We have already shown, that, in 1807, one Chan cellor of the Exchequer proposed to relieve the country from taxation, with a very slight exception, for several years together, while we were, during war, keeping up, if not increasing our expenditure, and supplying it by means of annual loans. What is this but disposing of a fund which ought to have been regarded as most sacred ? In 1809, another Chancellor of the Exchequer raised a loan, without raising any additional taxes to pay the interest of it, but pledged a portion of the war taxes for that purpose, thereby rendering an addition to that amount, necessary to the loan of the following and every succeeding year. Was not this disposing of the sinking fund by stealth, and accumulating debt at compound interest ? Another Chancellor of the Exchequer, in 1818, proposed a partial repeal of.the law, by which seven millions per annum of.the sinking fund was placed at his dis posal, and which he has employed in providing for the interest of new.debt. This was done with the sane tion of Parliament, and, as we apprehend, in direct violation of all the laws which had before been pass ed regarding the sinking fund. But what has be come of the remainder of this fund, after deducting the seven millions taken from it by the act of 1813? It should now be sixteen millions, and at that amount it was returned in the annual finance ac counts last laid before Parliament. The finance committee appointed by the House of Commons did not fail to see that nothing can be deemed an efficient fund for the redemption of debt in time of peace, but such as arises from an excess of revenue above expenditure, and as that excess, under the most favourable view, was not quite two millions, they considered that sum as the real efficient sink ing fund, which was now applicable to the discharge of debt. If the act of 1802 had been complied with, if the intentions of Mr Pitt had been fulfilled, we should now have had a clear excess of revenue of above twenty millions, applicable to the payment of the debt ; as it is, we have two millions only, and if we ask ministers what has become of the remain ing eighteen millions, they show us an expensive peace establishment, which they have no other means of defraying but by drafts on this fund, or several hundred millions of 3 per cents. on which it is em ployed in discharging the interest. If ministers had not had such an amount of taxes to depend on, would they have ventured, year after year, to en counter a deficiency of revenue below expenditure, for several years together, of more than twelve mil lions ? It is true that the measures of Mr Pitt lock ed it up from their immediate seizure, but they knew it was in the hands of the commissioners, and ,presumed as much upon it, and justly, with the knowledge they had of Parliament, as if it had been in their own. They considered the commissioners as their trustees, accumulating money for their be nefit, and of which they knew that they might dis pose whenever they should consider that the urgen cy of the case required it. They seem to have made a tacit agreement with the commissioners, that they should accumulate twelve millions per annum at compound interest, while they themselves accumu lated an equal amount of debt, also at compound interest. The facts are indeed no longer denied. In the last session of Parliament, for the first time the delusion was acknowledged by ministers, after it had become manifest to every other person ; but yet it is avowed to be their intention, to go on with this nominal sinking fund, raising a loan every year for the difference between its real and nominal amount, and letting the commissioners subscribe to it. On what principle this can be done, it would be difficult to give any rational account. Perhaps it may be said, that it would be a breach of faith to the stockholder to take away the sinking fund, but is it not equally a breach of faith if the Government itself sells to the commissioners the greatest part of the stock which they buy ? The stockholder wants something substantial and real to be done for him, and not any thing deceitful and delusive. Disguise it as you will, if of fourteen millions to be invested by the commissioners in time of peace, the stock which twelve millions will purchase is sold by the Government itself, which creates it for the very pur pose of obtaining these twelve millions, and only stock for two millions is purchased in the market, and no taxes for sinking fund or interest are pro vided for the twelve millions which Government takes ; the result is precisely the same to the stock holder, and to every one concerned, as if the sink ing fund was reduced to two millions. It is utterly
unworthy of a great country to countenance such pitiful shifts and evasions.
The, sinking fund, then, has, instead of diminish ing the debt, greatly increased it. The sinking fund has encouraged expenditure. If, during war, a country spends twenty millions per annum, in addi tion to its ordinary expenditure, and raises taxes only for the interest, it will in twenty years, accumulate a debt of four hundred millions ; and its taxes will increase to twenty millions per annum. If, in addi tion to the million per annum, taxes of L.200,000 were raised for a sinking fund, and regularly applied to the purchase of stock,the taxes, at the end of twen ty years, would be twenty-four millions, and its debt only 342 millions ; for fifty-eight millions will have been paid off by the sinking fund ; but if, at the end of this period, new debt shall be contracted, and the sinking fund itself, with all its accumulations, amounting to L.6,940,000, be absorbed in the pay ment of interest on such debt, the whole amount of debt will be 538 millions, exceeding that which would have existed if there had been no sinking fund by 138 millions. If such an additional expen. diture were necessary, provision should be made for it without any interference with the sinking fund. If, at the end of the war, there is not a clear surplus of revenue above expenditure of L. 6,940,000, on the above supposition, there is no use whatever in persevering in a system which is so little adequate to its object. After all our experience, however, we are again toiling to raise a sinking fund ; and, in the last session of Parliament, three millions of new taxes were voted, with the avowed object of raising the remnant of our sinking fund, now reduced to two millions, to five millions. Is it rash to prognosticate that this sinking fund will share the fate of all those which have preceded it ? Probably it will accumu late for a few years, till we are engaged in some new contest, when ministers, finding it difficult to raise taxes for the interest oiloans, will silently encroach on this fund, and we shall be fortunate if, in their next arrangement, we shall be able to preserve out of its wreck an amount so large as two millions.
It is, we think, sufficiently proved, that no securi ties can be given by ministers that the sinking fund shall be faithfully devoted to the payment of debt, and without such securities we should be much bet ter without such a fund. To pay off the whole, or a great portion of our debt, is, in our estimation, a most desirable object ; if, at the same time, we ac knowledged the evils of the funding system, and re solutely determined to carry on our future contests without having recourse to it. This cannot, or ra ther will not, be done by a sinking fund as at pre sent constituted, nor by any other that we can sug gest ; but if, without raising any fund, the debt were paid by a tax on property, once for all, it would ef feet ;its object. Its operation might be completed in two or• three years during peace ; and, if we mean honestly to discharge the debt, we do not see any ether mode of accomplishing it. The objections to this plan are the same as those which we have al ready dttempted to answer in speaking of war taxes. The stockholders being paid off; would have a large mass of property, for which they would be eagerly seeking employment. Manufacturers and landhold ers would want large sums for their payments into the Exchequer. These two parties would not fail to make an arrangement with each other, by which one party would employ their money, and the other raise it. They might do this by loan, or by sale and purchase, as they might think it most conducive to their respective interests ; with this the state would have nothing. to do. Thus, by one great effort, we should get rid of one of the most terrible scourges which was ever invented to afflict a nation ; and our commerce would be extended without being subject to all the vexatious delays and interruptions which our present artificial system imposes upon it.