting to £80,000 per ann. till the
1st August, 1712, the time when the duties upon
which they were charged would be disengaged from
mortgage.
*
A new agreement was at this time entered into
* This was either applied to other purposes, or was found insuf-
ficient, (being only the payment for three years and a quarter,) as
the house of commons, 23d Feb. 1712, passed a resolution for ma-
king good the sum which then was, or before the 1st August follow-
ing should be, deficient on the payment of these annuities; and, also,
on the annuities of £40,000 per annum, with respect to which the
sum reserved appears to have been fully adequate to the payments
till the commencement of the fund upon which they were charged.
F
น
J
*
1
66
NATIONAL DEBT
♪
with the East-India Company:* who, upon an ex-
tension of the term of their charter to 25th March,
1726, advanced £1,200,000, in six instalments of
£200,000 each, for the use of government; for
which they were not to have any interest, but to
continue to receive their former annuity of £160,000.
Their capital thus became £3,200,000, and the in-
terest received equal to 5 per cent. upon the whole.
To enable the company to make good this loan to
the public, they were empowered (by 6 Anne, c. 17.)
to borrow the sum of £1,500,000 on bonds, and
also to make a call on their proprietors.
£ 729,067 : 15 : 63 was to be borrowed, at 6
per
cent. per ann. payable quarterly, upon an act for con-
tinuing the half subsidies or duties on wines, vinegar,
tobacco, India goods, &c. and for imposing a duty
upon prize-goods. The same pernicious plan was
adopted on this as on loans of the preceding year, by
borrowing a farther sum for paying the quarterly
interest, till the duties should become sufficient for
that purpose.
1708.-A new agreement with the Bank was ad-
justed towards the end of the year 1708, and sanc-
tioned by parliament early in 1709, by means of
which a considerable sum was obtained for the public
service. The capital of the company, at their estab-
lishment, in 1694, was £1,200,000:† in 1697, they
*The new and old East-India Companies had been previously
united in 1702.
† See page 30.
FROM 1702 TO 1713.
67
:
were authorised to increase their capital, for paying
off tallies or orders upon the deficient funds;* and,
in 1707, a call was made from the proprietors to
enable the company to undertake the circulation of
£1,500,000 exchequer-bills, † by which means their
capital stock was augmented to £2,201,171: 10: 0.
They now engaged to cancel all the above exche-
quer-bills, with those that had been issued for pay-
ing the interest as it became due, amounting toge-
ther to 1,775,027 17 10%, including interest then
due; and to circulate new exchequer-bills to the
amount of £2,500,000. Also, to pay into the Ex-
chequer, before 25th August, 1709, £400,000, on
which they were to receive interest only till the
1st August, 1711. This made their original capital
of £1,200,000, at 8 per cent. amount to £1,600,000,
at 6
per cent.
The rate of interest to be allowed on
the amount of exchequer-bills cancelled was 6 per
cent. or, in the whole, £106,501 13: 5 per an-
num; and the new exchequer-bills were to carry
2d.
per cent. per day; over and above which they were
to have 3 per cent. per ann. from the time the bills
were issued to the day they should be discharged.‡
To enable the company to fulfil this agreement, they
were empowered to double their capital; for which
purpose they had lately taken subscriptions at the
rate of £115 for every £100 stock, by which they
* See page 40.
↑ See page 62.
↑ Navy-bills, at this time, carried 6 per cent. interest.
F 2
68
NATIONAL DEBT
raised £2,531,347 46, and the capital stock of
the company became £4,402,343. Till the new
exchequer-bills were paid off and cancelled, no
more were to be issued by government without
the consent of the Bank. But, by another act of
the same session, (c. 8.) the Bank was authorised to
agree to circulate farther exchequer-bills, on the same
terms, for £612,739.
Although the effect of converting the interest into
capital as it became due was obvious in the in-
creased capital of the exchequer-bills to be cancelled,
the consequence was so far from convincing govern-
ment of its impropriety, that it was immediately re-
sumed on a more extensive scale: for, the duties ap-
propriated for paying the new income to the Bank
being charged with the payment of former debts,
the Treasury were impowered to issue new exche-
quer-bills, every quarter, for payment of the interest
and premium as it became due, until the funds ap-
propriated should be sufficient to answer the same.
Thus, for four or five years, we were to borrow mo-
ney quarterly, to pay the interest growing due upon
the principal, and that interest to be quarterly con-
verted into principal, bearing interest at the rate of
6 per cent. and so on, till the appropriated fund
should become sufficient to answer the same.
£645,000 was also borrowed on the same plan, at
6 per cent. per annum, upon an act for continu-
History of our National Debts and Taxes, part ii. page 104.
FROM 1702 TO 1713.
69
ing several duties to 1st August, 1716, upon
which such farther sums were also to be borrowed
as should be found necessary for paying the quarterly
interest, till the duties should be disengaged, and
become sufficient to satisfy the same. Upon this
act the Bank also undertook to circulate exchequer-
bills for the farther sum of £400,000, at the same
premium as on the bills they had before undertaken
to circulate.
}
In 1710, the practice of raising money for the
public service by lotteries was revived; in which
mode the sums of £1,500,000 and £900,000 were
obtained. The first consisted of 150,000 tickets,
at £10 each, every ticket being entitled to an
annuity for thirty-two years, the blank at 14s. per
annum, and the prizes to greater annuities, from
£5 to £1000 per annum. * The annuities on
the fortunate tickets were paid half-yearly,
at Lady-day and Michaelmas, and amounted to
* There were 3750 fortunate tickets, viz. 1 of £1000 per ann.
500
}
3-
4
400
4
300
4
200
20
100
30 -
50
100
20
601
10
2983
5
3750
70
NATIONAL DEBT
*
£32,625 per ann. Those on the blanks were paid
yearly, at Michaelmas, and amounted to £102,373
12:0 per annum. The contribution was to be
paid into the Exchequer, on or before the 1st Sept.
1710, and interest at 8 per cent. per annum to be
allowed the subscribers, from the time of actual pay-
ment to the 29th Sept. 1710, the day from which
the annuities commenced. The books for receiving
subscriptions to this lottery were opened on the
20th January, 1710, at Mercer's Chapel, and above
£600,000 was subscribed the first day. †
The second act was for raising £900,000 by the
sale of annuities for thirty-two years, from 29th Sept.
1710, at the rate of 9 per cent. or 11 years pur-
chase; and, if the whole was not subscribed before
1st May, 1710, the residue was to be raised by a
similar lottery to that just mentioned. The annui-
ties upon this act amounted to £81,000 per an-
num.
The other loans, towards the supplies for this
year, were £500,000, at 6 per cent. per annum,
payable quarterly, upon an act for laying a duty
upon candles and a tax upon apprentices; and
£1,296,552:9: 113, at 6 per cent. per ann. paya-
ble quarterly, upon an act for continuing various
duties to the 1st of August, 1720; but, as these
5 Geo. I. c. 19.
+ "Hist. of our Customs, Aids, Subsidies, National Debts, and
“Taxes," part ii. page 63. This was the first lottery on which
the Bank received the subscriptions for government.
FROM 1702 TO 1713.
71
A
duties were already anticipated for six years to come,
the surplus of the salt-duties was to be applied, in
the mean time, to the payment of the interest of the
sum thus borrowed; and, if there was no surplus, or
not sufficient, the Treasury were impowered to bor-
row money, quarterly, at 6 per cent. for making
good the said interest. The insufficiency of the
provision from the salt-duties is evident, from its
being found necessary to borrow £74,875: 19 : 14
in the first year, for paying interest on this loan to
25th March, 1711; so that, if the surplus was not
likely to increase, this was plainly borrowing money
at 6 per cent. compound interest.
As in the year 1710 there was a total change of
ministers, it may not be improper to give an abstract
of the receipts and payments from the commence-
ment of the war to that period,
Receipts.
Balance remaining at Lady-day, 1702, (see page 54.)
Customs
Excise.
Letter-money
•
Land-taxes.
Poll-taxes
Promiscuous taxes.
Sundry other receipts
Loans, being the excess in such years in which more
was borrowed than repaid
£
619,160
10,683,819
14,254,568
1,520,401
16,285,904
5,287
2,251,172
84,887
17,361,196
£ 63,066,394
1
72
NATIONAL DEBT
Payments.
£
Navy.
Army
17,066,052
23,582,052
Transports
Ordnance
•
Civil-list.
Miscellaneous services
Interest of loans.
Balance remaining
716,220
1,863,532
5,799,092
9,678,506
3,799,879
561,061
}
£ 63,066,394
*
1710.-In the first session of the new parliament,*
which began the 25th November, the sum of
£1,500,000 was raised upon a lottery of 150,000
tickets, at £10 each; and the whole money ad-
vanced was to be repaid, both on blanks and prizes,
in thirty-two years, from 29th Sept. 1711, with in-
terest, at 6 per cent. per ann. payable half-yearly,
with the additional sum of £428,570, to be divided
in prizes, and paid, with the like interest, in thirty-
two years. This addition of about £28: 11
5 per
cent. on the prizes was the first instance of a dou-
:
* The queen, in her speech, 27th Nov. mentions, that the navy,
and other offices, are burthened with heavy debts, and desires that
some way may be found to answer those demands, and to prevent
the like for the time to come.
August, 1710, Lord Godolphin being removed from his post of
Treasurer, this important office was put into the hands of commission-
ers, who were the Earl of Powlet, Mr. Harley, Sir Thomas Mansel,
Mr. Paget, and Mr. Benson; Mr. Harley, through whose influence
and advice chiefly the late ministers had been removed, being also
appointed Chancellor of the Exchequer.
1
k
1
FROM 1702 To 1713.
73
ceur to the subscribers upon the modern plan of en-
titling them to a larger capital than the sum actually
advanced a practice which has contributed so much
of late years to the increase of the public debts.
An act was also passed for laying a new duty upon
the importation of hops, and an excise of a penny
per pound upon all hops grown in Great Britain;
upon credit of which government were empowered
to borrow £180,000, at 6 per cent. per ann. paya-
ble quarterly.
The proprietors and inhabitants of the islands of
St. Christopher and Nevis having greatly suffered by
'the invasion of the French in 1705, it was enacted,
(by 9 Anne, c. 23.) in order to encourage the suf-
ferers to resettle their plantations, that there should
be distributed, amongst such proprietors as had or
should resettle, £103,003: 11:4, in proportion to
their losses, by debentures to be issued by the com-
missioners for trade and plantations, at 6
per cent.
interest.
Although the new minister was known to be cn-
deavouring to bring about a peace, the moneyed men
did not approve of his measures; which, with the
great amount of the floating debt, brought govern-
ment-securities to a large discount: in consequence
of this an agreement was made with the Bank for
reducing the amount of exchequer-bills. The com-
pany undertook to circulate all those then outstand-
ing, by paying the principal and interest due upon
them when demanded, with all such as were to be
issued under the authority of several late acts for
74
NATIONAL DEBT
paying interest upon sums borrowed on anticipated
funds; for this purpose they were to receive from
government £45,000 per annum, besides the 3 per
cent. before allowed for circulating them, till the
bills outstanding should be reduced to £1,900,000.*
About this time was adjusted one of the most im-
portant transactions relating to the finances of the
country. This was the establishment of the South-
Sea Company, a project, which, whatever might be
the intentions of those who planned it, with respect
to the commercial views that were the ostensible
object of the scheme, certainly afforded considerable
relief to government by consolidating various debts,
and making a sort of provision for them, which con-
tributed to the support of public credit. There hap-
pened at this time to be a very large arrear of navy,
transport, and victualling, debentures, without any
fund being established for putting them in a regular
course of payment: for this reason, and also on ac-
count of the measures of the new minister, (who was
by no means popular with the moneyed interest,) they
were at a considerable discount. It became necessary
therefore for government to devise some plan for
reviving the drooping credit of the country; and it
was thought, if a fund should be provided for payment
of the interest of this arrear, and if some hope of
commercial advantages should be held out as a bonus
For extending the circulation of the bills, the Treasury were
empowered, if the Bank should desire it, to issue smaller bills, of
£ 6:5:0 each.
FROM 1702 TO 1713.
75
to the creditors, that the tide of public opinion would
turn in favour of the existing administration.
A scheme was accordingly adjusted and brought
forward by Mr. Harley, then Chancellor of the Ex-
chequer, and the opinion of its efficacy for retrieving
the languishing state of public credit was so great,
that, upon his being created Earl of Oxford in the
same year, this service was particularly mentioned
in the patent as one of the chief reasons for advancing
him to that honour.* The plan was, that the holders
of tallies, &c. should be erected, by royal charter, into
a company for exclusively trading to the South Seas,
&c. in addition to which, government were to allow
them 6 per cent. per annum for their debt, and also
£ 8,000 per annum for management.
The debts and deficiencies to be provided for by
this means were the following; viz.
£.
S. d.
Debt of the navy, to 29th September, 1710.
Debt of the office of ordnance, to 29th Septem-
5,130,539 5 5
ber, 1710
154,324 15 81
For transport-service, to ditto
424,791 5 41
Principal and interest on army and transport
debentures, to ditto
1,018,656 17 93
Principal and interest to 29th September, 1710,
of deficient tallies and orders, on 9 W. III.
c. 13. and 1 Anne, stat. 2. c. 4.
Carried forward
12,025 1 0
6,740,337 5 23
* He was chosen governor of the South-Sea Company, at a ge-
neral court held 15th August, 1711.
76
1
NATIONAL DEBT
1
Brought over
Debts incurred between the 29th September and
25th December, 1710, in the navy, victual-
ling, and transport, offices, with interest
Subsidies to the Elector of Hanover and Duke
of Zell
Computed interest from 25th December, 1710,
to 25th December, 1711,* on such of the
above debts as carry interest
Borrowed for the service of the year 1710,† (8
£. S. d.
6,740,337 5 22
378,859 5 81
9,375 0 0
85,000 0 0
Anne, c. 13.)
Interest on ditto to 25th March, 1711
1,296,552 9 11
74,875 19 14
8,585,000 00
Interest on the amount of the above sums,
from
25th March to 25th December, 1711,
at 6 per cent.
Total of debts, deficiencies, and interest
To be raised for the service of the year
386,325 0 0
8,971,325 0 0
500,000 0
£ 9,471,325 0 0
For paying interest upon the above sum, amounting
to £568,279: 10 per annum, the duties continued
* This is evidently an error in the act, the sum is much too small
for a year's interest, and should most probably be for one quarter's
interest to 25th March, 1711; as the interest from that time to
25th December, 1711, is afterwards computed on the whole.
+ See page 71. This subscription of the subsidy-tallies of the
year 1710 was in order to have the general mortgage free at the
year 1716, to be made a fund for paying the interest of the whole
debt provided for by this act.
Previously to this time, part of the above debts did not bear
any interest; but, on their forming part of the company's capital,
interest was paid on the whole.
FROM 1702 To 1713.
77
by acts (8 Anne, c. 9 and 13) of the last session were
made perpetual; if these duties should prove de-
ficient in any year, the deficiency was to be made
good out of the next aids granted by parliament; and,
if there should be any surplus, it was to be applied
towards discharging the principal; but, as the duties
were already charged with the re-payment of former
loans, the interest growing due was to be paid quar-
terly, out of any moneys or public securities in the
hands of the treasurer of the navy, which were not
otherwise appropriated, till the time when the funds
would become free.
As some of the above sums were only estimates,
and as the proprietors of tallies and other public se-
curities were under no obligation to subscribe them
into the stock of the intended company, it could not
be expected that the total of this statement would
be the exact amount of the company's capital. It
was directed, that an account should be made out,
and transmitted to the Exchequer, of the real amount
of their stock on the 25th December, 1713, when
it appeared their actual capital was £9,177,967: 15: 4,
on which the interest at 6 per cent. amounted to
£550,678 1: 3 per annum.*
* In the queen's speech, on concluding the next session, 16th
July, 1713, this transaction was alluded to in the following words :
"At your first meeting, you found a method, without farther charge
"to my people, to ease them of the heavy load of more than nine
"millions; and the way of doing it may bring great advantage to
"the nation." It is not very easy to comprehend how the public
could be said to be eased of this burthen by making it perpetual.
78
NATIONAL DEBT
Although £1,500,000 had been borrowed upon
a lottery, £180,000 upon the hop-duty, and £500,000
towards the supplies was to be included in the ca-
pital of the South Sea Company, the farther sum of
£2,000,000 was found necessary for carrying on the
war, and the mode chosen for raising it was by
another lottery, upon terms still more extraordinary
than the former. This was called a class lottery,
and consisted of all prizes and no blanks, the prizes
being formed by dividing the additional sum of
£602,200 among them, with a profit of £10 each
upon every blank, and the whole capital of £2,602,200
was entitled to an interest of 6 per cent. payable
quarterly, till the principal should be paid off.* The
number of tickets was 20,000, of £100 each. By
this scheme, the public paid, besides the interest,
(amounting to £7: 16: 1 per cent. on the sum ad-
vanced) a premium of £30:2:2 per cent. for the
money borrowed.
In consequence of an investigation of the conduct
of the late ministry, great frauds and mismanage-
ment were discovered in several public offices.
Among other things, it appeared, that, on the 8th
December, 1710, there was an arrear of the land-
tax for five years, ending 24th March, 1709, of no
less than £272,596: 8: 8 in the hands of the re-
*The yearly fund established for discharging principal and in-
terest was £186,670 per annum for 32 years, from 29th Septem-
ber, 1711; and in the next session an addition was made to it of
£50 per annum.
FROM 1702 TO 1713.
79
ceivers; and that, at Christmas, 1710, there remained
the enormous sum of £35,302,107 of public money,
unaccounted for.* These gross abuses were strongly
represented in an address to the queen, and declared
by the house to be a notorious breach of trust; but
it does not appear that the delinquents were ever
brought to punishment, except in one or two in-
stances.
1711.-In the next session, which began 7th
December, lotteries were again resorted to, as the
mode of raising the greater part of the sum wanting
towards the supplies. Upon an act for imposing
various new taxes, consisting chiefly of excise-duties,
£1,800,000 was borrowed by way of lottery, at £10
a ticket; with an additional capital of £541,740,
The duties were granted for establishing an annual
fund of £168,003 for 32 years, from Christmas 1712,
in which time the principal of £2,341,740, with the
interest at 6 per cent. was to be paid off; and, if the
fund proved deficient, the deficiency was to be made
good out of the next aids granted by parliament.
The premium upon the sum borrowed by this scheme
* History of our National Debts and Taxes, &c. part ii. page 130.
It is probable, however, that most of the accounts would have been
furnished, had not the ministry and parliament neglected to call for
them.
†The queen's specch, 11th December, mentioned that both place
and time were appointed for opening the treaty of a general peace.
The negociations commenced at Utrecht, in December, 1711, or
January, 1712.
80
NATIONAL DEBT
was about £30: 1: 11 per cent. and the annual in-
terest at the rate of £7: 16: 1 per cent.
The like sum of £1,800,000 was raised on a se-
cond lottery, at £100 a ticket; with an additional
capital of £541,990, the whole bearing interest at
6 per cent. secured upon a fund of £168,003 per
annum, by which the principal and interest was to
be paid off in 32 years, from 29th September, 1712,
with a similar provision that any deficiency of the
fund should be made good out of the next aids grant-
ed by parliament. Thus, at a time when there was
every probability of a speedy peace money was
borrowed for the public service at £7: 16: 1 per
cent. with an engagement to pay a premium of
£30 22 per cent.
Several highly improper practices having been de-
tected by the commissioners of accounts, in the
management of contracts for the service of the army,
Robert Walpole, Esq. afterwards Earl of Orford, and
Adam Cardounel, Esq. secretary to the Duke of
Marlborough, were expelled the house, and the former
committed to the Tower; even the people's favourite
General was by no means undeservedly censured in
this respect, and the house of commons passed a
resolution, that his conduct, in taking several sums
of money annually from the contractors for furnish-
*
*The Duke, however, endeavoured to defend his conduct, on the
same ground as such practices are usually justified, that it had been
done before by others.-See The Duke of Marlborough's Case and
Vindication of himself.
FROM 1702 To 1713.
81
ing the bread and bread-waggons for the army in the
low countries, was unwarrantable and illegal.
These circumstances, and the flagrant abuses that
had been brought to light in the last session, serve
to lesson our surprise at the great expense of this
war, and the rapid increase of the public debts: but
surely it is a matter of astonishment, that, after hav-
ing discovered them, the parliament should take no
effectual means for recovering the large sums that
had been embezzled or witheld, and for applying
what they had decided to be "public money" to the
public use; but possibly they might think it would
be establishing a bad precedent.
In January, 1712, a bill was ordered to be brought
in to continue the act of the last session, for taking,
examining, and stating, the public accounts for one
year longer; and, on the 17th March following, a
second report of the commissioners of public ac-
counts was laid before the commons, in which they
present a state of the receipts and payments at the
Exchequer from Michaelmas 1710, to Michaelmas
1711, with observations on several mismanagements
in the public revenue of Scotland; and on many
neglects and irregularities in accounting for the pub-
lic money in England; observing, that, as the neglect
of passing accounts, according to the rules of the
Exchequer, had been a great detriment and loss to
the public, so it had been a great prejudice, that
many accounts had been passed by privy seals, and
in an extraordinary and irregular manner, not so much
G
82
NATIONAL DEBT
Į
to supply the want of form as to justify unreasonable
and extravagant payments.
1713.-In consequence of the negociations for
peace, the opening of the next session* was deferred
till the 9th April; and, as the treaty was then signed,
the ministry thought proper to reduce the land-tax
to 2s. in the pound. This measure was sure to please
their friends in the house, and the landed interest in
general; but, as a sum considerably greater than what
would be thus raised on land and upon the malt-
duty was wanting for the service of the year, it was
resolved to raise £1,200,000 by issuing new exche-
quer-bills. These bills carried interest at 2d. a day
per cent. and the bank undertook to circulate them
upon being allowed 3 per cent. per annum, payable
weekly, and the farther sum of £8000 per annum
payable quarterly: which payments, with the yearly
sum of £45,000, pursuant to the agreement of the
year 1711, were to be continued until the total
amount of outstanding exchequer-bills should be re-
duced to £1,900,000. A provision was also made for
applying the annual sum of £270,999: 7 for pay-
ing off and cancelling exchequer-bills; but, as the
fund out of which this was to arise was not disen-
66
*The queen informed the house of commons, that " As great &
progress has been made in reducing the public expense as the
"circumstances of affairs would admit."
+ The malt-duty was now first extended to Scotland, which had
hitherto been exempt from it, under the 14th article of the union.
‡ Sce page 73.
FROM 1702 To 1713.
83
gaged from former mortgages, recourse was again
had to the pernicious expedient of empowering the
Treasury to compute quarterly what was due for
premium and interest, and to issue new exchequer-
bills for the same, at the like rate of interest and
premium, for circulation, until the fund upon which
they were charged should become free, and sufficient
to answer them.
G 2
1
84
CHAPTER IV.
The History of the National Debt, from the Peace
of Utrecht, in 1713, to the South-Sea Bubble in
1720.
AS the late expensive war had brought consider-
able burthens on the country, by the number of new
taxes which it had been found necessary to establish
in order to provide funds for the various loans; and
as the new ministry were willing to ingratiate them-
selves with the people, by avoiding, for the present,
any new impositions; it cannot be expected that
much would be done towards discharging the in-
cumbrances that had been so rapidly accumulating;
particularly as the peace was not ratified till the end
of the session. £500,000 was granted to discharge
debts and arrears, due in 1710, on the civil-list re-
venue, in consequence of a message from the queen
to the commons on 25th June, 1713, informing them
of the difficulties she laid under by debts contracted
in her civil government, and hoping that they
would not be unwilling to empower her to raise
such a sum of money, on the civil-list funds, as
might enable her to discharge those debts. This
FROM 1713 TO 1720.
85
It
sum was raised by a lottery* and charged upon
£35,000 per annum, payable for 32 years, from
Michaelmas, 1713, out of the civil-list revenue.
must be allowed, that there was more excuse for con-
tracting this debt, which afterwards became a charge
upon
the public, than has appeared in several subse-
quent applications to parliament for discharging civil-
list debts; particularly as the contributions made by
the queen in the first years of her reign must have
reduced her income below £600,000 per annum.†
The only provisions for deficiencies were for ma-
king good the quarterly payments to the South-Sea
Company, and on the class-lottery of 1711, amounting
together to £604,321: 12:01.
In the course of this session, it appeared, from the
reports of the commissioners of accounts, that Wil-
liam Churchill, M. P. (who had been a commissioner
for sick and wounded seamen,) had reserved to him-
self half the profits on some contracts made by that
board, and that the Earl of Wharton had received
£1000 for the procuration of a place; but, as these
offences were committed prior to the act of indemnity
of 1709, the house could only pass general votes of
censure, declaring similar practices to be notorious
and scandalous corruptions.
* The capital created was £633,010; the interest 4 per cent.
†There was, however, a suspicion that the civil-list funds, which
were first given for about £700,000 per annum only, yielded at
this time above £850,000; and, though the commons addressed the
queen for an account of the net produce of these funds, they re-
ceived no answer, which seems to confirm the suspicion.
$6
NATIONAL DEBT
F
**
1714. In the next session, which was the first
of a new parliament, and which met the 16th Feb. the
most important financial measure was the reduction
of legal interest from 6 to 5 per cent. to take place
from 29th Sep. 1714. (12 Anne, stat. 2. c. 16.) The
current rate of interest during this reign had always
been above 5 per cent. and it appears, that, even at
the time of the reduction, money could not be bor-
rowed by government at this rate; yet, according to
the preamble of the act, the measure was become
absolutely necessary to bring the legal rate of interest
to a nearer proportion with the interest allowed for
money in foreign states.
The deficiencies of funds provided for were as
follows:
For making good the quarterly payments to the
South-Sea Company
£. S. d.
498,085 10 0
For deficiency of the fund of the class-lottery,
1711, to Michaelmas 1712
67,358 15 7
For ditto, class-lottery, 1712, to Michaelmas
1713
67,546 4 31
42,576 6 4
For ditto of the East-India Company's fund
For ditto of principal and interest, on 3 Anne,
c. 5.
Interest on Nevis and St. Christopher's debentures
for three years, to 25th December, 1714
88,741 13 10
18,540 12 92
* June 9th, 1714, the house of commons addressed the queen that
the quarter part of the profits of the South-Sea Company's annual
ship, under the assiento contract, which the queen had reserved to
herself, might be applied to the discharge of the national debts;
but the queen soon after informed them that she had given it up to
the company.
FROM 1713 TO 1720.
gj
But, though these arrears of interest on former loans,
amounting together to £782,849 2: 101, were
now paid, (which was probably necessary for the
preservation of public credit,) a new debt of more
than double this sum was at the same time incurred.
It was found necessary to borrow £1,400,000 to-
wards the supplies, and this was raised by a lottery,
at £10 a ticket, upon the plan of those of the pre-
ceding years. The blanks to have their whole money
repaid, with interest at 4 per cent. and the additional
sum of £476,400 to be divided among the prizes;
which additional capital likewise carried 4 per cent.
interest, making the interest paid by government on
the total capital of £1,876,400 equal to £5: 7:2
per cent. on £1,400,000, the sum borrowed, besides
the engagement to pay, in the redemption of the
loan, a premium of upwards of £34 per cent. The
discharge of the principal and interest of this loan
was secured upon a yearly fund of £105,000 per
annum for 32 years, from the 2d of August, 1714,
with the usual provision, that, in case it fell short of
this sum, the deficiency should be made good out of
the next supplies granted by parliament. Not above
£60,000 or £70,000 having been subscribed on the
terms first proposed, before the queen's death, the
July 1714, the Earl of Oxford resigned the office of Lord High
Treasurer, and was succeeded by the Duke of Shrewsbury; Sir
W. Wyndham remaining Chancellor of the Exchequer; but in Octo-
ber following a new ministry was formed, in which the Earl of Ha-
lifax was First Lord of the Treasury, and Sir Richard Onslow Chan-
cellor of the Exchequer.
1
88
NATIONAL DEBT
lords of the regency submitted the subject to parlia
ment; in consequence of which the time for re-
ceiving the contributions was prolonged, the fund
upon which the loan was charged was increased to
£116,573 : 12:0 per annum, and an addition of
1 per cent. was made to the interest of 4 per cent.
before allowed on the blank tickets.
66
Upon the death of Queen Anne, and the acces-
sion of George I. an addition was made to the civil-list
revenue, for the purpose of making it
of making it up £700,000
per ann. clear of incumbrances; and, in the address
of the house of commons to their new sovereign, they
expressed their unanimous resolution "to maintain
"the public credit of the nation, and, effectually, to
"make good all funds which have been granted by
parliament for the security of any money which
"has been or shall be advanced for the public ser-
"vice." But, as the revenues had been anticipated
and mortgaged so much in the course of the late
expensive war, and as the landholders, having got the
land-tax reduced to two shillings in the pound, were
desirous, if possible, to keep it at that rate, nothing
could be done towards paying off the public debts
on the contrary, it will appear, that it was not only
found necessary to contract new debts, but also to
raise the land-tax for the next year to four shillings
* This address was agreed to 5th Aug. and on 21st, the bill for
settling the civil-list revenue was passed; not only before the king's
arrival, but before the houses of parliament had received his answer
to their addresses.
1
FROM 1713 TO 1720.
89
in the pound, which was the same rate as during the
war.
1715. The first session of parliament, * which
commenced the 17th March, continued till the 7th
of August, 1716, and the supplies for two years
were granted in it; among which were included the
following sums for making good the deficiencies of
funds established for paying the interest on former
loans:
For the South-Sea Company's annuity
For deficiency on the class-lottery 1711, to Mi-
chaelmas, 1714
Ditto
£ 538,678 1 0
53,322 0 0
1712, to Mi-
52,938 9 8
295,202 11 }
chaelmas, 1714.
South-Sea Company's annuity.
One year's interest on £61,707 3 2 remain-
ing due on money borrowed upon 3 Anne, c. 4.
One year's interest on £314,219 : 11: 2} re-
maining due on money borrowed upon 8 Anne,
c. 9.
Deficiency of the fund for the £10 lottery 1712,
for two years
3,702 8 7
18,853 3 6
42,665 13 6
* The king, in his speech, 21st March, observes, that "the
“public debts are very great, and surprisingly increased, even
"since the fatal cessation of arms :
that his first care was to pre-
yent a farther increase of these debts, by paying off
of ships which had been unnecessarily kept in pay.
a great number
That he relied
on the commons for such supplies as were requisite for the year's
Oct. 10, 1715,Robert Walpole, Esq. (afterwards Earl of Orford,)
was made First Lord of the Treasury, and Chancellor of the Exche-
quer.
90
NATIONAL DEBT
By an act of this session, the AGGREGATE FUND
was established. This was formed by the united
produce of various taxes, now made perpetual, with
the surplus of other revenues, and all other public
money, which, after Michaelmas, 1715, should be
brought into the Exchequer, and not appropriated
to any other use. The fund thus established, which
was the first of the four principal funds into which
the revenue was afterwards divided, was rendered
subject to the following charges, viz.
The interest and allowances (amounting to
£7:36 per cent.) on all outstanding exche-
quer-bills, (£4,676,812 : 10 : 0)
To the Bank, by agreement of 1711 *
Ditto
1713+
Addition to the civil-list revenueţ
: £335,561
6 0
45,000 0 0
8,000 0 0
120,000 0 0
Interest on £1,079,000, raised by loan for the
service of the year
54,600 0 0
It was also charged with any deficiency that should
happen in the Bank's original fund, or in the fund of
£106,501 : 13 : 5 per ann. established in 1709 §';
and, out of the remainder of the produce of this
service, and for the support of the public faith; and had no doubt
but they would concur with him in opinion, that nothing could
contribute more to support the credit of the nation than a strict
observance of all parliamentary engagements.
* Sce page 73.
+ See page 82.
In 1717 the aggregate fund was charged with £ 4000 per ann.
to the sheriffs of England and Wales, for defraying fees and charges
attending their office, which was properly a new grant to the civil-
list revenue.
§ See page 66.
}
FROM 1713 TO 1720.
91
general fund, the yearly sum of £270,999 : 7 : 0,
or so much thereof as the residue should amount to,
was appropriated to the paying off the exchequer-
bills then outstanding. This was the sum that had
been appropriated to the same purpose in 1713,
by 12 Anne, stat. i. c. 11. when a provision was made,
that if it proved deficient it should be made good
out of the next supplies.
The loan of £910,000, with the interest of
which this fund was charged, was originally in-
tended to have been raised on 6 per cent. perpetual
redeemable annuities; but it was afterwards found
that it might be raised at 5 per cent. This loan was
the first on perpetual annuities, for which the Bank
undertook to receive the subscriptions for govern-
ment; and their cashier was allowed £500 for his
trouble, with the yearly sum of £250; and £200,
yearly, to the accountant, for management. As
provision had been made for paying interest at one
per cent. more on this loan; and as it was, probably,
thought a favourable opportunity for obtaining mo-
ney on more advantageous terms than those on which
it had hitherto been borrowed; the farther sum of
£169,000 was likewise raised on redeemable 5 per
cent. annuities, charged on the remainder of the
£54,600 per ann. which had been appropriated for
the former loan. £822,032 48 was raised to-
:
wards the supplies by adding that sum to the
Of this sum £ 583,339 : 0 : 8 was due to the company for in-
terest and management to 25th Dec. 1715, the remainder of the
additional stock, £238,693 : 4:0, was made transferable for the
use of the public, as the Treasury should direct.
92
NATIONAL DEBT
capital of the South-Sea Company, which made the
same amount to £10,000,000, and the annual sum,
payable for interest, £600,000, with £8000 for
management.
By the act which established the aggregate fund,
the sum of £77,694: 1: 7, of unappropriated money,
brought into the Exchequer before 12th June, 1714,
was granted towards discharging the king's extraor
dinary expenses, from his accession till Michaelmas,
1715; and, by the second land-tax act, the sum of
£45,980: 12 : 63, in arrear for four years land-tax
for the palaces of Whitehall and St. James's, was re-
mitted; which sums ought to be added to the grants
made at different times in addition to the civil-list.
By an act of 12 Anne, it appeared that the sum
of £230,308 9: 10 was then due to the creditors
of the public in Scotland; and the Commissioners of
Equivalent were empowered to issue debentures, bear-
ing interest at 5 per cent. from 24th June, 1714,
payable out of the first money due to Scotland, in
pursuance of the fifteenth article of the union. In
this session an act was passed, empowering the Trea-
sury to issue £ 15,822 : 8 : 72 out of the customs
or excise in Scotland, for a year's interest on this
sum, with the salaries and charges of the Commis-
sioners of Equivalent. It also appeared, that the
sum of £18,241: 10: 10 was due to William
Pateson, Esq. with interest at 5 per. cent. from
25th March, 1713, which was made payable out
of the Equivalent to Scotland.
Since the conclusion of the war, no steps had been
FROM 1713 TO 1720.
93
taken for alleviating the public burthens. On the
contrary, they had been very considerably augment-
ed by several new loans; and it is probable that no
effectual measures would have been thought of, had
not a general apprehension of an invasion induced
ministers to calculate the pecuniary resources of the
country. They now saw reason to fear that it
would be impossible to raise the supplies necessary
for any formidable exertions, while the whole pub-
lic revenue (excepting the annual land and malt-
taxes) was already mortgaged for paying the debts
incurred in the two preceding wars, and while it
had even been found necessary to borrow money to
defray the interest of loans charged upon distant an-
ticipations. Convinced of the necessity of imme-
diately providing funds on which to raise new sup-
plies, they devised a plan every way calculated for
the purpose. This was effected by reducing the in-
terest payable to the public creditors, which the
state of the country rendered at this time practica-
ble. But, before we give an account of this arrange-
ment, it may be proper to state the total amount
of the National Debt.
منة
94
NATIONAL DEBT
↓
Amount of the National Debt, 31st December, 1716.
Annuities at 14 per cent. afterwards converted into a certain term of 99
years, from 25th January, 1692
Annuities, with benefit of survivorship, 1692
Principal.
Interest.
£ 1,491,639 6 10 £ 124,866 0 0.
>
108,100 0 0
7,567 0 0
Annuities on one, two, and three, lives, from 29th Sept. 1694, with the re-
mainder of the term of 96 years on the annuities on one life
369,704 8 0
36,070 2 3
Annuities for 99 years, from 25th March, 1704
1,569,664 18 6
104,745 10 61
Ditto
from 25th Dec, 1705
Ditto
from 25th March, 1706
Ditto
from 25th March, 1707
Ditto
Ditto
Annuities for 32 years,
Ditto
from 25th March, 1708
from 24th June,
from 29th Sept.
1708
690,000 o o
2,855,761 0
1,155,000 0 0
640,000 0 0
1,280,000 00
46,000 0 0
184,242 14 0
72,187 10 O
40,000 0 0
80,000 0 0
1710
900,000 0 0
81,000 0 0
from 29th Sept.
1710, on £10 lottery
1,500,000 0 6.
134,998 12 0
12,559,869 13 4-
911,677 8 9/2
Banker's debt, at 3 per cent. upon £ 1,328,526
£10 lottery, 1711,* at 6 per cent.
Class-lottery, 1711, at 6 per cent.
£10 lottery, 1712, at 6 per cent.
Class-lottery, 1712, at 6 per cent.
664,263 0 0
39,855 16 0
1,666,070 0 0
135,000 0 0
2,525,970 0 0
186,670 0 0.
2,258,520 0 O
168,003 0 0
2,312,065 0 0
168,003 0 0-
FROM 1713 TO 1720.
95
Civil-list lottery, 1713, at 4 per cent.
Lottery, 1714, blanks at 5 per cent. prizes at 4 per cent.
East-India capital, at 5 per cent.
South-Sea capital, at 6 per cent.
Bank capital, at 6
per cent.
Ditto, for cancelling exchequer-bills, at 6 per cent.
Exchequer-bills, with the allowance for circulating them
Five per cents. transferable at the Bank
Navy debt, £ 1,043,336: 19: 92, of which £ 334,239 : 9 : 12 arose from
the deficiency of the supplies
Deficiency of supplies
Principal and interest remaining due, of the money borrowed in 1710, on
the candle-duty
Ditto, on the low wine act
599,190 0 0
1,812,100 0.
35,000 0 a
0. 0
116,573 12 0.
3,200,000 Ο Ο
160,000 0 0
10,000,000 0 0
608,000 0 0
1,600,000 0
оо
100,000 0 0.
1,775,027 17 10
106,501 17 6
4,561,025 0 0
1,079,000 0 0
328,561 18 63
53,450 0 0
46,613,100 11 21 3,117,296 12 10
709,097 10
577,014 16 1
8
314,219 11 21
61,707 3 2
99,361 16 0
?
†£48,374,501 8 4
By the lotteries of 1711 to 1714, a capital of £ 2,723,910 was added more than the money advanced.
It is supposed that nearly three millions should be added to this amount for debts then due, but not adjusted, (see the
statement at the end of Some Considerations on the National Debt, &c.)
Nevis and St. Christopher's debentures
96
NATIONAL DEBT
?
{
The loans on the lotteries of 1711, 1712,
1713, and 1714 were charged on funds which were
estimated to be sufficient for paying the annual
interest, and gradually discharging the principal
in the course of 32 years; it must therefore be re-
membered, that the total of annual interest above-
stated includes the provision thus made for liqui-
dating the principal on these loans; and is properly
the net annual sum paid to the public creditors at
the above period, including the allowance for ma-
nagement on the Bank and the South-Sea capitals.
Had the above appropriations been regularly applied
in discharging both principal and interest on the
lottery-loans, the public would have been long since
free from any charge on account of these debts:
whereas, by engrafting the greater part of them into
the South-Sea Company's capital, and thus diverting
that part of the appropriation which was intended
to discharge the principal, they may be properly
considered as still forming a part of the National Debt;
with but little probability of their being ever paid
off.
The parts of this debt, contracted in the different
reigns, were as follows:
着
​In the reign of Charles II.
William III..
Anne
1
£.
S. d.
[664,263 0 0
5,169,443 14 10
39,353,650 2 03
George I. to 31st Dec. 1716. 3,177,144 11 54
£ 48,364,501 8 4
FROM 1713 TO 1720.
97
Thus stood the public debts at the end of the year
1716, when the government thought it necessary
to concert seriously such measures as might lay the
foundation of an effectual plan for their reduction.*
This intention was announced in the following pa-
ragraph of the king's speech on opening the next
session, 20th February, 1717: "You are all sensible
"of the insupportable weight of the National Debts,
"which the public became engaged for from the
necessity of the times, the pressures of a long and
expensive war, and the languishing state of public
credit; but the scene being now so happily changed,
"if no new disturbances shall plunge us again into
streights and difficulties, the general expectation
seems to require of you, that you should turn your
thoughts towards some method of extricating your-
CC
CC
66
"C
(c
(
selves by reducing, by degrees, the debts of the nation."
To this the commons replied, that they were but
too sensible of the unsupportable weight of the Na-
tional Debts, and would not neglect to apply them-
selves with all possible diligence and attention to
the great and necessary work of reducing, by de-
grees, this heavy burthen, as the most effectual means
* The government of France laboured at this time under very
considerable difficulties from the great amount of their public debts;
and to recover public securities from the enormous discount at
which they were sold was the cause of the famous company of
the West or Mississippi Company being now projected; the scheme
of which appears to have been taken from the establishment of the
South-Sea Company.
H
1
98
NATIONAL DEBT
of preserving to the public funds a real and certain
security.
The current rate of interest had lowered consider-
ably since the late war, which probably arose in part
from a real increase of the national capital, and partly
from government loans to any considerable amount
not being now wanted; and it was probably with
the view of ascertaining how far they might venture
in their intended plan of reduction, that, previously to
its being brought before the house, the ministry, on
the 5th March, got a resolution passed, That who-
soever should advance any sum not exceeding
£600,000, for the service of the public, should be
re-paid the same, with interest at 4 per cent. out of
the first aid granted in this session of parliament.
And, at the same time, a resolution was also passed,
That the house would effectually make good the
deficiencies of all parliamentary engagements. The
first of these resolutions gave some alarm to the
stock-holders and other moneyed persons, from an
apprehension that it might be the intent of govern-
ment to reduce the interest on other public securities
to this rate; and, either from being able to employ
their money to better advantage or from a secret
combination, only the small sum of £45,000 was
subscribed towards this loan on the three following
days after passing the resolution. Having tried in
vain to get it filled up, the house, on the 23d March,
found it necessary to raise the interest to 5 per cent.
on which the whole was immediately subscribed.
In another speech, from the king, on the 6th May,
1
FROM 1713 TO 1720.
99
66
(C
(6
XC
was the following passage: "I must recommend to
you, as I did at the beginning of the session, to
"take all proper methods for reducing the public
debts, with a just regard to parliamentary credit."
To which the house replied, "We are truly sensible
"how much the ease and prosperity of your subjects
depend on the accomplishing that great and ne-
cessary work, of reducing the public debts; and
are resolved to carry it on in the most effectual
manner, with just regard to parliamentary credit."
Accordingly, on the 20th May, Mr. Stanhope, who
was at that time First Lord of the Treasury and
Chancellor of the Exchequer, laid before the house
the proposals of the Bank of England and of the
South-Sea Company; which, after undergoing some
alterations, became the foundation of three acts
passed in the course of the session, for reducing the
interest on a considerable part of the public debts,
and forming the four great funds, called the South-
Sea Fund, the General Fund, the Aggregate Fund,
(first established in the last session,) and the Sinking
Fund. These are so frequently mentioned in sub-
sequent financial transactions, that it will be ne-
cessary to give a more particular account of their
origin.
By one of these acts, (3 Geo. I. c. 8.) a new agree-
April 10th, 1717, Mr. Walpole resigned his places of First Lord.
of the Treasury and Chancellor of the Exchequer; and, on the 15th,
James Stanhope, Esq. (afterwards Earl Stanhope,) succeeded him.
H 2
100
NATIONAL DEBT
F
ment was entered into with the Bank, by which part
of the interest payable to them was reduced from
6 to 5 per cent. Their original fund, of £100,000
per annum, was to remain the same, but the annuity of
£106,501 : 13 : 5, payable pursuant to 7 Anne, c. 7.
for cancelling exchequer-bills, was to be reduced, from
Midsummer 1718, to £88,751:7: 10 per annum,
redeemable at a year's notice, upon payment of the
principal of £1,775,027 : 17 : 10%, with all arrears of
interest. They likewise agreed to deliver up to
be cancelled exchequer-bills to the amount of
£2,000,000, in consideration of au annuity of
£100,000, being at the rate of 5 per cent. for the
same, to commence from Christmas 1717: this was
also made redeemable at a year's notice, upon re-
payment of the principal and all arrears of the an-
nuity. The remainder of the outstanding exchequer-
bills,* amounting to £2,561,025, they were to con-
tinue to circulate, at the allowance of 3 per cent. per
annum, amounting to £76,830: 15 per annum; the
interest upon these bills to be continued at 2d. per
cent. per day, with the original allowances of
£45,000 and £8000 for circulation, till Christmas
1717; after which, the interest was to be reduced to
1d. per cent. per day, and the allowances to cease.
In order to enable government to carry into effect
the intended reduction of other funds, the company
also agreed to advance, before the 25th March, 1718,
*The interest and allowances to the Bank on these bills amounted
to £7: 4:03 per cent.
}
FROM 1713 TO 1720.
101
the whole or any part of £2,500,000, at 5 per cent.
interest, on condition that not above half a million
should be required at any one time. These annual
payments to the Bank were secured upon the re-
venues forming the AGGREGATE FUND, which were
again granted for ever, and with which were con-
solidated the duties on houses. If at the end of
any quarter, after Lady-day 1717, the produce of
the fund should not be sufficient to answer the
charges upon it, the deficiency was to be made good
out of the produce of any subsequent quarter in
which there should be an overplus; but if there should
still be a deficiency at the end of any one year it was
to be made good out of the next aids granted in
parliament.*
By another act, (c. 9,) establishing the SOUTH-SEA
FUND, the interest on the South-Sea Capital was
reduced from 6 to 5 per cent. the company having
The saving to government, by this agreement with the Bank,
was as follows:
Que per cent. on £1,775,027: 17: 103
Paid before on £4,561,025
exchequer-bills
In future on £2,000,000 ditto
cancelled £100,000 0 0
3 per cent. on
£2,561,025. 76,830 15 0
1d. per cent. per
day on ditto 38,948 18 51
£. s. d.
17,750 5 6
£328,561 18 63
112,782 5 11
215,779 13 51
Annual saving. £ 130,532 10 S
?
102
NATIONAL DEBT
1
agreed to accept of a yearly fund of £500,000, with
their former allowance of £8000 per annum for
management, in lieu of £600,000 per annum, which
was therefore to cease from Midsummer 1718.
They also agreed to advance any sum not exceed-
ing £2,000,000, before Christmas 1717, at 5 per
cent. interest, on condition that not more than half
a million should be required at a time, and that they
should have a fortnight's notice of each requisition.
For payment of this annuity all the duties appro-
priated at the establishment of the company were
again appropriated and granted for ever, with the
collateral security of the general fund established this
session. Upon re-payment of the £2,000,000, or
such part thereof as should be advanced, the interest
was of course to cease; and upon one year's notice,
to be given at Midsummer 1723, or any quarter day
afterwards, part of their capital might be paid off, on
condition that not less than a million should be paid
off at a time.
Having thus effected the reduction of the interest
on a principal of £16;336,052 17 10, and having
secured loans at 5 per cent. from the two companies,
to the amount of £4,500,000, for the purpose of pay-
ing off such proprietors as did not signify their consent
to the intended reduction of other funds, another
act was passed, at the same time, for this purpose, by
which the fund, afterwards called the GENERAL
FUND, was established. By this act (3 Geo. I. c. 7.)
various duties, that had been granted chiefly for the
term of 32 years, in the reign of Queen Anne, with
}
1
FROM 1713 TO 1720.
103
:
the appropriation of £39,855 15:7 per annum
out of the hereditary excise, by an act of the last
year of King William, for making provision for the
banker's debt, were now granted for ever. The
debt, which had been charged upon the duties and
revenues thus perpetuated, amounted to £8,762,625
upon the lottery-acts of Queen Anne, and £664,263
upon 12 W. III. c. 12. all carrying interest at 6 per
cent. per annum; and, as it was now intended to
reduce the interest to 5 per cent. such of the pro
prietors as did not subscribe for the same were to be
paid off at par: which was to be done by selling
annuities at 5 per cent. to other persons, or with the
money to be advanced by the Bank and South-Sea
Company for this purpose.
* The nett annual pro-
duce of the duties thus consolidated into one fund
was computed at £724,849: 6: 10, consisting of
the following appropriations, viz.
£.
s. d.
Fund of the £10 lottery, 1711
Fund of the class-lottery, 1711
135,000 0 0
186,670 0 0
pér ann.
ditto.
Fund of the £10 lottery, 1712
168,003 0 0
ditto.
Fund of the class-lottery, 1712
168,003 0 0
ditto.
Out of the hereditary excise
39,855 15 7
ditto.
Surplus of duties granted by 9 Anne, c. 6. 27,317 11 3 ditto.
£ 724,849 6 10
This annual sum was charged with the payment
*The whole of the public creditors signified their assent to the
reduction in consequence, no part of the sums were required, which
the Bank and South-Sea Company had agreed to advance.
104
NATIONAL DEBT
of the future interest at 5 per cent. on the above-
mentioned debts, and the overplus was appropriated
to pay off the principal. If the produce should not
amount to the above sum, the deficiency was to be
made good out of the first aids granted in parliament
after such deficiency should appear. The principal
sums charged upon this fund were as follows,
Remaining of £1,928,570 on £10 lottery, 1711. 1,666,070 0 0
Ditto of 2,602,200
class-lottery, 1711
2,525,970 00
Ditto
of
2,341,740
£10lottery, 1712
2,258,520 0 0
Ditto of 2,341,990
class-lottery, 1712
2,312,065 0 0
Banker's debt, being the moiety of £1,328,526
664,263 0 0
Remaining of loan on 3 and 4 Anne, c. 4.
Ditto
on duties on candles
61,707 3 2
314,219 11 24
£9,802,814 14 41
Deficiency of last year's grants
577,014 16 1
Bills of exchange for the Canada expedition
24,195 11 2
£ 10,404,025
1 7/1/2
}
8
To the above must be added a quarter's interest
thereon, at 5 per cent. which was to form part of
the principal; the produce of the duties to Michael-
mas 1717, from which time the fund commenced,
being applied to the payment of the interest, at 6
per cent, due the preceding Midsummer. The above
debts were now made payable at the Bank, and were all
to carry 5 per cent. except the annuities, sold for
making good the deficiency of grants and for the
Canada-bills, which were to be 4 per cent. annuities.
The fund was also charged with 4 per cent. per an-
num on debentures, to be made out for debts due to
the army.
FROM 1713 TO 1720.
105
Thus it appears, that a very considerable reduction
was made in the annual payments on the public
debts,* but the most important part of the plan was
contained in the clause of this act, by which the
provision for future redemptions, afterwards called
the SINKING FUND, was established. By this clause
it is enacted, that all the moneys which at the end
of any quarter should arise from the surplusses of
the several funds, called the Aggregate Fund, the
Fund of the South-Sea Company, and of the re-
venues and duties charged with the General yearly
Fund of £724,849 6: 10, and also the excess or
overplus of the said General yearly Fund, when
there should be such excess or overplus beyond the
payments with which it was charged, should be
"appropriated, reserved, and applied, to and for the
:
farther discharging the principal and interest of
"such national debts and incumbrances as were in-
“curred before the 25th day of December, 1716,
"and are declared to be national debts, and were
66
provided for by act or acts of parliament, in
"such a manner or form as shall be directed or ap-
"pointed by any future acts of parliament, to be
* The total annual interest saved to government by the reduction
£. S. d.
appears to have been :
On part of debt due to the Bank (see page 101.) 130,532 10 8
On South-Sea capital
On £9,802,814 : 14: 41 on the General Fund
100,000 0 0
98,028 2 113
Total.
£ 328,560 13 74
106
NATIONAL Debt
*
66
discharged therewith, or out of the same, and to
"or for none other use, intent, or purpose, whatso-
cr
ever. "*
These arrangements were well calculated for effect-
ing a gradual reduction of the amount of the debt;
and, instead of causing a depression in the value of
stocks, which might have been expected from the
reduction of their interest, they soon began to rise.†
A new confidence was given to the public creditors,
from a persuasion that the provisions now made
would prevent those inconveniences that had former-
ly arisen from the interest on particular debts, being
frequently long in arrear; and that, instead of a de-
preciation of the current value of their securities,
which generally attends an increase of debts, their
price would, in general, increase in proportion to the
* Sir R. Walpole claimed much honour as the father of the sink-
ing fund, but it is evident that it required no invention and but little
judgement to adopt a plan which had been pursued in other coun-
tries, and which was contained in a pamphlet published several years
before. (A Letter to a Member of the late Parliament, concerning the
Debts of the Nation, 1701.) The utility indeed was so obvious, that
not to have adopted it, when the reduction of interest rendered it so
practicable, and when an example had been set in the establish-
ment of the Aggregate Fund, would have been wholly inexcusable.
It was, in fact, nothing more than applying the surplusses of funds
which were before established to the uses for which they had been
already appropriated.
† South-Sea stock, which, at Lady-day, 1717, was but at 100%,
got up, by Michaelmas, to 1113 per cent. A similar effect had re-
sulted from the establishment of a sinking fund, by reducing the
interest on the debt of the ecclesiastical state, by Pope Innocent XI.
in 1685.
FROM 1713 TO 1720.
107
progress of redemption.* The public had also at
least a distant hope of being relieved from some of
the many taxes that it had been found necessary to
impose, for paying the interest on these debts; the
pernicious effects of which, both on the foreign
trade and on the internal state of the country, was
now sensibly felt.
It has appeared, that, in the establishment of the
general fund, provision was made for a considerable
deficiency of the last year's grants, and it might have
been expected that care would have been taken not
to throw a similar incumbrance upon the succeeding
year. Notwithstanding which, the supplies voted
for the current year amounted to £2,550,127: 19:31,
which exceeded the estimate of the land-tax at
3s. and the malt-duty, the only parts of the revenue
applicable to the supplies, by £319,951: 19: 11,
which, with the deficiency of the South-Sea Com-
pany's fund, being £166,502 1274, to be made
good out of the aids of this session, left a deficiency
of £486,454 : 12: 63, with the probability of its
considerably exceeding that amount.
In the above amount of the supplies is included
the sum of £250,000, granted in consequence of a
message from the king, on the 3d April, respecting a
threatened invasion from Sweden, in favour of the
Pretender. This vote, which established a precedent
for the votes of credit, so well known since, was
* These considerations were a great inducement to the public
creditors to agree to the reduction of interest.
108
NATIONAL DEBT
1
་
passed, not for the purpose of repelling the invasion,
in case it should have been attempted, (for that
might have been more properly done by specific
grants for augmenting the sea or land forces,) but
"to enable his majesty to concert such measures, with
"foreign princes and states, as might prevent any
"charge or apprehensions from the designs of Sweden
"for the future." It met with considerable oppo-
sition in the house of commons, and was agreed to
by a much smaller majority* than has usually appear-
ed of late years upon such motions.
In this session was likewise passed, an act for con-
tinuing, during another year, the Equivalent-act,
passed in the last session, and the Treasury were
directed to issue out of the Customs and Excise, in
Scotland, £31,565: 2:54 to the Commissioners of the
Equivalent, to be applied to the payment of two years
interest on the same, due to the creditors in Scotland
and to William Paterson, Esq.
1717.-In the next session, which began 21st
November, £29,645 : 8 : 94 was voted for the de-
ficiency of the South-Sea Company's fund; from
* The numbers were 153 against 149, being a majority of only
four. In order to disunite the formidable opposition which ap
peared on this occasion, Lord Townshend was dismissed from the
Lord Lieutenancy of Ireland, upon which, Mr Robert Walpole im-
mediately resigned his place of First Lord of the Treasury and
Chancellor of the Exchequer, and Mr. Methuen and Mr. Pultney
followed his example.
† See page 92.-This debt was provided for in the session of
1718.
3
↓
FROM 1713 TO 1720.
109
which it would appear that the fund now produced
nearly the full sum charged upon it; but the de-
ficiency afterwards appeared considerably greater than
the sum here voted, and was provided for in the next
session: the sum of £581,196 : S was also voted for
the deficiencies of last year's grants. The total of
the grants for 1718, including the above sums, was
£2,644,437 4 84, which exceeded the estimate of
the land and malt taxes by £414,923: 1: 61, yet
attempts were made, and strongly supported in the
house, to get the land-tax reduced to 2s. in the pound.
Just before the end of the session a message was
received from the king, informing the house, that,
being engaged in several negociations, of the utmost
concern to the welfare of these kingdoms and the
tranquillity of Europe, and having received infor-
mation which made him judge that it would give
weight to his endeavours if a naval force were em-
ployed, he had thought fit to acquaint them there-
with; not doubting but that, in case he should be
obliged to exceed the number of men granted for
the sea-service, the house would, at their next meet-
ing, provide for such excess. The measure was im-
mediately acquiesced in, and an address was presented
to that effect. This was an improvement on the
vote of the preceding year; for, though confined to
one branch of the expenditure, it was, with respect
to that branch, perfectly unlimited.
1718.-The king's speech, on opening the next
session, 11th Nov. contained the following passage:
"I have the pleasure to observe to you, that the
110
NATIONAL DEBT
"funds, appropriated for sinking the public debts,
"have answered above expectation. I must, how-
ever, recommend to you, to consider of proper
"methods for improving them, by preventing the
"frauds and abuses daily committed in the public
"revenues; not doubting, in all your proceedings,
""
CC
you will have that regard to the inviolable pre-
"servation of the public credit, which may quiet.
