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The whole amount of the debt now existing would, by the present mode, be redeemed about 1845; by the new Plan, about 1837.
it would be rash to decide, and the supposition of any particular sum is assumed for illustration only, but it is by no means essential to the system itself, which will be found capable of being adapted to every variety of circumstances which can be expected to arise.
The Sinking Fund will be much greater according to the present Plan, than by that proposed, till about the year 1830, when the Consolidated Sinking Fund of 1802 will fall in, and an annual sum of twenty-one millions will be at once taken from it. Their subsequent progress will correspond more nearly, as the successive extinction of loans will operate on both. The new Plan will, however, continue more equable and uniform in its progress.
If the sum necessary to be raised should exceed 28,000,000l. the advantages of the new Plan, in point of taxation, would be somewhat diminished; but the redemption of the existing debt would be accelerated, and the Sinking Fund would increase more rapidly; and opposite effects would of course be produced, if the sums borrowed were diminished, or if they were obtained at a rate of interest below 51. per cent. This is shewn by Tables pointing out the effects of a succession of loans of 25,000,000l. and of 12,000,000l. respectively, [See Tables B. 1, 2, 3, and C. 1, 2, 3.] which prove that in the latter case no taxes would be required, except those provided in the first year, till the complete redemption of the existing debt.
But the principal advantage of the proposed Plan, in time of peace, would be the facility of keeping in reserve the means of funding a large sum (suppose
the renewal of hostilities.
It may however reasonably be hoped, that even in the event of a continuance of the present rate of expence, the cessation of the imposition of taxes for some years, would have a considerable effect in improv-100,000,000l.) as a resource in case of ing the existing revenue, and consequently in lessening the amount to be borrowed. This has been in some degree experienced even in consequence of the partial relief from additional taxes, which has taken place since the year 1806. It should also be remarked, that such a saving of permanent taxes would create a comparative facility of increasing the war taxes, if such a measure should be thought advisable, as it probably may be in the event of an increase of expence or even of any considerable duration of its present amount. How far this may be expected,
In the event of peace, the Sinking Fund would continue to accumulate at compound interest as at present, unless the inconveniences arising from the too rapid diminution of the rate of interest, should induce parliament to interfere by ordering the stock purchased by the Commissioners to be cancelled. This kind of interruption is not however peculiar to the new system; but must equally take place under the present mode of redemption, whenever its progress should be found to be too rapid. In case the present mode of redemption should be adhered to, such a change, whenever it might take place, would, however, be attended with the disadvantage of appearing to be a deviation from the established principles of the Sinking Fund, while in the former it would obviously be a consequence flowing from them. In either case it is highly important that sufficient security should be preserved for the ul timate redemption of the debt within 45 years from its creation, according to the provisions of the Act of 1792.
This fund, which would be formed in a few years by the redeemed stock standing in the names of the Commissioners, would be continually increasing, unless checked in the manner above mentioned; and in no case should it be reduced below such a sum as may be thought amply sufficient to support the confidence of the country at home, and to maintain its dignity abroad. It would, indeed, be such a treasure, as no other country has ever possessed, and the first example of an im mense accumulation of public property,
formed without the impoverishment of any individual, or any embarrassment of the general circulation. For the sake of illustrating this part of the subject, a Table is annexed, which shews the application of the Plan to alternate periods of war and peace. [See Table D. 1, 2, 3.]
It may be observed, in favour of this Plan, that it is less liable than any other modification of the Sinking Fund, to be abused as a precedent for encroachment upon it; not only because it arises out of the principles of the Sinking Fund itself, but because it turns entirely on the application of the stock purchased by the Commissioners, which must, in any possible arrangement of the Sinking Fund, be cancelled, sooner or later; the only question being as to time and mode.
In considering this subject, we must not forget that the great and ultimate object
Those parts of them which relate to the
of the Sinking Fund is, to relieve the na-proposed Plan, all assume that an annual tion from the burden of taxes which would sum of 867,9631. equal to one per cent. on be entailed upon it by the indefinite ex- the amount of the stock provided for in tension of the public debt. It answers 1802, and on which no Sinking Fund was other collateral purposes of considerable then created, will be added to the Sinking importance; but this is its direct and im- Fund, and provided for by new permamediate object. Now, as it cannot be less nent taxes: and also, that 260,000l. a important to prevent the immediate in-year will be added to the Sinking Fund, crease of taxes, than to provide for their in respect of unprovided Exchequer Bills. future possible reduction, that would seem This latter sum is supposed to be supplied to be the best arrangement of a Sinking by new war taxes, to an equal amount; Fund, which, while it provided for the ul- and these sums together make up the timate discharge of debt within a certain amount of 1,127,9637. for which taxes are moderate period, afforded the earliest stated in the Tables to be provided in the relief to the public, and limited the maxi- first year of the new Plan. mum of total charge within the narrowest compass.
