^ 
 
 ON 
 
 THE PUBLIC DEBT, 
 
 WITH 
 
 A PLAN FOR ITS FINAL EXTINCTION. 
 
 " He who hopes to produce great good without hazarding some evil is not the 
 pcnon from whom, in a situation of difBculty, much advantage is to be 
 expected. All that is left is a choice of evils. He that talks rationally will 
 rejoice if he can discover a remedy that, with a mixture of evil, will be able to 
 overcome the mortality of the disease." — Fu* tm llui Bank Restriction Act, 
 
 LONDON: 
 PELHAM RICHARDSON, 23, CORNHH.F, 
 
 1839. 
 
 [ZV/fy One SltiUiu(j.'\
 
 MARCIIANT, IMtlNTEK, INORAM-COUUT, FENCIIURClI-STJlEEt.
 
 R E M A R K S 
 
 ON THE 
 
 ,lFinanrr fBraourrs of /ttoljcrn iTtmr^, 
 
 ARISING OUT OF THE QUESTION, 
 
 " Is the Public Debt of this Cuuutry ever to be reduced.^" 
 
 Tjik sinkiiitr lund of Mr. I'ilt has bciMi tlic sul)jcct 
 of general condemnation, if not of ridicnlc, witli all 
 the post-facto financiers ol' the prcsriit duv ; hut 
 most unjustly so, for if the (juestion hi; fairly dis- 
 cussed, it will not he whether the scheme of Mr. 
 Pitt should he- pt-rscvcrcd in, namdv, su[Kr-ta\ation 
 with the view to reserve a portion of the product as 
 a nest-ej^g to redeem in after-ages the deht of the 
 nation, hut whetln r Mi Pitt coidd have extracted 
 the hirge sinus lie did finiii the jiDckcts of the 
 people, had he not held out the promise ;uid j)ros- 
 pect of repayment; had he «xp«'nded the whole of 
 what he borrowed ; had he not set apart a ])ortion 
 of the general receipts of the Treasury as a redemp 
 tion fund, invested in the puhlic securities, to Ix- 

 
 accumulated annually by at least the interest pay- 
 able, out of the taxes, on such securities. 
 
 But our modern financiers, on the contrary, de- 
 clare their incapacity to reduce the debt at all, to 
 pay back to the public creditor any portion of the 
 money lent to the nation. All that they promise to 
 do for the fundholder is, to allow his name to remain 
 in the books of the Bank of England with his pre- 
 cise amount of stock to his credit, whilst they watch 
 for every opportunity to reduce the interest origi- 
 nally agreed to be paid thereon ; thus contempla- 
 ting the injury of the public creditor, whilst the 
 nation will remain as laro-e a debtor as before. And 
 all this is called " upholding the national faith," 
 and " sustaining public credit." 
 
 It would be considered absurd in a private indi- 
 vidual to boast of the integrity of his conduct to- 
 wards his creditors, if he contented himself with 
 merely acknowledging the precise amount of his 
 liabilities, yet made no efforts to reduce them and 
 even evaded the payment of the rate of interest he 
 had stipulated to pay upon them ; for by such 
 conduct he would, in point of fact, diminish the in- 
 trinsic value of his obligations; or, in other words, 
 depreciate the property of his creditors. Neverthe- 
 less modern financiers talk loudly about the inviola- 
 bility of Acts of Parliament and public faith, as if 
 every day's experience did not show that each Act 
 of Parliament is but the executioner of its prede- 
 cessor, and a"? if public faith were not violated when 
 the public creditor is compelled to take 3| percent.
 
 instead of 4, or any thing less than his original bar 
 gain entitled him to expect ; as if public faith had 
 not long since been broken when the sinking fund 
 of Mr. Pitt was abandoned. It, therefore, will not 
 be a fair objection to take to the following sugges- 
 tions, that they involve a breach of the national 
 contract with the fundholder, since that was long 
 ago infringed, and in more ways than one ; the 
 sink ins: fund has been discontinued, the rate of 
 interest has been lowered. 
 
 Fully to consider the question propounded would 
 lead into various branches of our internal policy, 
 about which there are so many conflicting opinions 
 current, that it would require a volume of argument 
 to discuss each of them separately ; let us then 
 limit the consideration by comi)aring these great 
 thintrs with small, by takin<j: the case of an indivi- 
 dual involved in debt, and seeing whether he would 
 be likely to retrieve his fortunes should he unwisely 
 declare his inability to pay any portion of the prin- 
 cipal money owing by him, and at the samc^ time 
 use every expedient to induce or compel his credi- 
 tors to take less interest for their loans than was 
 agreed upon when they first entered into dealings 
 with him. ft would be a waste of words to demon- 
 strate that the obvious and inevitable conse(|uenccs 
 of such conduct would be ruin to the debtor, and 
 total loss to his creditors, A man in debt adopts a 
 very (liiVcrent course. Suppose he owes£10,()()(), 
 which he knows not how to pay, what steps does he 
 take to extricate himself!' IJoes he solicit his rredi-
 
 tors to take less than the rate of interest agreed to 
 be paid to them when he obtained their money ? 
 Suppose that interest to be 4 per cent., does he ask 
 them to take £300 a year in lieu of £400 ? and by 
 such a measure expect to relieve himself from em- 
 barrassment ? Does he not rather endeavour to re- 
 duce the principal money by the immediate sacrifice 
 of some portion of his property, or by compromising 
 the principal to reduce his annual burthen ? For, 
 were he to prevail with his creditors to reduce the 
 interest, whilst the principal remained intact, he 
 could not by such an operation diminish his diffi- 
 culties, but would, by injuring his credit, lessen his 
 ability to extricate himself from his unfortunate 
 position. And is there so great a difference be- 
 tween the cases of an individual owing money and 
 of a nation involved in debt, as that what would 
 obviously be absurd in the one, becomes wise and 
 prudent in the other ? 
 
