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at 800 0 0

58,915 13 0 22,138 0 0

1808 10,188,606 16 5 1809 10,863,238 12 6 1810 11,589,626 10 11 1811 12,407,320 6 3 1812 13,391,941 3 *1813 15,379,624 1 8 73,644,561 8 11 1814 16,118,763 9 11 1815 15,682,446 17 1 1816 15,687,022 5 6 1817 | 14,518,290 14 3 1818 15,552,765 19 3 1819 16,305,590 19 1 1820 17,510,628 18 3 | 114,175,509 3 4

4,630 4 3 3,544 2 2 3,473 95 3,451 14 7 3,972 16 11 9,864 18 8 4,674 2 2 +4,095 0 8 4,626 13 8 4,853 17 11 6,399 12 10 7,240 4 8 7,109 6 9

at 800

0 0

88,940 0 4

33,353 0 0

259,434,837 14 2

207,969 2 9

89,065 0 0

87,552 10 2

Mystery of the Funding System.

* The Sums expended since 1813 are taken from the Annual Finance Accounts.
+ There is no charge in this Account for Irish Debt until 1817, the Account having been kept in Ireland.

ABSTRACT OF THE ABOVE ACCOUNT.
Paid to the Bank for receiving Loans, as per Column No. 3.

£207,969 2 9
Paid to the Bank for its Management, as per Column No. 4....

89,065 0 0
Paid to the National Debt Office for their Management, as per Column No. 5.

87,552 10 %
Total Expense of the " Machinery"

£384,595 12 11
ABSTRACT EXPENSE-YEAR 1820.
Paid to the Bank for receiving Loans £17,510,628 to raise Money for the Commissioners to buy Stock with £14,000
Paid to the Bank for managing the same Amount. .

5,250
Paid to the National Debt Office for their Management

7,109 Expense for Machinery in 1820.

£26,359

Mystery of the Funding System.

No. III. An Account of the Total Amount of the FUNDED and UNFUNDED

DEBT of Great BRITAIN and Ireland, as it stood in each Year, from the Year 1786 to 1819, both inclusive ; distinguishing the Amount of Funded Debt redeemed, and also the Amount of Interest

and Charges upon the unredeemed Debt, from the Amount paid to the Commissioners for the Reduction of the National Debt on account of Sinking Fund or Interest on redeemed Debt. [Parl. Paper, No. 35, Dec. 1819.]

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£
£
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£ 1786 249,175,323

249,175,323 9,774,398 1,000,000 10,774,398 1787 248,559,106 662,750 249,221,850 9,619,859 1,055,638 10,675,497 1788|247,221,842 2,119,650 249,341,492 9,499,756 1,109,82910,609,585 1789 247,144,789 3,626,000 250,770,789 9,459,962 1,184,735 10,644,697 1790246,733,969 5,184,850 251,918,819 9,579,208 1,207,179 10,786,387 1791247,379,445 6,772,350 254,151,795 9,541,494 1,256,142 10,797,636 1792244,405,021 8,279,450 252,684,471 9,534,267 1,368,532 10,902,799 1793 244,064,335 10,242,100 254,306,455 9,449,637 1,419,338 10,868,975 1794 251,988,783 12,416,505 264,405,288 9,605,054 1,748,575 11,353,629 1795267,635,345 15,221,450 282,856,795 10,355,711| 2,000,099 12,355,810 1796 326,833,921 18,304,905 345,138,826 12,481,313 2,639,875 15,121,188 1797 371,119,039 22,695,575 393,814,614 14,661,989 3,344,338 18,006,327 1798 398,051,408 29,485,598 427,537,000 15,526,987 3,950,470 19,477,457 1799 432,605,798 37,588,473 470,194,27) 16,608,245| 4,455,581 21,063,826 1800 447,620, 128 58,138,566 505,758,694 17,600,843 4,783,070 22,383,913 1801 479,046,141 68,851,735 547,897,870 18,156,485 5,151,257 23,307,742 1802 522,228,729 79,343,060 601,571,789 20,119,512 6,025,876|26,145,388 1803|540,668,080 88,779,449 629,447,529 20,708,570 6,335,055 27,043,625 1804551,368,256 101,961,115| 653,329,371 20,622,029 6,871,774 27,493,803 1805 575,319,723 114,821,745 690, 141,468|20,949,518 7,550,221|28,499,739 1806604,535,141128,581,442 733,116,583|22,649,361 8,373,865 31,023,226 1807|625,130,227 142,943,984 768,074,211|23,085,641 9,142,908 32,228,549 1808637,738,420 158,072,856 796,411,276 23,251,61910,287,245 33,538,864 1809 648,024, 192|174,700,848 822,725,04023,563,672 10,936,566 34,500,238 1810658,360,665 191,296,625 849,657,290 24,475,338 11,720,533 36,195,871 1811666,665,446 209,162,082 875,827,528 24,835,553 12,546,246 37,381,799 1812 682,805, 104 229,782,020 912,587,124 25,339,973 13,469,130 38,809,103 1813713,357,041 253,927,786 967,284,827|26,733,97114,683,192 41,417,163 1814794,326,522281,265,961 1,075,592,483|29,867,256 13,473,01645,340,272 1815 817,633,616 303,754,320 1,121,387,936 30,583,426 13,401,153 43,984,579 1816863,031,371 327,669,418 1,190,700,789 33,696,57613,478,540 47,175,116 1817 847,206,875 350,569,427 1,197,776,30232,342,93014,009,554 46,352,484 1818 838,767,526 369,988,580 1,208,756,106 31,239,094 14,596,683 45,835,777 1819 840,738,518 389,637,019 1,230,375,567 33,372,349 15,815,001 49,187,350

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General Principles of Finance. I. THE annual income of a nation consists of the united produce of its agricultural labour, manufactures, and commerce. This income is the source from which the inhabitants derive the necessaries and comforts of life; distributed, according to their stations, in various proportions, and from which the public revenue, necessary for internal administration, or for war, is raised.

