} 



BRITAIN. 



705 



ibimtain of justice, and general conservator of the 

 peace of the kingdom, he alone has the right of erect- 

 ing courts of judicature, and all jurisdictions of courts 

 are derived from the crown. As the fountain of ho- 

 nour, of office, and of privilege, he has the power of 

 conferring dignities, disposing of offices, and confer- 

 ring privileges on private persons. In the foreign 

 relations of the nation, he is considered the nation's ' 

 representative, and therefore has the sole power of 

 sending and receiving ambassadors, making treaties 

 and alliances, declaring war and making peace. The 

 council of the king is distinguished into the privy 

 council and the cabinet councu. The latter consists 

 of those ministers of state more immediately in the 

 confidence of the king, who are summoned to consult 

 upon executive matters ; their number and selection 

 depend only upon the king's pleasure. It is generally 

 composed of the lord chancellor, the first lord of the 

 treasury, the four principal secretaries of state, the 

 chancellor of the exchequer, the first lord of the ad- 

 miralty, &c. (fourteen or fifteen members) ; the re- 

 maining members of the ministry not belonging to 

 the cabinet. The privy council, the number or wnich 

 is indefinite (at present about 150), is constituted by 

 the king's nomination, and generally consists of the 

 princes of the blood, the ministers, &c. The dissolu- 

 tion of the privy council depends on the king's plea- 

 sure, and formerly took place, ipso facto, by the king's 

 death. But, to prevent the inconvenience of having 

 no council on the accession of a new prince, it was 

 enacted, in 1708, that it shall continue for six months 

 after the demise of the crown, unless otherwise de- 

 termined by the successor. The privy council exer- 

 cises original jurisdiction in some cases, as in ques- 

 tions between two colonies as to the extent of their 

 charters, &c., and has an appellate jurisdiction over 

 all the dominions of the empire, except Great Britain 

 and Ireland. 



Financial History. The practice of borrowing mo- 

 ney in order to defray a part of the war expenditure 

 began, in this country, in the reign of William III. 

 In the infancy of the practice, it was customary to 

 borrow upon the security of some tax, or portion of a 

 tax, set apart as a fund for discharging the principal 

 and the interest of the sum borrowed. This discharge 

 was, however, very rarely effected. The public exi- 

 gencies still continuing, the loans were, in most cases, 

 either continued, or the taxes were again mortgaged 

 for fresh ones. At length the practice of borrowing 

 for a fixed period, or, as it is commonly termed, upon 

 terminable annuities, was almost entirely abandoned, 

 and most loans were made upon interminable annui- 

 ties, or until such time as it might be convenient for 

 government to pay off the principal. 



In the beginning of the funding system, the term 

 fund meant the taxes or funds appropriated to the 

 discharge of the principal and interest of loans ; those 

 who held government securities, and sold them to 

 others, selling, of course, a corresponding claim upon 

 some fund. But after the debt began to grow large, 

 and the practice of borrowing upon interminable an- 

 nuities had been introduced, the meaning attached to 

 the term fund was gradually changed ; and instead of 

 signifying the security upon which loans were ad- 

 vanced, it has, for a long time, signified the principal 

 of the loans themselves. 



Owing partly, perhaps, to the scarcity of disposable 

 capital at the time, but far more to the supposed in- 

 security of the Revolutionary establishment, the rate 

 of interest paid by government in the early part of 

 the funding system was, comparatively, high. But 

 as the country became richer, and the confidence of 

 the public in the stability of government was in- 

 <T-ased, ministers were enabled to take measures for 

 ri ducing the interest, first in 1716, and again in 1749. 



During/the reigns of William III. and Anne, the 

 interest Aipulated for loans was very various. But in 

 the re/ad of George II. a different practice was adopt- 

 ed. Instead of varying the interest upon the loan 

 accpraing to the state of the money market at the 

 tirrtp, the rate of interest was generally fixed at three 

 m-three and a half per cent. ; the necessary variation 

 bfcing made in the principal funded. Thus, suppose 

 government were anxious to borrow, that they pre- 

 ferred borrowing in a three per cent, stock, and that 

 they could not negotiate a loan for less than 4^ per 

 cent. ; they effected their object by giving the lender, 

 in return for every 100 advanced, ,150 3 percent, 

 stock ; that is, they bound the country to pay him 

 or his assignees 4 10s. a year in all time to come, 

 or, otherwise, to extinguish the debt by a payment of 

 150. In consequence of the prevalence of this 

 practice, the principal of the debt now existing 

 amounts to nearly two fifths more than the sum ac- 

 tually advanced by the lenders. 



Some advantages are, however, derivable, or sup- 

 posed to be derivable, from this system. It render* 

 the management of the debt, and its transfer, more 

 simple and commodious than it would have been, had 

 it consisted of a great number of funds bearing differ- 

 ent rates of interest ; and it is contended, that the 

 greater field for speculation afforded to the dealers 

 in stocks bearing a low rate of interest, has enabled 

 government to borrow, by funding additional capi- 

 tals, for a considerably less payment on account of 

 interest than would have been necessary had no such 

 increase of capital been made. The advantages, 

 however, now referred to are really of very trifling 

 importance ; and the method of funding by an in- 

 crease of capital has been a most improvident one, 

 and most injurious to the public interests. 



The public income at the Revolution amounted to 

 2,001 ,855. At the death of William it had increas- 

 ed to 3,895,205, being nearly doubled. This aug- 

 mentation arose from various new duties ; especially 

 the excise on salt, the distillery, and the malt-tax. 

 The other sources of revenue were the customs, land- 

 tax, poll-taxes, a tax on births, marriages, and burials, 

 hearth-money, the post-office, and other smaller du- 

 ties. The total sums raised by taxes and by loans, 

 during this reign were as follow : 



Customs . . . 13,296,833 14 



Excise . . 13,649,328 5| 



Land-taxes 19,174,059 8 3j 



Polls .... 2,557,649 7 7J 



Burials, births, marriages, and bachelors, 



&c. . .... 275,517 18 1 



Various articles, including permanent 



loans and temporary loans unpaid 23,093,980 16 7 1 



72,047,309 5 (ij 



Of the fourteen years of William III.'s reign, 

 nearly ten were years of war. The military antt 

 naval expenses amounted to 44,847,382, being mort 

 than one-half the whole expenditure of government. 

 After all the blood and treasure expended by Wil- 

 liam, his ambition and revenge remained unsatisfied ; 

 and the ostensible object of the war, the curbing oi 

 the ambition of Louis XIV. unattained. 



The revenue, at the commencement of Queen 

 Anne's reign, amounted to 3,195,205. At the pe- 

 riod of the union with Scotland, in 1709, the revenue 

 of England amounted to 5,691,803. The sums re- 

 ceivea into the exchequer, during twelve years anil 

 three-quarters, were 



Customs 15,113311 



Excise 20,850,90:) 



Land-tax .... 22,285,90U 



Miscellaneous, including Post-Office, Stamps, and 



smaller loans of the Revenue . . 5,261,340 



Amount of Loans . . 59,853,154 



Total . 123,365,129 