 In the case of a private individual compromise 
 has been hinted at, and why not resort to it with 
 the public creditor ? It is self-interest, not genero- 
 sity, which induces the creditors of a private indi- 
 vidual to agree to a new arrangement, less advanta- 
 geous than their original contract. And if the 
 public creditor will calmly and ])atiently consider 
 his situation, he will see how much his interest is 
 concerned in entering, before it be too late, into 
 some compromise with the nation. But before the 
 private creditor compounds with his debtor, he 
 takes care that every available means to fulfil the
 
 original compact has been tried by his debtor, and 
 exhausted. And surely the public creditor would 
 be disposed to look into his relative situation with 
 the public debt under the same feeling : — if the sub- 
 ject were fairly and clearly put before him ; if he 
 were made to contemplate the probability of a 
 future war, the inevitable consequence of which 
 would be an auomentation of the debt, and that 
 perhaps to an overwhelming amount ; and if it 
 could be shown, which at present it cannot, that 
 every available public asset had already been rea- 
 lized and devoted to the reduction of the debt : if 
 our conflicting manufacturing and agricultural inte- 
 rests were candidly set before him ; could he fail to 
 perceive that any considerable further amount of 
 taxation nmst add to the cost of production, and so 
 exclude our manufactures from every part of the 
 continent ; and consequently, that from fresh taxes 
 as the means of payment, he has not the slightest 
 hope of redress? Would he not tlicn, like the ])ri- 
 vate creditor, perceive it to be much brltcr to take 
 a composition now, tliau wait a few years and then, 
 in all |)robability, lose the whole; ;\.ut\ at the 
 same time not feel that though \\c is compelled 
 to make some sacrifice on his lull claim, yet still 
 the portion lie would obtain must, under the im- 
 proved circumstances of the country, yield as much 
 comfort and luxury as does the interest now received 
 on his entire demand, under comj)aratively high 
 prices and heavy taxation. 
 
 It may be remarked on thc.^e arguments that the
 
 8 
 
 national wealth has been rapidly advancing for 
 many years, and that, as in the year 1S15, a much 
 larger nominal amount was raised in taxes than 
 forty-eight millions, (the amount raised last year,) 
 so there must be the practicability of paying the 
 interest on a still larger amount of debt than now 
 exists, or of imposing fresh taxes to be applied to 
 the gradual extinction of the existing debt. But 
 such reasoners would omit to notice that, since 
 1815, Mr. Peel's Bill has come into operation, that 
 the forty-eight millions of 1838 are probably equal 
 in value to the seventy-one millions of 1815, and 
 also that, as it cannot be denied that the income of 
 the nation is derived from the profits on agriculture, 
 manufactures, and commerce, and as our prices are 
 much lowered by the introduction of a gold cur- 
 rency, so are our profits lessened, and it becomes a 
 question whether there are the means to pay a more 
 onerous taxation than we now labour under, without 
 cramping, perhaps destroying altogether, the ener- 
 gies of the farmer, manufacturer, and merchant. 
 
 But the question still remains : — is the public 
 debt, the interest on which forms three-fifths of the 
 aggregate annual expenditure, ever to be reduced ? 
 If, after twenty-five years of peace, the answer of 
 the present Chancellor of the Exchequer is to be 
 in accordance with the opinions of his predecessors, 
 in the nefrative, what reasonable man can hesitate 
 to predict that the period must arrive when even 
 the interest will not bo forthcoming; for, as in the 
 event of war, the present income of tlie country
 
 9 
 
 will not suffice to carry it on and also to pay the 
 interest to accrue on the now existing debt, fresh 
 loans must be resorted to until tlie system of bor- 
 rowinof fails. There must be a limit to the faci- 
 lities of Government in borrowing money, and to 
 the credulity of tlie public in lending it. The 
 whole question, therefore, rests upon the one pos- 
 tulate, the certainty of this country being engaged, 
 sooner or later, in an expensive war. For should 
 ^^^we go to war the debt must be increased, and who 
 shall say to what extent ? Now, assuming that the 
 event of war will happen, and therefore that some 
 financial measure with respect to the existing debt 
 ought now to be adopted to place it on a better 
 footing, and so induce the public, when the neces- 
 sity arises, to advance upon reasonable terms more 
 money to the Government, ougiit the preference to 
 be given to measures v.hich involve only a reduc- 
 tion of the interest of the debt, or to one which 
 shall have for its object a diminution of the corpus 
 of the debt? The answer to this incpiiry is ob- 
 vious. Judging from past events, we cannot export 
 peace to last more than half a century, twenty-live 
 years of which have already oxpir(d ; and as, when 
 the period of war arrives, mf)rc money must be 
 borrowed, the piiblie will be more ready to buy 
 omnium, or a (iovernmcnt terminabh; amniity, 
 should the corpus of the debt be five hundred mil- 
 lions, thrill il it remain as it is, seven hundred 
 and sixty millions. 
 
