brought up the minutes of evidence taken before the Helleston committee. On moving that the same do lie upon the table, he observed, that he acted only as the organ of the Committee in bringing up these minutes, and in making the special report, which he was directed to do yesterday by a majority of the Committee, to whose decision he bowed, but that for his part he did not think it necessary to have troubled the House on the subject. For although compelled by a sense of duty to consider the agreement existing between certain electors of Helleston and a noble duke (of Leeds) as an improper transaction, he was of opinion the determination of the Committee had sufficiently marked the sense of parliament, and prevented the recurrence of such practice: that it was not his intention to move any proceeding in the House, as he trusted that on perusal of the Minutes, it would appear to gentlemen that the Committee had done all that could be required of them, or that the case demanded.

wished some member of the Committee to bring forward a motion on the subject, as it appeared that infringements of an act of parliament had taken place, which called for inquiry. He thought the papers should be printed.

said, that he was as anxious as the hon. gentleman who spoke last that the minutes should be printed, and be in the hands of members as early as possible, as they would then judge whether their Report had not been made upon a case which called for it less than any which had ever before been brought under the consideration of the House by a Committee. He said he was ready at any time to meet the hon. gentleman, if he should think proper to call the attention of the House to the Report, and hoped to be able to convince the House that it was not necessary for them to take any steps in consequence of it.—It was then ordered to be printed.

rose and said:

Mr. Lushington;

Much as we must all have lamented the circumstance which occasioned the frequent postponement of this debate; the delay, I trust, has been attended with this good effect, that it has enabled gentlemen to examine more attentively the principles of the measure which is now under our consideration. In rising to submit to the Committee such observations as have occurred to me on the subject, I can assure you, Sir, that I never offered myself their notice under feelings of anxiety equal to those which I experience at this moment:—an anxiety arising not from any apprehension that I shall not be heard by the Committee with their usual kindness and indulgence, but from the deep sense which I entertain of the vast importance of the question now before us, compared with my own conscious inability to do any thing like justice even to the view which I feel myself compelled to take of it. Nor is this my only difficulty. There are others arising out of the very nature of the subject itself. A measure, in my opinion, more important in all its bearings, in all its effects and consequences, never was agitated in this House; but at the same time it is one devoid of every thing which can give attraction to debate; one not very familiar perhaps to many gentlemen now present, and requiring therefore, on the part of the person who undertakes to explain its tendency, a degree of clearness and perspicuity which I cannot flatter myself that I shall be able to bring to the discussion. Notwithstanding all these difficulties, and the consequent dread of failing in the task which I have imposed upon myself, I feel still more strongly that it would be a dereliction of duty were I to shrink from the attempt, and not to endeavour to claim for this subject, some share of that public attention which has lately been painfully engrossed by concerns of a very different description—concerns which I trust will never again occupy this House, and of which the agitation out of doors cannot be too much or too soon discouraged by every man who values the best interests of the country, or has a proper feeling for the honour and character of the age in which we live.

Before I enter upon the Resolutions now under discussion, I cannot refuse to myself the satisfaction of acknowledging the uniform courtesy and attention of the Chancellor of the Exchequer, in furnishing me with every facility of information. On my part, I trust my right hon. friend will not think me unwarranted in referring to my past conduct as the best guarantee that I am not actuated by any disposition to throw difficulties in the way of his financial arrangements. I hope therefore, that both with him and the Committee, I shall have credit for sincerity, when, as the result of the most anxious and deliberate consideration which I have been able to give to the present plan, I am compelled to declare my conscientious conviction, that, by adopting it, we should incur the risk of losing the fruits of all the sacrifices which we have made for the last twenty years;—that we should lay ourselves open not to the mere possibility, but, as it appears to me, to the probable and imminent danger (in the event of a long continuance of the war), of undermining, if not destroying altogether, that system of public credit which is the foundation of our present safety and independence, and the best support of that pre-eminent rank which we are now struggling to maintain among the nations of the world.

There is another question of a magnitude not inferior to this, which cannot be put out of sight in the examination of these proposals—a question respecting, which the feelings of gentlemen will not be less alive, nor their understandings less anxious to arrive at a satisfactory result, than even upon a matter so nearly connected with the public safety: I mean, Sir, the maintenance of public faith, on all occasions so essential to the honour of the country, and, in this instance, more especially so to the honour and character of parliament. The highest considerations of public policy and public justice are therefore equally involved in the present discussion. To these I must be allowed to add another consideration, of a more limited nature certainly; but at the same time one which has great weight with me, and will, I trust, have its weight with many other gentlemen in this House. The edifice of the sinking fund, which we are this day called upon to disfigure and half pull down, is perhaps the proudest monument which was raised by the virtues and genius of Mr. Pitt to his own fair fame. So it was held in his own estimation; so it is held in the estimations of his friends, and not only of his friends, but of those who were his political enemies, and of the whole world. Upon his friends then I call, from the reverence and affection which they feel for his memory; upon those who were his enemies I call from their love of justice and of their country, to lend their aid to my feeble efforts for preserving this monument of public utility and individual fame, unmutilated and entire, in all the beauty of design, in all the strength and symmetry of proportion, assigned to it by the hands of its immortal author.

The name of Mr. Pitt naturally brings me to the origin of this great measure of a permanent sinking fund, and to a short review of its progress and completion under his auspices, as preparatory to the examination of those proposals of my right hon. friend the Chancellor of the Exchequer, which I cannot but consider as an invasion of it.

When Mr. Pitt was called to the head of affairs, and to the management of our finances, at the close of the American war, credit was at its lowest ebb, our revenue deplorably deficient, and our resources for improving it apparently exhausted. Yet such at that time were the real resources of the country, when properly called forth, and wisely administered, that in the year 1786, Mr. Pitt was enabled, after making provision for the interest of the public debt, and for all the expences of a peace establishment, to set aside and appropri- ate a surplus of income, amounting to one million annually, as the foundation of a sinking fund for the redemption of the then existing debt of 238 millions. By the act of parliament which was passed for this purpose (26 Geo. 3, cap. 31), it was provided, that this sum of one million should be laid out, either in the redemption of stock, if at par, or, if under par, in the purchase of it in the open market at the current price of the day;—that the interest arising from all stock so redeemed should be added to the principal, and be laid out in the same manner, until, by their joint accumulation at compound interest, they should amount to the annual sum of four millions;—that, when this sinking fund had reached that amount, it should continue from thenceforth to be laid out at simple interest only, leaving the amount of interest annually redeemed at the disposal of parliament. Such is the outline of the original plan devised by Mr. Pitt for the reduction of the national debt, which, up to the year 1786, had been allowed to accumulate without any permanent provision being made for its gradual and, ultimate liquidation. But he did not stop here. He wished, in the event of any future war, to guard the country against the evils arising from too rapid an accumulation of debt, and consequent depression of public credit; and to place us beyond the reach of that helplessness, despondency, and alarm, which had brought the finances of the country to the brink of ruin in the American way Mr. Pitt felt at that time, that the greatest difficulty which he had to contend withy in framing any permanent system of a sinking fond, was to find the means of protecting it from the danger of future alienation, before it should have accomplished the purpose for which it was formed. The plan which he submitted to parliament in 1792 was framed with the specific view of guarding against this danger, and of holding out to the public a guarantee, that any future debts which the state might have occasion to contract, should, from the moment of their being incurred, be placed in a course of liquidation, uniform and unalterable. This plan contained within itself a principle of permanency, which, being applied to every loan at the time of making the contract, could not, frond that moment, be varied or departed from, without a breach of such contract. Under this plan, not only the sinking fund which it provides, but the application and accumulation of that sinking fund, are so interwoven and bound up with the contract for the loan, as to remain a condition between the borrower and the lender, until every obligation of that contract shall be cancelled by the extinction of the loan itself. That such was Mr. Pitt's understanding of the plan which he proposed to parliament in 1792, is, I think, placed beyond all doubt (if, indeed, there could exist a doubt on the subject) by what passed in this House on that occasion. It was made an objection to the measure (and I entreat gentlemen to recollect this circumstance when we come to the discussion of the present proposals) that it would place the reimbursement of all future loans beyond the discretion and control of parliament,—an objection which was answered by Mr. Pitt in such a manner as to show that, in his judgment, this very objection was the principal merit and recommendation of his plan. Another advantage of the plan is, that by the mode in which it is carried into effect, the power of the sinking fund is always necessarily increased, directly in proportion as public credit is depressed at the time of making the loan to which such sinking fund is annexed.

These were the principles laid down by Mr. Pitt in 1792, as the foundation of a sinking fund applicable to the liquidation of any new debt. The mode provided by him for carrying these principles into effect is so simple, that, for the explanation of it, little more can be necessary than to refer to that portion of the Act (32 Geo. 3, cap. 55) which provides for this measure. Indeed, Sir, the words of the enactment which particularly relate to this purpose, are so essential to a fair discussion of the proposals now before us, that I must request that the third section of this Act may be read. [The section in question was here read by the Clerk.^*]

^* "And, for more effectually preventing the inconvenient and dangerous accumulation of debt hereafter, in consequence of any future loans, be it further enacted by the authority aforesaid, that whenever any sums of money shall hereafter be raised by loans for public purposes, a separate account shall be kept, at the receipt of his Majesty's exchequer, of the annuities or annual interest to be incurred in respect of the same; and in case the said loan shall be raised for any other purpose than that of paying off some ex-isting capital stock bearing a higher rate of interest than the capital stock to be created by such loan, and shall be raised by perpetual redeemable annuities, and provision shall not have been made by parliament for paying off, within forty-five years, the whole of the capital stock to be created by such loan, from thenceforth, at the end of every quarter subsequent to the day on which the act or acts of parliament, by which such loans shall be created, shall have received the royal assent, an additional sum shall be set apart out of the monies composing the consolidated fund, and shall be issued at the said receipt of the Exchequer to the governor and company of the bank of England, to be by them placed to the account of the commissioners for the reduction of the national debt; the total annual amount of which additional sum shall be equal to one hundredth part of the capital stock created by such loans."

The enactment, therefore, applicable to every loan that should be raised after 1792, is simply this; that either some specific provision should be made at the time of such loan being raised, for paying it off within a period which might extend to, but should not exceed, forty-five years; or, in default of such provision, that a sinking fund, equal to one per cent. not on the amount of the money borrowed, but of the capital stock created, should "from thenceforth" issue from the Exchequer, and be applied at compound interest to the liquidation of such loan. It is therefore obvious, that, at the time of making a loan, the government is at liberty to adopt either of these modes for its gradual redemption. It may declare to the parties with whom it may be dealing, first, that it will provide for paying off in each year one forty-fifth of the capital to be borrowed;—or, 2dly, that it will raise the loan by granting an annuity terminable in forty-five years;—or, 3dly, that, instead of making provision, in one or other of these modes, for paying off any portion of such loan immediately, a sinking fund shall be assigned, to begin to operate at some future period, and of such an amount, as to ensure the extinction of the loan between the date of the commencement of such sinking fund, and the end of the prescribed term of forty-five years. But if no specific provision is made for the redemption of the loan, at the time of con trating for it, then, and thenceforth, the other alternative of a one per cent. sinking fund takes effect quite as a matter of course.

The principle upon which the period of forty-five years was fixed upon as the extreme term beyond which the liquidation of any future debt should in no case be protracted, may, I think, be collected from this circumstance; that a sinking fund of one per cent. operating at compound interest, and supposing the rate of that interest to be invariably three per cent. will redeem a capital equal to one hundred times its amount, in little more than forty-five years. It may here be necessary to remind the Committee, that we are not at liberty to compel the public creditor to accept the repayment of his stock at any price below par:—at par every portion of the public debt is redeemable; hut below that price, the state, like any other purchaser, may go into the market, and buy at the price of the day. Now, the great bulk of our debt, as every body knows, consists of a three per cent. stock; and we have none which has been funded at a lower rate. Consequently, the lowest rate of compound interest, at which the sinking fund can improve, is three per cent. It is the rate at which it would improve, if the three per cent. stock was uniformly paid off at par. In proportion as the stock, instead of being paid off, is purchased below par, is that rate of improvement of the sinking fund increased. But, forasmuch as a one per cent. sinking fund, constantly operating at three per cent. would redeem the capital of any loan in a period of about forty-five years, it follows, from there being no stock below that rate of interest, that forty-five years is the ultimate term to which the liquidation of any debt, having a sinking fund of one per cent. can, by possibility, be postponed. It is the maximum of time which the redemption would require, on the supposition of the sinking fund being uniformly restrained, by the most flourishing state of public credit, to the minimum of velocity at which it can proceed. Now it is a fact, not immaterial to the present discussion, that for the last fifty years, the three per cents have never once been at par; that, within that period, they have been below fifty, and that for the last twenty years (that is, since this law of 1792 began to take effect), their average price has not exceeded sixty-seven.

Let us, then, see what has been, and is, the practical application of this law of 1792 to the loans which, since that year, have been raised for the public service. When a loan is wanted, the Chancellor of the Exchequer, acting on behalf of the public, signifies to the parties disposed to lend their money, the particular stocks in which he means to fund the loan. If, at the same time, or at any time before the contract, he has it in contemplation to make any provision for the redemption of such loan, other than a one per cent. sinking fund, he would of course apprize the parties of the nature of that provision; but if he should remain silent on this point, the law declares to them, without any confirmation from him (and, in point of fact, I believe I may add, that on no occasion have they ever demanded or received any such confirmation), that a sinking fund of one per cent. will issue of course, and will be employed at compound interest, for the gradual redemption of the new stock about to be created. Knowing this, the lenders are well aware that the efficacy of this sinking fund will be in proportion to the depression of the stock which they are to receive in return for their money;—if a three per cent. stock, for instance, be what they are to receive, and the price at which it is taken be 50; the sinking fund will be equal to two per cent. on the money capital borrowed; and the rate, in point of time, at which the redemption will then proceed, will be that of about twenty-three, instead of forty-five years. Thus, in proportion to the depression existing at the time, does this sinking fund operate at once as an improved check to prevent a further fall, and as a powerful lever to produce, at no distant period, a probable rise in the market. What is the consequence? Why, that the lenders are enabled and induced, or, if you will, by the competition which exists among them, compelled, to give better terms to the public. These better terms are the advantage which, in every past loan, the country has derived from a one per cent. sinking fund; but it is, as I conceive, an advantage obtained by incurring an obligation, from which we are not now at liberty to depart. The advantage and the obligation are reciprocal; they both commence with the commencement of the contract, and from that moment we are not at liberty to keep the one and to disregard the other.

