which had been incurred proved, after all, but a light burden, and Pitt's dexterity made it seem lighter still. There was a deficit of three millions and a floating debt of fourteen millions. Exchequer bills were at twenty discount, and the duty on tea was so heavy that the smuggling traffic in it doubled in amount the lawful trade. The Three per Cents. had fallen to fifty-six; and the anxiety which this caused was removed by a stroke of finance worthy of a prime minister who was also Chancellor of the Exchequer. By increased taxation he raised £900,000, and at the same time he created his famous Sinking Fund. It was an old idea of Walpole's revived. It consisted in a million per annum being laid by out of the revenue to accumulate at compound interest, and so redeem the public debt with money not extracted from the pockets of taxpayers. Of course it was a hocus-pocus, for it borrowed money to pay a debt; it played the debt, as Thomas Moore said, from one hand to another, instead of paying it; it was compound interest paid by the nation to itself;* yet it quieted the restless multitude, and hoodwinked both the friends and enemies of the government. Sheridan declared that it reminded him of the person in the comedy who asked, "If you won't lend me the money, how can I pay you?" Being found useless, it was abolished in 1829. If a portion of the public * Goldwin Smith, "Lectures on Pitt," [p. 61; edited by Chambers, p. 209. "British Empire,” revenue be set apart to be applied to the reduction of a national debt, it is evident that some extra means must be employed to raise that portion, or that the national expenditure must be diminished; for he who is in debt. can have nothing to lay by unless his income be increased or his expenses lessened. Many of the imposts introduced by Pitt continue in force, such as the duties on game certificates, on excise licenses, and on horses; while others have been rescinded by a wiser policy, such as the window and paper tax, the taxes on candles, bricks, tiles, calico, and linen. The happiness and welfare of a people is best consulted by taxing as far as possible the luxuries, and leaving untaxed the necessaries of life. The duties on tea and spirits were diminished under Pitt's administration; and thus the trade of smugglers, who numbered about forty thousand, was happily impaired. Nearly half of the national debt of fourteen millions having been funded by Pitt, he was highly extolled for this also, and described as the prince of financiers. Yet he himself defended his conduct on the plea of necessity; and while he followed the vicious examples of his predecessors, he did justice in his speeches to the true principles of finance. It was the old story of seeing and approving the better course and pursuing the worse.* The extraordinary popularity which Pitt enjoyed enabled him not only to palm off his Sinking Fund on the Macaulay's "Biographies," p. 189; Westminster Review, July, 1862. nation successfully, but also to adjust the India question, which Fox, through royal interference, had been compelled to abandon. He was content to enact, in the first instance, a partial change; to control the unruly Company by means of a Board; and then, at a later period, in 1786, to diminish the powers of the directors still further, by vesting the nomination of the Governor-General and the Commander-in-Chief in the Crown, and by uniting both these offices in one person. He thus left to the Company the semblance of power, while he gradually deprived it of the reality.* Again, in 1787, his Declaratory Bill increased the number of royal troops in India, and appropriated Indian revenue to useful purposes without asking the consent of the directors. The result of these laws was highly beneficial; and Earl Russell allows that Dundas had some reason for boasting that, before Pitt's time, we never had a government of India acting in harmony together at home and abroad on pure and sound principles. * Marshman's "History of India," vol. i. p. 434. Correspondence of Lord Cornwallis, vol. i. pp. 211—14. |