"the minds of all those that have trusted to parlia-
mentary engagements." Having voted £502,719
10 10%, for making good the deficiency of grants
in the preceding year, and £102,092 13 0
: :
for making good the deficiency of the general fund of
£724,849:6: 10 per annum, a provision was made,
by a clause in the land-tax act, for £110,312 : 17
4, paid by the treasurer of the navy to the South-
Sea Company, for making good the deficiency of their
fund, over and above the sum granted for this pur-
pose in the last session; which sum of £110,312
17: 4 was raised on annuities at 5 per cent. per
annum, charged upon the general fund and made
payable at the Bank.
The produce of the funds, alluded to in the king's
speech, will appear from the act for appropriating
the surplusses. Thus act (5 Geo. I. c. 5.) directs,
that £196,444: 18:31, being the overplus, at Mi-
chaelmas, 1718, of the Aggregate Fund; all the over-
plus moneys of the civil-list fand, for three years,
ending at Michaelmas, 1718; £19.577: 10: 0, be-
ing the overplus of the South Sea Company's fund,
FROM 1713 TO 1720.
111
at Michaelmas, 1718; and £190,436: 15: 11%,*
the overplus at Michaelmas, 1718, of the General
Fund, after reserving £130,000 towards paying the
quarter's annuity charged thereon to Christmas, 1718,
with all the surplusses of the said funds that should
arise in the half year, ending at Lady-day, 1719,
should be then applied towards paying off the prin-
cipal and interest of the outstanding exchequer-bills,
for redeeming the annuity of £76,830: 15 : 0, pay-
able to the Bank for circulating them, agreeably to the
notice that had been given in the preceding session.
But, as these surplusses would discharge but a small
part of the bills, £500,000 was to be raised for the
same purpose, at 4 per cent. per ann. from 25th
March, 1719, by a lottery of 168,665 tickets, at
£3 a ticket, making in the whole £ 505,995, (of
which £5995 was for the expense of drawing the
lottery). £ 520,000, to be applied in the like man-
ner, was also borrowed, at 5 per cent. per ann. pay-
able quarterly, and charged upon the Aggregate Fund,
and the Treasury were empowered to contract with
any persons for circulating the remainder of the bills
at such allowance as should be agreed upon. Thus,
there appears to have been a determination to redeem
* This must not be considered as the surplus of the duties compo
sing the General Fund; for it appears, by the vote before-mentioned,
that they had not amounted to the fixed annual sum by £102,092
13: 0, therefore the overplus here stated is the excess of the fund
beyond the annuities charged upon it, after making good the above
deficiency.
119
NATIONAL DEBT
cent.
the annuity, payable to the Bank, at all events, though
for what reason, unless as a favour to the company,
it is difficult to conceive; for, as the interest on the
bills was now reduced to 1d. per cent. per day, the
actual charge of them was £115,779: 13:4 per
ann. on the whole, being at the rate of £4: 10:5
per cent. whereas, £ 520,000 at least of the money
raised for paying them off was borrowed at 5 per
However, it might probably be thought
that with many persons this measure would have
the appearance of paying off a debt of £ 2,561,025,
and thus contribute to establish a favourable opinion
of the efficacy of the sinking fund.-A reduction of
the National Debt was thus happily begun; but a
considerable part of it consisted of annuities for a
certain term of years; which, with others raised
under particular circumstances, were irredeemable.
To prevent this from causing any impediment to the
operation of the Sinking Fund, an act was passed for
converting some of these irredeemable annuities into
redeemable debts; these were the lottery-annuities
of the year 1710, amounting to £134,998: 12:0
per annum, which, with £ 168,748 : 5 : 0, in ar-
rear thereon at Christmas, 1718, was to be sub-
scribed into the South-Sea Company's stock, on the
following terms, viz. The annuities were to be taken
in at 11 years purchase, and the arrear at cent. per
cent. The company agreed to pay into the Exche-
quer £778,750, (or a proportionate part, in casc
all the annuities and arrears should not be subscribed,)
which was to be carried to the Sinking Fund to be
FROM 1713 TO 1720.
113
employed in discharging the National Debt; and,
for the sum which their capital would be augmented
by the subscription of the annuities, and the money
advanced, they were to have 5 per cent. per ann. in
addition to the interest at the same rate, payable at
this time on their capital of £10,000,000; also am
allowance of £ 2000 per ann. (or a proportional part,
in case the whole of the annuity and arrears were
not subscribed) in addition to their former allowance
of £8000 per ann. for expense of management.
The former agreement, that their capital should be
irredeemable till Midsummer, 1723, and then not
less than a million to be paid off at a time, was ex-
tended to the addition thus made to it. The interest
on the new stock, created pursuant to this act,
amounted to £87,342: 45 per ann. attended with
£1397 96 per ann. for management.
As the annuities were thus converted into redeem-
able debts, at a price below their real value, it
would have been an advantage to the public had
the interest saved been faithfully applied in redeem-
ing the principal of these or other debts. But, as
such a saving in the annual payments affords an op-
portunity of charging the funds upon which they
are secured with the interest of new loans, without
the necessity of imposing any new taxes, it might
have been expected, that, at a future emergency,
the temptation would become too powerful for the
justice and patriotism of ministers, and that the
debt, which a limited time would have redeemed,
I
114
NATIONAL DEBT
would be perpetuated with as much new capital as
the original fund would pay the interest of. Had
there not been ground for such apprehensions, it
would certainly have been better to have made the
saving of interest an addition to the income of the
Sinking Fund, than to borrow money upon it at
5 per cent. to be employed in paying off exchequer
bills.
}
In this session, the duty on the importation of
coals into the port of London, which had been hi-
therto appropriated to the repairing and building of
churches in London and Westminster, was, in part,
appropriated to the use of the public; the annual
sum of £30,559 14:0, out of the same, being
made a fund for payment of the principal and in-
terest, at 4 per cent. on £ 505,995, raised towards
the supplies by another lottery of 168,665 tickets,
at £3 each; the chances of which were to be de-
termined by the drawing of the before-mentioned lot-
tery of the same kind.
A provision was also made for the public debts of
Scotland, in lieu of the equivalent then due, or grow-
ing due. The debt remaining, amounting to
£ 248,550 : 0 : 91, was made a public debt of the
United Kingdom, (redeemable by parliament on pay-
ment of the principal sum,) and the creditors were
incorporated the interest, to Midsummer, 1719,
amounted to £30,823 7: 2, and from that time
they were to have an annuity of £10,000, with
£600 per annum for management, to be divided
?
FROM 1713 TO 1720.
115
among the creditors, in proportion to their share of
the debt, which annual sums were made payable out
of the produce of the revenues in Scotland.
In the beginning of the session, war had been de-
clared against Spain; and, on the 10th March, the
king went to parliament to inform the two houses of
his having received advices that an invasion would
be suddenly attempted in favour of the Pretender.
In consequence of which the commons presented an
address, desiring his Majesty to give orders for aug-
menting the sea and land forces, and promising that
they would effectually make good any increase of ex-
pense that should arise from such augmentation.
Thus we see how votes of credit were gradually ex-
tended. By that of 1717, the power of expenditure
was limited to £250,000; in 1718 the sum was
unlimited, but the vote only authorized the increase
of the navy; in the present instance the sum was
also unlimited, and the power given to increase the
army as well as the navy. The extraordinary ex-
pense incurred by this vote was, however, by no
means so great as might have been apprehended, as
will appear from the following sums, granted in the
next session, for making good the extra expenses of
this year, a considerable part of which must have
arisen from the deficiency of grants.
£ s. d.
For transport-service for 1719, not provided for. 20,530 18 10
Extra expenses of laud-forces, ditto
Extra expenses of the navy, ditto
99,768 2 2 14
377,561 6 93
1719.-At the opening of the session in which
12
116
NATIONAL DEET
these sums were granted, (23d Nov.) the commons
were again desired to turn their thoughts to all pro-
per means for lessening the debts of the nation.
This was preparatory to the discussion of the propo-
sals from the Bank and South-Sea Company, for
taking in the public debts. But, previous to the ac-
count of the agreement made with the latter, which
laid the foundation of the too-well-known South-Sea
bubble, it will be proper to mention the other finan-
cial measures of the year. The sum of £312,000
was raised on the plate-duty toward the supplies,
which was to be advanced in four payments of
25 per cent. each: the rate of interest was 4 per cent.
per annum, payable half-yearly; but, as it commen-
ced from 25th March, and as discount was allowed
for prompt payment, at 5 per cent. per annum, from
the time of actual payment to 1st December, 1720,
(forming together, to such as paid in the whole at
the time fixed for the first payment, a bonus of
about 3 per cent.) the real rate of interest was
£4:29 per cent. The Sinking Fund was made a
collateral security for this loan, and likewise for the
million of exchequer-bills, issued as an accommo-
dation to the South Sea Company, as will be
menționed hereafter, which had the effect, though
perhaps it was not then intended, of preparing
the way for more important infringements on it.
By the act for establishing this loan, the sum of
£200,737 14 94 was also to be taken, towards
the supplies, out of the net produce of the forfeited
estates which had been sold for the public use.
!
FROM 1713 TO 1720.
117
The following sums were likewise granted, viz.
For deficiency of last year's
malt-tax
For deficiency on the hop-
duty for 1711
•
Deficiency of the General
Fund for 1719
£
5. d.
120,000 0 0, with interest.
8,590 16 81, with interest.
88,849 3 11
The civil list was again in arrear, or, at least,
was said to be so, for the house of commons had
no knowledge of such arrear, previous to his
Majesty's message of the 4th of May, and the mo-
tion for an account of particulars was negatived. By
the message, his Majesty informed them of his
intention to establish the two corporations of the
Royal Exchange and London Assurance companies,
and hoped for their concurrence to confirm the pri-
vileges intended to be granted, and to enable him
to apply the money which the companies had agreed
to advance to discharge the debts of his civil go-
vernment; an act for this purpose was accordingly
passed, and the charters were executed 22d June,
1720. The sum which the companies had agreed
to pay was £600,000, being £ 300,000 each: but,
in the following year, half this sum was remitted,
so that there was only £300,000 advanced in the
whole.
;
118
CHAPTER V.
1
Y
The History of the South-Sea Bubble, in 1720.
}
་
WE have now arrived at a year pregnant beyond
all others with romantic schemes and visionary pro-
jects; a year, the transactions of which should be
held in perpetual remembrance by every minister,
since it affords innumerable beacons to guide him in
his financial voyage.
K
་
. In order to understand the object of government
in forming the memorable South-Sea scheme, it is
necessary to remark, that the great irregularity ob-
served in paying the interest due to the public cre-
ditors, and the want of confidence which such a
course must naturally inspire, were convincing
proofs that great improvements were necessary in
this department of government. Added to this, the
nation had become enamoured with the operation of
the Sinking Fund; by which it was fondly expected
that they should soon be relieved from all their
financial difficulties. To expedite this desirable ob-
ject no sacrifices were thought sufficient, and the
public hailed with joy a project which fostered this
}
SOUTH-SEA BUBBLE,
119
1
delusive hope; but which, in the end, not only ren-
dered their existing burthens perpetual, but also
afforded ministers the means of still farther adding to
their pressure. The South-Sea Company proposed
to consolidate the several floating debts, by allowing
the creditors to subscribe them into their capital;
the Company, in consequence, guaranteeing the re-
gular payment of interest; and, in order to render the
period of liquidation more near, they proposed to con-
vert the irredeemable temporary annuities into re-
deemable perpetuities.
The proposals were first laid before the house on
the 22d January, 1720, and, after some alterations.
therein, were preferred to those of the Bank,* and
accepted on the 1st of February. The act, which
was afterwards passed for confirming this agreement,
recites the grant of the following irredeemable an-
nuities; viz.
Part for 96 years, from 25th January, 1695,
and part for 89 years, from 25th January,
1702
Part for 96 years, from 25th January, 1695,
and part for 89 years, from 25th January,
1702
£.
S. d.
124,409 1 9
15,236 12 0
For 99 years, from 25th March, 1704, with
£1200 per annum for management.
104,745 10 63
Carried forward. . .
244,391 4 3
The Bank offered to advance 5 millions, which was more by
3 millions and a half than the South-Sea Company proposed at
first; but the latter were at length induced to offer 7 millions
rather than let the Bank undertake it.
120
SOUTH-SEA BUBBLE.
£.* St. d.
Brought over
244,391 4 31
For 99 years, from 25th Dec.
1705
46,000 o o
For ditto
from 25th March, 1706
184,242 14 0
For ditto
from 25th March, 1707
72,187 10 0
For ditto
from 25th March, 1708
40,000 0 0
*
For ditto from 24th June, 1708
80,000 0 0
Per annum, long annuities
£ 666,821 8 3
with the following annuities for 32 years, upon the
two lotteries of 1710:-
From 29th September, 1710 (8 Anne, c. 7.)
From 29th September, 1710, remainder of
annuities granted by 8 Anne, c. 4. part
having been subscribed into the South-Sea
Company's Stock, pursuant to 5 Gco. I.
c. 19.
Per annum lottery annuities
81,000 0 0
46,260 6 1
£ 127,260 6 1
also the redeemable debts, upon perpetual annuities;
viz.
At 4 per cent. on the civil-list lottery, 1713
At 5 per cent. on the blanks of the lottery,
1714
At 4 per cent. on the prizes of ditto
At 5 per cent. transferable at the Bank
(1 Geo. I. c. 19 & 21)
On the £10 lottery, 1711
On the class-lottery, 1711
On the £10 lottery, 1712.
On the class-lottery, 1712
Moiety of the banker's debt
•
563,300 0 0
1,055,990 0 0
652,020 0 0
1,079,000 0 0
1,672,821 10 0
2,563,768 4 0
2,292,367 7 0
2,346,745 19 6
658,654 13 52
Carried forward...
12,884,667 13 112
SOUTH-SEA BUBBLE.
121
£,
S.
d.
Brought over..
At 4 per cent, payable at the Bank, and
charged upon the General Fund
At 5 per cent. payable at the Bank, and
charged upon the General Fund (5 Geo.
I. c. 1.
At 4 per cent. by an act of 5 Geo. I.
*
At 4 per cent, payable at the Bank, on the
first lottery, 1719, (5 Geo. I. c. 3.)
At 4 per cent. payable at the Exchequer, on
the second lottery, 1719, (5 Geo. I. c. 9.)
Total redeemable debts
12,884,667 13 112
2,550,916 8 8
110,312 17 A
585 7 1
500,000 0 0
500,000 0 0
£16,546,482 7 1
The Company were to take in the above debts, by
purchase or subscription, at such rates and prices
as they could agree upon with the respective pro-
prietors; and they were empowered to raise the money
necessary for making such purchases, either by calls
upon their members, by annuities, bonds, or bills,
or by opening subscriptions for new stock. They
were to have an addition to their capital of cent. per
cent. for the redeemable debts, with interest at 5
per cent. on £11,779,660: 11: 34, being the a-
mount of such of these debts as carried 5 per cent.
and interest at 4 per cent. on £4,776,821 : 15 : 91,
being the amount of those bearing 4 per cent. interest;
also, an allowance for management on the new ca-
pital, in the same proportion as on their old one.
The addition to their capital, for the long annuities
was to be after the rate of 20 years purchase, and
122
SOUTH-SEA BUBBLE,
1
for the lottery annuities after the rate of 14 years
purchase, which additional capital was to carry 5 per
cent. interest till 24th June, 1727, from which day
the interest on the whole of their capital was to be
reduced to 4 per cent. per annum. For the liberty
of increasing their stock, by taking in and paying
off all the redeemable debts, (which they engaged to
do before the 1st March, 1721,) the Company were
to pay into the Exchequer towards discharging such
national debts as were incurred before the 25th De-
cember, 1716, £4,156,306 : 4; 11; and 4 years
purchase for the irredeemable annuities which, had
the whole been subscribed, would have amounted
to the farther sum of £3,573,367: 14: 84: they
also agreed to pay into the Exchequer, for the same
purpose, one year's purchase for such part of the long
annuities as should not be taken in by them before
the said 1st May, 1721; and undertook to circulate
for seven years, and to pay the interest at 2d. a
day per cent. upon the new exchequer-bills, to be
issued for the loan on the malt-duty for 1720; and
to furnish a proportional part of the money that
should be necessary for circulating any new bills
that might be issued within the seven years, and to
pay a proportional part of the interest to grow duę
thereon.
As the Company were likely to want more money
for carrying this scheme into execution than could
have been conveniently obtained from their mem-
bers, or by the money-subscriptions which they
opened, an act was passed, authorizing the treasury
2
SOUTH-SEA BUBBLE.
123
to cause exchequer-bills to the amount of £1,000,000
to be made out within one year from 10th May,
1720; which bills, bearing interest at 2d. a day, per
cent. were to be lent to the South-Sea Company,
upon their giving security for the principal and in-
terest at 5 per cent.* The Sinking Fund, with the
sum of £328,673 : 4: 101, advanced by the South-
Sea Company on the subscription of the lottery
annuities in 1719, were made a fund for borrowing,
at 5 per cent. the sum to be advanced by govern-
ment for its proportion of the money necessary for
circulating these new bills.
These were the chief particulars of this celebrated
scheme, by which, had it been completely executed,
the total capital of the Company would have been
£43,451,399: 6; 114; the interest received by them
from government, £2,124,901 : 14; 11½ per annum;
and the allowance for management, £34,761:2:4
per annum.
It is difficult to conceive how the South-Sea Com-
pany could expect to derive such permanent ad-
vantages from their agreement with government as
would support any considerable increase of their
dividend; yet the expectation of profit was so great
as to excite the most general, though most extrava-
gant, infatuation that was ever known in this coun-
try. The bill passed the 7th April, 1720, and, by
the beginning of June, the Company's stock sold for
* The interest to be paid by the Company was afterwards fix-
ed at 4 per cent.
124
SOUTH-SEA BUBBLE.
f
nearly £900 per cent. This great price tempted
some of the more prudent to become sellers, and
many being obliged to part with their stock to make
good their payments on the money-subscriptions,
caused a considerable depression; in addition to
which, the king having, on the 11th of this month,
declared his intention of visiting Hanover, many of
the nobility and others, who were to attend him,
began to sell out, which reduced the price, by the
14th, to £710, and afterwards to £640, and from
about this price to £750 it continued till the shutting
of the Company's books, on 22d June. As no actual
transfers could be then made, and as bargains for
time are always, the subject of speculation, the gamb-
ling mania soon revived, and agreements were made,
for the opening, at the enormous price of a thousand
per cent. and upwards. The greater part of those
who took advantage of the delusion must, no doubt,
have been sensible that it could not last long, and
were willing to make sure of the profit which this
price afforded. The temptation to those who had
bought in early was still stronger, so that, at the
opening, the sellers were very numerous; this lower-
ed the price, and made others think of selling out
lest it should be farther depressed, which, of course,
spread the alarm, and the price fell as rapidly, if not
more so, than it had risen, the difference being not
less than 800 per cent. in the short space of three
weeks; and, notwithstanding the endeavours that were
made to keep it up, the current price was only about
£200 per cent. at the opening of the next session
SOUTH-SEA BUBBLE,
125
1
The speech
of parliament, 8th December, 1720.
from the throne, on this occasion, expressed great
concern for the unhappy issue of this business, and
particularly recommended to the house of commons
to consider of the most effectual and speedy me-
thods to restore the national credit, and fix it upon
a lasting foundation; exhorting them to proceed
with the utmost prudence, temper, and resolution,
in the application of proper remedies. The pro-
priety of this admonition was immediately evident,
from many severe expressions that occured in the
debate relating to this part of the speech, on the
motion for an address of thanks; which, whether
they proceeded from honest indignation against the
principal managers of these iniquitous transactions,
from the resentment of those who were considerable
losers, from a desire to vindicate the honour of the
house, (since two or three of its members were par-
ticularly concerned,)-or from the invidious design of
displacing the ministry,—were equally improper on
entering upon an investigation that required a steady
adherence to justice, and a faithful discrimination
unbiassed by personal considerations.
On the 12th December, the directors of the South-
Sea Company were ordered to lay before the house
an account of their proceedings; and, as the present
calamity evidently arose principally from the great
speculations that had been carried on for time,
particularly in the late interval between the shutting
and opening of the Company's books, the house, on
the 20th, passed a resolution: "That it will very
126
SOUTH-SEA BÚBBLÉ.
86
"much contribute towards the establishing public
credit, to prevent the infamous practice of stock-
"jobbing," and a bill was ordered to be brought in
for this purpose. On the 21st, Mr. Robert Walpole
proposed a scheme for the restoration of public credit,
by engrafting nine millions of South-Sea Stock into
the capital of the Bank of England, and nine millions
more into the capital of the East-India Company;
and the committee of the house were empowered to
receive proposals for this purpose. The subject was
discussed at the Bank in a general court, held on the
29th, and by the East India Company in a general
court, on the 3d January, 1721. On the 5th January
the proposals were taken into consideration by the
house of commons; and, on the 10th, a bill was
ordered to be brought in for this purpose, which
received the royal assent on the 22d, but was only
partially carried into execution; for, instead of eigh
teen millions intended to have been transferred to the
Bank and East-India Company, only four millions
was actually transferred, which was taken by the
Bank; who, in order to make this purchase, sold
£3,389,831 new stock, at 118 per cent.
Prior to this, there had been some engagements
entered into between the Bank and South-Sea Com-
pany; for, when the price of South-Sea Stock had
continued sometime sinking, the directors, with the
view of retrieving the credit of the Company, made
advances towards an union with the East-India
Company; but, being unsuccessful, they were re-
duced to the necessity of making overtures to the
SOUTH-SEA BUBBĹÉ.
127
Bank of England.
cordingly held between a select number of the di-
rectors of the two Companies, which raised so great
an expectation of their coming to an agreement,
that, on the 12th September, in the morning, upon
a report being spread that the Bank had agreed to
undertake the circulation of six millions of South-
Sea Bonds, South-Sea Stock immediately rose to
£670 per cent. but, in the afternoon, when the report
was known to be groundless, it fell again to £580,
the next day to £570, and so gradually, till the 19th
September, to £400. On this day, a court of di-
rectors was held, to endeavour to stop the depression
of their stock, who at last agreed to desire a fresh
conference with the Bank, and to summon a general
court to meet the next day. In this conference be-
tween the directors, a memorandum was drawn up
of an agreement between the two Companies, by
which the Bank was to circulate their bonds, and to
take South-Sea Stock at a price to be agreed on, in
lieu of £3,775,000, which the South-Sea Company
were to pay them at Lady-day and Michaelmas, 1721.
The substance of this intended agreement was com-
municated to the proprietors on the following day;
and, after the articles of the contract had been dis-
cussed in a committee of the two companies, it was
confirmed and ratified by the court of directors of
each company, and signified in form to the Com-
missioners of the Treasury. It had, for a short time,
some effect in keeping up the price of South-Sea
Stock; but, as the price afterwards fell considerably,
Several conferences were ac
128
SOUTH-SEA BUBBLE.
**
the Bank declined fulfilling their engagement, dény-
ing that it had ever been executed as a legal con→
tract.!
A bill was brought in to restrain the governor, di-
rectors, and principal officers, of the South-Sea Com-
pany from quitting the kingdom for one year, from
8th Dec. 1720, and to the end of the then next ses-
sion of parliament; and to compel them to deliver
inventories of-all their real and personal estates. A
committee was also appointed to inquire into all pro-
ceedings relative to the execution of the South-Sea
Act. On the 22d January, Mr. R. Knight, the
cashier of the company, absconded; of which infor
mation was given to the house on the following day;
when General Ross, one of the members of the com-
mittee, declared, "that they had already discovered
"a train of the deepest villainy and fraud that hell
"ever
ever contrived to ruin a nation." Orders were
instantly given to take into custody several of the
directors and principal officers, and to seize their pa-
pers. Two of the members, who were directors of
the company, were immediately expelled the house,
and secured; which was the fate of two others a few
days after.
The directors of the company were certainly guilty
of a most villainous fraud in carrying on this de-
structive scheme: even those who were the least
concerned in it were highly culpable in not opposing.
such proceedings. But the directors were by no
means the only delinquents; many persons then in
the administration were deeply implicated, particu
SOUTH-SEA BUBBLE.
129
larly Mr. J. Aislabie, Chancellor of the Exchequer,
who had originally strenuously defended the South-
Sea Company's proposals, and constantly supported
the measures taken for carrying them into execution.
Although in a situation which ought to have ren-
dered him particularly attentive to the preservation
of public credit, he encouraged and supported this
fatal speculation. From the evidence of one of the
directors it appeared, that Mr. Aislabie had caused
the accounts between them to be destroyed, and had
given him a discharge for the balance, amounting to
the sum of £ 842,000! In consequence of this, on
the 8th of March, he was expelled the house, and
committed prisoner to the Tower; and, on the 10th,
Sir George Caswall, another member, was expelled,
and committed to the same place.
The deranged state of credit, and particularly of
the South-Sea Company's concerns, rendered them
unable to fulfil their agreement for the payment of
£4,156,306 4: 11, with four and a half years pur-
chase for the terminable annuities taken in, and one
year's purchase for the long-annuities not taken in:
which sums, by 6 Geo. I. c. 4. were to be paid
On the removal of Mr. Aislabie, Sir John Pratt, Chief Justice of
the King's Bench, was appointed Chancellor of the Exchequer, pro
tempore, and, on the 3d of April, Robert Walpole, Esq. afterwards
Sir Robert and Earl of Orford, was made First Lord of the Treasury,
and Chancellor and under Treasurer of the Exchequer. The Hon.
Henry Pelham was likewise made one of the Lords of the Trea-
sury.
K
130
SOUTH-SEA BUBBLE.
>
within one year, by four equal quarterly payments,
commencing 25th March, 1721. But, petitions from
the company being presented to the king and to
the house of commons, praying for relief, the time
of payment was extended to 25th December, 1722;
and, in case of default, the money was to be stopped
out of the payments to the company from the Ex-
chequer. The repayment of a million, lent to the
company, in exchequer-bills, on 7th June, 1720, was
also postponed to 7th June, 1722.
An act was likewise passed, for raising money upon
the estates of the late sub and deputy governors, di-.
rectors, cashier, deputy cashier, and accountant, of
the South-Sea Company, and of John Aislabie, Esq.
and likewise of James Craggs, Esq. late post-master-
general; the produce of which, after certain allow-
ances, was to be divided among all the members, in
proportion to their respective shares, towards making
good the loss sustained by them. The balance of
the estates of the sub and deputy governors, direc-
tors, deputy cashier, and accountant, according
to the accounts delivered upon oath to the Ba-
rons of the Exchequer, amounted in the whole to
£2,023,123: 17: 7: out of which allowances were
made to each, according to their real or supposed
guilt; amounting, in all, to £354,600 only.
As the proprietors of the public debts which had
been subscribed into the South-Sea Company's stock
contended that they were not bound by their sub-
scriptions, and were taking the necessary steps to
get the question decided by law, it was thought ne-
SOUTH-SEA BUBBLE.
131
cessary to determine the dispute by act of parliament.
By this act, (7 Geo. I. sess. ii. c. 1.) the company
were exonerated from all the payments to which they
were bound by the original agreement for increasing
their capital, for making which payments a farther
time had lately been granted; and, in lieu thereof,
two millions only of their capital was annihilated
from Midsummer, 1722, with the annuity attending
the same; and various regulations were adopted for
adjusting the shares of the proprietors, and for set-
tling the demands on such as had borrowed money
of the company on their stock or subscription re-
ceipts. In consequence of a petition from the South-
Sea Company in 1724, an act was passed for reviving
the two million stock thus annihilated; by which,
all the profit, that the public were to have derived
from this celebrated scheme, was finally relinquished.
After dividing this additional two millions among all
the proprietors, the whole of the Company's capital,
amounting to £33,802,203: 5: 64* was divided into
two equal parts of £16,901,101: 12:94 each; one
to remain as their trading stock, and the dividends
thereon subject to the profits or loss of their trade
the other to be converted into a joint stock attended
with annuities, in lieu of all dividends, at 5 per cent.
till 24th June, 1727, then to be reduced to 4 per cent.
These annuities were distinguished by the title of
* The sum stated in the act is £33,802,483: 14 :: 0}, but
an error was afterwards discovered and corrected by 3 George II.
c. 16.
K 2
132
SOUTH-SEA BUBBLE.
The joint Stock of South-Sea Annuities, but have
since been commonly called Old South-Sea Annuities.
These were the principal measures that were taken
in consequence of the failure of the South-Sea
scheme: which, instead of furnishing a considera-
ble sum to be employed in the reduction of the pub-
lic debts, increased their amount by an addition
of £3,034,769: 11: 115, (including the subscrip-
tion of the lottery-annuities in the preceding year,)
while the present annual charge was rather aug-
mented than diminished, by the allowance for manage-
ment on the increased capital. The reduction of a part
of the interest was, however, secured; and, as the
South-Sea capital was redeemable, it might be lessened
by degrees, by paying off a part with the produce of
the Sinking Fund, or a farther reduction of interest
effected at a more favourable period. But this de-
pended upon future circumstances; while, on the
other hand, had the annuities which were converted
into redeemable perpetuities remained in their origi-
nal state, there was a certainty of their expiring at a
fixed period.*
*Sir Humphrey Mackworth, in this year, published a proposal
for paying off the public debts, &c. by issuing a paper currency se-
cured on all the funds and public revenues of the kingdom, for so
much money as the public debts amount to, to pass as the current
coin in all payments whatsoever, till redeemed by the revenue, or
otherwise. A delusive project, and worthy of the year in which it
was proposed. See A Proposal for Payment of the Public Debts, &c
133
CHAPTER VI.
The History of the National Debt, from the South-
Sea Bubble to the Commencement of the War in
1739.
FROM the great depression of public credit, oc-
casioned by the failure of the South-Sea scheme, go-
vernment was under the necessity of allowing 6 per
cent. interest for the usual loan of £1,410,000 on
the land-tax of 1721, at the rate of three shillings
in the pound; though, for some years past, the loan
had been obtained at 5 per cent. To procure the
similar advance on the malt-tax, a lottery was adopt-
ed, of 70,000 tickets, at £10 each, with an addition
of 5 per cent. or £ 35,000 on the whole: if the tax
did not produce £735,000, of which there was
little probability, the deficiency was to be made
good out of the next aids granted after 29th
September 1722; and the whole carried interest at
4 per cent. from 24th June, 1722, till paid off,
Besides these customary loans, there was another of
£ 500,000 for the discharge of civil-list debts.. The
two Assurance Companies, established pursuant to an
act of the last session, were to have paid together
£600,000, of which only £222,500 had actually
been advanced on the 11th July, 1721, when his
134
NATIONAL DEBT
Majesty's message was brought to the house, inform-
ing them, that, if this provision had not proved in a
great degree ineffectual, he should not have been
under the necessity of applying again to parliament
on this occasion: but, being resolved to cause a re-
trenchment to be made in his civil-list expenses for
the future, and finding this could not well be ef-
fected without discharging the arrears, (which
at the preceding Lady-day amounted to upwards of
£550,000,) he requested to be empowered to raise
money upon the civil-list revenue. * An act was ac-
cordingly passed, authorising his Majesty to borrow
£500,000, at 5 per cent. interest, payable quarterly,
from 24th June, 1721, which was charged upon a de-
duction of sixpence in the pound out of all salaries,
wages, pensions, or other payments from the crown;
and the annuities made transferable at the Bank.
By a clause of this act, the two Assurance Companies,
after payment of £77,500, were discharged from
paying the farther sum of £300,000 then remaining
due. By this act, £191,028: 16 6 was granted,
out of the produce of the Sinking Fund, for making
good a deficiency due to the East-India Company, at
Michaelmas, 1719; which certainly could not be
deemed a national debt, "incurred before the 25th
December, 1716," and, therefore, did not come with-
in the original appropriation of the Sinking Fund.
:
*It is evident, that if, as the message says, the payment of the
whole sum agreed to be advanced by the companies would have
precluded the necessity of applying to parliament, there could be no
occasion to grant £500,000 to make good a deficiency of £300,000.
FROM 1720 тo 1739.
135
There were, also, some smaller infringements on the
fund, viz. £2700 paid to the commissioners ap-
pointed to take in subscriptions to the South-Sea
Company; and £ 89 : 19 : 44 returned to one of the
receivers of taxes for an over-payment on the land-
tax for 1716, (which ought to have been repaid out
of the land-tax for the current year,) and £12,480
91 for principal and interest remaining due of the
loan on the hop-duty. The other deficiencies provi-
ded for in this session were, on the malt-tax for 1719,
£153,805 : 14: 2, with interest; and £82,793
19: 107 for the deficiency of the General Fund for
1720.
1721.-In the session, which began 19th October,
£125,000 was voted for a deficiency in the malt-tax
for 1720, and made payable out of the land-tax for the
ensuing year; and £111,532: 13 : 9 for the defici-
ency of the General Fund at Michaelmas, 1721. The
Land-tax for 1722 was reduced to 2s. in the pound,
and the interest on the anticipation, both of the land
and malt, was now fixed again at the usual rate of
5 per cent.
As the navy-debt had accumulated to the
large sum of £1,700,000, (in consequence of
which navy and victualling bills were at a high dis-
count) its reduction was recommended to the house
of commons at the opening of the session: accord-
ingly, on the 1st of Nov. £1,000,000 was granted to-
wards discharging the debt of the navy,* as it stood
* The navy-debt, 24th Dec. 1716, was £709,096 : 19: 81, so
that granting now a million for payment of navy-debt, which, in fact,
136
NATIONAL DEBT
on the 30th Sept. 1721; and the means taken for
raising this sum were as follows: the exchequer-bills
then current amounted to £1,919,912: 10: 0, con-
sisting of £ 896,662 ; 10 : 0 issued in lieu of old bills,
pursuant to the malt-act for 1720; £23,250 for in-
terest on the old bills converted into principal; and
£1,000,000 lent to the South-Sea Company. These
bills, at least the last sum, could by no means be
considered as debts contracted before the 25th of De-
cember, 1716; it was, however, found expedient to
pay off a million of them out of the income of the
Sinking Fund; and, in lieu of the bills to be thus
cancelled, by 25th March, 1722, the Treasury were
empowered to raise £1,000,000 upon new exchequer-
bills, bearing the same interest of 2d. per cent. per
diem, which were to be placed as cash in the hands-
of the tellers of the Exchequer, for the service of the
ensuing year; and, as the South-Sea Company were
unable to fulfil the agreement they had entered into,
respecting the circulation of exchequer-bills, or to
repay the million lent them in these securities, they
were released from the former, and the time for re-
payment of the latter was farther extended to the
7th of June, 1723.* The Treasury were also em-
powered to contract for the circulation of the remain-
der of the bills and the new ones to be issued, with
any persons who would undertake the same at a rate
not exceeding 3 per cent. per ann. while the amount
was taken from the Sinking Fund, was the same as if £ 290,903
0: 31 had been taken from it towards the current services.
* See page 130.
FROM 1720 TO 1739.
137
of the bills outstanding exceeded one million, and
at 1 per cent. per annum, after they should be re-
duced to a million, or under. The circulation was
undertaken by the Bank, upon these terms, from
24th July, 1722. The Sinking Fund, with the mil-
lion due from the South-Sea Company, were charged
with the principal and interest, and the allowance
for circulation of all these bills. By the act passed
for the above purposes, it is also recited, that the
civil-list revenues for the year, ending at Mich. 1720,
produced a surplus of £102,682 7: 11 beyond
the sum of £700,000 per annum; which surplus
was to be replaced out of the £500,000 which his
Majesty had been empowered to borrow in the last
session. Provision was also made for paying off, or
rather funding, the debentures formerly issued for
the relief of the sufferers in the islands of Nevis and
St. Christophers, the interest on which had been
very irregularly paid, and was at this time seven
years in arrear: this arrear of interest, amounting to
£41,731 : 19: 14, was added to the principal of
£99,361: 16:0, forming together a capital of
£141,093; 15: 14, bearing 3 per cent interest, from
25th Dec. 1721, which was charged upon the Gene-
ral Fund.
1722 -In the next session, which began the 9th
of October, the land-tax was continued at 2s. in the
pound, with power to raise a million thereon, at
3 per cent. interest, either by loan or on exchequer-
bills; £18,243 1: 2 then in the Exchequer, of ar-
}
1
胄
​3
138
NATIONAL DEBT
rears of former land-taxes, was also appropriated to-
wards the supplies for 1723.
For obtaining the usual loan on the malt-duty, a
lottery of £10 a ticket was again thought necessary,
by which an expense of £9,700 was incurred for
rewards and charges attending the lottery, and which
ought to be considered as an addition to the rate of
interest paid for money borrowed in this manner:
£977: 4:0 of the malt-duty of 1721 was also ap-
propriated towards the supplies. The other defici-
encies made good in this session were,
£. S. a.
Deficiency of the Gencial Fund, at Mich. 1722, 84,252 4 61
Deficiency of grants for 1722
65,422 15 91%
•
In addition to the land and malt taxes, an act was
passed for laying a tax upon papists and nonjurors,
by raising £100,000 upon the real and personal
estates of such persons, over and above the double
land-tax, and all other taxes paid by them. The oc-
casion of this partial tax (as unjust in principle as the
old exactions from the Jews) was the discovery of a
plot in favour of the Pretender, in which, without
proof, the catholics were supposed to be particularly
concerned. To give it the appearance of lenity,
it was granted in lieu of the rents and profits of
two-thirds of their registered estates for one year,
which had been subjected to forfeiture in the reign of
Queen Elizabeth, by a law that probably was never
intended to be carried into execution. The intention
of proposing a tax of this kind was first mentioned
FROM 1720 TO 1739.
139
by Mr. Walpole, the Chancellor of the Exchequer,
in a committee of ways and means, on the 31st of
October, and the resolution for that purpose was
agreed to by the house on 26th of November; but,
as the tax met with much opposition, the act was
not passed till the 27th of May, 1723. The sums
assessed by the act upon the different counties and
principal cities amounted only to £95,989: 19: 9,
without deducting the allowance for collection; yet
the Treasury were empowered to borrow upon credit
of the tax the full sum of £100,000, at 3 per cent.
either by loan or on exchequer-bills.
*
As the million due from the South-Sea Company
was payable on or before the 7th of June, this sum
was appropriated for paying off the million in exche-
quer-bills issued in 1722, which were thus cancelled.
It has appeared, that, of the debts intended to have
been taken in by the South-Sea Company, the whole
were not subscribed; and, as notice had been given
for paying off £1,204,786 3: 44 remaining unsub-
scribed† of the 5 per cent. lottery-annuities, it was
now effected by issuing the sum of £ 204,786 : 3:42
from the Sinking Fund, and raising one million on
exchequer-bills, bearing interest at 2d. a day per cent.
which bills were to be paid off out of the growing pro-
duce of the Sinking Fund; and notice was given, that
* £ 5,726 : 16 : 3 was issued out of the produce of the Sinking
Fund for interest and circulation of the exchequer-bills on this tax,
but was afterwards replaced to the fund.
+ The South-Sea Company's capital was irredeemable till Mid-
summer, 1727.
140
NATIONAL DEBT
}
£235,297 : 18 : 4, remaining unsubscribed of the
5 per cent. annuities, created in 1715, (by 1 Geo. I.
sess. ii. c. 19 & 21.) would be paid off at Lady-day,
1724; though it was evident, that, if the whole in-
come of the fund was applied to this purpose, they
could not be cancelled in less time than about a year
and a half.
1724.-The king's speech, on opening the next ses-
sion, 9th January, after congratulations on the flourish-
ing state of the nation, contained the following passage:
"I must, in a particular manner, recommend to
your care the public debts of the kingdom, as the
"most national concern you can possibly take into
your consideration. I am persuaded it must be a
66
<<
66
very great satisfaction to all my faithful subjects
"to see the Sinking Fund improved and augmented,
"and the debt of the nation thereby put into a me-
"thod of being so much the sooner gradually redu-
"ced and paid off. It would be a work truly worthy
"of a British parliament to begin this commend-
"able undertaking, and to make such a progress
"therein as, with a strict regard to public faith and
66
private property, may pave the way to this great
"and desirable end." The commons in their address
expressed great satisfaction at this part of his Ma-
jesty's speech, and promised to use their utmost en-
deavours to improve and augment the Sinking Fund,
and thereby put the National Debt into a method of
being gradually reduced and paid.
The land-tax was continued at 2s. in the pound;
and £11,420: 1:5, then in the Exchequer, of ar-
rears of former land-taxes, was appropriated towards
FROM 1720 TO 1739.
141
the supplies. The loan on the malt-duty was again
procured by a lottery, attended with an expense of
£10,200; though, as the interest of the loan on
the land-tax was only 3 per cent. the farther sum of
700,000 might probably have been obtained at nearly
the same rate, without having recourse to this per-
nicious expedient. The deficiencies made good were,
1
Deficiency of the grants for 1723. . .
Ditto
Ditto
£ S. d.
57,331 11 83
of the General Fund, at Mich. 1723.. 62,634 9 93
of malt-duty, 1722, at Lady-day, 1724 50,004 11 73
It will be recollected, that the amount of the Ge-
neral Fund was fixed at £724,849 : 6 : 10%, and that
the annual charge upon it was considerably under
this sum; consequently, although there had been a
vote every session for making up what it fell short of
the fixed sum; there was an actual surplus, which
appeared to be increasing: the surplus of the Aggre-
gate Fund had, also, considerably increased; and,
therefore, although the surplus of the South-Sea Fund
had been more uncertain, the income of the Sinking
Fund was much augmented. An act was accord-
ingly passed, for appropriating part of the produce
of this fund for paying off the following 5 per cent.
annuities remaining unsubscribed into the capital
stock of the South-Sea Company, viz.
Remaining of £910,000, raised by 1 Geo. I.
sess. ii. c. 19.
Remaining of £169,000, raised by 1 Geo. I.
sess. ii. c. 21.
Remaining of £110,312 : 17: 44, raised by
5 Geo. I. a, 1.
£. s. d.
203,824 5 0
31,473 13 4
2,510 0 0
142
NATIONAL DEBT
Also, £95,640 for discharging the principal, payable
in course on the standing orders for blank lottery
tickets of 1714, with the interest due thereon, at
5 per cent. to Lady-day, 1724. By a clause of this
act, £15,144: 19 was directed to be paid, out of the
Sinking Fund, to the tellers of the Exchequer, to
make good the loss upon 605,798 guineas, remaining
in their offices upon the reduction thereof from
£116 to £1 : 1 each, pursuant to an act of this
session; which was evidently a payment that had no
connection with the original appropriation of the
fund.
As the same tranquil and favourable situation of
affairs continued, when the parliament met on the
12th November, 1724, the land-tax was continued
at 2s. in the pound, with a clause for appropriating
£13,0107:22 remaining in the exchequer of
arrears of land-taxes payable in or before the year
1721, towards the supply for 1725; and a deficiency
of £240,000 on the land-tax for 1722 was trans-
ferred to this register. The estimate of the malt-
duty for 1725 was increased to £750,000, being the
sum at which it has been usually taken since. The
deficiencies provided for were as follows; viz.
For principal and interest of unsatisfied certifi-
cates on malt-lottery, 1723.
Ditto land-tax 1720, at Michaelmas, 1725
Deficiency of the General Fund
Deficiency of grants, for 1724
•
£. S. d.
210,401 10 6
60,501 13 6
57,953 5 93
37,931 9 10
No farther progress could be made at this time in
the redemption of the public debts by means of the
FROM 1720 TO 1739.
143
Sinking Fund, as the income thereof was already
appropriated towards cancelling the million in ex-
chequer-bills, issued in 1723, and for paying the
charges attending the same; a measure of consider-
able importance was however accomplished by an
igreement with the Bank for reducing the interest
ifter Midsummer, 1727, from 5 to 4 per cent. on
the sums of £1,775,027 : 17: 10 and £2,000,000
lue to them for cancelling exchequer-bills: the prin-
ipal to be redeemable at any period upon payment
of not less than £500,000 at a time,*
While the administration appeared to be seriously
engaged in pursuing proper measures for paying off
he public debts, some persons began to entertain a
loubt whether these measures would not be attended
with disadvantages, by lessening the circulation of
noney; and that, if any considerable progress was
nade, it would affect the consumption of commodi-
ies so much as to render it impossible to raise the
ame revenue: they should, however, have remem-
›ered, that in such a case there would not have been
ccasion for so great a revenue.
Erasmus Philips,
he author of The State of the Nation, in respect
o her Commerce, Debts, and Money, published in
1725, conceived it probable that, if 20 millions of
he debt were paid off, the difficulty of employing
noney would become so great, that half of it
vould be found useless and be hoarded up!!
* This agreement was a saving to government of £37,750 : 5: 6§
er annum.
144
NATIONAL DEBT
On the 8th April, a message from the king was
delivered to the house of commons, informing them
that the necessities of his majesty's government had
rendered it impracticable for him to make any con-
siderable retrenchments in the civil-list, and had
engaged him in some extraordinary expenses. For
discharging the debts thus contracted, he hoped to be
empowered to raise a sufficient sum upon the credit
of the funds lately settled for the payment of the
civil-list annuities. As provision had been made
for the civil-list debts in 1721, the account laid be-
fore the house upon this occasion excited some sur-
prise; the amount of the debts at Michaelmas, 1724,
being no less than £508,367 19 4; however,
after some debate, a bill was brought in and passed
for authorising his majesty to raise £1,000,000,
either by exchequer-bills, bearing interest at 2d. per
cent. per diem, or by loan at 3 per cent. per annum:
and one half of the sum so raised was appropriated
for redeeming the annuities of £25,000 per annum,
charged upon the civil-list revenues by an act of the
year 1721; the other part to be applied towards dis-
charging the debts and arrears due from his majesty
to his servants and others: the sum was accordingly
raised by issuing new exchequer-bills.
1726.-Considerable changes took place in the
political state of Europe previous to the next meeting
of parliament, 20th January; and, as the king's speech
appeared full of much apprehension, the public funds.
experienced a considerable depression. The land-
tax was, however, continued at 2s. in the pound;
FROM 1720 TO 1739.
145
and the anticipation of this, and the malt-duty, was
to be obtained either by loan at 3 per cent. or by
exchequer-bills bearing 2d. per cent. per diem.
deficiencies made good were as follows:-
The
Deficiency of grants for 1725.
£.
S. d.
158,389 2 8
44,621 2 4
Deficiency of the tax on papists granted in 1723
Deficiency of the General Fund
60,235 8 8
:
VL
The sum of £66,100 was also paid for principal and
interest unsatisfied of the loan on the Land-tax 1724,
at Michaelmas 1726; and £164,443 2:2 for
principal and interest of unsatisfied certificates of the
malt-lottery 1724, at 5th May, 1726. In order to
cancel the exchequer-bills issued for the civil-list
debts, pursuant to an act of the last session, an act
was now passed for raising £1,000,000 at 3 per
cent. per annum from 24th June, 1726, by way of
lottery of 100,000 tickets at £10 a ticket; and the
power of making the deduction of 6d. in the pound
upon all salaries, fees, wages, pensions, annuities,
and other payments from the civil-list, was continued
to his majesty, his heirs and successors; out of which,
£30,000 per annum was appropriated as a fund for
payment of the interest on this loan, and the sur-
plus, if any, to be at the disposal of parliament. By
this lottery a charge was incurred of £12,000 for
rewards and services attending the same, and prompt
payment of contributions; besides a loss of £7657 : 10
* This was the sum voted, but the deficiency was satisfied with
£38,900.
L
»
>
146
NATIONAL DEBT
1
on drawing the chances, from a considerable number
of the tickets remaining undisposed of; provision for
which was made in the next session,
Early in the session, a motion was made by Mr.
W. Pulteney, who was then in opposition, for a
committee to be appointed to state the public debts,
as they stood on 25th December, 1714, (being the
year of the king's accession,) and to shew what debts
had been incurred since that time to 25th Decem-
ber, 1725,-how much of the same had been provi-
ded for, and how much remained unprovided for by
parliament.* This motion was lost, being opposed
by the minister and his friends, upon the ground of
being unseasonable and likely to have a dangerous
effect upon public credit; their principal objection to
it, though not avowed, most probably arose from
perceiving that a loan would be necessary towards
the supplies, in addition to the lottery-loan; which
might not have been so easily obtained, if any con-
*The general suspicion that began to prevail of the inercase of the
public debts since the establishment of the Sinking Fund; and of
the inadequacy of that provision to the end for which it was designed;
occasioned the publication of an excellent Essay on the Public
Debts, which has been generally ascribed to Sir Nathaniel Gould.
In this essay it was shown, that, although there was an appearance
of increase, from the South-Sca subscription, and from several ar-
ticles being brought to account which were actually due before 25th
December, 1716, yet the debt had in reality been diminished; and
that, with the great addition that would be made to the Sinking Fund
from the reduction of interest in 1727, it would, if not diverted to
any other purpose, discharge all the debt then existing in about 56
years; or, with a farther reduction of interest, in a shorter period.
FROM 1720 TO 1739.
147
clusions had been drawn from such an inquiry, un-
favourable to the measures that had been taken for
the reduction of the debt.
As a fund on which to borrow the sum required
for the public service, a new tax was imposed; being
a duty, by way of licence, upon all victuallers within
the bills of mortality; upon which £500,000 was
to be raised by issuing exchequer-bills, bearing in-
terest at 2d. per cent. per diem, payable every three
months. The surplus of the duty, if any, was to be
applied towards discharging the principal of the bills;
but if instead of a surplus there should be a defi-
ciency, by the tax falling short of the annual interest,
this deficiency was to be made good out of the
Sinking Fund, and to be replaced from the next aids
granted by parliament.
•
We have before had occasion to notice that vague
and dangerous mode of granting the public money
called a vote of credit, which was again adopted in
this session, in consequence of a message from his
majesty, delivered to the house of commons on the
24th March. The motion for this purpose was op-
posed, and it was observed, that no account had yet
been obtained of the sum expended on a similar vote
in 1717: the ministry however had a considerable
majority, and an unlimited vote was passed; on
which there was taken out of the annual supplies the
sum of £175,000, over and above £75,000, on ac-
count of the treaty with the Landgrave of Hesse
Cassel,
!
L 2
148
NATIONAL DEBT
1727. The next session was opened on the 17th
January, with a long speech from the throne, noticing
the engagements entered into between the Empe-
ror of Germany and the King of Spain,-their com-
bination to support the cause of the pretender,—the
infraction of our treaties of commerce,-the revival
of the King of Spain's claim to Gibraltar and Port
Mahon, and the memorial left by the Spanish mi-
nister on being recalled from London, (considered as
little short of a declaration of war) which circum-
stances evidently threatened the nation with hosti-
lities, and consequently with their usual attendant,
an increase of the national burthens. The following
passage of the king's speech, however, deserves par-
ticular notice :-" Let all that wish well to the peace
"and quiet of my government have the satisfaction
"to see that our present necessities shall make no
"interruption in the progress of that desirable work
"of gradually discharging the National Debt: I
hope, therefore, you will make a provision for the
"immediate application of the produce of the Sink-
ing Fund to the uses for which it was so wisely
contrived, and to which it stands now appropri-
"ated." The usual nature of an address of thanks
renders it unnecessary to say, that the commons
agreed to consider the subject thus recommended
to their attention: the act passed in consequence
thereof we shall presently explain. As the nc-
cessity of increasing the forces required an aug-
mentation of the ways and means, Sir R. Walpole
(6
(6
FROM 1720 TO 1739.
149
proposed raising the land-tax to 4s. in the pound ;*
which was opposed by some of the opposition, who
alleged that it was more eligible to apply the pro-
duce of the Sinking Fund towards the present ne-
cessities; but, after some debate, the motion was
carried, and the bill was afterwards passed, with the
usual clause of credit for borrowing £2,000,000
thereon, at 3 per cent. The loan on the malt-duty
was likewise at 3 per cent. and in this act an ex-
traordinary clause was introduced, empowering his
Majesty to apply "such sums of money as shall be
"necessary for answering and defraying such ex-
penses and engagements as have at any time been,
or shall before or until the 25th Dec, 1727, be, made
(C
(6
[C
(C
1
by his Majesty, in concerting such measures as he,
"in his great wisdom, thinks will best conduce to
"the security of the trade and navigation of this
kingdom, and to the preserving and restoring the
peace of Europe." The proposal for introducing
this unlimited clause justly experienced much op-
position; which, however, proved ineffectual, and it
was carried by a considerable majority.†
* The land-tax had for five years past been at 2s. in the pound,
and produced into the Exchequer the following sums :-
1722.
1723
1724.
£.
s. d.
.. 991,729 4 11
113
992,187 14 9
1725
1726.
990,354 2102
985,787 7 7
964,181 3 31
† £250,000 was taken for these services, besides £50,000 more
for the King of Sweden, upon his accession to the treaty of Hanover.
150
NATIONAL DEBT
An attempt was made to obtain a particular ac-
count of the distribution of £125,000, issued on the
vote of credit in the preceding year: but though
ministers, for the sake of appearances, agreed to an
address for this purpose, it was not thought proper
to permit such an account to be laid before the
house.
The deficiencies made good were,
For deficiency of grants for the year 1726
Ditto of the General Fund.
£. s. d.
160,306 17 51
54,196 7 94
The sum of £76,642 7 11 was also paid for
principal and interest remaining due of the loan on
the land-tax 1725, at Michaelmas, 1727; and
£172,871: 5:2 on the malt-duty 1725, at 29th
April, 1727.
The act for directing the application of the pro-
duce of the Sinking Fund is 13 George I. c. 3. by
which the following sums were ordered to be paid
off :-
Remaining unsubscribed into the capital of the
South-Sca Company, of £947,514 7: 8 for
tallies of salt, charged on the General Fund,
pursuant to 3 George I. c. 7.
Remaining unsubscribed into the capital of the
South-Sea Company, of £1,603,987 : 8:13
for army debentures, made out to 21st March,
1719, and charged on the General Fund, pur-
suant to 3 George I. c. 7. . . .
Remaining unsubscribed into the capital of the
South-Sea Company of £5,000,000 raised by
the first lottery of the year 1719, and charged
upon the Aggregate Fund
£.
s. d.
198,958 8 3
393,191 14 5
58,300 o o
FROM 1720 TO 1739.
151
These three sums with £548,939: 12:6 in
army debentures, (certified since the 21st March
1719, pursuant to several acts for stating the
debts of the army,) amounted together to
£1,199,392 : 15: 2, bearing 4 per cent. interest;
and, for paying off this sum, the Treasury were em-
powered, if they thought proper, to employ the pro-
duce of the Sinking Fund, previous to paying off
the exchequer-bills then charged' upon it. £295,050
2:7 was however issued out of the Sinking Fund
for cancelling the remainder of the old exchequer-
bills; also £5000 for cancelling the remainder of
the million, in exchequer-bills, issued in 1723;* be-
sides £10,882: 16:7 to the Bank, for circulating ex-
chequer-bills to 24th July, 1727; and £72,559 14
for paying off Nevis and St. Christopher's debentures
to such proprietors as should not accept the 3 per
cent. annuities established by the lottery-act of the last
session; which, not having been all subscribed for,†
were now offered in lieu of these debentures. The sum
of £10,725 : 5; 34 remaining in the Exchequer un-
*See page 139.
+The whole of the lottery had been subscribed for; but, the tickets
soon getting to a discount, several persons refused to take them, so
that government was obliged to stand the chance of drawing; on
which there was a loss of £7657: 10, The sum that remained in
tickets in the Exchequer at the time of drawing the lottery was
£103,272 10, and, as this could not regularly be taken from the
Sinking Fund, it was done in an indirect manner, by taking the
money for the debentures exchanged for civil-list annuities; the
debentures being debts incurred before 25th December, 1716. The
sum exchanged by Christmas, 1727, was £72,559 14.
152
NATIONAL DEBT
claimed on the Banker's debt, to 29th September
1717, was in this year carried to the Sinking Fund;
as was likewise one hundred and twenty pounds receiv-
ed by the Chancellor of the Exchequer from a person
unknown, towards discharging the public debts.
In this session, the sum of £370,000 was borrowed
at 4 per cent. payable quarterly, upon the surplus
of the duties on coals and culm; and, if the surplus
proved insufficient, the deficiency was to be made
good out of the next supplies granted in parliament,
or out of the Sinking Fund: this loan, or anticipation,
was opposed in the house of commons, upon the
ground that the surplusses upon which it was to be
charged ought to be applied towards augmenting the
Sinking Fund; but, whatever might have been in-
tended, it is certain that they had never been re-
gularly appropriated to this purpose.
An instance of great neglect in the management
of the public revenue appeared in consequence of a
petition from the commissioners for licensing hawkers,
&c. praying for leave to bring in a bill to enable them
to compound for a debt occasioned by the default of
their cashier, who had absconded: which being re-
ferred to a committee, it appeared that £1500 only
had been paid into the Exchequer upon these duties,
from Midsummer, 1719, to Midsummer, 1723, al-
though the commissioners were bound by the act to
pay the produce of the duties into the Exchequer
weekly; and that, in consequence of the neglect of
the late commissioners, there was a deficiency of
£42,693 : 13 : 5, of which £6000 was recovered
from the securities of the cashier. The petition was
1
1
FROM 1720 тo 1739.
153
}
rejected, but it does not appear that the commis-
sioners ever incurred any kind of punishment for their
gross neglect and mismanagement: so that, instead
of making an example to deter other public officers
from neglecting their duty, it encouraged similar
depredations on the revenue, by shewing that it
might be done with impunity.
As the king died on the 11th June, 1727, it may be
proper to give an account of the amount of the National
Debt at the end of that year: not that this circumstance
produced any considerable change of measures, but
on account of a current opinion of the inefficacy of
the Sinking Fund, and of the increase of the National
Debt, which soon after became a subject of parlia-
mentary inquiry. It may also be necessary to ob-
serve, that, at Midsummer in this year, the interest
on the principal part of the debt became reduced to
4 per cent. according to former agreements, and
many persons were of opinion that a farther reduction
would be an advantageous measure.
154
NATIONAL DEBT
Amount of the National Debt, at Christmas, 1727.
1
Principal.
Interest.
£. S. d.