If I have had the good fortune to make myself understood in the principles which I have now stated, I should hope that gentlemen would be able to follow me in the application of them to the existing state of our sinking, fund, and to the plan now under consideration.

The loans made since the year 1792, with some exceptions, which I shall have occasion to explain presently, have been made with a sinking fund of one per cent. If gentlemen recollect what has been the general price of the stocks since the breaking out of the war, they will, I am sure, think that government acted very wisely in preferring this mode of redemption to the less efficacious modes which were open to them under the other alternative of the Act.

The foundation of the new system now proposed to us is this:—my right hon. friend, the Chancellor of the Exchequer, construes the Act of 1792, as leaving parliament at liberty to regulate and modify, according to its discretion, in any manner, and at any time, the redemption of the whole debt contracted under the terms of that Act, provided the final liquidation of each of those separate loans, which together constitute the aggregate of that debt, is not protracted beyond the full period of forty-five years.

The question of public faith which arises upon this construction is:—whether, having made our option, at the time of the contract for each loan, in favour of a one per cent. sinking fund, and having received the benefit accruing from that option, the issue of that one percent. from the Exchequer, and its progressive accumulation, and uninterrupted application, be not thenceforth conditions of the contract itself, from which we are not at liberty to deviate, so long as any part of that loan shall continue unredeemed?

Now, that there is nothing in the clause which has been read to authorize any option subsequent to the time of making the contract, is quite clear. The enactment is imperative, the words of it are peremptory, and admit but of one construction: "If provision shall not have been made by parliament for paying off within forty-five years the whole of the capital stock to be created by such loan." These words cannot be understood as having reference to any but a provision antecedent to, or, at the utmost, actually concurrent with, the formation of the contract. Well, Sir, the clause proceeds thus: "from thenceforth, at the end of every quarter, subsequent to the day on which the act of parliament by which such loan shall be created, shall have received the royal assent, an additional sum shall be set apart out of the monies composing the consolidated fund, and shall be issued at the said receipt of the Exchequer, to the governor and company of the bank of England, to be by them placed to the account of the commissioners for the reduction of the national debt; the total annual amount of which additional sum shall be equal to one hundredth part of the capital stock created by such loans." Here the enactment ends. If it had been the intention of the legislature to reserve to itself a subsequent power of reverting to the first alternative of forty-five years, should we not have found at the end of this clause some words declaratory of this intention?—Some "until," or other such word, to qualify that peremptory "thenceforth" which governs this part of the enactment? It is just as clear, then, from the whole of this clause, both from what it says, and from what it omits to say, that we have no subsequent option, as it is clear that we have such an option at the time of making the contract. By the fifth section of the same Act, if is directed that "the sinking fund of each separate loan shall be set apart, and issued at the receipt of the Exchequer at the end of each quarter in the order in which such loans shall have respectively taken place." And the eighth section provides, that all such sinking funds shall be applied to the redemption of debt; that all stock redeemed shall be transferred to the account of the same commissioners for the reduction of the national debt, to whom the one per cents are issued, and be placed to their account; and lastly, that the separate sinking fund of each new loan, and also the dividends payable on any stock redeemed or purchased in each quarter, shall be placed to a separate account in the name of the said commissioners, to be kept in consequence of every such loan respectively.

This Act, therefore, positively enjoins three things to be done with respect to every loan that has been raised with a one per cent. sinking fund: first, the regular quarterly issue of that one per cent. from the Exchequer, to be laid out quarterly in the redemption or purchase of stock; secondly, that all stock so redeemed or purchased shall be transferred to the commissioners for the reduction of the national debt, and the dividends of such stock car- ried to the same account as the one per cent. issued quarterly from the Exchequer; and, thirdly, that a distinct account shall be kept of the progress made by each separate one per cent. and the dividends arising from it, in the redemption of the specific loan for the liquidation of which that one per cent was assigned.

The Act does not in terms prescribe any period when the issue of the one per cent. on each separate loan, and its accumulation at compound interest, shall cease and determine; but, as by this Act each loan is a separate debt with its own distinct sinking fund; and as that sinking fund can have no other application than the liquidation of the particular loan in respect of which it was originally issued; there can be no doubt that, according to the intent and meaning of the Act, the whole charge of such loan, as well for interest as for sinking fund, is set free, and reverts to the consolidated fund as soon as that liquidation is completed. This construction of the law will not be disputed by any one.

Let us now examine whether the present plan of my right hon. friend is consistent with the three conditions prescribed by this Act. With the quarterly issue from the Exchequer of the several one per cents in respect of each loan, the plan does not interfere. But does it not break in upon the concurrent application of these several one per cents to the reduction of their respective loans, as well as upon the transfer of the stock purchased by each of these separate sinking funds, and the application of the dividends arising from that stock? That it does, and to what degree it does so, must be obvious to every one, from the simple statement that my right hon. friend's practical measure, for withdrawing in the next four years, between seven and eight millions from the aggregate sinking fund, rests altogether upon the assumption, that no one of the several sinking funds which have been issued in respect of the different loans made since 1793 (that is, in respect of the whole debt of the present war, to which alone they are applicable), has yet begun to operate: that the loan, of 1793, for instance, and so on of every subsequent year, remains as yet unassailed by its specific sinking fund. My right hon. friend having thus, very conveniently for his purpose, assumed that the whole of the public debt contracted since 1792, has hitherto had no sinking fund at all applied to it; he, with equal ease, assumes, in the next place, that the whole of the debt prior to 1792 is actually paid off. Now this debt amounted to 238 millions; and for its separate liquidation, Mr. Pitt established the original sinking fund of one million in 1786. That million (which, for the sake of distinguishing it from the one per cent. sinking funds, I shall call the old sinking fund) with some other aid afforded to it, having continued to accumulate at compound interest ever since 1786, has actually reduced about 97 out of the 238 millions, which formed the old debt. Of the new debt about 116 millions have been paid off by the several one per cents issued from the Exchequer for that purpose. This is the abstract of the account as it actually stands in the books of the commissioners for the reduction of the national debt. But, in the face of this account, we are now called upon to resolve, that the whole of the old, and not one shilling of the new debt, has been redeemed. How my right hon. friend can reconcile such a resolution with the Act of 1792, I am utterly at a loss to conjecture.

But, leaving this task to his ingenuity, I must observe to the committee, first, that the very foundation of his assumption that the old debt has been paid off, is laid in the circumstance of our having incurred a new debt of a much larger amount; and secondly, that, even allowing him that assumption, he would not have been able to erect his present scheme upon it, if the credit of the country had not been for the last twenty years materially impaired by the pressure of that new debt. On the one hand, had the sinking fund been operating at three per cent. during that period, he could not have touched it, even under his own construction of the Act of 1792: on the other hand, had the price of the stocks been still lower than it has been, he would have taken from that sinking fund still more largely than he is now, according to his own rule, enabled to take. This then is the new doctrine of the sinking fund;—that having been originally established "to prevent the inconvenient and dangerous accumulation of debt hereafter" (to borrow the very words of the Act), and for the support and improvement of public credit; it is in the accumulation of new debt that my right hon. friend finds at once the means and the pretence for invading that sinking fund; and the degree of the depression of public credit, is with him the measure of the extent to which that invasion may be carried. And this is the system of which it is gravely predicated, that it is no departure from the letter, and no violation of the spirit of the Act of 1792; and of which we are desired seriously to believe, that it is only the following up and improving upon the original measure of Mr. Pitt!—of which measure the clear and governing intention was, that every future loan should, from the moment of its creation, carry with it the seeds of its destruction; and that the course of its reimbursement should, from that moment, be placed beyond the discretion and the controul of parliament.

It appears to me to be so impossible that any man should entertain a serious opinion that the measure of my right hon. friend can be carried into effect without a departure from the Act of 1792, and a consequent violation of the contracts made under that Act, that I could really wish, before we proceed one step in this business, that the intended arrangement of my right hon. friend should be submitted as a case for legal opinion with a reference to that Act. This, I think, is the least that we can do in fairness to the whole body of the public creditors of the state; who, be it remembered, when they are at issue with you upon the extent of the obligations which their contract has imposed upon you, have no appeal but from your power to your justice. Let us show them, if we can, by the authority of the great luminaries of the law, that we have right on our side, when we are about to interfere with the accumulation, and to interrupt the application of the one per cent. sinking funds issued under the Act of 1792. I should wish to ask those who are best qualified to expound this statute, and I now ask my right hon. friend;—If, under this statute, we can carry our interferference to the extent proposed, what is there to prevent our going a step further, and meddling with the issue of the one per cent. itself? The issue, the application, the accumulation, are all governed by the same enactments, without any proviso or exception, to enable us to vary or modify the one more than the other. I should also wish that my right hon. friend would tell me how soon, after contracting for a loan with a one per cent. sinking fund, be conceives this right of interference on the part of the public to commence? Does it begin with the first quar- terly issue, or with the tenth or twentieth? If not with the first, why not as well with the first as with any subsequent one? And, if with the first, does my right hon. friend conceive, that, after bargaining for a loan (that of last year for instance) he would be at liberty, without the consent of the contractors, to direct the dividends arising from the first quarterly issue of the one per cent. sinking fund annexed to that loan, not to be applied in aid of the second quarterly issue, in the purchase of stock? If this would be a breach of faith towards the original contractor, in the first year of the loan, how would it be consistent with faith towards the alienee of that contractor, in any subsequent year of the same loan? And how is my right hon. friend to distinguish between the stockholders, who are the original contractors, and those who have since purchased from them?

In a case of this nature it is not immaterial to inquire what has been the general understanding upon the subject. I will not detain the Committee with what has been said and written out of doors, though I could accumulate from that source many great authorities; but I will refer them at once to one originating among ourselves, sanctioned by the Report of a Committee of this House, never referred to, but with the just praise which is due to accurate research, sound decision, and correct discrimination; a Report, for which we are more immediately indebted to the most distinguished authority in this House; now, in virtue of his high office, himself one of the commissioners for the reduction of the national debt. Sir, the first Report of the Committee of Finance of the year 1797 relates to the public debt and the sinking fund; and it concludes with these remarkable words: "the old sinking fund, after reaching the sum of four millions, is no longer made applicable by law to the discharge at compound interest of what may then remain of the old debt; but the operation of the new sinking fund is to continue at compound interest till the new debt shall be totally discharged." It is impossible to mistake the object or meaning of this sentence. By marking the difference between the old sinking fund and the new, between the law of 1786 and that of 1792, it most forcibly delineates the true character of the latter.

^* The present Speaker, who was chairman of the Committee of Finance in 1797. Respecting the most distinguished committee that made this Report, it is only necessary to, ask, with your present Speaker for its chairman, if it is too much to assume that the public had a right to look to this Report for the true construction of the Act of 1792, and to rest upon it, as a guarantee that that construction would be faithfully adhered to and observed?

But my right hon. friend mainly rests his present construction of this Act upon what he infers must have been the opinion of Mr. Pitt; and this inference he draws partly from certain financial arrangements which Mr. Pitt brought forward between the years 1798, and 1800, and partly from his concurrence in the arrangement of Mr. Addington (now lord Sidmouth), in the year 1802.

If my right hon. friend had been able to call to his aid the clear and positive authority of Mr. Pitt, much as I venerate that authority, I could not, in such a case as this, allow it to confound the plain and obvious meaning of a contract founded upon the letter of an act of parliament. But the facts to which my right hon. friend refers, seem to me in no degree to warrant the conclusion which he attempts to draw from then.

What are those facts? Why, that, in 1798, 1799, and 1800, Mr. Pitt raised a part of the loan wanted for the service of those years without a one per cent. sinking fund; and that he concurred in a similar course adopted by Mr. Addington in 1802. The first question that arises upon the statement of this fact is this: did Mr. Pitt and Mr. Addington, at the time of making those loans, propose no other provision for their redemption within forty-five years? Because, if they did propose any other, it is obvious that they only availed themselves of that alternative which was left to them by the law. Now, in the first place, what did Mr. Pitt do? In 1798, for the first time, he had recourse to a plan for raising a large portion of the supplies within the year. His avowed object in this bold measure, was to prevent the too rapid accumulation of debt, and to restore public credit, at that time very much depressed. As an essential part of his plan, he therefore laid down the principle, that, in whatever amount the sum borrowed within the year should exceed the sum redeemed by the ordinary sinking fund, provision should be made for paying off such an excess within a very few years, by some more powerful means than a one per cent. sinking fund. For executing this purpose, he charged the interest of so much of the loan of the year (considering that portion of it as a temporary or war-loan only) as exceeded the amount of the whole sinking fund, upon the total produce of the war-taxes; and instead of an immediate one per cent sinking fund, he assigned the whole amount of those taxes, except what was requisite for the payment of the interest of the war-loan, to the exclusive purpose of entirely liquidating that loan; such liquidation to commence with the close of the war; and the war-taxes to be continued until it was completed. Now in what terms does my right hon. friend allude to this measure in his printed statement?^* He says, that it was "to repay, within a few years after the conclusion of peace, all debt contracted beyond the amount of the sinking fund in each year." Then if "these few years" were likely to fall within forty-five years from 1798, Mr. Pitt was completely warranted, by the letter of the law, in substituting this reversionary sinking fund for an immediate one per cent. The intention with which Mr. Pitt acted is obvious, that of greatly adding to, instead of impairing, the strength of the sinking fund. But then, said my right hon. friend in his opening speech, "the war might have continued forty-five years; and in that case these war-taxes could not have been applied to the purpose of redeeming debt." What inference he wishes us to draw from this rather strained supposition, I am at a loss to understand; but before he can avail himself of it, as bearing in any way upon Mr. Pitt's authority, he must begin by shewing not only that when the plan of 1798 was brought forward by Mr. Pitt, he contemplated the possibility of the war being protracted to forty-five years from that time; but also, that having such contingency in his contemplation, he had further made up his mind, in the event of its being realized, not to provide any other sinking fund for the redemption of these war-loans. This is a task which I think my right hon. friend will scarcely attempt.

