FUNDS, public, the taxes or other pub lic revenues appropriated to the payment of the interest or principal of the national debt. When the expedient of borrowing large sums for the public service was first adopted, it was found necessary to set apart and assign to the lender the pro duce of some branch of the revenue, sup posed to be adequate to the payment of the interest or principal, or both, accord ing to the terms of the contract ; each loan had thus a separate fund provided for it, which was usually distinguished by the date of the transaction, the rate per cent. payable, or some circumstance relating to the mode of raising the money,or the pur pose to which it was to be applied. These separate funds sometimes produced more than the yearly payments with which they were charged, but more frequently fell short of them ; and as making good the deficiencies of some, from the surpluses of others, or from the current supplies, created much trouble and useless intrica cy in the management of the public fi nances, it was found more convenient to combine several of the funds, and to charge the payments for which they had been set apart on the aggregate produce of the several duties. It then became ne cessary to give a more general deno mination to the fund: and thus have been established, at different periods, the Ag gregate Fund, the South Sea Fund, the General Fund, the Sinking Fund, and the Consolidated Fund, The Aggregate Fund was established in the year 1715, and had this name given to it, because it consisted of a great varie ty of taxes and surpluses of taxes, which were in that year consolidated, and given as the security for discharging the inte rest and principal of all the exchequer bills then outstanding, and of some other public debts : and likewise for the pay ment of 120,0001. per annum to the civil list.
The South Sea Fund was established in 1716,and was so called, because appropri ated to pay the interest and allowance for management on the capital of the South Sea Company.
The General Fund was also established in 1716, by making perpetual various du ties, which had been granted for the term of thirty-two years, and consolidating them with some other duties into one fund. It was appropriated chiefly to the
payment of the interest on various sums raised by lotteries during the reign of Queen Anne.
The Sinking Fund consisted of the surpluses of the three funds just mention ed, whenever the produce of the taxes composing them should be greater than the charges upon them. The establish ment of these funds formed part of a plan for a general reduction of the interest payable on the public debts, and this be ing effected, the charge on each of the three funds was ofcou rse lessen edconside rably, and the future overplus was direct ed to he carried into a fourth fund, to which was given the name of the Sinking Fund, because appropriated to the pur pose of redeeming or sinking the public debts. The act of parliament by which this fund was established expressly or dained, that it should be applied to the discharge of the public,debts, and " to or for none other use, intent, or purpose whatsoever ;" yet in the course of a few years many encroachments were made upon it, and ultimately it became a mere nominal distinction, the whole produce of it being usually taken towards the sup plies of the current year.
The Consolidated Fund was establish ed in consequence of a new arrangement of the public accounts in the year 1786, when the funds above mentioned were abolished, and the whole of the public revenue, (except the annual grants) in cluded under this general head. Out of this fund are paid the interest and ex penses of management of all the public debts, the interest on Exchequer bills, the civil list, pensions to the royal family and others, salaries and allowances to va rious public officers, and some miscella neous annual expenses. The surplus of the produce of the fund, after satisfying all these charges, is annually granted by parliament as part of the ways and means for raising the supplies voted.