£. S. d.
Annuities for long terms, remainder of original sum
1,837,533 0 9
131,458 12 8
Annuities for lives, with benefit of survivorship, original sum
108,100 0 0
7,567 0 0
Annuities for two and three lives
149,384 11 4
17,527 8 9
9 per cent. annuities, 1710, unsubscribed
161,108 6 s
Lottery annuities, 1710
109,282 4 5/1/2
4 per cent. annuities for army-debentures
218,165 16 43
14,499 15 0
9,836 2 0
8,726 12 71
Ditto on the plate act (6 Geo. I. c. 12.)
312,000 0 0
12,480 0 0
3
per cent. annuities for Nevis and St. Christopher's debentures
Loans on the coal-duties, at 4 per cent. per annum, 1719
68,534 1 11
2,056 0 5
90,000 ◊ ◊
0
3,600 0 0
Exchequer-bills on victualler's act, 1726
486,600 0 0
14,598 0
Exchequer-bills on the surplus of the coal duty, 1727
338,800 0 0
10,164 0 0
Exchequer-bills made out for interest on old bills
2,200 0 0
East-India Company's capital, at 5 per cent.
3,200,000 0 0
160,000 @ @
€
FROM 1720 TO 1759.
155
Bank original fund, at 6 per cent..
Ditto for cancelling exchequer-bills, at 4 per cent.
1,600,000 0 0
96,000 ◊ ◊
1,775,027 17 10
71,001 2 3
Ditto for cancelling exchequer-bills, 1717, at 4 per cent..
2,000,000 0 0
80,000 0 o
Ditto purchased of the South-Sea Company
·
4,000,000 0 0
160,000 0 0
33,802,203 5 6
1,352,088
2 71
810,063 15 0
671,788 2 7
South-Sea stock and annuities, at 4 per cent.
Navy debt for Stores, &c.
Ditto for seamen's wages, &c.
Victualling debt
Debt of sick and hurt office
3 per cent. annuities, 1726, charged on the civil-list deductions
573,722 1 9
16,642 13 11
1,000,000 0 0
30,000 0 0
£53,331,155 17 5 2,181,602 16 42
136
NATIONAL DEBT
Besides the above annual interest, £5898: 3:5£
per annum was payable to the Bank for charges of
management; and £19,499 : 6:0½ to the South-Sea
Company on the same account.
The reduction of the interest, from 5 to 4 per cent.
on £ 29,963,119 17 : 0, being the part of South-Sea
stock and annuities, which carried 5 per cent. and on
£7,775,027 : 17: 10, due to the Bank, produced
an abatement of £377,381 : 9:6 in the annual
charge of the above debt, which formed an impor-
tant addition to the Sinking Fund, from Midsum-
mer, 1727; at that time the surplusses of the three
funds, composing the Sinking Fund, amounted to
£922,003 : 1:9; or, including some incidental re-
ceipts, to £939,103 : 7 : 5.
Upon the accession of George II. the ministry took
the most effectual method of ingratiating themselves
with their new sovereign, by procuring a very consi-
derable addition to his revenue. The parliament had
given to George I. a clear revenue of £700,000 per
annum, which considerably exceeded that of his pre-
decessor; yet we have seen, that he was under the
necessity of applying twice to parliament to enable
him to discharge civil-list debts, besides receiving the
sum of £ 300,000, for this purpose, from the Assu-
rance-companies, and obtaining several considerable
sums for foreign secret service: he also left conside-
rable arrears at the time of his decease. In order
to prevent the disagreeable necessity of similar
applications in future, and to provide more effec-
tually for the support of the royal dignity, which
FROM 1720 TO 1739.
157
was now thought to require a greater expense, Sir
Robert Walpole, on the 3d of July, 1727, moved that
the entire revenues of the civil-list, which produced
about £100,000 per annum above the yearly sum of
£700,000, might be settled on his Majesty during
his life. The surplus of these revenues, beyond the
specific yearly sum, had been appropriated to the
Sinking Fund; and, on this occasion, Mr Shippen,
w.ho very ably opposed the motion, reminded Sir Ro-
bert Walpole of his inconsistency in proposing an in-
novation on the fund, for the establishment of which
he had taken so much credit to himself. The act
was, however, passed, by which the whole of the
civil-list revenues were granted to his Majesty for
life, with a provision, that, if in any year they should
fall short of the sum of £800,000, the deficiency
should be made good out of the next aids granted in
parliament. By another act, the king was empow-
ered to settle an annuity of £100,000 on the queen,
in case she should survive him, to be charged upon
the civil-list revenues, with the collateral security of
*
* Net produce of the civil-list revenues, being the average of
four years, ending at Michaelmas, 1726.
Hereditary and temporary excise, exclusive of
all appropriations . .
New subsidy of tunnage and poundage
Letter-money, exclusive of £700 per week.
Fines, seizures, and other small branches
From the Aggregate Fund
ざ
​d.
286,518 5 11
302,297 15 1
38,970 9 44
55,892
120,000 0 0
£ 803,678 14 9
}
158
NATIONAL DEBT
1
the Aggregate Fund; which was another indirect in
fringement on the Sinking Fund, to which the surplus
of the Aggregate Fund belonged.
1728. In the session, which was opened the 27th
of January, the following deficiencies were provided
for, viz.
Deficiency of grants for the year 1727
Ditto of General Fund for the year, end-
ing Michaelmas, 1727.
£ S. d.
279,360 1 18
33,611 5 4
Ditto
of malt-duty, 1726
•
Ditto,
of land-tax, 1726
138,708 2 8
86,153 2 14
To pay off the principal remaining of the sums bor-
rowed in 1719 on the coal-duties, £90,000* was
granted; and £103, 140 to pay so much of the
£360,000 granted for building churches, by 5 Geo. I.
c. 9. as had not been raised by loans in pursuance
thereof. These sums were to be paid out of the loan
from the Bank, that the coal-duties might be charged
with the interest of the money to be advanced by
them. † £338,800 was also granted to discharge and
cancel the exchequer-bills issued in 1727 upon the
surplus of the coal-duties; and £434,605 to re-
paid.
This was the sum granted, but only £85,520 was actually
The surplus of this duty was generally thought to have been
appropriated to the Sinking Fund, but had lately been charged
with the payment of a loan, (page 152.) This sum was now re-
deemed, in order that the produce of the duty might be charged with
a larger loan.
As the capital of the company was not redeemable in less sums
than £ 500,000 at a time, £ 65,395 was, issued out of the Sinking
Fund to make up the sum stipulated.
1{
FROM 1720 TO 1739.
159
deem the annuity of £17,384: 40, payable to the
South-Sea Company, on the like sum subscribed into
their capital, being part of £500,000 raised for the
service of 1719,by lottery, pursuant to the beforemen-
tioned act, 5 Geo. I. c. 9. The sum of £500,000 was
likewise granted towards paying off such part of the
navy-debt as was due under the head of seamen's wa-
ges, which, by the account laid before the house, a-
mounted on 31st Dec. 1727, to £671,788:2: 7; or, de-
ducting the sum in the treasurer's hands on that account,
to £570,889 : 12:34. This sum of £500,000 was
raised by exchequer-bills bearing interest at 2d. per
cent. per diem, and was charged upon the first aids
granted by parliament after Michaelmas, 1728.*
The sum which the Bank agreed to advance was
£1,750,000, at 4 per cent. and they were to be re-
paid (out of the produce of the Sinking Fund)
£1,000,000, being part of £1,775,027 : 17 : 101,
due to them for cancelling exchequer-bills. This
sum carried 4 per cent. interest, as did likewise the
£500,000 repaid the South-Sea Company: the
£338,800 in exchequer-bills, on the surplus of the
coal-duties, carried only 3 per cent. so that this loan
from the Bank could not be intended to effect any
saving of interest; but it might be necessary to pre-
serve the appearance of paying off the National
Debt, or in order to prepare for a more direct appro-
* It would have been a considerable saving if money had been
raised at the same rate for discharging the other parts of the navy-
debt, as navy-bills at this time carried 5 per cent. interest.
160
NATIONAL DEBT
priation of the produce of the Sinking Fund towards
the supplies. The efficacy of the fund was at this
time much doubted; for, though no one could deny
that it was wisely contrived, and that, if the original
intention was steadily adhered to, its power would
be continually increasing and become capable of dis-
charging any debt which it was then thought possi-
ble the country could bear, yet, while it was fre-
quently found necessary to borrow money in time of
peace towards the supplies, it was natural to apprc-
hend that the debts would increase rapidly in time
of war.
As it had appeared, upon the face of the
accounts laid before parliament, that the National
Debt was at this time greater than at the time of
the establishment of the Sinking Fund, it afforded
too just grounds for censuring ministers to be neg-
lected by the party then in opposition.* After se-
* In the debate upon the proposal for the loan of £1,750,000,
Sir R. Walpole, who proposed it, took occasion to complain of a
false representation of the public debts, which he said had been in-
dustriously propagated through the kingdom, in order to make the
people believe that they were greatly increased, instead of being
lessencd, since the year 1716; whereas he could prove, that there
had been about four millions more paid off than contracted. Mr.
William Pulteney declared his surprise at this assertion, since, in all
the ways in which he had considered the National Debt, there ap-
peared to be a balance of some millions on the other side. This
produced a mutual challenge to prove their assertions, and it was
expected that the matter would have been brought to issue the next
time the house went into a committee of supply; but, after several
delays, the minister thought proper to ward it off by moving, that a
committee be appointed for stating the National Debt. See Some
Considerations on the National Debts, &c.
P
哥
​FROM 1720 тo 1739.
161
veral debates on this subject, the commons, on the
4th of March, in a committee of the whole house,
took into consideration the state of the National
Debt; and on the 12th passed the following resolu-
tions, viz.
1. "That the moneys already issued and applied
"towards discharging the National Debts, incurred
"before Christmas, 1716, together with the sum of
£220,435: 16: 44, which will be issued at Lady-
66
CC
day, 1728, towards discharging the said debts,
"amount to £ 6,648,762: 5:14. *
<<
2. "That the several National Debts, including
"the Debt of the Navy as it stood December 31,
1727, contracted and incurred since December 25,
"1716, for answering and defraying the annual
charges and expenses of the public for the current
"service of the several years since the said 25th of
December, 1716, amounted, on the 8th day of
"March, 1727, to the sum of £2,605,545: 16:03.†
<<
kr
* This sum includes an estimated discharge of £ 346,860 on the
coal-tax, which was granted by 9 Anne, for building new churches,
and continued by 1 Geo. I. for one year farther; upon which acts
£164,000 was borrowed, but had at this time been long paid off.
The mode in which the payment of this debt of £ 346,860, (which
never existed) is discovered, is by valuing the produce of the duty
for the nine years from the grant at £ 540,000, and deducting
£193,140 remaining of £360,000 borrowed on this duty by an
act passed in 1719.
↑ It must be observed, that, according to some curious distinc-
tions made in drawing up the representation, this sum is not the
increase of the debts to that time, but the debt incurred for the cur-
rent services.
M
162
NATIONAL DEBT
<<
CG
66
3. "That the National Debt, contracted since the
"25th of December, 1716, for or in respect to the
sum advanced by the South-Sea Company, pursu-
"ant to an act of the 5th year of King George I.
"for the liberty of increasing their capital stock, be-
ing so much thereof as was applied to the Sinking
Fund, doth amount to the sum of £328,673:4:10.
4. That the National Debt, contracted since
"the 25th December, 1716, for making good the
yearly deficiencies of the General Fund, from the
"establishment thereof, to and for the year ending
"at Michaelmas, 1726, the surplus whereof is ap-
plicable to the Sinking Fund, amounts to the sum
" of £703,740:6:21; and that, by virtue of two acts
"of parliament, of the fifth year of King George I.
"farther additions have been made to the capital
"stock of the South-Sea Company, for making good
"several deficiencies of the original and additional
"funds of the said company, settled and established
"before the 25th December, 1716, amounting to-
"gether to the sum of £290,028: 19: 11."*
66
These resolutions will be found to disagree very
considerably with the statements we have given of
the National Debt; to account for which it must
be observed, that, in the statement of the debt, on
25th December, 1716, which was laid before the
house on this occasion, the amount was increased by
* These several species of debts incurred amount together to
3,927,988 7: 14, which, however, is exclusive of the civil-list
£1,000,000, and of several other sums which ought to have been
included. See Considerations on the National Debts, &c. page 56
{
FROM 1720 TO 1739.
163
*
£3,034,769: 11: 11 for the additional capital cre-
ated in 1719 and 1720, by converting the irredeem-
able annuities into redeemable perpetuities: while,
in the statement of the debt, on 25th December, 1727,
the civil-list million was omitted, with several other
articles; particularly £312,000 borrowed on the
plate-duty, which was afterwards included in a more
correct account. Upon these resolutions, however,
a representation was drawn up of the state of the
Debt, of the Sinking Fund, and of Public Credit;
which, on the 10th of April, was presented to the
king; who, in his answer, observed, that the provi-
sion made for gradually discharging the National
Debt was now become so certain and considerable
that nothing but some unforeseen event could alter
or diminish it; which afforded the fairest prospect of
seeing the old debts discharged without any neces-
sity of incurring new ones; and that they might be
assured it would be his particular care and study to
maintain and preserve the public credit, and to im-
prove the Sinking Fund.
On the 6th of May, a message was delivered to
the house of commons, on which an unlimited vote
of credit was passed, although any explanation had
been refused respecting the distribution of £250,000
* Those who wish to see a more particular account of the addi-
tions made to the debt, and the sums actually discharged from the
year 1716 to this period, are referred to Some Considerations on the
National Debts, the Sinking Fund, and the State of Public Credit,
published in 1729.
M 2
164
NATIONAL DEBT
issued on a similar vote of the last parliament. By
an act, afterwards passed, £60,000 was appropriated ·
for the purposes stated in this message.
1729. In the next session, which began 21st Jan.
the land-tax was continued at 3s. in the pound, with
the usual power of borrowing £1,500,000 thereon,
and £750,000 on the malt-duty, at 3 per cent.
£11,694 : 17 : 81, of arrears of former land-taxes,
and £7,657 9: 2, arrears of malt-duty 1727, were
also applied towards the supplies for this year. The
following sums were likewise voted for the public
service.
Deficiency of grants, 1728
Ditto
of General Fund, 1728
For discharging exchequer-bills issued on the act
of the last year for seamens wages
For deficiency of the malt-duty 1727
Ditto
of land-tax 1727
£ s.
S. d.
103,189 11 74
63,902 15 2}
505,822 5 31
5 71
274,318
105,528 10 51
On the 3d of February, upon some accounts rela-
tive to the navy-debt being laid before the house
of commons, Mr. Pulteney, and other members in
opposition, took occasion to repeat their former as-
sertions of the increase of the public debts, and to
enforce the necessity of raising the supplies within
the year: a practice which ought always to be fol-
lowed in time of peace, and was particularly neces-
*
An account of the amount of the interest-money which had
been paid for navy and victualling bills, from the 25th Dec. 1721,
to the 25th Dec. 1728.
1
に​さっ
​FROM 1720 тo 1739.
165
"
sary at this period, if the ministry had really wished
to see any important reduction of the debt made by
the Sinking Fund. But it is probable that they had
now given up all intentions of this kind, and only
thought of availing themselves of the produce of the
fund in a circuitous manner, till they might venture
upon a more direct application of it towards the sup-
plies. They had promised to make the proper dispo-
sition of the growing produce of the Sinking Fund,
and now boasted that the supplies for the year would
be raised without laying any new taxes. But, upon
a motion being made, "That the house would raise
"the supplies for the current service of the year,
"without creating any new debt upon any fund
whatsoever," it was negatived; for, as the supplies
considerably exceeded the amount of the land and
malt duty, it was thought proper to make up the
difference by a loan, which was procured in the same
manner as that of the preceding year, by repaying
the Bank a part of the debt due to them, out of the
produce of the Sinking Fund, and borrowing of
them a farther sum. The amount of this loan was
£1,250,000, on 4 per cent. annuities, redeemable in
sums not less than £500,000 at a time; and they
were to be paid out of the produce of the Sinking
Fund £775,027 17 101, for redeeming the re-
mainder of the annuity of £71,001: 2 : 33,
payable to them for delivering up exchequer-bills
to be cancelled in 1709; also, £500,000 for re-
deeming part of the annuity on the principal of
·
1
166
NATIONAL DEBT
£ 2,000,000, due to them for the like sum in ex-
chequer-bills delivered up to be cancelled in 1717.
The surplus of the duties upon which the new loan
was charged ought to have been carried to the Sink-
ing Fund, though it does not appear that they had
ever been regularly appropriated thereto. *
An address was presented to the king, for an ac-
count of the distribution of the sum issued on the
vote of credit of the preceding session. This was re-
fused, with the usual assurances, that it had been
disbursed for services which required the greatest
secrecy, and that an account of the distribution of
it could not possibly be given without a manifest
prejudice to the public. Though the commons were
thus denied all information respecting this sum, they
· soon
after very loyally granted his Majesty
£115,000, on account of deficiencies said to exist
in the civil-list revenues, (though, upon the examina-
tion of the officers of the revenue, and from several
accounts called for and delivered to the house, it
plainly appeared, that more than this sum was actu-
ally in arrear, and would be soon paid into the Ex-
chequer ;) which was to be refunded for the use of
the public, out of the arrears of the civil-list revenues
outstanding at the king's death, if they should be
*But, if this was not an actual infringement on the fund, surely it
could not be pretended, that paying out of it £4191:14: 6, to one
of the tellers of the Exchequer, to make good a loss of the like sum
stolen out of his office, was appropriating the fund to its intended
purpose.
FROM 1720 to 1739.
167
{
more than sufficient to make up the produce of
the said revenues, £800,000 per annum during his
life.
The king's speech on opening the next session,
9th November, 1729, communicated the information
that all differences with Spain had been adjusted, by
the conclusion of an absolute treaty of peace with
that power, and that he had ordered a reduction both
of the sea and land forces. As in the course of the
following year a contribution was expected from
the East-India Company, the land-tax for 1730 was
reduced to 28. in the pound: the interest of the loan
upon this and the malt-duty was at 3 per cent.
and £11,655: 119 arrears of former land-taxes,
with £9494: 2 : 3 arrears of malt-duty 1728, were
applied towards the supplies for this year. The sums
voted for deficiencies were the following, viz.
£ S. d.
For deficiency of grants in 1729
115,446 0 3
For the deficiency of the General Fund, at Mi-
chaelmas, 1729..
63,344 16 51
For the deficiency of malt-duty, 1728
227,457 11 5
82,813 19 6
Ditto for the land-tax, 1728
The reduction of the land-tax, (which certainly ought
to have been continued at 3s.) rendered it necessary
to contract a new debt; but it was thought expedi-
ent to throw it upon the next year, by raising
£550,000 upon exchequer-bills, to be repaid out of
the first aids granted in parliament after Michael-
168
NATIONAL DEBT
mas, 1730.*
The interest, &c. on this sum, were
charged upon the surplus of the East-India Com-
pany's fund, to arise after Lady-day, 1730.
The probability of there being such surplus arose
from a new agreement entered into with the com-
pany, who agreed to advance to government, on or
before 24th December, 1730, £200,000, to be ap-
plied to the current service, and consented to the
interest on their capital being reduced from 5 to 4
per cent. The capital of £ 3,200,000 to be redeem-
able upon one year's notice, after Lady-day, 1736,
in payments of not less than half a million at a time.
The growing produce of the Sinking Fund was ap-
propriated to the payment of £1,000,000 of their
capital, at or after Midsummer, 1730; and, if the
company should desire to have the whole million
paid at once, the Treasury were empowered to bor-
row, at 4 per cent. upon the credit of the future pro-
duce of the fund, so much as should be wanting to
complete the same at Midsummer, 1730. This, how-
ever, was not found necessary, as the company re-
ceived £725,000 at Midsummer, and the remaining
£275,000 at Michaelmas, out of the produce of the
fund. In this session the salt-duties, which formed
the principal part of the fund for payment of the
East-India Company's annuity, were repealed, under
the plausible pretext that they were very burthen-
* £ 6443: 7: 4 was paid the Bank for circulating these bills, and
£21 16 13 to exchequer-bill officer for expenses.
:
FROM 1720 TO 1739.
169
}
some to the poor, and expensive in the collection;
but the real motive we shall have occasion to notice
hereafter; at present we shall only observe, that it
appears to have been a part of the systematic plan of
encroachment on the Sinking Fund, which the mi-
nister, well knowing the influence and security which
government derived from the national debt, seems
to have adopted, at the very time that he was pro-
fessing the highest opinion of its efficacy and im-
portance. The East-India Company's annuity was
now charged upon the Aggregate Fund, the surplus
of which formed the principal part of the Sinking
Fund; and, as a part of the salt-duties belonged to
the South-Sea Company's fund, it was provided, that,
in case of any deficiency in the company's original
fund, this should, likewise, be paid out of the Ag-
gregate Fund.
In February, 1730, a bill was brought into parlia-
ment, to prohibit any person from advancing loans
to any foreign prince or state, without a licence from
his Majesty, or the authority of parliament. The
reason which the minister gave for bringing in this
bill was, that at that time a subscription was trans-
acting for the Emperor, and that no less a sum than
£400,000 was then raising for his use.
1731.-In the session, which began the 21st of
January, the land-tax was continued at the same
rate as in the last year; and upon this and the malt-
duty the loan was £1,750,000 at 3 per cent. The
following sums were also appropriated towards the
supplies, viz. £ 32,516; 12: 114, arrears of former
170
NATIONAL DEBT
}
land-taxes payable in or before 1728; £669:9: 10%,
arrears of sundry malt-duties; £9528: 3:1, arising
from the duties on compound liquors, imposed in
1729; and £15,101: 12 5 arrears of malt-duty,
1729. The deficiencies made good were as follows:
Deficiency of grants for the year 1730
Ditto of the General Fund, at Mich. 1730,
Malt-duty, 1729, at Lady-day, 1731
Land-tax, 1729, at Michaelmas, 1731
•
£. s. d.
134,312 14 6
39,353 4 11
93,874 3 9}
71,013 3 4
As the supplies voted for the year, exclusive of
£510,400* for cancelling the exchequer-bills of the
last session, considerably exceeded the ordinary ways
and means, a loan was found necessary, which was
raised in the following manner: upon the repeal of
the salt-duties in the last session, the stamp-duties,
which also made a part of the fund for the payment
of the East-India Company's annuity, were continued;
and, the annuity being charged upon the Aggregate
Fund, these remaining duties of course became free
and liable to a new appropriation: it was now thought
expedient to take advantage of this circumstance,
which was probably one of the objects the minister
had in view in his scheme of repealing the salt-duties;
accordingly, the stamp-duty was made a fund for
paying the interest from Michaelmas, 1731, on
£400,000 borrowed on redeemable annuities, at 9
*The sum paid, according to the account of the disposition of
grants, was £ 504,200.
FROM 1720 TO 1739.
171
per cent. from 29th-September, and on £800,000
raised by a lottery, at £10 a ticket, bearing 3 per
cent. interest, to commence from Christmas, 1731.
A new innovation on the Aggregate Fund must also
be noticed; this was charging the fund with an an-
nual sum for the amount of some duties abolished.
The produce of the Sinking Fund, at Michaelmas,
1731, was directed to be applied to the payment of
£1,000,000 South-Sea annuities; with power to bor-
row money upon the future proceeds of the fund,
in case there should not then be sufficient to complete
the million: this, however, was not found necessary,
as the fund produced more.
1732.-In the next session, which began 13th of
January, the land-tax was reduced to one shilling in
the pound, and the loan upon this and the malt-duty
was £1,250,000, at 3 per cent. the arrear of malt-
duty 1730, amounting to £7267: 6:0, was also
applied towards the supplies. The deficiencies made
good were:
Malt-duty 1730, at Lady-day, 1732
Land-tax 1730, at Michaelmas, 1732
£.
s. d.
137,137 16 6
80,399 12 31
الجاسم
£41,346: 1:13 was also voted for the deficiency of
the General Fund, but, owing to the insufficiency
of the grants, it was not paid till the following year.
The peaceable situation of the country, and the
general tranquillity of Europe, seem to have deter-
mined the minister to avail himself of so favourable
an opportunity for endeavouring to ingratiate him-
✩
172
NATIONAL DEBT
self with the landed interest, by reducing the land-
tax to 1s. in consequence of which, a deficiency of
£121,395 3 4 was left unprovided for, although
£123,580 2:52, surplus of the grants for 1731,
was appropriated to the supplies for this year, and
£500,000 was borrowed on the salt-duties. The
revival of the salt-duties, which Sir R. Walpole took
care to make the condition on which he should pro-
pose
the reduction of the land-tax, met with great
opposition; and it was justly observed, that, if they
were revived without being again appropriated to the
Sinking Fund, a most dangerous precedent would be
established; for, by taking off taxes belonging to the
fund in one year, and laying them on in the next for a
new purpose, the fund might be at last entirely ex-
hausted, and the National Debt might remain for ever
unpaid. The forcible arguments that were urged in the
house of commons* had, however, little effect; the mi-
nister now declared that of all the taxes he could ever
think of there was no one less felt. The bill was ac-
cordingly brought in and passed, and Sir R. Walpole
might congratulate himself upon the accomplishment
of this financial manœuvre. The nett produce of these
duties, on an average of four years, ending Michaelmas
1726, was £185,595, although the gross produce
was upwards of £470,000 for England only; and,
* See also The Lord's Protest, 31° Martü, 1732.
As a proof that the salt-duties were repealed with the intention
of being re-imposed, the commissioners and officers were to be con-
tinued in pay for 18 months, from 25th December, 1730. The
duties were now revived from 25th March, 1732,
1
$
FROM 1720 TO 1789.
173
being now granted for 3 years, £500,000 was bor-
rowed thereon at 3 per cent,
At a general court of the South-Sea Company,
20th April, 1732, a resolution was passed for making
application to parliament to be empowered to divide
their present capital into four parts, and to convert
three thereof into annuities, at 4 per cent. per ann. and
the remaining fourth into a trading-capital; a sixth and
one fourth per cent. being first deducted for the pay-
ment of a million of their bonds. The petition was
presented to parliament on the 26th, but after a long,
debate it was thought proper to delay the affair till
the next session.
By an act of this session there was directed to be
issued, out of the produce of the Sinking Fund, the
sum of £1,000,000, for redeeming a proportional part
of the stock of the South-Sea Company, which was
paid accordingly at Midsummer.
We have already had occasion to notice various
encroachments on the Sinking Fund, which at first
were small and indirect, but had become of late more
open and important; notwithstanding which, it had
produced, from its establishment in 1717 to Michael-
mas in the present year, £12,193,705 : 5 : 0ž, having
increased from about half a million a year to up-
wards of a million, which sufficiently shews that, in
this respect, it had fully answered the expectations.
that were formed at its establishment; and that, had
it been faithfully applied, it would long since have
annihilated the debt, to the discharge of which it
had been appropriated. The infringements on the
174
NATIONAL DEBT ·
fund had all been made under the administration of
Sir R. Walpole, who had once gloried in calling
himself the father of this laudable project; but
what he had hitherto done appears to have been
intended (particularly within the last two or three
years) to prepare the way for a more direct seizure
on the produce, which soon destroyed its efficacy, and
at length, by its frequent repetition, rendered the
Sinking Fund a mere nominal distinction.
1733.-In the next session, which began 16th Ja-
nuary, the land-tax was again fixed at one shilling
in the pound, but has never been at so low a rate
since. The Treasury were empowered to borrow
£1,250,000 upon the land and malt-taxes, by loans
or exchequer-bills at 3 per cent. and £33, 143, 6: 11
arrears of former land-taxes, with £4820: 9, 9 ar-
rears of malt-duty 1731, were appropriated towards
the supplies for 1733. The deficiencies made good
were:
Malt-duty 1731, at Lady-day, 1733
Land-tax 1731, at Michaelmas, 1733
3
4
£.
:
si d.
4
110,774 14 12
54,805 12 102
The sum of £121,395 3: 4 was also granted for
the deficiency of the last year's grants, which in-
cluded £41,346 1: 1 voted in the last session
for the deficiency of the General Fund at Michael-
mas, 1731, but not paid; it was now voted again,
but neither this sum nor £43,274: 19:9, for the
deficiency of the fund at Michaelmas, 1732, were
made good till 1734; we need not wonder, however,
FROM 1720 TO 1739.
175
that the ministry were so careless respecting the im-
provement of the Sinking Fund, when they had de-
termined to attempt a more open violation of it. On
the 7th February, a motion was made in the house
of commons,
"That this house will raise the ne-
6c
cessary supplies for the current service of this year,
"without creating any new debt upon any fund
"whatsoever;" but this, like a similar motion, made
about four years before, was lost: the design of it
appears to have been, to furnish an additional ground
for opposition to an expected motion of Sir R. Wal-
pole's, which he brought forward on the 23d Febru-
ary, for issuing £500,000 out of the Sinking Fund,
towards the service of the year 1733. Such a pro-
position from the pretended father of the Sinking
Fund, who had said that he considered, as a funda-
mental law of the realm, the act which declared it
should be applied to the payment of the National
Debts incurred before 25th December, 1716, and to
no other use whatsoever, naturally excited some se-
vere reflections. Sir J. Barnard in an excellent speech
on the occasion, justly observed, that to ease our-
selves, by loading our posterity, is a poor temporary
expedient of short-sighted or self-interested politi-
cians, and that the author of such an expedient must
expect the curses of future generations. Arguments,
however, were vain: the minister in all probability
would not have ventured to make such a proposal, had
he not been confident of a majority in his favour: the
bill was accordingly brought in and passed. By this
act, £1,000,000 was also to be issued, out of the
176
NATIONAL DEBT
Sinking Fund, for redeeming part of the South-Sea
Annuities; but, the former sum being first taken,
there remained, at Michaelmas, only £913, 115:15:34
for the South-Sea Company; they were therefore
paid the remainder of the million in the next quarter,
with £651:12:7 for interest thereon, at 3 per
cent. from Michaelmas to Christmas.
On the 26th April, a petition from the South-Sea
Company was presented to the house of commons,
similar to that presented in the last session, for leave
to reduce three-fourths of their capital into annuities;
in consequence of which, a motion was made, on the
following day, that the directors should lay before
the house an account of what sums of money, South-
Sea Stock, and South-Sea Annuities, had been received
from the trustees for raising money on the estates
of the late directors of the South-Sea Company and
others: this passed in the negative; but a motion was
carried, in the house of lords, "That the directors of
"the South-Sea Company be ordered to lay before the
"house an account how the produce of the forfeited
"estates of the directors of that Company, in the
66
year 1720, has been disposed of, and all the orders
"made in the general courts of that Company, re-
lating to the disposal thereof." This account, how-
ever, not being very satisfactory, the present and late
directors and the inspectors of their accounts were
examined by the house. A motion afterwards made,
for the appointment of a committee to examine
into the affairs of the South-Sea Company ever since
the year 1720, being lost, occasioned a protest, set-
FROM 1720 TO 1739.
177
ting forth very strong reasons in favour of the ap-
pointment of such a committee.
By the act passed for carrying the object of their
petition into execution, the capital stock of the
Company, which amounted to £14,651,103: 8:1,
was after the 24th June, 1733, to be divided into
four equal parts; and three-fourths of the same, a-
mounting to £10,988,327: 11:02, was to be con-
verted into a joint stock, attended with annuities at
4 per cent. to be distinguished by the title of the
"New Joint Stock of South-Sea Annuities :" the other
fourth part, amounting to £3,662,775 : 17:04, was
to remain as a trading or capital stock, subject to
the diminution or increase of the dividend thereon
by the loss or profit of their trade; neither of which
were, however, likely to be very considerable, as they
had given up the Greenland Fishery, and were at
this time treating with the King of Spain's agents for
an equivalent in lieu of their right of sending an an-
nual ship to the Spanish West Indies.
1734.-The next session began 17th January, and,
as a war had broken out on the Continent, (in which,
as our continental connexions had lately been so
wisely strengthened, there was great probability that
we should soon be engaged,) a considerable augmen-
tation of the forces was thought necessary. The
land-tax was therefore raised to 2s. in the pound, and
it will appear that it would have been much better to
have still farther encreased it to 4s. rather than to
have resorted to the means that were adopted for
raising the supplies. The loan upon the malt-duty
N
178
{
NATIONAL DEBT
was £750,000 at 3 per cent. and upon the land-tax
£1,000,000 at 3 per cent.-£20,578 : 11: 10 ar-
rears of former land-taxes, and £7,783: 19 arrears of
malt-duty 1732, were also applied towards the sup-
plies. The deficiencies made good were:
Malt-duty 1732, at Lady-day, 1734
Land-tax 1732, at Michaelmas, 1734
General Fund at Michaelmas, 1733
Grants, for the year 1733 .
£. s. d.
44,133 4 52
29,229 4 41
48,516 14 61
. 287,343 5 1
the last sum included £84,621 :0: 102 for the de-
ficiency of the General Fund at Michaelmas, 1731,
and 1732, the payment of which had been voted in
the two preceding sessions, but was not made till this
year.
One of the expedients for supplying part of the
sum wanting towards the supplies was by continuing
the salt-duties, (which were already granted and
mortgaged to the 25th March, 1735,) for seven years
longer, to the 25th March, 1742; this was effected
with little opposition, although the revival of the
duty had before been so strongly opposed. The sum
borrowed upon this anticipation was £1,000,000, at
4 per cent. and, as the duty would not be free for at
least one year and a quarter, the charge of compound
interest should be reckoned for that time.
By another act, the precedent established in the
´last session was considerably improved upon, by di-
recting that there should be taken from the Sinking
Fund, towards raising the supply, the sum of
✔
FROM 1720 TO 1739.
179
*
£1,200,000, which was more than a year's produce
of the fund; the bill was severely opposed, and a
strong protest against it was signed by 21 Lords. In
order to furnish a better pretence for taking this from
the Sinking Fund, a vote was passed for paying off
the like sum of the navy debt, which, on the 31st
December, 1793, amounted to £2,020,175: 18: 1;
but, though it was thought proper to pay off this
part of the unfunded debt, an opportunity was given
for contracting new debts, by incurring expenses to
any amount, under the authority of a vote of credit;†
in which the house of commons desired his Majesty
to augment his forces by land or sea as far as in his
great wisdom he should judge necessary: thus, with-
out limiting either the sum or time, the house in this
their last session gave a general power of contracting
debts, and left them to be provided for by the next
parliament.
* Produce of the Sinking Fund in the year ending
31st December, 1731
Ditto
Ditto
1732
1733
1,002,587 7 12
1,097,530 0 22
1,093,997 10 0
+ It was thought proper on this occasion, that the message on
which the vote of credit was founded should contain the gracious
promise that an account of the services performed should be laid
before the next parliament.
‡ The general and unlimited power given to the ministers, by this
resolution of 3d April, was, as justly observed by Mr. Hatsell, in his
Precedents of the House of Commons, a measure entirely subversive
of those rules and restrictive forms of parliament, which the house
of commons have imposed upon themselves in the mode of granting
supplies; and was contrary to the practice which had been wisely
established since the revolution, of appropriating the supplies to the
services for which they had been voted.
N 2
180
NATIONAL DEBT
Į
In this year, £10,112:4:83 was also taken out
of the Sinking Fund to make good the deficiency of
the duty on wrought plate, at Lady-day, 1734.
1735.-In the first session of the new parliament,
which began 23d January,* the land-tax was con-
tinued at 2s. in the pound, with power to borrow the
usual sums both upon the land and malt, at 3 per
cent.-£9,165: 13, arrears of malt-duty 1733, was
also applied towards the supplies for the current
year. The deficiencies made good were as follows:
Of malt-duty 1733, at Lady-day, 1735
Of land-tax 1733, at Michaelmas, 1735
Of General Fund, at Michaelmas, 1734
Of grants, for the year 1734 .
£. S. d.
107,509 18 01
22,300 0 0
37,557 13 4
36,405 15 41
The same motives, which first tempted the minister
to divert the Sinking Fund from the purposes to
which it was appropriated, again induced him to pre-
fer taking it towards the supplies, to imposing any
new tax or raising the land-tax. An act was there-
fore passed, by which £1,000,000 was to be issued
out of the produce of the Fund at Lady-day, 1736,
towards the service of the year;† but, as it was doubt-
ful whether the Fund would, by that time, amount
to so much, the future produce was mortgaged
by borrowing, at 4 per cent. what was wanting to
*In the course of this month, a loan of £250,000 for the Empe-
ror was subscribed at the Bank, by licence from his Majesty.
† £24,570: 2:7 was also taken from the fund, to pay interest on
the million borrowed in the preceding year on the salt-duties: this
was afterwards replaced out of the supplies for 1737.
न
FROM 1720 TO 1739.
181
7
complete the sum.* By another act, the salt-duties,
which were already granted and mortgaged to 25th
March, 1742, were farther continued for four years,
to 25th March, 1746; and, upon this distant provision,
£500,000 was borrowed of the Bank, at 4 per cent.
per annum. Thus, about £140,000 was to be paid
for interest on this loan before the tax could be ap-.
plied to the payment of it; which, with about
£45,000 for interest, after 25th March, 1742, and
£120,000 for four years expense of collecting this
duty, makes £805,000 to be paid by government for
this loan.t
量
​In this session an attempt was made, but without
success, to obtain an account of the expenses incur-
red in consequence of the vote of credit passed to-
wards the end of the last session; the only information
that could be gained respecting it was, by comparing
the particulars given in the account of the whole
expenses of the year with the sums they had voted
for the several services.
1736. In the next session, which began 15th
January, the land and malt taxes were continued as
in the last year, with power to borrow the usual
sums thereon by exchequer-bills, at 3 per cent.
£5507:7:11 arrears of the malt-duty 1734, was
also applied towards the service of this year. The
deficiencies made good were:
* The surplus of the Sinking Fund at Lady-day, 1735, (after pay-
ing the £1,200,000 granted for the last year,) was £273,034 : 10 : 2
+ See Lord Bathurst's Speech, 25th April, 1735.
182
NATIONAL DEBT
£. S. d.
155,360 16 10
48,129 3 3
Of malt-duty 1734, at Lady-day, 1736
Of land-tax 1734, at Michaelmas, 1736
Of grants, for the year 1735
21,096 9 8
£22,944 14 was also voted for the deficiency of
the General Fund at Michaelmas, 1735, and
£24,570 27 to make good to the Sinking Fund
the like sum paid out of the same for interest on the
million borrowed on the salt-duties in 1734; but these
sums were not made good till 1737.
We have seen, for several years, nearly the whole
produce of the Sinking Fund applied towards the
current service, and consequently little progress
made in the reduction of the Debt; it was now dis-
covered, that, by borrowing the sums wanted towards
the supplies, and charging the interest on the Sink-
ing Fund,* a considerable sum would remain to be
applied in carrying on the appearance of paying off
the National Debt, or to be seized at some future
'time towards the current services. Accordingly, the
fund was now charged with the interest at 3 per cent.
from 24th June, on £600,000 to be raised by loan, †
* The intentions of the ministry were probably known or suspected,
for, on the 2d February, a motion was made by Mr. Sandys and se-
conded by Sir John Barnard, for the house to resolve "That they
"would raise the supplies necessary for the service of the ensuing
year within the year;" but, notwithstanding the evident propriety
of adopting this plan, and applying the Sinking Fund to the purpose
for which it was designed, the question was lost without a division.
"
+ When once the Fund had been violated, it was easy to perceive
that it would soon be made a fund for contracting new debts instead
of paying off the old; and this measure, which had been predicted in
FROM 1720 TO 1739.
183
and £1,000,000 of New South-Sea Annuities was to
be redeemed at Christmas; if the produce of the
Fund should not then be sufficient, the Treasury were
empowered to borrow the deficiency upon credit of
the growing produce: £1,008: 16: 84 was also paid
out of the Fund for 11 years interest, to 29th Sep-
tember, 1717, on £2862 : 0 : 5 of the Banker's Debt,
and £1431 : 0 : 2 for the redemption thereof, pur-
suant to 13 Geo. I. c. 3. £10,043 3 10 was like-
wise taken out of the Fund for the deficiency of the
additional stamp-duty at Christmas, 1735.
It may be proper to notice, that, by an act imposing
a very high duty on spirituous liquors, with the view
of prohibiting or at least restraining the use of them,
which had greatly increased for some years past,
the Aggregate Fund was charged with £70,000 per
annum to the civil-list revenue, as a compensation for
the loss it might sustain from the diminution of these
duties, which provision, to view it in the most fa-
vourable light, was useless; as it was already pro-
vided, by 1 Geo. II. c. 1. that, if these revenues fell
short of £800,000, the deficiency should be made
good by parliament.
the last session by those who opposed the grant out of the Fund for
the current service, was now carried into effect. The only necessity
for this loan was to keep the land-tax at 2s. and, in defence of the
measure, the ministry mentioned the unwillingness of the public
creditors to receive their money; to which it was justly answered,
that this unwillingness was a certain sign of their having an advan-
tagcous bargain, and was therefore a demonstration that it was the
interest of the public to pay them off as fast as possible.
>
184
NATIONAL DEBT,
1737.-In the next session, which was opened on
15th January, the land and malt taxes were granted
as in the last year, with the usual loan thereon at
3 per cent. £556163, arrears of malt-duty
1735, were also applied towards the service of this
year. The deficiencies made good were as follows,
viz.
Malt-duty 1735, at Lady-day, 1737
Land-tax 1735, at Michaelmas, 1737
Grants for the year 1736.
£.
§. d.
209,010 1 8
49,700 0 0
62,401 3 61
Also, £10,043 3 104 for replacing to the Sinking
Fund the like sum issued out of it, in the last year,
for the deficiency of the additional stamp-duties at
Christmas, 1735.
**
As the continuation of the land-tax at 2s. again
rendered a loan a necessary part of the ways and
means for supporting the peace-establishment, a
new mode of perverting the Sinking Fund was
adopted; this was, repealing the duties on sweets,
the surplus of which formed a part of the Aggregate
Fund, and, consequently, of the Sinking Fund, and
granting other duties in lieu thereof; upon the cre-
dit of which £500,000 was to be borrowed by ex-
chequer-bills or loan, at 3 per cent. By the same
act, £1,000,000 was to be paid at Michaelmas, for
redeeming part of the capital of Old South-Sea An-
nuities, though it was strongly contended, that as
£5,500,000 of the South-Sea capital had been al-
1
* See 1 Geo. I. sess. ii. c. 12.
FROM 1720 тo 1739.
185
ready paid off, the payment should now be made to
the Bank or India Company. £18,539:07 was
issued out of the Sinking Fund for a year's interest
and expense of management on £600,000, borrowed
in the preceding year on the credit of this fund ; also,
£30,000 for one year and half's interest on
£500,000, advanced by the Bank on the credit of
the salt-duties in 1735; besides £ 3232: 18: 10 for
deficiency of the additional stamp-duties at Christ-
mas, 1736, and £11,894 : 9:9 for deficiency of the
plate-duty at Lady-day, 1737.
1738. In the next session, which began 24th Ja-
puary, the land and malt taxes were continued as in
the last year, and the usual sum borrowed thereon at
3 per cent. £2169 17 4, arrears of malt-duty
1736, was also applied towards the supplies for this
year. The deficiencies made good were:
Of malt-duty 1736, at Lady-day, 1738
Land-tax 1736, at Michaelmas, 1738
For deficiency of grants for 1737
£
s. d.
173,728 18 11
34,797 4 71
*28,321 4 112
Also, £32,232: 18: 10, for replacing to the Sink-
ing Fund the sums taken out of it in the preceding
year, for the deficiency of the additional stamp-duties,
and interest paid to the Bank on the loan on the
şalt-duties 1735.
All ideas of applying the Sinking Fund to the pur-
poses for which it was established appear to have
*This sum was voted, but the deficiency proved to be only
£28,267: 0:51.
180
NATIONAL DEBT
been now given up by those who had the management
of our financial affairs; but, as many persons still saw
the necessity of paying off the debts, as well as the
impolicy of contracting new ones in time of peace,
an act was passed, by which the ministry effectually
promoted their own views, while they pretended a
regard to the opinion of those who wished to see the
debts gradually reduced. By this act, £1,500,000
of the money arising from the Sinking Fund was ap-
propriated towards the supply for 1738; and govern-
ment were empowered to raise, by loans or exche-
quer-bills, at 3 per cent. the farther sum of
£ 500,000, * upon credit of the Sinking Fund. But,
in order to cover their design of appropriating by
degrees the whole produce of the fund, £1,000,000,
was to be paid to the Bank for redeeming part of the
annuity of £80,000, payable to them by 11 Geo. I.
c. 9. part of which had been redeemed, pursuant to
2 Geo. II. c. 3. and with respect to which it is very
doubtful whether it came within the meaning of the
act by which the Sinking Fund was established. †
The following sums were also paid out of the Sink-
ing Fund, £ 26: 8: 9 for 11 years interest on £75
bankers debt, and £ 37: 10: 0, for redemption of
1
**This sum was intended as a provision for the expenses of an
armament against Spain; but, the dispute being afterwards considered
as adjusted, it was thought necessary to raise only £ 300,000.
As the time was approaching when the exclusive privilege of
the Bank might be determined by the redemption of their original
fund, it is probable one view in this repayment was to induce them
to offer better terms for its renewal.
FROM 1720 TO 1739.
187
£18,120
the same, pursuant to 13 Geo. I. c. 3.
8: 1, for one year's interest and charges of manage-
ment on £600,000, borrowed in 1736, upon credit
of this fund. £3552: 18; 0, to make good the
deficiency of the stamp-duty at Christmas, 1737;
and £20,000 for one year's interest, due 8th Sep-
tember, 1738, on £500,000, advanced by the Bank
in 1735 on the salt-duties.
The high price of the public funds,* in the be-
ginning of 1737, the 3 per cents. being above par,
gave rise to several schemes for reducing the interest
of the National Debt; the subject was discussed in
parliament, and the house of commons came to the
following resolutions: "That all the public funds,
"redeemable by law, which carry an interest of
"4 per cent. per annum, be redeemed according to
"the respective provisoes, or clauses of redemption,
"contained in the acts of parliament for that pur-
<6
pose, or be converted into an interest, or annuity,
"not exceeding 3 per cent. per annum, not redeem-
"able till after fourteen years;" and, that his Ma-
jesty be enabled to borrow any sum of money at an
interest not exceeding 3 per cent. to be applied to-
wards redeeming the National Debt. A bill was ac-
cordingly brought in for these purposes, on 22d of
April; but, after two readings in the house of com-
mons, was lost.
January
3 per cents.
£103
S.Sea Annuities.
India-Stock.
1112
1773
February
June
1053
. 107
113.
1791
188
NATIONAL DEBT
1739.-The next session began the 1st February,
in which the land and malt taxes were continued as
in the last year, with power to borrow the usual sum
on the malt-duty at 3 per cent. and on the land-
tax at 3 per cent. £7000, arrears of malt-duty 1737,
was also applied towards the supplies. The deficien-
cies made good were:
For deficiency of malt-duty 1737, at Lady-day,
1739...
For deficiency of land-tax 1737, at Michaelmas,
1739
£ s. d.
129,696 10 42
39,704 9 10
Also to the Sinking Fund, for the deficiency of the
stamp-duties at Christmas, 1737, £3552:18: 0;
and to the Bank, and for interest paid on the salt-
loan of 1735, £20,000.
Had the minister been inclined to have raised the
land-tax in this year, there is every reason to believe,
that from the disposition of the country, it would
have met with little objection, but he preferred re-
sorting again to the pernicious expedient of applying
the Sinking Fund to the current service. An act
was therefore passed, which directed that £500,000
should be issued out of the produce of the Fund at
Midsummer; and, as a vote of credit had been passed
for £500,000, for enabling his Majesty to increase
the forces, if necessary, this sum was likewise to be
taken from the Sinking Fund; but, as it might be
wanting before the produce of the fund was sufficient
to supply it, the Treasury were empowered to bor-
row £500,000, either by loan or exchequer-hills,
FROM 1720 TO 1789.
189
at 3 per cent. per annum, charged upon the growing
produce of the said Fund. The sums now payable
out of the Sinking Fund, for interest and deficiencies,
were as follows:
£. S. d.
For interest and charges on £600,000, borrow-
ed, 1736
18,038 15 8
Ditto
on £ 300,000, borrow-
ed, 1738 ..
9,437 14 10
For deficiency of additional stamp-duty, at Christ-
mas, 1738.
Ditto
5,865 18 9
of plate-duty, at Lady-day, 1739
5,834 17 11/
To the Bank, for interest on £ 500,000 on the
salt-duties
20,000 0 0
Thus, in the course of seven years, this sacred fund
had been robbed of £3,200,000, and subjected
to an annual charge of
59,177 7 3
↑
}
190
NATIONAL DEBT.
The following is the State of the National Debt, as it stood December 31, 1739, immediately
on the Entrance into a new IVar.
Principal.
£
Interest.
s. d.
£
S. d.
The capital of the Bank of England, at 6 per cent.
For cancelling exchequer-bills, at 4 per cent...
Purchased of the South-Sea Company, at 4 per cent.
Annuities, at 4 per cent. from Midsummer, 1728
Annuities, at 4 per cent. from Midsummer, 1729
The capital of the East-India Company, at 4 per cent.
South-Sea Stock and Annuities, at 4 per cent.
Various long and short annuities, exchequer-bills, &c.
Navy and victualling debt, at 4 per cent.
1,600,000 0 0
96,000 0 0
500,000 0 0
20,000 0 0
4,000,000 0 0
160,000 0 0
1,750,000 0 0
70,000 0 0
1,250,000 0 0
3,200,000 0 0
27,302,203 5 6
50,000 0 0
128,000 0 0
1,092,088 2 7
6,527,735 2 48
824,684 15 6
314,949 19 8
32,987 7 92
£46,954,623 3 43
1,964,025 10 1
¿
Debt on December 31, 1727
Ditto,
1739
53,019,155 17 51
46,954,623 3 4
£6,064,532 14 0
191
CHAPTER VII
The History of the National Debt, from the Com-
mencement of the War, in 1739, to the Peace of
Aix-la-Chapelle, in 1748.
IN the session, which began 15th November, 1739,
the land-tax was raised to 4s. in the pound, with
power to borrow £2,000,000, at 3 per cent. The
malt-duty was continued as usual: and £4426: 19: 1,
arrears of malt-duty 1738, was appropriated towards
the supplies. The deficiencies made good were:
Malt-duty 1738, at Lady-day, 1740
Land-tax 1738, at Michaelmas, 1740
s. d.
127,543 17 18
46,400 0 0
And likewise £25,865 : 18:9 to the Sinking
Fund, for making good the deficiency of additional
stamp-duties at Christmas, 1738, and for one year's
interest to the Bank, on the salt-loan, to 8th Sep-
tember, 1739.
As the produce of the land-tax, at the rate to which
it was now raised, would, with the malt-duty, have
been but little more than sufficient to defray the
peace-establishment, it was very inadequate to the
<<
192
NATIONAL DEBT
expenses of the war; consequently, £1,000,000 was
granted out of the produce of the Sinking Fund to-
wards the supply, and power was given to raise the
farther sum of £ 200,000 upon the growing produce
of the fund, by loans or exchequer-bills, at 34 per cent.
interest. In addition to these sums £88,722 : 7 : 104,
being the overplus of the grants of the preceding
year, was appropriated towards the supply; as was
likewise £21,000: 1: 8, remaining in the Ex-
chequer from the sale of lands in St. Christopher's.
1740-The next session began the 18th Novem-
ber. The land-tax was continued at 4s. in the pound,
with power to borrow the usual sums on this and the
malt-duty, by loans or exchequer-bills, bearing in-
terest not exceeding 4 per cent. The following sums
were appropriated towards the supplies :
Arrears of malt-duty 1739
Surplus of the last year's grants
Arising from sundry surplusses
£ s. d.
2,275 14 113
39,588 10 10
11,434 4 0
The deficiencies made good were as follows:
Of malt-duty 1739, at Lady-day, 1741
249,679 7 0
Of the General Fund for the year ending Mi-
chaelmas, 1740.
2,625 4·38
For replacing to the Sinking Fund the deficiency
of the additional stamp-duties at Christmas,
1739
For ditto, paid the Bank for one year's interest,
due 8th September, 1740, on the loan on the
salt-duties, 1735
For ditto, for default of the duty on sweets, at
Michaelmas, 1739 ...
5,021 10 1
.20,000 0 0.
23,711
$ 6'
FROM 1739 TO 1748.
193
As the supplies voted in this session considerably
exceeded those of the last, the following mode was
adopted for raising the sums wanting. The salt-du-
ties, which were already subject to two anticipations,*
were granted for the farther term of seven years,
from 25th March, 1746; and upon this distant pro-
vision the Treasury were empowered to borrow
£1,200,000, by loans, or exchequer-bills, at 4 per
cent. per annum, payable quarterly; so that £240,000
was to be paid for interest before the fund
upon which it was charged became applicable
to it. In addition to this loan, £1,000,000 was
granted out of the produce of the Sinking Fund, for
the service of the year; but lest, from the previous
charges on the fund, this money should not come in
so fast as it might be wanted, there was a clause in
the act, enabling government to anticipate the grow-
ing produce at an interest of 3 per cent.
1741.-In the next session, which began 1st of
December, the land and malt taxes were continued
as in the preceding year, with power to raise
£2,750,000 thereon by loans, or exchequer-bills,
at interest not exceeding 3 per cent. The sums paid
for deficiencies were as follows:
£ 5. a,
285,110 9 9
Malt-duty 1740, at Lady-day, 1742.
Land-tax 1740, at Michaelmas, 1742
General Fund, at Michaelmas, 1741 .
•
81,568 7 3
58,737 11 2
See page 181.
3
194
NATIONAL DEBT
Grants for the year 1741
To replace to the Sinking Fund the deficiency
of additional stamp-duties at Christmas, 1740
To ditto, for half year's interest, due 8th of
March, 1740, on salt-loan 1735
To ditto, for half a year's interest, due 5th No-
vember, 1741, on £1,200,000 borrowed on
£. §.
§. d.
263,731 17 7
4,048 147
10,000 0 0
the salt-duties, 1741
•
21,000 0 0
To ditto, for deficiency of duties on sweets, at
Michaelmas, 1741
27,850 1 2
To ditto of the duty on victuallers, at Michael-
mas, 1741
19,018 4 11
The supplies for this year exceeded all preceding
years since the war of Queen Anne's reign, and the
provisions for raising the same, in addition to the
land and malt taxes, were as follows: £1,000,000 was
granted out of the Sinking Fund, to be raised by
loans or exchequer-bills at 3½ per cent. interest, upon
credit of the growing produce of the fund.
£800,000 to be raised by annuities, at 3 per cent.
from 24th June, transferable at the Bank and char-
ged upon the Sinking Fund. The allowance to the
Bank for receiving the subscriptions, which, on si-
milar occasions, had hitherto been at the rate of
£805 15: 10 per million, was on this loan £500,
being at the rate of £625 per million. The Treasury
In February, 1742, upon the termination of Sir Robert Walpole's
long administration, Mr. Sandys was appointed one of the Lords of
the Treasury and Chancellor of the Exchequer, and Lord Wilmington
First Lord of the Treasury.
#
FROM 1739 тo 1748.
195
were also to allow them, out of the Sinking Fund,
£450 per annum for management. The sum paid
as discount to the contributors was £7,677 : 7 : 3.
As the term to which the Bank-charter had been
extended, by the act of 12 Anne, was just expiring, a
new agreement was entered into with the Company,
who were to advance £1,600,000, without interest,
towards the supply for the service of the year 1742,
and were empowered to enlarge their capital by creat-
ing new stock to the same amount. The loan was to
be advanced on or before 25th December, 1742, at
such times and in such proportions as the Treasury
should direct, provided the Bank should not be re-
quired to pay more than £400,000 at a time, nor
without having one month's notice before each pay-
ment: however, the Company paid up the greater part
of it before the stipulated time, and were allowed
£39,115 12 for discount. By the act, passed for
establishing this agreement, it was declared, that the
acts of 7 and 12 Anne, and all other acts for deter-
mining the corporation, should be void; and that
the Company should remain a body corporate and
politic for ever, subject to the restrictions and agree-
ments contained in the acts and charters then in
force.
:
1742. The next session began the 16th Novem-
ber, in which the land and malt taxes were continued
as in the preceding year, with the usual loans there-
on at 3 per cent.
The deficiencies made good
were:
0 2
196
NATIONAL DEBT
}
Malt-duty 1741, at Lady-day, 1743
Land-tax 1741, at Michaelmas, 1743
General Fund for one year, ending Michael-
mas, 1742
For replacing to the Sinking Fund the deficiency
of the additional stamp-duties, at Christmas,
1741
£ 9. d.
134,063 17 104
121,078 16 8
58,869 15 7
3,819 0 2
Ditto one year's interest on loan on salt-duties
1741
42,000 0 0
Ditto for deficiency of duty on sweets, at Mi-
chaelmas, 1742.
13,786 10 11
Ditto for deficiency of duty on victuallers, at
Michaelmas, 1742
4,333 10 1
The supplies voted in this session exceeded those
of the last; and the following ways and means were
adopted for raising them. The high duties which
had been imposed on spirituous liquors in 1736,* in
order to restrain the use of them, were now repealed,
on account of the great encouragement they had
given to smuggling; and lower duties were granted
in their place, from 25th March, 1743; upon which
£1,000,000 was to be borrowed, by exchequer-bills,
at 3 per cent. but, as the sum of £481,400 was out-
standing of the £500,000 borrowed by exchequer-
bills on the duty on victuallers, (established by the
Pot-act of 1726,† which was now repealed,) these
bills were to be discharged out of the million to be
raised on the new duties. The farther sum of
£1,000,000 was borrowed on 3 per cent. annuities,
and £800,000 on a lottery, at £10 a ticket, attended
* See page 183. + See page 147.
FROM 1739 тo 1748.