 How ha])p(;ns it. then, that llu; liinds .sustain so
 
 10 
 
 high a value, tliat wliat would destroy the credit of 
 a private individual has no effect in depressing the 
 national securities ? The explanation is easy — it is 
 to be found in the enormous sums locked up by 
 Chancery in the public securities, but, above all, 
 in the much larger portions of the debt standing 
 in the names of trustees, who have no more power 
 than their cestuique trust to change the security, 
 though both should foresee with prophetic infal- 
 libility the certain and proximate annihilation of 
 the national debt. This class of investment aug- 
 ments with every year, tending to uphold the price 
 of stocks, and rendering their nominal value un- 
 assailable by any thing short of the convulsion of 
 war, or a large augmentation of the debt itself. * 
 
 In these reasonings there is nothing new — they 
 are in every man's mind, and therefore they may 
 be considered as founded in truth and reason. 
 How comes it, then, that no efforts are made to 
 reduce the corpus of the debt, and so not only to 
 diminish the burthens of the nation, but to give 
 stability to the funds, instead of curtailino- from 
 time to time the income of die public annuitant, 
 without approaching a step towards the diminution 
 of the debt itself? It may be, because it is a much 
 easier operation to reduce the interest payable, than 
 to discharge any portion of the principal ; for three- 
 
 * It was the opinion of the late Mr. N. M. Rothschild, that 
 the moveable stock, some years back, did not then exceed 
 £100,000,000, and every year diminishes its amount.
 
 11 
 
 fourths of the parties witli whom the Finance 
 Minister has to deal, having- no voice in the matter, 
 must take what their trustees can get and hold their 
 peace ; they have no voice to protest, no power to 
 resist. It may be, because our Chancellors of the 
 Exchequer have been selected from the legal pro- 
 fession or from the Government departments, and 
 as soon as new measures of finance are proposed, 
 gentlemen so educated are prone to recur to Acts 
 ^^ , of Parliament, and to decline the responsibility of 
 thinkino- and actins: for themselves in a case of 
 admitted difficulty. They do not allow themselves 
 to entertain measures for the protection of those 
 hundreds of individuals whose property being the 
 subject of settlement, is fast bound in the trannnels 
 of Consols, and who must abide the fate of the 
 funds be it good or evil. It is, however, to be fer- 
 vently hoped that the present Chancellor of the 
 Exchequer — being a iiorus homo — ncitlu'r a hiwver 
 nor long enough in Government oflices to be pre- 
 judiced in favour of their past proceedings, will 
 make some vijiorous effort to extricate the finances 
 of the country from the ir pirsr-nt unhealthy con- 
 dition. And woe Ijc to that I'inance Minister, who 
 having his eyes open to tlie result of t\\r /}/r-/ficfifc 
 system, shall lack the rouragc to bring the case 
 before Parliament mid the country in all its naked 
 truth and deformity. 
 
 Another reason for this indisposition to interfere 
 with the princi|)al of the debt is the prevailing
 
 12 
 
 opinion, that, in order to do this with any success 
 or eifect, it is indispensable to impose fresh taxes. 
 This is true if the reduction is to be immediate, 
 but by no means true if it is to be distant and pro- 
 spective. It is also contended that whilst the 
 money, requisite^ as it is assumed, to reduce the debt, 
 is not exacted from the public in the shape of taxes, 
 it is fructify injT in the pockets of the people. The 
 fact is undeniable, but cin bono the concession ? 
 What financial eifect is produced thereby .' The 
 debt remains intact. Will the man, whose purse 
 is fructified, be thereafter the more willing to ad- 
 vance his money to the Government without con- 
 sidering the value of the security on which he is 
 to rely for repayment? Will he buy British I O U's, 
 never to be redeemed, of a debt bearing 3 per cent, 
 interest, in preference to other national I O U's, 
 parts of much smaller debts, the interest on which 
 is larger and is paid with equal punctuality ? Is it 
 because he is fructified that therefore he is stul- 
 tified ? — because he has become rich that therefore 
 he must be silly 1 If such be not the conclusive 
 inferences, to what does the argument of fructi- 
 fication amount? — Why, to as great a fallacy as the 
 scheme of Mr. Pitt is pronounced to be by our 
 modern financiers ; but with this distinction, that 
 Mr. Pitt's scheme gave stability to the funds 
 though it imposed a present burthen, whilst in the 
 existino: scheme is involved an inevitable future 
 bankruptcy.
 
 13 
 
 Measures then ought to be resorted to by which 
 the corpus of the debt would be reduced ;* and 
 the fundholder, if he sees his own interest, will not 
 object to terms which may even amount to a com- 
 promise of some portion of his capital, in order to 
 fix the remainder on a solid basis. 
 
 And who arc the dissentients when any conversion 
 of the public securities is proposed? — Not the great 
 bulk of proprietors, for they have no voice in the 
 matter ; they are like the sign of the original good 
 woman in St. Giles's, having hands to receive the 
 dividends, but no head to object to the conversion. 
 The dissentients are chiefly a small body of dealers 
 in stock, and a few individuals who happen to have 
 deposited their money in stock as a temporary in- 
 vestment until they can turn it to better account. 
 Tiicse dissentients will object to every phm of con- 
 
 * " By the conversion of the 5 and 4 per cents., tlie finnual 
 " charge has been lessoned to the extent of £2,350,000; and 
 '• yet the difference in the charges at the two jjeriods (181G and 
 " 1837) is no more than £3,240,923. ft is evident tin u that 
 " these vaunted operations, by which so niiicii piivatioii lias lii'cn 
 " entailed on fiindlioldeiH of limiiii! iiKumc, have Ijeen of little 
 ** real benefit to the country ; fur if is quite plain that tlic dinii- 
 •' nntion of the charge has not kept pace with that of the capital, 
 '* and that much of what the nation has gained by ' reductions' 
 " of doubtful wisdom, has been lost by other 'conversions' for 
 " whirh a necessity ought never to have arisen. Had the sums 
 " thus saved been employed in the reducticm of the principaf, the 
 " advantages to the nation would be greater in the cnA." — Field's 
 14</t Edilwn of Fortune's Epitome of the Stocks and Public 
 Funds.
 