Such are the leading considerations which have suggested the foregoing Plan, and the objects which it has been intended to effect. There is, however, no wish to disguise the weight, which the political circumstances of the present moment have
The several loans (except in Table C.) are supposed to be raised at 5 per cent. interest, with a Sinking Fund equal to one-third of the interest, being the proportion applicable, according to the Act of 1792, to a 3 per cent. stock, except in those cases, in which, by the proposed Plan, a larger Sinking Fund is required.
Table, A. 1.
Estimated ANNUAL and TOTAL AMOUNT of NEW TAXES, to be imposed according to the Existing SYSTEM, and according to the Proposed PLAN; on the Supposition of Annual Loans of £. 28,000,000 at £.5 per cent. until the Redemption of all Funded Debt created prior to 1813.
*In 1821, the War Taxes pledged for the Loan of 1807 will, according to the Existing System at £.5 per cent. be set at liberty by the Redemption of that Loan, and again become applicable to the Service of the year. The future Annual Loans are therefore reduced to £. 27,000,000 and the Charge thereby occasioned to £. 1,800,000; and from the year 1829, it is supposed that the Loans will be charged upon the Funds appropriated to the Consolidated Sinking Fund of 1802, which will fall in in 1830, and the several Loans which will fall in after that year; and therefore no further Taxes will be necessary.
Table, A. 2.
Estimated Amount of the SINKING FUND, at the 1st of August in each Year, according to the Existing SYSTEM, and according to the Proposed PLAN, upon the foregoing Suppositions.
Existing System. Proposed Plan.
13,269,958 14,397,921 1814 14,423,455 | 13,647,817
1815 15,634,627 12,860,207 1816 16,906,357
1818 19,643,757 11,607,837
1819 21,115,944 11,428,842 1820 22,661,740 12,639,033
1825 30,103,750 14,876,057
32,081,437 16,227,984 1827 34,158,008 16,719,465 36,338,408 16,734,351 1829 38,627,828 18,161,693
13,896,609 24,718,019 15,208,314 26,426,419 14,498,729
18,634,662 1832 22,094,571 19,027,436
1833 23,671,799 | 19,606,337
1836 25,141,534 21,300,648
1837 26,858,638 21,917,084 1838 28,674,069 1839 30,580,272 1840 32,581,785
1841 34,683,374 1842 36,890,042 1843 37,158,317 1844 36,822,317 1845 37,953,346
addition of £. 1,127,963 proposed * Throughout this Column, the Sinking Fund is shewn as increased by the
to be made in the
In 1830, the Sinking Fund, according to the Existing System, is reduced from £. 41,031,719, its amount on the 1st August of that year, to £. 19,745,200 in consequence of the Redemption of the Debts consolidated by the Act of 1802.
A reduction of a similar nature, but of smaller amount, takes place on the Redemption of each subsequent Loan, the Period of which may be found in Table, A. 3.
Table, B. 1.
Estimated ANNUAL and TOTAL AMOUNT of NEW TAXES, to be imposed according to the Existing SYSTEM, and according to the Proposed PLAN; on the Supposition of Annual Loans of 25 Millions at £.5 per centum, until the Redemption of all Funded Debt created prior to 1813.- -N. B. In this, and the following Tables, it has not been thought necessary to make allowance in the calculations which relate to the Proposed Plan, for the application within the first year of the Per-Centage provided for each Loan; the operation of which has, however, been attended to in Table A. and throughout all the calculations respecting the Existing System.
27,735,328 1,099,504 | 15,823,894 11,909,434
Aggregate Amount of the Excess of Taxes, according to The Existing System.
1,127,963 | 5,538,701 | 12,154,808 1,284,835 7,048,495 19,203,303 1,740,777 8,259,219 27,462,522 3,528,277 8,138,385 35,600,907 5,307,443 8,025,885 | 43,626,792
7,074,109 7,859,219 51,486,011 7,074,109 9,459,219 | 60,945,230 8,161,040 9,972,288 70,917,518 9,019,373 10,713,955 81,631,473 9,952,729 11,380,599 93,012,072 10,835,545 12,097,783 105,109,855 12,585,545 11,947,783 117,057,638 12,982,724 13,150,604 130,208,242 14,724,390 13,008,938 143,217,180 14,724,390 13,008,938
* In 1821, the War Taxes pledged for the Loan of 1807 will, according to the Existing System at £.5 per centum, be set at liberty by the Redemption of that Loan, and again become applicable to the Service of the year. The future annual Loans are therefore reduced to £. 24,000,000 and the Charge thereby occasioned to £. 1,600,000; and from the year 1829, it is supposed that the Loans will be charged upon the Funds appropriated to the consolidated Sinking Fund of 1802, which will fall in in 1830, and the several Loans which will fall in after that year; and therefore no further Taxes will be necessary.