FUNDS. 



in the year 1715, and had this name given 

 to it, because it consisted of a great varie- 

 ty of taxes and surpluses of taxes, which 

 were in that year consolidated, and given 

 as the security for discharging the inte- 

 rest and principal of all the exchequer 

 bills then outstanding, and of some other 

 public debts: and likewise for the pay- 

 ment of 120,OOOJ. per annum to the civil 

 list. 



The South Sea Fund was established in 

 1716,and was so called, because appropri- 

 ated to pay the interest and allowance for 

 management on the capital of the South 

 Sea Company. 



The General Fund was also established 

 in 1716, by making perpetual various du- 

 ties, which had been granted for the term 

 of thirty-two years, and consolidating 

 them with some other duties into one 

 fund. It was appropriated chiefly to the 

 payment of the interest on various sums 

 raised by lotteries during the reign of 

 Queen Anne. 



The Sinking Fund consisted of the 

 surpluses of the three funds just mention- 

 ed, whenever the produce of the taxes 

 composing them should be greater than 

 the charges upon them. The establish- 

 ment of these ftinds formed part of a plan 

 for a general reduction of the interest 

 payable on the public debts, and this be- 

 ing effected, the charge on each of the 

 three funds was of course lessenedconside- 

 rably, and the future overplus was direct- 

 ed to be carried into a fourth fund, to 

 which was given the name of the Sinking 

 Fund, because appropriated to the pur- 

 pose of redeeming or sinking the public 

 debts. The act of parliament by which 

 this fund was established expressly or- 

 dained, that it should be applied to the 

 discharge of the public debts, and " to or 

 for none other use, intent, or purpose 

 whatsoever ;" yet in the course of a few 

 j'ears many encroachments were made 

 upon it, and ultimately it became a mere 

 nominal distinction, the whole produce of 

 it being usually taken towards the sup- 

 plies of the current year. 



-The Consolidated Fund was establish- 

 ed in consequence of a new arrangement 

 of the public accounts in the year 1786, 

 when the funds above mentioned were 

 abolished, and the whole of the public 

 revenue, (except the annual grants) in- 

 cluded under this general head. Out of 

 this fund are paid the interest and ex- 

 penses of management of all the public 

 debts, the interest on Exchequer bills, 

 the civil list, pensions to the royal family 

 and others, salaries and allowances to va- 



rious public officers, and some miscella- 

 neous annual expenses. The surplus of 

 the produce of the fund, after satisfying 

 all these charges, is annually granted by- 

 parliament as part of the ways and means 

 for raising the supplies voted. 



Hence it appears that the public fund* 

 are properly the provision which has 

 been made for payment of the interest or 

 principal of the public debts, but as the 

 possession of the acknowledgment, given 

 by government for the money borrowed, 

 established a right to receive the pay- 

 ments from the fund on which the loan 

 was originally charged, the sale of these 

 securities was considered as the sale of a 

 portion of that particular fund, and as the 

 acknowledgments given were of different 

 kinds, the general appellation of the pro- 

 vision on which they rested was found 

 more convenient for purposes of busi- 

 ness. Thus the sale and purchase of go- 

 vernment securities was commonly called 

 the sale and purchase of the public funds, 

 till, in the course of time, the expression 

 has so far varied from its original signifi- 

 cation, that instead of meaning the reve- 

 nue out of which the interest of the pub- 

 lic debts is payable, it denominates the 

 capital of the debts, in which sense it is 

 now commonly used. Thus, the posses- 

 sion of 1QOOI. in the public funds is un- 

 derstood to mean WOOL capital, bearing a 

 certain rate of interest, at 3, 4, or 5 per 

 cent per annum, according to the origi- 

 nal terms of the loan. 



The debts bearing a certain rate of in- 

 terest, payable till the principal shall be 

 redeemed, are denominated, in the lan- 

 guage of finance, perpetual annuities, or 

 redeemable annuities, but in the common 

 course of business, they are called funds 

 or stocks: a small part of the public 

 debts consist of annuities for a certain 

 term of years, commonly called long or 

 short annuities : there are also some life 

 and tontine annuities still existing ; but 

 the whole of the terminable annuities 

 bears a very small proportion to the per- 

 manent debts. The perpetual annuities 

 are distinguished according to the rate of 

 interest they pay, or the time or purpose 

 of their creation; and when by a new loan 

 government contracts an additional debt, 

 bearing a certain fixed interest, the capi- 

 tal thus created is added to the amount 

 of that part of the public debt which bears 

 the same rate of interest, and the pro- 

 duce of the taxes imposed for payment of 

 the interest of such new debt being car- 

 ried,tothe fund established for payingthe 

 interest of the former capital, the old 