 14 
 
 version, upon the principle which induces landed 
 proprietors to object to a railroad passing through 
 their estates, that they may get more than a fair 
 price for the land taken from them, though the 
 measure materially enhances the value of the re- 
 mainder.* But ought the legislature to permit such 
 persons to have a voice in the matter, especially if 
 the plan to be proposed involves no breach of 
 faith ? And can it be termed bad faith towards the 
 national creditor to give him in exchange for his 
 present doubtful security, another that will produce 
 as much income lor the present, and one freed from 
 much of the doubt attaching to the validity of his 
 present security. The Act of Parliament, therefore, 
 which would warrant any conversion such as is 
 herein contemplated, should make it compulsory 
 with every description of fundholder to conform to 
 the scheme contained in it ; on the one hand com- 
 pelling all parties concerned to accept an arrange- 
 ment which will not injure them, whilst it will con- 
 duce to the public good ; and on the other hand, 
 protecting trustees from all litigious attacks by their 
 cestui(jue trusts. 
 
 The plan of conversion to be proposed would, in 
 its effect, be prospective only with regard to the 
 amount of interest payable on the debt ; but imme- 
 diate with respect to the amount of the debt itself. 
 
 * If, however, a bonus be what these gentlemen want for 
 assenting to a conversion that will benefit both their country and 
 themselves, a bonus they may obtain, as will hereafter be 
 explained.
 
 15 
 
 The same interest would for the next fifty years be 
 paid to the fimdholders, but the debt of the nation 
 would be greatly and immediately reduced. The 
 burtliens of the people would for a limited period 
 remain as they are, but they would gradually lessen, 
 and in a century and a half at most, possibly within 
 a century, be altogether removed. 
 
 The unredeemed debt* of Great Britain and 
 Ireland consists i?i round numbers of 
 
 .509,750,000 3 per cents, and interest thereon £15,292,500 
 
 249,956,000 3^ „ „ . „ „ 8,748,460 
 
 1,015,000 4 „ „ „ „ 64,600 
 
 1,449,000 5 „ „ „ „ 72,450 
 
 762,770,000 £24,178,010 
 
 that is, the nation owes about 703 millions, for 
 which the public creditors receive about twenty-four 
 millions and a cjuartcr of interest per annum. 
 "Would those creditors be danmificd, in the smallest 
 degree, if all the liji^ht stocks, as they arc termed, 
 were converte<l into r> per cent, stock, in such a 
 ratio as would yield to the stock-holder, at the time 
 of conversion, a precisely c(HK)^ amount of dividend 
 
 • Finding it impossil)!*' to arrive at an aj^rteniciit of llio 
 amount of interest payable on tliu unredeemed permanent debt, as 
 stated in page 103 of the Finance Accounts for the year ending 
 5th January, 1839, with tiic amount actually paid (hereon as 
 stated in page 15 of the same Btatemcnt, the debt ia taken in 
 round nund)ers, sufficiently near to the fact for all purposes of the 
 present consideration, and the interest is computed on the assumed 
 capital.
 
 16 
 
 1,0 tliat wliicli lie received before tlic conversion? 
 Certainly not. Would the public creditor be in any 
 way injured if the quantum of a 5 per cent, stock, 
 o-iven in exchanoe for his £100 Consols, should be 
 vendible in the market for precisely as much as his 
 £100 Consols would have commanded? Certainly 
 not. As the security would be the same for the 
 5 per cent, stock as for the 3 per cents., can 
 there be a doubt that the rate of interest being 
 increased from 3 to 5 per cent., the value of the 
 5 per cent, stock would augment in exact proportion 
 to the increase of interest ? Certainly not. Whilst, 
 then, the fundholder would not suffer, the nation 
 would benefit by the measure ; for the effect of con- 
 verting the 3 per cents, and all other denominations 
 of permanent slock into a new 5 per cent, stock in 
 the ratio above mentioned, would be, as the following 
 table shows, to leave the amount of interest pre- 
 cisely as it now is, but to reduce the bulk or corpus 
 of the debt from £702,770,000 to £483,500,200, 
 thus diminishing it by the enormous sum of 
 £279,209,800. 
 
 Interest. New Fives. Interest. 
 
