DEBT, NATIONAL. 



ywhin jthe limited time, the principal and 

 interest of the money borrowed, deficien- 

 cies arose ; to make good which, it be- 

 came necessary to prolong the original 

 term. This expedient was repeated, and 

 money was sometimes borrowed on a 

 fund already anticipated for several years 

 to come. Exchequer bills were issued, 

 and lotteries introduced, but all these 

 temporary means were found inade- 

 quate to the rapid increase of the public 

 expenditure ; which of course soon caus- 

 ed an accumulation of public debts; and 

 as the interest payable to the public cre- 

 ditors was frequently some time in ar- 

 rear, public credit was occasionally re- 

 duced to a very low ebb, and apprehen- 

 sions were entertained that the public 

 debt had already become too heavy a 

 burthen for the country to prosper un- 

 der. 



In the year 1711 a project was formed 

 for relieving the government from the 

 financial difficulties under which it la- 

 boured, by permitting the proprietors of 

 various debts and arrears, amounting 1 to 

 8,971,325/. to subscribe them towards 

 raising the capital of a company formed 

 for carrying on a trade to the South Seas. 

 The actual capital of the company was 

 9,177,967 J. 15s. 4d., which, for the further 

 accommodation of government, was in- 

 creased in 1715 to ten millions. 



The total amount of the. national xlebt, 

 on the 31st of December, 1716, was 

 48,364,501 1. 8s. 4d. which, on the opening 

 of the following session of parliament, 

 was mentioned in the King's speech, and 

 the Commons' address, as an insupporta- 

 ble weight, and the government appears 

 to have thought it necessary to concert 

 seriously such measures, as might lay the 

 foundation of an effectual plan for its re- 

 duction. In consequence of this dispo- 

 sition, all the existing taxes, except the 

 land and malt, were made perpetual ; and, 

 having been distributed into three classes, 

 called the Aggregate, South Sea, and 

 General Funds, the surplusses remaining, 

 after satisfying the previous charges upon 

 these respective funds, were formed into 

 a separate fund, called the Sinking Fund, 

 for the express purpose of discharging 1 

 the principal and interest of such national 

 debts and incumbrances as were incurred 

 before the 25th of December, 1716. See 

 SINKING FUND. 



The memorable South Sea scheme, in 

 the year 1720, was to have furnished a 

 considerable sum, to be employed in the 

 reduction of the public debts; instead of 

 which it increased their amount by an ad- 



VOL. IV. 



dition to the'capital of 3,034,769/. 11. lid. 

 while the annual charge was rather aug- 

 mented than diminished by the allowance 

 for management on the increased capital. 

 The reduction of a part of the interest 

 was, however, secured ; and as the com- 

 pany's capital was redeemable, a further 

 reduction of interest might be effected at 

 a future period ; but this depended on 

 future circumstances .- whereas, had the 

 terminable annuities which were convert- 

 ed into redeemable perpetuities by this 

 scheme, remained in their original state, 

 there was a certainty of their expiring at 

 a fixed period. 



In 1727 the interest on 37,758,007/. of 

 the public debt was reduced from 5 to 4 

 per cent, which produced an important 

 addition to the Sinking Fund. An opinion, 

 however, began to prevail, that the pub- 

 lie debts had increased since the esta- 

 blishment of the fund, and that this provi- 

 sion was inadequte to the purpose for 

 which it was designed. This occasioned 

 the .publication of an excellent essay on 

 the public debts, which has been general- 

 ly ascribed to Sir Nath. Gould, in which 

 it was clearly shewn, that although from 

 the South Sea subscription, and from se- 

 veral articles being brought to account 

 which were actually due before the 25th 

 of December, 1716, there was an appear- 

 ance of increase, the debt had in reality 

 been diminished, and that from the great 

 addition now made to the Sinking Fund, 

 by the reduction of interest, it would, if 

 not diverted to any other purpose, dis- 

 charge all the debts-then existing in about 

 56 years, or with a further reduction of 

 interest in a shorter period. 



The application of the sinking fund to 

 its original object was, however, of short 

 duration : in 1733 half a million was taken, 

 from it towards the supplies : larger sums 

 were taken in the following years, and 

 the whole amount paid off by the fund, 

 from its establishment to the year 1739, 

 was only 8,328,354/. leaving the total 

 amount of the national debt 47,314,829/. 

 The war which began in this year increas- 

 ed the debt to 78,293,313/. the interest on 

 which amounted to 3,061,004Z per an- 

 num : but the rise in.the price f the pub- 

 lic funds on the peace enabled govern- 

 ment, in 1749, to lessen the annual 

 charge, by reducing the interest on 

 57,703,475^. from 4 to 3 per cent, till the 

 25th December, 1757, and thence 3 per 

 cent. This reduction produced a saving 

 of 612,735/. per annum ; and with the 

 salt duties, amounting to about 220,000/. 

 per annum, formed another important ad- 