We now come to Mr. Addington's measure. In 1802 (being somewhat less than forty-five years from 1798) peace had been made. It was then thought expedient at once to repeal the income-tax, instead of continuing it until the liquidation of the war-loans had been effected. It is not material now to consider whether this measure was very politic, or altogether consistent with the pledge given to the public creditor for the redemption of the war-loans by the continuance of the income-tax. But what is much to the present purpose, is to ascertain, whether when these war-loans, by the repeal of this tax, were thrown back upon the ordinary provision of the Act of 1792, a sinking fund consistent with that Act was or was not provided? These war-loans, together with the loan raised for the service of the year 1802, amounted to a capital of near 90 millions of stock. To this capital no one per cent. was allotted; but was not recourse had to the other alternative of the act? Most certainly it was. Without going into minute details, it may be sufficient to state that a reversionary sinking fund was created to commence indeed in about twelve to fifteen years from that time, but to be of such efficacy when it should commence, and to be so greatly accelerated by subsequent additions in its progress, as, under the most unfavourable supposition, to be certain of reducing the whole of this debt within forty-five years. This reversionary sinking fund was to arise in the following manner:—by continuing the old sinking fund at compound interest after it should have reached its maximum of four millions; and by continuing also the new sinking fund or aggregate of the one per cents of the loans since 1792, after such one per cents should have liquidated the several loans in respect of which they were originally issued. Elaborate Tables were laid before the House, clearly shewing that these funds would be fully adequate to the object. There is nothing, therefore, in the Act of 1802 which is a departure from the spirit of the Act of 1792.

See vol.24, Appendix, p. ii.

The Act of 1802, it is true, has prescribed a mode of executing its intended purpose very inconvenient in other respects; but in principle, it affords neither justification nor precedent for the measure now in contemplation. It is in substance no more a departure from the spirit of the Act of 1792, than the sinking fund of five per cent. annexed to the loan of 1807, or any other specific mode of redemption different from a one per cent. The one per cent. is the general rule; the other is the exception, but it is an exception to which we have a right to resort, at the time of making a new loan, as often as we think it is for the general interest so to do.

Having now examined the inferences upon which Mr. Pitt's authority in favour of the plan is assumed, I might safely leave them to the judgment of the Committee and of the public; but I must go one step further. A sense of the duty which I owe as well to the public, as to Mr. Pitt's memory, induces me to state the fact which I am now about to mention; and for the accuracy of which I am ready, if necessary, to pledge my honour and every thing most dear to me in the world.

In 1802, when men's minds were turned to these subjects by the plan then before the House, a person of great skill in calculation, and of great ingenuity in subjects of political economy, put into my hands some observations which he had committed to writing on the subject of consolidating the old and new debts, and the old and new sinking funds. The conclusion to which he came was this, that we ought, at stated intervals (I think of seven years), to measure the proportion of the whole sinking fund to the whole debt; and that, whatever might be the excess of the sinking fund over and above what would be requisite for extinguishing the unredeemed debt in forty-five years, such excess might be placed at the disposal of parliament. I own that I was struck with the plausibility of this scheme, at least as applicable to a state of peace; and having obtained the author's permission, if not at his request (I now forget which) I communicated his scheme to Mr. Pitt. Mr. Pitt rejected it at once with the most pointed reprobation of its principle; and I perfectly recollect, that when I rather stood up for the measure as a peace arrangement, he said, that whenever the time should come that the diminution of the rate of interest was felt to be an evil, he had other ideas as to the best mode of obviating that evil, by converting it to a great public advantage; and that, in a state of war, the plan would be ruinous and inadmissible. I well remember some still harsher terms which Mr. Pitt applied to this suggestion, but I will not repeat them, because it is in principle and in effect the same measure as that of my right hon. friend. But if they are the same in principle, the circumstances of the present time and of 1802, are widely different. In 1802 we were in a state of peace; credit was high, the accumulation of unredeemed debt was much smaller than at present, without any expectation at that moment that it would be necessary soon to add to that accumulation. In 1813, we are engaged in a most extensive war, our credit very much impaired, our unredeemed debt increased, and now annually increasing in a most alarming degree.

Here then is the direct testimony of Mr. Pitt, in opposition to vague inferences; and I have no manner of doubt that, if his voice could now be heard amongst us, my right hon. friend's plan would not endure for a single hour.

That plan, in its principle, may truly be described as an expedient for pushing the debt in time of war to the maximum of its amount, by reducing the sinking fund to the minimum of its power.

It is an error which must sooner or later prove fatal to our credit, that we are doing enough, if we reserve such a sinking fund as would redeem our debt in forty-live years, without reference to the total amount of that debt. The proportion of the sinking fund to the unredeemed debt is but a secondary consideration: the actual amount of that debt ought to be the first object of our solicitude. It is undeniable in theory, that a debt of 1,000 millions would as certainly be liquidated in forty-five years by a sinking fund of ten millions, as that a debt of 100 millions would be liquidated by a sinking fund of one million. But in practice a debt of 100 millions might be safe, and possibly salutary to the state, even without any sinking fund at all; whilst 1,000 millions of unredeemed debt, all liable to be brought into the market, might, under many conceivable circumstances, entirely break down that credit, which the smaller sum would in no degree impair. Comparisons of this nature, in proportion as they are true in arithmetic, are dangerous in the concerns of nations. Whilst they gratify ingenuity in the closet, they may undermine our resources upon the Stock Exchange.

I shall probably be reminded, that, whatever there may be in common between the plan rejected by Mr. Pitt in 1802, and the measure now before us, the latter comes recommended by many peculiar advantages, which more than counterbalance the objections to which it may be liable. Any proposal which postpones the necessity of adding to our burdens, however pregnant with difficulty and danger that proposal may be in its probable and not distant consequences, cannot fail, especially if those consequences are kept out of sight, to be favourably received by this House and the public. The plan of ray right hon. friend possesses, undoubtedly, that claim to favour. If he had called for your support upon that claim only, the discussion would have been much simplified. But, in my right hon. friend's statement, this benefit, which I have no wish to undervalue, is obscured and lost amidst the blaze of more brilliant advantages and dazzling prospects, which have been opened to us on this occasion.

From the very sincere respect which I feel for my right hon. friend, it really gives me pain to be obliged to refer at all to these other advantages of his plan. For I cannot help saying, and he will excuse me for taking this liberty with them, that they appear to me calculated to confuse and perplex, without at all meliorating his system.

These other advantages of the plan amount to four: first, that it provides for a gradual and equable reduction of the national debt: secondly, that it provides against the evils likely to arise from too rapid a diminution of the rate of interest: thirdly, that it provides an immediate subsidy of 120 millions, for carrying on the present war: and fourthly, that it provides for the accumulation of a treasure of 100 millions, in time of peace, as a reserve for any future war.

With respect to the first of these advantages, I know not in what terms to express my astonishment. "A gradual and equable reduction of the national debt!" as if that reduction was at this moment too rapid—as if there was any thing arbitrary and capricious in the present mode of applying the sinking fund! Again, as if we had already done too much in the way of reduction of a debt, which, when the new sinking fund began, was little more than 200 millions, and which now exceeds 600 millions unredeemed,—as if it were necessary, in order to make that reduction more equable, to diminish the amount of the sinking fund of the year, in proportion as the amount of the loan is increased,—as if it were particularly wise and pressing to begin to check the growth of the sinking fund in the present year, when the loan to be raised, joined to what remains unredeemed of that of last year, will make a greater addition to the debt, than all that was added to it in the six preceding years of the war!

That my right hon. friend should have spent his valuable time in providing, at this moment, for the second of these advantages, is to me still more surprising. "The evils likely to arise from too rapid a diminution of the rate of interest,"—when, with all the aid which credit has derived from the present rapidly growing sinking fund—with all the improvements, wonderful and extensive beyond the hopes of the most sanguine, in our political situation,—with all the temptation which a nominal capital holds out to the lender in the three per cents,—my right hon. friend is not able, even in that favourite fund, to raise a single 100l. within the legal rate of interest! With these circumstances before him,—with a loan to be negotiated for the service of the year, which cannot be much short of forty millions, what is the step taken by my right hon. friend with a view to an immediate practical effect? Why, a successive diminution of the sinking fund, infinitely more rapid than its growth has ever been, to be accompanied with a series of loans much larger than were ever before raised in this country. What is the disease which now affects our public credits? When my right hon. friend was first called in, he did not hesitate to declare, that his patient was "labouring" (to use his own expression) under great weakness and depression; but, by way of comfort, he assured us that at his next call he should be prepared with some very invigorating remedy. This is his second visit, for which we have been looking forward with so much hope. The symptoms of the disease continue nearly the same, or rather worse; but what says the physicians? He tells you, that, in turning the case in his mind, it has occurred to him, that his patient, if he should not sink under his present exhausting complaint, may possibly be liable at some distant period of His life (as nearly as he can now prognosticate, about the year 1830), to the inconvenience of repletion. Therefore, as an apt remedy for this distant disorder, be prescribes, instead of the promised restorative, a copious bleeding forthwith; and that it should be followed, in rapid succession, by three other bleedings still more severe. If the patient should undergo this discipline, the natural consequences must follow; and I agree with my right hon. friend, that the numerous friends of that patient, the whole body of the public creditors, should (as the phrase is) be prepared for the event. By the time of the fourth bleeding, should the present complaint continue, the most sanguine among them will, I think, have little doubt as to the result; and their mourning on the melancholy occasion will, I am satisfied, be not only very general, but Very sincere.

But this is a distant danger, which good fortune may, after all, avert; and, in the mean time, my right hon. friend's plan gives us art immediate subsidy of 120 millions for carrying on the war. When this subsidy was first mentioned, I really imagined that my right hon. friend had at last found that philosopher's stone, which, Van Helmont, and so many other ingenious men of former times, had Spent their lives in vain endeavours to find: or, at least, as was often the case with them, that, in searching for it, he had accidentally stumbled upon some other very useful discovery;—that he had found a treasure to this amount in some dark recess or Secret drawer of the Exchequer, where it had been boarded and forgotten by one of his predecessors. But When I came to understand what the finding actually was, my hopes were sadly disappointed. All that my right hon. friend has really found out is, that, by contracting a debt of between eight and nine hundred millions, we hare paid off one of 220 millions. Does my right hon. friend think that, upon the fair adjustment of such an account as this, there is any balance in our favour? It is in this balance, however, that my right hon. friend finds an immediate available subsidy of 120 millions.

But if this promised treasure is only a golden dream, as to the present, to what bright prospects do we not awake for the future! One hundred millions of public property to be accumulated on the restoration of peace! This, says my right hon. friend, is "the principal advantage of my plan."—Thisi at least, Will be a real treasure; arid such a treasure, he Well adds, "as no other country ever possessed." The whole secret of this great discovery consists in nothing more than this; that, having contracted in the present war a debt; which already exceeds 600 millions, my right hon. friend purposed, if sufficient time is allowed him, to pay off 100 millions of that debt, between the restoration of peace, and the renewal of war. I perfectly agree with my right hon. friend, that this advantage, admirable as it must appear for its simplicity when once it is explained, is one that no other country ever possessed; chiefly, indeed, because no other country ever possessed the preliminary qualification of being sufficiently in debt to enable it to enjoy this advantage. Really, Sir, if any other person than my right hon. friend had stated this as the principal advantage of his plan (an advantage, by the bye, not only not exclusively belonging to this plan, but unavoidable under any plan of a sinking fund in time of peace) I should have thought that he was trifling with our understandings; that he was treating us as persons incapable of distinguishing between the paying off of a small portion of existing incumbrances, and the actual amassing of wealth;—that he was exhibiting to us the amount of the national debt, as so much wealth accumulated, and not what it really is, the record of so much wealth consumed.

The remaining advantage of the plan, then, is the irresistible bait (for such I apprehend it will prove) of the postponement of fresh taxes for the next three years. I am not afraid that any man in this House, or, I hope, out of it, will do me the injustice to suppose that I am more insensible than another to the pressure of existing burdens upon the people of this country. But I should indeed be departing from the wise example of former parliaments, and of the great men of other, and (at least in that respect) better times; I should be losing sight of every sound principle of state policy, and of every established maxim of practical finance, if I were on this occasion to surrender my judgment to my feelings, and to shrink from the duty of a dispassionate inquiry, from the dread of its leading me, contrary to my wishes, to a painful conclusion.

In the existence even of an individual, four years is not a long period: in the existence of a nation it is next to nothing. On occasions like the present, much eloquent declamation is employed, to show how little our predecessors have done for us, and how much we have done for posterity. We advert to the neglect of those who have gone before us, in providing for our comfort; and we complacently contrast that neglect, with the anxious care that we have manifested for the ease of those who are to follow us. This, I apprehend, has been the language of all times, and I am unwilling to disturb a feeling of so much self-satisfaction. I must own, however, that in the unbroken chain of a nation's existence, I know not how to put my hand on the exact link at which posterity commences. But this I know, that the parliament which succeeded to the debt of the American war, represented themselves as the aggrieved posterity of those who had carried on that war. That parliament was left with an unredeemed debt of near 240 millions, and an annual charge for the interest of that, debt of between seven and eight millions. The parliament which may follow the present one, if peace should be then restored, will, I suppose, by a parity of feeling, be the posterity of those who have carried on the present war. That posterity will succeed, if the war should continue but four years longer, to an unredeemed debt of about 700 millions, and to an annual charge for the interest of that debt (exclusive, as in the other case, of any sinking fund), of about 26, millions. What will be the language of that posterity I will not pretend to anticipate:—as one of their predecessors, I hope it will not be wanting in gratitude for the great exertions which we have been compelled to make. But let us not shut our eyes to facts; and fondly delude ourselves with the idea that we have already done so much for the relief of posterity (always recollecting that of the posterity to which I allude, some of us may hope to be members), that it ought now to be left to shift entirely for itself.

