630 
a different arrangement. All that its re- 
presentatives would be likely to desire, 
would be an assurance that the contract 
should be maintained, bond fide, that the 
sum once fixed should be made good, 
whatever be the fluctuations of our eur- 
rency. 
Average Prices of the 3 per cent, Con- 
sols during the following years :— 
1803 70, 57, 53. 
55, 06, 58. 
56, 58, 60. 
60, 62, 64. 
61, 62, 64, 
62, 64, 66, 68. 
67, 68, 70. 
70, 71, 69, 66. 
65, 64, 63. 
62, 61, 59, 58. 
58, 57, 60, 61. 
64, 66, 64. 
65,58, 60, 
60, 62, 63. 
63, 70, 75, 83. 
80, 82, 79. 
77, 74, 65, 70, 68. 
68, 69, 70. 
1821 69, 72, 75, 77. 
1822 76, 77, 78, 79, 80. 
THE SINKING FUND. 
The idea of a Sinking Fund is of old 
date, haying been conceived more than a 
century ago, by Sir R. Walpole, the only 
public man of his age who appears to 
have been conversant with finance. The 
original plan was simple, the fund being 
formed in the first instance of a small 
sum of surplus revenue, and augmented 
progressively by the interest of such part 
of the debt as was paid off by its opera- 
tion... Here was no display of the won- 
ders of compound interest, but the long 
peace that ensued, favoured the reduction 
of debt, and the fund, though small, was 
progressively increasing. Such continued 
the ‘course of circumstances until 1733, 
when the troubled aspect of the Conti- 
nent, and the difficulty of imposing new 
taxes, necessitated an interference with 
some disposable resource, and the sink- 
ing fund was encroached on. A prece- 
dent ‘once given, trespasses became fre- 
quent, ‘and: this’ fund, though» never 
abolished, proved of so slender operation 
that in the course: of half a century, it 
had not discharged above 15,000,0001. of 
our debt, At last, in’ 1786, the scheme 
was’ revived with augmented energy, 
aided on ‘the one hand~ by Dr. Price’s 
flattering calculations of the effect of 
compound interest, on the other by Mr. 
Pitt’s declared determination to consider 
1804 
1805 
1806 
1807 
1808 
1809 
1810 
1811 
1812 
1818 
1814 
1815 
1816 
1817 
1818 
1819 
1820 
Lowe on the State of England. 
its funds inviolable. The new plan was 
in substance the same as that of Sir R. 
Walpole, but the reserve was invested 
with many additional safeguards, being 
committed toa special board of commis- 
sioners who were independent, not merely 
of the treasury, but in some respects of 
Parliament. : 
It was at this time that the public first 
became familiar with the term “ Consoli- 
dated Fund,” which meant, however, 
nothing more than our taxes, formed into’ 
an aggregate, out of which government 
pledged itself, whatever might be the pro- 
portion of our revenue to our expenditure, 
to pay a million annually to the new com- 
missioners. This fund of a million was 
strengthened by two other sources of sup-" 
ply; the amount of government annui- 
ties as they successively expired, and the 
interest of such stock as was annually re-’ 
deemed. The measure now brought into’ 
operation, paid off the following sums : 
In 1787. . £662,750 Stock. .. 
1788 1,456,900. 
1789 1,506,350 
1790 1,558,850 
1791 . 1,587,500 
1792 1,507,100 
These sums, small as they were, could 
hardly be considered bona ‘fide reduc~ 
tions of the public debt, since the Span- 
ish armament in 1790, necessitated an 
addition to our burdens of nearly half 
their amount. In an arithmetical sense, 
accordingly, the effect was inconsider- 
able; in a political sense it was other- 
wise, as it excited the expectation of great’ 
subsequent reductions. To strengthen 
this expectation, and to remove:an appre= 
hension that a renewal of war, by neces- 
sitating new loans, might cast these an- 
nual liquidations into the shade, Mr. Pitt 
obtained in 1792, an act of parliament 
declaring that all future loans should 
carry in themselves the means of their 
progressive extinction, ministers on con- 
tracting a loan, being pledged to’ “ pro- 
vide taxes, not only for the interest but 
for an addition to the sinking fund.” This 
provision, whether at bottom, judicious or 
not, was very favourably received by the 
public, and had, in concurrence with the 
commercial prosperity of the year,’ the 
effect of: producing a very considerable 
tise in the funds. é 
But this flattering prospect was forth- 
with overcast by our participation in the 
war against France, and the unparalleled 
magnitude of our expence. The sinking 
fund was maintained and operated a 
large apparent reduction, but the result 
in 
