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HAMILTON. 



Mathematics," intended for the use of his own stu- 

 dents : but the great work so generally attached to 

 his name, did not appear till he had passed his 

 seventieth year. The " Inquiry concerning the Rise 

 and Progress, the Redemption and Present State of 

 the National Debt of Great Britain," was published 

 at Edinburgh in 1813. It created in every quarter, 

 except that which might have best profited by the 

 warning voice, a sudden consciousness of the folly of 

 the system under which the national income was in 

 ninny respects conducted ; but it was not till his dis- 

 coveries had made their silent progress through the 

 medium of public opinion, that they began gradually to 

 affect the measures of the government. The principal 

 part of this inquiry, is devoted to the consideration 

 of the measures which have at different periods been 

 adopted for attempting the reduction of the national 

 debt. The earliest attempt at a sinking fund was 

 made in the year 1716, under the auspices of Sir Robt. 

 Walpole, a measure of which that acute minister 

 may not improbably have seen the inutility, as in the 

 year 1733, he applied five millions of the then sink- 

 ing fund to the public exigencies ; the principal al- 

 ways nominally existed, although it was not main- 

 tained with constant regularity and zeal, until the 

 year 1786, when the celebrated sinking fund of Mr 

 Pitt was formed, by the disposal of part of the in- 

 come of the nation to commissioners for the re- 

 demption of the debt, a measure which was modi- 

 fied in 1792, by the assignment of one per cent, 

 annually, on the nominal capital of each loan 

 contracted during the war, as a sinking fund ap- 

 propriated for the redemption of the particular 

 loan to which it was attached. It underwent several 

 other modifications, particularly in 1802 and 1807. 

 The great prophet and propounder of this system, the 

 celebrated Dr Price, unfolded his views on the sub- 

 ject, in his treatise " Of Reversionary Annuities," 

 published in 1771. The practical results of Dr 

 Price's theories were, the proposal of a plan, by 

 which a nation might borrow at simple interest, and 

 accumulate at compound interest a fimd for its repay- 

 ment : boldly pushing his theory to its extremities, 

 and maintaining that it is better to borrow at high 

 than at low interest, because the debt will be more 

 speedily repaid ; and as a corollary, that a sinking 

 fund during war is more efficient than at any other 

 time, and that to terminate it then, is " the madness 

 of giving it a mortal blow." The supposition main- 

 tained by Dr Hamilton, in opposition to these golden 

 visions of eternal borrowing for the purpose of in- 

 creasing national riches was, that if a person borrows 

 money, and assigns a part of it to accumulate at com- 

 pound interest for the repayment of the whole, he is 

 just in the same situation as if he had deducted that 

 part from his loan and hence the general scope of 

 his argument goes to prove the utter uselessness of a 

 borrowed sinking fund, and the fallacy of continuing 

 its operation during war, or when the expenditure of 

 the nation overbalances the income. The sinking 

 fund was strictly a borrowed one, in as far as money 

 was laid aside for it, while the nation was obliged to 

 borrow for the support of its expenditure. The evil 

 of the system was found by Dr Hamilton to consist, 

 not only in the fallacy it imposes on the public, but 

 in its positive loss of resources. The loans were 

 raised at a rate more disadvantageous to the bor- 

 rower than that at which the creditor afterwards 

 received payment of them, and the management ot 

 the system was expensive ; if a man who is in debt 

 borrows merely for the purpose of paying his debt, 

 and transacts the business himself, he merely exposes 

 himself to more trouble than he would have encoun- 

 tered by continuing debtor to his former creditor ; if 

 he. employ an agent to transact the business, he is a 



loser by thn amount of fees paid to that agent. These 

 truths Dr Hamilton was not content with proving 

 argumentatively he coupled them witli a minute 

 history of the various financial proceedings f the 

 country, and tables of practical calculation, showing 

 the exact sums which the government has at different 

 periods misapplied. Along with Mr Pitt's system 

 of finance, he gave an account of that of lord Henry 

 Petty, established in 1807; a complicated scheme, 

 the operation of which seems not to have been per- 

 ceived by its inventor, and which, had it continued 

 for any length of time, might have produced effects 

 more ruinous than those of any system which has been 

 devised. The summary of his proofs and discussions 

 on the subject, as expressed in his own words, was as 

 follows : " The excess of revenue above expenditure 

 is the only real sinking fund by which the public debt 

 can be discharged. The increase of the revenue, or 

 the diminution of expense, are the only means by 

 which a sinking fund can be enlarged, and its oper- 

 ations rendered more effectual ; and all schemes for 

 discharging the national debt, by sinking funds, 

 operating by compound interest, or in any other 

 manner, unless so far as they are founded upon this 

 principle, are illusory." The discovery made by Dr 

 Hamilton was one of those few triumphant achieve- 

 ments, which, founded on the indisputable ground 

 of practical calculation, can never be controverted or 

 doubted : and although a few individuals, from a 

 love of system, while apparently admitting the truths 

 demonstrated by Dr Hamilton, in attempting to 

 vindicate the system on separate grounds, have fallen, 

 mutato nomine, in the same fallacy. The Edinburgh 

 reviewers, Ricardo, Say, and all the eminent political 

 economists of the age, have supported his doctrine ; 

 while the late lord Grenville a member of the 

 administration which devised the sinking fund, and 

 for some time first lord of the treasury in a pamphlet, 

 which is a striking and noble specimen of political 

 candour, admitted that the treatise of Dr Hamilton 

 opened his eyes to the fallacj of uis once favourite 

 measure. 



In 1825, Dr Hamilton's declining years were 

 saddened by the death of his second wife, whom he 

 had married in 1782 ; and on the 14tli day of July, 

 1829, he died in the bosom of his family, and in that 

 retirement which his unobtrusive mind always court- 

 ed, and which he had never for any considerable 

 period relinquished. Several essays were found 

 among his papers, which were published by his 

 friends in 1830, under the title of " The Progress of 

 Society :" it is probable that the author might have 

 intended to have infused through them a connecting 

 spirit, which might have formed them into a general 

 treatise on most subjects connected with political 

 economy ; they however appeared in a disconnected 

 state, and although the majority of them contain 

 very deep and abstruse remarks well worthy of 

 attention, there are others which may, perhaps, be 

 said to contain too little of the close and practical 

 reasoning which generally distinguishes their author's 

 mind. 



HAMILTON, WILLIAM, a poet of the last cen- 

 tury, usually called Hamilton of Bangour, from the 

 place of his birth, Bangour, in Ayrshire, was born 

 in 1704. At the commencement of the insurrection 

 of 1745, he joined the standard of Prince Charles, 

 and was present at the battle of Culloden, after 

 which he became an exile from his native country, 

 but was at length pardoned. He died in France in 

 1754. His poems, which were first published at 

 Glasgow in 1748, and afterwards reprinted several 

 times, display liveliness of imagination and delicacy 

 of sentiment. The well known ballad of the " Braes 

 of Yarrow" is by this author. Hamilton of Bangour 