197
with the like 3 per cent. annuities, charged upon the
new duties on spirituous liquors: this loan was at
tended with an expense of £13,400 for allowance to
the Bank for receiving contributions, drawing the
lottery, &c. To these sums were added, the grant of
£1,000,000 from the Sinking Fund, with power to
borrow the same at 3 per cent. by loans or exchequer-
bills upon the growing produce.
The current rate of interest on private securities
at this time being not more than 4 per cent. a scheme
was suggested for reducing the legal rate of interest
to 4 per cent. and the interest on such part of the
public funds as carried 4, to 3 per cent. with the pri-
vilege of non-redemption for 14 years on the greater
part of the public debt. The proposal engaged a
great deal of attention; it was generally disapproved
of in the city, and the bill brought in was not pass-
ed. The condition of non-redemption was objected
to by many advocates for the reduction, as leaving
too small a part of the debt to be paid off during
the 14 years; so that, at the end of the term, the
principal of the debt would have been nearly the
same, though attended with a less annuity; and the
application of the Sinking Fund to the supplies would
become in the mean time not a matter of con-
venience but of necessity, from the want of redeem-
able debts to discharge. There would, also, have
been but little hope of its being given up at the end
of the term for the purposes for which it was in-
tended. Whatever ground there might be for these
objections, it will hereafter appear that little incon-
1
الحميد
198
NATIONAL DEBT
venience would have resulted from the condition of
non-redemption, as far as related to the disposition
of the Sinking Fund, since the ministry had for
some years been permitted to apply it towards the
current services, and it was too commodious a re-
source to be given up. With respect to the capital
of the debt remaining nearly the same, there are few
of those who made the objection but would, at the
end of the 14 years, have wished their apprehension
verified.
1743. The supplies voted in the session, which
began 1st December, again exceeded those of the
preceding year: the land-tax was therefore continued
at 4s. in the pound, with the usual malt-duty; the
interest of the loans thereon not to exceed 3 per cent.
The deficiencies made good were :—
Malt-duty 1742, at Lady-day, 174+
Land-tax 1742, at Michaelmas, 1744
Grants for the year 1743
General Fund at Michaelmas, 1743
A
For replacing to the Sinking Fund the deficiency
of the additional stamp-duties, 1742
Ditto one year's interest on loan on salt-duty
· 1741
Ditto deficiency of duty on victuallers, Mid-
suminer, 1743
Ditto deficiency of duties on sweets, Michael-
mas, 1743 ..
£.
s. d.
142,600 2 72
89,401 17 5
119,934 4 4
55,827 16 31
4,392 19· 5
42,0000 0
8,295 9 1
13,870 7 0
Upon the formation of a new ministry, in August, 1743, the Hon.
Henry Pelham was appointed First Lord of the Treasury and Chan-
cellor of the Exchequer.
FROM 1739 To 1748.
199
As the new duty on spirituous liquors, notwith-
standing it had been much evaded, had produced
considerably more than the charge upon it, and as
one year's experience was thought sufficient to as-
certain its future amount, the surplus was made a
fund for borrowing a farther sum: an agreement was
accordingly entered into with the East-India Com-
pany, who, at a general court, held 2d February,
agreed to advance, for the use of government,
£1,000,000, at 3 per cent. per annum, on condition
of having the term of their charter extended. By
the act passed for this purpose their former annuity
of £128,000 on their capital of £3,200,000, toge-
ther with the new annuity of £30,000 on the
million now to be advanced, were made irredeemable
till after a year's notice, to be given from Lady-day,
1745. Their exclusive privilege of trading to the
East-Indies, (which, by the agreement of the year
1730, was determinable upon three years notice being
given after Lady-day, 1766,) was continued for the
farther term of 14 years, then to determine upon three
years notice being given by parliament at any time
after 25th March, 1780, and upon re-payment of the
£4,200,000 with all arrears of interest. The surplus
of the new duties was likewise made a fund for bor-
rowing the farther sum of £1,800,000, viz.
£1,200,000 by annuities at 3 per cent. with a pre-
mium of 3 per cent, paid out of the purchase-money ;
and £600,000 by a lottery of 60,000 tickets at
£10 each, attended with like 3 per cent. annuities
1
200
NATIONAL DEBT
1
so that, including the loan of last session, the new
duties on spirituous liquors and licences were now
charged with the interest of £5,600,000.
To these sums must be added, pursuant to the
system now fully established, the grant of
£1,000,000 from the Sinking Fund, with the usual
power of raising the same by loans or exchequer,
bills, at 3 per cent. charged upon the growing produce
of the fund.
1744.-The object of the war was considerably
changed when the next session commenced, 17th
November; or rather it was carried on without a
determinate object, and consequently the mode in
which it was to be prosecuted varied with circum-
stances. The army-estimates, (though the number
of British troops was increased) were less than for the
last year, yet the total amount of the supplies was
nearly the same; it was consequently necessary to
raise an equal sum in addition to the ordinary re-
venue of land and malt. The land-tax* was con-
tinued at 4s. with power to borrow the usual sum
of £2,750,000 upon this and the malt-duty, by loans
or exchequer-bills at 3 per cent. interest.-£21,244
138 surplus of malt-duty for 1743 was appro-
priated towards the supplies. The deficiencies made
good were as follows:
* The land-tax act contained the usual clause, that such part of
the produce of the Sinking Fund as was not already appropriated
should be applied to the discharge of the National Debts, incurred
before the 25th December, 1716.
FROM 1789 to 1748.
201
£.
d.
127,252 16 81
Land-tax 1743, at Michaelmas, 1745.
Grants for the year 1744.
General Fund for the year ending March, 1744
For replacing to the Sinking Fund the deficiency
of additional stamp-duties at Christmas, 1743
Ditto for deficiency of duty on sweets, at Mi-
chaelmas, 1744
B
177,421 18 33
65,265 13 5
5,095 8 8
13,957 19 21
As the supplies voted required grants equal in
amount to those of the last session, the salt-duties,
which were already granted to 25th March, 1753,
were farther continued to 25th March, 1759; and
upon this remote anticipation, the Treasury were
empowered to borrow £1,000,000, at 3 per cent.
interest, payable at the Exchequer, and to com-
mence from Lady-day, 1745,* although the last
payment of the subscription was not to be made
till the following November. By another act, for
laying additional duties upon all wines imported, the
farther sum of £2,000,000 was raised, viz. £1,500,000
on annuities at 3 per cent. from 25th March, payable
at the Bank, and £500,000 by a lottery of 50,000
tickets, at £10 each. Every subscriber of ten tickets
to have an additional annuity of £4: 10 for his own
life or that of any other person he should nominate,
commencing from 24th June, 1745, and amounting
in the whole to £22,500. The expenses attending
this loan in allowance to the Bank for receiving the
* The contributors were divided into ten classes, and the course
of payment was determined by lot.
€02
NATIONAL, DEBT
t
3
2
money, drawing the lottery, &c. amounted to
£16,400.
The produce of the Sinking Fund had decreased,
though not very considerably, since the commence-
ment of the war. As the balance remaining after
making good the charges upon it for the last year
was very small, and as the interest of the new loan
on the salt-duties was now to be paid out of it, it
was thought proper to grant only £800,000 from it,
towards the supplies for the current year, with power
to borrow the money at 3 per cent. upon credit of
the growing produce of the fund.
The alarm occasioned by tire Pretender landing in
Scotland had a considerable effect upon the public
funds; 3 per cents. which in May had been upwards
of 93, fell towards the end of September to 843; at
the same time, the alarm having caused a great run
upon the Bank, the principal stock-holders and mer-
chants met, on the 26th September, and came to the
following agreement: "We, the undersigned mer-
"chants and others, being sensible how necessary the
preservation of public credit is at this time, do
hereby declare, that we will not refuse to receive
"bank-notes in payment of any sum of money to be
paid to us. And we will use our utmost endeavours
"to make all our payments in the same manner.”
These resolutions were signed by 1140 persons, by
five o'clock the next afternoon.* As a farther means
66
""
* Gentleman's Magazine, vol. xv. page 500.
1
FROM 1759 тo 1748.
203
of supporting the credit of paper-currency, the East-
India Company declared that they would take in
their bonds at par, in payment for goods bought at
their sales; but, as this was a measure taken by the
Company chiefly for the support of their own credit,
it was not attended with so much effect as the
former, and their bonds, which at this time were at
10s, discount, were afterwards much lower.
1745. The progress of the rebellion in Scotland
rendered it necessary to assemble the parliament
rather earlier than usual; they accordingly met on
the 17th October; and, as there was now a greater
necessity for increasing the forces, the supplies voted
were of course greater than those for the last year.
The land-tax was continued at 4s. in the pound, and
a loan upon it was opened at the Exchequer; but,
as it was found impossible to obtain the usual sum
thereon from individuals at interest "not exceeding
$6
4 per cent." an agreement was entered into with
the Bank, who engaged to advance one million at 4
per cent. upon the land and malt duties, on condition
that not more than £250,000 should be demanded at a
time; and that, previous to each payment, they should
have a fortnight's notice. They also agreed to de-
liver up, to be cancelled, all the exchequer-bills then
outstanding, which had been issued under the acts
for imposing new duties on spirituous liquors, in
1743, amounting to £986,800, for which they were
to have an annuity of £39,472, (being at the rate of
4 per cent.) with power to add the like sum of
£986,800 to their capital stock, if they thought
204
NATIONAL DEBT
proper. The deficiencies made good in this session
were as follows:
£
S.
d.
Malt-duty 1744, at Lady-day, 1746
Land-tax 1744 at Michaelmas, 1746
Grants for the year 1745 .
General Fund for one year, ending Michaelmas,
1745 ..
?
For replacing to the Sinking Fund the deficiency
of additional stamp-duties, at Christmas, 1744
Ditto of duty on sweets, Michaelmas, 1745 .
Ditto for half a year's interest, due Michaelmas,
1745, on the last year's loan on the salt-duties
163,260 14 8
146,399 12 61
11,950 2 94
49,252 18 9
8,367 9 10
13,793 3 5
17,500 0 0
As the duties on spirituous liquors had been found
very productive, additional duties were now granted;
which, with new duties on glass, were made a fund for
borrowing the sum of £3,000,000,* viz. £2,500,000
on 4 per cent. annuities, commencing from 25th
March, 1746; and £500,000 by a lottery of 50,000
tickets at £10 each, attended with 4 per cent. an-
nuities from 25th December, 1746. Every contri-
butor of £100 for 10 tickets to have, in addition
to the interest of 4 per cent. an annuity of £9 du-
ring his own life or any other life he should nominate
before the 25th December, 1746, amounting in the
whole to £45,000 per annum. Annuities on young
lives were known to be worth 16 years purchase,
and it has since appeared that the lives nominated
were worth more; so that on this loan a bonus of at
least £720,000 was given to the subscribers besides
* The stock created by this loan now forms a part of the 3 per
cent. Reduced Annuities.
FROM 1739 TO 1748.
205
the profits of the lottery, which may be reckoned at
15s. per ticket: it was attended with a charge
of £14,414: 9: 6 for expense of receiving the sub-
scriptions and drawing the tickets. The contributions
to the £2,500,000 were to be made in seven pay-
ments, the last on the 20th December; and, as it
was not then thought proper actually to pay interest
on a loan before the whole money was advanced, the
first payment of interest was to be for three quarters
of a year, to 25th December.
In addition to the above sums, £1,000,000 was
granted out of the Sinking Fund, with power to
borrow the same at 4 per cent. upon credit of the
growing produce; which was a very necessary clause,
as there was little probability of the fund producing
so much in this year. His Majesty was likewise em-
powered to raise the farther sum of £500,000 by
loans or exchequer-bills at 4 per cent. to be paid out
of the next supplies, or if no supplies should be voted
before Midsummer, 1747, to be then paid out of the
Sinking Fund.
1746. The next session began 18th November;
On 10th February, 1746, the Duke of Newcastle and Lord Har-
rington resigned; and also, on the following day, Mr. Pelham, Lord
Hardwicke, Lord Pembroke, Mr. Legge, Mr. George Grenville, and
several others. They were, however, all re-instated on the 14th Fe-
bruary, and succeeded in their principal object, the introduction of
Mr. Pitt, who was made a Vice-Treasurer of Ireland. Fu May fol-
lowing, Mr. Pitt was appointed Paymaster of the Forces, in which
situation, he gave a proof of his integrity by placing whatever money
belonged to the office in the Bank, where it might be always ready
206
NATIONAL DEBT
the land-tax was continued at 4s. in the pound, with
the usual malt-duty, and the interest upon the an-
ticipation thereof to be at 4 per cent. £112,508
19: 2 surplus of the duty on spirituous liquors was
appropriated towards the supply for 1747. The de-
ficiencies made good were as follows: viz.
Malt-duty 1745, at Lady-day, 1747
Land-tax 1745, at Michaelmas, 1747
Grants for the year 1746 . .
General Fund for one year, at Michaelmas, 1746
Deficiences of civil-list revenues in seven years,
ending at Midsummer, 1746.
To replace to the Sinking Fund the deficiency of
the additional stamp-duties, at Christmas, 1745
Ditto duty on sweets, at Michaelmas, 1746 . .
Ditto interest for one year, to Michaelmás, 1746,
£. 5. d.
192,296 13 71
143,867 15 52
135,378 4 7
10,211 5 31
456,733 16 33
7,978 8 4
13,910 0 5
on a million borrowed on salt-duties in 1745 35,000 o o
Ditto for deficiency of additional duties on wines,
at Midsummer, 1746
Deficiency of duty on licences for retailing spi-
rituous liquors, at Lady-day, 1746.
Ditto of additional duties on wines, at Christmas,
1746 ..
49,693 17 93
16,670 11 12
1,421 11 2
Ditto of duties on glass and spirituous liquors, at
Christmas, 1746.
58,233 1 11
Ditto of half subsidy of tunnage and poundage, at
Christmas, 1746
85,968 12 33
Ditto of the surplus of the fund for the lottery
1714, at Christmas, 1746 . . .
38,648, 5 21
1
for the public service, instead of retaining £100,000 in his hands,
as most of his predecessors had done, by the use of which, they
might make £3,000 or £4,000 per annum beyond the legal ap-
pointment.
FROM 1739 to 1748.
207
The supplies voted, including these sums, very
considerably exceeded the preceding years of this
war; of course, loans to a considerable amount were
necessary; and, in order to provide a fund for this
purpose, new duties on houses and windows were
imposed, to commence from Lady-day, 1747, and
upon credit of which, £4,000,000* was borrowed
at 4 per cent. with an additional capital of £10 for
every £100, bearing the same interest. The an-
nuity was to commence from Michaelmas, 1747, and,
if the fund established proved deficient, it was to be
made good out of the next supplies; but, if no sup-
plies should be granted within six months, then out
of the Sinking Fund.
A farther loan of £1,000,000 was raised by a
lottery of 100,000 tickets, at £10 each, attended
with 4 per cent. annuities from Midsummer, 1747,
charged upon new duties on coaches and other car-
riages, with the collateral security of the Sinking
Fund, as in the above loan. In this lottery, only
50,000 tickets were printcd, the drawing of which
determined the corresponding tickets of the other
50,000. The money was advanced in four pay-
*The subscription was opened on 12th December, for four million;
but, in less than four hours, six million was subscribed, and many
more persons came after the subscription was closed. Gentleman's
Magazine, vol. xvi. page 667. It must be remembered that the re-
bellion was now over, and that the terms offered to the subscribers
were very advantageous, which accounts for the difference between
this and the last year, when it was found impracticable to raise a
million by public subscription at 4 per cent.
208
NATIONAL DEBT
ments of 25 per cent. each. The allowance to the
Bank for receiving the subscriptions to the two loans,
with the charge of drawing the lottery, was
£15,805 15: 10.
To the above sums must be added, what was now
become a matter of course, the grant of £1,000,000
from the Sinking Fund, with power to raise the same
by loans or exchequer-bills at 4 per cent. and, as the
£500,000 charged upon the supplies of this
year, in
the last session, was of course made good, together
with £16,375: 129 for interest thereon, his Ma-
jesty was empowered to raise the farther sum of
£500,000 by exchequer-bills at 4 per cent. interest;
to be re-paid out of the first supplies granted after
Michaelmas, 1747, or if no supplies should be granted,
then out of the Sinking Fund.
1747.-In the next session, which was the first
of a new parliament, and met 10th November, the
land and malt taxes were continued as in the last
year, with power to borrow the usual sums thereon
at 4 per cent. The supplies voted were greater than
in any former year, and included the following sums
for deficiencies :
To replace to the Sinking Fund one year's in
terest to Michaelmas, 1747, on £1,000,000
borrowed on the salt-duties 1745
Ditto for deficiency of additional stamp-duties at
Christmas, 1746
Ditto of licences for retailing spirituous liquors,
£.
s. d.
35,000 0 0
7,118 5
at Lady-day, 1747
16,362 8 5
Ditto of additional duties on wines, at Midsum-
mer, 1747
29,765 19 5
1
FROM 1739 TO 1748.
209
Ditto of duties on glass and spirituous liquors, at
Midsummer, 1747
Ditto of duties on sweets, at Michaelmas, 1747
Deficiency of last year's grants
Ditto of duties on glass and spirituous liquors, at
Christmas, 1747
Ditto of malt-duty 1746, at Lady-day, 1748 . . .
Ditto of land-tax 1746, at Michaelmas, 1748.
£. S. d.
34,177 7 3
13,660 18 6
571,827 18 7
39,846 11 7
181,756 10 24
159,727 1 14
In this session, as well as in the last, £1,000,000
was granted towards paying off the debt of the navy;
notwithstanding which, it remained very consider-
able, as will appear in the following year.
The fund established for the loan of this year was
an additional subsidy of poundage upon all goods
imported after 1st March, 1747, at the rate of 5 per
cent. ad valorem ; upon which, the sum of
£6,300,000* was borrowed on redeemable annuities,
at 4 per cent. from Michaelmas, 1748, with a £10
lottery-ticket, entitled to £10 stock, bearing interest
after the same rate. The money was to be advanced
by ten instalments of 10 per cent. each, and those
who paid in the whole before any of the respective
days of payment were allowed interest at 5 per cent.
per annum, from the day of payment, to Michaelmas,
1748; but, many of the subscribers, so far from being
able to avail themselves of this advantage, found
themselves unable to make good their payments a t
*The subscription for this loan was opened November 14th, 1747,
at the Treasury, and at Sir John Barnard's, in Birchin-Lane: a
much larger sum than was required was very soon subscribed.
P
1
210
NATIONAL DEBT
1
}
the times stipulated, without disposing of some of
their scrip, which could not be done except at a
great loss, it being at a considerable discount.* Par-
liament therefore thought proper to grant them re-
lief by introducing clauses in a subsequent act of
the same session; by which the fifth and sixth pay-
ments, which were to have been made on 22d April
and 24th May, were postponed to 22d October and
24th November; the other payments, however, to
remain as before fixed. The subscribers were to
allow interest at 4 per cent. from Michaelmas, 1748,
to the time of paying the sums thus postponed. The
allowance of interest to the subscribers who made
pompt payment amounted to £134,858 12: 11, and
the expense of receiving the subscriptions and drawing
the lottery was £17,930. In addition to this,
£1,000,000 was granted from the Sinking Fund,
The magnitude of the loan may have been one reason for this;
but it is also suspected that it arose in a great measure from the
ministry having reserved it for their particular friends; many of
whom, encouraged by the profit that had been made on the last
year's subscription, readily subscribed for larger sums than they
were able to complete, by which the moneyed men in the city were
disappointed, and did all in their power to discountenance it. See
The History of our National Debts and Taxés, part iv. page 152. Note
withstanding this, it sold at first from to 1 per cent. premium,
and continued so till within a few days of the second payment, when
it got to par, and, on the 25th January, to per cent. discount.
From that time it continued falling, so that, on the 23d March, the
day before the third payment, it was at 17 per cent. discount, though
many of the subscribers had made great exertions to make good their
payment.
*
FROM 1739 TO 1748.
211
with the usual power of borrowing the money at 4
per cent. upon credit of the growing produce. The
'sum of £500,000, raised upon the vote of credit of
the last session, was of course made good, with
£4,809 16: 11 for interest thereon.
The king's speech, on concluding this session,
communicated the information of the preliminaries*
of a general peace having been signed, which put
an end to this expensive war, in the course of which,
£9,000,000 had been taken from the Sinking Fund,
and £26,018,600 raised by continuing or perpetua-
ting taxes, viz.
Sinking Fund.
Loans.
1740..
£1,200,000 ..
1741
1,000,000
£1,200,000
1742
1,000,000
2,400,000
1743
1,000,000
2,318,600
1744
1,000,000
2,800,000
1745
800,000 .
3,000,000
1746 .
1,000,000
3,000,000
1747
1,000,000
5,000,000
1748.
1,000,000
6,300,000
£ 9,000,000
£ 26,018,600
* The preliminaries were signed on the 19th April, and procla-
mation for a cessation of arms was made in London on the 9th
May.
1
CT
212
NATIONAL DEBT.
1
1
The following is a Statement of the Amount of the
National Debt, together with the Sums borrowed
and paid off during each year of the War.
1
Capital.
£.
8. d.
Paid off.
£. S. d.
Increased by loans.
£.
2,400,000 441,098 6 8
2,800,000 671,700 0 0
2,800,000 164,100 0
3,000,000 153,800 0
3,000,000 168,950 0
5,400,000 162,700 00
6,930,000 183,400 0
Dec.31, 1741 47,956,146 3 5
1742 49,915,047 16 91
1743 52,043,347 16 91
1744 54,679,247 16 9
1745 57,525,447 16 91
1746 60,356,497 16 91
1747 65,593,797 16 9
1748 72,340,397 16 91
0
As the definitive treaty was not signed till 18th
October, 1748, many of the war-expenses remained,
of course, to be provided for in the next session,
1
213
1
CHAPTER VIII.
The History of the National Debt, from the Peace
of Aix-la-Chapelle in 1748, to the Commencement
of the Seven Years IVar in 1756.
AS the supplies for 1749 necessarily exceeded a
peace-establishment, the land-tax was continued at
4s. in the pound, and the interest of the anticipation
of both the land and malt taxes was again fixed at
4 per cent.
The deficiencies made good were as
follows:
To replace to the Sinking Fund one year's in-
terest to Michaelmas, 1748, on £1,000,000
'borrowed on the salt-duties in 1745
Ditto deficiency of additional stamp-duties, at
Christmas, 1747
Ditto of licences for retailing spirituous liquors,
at Lady-day, 1748 .
Ditto of additional duty on wines, at Midsum-
mer, 1748
Ditto of duty on sweets, at Michaelmas, 1748 .
Ditto of duties on glass and spirituous liquors, at
Midsummer, 1748
£. s. ď.
35,000 0 Q
7,180 5 8
9,308 7 4
15,297 11 53
13,827 12 6
33,804 13 14
J
914
NATIONAL DEBT
£.
s. d.
}
Ditto of new duties on houses and windows, at
Michaelmas, 1748
Deficiency of additional duty on wines, at Christ-
mas, 1748
Ditto of duties on glass and spirituous liquors, at
Christmas, 1748
Ditto of grants, for the year 1748.
Ditto of new duties on houses and windows, at
Lady-day, 1749 ...
Ditto of malt-duty 1747, at Lady-day, 1749..
Ditto of land-tax 1747, at Michaelmas, 1749.
28,268 15 52
1,462 6 10
41,822 10 5
470,186 9 61
31,060 16 0
119,861 17 0
146,447 11 8
As the navy-debt, notwithstanding the grants of
a million in the last two years towards payment there-
of, had become too considerable to be paid off in the
usual course, the plan of funding the principal part
of it was adopted. An act was accordingly passed
for converting into 4 per cent.* perpetual redeemable
annuities, bills payable in the course of the
navy and
victualling offices, and for transports, which were
made out between 1st January, 1747, and 31st De-
cember, 1748, to the amount of £3,000,000; and
ordnance-debentures made out on or before the 31st
December, 1748, amounting to £230,382: 5 1.
Many of these debts carried 5 per cent. interest, and
what was due thereon to 25th March, 1749, was
added to the principal and converted with it into
:
* On the 20th March, 1749, when the House passed the resolu-
tions for this purpose, 4 per cents. 1746 were 1013, and 4 per
cents. 1748, 102]: they had been about these prices for several
weeks.
FROM 1748 тo 1756.
215
stock. The interest on the capital of £3,072,472
0:10, which was thus created, was charged upon
the Sinking Fund, in direct contradiction to the usual
clause of the malt-duty act, which had been con-
tinued in that of the present session, directing "That
"the moneys of the Sinking Fund that were unap-
propriated should go to the discharging the Na-
"tional Debts incurred before 25th December, 1716,
"in such manner as should be directed by parlia
ment, and to no other use."
<<
66
The ways and means for raising the supplies, in
addition to the land and malt taxes, were £1,000,000,
to be taken out of the surplus of the Sinking Fund,
with the usual power of raising the same on exche-
quer-tallies, bearing 4 per cent. interest, payable
quarterly; and £1,000,000 to be raised by exche-
quer-bills issued at any time before 25th December,
1749, to bear interest not exceeding 4 per cent. per
annum, and charged upon the first supplies granted
after 29th September, 1749; but, if no supplies should
be granted before Midsummer 1750, to be then
charged upon the Sinking Fund.
1749.--The king, in his opening speech, Novem-
ber 16th, particularly recommended to the commons
the reduction of the National Debt: and they, in their
address, thanked his Majesty for recommending this
subject to them, as an object worthy of their most
serious attention; and gave assurances that they would
apply themselves with all possible diligence "to
"find out the properest means to accomplish so
great and necessary a work, with the strictest re-
'
}
216
NATIONAL DEBT
"gard to public faith and private property." Ace
cordingly, on the 23d November, the house resolved
that they would, on the Tuesday following, take
into consideration that part of the king's speech
which related to the National Debt: and an account
was ordered to be laid before the house of that part
of the Debt which carried 4 per cent. interest; which
included the greater part, as will appear from the
following statement.
Amount of the National Debt, 31st December,
1749.
Annuities for long terms, remainder of
original sum unsubscribed
Annuities for lives, with benefit of survivor-
ship, original sum
Annuities for two and three lives, remaining
after what is fallen in
Annuities on plate-act (6 Geo. I. c. 12.)
3 per cent. annuities, in lieu of Nevis and St.
Christopher's debentures
3 per cent. annuities, 1731
3 per cent. annuities, 1736, charged on Sink-
ing Fund
•
Ditto 1738, charged on ditto
Loan on salt-duties 1741
Ditto continued, 1745
Exchequer-bills for interest of old bills ex-
changed . .
East-India Company's capital, at 4 per cent.
Carried forward.....
£. S. d.
1,836,275 17 102
108,100 0 0
95,814 1 62
312,000 0 0
37,821 5 5 14
400,000 0 0
600,000 0 0
300,000 0 Q
238,400 0 0
1,000,000 0 0
2,200 0 0
3,200,000 0 0
£8,130,611 4 63
T
1
FROM 1748 TO 1756.
217
£. 3, d.
Brought over..
£
6.120,011
Ditto annuities at 3 per cent. 1744
Bank original fund
•
Ditto for cancelling exchequer-bills, 3 Geo. I.
at 4 per cent.
•
Ditto purchased of the South-Sea Company,
at 4 per cent.
•
Ditto exchequer-bills on duty on sweets, 1737
Ditto 4 per cent. annuities 1728
Ditto 4 per cent. annuities 1729
1,000,000 0
3,200,000 0 0
500,000 0 0
4,000,000 0
0
499,600 0
1,750,000 0 0
0
1,250,000 0
0
3 per cent. annuities for lottery 1731
800,000 0 0
3
3
per
cent. annuities 1744
3 per cent. annuities 1742
per cent. annuities 1743
800,000 0 0
1,800,000 0 0
1,800,000 0 0
2,000,000 0 0
3,000,000 0 0.
3 per cent, annuities 1745
per cent annuities 1746 .
4 per cent. annuities 1746 to the Bank
4
per
cent. lottery 1747.
4 per cent. annuities 1747
4 per cent annuities 1748
4 per cent. annuitics 1749, for navy &c.
bills funded
South-Sea capital
•
This total of the debt is agreeable to the state-
ments laid before parliament; to which
must be added the 3 per cent annuities
1726
Also, the life-annuities granted on the loans
of 1745 and 1746, now £64,798, which,
valued at 14 years puschase, makes .
986,800 0 0
1,000,000 0 o
0·0
4,400,000
6,930,000 0 0
3,072,472 0 10
27,302,203 5 6
£74,221,686 10 111
1,000,000 0 0
907,172 0 0
£76,128,858 10 11
218
NATIONAL DEBT
The land-tax was reduced to 3s. in the pound,
with the usual clause for borrowing any sum not
exceeding £1,500,000 by loans or exchequer-bills, at
interest not exceeding three per cent. per annum,
payable quarterly. The malt-duty as usual. The
deficiencies made good this year were as follows,
viz.
બધ
s. d.
For replacing to the Sinking Fund deficiencies of
salt-duties 1745
35,000 0 0
Ditto, deficiency of additional stamp-dutics at
Christmas, 1748
5,183 17 8
Ditto of licences for retailing spirituous liquors,
Lady-day, 1749
5,724 3 9
Ditto of additional duties on wines, at Mid-
summer, 1749 .
7,196 4 5
13,361 10 1
21,564 2 10}
Ditto of duty on sweets, at Michaelmas, 1749 .
Ditto of duties on glass and spirituous liquors, at
Midsummer, 1749
Deficiency of ditto at Christmas, 1749 ..
Ditto of the half subsidy of tunnage and pound-
age, mortgaged to the South-Sea Company in
1708, Christmas, 1749
Ditto of grants for the year 1749
•
Ditto of malt-duty 1728, at Lady-day, 1750
Ditto of land-tax 1748, at Michaelmas, 1750.
39,631 6 101
94,655 7 4
275,736 5 5
178,384 4 5
114,489 0 0
As the million raised in the last session upon cre-
dit of the supplies for this year was now to be repaid,
with £30,570:7:5 for interest and charges there-
on, it was found necessary to raise £1,000,000 on
3 per cent. annuities, commencing from Lady-day,
FROM 1748 TO 1756.
219
1750, which were charged upon the Sinking Fund.
The first payment of the annuities to be for three-
quarters of a year, from 25th March to 25th Decem-
ber, 1750, being only a week after the last instal-
ment, which was then found sufficient advantage
to get the subscription filled almost as soon as it was
opened. In addition to this, £900,000 was granted
out of the Sinking Fund, with the usual power of
borrowing money at 3 per cent. and the surplusses of
sundry duties remaining in the Exchequer, amount-
ing to £118,526 10:34 were appropriated towards
the supplies for the current year.
As the influx of money since the peace had consi-
derably lowered the current rate of interest,* the
scheme, which had been several times projected, of
reducing the interest of the public debts to 3 per
cent. was now carried into execution. This mea-
sure had been recommended in the speech on open-
ing the session; and, upon the House of Commons
coming to several resolutions upon it, on 29th of No-
vember, books were immediately opened at the Ex-
chequer, Bank, and South-Sea House, for receiving
consents. By the act passed for this purpose, the
interest was reduced on all the public debts redeema-
ble by law, which then carried 4 per cent. viz.
* Three per cents, had for some months been above par; in Oc-
tober they were nearly the whole month above 102; four per cents.
at the same time 107 in December, 1749, three per cents. fell
under par, and 4 per cents. to about 103.
A
920
NATIONAL DEET
}
Annuities payable at the Exchequer, on the
· Plate-act.
Due to the Bank *
Annuities transferable at the Bank †
Due to the East-India Company ↑
South-Sea Stock and Annuities §.
£.
312,000
8,486,800 α →
18,402,472 0 10
3,200,000 ✪
27,302,203 5 6
Total, at 4 per cent. £57,703,475 6 4
* For cancelling exchequer-bills
500,000 €
Purchased of South-Sea Company
4,000,000 0
Advanced, 1728
1,750,000 0
Ditto, 1729
1,250,000 0
Exchequer-bills cancelled, 1746
986,800 0
£8,486,800 0 0
† Four per cent. 1746 . . .
Ditto,
Lottery, 1747
Ditto,
1747
Ditto,
1748
3,000,000 0
1,000,000 0
4,400,000 o o
0
6,930,000 0
Ditto,
1749, for Navy-bills, funded 3,072,472 0 10
£ 18,402,472 0 10
1
It being afterwards discovered, that no part of this sum could
be paid off without likewise paying off a proportional part of the
£1,000,000, at 3 per cent. advanced in 1744, pursuant to 17 Geo. II.
a resolution was passed for redeeming that million also.
§ South-Sea Stock ..
Old South-Sea Annuities
New ditto,
·
$,662,784 8 6
13,651,099 17 5
9,988,318 19 7
去
​£ 27,302,203 5 6
FROM 1748 TO 1756.
221
A
The companies and the proprietors, upon signify-
ing their consent to the reduction on or before the
28th of February, 1750, were to have 4 per cent, to
the 25th of December following; from that time
3 per cent. till the 25th December, 1757, and af-
terwards 3 per cent. and no part of these debts, ex-
cept that due to the East-India Company, to be
liable to be redeemed till after the 25th December,
1757. Considering the number of the proprietors,
and the various circumstances connected with a mea-
sure of this kind, the time allowed for receiving the
consents certainly appears to have been too short;
the limitation was, however, subject to such farther
directions as should be given by the commissioners
of the Treasury; and, before the end of the session,
it was thought proper to pass a new act, (23 Geo. II.
c. 22.) extending the time of subscription to 30th of
May, 1750, on condition that the interest on the
sums subscribed under this act should be reduced
from 3 to 3 per cent. on 25th December, 1755; but,
as 'there were still some proprietors who, either from
ignorance or a disapprobation of the measure, did not
signify their consent, the following sums remained
unsubscribed after the expiration of the limited time.
Annuities payable at the Exchequer on the Plate-
act
Annuities transferable at the Bank
Old and New South-Sea Annuities
£ s. d.
182,250 0 0
844,226 4 6
2,325,023 7 11
£ 3,331,499 12 5
222
NATIONAL DEBT
1751.-One of the first things which occupied the
attention of parliament, in the session which began
17th January, was, to provide the means of paying
off such proprietors as had not signified their consent
to the reduction of interest pursuant to the acts of
the last session; and, as the principal part of the
sums unsubscribed consisted of South-Sea Annuities,
£2,100,000 was borrowed towards paying them off,
on 3 per cent. annuities, charged on the Sinking
Fund, and made transferable at the South-Sea House :*
viz. £1,400,000 on annuities at 3 per cent. and
£700,000 on lottery of 70,000 tickets, attended with
like 3 per cent. annuities. The deposit on each, (10
per cent.) to be made on 15th March, 1751, and the
first payment of the annuities to be computed from
the respective times of paying the subscription to
25th December, 1751. The charges for receiving
subscriptions, and drawing the lottery, amounted to
£13,691 : 12 : 1. The Bank had agreed to advance
the whole sum that would be wanting in addition to
the loan for paying off the sums unsubscribed; but,
as since this proposal £13,328 in Bank Annuities
had been allowed to be subscribed, and £48, 129
16:4 in Old and New South-Sea Annuities, the sums
to be advanced amounted to £1,190,041 16 : 1
* The resolution of the committee of ways and means, respecting
this'loan, was agreed to by the house 21st February; on which day
3 per cents. were at 983, and had been about this price for some
weeks past; on the 15th March they got up to 99, and on the
22th April to par, and continued so during the remainder of the
year.
FROM 1748 To 1756.
293
only, for which they were to have exchequer-bills,
charged on the Sinking Fund, bearing 3 per cent.
interest. The sum thus advanced, with the
£2,100,000, raised by loan, were applied to dis-
charge at par the following sums remaining unsub-
scribed, viz.
Annuities payable at the Exchequer, on the Plate-
act
Ditto 1746, payable at the Bank
Ditto 1747, ditto
Ditto on lottery, 1747, ditto
Ditto 1748, ditto
Ditto, 1749, ditto
•
Old South-Sea Annuities
£. S. d.
-182,250 0 0
175,571 6 1
210,634 15 0
70,723 9 6
269,993 1 9
103,975 12 2
New South-Sea ditto..
1,246,829 14 10
1,030,063 16 9
£ 3,290,041 16 1
By an act of this session, (24 Geo. II. c. 11.) the
South-Sea Company were to receive 4 per cent. in-
terest on their capital stock till the 25th December,
1757, and from that time three per cent.
With respect to the grants for the year 1751, the
land-tax was continued at 3s. in the pound, with
power to borrow the usual sums upon both the land
and malt taxes, at 3 per cent. The deficiencies made
good were as follows, viz.
To replace to the Sinking Fund one year's in-
terest to Michaelmas, 1750, on loan on the
salt-duties 1745
Christmas, 1749.
•
Ditto, deficiency of additional stamp-duties, at
•
£.
s. d.
35,000 ◊ ◊
6,461 1 1
हूँ
224
NATIONAL DEBT
Ditto of licences for spirituous liquors, Lady-day,
1750
Ditto of duty on sweets, at Michaelmas, 1750..
Ditto of additional duties on wines, at Midsum-
mer, 1750 ..
Ditto of duties on glass and spirituous liquors,
at ditto
£. S. ď
7,880 17 1
12,534 2 0}
4,592 16 9
30,422 6 3
Ditto of additional subsidy of poundage 1747, at
Michaelmas, 1750………….
42,559 12 7
Ditto of new duties on houses and windows, at
ditto
70,097 14 8
Deficiency of grants for the year 1750......
Ditto, inalt-duty 1749, at Lady-day, 1751 ....
Ditto, land-tax 1749, at Michaelmas, 1751....
65,797 8 11
74,482 19 3
147,487 0 61
As the deficiencies, annually made good out of the
Sinking Fund, and afterwards replaced from the sup-
plies, now amounted to a considerable sum; and
as it was this year charged with the interest on
the new loan and exchequer-bills, and with the dis-
charge of the principal of the latter, only £600,000
was granted out of the Fund towards the service of
the year, with the usual power of raising the same
by exchequer-bills, at 3 per cent.
A few days before the conclusion of the session, a
notice, (dated 15th June, 1751,) was published in
the London Gazette, by the Speaker of the house of
commons, pursuant to the resolution and order of
the house, that the 3 per cent. annuities, payable
at the Exchequer by an act of 4 Geo. II. charged on
the stamp-duties, would be redeemed and paid off
on 10th October, 1752.
FROM 1748 to 1756.
225
In the next session, which began the 14th of No-
vember, 1751, the land and malt taxes were con-
tinued as in the preceding year; the interest of the
loans, or exchequer-bills, thereon being at 3 per
cent. per annum.
The deficiencies made good were as follows, viz.
To replace to the Sinking Fund the deficiency of
additional stamp-duties, at Christmas, 1750
Ditto of licences for spirituous liquors, at Lady-
day, 1751
£
s. d.
6,997 8 3
5,431 6 4
Ditto of the 12s. per barrel on sweets, at Mi-
chaelmas, 1751
11,737 14 4
Ditto of additional duties on wines, at Midsum-
mer, 1751
24,102 19 5
Ditto of duties on glass and spirituous liquors,
at ditto.....
52,969 1 71
Ditto of duties on houses and windows, at Mi-
chaelmas, 1751
61,066 7 101
Deficiency of duties on spirituous liquors 1743,
at Christmas, 1751 ……….
17,119 14 43
Ditto of additional duties on wines 1745, at
ditto
6,693 17 4
Ditto of duties on glass and spirituous liquors,
at ditto ...
24,968 12 10
Ditto of half subsidy of tunnage and poundage,
at ditto.
89,925 10 7
Ditto of Grants for the year 1751
Ditto of malt-duty 1750, at Lady-day, 1752
Ditto of land-tax 1750, at Michaelmas 1752
54,751 5 5
122,833 10 11
93,522 5 0
The sum of £900,000 was granted towards dis-
charging the navy-debt; together with £400,000
for paying off the 3 per cent. annuities, created in
K
226
NATIONAL DEBT
1731 and, as the exchequer-bills issued in the last
session were now to be paid off, £1,400,000 was
raised by new exchequer-bills,* at 3 per cent. charged
on the Sinking Fund, in addition to £500,000
granted out of the Fund towards the supplies.
An act was now passed, which contributed much
to simplify the public accounts, and removed the
great inconvenience to stockholders, of having their
property in many different funds; and, by reducing
the number of accounts necessary to be kept, lessened
the expense and trouble of management. By this
act the following loans, bearing 3 per cent. interest,
were consolidated into one joint stock of 3 per cent.
annuities, and the duties upon which they were
charged were carried to the Sinking Fund, out of
which the annuities were made payable from the
24th June, 1752.
3 per cent. Annuities, Lottery 1731, by 4 Geo. II. c. 9. £ 800,000
800,000
Ditto
1742
15 Geo. II. c. 19.
Ditto
1743
16 Geo. II. c. 13.
1,800,000
Ditto
1744
17 Geò. II. c. 18.
1,800,000
Ditto
1745
18 Geo. II. c. 9.
2,000,000
Ditto
1750
23 Geo. II. c. 16. 1,000,000
£ 8,200,000
The proprietors of 3 per cent. annuities, payable
at the Exchequer on £600,000, borrowed in 1736,
*This sum the Bank, at a general court, held 2d January, 1752,
agreed to advance, and their proposal was accepted by the house of
commons on the 27th.
FROM 1748 TO 1756.
227
and £300,000, borrowed in 1738, charged on the
Sinking Fund; and the proprietors of 3 per cent. an-
nuities, granted in lieu of Nevis and St. Christopher's
debentures,* amounting to £37,821 5: 14, were
allowed to subscribe the same into the joint stock
created by this act, which sums, amounting together
to £9,137,821 5: 1, formed the first capital of
5:11,
the present stock of Three per cent Consolidated An-
nuities.
·
* The debentures were granted in 1711; and,
in 1714, the interest thereon being three years
in arrear, was paid, amounting to £18,540
12:9. In 1722, the interest being again in
arrear for seven years, amounting to £41,731
19:14, was added to the principal and con-
verted into stock, bearing 3 per interest, which
made the whole sum equal to
In 1727, £103,272: 10: 0 was granted to-
wards their discharge, which was paid out of the
Sinking Fund, as follows:
In 1727
1728
•
1729..
£72,559 14 0
£ s. d.
141,098 15 14
1730..
16,678 19 3
3,382 7
7 0
10,561 9 81
103,272 10 0
£ 37,821 5 1
It may be remembered, that in 1733, £80,000 was granted as
a marriage-portion to the Princess Royal, and £10,000 to the
trustees of Georgia, out of the moneys arising from the sale of
lands in St. Christopher's, part of which would certainly have been
applied with more propriety to the payment of the above small
sum.
a 2
र
228
NATIONAL DEBT
क
By the same act, the capitals of the late 4 per
cents. which had been reduced by paying off such
proprietors as had not consented to the reduction of
interest, were likewise consolidated into a joint stock,
viz.
Original Amount.
Present Amount.
£
S. d.
£
S. d.
Annuities 1746....
3,000,000 0
0..
O....
2,824,428 13 11
1747.
4,400,000 0
0..
O....
4,189,365 5 0
1747
1,000,000 0
0..
O....
929,276 10 6
1748....
6,930,000 0
6,930,000 0
0...
0....
6,660,006 18 3
1749....
3,072,472 0 10....
0 10...
2,968,496 8
8
£ 18,402,472 0 10
17,571,573 16 4
4
Of this sum £14,857,955 : 18 4 was subscribed,
pursuant to the first act of 1750, and was therefore
entitled to 3 per cent. interest to 25th December,
1757; the remainder, £2,713,617 : 18 : 0, being sub-
scribed under the second act, carried 3 per cent.
to 25th December, 1755, only; the two subscriptions
were, therefore, erected into separate joint stocks,
till 5th April, 1758, from which time they were
united. The duties on which the annuities were
charged were to be carried into and made part of the
Sinking Fund, out of which all future payments of
interest were to be made. The proprietors of annu-
ities, payable at the Exchequer on the plate-act, of
which there now remained £129,750, were allowed
to subscribe the same into the joint stock, which,
therefore, amounted in the whole to £17,701,323
16:4, being the original capital of the present stock
FROM 1748 To 1756.
229
--
of Three per cent. Reduced Annuities. The interest
and management on the joint stock of 3 per cent.
annuities, amounted to £278,585 2 9 per annum,
and on the 34 per cent. to £629,430:6:9 per annum.
This measure had considerable effect in raising the
value of the 3 per cents. which were above par the
whole of this year; in June they were as high as
106½, at which time the late 4 per cents. which car-
ried 3 per cent. for several years were 1073; Old and
New South-Sea Annuities 108.
1753. In the next session, which began 11th Ja-
nuary, the land-tax was reduced to 2s. in the pound,
though it was evident that even at 3 s. it was inadi-
quate to the peace-establishment, without the as-
sistance of the Sinking Fund; but the landed interest
preferred immediate relief to every other considera-
tion.
The deficiencies made good were as follows, viz.
£
s. d.
To replace to the Sinking Fund the deficiency of
aditional stamp-duties at Christmas, 1751 ..
Ditto of duties on spirituous liquors, at Lady-
day, 1752...
Ditto of duties on sweets, at Michaelmas, 1752
Deficiency of malt-duty 1751, at Lady-day 1753
Ditto, land-tax 1751, at Michaelmas, 1753 ..
7,916 19 11
749 3 31
9,846 3 31
193,125 14 0
83,866 15 5
Hence it appears, that the measures lately taken
had much shortened the list of deficiencies to be pro-
vided for; and, there being now the sum of
£234,875: 19: 3 remaining in the Exchequer,
{
+
230
NATIONAL DEBT
arising from surplusses of several duties, and
£18,035 9:02 overplus of the grants for 1752,
these sums were appropriated towards the service
for this year.*
£ 420,000 was also granted out of
the produce of the Sinking Fund.
The salt-duties, which had been continued to the
25th of March, 1759, were now made perpetual;
and, after the principal and interest of the last loan
thereon should be discharged, the produce of the
duties were to form part of the Sinking Fund, as
some compensation for the annual infringements
which had been made on it.
In the next session, which began the 15th No-
vember, the land and malt taxes were continued as
in the last year, with the usual loans thereon. The
deficiencies made good were as follows:
£
S. d.
To replace to the Sinking Fund the deficiency of
the duties on sweets, at Michaelmas, 1753 ..
Deficiency to 5th January, 1754, of half subsidy
of tunnage and poundage, mortgaged for an-
nuities 1708, and to the South-Sea Company
Deficiency of malt-duty 1752, at Lady-day,
1754
Ditto of land-tax 1752, at Michaelmas, 1754,
6,792 15 0
61,505 19 91
160,932 8 72
93,983 19 8
* The surplus of the excise, which formed a principal part of
the former sum, ought certainly to have been carried to the Aggre-
gate Fund, pursuant to 1 Geo. I. sess. ii. c. 12. and the surplus
of the Funds for the lottery 1714, to the South-Sea Fund, pursuant
to 6 Geo. I. c. 4.
FROM 1748 TO 1756.
231
£94,348:1:14, remaining in the Exchequer,
arising from the surplus of several duties, and of last
year's grants, was appropriated towards the service
of the year 1754, together with £700,000 out of
the Sinking Fund.-£499,600 was also ordered to
be issued out of the same Fund, to the Bank, for
discharging exchequer-bills made out in 1737, and
charged on the duties of 12s. per barrel on sweets, with
the interest due upon the bills to the time of their
being paid off. From the 5th April the duty on
sweets was carried to, and made part of, the Sinking
Fund.
1754.—In the next session, which began 14th
November, the land-tax was again fixed at 2s. in
the pound, which was the last time of its being levied
at this rate. The deficiencies made good were, of
malt-duty 1753, at Lady-day, 1755, £103,653:17:31
and of land-tax 1753, at Michaelmas, 1755, £ 51,000.
As it was thought proper to pay off £700,000 of
the navy-debt, and as a vote of £1,100,000 was passed
to enable his Majesty to augment the forces by sea
and land, it is evident that the ordinary grants would
be insufficient. Accordingly it was found necessary
to borrow a million in addition to the large grant
from the Sinking Fund. The loan was obtained on
a lottery of 100,000 tickets, at £10 each;* and of
* The resolution of the house of commons for raising this loan
was published in the London Gazette, 8th April; the subscription
to be received at the Bank, and to close on the 15th instant. The
crowd of persons at the Bank to subscribe was so great, that the
counters were broken by their eagerness in pushing forward; and,
232
NATIONAL DEBT.
1
the £1,000,000 thus raised, £900,000 was to be
attended with 3 per cent. annuities, charged upon
the Sinking Fund, to commence from the 5th of
January, 1756.
The sum granted out of the Sinking Fund was
£1,420,000, with power to raise the same at 3 per
cent. per annum, upon credit of the growing produce;
£ 500,000 of which was advanced by the Bank of
England.-£67,9629: 53 remaining in the Ex-
chequer, arising from the surplus of several duties
and the grants of last year was appropriated towards
the service of 1755.
on the close of the subscription, the sum subscribed amounted to
£3,880,000, in consequence of which a proportionable reduction
was made out of each person's share. Every one was at liberty to
subscribe for any number of tickets, upon condition of such pro-
portionate reduction, in case the whole sum subscribed exceeded a
million.
The Right Honourable H. Pelham, who had been First Lord of the
Treasury, and Chancellor of the Exchequer, ever since 1743, died
6th March, 1754; and, on the 6th of April following, the Honour-
able Henry Bilson Legge was made Chancellor and Under Treasurer
of the Exchequer.
*
233
CHAPTER IX.
The History of the National Debt, from the Com-
mencement of the Seven Years War, in 1756, to
the Peace of Paris, in 1763.
IN the session, which began 13th of November,
1755, the land-tax was raised to 4s. in the pound,
and the malt-duty was continued as usual. The de-
ficiencies made good were as follows:
£ s. d.
Deficiency of malt-duty 1754, at Lady-day,
1756......
85,494 13 7
Ditto of land-tax 1754, at Michaelmas, 1756
57,744 2 9
Ditto of grants for the year 1755
3,038 6 103
Ditto of half subsidy of tunnage and poundage to
5th January, 1756
71,181 2 22
Towards raising the supplies, which, including a
vote of credit, amounted to upwards of seven million,
a loan of £2,000,000 was borrowed on the following
terms, viz. £1,500,000 on annuities at 3 per cent.
:
234
NATIONAL DEBT
irredeemable for 15 years.*-£500,000 on a lottery
of 50,000 tickets, attended with 3 per cent. annuities,
commencing from 5th January, 1757. Every sub-
scriber of £400 to have £300 in the 3 per cents.
and £100 in lottery-tickets. The interest was char-
ged upon the Sinking Fund; on which account a new
duty upon licences for retailing beer and other liquors,
and an additional duty upon cards and dice, were
granted, and made part of the Sinking Fund. But,
though care was taken to increase the Fund by new
taxes, to answer the charge of the loan, a new mode
of extending the claim upon it towards the supplies
was at the same time adopted. By the act passed for
this purpose the whole surplus for the quarter ending
5th April, 1756, amounting to £255,955: 11: 111,
was granted first; and then the farther sum of
£1,300,000 out of the growing produce of the Fund.
The sum of £83,412 2 5 remaining in the Ex-
chequer, was also appropriated towards the service
of this year. By another act of this session, power
was granted to borrow £1,000,000 by exchequer-
bills, but only £700,000 was actually raised; these
bills were charged upon the next supplies; but, if no
sufficient supplies should be granted before 5th July,
1757, they were then to be paid out of the Sinking
Fund.
!
1756.-In the session, which began 2d December,
the land and malt taxes were continued as in the
*The annuity to commence from 11th February, 1756, but the
first payment thereof to be made 5th January, 1757, and afterwards
half-yearly.
}
FROM 1756 тo 1763.
235
preceding year:* the deficiencies made good were of
the malt-duty 1755, at Lady-day, 1757, £190,616
16: 63; and of the land-tax 1755, at Michaelmas,
1757, £54,894: 18 5.
The supplies for this year exceeded those for the
last, and one of the expedients for raising them was,
a lottery consisting of a million and five tickets, at
one guinea each, amounting in the whole to
£1,050,005 : 5, half of which, or £525,002 : 12 : 6
was to be applied to the service of the year, and the
other half was to form the prizes: the tickets were
divided into 15 classes of 66,667 each, the whole to
be determined by the drawing of one class, by mak-
ing the prizes in the other classes correspond to those
which were drawn, so that each class would contain
the same number of prizes, viz.
* The interest of the loan on the land-tax, according to the act,
was to be at 3 per cent. per annum, but of the loan on the malt-duty
3 per cent. the former was either limited to 3 per cent. by mistake,
or it was found difficult to obtain the loan at that rate, for a clause
was inserted in the malt-act allowing 3 per cent. on the former as
well as on the latter.
The ministry, having become very unpopular, thought it most pru-
dent to resign, and Mr. Pitt being applied to came into power, as
Secretary of State, nominating his friends for the other departments
of the new ministry, in which the Duke of Devonshire became First
Lord of the Treasury, and Mr. Legge, whose abilities and integrity
justly entitled him to the esteem of Mr. Pitt, was continued in his
office of Chancellor of the Exchequer.
987
NATIONAL DEBT
£
1. of 10,000
1
2.. of ..500
.... 5,000
10........100
•
.... 3,000
100.
50
1. . . . . . . . 1,000
200.
20
440..
10
with £300 for the first drawn, and £300: 3:6 for
the last drawn, amounting to £35,000: 3: 6. The
disadvantageous nature of this scheme is so obvious,
that it cannot be wondered at that it did not succeed,
particularly as the plan of it was in some degree in-
consistent with the vulgar notions of chance, by which
the spirit of lottery-adventure is chiefly supported.*
Only £440,262 : 18 was advanced, of which
£221,001 : 1 was paid back for prizes, so that there
remained only £219,261: 17 applicable towards the
supplies. The 580,707 tickets remaining undisposed
of, amounting to £609,742 : 7, were afterwards or-
dered to be cancelled.
It was also intended to raise a loan of £2,500,000†
and subscriptions were accordingly taken for it; but,
after the subscribers had made their deposit, it was
found necessary to increase the sum to £3,000,000,
* Another reason of its not succeeding was, that it was not disposed
of to any particular set of subscribers, who would have tried every
means to get the tickets off with a profit, but every person was at
liberty to purchase any number of tickets at the Bank of England.
+ Only the small sum of £313,100 was subscribed, the whole
of which was afterwards transferred to the new loan.
FROM 1756 TO 1763.
237
and, a new arrangement being made, the following
terms were agreed upon, viz.-For every £100 ad-
vanced, the subscribers were to have £100 3 per
cent. annuities, commencing from 5th July, 1757,
and an annuity for life of £12:6: the first half
year to be paid 5th January, 1758, if the subscribers
had appointed their nominees on or before that time.
The life-annuities to be payable half yearly at the
Exchequer, and any person receiving the annuity for
any time beyond the life of the nominee, knowing
such nominee to be dead, to forfeit treble the money
so received and £500. The persons who had paid
the deposit of 15 per cent. on the intended loan of
£2,500,000* were allowed to subscribe into the new
* This loan was to have been raised by a tontine, and terminable
annuities, the subscribers having the option of subscribing for
either: the tontine was divided into five classes, viz.
Class.
£ s. d.
1 Annuities of 4
0 0 per cent. for the lives of nominees of any
age, with benefit of survivorship for 60
years.
2 ditto.... 50 per cent. for the lives of nominees above the
age of 20 years, with benefit of survivor-
3 ditto......4 10
4 ditto......4 15
ship for 50 years.
0 per cent. for the lives of nominees above the
age of 30 years, with benefit of survivor-
ship for 43 years.
4 15 0 per cent. for the lives of nominees above
the age of 40 years, with benefit of sur-
vivorship for 38 years.
5 ditto......5 0 0 per cent. for the lives of nominees above the
age of 50 years, with benefit of survivor-
ship for 35 years,
238
NATIONAL DEBT
$
loan, and such as had paid more than the 15 per cent.
and taken the discount, were to have that part which
exceeded the 15 per cent. returned, with interest at
3 per cent. The sum paid for interest of money thus
returned was £139: 15: 7.
£139: 157. It does not appear
that any discount was allowed for prompt payment
on the new loan.
As the £700,000 raised under the vote of credit
of the last session was now to be repaid, with
£12,249: 19: 11 for interest, and application hav-
ing again been made by a message from his Majesty
that he might be enable to defray extraordinary ex-
penses, a new vote of credit was passed for £1,000,000
to be raised by loan or exchequer-bills, charged on
the next supplies, and if no sufficient supplies should
be granted before 5th July, 1758, to be paid out of
the Sinking Fund: this sum the Bank were empow-
ered to advance for the use of government.
With respect to the Sinking Fund, as the interest
payable on the second subscriptions of 1750 was
now 3 per cent.* and as the salt-duties were now
or, in lieu of these annuities, they were offered the following for terms
of years certain, viz.
£
s.
d.
4 0 0 per cent. for 66 years.
4 5
0 per cent. for 54 years.
4 10
0 per cent. for 46½ years.
4 15 0 per cent, for 41 years.
500 per cent. for 36 years.
The time was not far distant when the first subscriptions would
also become 3 per cents.
FROM 1756 to 1763.
239
brought into the fund, its income was increasing con-
siderably, so that, although £1,200,000 was granted
out of it towards the supply for this year, there yet
remained on 10th October, after payment of this
sum, a surplus of £93,371 : 11: 74; a circumstance
that had not happened for some years past.*
* This sum was afterwards appropriated towards the supplies for
the following year.
240
NATIONAL DEBT
{
Annuities for long terms
Amount of the National Debt, 5th January, 1757.
Ditto for lives with survivorship
Ditto for two and three lives
Exchequer-bills for interest of old bills
East-India capital and annuities
Bank ditto
3 per cent. annuities charged on Sinking Fund.
3 per cent. ditto £14,984,455 : 18 : 4 )
3 per cent. ditto £2,716,867: 18:05
31 per cent. ditto, (29 Geo. II.)
