A provision was also made, for the first time, for 1 per cent. sinking fund on the unfunded debt then existing, or which might thereafter be contracted.
In 1802, it has been already observed, it was deemed expedient that no provision should be made for a sinking fund of 1 per cent. on a capital of L.86,796,300; and as it was considered by the pro poser of the new regulation in 1813, that he was re verting to the principle of Mr Pitt's act of 1792, he provided that L.867,963 should be added to the • sinking fund for the 1 per cent. on the capital stock created, and which was omitted to be provided for in 1802. • This was the substance of Mr Vansittart's new plan, and which he contended was not injurious to the stockholder, as it strictly conformed to the spirit of Mr Pitt's act of 1792.
1st, By Mr Pitt's act, no relief could be afforded to the public from the burthens of taxation, till the stock redeemed by the original sinking fund of one million amounted to such a sum as that the divi dends on the capital stock redeemed should amount to three millions, making the whole sinking fund four millions ; from thenceforth the four millions were to discharge debt as before, but the interest of debt so discharged was to be available for the public service, and the public was not to be relieved from the charge on the remainder of the debt of 238 mil lions till the four millions, at simple interest, and the further sinking fund which might arise from the fall ing in of terminable annuities, together with the ad ditional sum of L. 200,000 per annum, voted in 1792, with their accumulations, had redeemed the capital of 238 millions. The sinking fund arising from the 1 per cent. on each loan, was directed, by the act of 1792, to be applied to each separate loan for which it was raised. Mr Vansittart thought himself justified and free from any breach of faith to the stockholder, in taking for the public service, not the interest of four millions, which is all that Mr Pitt's bill would allow him to take, but the in terest on 238 millions : And on what plea ? because the whole consolidated sinking funds, comprising the 1 per cent. on every loan raised since 1793, had purchased 288 millions of stock. On Mr Pitt's plan, he might have taken L.20,000 per annum from the sinking fund ; on his own construction of that act, he took from it more than seven millions per annum.
2dly, Mr Vansittart acknowledged, that the stock holder, in 1802, was deprived of the advantage of 1 per cent. sinking fund on a capital of L.86,796,300, and therefore to be very just, he gives, in 1818, 1 per cent. on that capital ; but should he not have added the accumulation which would have been made in the eleven years, from 1802 to 1813, on L.867,963, at compound interest, and which would have given a further addition to the sinking fund of more than L.860,000 per annum ; idly, On Mr Pitt's plan, every loan was to be re• deemed by its sinking fund, under the most unfa vourable circumstances, in 45 years. If the loan was raised in a 3 per cent. fund at 60, and the stock was uniformly to continue at that price, a 1 per cent. sinking fund would redeem the loan to which it was attached in 29 years; but then no relief would be given to the public from taxation till the end of 29 years ; and, if there had been loans of ten millions every year for that period, when the first loan was paid off, the second would require only one year for its final liquidation ; the third two years, and so on. On Mr Vansittart's plan, under the same circuit'• stances, the sinking fund of each and every loan was to be applied, in the first instance, to the re demption of the first loan ; and when that was re. deemed and cancelled, the whole of the sinking funds were to be applied to the payment of the se cond ; and so on successively. The first loan of
ten millions would be cancelled in less than 13 years, the second in less than six years after the first, the third in a less time, and so on. At the end of the 13th year, the public would be relieved from the in. terest on the first loan, or, which is the same thing, from the necessity of finding fresh taxes for a new loan at the end of 13 years, for two new loans at the end of 19 years ; but what would be the state of its debt at either of these periods, or at the end of 29 years ? Could this advantage be obtained without a corresponding disadvantage ? No ; the excess of debt on Mr Vansittart's plan would be exactly equal to these various sums, thus prematurely released by cancelled stock, accumulated at compound interest, How could it be otherwise ? Is it possible that we could obtain a present relief from the charge of debt without either directly or indirectly borrowing the fund necessary to provide that relief at compound interest ? " By this means," says Mr Vansittart, " the loan first contracted would be discharged at an earlier period, and the funds charged with the payment of its interest would become applicable to the public service. Thus, in the event of a long war, a considerable resource might accrue during the course of the war itself, as every successive loan would contribute to accelerate the redemption of those previously existing ; and the total amount of charge to be borne by the public, in respect of the public debt, would be reduced to a narrower com pass than in the other mode, in which a greater number of loans would be co-existing. At the same time, the ultimate discharge of the whole debt would be rather accelerated than retarded." " It is now only necessary to declare, that an amount of stock equal to the whole of the debt existing in 1786 has been redeemed; and that, in like manner, when ever an amount of stock equal to the capital and charge of any loan raised since 1792 shall be re• deemed, in its proper order of succession, such loan shall be deemed and taken to be redeemed and sa tisfied. Every part of the system will then fall at once into its proper place ; and we shall proceed with the future redemption with all the advantages which would have been derived from the original adoption of the mode of successive instead of simul taneous redemption. Instead of waiting till the purchase of the whole of the debt consolidated in 1802 shall be completed, that part of it which exist ed previously to 1792 will be considered as already redeemed, and the subsequent loans will follow in succession, whenever equal portions of stock shall have been purchased. It is satisfactory to observe, that, by a gradual and equable progress, we shall still have the power of effecting the complete repayment of the debt more speedily than by the present course." Is it possible that Mr Vansittart could so deceive him self as to believe that, by taking five millions from the sinking fund, which would not have been taken by the provisions of the act of 1802, which would not have been taken by the act of 1792, and other slims successively, in shorter times than could have been effected by the provisions of those two acts, he would be enabled to complete the repayment of the debt more speedily ? Is it possible that he could be lieve that, by diminishing the sinking fund, that is, the amount of revenue as compared with expendi ture, he would effect the payment of our debt more speedily ? It is impossible to believe this. How then are his words to be accounted for ? In one way he might have a meaning. It might be this, —I know we shall be more in debt in 10, 20, and 30 years, on my plan, than we should have been on that of Lord Sidmouth, or on that of Mr Pitt ; but we shall have effected a greater pay .