Page images

iog al such a -moment some aid in alleviation of the burthens and necessities of the country. But it is not proposed in any case to apply to the charge of new loans a larger portion of the sinking fund than such as will always leave an amount of sinking fund equal to the interest payable on such part of the present debt as shall remain unredeemed. Nor is it meaut that this or any other operation of finance shall ever prevent the redemption of a sum equal to the present debt in as short a period as that in which it would have been redeemed, if this new plan had not been brought forward. Nor will the final redemption of any supplementary loans he postponed beyond the period of 45 years prescribed by the act of 1792 for the extinction of all future loans; while each of the anuual war loans will be successively redeemed in fourteen years from the date of its creation, so long as war shall continue; and whenever peace sJiall come, it will be redeemed always within a period far short of the 45 years required by the above-mentioned act.

In tin- result therefore of the whole measure, there will not be imposed any new taxes for the first three years from this time. New taxes of less than 300,0001. on an average of seveu years from 1810 to 18 to', both inclusive, are all that will be necessary, in order to procure for the country the full benefit and advantages of the plau here described; which will continue for twenty years; during the last ten of which again no new taxes whatever will he required.

It appears, therefore, that parliament will be enabled to provide for' the prolonged expenditure of a necessary war, without violating any

right or interest whatever, and without imposing further burthens on the country, except to a small and limited amount: and these purposes will be attained with benefit to the public creditor, and in strict conformity both to the wise principles on which the sinking fund was established, and to the several acts of parliament by which it has beeu regulated.

It is admitted, that if the war should be prolonged, certain portions of the war taxes, with the exception of the property tax, will be more or less pledged for periods, in no case exceeding fourteen years. How far some parts of those taxes are of a description to remain in force after the war; and what may be the provision to be made hereafter for a peace establishment, probably much larger than in former periods of peace; are considerations which, at present, need not be anticipated.

It is reasonable to assume, that' the means and resources which can now maintain the prolonged expenditure of .an extensive war, will be invigorated and increased by the return of peace, and will then be found amply sufficient for the exigencies of the public service. Those exigencies must, at all events, be comparatively small, whatever may still be the troubled and precarious circumstances of Europe.

Undoubtedly there prevails in the country a disposition to make any further sacrifices that the safety, iudependance, and honour of the nation may require: but it would be an abuse of that disposition, toapplv it to unnecessary and overstrained exertions. And it must not pass unobserved, that in the supposition of a continued war, if (he loans for


the annual expenditure should be raised according to the system hitherto pursued, permanent taxes must be imposed, amounting in the period assumed, to 13 millions additional revenue. Such an addition would add heavily to the public burthen*, and would be more felt after the return of peace than a temporary continuance of the war taxes. In the mean time; and amidst the other evils of war, the country would be subjected to the accumulated pressure of all the old revenues, and of the war taxes, and of new permanent taxes.

The means of effectuating a plan of such immense importance, arise partly from the extent to which the system of the sinking fund has already been carried in pursuance of the intentions of its author, and partly fioru the great exertions made by parliament, during the war, to raise the war taxes to their present very large amount. It now appears, that the strong measure adopted in the last session, by which all the war taxes, and particularly the property tax, were so much augmented, was a step taken not merely with a view to provide for present necessities, but in order to lay the foundation of a system which should be adequate to the full exigencies _of this unexpected crisis, and should combine the two apparently irreconcilable objects, of relieving the public from all future pressure of taxation, and of exhibiting to the enemy resources by which we may defy his implacable hostility, to whatever period it may be prolonged.

To have done this, is certainly a recompence for many sacrifices and privations. This is a consideration which will enable the country to submit with cucarfoluess to its present

burthens, knowing, that although they may be continued in part for a limited time, they will uow be no further increased.

Lord Castltreagh's Plan of Finance.