Looking then at the proposals before us, not with a reference to the year 1912, to which one of my right hon. friend's Tables carries us forward, but to the reasonable compass of the next fifteen or twenty years; there are three considerations to be attended to in examining the present plan, comparatively with the existing system: 1st, the whole amount of unredeemed debt: 2dly, the proportion of the sinking fund to that debt: and 3dly, the amount of new taxes that would be requisite under the one system or the other.

This, examination of course proceeds, on the supposition of the continuance of war, and of an annual loan of 28 millions being requisite, as assumed by my right; hon. friend. In the event of peace, the charge of war, for which his plan is in- tended to provide, would of course cease: and I cannot help thinking that it will be quite time enough, when peace shall he restored, to meet difficulties of an opposite kind, which my right hon. friend apprehends peace may bring upon us: such as the too rapid reduction of debt, and diminution of the rate of interest.

Well aware as I am, and indeed, as every man must be, that the whole sum annually raised upon the country, is applied, either to defray the charge of existing debt, or that of our necessary establishments, it appeared to me, from the first glance of my right hon. friend's plan, that it involved this paradox—That, assuming our establishments to continue the same, this new system professed, not only for the present, but permanently, to decrease our taxes, while it increased our debt: and further, that it professed ultimately to accelerate the redemption of that debt, while it diminished the sinking fund. It was some time before I could find any way out of this paradox; but sit is, I think, to be found by a close examination of my right hon. friend's Tables.^* I shall not go through the whole of them; but I refer particularly to Table A. 1, 2, and 3.

I am far from wishing to insinuate that there exists any arithmetical inaccuracy in those Tables: but I must say, that they are so constructed as, although correct in themselves, to convey an impression which is very much otherwise.

In the column (Table A. 1.) showing the amount of new taxes under the proposed plan, credit is taken in each year in abatement of those taxes, for the whole sum supposed to be set free by the portion of debt assumed to have been finally paid off. In the column of the same Table, showing the amount of new taxes that would be necessary under the existing system, no credit is given for the sums that would really be set free by the actual extinction of debt according to the law as it now stands. For instance, in 1821 the charge of the war-loan of 1807 would be set free by the existing system, and ought, therefore, to have been stated as applicable in abatement of taxes set down opposite to that year: in like manner, in 1829, taxes to the amount of 21 millions would be set free, and ought of course to be deducted from the total of new taxes stated in the Table opposite to that year. The result would then be, that the total increase of taxes in the year 1829–30, under the proposed plan, would

^*See vol. 24, Appendix.

If the calculation should be carried on upon the same data, to the last year of that Table, the result would be as follows:

The two other points of comparison are, the unredeemed debt and the sinking fund. I have examined them, and if my figures are accurate, which I believe them to be, they would stand as follows:

Unredeemed Debt.

The respective sinking funds would stand thus:

I am satisfied to leave the result of these comparisons upon two different periods, one of 17 and the other of 25 years, to the judgment of the committee. But I must just observe, that they are made on the supposition that the annual loan of 28 millions would be raised on terms as favourable under the proposed plan as under the existing system: a supposition altogether unreasonable, when we consider the greater accumulation of debt, and the diminished power of the sinking fund under the proposed plan. It may be difficult to form any conjecture as to the amount of the difference; but whatever it might be, the result to that amount would be still more unfavourable to the proposed plan.

Another consideration to which it is most material to advert, in taking this comparative view, is, that it proceeds upon the supposition that the sinking fund will not be touched beyond the amount estimated in my right hon. friend's tables. These tables show how far he proposes to go; but the principle of 45 years, upon which he grounds his right to touch the sinking fund at all, would carry us much farther. My right hon. friend says, in his Statement, "that the mode of exercising this discretionary power of parliament to cancel such portions of debt as shall have been redeemed, may be varied as circumstances may require; but, during war, that which has been pointed out, appears to be most generally advantageous." Now, if this discretionary power is once established in principle, does any one doubt, that, upon every occasion of temporary pressure, it will be resorted to? Does any one doubt but that we shall go the full length of the principle of never allowing the sinking fund to exceed the minimum proportion of one to a hundred of the unredeemed debt?—and that, once armed with this discretion, we shall, upon a little further pressure, go one step further, and take away the sinking fund altogether?

In vindication of the plan, I have heard something like this kind of argument;—that, admitting it not to be strictly consistent with justice to the creditor of the state, still, if it promises to operate greatly to the general relief of the public, without being materially prejudicial to the public creditor, it ought to be adopted.

Without dwelling upon such general observations as must occur to every man, upon the great danger of attempting to justify by this doctrine of conveniency a violation of the plain letter of an engagement;—without stopping to remind the Committee, that, in any such attempt, we are at once party and judge, and judge without appeal; I will confine myself to the mere question pf probable injury. If not immediately, in the course of no very long period, the plan must be highly prejudicial to the public creditor. It may not operate immediately, because political circumstances are now very favourable to public credit: and also because, in the first year of this plan, the sinking fund will not be materially, if at all, impaired. But what must be its effect in future years, when the sinking fund will be diminished between seven and eight millions; and when the public mind may possibly not be elated with the same sanguine hopes as are justly entertained at this moment?

A loan is but the sale by government, at the best price which it can obtain in the open market, of a certain amount of annuities charged upon the income of the nation. The public debt is the aggregate amount of those annuities already sold in the market. In that market government is both a seller and a buyer: a seller to the amount of the loan: a buyer to the amount of the sinking fund. It follows, therefore, upon the plain principle of supply and demand, that if government, being compelled, from any circumstance, to sell more, determines at the same time to buy less, the price of the article must fall. Now the effect of this plan, and especially in the next four years, is very greatly to increase the difference between the sum to be added to, and the sum to be redeemed from, the national debt in each year. The accounts now before us show what has been the effect upon public credit within the last three years of loans very far short in their amount of those now wanted, and notwithstanding a constantly growing sinking fund. When the excess of our loan, above our sinking fund did not, upon an average, exceed five millions (money value), as was the case in the five years ending with 1811, the three per cents rose to near 70; but now, when that excess is more than 15 millions in each year, they have fallen to 59. Is this a moment for breaking in upon the sinking fund, and for taking away from it, by wholesale, in four years, the amount of the accumulations of thirty?

My right hon. friend satisfies his own conscience, however, by the reflection, that he shall, compensate to the annuitant this unavoidable depreciation of his security, by affording him a temporary respite from taxation. Again I must object, when the faith of a contract is at stake, to this doctrine of equivalents, this balance of injury and kindness. How can we know what is an adequate equivalent? The price of the public stocks does not depend upon the value of the dry annuity. It is a joint consideration of this annuity, and of the prospect of an increase in the value of the nominal capital, that operates upon the mind of the purchaser. I had a pretty strong proof of this when I myself was in office. From a wish to guard the public against the great loss of redeeming, perhaps at par, three per cents which might be borrowed at 60, I proposed to the bidders for the loan to make them redeemable at 80. They would not bid at all upon the proposal. If my right hon. friend doubts whether this prospect of higher prices enters info their calculation, let him try what they would now give for a three per cent. annuity redeemable at 60.

If the view which I have taken of this plan, so far as regards the public faith, be correct, it cannot be necessary to show, by many additional arguments, that the whole system, viewed abstractedly from its justice, is at variance with sound policy. That it would prove so in. its ultimate effects, no man, I think, can doubt; but, in the present instance, it will also be found (what may not always, perhaps, be the case), that not only our permanent, but our immediate interest requires of us, not to deviate from the straight-forward path in which we have hitherto proceeded.

I have the more confidences in the solidity of the objections which I take to the mere policy of the measure, because they are almost all derived from principles of finance, and lessons of political economy, for which I am indebted to the great practical masters of this science in modern times; and mainly, I speak it with unfeigned sincerity, to my right hon. friend himself.

The tables to which I have recently referred, establish, beyond all doubt, that the plan cannot be persisted in for three or four years without a serious injury to public credit. But in time of war, when we have to borrow so largely, is not the efficiency of that credit essential to the efficiency of the state? Is not its support the true husbanding, and its decline the profuse waste, of our yet remaining resources? Then what is the state of our credit at the very outset of this plan? Is it not already "labouring" under the vast accumulation of debt? and does it not manifestly sink, in spite of a state of external circumstances so unusually favourable, under the enormous calls that are made upon it by the unparalleled magnitude of our loans? Is it not true, that by the weight of loans far less than those now required, and notwithstanding a growing sinking fund, the public securities have suffered a depreciation little short of 20 per cent. within the last three years? Does the Chancellor of the Exchequer consider such a depreciation upon a capital of six hundred millions to be in itself nothing? Does he think it a matter of indifference whether the interest of money is at six or seven per cent. instead of being at or under the usual legal rate? Does he imagine that this depreciation, and this high rate of interest, will have no prejudicial effect upon our industry, our manufactures, our commerce, our internal improvements, and, above all, upon the progress of our agriculture? If the demands of the state are so large, and the temptations which it offers so powerful, as to absorb the innumerable streams and channels by which individual credit is nurtured and supported; the activity which is created, the exertions which are called forth by that credit in every branch of productive industry, must proportionably languish and decay. Does my right hon. friend seriously expect, or does experience warrant him to hope, as he intimates in his Statement, that in such a state of credit our permanent revenue can improve? The prosperity of that revenue depends, In a great degree, on the facility with which the active classes of the community are enabled to borrow the capitals requisite for their various pursuits. However paradoxical it may appear, there is, I will venture to say, no part of our population so nearly interested in the improvement of public credit as those to whom these borrowed capitals afford employment; and none, consequently, who ought more cheerfully to acquiesce in whatever sacrifices may be necessary for the support of that credit.

I have heard the proposed plan excused and palliated out of doors, by some who cannot approve of its principle, from an expectation that it will give such an impression of our resources, as may, in the present state of affairs, be attended with the most important consequences: that our friends on the continent will be elated, and our enemies astounded, by the promulgation of a plan for carrying on the war for four years without taxes.

I trust that this most shallow of all hopes, this most short-sighted of all the views which can be taken of the subject, is not entertained by his Majesty's government as any recommendation of the plan.

The governments of the continent, and the thinking and intelligent part of their subjects, are likely to take a very different impression. They look upon our sinking fund—and the events of the last 20 years, and not less than the events, our language and our conduct also, have taught them to look upon it, as the main stay and prop of our credit—as the perennial source which supplies our annually-growing exertions—as that sacred reserve which no momentary temptation, in the apparent extremity of our fortunes, could for one moment induce us to weaken, or impair. They have seen us in the hour of our severest trials, when the Bank stopped payment, when our fleets mutinied, when rebellion raged in a sister kingdom, carrying additional aid to that fund, instead of breaking in upon it. They know what we have done for that fund, and, as is often the case with those who are mere spectators of the blessings which others uninterruptedly, and for that reason almost unconsciously, enjoy, they also know, perhaps, better than ourselves, what it has done for us. If I wished to illustrate what I believe to be the general feeling of the continent respecting our sinking fund, I could not do so more forcibly perhaps, than by stating, that in France a sinking fund has been established upon the principles of our sinking fund; and established by whom? By Buonaparté himself; that great despoiler of the civilized world; that wholesale plunderer of the accumulations of peaceable industry: by Buonaparté, who thinks that the best system of finance is in the success of his sword; who acts as if the whole science of political òconomy consisted in the transfer of his subjects from productive to unproductive pursuits. That the sinking fund of France is merely a delusion, I perfectly believe. But it has been justly said, that "hypocrisy is the homage which vice is forced to pay to virtue;" and there cannot be a clearer proof of the opinion sincerely entertained of the sinking fund of England, than this attempt to delude the people of the continent by a pretended imitation of it.

If my right hon. friend, therefore, has been induced to adopt this measure, as one likely to overawe the enemy into moderation, I am afraid it will have a very different tendency. If, from any circum- stances, he thinks that peace may soon be attained; why unnecessarily weaken confidence at home, and revive in the breast of Buonaparté those vain hopes of wearing out our resources, which adversity, though it may not have extinguished them, has probably in some degree subdued? If war is likely to continue, why begin upon a system, which, if pushed to its utmost, may at last drive us to the necessity of signing a precipitate and disadvantageous peace?

This, it is true, is not the first time that we have had recourse to expedients widely departing from the ordinary and legitimate system of adding to our income by permanent taxes, in proportion to the increase of permanent charge created by the loan of the year. In 1807, an expectation was held out to the people that no new taxes should be imposed for three years. Accordingly, the loan of that year was assigned upon the war-taxes. In 1808, the falling in of the short annuities, and an advance by the Bank of three millions without interest, enabled parliament to meet the charge of the small loan required for that year, without materially breaking in upon the assurance that taxation should be suspended for three years. In 1809, the charge of the loan was thrown upon the war-taxes. This measure was strongly objected to; and the ground of its defence, as argued by myself and others, was, not the general policy of the measure, but its particular expediency, and for that year only, as necessary to complete the term of the respite from taxation promised in the year 1807. The war-taxes mortgaged for the charge of this loan amounted to one million. It is obvious, that the effect of this mortgage was of course to diminish your disposable revenue, and to increase your loan to the same amount in that and every subsequent year. If, instead of the war taxes, the million be taken from the sinking fund, a difference to that amount is created between the sum borrowed and the sum redeemed. In both cases, the effect for the first year, with respect to the public credit and the accumulation of debt, is the same; but prospectively that credit will be injured in an infinitely greater degree, by the deduction of a million from the sinking fund; because this million would have continued to improve and accumulate at compound interest for the reduction of debt; which of course is not the case with the million of war-taxes.

Carrying along with us these considerations, and recollecting that the measure of 1809 dipped into the war-taxes for one year, and for one million only; let us see what were the sentiments of the highest financial authorities upon this measure.

The first great authority to which I must request the attention of the Committee, and from which, as well from its great excellence, as from the peculiar respect to which it is now entitled from this House, I shall borrow very copiously, is that of my right hon. friend himself. He thought it his duty, at the close of the session of 1809, to move a series of Resolutions of Finance. In the course of the following summer, he did himself much honour, and the country much service, by carefully revising and publishing the substance of his observations on that occasion.^* The extracts from that publication, which I am now about to read to the Committee, will, I am sure, be, to every gentleman, the strongest inducement carefully to peruse the whole.