South-Sea stock and annuities
Annuities at 3 per cent. 1751
Life annuities, 1745
Ditto 1746
3 per cents. 1726.
Exchequer-bills
Principal.
£ 1,836,275 17 10₫ ••••
108,100 0 0
83,055 14 10
2,200 0 0
4,200,000 0 0
Interest.
136,453 12 8
7,567 0 0
10,047 12 0
127,687 10 0
11,686,800 0 0
398,936 35
10,537,821 5 1....
320,585 2 9
17,701,323 16 4
615,846 0 0
1,500,000 0 0
52,500 0 0
25,025,309 13 11.
878,632 12 0
2,100,000 0 0
64,181 5 0
£74,780,886 8 2
1,000,000 0
700,000 0 0
£ 76,480,886 8 21
20,214 10 0
40,489 0 0
2,673,140 7 11
FROM 1756 тo 1763.
241
1757.-In the next session, which began the 1st
December, the land and malt taxes were continued
as in the last year. The supplies considerably ex-
ceeded those for 1757, and included the following
sums for deficiencies, viz.
Deficiency of last year's grants.
Ditto malt-duty 1756, at Lady-day, 1758....
Ditto land-tax 1756, at Michaelmas, 1758....
£ S. d.
284,802 1 02
376,427 6 111
77,396 1 9
In this session, a tax of 1s. in the pound was im-
posed upon all places and pensions exceeding £100
per annum; which, with an additional duty upon
houses and windows, was made a fund for borrowing
£5,000,000; with a provision, that, if the fund proved
deficient, the deficiency should be made good out of
the Sinking Fund, and replaced from the next sup-
plies. The terms of the loan were as follows:
£4,500,000, on annuities at 33 per cent. for 24 years,
from 5th July, 1758, and from that time 3 per cent.
and £500,000 on a lottery of 50,000 tickets, at £10
each, attended with annuities at 3 per cent. from 5th
January, 1759. As the two sums formed one loan,
every subscriber of £500 had £450 in annuities
and £50 in tickets.
April 6th, 1757, Lord Mansfield was appointed Chancellor of
the Exchequer, pro tempore, but it was soon found necessary to
recall Mr. Pitt; and, in the new arrangement formed by him on 2d
July, the Duke of Newcastle was made First Lord of the Treasury.
and Mr. Legge re-appointed Chancellor of the Exchequer.
R
242
NATIONAL DEBT
As the produce of the Sinking Fund was greater
than in any year since its establishment, and as the
charge upon it was less than it had lately been,* the
sums taken from it towards the supply exceeded all
former grants of the kind, amounting to no less than
£2,491,848 : 5.† The sum of £300,000, raised
under the vote of credit of the last session, being
now to be repaid, with £8750 for interest; a similar
vote was now passed, to enable his Majesty, at any
time before the 5th January, 1759, to authorise the
commissioners of the Treasury to raise £ 800,000 by
loan or exchequer-bills, to be repaid out of the first
supplies; or, if no sufficient supplies should be granted
before the 5th July, 1759, then out of the Sinking
Fund. §
1758.-In the next session, which began 23d
*This arose chiefly from the second subscriptions of 1750 becom-
ing 3 per cents.
}
+ Viz.-Disposable surplus on 10th Oct. 1757
Out of the growing surplus....
Disposable surplus on 5th April, 1758........
Out of the growing surplus-
£ S. d.
93,371 11 7
300,000 0 0
492,400 8 3
1,606,076 5 12
£ 2,491,848 5 0.
This was in consequence of a message from his Majesty on the
13th June, desiring to be enabled to defray any extraordinary ex-
penses of the war, incurred or, to be incurred, for the service of the
year, 1758.
{
§ August 1st, 1758, a loan of £200,000 to his Majesty, in his
quality of Elector of Hanover, was opened at the Bank, and imme-
diately filled by eight of the principal merchants and bankers; four
of whom were appointed trustees for the management of the loan.
FROM 1756 To 1763.
243
November, the land-tax for 1759 was continued at
4s. in the pound. The malt-duty continued as usual.
The deficiencies made good were,
To replace to the Sinking Fund the deficiency of
glass and spirituous liquors 1746, on 5th July,
1758 .
To ditto deficiency of the fund for paying annui-
ties granted 1757, on the 5th January and 5th
July, 1758...
Malt-duty 1757, at Lady-day, 1759........
Land-tax 1757, at Michaelmas, 1759........
48
s. d.
8,881 11 10
24,371 6 113
183,439 15 10
132,393 19 4
The supplies voted again very considerably ex-
ceeded those for the preceding year; it was therefore
necessary that the loan should likewise be greater.
The sum borrowed was £6,600,000, being a larger
sum than had ever before been raised in this country
at one time. The terms on which it was obtained
were, that, for every £100 advanced, the subscribers
should be entitled to £100 stock, bearing interest at
3 per cent. per annum, commencing from 5th Ja-
nuary, 1759, with an additional capital of £5, bearing
interest at the same rate per cent. and a lottery-ticket
entitling them to a farther additional capital of
£10, bearing the like interest, commencing from 5th
January, 1760.*
The capital created by this loan was £ 7,590,000,
which was afterwards (by 33 Geo. II. c. 12.) added
The terms were agreed to by the house of commons 3 Febru.
ary, on which day, 3 per cent. consols were 881, and had been about
this price for several days; 33 per cent. 1756, about 94.
&
R 2
244
NATIONAL DEBT
1
to the joint stock of 3 per cents consolidated in
1752. The annual interest was £227,700, and the
charge of management £4269:7:6, per annum.
£16,921 : 3:2 was allowed to the subscribers by
way of discount; and the allowance to the Bank for
receiving the contributions, with the charge of draw-
ing the lottery, was £16,318 : 4 : 6.
As 3 per cents at the time of negociating the
loan were about 881, it may be presumed, that the
money would have been advanced on 3 per cents
at 86 or 7, by which the capital created would have
been the same, but the profit of the lottery saved.
Deducting £130,200 for the profits of the lottery,
being £150,000 minus £19,800 for one year's in-
terest, (the annuity on the lottery not commencing
till next year,) makes £6,469,800 the value received
for the debt incurred on £7,590,000, which was
the same as selling the 3 per cents. at 851.
The duties charged with the payment of the an-
nuities on the loan of 1757 having proved deficient,
the capital of that loan was now added to the joint
stock of 3 per cents consolidated in 1752, and charged
upon the Sinking Fund, to which the produce of the
duties was in future to be carried.
The sums granted out of the Sinking Fund* to-
wards the service of the year were £180,076: 17:0₫
remaining in the Exchequer, of the produce of the
• In this year, £624 was carried to the Sinking Fund, having
been paid at the Exchequer by a person unknown, for conscience
sake; a very uncommon instance of the power of conscience over
those who share iu the plunder of the public.
FROM 1756 To 1763.
245
Fund to 5th April, 1759, and the farther sum of
£2,250,000 out of the future produce. £253,308
3: 104, arising from the surplus of the grants for
the last year; the sum of £100,000, granted in De-
cember, 1755, for the Empress of Russia, and now
repaid; and £80,000, granted for the militia more than
was required, were also applied to the service of this year.
And, as the £ 800,000 raised upon the vote of credit
of the last session was now repaid, with £1,663: 12:1
for interest, a new vote of credit was passed for
£1,000,000, to be raised by loan, or exchequer-bills,
charged upon the next supplies, with the collateral
security of the Sinking Fund.
1759. In the session which began 13th Novem-
ber, the land and malt taxes were continued as in the
last year, with the usual loans, by exchequer-bills, at
4 per cent. interest.* The deficiencies made good
were as follows, viz.
To replace to the Sinking Fund the deficiency
of the Fund for life-annuities 1746, on 5th of
£
s. da
January, 1759 ...
To ditto of Fund for annuities 1757, at ditto
8,752 6 10
7,651 9 8
To ditto
1758, on 5th July,
1759
124,736 7 14
1759, ditto
84,141 15 8
To ditto
Deficiency of grants for 1759
75,170 0,31
* On the first day of the session, Tuesday, 13th November, the
Bank agreed to accommodate the Lords of the Treasury with
£500,000, upon tallies and orders on the act of the last session, for
granting certain sums out of the Sinking Fund, at not less than 4 per
cent. per annum, interest. Report of the Lords Commissioners of Se-
crecy, 1797, page 137.
246.
NATIONAL DEBT
!
Ditto land-tax 1758, at 2d April, 1760 ...
Ditto malt-duty 1758, at Lady-day, 1760 ....
14₫
262,392
100,910 13 12
The supplies for this year were greater than the
last by nearly three million, and a loan of £8,000,000
was found necessary towards raising them; the terms
were as follows:-For every £100 the subscribers
were to have 4 per cent. per annum for 21 years,
from 5th January, 1760, and afterwards 3 per cent.
per annum, with an additional capital of £3, con-
sisting of a lottery-ticket, bearing the like interest of
4 per cent. for 20 years, from 5th January, 1761,
and afterwards 3 per cent.
>
Those subscribers who possessed exchequer-bills
made out under the act of the last session for à vote
of credit were at liberty to pay them in; such bills,
with the interest due thereon, to be taken as cash in
the payments on the loan. The capital stock created
was £ 8,240,000, and the interest thereon £329,600,
till the year 1781, and, from that time, £247,200.
per annum. For the payment of this 'interest, an
additional duty of 3 d. per bushel on malt was granted,
with the usual provision for making good any defici-
ency out of the Sinking Fund, to be replaced from
the next supplics. As the duty soon appeared defi-
cient, the interest was afterwards charged upon the
Sinking Fund, to which the duties were then added,
by 2 Geo. III. c. 9. The interest was at first payable
June 24, The Duke of Newcastle, Henry Bilson Legge, Esq. Robert
Nugent, Esq. James Grenville, Esq, and Lord North, were made
commissioners for executing the office of Lord High Treasurer.
FROM 1756 тo 1763.
247
in January and July; but, a few years after, it was
altered to April and October. The sum allowed for
discount was £ 56,755 : 4 : 5; and to the Bank, for
receiving contributions and drawing the lottery,
£17,446 6: 8.
As the million raised pursuant to the vote of credit
of the last session was now repaid, with £12,924
68 for interest thereon, a similar vote was passed
to enable his Majesty to authorise the Treasury to
raise £1,000,000 by loans, or exchequer-bills, charg-
ed upon the next supplies; or, if no sufficient sup-
plies should be granted before 5th July, 1761, to be
then paid out of the Sinking Fund.*
Great as the sums were that had been of late years
taken from the Sinking Fund towards the supplies,
those granted out of it for this year still exceeded
them, amounting to £2,602,706 99, with power
to raise the same by exchequer-bills on the credit of
the future produce, on which £4,359: 19: 10 was
paid for interest.
On the 3d of March the house of commons resol-
ved, that the capital of £ 7,590,000, created by loan
of the preceding year, should be added to the joint
stock of 3 per cent consolidated annuities; such persons
as should not, on or before the 20th of June, signify
their dissent, to be deemed assenting thereto; and
* The Bank, on the 3d July, 1760, agreed to accommodate the
Lords of the Treasury with £ 500,000, on exchequer-bills, at 4 per
cent. per annum, on this act, (c. 18.) which they afterwards in-
creased to £678,376: 4: 91, to be repaid, if the Bank desire it,
out of the first loans to be made on the next aids to be granted
in parliament. Report, 1797.
i
248
NATIONAL DEBT
f
the duties upon which the annuities were charged to
be added to the Sinking Fund.
66
CC
(6
66
It appears, that, the 13th of February, 1760, a
minute of the Treasury-board was sent to the Bank,
informing the directors, that "The Duke of New-
"castle having stated the great and pressing demands
"of money daily made, and the necessity of finding
"out some methods for advancing money on the
supplies granted by parliament, acquainted the
Lords, that he had mentioned the same to the
governor and deputy-governor of the Bank, and
that, as the Bank had refused any farther advance-
"ments to the public, he had acquainted the said
governor and deputy-governor, that the Treasury
must be obliged to use the power which the Bank
"contract gives them, of issuing exchequer-bills to
"be circulated by the Bank, to the amount of
"£528,610: 12: 43, under acts of parliament pass-
"ed before the date of that contract, and must also
"be obliged to apply to parliament to enable the
navy and victualling boards to issue bills in the
"nature of exchequer-bills, which shall be received
<< as cash in all offices of the revenue. But that, if
"these methods would be inconvenient to the Bank,
"his Grace had proposed, that they should consent
"to the Treasury's issuing of exchequer-bills to the
"amount of £1,500,000, or £2,000,000, on the
"land-tax of 1760, and on the remaining Sinking
"Fund; such exchequer-bills to stand upon the cre-
"dit of the supplies only, and not to be compre-
"hended in the Bank's contract for circulating ex-
.
塑
​FROM 1756 To 1763.
249
#
chequer-bills." The Bank, whatever their former
reasons for refusal might have been, thought proper
upon this representation to acquiesce in the Lords of
the Treasury issuing exchequer-bills to the amount
of £1,500,000, or £2,000,000, as proposed.
*
Notwithstanding a million was now granted to-
wards the discharge of the navy-debt, in addition
to very considerable sums granted in several prece-
ding sessions, it was found necessary to borrow the
farther sum of £1,500,000 for the same service.†
This was raised by exchequer-bills charged on the
next supplies; and, if no sufficient supplies should be
granted before the 5th of July, 1761, to be paid out
of the Sinking Fund.
1760. The first session of the present reignt be-
gan the 18th of November, 1760, in which, after
settling the clear sum of £800,000 per annum on
the king for life, in lieu of the revenues granted to
his predecessors, § the land and malt taxes were con-
* Report of Lords Com. of Secrecy, 1797, p. 138.
† One million of this loan was for raising the sum granted towards
the discharge of the navy-debt; and £ 500,000 was in part of the
supply granted for naval services.
The king, in his speech, addressing the commons, states, that,
as the greatest part of the civil-list revenues were now determined,
he trusted in their duty and affection to make the proper provision
for supporting the civil government with honour and dignity. "On
my part you may be assured of a regular and becoming eco-
"nomy."
The net income of the king was, however, only £723,000,
on account of the annuities payable to the Princess Dowager of
Wales, the Duke of Cumberland, and Princess Amelia.
250
NATIONAL DEBT
tinued as in the last year, with power to borrow the
usual sums by loans, or exchequer-bills, at 4 per
cent. per annum, payable quarterly. The deficien-
cies made good were,
To replace to the Sinking Fund the deficiency
of the Fund for the Annuities granted 1758, on
15th July, 1760....
Ditto of Annuities 1759, on 5th January, 1760
Ditto
1760, on 5th July,, 1760 · ·
Deficiency of land-tax 1759, at Michaelmas,
£
d.
72,011 6 11
5,969 12 9
49,424 0 0
1761
173,162 0 93
Ditto of malt-duty 1759, at Lady-day, 1761 ·
Ditto of grants for the year 1760
•
105,579 2.11
89,510 12 11
As the supplies voted for this year far exceeded
those of any former year, it was necessary to borrow
a much larger sum than had ever before been raised
by loan in this country. The amount of the loan was
£12,000,000, viz. £11,400,000 on 3 per cent. an-
nuities, commencing from 5th January, 1761, with
an annuity of £1:2:6 for every £100, for 99
years, commencing from the same time; and
£600,000 by a lottery of 60,000 tickets, at £10
each, attended with like 3 per cent. annuities, com-
mencing from 5th January,1762.*
*The terms of the loan were agreed to by the house, 18th De-
cember, 1760; on the 31st December and 1st January following,
3 per cent. consols were 75; 4 per cents. 90.
March 21st, Lord Barrington was appointed Chancellor of the
Exchequer, and one of the Commissioners of the Treasury, in the
room of Mr Leggc.
}
FROM 1756 TO 1763.
251
The allowance to the Bank, for receiving the con-
tributions and charge of drawing the lottery, was
£ 20,629 : 15 : 0.
As the sum granted out of the produce of the
Sinking Fund for 1760 was greater than could be
expected to arise within the year, only £1,762,400
was granted for 1761, with power to raise the same
by loans, or exchequer-bills, charged on the grow-
ing produce of the Fund, without any limitation as.
to the rate of interest; and the Bank were empowered
to advance the whole or any part thereof, by which
a charge of £6,229: 7: 3 was incurred for interest.
The million raised under the vote of credit of the
last session was now paid off, with £20,170: 12:3
for interest and charges thereon; a new vote was,
therefore, passed for £1,000,000, to be raised by
loans, or exchequer-bills, charged on the next sup-
plies, or, if no sufficient supplies should be granted
before the 5th July, 1762, to be paid out of the
Sinking Fund. There was also to be discharged
the farther sum of £1,500,000, borrowed on exche-
quer-bills, pursuant to an act of the last session, with
£34,000 for interest and charges thereon; but, as
it was found more convenient to continue the debt
than to spare money for the payment of it, the like
sum of £1,500,000 was borrowed, by issuing new
exchequer-bills, to be paid out of the next supplies;
or, if no sufficient supplies should be granted before
5th July, 1762, to be paid from the Sinking Fund,
and replaced out of the first supplies afterwards
granted. The Bank were empowered to advance
252
NATIONAL DEBT.
the whole or any part of this £1,500,000, and
likewise of the £1,000,000 before mentioned.
1
1761.-In the next session, which began 3d of
November, the land and malt taxes were continued,
as in the last year, with the usual loans thereon, at
interest not exceeding 4 per cent. per annum, paya-
ble quarterly. The deficiencies made good were :
To replace to the Sinking Fund the deficiency
of the Fund for Annuities 1758, at 5th July,
- 1761
Ditto for Annuities 1760, at ditto
Ditto
£
다음
​5. d.
52,393 16 98
10,540 0 0
1761, at ditto
103,906 0 0
112,613 5 5
Ditto of malt-duty 1760, at Lady day, 1762 ..
Ditto of land-tax 1760, at Michaelmas, 1762
88,746 0 10
137,981
6 11
Deficiency of grants for 1761
The amount of the loan was £12,000,000, the
same as for the last year; but, as must be expected
in the progress of a war, was made on worse terms.
Every subscriber of £100 had for £80 thereof
£100 stock, bearing 4 per cent. interest for nineteen
years, and then to become 3 per cent. redeemable
at par; and for the remaining £20, an annuity of
£1 for 98 years, from the 5th January, 1762. The
deposit was 15 per cent. on the whole, to be paid
23d December. *
per cents
* 23d December, 3 per cent. consols were 691; 3
743, and 4 per cents 81; long annuities about 20 years pur-
chase. On the 26th of the same month the new scrip fell 4 per
cent. a rupture with Spain being feared. The declaration of war
FROM 1756 TO 1763.
253
The capital created by this loan was made a joint
stock with that of the loan for the year 1760, and
the interest on both was charged upon the Sinking
Fund; the duties provided for the payment of it be-
ing made a part of the Fund. It has already appeared,
that the duties provided for the annuities of 1760 were
insufficient; and, as there was a probability that the
new duties on houses and windows, which formed
the provision for the loan of the present year, would
be still more so, it is evident that the net produce of
the Sinking Fund was diminished by this transac-
with Spain was publicly proclaimed on 4th January, 1762, at which
time 3 per cent. consols were about 641; but, on the 30th, were
done at 61, which appears to have been the lowest price during
this war. In February they got up to 68; in March they fluctuated
from 66 to 69, and the following month were rather better: top
wards the end of May they got up to 74, and, on the various reports
generally attendant on the expectation of peace, they fluctuated
from 73 to 803, till the 30th August, when the Lord Mayor re-
ceived a letter from the secretary of state, informing him, that ple-
nipotentiaries were appointed to treat for peace, upon which the
funds experienced a considerable rise, 3 per cent. consols being
done, on the 4th of September, at 883, 4 per cents 99, and long
annuities at 28 years purchase. They afterwards fell considera-
bly, and, even when it was known that preliminaries were signed,
they were generally under these prices: 4 per cents however shut
for the Christmas dividend above par.
The Duke of Newcastle having received an intimation that his
resignation was expected, resigned the office of First Lord of the
Treasury, 26th May, 1762, and was succeeded by the Earl of Bute;
Sir Francis Dashwood was appointed Chancellor of the Exchequer.
}
254
NATIONAL DEBT
{
tion. The sum allowed for discount was £ 46,539
2:7, and to the Bank, for receiving the subscrip-
tions, £9,669 10 0.
.
Dr. Price objects to this loan,* that a sum of
£4,800,000 was needlessly added to the public
debts: "For, had 5 per cent. been offered for every
“£60 advanced, and for the remaining £40 an
annuity of £2, during 19 years, and afterwards
"of £1 for 79 years, equal encouragement would
"have been given to contributors; the annuity
"payable by the public would have been the same;
"and the new capital would have been £7,200,000,
bearing 5 per cent. interést." He seems to be
46
aware, that it would have been necessary to have
made this 5 per cent. stock irredeemable (as the 4 per
cent. stock was) for a certain term; but he should
also have recollected, that 5 per cent. stock never
sells for so much as a larger capital of 4 or 3 per
cents producing the same interest, and, therefore,
fewer persons would have been willing to advance a
loan upon the former, and, perhaps, none at the
same interest as they would upon the latter stocks.†
The £1,500,000, raised on exchequer-bills, pursu-
ant to an act of the last session, and charged on the
supplies of this year, was of course made good,
with £40,317: 5:5 for interest thereon; but this
* Additional Observations on Civil Liberty, p. 96.
† An inattention to this and some other particulars has given rise
to much false reasoning in that chapter of Dr. Price's Observations
on Rev. Pay.; entitled, On Public, Credit and the National Debt.
FROM 1756 TO 1763.
255
was done, according to precedent, by raising the same
sum on new exchequer-bills, charged on the next sup
plies; with the usual provision, that, if no sufficient
supplies should be granted before 5th July, 1763,
they should be paid out of the Sinking Fund, and
replaced out of the first supplies afterwards granted.*
In the same inanner the £1,000,000 in exchequer-
bills, on the vote of credit, was paid off, with
£2,639 : 7:04 for interest; and an act passed for
another vote of credit for £1,000,000, charged on
the next supplies, with the collateral security of the
Sinking Fund as before.
The sum of £1,009,217 : 2 : 8½ was granted out
of the produce of the Sinking Fund for the year 1762,
with a clause for raising the whole, or any part, by
loan or exchequer-bills, without any limitation of
interest. The following sums were also appropriated
for the service of this year, £115,000 granted to
George II. in 1729,† on condition that it should be
refunded from the civil-list revenues outstanding at
the time of his decease, and which was accordingly
now repaid; £170,000 remaining unapplied of mo-
ney granted for the militia in former years; and
£73,678, arising from a surplus of the duties on malt,
to 5th January, 1762.
1762. The next session began 25th November;
*Of this sum £1,000,000 was appropriated towards discharging
the debt of the navy, and £ 500,000 towards the naval services.
for the year. The Bank were empowered to advance the whole or
any part.
† See page 166.
256
NATIONAL DEBT
•
and, as there were very considerable expenses attend-
ing the conclusion of the war,* to be provided for,
the land-tax was continued at 4 s. with the usual
malt-duty, the loans thereon at interest not exceed-
ing 4 per cent. The deficiencies made good were :
Deficiency of half subsidy of tunnage and pound-
age, to 5th January, 1763
To replace to the Sinking Fund the deficiency, on
5th July, 1762, of the Fund for annuities on
the loan of £5,000,000 for 1758....
Ditto, the deficiency, on 5th January, 1762, of
the Fund for the annuities on part of the loan
of £12,000,000 for 1761
£ 49,558 1 6
48,891 14 il
26,710 0 0
Deficiency of grants for the year 1762
7,151 9 11
Land-tax 1761, at Michaelmas, 1763....
153,788 15 3
Malt-duty 1701, at Lady-day, 1763
175,420 2 73
As the Navy debt was very considerable, the
Preliminary articles of peace were signed, at Fontainbleau, ou
3d November, 1762, and the ratifications thereof exchanged on
the 22d November, at Versailles. The definitive treaty was con-
cluded at Paris, on 10th February, 1763, and the ratifications ex-
changed on 10th March.
† Debt of the Navy, 31st December, 1762.
Wear and tear, ordinary and transports
Seamen's wages
3,034,394 1
10
5
2,223,297 15 2
Victualling debt
•
Sick and wounded
•
1,329,321 9 3
113,628 15 5
Money in the hands of the
late and present Trea-
surers of the Navy……….
Money to be received from
Total, £7,700,642 1 3
503,616 15 31,771,517 6 11
the supplics for 1762. 1,267,900 10 10
£ 5,929,124 15 1
4
FROM 1756 TO 1763.
257
house of commons, on 3d February, Resolved, That
provision be made for enabling his Majesty to satisfy
all the bills payable in the course of the navy and
victualling offices, and for transports, which were
made out on or before the 31st December, 1762,
amounting to the sum of £3,075,316: 0:3. And,
on the 14th February, they resolved, that a similar
provision should be made for ordnance-debentures,
dated on or before 31st December, 1762, amounting
to £595,423 : 2: 5. Upon which resolutions a bill
was brought in and passed, allowing the proprietors
for the amount of the bills, and interest due thereon,
to 25th March, 1763, (which was added to the prin-
cipal,) annuities at 4 per cent. from the said 25th of
March, transferable at the Bank of England, and
payable out of the Sinking Fund; the sums that
should be issued for this purpose to be from time to
time replaced out of the next aids granted by parlia-
ment.* The market was thus cleared of a great quan-
tity of paper-circulation upon government-security,
which had excluded a like circulation upon private
security, and engrossed all the ready cash; this ope-
ration, therefore, made an opening for the admission
of notes on personal security, facilitated discount,
and occasioned an easier circulation of money.† The
above amount of navy, victualling, and transport,
bills had been issued under the following heads:
* The new stock was subject to redemption upon six months no-
tice in the London Gazette, by payments of not less than £500,000
at a time.
↑ Considerations on the Trade and Finances.
S
258
NATIONAL DEBT
For stores, freight of transports, &c.........
For premiums allowed on naval stores • • • • • • • ·
For slop-clothes, bedding, surgeons necessaries,
&c.
Victualling-bills
£
1,767,576 12 11
19,824 8 8
113,776 1 2
1,174,138 17 6
3,075,316 0 3
Ordnance-debentures.
595,423 2 5
£ 3,670,739 2 8
A part of this sum remained unsubscribed, al-
though a farther time for funding them was allowed
in the next session,* the stock created amounting
to £3,483,553 : 1:10.
The loan found necessary for the year 1763 was
£ 3,500,000, to be raised as follows: £2,800,000
on annuities at 4 per cent. redeemable at par, and
transferable at the Bank of England; and £700,000
on two lotteries of 35,000 tickets each; every blank
to be of the value of £5; and both blanks and pri-
zes to be attended with like 4 per cent. annuities,
which were to commence from 5th April, 1763,
and to be charged upon additional duties on wines,
and an excise-duty on cider, (the latter of which ex-
perienced great opposition) with the collateral se-
curity of the Sinking Fund. Every subscriber of
£100 to have £80 of the annuities, and one ticket
in each lottery at £10 each. The allowance to the
Bank for receiving the contributions, with the charges
of drawing the lotteries, amounted to £15,420;5:5.
* Annual Register, 1764,-and, Continuation of Anderson, page 55.
า
FROM 1756 To 1763.
259
As the sum of £1,500,000, in exchequer-bills,
charged on the supplies for this year, was now to be
repaid, with £51,629 : 17 : 2½ for interest thereon;
and likewise £1,000,000 in exchequer-bills on the
vote of credit, with £164: 4 10 for interest, it
was thought proper to raise £1,800,000, by issuing
new exchequer-bills, charged upon the first aids to
be granted in the next session, with the usual pre-
cautionary provision, that, if no sufficient supplies
should be granted before 5th July, 1764, they should
be paid out of the Sinking Fund, and the money re-
placed from the first supplies afterwards granted.
In addition to these loans, £2,000,000 was grant-
ed out of the produce of the Sinking Fund, with
power to raise the same by loan or exchequer-bills.
8 2
10
260
NATIONAL DEBT
Amount of the National Debt, 5th January, 1763.
Annuities for long terms, remainder of original sum ・・・
Ditto for lives, with benefit of survivorship
Capital.
£ S. d.
1,836,275 17 103
108,100 0 0
75,505 14 10
2,200 0 0
Interest & Managem¹
£ Ꮽ d.
136,453 12 8
7,567 0 0
9,155 12 0
1
Ditto for two and three lives, remaining.
Exchequer-bills for interest of old bills....
East-India Company's capital
3,200,000 0 0
Ditto annuities, at 3 per cent. 1744
1,000,000 0 0
Bank, original fund
3,200,000
00
Ditto, for cancelling Exchequer-bills, (3 Geo. I.)
Ditto purchased of the South-Sea Company
500,000 0 0
4,000,000 0 0
97,285 14 4
30,401 15 8
100,000 0 0
15,000 0 0
121,898. 351
Ditto 3 per cent. annuities 1728
Ditto
1729 ·
1,750,000 0 0
1,250,000 0 0
Ditto
1746
986,800 0 0
3 per cent. consolidated annuities
3 per cent. reduced annuities
3 per cent. annuities 1756
33,627,821 5 1
17,701,323 16 4
1,500,000 ✪ 0
•
52,500 0 Q
37,500 0 0
29,604 0 0
1,027,588 5 8
540,996 14 0
53,343 150 Q
FROM 1756 TO 1763.
261
•
160,031 5 0
820,985 0 o
765,326 3 11
64,181 5 O
2,100,000 00
122,603,336 8 21
4,069,818 5 11
1,000,000 0 0
30,000 0 0
220,248 0 0
447,582 0 0
18,354 0 0
Ditto
1758
4 per cent. annuities 1760 and 1762
South-Sea stock and annuities
3 per cent. annuities 1751
4,500,000 0 0
20,240,000 0 0
25,025,309 13 113
3 per cent. annuities 1726
Life annuities 1745, at 12 years purchase
Ditto
1746, at ditto
Ditto
1757, at 14 years. purchase
Long annuities 1761 and 1762, at 20 years purchase
Navy-debt, 31st December, 1762
456,202 5 0
5,034,820 5 Ó
129,762,188 18 21
5,929,124 15 1
£ 135,691,313 13 32
•
37,298 10 0
32,585 17 6
251,741 0 3
4,439,797 13 8
88,936 17 4
4,528,734 11 0
If to this be added £2,500,000, raised by exchequer-bills in 1762, and the German claims paid in 1764, 1765, and
1766, (amounting to £1,310,288: 14: 11,) the whole of the public debt will be £139,501,602: 7:51, making an
increase by the war of upwards of £63,000,000.
3
262
CHAPTER X.
}
The History of the National Debt, from the Peace
of Paris in 1763, to the Commencement of the
American War in 1775.
ON opening the next session, the 15th November,
1763, the improvement of the public revenue was
recommended to the consideration of the house of
commons, as the surest means of reducing the
National Debt, and of establishing the public credit
upon the most solid foundation; in consequence of
which some acts were afterwards passed for establish-
ing new regulations with respect to several articles of
revenue. Though it had hitherto been usual, upon
the return of peace, to reduce the land-tax, yet that
and the malt-tax were continued as in the last year,
with the usual loans at interest not exceeding 4 per
rent. The deficiencies made good were as follows,
viz.
£
S. d.
To replace to the Sinking Fund the deficiency
on 5th July, 1763, of the Fund for the in-
terest of £5,000,000, borrowed 1758………….
41,223 1 6-
FROM 1763 TO 1775.
968
Ditto on 10th Oct. 1763, of Fund for
£3,500,000, borrowed 1763...
Ditto for half a year's interest, due 29th Sept.
1763, on the navy and victualling bills,
funded in 1763....
Deficiency of grants for the last year....
Ditto malt-duty 1762, at Lady-day, 1764....
Ditto land-tax 1762, at Michaelmas, 1764,...
£ s. d.
36,699 15 4
69,671 1 2
129,489 0 3
322,079 7 57
171,850 10 7
In this session the long annuities, granted on the
loans of 1761 and 1762, together with the 3 per
cent. annuities on the loan of 1761, were consolidated
and charged upon the Sinking Fund, to which the
duties charged with these annuities were transferred.
The sum granted out of the Sinking Fund for the
service of this year was £2,000,000, with the usual
power of borrowing it by loan or Exchequer-bills
upon credit of the growing produce of the Fund.*
As the £1,800,000 in exchequer-bills, pursuant to
an act of the last session, was now to be paid off,
with £25,104; 90 for interest and charges, new
exchequer-bills were of course to be issued; but, as
they were at a discount, it was thought proper to
raise only £800,000 on bills for the same term as
those paid off, and even of this sum the Bank were
empowered to advance the whole or any part. The
farther sum of £1,000,000 was also raised on exche-
quer-bills, by an agreement with the Bank, (which was
sanctioned by the house of commons, 9th Feb. 1764)
*This grant was as usual defended upon the grounds of precedent
and the exigency of the time.
264
NATIONAL DEBT
who engaged to advance it on bills bearing interest
at 3 per cent. per annum,* payable quarterly; the
principal to be repaid out of the first supplies grant-
ed for the service of the year 1766, with the colla-
teral security of the Sinking Fund. They also agreed
to advance towards the supply £110,000, without in-
terest or any repayment of the principal.† £659,500,
arising from the sale of French prizes, was also ap-
plied towards the service of this year.
1765.—The next session was opened the 10th Jan-
uary
with a recommendation to the commons to con-
tinue their attention to the improvement of the pub-
lic revenue, and the diminution of the National Debt.
The land and malt taxes were continued as in the
last year, with power to raise the usual loan thereon
Exchequer-bills, bearing four per cent. interest, were at this time
at a discount, and navy-bills were at 9 per cent. discount.
+ If deferring a debt for two years, in time of peace, by which
means it may possibly fall upon the commencement of a new war,
can be considered as any great advantage to a nation, this agreement
must be pronounced a beneficial one on the part of government, as
the only favour which they granted to the Bank, on this occasion,
was of a very convenient nature: being merely the repeal of such
parts of the agreement of 1742, by which it was provided, that their •
yearly fund of £100,000 should cease and determine at any time,
upon 12 months notice, after 1st August, 1764, upon repayment of
£1,600,000, formerly advanced to government, and of £1,600,000
then advanced (making together £3,200,000) with all arrears of the
£100,000 per annum payable thereon, and all the principal and in-
terest due upon exchequer-bills or other parliamentary securities;
which provision for redemption was now postponed till 12 months
after 1st August, 1786.
FROM 1763 to 1775.
265
}
at an interest of 3 per cent. The following defi-
ciencies were made good, viz.
To replace to the Sinking Fund the deficiency
of fund at 5th July, 1764, for £5,00,000,
borrowed in 1758....
Ditto of Fund for £3,500,000, borrowed 1763,
at 10th Oct. 1764..
Ditto one year's interest, to 29th Sept. 1764, on the
navy and victualling bills, funded in 1763..
Deficiency of grants for the year 1764........
Ditto of malt-duty 1763, at Lady-day, 1765..
Ditto of land-tax 1763 at Michaelmas, 1765..
£
s: d.
48,176 1 11
49,742 1 24
139,342 2
249,660 4 10
160,599 4 63
268,000 0 0
The £800,000 in exchequer-bills, which formed
part of the ways and means of the last year, being
now to be paid off, with £22,338:6:10 for interest
and charges, the same amount was raised by new
exchequer-bills, without any limitation of interest
charged on the next supplies, or if no sufficient sup-
plies should be granted before 5th July, 1766, to be
paid out of the Sinking Fund, and replaced from the
first supplies afterwards granted; the Bank was em-
powered to advance the whole or any part of the
sum.*
An alteration was now made in the time of paying
the interest on £20,240,000, the consolidated capital
* Exchequer-bills were issued at 4 per cent. till the close of the
year 1764, when an experiment was made upon part of them at 3;
in 1765, the whole £800,000 was issued at 3 per cent. and even at
that rate they were generally about and sometimes above par. Con-
siderations on the Trade and Finances, &c.
*
*
+
1
266
NATIONAL DEBT
{
of the loans of 1760 and 1762; it was originally
made payable 5th January and 5th July, and had
hitherto been paid at those times; but it was now
directed that, with the consent of the proprietors,
after the payment for the half yeàr, due 5th July in
this year, one quarterly payment should be made 10th
October following, and from that time it should be
payable half-yearly, on the 5th April and 10th October,
The consent of the proprietors was taken by a clause,
enacting, that those who did not signify their dissent
on or before the 1st June, in books to be opened at
the Bank for that purpose, should be deemed to have
consented.*
As the navy-debt was still considerable, notwith-
standing the funding in 1763, and a sum of £650,000
granted towards its discharge in 1764, it became ne-
cessary to provide for £1,500,000 of this debt; and, as
funding was found to be a more convenient mode
than raising money to pay the bills, the former was
preferred, and the conditions offered to the proprie-
tors were as follows: navy, victualling, and trans-
port, bills, made out on or before 30th June, 1764,
(with the interest to 6th of April, 1765, added to the
principal) to have annuities for every £100, in the
following proportion: for parts, annuities at 3 per
cent, to be added to the joint stock of 3 per cent,
2
ड
*This new arrangement was in consequence of some inconve
niences having been occasioned by the Christmas quarter of the
Sinking Fund being always deficient, on account of the charge upon
that quarter exceeding the produce,
Maou
FROM 1763 To 1775.
267
2
इ
I
दु
Reduced Annuities; for parts, a proportionate num-
ber of tickets, of the value of £10 each, in a lottery
of 60,000 tickets, every blank to be of the value of
£6, and both blanks and prizes to be attended with
like 3 per cent. annuities; for the remaining a like
3 per cent. annuity, with liberty to convert it into a
tontine annuity, upon the following conditions: for
every £100 capital, to have, from the 5th April,
1765, during the life of the nominee whom he should
appoint, an annuity of £3, payable at the Exche-
quer, attended with benefit of survivorship; the no-
minees to be divided into six classes, and the annui-
ties, as they fall in, to be divided among the class to
which they belong; and, when there shall be only one
surviving nominee in any class, the whole annuity to
becontinued during his life, and at his death to cease
and determine.* The time fixed for delivering in the
bills to be funded was the 26th March; and, as the full
sum was not then brought in, it was thonght proper
to provide, that, if they did not by the 5th April
amount to the full sum of £1,500,000, the remain
der might be made up by a money-contribution, which
was to be applied towards the discharge of the bills
By this transaction a saving of £15,000 per annum was made
to the public, by substituting a stock at 3 per cent. instead of navy
bills at 4, which was done at a time when the 3 per cents. were below
87; and perhaps there is no instance of money borrowed, at that
rate, while the stocks bearing the same interest were so greatly under
par. From this saving, however, is to be deducted the profit on the
lottery, which appears to have been the chief inducement to the sub-
scription.
Y
268
NATIONAL DEBT
unsubscribed. The above-mentioned bills, made out
on or before the 3th June, 1764, amounted, with the
interest due thereon, to £1,971,589 : 5 : 8, of which
£1,347,500 was subscribed, agreeably to the above
conditions, and the remainder £152,500 was made
good by money-contributions from other per-
sons. Of the total £1,500,000, only £18,000 was
subscribed into the tontine-annuities, so that the ca-
pital of 3 per cent. stock created was £1,482,000.
The interest of the whole was charged upon the
Sinking Fund, upon which account various new du-
ties were granted, and added to that Fund.
As there was a surplus of the produce of the
Sinking Fund remaining in the Exchequer, on the 10th
October, 1764, amounting to £135,213: 5:04, this
9um was granted towards the supply; and, in conse-
quence of the surplus, the amount to be taken out of
the Fund for the current year was increased to
£2,100,000, with power to raise the whole or any
part by loans or exchequer-bills, on credit of the
growing produce. The following sums were also
appropriated towards the supplies for this year, viz.
the money remaining in the Exchequer, granted in
the last session for the militia, £80,000; out of the
duties granted by an act of the last session, and re-
served to be disposed of by parliament towards de-
fraying the expenses of the colonies in America,
£60,000;* out of new duties now laid upon gum
* These duties, however, produced only £3,223: 8: 10, and the
duties on gum arabic, &c. proved still more deficient, as they pro-
duced £72: 17: 10 only, instead of £12,000.
FROM 1763 TO 1775.
269
senega and gum arabic, £12,000; out of £670,000
agreed to be paid by the French king, for the sub-
sistence of prisoners during the late war, £ 308,000.
Agreeably to the notices given by the speaker of
the house of commons, pursuant to an order of the
house, an act was passed for paying off one-fourth
part of the capital of £ 3,483,553: 1: 10, 4 per
cent. annuities, created in 1763,* by funding navy-
bills; which fourth part, amounting to £870,888: 5:52.
was to be discharged in one payment, after providing
for the interest that would become due 25th Decem-
ber, 1765. As some measure of this kind had been
recommended to the house of commons, at the be-
ginning of the session, the adoption of it was acknow-
ledged at the conclusion in the following passage
of the speech. "The many bills which you have
formed, for the improvement and augmentation
"of the revenue in its several branches, and the
"early care which you have taken to discharge a
(C
* See page 257.
In this session was passed the unjust act for imposing stamp-du-
ties in America, which soon produce! such alarming but natural
consequences, that it was thought proper to dismiss the ministry
under which the measure was adopted; consequently, in July, 1765,
Lord Rockingham was appointed First Lord of the Treasury, and
Mr. W. Dowdeswell, whose talents and integrity well qualified him
for the office, Chancellor of the Exchequer. This event was not
marked by any material alteration in the price of stocks: 3 per
cents, were about 873.
I
270
NATIONAL DEBT
CL
part of the National Debt, are the most effectual
"methods to establish the public credit upon the
surest foundations, and to alleviate, by degrees,
"the burthens of my people."
(6
The disturbances which took place in the American
colonies, in consequence of the obnoxious stamp-act,
caused the parliament to be assembled 17th Decem-
ber, and the importance of this business excluded the
notice of other subjects in the king's speech on thẻ
occasion. The land and malt taxes for 1766 were
continued as in the last year, with power to raise the
usual sums thereon by loans or exchequer-bills, bear-
ing 3 per cent. interest, payable quarterly. The de-
ficiencies made good were:
£
s. d.
To replace to the Sinking Fund the deficiency
on 5th July, 1765, of the fund for annuities on
£5,000,000, borrowed 1758.....
Ditto annuities at 4 per cent. for the year, ending
29th September, 1765, on navy and victualling
bills, funded in 1763…………….
Ditto for charges of management on the said an-
nuities, for two years and a half to 29th Sep-
tember, 1765.......
Ditto for deficiency on 10th October, 1765 of
the fund for annuities on £3,500,000, bor-
rowed 1763 ...
Ditto for three months annuity to 25th Decem-
ber, 1765, on part of the 4 per cent. annuities
1763, redeemed pursuant to 5 Geo. III. c. 23. ·
Deficiency of grants for 1765, the sum voted
45,561 7 103
139,342 2 4
4,898 14 91
29,211 12 6
8,708 17 7
£292,828 : 0 : 41, but was satisfied with. 291,328
FROM 1763 TO 1775.
271
Ditto malt-duty 1764, at Lady-day, 1766....
Ditto land-tax 1764, at Michaelmas, 1766....
£ s. d.
175,904 11 111
205,717 13 1
An act was passed (agreeably to the public no-
tices that had been given by the speaker of the
house of commons, pursuant to the order of the
house) for paying off another fourth part, or
£870,888: 5:5½, of the 4 per cent. annuities, created
1763, by funding navy-bills; these were to be re-
deemed after paying the interest that would become
due 25th December, 1766. There was also a debt of
exchequer-bills to be discharged, consisting of
£ 1,000,000 taken by the Bank in 1764, (on which
£51,763:8:4 was due for interest and charges) and
£800,000 raised as part of the ways and means for
the last year, with £14,127:7: 8 for interest and
charges; but, though it was necessary to pay off these
bills, the debt was continued by raising the same suni
of £1,800,000 in new exchequer-bills, charged
upon the first aids to be granted in the next session
of parliament, with the collateral security of the
Sinking Fund. The Bank agreed to circulate
£1,000,000 at 3 per cent. and the £800,000 was
issued in payments as usual. In addition to the
money granted for redeeming part of the 4 per
cents £1,200,000 was voted towards discharging
the debt of the navy; a loan was, therefore, found
necessary, which was raised on the following terms:
£900,000 by annnities at 3 per cent. commencing
from 5th January, 1766; and £600,000 by a lottery
272
NATIONAL Debt
1
of 60,000 tickets, of which every blank was of the
value of £6, and both blanks and prizes attended
with like 3 per cent. annuities, commencing from
5th January, 1767. Every subscriber of £100 to
have £60 in the 3 per cent. annuities, and, for the
remaining £40, four tickets at £10 each.
As it appeared, by an account laid before parlia
ment, that, on 5th April, 1766, there was a surplus
of the Sinking Fund of £439,586 16: 24 subject
to the disposition of parliament, the sum granted out
of that Fund towards the supply was £2,150,000,
including the before-mentioned sum: the remainder,
or £1,710,413: 3: 94, the treasury were empowered
to raise by loan or exchequer-bills, without any
limitation as to the rate of interest: £181,000 of the
moneys agreed to be paid by the king of France
for the maintenance of French prisoners was also ap-
propriated towards the supplies; with £28,000 arising
from the sale of French prizes taken before the de-
claration of war; £5000 of such sums as shall arise
from the sale of lands in the ceded islands; and
£218,7208 arising from various savings and
disposable duties.
1766.—The riots which took place in many parts
of the country, in consequence of the high price of
corn, caused the parliament to be assembled again on
the 11th November; and, as this was the first session
since the new ministry* came into power, the landed
* Consisting of the Duke of Grafton, Earl of Shelburne, Lord
Camden, Right Hon. Charles Townshend, and the Earl of Chatham.
1
FROM 1763 TO 1775.
273
interest formed a majority against them, and got the
land-tax for 1767 reduced to 38. in the pound. In
consequence of which, notwithstanding the assis-
tance of several auxiliary articles towards the supplies,
the deficiency of the grants became greater than
usual, and it was found necessary to impose some
new taxes. The deficiencies of the last year now
made good were :
To replace to the Sinking Fund the deficiency on
the 5th July, 1766, of the Fund for the an-
nuities on £5,000,000, borrowed 1758....
To ditto, to replace the deficiency on 10th Oc-
tober, 1766, of the Fund for the annuities on
£ 3,500,000, borrowed 1763
To ditto, to replace the annuities for the year,
ending 29th September, 1766, on navy and
victualling bills, funded 1763
To ditto, for charges of management, for one
year, ending 29th September, on ditto....
To ditto, for three months annuity, to 25th De-
cember, 1766, on part of the said annuities,
redeemed pursuant to 6 Geo. III. c. 21.……….
Deficiency of grants for the year 1766......
Ditto of malt-duty 1765, at Lady-day, 1767..
Ditto of land-tax 1765, at Michaelmas, 1767..
48
s. d.
49,660 9 21
12,758 13 7
104,506 11 10
1,592 1 92
8,708 17 73
129,144 2 8
300,610 14 9
228,212 0 11
amounting to
The exchequer-bills of the last year,
£ 1,800,000, were discharged in course, with
£43,229 2: 4 for interest and charges; and, as
these bills, which formerly were a resource reserved
for emergencies, were now become a regular part of
the ways and means, a sum equal to that paid off
T
274
NATIONAL DEBT
was raised by new exchequer-bills, charged upon the
first supplies to be granted in the next session.
On the 13th April the house of commons resolved
to pay off the remainder of the 4 per cent. annuities,
created by funding navy-bills, in 1763, which were
now reduced, by the payments in the two last years,
to £1,741,776: 10: 11, which sum was to be dis-
charged in one payment, after paying the interest
due thereon, on 25th December, 1767: at the same
time it was resolved to pay off, on 5th January,
1768, £875,000, being one-fourth part of the capi-
tal of 4 per cent. created by the loan of 1763.
£300,000 was also granted towards the discharge
of the navy-debt. Towards making these payments
it was found necessary to borrow £1,500,000, which
was obtained nearly upon the same terms as those of
the loan in the preceding year; viz: £900,000 on
3 per cent. annuities, commencing from 5th Janu-
ary, 1767, and £600,000* on a lottery of 60,000
tickets, attended with 3 per cent. annuities, com-
mencing from 5th January, 1768, The subscribers
to have for every £100-£60 in the annuities, and
four lottery-tickets at £10 each. †
The annuities were of course charged upon the
Sinking Fund, to which the new duties on linens and
* The whole of this was divided into prizes.
+ The resolutions respecting this loan passed the house 16th of
April, on which day 3 per cent Consols were 881; 3 per cents
94, and Long Annuities 27 years purchase.
FROM 1763 TO 1775.
275
chip-hats, granted this session, were directed to be
carried.
The sums granted out of the Sinking Fund, to-
wards the supply, were £469, 147 14 34,* re-
maining in the Exchequer, being the surplus of the
Fund on the 5th April, 1767; and £2,010,121
10:34 out of the growing produce of the Fund,
with the usual power of raising the same by loans or
exchequer-bills, which was found a very necessary
clause. Various other sums, remaining for the dis-
position of parliament, were also appropriated to the
same purpose.
It
may be
proper to notice a measure of this ses-
sion, which has since been appealed to as a prece-
dent on a different occasion: the two-sevenths ex-
cise, granted in 1693, was charged with the pay-
ment of annuities on two and three lives, and a sum
sufficient for this purpose was retained in the Exche-
quer; but, many of the annuities having expired by
the death of the annuitants, though their representa-
tives had neglected to furnish the required certifi-
cates, the sum remaining in the Exchequer, on the
5th April, 1767, amounting to £ 84,604 3: 3, was
directed to be carried to the Aggregate Fund, and
that fund was made a security for any future claims
on account of these unclaimed annuities, in case the
growing produce of the two-sevenths excise should
not be sufficient to answer the same. A farther sum
of £30,291: 11: 34 was taken from this account
11:34
in 1771.
*
:
According to the act, £469,147: 14 : 03.
T &
276
NATIONAL DEBT
!
(6
1767.-As there was every reason to expect a con-
tinuance of peace, the reduction of the National
Debt was again recommended to the Commons on
opening the next session, 24th November, and the
House in their address noticed this subject in the
following words: "Our regard to your Majesty's
"recommendation, as well as the indispensable duty
we owe to those whom we represent, will make
"us earnestly attentive to the great object of dimi-
"nishing the National Debt; being convinced that
nothing can so effectually tend to add real lustre
"and dignity to your Majesty's government, or to
give solid and permanent strength to these king-
"doms.” Had they been as earnest for the accom-
plishment of this object as these expressions seem to
imply, the land-tax would certainly have been raised
to four shillings, instead of being continued at three
shillings.
CC
66
The deficiencies made good were:
To replace to the Sinking Fund the deficiency on
4th July, 1767, of the Fund for annuities on
£ 5,000,000, borrowed 1758
4.
To replace to ditto the deficiency on 10th Octo-
ber, 1767, of the Fund for the annuities on
£3,500,000, borrowed 1763....
To replace to ditto one year and a quarter's an-
nuities, to Christmas, 1767, on the joint stock.
of 4 per cents then to be redeemed...
To replace to ditto three months annuity to
5th January, 1768, on £ 875,000, part of
the 4 per cents 1763, then redeemed
Deficiency of grants for 1767
Ditto of malt-duty 1766, at Lady-day, 1768 ·
Ditto of land-tax 1766, at Michaelmas, 1768 :
53,480 17 82
59,322 16 10
88,435 19 63
8,750 0 0
392,484 4 53
271,539 10 35
252,920 12 51
FROM 1763 TO 1775.
277
The £1,800,000 in exchequer-bills was of course
paid off, with £35,755 13: 3 for interest and
charges; and the like sum was raised by new exche-
quer-bills.
As it was now resolved to pay off £2,625,000,
bearing 4 per cent. interest,* (being the remainder of
the capital created by the loan of 1763,) it was
found necessary, notwithstanding the contribution of
£400,000 from the East-India Company, † to raise
£1,900,000 by way of loan, viz. £1,300,000 on
3 per cent. annuities, commencing from 5th Janu-
ary, 1768; and £ 600,000 on a lottery of 60,000
tickets, at £10 each, entitled to like 3 per cent. an-
nuities, but commencing from 5th January, 1769:
every contributor of £65, towards the £1,300,000,
to take three tickets in the lottery. The Sinking
Fund, as may be expected, was charged with these
annuities; and, as a provision, the duties out of
which the interest on the 4 per cents 1763 (now in a
course of redemption) was payable were added to
the Fund.
*The four per cents were to be redeemed in three equal pay-
ments, as follows: £875,000 on 5th July, 1768; £875,000 on
10th October, 1768, and £875,000 on 5th January, 1769, with the
annuity thereon up to the day of redemption.
† A new arrangement was now made with the Company, by
which they agreed to advance for the use of government £ 400,000
per annum for two years.
In December, 1767, Lord North was appointed Chancellor of
the Exchequer.
278
NATIONAL DEBT
The sum granted out of the Sinking Fund, for the
service of this year, was £2,250,000, part of which
was raised by exchequer-bills on the credit of the
growing produce.
1768.-The first session of the new parliament
was opened on the 11th of May. This being merely
for the purpose of renewing some temporary bills that
were near expiring, no financial business was brought
forward till the next session, which began the 8th of
November following. As the National Debt was not
even mentioned in the king's speech, it could not be
expected that the reduction of it, which had lately
been thought so important an object, would be very
earnestly pursued; the land-tax was, therefore, con-
tinued at 3 s. in the pound for the year 1769. The
deficiencies made good were:
To replace to the Sinking Fund the deficiency.
on the 5th July, 1768, of the Fund for annu-
ities, on £5,000,000, borrowed 1759....
To replace to ditto the deficiency on 5th April,
1768, of the Fund for the annuities on
£ 3,500,000,- borrowed 1763
Deficiency of grants for 1768 ...
Malt-duty 1767, at Lady-day, 1769......
Land-tax 1767, at Michaelmas, 1769
£ s.
s. d.
47,531 18 6
18,930 3 42
186,043 1 72
133,747 11 2}
212,503 18 51
The exchequer-bills of the preceding year were
paid off in course; with £59,745 6: 34 for interest
and charges; and the like sum of £1,800,000 was
raised by issuing new exchequer-bills as part of the
ways and means for this year,
1
FROM 1763 TO 1775.
279
In addition to £400,000 paid by the East-India
Company, pursuant to their agreement, £180,000
was raised, towards the supplies by the profit on a
lottery; besides the use of the contribution-money
for several months. The lottery consisted of 60,000
tickets, at £13 each, amounting to £ 780,000; of
which £ 600,000 was repaid in prizes. About the
middle of November, the tickets sold at £12: 16:0,
being 4 s. under the original price. In May they got
up to £16: 6: 6, and they were afterwards from
£14 to £15.
The sums granted out of the Sinking Fund, for
the service of this year, were the surplus of
£135,177: 15: 61, remaining in the Exchequer on
the 5th April, 1769, for the disposition of parlia-
ment; and £ 1,664,822 : 4 : 5 out of the growing
produce of the Fund, with the usual power of raising
the same by loans or exchequer-bills. Sundry sur-
plusses and other moneys at the disposition of par-
liament, amounting to £234,649: 19: 91, were
also appropriated to the same purpose.
One reason that no progress was made during this
session in the payment of the National Debt was, pro-
bably, that the ministry knew they should have a debt
of a different description to bring forward and provide
for: accordingly, on the 28th February, a message
from his Majesty was brought to the house of com-
mons, informing them, that, the expenses of his civil
government having exceeded the revenue settled by
parliament, he had been under the necessity of con-
tracting a considerable debt, and that he relied on
280
NATIONAL DEBT
their zeal and affection for the discharge of this in-
cumbrance. This application occasioned great de-
bates, which, however, ended in granting £513,511
to pay the arrears and debts due on the civil-list to
5th January, 1769.* The charge of his Majesty's
civil government, for one year, ending the 5th of
January, 1766, was stated at £ 924,042 : 2 : 5.
In this session the agreement with the East-India
Company was renewed, by which they were to pay
£ 400,000 per annum to government, for five years,
from 1st February, 1769, on similar conditions with
the agreement made two years since.
About this time Dr. Price first offered to the pub-
lic some Observations on Public Credit, and the Na-
tional Debt, in the third chapter of his Observations
on Reversionary Payments. He strongly pointed
out the destructive tendency of the funding system,
and that, rather than continue to contract debts
without providing for their redemption, it would be
better to raise no money but upon terminable annui-
ties, by which means time would do that necessarily
for the public, which, if trusted to ministers, might
never be done. But the object which he particularly
recommended was the establishment of a permanent
Sinking Fund, on the principle of the Fund that had
* His Majesty, after thanking the Commons, tells them, that he
shall ever consider their readiness in relieving him from the difficul-
ties increasing upon him by the continuance of this debt as an addi-
tional motive" to endeavour to confine the expenses of his civil
government within such bounds as the honour of his crown can
"possibly admit."
16
FROM 1763 TO 1775.
281
been formally established and so soon destroyed.
The necessity of adopting this measure and the
advantages that would attend it were strongly point-
ed out; but, even at this period, the Dr. does not
appear to have entertained great hopes of seeing an
efficient plan adopted, and long continued.
1770. The next session began the 9th January,
in which the land and malt taxes were continued as
in the preceding year, with the usual loans, at in-
terest not exceeding 3 per cent. The deficiencies
made good were:
To replace to the Sinking Fund the deficiency on
5th July, 1769, of the Fund for the annuities
on £5,000,000, borrowed 1758
Deficiency of grants for the year 1769 ......
£
S. d.
46,463 12 S
55,011 75
The exchequer-bills of the preceding year were
discharged in course, and the like sum was raised in
new exchequer-bills, charged upon the first aids
granted in the next session. As the redeemable
4 per cents were all paid off, notice was now given,
(by an order of the house of commons, inserted in
the London Gazette of 27th April, 1770,) that the
capital of £1,500,000, bearing 34 per cent. interest,
which formed part of the loan of the year 1756,
would be redeemed on the 12th February, 1771,*
* This was the first day on which they became redeemable.