 500,750,000 Cons, bearing 15.292,500 into 305,850,000 bearing 15,292,500 
 
 249,950,000 3 i per cts. „ 8,748,400 „ 174,909,200 „ 8,748,460 
 
 1,615,000 4 per cts. „ 64,00!) „ 1,292,000 „ 64,000 
 
 1,449,000 5 per cts. „ 72,450 „ 1,449,000 „ 72,450 
 
 702,770,000 „ 24,178,010 „ 483,500,200 „ 24,178,010 
 
 Were this the only measure to be proposed, it 
 might be successfully contended that the finances 
 of the country would be greatly advantaged thereby;
 
 17 
 
 but such not being- the only object in view, we pro- 
 ceed at once to the next suggestion, which is, to 
 make the fundholders' new security a terminable 
 annuity, divided into three parts or series ; the first 
 two irredeemable, but determined as to duration 
 and rate of interest ; the last determined also as to 
 duration and rate of interest, but redeemable, -and 
 to redeem which all surplus revenue should be ap- 
 plied. Each series to be for the term of fifty years. 
 In computing the price of a terminable annuity, 
 the first requisite is the value of money. The price 
 of Consols is usually taken for this purpose, the 
 interest which Consols will yield if i)urchased at the 
 period when the value of the annuity is to be ascer- 
 tained. The present price of Consols being 92, the 
 value of money invested in Government securities 
 may be estimated at 3^ ])er cent. ; and at that value 
 the terminable annuity will be calculated. Were a 
 conversion of Consols into a new 5 ])er cent, stock 
 to take place upon a scale by wliicli the stockholder 
 would not be injured in the |)rcsent value of the 
 new security, 1m' must obtain lor his t'lOO Consols 
 such an amount of the new stock as would produce, 
 when s(jld, at hast 1*92, As in comparison with 
 £100 :i j)er cents. £100 ;> per cent, stock wcmld 
 be more valuable by two-fitths, it would produce 
 (according to the present piic (;ot(yonsols)£1.03:G:8, 
 so three-fifths of £100 o per cents., or £(;<», as it 
 would yield a dividend n\' i'.i, would doubtless 
 produce (at the present vnhic of i)(d)lic sccnrifios) 
 £92. If, therefore", a new o per cent, were to be 
 
 u
 
 18 
 
 created whilst tlic value of the public securities 
 remains as at present, and that new stock were in 
 the shape of a terminable annuity, that annuity 
 must be given on such terms as would make its 
 value in the market £153 : 6 : 8. If this be done, 
 is it not all that the strictest equity can demand of 
 the Government, so to arranoe with the fundholder 
 in the proposed conversion that he shall obtain in 
 national securities or in money, or in both, pre- 
 cisely £153 : 6 : 8, or in other words, the value of 
 £1 G6 : 13 : 4, 3 per cents.? 
 
 The plan proposed proceeds by creating for the 
 first series a terminable annuity at such a rate of 
 interest as shall not diminish in any degree the 
 fundholder's income for fifty years to come, but, on 
 the contrary, the whole arrangement shall augment 
 it nearly ^ per cent, on every £100 Consols. So 
 far every consideration is given to the public credi- 
 tor ; but after that comes the nation's turn to be 
 benefited, which it would be at the end of fifty 
 years by reducing the annuity to the second series, 
 or from 5 to 4 per cent., and so effecting an annual 
 saving of £4,835,G02 per annum. And again, at 
 the expiration of a second half century, by reducing 
 the interest on the third series to 3 per cent, 
 and so diminishing the national burthen another 
 £4,835,602 per annum. At the conclusion of the 
 third emd last scries of fifty years the debt would 
 be extinguished, and the annual interest of 
 £14,500,800 payable on the last series would cease. 
 Taking money at 3^ per cent, and assuming that
 
 19 
 
 it is improvable at half-yearly interest, the present 
 value of an annuity of 
 
 £5 for fifty years (first series) is £123 3 1 
 
 £4 do. (second series) is ... . 19 13 1 
 £3 do. (third series) is 2 18 10 
 
 Makinof too-ether £145 15 
 
 And leaving a deficit unprovided for of 7 118 
 
 to make up the aggregate of £100 new 
 5 per cent, stock created by the con- 
 version into it of £1G6 : 13 :4 3 per 
 cents £153 G 8 
 
 But this deficit of £7:11:8 per cent, on Consols would 
 on the entire conversion, amount to about 30 millions 
 of money, and to overcome this difficulty some con- 
 cessions must be made by the Crown, and all parties 
 interested must unite to carry an object so greatly 
 to be desired. The fundholder especially ought to 
 be the last to ofier any difficulty. Indeed it would 
 appear, that, if I)y any scheme he were guaranteed 
 to be a loser of no moic than i 1 : I I \>rv ccnf. on 
 his Consols, which tliis deficiency of £7 : i 1 : s on 
 £1GG : 13:4 Consols amounts to, he would have 
 cause to r on-jratulate himself; for, as assuredly as 
 two and two make four, aiui us palpiihlc ;i^ that 
 axiom is the c(;rtainty, that unless efiectual nicasuies 
 be taken to secure the funrlholder by some plan 
 ■which shall also include the j)rospect of relief to 
 the nation, his at present friigile security nuist 
 sooner or later fail him. Means, however, can be 
 devised to accomplish both desiderata. 
 