In the first part of that publication, my right hon. friend has given a very interesting narrative of the bold and manly measures adopted by lord Sidmouth upon the renewal of the war in 1803, for raising a large disposable revenue within the year. As my right hon. friend must have had a principal share in maturing and bringing forward those measures, he is well entitled to participate in the just credit which they reflect upon that administration. My right hon. friend closes his remarks on that part of his subject in the following terms: "In the statement of his (lord Sidmouth's) last budget, he strongly urged the importance of adhering to the same system by an annual addition of at least one million to the war-taxes, till the object of equalizing the income and the expenditure of the country should be obtained. He knew that when this great point was attained, the continual accumulation of the sinking fund would speedily afford means of relief to the public, which could not be employed either with justice to the stockholders, or safety to the state, so long as the accumulation of debt continued."—With justice to the stockholders, with safety to the state, so long as the accumulation of debt continued! Will the Committee forgive me for having detained them so long upon the injustice of the present proposal, when I might have satisfied them at once by the decided testimony of my right hon. friend? Will the country forgive me the expression of my apprehensions for its danger, when they are told from such high authority, that the sinking fund cannot be touched with safety to the state, so long as the accumulation of debt continues? Will my right hon. friend forgive me, if, in the name of that justice which he acknowledges to be due to the public creditor; if, in the name of that state, of whose safety he is one of the immediate and responsible guardians; if, in the name of his own fair fame, which is the merited and best reward of his public labours—I conjure him not to persist in a system, which, by anticipation, he has so justly condemned?.

^* See vol. 14, p. 1131.

I now proceed to another part of the publication, in which my right hon; friend expresses himself in these terms:

"Let me not, Sir, be misunderstood as the advocate of excessive or unlimited taxation. I am aware that all taxation is in itself an evil, and I can conceive many circumstances under which I should think the Chancellor of the Exchequer had acted in the present instance with prudence and judgment.

"The first and most obvious of these would be a great and general impoverishment of the country. It might then happen (as in fact it did towards the close of the American war), that the imposition of new taxes would add nothing to the revenue, but only depress the produce of the old ones. But I would ask the right hon. gentleman, and every gentleman present, from whatever part of the country, where the symptoms of such impoverishment appear? Supposing, however, such a decay to exist, I say that the same necessity which contracts our means ought to limit our expences. Shall we be the richer for plunging deeper in debt? Will it increase our resources to consume those which yet remain?"

These are the questions which my right hon. friend put in 1809: I hope that he is now prepared to answer them.

He proceeds thus:—

"In another case of a very opposite kind I might think it advisable to abstain from further taxation—that of a very rapid improvement of the existing revenue. Did our resources appear to be increasing in a degree nearly commmensurate to our wants, I should be unwilling to endanger so prosperous a state of things by any interference, or to abridge the comforts of the public by any charge which might be safely avoided or deferred. But though I am convinced that the national wealth is progressively increasing, I fear we are far from such a state of things. The revenue has of late appeared rather to decline than to increase."

I would just ask my right hon. friend whether this remark does not exactly apply to the present state of the revenue.

"Another case in which I might approve of the course which has been pursued is that of a prospect of immediate peace, or of a great reduction of expence from any other cause. But of all suppositions this seems at present the most extravagant. The war rages more extensively and with greater exasperation than ever, and every day seems to bring forward some fresh obstacle to accommodation, and sortie new call for our exertions.

"But leaving to the defenders of this measure to point out such circumstances as may, in their opinion, justify it, I shall proceed to state a few of the numerous objections which induced me to condemn it.

"In the first place, it is a weak and delusive resource, which will be speedily exhausted.

A second objection to this diversion of the war-taxes from the purposes for which they were originally granted by parliament, is, the continual and progressive increase it must occasion in the difficulty of raising the supplies. As the amount of the loan must annually be augmented by a sum equal to the war-taxes which have been appropriated both by that, and all preceding loans, they would be most rapidly consumed, by a continual accumulation of compound interest; and when it shall become unavoidable to seek for fresh funds for these augmented loans, where will they be found, and in what state of credit will these loans be raised? If the right hon. gentleman thinks that the people, having been indulged with a respite from further taxation, will return to it more readily, he is greatly mistaken. Having once been told by authority, that further burdens were either intolerable or unnecessary, they will readily listen to those who will never be wanting to tell them the same thing again; and they will be disposed to countenance wild plans of retrenchment, and chimerical schemes of finance."

If the Committee will only substitute the words sinking fund for war-taxes, through the whole of this paragraph, I have no other alteration to offer either in the language Or in the argument.

"Another most important objection occurs when we consider the establishment which it will probably be necessary to maintain whenever peace may be concluded.

"It is an objection not less important, though of a totally different nature from any of the preceding, that the system of finance pursued this year, has the strongest possible tendency to encourage prodigality in the public expenditure.

"It is no less true in public than in private economy, that what is easily acquired, is often needlessly spent. It is also the natural bias of every department, and may even proceed from a laudable though inconsiderate zeal for the public service, to draw to itself as large a portion as possible of the supplies. If this be not checked (as I fear at present it cannot be) by a firm and over-ruling controul at the Treasury, it naturally leads to an indefinite and wasteful expense. But the strongest stimulus to excite the Treasury to perform its duty by a vigilant restraint on the public expenditure is wanting, if supplies can be obtained without an immediate pressure on the people. The temptations which perpetually occur to a minister, of a loose and careless administration of the public purse, are constantly counteracted by the impending and painful task of taxation.

"It will be evident to every gentleman, that if the amount of the loan is reduced, the competition to obtain it will be increased, and the supply of capital in the market more abundant, compared with the demand, and the sum to be raised will consequently be obtained on more favourable terms. The principle of this saving is perhaps not less certain than a mathematical demonstration, but the extent of its operation can only be calculated on hypothetical data, and it may not therefore be a proper subject for a distinct Resolution of the House, Every gentleman will form his own supposition: I will just mention one Which seems to me supported by a strong analogy. In the year 1798, when Mr. Pitt first proposed his system of war-taxes, the loan was raised at an interest of above six per cent; In 1800, when they had been established two years, the interest of the loan but little exceeded four and a half per cent. Adding the one per cent. sinking fund to be provided on the capital created, the total saving amounted to about two per cent. on the whole sum raised both by loan and wartaxes.

"Such, Sir, have been the effects of the system which the Chancellor of the Exchequer has this year forsaken and impaired: a system sanctioned by general approbation, and proved by experience to be solid, wise, and economical. It has indeed required many sacrifices, and may require more: but it is a most dangerous delusion, to expect to perform great achievements without making great exertions. If we cannot reduce our expences to our income, we must raise our income in proportion to our expences. I am willing to give credit to the right hon. gentleman for readiness to effect every practicable and prudent retrenchment; and I trust still more to the disposition of parliament and of the public to enforce it. But what more is wanting, and much more, I fear, must be wanting, we must be prepared to furnish; and it has been my wish, in what I have said, to strengthen the hands of government (so far as my arguments or opinions could have any force), and to facilitate its resuming the wise, the secure, and honourable course hitherto pursued."

Let us now see how this measure of withdrawing a million from the war-taxes was viewed by other great authorities.

In the Journals of the House of Lords I find a Protest^* against the measure, to which the first signature is that of lord Sidmouth. The name of lords Grenville and Carrington are also subscribed to the same document, in which I find, among others, the following objections:

"Because the present measure is subversive of the principles on which the sinking funds and war-taxes have been successively established and augmented—principles invariably adhered to under every change of men and measures during the last 23 years, and now first abandoned.

"Because the system, of which this measure is, we fear, the commencement, will rapidly absorb all the extraordinary resources provided by the wisdom of parliament to meet the exigencies of war; and will, within a very few years, plunge this country into financial difficulties, such as have never yet been apprehended even by those who have thought most unfavourably of the resources of the country."

^* See vol. 14, p. 987

In the month of July 1812, we find my right hon. friend (then, as now, Chancellor of the Exchequer) stating to this House, that "he should probably feel it necessary to prepare some plan, whatever it might be, for the more effectual support of public credit. What particularly occurred to him would be to make some addition to the sinking fund for whatever portion of the loan might exceed the amount of the sum to be redeemed within the year."

My right hon. friend proposes to make this addition indeed; but in what manner? By taking from the sinking fund, as it now exists, not only this addition, but also the one per cent. for the other part of the loan, and all the charge of interest for the whole.

To the authority of my right hon. friend, at least up to the present moment, for strengthening, instead of impairing the sinking fund; to that of lord Sidmonth and of lord Grenville, I must add the greatest authority of all, that of Mr. Pitt I can take upon me to assure the Committee, in the most confident manner, that it was the strong leaning of his mind, I might almost say his fixed intention, had he lived to direct the finances of the country for another year, to impose not only the taxes that might be necessary to meet the charge of the loan of that year, but as many more as he thought the country could bear without too great or too sudden a pressure upon its resources. All the surplus of such taxes, beyond the interest of the loan, he intended to apply as an immediate voluntary aid to the sinking fund, to be gradually withdrawn for the charge of future loans, if for that purpose any part of it, or the whole, should, in future years, be required.

My right hon. friend, and others who so strongly condemned the subtraction of a single million from the war-taxes in 1809, will not contend that the accumulation of debt, or the state of public credit, or the amount of the loan, compared to the sinking fund, was such as to render hazardous at that period what is comparatively safe at present. In that year the three per cents were at 68; they are now at 59. In that year the loan was 17 millions, and the sinking fund about 10 millions. For the present year the loan, I much fear, will not be short of 30 millions on account of England only, and the sinking fund less than 14 millions.

It cannot be imputed to my right hon. friend, that, in enumerating all the virtues of his plan, he ever mentioned economy as one of its recommendations. He well knew that he could not, although it is an inference in its favour which some persons have derived from a superficial examination of his Tables. My right hon. friend, I am sure, would be the last man to countenance such an inference. He has most successfully shown, on various occasions, that true economy consists in a course altogether opposite to that which he now adopts. He has reduced to figures, and recorded in resolutions, the proofs of that economy, demonstrating by the most irrefragable evidence, that to accumulate debt, in the manner and to the extent now proposed by this plan, is the very reverse of good management. He has shown you what you have actually saved by raising a large portion of your supplies within the year. I will not fatigue the Committee by a detailed reference to these proofs. They will find them in the speeches of my right hon. friend, to which I have already referred.

If our resources are not infinite and absolutely inexhaustible; if we have already dipped deep into those resources; surely it the more becomes us well to consider, whether the remainder are not now in danger of being dissipated with unnecessary celerity? Whether, by mortgaging now, at usurious interest, that income which we had wisely set aside for the discharge of existing incumbrances, we shall be more at our ease some few years hence? Whether, by accumulating debt now, upon terms which may oblige us to redeem it at an expence nearly double hereafter, we are compensated for the immediate pressure of usurious interest, by the prospect of future relief? Let gentlemen look round the world, and show me a state once in difficulty; let them look among their acquaintance, and show me an individual, once involved, that has ever been brought round and saved by these, or such-like expedients. If they still doubt the delusion of such a system, one example drawn from the financial affairs of this country, and brought before them, not by a comparison of distant transactions, but confined to the three last years of the present war, will, perhaps more forcibly than any more general view, open their eyes to the wasteful consequences of the proposed plan.

Let us compare the terms of the loan of 1810 with the terms of the loan of 1812, both in the three per cents. In 1810, for every 100l. sterling the contractors received 140l. 7s. 6d. three per cent. stock: in 1812, for every 100l. sterling they received 176l. three per cent. stock. A loan of 28 millions, the amount assumed by my right hon. friend to be hereafter annually raised, would, if negociated upon the terms of 1812, add to the amount of debt in each year 10,000,000l. of stock, and to the permanent annual charge 404,000l. (money value), more than if negociated upon the terms of 1810. And who shall say that, under this plan, future loans will be raised even on the terms of 1812? Neither is this all: in 1810 the exchequer bills were circulated at an interest of 3d. per day for every 100l. The interest is now 3½d. This is another increase of annual charge, exceeding 200,000l. Let gentlemen calculate what these differences only would amount to in the next four years, both in increased debt and in increased permanent charge; and then they will have some faint idea of the œconomy of a plan, the tendency of which, it is admitted, is to lower the price of the funds. On the other hand, there can be very little doubt, if the sinking fund were left to its natural growth for those four years (with the same amount of loan), that the funds would revert to the more favourable prices of the year 1810.

Another consideration of œceconomy is, that the reduction of interest upon the five and four per cent. stocks, which has always been looked to as one of the advantages that would speedily be realized by the sinking fund on the restoration of peace, and which would produce a saving of nearly three millions a year, must necessarily be retarded by the effects of the proposed system.

I am aware that it may be said to me;—"If, after all, you are of opinion that this measure is so doubtful with respect to public faith, in policy so hazardous, and in economy so expensive, what is it that you would recommend?" My general answer is, that it forms no part of the duty of an individual member of parliament, neither holding a responsible situation, nor possessing those means of informing and maturing his judgment which properly belong to office, to go beyond the sphere of his duty. That duty I have discharged, by stating my conscientious opinion upon the present plan. It certainly is not necessary, and it may not be altogether prudent, for me to go further.

But knowing, as I do, all the difficulties of ray right hon. friend's situation, and anxious, as I am, to satisfy him and the Committee, that it is not my disposition to add to those difficulties, I am prepared to state what has occurred to me for obviating the fundamental objection which I feel to the intended measure in its present shape, if the patience of the Committee, which I have already so much abused, should incline them not to refuse this further indulgence.

My right hon. friend stated to this committee, on a former occasion, that during war, but especially during the present war, the country possessed means of taxation, which, from their nature, could not be permanently continued in time of peace. In this I agree with my right hon. friend, thinking with him, that the war-taxes, productive as they already are, might however be considerably augmented. That the permanent taxes do not admit of the same latitude, is an opinion which of late years I have more than once declared in this House. I also agree with my right hon. friend, that an alteration will, at some time hereafter, be requisite in the Sinking Fund Act of 1802, so as to render more equal, and to extend over a larger portion of time, that relief which the public will derive from the extinction of the debt contracted prior to that period. I subscribe to the opinion, that to have devolved the whole of that relief upon one year, is an unwise departure from the original Acts of 1786 and 1792; but, on the other hand, I contend, in the first place, that no alteration is immediately necessary; and 2dly, that, whenever it is attempted, the object which we ought to have principally in view should be, both as to sinking fund and debt, to revert, as much as possible, to the salutary provisions of those original Acts.