In January, 1770, Lord North became First Lord of the Trea-
sury, and still retained the Chancellorship of the Exchequer,
232
NATIONAL DEBT
'
after discharging the interest then payable on the
same, up to the day appointed for the redemption
thereof: this had the effect that might be expected,
of keeping the stock above par till redemption. At
the same time a scheme was projected for reducing
the interest on part of the 4 per cents, consolidated
in 1762, by allowing the proprietors to subscribe to
the amount of £ 2,500,000 into the 3 per cent. Con-
solidated Annuities; the rate of 3 per cent. to com-
mence from 5th January, 1770; and, as an induce-
ment to make this exchange, they were entitled, for
every £100 subscribed, to have two tickets in a
lottery of 50,000, at the rate of £14 each, and, in
consideration of their subscription, were to have a
receipt from the Bank for £4, in part of the said
£ 14 per ticket; the farther payments to be made as
follows: £1 per ticket on or before 15th June, £?
on or before 20th July, £3 on or before 21st Au-
gust, and £4 on or before 25th September: the
usual discount, at 3 per cent. was allowed to those
who paid in the whole on or before 17th August.
From the nature of this scheme it is not to be won-
dered at that it did not fully succeed, as there was a
doubt from the scheme, (£500,000 only being di-
vided into prizes,) whether the subscribers would re-
alize the £4, pretended to be given them, without
looking to any farther profit. The sum subscribed
into the 3 per cents was £ 1,253,700; but there was
a clause, that, if the whole £2,500,000 was not sub-
scribed, any persons should be at liberty to purchase
the remaining tickets at the rate of £ 14 per ticket.
FROM 1763 тo 1775.
283
The sums granted out of the Sinking Fund, for
the service of this year, were £299,375: 6:61
surplus of the Fund remaining in the Exchequer, on
the 5th January, 1770, for the disposition of parlia-
ment; £773,240 16: 0, the surplus of the Fund
for the quarter ending the 5th April; and £1,700,000
out of the growing produce of the Fund, with power
to raise the same by loans or exchequer-bills.
The next session began on the 13th of November;
and, as preparations for hostilities were thought ne-
cessary, on account of a dispute with Spain relative
to Falkland Islands,* the land-tax was raised to four
shillings in the pound, though not without some op-
position, and a promise obtained from the ministry,
that, if a war did not take place, it should be redu-
ced again to three shillings in the next session. As
there was a small overplus of the grants of the last
year, which was appropriated towards the service of
the current year, the only deficiencies to be made
good were those of the land and malt taxes for
1769; and £ 35,085 : 2 : 11 to replace to the Sink-
ing Fund the deficiency, on the 5th July, 1770, of
the Fund for the annuities on £5,000,000, borrowed
in 1758.
The exchequer-bills of the last year were dis-
charged in course, and the like sum of £1,800,000
*On 20th February, 1770, two Spanish frigates arrived at Port
Egmont, and took possession of Falkland Islands in the name of the
king of Spain. It was not publicly known in London till the be-
ginning of September.
t
7
284
NATIONAL DEBT
1
raised by issuing new ones, charged upon the first
aids to be granted in the next session of parliament.
A lottery was created of 50,000 tickets at £13
each, amounting to £650,000; the sum divided into
prizes was £ 500,000, but as there was a deduction of
10 per cent. from the prizes, the sum actually paid
was only £450,000: a very pernicious scheme,
as many persons who are usually adventurers in
the lottery would not consider the discount, and
therefore conceive themselves entitled to a better
chance than they really were.
The sums granted out of the Sinking Fund for the
service of this year were £691,977: 7:9, the sur-
plus remaining in the Exchequer on the 5th April,
1771; and £1,650,000 out of the growing produce
of the Fund, with the usual power of raising the
latter sum by loans or exchequer-bills.
In 1771, Dr. Price, in An Appeal to the Public on
the subject of the National Debt, endeavoured
to engage more general attention to the observa-
tions on the National Debt, contained in his Trea-
tise on Reversionary Payments; and, by exposing
the fallacy of the arguments usually employed to
justify the alienation of the Sinking Fuud, to con-
vince the public, that the best scheme for paying off
the National Debt was that which had long been
known, which had been established, but unhappily
crushed in its infancy, and the restoration of which
appeared to him of such essential importance, that
he says:
"If the whole of it cannot be unalienably
applied to its original use, let some part of it be
FROM 1763 тo 1775.
285
"so applied, that the nation may at least enjoy a
"chance of being saved;" being fully persuaded,
that not only the preservation of our trade and liber-
ties, but the very being of the state, depended upon
the reduction of our debts.
1772.-In the next session, which began the 21st
January, although the dispute with Spain was ad-
justed, and there was every appearance of a conti-
nuance of peace, it was thought proper to keep up a
greater naval force than had been usual in time of
peace; notwithstanding which the additional shilling
was taken off the land-tax, as had been promised in
the last session.
The deficiencies made good were to replace to
the Sinking Fund the deficiency on the 5th July,
1771, of the fund for the annuities on £5,000,000,
borrowed in 1758, £42,445: 5:5; and for defi-
ciency of grants for the year 1771, £ 39,456 0: 101.
The exchequer-bills of last year, amounting to
£ 1,800,000, were paid off in course, and the like sum
issued in new bills, charged upon the first aids
granted in the next session of parliament. The sums
granted out of the Sinking Fund towards the service
of this year were:
The surplus remaining in the Exchequer on
10th October, 1771
The surplus remaining in the Exchequer on
5th January, 1772.....
Remaining in the Exchequer on 5th April••••
£
s. d.
136,116 0 82
55,192 6 112
305,398 13 2
286
NATIONAL DEBT
£
6. d.
Out of the growing produce of the Fund,
with the usual power of raising the same by
Ioans or exchequer-bills
1,856,723 1 2
1
The reduction of the debt still went on slowly;
the sum granted for this purpose was £ 1,350,000 to
be employed in discharging £1,500,000 3 per cents,
at £90 money for every £100 stock. This was the
first instance of redeeming the public debts under
par, and the advantage given to the subscribers, to
induce them to accept these terms, was, that for
every £100 subscribed to be paid off they were en-
titled to have four tickets in a lottery of 60,000
tickets, on payment of £12: 10 per ticket; so that,
in addition to the £90 received from government,
they had whatever profit they could make by dispo-
sing of their tickets at a higher price than that at
which they took them.* The sum divided into
prizes was £600,000, so that the profit to the public
was £150,000. The resolution for this redemption
passed the house of commons on the 2d May,
and the time limited for the subscription was the
15th of the same month, and on the first two days
no person was allowed to subscribe more than
* In 1773, Dr. Price, in the preface to 3d edit. of his Observa-
tions on Reversionary Payments, offered some remarks on this plan,
which he shewed to be a weak and temporary scheme; and, from its
inadequacy to the proposed object, took the opportunity of again
enforcing the necessity of restoring the plan formerly established,
and securing it from future perversion.
FROM 1763 To 1775.
287
£10,000. The proportions of the different stocks
subscribed were as follows:
£
Three per cent. Consols..
732,975
Three per cent. Reduced
•
318,300
Old South-Sea Annuities
194,250
New South-Sea Annuities
176,325
Three per cents 1751.....
78,150
£1,500,000
Which sums were redeemed accordingly in two pay-
ments, one-half on the 15th July, and the other
half on 20th October,* *
The embarrassments of the East-India Company,
and other important subjects, caused the parliament
to be assembled on 26th November, 1772; and, as
there was every appearance of a continuance of
peace with the powers of Europe, the land-tax was
continued at 3s. in the pound for 1773. The defi-
ciencies made good were:
s. d.
To replace to the Sinking Fund the deficiency on
the 5th July, 1772, of the fund for the annuities
on £ 5,000,000, borrowed in 1758.
Deficiency of grants for the year 1772-
48,245 11 6
21,085 1 7
* As the 3 per cent Reduced and Old South-Sea Annuities were
payable half-yearly, in April and October, and as the subscribers
were entitled to interest to 5th July, a quarters payment was made on
these two stocks.
288
NATIONAL DEBT
The pecuniary distresses of the East-India Com-
pany, arising from the misconduct of their servants
in India, and in some measure from their late contri-
butions to government, together with the loss of the
American market for their teas, and the increase of
their dividends, reduced them to the necessity of peti-
tioning parliament for relief, by means of a loan of
£1,400,000, for four years, at 4 per cent. interest, the
company agreeing not to make a dividend of more
than 6 per cent. until the loan should be reduced, by
repayments, to £750,000; that then they might
raise their dividends to 8 per cent. and, after the whole
loan was discharged, the surplus of their net profits,
above the said dividend, should be appropriated to
the reduction of their bond-debt to £1,500,000; and
from that time the surplus profits should be equally
divided between the public and the Company. The
loan being agreed to, though with some variation
from the conditions proposed by the Company, it
was raised upon exchequer-bills, charged upon
payments to be made into the Exchequer by the
Company, of all the surplus of their clear revenues
and profits, after setting apart the dividend of 6 per
cent. and, if this should prove insufficient to dis-
charge the whole principal, interest, and charges,
of the bills, before 6th April, 1779, the same to be
made good out of the aids to be granted for the ser-
vice of the year 1779, with the additional security of
the Sinking Fund; £600,000 of the loan was to be
paid to the Bank, in part of the debt due to them
from the Company.
the
1
FROM 1763 TO 1775.
289
The exchequer-bills of the last session, amounting
to £1,800,000, were discharged in course; but, as the
agreement with the India Company would bring an
additional number of these bills into circulation, it
was thought proper to raise only £1,000,000 by new
exchequer-bills towards the supplies; charged, as
usual, on the first aids to be granted in the next ses-
sion. The sums appropriated out of the Sinking
Fund towards the supply for this year were
£350,1937 44, the surplus remaining in the
Exchequer on the 5th April, 1773; and £2,349,806
12: 7 out of the growing produce of the Fund,
with the usual power of raising the same by loans or
exchequer-bills. No measures were taken this session
for reducing the National Debt.
:
1774.-In the next session, which began 13th
January, the land and malt taxes were continued as in
the preceding year. There being a surplus of the
grants for 1773, (which was appropriated towards the
supply for this year) the only deficiencies to be made
good were:
For replacing to the Sinking Fund the deficiency
on the 5th July, 1773, of the fund for the an-
nuities on £5,000,000, borrowed 1758.
Deficiency of land-tax 1773......
Ditto of malt-duty 1773.
£
s. d.
43,645 12 8
215,164 7 6
284,835 12 6
The million in exchequer-bills of the last year
was discharged in course, and £1,250,000 was raised
by new bills, charged as usual on the first aids to be
U
M
290
NATIONAL DEBT
granted in the next session. The sums granted out
of the Sinking Fund towards the supply were, the
surplus of £113, 190: 11: 7 remaining in the Ex-
11:74
chequer on the 5th January, 1774; £619,303:7: 33
remaining in the Exchequer on the 5th April, 1774,
and £2,080,696 12 8 out of the growing pro-
duce of the Fund, with power to raise the latter sum
by loans or exchequer-bills.
The grants of this session for the reduction of the
debt were, for reducing the navy-debt, £200,000 ;
and, for redeeming 3 per cent stock, £880,000: this
redemption, like that of 1772, included 3 per cent con-
solidated and 3 per cent. Reduced Bank Annuities, Old
and New South-Sea Annuities, and 3 per cents 1751;
but the conditions were somewhat different from the
former, they were now to have but £88 money, and
were entitled, for every £100 subscribed, to have six
tickets in a lottery of 60,000 tickets, on payment of
£12: 10 per ticket. The sum of £600,000 to be
divided in prizes. The proprietors received the
money for their stock in two payments, half on the
15th July, and half on the 20th October; and were
entitled to the dividend due 5th July, a quarter's pay-
ment being made on the 3 per cent Reduced and Old
South-Sea Annuities. The resolution for this redemp
tion passed the house of commons on the 19th May,
and the time limited for the subscription was the 28th
of the same month. During the first two days, no
person was allowed to subscribe more than £5000
stock. The proportions subscribed in the different
funds were as follows, viz.
FROM 1763 TO 1775.
291
£
3 per cent. Consol..
372,350
3 per cent. Reduced
264,950
Old South-Sea Annuities..
140,900
New South-Sea Annuities.. 162,900
3 per cents 1751.
58,900
£1,000,000
The duties to be paid in America on paper, paint,
and glass, were repealed; but the tea-duty, which
had been imposed by the same act, was left standing
to serve the Company as was pretended, but in reality
to preserve the right, as it was called, to tax the co-
lonies.
The next session, which was the first of a new
parliament, began the 30th November, and although
the disputes between this country and the American
colonies had been brought to an eventful crisis, and
the ministry seemed determined to pursue coercive
measures, no augmentation of the forces was thought
necessary; but, on the contrary, a less number of sea-
men were voted than in the preceding year; the
land-tax for 1775 was therefore continued at 3s. in
the pound, the last time of its being fixed at that
rate. The deficiencies made good were:
To replace to the Sinking Fund the deficiency on
the 5th July, 1774 of the fund for the annuities
on £5,000,000, borrowed in 1758.
Deficiency of grants for the year 1774
Ditto of land-tax ·
Ditto of malt-dury
વા
8, d.
45,446 8 2
112,528
112,528 2 53
223,168 0 0
227,832 0 0
U 2
292
NATIONAL DEBT
The exchequer-bills of the last year, amounting
to £1,250,000, were paid off, in course, and the like
sum raised by issuing new bills, charged as usual on
the first aids to be granted in the next session. The
sums granted out of the Sinking Fund towards the
supply for this year were, the surplus of £11,239: 10
remaining in the Exchequer on the 5th January,
1775;-£884,447 3 104 remaining in the Exche-
quer on the 5th April; and £1,904,313 : 6 : 13* out
of the growing produce of the Fund to these
sums were added the profits of a lottery.† £880,000
was granted for redeeming £1,000,000 3 per cents,
upon the same conditions as in the preceding year,
of £88 for every £100 stock, and six tickets at
£12 10 each. The day for receiving the subscrip-
tions was 8th May, and considerably more than the
sum proposed was subscribed; in consequence of
which, a proportionate reduction of each subscrip-
tion was made. The money was paid half on the
15th July, and half on the 20th October, and the
subscribers were entitled to the dividend due 5th
July; the 3 per cent. Reduced and Old South-Sea
Annuities being due in April and October, a quar-
ter's payment was made on these to 5th July. The
proportions subscribed in the different capitals were
as follows:
The act says £1,915,552 : 16 : 113.
†This was £150,000; being 60,000 tickets at £12 : 10, of which
£600,000 was divided into prizes.
FROM 1763 TO 1775.
293
£
3 per cent. Consol.
424,500
3 per cent. Reduced
246,300
Old South-Sea Annuities
161,650
New South-Sea Annuities 124,200
3 per cents 1751…………..
43,350
£1,000,000
The total capital of the public debts that had
been discharged since the commencement of the
war was as follows:
In 1765
1766
•
s. d.
870,888 5 5 bearing 4 per cent. interest.
870,888 5 5
1767
2,616,776 10 10
1768
2,625,000 0 0
1771
1,500,000 0 0
33
1772
1,500,000 0 0
1774
1,000,000 0 0
3
1775
1,000,000 0 0
3
£11,983,553 1 10
1
During which time there had been borrowed on 3 per
cent. stock, in 1765, 1766, 1767, & 1768, £6,400,000.
294
CHAPTER XI,
i
The History of the National Debt, from the Com-
mencement of the American War in 1775 to its
Conclusion in 1783.
THE next session of parliament met 26th October,
1775, and as hostilities with America were now com-
menced, a considerable augmentation of forces was
necessary; the land-tax for 1776 was therefore raised
to 4s. in the pound: on this occasion it was asserted
in the house of commons, that the rate to which the
tax was now raised would be perpetual, as it must be
found impossible in future to support the peace-esta-
blishment without it; experience has fully confirmed
these assertions, the land-tax having been invariably
continued at 4s. and no one can now expect to see it
again reduced. In the following pages we shall,
therefore, omit any farther notice of the land-tax, it
being remembered that in each it was continued
year it
1
事
​4
FROM 1775 TO 1783.
295
at 4s. with power to raise £2,000,000 by loans or
exchequer-bills on the credit thereof.
The deficiencies made good in this session were:
To replace to the Sinking Fund the deficiency on
the 5th July, 1775, of the fund for the an-
nuities on £5,000,000 borrowed in 1758..
Deficiency of grants for the year 1775
Ditto of land-tax ·
Ditto of malt-duty • • • •
·
£ s. d.
44,096 5 10}
37,348 12 81*
260,221 8 10
189,778 11 2
This
To which may be added £1,000,000 granted to-
wards the discharge of the navy-debt. £1,250,000,
in exchequer-bills of the preceding year, was
discharged in course, and the sums to be raised
by new bills, as part of the ways and means
for this year, was extended to £1,500,000.
additional sum, with the increase of the land-
tax, were, however, far from being sufficient to an-
swer the increase of the supplies voted, and a loan of
£2,000,000 was found necessary. The terms were as
follows: £1,400,000 on 3 per cent annuities from 5th
April, 1776, and £600,000 on a lottery of 60,000 tick-
ets, attended with 3 per cent. annuities, commencing
from 5th January, 1777. Every subscriber of £100
to have for £70 thereof £77 10 3 per cent. stock,
and, for the remaining £30, three lottery-tickets at
£10 each. The instalments were as follows:
*The act says £37,348 : 12 : 7.
t
296
NATIONAL DEBT
On the £1,400,000.
On the £600,000.
15 per cent. deposit.
15 per cent.
15
20th May.*
25
deposit.
14th Junc.
20
28th June.
30
10th August.
15
31st July.
30
3d October.
15
20
10th September.
24th October.
Those who paid in the whole on the £1,400,000 at
any time between the 5th July and 7th September,
or on the lottery, on or before the 8th August, were
allowed discount at the rate of 3 per cent. per annum,
from the day of completing the payment, to the re-
spective days fixed for the last instalment. The
terms of this loan, though some objections have been
made to them,† were perhaps more moderate than
those of any loan which has been negociated since;
for, deducting £150,000 for the profits of the lot-
tery, relinquished by government to the subscribers,
the sum received is reduced to £1,850,000, and,
in consideration for this, a debt was created of
£2,150,000, the interest on which amounted to
£64,500, and the management to £12097: 6 per
annum, making together an annual charge of £3:11
per cent.
The sums granted out of the Sinking Fund
towards the supply for this year were the sur-
plus of £980,441: 1: 1½, remaining in the Exche-
quer on the 5th April, 1776, and £1,837,428: 3:10
out of the growing surplus of the fund, which the
*The act says 30th May.
+ See Dr. Price's Additional Observations on Civil Liberty, page 90.
FROM 1775 TO 1783.
297
treasury were as usual empowered to raise by loans or
exchequer-bills, and the Bank were authorised to
advance the same.
Towards the close of the session, Lord North deli
vered a message from his Majesty, requesting a provi-
sion for any extraordinary expenses that might be
incurred; in consequence of which a vote of credit
was passed for £1,000,000.
1776.—In the next session, which began 31st
October, the following deficiencies were made good:
£
s. d.
To replace to the Sinking Fund the like sum issued
out of the same, to make good the deficiency on
the 5th July, 1776, of the fund for the annuities
on £ 5,000,000, borrowed in 1758.
Deficiency of grants for the year 1776..........
Ditto of land-tax
Ditto of malt-duty
44,599 13 41
61,288 7 12
250,000 0 0
200,000 0 0
£1,000,000 was granted towards reducing the navy-
debt. The sum of £1,500,000, in exchequer-bills
of the preceding year, was discharged in course,
and likewise the farther sum of £1,000,000, issued
by virtue of the act for a vote of credit. The sum
raised this year by exchequer-bills, as part of the
ways and means, was, as in the preceding year,
£1,500,000 charged as usual upon the first aids to be
granted in the next session, or if none should be
granted before 5th July, 1778, to be paid out of the
Sinking Fund, and the money replaced from the first
298
NATIONAL DEBT
supplies the Bank were authorised to advance the
same.
As the supplies voted exceeded those of the last
year, a greater loan was found necessary: the amount
was £5,000,000, with the farther sum of £500,000
by a lottery; the contributors towards the former
sum being entitled, for every £100 advanced, to
£100 4 per cent. stock, irredeemable for 10 years
from the 5th April, 1777,* and likewise to an
annuity of 10s. per cent. for ten years from the said
5th April, payable half-yearly at the Bank; and upon
payment of the farther sum of £10, to have a ticket
in the lottery of 50,000 tickets, amounting to
£500,000, the whole of which was distributed into
prizes, so that the subscribers had all the profit attend-
ing it. The instalments were as follows:
On £5,000,000.
15 per cent. 23d May.
On £500,000.
15 per cent. 23d May.
10th July.
15
30th June.
25
15
29th July.
30
28th August.
20
5th Sept.
30
7th October,
15
29th October.
20
1st Dec.
Those who paid in the whole on the £5,000,000, on
or before the 27th October, or, on the lottery, on or
After the expiration of the tenth year, upon six months notice,
to be printed in the London Gazette, and affixed upon the Royal
Exchange, by authority of parliament, the whole or any part may be
redeemed by payments of not less than £ 500 000 at a time.
FROM 1775 TO 1783.
299
before the 27th August, were allowed discount at
3 per cent. per annum, from the day of completing
the payment to the 1st December on the former,
and to the 7th October on the latter. The annuities
were charged upon the Sinking Fund, and, in conse-
quence, new taxes were added to the Fund. This
method of making the interest, &c. on all the loans
payable out of one general fund, was far preferable to
that which had usually been adopted of establishing
separate funds for each loan.
:
The sums granted out of the Sinking Fund to-
wards the supply for this year were, the surplus of
£295,832 18: 6 remaining in the Exchequer on
the 5th January, 1777; £760,363 14:24 remain-
ing in the Exchequer on
Exchequer on the 5th April; and
£1,939,636 : 5:9 out of the future produce of the
Fund, with the usual power of raising the latter sum
by loans or exchequer-bills.
66
On the 10th April, a message from his Majesty,
which had long been expected, was delivered by
Lord North to the house of commons, being not only
another application for the payment of civil-list
debts, but likewise for some farther provision
"for the better support of his Majesty's household,
"and of the honour and dignity of his crown.”
This application produced warm debates, which ended,
as might be presumed, in agreeing to the object of it,
by granting £618,340 9 6 to discharge the ar-
rears and debts due upon the civil-list, on the 5th
January, 1777, and £100,000 per annum, commencing
from the 5th January, and payable out of the Aggre
:
300
NATIONAL DEBT
gate Fund, in addition to the clear income of
£800,000 granted to his Majesty at the commence-
ment of his reign. The Speaker of the house of
commons, (Sir Fletcher Norton) on presenting the
bill for the royal assent, addressed his Majesty in the
following energetic terms:
46
"Most Gracious Sovereign,
"The bill, which it is now my duty to present
"to your Majesty, is entitled An Act for the better
Support of his Majesty's Household, and of the
Honour and Dignity of the Crown of Great Bri-
tain, to which your Commons humbly beg your
royal assent.
66
"By this bill, Sir, and the respectful circumstances
"which preceded and accompanied it, your Com-
66
mons have given the fullest and clearest proof of
"their zeal and affection for your Majesty: for, in a
"time of public distress, full of difficulty and dan-
ger, their constituents labouring under burthens
"almost too heavy to be borne, your faithful Com-
44
mons postponed all other business, and, with as
"much despatch as the nature of their proceeding
"would admit, have not only granted to your Ma-
jesty a large present supply, but also a very great
"additional revenue; great beyond example; great,
beyond your Majesty's highest expense!
"L
*
146
"But all this, Sir, they have done, in a well-
grounded confidence, that you will apply wisely
" what they have granted liberally; and feeling, what
every good subject must feel with the greatest sa-
46
FROM 1775 TO 1789.
30.1
60
56
(6
66
tisfaction, that, under the direction of your Ma-
'jesty's wisdom, the affluence and grandeur of the
Sovereign will reflect dignity and honour upon the
people."
For this manly effusion of genuine patriotism Sir
Fletcher received the thanks of the house, and his
speech was desired to be printed, notwithstanding it
gave great offence to many persons then in power,
who seemed alarmed that any thing but adulation
should reach the ear of royalty. The freedom of
the city of London was also conferred upon him on
this occasion. The royal income at this time, includ-
ing the revenue of Hanover, Wales, &c. was estimated
at £1,302,000, and the total expenditure from 6th
January, 1776, to 5th January, 1777, £984,100.
A vote of credit, as usual, was passed for
£1,000,000 to be raised on loans or exchequer bills,
charged upon the first supplies of the next session,
with the collateral security of the Sinking Fund.
:
302
NATIONAL DEBT
*
108,100 0 0
$40,781 оо
2,200 0 0
7,567 o a
79,366 0 0
Amount of the National Debt, 5th January, 1776.
Annuities for long terms, original sum•
Capital.
£ s. d.
1,836,275 17 103*,
Int. & Management.
£
s. 6.
136,453 12 8
Ditto for lives with survivorship, ditto
Various life annuities
Exchequer-bills for interest of old bills
East-India Company's capital and annuities
Bank capital
4,200,000 0 0
11,686,800 0 0
3 per cent. Consolidated Annuities
3 per cent. Reduced Annuities
31 per cents 1758
38,251,696 5 1
18,353,773 16 4
4,500,000 0 0
5
127,687 10 Q
356,502 3
1,169,067 9 4
560,937 4
160,031 5 0
4 per cents 1760 and 1762..
Ditto 3 per cents 1751
18,986,500 0 0
770,131 15 103
South-Sea stock and annuities
24,065,084 13 113
735,974 13 11
1,919,600 0 0
58,667 15 6
FROM 1775 TO 1783.
303
3 per cent. Annuities 1726.
1,000,000 0
30,360 • •
Long annuities, 84 years at 4 per cent.
6,060,110 14 10
251,741 0 0
131,810,722 8 1
4,444,487 9 8
Exchequer-bills
1,250,000 0 0
Navy-debt...
Civil-list debt
1,850,000 0
500,000 0 0
!
135,410,722 8 1
The capital originally advanced, as above, was less than the real value of the annuities, even at the period of this
statement, after the annuities had been paid so many years :
£56,230: 14: 6 average 15 years value, at 4 per cent.£ 625,195
80,222 : 18 : 2 average 36 years ..... ditto..、、、、、、 1,387,214
£ 2,012,409
304
NATIONAL DEBT
1777.-Although France had not actually engaged
in the war, when the next session began, 20th N6--
vember, the probability of this event rendered it
necessary to augment the naval force, and the total
of the supplies voted considerably exceeded that of
the preceding year. The deficiencies made good
were:
To replace to the Sinking Fund the deficiency of
the fund for the annuities on £5,000,000 bor-
rowed in 1758, to 5th July, 1777
Deficiency of grants for the year 1777
Ditto of the land-tax..
Ditto of the malt-duty.....
ર
£
s. d.
43,621 10 93
•
38,493 2 74
252,000 0 O
200,000 0 0
The exchequer-bills of the last year, amounting to
£1,500,000 with £1,000,000, issued pursuant to
the vote of credit, were paid off, in course, and the
sums of £1,500,000 and £500,000 raised by new
exchequer-bills, as part of the ways and means, be-
sides a vote of credit for one million. All these
sums were charged upon the aids of the next session,
or if none should be granted before 5th July, 1779,
to be paid out of the Sinking Fund, and the money
replaced from the next supplies.
The loan found necessary to answer the supplies
granted was £6,000,000; the terms of which were
as follows: every subscriber of £100 to have £100
3 per cent. stock, and an annuity of £2: 10, for the
term of 30 years, both commencing from the 5th
January, 1778, with liberty to have, instead of the
FROM 1775 TO 1783.
305
P
annuity for 30 years, a life-annuity, payable half-
yearly at the Exchequer; and, as a farther advan-
tage, the subscribers were allowed, upon payment
of the additional sum of £10 per ticket, for every
£500, four tickets in a lottery of 48,000 tickets,*
amounting to £480,000, the whole of which was
distributed into prizes. This, according to the prac-
tice established of late, was left to be paid out of
the supplies of the next session. The instalments
were as follows:
On the £6,000,000.
On the £ 480,000.
deposit.
28th April.
15 per cent.
10 per cent.
deposit.
10-
14th April.
20
15
19th May.
20
3d July.
10
23d June,
20
25th July.
15
4th August.
25.
9th October.
10
15th September.
10
23d October.
10
20th November.
10
18th December.
Those who paid in the whole on the six million-
on or before the 17th of November, or on the lot-
tery on or before the 21st of August, were allowed
discount at 3 per cent. per annum, from the day of
completing the payment to the 18th of December
In the preceding year there were upwards of 400 lottery-
offices in and about London only; but a late act obliging the keep-
èrs of them to take out licences, at the expense of £50, the whole
number in this year, for all England, as appears by the list pub-
lished by authority, amounted to no more than 51.
X
306
NATIONAL DEBT
on the former, and to the 9th of October on the
latter. The subscribers were allowed till the 22d of
December, the option of nominating lives in lieu of
the annuity for thirty years; but the latter were ge-
nerally preferred; the life-annuities amounting to
£2,849 13:0 only; the annuities for thirty years
to £147,150: 7 : 0.
The sums granted out of the Sinking Fund to-
wards the supply were, the surplus of £703,790
18: 3½, remaining in the Exchequer on the 5th of
April; and £2,296,209: 1: 8½ out of the growing
produce of the Fund.
In the course of this session a motion was made
for granting, during the continuance of the war, one
fourth part of the net income upon the salaries, fees,
and perquisites, of all offices under the crown, (with
certain exceptions,) and of all pensions payable at
the Exchequer. This motion was made by a gentle-
man in office, and was actually carried in the com-
mittee of ways and means by a majority of 18! It
is scarcely necessary to add, that it was afterwards
rejected.
1778.-As the war was extended, both in its ob-
ject and importance, by hostilities with France, which
commenced about the middle of the year 1778, it
became necessary, in the session which met the 25th
of November, to vote a farther augmentation of the
forces; which, of course, increased the supplies to
be raised. The deficiencies made good were:
}
FROM 1773 TO 1783.
307
To replace to the Sinking Fund the deficiency
of the 5th July, 1778, of the Fund for the an
nuities on the loan of 1758 ......
To replace to ditto the deficiency on 5th July,
1778, of the Fund for the annuities on the
loan of 1778
•
Deficiency of grants for the year 1778.......
Ditto of land-tax
Ditto of malt-duty. . . . . . . . .
£
$.
1. d.
40,540 0 0
98,891 3 8
66,744 4 3
250,000 0 0
200,000 0 0
The exchequer-bills of the preceding year, con-
sisting of the several sums of £1,500,000, £500,000,
and £1,000,000, (the latter being the vote of credit,)
were discharged in course; and the sum raised by
new bills, as part of the ways and means for the
current year, was increased to £1,500,000 and
£1,900,000, besides the vote of credit for £1,000,000,
which were all charged upon the aids to be granted
in the next session.
The loan for this year was £7,000,000, and was
raised upon the following terms: Every £100 ad-
vanced to entitle the contributor to £100 three per
cent. Consols, and to an annuity of £3: 15: 0 for
29 years, payable half-yearly at the Bank, or to a
life-annuity, payable half-yearly at the Exchequer;
and, also, to be entitled, for every £1000 contribu-
ted, to seven tickets, in a lottery of 49,000 tickets,
upon paying the farther sum of £10 for each ticket,
amounting to £490,000, the whole of which was
divided into prizes.
x 2
*308
NATIONAL DEBT
The payments were made as follows:
On £7,000,000.
On £ 490,000.
15 percent.
2d March.
15 percent.
2d March.
10
- 23d April.
20
9th April.
15
28th May.
25
7th May.
10
25th June.
20
11th June.
15
23d July.
20
8th October,
15
27th August.
10
22d October.
10
}
19th Nov.
Those who paid in the whole on the seven million
on or before the 19th October, or on the lottery on
or before the 8th of June, were allowed discount at
3 per cent. per annum, from the day of completing
the payment to the respective days of the last in-
stalments. The annuity on the lives nominated
amounted to £5,318 : 18 : 7, and the annuity for
twenty-nine years to £257,181 1: 5.
The sum granted out of the Sinking Fund, to-
wards the supply for this year, was £2,071,854
13: 81.
1779.-As Spain had joined in the war against
this country, previous to the opening of the session,
which met the 25th November, a farther augmenta-
tion of the forces became necessary, and of course
the supplies for 1780 exceeded those for the prece-
ding year.* The deficiencies made good were:
* The great expenses of the war, the shameful abuses by which
they were augmented, the rapid increase of the debt, and the terms
on which the late loans had been made, induced the late Dr. Price,
with the assistance of another eminent character, to endeavour to
rouse the attention of their countrymen to a sense of these increasing
evils, in an excellent publication under the title of Facts, which
appeared in the beginning of the year 1780.
FROM 1775 TO 1783.
309
To replace to the Sinking Fund the deficiency
on 5th July, 1779, of the Fund for the annu-
ities on the loan 1758
To ditto 1778
To ditto 1779
£ s.
s. d
37,372 18 93
332,856 4 5
167,036 14 15
Deficiency of grants for the year 1779
300,687 0 7
250,000 0.0
200,000 0 0
Ditto of land-tax
Ditto of malt-duty
The exchequer-bills of the last year, amounting
to £1,500,000 and £1,900,000, were discharged in
course, and the like sums raised by new exchequer-
bills, charged upon the first aids to be granted in the
next session. £1,000,000 in exchequer-bills, issued
by virtue of the act for a vote of credit, was like-
wise discharged, and a vote of credit passed for the
șanie sum. £1,500,000 was granted towards redu-
cing the navy-debt.
The amount of the loan for this year was
£12,000,000; the terms as follows: Every £100
advanced, to entitle the contributor to £100 four
per cent. stock, with interest from 5th January, 1780,
irredeemable for seven years and a quarter; and to
an annuity of £1:16:3 for the certain term of
80 years, from the 5th of January, 1780. Even
this was not thought sufficient, and the profits of a
lottery were again given as a douceur to the sub-
scribers, every contributor of £1000 being entitled
to have four tickets, upon payment of the farther
sum of £10 per ticket, amounting in the whole to
{
310
NATIONAL DEBT
£480,000, all which was divided into prizes. The
instalments were as follows:
On £12,000,000.
On £480,000.
15 percent.
deposit.
15 per cent.
deposit.
10
26th May.
20
12th May.
10
28th April.
25
14th July.
10.
23d June.
20
12th Sept.
10
21th July.
20
10th October.
15
29th August.
10 T
26th Sept.
10
24th October.
10
24th Nov.
!
Those who paid in the whole, on or before the
23d October, on the 12 million, or on or before the
11th September on the lottery, were allowed dis-
count at 3 per cent. per annum, from the day of.
completing the payment to the 24th November on
the former, and to the 10th October on the latter.
A quarter's annuity on the 4 per cents, to the 5th of
April, 1780, was to be paid as soon after the 5th of
April as the subscriber should have completed his
payment, and afterwards to be consolidated with the
4 per cents 1777, and payable half-yearly.
The sums granted out of the Sinking Fund were
the surplus of £650,457 18: 0, remaining in the
Exchequer on the 5th April, 1780, and £1,849,542
1:11 out of the growing produce of the Fund;
which latter the Treasury were empowered to raise
by loans or exchequer-bills upon credit of the Fund;
and the Bank were authorised to advance the same,
FROM 1775 TO 1783.
311
On the 21st of March the house of commons re-
solved, that the Speaker should give notice to the
East-India Company, that the debt of £4,200,000,
which the public owed them, with all arrears of in-
terest, would be paid on the 5th April, 1783: this
was required by act of parliament, previous to the
determination of their exclusive privileges. The no-
tice was given accordingly, though it cannot be
supposed, that, at a time when the 3 per cent. India
annuities were under 60, and none of our 3 per cent.
stocks above 61, that there could be any intention
of carrying it into execution. It was intended merely
as a preparatory step towards a new agreement with
the Company for the renewal of their charter.
The great expense of the war, which was rapidly
increasing, and the great abuses attending the ex-
penditure, began to engage general attention. The
example of France* might, probably, have some ef-
fect in exciting a sense of the importance of an eco-
nomical reform in the administration of the finances.
Mr. Burke brought forward his unsuccessful plan for
a reform of the civil-list establishment, which occu-
pied the attention of the house of commons during
considerable part of the session.
of the session. But the only mea-
sure towards a reform in the other branches of the
The public revenue in France had been considerably augmented
by the economy and reformation introduced into the several depart-
ments of the finances, under the direction of M. Neckar. See the Edicts
of 17th October, and 3d December, 1779; and, The State of the
Finances of France, laid before the king in the month of January,
1781, by M. Neckar, Director-General of the finances.
312
NATIONAL DEET
public expenditure was the preparatory step of ap-
pointing a commission* to examine and state the
public accounts, who were directed to take an ac-
count of the public money in the hands of the several
accountants, and to consider what sum it might be
proper to leave in the hands of each accountant for,
carrying on the services to which the same was ap-
plicable, and what sums might be taken out of their
hands for the public service. As the commission
was appointed late in the session, and had to call for
accounts that could not be immediately furnished,
they did not make any report till the next ses-
sion.
1780. The first session of the new parliament
met the first of November; and, a still farther aug-
mentation of the forces being thought necessary, the
supplies voted exceeded in amount those for any for
mer year; but, previous to the account of the debts
discharged or incurred, it may be proper to notice
the reports of the commissioners of accounts: these
were made at different times in the course of the
session. The first is dated the 27th November, 1780,
by which it appears, that the balances in the hands
of the Receivers General, for the taxes on land, win-
* 20 Geo. III. c. 54. The preamble to the act states, that the
object of appointing the committee was, "that his Majesty and the
"people of this kingdom may be satisfied and truly informed, whe
ther all the said duties, taxes, and moneys, raised and appropria-
"ted for the public service of this kingdom, have been faithfully is-
sued out, disposed, ordered, and expended, for the ends and
purposes for which they were granted, &c."
66
FROM 1775 TO 1783.
313
dows and houses, servants, and inhabited houses,
amounted together to the sum of £657,400: 13:4;
that the only services to which these sums were ap-
plicable, in the hands of the respective accountants,
were to the payment of the marching-guinea, pur-
suant to the militia-act of 2 Geo. III. and a farther
payment, on account of the militia, by 20 Geo. III.
that the chief pretence on which these large sums
were retained in the hands of the Receivers General-
was the insufficiency of the salary of two pence in
the pound: that there had not only arisen an unne-
cessary expense of upwards of £13,000 per annum,
which the public had been obliged to pay for want
of the use of their own money, but that, out of
£113,161 7:21, arrears in the hands of defaulters,
£24,257:7:24 was actually lost upon composition,
and that the recovery of a great part of the remain-
der was doubtful. The report farther states, that, as
there were no services to which the sums in the hands
of the receivers were applicable but what might be
defrayed out of the current receipts of the taxes, it
was not proper to leave any part of the before-men-
tioned sum of £657,400 13: 4 in the hands of the
Receivers General, but that the same ought to be
paid into the Exchequer, by such instalments as
might be thought reasonable in regard to a practice
of so long continuance.
The second report is dated the 31st January, 1781,
and relates to all the remaining branches of the pub-
lic revenue. With respect to the customs, excise,
stamp-office, salt-office, office for licensing hawkers
ร
314
NATIONAL DEBT
1
and pedlers, and office for hackney coaches and
chairs, it is observed, that the punctuality and ex-
pedition with which the duties collected in these of-
fices pass from the pocket of the subject into the
Exchequer, leaves no room to suggest any altera-
tion in the time or manner of paying in the same;
and the commissioners were of opinion, that the
method established in these offices, of paying the
balance every week into the Exchequer, ought to be
adopted in the post-office. The first-fruits, and
tenths, and the deductions of sixpence and one shil-
ling in the pound from pensions and salaries, they
conceived were retained too long in the hands of the
respective receivers; observing, that there exists no
reason why the public should not have the custody
and use of public money, rather than an individual,
until the service to which it is appropriated calls for
its application.
The 3d report, which is dated 6th March, 1781,
relates entirely to the treasurers of the navy, who, it
appeared, had been permitted, and were in some mea-
sure, from the mode in which the business of the
office was conducted, under the necessity of retain-
ing large sums in their hands, for many years after
they were out of office; in consequence of which,
there was, at the time of this report, a sum of
£27,611 : 6:54, remaining due from the executors
of Viscount Falkland, whose final account is dated
4th April, 1689, which, of course, might be consi
dered as a loss arising from this practice: that the
final accounts of Mr. Grenville, who resigned in
!
FROM 1775 тo 1783.
315
1762; of Lord Barrington, who resigned in 1765; of
Lord Howe, who resigned in 1770; and of Sir Gil-
bert Elliott, who died in 1777, were then not settled ;*
and that a balance considerably greater than the ser-
vice required was constantly left in the hands of the
treasurer; all which circumstances have undoubtedly
contributed to the great and increasing expense of
this branch of the public service.
In the 4th report, dated 9th April, 1781, they ob
serve, that, after the Treasurers of the Navy, they
find the names of many persons whose accounts
had not been prosecuted for upwards of seventy
years; giving these up as hopeless, they proceeded to
the accounts of the pay-masters of the forces, whose
final accounts they found were not delivered till se-
veral years after they went out of office, and that
they retained a considerable sum in their hands long
after. The account of the Earl of Lincoln, delivered
in 1720, being imperfect, had been withdrawn and
not returned to the office, and there appeared no
chance of recovering any part of the balance; the
final account of Lord Holland, who resigned in 1765,
was not delivered till 1772, and the balance still re-
* Pursuant to an act passed in this session, the following sums
were paid into the Exchequer, on account of these balances, and
applied towards the supplies for 1781:
£
5. d.
By the executors of Geo. Grenville, Esq. 11,582 15 9
By Lord Barrington.......
By Lord Howc.
By executors of Sir Gilbert Elliott.
9,316 9 102
9,969 0 4
6,000 0 0
316
NATIONAL DEBT
maining in the hands of his executors amounted to
£256,456 : 8 : 2; the balances remaining on the ac-
counts of Mr. C. Townshend, who resigned in 1766;
of Lord North and Mr. Cooke, who resigned in 1767;
and of Mr. Cooke and Mr. Townshend, who re-
signed in 1768; were not so great, amounting, with
the former sum, to £377,788 5: 7.* The loss
sustained by the public, from not having the use of
the money remaining in the hands of Lord Holland
and his above-mentioned successors, the commis-
sioners compute, at 4 per cent. per annum, amounted
at simple interest to £294,836: 14; can it be won-
dered that, under such management, our expenses and
our debts have been so rapidly increasing?
In the 5th report, dated 10th August, 1781, the
commissioners enter into an examination of the re-
ceipts and issues of the paymaster-general of the
forces, and the mode in which the accounts of the
office were kept, pointing out the great and unneces-
sary loss and risk, from constantly leaving in the
hands of the paymaster-general a large sum of
public money, not employed in the public service, and
suggesting the propriety of taking away from this
officer the custody of the public cash, and placing it
in the Bank, to be drawn for as the service required.-
*The following sums were paid into the Exchequer on account of
these balances, and applied towards the supply for 1781:
By the executor of Lord Holland ·
Administrators of C. Townshend, Esq.....
Lord North and the executors of G. Cooke,
Esq....
Right Hon. T. Townshend and ditto
232,515 4
8
27,000
27,000 0 0
60,075 5 10
11,181 7 Q
}
FROM 1775 TO 1783.
317
To return to the supplies for 1781, the deficiencies
to be made good were:
Deficiency on 5th July, 1780, of the fund for
£
s. d.
30,999 11 2
the annuities on the loan of 1758.....
Ditto of the fund for annuities on loan of 1778
191,664 7 2
Ditto.....
.ditto...... 1779
1779
193,663 0 1
Ditto...
ditto.
1780
222,745 4 6
Ditto of ways and means for the year.... 1780
$,551 8 82
Ditto of land-tax.
Ditto of malt-duty.
3
252,978 11 0
43,717 2 113
The exchequer-bills of the preceding year were
discharged, in course, amounting to £1,500,000, with
£59,678: 17 for interest and charges thereon:
£1,900,000, with £41,489 3: 5 for interest and
:
charges, and £1,000,000 on the vote of credit, with
£33,261:29 for interest and charges; and the like
sums of £1,500,000 and £1,900,000 were raised by
exchequer-bills, as part of the ways and means
charged upon the supplies of the next session, with
the collateral security of the Sinking Fund; also the
farther sum of £2,000,000, which the Bank agreed
to advance on exchequer-bills, bearing 3 per cent,
interest, to be repaid out of the supplies for 1784, be-
*This was to be advanced in two payments, viz. £1,000,000 on
or before 15th November, 1781, and £1,000,000 on or before the
15th February, 1782; in cousideration of which, the fund of
£100,000 per annum, determinable by the agreement of 1764,
upon 12 months notice after 1st August, 1786, wàs continued to
them with their exclusive privileges, subject to redemption upon 12
months notice after 1st August, 1812.
1
1
1
A
318
NATIONAL DEBT
sides the usual vote of credit for £1,000,000. Yet,
even with this additional assistance from the Bank,
and grants of more than £400,000 out of the ba-
lances remaining in the hands of several of the pub-
lic accountants, and £400,000 from the East-India
Company, a loan to the amount of £12,000,000
was found necessary, which was obtained at a less in-
terest, but with a much greater increase of debt, than
in the preceding year, viz. every £100 advanced to
entitle the contributor to £150 3 per cent. stock, and
to £25 4 per cent. stock, the interest on both to
commence from 5th January, 1781; on this account
a quarter's interest was paid on the 4 per cents in
order to make the half-yearly payments due at the
same time with the former 4 per cents. Every con-
tributor of £1000 was likewise entitled to have four
tickets in a lottery of 48,000 tickets, upon payment
of the farther sum of £10 for each ticket, amount-
ing to £480,000, the whole of which was divided
into prizes the deposit was 15 per cent. on the
whole; the subsequent instalments as follows:
On £ 480,000
20 per cent. 11th May.
10th July.
11th Sept.
On £ 12,000,000
10 per cent. 27th April.
10
18th May.
25
10
14th June.
20
10
24th July.
20
9th October.
15
21st August.
10
18th Sept.
10
23d October.
[
10
23d Nov.
H
FROM 1775 to 1783.
319
Those who paid in the whole on the £12,000,000
before the 22d of October, or on the £480,000 on or
before the 10th September, were allowed discount at
3 per cent. per annum, from the day of completing
the payment to the 23d November on the former,
and to the 9th October on the latter, the annuities
not to be payable till the subscribers had completed
the whole of the payments. The terms of this loan
were very severely censured in the house of com-
mons, and a list of the subscribers, specifying the
sum subscribed by each, was laid before the house.
In the house of lords, a protest was entered against it.
The sums granted out of the Sinking Fund towards
the supply were £288,346: 19: 8, the surplus re-
maining in the Exchequer on the 5th January, 1781;
£757,087: 17: 10, remaining in the Exchequer on the
5th April, and £1,742,912 : 2 : 2 out of the growing
produce of the Fund.
As the term for which the loan of 1760 and
1762 carried 4 per cent. interest expired 5th Ja-
nuary, 1781, the capital thereof, which had been re-
duced by the subscription in 1770 to £18,986,300,
was now consolidated with the 3 per cent. Reduced
Annuities, and the proprietors were allowed till the
20th March to signify their dissent to the measure.
Notwithstanding the disgrace and disasters of the
campaign of 1781, the hopeless contest was still to
be prosecuted; and in the next session, which began
the 27th November, an additional number of seamen
were voted. The deficiencies made good were:
320
NATIONAL DEBT
+
Deficiency of the Fund for annuities 1758....
£ s. d.
35,149 8 04
Ditto....
1778....
183,380 3 8
1779...
102,806 9 0
1780..
153,193 8 11
Ditto.
Ditto....
Ditto of ways and means for the year 1781...
Ditto of land-tax.
Ditto of malt-duty...
19,667 5 11
256,964 8 7
163,035 11 41
M
The exchequer-bills of the preceding year, viz.
£1,500,000, £1,900,000, and £1,000,000 on the
vote of credit, were discharged, in course, and the
like sums raised on new exchequer-bills, as part of the
ways and means, and on the vote of credit for the
current year.
There being no temporary resources, as in the last
year, a loan of £13,500,000 was found necessary,
a greater sum than had ever before been raised at
one time; the terms were as follows: every £100
advanced entitled the contributor to £100 3 per
cent. Consolidated Annuities; £50 four per cent.
Consolidated Annuities, and an annuity of 17s. 6d.
for 78 years; the interest of the 3 per cents and the
long annuity to commence from 5th January; the
interest of the 4 per cents. from 5th April; and, as a
farther douceur, every contributor of £1000 was
entitled to have three tickets in a lottery of 40,500
tickets, amounting in the whole to £405,000, upon
payment of the farther sum of £10 for each ticket. ·
The deposit was 15 per cent. upon the whole, th
subsequent instalments as follows:
FROM 1775 TO 1783.
321
On the £13,500,000.
10 per cent. 12th April.
10
7th May.
25
10
13th June.
20
On the £405,000.
20 per cent. 28th May.
9th July.
10th September.
10
19th July.
20
11th October.
15
22d August.
10
20th September
10
24th October.
10
26th November.
Those who paid in the whole on the £13,500,000
by the 23d October, or on the £ 405,000 on or before
the 9th September, were allowed discount at 3 per cent.
per annum, from the day of completing the payment
to 26th of November, on the former, and to the 11th
October on the latter. The bonus on this loan was
stated by Lord North, on opening the budget, 25th
February, 1782, at only 2 per cent. viz.
£100, 3 per cents at 54.....
£50, 4 per cents at 67
d.
£ s.
54 0 0
33 10 0
17s. 6d. long annuity, at 15.. 13 11 3
Profit on tickets.
0 18 9
£102 -0 0
To this, however, should be added the discount
on prompt payment, which would make the bonus
upwards of 3 per cent.
The term for which the capital of £4,500,000,
part of the loan of 1758, carried 3 per cent. interest
expiring the 5th July, 1782, a clause was introduced
into the first exchequer-bill act of this session, for
adding the same to the capital of the 3 per cent con-
Y
}
322
NATIONAL DEBT
sols, by enacting that such proprietors as should not
on or before the 6th of June signify their dissent to
such consolidation, should be deemed to have as-
sented thereto.
The sums granted out of the Sinking Fund, to-
wards the supply for this year, were £255,476
1: 10; the surplus remaining in the Exchequer on
October, 1781; £615,284 9: 4 remaining in the
Exchequer on 5th April, 1782;* and the sum of
£2,284,715 10: 8 out of the growing produce of
the Fund.
The sixth report of the Commissioners of Accounts
is dated 9th February, 1782, and was presented to the
house of commons on the 11th February; it con-
tained a detail of the fees and gratuities paid or given
in collecting, issuing, expending, and accounting for,
the public money; and shews not only a considera-
ble diminution of the public money, in passing into
and from the Exchequer, but also a considerable
number of places with little or no employment for the
holders of them; while in the pay-offices of the navy
1
*The act (c. 67.) says £200,000 out of the surplus remaining
in the Exchequer on 10th October, 1781; and £670,760: 11: 22
of the surplus on 5th April, 1782.
March 27th, the Marquis of Rockingham was constituted First
Lord of the Treasury, and Lord John Cavendish Chancellor of the
Exchequer; but, in July following, on the death of the Marquis,
the latter resigned, and was succeeded by Mr. Pitt, and the office of
First Lord of the Treasury was filled by the Earl of Shelburne,
FROM 1775 TO 1783.
323
}
and army considerable emolument attended delay,
and, of course, accounts were left many years unset-
tled. The fee of poundage, by the immense increase
of our annual expenditure, had become of great mag-
nitude; it appeared that, in the year 1780, this allow-
ance was paid at the Exchequer on nearly £16,000,000,
amounting to upwards of £62,225; of which much
the greater part was paid to officers for transacting
either very little or no business at all. The total
of the emoluments accruing in that year to the
ineffective officers of the Exchequer amounted to
£45,332.
The seventh report of the Commissioners of Ac-
counts is dated the 18th June, 1782; the subjects
of it are the accounts of extraordinary services in-
curred and not provided for by parliament, which had
been laid before the house of commons since 1st
January, 1776; and the report justifies the suspicion of
abuse in this branch of the expenditure, by admitting
that the officers, entrusted with this part of the
public money, have been permitted to have an inter-
est themselves in the subject matter of expense; and
that the vouchers, by which the accountants dis-
charge themselves of the sums entrusted to them, are
allowed without having undergone sufficient exami-
nation that of £10,083,863 : 2 : 6, issued for these
services to North America, within the last six years,
the expenditure of about £8,760,000 still remained
to be accounted for; and that of this sum there had
been sued to Canada, between 1st June, 1776, and
23d October, 1781, £2,236,029 11: 7, a province
1
Y 2
324
NATIONAL DEBT.
whose military operations, since 1777, the public
were not made acquainted with, and upon the expen-
diture of which they knew of no existing check or
controul whatever.
The Earl of Stair, who had paid considerable at-
tention to the national finances, in a pamphlet pub-
lished in 1782, solemnly declares it to be his opinion,
after a most careful and laborious investigation, that
the state was then burthened to its utmost solvency,
and the public revenue would never reach thirteen
millions. Facts and Consequences, &c. by John Earl
of Stair, page 24.
The original object of the war had for some time
past become hopeless; and, the general sense of the
people being strongly for peace, a treaty was set on
foot; and, on 23d November, letters were sent from
the Secretary of State to the Lord Mayor and the
Governor of the Bank, acquainting them, for the in-
formation of the public, and to prevent the mischiefs
arising from speculations in the funds, that the
negociations carrying on at Paris were brought
so far to a point as to promise a decisive conclusion,
either for peace or war, before the meeting of parlia-
ment, which, on that account, was to be prorogued
to the 5th December.
}
325
CHAPTER XII.
The History of the National Debt, from the Con-
clusion of the American War in 1783, to the
War which commenced in 1793.
THE next session was opened on the 5th Decem-
ber, 1782, with a speech of unusual length, particu-
larly in that part addressed to the house of commons,
which is generally very concise. After adverting to
various financial subjects, the National Debt is no-
ticed in the following words: "I must recommend to
(6
you an immediate attention to the great objects of
"the public receipts and expenditure, and, above all,
to`the state of the public debt: notwithstanding
"the great increase of it during the war, it is to be
hoped, that such regulations may be still esta-
"blished, such savings made, and future loans so
"conducted, as to promote the means of its gradual
(C
redemption by a fixed course of payment. I must
"with particular earnestness distinguish, for your se-
"rious consideration, that part of the debt which
326
NATIONAL DEBT
"consists of navy, ordnance, and victualling, bills;
"the enormous discount upon some of these bills
"shews this mode of payment to be a most ruinous
"expedient."
The preliminary articles of peace were signed 20th
January, 1783, and one of the principal grounds on
which they were defended was the impoverished
state of our finances, from which it was asserted,
that a continuance of the war would be attended
with nothing short of certain ruin. The deficiencies
made good were as follows:
£
s. d.
Deficiency on the 5th July, 1782, of fund for
annuities
1758
46,444 0 11
Ditto..
annuities 1778
160,191 8 8
Ditto.
1779
63,888 8 7
Ditto....
1780
141,871 7 7
Ditto
1782
138,682 17 4
Ditto of grants for the year 1782
282,502 8 2
188,802 7 41
Ditto of land-tax 1781, at Michaelmas, 1783..
Ditto of malt-duty 1781, at Lady-day, 1783∙∙
155,056 15 8
The exchequer-bills of the preceding year, amount-
ing to £1,500,000, and £1,495,000 with £1,000,000
on the vote of credit, were paid off in course; and
the sums of £1,000,000 and £1,500,000, raised by
On 31st March Mr. Pitt resigned his office of Chancellor of the
Exchequer, and was succeeded by Lord John Cavendish; but, on a
change of ministers in December following, he again came into
office.
FROM 1783 TO 1793.
327
new exchequer-bills, as part of the ways and means,
charged upon the first aids of the next session, with
the collateral security of the Sinking Fund.
As the late ministry had exhausted the Treasury,
the new Chancellor of the Exchequer, upon coming
into office, found himself almost immediately under
the necessity of negociating a loan of £12,000,000,
the terms of which were settled with eleven princi-
pal bankers, who took £700,000 each; the remain-
der was divided amongst the other bankers, public
companies, and the clerks in public offices. The
terms were laid before the house of commons on 16th
April, and, after some objections, agreed to as follows:
every £100 advanced to entitle the contributor to
£100 3 per cent Consolidated Annuities, with interest
from 5th January; £25 4 per cent Annuities from
5th April; and an annuity of 13s. 4d. for 77 years,
from the 5th January: every contributor of £1000
was likewise entitled to have four tickets in a lottery
of 48,000 tickets, upon payment of the farther sum
of £10 per ticket, amounting in the whole to
£480,000. The deposit was 15 per cent. the sub-
sequent instalments as follows, viz,
On £ 480,000.
3d June,
11th July.
On £12,000,000.
10 per cent. 30th May.
20 per cent.
15
27th June.
25
10
29th July.
20
9th September.
15
29th August.
20
3d October,
10
26th September.
15
31st October.
10
5th December.
328
NATIONAL DEBT
Those who paid in the whole on the £12,000,000 on
or before the 30th October, or on the lottery on or
before the 8th September, were allowed discount at
3 per cent per annum, from the day of completing
the payment to the 5th December on the former,
and the 3d October on the latter. The bonus on this
loan, according to the price of stocks, on the day on
which the terms were settled, was about £3: 10
per cent. but it soon bore a premium of 6 per cent.
and afterwards got up to 8 per cent. however, by
the time of the fourth payment it was at par, and
afterwards at a discount.