 B 2
 
 20 
 
 The 30 millions of money required to pay the 
 deficit to the stockholder may be raised in the first 
 instance by loan on new 5 per cent, stock, redeem- 
 able at £153 : G : 8 per cent, and by instalments of 
 £15 per cent, at a time, in order to render the 
 redemption gradual as well as practicable. The 
 price of the new loan is fixed at £153 : 6 : 8 per 
 cent. ; its value being- computed as a 5 per cent, 
 stock by the present value of Consols, and because 
 it need not be sold by open tender, but may be 
 apportioned to the holders of Consols and other 
 stocks as a sort of bonus on the proposed conversion. 
 As the bonus on each £100 of the new stock would 
 be £7 : 1 1 : 8, so the proportion to each £100 Con- 
 sols would be £4 : 11 of the new stock. Thus, the 
 present holder of Consols, say of £10,000, instead 
 of receiving a dividend of £300 a-year, would 
 for fifty years receive per annum ....£322 15 
 Viz. the interest on £G000 
 
 New 5 per Cents £300 
 
 And the interest on sixty 
 
 times £7 : 11 : 8, or 100 
 
 times £4:11 — £455, 
 
 producing at 5 per cent. 
 
 per annum 22 15 
 
 £322 15 
 
 But, whilst the value of Consols at the present 
 day is so high, that the quantum of the proposed 
 terminable annuity appertaining to £100 Consols 
 upon the proposed conversion would not produce, if 
 sold, a sum equal to the value of £100 Consols, the
 
 21 
 
 other denominations of stock proposed also to be 
 converted into 5 per cents, do not bear a relatively 
 high value. For example, to purchase an income 
 of £5 in 34- per cents, requires an outlay of £143 
 only, whilst to purchase an equal income in Consols 
 requires an outlay of £153 : 6 : 8 ;* the value of 
 the annuity being the standard by which these sug- 
 gestions are regulated, the bonus to be given to 
 the higher denomination of stock should not be in 
 "" equal proportion to that to be given to the lowest 
 denomination, the present worth of the proposed 
 annuities (£145 : 15) being greater than that of a 
 sufficient quantity of 3^ per cents. (£143) to produce 
 £5 per annum. To prevent all cavil, however, let 
 something of a bonus be given on 3| per cents, and 
 4 per cents, and let the ratio thereof be regulated 
 by the amount of interest payable on the various 
 denominations. As 3 per cents, on being converted 
 into fives would be entitled to a bonus of £4 : 11 
 per cent., equal to £2 : 5 : for every £ 1 increase 
 of interest, so upon that ratio the bonusses would 
 range thus : 
 
 For every £100 Consols £4 11 o 
 
 For every £ 1 00 3 ; per Cents. . . £ 3 H 3 
 For every £100 4 per Cents. . .£2 5 H 
 Accordin"- to this scah-, the. foHowiiii;- 1;iblc shows 
 
 * This mode of compJiriHon ciinnot hv rniulc willi rrfcronce to 
 4 per cent, stock, as the only portion of tlio pnhlic debt boarinp 
 that rate of interest is the loan by the Dank nl' Ireland and not 
 in the market, wherefore no price can be attached to it.
 
 22 
 
 the amount of money or quantity of stock required 
 to satisfy each class of stockholder. 
 
 Hloney. 5 per Cent. Stock. 
 509,750,000 3 per cents at £4 11 per cent. £23,193,625 = 15,126,277 
 249,956,000 3i „ „ „ 3 8 3 „ „ 8,529,748 = 5.562.879 
 1,615,000 4 „ „ „ 2 6 6 „ ., 36.741 = 23,961 
 
 £31,760,114 20,713,117 
 
 To make the repayment of the principal as well 
 as the annual interest on this loan secure, the fol- 
 lowing resources might be resorted to, find the first 
 four pledged for that object. 
 
 1. The Crown lands and land revenues (excepting 
 
 the royal parks). 
 
 2. The duchies of Cornwall and Lancaster. 
 
 3. Sale of the Crown lands in the colonies. 
 
 4. A tax in the shape of a stamp on all contracts 
 
 for the purchase and sale of the new 5 per 
 cent, stock, whether for money or time, as also 
 on all purchases and sales, for money or time, 
 of every other British or foreign stock, or share 
 in a public company, efiected in the United 
 Kingdom. 
 
 5. A reduction of at least £600,000 per annum in 
 
 the charge of collecting the public revenue. 
 The estimate of these resources is as follows. 
 1. The gross receipts of the department 
 of Woods and Forests for the year 
 ending 5 January, 1839,
 
 23 
 
 were £479,105 
 
 The payments out of 
 that income in its pro- 
 gress to the Exchequer 
 
 were . 206,786 
 
 leaving an available ba- 
 lance of £270,000 
 
 2. The assumed gross receipts of the 
 
 duchies of Cornwall and Lan- 
 caster for the same pe- 
 riod* £130,000 
 
 the payments thereout. . 50,000 
 
 80,000 
 
 3. The sale of Crown lands in the colonies 600,000 
 
 4. Tax by stamped contracts 300,000 
 
 5. Reduction in tlie cost of collecting 
 
 the revenues 600,000 
 
 1,850,000 
 Enougli income might tlius be de- 
 rived to pay tlie interest of, per an- 
 nuiii, the new louii I,0;i5,655 
 
 and to hjave a surplus oi', per annum €814,345 
 
 But, rnrtlicr, the persuasion is, that tliese resources, 
 if made avaihil)h; to the fullest extent, are sulli- 
 cient, besides paying the interest on the new loan, 
 to redeem in twenty years the princijjal of that loan, 
 and in ( i<'lit years more the third series of the 
 deferred -annuity. The calculation stands thus : — 
 
 * An annual return of the duchy revenues wa» promised to 
 Parliament, but, as yet, has not been presented.
 