The simultaneous extinction of a very large portion of debt, and an accumulation of sinking fund, that would become unnecessarily large for some years before that event shall take place, are the two inconveniences against which my right hon. friend wishes now to provide. In order of time, the too great accumulation of the sinking fund is the first of these evils: it must necessarily precede the other. But, surely, this is not an inconvenience which is either now pressing upon us, or is likely to arise, so long as we are compelled to borrow far beyond what the sinking fund can redeem within the year. On the one hand, therefore, it cannot be said that any such evil now exists to call for our immediate interference: on the other, I have the clear and recorded opinion; of my right hon. friend, that the sinking fund cannot be touched, "either with justice to the stockholder, or safety to the state, so long as the accumulation of debt continues."

Let us then examine, whether, upon the grounds which I have stated, my right hon. friend's plan cannot be so amended as to bring it within those limits of justice and safety, which he has so accurately defined. For that purpose we must find the means of avoiding the necessity of impairing the efficacy of the sinking fund at the present moment.

Now my right hon. friend is already provided with taxes to the amount of 1,130,000l. for the present year. He wants about 700,000l. more to meet the estimated charge. The course I should take would be in substance this:—First, I would charge these 700,000l. permanently upon the income of the sinking fund; but secondly, I would repay to the sinking fund, within the year, and out of the produce of the war taxes, a sum equal to the charge so thrown upon it in the first instance: and thirdly, I would impose new war-taxes to that amount, unless upon examination it should turn out (as I believe it would) that by the improvements already made, or which might be made, in the assessment and collection of the property-tax, an increase in its produce to the full amount required might be expected in the present year. If such an increase may be reckoned upon, no new taxes would be necessary beyond those which the Chancellor of the Exchequer is actually prepared to impose.

If the war should continue, I should in like manner charge the interest of the loan of the next year upon the sinking fund; replacing to the sinking fund the amount of the sum so charged out of the produce of the war-taxes, and increasing those taxes by an addition equivalent to the amount so transferred to the sinking fund.

The advantages of this mode of proceeding, as compared with that of my right hon. friend, would be these:—first, you would avoid breaking in upon the efficacy of your sinking fund during the war: secondly, by charging upon that fund the interest of the loans, you give to the contractors at once that permanent security which the war-taxes, from their nature, do not afford: thirdly, you maintain the disposable revenue at its present amount: fourthly, by the growth of the sinking fund, you would revive and sustain public credit; (raising the loans in consequence upon far cheaper terms:) and fifthly, the unredeemed debt would be smaller by many millions at the close of the war.

I should not object to mortgage, in this manner, the sinking fund to the amount in the whole required by my right hon. friend for the next four years, if the continuance of the war should render such a sacrifice necessary.

If at the end of the four years, or sooner, peace should be restored, we should then be in a situation to revise the Act of 1802, without injury to the public interest, or to the public creditor; but, even then, I should think it improvident to interfere too hastily with the operations of the sinking fund. I would still continue to repay to that fund, by a portion of the war-taxes, to be continued specifically for that purpose, the full amount charged upon it on account of loans, until the state of public credit should admit of a reduction of interest on the fire per cent. stock.

When we shall not only have ceased to make any addition to our existing debt, but shall further be enabled to reduce the interest on a large portion of that debt; then, I should say, the time would be arrived, when, without prejudice to the state, or injury to individuals, you might leave the charge of those loans upon the sinking fund, unreplaced by any further repayment from other sources.

The reduction of the five per cent. to a four per cent. stock would be an advantage of no small consideration, which is at least postponed by the plan of my right hon. friend. The saving by this reduction of interest, when it takes place, will be more than one million a year; a saving either to be made over to the sinking fund, or to be appropriated to the public service, as may appear most expedient, under all the circumstances of the country, at the time when it may take place.

In 1819, we should have the further aid of the imperial annuities (230,000l. a year), which will then fall in; and in 1821, the charge of the loan of 1807, amounting to l,200,000l. a year, will be set free. Without anticipating the duty of a future parliament, as to what may be the most proper application of these sums; it is obvious that these resources, from the proximity of their falling in, might, in the event of peace, afford further facilities in the execution of the suggestion of which I am now stating only a very general outline.

Let us suppose that we act upon the principle of this suggestion, and that peace is not restored sooner than the end of the year 1816. We should, by that time, have mortgaged the sinking fund to the amount of about six millions. Its whole amount applicable to the reduction of debt, in 1816, would be upwards of 18 millions. It is not over-sanguine to assume, that by the effect of the continuance of such a sinking fund, with its annual improvement for two years after a peace, the interest on the five per cent. stock might be reduced to four per cent. On the other hand, it cannot be denied by those who are acquainted with the nature of our war-taxes, that several of the most productive (independent of the property-tax, which, in a more or less proportion, must, I think, be continued, at least for some years, as the foundation of our peace establishment) might without difficulty be maintained for two years after the restoration of peace; say till the close of 1818. The sinking fund would then have reached nearly to twenty millions. By deducting the aid of the war-taxes, it would, in the year 1819, be reduced to somewhat above fourteen millions, or fifteen, if the saving by the contemporaneous reduction of the five per cents should be allotted to it. From that period, so long as peace should continue, we should have annually the gratifying task to perform, of remitting to the people more or less of their burdens; and we might look back upon our past difficulties with the cheering recollection, that a firm adherence to the principles laid down by Mr. Pitt in 1792 had enabled us to provide for all the exigencies of this tremendous and protracted contest, without for a moment swerving from that strict good faith which at once raises our character and doubles our resources; at once enables us, by exertions unparalleled in our history, to uphold the glory of our arms in every quarter of the world, and to find in the public credit at home the means by which such exertions are to be sustained.

I will not weary the committee by going into further details of the alteration which I could wish to see introduced into the plan of my right hon. friend. If the prin- ciple of that alteration should once be admitted by him, I am sure that he would be infinitely more competent to direct its application than myself. By adopting it, he would remove the only insuperable objection which I feel to his plan; that which arises from its directly breaking in upon the sinking fund, and diminishing its effective amount and operation, under circumstances, which, according to my right hon. friend's own words, more than once quoted by me, render such interference neither consistent "with justice to the stockholder, nor with safety to the state."

confessed that the speech of his right hon. friend who had just concluded, had abounded with mistakes so great, and with misconceptions so radical, that he almost despaired of convincing the committee of the expediency of the plan he had proposed. He was the more confirmed in that fear, because his right hon. friend, who had all the assistance of official information, had totally misunderstood his plan, and the principles on which it was founded; his right hon. friend would have taken a fairer view of that plan, if he had considered it as the means by which they were to be enabled on that day to enter upon the enjoyment of those provisions which had so long been in a state of preparation. The question was, whether the time was really come when the nation was to avail itself of the advantages which had been prepared. His right hon. friend was much mistaken when he said that the plan which had been proposed would operate in a manner prejudicial to the interests of the stockholder. He could never have reconciled himself to the plan, if it could have such an effect. His right hon. friend had not mentioned what he (the Chancellor of the Exchequer) believed was generally understood, that a departure from the Act of 1802 must at some time necessarily take place. This was that which must occur, and therefore the question now before them was, in a great measure, whether or not the present was the proper time for departing from it? He was far from wishing to put the sinking fund down. Instead of doing this, he hoped the proceeding of that night would place it on a more solid foundation than it ever had been, and make it more than ever a glorious monument to the memory of Mr. Pitt. He admitted that, for all the loans contracted since the Act of 1792 was passed, the creditors had a right to the full benefit of the provisions of that act; but he contended it was in no degree infringed by the resolutions under consideration. The plan, of which they were a part, went to annihilate every debt, contracted not only within the period of 45 years, but within a shorter period than that within which its liquidation was promised by the existing system. He had thought it probable his right hon. friend would have pointed out some case in which this could not be made clear, but as his industry had not discovered an instance of this, he (the Chancellor of the Exchequer) could not but think he had a right to suppose that such could not be found. This brought to his recollection what appeared to him a most extraordinary objection to the plan which had been urged by the right hon. gentleman. He had objected to it, that its principle was to take the sinking fund, and after reserving of it so much as would serve to extinguish the debt in 45 years, to apply the remainder to the public service. This he declared was no part of the present plan, though he contended, that by the Act of 1792, to vary the mode of the redemption of the debt to the principle of extinguishing each successive loan within the period of 45 years, was stedfastly kept in view. Nothing, however, in the present plan, brought this question now before the House, as the plan which he had suggested went to discharge the debt incurred by each loan within a shorter period even than that within which, by the existing system, it could be extinguished. That it was the opinion of Mr. Pitt that it ought to rest with parliament, to purchase, in the present mode of redeeming the public debt without variation, or to vary it according to circumstances, was clear from the proposition brought forward in that House in 1803, with the concurrence, and at the suggestion of that distinguished statesman.

The right hon. gentleman had said, that if the sinking fund's operation by compound interest were broken in upon at all, the one percent. which formed the sinking fund, might next be taken away. He strongly dissented from this opinion, and contended that the two cases were quite different. The mode of redeeming the debt might be varied, but the one per cent. could not be withheld or taken away. The several loans contracted were directed by the act to be paid off in regular succession. The only way to effect this, as all the loans were raised in a common stock, was to pay off a portion of the debt equal to the amount of some of the loans, and then to assume that such loans were discharged. The Act of 1803 clearly recognised the right of parliament to vary the mode of effecting the redemption of the debt. The great object of this plan had been stated by the right hon. gentleman, to postpone the charges which might now fall on the country for several years. He admitted this to be one of the objects he had in view, and he would own that he thought it one of no small importance. He hardly knew what could be more desirable, than to postpone those charges for 4 years, if this could be done without violating those great principles which ought ever to regulate their conduct. He would now suppose, that it could be proved to Buonaparté, that without departing from those principles of good faith which they had hitherto kept in view, they could prosecute the war with vigour for that period without imposing any new burthens on the people. He did not think Buonaparté would find much consolation in looking forward to the bankruptcies which might afterwards take place. Great advantages might result from such a measure to this country. Within the space of four years the face of Europe might be essentially changed; and if ever there was a period at which great sacrifices could be made for a time, if they could be made without a violation of great constitutional principles, this was the period which called for them. The right hon. gentleman had laid great stress on the sentiments which he had delivered on former occasions. He had no disposition to deny what he had then stated, nor to explain his statements away. Content to take them as they stood, they were what he thought was right at the time, and in nothing were they inconsistent with the principles he maintained now. The Committee would see, that a provision was made in the plan for a long series of years. That great expences would long be felt, he could not but expect; but that the expenditure of the country would very long remain what it was at present, he had no right to take for granted.

The right hon. gentleman had taken an advantage of him in referring to his statements, and supposed the case of the war continuing for 25 years. If war should continue the scourge of Europe for 25 years longer, great sacrifices would certainly be necessary on the part of this country. In that case, we should see nearly 45 years (with little interruption) of war and desolation, which was a scene which he believed the history of the world had never yet presented. If such a calamity should occur, heavy additional taxes were certainly the least we could expect. The right hon. gentleman had supposed in his calculations that the debt created had all been created in the 3 per cents. He could not admit any such supposition. On looking back to the last 5 years, 1808, 9 10, 11, and 12, the total amount of stock created in the 3 per cents. was 53½ millions out of 118 millions. He must protest against the inference to be drawn from the supposition of the right hon. gentleman, and against the assumption, that it was indifferent in what funds the stock was created. There would be a very great difference in speaking of a thousand millions in one fund and a thousand millions in another. He felt satisfaction at finding that his right hon. friend had not been able to discover any inaccuracy in his tables. In the additional tables, however, which had been made out for the right hon. gentleman, there was an error, which, though not of importance in a calculation for a long series of years, was so when applied for a single year. It assumed the sinking fund to be equal in amount to each fund created. A moment's consideration would prove this to be erroneous. The effect of the new plan would be to increase the sinking fund for the first year. In the first six quarters, he calculated it would be enlarged by 400,000l. beyond what it would be by the present system.

Having stated the periods at which the payments were to be made to the Sinking Fund, he proceeded to controvert the statement that the taxes would be greatly increased from the year 1830. From the falling in of the consolidated sinking fund at that period, it was thought no additional taxes would be necessary, in the supposition of war continuing for a considerable time. The question might be brought into a very narrow compass. It was this—shall we pay taxes now, or risk being called upon to pay taxes in 1830? In addition to that feeling, which made us naturally disposed to put off the evil for the present, when it could be done without danger, there was this consideration in favour of the plan: we knew the taxes were wanted now; from a change of circumstances they might not be called for in 1830. The right hon. gentleman had stated Mr. Addington to have been favourable, in 1803, to a plan which Mr. Pitt had, when dying, mentioned as that which he had had in contemplation; namely, a plan to increase the war taxes. This was afterwards carried into effect by the present marquis of Lansdowne and lord Grenville. In speaking on this subject, the right hon. gentleman had not paid sufficient attention to circumstances. Great efforts had been made in 1807 to equalize the public burdens and the public expenditure, and this for a time had been very successful. It had ceased to be so, and after such an effort so recenlty made, it was for the House to determine whether it would be prudent to attempt to carry that plan any farther.