I
It had been, and still continues to be, the almost
invariable practice of the Bank, after the first or
second payments have been made by the subscribers,
to advance nearly the whole of the remaining in-
stalments as they become due; this year, however,
they thought it prudent to decline making the cus-
tomary advances, in consequence of the gradual de-
crease of their cash; but, about August or Septem-
ber (the payments being lighter, and the prospects
of the Bank more promising) they were induced to
take in the loan, notwithstanding their actual quan-
tity of cash was less than in May, when the mea-
sure was first objected to.
The sum granted out of the Sinking Fund towards
the supplies for this year was £2,200,000, with the
usual power of raising the same by loans or exche-
quer-bills upon credit of the Fund.
•
By an Act, (23 Geo. 3. c. 82.) for establishing cer-
tain regulations respecting offices in the Exchequer,
}
FROM 1783 TO 1793.
329
a proportion of the fees of the regulated offices, be-
yond certain allowances, is directed to be paid towards
the uses of his Majesty's civil government, which is
the last addition that has been made to the civil-list
revenue.
The 8th report of the Commissioners of Accounts,
dated 20th December, 1782, relates to the mode of
passing the public accounts, and shews that many of
the existing forms of the Exchequer were attended
with unnecessary trouble, delay, and expense, while
the power of compelling the public accountants to
come to an account had become quite nugatory from
the sanction of precedent. The writs issued by the
remembrancer of the Exchequer, against persons who
had millions to account for, were never executed; it.
had become a matter of course for the sheriffs, in re-
turn, to give it under their hands, and confirm it by
oath in the Court of Exchequer, "That the Trea-
66
surer of the Navy is not to be found, either in the
city of London or in the county of Middlesex;
"and that the paymaster-general of the forces has
"neither lands nor chattels in either of those dis-
tricts, by which he can be distrained."
(C
The East-India Company were at this time under
considerable difficulties, being not only unable to pay
the duties due from them to government, but to make
any dividend to the proprietors: government, there-
fore, lent them £300,000 in exchequer-bills, and the
Bank advanced the moncy on them at 4 per cent, in-
terest, which enabled the Company to pay the divi-
dend.
330
NATIONAL DEBT
1783. The next session began 11th November; and,
a dissolution of parliament being soon after expected,
in consequence of a change of ministers, the house
of commons, on the 19th of December, deferred the
third reading of the land-tax act, with a view of
preventing this measure; and, on the 12th January,
1784, they passed a resolution, that, if any person in
the Treasury, Exchequer, or Bank of England, em-
ployed in the payment of public money, should pay
any money for the services voted in this session, after
the parliament shall have been prorogued or dissolved,
(if it be prorogued or dissolved before any act shall
have passed appropriating the supplies to such ser-
vices,) it would be a high crime and misdemeanor,
a daring breach of the public trust, derogatory to the
fundamental privileges of parliament, and subversive
of the constitution of the country. The mutiny-
bill was at the same time postponed.
The land-tax act being passed, the parliament was
dissolved on the 25th March. The next parliament
met on the 17th May, and soon after proceeded to
grant the supplies for the year, which included the
following sums for deficiencies, viz.
To replace to the Sinking Fund the deficiency of
the Fund for the annuities on the loan of the year
£
3. d.
1758 to 5th July, 1783..
23,556 2 7
Ditto...
Ditto....
1778
ditto
*168,090 2 93
1779
ditto
73,339 19 8
* The act says £168,019 2 93
$
Ditto.
Ditto.
Ditto...
FROM 1783 to 1793.
331
£ $. d.
207,909 10 3
1780 to 10th Oct. 1783
1782 5th July,
435,888 19 2
1783
10th Oct.
24,943 5 0
36,814 15 52
Deficiency of grants for the year 1783....
Ditto of malt-duty....1782 at Lady-day, 1784
··1782 Michaelmas, 1784
Ditto of land-tax
442,107 6 10
231,772 4 81
The exchequer-bills of the preceding year,* amount-
ing to £1,000,000, and £1,169,400, were discharg-
ed in course, and the sums of £1,500,000, and
£1,000,000, granted to be raised by exchequer-
bills, as part of the ways and means for this year,
charged as usual on the first aids of the next session,
with the collateral security of the Sinking Fund.
On the 30th of June, Mr. Pitt laid before the
house the terms of the loan of £6,000,000, which
was found necessary towards making good the re-
maining expenses of the late war; they were as fol-
lows: Every £100 advanced to entitle the contri-
butor to £100 three per cent Consolidated Annuities,
interest commencing from 5th July; £50, four
per cent Consolidated Annuities, interest commencing
from 5th April; and 5 s. 6d. annuity for 75 years,
from 5th July. Also, for every £1000 subscribed,
to be entitled to have six tickets in a lottery of
36,000 tickets, upon payment of the farther sum of
*The repayment of £ 2,000,000, advanced by the Bank on ex-
chequer-bills, towards the supply for 1781, was deferred by suc-
cessive postponements to 5th January, 1787, and the interest there-
on continued at 3 per cent.
332
NATIONAL DEBT
£10 per ticket.* The deposit was 15 per cent. upon
the whole; the subsequent instalments as follows:
On £6,000,000.
15 per cent. 16th August.
On £360,000.
15 per cent. 20th August.
-17th September
30
27th October.
30
15
20
20
7th December.
15
-20th January.
-24th September.
-21st October.
Those who paid in the whole on the £6,000,000
on or before the 6th December, or on the lottery
on or before the 23d September, were allowed dis-
count at 3 per cent. from the day of completing the
payment to the 20th January on the former, and to
the 21st of October on the latter. The whole mo-
ney advanced was £5,999,362, the remaining £638
not being paid by a subscriber, who thereby for-
feited £522, the first, second, and third, payments
on £1160. The sum forfeited was, however, repaid
The terms of the loan were thus stated by Mr. Pitt:
£ s. d.
£100, 3 per cents.
.57 12 6
50, 4 ditto....
37 8 9
5 s. 6d. long annuity 4 17 11
£ 99 19 2
The douceur of lottery-tickets, he observed, would cost the public
nothing; but it was certainly giving away a profit which would
otherwise have been applicable to the public service, and therefore
it should be considered in the light of a bonus paid. At 8s. per
ticket, it makes 4s. 93 d. to be added to the above terms for £100.
FROM 1783 тo 1793.
333
in 1787, pursuant to a vote of the house of com-
mons; the neglect being stated to have happened
from illness. The capital of the 3 per cents, created
by the loan was, consequently, £2,000 less than
it would otherwise have been.
The amount of the unfunded debt, at the conclu-
sion of the war, had caused navy-bills to fall towards
the end of the year 1783 to a very great discount.
On the 8th of January, in this year, it was as high
as 21 per cent. and continued very high, even after
it was known that a considerable part would be
funded; the average for the whole of 1784 being
17 per cent. The necessity of taking some measure
to provide for this debt will appear from the follow-
ing statement of the amount of the navy and vic-
tualling debt (exclusive of ordnance) on the 31st of
December, 1783.
Navy-bills registered
Freight of transports
Victualling-bills
Ditto debt, for which bills are not made out
Total, 31st December, 1783,
£ S. d.
3 8
7,973,500
718,350 5 10
4,655,801 14 S
20,871 4 9
£ 13,368,523 8 6
The funding included only the navy and victual-
ling bills, made out between 1st of June, 1781, and
1st of July, 1782, with the interest due thereon to
5th July, 1784; and ordnance-debentures of the
same period, with interest at 4 per cent. from the
expiration of 15 months from their dates to 5th of
July, 1784: the whole, amounting to £ 6,397,100,
334
NATIONAL DEBT
were funded at £107: 10; 6 per cent. and the
5 per cent. stock thus created was £6,879,3411:9:6.
The sum granted out of the Sinking Fund
for the year 1784 was £800,000, which the Trea-
sury were empowered to borrow upon loan or exche-
quer-bills upon credit of the Fund. £60,000 was
granted to his Majesty to enable him to discharge
civil-list debts.
1785.-On opening the next session, 26th Janu-
ary, the consideration of the reports of the commis-
sioners of accounts was recommended to parliament,
with such regulations as might appear necessary in
the different public offices. This was preparatory
to the introduction of a bill which was afterwards
brought in and passed, for appointing commission-
ers to inquire into the fees, gratuities, perquisites,
and emoluments of the several public offices, and to
examine into any abuses which might exist in the
same.*
The deficiencies made good in this session.
were:
To replace to the Sinking Fund the deficiency
on 5th July, 1784, of the fund for the annuities
on the loan of the year 1758.
£
s. d.
12,087 7 8
Ditto
1778
159,620 19
Ditto
1779
122,730 4 8
Ditto
1780
158,551 4 11
Ditto
1
1782
114,214 4 3
Ditto
1783
617,466 10 0
Ditto
1784
24,044 0 0
* In consequence, an act was passed for better regulating the of
fice of Treasurer of the Navy, by which all money for naval services-
FROM 1783 тo 1793.
335
1
There being a small overplus of the grants for the
last year, it was appropriated towards the supplies
for the current year. The exchequer-bills of the last
year amounting to £1,500,000 and £1,000,000,
were discharged in course, and the like sums raised
by new exchequer-bills* charged on the first aids of
the next session, with the addition of £1,000,000
borrowed of the Bank on Exchequer-bills, likewise
charged upon the aids of the next session. The
sums granted out of the Sinking Fund towards the
supply were, the surplus of £702,539: 16: 1½, re-
maining in the Exchequer on the 5th April, 1785;
and £2,297,460: 3: 10½, out of the growing sur-
is to be issued from the Treasury to the Bank of England, and to be
drawn from thence by the Treasurer of the Navy, who is to specify in
each draft the head of service for which the same is drawn; and is re-
quired to make up his accounts, annually, to 31st December in each
year. Another bill was likewise passed, intituled, An act for better
exumining and auditing the public accounts of this kingdom, by which
the commissioners for auditing the public accounts were first appointed.
* Amount of exchequer-bills, outstanding 19th April, 1785.
· 1783.
On land-tax •
433,000 0 0
Ditto
1784.
1,469,000 0 0
Ditto
1785..
613,490 18 41
Malt-tax
1784.
737,280 0 101
Bank-loan
1781.
2,000,000 0 0
Civil-list debts
1783
217,500 0 ọ
East-India Company
1783.
500,000 0 0
Supply
1785
1,500,000 0 Q
Ditto
·
1785..
140,900 0 0
£ 7,410,870 19 3
336
NATIONAL DEBT
}
plus, which latter sum the Treasury were empowered
to raise by loans or exchequer-bills.
In opening the budget for this year, Mr. Pitt sta-
ted his intention of proposing the establishment of a
Sinking Fund, and proposed some new taxes in order
to raise a surplus of revenue as a foundation for this
plan, which was deferred carrying into execution
till the next year. It is highly probable, that the
low state of the funds was one of the principal
circumstances which induced the minister to adopt
this project; and the manner in which it was after-
wards carried into execution confirms this opinion.
*
The depression of the funds caused the discount
on navy-bills to remain very considerable; even
the beginning of April it was as high as 16 per cent.
but the intention of funding the greater part being
made known soon raised the price. The terms pro-
posed were as follows: All navy, victualling, and
transport, bills, dated on or before 30th June, 1783,
with interest to 5th July, 1785, were allowed £111
8: 0 five per cent. stock for every £100 of the said
principal and interest; and the bills made out between
the 30th June, 1783, and 1st January, 1785, with
interest to 5th July, 1785, after deducting five shil-
lings per cent. upon the amount of such principal and
interest for every month, (being at the rate of 3 per
cent. per annum,) between the 1st July, 1783, and
the day on which the bill was made out, were al-
* They had risen upon the peace, but had fallen eonsiderably
soon after; 8 per cents had now remained for a long time under 60.
FROM 1783 TO 1793.
337
lowed stock in the same proportion, as were likewise
ordnance-debentures, dated on or before the 31st of
December, 1783, with interest at 4 per cent. per an-
num, from the expiration of fifteen months from their
date, to the 5th July, 1785. The stock to be irre-
deemable till 25 million of the public debt, bearing
either 3 or 4 per cent. interest, shall have been re-
deemed and paid off; and to be consolidated with
the 5 per cent. stock created in the last session. The
amount of the bills funded, and the stock created
thereby, was as follows:
Amount of Bills.
£
S.
d.
5 per cent. Stock.
£
S. ๔.
9...... 7,131,181 1 3
Navy. . . . . . 6,401,423 0 9..
Victualling 2,925,804 4
Ordnance 538,714 13
£ 9,865,941 18 4
4
3,259,343 1 4
3......
600,127 7 9
10,990,651 10 4
The market being thus cleared of the principal
part of the load of floating paper with which it had of
late been overstocked, the discount upon navy-
-bills
soon became less, and, before the end of the year,
was only 24 per cent. It must be observed, that, by
funding the bills an addition was made to the debt of
upwards of one million, by converting a bill of £100,
for which government, in many instances, had not
received more than £90 value, into a debt of £111
80, yet the necessity of adopting some such mea-
sure made this additional debt more justifiable than
the needless increase of capital, by which the amount
Z
338
NATIONAL DEBT-
of the debt had been so much augmented during the
late war, the extent of which will appear from the
following view of the several loans :
Money borrowed. Debt created.
1776
1777
....
£
£
Interest.
£
2,000,000...... 2,150,000...... 64,500
5,000,000.. 5,000,000...... 225,000
1778..... 6,000,000...... 6,000,000...... 330,000
•
...
1779 7,000,000..... 7,000,000...... 472,500
1780......12,000,000......12,000,000...... 697,500
1781
1782
1783
•
•
•
·
1784....
..21,000,000...... 660,000
·12,000,000......21,000,000.
13,500,000.. 20,250,000...... 793,125
12,000,000.
•
15,000,000.
560,000
6,000,000...... 9,000,000..
316,500
£ 75,500,000
97,400,000
4,119,125
}
So that a nominal capital of £21,900,000 was added
to the capital of £75,500,000 actually borrowed,
and the interest on the whole amounted to £5 : 9 : 1
9:1
per cent. of which the perpetual interest was equal
to £4: 6:0 per cent. on the whole.
1786. In the session, which began the 24th of
January, Mr. Pitt brought forward the measure
which he had before intimated of a new Sinking
Fund. Among those whom he consulted on this oc-
casion, he particularly sought the advice and assist-
ance of the late Dr. Price, who readily communi-
cated three plans, which he conceived to be best
* See A Review of Dr. Price's Writings on the Finances of Great
Britain, by Mr. Morgan.
1
FROM 1783 to 1793.
339
adapted for carrying into execution a measure that
he had so often urged in his excellent publications,
particularly before the late war had swelled the pub-
lic debts to such a hopeless magnitude. It was one
of the plans thus communicated that was afterwards
adopted by the minister, but with some alteration
that considerably affected its efficacy. The speech,
on opening the session, recommended the establish-
ment of a fixed plan for the reduction of the Na-
tional Debt, and expressed a confidence, that this
important measure might be effected with little ad-
dition to the public burthens. In order to ascertain
this point, a select committee was appointed to exa-
mine and state the accounts presented to the house,
relating to the public income and expenditure, * and
to report what might be expected to be the annual
amount of the said income and expenditure in future.
On the 21st March, the committee made their re-
port; and conceiving that existing circumstances
rendered any averages drawn from the amount of the
revenue in former periods in a great degree inappli-
cable to the situation of the country, they formed an
account of the public receipt and expenditure to Mi-
chaelmas, 1785, and to 5th January, 1786, from
which it appeared, that at the former period there
was a surplus of £901,001, and at the latter a sur-
* Commissioners had been appointed to examine and state the
public accounts, by 20 Geo. III. c. 54. and continued by 21 Geo. III.
22 Geo. III. c. 50. 23 Geo. III. c. 68. -94 Geo. III,
and 25 Geo. III. c. 68.
c. 45.
c. 13.
}
z 2
540
NATIONAL DEBT
plus of £919,290. As it was evident, that a fund
of less than one million per annum would be very
inadequate to the purpose for which it was designed,
new taxes were imposed for raising the surplus re-
venue to this sum; and, in order the more effectual-
ly to prevent ministers from diverting it to other
purposes, the mode which had been suggested in
different publications on this subject was adopted, of
vesting the annual sum of one million in the hands of
commissioners. The commissioners appointed by
the act, (26 Geo. III. c. 31.) are: The Speaker of
the house of commons, the Chancellor of the Exche-
quer, the Master of the Rolls, the Accomptant-
General of the Court of Chancery, and the Governor
and Deputy Governor of the Bank of England for
the time being, respectively.* The money is di-
rected to be issued to the Bank of England, on
their account, in four equal quarterly payments of
£250,000 each, and is to be applied either in paying
off such Redeemable Annuities as shall be at or
above par, in such manner as shall be directed by
act of parliament, or in the purchase of annuities
below par at the market price, which was the mode
chicfly intended to be pursued.
The annual million
* The sanctity of a sacrifice was no protection from the devouring
appetite of the daughters of Electra. In like manner the statesmen
of the present day have ceased to behold with reverential awe this
ration's only hope,-at least, if we may judge from a late plan of
finance, the ultimate object of which was evidently the alienation of
the Sinking Fund.
FROM 1783 TO 1793.
341
was to be augmented by the dividends on the stock
purchased, the annuities for lives or terms as they
should fall in or expire,* and the sums saved by any
reduction of interest; and the Fund is to be con-
tinued thus increasing till it amounts to four millions
per annum, from which time the dividend on such
capital as shall be paid off or purchased by the com-
missioners, with the annuities that may afterwards
fall in, are to be at the disposal of parliament. At
the suggestion of Mr. Fox, a clause was introduced,
empowering the commissioners to subscribe towards
any public loan, to be raised by act of parliament,
upon Perpetual Annuities, subject to redemption at
par; and they were likewise empowered to continue
purchasing stock when it should get above par, un-
less otherwise directed by parliament. †
From the establishment of the Sinking Fund, in
1717, to this time, the year was considered as ending
on the 10th of October, in order that there might
be a reserved sum in the Exchequer towards paying
*From the time that any stock, or annuities for lives or term,
is placed to the account of the commissioners, the allowance for
management thereon is to cease.
+ Earl Stanhope proposed a plan for endeavouring to fix the price
of 3 per cents, which were then below 70, in order to prevent the
public from redeeming them at 100, or even at 90, on an average;
this was, by permitting the holders of 3 per cent consols to subscribe
for the conversion of their stock into 4 per cents, (£400 three per
cents into £300 four per cents,) attended with the right of priority
of redemption in the order in which the stock was subscribed. See
Observations on Mr. Pitt's Plan for the Reduction of the National
Debt. By Charles, Earl Stanhope.
342
NATIONAL DEBT
↑
the growing dividends. By this present act,
it was declared, that, in future, the yearly ac-
counts should be reckoned from the 5th of Ja-
nuary to the 5th of January following: the revenue
of 1786 had, therefore, the advantage of five quarters
produce of the Sinking Fund, from the 10th of Oc-
tober, 1785, to the 5th of January, 1787.
}
!
FROM 1783 TO 1793.
343
The Amount of the National Debt, as it stood on the 5th January, 1786, was as follows:
Annuities for long terms, remainder of original sum
Ditto for two and three lives
Exchequer-bills for interest of old bills
Annuities with survivorship 1765..
Ditto annuities 1744
East-India Company's capital
Bank, original fund
Ditto, for cancelling Exchequer-bills
Ditto purchased of the South-Sea Company
Ditto 3 per cent. annuities 1728
Ditto
Ditto
1729
1746
3 per cent Consolidated Annuities
3 per cent Reduced Annuities
Principal.
£ S. d.
1,836,275 17 101
67,155 8 23
2,200 0 0
18,000 0 0
3,200,000 0 0
1,000,000 0 0
3,200,000 0 0
500,000 0 0
4,000,000 0 0
1,750,000 0 0
1,250,000 0 0
986,800 0 0
107,399,696 5 13
37,340,073 16 4
Carried over
£ 162,550,201 7 6
•
•
•
•
•
Interest & Manageint
£ S. d.
136,453 12 8
8,195 12 0
540 0 0
97,285 14 4
30,401 15 8
100,000 0
15,000 0 0
121,898 3 5
52,500 0 Q
37,500 0 0
29,604 0 0
3,282,247
8 10
1,141,206 0 0
5,052,832 6 111
344
NATIONAL DEBT
Brought over.. • • •
£
162,550,201
s. d.
7 63
£ s. d.
5,052,832 6 113
32,750,000 0 O
1,328,421 17 6
17,869,993 9 10
903,551 10 10
10/
24,065,084 13 11
735,974 13 11
1,919,600 0 0
58,067 15 6
14,488,798 2
689,942 15 4
5,535,233 18 10
410,017 6 7
25,351 11 3
25,351 11 3
683,627 0 10
4
per cent Annuities
5 per cent Annuities 1784 and 1785
South-Sea stock and annuities
Ditto Aunuities, 1751
Long Annuities, 74 years remaining-
Short Annuities, 22 years remaining.
Ditto
1777, 13 year remaining
Life Annuities
1
£259,887,890 4 32
68,362 14 1
9,273,122 12 0
The Long Annuities are valued at 21 years purchase, the Short Annuities at 13 years purchase, which were about the
maiket prices in January, 1786, though both under the real value. The annuities 1777 are taken at one year, and the Life
Annuities at 10 years purchase. To the above should be added the
3 per cents 1726
Navy-debt'
Exchequer-billst
·
1,000,000 00
30,360 ◊ ◊
1,712,489 14 4}
34,249 15 9
5,500,000 0 0
174,500 0 0
* The interest on navy-bills was 4 per cent. but as a considerable part of this sum consisted of wages, &c. which bore no
interest, the average on the whole is taken at 2 per cent.
The interest on Exchequer-bills is exclusive of upwards of £100,000 per annum paid for those on the land and malt loans
1
FROM 1783 TO 1793.
345
Having thus given some account of the establish-
ment of this plan for reducing the National Debt,
the progress of which will hereafter be noticed, I
shall proceed to the financial arrangements for the
year. The deficiencies made good were as follows:
£
S. 44.
To replace to the Sinking Fund the deficiency to
5th July, 1785, of the duties granted for re-
pealing the duties on tea
To ditto the deficiency of the fund for the pay-
ment of annuities on the loan of the year
1758, on 5th January, 1785
365,719 2 4
To ditto 1778, 5th July. 1785
To ditto 1779,
ditto
To ditto 1780,
ditto
To ditto 1783,
ditto
To ditto 1784,
ditto
16,588 4 63
180,357 3 61
15,991 5 2
141,864 11
8
361,963 3 4
To make good deficiency of grants for 1785....
202,581 7 7
127,138 3 23
The exchequer-bills of the preceding year, amount-
ing to £1,500,000 and £1,000,000, and the addi-
tional £1,000,000 advanced by the Bank; also, the
loan of £2,000,000, advanced by the Bank in 1781,
on exchequer-bills, the payment of which had been
twice postponed, were discharged, and an equal
amount in the sums of £2,500,000 and £3,000,000,
aised by new exchequer-bills as part of the ways
and means.
1
Notwithstanding the grant to the civil-list, of
£60,000 in 1784, and the participation of the fees
346
NATIONAL DEBT
of regulated exchequer-offices,* there was now a far-
ther grant of £210,000, for the purpose of dis-
charging outstanding exchequer-bills, to the amount
of £180,000, for which the civil-list stood mortga
ged, and £30,000 additional debt, which it had in-
curred during the last
year.
The sums granted out of the Sinking Fund, to-
wards the supply, were, the surplus of £582,488
15: 94, remaining in the Exchequer on the 5th of
January, 1786, the surplus of £628,982 : 0 : r, re-
maining in the Exchequer on the 5th of April, and
£ 2,600,000 out of the growing produce of the Fund;
which latter sum the Treasury were, as usual, em-
powered to raise by loan or exchequer-bills, on cre-
dit of the fund: and the Bank were allowed to ad-
vance the same.
It must have been observed, that the loans of the
late war were chiefly raised on 3 per cent Consolida-
ted Annuities and Long Annuities, the interest on
both of which being payable in January and July,
had caused the interest on the debt, payable in these
quarters, to exceed very considerably the payments
for the Lady-day and Michaelmas quarters. In or-
der, therefore, to reduce this inequality, the time of
payment of the Long Annuities, and the annuities of
Which latter, indeed, was of no great magnitude, producing
to the civil-list only,
In 1784
1785.
•
•
£
1,800 0 0
S. d.
·
3,622 8 10
1786...
•
4,694 5 103
FROM 1783 TO 1793.
347
1778 and 1779, now called Short Annuities, was
changed by an act passed in this session, which di-
rects, that after the half year's payment, due 5th of
July, 1786, one quarterly payment shall be made on
10th October, and from that time the annuities are
to be paid half-yearly, on the 5th April and 10th of
October, till the quarter-day preceding the time at
which they expire, and the quarter's annuity for the
remaining time shall be paid on the quarterly-day of
payment on which the same shall become due.*
In this session the East-India Company obtained
an act to enable them to increase their capital; but,
as no advance to government was made on this oc-
casion, it is unnecessary to take any farther notice
of it.
The session was closed, 11th July, with a short
speech, in which his Majesty thanked the house of
commons for the provision made for discharging the
incumbrances on the civil-list, and expressed an ex-
pectation of the most salutary effects from the plan
adopted for the reduction of the National Debt; an
object "inseparably connected with the essential in-
"terests of the public."
66
1787.-The speech, on opening the next session.
23d January, contained the following passage:
"trust you will be able this session to carry into ef
"fect, regulations for the ease of the merchants, and
"for simplifying the public accounts in the various
* The proprietors were allowed to the 1st of June to signify theis
dissent.
348
NATIONAL DEBT
<<
"branches of the revenue." This was a preparatory
notice of a very necessary and useful measure, the
consolidation of the various duties of customs and
excise. The subject was brought forward by Mr.
Pitt, on the 26th February, when, after particularly
noticing the confused state of the customs, arising
from the duty on most articles having been granted
at many different times and differently appropriated,
he observed the intended alteration would require
3000 resolutions, and therefore first moved a general
resolution: "That all the duties of customs and
"excise, and certain duties of stamps in Great Bri-
tain, do cease and determine, and, that other duties
"be substituted in their stead." The plan meeting
with general approbation, a bill was brought in and
passed for carrying it into execution. By this act,
all the duties of customs, the excise duties, (with
the exception of the malt,) and the principal stamp-
duties were to cease from 10th May, 1787, and the
new duties established, by the act, with the duties
on hackney-coaches, hawkers and pedlars, houses
and windows, male and female servants, &c. and all
arrears of duties and other moneys paid into the Ex-
chequer not othewise appropriated, were constituted
a fund to be called, The Consolidated Fund. Thus,
the distinctions of the General, Aggregate, South-
Sea, and Sinking, Funds were done away.*
* All the annuities payable to the public creditors, which had
been charged upon the Sinking Fund, or other funds, were now
made payable, from 5th July, 1787, out of the Consolidated Fund;
but as this might be considered a change of the security upon which
1
FROM 1783 TO 1793.
349
The following sums were afterwards granted, to
make good to the Sinking Fund the like sums istued
therefrom, viz.
For deficiency of the Fund for annuities 1758
Ditto.
Ditto.
Ditto...
Ditto..
Ditto.
£ 3.
d.
to 5th July, 1786
18,574 13 10
1778
10th October
127.796 19 3
•
1779
5th July
35,039 13 5
1780
10th October
184,234 3 2
· 1782
5th July
11,205 5 11
•
1783
10th October
292,448 14 7}
5th July
532,662 18 42
Ditto... 1784 and 1785
•
Ditto for deficiency and loss by repeal of the
duties on tea in 1784 and 1785 to 5th April,
1786 ...
233,410 6 74
The sum of £1,226,072 : 2 : 113, being the sur-
plus of the Sinking Fund remaining in the Exche-
quer on the 5th April, 1787, was granted towards
the supplies, and, whatever surplus might afterwards
arise, was directed to be carried to the new Consoli-
dated Fund, out of which £ 2,400,000 was likewise
granted towards the supply, with the usual power of
raising the same by loans or exchequer-bills.
The exchequer-bills of the preceding year, amount-
ing to £5,500,000, were discharged in course, and
£145,786 8: 4 paid for interest and charges; the
the money had been originally advanced, any of the proprietors who
might disapprove of the same were allowed till the 1st of June to
siguify their dissent, in a book to be opened for that purpose, at the
Bank; and if they did not thus signify their dissent, they were to
be deemed to have assented to the same.
350
NATIONAL DEBT
like sum of £5,500,000 was raised by new exche-
quer-bills, as part of the ways and means, and
charged, as usual, on the supplies of the next ses-
sion, with the collateral security of the Consolidated
Fund.
The deficiency of grants for 1786, made good in
this session, was, £240,324 : 19 : 104.
It may not be improper to notice the application
to parliament for the payment of the Prince of
Wales's debts,* in consequence of which the house
of commons, on 24th May, presented an address to
the king, desiring that he would order the sum of
£161,000 to be issued out of the civil-list for that
purpose, and £20,000 on account of the works at
Carlton-House assuring his Majesty, that his faith-
ful commons would make good the same, which was
done in the next session.
As government thought proper to order an aug-
mentation of the sea and land forces, on account of
the king of France having signified his intention of
assisting the Dutch against the king of Prussia, it
was found necessary to assemble parliament on the
27th November; but the budget for the year was
not brought forward by Mr. Pitt till the 5th May,
The following abstract of the debts was laid before the house:
Bonds..
£13,000
Purchase of houses...
4,000
#
Expenses of Carleton-House
53,305
Tradesmen's bills
90,804
£ 161,109
FROM 1783 To 1793.
351
on which occasion he stated the permanent peace-
establishment at £15,624,000: this exceeded the
sum at which it had been calculated by the select
committee of 1786, on account of the additional
West-India establishment, and a subsidy to the Land-
grave of Hesse Cassel, pursuant to a treaty concluded
on the 28th September, 1787. The deficiencies made
good this year were as follows:
£ S. d.
Deficiency of the commutation-tax
89,899 2 51
Ditto of the fund for annuities 1758 to 5th Ja-
nuary, 1787
21,816 3 62
Ditto
•
1778 to 5th April, 1787
68,895 16 81
Ditto
∙1780
ditto
143,614 13 10
Ditto
1783
ditto
178,144 10 O
Ditto.... 1784 and 1785 to 5th January, 1787 76,362 8 03
Ditto of grants for 1787
63,671 18 24
The exchequer-bills of the preceding year, amount-
ing to £5,500,000, were discharged in course, and
£181,419: 6: 7 paid for interest thereon; the like
sum of £5,500,000 was raised as part of the ways
and means, by new exchequer-bills, charged as usual
on the supplies of the next session. The sums
granted out of the produce of the Consolidated Fund,
were the surplus of £589.162: 15: 2, remaining
in the Exchequer, on 5th April, 1788, and £2,545,000
out of the growing produce of the fund, with the
usual clause, empowering the Treasury to raise the
latter by loans or exchequer-bills.
1788. The illness of the king preventing a farther
prorogation, the parliament met again on the 20th
November, and adjourned to the 4th December: this
352
NATIONAL DEBT
1
subject causing considerable discussion and delay of
public business; the supplies were voted rather later
than usual; the budget was not brought forward till
the 10th June, when Mr. Pitt, notwithstanding his
favourable account of the state of the finances,
found it necessary to propose new loans and new
taxes. He allowed that the navy-debt had increased
about £500,000, but attributed this, and the loan
now found necessary, to the extraordinary expenses
which had increased the expenditure beyond the sum
it had been stated at by the committee of 1786.
These extraordinaries consisted chiefly of £852,000
paid in compensation to the American loyalists;
£216,000 for the Prince of Wales's debts; £210,000
for the debts of the civil-list; and £253,000 for
the expense of the armament of last year; but
although these might be considered as expenses not
likely to occur again, they ought to have afforded a
caution against forming estimates of the expendi-
ture upon a supposition that no such extraordinary
expenses would occur.
The sum of £191,342 : 13 had been issued out of
the civil-list revenue for secret service abroad, and
was now replaced from the supplies; of this sum
£187,000 had been advanced as a loan to the Prince
of Orange, which was to be repaid by instalments;
it was, therefore, thought proper to raise the sum on
terminable annuities, and though the annual instal-
ments were expected to be equal to the payment
of the annuities, yet it would probably have been diffi-
cult to obtain even so small a loan on such security; it
was, therefore, negociated as a debt of this country,
FROM 1783 TO 1793.
353
depending on the same security as the other public
debts. The terms were: for every £100 advanced,
the contributor should be entitled to an annuity of
£799 for 18 years, from 5th April, 1789, to
be added to, and made one joint stock with, the an-
nuities for 30 and 29 years, 'granted in 1778 and
1779. The payments were as follows:
10 per cent. deposit.
21st August.
25th September
30th October.
15
15
15
15
27th November.
15
24th December.
15
29th Jan. 1790.
Those who paid in any of the instalments before the
appointed days were allowed discount at 3 per cent.
per annum, from the day of such payment to the day
on which such instalments would have become due.
This stock, previous to its expiring in 1808, was
called the Bank Short Annuities.
The farther sum proposed to be raised by loan to-
wards the supplies was £1,002,500, for obtaining
which, the unusual mode of a tontine was adopted.
The scheme consisted of 10,000 shares, at £100 : 5
each, divided into the following classes:
Annuity.
£ s. d.
Class.
1 lives under 20 years of age-
4 3 0
2
from 20 to 30 -
4 5 6
3
A a
354
NATIONAL DEBT
Class.
Annuity.
£ s. d.
3
from 30 to 40
4 8 6
4
from 40 to 50
·
4 13 6
5
from 50 to 60
5 1 6
6
above 60
5 12 0
The subscribers were at liberty to name either their
own life or that of any other person, and were al-
lowed till the 10th October, 1790, to nominate the
same; but the subscription was to be paid as follows:
£10 5 0 per share deposit.
15 0 0-
15 0
0
15 0
15 0 0
15 0 0
15 0 0-
21st August.
25th September.
30th October.
27th November.
24th December.
29th January, 1790.
Upon the death of any nominee, the annuity fal-
ling in to be equally distributed among the several
persons interested, whose nominees are living, in the
respective class to which the life deceased be-
longed, until the annuities of that class shall have in-
creased by survivorship to £1000 per annum on each
remaining share; from which time no benefit is to
arise from survivorship, but each annuity of £1000
to cease upon the extinction of the life entitled to the
same. The annuities to be payable half-yearly at the
Exchequer; and as, in consequence of the time al-
lowed for appointing the nominees, the first half year's
payment of the annuities could not become due till
FROM 1783 to 1793.
355
5th April, 1791, the subscribers were allowed interest
at 4 per cent. per annum, for a year and a quarter, to
10th October, 1790; which was paid the 11th March,
1791, amounting to £50,104: 19. The discount
allowed for prompt payment amounted to £1124
3:10, and the Bank were allowed £2000 for re-
ceiving the contributions and paying them into the
Exchequer. This scheme, like former attempts of the
kind, was unsuccessful, as will appear in the account
of the next session.
The exchequer-bills of 1788, amounting to
£5,500,000 were discharged in course, with £186,714
14:24 for interest, &c. and the like sum was raised
by new exchequer-bills, charged on the next supplies,
with the collateral security of the Consolidated Fund.
The deficiency of the last year's grants made good
was £331,649: 18: 32.
1790.-The next session began the 21st January,
and the budget was brought forward on the 15th
April, when Mr. Pitt again congratulated the com-
mittee on the prosperous state of the finances, though
he was under the necessity of admitting, that the re-
venue and expenditure could not be brought to a
permanent balance, without a considerable farther
reduction of the latter.
The deficiency of the last year's grants, made good
in this year, was £231,517: 12: 24. The exchequer-
bills of the last year, amounting to £5,500,000 were
discharged in course, with £176,768: 13:7 for
interest, &c. and the like sum raised by new exche-
quer-bills, charged upon the supplies of the next
A a 2
356
NATIONAL DEBT
1
session. The grant out of the Consolidated Fund was
£621,151 1: 3, from the surplus remaining in the
Exchequer on 5th April, 1790; and £2,300,000 out
of the growing surplus.
£200,000 was granted towards the discharge of
the navy-debt, and £1,000,000 for such augmentation
of forces as the exigencies of affairs might require.
The tontine, which formed part of the ways and
means of the last year, was at first at a premium, but
soon got to a considerable discount; and those
who had taken the whole found much difficulty in
disposing of their shares, the greater part of which
still remained on their hands. In order, therefore, to
afford them some relief, it was proposed to enlarge
the time for nomination; but, as this would have been
injurious to those who had already nominated, it was
relinquished, and, on the 26th May, Mr. Pitt proposed
to the house, that the holders of the tontine-shares
should be allowed the option of changing them for
Long Annuities. An act (30 Geo. III. c. 45.) for this
purpose was afterwards passed, by which the contri-
butors were allowed, at any time on or before the
20th September, 1790, to exchange their shares for
annuities of £4: 5, for 691 years, from the 10th
October; and, in order to place those who retained
their shares on the same footing as they would have
been had the whole number been filled up, the Com-
missioners of the Treasury were empowered to nomi-
nate lives, for the shares exchanged, from the peers
of Great Britain or Ireland, or their children, ba-
ronets, lords of manors, justices of the peace, fellows
FROM 1783 TO 1793.
357
of colleges, governors of the Charter-house, Found-
ling-Hospital, or Christ's Hospital, or those who are
registered on the books of the Amicable Society; and
the lives thus nominated were to be distributed among
the several classes, in the same proportion as the no-
Of the 10,000
minees appointed by the subscribers.
.* the
shares, lives were nominated for only 4219;*
shares exchanged for Long Annuities were 5733, and
48 were forfeited, after paying part of the purchase-
money. The amount of the annuities on the tontine-
shares retained by the subscribers, and on those
to which government nominated, was, on the 5th
April, 1791, as follows, viz.
Amount of the annuities on lives nominated by the
subscribers
£ s. d.
Ditto on lives nominated on the part of government 24,681 17
18,180 3 11
1
£42,862 1 0
In the king's speech, on opening the next session,
(which was the first of a new parliament) 26th No-
£ s. d.
£ s. d.
1st class..2810 shares, at..4 3 0 O per annum.. 11,661 10 0
2
525
4 5 6
2,244 7 6
3
360
4 8 6
1,593 o a
4
272
4 13 6
1,271 12
0
5
170
5 1 6
6.
82
5 12 0
862 15
459 4 0
4219
£18,092 8 6
358
NATIONAL DEBT
vember, 1790, his Majesty expressed his satisfaction
in communicating the information, that the differ-
ences with Spain, which had occasioned the late ar-
mament, were adjusted. An important part of this
business, however, still remained to be considered,
which was the expense attending it; accordingly, on
the 15th December, the house of commons having
resolved itself into a committee of ways and means,
Mr. Pitt brought forward his armament-budget; the
expense he stated at £3,133,000; and the plan för
providing for it was by taking £500,000 of the un-
claimed dividends in the hands of the Directors of
the Bank of England, imposing new taxes, for four
years only, to the amount of £728,000, and modify-
ing the perpetual tax on receipts; by which means.
£1,300,000 would arise in the first year, and, with
£1,833,000 to be raised on exchequer-bills, would
answer the whole expense incurred. More than half
the debt would thus be discharged in two years; after
which, part of the taxes might be taken off, and the
others continued for the payment of the remainder in
the two succeeding years. The proposal for appro-
priating to the public use so large a sum out of the
unclaimed dividends met with much opposition,
though it was intended to give the public creditors
the security of the Consolidated Fund for any future
demands. The minister stated, that this balance, in
the hands of the Bank Directors, had been uniformly
increasing since the year 1797; in that year it was
£43,000; in 1774 it amounted to £292,000; in
1786 it was £314,000; and, on the 5th July, 1789,
FROM 1783 TO 1793.
359
the time to which the account was made up, it had
increased to £547,000: on the 12th October, 1790,
there was a floating balance of £660,000; so that, after
the proposed appropriation of £500,000, there would
remain in the hands of the Bank £160,000 to answer
any casual demand. This project being generally
disapproved of by the stock-holders, it was afterwards
agreed to accept of a loan, without interest, from the
Bank of the same sum, as long as a floating balance
to that amount should remain in the hands of their
cashier. An act was accordingly passed, providing,
that, whenever the money remaining in the hands of
the Bank, for unclaimed dividends, (exclusive of
those due the preceding quarter,) should be reduced
under £600,000, the sum which it was less than
£600,000 should be immediately repaid them at the
Exchequer.* In consequence, however, of publish-
ing the list of the proprietors of unclaimed dividends,
a considerable part of them were received; the sum,
therefore, lent to government on this account was
only £376,739.
The speaker of the house of commons, on present-
ting the above-mentioned bills for the royal assent, on
29th December, observed, that they had provided for
the complete and speedy discharge of these expenses
without any lasting addition to the National Debt, or
any embarrasment to that system which had so
effectually sustained and advanced the public credit of
*This act also secured to them the continuance of the allowance
for management, at the rate of £450 per annum per million.
་
**
360
NATIONAL DEBT
I
the country; and hoped, that this would operate as a
salutary example to future times. But it was very
evident, that, if four years were requisite to discharge
the expenses of a mere armament, there was little
probability that we should ever enjoy a period of
peace long enough to provide for the expenses of
an actual war. A proof of the slight ground there
was for entertaining such hopes soon occurred; on
the 28th March, 1791, a message from the king was
delivered to both houses of parliament, acquainting
them, that, his endeavours to effect a pacification be-
tween Russia and the Porte having hitherto been
unsuccessful, it was judged requisite, in order to add
weight to his representations, to make some farther
augmentation of the naval force: in consequence of
this message an address was agreed to promising
to make good any additional expense which might be
incurred by such augmentation; thus authorising a
new armament and hazarding a war, to induce the
Empress to relinquish the town of Oczakow, which
she had taken from the Turks.
On the 8th April a select committee was appointed
to examine and state the accounts laid before the
house, relating to the public income and expenditure,
and to report what has been its amount during the
last five years, and what it would probably be in fu-
ture; also what alteration has taken place in the
amount of the public debt since the 5th January,
1786. Their report, which was presented to the
house on the 10th May, was more clear and circum-
stantial than that of the committee of 1786. With
FROM 1783 TO 1793.
363
respect to the National Debt, they observed, that,
during the period referred to them, there had been
applied towards its discharge £4,750,000, ari-
sing from the quarterly payments directed by act
of parliament; and a farther sum of £674,592,
arising from the interest of stock purchased, and an-
nuities expired or fallen in; making together
£5,424,592; that the capital stock bought up by
the commissioners to 1st February, 1791, was
£6,772,350, which being all three per cents, the
annual interest of the same was £203,170: 10;
which, with the annuities expired or fallen in, made
the sum at this time applicable to the purchase of
stock £1,254,804 14:6, viz.
£ 5. d.
Annual million
1,000,000 0 0
Interest on stock purchased
203,170 10 0
Annuities of 1777.
25,000 0 0
1
Annuities unclaimed
22,030 14 6
Annuities expired • • • •
4,603 10 0
£1,254,804 14 6
The only increase of the funded debt, according to
this report, was the capital of £1,002,140, raised by
the tontine in 1789; the farther sum of £187,000,
raised by Short Annuities, (of which £34,000 had
been since repaid,) did not appear to them of a nature
to be stated as an increase of the national incum-
brances. Of the unfunded part, the increase of the
navy-debt was stated at £457,950; on the ordnance
362
NATIONAL DEBT
account, for articles unprovided for by parliament,
£61,909 0:7; and the increase of the deficiency
of grants £80,590.
crease.
On the 18th May Mr. Pitt brought forward his
budget for the year, in which all his estimates ex-
ceeded those of the select committee; although they
had calculated the expenditure, upon a peace-esta-
blishment, at £490,997 more than the committee of
1786, without explaining any necessity for such in-
The subject was taken up in a very able
manner by Mr. Sheridan, and the state of the finances
underwent a very long discussion; the principal ob-
ject of Mr. Sheridan was to prove, from the report of
the committee, that, during the last five years, the ex-
penditure had considerably exceeded the income,* the
deficiency having been made good by extraordinary
receipts; and that the greater part of these resources
being, from their nature, not to be expected in future,
the small excess of the income beyond the expen-
diture was wholly inadequate to answer future extra-
ordinary expenses, even such as were actually fore-
seen and admitted by the select committec.
With respect to the supplies, the exchequer-bills
of the last year were discharged, and the same sum
of £5,500,000 raised by new exchequer-bills as part
of the ways and means. The deficiency of the
grants for 1790 made good was £207,728: 3: 1.
1792.-The king's speech, on opening the next
session, 31st January, proposed an immediate reduc-
颅
​Report. See also A Review of Dr. Price's writings on the Finances.
FROM 1783 TO 1793.
36S
}
I
tion in the naval and military establishments, and held
forth still brighter expectations: the following are the
words: entertain the pleasing hope, that the
"reduchons which may be found practicable in the
establishments, and the continued increase of
"the revenue, will enable you, after making due
provision for the several branches of the public
service, to enter upon a system of gradually re-
lieving my subjects from some part of the existing
"taxes, at the same time giving additional efficacy
"to the plan for the reduction of the National Debt,
on the success of which our future ease and security
"essentially depend. With a view to this important
object, let me also recommend it to you to turn your
"attention to the consideration of such measures as
44
66
66
the state of the funds and of public credit may
render practicable and expedient, towards a reduc-
"tion in the rate of interest of any of the annuities
"which are now redeemable." In the debate upon
this speech, Mr. Pitt, after stating the flourishing
condition of the country, contended, that a constant
attention to the lessening of the public burthens, and
paying off the National Debt, was the best security
for the continuance of its prosperity.
On the 17th February, Mr. Pitt, in a very eloquent
speech, entered into a general discussion of the state
of the national finances, which he contended were in
so flourishing a condition as to admit of the repeal of
several taxes, and the application of £400,000 in aid
of the Fund for the reduction of the debt; and that,
the operation of the Fund being accelerated by this
364
NATIONAL DEBT
and future intended additions, it might be expected,
that 25 million of the 3 per cents would be paid off
by the year 1800, when the 5 per cents would, of
course, become redeemable; and that, in the year
1808, the Fund would amount to 4 million per annum,
being the sum to which it is restricted by the act.*
On this occasion he observed, that, when the plan of
reduction was first discussed, it was a question whe-
ther the commission should be allowed on the sum
laid out, or the nominal sum redeemed; fortunately,
that question was now at an end, as the remaining
debt would probably be redeemed at par.
A measure of much greater importance than the
proposed additions, and infinitely more judicious than
speculations upon future redemptions, was a provi-
sion that, whenever, in future, any money shall be
raised by loan or perpetual redeemable annuities, a
separate account shall be kept of the same, and a
sum, equal to one per cent. on the stock created by
such loans, shall be issued out of the produce of the
Consolidated Fund in quarterly payments, to be
placed to the account of the commissioners for liqui-
dating the debt: and if the loan, or any part there-
of, is raised by annuities for a longer term than 45
years, or for lives, a computation is to be made, at 3
per cent. interest, of what will be at the end of 45
* This injudicious restriction was taken off by an act passed in
1802, which provided, that the two funds should continue to accu-
mulate till all the then existing redeemable annuities should be paid
off.
1
I
FROM 1783 тo 1793.
365
years the actual value of such part of the annuities
as may be then outstanding, and the sum to be
placed to the account of the commissioners is to be
equal to one per cent. on this computed future value.
It was also enacted, that, when the interest on any re-
deemable stock should be reduced, or the capital paid
off, by money raised at a less rate of interest, the
saving of interest should be carried to the Fund. This
was certainly a judicious improvement on the original
plan, as it prevented the operation of the million per
annum, and the intended addition, from being im-
peded by any future debt incurred.
In the course of this session an attempt was made
to set aside that pernicious mode of raising money by
lotteries, which had for some years past formed a regular
part of the ways and means; but, though the evil effects
which this mode of legal gambling produced on the
industry and morals of the people cannot be denied,
and though the revenue was stated to be in so flou-
rishing a state as to admit of the repeal of taxes,
the opposition proved ineffectual, and a lottery of
50,000 tickets was again established, which, at £16:5
each, made a profit to government of £312,500.
The exchequer-bills of the preceding year for
£5,500,000 were discharged in course, and the like
sum raised by new exchequer-bills, as part of the ways
and means, charged as usual on the supplies of the
next session.
The sums granted out of the Consolidated Fund
were, the surplus to 5th January, £155,495 : 19 : 0;
Ditto to 5th April, £486,000; and out of the grow-
366
NATIONAL DEBT
1
1
ing produce £2,300,000, with power to raise the latter
sum by loan or exchequer-bills.
The favourable representations of the state of the
finances, and the hope which prevailed, in the begin-
ning of the year, of a continuance of peace, raised
the public funds to a greater price than they had been
at for many years past;* in February, 5 per cents
were at 120; and 4 per cents, although redeemable,
were, on the 13th March, at 105; but 3 per cent
Consols got up in a much greater proportion, being
done on the 8th March at 97%; this probably re-
sulted, in a great measure, from the commissioners
confining their purchases to the latter stock.
ལྟ
* The disturbed state of other parts of Europe contributed to this
effect, by rendering our funds a favourite object of purchase for
those moneyed men on the continent who wished to secure their pro-
perty. Immense sums, it is said, flowed in from France and the
Low Countries.
A
FROM 1783 TO 1793.
367
The following is the Amount of the National Debt, on the 5th January, 1793.
Exchequer-Annuities for terms. •. •
Ditto annuities 1765
Ditto Tontine-Annuities 1789
Ditto annuities on lives
Bank capital
South-Sea Company ·
Ditto annuities 1751
3 per cent. Annuities 1726.
3 per cent. Consolidated Annuities
3
per cent Reduced
4 per cent Consolidated Annuities.
5
per cent Consolidated Annuities.
Long Annuities
Short Annuities 1778, &c.
Carried over ☀ ☀ ☀ ☀ ☀ ☀
Capital.
£ s. d.
945,725 8 8
8,640 0 0
671,071 16 5
Int. & Management.
£ s. d.
135,103 12 8
540 0 0
61,006 10 7
19,322 7 0
356,502 3 5
427,766 13 4
11,686,800 0 0
24,065,084 13 11
735,974 13 11
1,919,600 0 0
1,000,000 0 0
107,399,696 5 11
41,540,073 16 4
32,750,000 0 o
17,869,993 9 10
14,253,371 10 0
4,228,817 14 0
J
258,766,641 7 71
•
•
58,373 11 9
30,450 0 0
3,264,756 13 9
1,262,786 19 11
1,324,509 7 0
901,541 3 41
712,668 11 61
422,881 15 5
9,286,417 10 42
368
NATIONAL DEBI
Exchequer-bills
Treasury account
Army-services unsatisfied
Ordnance ditto
Navy-debt.....……………….
Brought over... . . .
£.
s. d.
258,766,641 7 72
5,500,000 0 0
685,936 1
1 5
641,176 0 0
81,025 5 S
3,344,397 3 5
£ 269,019,175 18 1
369
CHAPTER XIII.
The History of the National Debt, from the Com-
mencement of the War, in 1793, to the Year 1800.
THE success of the French against the arms of
Austria and Prussia could not be agreeable to any
of the existing governments of Europe; their deter-
mination to restore the free navigation of the Scheldt
and Meuse gave particular alarm to that of Holland;
but, as it cannot be supposed that this object was of
sufficient importance to Great Britain to hazard a
war, much less that the free government of this
country could be interested in opposing the forma-
tion of a free government for France, we must ascribe
the augmentation of the naval and military forces,
and the unexpected proclamations of the 1st Decem-
ber, 1792, for embodying the militia, and for the
meeting of parliament on the 13th, to an unquestion-
able desire of preserving the internal tranquillity of
the country, and maintaining a strict neutrality with
respect to the war. In the king's speech, he la-
ments the necessity for extraordinary expenses,
B b
་
Y
}
370
NATIONAL DEBT
"which may for a time prevent the application of
"additional sums beyond those which are already
"annually appropriated to the reduction of the pub-
"lic debt," but adds, that it afforded him great con-
solation to reflect, that they would find ample re-
sources for effectually defraying the expense of vi-
gorous preparations from the excess of the actual
revenue beyond the expenditure. Accordingly, on
the 7th January, 1793, Mr. Pitt observed, that the
sum granted for the service of the preceding year,
out of the produce of the Consolidated Fund, to the
5th April, 1793, had not only been satisfied on the
5th of January, but that there remained a surplus of
£ 435,696 : 1 : 74; he, therefore, moved, that this
sum be applied towards the services for 1793, which
was agreed to. But, as hostilities commenced soon
after, it was found necessary to include a loan in
the ways and means for the year. The amount was
£4,500,000; and the terms were: that, for every
£72 advanced, the contributor should be entitled
to £100 three per cent. stock, bearing interest from
5th January, 1793. The instalments were as fol-
lows:
10 per cent. 4th April.
31st May.
10
10
19th July.
10
16th August.
15
15
15 -
15
27th September.
8th November.
13th December.
24th January, 1794
I
FROM 1793 TO 1800.
371
Those who paid in the whole on or before the
12th of December were allowed discount at 3 per
cent. per annum, from the day of completing the
payment to the 24th of January, 1794.
The annual charge which the country was put to
on account of this loan was:
For interest.
Management
Redeeming Fund of 1 per cent.
£ s. d.
187,500 0 0
2,812 10 0
62,500 0 0
252,812 10 0
As a provision for which, the temporary taxes im
posed for defraying the expenses of the armament in
1791 were now made perpetual. It was originally
intended to have raised the loan on 4 or 5 per cent.
stock; but, the embarrassed state of commercial cre-
dit having caused a scarcity of cash, the minister re-
ceived offers from one set of subscribers only; and,
as they preferred 3 per cents, it was judged expedi-
ent to conclude the bargain in that stock, on the
above terms, which were between 4 and 5 per cent.
under the market-price.
When the loan was first announced to the house,
Mr. Pitt stated his intention of admitting the com-
inissioners for liquidating the debt to subscribe for
£1,650,000, which they were fully competent to
have done from the increase of the fund, as appears
by an account laid before the house on the 11th of
Bbo
A
372
NATIONAL DEBT
February. But this measure was relinquished, from
the consideration that the daily purchases made by
the commissioners contribute materially to keep up
the price of the stocks, and that such subscription
would delay the period when the 5 per cents would
become redeemable.
The minister admitted that the terms of the loan
were much more disadvantageous than might have
been expected; but that, having done every thing
in his power to excite a competition among the mo-
neyed men without effect, they were the best he could,
procure.
The exchequer-bills of the preceding year amount-
ing to £5,500,000 were discharged, and the like sum
was raised by new exchequer-bills, (charged as usual
upon the first supplies of the next session, with the
collateral security of the Consolidated Fund,) viz.
£4,000,000, as part of the ways and means, and
£1,500,000 as a vote of credit.*
*In the act for granting the last mentioned sum, a clause was in-
troduced of a much more important nature than appears to have
been generally apprehended at that time; and, as I shall hereafter
have occasion to notice its consequences, it may be proper to give
some account of it. It had long been customary for the Bank to
pay such Treasury bills of exchange as were directed to them till
the amount was about £20,000 or £30,000, when it was usual
for the Treasury to send down orders for the advances to be set off
from the respective accounts to which the bills properly belonged.
They sometimes exceeded the sum here stated, even in time of
peace; but, when they amounted to near £ 50,000, it was gene-
rally a subject of complaint, and, in the course of the American
war, they scarcely ever exceeded £150,000 at a time. The
*
FROM 1793 TO 1800..
373
The deficiency of grants for the year 1792 made
good in this session was £225,325 : 2 : 4.
The sums granted out of the produce of the con-
solidated fund were £435,696: 1:7, the surplus
to 5th January, 1793; and £ 3,209,000 out of the
surplus to arise from the 5th January, 1793, to the
5th April, 1794
In the course of this session a new agreement was
entered into with the East-India Company, by which
the sum of £4,200,000, due from the public to them,
was transferred from their management to the Bank
of England. In 1750, the India Company had been
empowered to raise money upon this debt by the sale
of 3 per cent. annuities, transferable at the India-house,
amount of these advances in the last three years had been as fol
lows:
On 25th February, 1790...…….
€ 20,468
1791....
1792....
22,878
26,999
{
As these bills were now likely to increase, the Bank directors were
alarmed, lest they should incur the penalties of an act of 5 & 6 Will.
& Mary, by which it was enacted, that, if the Bank should advance
any sum of money, by way of loan or anticipation on any branch of
the public revenue, except such on which a credit of loan is granted
by parliament, they should forfeit treble the sum. They, therefore,
suggested the propriety of introducing the above-mentioned clause,
which provided, that the act of W. & M. should not be construed
to extend to any past or future advances for the purpose of paying
bills of exchange, accepted by or on account of the Lords of the
Treasury, and made payable at the Bank of England, but not spe-
eifically charged or lent on any part of the public revenue.
<
}
374
NATIONAL DEBT
and the capital actually sold was £ 2,992,440 : 5 : 0,
on which government allowed them £1,687 per an-
num for management. These India-annuities, as they
were commonly called, were subject to the same.
conditions of redemption as the original debt of
£4,200,000. In 1791, the Speaker of the house
of commons gave notice to the Company, pursuant
to the order of the house, that the debt of
£4,200,000, with all arrears of annuity thereon,
would be redeemed and paid off on the 31st March,
1794; and, though it cannot be supposed that at
the time of giving this notice there was any inten-
tion of carrying it into execution, and determining
the Company, yet the proprietors of the India-annu-
ities now contended that in consequence of it they
looked to the payment of the capital due to them, at
par, on the 31st of March, 1794. The principal
grounds on which they justified this claim was, that,
at the time of giving the notice, it was the general
expectation that the 3 per cents would soon be
above par; and that, therefore, had no other arrange-
ment been made, they would have been paid off at a
considerable loss, while, on the other hand, they
could derive no benefit whatever from the new
agreement, which prevented them from being paid.
It was not, however, thought proper, under the pre-
sent circumstances, to comply with the claims of
the India-annuitants; but an act was passed, by
which the whole debt of £4,200,000 was, from the
31st of August, 1793, engrafted upon and consoli-
dated with the 3 per cent. Reduced Bank Annuities:
FROM 1793 TO 1800.