II. The portion of national income, which can be appropriated to public purposes, and the possible amount of taxation, is limited; and we are apparently advanced to that limit.

III. The amount of the revenue raised in time of peace ought to be greater than the expense of a peace establishment, and the overplus applied to the discharge of debt contracted in former wars, or reserved as a resource for the expense of future wars.

IV. In time of war taxes may be raised to a greater height than can be easily borne in peaceable times; and the amount of the additional taxes, together with the surplus of the peace establishment, applied for defraying the expense of the war:

V. The expense of modern wars has been generally so great, that the revenue raised within the year has been insufficient to pay it: hence the necessity of having recourse to the system of funding, or anticipation.

VI. In every year of war, where this system is adopted, the amount of the public debt is increased; and the total increase of debt, during the war, depends on its duration, and the annual excess of the expenditure above the revenue. VII. In every year of peace, the excess of the revenue above the expen

State of the Finances.

diture ought to be applied to the discharge of the national Debt; and the amount discharged during any period of peace depends upon the length of its continuance, and the amount of the annual surplus.

VIII. If the periods of war, compared with those of peace, and the annual excess of the war expenditure, compared with the annual savings during the peace establishment, be so related, that more debt is contracted in every war than is discharged in the succeeding peace, the consequence is a perpetual increase of debt; and the ultimate consequence must be, its amount to a magnitude which the nation is unable to bear.

IX. The only effectual remedies to this danger are the extension of the relative lengths of the periods of peace; frugality in peace establishments; lessening the war expenses; and increase of taxes, whether permanent or levied during war.

X. If the three former of these remedies be impracticable, the last forms the only resource. By increasing the war taxes, the sum required to be raised by loan is lessened. By increasing the taxes in time of peace, the sum applicable to the discharge of debt is increased. These measures may he followed to such an extent, that the savings, in time of peace, may be brought to an equality with the surplus expenditure in time of war, even on the supposition, that the periods of their relative duration shall be the same, for centuries to come, that they have been for a century past.

XI. 'When taxation is carried to the extent mentioned above, the affairs of the nation will go on under the pressure of existing burdens, bút without à continual accuthulation of debt, which would terminate in bankruptcy. So long as taxation is below that standard, accumulation of debt advances ; and it becomes more difficult to raise taxation to the proper height. If it should ever be carried beyond that standard, a gradual discharge of the existing burdens will be obtained'; and these circumstances will take place in the exact degree in which taxation falls short of, or exceeds, the standard of average expenditure.

XII. The excess of revenue above expenditure is the only real Sinking Fund by which public debt can be discharged. The increase of the revenue and the diminution of expense are the only means by which this Sinking Fund can

can be enlarged, and its operations rendered more effectúal : 'and all schemes for discharging the National Debt, by Sinking Funds operating by compound interest, or in any other manner, unless so far 'as they are founded on this principle, are illusory.

State of the Finances.

These propositions are taken with a slight alteration from Dr. Hamilton's “ Inquiry into the Rise and Progress of the National Debt ;” and far the greater part are so incontrovertible, that it may appear superfluous to adduce any argument in support of them; and the others may be inferred by a very obvious train of reasoning. Yet measures inconsistent with them have not only been advanced by men of reputed abilities, but have been acted on by successive administrations, and annually supported in Parliament, and blazoned forth in every government publication. This may form an apology for a few observations; and, in order that our remarks may be intelligible, and convenient for reference, we shall number them in the same order as the propositions.

1. In every nation a part of the annual income must be withdrawn from the inhabitants for the support of the army and navy, the administration of justice, and other public purposes. The sum thus withdrawn, however reasonable and necessary, is abstracted from the funds which supply the wants of the people, and, consequently, lessen their enjoyments. Taxation, therefore, though necessary, in some degree, is an evil. It may arise to a magnitude which will press severely on the comforts and necessaries of the trading and working classes. Hence the sophistry, that taxes are either harmless or beneficial; that they either return by other channels, or are a, spur to industry. That which is taken and consumed can never be returned by any channel; and that can never form a spur to industry, which lęsşens the rewards by which industry is excited and put in motion.

2. That the amount of taxation is limited, and that we have reached that limit, is clear from the depression of agriculture, and all branches of productive industry, from the pressure of taxation. We have arrived at the anomalous state described by Swift, when 2 and 2 do not make 4. If more taxes be imposed, instead of increasing, they will probably diminish their stotal amount, by impairing the sources from which they are clerived.

3. The latter part of this proposition requires explanation. We are for raising no surplus revenue in a time of peace, “as a resource for future wars.Such a precaution might involve the pation in war, unnecessarily; as governments, for obvious reasons, are always prone to commence hostilities, and are restrained more by want of meộns than inclination.

4. It is not intended to affirm, that the power of a nation to bear taxes is increased in consequence of its being engaged in war. The contrary i is always the case. Labour, agriculture, commerce, and manufactures, are the sources from which all revenue is derived. Some of them may be ameliorated, but they are depressed on the whole, and do not attain the

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