In his judgment the present plan afforded a probable prospect of affording the country much benefit, without exposing it to those inconveniences which were anticipated. The right hon. gentleman did not do it justice, when he spoke of it as being founded on a calculation which extended to but four years; he would find it extended to 14; and he (the Chancellor of the Exchequer) would have thought very little of its provisions had they not been of a more permanent nature, if they had not been framed with a view to a change of circumstances, as well as to give the sinking fund a steady operation. The advantage which it offered in preventing too rapid a diminution of the rate of interest, was one which, during the war, ought not to be lost sight of. The advantage, too, which it would hereafter give, in furnishing 100 millions in time of peace, as a fund against the return of hostilities, was one of great moment. This would place an instrument of force in the hands of parliament, which might lead to the most important results. He hardly knew of any thing more desirable than to have such a fund so treasured up, if it could be formed without a great public inconvenience. He was of opinion, that even advantages might be bought too dearly; and any advantages which this plan might offer, would, in his opinion, be too dearly purchased, if they could not be gained without a deviation from justice towards the public creditor. The plan, however, he repeated, was not founded in injustice, nor in any respect an infringement of those laws under which they believed themselves secure. It might be objected by some, that keeping in reserve a large fund to meet the expences of a new war, might be likely to make the government of this country arrogant and ambitious, and therefore have a tendency unnecessarily to plunge us in new contests. On this subject he would say, from long experience and observations, that it would be better for our neighbours to depend on the moderation of this country, than for this country to depend on theirs. Me should not think the plan objectionable on this account. If the sums treasured up, were misapplied by the arrogant or ambitious conduct of any government, the blame must fall on the heads of those who misused it, and not on those who put it into their hands for purposes of defence. They did their duty in furnishing the means of preserving the greatness and glory of the country, though those means might be used for the purposes of ambition, rapine, and desolation. He passed over the minute details connected with the subject, as he wished this plan to be considered as a great measure of national policy. The landed proprietors he thought it would relieve from charges which would press heavy upon them at this time, if some such measure were not attempted: to those engaged in trade he looked for support from the advantages it was calculated to afford them; and to the stock-holders, whom it more immediately affected than any other class in the community, he trusted it would be satisfactory, as it gave them greater benefit than the other classes to which he had alluded. He now returned to the question, as to the propriety of bringing forward this measure at the present time. The present period, he thought, offered a favourable opportunity for its being acted upon, the whole of the funded debt of 1786, amounting to near 240,000,000l. having been liquidated by the operation of the one per cent. sinking fund. The public had a right to receive the earliest possible benefit from the operation of that fund, for the great exertions they had made to pay off the debt. He repeated the present plan was no infringement of the Act of 1792, and quoted the provisions of that Act to support this assertion. Of all the objections that had been made to his plan, he had heard none, except such as arose from misconceptions, which he had not before fully and deliberately considered. What weight they would have with the Committee it was not for him to say, but in his mind they were not to be compared with the advantages which the plan presented. With every disposition to give the arguments of his opponents all the importance which belonged to them, he could not think they at all made against his plan. The benefits which would result from it were immediate and certain, the inconveniences apprehended uncertain and remote.

said he entertained much the same view of this question as his hon. friend (Mr. Huskisson), the impression of whose admirable statement on the House, he trusted he should not weaken by any thing which he might take the liberty of urging. When the right hon. the Chancellor of the Exchequer first submitted his plan to the House, he, in common with others, was fearful that, when it was understood, the sinking fund, which had at all times been considered sacred, was about to be touched, a panic would immediately arise in the public mind. This sensation he lent his exertions to suppress, and was happy to find that persons without doors had met the subject without those alarms which he had anticipated. From the strong desire he had entertained that no panic should take place out of doors at an idea of an attack upon the sinking fund, he did, on the first bringing forward of the present Resolutions, state that, whatever might be the future operation of the measure, there was no occasion for indulging any immediate alarm on account of it. Lest what he had said on that occasion however should be construed into an approbation of the present measure, he found himself impelled in this early stage of the proceeding, to set himself right in this respect with the House and the public. What he had then said, in disapprobation of the plan, he was now desirous of renewing—convinced, as he was, that any infringement on the sinking fund was not alone of deep importance to the country, but likely to be attended with the most serious effects. He entreated gentlemen would not be led away with the plausible hope that they would, in reality, he relieved from that burthen of taxes which had been alluded to. Any person who had read the speech which the right hon. the Chancellor of the Exchequer had delivered to the House, and had studied it with coolness and deliberation, must have been convinced, that the plan which had been proposed, would ultimately, if parliament did not interpose to put an end to its existence, bring ruin upon the country. The plan of his right hon. friend the Chancellor of the Exchequer, whatever he might say to the contrary, was the first which had gone the length of touching the sinking fund, notwithstanding it had all along been predicted that it would be broke in upon the moment it was worth touching. We had seen astonishing instances of financial distress, previous to the suspension of the payments in specie by the Bank; but notwithstanding the various distresses which the country had been reduced to, notwithstanding the stoppage of bank payments, and the unparalleled failures that have taken place in the commercial part of the country, the sinking fund had never been attempted to be touched till this year, and no such measure as the present had ever been seriously thought of. Let it not be supposed, however, that the present measure could have the effect of relieving the public from burdens and taxes. It was impossible for any gentleman, or for the public, not to see that the system, if to be persevered in, must lead, he should not say to ruin, for that the House would prevent; but, that it could not ultimately prevent from falling on them burdens which they must bear; and that the transposition of figures from one account to another could not prevent this. He should consider, first, Whether this was or was not a violation of good faith with the public creditor? 2ndly, If the measure could be of any public advantage? In considering the first of these questions, it was not enough to look if there was any possibility of finding an excuse for making this infringement; but whether there was any law by which this fund could at all be touched. The general sense of the public was that the sinking fund is pledged by parliament as a security to the stockholders, and they depend on the justice and good faith of parliament to preserve to them that security; and if it appeared to the public that this sinking fund ought never to be touched, placing it in the light of a contract, the principle of honour ought to be to parliament what the principle of justice is to individuals. If a fund so pledged as a security to another, were in a courts of equity, it would be beyond the power of the party pledging it, at all to interfere in the application of the produce of it; and, on this principle, the public having still within their power the direction of this fund pledged by them for particular purposes, the forge of ho- nour ought to be to them what the course of justice would be to a common individual! If the principle of touching the sinking fund was allowed this year, what guarantee had the public against some new propositon of a similar description hereafter? He should not enter into the merits of the measure in 1802, for the sake of inquiring if it went to violate the original purposes of the sinking fund; it Was sufficient for the purpose of the present argument, that such was not the intention of the Act of 1802, and that an equivalent was there given. Therefore, though parliament thought proper there to regulate the application of the proceeds of part of the sinking fund, that afforded no argument why they should now regulate it again, and in a very different sense. So much as to the faith pledged to the public creditor. Then, as to the payment of the whole debt within 45 years, the statement of the honourable gentleman (Mr. Huskisson) on that point, it was impossible for him to improve. The right hon. the Chancellor of the Exchequer gave the House and the country a new sinking fund; but on the same principle on which he now touched the old sinking fund, might he come next year and take away whatever part of the additional sinking fund he thought proper. The next question was if this was the proper time for such a measure as the present: the Chancellor of the Exchequer said it was, but he differed from him in that opinion.—The right hon. gentleman stated, and truly, that the state of the sinking fund would at some time or another, require regulation and allotment. But it seemed rather a poor excuse, because something was wanted in the year 1813, to select that as the year for regulating a fund which might require some regulation in the year 1830. But the right hon. gentleman saw something in the present time peculiarly favourable to this measure. It was clear that up to the year 1809, nothing had occurred so peculiarly favourable to an encroachment on the sinking fund, as to render such a measure at all advisable. If he (Mr. Baring) therefore, could shew that 1809 was infinitely more favourable for the carrying into execution such a measure than the present moment, the right hon. gentleman's argument on this head would fall to the ground. From what fund any sum of money for the service of the year was taken was a mere matter of book-keeping at the Treasury; but the real question was what did the country spend, and what funds had she to spend, throwing all her funds into one common stock, and placing her expenditure against her income? Mr. Perceval's proposition in the year 1809 was to break in upon taxes set aside for a particular purpose, only for one year; but such a measure was then deemed inexpedient. Were things, then, so much altered for the better, that what could not then be done for one year, was now justifiable for a number of years? To prove this, the right hon. gentleman must shew that things were in an infinitely more favourable situation now than they were then. To shew that this was far from being the case, he (Mr. Baring) should only state, that in 1809 the surplus of the consolidated fund was upwards of seven millions, with a great difference of expenditure. He was afraid he could not say that for the present year it amounted to one million, so that he might state that this surplus was now absolutely reduced to nothing. The difference between our expences in the year 1809 and those of the present year, he was certain, he did not overstate at an increase of 10 millions, thereby creating a difference as between our expenditure for 1809, and the present year, and our funds to meet that increased expenditure, to the amount of upwards of 17 millions. In the year 1809 the 3 per cents. were at 66½ at present they were so low as 59. These were the changes of circumstances between the year 1809 and the present year: and after it had been found that in the year 1809 an operation similar to the present could not be borne even for a single year, he left it to the country to say, if they were prepared to indulge in these golden dreams of the Chancellor of the Exchequer, and for four years together, to lie down under this sort of expenditure? On whatever fund the money was raised still the question remained, what was the sum which was actually spent. In the year 1807 the excess of the loan unprovided for was 3,800,000l. This year it would be fourteen millions and a half, supposing that the loan for the year would be twenty-eight millions. In the year 1807 there was a pledge, that if the loan exceeded the sum mentioned, parliament should provide for the excess by taxes. Now, however, by the plan proposed, whatever excess arose, was to be laid on the sinking fund. The hon. gentleman (Mr. Huskisson) had told the difference between the rate of borrowing the loan for this year and for the year 1809, and that it would occasion a difference to the amount of ten millions of stock. He (Mr. Baring) declared it to be impossible that we could go on borrowing at this rate. Taking the last nine years, the sum borrowed for the service of the country was, on an average, 9½ millions a year; and for the next nine years, the average would be 25½ millions a year. This fact alone, he contended, must have a strong impression on the mind of the public creditor. If we were for the next nine years to borrow 25½ millions a year above what we were to pay off, with a decreasing sinking fund, whereas for the last nine years, we had only borrowed, on an average, 9½ millions above what we were to pay off, and that, too, with an increasing sinking fund:—was that, he asked, to have no effect on the stockholder? It was impossible, he contended, that this plan should continue without bringing the 3 per cents. to 50! The right hon. gentleman held out as an inducement that the country would be relieved from taxes; but in the year 1809, he opposed such a plan; and what had occurred since to make it necessary to give relief from taxation this year? It was said, that at present the country wanted rest. But it ought to be remembered, that it had suffered no serious taxation since 1806; there had not been any serious tax since 1806, until last year; altogether they did not amount to 800,000l.; and on the last year the only heavy tax was that on leather. If it were necessary this year to give relief from taxes, it must be because the country was considered as unable to bear taxes at any time. It was to be considered, that except the ad valorem taxes, all taxes had, from the great depreciation in the currency, really declined in value. There were even more and better reasons for the proposed respite in 1809 than at present. No essential relief would be afforded to the country by the respite, at least only a partial relief. To the funded property it was immaterial whether the taxes increased or the debt. By the monied man it would be felt, not in taxes, but in depreciated capital, There might be an increased amount of fictitious capital, and the holders of that might feel it; but it would not be felt by the holders of land, or of any real property, for these would increase in value also. It was then only the holder of nominal property who was most exposed to suffer. If taxes were laid on, the landed interest would find relief in the increased price of productions; but if the debt were increased, the burden war thrown entirely on the funded property, l-5th, as it was already stated, of the property of the country. But he was confident there was too much good sense and justice in the landed interest for them to wish to throw the burthen on the stockholders; for if the public credit were ruined, on them must fall the burthen. He hoped his right hon. friend would be induced to postpone his motion, and take the chance of political events till next year. The right hon. gentleman had stated that he must raise 1,100,000l. and that it would not be very difficult to raise the remainder; he would see that this was not an auspicious moment for his plan, when public credit was low and the revenue fallen off very considerably. But as it was the landed interest that would ultimately, in case of deficiency, have to pay, it was their interest to uphold the credit of the funded or monied interest.

said, if he thought the plan of his right hon. friend would tend to weigh down the sinking fund, or that national credit would sustain the slightest shock, he would be the last person living to give his sanction to its adoption.—He believed on the contrary that of the measures which offered themselves for our choice, this presented the greatest advantages, or perhaps, to speak more correctly, was the most free from inconvenience.—There were but three modes, by which we could meet the pecuniary exigencies of the year. By raising new permanent taxes—by extending or rendering permanent the war taxes, or, by some arrangement of the sinking fund, which would render either of the other modes unnecessary. He would shortly examine each. When he spoke of the difficulty of raising new permanent taxes, he confessed it excited in his mind more surprise that they had been carried so far, than that it was now found inexpedient to extend them further. He would state to the House the extraordinary progress of their increase. In 1786 the permanent taxes amounted to ten millions, in 1793, when the present war commenced, to fourteen millions, and now they had reached the enormous sum of between thirty five and thirty-six millions; to which was to be added war taxes of between twenty-two and twenty-three millions, making a total annual increase of war taxes and permanent taxes together, imposed from 1793 to the present time, of forty-four millions. In 1807, lord Henry Petty, for whom he entertained a very high respect, stated, that it would be most advisable to abstain from taxation, from the pressure which further taxes would create upon the people. Those who differed with that noble lord in the wisdom and policy of the financial plan which he then brought forward, of which he was one, at least agreed with him in one point—that it was expedient at that time to desist from taxation. What has taken place since that period? Not, as the hon. gentleman who preceded him had stated, that permanent taxes amounting to 800,000l. had been imposed, but that four millions of additional permanent taxes had been laid on, and more than two millions and a half of war taxes had been rendered permanent. If, then, it was thought wise to abstain from further permanent taxation at the period to which he referred, how much stronger did every consideration which then operated upon our minds now impel us to adopt that determination. If persons still doubted, an accurate examination of the produce of the permanent taxes for the last year would afford the strongest ground of conviction. He now came to the war taxes—he did not think they could prudently be carried further at this time. He thought that in 1807 the measure of rendering such of the war taxes permanent as would yield in time of peace as well as in war, was a better mode of raising the supplies than by adopting the plan of lord Henry Petty, and he had so stated his opinion at that time; but this measure had been adopted, we had since rendered permanent near three millions of the war taxes of customs and excise—we could not in prudence go further. The duty upon the tonnage of ships must be abolished upon every principle of sound policy upon the restoration of peace. The duty upon spirits must be lowered; in fact, there remained none of the war duties which would be rendered permanent with any certainty of their yielding in peace, except the property tax, and he had no difficulty of stating it as his decided opinion, that it would be more expedient to continue a part of this tax during peace, than to impose any new taxes, or to extend any other of the war taxes. (Hear, hear.) Under the improvements of his hon. friend the Chancellor of the Exchequer in its collection, this tax had much increased; he thought it capable of still further, improvement; and he expected from the amount he had seen of it, to find the revenue arising from this source progressively increasing; but when he considered the expence which would be occasioned by the winding up of such a war as the present, and particularly when he reflected upon the probable amount of our future peace establishment, he thought it would be as impolitic now to extend our system of war taxes as that of permanent taxes: and in a choice of inconveniences, which was perhaps the most just way of describing our situation, be was decidedly of opinion that the remaining mode which presented itself of raising the supplies by means of the sinking fund, was that which under all circumstances it was most advisable to adopt.