 24 
 
 To interest on the loan of £20,713,1 17, 5 per cents. 
 
 at £1,035, 655 per annum, for 20 
 
 years £20,713,117 
 
 To principal money of that loan at 
 
 £153:6:8 percent 31,700,114 
 
 To value of deferred annuity of 
 
 £2 : 18 : 10 per cent. on 
 
 £483,500,200 stock 11,947,965 
 
 04,421,196 
 By surplus of £814,345 
 
 for twenty years . . £ 16,286,900 
 By sale of Crown lands 
 
 and duchies, (esti- 
 mated at forty years 
 
 of their present 
 
 gross income, worth 
 
 £24,000,000) 32,000,000 
 
 By continuing the sale 
 
 of colonial lands, , 
 
 the tax on stamped 
 
 contracts, and the 
 
 reduction in cost of 
 
 collecting the reve- 
 nue, for eight years 
 
 beyond the twenty. . 12,000,000 
 
 £60,286,900 
 
 But a few words must be said in support of these 
 estimates. The gross income of the Woods and 
 Forests is now, under Government management, 
 £480,000, although much of the Crown land is
 
 25 
 
 unproductive. Is it too much to assume the value 
 of this property to be thirty-two millions ? For 
 without insinuating" the most distant imputation of 
 neglect or of wasteful expenditure in the manage- 
 ment of the Crown property, it may be safely 
 asserted, that, private individuals make more of 
 their property than public bodies, and the Govern- 
 ment least of all public bodies. There are large 
 tracts of land belono-ino; to the Crown altoo-ether 
 unproductive, and many others let far below their 
 value, all of which, if exposed to sale, would find 
 purchasers at something near their real value ; par- 
 ticularly if the sales were of moderate quantities 
 and periodical. Many of these uncultivated tracts, 
 had they been in the possession of private parties, 
 would long since have been rendered valuable by 
 the outlay of capital upon them, and others greatly 
 improved under the anxious surveillance of individual 
 interest. At all events the salaries of the persons at- 
 tached to the department would be saved by the new 
 arrangement; and k^t it be noticed that the cliarge 
 of collecting tlie Crown proj)erty is cstiiiuited in the 
 finance accounts at 10.^ per cent. 
 
 Perhaps wc shall be tohl of the inalienabh; rights 
 of the Crown, lias not. the C^rown already and in 
 many instances commuted its rights ? antl w hen 
 the dignity of the Crown lias always been lil)erally 
 provided for r)iit of tlic jinblir |)urse, wh;it jirctcnce 
 is there for continuing the semblance ol hereditary 
 possessions by retaining the two ducliies but to 
 employ out of their resources a numerous corps of
 
 2G 
 
 public ofllcers, from whose services neither the 
 otttcers themselves, nor the Crow^n, nor the public 
 reap any essential benefit.* 
 
 The sale of the colonial lands would not only 
 yield a revenue, but might be so conducted as to 
 operate most beneficially on society at home, and 
 to strengthen our transmarine possessions, by 
 devoting one moiety of the produce of the sales 
 to defray the transports of emigrants. Twenty 
 pounds is a liberal allowance for the transit of 
 an individual to our most distant colony ; taking 
 £14 as an average cost, ten thousand persons 
 might be annually withdrawn from misery and 
 want, and put into the path of happiness and 
 abundance, for £140,000; but it is apprehended 
 that sales of colonial lands to a very much larger 
 extent may annually be effected. 
 
 Stamped contracts for purchases and sales of 
 property in the funds and public companies. When 
 this idea was formerly raised by Lord Althorp in 
 one of his budfrets, it was hailed with acclamation 
 by the House of Commons for half an hour, but 
 the fundholders quickly assembled in force, and 
 before the debate was over, the din of applause 
 was condensed into a torrent of invective strength- 
 ened by quotations from those Acts of Parlia- 
 ment on which the various national debts are 
 based. But as all these Acts would be repealed 
 
 * If reports can be relied on, a near approaching event will 
 afford the opportunity to set this matter to rights.
 
 27 
 
 by tlie conversion already described, and a new 
 Act of Parliament would be required for the pur- 
 pose, a clause might be introduced into it sanc- 
 tioning the trifling impost of five shillings in the 
 shape of a stamp^ on every contract (to be held 
 valid in the courts of law) for the purchase and sale 
 of this description of property. This plan would 
 readily be embraced by all brokers, who are now 
 at the mercy of persons dealing for time in the 
 national securities of this and of foreign countries. 
 It is absurd to suppose that the risk incurred 
 deters the broker from giving facility to such 
 speculations. The commission is his temptation, 
 and if one broker declines to act for a speculator, 
 he will find another less scrupulous who will 
 operate for him. If speculating u[)on the rise or 
 fall of stocks be a greater vice than speculating 
 upon the rise or fall of grain or any other com- 
 modity, (which it is dillicult to prove,) then the 
 dealing ought to be put down by strong enact- 
 ments and penalties ; hut whilst the eyes of the 
 legislature are turned aside from these transactions, 
 or, in other words, whilst they are permitted to be, 
 the broker for stocks ought to be protected as well 
 as the broker for any mercantile commodity. And 
 as this desideraluiu would be jjaid to the govern- 
 ment at the cost of the jobber, two beneficial 
 consequences would ensu(3 from the one mcasiu'c. 
 The sum of £300,000, stated as likely tu be pro- 
 duced by such a tax, is in some degree conjectural, 
 but extensive in([uir'os on the sul))cct have been
 
 28 
 
 made, and the expected result is far from being 
 devoid of foundation. 
 