375
which engraftment and consolidation was to be
deemed and taken to be a redemption of the debt of
£4,200,000 between the public and the Company,
and the allowance of £1,687 per annum to them for
management to cease. The proprietors of the India-
annuities, therefore, had 3 per cent. Reduced Annu-
ities in lieu of their former stock, and the Company
became proprietors of £1,207,559:15:0 in the same
stock, on which they now receive the interest from
the Bank.
The check given by the war to mercantile specu-
lation, which had been carried to a great extent,
produced a considerable shock to the system of paper-
credit. The number of bankruptcies exceeded what
had ever before been known,* and parliament found
it-necessary to issue exchequer-bills for the support
of private credit, which was soon found effectual in
stopping the
progress of the evil, which appeared to
threaten ruin to the whole commercial interest. The
sum allowed to be issued was £5,000,000, but there
was lent upon different applications £2,202,000 only;
of this the merchants in the capital received about
£1,000,000; at Manchester, about £250,000; at
Liverpool, about £130,000; and at Bristol, only
£40,000. There were applications for £1,215,100
*
* In April there were 188 bankruptcies, in May 209, and in
the whole year 1304, besides a great number of temporary stop-
pages. Even the Bank of England found their cash and bullion in
the beginning of 1793 reduced very much below their ordinary
amount. They, however, considerably increased their discounts.
}
1
*
Y
1
•
376
NATIONAL DEBT
more, but they were withdrawn, and 49 were refu-
sed for want of proper security. The bills carried
interest at 24d. per cent. per diem: but the interest
paid by the borrowers was 5 per cent. per annum,
so that government derived a profit of rather more
than £4,000, after paying all expenses.
1794.-The next session began 21st January, and
the budget was brought forward on the 4th Febru+
ary. Although in the preceding year the forces had
been increased considerably beyond the number vo-
ted, yet a much greater augmentation was thought
necessary for the prosecution of the war on the con-
tinent; the sum to be raised by loan was, therefore,
£11,000,000, which was obtained on the following
terms: Every contributor of £100 to have £100
three per cent. Consolidated Annuities, to commence
from 5th January; £25 four per cents, from 10th
October, 1793; and an annuity of 11 s. 5 d., for 661
years, from 10th October, 1793. The instalments
to be made as follows:
10 per cent.
10
10
10
1
15
15
15
15
deposit.
15 h April.
6th June.
18th July.
29th August.
17th October.
28th November.
13th January, 1795.
Those who paid in the whole at any time before
the 27th November were allowed discount at 3 per
cent. per annum, from the day of completing their
FROM 1793 To 1800.
377
&
payment to the 13th January, 1795.
expense was:
For interest
For management
Redeeming Fund'...
The annual
£ s. d.
502,791 13 4
6,893 18 1
147,180 0 0
£ 656,865 11 5}
The act for establishing this loan was the first
passed in the session, an evident proof that the Trea-
sury was much in want of money; which, indeed,
might be presumed from the Bank advances having
increased on the 25th February to £9,786,514, by
means of the clause in the exchequer-bill act of the
last session, under which the advance on Treasury
bills of exchange now amounted to £717,175.
As the navy-debt had increased considerably in
the last year, a part of it was now funded, consist-
ing of navy and victualling bills, made out to the
31st of March, 1793; for the principal of which,
with interest to the 1st of March, 1794, the holders
were allowed 5 per cent. stock, at the rate of 101
per cent. with the interest thereon from the 5th of
January. The amount of the bills thus cancelled was
£1,907,452:57, and the capital of stock created
£1,926,525 : 12:5: the interest and management
on which amounts to £97,193; 4: 3 per annum,
and the fund of one per cent. for the redemption of
the capital to £19,265 5:0 per annum, making a
total annual charge of £116,458 9: 31.
*
* The act was passed the 4th of April, and the time allowed for
378
NATIONAL DEBT
As the interest on the Navy-bills hitherto issued did
not commence till the expiration of 15 months from
their dates, and as the time of payment was very un-
certain, they were frequently at a considerable dis-
count, which, of course, made the debt increase the
more rapidly, government being under the necessity of
allowing the current discount in the bills issued. An
attempt was now made to remedy this evil, by a
clause inserted in the funding-act, as follows: "And
"whereas it is expedient to provide for the regular
<<
(6
payment in course, at stated periods, of all navy
"and victualling bills that shall be issued in future;
"be it further enacted, by the authority aforesaid,
"that, from and after the 5th day of April, 1784, all
bills, registered in the course of the navy and vic-
tualling, shall be made payable on a certain day,
"to be expressed in each particular bill; which day
"shall not be later than 15 months from the date of
"such bill; and that the interest on such bills as
"usually carry interest shall commence from the
CC
((
day on which the said bills shall be registered, and
"shall be paid at such stated periods as shall be in.
"dorsed in writing on such bill at the time of issuing
the same."
The exchequer-bills of the preceding year were
discharged in course, amounting to £5,500,000, and
carrying in the bills was on or before the 12th April; but it was af-
terwards thought proper to pass another act, extending the time to
1st July. The new stock was added to the former 5 per cents, with
the same condition of being irredeemable till 25 million of the
3 or 4 per cents be paid off.
FROM 1793 TO 1800.
379
only £3,500,000 raised by new bills, carrying in-
terest at the rate of 3 d. per day, as part of the ways
and means; but the vote of credit being increased to
£2,500,000 made the total sum raised by exche-
quer-bills greater than before.
:
The sums granted out of the Consolidated Fund
were, the surplus of £231,841 16 10, remaining
in the Exchequer on the 5th April; and £2,697,000
out of the growing surplus, which the Treasury were
empowered to raise by loans or exchequer-bills. The
deficiency of grants for 1793 made good was
£475,022 : 13: 10.
In the course of this session a motion was made.
for appropriating certain parts of the salaries of sine-
cure places and pensions to the public use during
the continuance of the war: it is scarcely necessary
to say, that the motion was negatived.*
The next session began 30th of December, 1794,
and, notwithstanding the discouragements of the last
campaign, an augmentation of the forces was voted
for the prosecution of the war. As some of our al-
lies had, from interest or necessity, forsaken the
common cause, it was thought adviseable to secure
the co-operation of the Emperor, by permitting him
to borrow in this country the money necessary for
* The government of Spain soon after took the credit of actually
adopting this measure, by imposing a tax of 25 per cent. upon all
places, salaries, and pensions, whatever, for the support of the war;
and ordaining, that no person whatever should receive more than
one salary, though possessed of various employments under the go-
vernment,
380
NATIONAL DEBT
defraying his expenses. A loan to the amount of
£3,000,000 sterling had been negociated in Lon-
don, through the house of Boyd, Benfield, and Co.
who had remitted the money to the Imperial govern-
ment; but this transaction was of a private nature,
without any security from, or even the direct sanc-
tion of, the government of this country. The Octroi,
or engagement, respecting the loan, is dated the
18th May, 1794; and it may be supposed that by
the beginning of 1795 the whole sum was expend-
ed, as it was found necessary to make some tempo-
rary advance for the supply of the Austrian army.
It appears, that the effects of the loan were suffi-
cient to excite, in the opinions of those best ac-
quainted with the subject, some apprehensions re-
specting the consequences of any future measure of
the kind: accordingly, on a farther loan of the same
nature being suggested, the court of directors of
the Bank, on the 15th January, directed the gover-
nor and deputy-governor to take an early opportu
nity of informing the Chancellor of the Exchequer,
that, being desirous at all times to give every as-
sistance and accommodation to the public service,
they think it proper, at this period, when a loan for
a foreign state, to the amount of £6,000,000, and
one for our own national wants of £18,000,000, are
about to be raised, "to bring to his consideration,
that it is their wish that he would settle his ar-
rangements of finances for the present year in such
a manner as not to depend on any farther assist-
"ance from them beyond what is already agreed for;
(C
แ
FROM 1793 TO 1800.
381
CC
CC
*&
and, particularly, that the stipulations for the fu-
"ture advances to be made by them, if necessary,
"for the payment of Treasury bills of exchange, be
strictly adhered to, as they cannot allow that ad-
"vance at any time to exceed the sum of five hun-
"dred thousand pounds." The rapid increase of the
advances on treasury-bills will appear on referring to
the accounts of the last two years on the 1st Janu-
ary, 1795, it amounted to £1,979,296:9: 9; and, on
the 15th, when the above representation was agreed
upon, it had increased to £ 2,234,290 : 0 : 6; this
amount the Chancellor of the Exchequer said he
was going to reduce immediately, but it might not
be in his power to bring it down to the sum stipu-
lated till after the first payment on the ensuing loan.
The court of directors, or the 16th of April, again
directed the governors to wait on Mr. Pitt, and men-
tion the uneasiness they felt on being left so long in
advance to so large an amount on the treasury-bills.
Mr. Pitt, appearing fully convinced of the propriety
of the representation, said, he would order
£1,200,000 to be paid to the Bank on that account
immediately.
On the 23d of February, Mr. Pitt brought for-
ward the budget, and stated to the house the terms
of the loan of £18,000,000, as follows: Every £100
advanced to entitle the contributor to £100 three
per cent. annuities, commencing from 5th January;
£ 33:6:8, four per cent. annuities, from 10th
October, 1794; and 8s. 6d. annuity for 65 years,
likewise conimencing from the 10th October, 1794;
382
NATIONAL DEBT
with a condition, that every contributor of £100
should be at liberty to contribute £33: 68 to any
loan, not exceeding £6,000,000, for the service of
the Emperor; and, in case no loan to the Emperor
should be guaranteed by parliament, each subscriber
to have for every £100 a farther long annuity of
4s. 6d. or, if the loan should be less than six mil-
lion, a farther annuity in the proportion of 6d. per
cent. for every £750,000, which the proposed loan
should fall short of six million. The instalments were
as follows:
10 percent. deposit.
17th April.
10
10
12th June.
10
17th July.
15
28th August.
15
23d October.
15.
15
27th November.
15th January, 1796.
Those who paid in the whole before the 20th of
March were allowed discount at 3 per cent. per an-
num, from the 23d of January, 1795, to the 15th of
January, 1796; and those who paid in the whole
before the 27th November were allowed discount at
the same rate per cent. from the day of completing
-the payment to the 15th January, 1796. The yearly
charge incurred was:
For interest.
£ s. d.
865,500 0 0
11,761 17. 6
Management
Redeeming fund..
252,835 0 0
£ 1,130,096 17 6
FROM 1793 TO 1800.
383
As the loan to the Emperor, which was afterwards
guaranteed, was only £4,600,000, the additional
long annuity granted to the subscribers, agreeably
to the above conditions, was 1s. per cent.
At the time of communicating the terms of the
loan, the Chancellor likewise stated his intention of
funding part of the navy-debt. The conditions upon
which this measure was carried into execution were:
that the holders of all navy and victualling bills,
which were made out on or before the 30th of Sep-
tember, 1793, who should on or before the 1st of
May carry the same to the respective offices, having
the interest thereon computed to the 10th of March,
should have, for every £100 principal, £108 five per
cent. stock, bearing interest from the 5th of Janu-
ary, and irredeemable, like the former 5 per cents,
till 25 million of the public debts, bearing 4 or 3 per
cent. interest, shall have been redeemed. The amount
of the bills thus cancelled was £ 1,490,647 : 6 : 6,
and the capital stock created £1,609,897 : 17 : 1;
the interest and management on which amounts to
£81,219 6 11 per annum, and the fund of 1 per
cent. for the redemption of the capital to £16,098
196, making an annual charge of £97,318: 65.
On the 19th of May, an act was passed for making
part of the capital of two loans for the use of the
government of Ireland transferable, and the annui-
ties thereon payable at the Bank of England; a mea-
sure attended with the same effect as the Imperial
loan, as it caused a very considerable sum in specie
to be sent to Ireland.
บ
384
NATIONAL DEBT
{
On the 4th of February, a message from the king
was laid before parliament, respecting the intended
loan to the Emperor; it stated his Imperial Majesty's
inclination to make the greatest exertions in the
common cause in the ensuing campaign; these ex-
ertions, however, required a loan of four million, on
the credit of the revenues of his hereditary domi-
nions, guaranteed by his Majesty. This would ena-
ble him to bring against the common enemy 200,000
men; but, as his Majesty thought a similar loan to a
larger extent would enable the Emperor to employ
a still more considerable force, he had desired his
minister at Vienna to express his readiness to recom-
mend such an arrangement to parliament. The far-
ther consideration of the subject was postponed till
the 28th of May, in order that an account of the ad-
vances which had been made might be laid before
the house.
In the beginning of that month a new arrangement
had been concluded at Vienna for a farther loan of
£1,600,000, through the house of Boyd, Benfield,
and Co. and, at the same time, a convention between
the King of Great Britain and the Emperor was
signed, in which the former engages proposing to
parliament to guarantee the regular payment of the
half-yearly dividends on the sum of £4,600,000
sterling, the amount of the two loans; "his Impe-
"rial Majesty solemnly engaging to his Britannic
Majesty, that he will make due provision for the
regular discharge of the payments which shall be
come due in consequence of the said loans, so as
$6
66
FROM 1793 To 1800.
385
"that those payments shall never fall as a burthen
66 on the finances of Great Britain." An act was ac-
cordingly passed, by which the subscribers to the loan
of £18,000,000 were entitled, for every £100 sub-
scribed, to subscribe the farther sum of £25: 11:1 1/1/0
towards the loan for the Emperor; and, in case of
default in payment of the interest and annuity sti-
pulated to be paid, on the part of the Emperor, half-
yearly, on the 1st of May and 1st of November, the
same is to be paid to the holders of the stock on the
5th of July and 5th of January, respectively, out of
the Consolidated Fund. The loan is secured upon
all the revenues of the different hereditary dominions.
of his Imperial Majesty, with the collateral security
of mortgage-actions of the bank of Vienna, depo-
sited in the Bank of England, for a sum in the pro-
portion of four to three of the loan; and, in case the
payments should fall upon the British government,
they may sue the receivers or treasurers of the Impe-
rial revenues, and negociate the actions on the bank
of Vienna, or claim upon them. The capital of 3 per
cent. stock, created by this loan, was £3,833,333
6:8, which, though sold at the rate of 60 per cent.
is redeemable at par; the Emperor, however, enga-
ges to remit, monthly, the sum £7,666 : 13:4, to
be applied to the buying up of the stock at the
market-price; which sum, with the dividends of the
stock bought up, is to form a Sinking Fund for the
gradual redemption of the capital. As the English
and Imperial loans were taken by the same subscrit
CC
•
386
NATIONAL DEBT
1
bers, the whole was £22,600,000, and every £100
omnium consisted of
£ s.
d.
75 0 0,
Three per cent. Consols.
25 0
0,
Four per cents.
0 7
1,
Long Annuity.
15 19 54, Imperial 3 per cents.
0 19 2, Imperial Annuity.
The consequences of the Imperial and Irish loans,
which caused a considerable exportation of specie
and bullion, soon began to appear in the rise of
the price of gold, which got to upwards of £4:3
per ounce, and the Bank experienced a very large
and continued drain; in consequence of which, on
the 8th of October, they made a representation to
Mr. Pitt, reminding him of their having announced
to him in the beginning of the year their apprehen-
sions from the Imperial loan. On the 23d, the Go-
vernor of the Bank acquainted him, that the drain
of cash continued, and was likely to do so while the
bills from abroad were drawn on the Treasury; and
that, notwithstanding the repeated promises of re-
duction, the Bank were still in advance above a mil-
lion and a half on these bills. Under these circum-
stances it is evident, that little present assistance
could be expected from the Bank; and, as a consi-
derable sum would soon be found necessary to sup-
ply the unparalleled expenditure of the war, it was
thought necessary to assemble parliament on the
29th October, 1795.
FROM 1793 TO 1800.
387
I shall make no observations on the variable object
of the war; it is sufficient to observe, that, although
our allies, the Dutch, on whose account we entered
into it, had now become our enemies, the war was
to be continued; and his Majesty, in his speech to
the commons, expressed his deep concern, that the
exigencies of the public service would require farther
additions to the heavy burthens which had been un-
avoidably imposed on the people.*
Of the nature of these burthens the public were
soon made acquainted, as the budget for the ensuing
year was brought forward on the 7th of December,
being much earlier than the financial arrangements
are usually laid before the house. The loan amounted
to £ 18,000,000, on the following terms, viz. Every
£100 advanced to entitle the contributor to £120
three per cent. Consolidated Annuities, from 5th of
July, 1795; £25 three per cent. Reduced Annui-
ties, from the 10th of October, 1795; and 6s. 6d.
annuity, for 644 years, from the 10th of October,
1795. The payments as follows:
Nothing shews the power which parliament have of late years
permitted the minister to assume in disposing of the public money,
and the consequent little importance of appropriation-acts, than the
great increase of the sums expended without the previous consent
of parliament, under the title of extraordinaries; a practice which
had been carried to a most dangerous height in the American war,
but was now extended much farther: the sums thus expended nearly
equalling those granted on estimate.-See The Substance of a Speech
made in the House of Peers, on 13th May, 1796, by the Earl of
Lauderdale.
c c 2
388
NATIONAL DEBT.
10 per cent. 10th December.
20th January, 1796.
10
10
18th March.
10
20th May.
15
22d July.
15
15
15
9th September.
11th November.
16th December.
}
Those who paid in the whole before the 30th of
December, 1795, were allowed discount, at three
and a quarter per cent. per annum, from the day of
completing the payment to 16th December, 1796;
and those who paid in the whole before the 10th of
November, 1796, were allowed the usual discount,
at 3 per cent. per annum, from the day of completing
the payment to the 16th December, 1796. The
terms of this loan excited considerable discussion;
and it appears evident from them, that Mr. Pitt, who
had formerly strongly reprobated borrowing in the
3 per cents had now changed his opinion. For
£18,000,000 advanced, a capital was created of
£ 26,100,000, besides the Long Annuity of £58,500;
but the principal subject of animadversion was some
particular circumstances attending the transaction.
It appeared, on the investigation of the business, that
Mr. James Morgan would have taken it at 3 s. Long
Annuity per cent. less; but the minister thought
himself under some obligation to acceed to the pro-
posal of the subscribers to the last loan. The bar-
gain was concluded on the 25th November; a short
time before which the commissioners for liquidating
FROM 1793 тo 1800.
389
the debt, who had hitherto made all their purchases
in the 3 per cents, began to purchase in the 4 per
cents, which naturally raised the latter, and contri-
buted to depress the former, so that upon a message
to parliament, and the commissioners resuming their
purchases in the 3 per cents, the Omnium got up
to a high premium.
The exchequer-bills of the preceding year, amount-
ing to £6,000,000, were discharged in course; and
it was proposed to raise the same sum by new bills,
viz. £ 3,500,000 as part of the ways and means, and
£2,500,000 as a vote of credit.*
Previous to the opening of the budget, the Bank
had communicated to the minister their fears respect-
ing an intended farther loan to the Emperor; stating,
that, from the effects of the Emperor's last loan, and
the continual drain of bullion and specie which they
still experienced, they had "the most cogent reasons to
66
apprehend very momentous and alarming consequen-
"ces" from such a measure. These representations
induced the minister to defer the intended Imperial
loan; but this alone was not sufficient to avert the
inconveniences which the Bank were likely to ex-
perience. Their cash and bullion had diminished in
the course of the year about one half, while the ad-
vances to government had greatly increased, and
*The Bank had informed Mr. Pitt, in November, that it would
be absolutely out of their power to make the usual advance on the
vote of credit of £2,500,000, which it was supposed would be
proposed.
390
NATIONAL DEBT
I
amounted, on the 19th December, to £12,846,700,
and this increase had been principally on Treasury-
bills of exchange, notwithstanding the court of di-
rectors had a few months before informed the mini-
ster, that they had determined to give orders to their
cashiers to refuse payment of all such bills whene-
ver the advance thereon exceeded the sum of
£500,000. Under these circumstances the directors
thought proper to lessen their discounts very consi-
derably; and, on the 31st of December, a notice to
this effect was ordered to be stuck up in the discount-
office.*
*
* The large sums of money which had been sent abroad caused a
considerable scarcity, and the great diminution of mercantile dis-
counts at the Bank increased the distress; in conscquence of which
a meeting of some of the principal merchants and bankers was holden,
at the London Tavern, on the 2d of April, 1796, who passed seve-
ral resolutions on the subject, and appointed a committee to consi-
der if any means could be devised" for augmenting the circulating
“medium of the country, so as to restore it to what it was previous
"to the late resolution of the Bank of England for diminishing their
discounts, without infringing the exclusive privilege of banking,
"granted to the Bank of England, and without violating any prin-
ciple of public faith or confidence."
$4
On the 5th of April, the committee had an interview with the
Chancellor of the Exchequer, to propose the establishment of a
board for issuing promissory notes, payable in six months from their
dates, and bearing interest at 11 d. per cent. per day; they learnt,
that the Bank directors had proposed, as the best remedy for the
scarcity of money, that the floating debt should be funded, which
the minister said he would try first.
1
FROM 1793 TO 1800.
391
1
1
From the objections that had been made by the
Bank to a farther Imperial loan, the project was af-
terwards formed of assisting the Emperor to raise a
loan in Germany by the guarantee of the parliament
of this country; but this scheme appeared almost
equally objectionable; and, on the 14th of January,
1796, the Bank committee of treasury gave it as
their opinion, that it should be represented to the
Chancellor of the Exchequer, that they could not
view this proposal in any light which would not, one
way or other, be detrimental to this country, even if
a law were to be passed to prevent British subjects
from taking any share therein. Finding (notwith-
standing their representations, which every day ap-
peared to confirm,) that the minister still retained
the idea of giving farther assistance to the Emperor,
the court of directors, on the 11th of February, re-
solved, "That it is the opinion of this court, found-
"ed upon its experience of the effects of the late
Imperial loan, that, if any farther loan or advance
"of money to the Emperor, or to any other foreign
"state, should, in the present state of affairs, take
place, it will, in all probability, prove fatal to the
"Bank of England. The court of directors do,
therefore, most earnestly deprecate the adoption
"of any such measure; and they solemnly protest
against any responsibility for the calamitous con-
sequences that may follow thereupon."
(C
(C
66
(6
46
On the 18th of April, Mr. Pitt brought forward a
second, or supplementary, budget, a circumstance
before unknown in the financial history of this coun-
}
392
NATIONAL DEBT
try. In order to provide for additional extraordina-
ries of the army and navy, and for £1,000,000,
which, from the high discount on exchequer-bills, it
was not thought adviseable to raise on those securi-
ties, it was found necessary to negociate a farther
loan of £7,500,000, which was raised on the fol-
lowing terms: Every £100 advanced to entitle the
contributor to £120 three per cent. Consolidated An-
nuities, from the 5th of January; £25 three per
cent. Reduced; and 5 s. 6d. Long Annuity for 631,
5s.
from 5th April; the deposit was 10 per cent. to be
paid the 26th of April; the subsequent instalments
as follows, viz.
15 per cent. 27th May.
15
23d June.
15
29th July.
15
19th August.
15
23d September.
15
**
26th October.
Those who paid in the whole on or before the
22d September were allowed discount at 3 per cent.
per annum, from the day of completing the payment
to the 26th of October.
The holders of exchequer-bills, made out pursuant
to the exchequer-bill acts of the preceding year, or
the vote-of-credit act, or on the credit of the Con-
solidated Fund, were at liberty to pay in the same
as cash in making their payments.
The Omnium of this loan was at first at a premium
of 24 per cent. but soon fell to a discount.
FROM 1793 TO 1800.
393
The Navy-debt, on the 31st December, 1795, was
£10,788,984: 14:51, of which upwards of two
million and a half was left unprovided for. The
amount of the bills issued, from 31st December,
1795, to 1st of April, 1796, was as follows:
1
Navy-bills......
Victualling-bills
£ s. d.
1,017,230 12 8
1,049,395 11 6
Transport-bills
755,763 10 4
£ 2,822,389 14 6
:
•
In order to diminish the amount of this floating
debt, it was now resolved to fund all the bills (except
those in the hands of the Bank) which were made
out on or before the 30th September, 1795, amount-
ing to £4,331,141 14 10. But, as it was evident
that it would have been an unfair advantage to al-
low the holders of those lately issued to fund them
on the same terms as those nearly due, they were di-
vided into two classes; the first, containing the bills
made out on or before the 31st of May, 1795, to
have £105 five per cent. stock for every £100 of
principal and interest; the other class, consisting of
those bills made out after the 31st of May and on
or before the 30th September, 1795, to have £104
five per cent. stock for every £100. The interest on
the bills was allowed to the 30th of April, and the
interest on the stock commenced from the 5th Janu-
ary. The amount of the bills thus cancelled was
3
1
{
394
NATIONAL DEBT
£4,226,796 14: 0, and the capital stock created
thereby £4,414,074: 4: 6; the interest on which
amounts to £222,690 : 0 : 10, and the fund of
one per cent. on the capital to £44,140 14: 10
per annum.
The Navy-debt being thus reduced, and loans ha-
ving been negociated to the enormous amount of
£25,500,000, it could hardly have been expected
that government would experience any want of mo-
ney yet the payments on the loans did not by any
means come in sufficiently fast to supply the increas-
ing expenditure, and the minister was under the
necessity of making several applications to the Bank
for assistance, although it must have appeared, had
not the affairs of the company been thought an ob-
ject of secondary consideration, that, under their
present circumstances, the diminution of their advan-
ces, if not essential to their safety, would at least
have been an infinitely more prudent measure than
the increase of them. The minister strongly urged
the necessity and importance of the public services,
and his success in impressing this opinion on the
court of directors will appear from their proceedings
on the 26th of July, when, on agreeing to some
farther advance, they ordered a memorial to be pre-
sented to Mr. Pitt, with a request that he would
lay it before the cabinet, in which they declare, that
nothing could have induced them to comply with the
demand then made upon them "but the dread
"that their refusal might be productive of a great-
"er evil." The success of the directors to diminish
|
FROM 1793 or 1800.
395
the amount of the advances to government was very
inconsiderable, as may be seen from the following
account of their amount at the beginning of each
month, exclusive of the loan of £ 376,739 on un-
claimed dividends in July, 1791.
£
1796, January
11,292,700
February
11,499,700
March
11,260,600
April
11,168,700
May
11,392,100
June
July
August
•
11,248,300
10,352,800
9,306,500
10,043,900
t
September
October
November
December
8,946,600
8,769,000
10,818,500
1796.—The new parliament met on the 27th of
September; but, as the usual formalities occupied se-
veral days, the king's speech was not delivered till
the 6th of October. It held out the hope of peace
by the intention of sending immediately a person to
Paris, with full powers to treat for this object, while,
on the other hand, it expressed the expectation of
an invasion, and the probability of the war being
extended, by our late ally, the king of Spain, enga-
ging against us; and took no farther notice of the
state of the finances than observing, with great sa-
tisfaction, that, notwithstanding the temporary em-
barrasments which had been experienced, the state of
396
NATIONAL DEBT
*
}
the commerce, manufactures, and revenue, of the
country, proved the real extent and solidity of our
resources, and must be equal to any exertion which
the present crisis might require.
The rise of the public funds, which the mission of
Lord Malmsbury produced, happened very opportune-
ly, as the immense quantity of navy-bills issued in the
course of the year had brought them to a very high
discount, which enabled purchasers to make at the
rate of £18: 6:4 per cent. per annum; so that go-
vernment ra'd a more enormous interest on the mo-
ney raised by these bills than even on those outstand-
ing in January, 1784, as they did not then bear in-
terest till 6 months after they were issued. Though
the amount was now diminished, yet the necessity of
taking so large a floating debt out of the market was
evident. A meeting of the holders of navy and
exchequer-bills was accordingly holden at the London
Tavern, on the 26th of October, at which the Go-
vernor of the Bank read a letter which he had received
from the Chancellor of the Exchequer, announcing
his intention of funding all the navy-bills that would
be outstanding on the 31st of the month, and all
the exchequer-bills issued on the vote of credit for
1796. He was not authorised to offer any specific
terms, but submitted the following, which, if ap-
proved of, he would present to Mr. Pitt for his con-
currence. The navy and victualling bills to be di-
vided into four classes, according to the times at
which they were issued, and to be funded in 3, 4, or
5, per cent. stock, at the option of the holders; the
FROM 1793 TO 1800.
297
stocks being taken at the current price of the morn-
ing, viz. 3 per cent. Consols at 58, four per cents at
75, and 5 per cents at 88, making a deduction from
each, according to the different classes, viz.
Navy-bills. 3 per cent. 4 per cent. 5 per cent.
Class 1 ....56
·56
2 ...... 563.
3
57
• •
72....84 Oct. Nov. Dec. 1795.
...721.84} Jan. Feb. Mar. Apr. 1796.
•
73
85 May, June, July.
4577385 August, September, Oct.
5 per cent.
exchequer-
bills.
56 } . . . . .
· 7 23 · · · · 84 5
These terms were proposed to the house of com-
mons on the 28th; on which occasion Mr. Pitt
communicated the intention of adopting such regu-
lations, in respect to the navy and exchequer bills
to be issued in future, as he hoped would prevent
the possibility of their falling so low as to be at-
tended with material loss to the public, or injury to
the national credit. He then moved, that provision
be made for satisfying all navy, victualling, and
transport, bills, made out on or before the 27th of
October, 1796, amounting to £11,993,167: 19: 9,
and also for exchequer-bills, amounting to £2,500,000.
On the 31st, in the committee of ways and means,
the resolutions were moved for funding the bills, al-
lowing the holders, at their option, for every £100,
the following sums of stock, agreeably to the terms
above stated.
398
NATIONAL DEBT
3 per cents
4 per cents
First Class.
Capital.
£ s. d.
Interest produced.
£ s. d.
5 7 1
178 11 5
138 17 91.
5 11 1
5 per cents
119 0 111…….. 5 19 0
Second Class.
9. 5
93 …….. 5 6 2
3 per cents
176 19
4 per cents
137 18 7.
5
per cents
•
118 6 101
5 10
6 101.... 5 18
Third Class.
4
3 per cents
4 per cents
5 per cents
175 8 9
136 19 81..
117 12 11……….
5 5
3
5 9 7
5 17 7
Fourth Class.
3 per cents
173 18 3
5 4 4
4 per cents
5 per cents
136 1 1
5 8 10
.. 116 19 2
5 16 11
The exchequer-bills were the same as the second
class of navy-bills. The proportion of the capitals
to each other, in the different classes, is by no means
the same: for example, had the capitals of 4 and 5
per cents, in the fourth class, borne the same propor-
tion to the 3 per cents as in the first class, they
would have been as follows:
£
S. d.
£ s. d.
3 per cents.
173 18 3
5 4 4
4 per cents.
135 5 3
5 8 2
5 per cents..
.. 115 18 92
5 15 11
FROM 1793 To 1800.
399
This difference in the several classes was particu-
larly pointed out by Mr. Fox, but it was, probably,
not thought of sufficient importance to be worth
correcting; in fact, though it gave a superior advan-
tage to some of the bill-holders, it was but a very
small part of the profit made by them, and of course
lost by the public, in this transaction.
Amount of Bills cancelled by this Funding:
£
s, d.
Navy, victualling, and transport, bills........ 11,595,529 8 0
Exchequer-bills
1,433,870 0 0
£13,029,399 8 0
the above:
Navy, victualling,
3 per cents
and transport, bills.
4 per cents
5 per cents
3 per cents
Capital created in the different Stocks by Funding
£ s. d.
16,437,273 1 1 0
764,861 5 10
2,024,228 18 9
1,999,699 4 4
Exchequer-bills.
4 per cents
104,432 5 S
3 per cents
270,202 4 8
£21,600,697 0 3
Notwithstanding the removal of this great mass
of floating debt from the market, the public funds,
during the whole month of November, continued very
400
NATIONAL DEBT
low, 3 per cents being about 561; 4 per cents 721;
and 5 per cents about 85: it was evident, therefore,
that a loan to the required amount must be made on
terms that would appear very disadvantageous: va-
rious schemes were, therefore, suggested for raising
money by other modes, and the minister held several
meetings with the principal bankers, and other mo-
neyed men, at which the different plans were dis-
cussed and `generally objected to. The terms finally
agreed upon were transmitted by Mr. Pitt to the
Governors of the Bank, in a letter dated 30th No-
vember, in which he states, that, "Under the present
"circumstances, it seems of peculiar importance
"that a mode should be adopted for the providing
"for the service of the ensuing year, without incur-
66
(C
ring so heavy an annual charge, and so great an in-
crease of capital, as would attend a loan, made in
"the accustomed manner, at the present price of
"the funds :" that, with this view, it was in contem-
plation to propose to parliament, that all persons
possessed of a certain income should be required to
lend a certain proportion, stated at one-fourth, to be
repaid at a future period; but, as there was reason
to believe that many individuals, without waiting
for this measure being enforced, would voluntarily
contribute in a larger proportion, he requested that
the subject might be submitted to the consideration
of the Court of Directors, and (if they thought fit)
to the Court of Proprietors. Accordingly, a general
court was holden on the following day, when the terms
FROM 1793 TO 1800.
401
were communicated, which were afterwards published
in the public papers, viz.
Loan for the service of the year 1797.
Every person subscribing £100 to receive £112:10
in 5 per cent stock, to be irredeemable, unless with
the consent of the owner, until the expiration of
three years after the present 5 per cents shall have
been redeemed or reduced; but with an option in the
holder to be paid at par at his desire, on three months
notice, at any shorter period, not less than two years
from the conclusion of a definitive treaty of peace:
payment in either case to be made in money, or, at
the option of the holder, in 3 per cent stock, valued
at 75. The deposit to be made on the 13th January,
the second payment in March, and the remaining in-
stalments between March and October following:
the receipts not to be issued till after the second in-
stalment, or till after £20 has been deposited on each
£100: discount as usual on prompt payment:
interest to commence from 10th October, 1796.
The subscription on these terms was immediately
opened on Thursday, 1st December, and, before 12
o'clock on Monday the 5th, the whole £18,000,000 was
subscribed, and many more subscriptions were offered;
indeed, from the eagerness of some to display their
loyalty, and of others to obtain a part of what they
conceived might turn out a good speculation, it can-
not be doubted but that a much larger sum might have
been obtained. The East-India Company subscribed
D d
402
NATIONAL DEBT
£2,000,000, the Bank £1,000,000,* and most other
public companies in smaller proportion. The instal-
ments were afterwards fixed as follows:
10
15 per cent. 21st July.
-25th August.
10 per cent. 13th January.
-17th March.
15
10
-21st April.
15
10
2d June.
15
-28th Sept.
31st October.
As an encouragement to the subscribers to makę
immediate payments, those who paid in the whole,
or any part, before the 13th January, 1797, were
allowed discount at five per cent per annum on the
sum advanced, from the day of paying the same to
the 13th January; those who paid in 20 per cent.
between the 13th January and 17th March were al-
lowed discount at 5 per cent. on half the sum so paid
in, from the day of paying the same to 17th March ;
and those who paid in the whole between the 17th
March and 28th September were allowed discount at
3 per cent. from the day of completing the same to
the 31st October: but, as by these terms those who
paid in full before the 13th January would have had
a less allowance than if they had completed subse-
quent to 17th March, the former were afterwards
allowed the farther discount of 3 per cent per an-
num, on £90 per cent. so completed, from 13th Ja-
*The Bank paid up the whole of their subscription at once, to
enable government to repay them £1,054,000 that remained of the
bills on the Consolidated Fund 1795, and which were to have been
discharged out of the last loan.
FROM 1793 to 1800.
403
nuary to 31st October; and those who paid in the
whole between 13th January and 17th March were
allowed discount at 3 per cent per annum on £10
per
cent from 17th March to 31st October, and at
the same rate per cent per annum on £80 per cent.
from the day of completing the payment to the 31st
October.*
Government issued exchequer-bills, payable in
three months, in anticipation of the payments on the
loan, which were received in discharge of the instal-
ments. These bills, though they carried an interest
of about 5 per cent. and were for this short term,
were, nevertheless, a few days antecedent to the 26th
February, at a discount of 3 to 3 per cent. which
is equivalent to about 18 per cent per annum interest
for money.†
On the 7th December Mr. Pitt brought forward the
budget; on which occasion he proposed £1,023,000
to be repaid the Bank, and was under the necessity of
confessing, that, in the course of the year, the mi-
nistry had, on their own authority, made several ad-
vances of money to the emperor, amounting to about
£1,200,000. For this alarming stretch of ministe-
rial power the sanction of parliament was afterwards
obtained; and, on the 19th, in consequence of a mes-
*The subscriptions to this loan were soon after currently known
by the name of loyalty, and many of the subscribers had much rea-
son to repent of their bargain. There are some ingenious observa-
tions on the nature of such loans in the Earl of Lauderdale's
Thoughts on Finance.
Evidence of H. Thornton, 3d Rep. Com. Secrecy.
Dd2
404
NATIONAL DEBT
sage from his Majesty, proposing that he should be
enabled to continue such temporary advances, the
committee of supply voted £500,000 for this pur-
pose, to be issued at such times and in such manner as
his Majesty should see most proper. On the following
day, previous to the report of the committee being
taken into consideration, Mr. Nicholls moved, that
the Governor and Deputy-governor, of the Bank be re-
quired to attend at the bar of the house, to learn from
them the reasons that induced them, in a former
instance, to object to the measure of an Austrian loan,
and whether these reasons had ceased to exist. Had
it been thought proper to comply with this motion,
it is probable, that the number of those who voted
against the grant of farther advances would have
been increased; but it cannot be expected that the
measure would have been prevented.
A few days after parliament had confirmed this
pernicious expedient for securing the continuance of
the Emperor's efforts, proposals were circulated in
London for raising a loan of £300,000, for the use of
the Irish government, on stock transferable at the Bank
of England: it was taken by Messrs. Robarts,
Curtis, and Co. at £100 five per cent stock, and an
annuity of £4: 15 for 13 years, for every £100
advanced. On such terms it is not to be wondered
at that the loan immediately bore a premium of 7 per
cent; but, though it thus afforded a great profit to
the subscribers, it was attended with an evil to the
country similar to that produced by the Austrian
FROM 1793 TO 1800.
405
loans, as it contributed to diminish our circulating
specie.
On the 31st January, 1797, the Governors of the
Bank again waited on Mr. Pitt, and represented to him
how uneasy the court were at their large advances
to government, and especially on the treasury-bills
paid, which now amounted to £1,554,635, and
would, in a few days, be augmented to £1,819,818,
and required that some effective measure should be
immediately taken for the payment of the whole of
this sum, as had been so seriously promised them
should be done at the opening of the year. On the fol-
lowing day, Mr. Pitt hinted that he should want some
money to send to Ireland; on which the governor
and deputy-governor both told him, that any farther
drain of cash from the Bank would be very danger-
ous, as their cash had been materially lessened of late;
and, on the 10th February, on consideration of the
certainty that Mr. Pitt would be obliged to bring
forward a loan for Ireland, to the amount of
£1,500,000, the Bank resolved to request the repay-
ment of upwards of seven million of their advances
to government, as the only means which they could
propose against the mischiefs they dreaded from the
Irish loan. This intended loan was of a different na-
ture from the loan of £300,000 before mentioned:
it was to be negociated by the government of this
country for the purpose of making advances to the
Irish government; and, as it appeared most adviseable
to unite it with the farther loan that would be neces
sary for this country, the suggestion was communi-
-
406
NATIONAL DEBT
66
66
cated to the Bank. On the minister's letter being laid
before the Court of Directors, they approved of the
plan of uniting the loans, but added, They must
repeat their apprehensions, that any measure which
"tends to carry money out of the country is replete
"with alarming consequences to the Bank of Eng-
"land."
About this time the apprehension of the French
attempting a descent on our coast, which was
naturally increased by the precautions of government,
rendered many of the principal farmers in the mari-
time counties anxious to dispose of their stock and
get cash into their hands; this produced a run upon
some of the country banks, and particularly upon
those at Newcastle, who were under the necessity of
deferring the payment of all large sums till they
could obtain a sufficient supply of specie from Lon-
don.* The orders from the country banks to sell out
stock, for the purpose of sending them cash, and a
farther loan for government of upwards of 10 mil-
lion, being at the same time in agitation, caused a
great depression of the funds; and on Saturday, the
25th February, 3 per cent Consols were so low as 501;
4 per cents 65; and 5 per cents 75. The de-
"Persons of almost every description caught the alarm:-
"tradesmen, mechanics, and particularly women and farmers,
(to whom I am ashamed to add many of a superior class and
« rank,) all wanted guineas, for the sole purpose of hoarding."
Observations on the Establishment of the Bank of England, &c. by Sir
Francis Baring.
The want of punctuality on the part of government, with respect
FROM 1793 TO 1800.
497
mand for cash upon the Bank of England continued to
increase, and they are said to have issued, in the course
of this week, near a million in specie, and to have
had remaining on the 25th about £1,272,000 in cash
and bullion,* while their notes in circulation amounted
to £8,640,250. This circumstance, and the proba-
bility of the run continuing, and perhaps increasing,
excited general alarm; and, on the following day,
the Governors and some of the Directors of the
Bank attended on the minister, and had a consulta-
tion upon the subject. The privy council met, and
an order was passed, and immediately transmitted to
the Bank, requiring them to suspend their payments
of cash till the opinion of parliament could be taken.
The Directors caused the order to be printed, with a
few prefatory lines, informing the public, that the
affairs of the Bank were in the most prosperous situ-
ation, &c. The paper was distributed by 10 o'clock
on the morning of the 27th in the court-yard of the
Bank, where hundreds went to obtain the ominous
hand-bill. Not a guinea was to be seen in the
cashier's office, where it had generally abounded;
however, with a few exceptions, individuals did not
to some navy and victualling bills that had lately become due and
remained some days unpaid, perhaps contributed to the fall of public
securities.
*The cash and bullion remaining was greater than the amount to
which it had been reduced in 1783; but the rapidity of the drain
now made it probable, that, if suffered to go on, the cash in the Bank
would, in a very short time, be reduced below what might become
absolutely necessary for the public service.
408
NATIONAL DEBT
*
appear so alarmed as might have been expected, and
the funds experienced a considerable rise, 3 per cent
Consols were done from 50 to 52; 4 per cents from
66 to 67; and 5 per cents from 76 to 77; this
rise was the natural consequence of the inability to
procure cash for bank-paper, which put a stop to sel-
ling out for that purpose. The Bank, after this, con-
siderably increased their discounts, which was a
great accommodation to the mercantile world, who,
being thus provided with an additional number of
bank-notes, seemed to entertain little anxiety respect-
ing the mode of effecting the smaller payments.
On the 28th, the house of commons appointed a
secret committee of 15 members, to examine into the
concerns of the Bank; and, in order to provide an
adequate circulating medium, a bill was brought in to
enable the Bank to issue notes under five pounds;
one and two pound notes were accordingly prepared;
the first of which were dated 4th March, and were
issued to the public on the Monday following. On
the same day, the Bank signified, by advertisement,
that a quantity of dollars were ready to be issued, at
4s. 6d. each; but, by another advertisement of the
same date, the issue of them was postponed till the
9th, and, in the interval, it was thought proper to fix
the circulating value at 4s. 9d. each. The concourse
of persons endeavouring to get these dollars was so
great, for some time after they began to be issued,
that several persons had their clothes torn, and other
mischiefs were done, particularly on Saturdays, when
FROM 1793 TO 1800
409
Fanufacturers had great need of them to pay their
workmen.
The committee of secrecy immediately set about
forming an abstract of the affairs of the Bank, in
which they excluded the debt of £11,686,800, due
from government to the company, and, on the other
hand, the capital stock of £11,42,400, due to the
proprietors, and thus made it appear, that, on the
25th of February, there was a surplus of effects be-
longing to the company beyond the aggregate of
their debts, amounting to £ 3,826,890.* But, as the
greater part of their effects consisted of advances to
government, which could not be immediately repaid,
the committee, soon after, in a second report, gave
it as their opinion, that it was necessary to provide
for the confirmation and continuance, for a time to
be limited, of the measures taken in pursuance of
the order in council; † and an act was passed, re-
straining them from issuing cash till the 24th of
June next ensuing. Previous to which time, how-
ever, (partly in consequence of the advances to go-
vernment being greater than when they first stopped
payment,) it was deemed expedient to pass another
act, extending the restriction till one month after
the commencement of the next session of parliament.
The Bank, in the mean time, were allowed to issue
* See First Report from the Committee of Secrecy. Ordered to be
printed 3d March, 1797.
+ Sce Second Report from the Committee of Secrecy. Ordered 19
be printed 7th March, 1797.
410
NATIONAL DEBT
cash under certain conditions, and were prohibited
from making any farther advances for the public
service during the continuance of the restriction.
On the 26th, a notice from the Speaker of the
house of commons was inserted in the London Ga-
zette, signifying, that the Bank had notified to him,
that they meant to issue gold coin to the amount of
the dollars then in circulation, which had been stamp-
ed at the Tower: this had become highly necessary
from the number of counterfeit dollars that had got
into circulation; the Bank, accordingly, took in the
good ones, during the month of October, and, at
first, the croud of people who came to get rid of
them was nearly as great as it had been to get them
when first issued.
On the 24th of April, the terms of the loan of
£14,500,000* were settled, as follows: Every £100
advanced to entitle the contributor to £125, three
per cent. Consolidated Annuities; £50, three per
cent. Reduced Annuities; £20, four per cent. An-
nuities; and an annuity of 6s. 6d. for 62 years:
the interest on the 3 per cent consols to com-
mence from the 5th of January; the 3 per cent. Re-
duced, 4 per cents, and Long Annuity, from 5th of
April: and, as it was intended to raise a farther loan
of £3,500,000 for the Emperor, a proviso was an-
nexed, that, if provision should not be made for an
Imperial loan to the amount proposed, a deduction of
6 d. per cent. should be made from the Long Annuity
* Of this sum £1,500,000 was to be applied to the use of the
Irish government.
FROM 1793 TO 1800.
411
کیا
of 6s. 6d. for every million that the Imperial loan
should be less than three million and a half. The
deposit was to be made on or before the 28th, be-
ing 10 per cent. on the loan of £14,500,000, and at
the same rate on the farther loan of £3,500,000,
on condition, that, if the Imperial loan should be less
than the sum proposed, the excess of the deposit
should be carried to the account of the contributors,
as part of the second payment. The subsequent in-
stalments were fixed as follows:
10 per cent. 15th September.
10 per cent. 26th May.
15
21st June.
15
17th October.
10
18th July.
10
17th November.
10
15th August.
10
29th December.
Those who possessed exchequer-bills, made out
under the act of this session, for raising £18,000,000,
and which were dated previous to the 21st of Janu-
ary, or any of the exchequer-bills issued at par,
from the 7th to the 26th of April, under an engage-
ment, on the part of the Lords of the Treasury, to
propose to parliament, that they should be received
in
in
payment on the loan, † were at liberty to pay
the same, as money, in the deposit on their subscrip-
tion. It was afterwards thought proper to allow
those who possessed exchequer-bills, dated after the
1st of May, which would become payable on the
25th of August, to pay in the same, as money, in the
* About £6,000,000 of the loyalty loan had at this time been
paid into the Exchequer.
†These latter bills amounted to £ 422,000.
412
NATIONAL DEBT
second payment on the loan, due the 26th of May.
Those who paid in the whole of their contribution,
in money or exchequer-bills, on or before the 17th
of November, were allowed discount at the rate of
four per cent. per annum, from the day of comple-
ting the same to the 29th of December; and those
who paid in any part of their contribution before the
days fixed were allowed discount on the sum so
paid in advance, from the day of payment to the
day on which such sum would have become due.
The bonus on this loan was stated by Mr. Pitt as
follows:
£125, 3 per cent Consols, at 50
50, 3 per cent. Reduced,at ditto
20, 4 per cents, at 64
69. 6 d. Long Annuities, at 14 years purchase
£ s. d.
62 10 0
25 0 0
12 16 0
4 11 0
£ 104 17 0
These prices were rather above the market; not-
withstanding which, on the evening of the day on
which the terms were settled, the loan was at a pre-
mium of 44 per cent. the day following it got down
to 1 premium, and on the 26th was at par.
On the 1st of May, the house of commons took
into consideration a message from his Majesty re-
specting the Imperial loan, and agreed to guarantee
£3,500,000; being £1,620,000 for making good the
sums that had been already advanced to his Impe-
rial Majesty, and £1,880,000 to defray farther ad-
vances to be made in the course of the year, although
FROM 1793 TO 1800.
413
it was notorious that the Emperor was at this very
time negociating a separate peace with the French.
Preliminaries of peace being soon after signed, the
loan was concluded for the amount of the advances
only, being £1,620,000, which the subscribers to
the English loan took, according to their agree-
ment, at £226: 10:0 three per cent. stock for
every £100 advanced, the interest commencing
from 31st of January, 1797; and, as the loan thus
fell short of the sum originally intended, the Long
Annuity on the English loan was reduced 6d. per
cent. according to the conditions of the subscription.
The government of this country not only guaranteed
the payment of the dividends, in the same manner as
with respect to the Imperial loan of 1795, but, also,
a fund of one per cent. on the nominal capital for the
redemption of the same, to be paid quarterly out of
the Consolidated Fund, and placed to the account
of the commissioners for the reduction of the Na-
tional Debt.
About the beginning of May, the fear of issuing
specie, which the stoppage of the Bank had occa-
sioned, began to subside, and some of the bankers
ventured to pay small sums in gold; and, though the
Bank continued issuing dollars, the demand for them
was by no means so great as it had been. The funds
continued very low; on the 4th, three per cent.
consols were down to 47%, but, on the hope of
peace, they soon after got up a little.
1797.-Parliament met on the 2d of November;
and, as the Emperor of Germany had concluded a
心
​414
NATIONAL DEBT
separate treaty of peace, and had not made his stipu-
lated remittance to this country, which it is highly
probable was not in his power, the dividend on the
Imperial 3 per cents due ist of November was not
then paid, but was deferred till January, when it
was discharged from the Consolidated Fund, agree-
ably to the conditions of the act by which it was
guaranteed.
About the middle of November, a committee was
appointed, to take into consideration the expediency
of continuing the restriction, with respect to pay-
ment in cash at the Bank; and, upon the report of
the committee, a bill was brought in and passed,
continuing the restriction during the war, under cer-
tain conditions. This measure might appear of a
more permanent nature than was requisite, as the
Report of the Committee stated such a rapid im-
provement in the affairs of the Bank as seemed to
justify the hope that they would soon be able to re-
sume their usual functions. But, probably, Mr.
Pitt thought it necessary that the Bank should be
enabled to increase in safety the amount of their
notes, in support of his new system of finance which
he brought forward soon after.
The war had already added upwards of £155,000,000
to the public debt*, exclusive of terminable annui-
ties; and it was evident, that very large sums would
still be wanting: but, as the natural consequence
of creating so much new stock was evident, in ha-
* Account, dated Exchequer, 29th December, 1800.
FROM 1793 to 1800.
415
ving produced a greater depression of the public
funds than they had ever before experienced, the
minister appears to have begun to feel some alarm at
the tendency of his profusion, and to have enter-
tained an apprehension, that the funding system had
been extended nearly to its limits: he, therefore,
now proposed to raise a more considerable part of
the supplies within the year, and, for this purpose,
to triple the assessed taxes, from which he thus ex-
pected to obtain £7,000,000. The act for carrying
this project into execution was passed in the begin-
ning of January, 1798, and it contained a clause for
receiving at the Bank voluntary contributions from
such persons as should be inclined to contribute
more than the sum they would be assessed, or to
pay their assessments in advance. Considerable ex-
ertions were made to excite the people to these
loyal offerings, but with less success than some
sanguine supporters of the measure expected.
The sum received in the first three months (to
the 20th of April) was as follows:
Voluntary contributions.........
On assessed taxes
£ S: d.
1,083,840 13 2
646,510 3 8
£ 1,730,356 16 10
And, by an account, dated Exchequer, 11th of
February, 1800, it appears that the total amount
was:
416
A
NATIONAL DEBT
5. di
Voluntary contributions...
Assessed taxes ·
2,826,823 19 4
3,004,873 2 101
£ 5,831,697 2 22
This scheme reduced the sum which it would be
necessary to raise by loan, but still a considerable
one was unavoidable; therefore, as the debt was to
continue increasing, it was thought necessary to
adopt some counteracting measure for keeping up
the price of the funds. Accordingly, on the 2d of
April, Mr. Pitt proposed his plan for redeeming the
land-tax, by which he flattered himself, (or at least
told the public,) that about 80 millions of stock
would be taken out of the market: if it succeeded
only in part, it could not but have a favourable ef
fect on the funds, and, under this impression, a loan
of £17,000,000 was negociated soon after, (23d of
April,) of which £2,000,000 was for Ireland.* The
contract was made with Boyd & Co. and the bonus
was stated as follows:
£150 Consols, at 481
50 Reduced,-47
4s. 11 d. Long Annuity, at 13 years purchase.
Discount.
£ 5.
d.
72 15 0
23 15 0
3 3 11
3 0 0
£ 102 13 11
* The sum actually paid into the Exchequer, on account of this
loan, appears to have been £ 16,775,001 : 15: 2.
1
FROM 1793 тo 1800.
417
The Bank were authorised to retain £ 3,000,000,
which they had advanced on exchequer-bills, out of
the instalments of this loan; but, soon after, it was
communicated to the Company, that government
wished them to receive new exchequer-bills instead
of money, in lieu of those they held, which was
agreed to.
On closing the session of parliament, (29th June,)
his Majesty observed, that, "The provision which
"has been made for the redemption of the land-tax,
"has also established a system which, in its pro-
ઃઃ
gressive operation, may produce the happiest con-
sequences, by the increase of our resources, the
"diminution of our debt, and the support of public
credit." So far as the latter is indicated by the
price of the funds, the new system certainly appeared
to have a beneficial effect; for, on the 17th of Au-
gust, 3 per cents got up to 50%, on the 3d of Octo-
ber to 51, on the 23d of October to 523, soon after
to 53½, and on the 31st of October to 574; but, as
there was no solid ground for so great a rise, they
soon began to fall again; and, on the day previous to
the next meeting of parliament, were 544.
1798.-Parliament assembled on the 20th of, No-
vember, and, on the following day, a meeting was
held, at the Mansion-house, of some of the principal
merchants, bankers, traders, and others, who resol-
ved: "That the principle of finance, resorted to in
"the last session, of raising a considerable part of
"the supplies within the year, had contributed in
"an eminent degree to the improvement of public
E e
418
NATIONAL DEBT
"credit and the advantage of the community." But
they were of opinion, that an insufficient basis had
been adopted as the foundation of the contribution;
and, being impressed with full confidence that the
resources of these kingdoms are adequate to the
maintenance of our national honour and independ-
ence, think it proper to declare their readiness to
give their utmost support to such measures as the
legislature may deem best calculated to call forth
those resources in a more equal and effectual man-
ner. There can be little doubt that this meeting
was convened at the request of the minister, to pre-
pare the way for his intended tax on income, which
he accordingly brought forward on the 3d of Decem-
ber. At the same time, Mr. Pitt stated the supplies
for the ensuing year; but, notwithstanding the in-
timation that a loan of 14 million would be neces-
sary, it was communicated to the Stock Exchange,
on the following day, that, for the present he should
negociate for only three million, and that a farther
loan would be treated for in February.
The contractors had prepared their lists for 16 or
18 million, which of course they were obliged to re-
duce; and, on the 7th of December, the loan of
£3,000,000 was settled at £100, three per cent.
consols, and £ 87: 9: 6, three per cent. Reduced,
9:6,
for every £100; the amount being small, the whole
was to be advanced in four instalments, and no dis-
count was allowed for prompt payment.
By postponing the payment of £3,000,000 to the
Bank, and obtaining a farther advance from them on
'
FROM 1793 TO 1800.
419
may
exchequer-bills, the loan, which it had been said
would be negociated in February, was delayed till
the 5th of June, when £15,500,000 was taken be-
tween three lists, at £125 three per cent. Consols,
and £50, three per cent. Reduced, for every £100.
It be remarked, that, in this and the last loan,
no long annuity was granted; and thus the system
which had formerly been so much reprobated, even
by Mr. Pitt, of borrowing on stock, bearing a low
rate of interest, was fully established. The reason
of this was, no doubt, that it was more agreeable to
the stock-jobbers, and enabled the minister to make
the present burthen of the loan as light as possible.
£3,nn0,000 of this loan was for Ireland, and the
income-tax was charged with the interest and re-
demption of a capital equal to the stock created by
11 million of the loan. The terms were certainly
not so favourable to the subscribers as the last three,
but stocks rose considerably the same day, and or
the next the loan was 4 and 5 premium. On the
20th of August it was at 19 premium, and on the
3d of September at 224, but fell the same day, and
soon after more considerably, being on the 25th
September only 6 premium.
The capital of 3 per cent. Reduced, transferred
to the commissioners for reduction of the
debt, for land-tax redeemed before the 10th
of October, 1799, was
And of 3 per cent. consols, transferred in like
manner, before 5th January, 1800.....
£
s. d.
5,000,072 14 10
7,133,298 10. 2
4.0
NATIONAL DEBT
1
An Account of the National Debt, as it stood on the
5th of January, 1800.
Bank of England
South-Sea Company
3 per cents, 1751
3 per cent. Consols...
3 per cent. Reduced
4 per cent. Consols...
5 per cent. Navy
2
5 per cents, 1797
3 per cents, 1726
Imperial 3 per cents
Unfunded debt, &c. about
£
5. d.
11,686,800 00
24,065,084 13 11
Y
1,919,600 0 0
257,617,570 14 51
74,023,948 16 4
45,269.859 17 2
28,125,582 19 †
20,124,843 15
1,000,000 0 0
7,502,633 6 8
20,000,000 00
£ 491,335,924 3 18.
The stock redeemed by the commissioners, to the 1st of Febru-
ary, 1800, amounted to £44,733,294.
Galabin and Marchant, Printers,
Ingram-Court, London.
THE END.

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