In the house of commons, Feb. 1 2, his lordship said, that be never rose with greater diffidence in the course of bis parliamentary experience than at present; for, considering the attention which the noble lord (H. Petty, see p. 680,) must have given the subject, and the able assistance which lie had, it was painful and embarrassing to an individual to press upon the attention of the house a view so different from his. But as a considerable error existed between them, however the house might be disposed to think that the error was on his side, yet he felt so srrongly that it lay with the noble lord, that he could not forbear to slate the view which he had of this subject. He was anxious that ministers might be in possession of it, that they might prove its fallacy if founded in error. Therefore lie hoped that his motives would receive an indulgent construction from the house; as this was a task which he would not have undertaken had it not have been for a strong impression that there were good grounds of doubt as to the solidity of the noble lord's plan. While he said this, he was anxious that the house should not suppose the difference between the noble lord and him to be greater than it really was. He had no objection to the mode of taking a general view of the subject. There was no principle, for instance, which he thought more clear, than that the rapid reduction of the debt by the sinking

fund. fund, might be dangerous to the interests of the country, and he thought that a maximum ought undoubtedly to be established. But he objected to the superstructure which the noble lord had raised, by taking the ordinary expenditure of the year, without providing for the extraordinary expences which might be necessary in time of war, and by mortgaging the war taxes. He was glad that the noble lord took an extended view of the subject; and he was only sorry that he had adopted a principle inconsistent with the proper plans which such a view would suggest. The noble lord had thought proper to adopt a legislative measure for the next twenty years. But, on such a subject as this, be contended that no legislative measure ought to be adopted for such a long period, because it would reduce parliament to the greatest difficulties; and however beautiful the noble lord's plan at present might appear, he would find that it would soon occasion very considerable embarrassment. Nothing was more impolitic than legislating for future years, during which many circumstances might occur which could not at present be foreseen. He admitted, that it was proper to look forward, and to reason on probable data; and to the reasoning itself he had only to object that it was founded on data so fallacious, that it would serve only to raise expectations which must be disappointed. This would add material difficulties to the raising of the necessary supplies, when disappointed hope would he a grievance strongly felt, as accompanied with the additional burthens which must be borne by .'lie people. The noble lord must feel that the difficulty of raising necessary subsidies would be materially increas

ed; and subsidies must be raised, unless we were to be " Britannos toto orbe ditisos."—The noble lord, indeed, fairly and candidly stated, that such extraordinary supplies must be provided for, independent of his plan. But certainly he might have taken an average of the suras that would be required in this way, and considered what provision was to be made for them; as in all probability they would be no less necessary than other expences. The war expenditure at the time of the union was 32 millions, and now it was 38 millions, independent of extraordinary expences.—The probability of increase ought, therefore, to have been considered. However, he would argue the point with the noble lord upon his own data, and his own facts. His plan, if acted on in the mode which he proposed, was calculated to produce embarrassment, if not ruin; and he contended, that this embarrassment was gratuitous and unnecessary; for the indulgence which he proposed to grant might be given without any such embarrass-\ incut. This might be difficult to shew; but he hoped he should he allowed to state the view which he had of the subject. As to the expediency of making any arrangements with respect to the sinking fund, he admitted that the excesses would so far answer his purposes; but he begged of the noble lord also to admit him, that the excesses from 1816' would afford ways and means for any other system. From the written explanation that he had seen, (p. 682) he thought the noble lord's was one of the worst plans that could be adopted, and this was one fallacy. Another fallacy was, the assumption that the war taxes might be absorbed, without the greatest prejudice


to the country. This system of ubsorbing the war taxes was one which, if acted upon,, would he considered as borrowing money on its own loan*. Yet this was the way in which the noble lord proposed to provide for his war loans of 210 millions.—lie would compare this system of war loans with the former plan of finance; for it was impossible to doubt that, if the result was in favour of the former plan, the noble lord's plan was fundamentally .vicious. Why, then, taking any given sum and borrowing it on the system of double loans—the: one funded-at 10 per cent, and the supplementary loan at d per cent, one fur the fund,: and the other for the interest) and comparing this with the single loan at l per cent, as usual;—he would find, that in the former case there would be 6'0 millions and a fraction added to the debt at the close of the period, and hi the latter case only 30 millions and a fraction; the loss being upwards of 29 millions, and nearly in the proportion of 2 to 1. In comparing the two systems on consideration of prudence, the only way in which this could be done was upon five tests—1st, relative to the amount of borrowed capital in twenty years—2dly, relative to the effects of the plan on the sinking fund— <i(i\y, their comparative qualities to create charges to the country—4thly, what were their comparative qualities in admitting a mitigation of the present pressure on the nation— and, 5thly, how they would leave the tinance of the countly at the close of the period.