 That it is practicable, and to a great extent, to 
 economize in the cost of collecting the public 
 revenue is an opinion founded on the most con- 
 vincing evidence, and the Reports of the last 
 Excise Inquiry Commission, conducted by Sir 
 Henry Parnell, Mr. Behrens, and Mr. Wickham, 
 with Mr. T. C. Harrison as their secretary, con- 
 firm the belief By the twentieth Report of that 
 Commission it is made apparent that a saving of 
 £300,000 a year in that one branch of public 
 receipt might be effected. The charge for collecting 
 the excise duties is £1,037,961 ; the charge for 
 collecting the Ciistoms. . . .£ 1,300,806 
 
 Stamps 168,033 
 
 ■ Taxes 233,465 
 
 £ 1,702,304 
 
 exceeding the Excise Receipts by £664,344. 
 It is, therefore, assumed that a saving to an equal 
 extent, £300,000, is practicable in those three de- 
 partments. In the Excise there are accountants, 
 and comptrollers to check the accountants ; there 
 are receivers of cash, and comptrollers of cash ; 
 and an auditors' branch to supervise the vv^ork of 
 all the other branches. So in the Customs there are 
 collectors and comptrollers, examiners and inspec- 
 tor-generals' offices, all doing the account in gwork of 
 the department over and over, each in an imperfect 
 though diversified manner. Imperfect the work of 
 each must necessarily be, for were any one of
 
 29 
 
 their modes of record perfect, the others would be 
 too palpably superfluous to be continued. One 
 set of accounts surely might be devised, that would 
 embrace all that the five branches are now able to 
 develope. 
 
 But to resume the main point : — The mode of 
 providing for the interest and redemption of the 
 new stock and last series of the deferred annuity, 
 are, after all, matters of minor importance, and the 
 suffo-estions that have been oflered are rather 
 thrown out for consideration than relied upon with 
 confidence. But even, if the leading features of 
 this plan could be carried out, at an increased ex- 
 pense of one million per annum for fifty years, 
 which is the extent of the burthen, who would 
 hesitate to make the sacrifice which would be at- 
 tended with so large an amount of benefit? The 
 corpus of the unredeemed perpetual debt would 
 be reduced at once from 702 millions to 484 ; in 
 fifty years the country would be relieved from 
 £4,835,002 per annum ; in one hundred years the 
 debt would be annihilated. 
 
 The time has certainly arrived when, il' nicasuies 
 of a bold and decisive character arc not adopted, 
 the arts, manufactures, and wcaltli of (Ireat \W\- 
 tain must emigrate to countries morr lavourable to 
 their growth, progress, and prosperity. Il<'r«' the 
 indications of approaching decay and (it;cii:piUi(le 
 are daily becoming more apparent. TIic (iuniiushed 
 rate of profit resulting from tliu lieavy pressure of 
 taxation is gradually occasioning an efflux of capital
 
 30 
 
 which threatens tlie extinction of our commercial 
 greatness. The time is past for small reforms and 
 minute retrenchments. No half measures of this 
 sort will arrest the danger. Upon the subject of 
 Corn Laws, upon which so much stress has been 
 laid, and probably justly, as a principal obstacle 
 in the way of a beneficial intercoiirse with foreign 
 nations, opinions are too conflicting to permit 
 us to look forward to any such modification of 
 them as will enable us successfully to meet the 
 competition with rival manufactures of the Con- 
 tinent, which are every day rising up on the ruins 
 of our own. Visit the rapidly extending establish- 
 ments of Belgium, Germany, and Switzerland. 
 Converse with their intelligent proprietors. We 
 find them in high spirits, full of hope and con- 
 fidence, satisfied with their present position, and 
 requiring no better security or pledge for their 
 future prosperity than the continuance of our Corn 
 Laws, and the permanence of our unreduced Na- 
 tional Debt. But if we turn our eyes to the seats 
 of our own manufactures, what do we find ? We 
 find the rate of wages, always the best criterion of 
 the rate of profits, miserably low, insufficient to 
 prevent those outbreaks among the labouring classes 
 which have recently menaced public tranquillity. 
 And if we want further evidence of the diminished 
 rate of profit, and seek it among the master manu- 
 facturers, we find them ready to embark with their 
 men and machinery for other countries where their 
 honest industry, uncrippled by domestic taxation,
 
 31 
 
 AA 000 563 997 6 
 
 may have a fairer chance of success. But if we 
 look forward to the future and contemplate the pro- 
 bability of a foreign war, to be fought under the 
 pressure of our present enormous debt, we find still 
 further reasons, and a still more uro-ent motive for 
 providing some remedy for the financial embarrass- 
 ments in which we shall inevitably find ourselves 
 plunged. It has been the object of these pages to 
 point out that remedy — to teach the fundholder 
 liis true position — to indicate a mode of ultimately 
 getting rid of that fatal burthen, which, hanging 
 * liko a millstone round the neck of the country, 
 destroys its energies and crushes its s})irit. The 
 subject is of paramount importance. Attention can 
 hardly be drawn to it too frecjuently or too urgently. 
 But it is of little use to point out the evil, unless 
 we are also prepared with a remedy. The remedy 
 liere pointed out is by n<> means assumed to be free 
 from dithculties ; hut until a iwow reasonable or 
 effectual one is suggested, it at least deserves con- 
 sideration : 
 
 Si quid novisti recliiis istis, 
 CandidiiH iin[M:rli : ai noii, liin utcru iiieciini. 
 
 nil Ksn. 
 
 MAnciiANT, phisteb, iNGKAM-fovnT, reNcui;Rrii.6TnF.cr.