It had been said however by his hon. friend (Mr. Huskisson) that the adoption of the proposed plan would be a breach of faith to the stockholder—this he positively denied.—His hon. friend had argued this part of the subject with more ingenuity than soundness, and he had called to his aid the opinions of Mr. Pitt; he (Mr. Long) had at least as good and as frequent opportunities of knowing Mr. Pitt's opinions upon this subject as any person, and those opinions his hon. friend had mistaken, and therefore had mis-stated them. It was Mr. Pitt's decided opinion that if provision was made for paying off any public debt within 45 years, not from any arbitrary period that might be fixed, as had been contended for in the year 1807, but from the period of contracting each debt respectively, the public faith was kept with the stockholder, and the plan of his right hon. friend the Chancellor of the Exchequer provided the means of effecting completely this object. His hon. friend had argued at great length upon the Sinking Fund Act of 1792, but had passed very shortly over that of 1802—he had no doubt upon the construction of either, but if any doubt could even have existed respecting the Act of 1792, the 5th section? of the Act of 1802 removed it, and was in effect a complete answer to this part of his hon. friend's speech. [Mr. Long here read the 5th section of Act 42 Geo. 3, c. 71.] He defied his hon. friend to get over this enactment, which expressly provided that measures should be taken upon the creation of public debts so as that they should be redeemed within forty-five years from their creation—and this act was approved and supported by Mr. Pitt. The authority of Mr. Pitt was decidedly against his hon. friend; and as to the breach of faith, he was convinced that those who carefully examined this subject, would find that the attempt to fix such a stigma upon the present measure was unfounded and preposterous.

With respect to the plan of his hon. friend, offered in opposition to that we were then considering, he was unwilling to suppose he understood it, because he was unwilling to speak with disrespect of that which was suggested by him; but understanding it as he did, it appeared to him fraught with every objection, and particularly, with that very objection which had been made to the proposed plan. His hon. friend would begin by borrowing upon the sinking fund, what then became of his breach of faith to the stockholders? Oh! but he would throw the debt upon the war taxes now, and upon the sinking fund in time of peace: but if it is a breach of faith to borrow upon the sinking fund, it is as much so in time of peace as of war. Then he would impose new war taxes to make good the sum taken from the sinking fund. Upon what articles would he impose them? and who would lend money to the public upon the faith of war taxes only, from which the lender expects a permanent interest? For his hon. friend seemed always to forget that the lender of money looked quite as much to the certain and regular payment of the interest of his debt, as to the sinking fund for the ultimate extinction of it.

In this way it was said we are to go on till the year 1819, when 230,000l. a year, imperial annuities fall in, and till 1821 when 1,200,000l. of the loan of 1807 will be set free. Could his hon. friend believe that any person would be found to lend a guinea upon such a plan, if plan it could be called. He would not trust himself by characterising such a proposition, but he would only say that if this was the only one which was to be put in competition with that which the House had under its consideration, it was the highest eulogium that could be passed upon the proposition of the Chancellor of the Exchequer.

The plan before us would relieve us from taxation for three years; this was with him a great recommendation, not because we had not the means now of further taxation, which he thought we had if we were obliged to have recourse to it; but because at the end of that period, if the war continued, we could then resort to it with greater effect. If we acted like wise practical statesmen, we should look our situation in the face, we should compare the different resources which presented themselves to us—we must not be dismayed if after a noble struggle for our independence for the last 20years, the choice which offered itself was in some degree a choice of difficulties; he so considered it, and having weighed the different modes by which the means could be provided for carrying on the present contest, he was decidedly of opinion that the plan before us was the most free from objection, and as such was entitled to his hearty approbation and support.

had listened to the speech of his hon. friend (Mr. Huskisson): with the utmost attention, as he was anxious to discover whether it contained any errors or mis-statements: but, although the right hon. gentleman opposite had said there were several errors in that speech, he had perceived only one trifling mistake, which was afterwards corrected by the hon. gentleman himself. He was not averse to the opinion, that whatever there was of the sinking fund over and above what was necessary to redeem the national debt in 45 years, ought to be put at the disposal of parliament, and he agreed that there ought to be a progressive increasing sinking fund as the debt increased. The principle of his right hon. friend was very good, as it went to re-establish the principle of the gradual redemption of the debt. This had been the principle of all the sinking funds; and the departure from this principle in 1802 was the cause of alb the confusion since, and of all the new plans of finance. But his chief objections arose from his view of the Act of 1802; previous to which our sinking fund was upon a plan that could not well be improved. The good principle laid down in 1792 was altered and departed from in 1802. By that departure we lost more than 870,000l. a year, which we should now have at ours disposal, more than we have at present, if the Act of 1802 had not taken place. He was not quite sure, however, that this plane was consistent with the national faith; a great objection to it was, that it took at liberty with a certain species of property before that liberty was necessary. There was not yet a too great accumulation of the sinking fund to have it altogether applied to the purposes now in contemplation. He would not say how a lawyers might explain the Act of 1792; but the proper way was to consider bow a stock holder would explain it By the present plan they might always take present money from the sinking fund, and pay by promises. He felt with the Chancellor of the Exchequer, that it was a time of difficulty and distress; but he hoped he would not press his plan, but wait for one year, till he saw what course events would take; and he doubted not the House would anxiously give its assistance to provide for the present emergency.

said a few words in explanation, and stated that his plan was not intended to interfere with the sinking fund, properly so called.

said, that the Act of 1792 provided for the redemption of all debts in 45 years, and the one per cent. was to be a guarantee for such redemption. He rose in consequence of the speech of the right hon. gentleman who spoke first in the committee, who most emphatically called on the friends of Mr. Pitt to oppose the plan of his right hon. friend. In that character he certainly ranked himself; for he had acted under that great statesman from the very commencement of his (Mr. Rose's) political life; yet he was prepared to plead guilty to an entire approbation of the plan of his right hon. friend (Mr. Vansittart). When his right hon. friend mentioned to him, some months back, his intention of adoptingsome measure that might meet the exigency of the present moment, he replied, without knowing what his plan was, that he did not think it possible to provide for the necessities of the country, without touching the sinking fund. By the sinking fund established by Mr. Pitt in 1792, 212,000,000l. of debt had been liquidated during the most expensive and ruinous war that England ever was engaged in.—Sir R. Walpole bad attempted to establish a sinking fund—lord North succeeded in establishing a fund, which, in a peace of about twelve years, paid six millions of debt—while the sinking fond of Mr. Pitt had paid 212 millions, and taken with the amount of war-taxes paid, the sum might be called 400 millions. It had been admitted by an hon. gentleman (Mr. Thornton), that it would be proper and necessary to touch that fund at some time or other; and the only question therefore was, whether the present generation bad not done enough for posterity? Whether they were not now at liberty to do something for themselves? And whether it should be done now, or eight years hence, or only a few years before the 20 millions would fall in in the year 1839. For his own part, he had no hesitation in saying, that he conceived the present moment to be one that called for such an application of that fund. With regard to the paper in the hand-writing of Mr. Pitt, alluded to by an hon. member (Mr. Huskisson), he believed he had seen, if not that very paper, at least one of nearly the same description. It was the practice of Mr. Pitt, when meditating upon financial questions, to put down upon paper an outline of possible taxes that might be raised; but he was sure the hon. member would not pretend to say that the paper in question contained the serious and digested opinion of Mr. Pitt; and he remembered that when Mr. Pitt shewed him (Mr. Rose) a paper of that description, he (Mr. Rose) told him he was certain it would never be practicable to raise one half of those possible taxes. But it was the opinion of Mr. Pitt himself that it might be necessary at some period to break in upon the sinking fund: and be could appeal to many persons in that House in proof of hi assertion. He saw a stranger below the bar, a member of the other House, who could particularly affirm it. (Order, order!) With respect to what? had been said as to breaking faith with the public creditor, he thought it was too much to say, that for the sake of the future, we should oppress the present generation with additional taxes. The system of his right hon. friend he thought to be precisely that which, under all the circumstances, was best calculated to meet the difficulties of the case; it would accomplish a more gradual reduction of the public debt, and it would relieve the present time from taxes, which, to increase, he apprehended, would try the ingenuity of most persons.

said, that if ever he were to become a great financier—a thing which he did not think very likely—he should sincerely deprecate such a eulogist as the right hon. gentleman who spoke last, who had paid so ill a compliment to the patriotism of Mr. Pitt, when he had said, that had Mr. Pitt been alive, he would have been satisfied with the operation of that system, which had paid off 1212 millions, while a debt of 600 millions had accrued. Of the administration of Mr. Pitt he had never been an admirer; he never approved off the general system of his policy; but he should be wanting in candour and sincerity if he did not ac- knowledge that the sinking fund was the greatest boon this country ever received from the hands of any minister. With regard to the plan of the right hon. gentleman he conceived it to be founded altogether upon delusion; a very natural prejudice in favour of his own productions had led him to throw over it a veil which concealed its true character and colour. He (the Chancellor of the Exchequer) said it was only a modification of the sinking fund; he thought it a partial suspension of its operation. He confessed he was hostile to the plan of trenching on that fund; and if it was to be allowed that they could not carry on the measures of government, from deficiency of revenue, he hoped, at least, that some system of retrenchment would be adopted. If such a retrenchment could not be effected abroad, lest such a measure might lead to the violation of our good faith with our allies, it certainly might be effected at home, by putting a seasonable check to the erection of barracks and martello towers.

was not desirous of entering at any length into the merits of the right hon. gentleman's system, because every possible ground which could be taken to expose the danger and absurdity of it, had been taken by his hon. friend opposite to him (Mr. Huskisson). Indeed, such was the able and enlightened view in which his hon. friend had held up the defects of the plan proposed, and such was the perspicuous and impressive manner in which his sentiments were delivered, that he felt he should but weaken the effect of those clear statements and excellent arguments, were he to follow the same course of reasoning. He had, however, to express his hope, that the House would not be pressed to an immediate decision, because the merits of the question only began to be understood; and he was convinced that the speech of his hon. friend (Mr. Huskisson) would be attended by the happiest results to the best interests of the country. What he mainly wished was, that it might have a fair opportunity of working its way there, and with the public. He thought that, if by good fortune, that speech should go forth to the public with any reasonable preservation of its clearness, and argument, they would then come to the discussion of the question at a future day with a very different view of it from what they before possessed. He certainly did not, for his own part, wish to impute to the Chancellor of the Exchequer any design to entangle the finances of the country in such a maze as to render them unintelligible; but he was warranted in asserting, that since the plan now before the Committee was first brought forward, he had not met a single person who understood it thoroughly. As far, however, as he did comprehend it, he considered it as one of the most dangerous systems that had ever been contemplated. In not dividing the House therefore that night, he desired not to have it imputed to him, that he gave his approbation to the measure; for as a Bill would be brought in, founded upon the Resolutions of the Committee, there would be full time to discuss its different merits and defects, and he should certainly oppose it in every stage, and take the sense of parliament upon it. He should, however, then very frankly state, that he entertained very serious doubts whether the system upon which they were called upon to decide, was consistent with the act of parliament. If he did not mistake the question altogether, it appeared to him to be a gross breach of faith; and in order to ascertain if it were or were not so, gentlemen were bound to refer to the Act of 1802. He was one of the very few who did oppose the Act of 1802; and he had the merit, if there were any merit in it, of foreseeing the present mischief. For the last five sessions he had implored the House to take into their consideration the propriety, if not the absolute necessity, of appointing a committee to enquire into the financial state of the country. He had repeatedly urged that they could not go on without some strong measure of finance, and only eight months ago when he expressed that sentiment, the right hon. gentleman opposite, had characterised him as a person of very upright intentions, but with such an unfortunate bias upon all questions of finance, that he absolutely could not see right from wrong. But what was the right hon. gentleman now proposing to do? Precisely to adopt that strong measure which he had anticipated. He thought it, however, a most dangerous plan to lay his hand upon the sinking fund, that great security to the state, and take it. One great objection to the plan could not, in his mind, be surmounted; it was not grounded in the previous investigation or opinion of a Committee, appointed for that purpose; a proceeding not only sanctioned by all precedent, but by common sense, and the very nature of the thing itself. The basis, the true and only basis, upon which the Resolutions proposed for consideration and decision ought to be founded, was absolutely wanting; and the Committee were called upon for the expression of their conviction without any standard or ground-work. He contended, that no body of men were more hardly dealt with than the stockholders, by the operation of this plan. He would not, he could not, upon his honour, hesitate to say, that it was a complete violation of the respect due on the part of the government and of the country, to public faith. It was, in fact, one of the most fatal measures ever aimed at the prosperity and stability of the British empire. He should not trouble the Committee any longer, but would beg leave most earnestly to recommend a serious consideration of the subject to every member of the House; and he earnestly trusted that no inducement would operate upon their minds to make them believe, that any temporary benefit could justify the breach of public faith which would necessarily follow the adoption of the right hon. gentleman's plan.

expressed his hope, that the Report of the Committee would not be hurried, but that proper time would be given to consider both the principle and operation of the plan. At that moment, he felt himself justified in declaring, that the principle of the measure was most destructive to the best interests and permanent prosperity of the country.

highly approved of the propositions of his right hon. friend, the Chancellor of the Exchequer. He thought the proposed measure could not be fairly called a breach of public faith. In his humble estimation it merited the highest applause, inasmuch as it would very materially relieve the public, and would at the same time do away the necessity of further taxation for the present year.

The Resolutions were then agreed to seriatim; and the House having resumed, the Report was ordered to be brought up to-morrow.