As to the first head, the comparative quantity of capital to be borrowed in twenty years; as the finance plan stood at present, by borrowing 11 millions, nukui" in all 220 mil

lions, for twenty years, we s>Wokf be relieved from the war loans and supplementary loans. By the uoble lord's plan, as taken from his own table, it appeared, that in twenty years he would raise a capital of 2 IU millions, by the war loans and sn;>plementury loans, on another credit; making, together, ilu',200,00Ol.; so that, deducting the actual increase of capital, there would be an addition of 1.96,200,0001. by the noble lord's plan, independent of 82 millions liquidated by the ten per cent. It was no light matter, the raisin? ol so great a capital; for, at the end of fourteen years, the war taxes beinp absorbed, it would be necessary to raise 32 millions annually, by wav of loans; ajxl this would derange the circulating medium of the country, no less than the total extinction of the debt by the sinking fund. Therefore it appeared, that the plau was not only more objectionable tlrau the present simple system, bv raising the increased capital of 196,200,0001. in twenty years; but that there would be a great difficulty in the execution of it, such as it was.

He would next proceed to the second head, and consider the relative state of the debt and the sinking1 fund; for he admitted, that though a greater amount of the debt should be contracted, the effects of tins might be counteracted by a proportionally larger sinking fund. On looking at the present state of the sinking fund, it appeared that though 11 millions should be uunuallv borrowed, jet, in 1826", the debt would be reduced to about 270 millions; the decrease being 93,oi0,000l. in twenty years. Now, by the noble lord's plan, the state of the debt in 1S26 would be 4"»;>,537,00oL being au increase beyond j>0 luilliouc

and tnd a half. Then a* to the sinking fund, on comparing the difference, it appeared, that at the close of twenty years, the fund would be in proportion of 1-1 Oth to the debt, on the present plan;. and ou die new plan, that it would h*in the proportion only of b-17th; ami there was, therefore, the, whole, of- the difference in favour of the old system. But this was not the only point of difference; for, after twenty years, the fund on the old system would go on, increasing; whereas, on the noble -lord's plan it must be declining. He must beg- the noble lord's assistance for additional data on this point; but even upon four of the..nobis lord's own tallies, he would undertake, to shew* him the priucipie of ruin which prevailed in his plan, if' hie would only consent to look at its criects for ten years kubsequcnt to the close of the period of twenty years from the present time.

He would, now proceed to the third head, and consider the comparative merits of the two .systems, in point of charge to the public. Now, if we should go on nil It (he plaa of single loans at one per cent, supposing 11,000,0001. to be.borrowed annually, the annual charge would be 733,0001.; and on a capital of 230,000,0001. at the close of the period we should have 14,00*0,0001. Then how did the charge stand on the noble lord's system? By supplementary loans he would borrow C04.000.000l. for which he would provide 14,206,0001. The other braisch of his loans would absorb the war taxes. The charge then by the old system being 14,600,0001. and that for the noble lord's supplementary loans being 14,-26*6,0001. the difference betweeu the whole of

the charge on the old system, and that on one branch of tlie noble lord's, was only 394,0001.

He would next proceed to the fourth head; which was, the comparative quality of the two .systems to afford relief to the country from the present pressure; and here he was perfectly prepared to admit, that if relief coidd be granted, whioh would not ultimately be injurious to the country and to tl*c stockholders, it ought to' be allowed to those wlto liad so manfully borne up against the accumulated pressure which the state of the times rendered nccessasy. This was a point which, if it could by any means be accomplished, ought to he aimed at.

This being his opinion, he was disposed to meet the noble lord on his own ground, ami to maintain the comparative merits of the old system, in the point of administering relief to the people, or at least in that of net adding materially to the burthens which at present pressed upon them. Now he had shewed that, if parliament could persuade itself to take the excesses of the sinking fund, these might he made a part of tlie ways and means. The excess would amount to upwards of 11 millions in I8l6. He had stated, that loans might be made upon that, either upon the one system or the other. Taking the exces< of the funds then, together with the annuities, and the noble lord'- taxes, you would have considerably beyond 13 millions as ways and means on the old system. On the new system you would have upwards of 14 millions. But upon the old system it would only, upou the whole, require a difference of 30;),000l. in taxes to carry you on. But the noble lord had the war loans separate from


« PreviousContinue »