^ 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.