property to any purchaser. The deposit 
is generally ten per cent, and is made 
at or about tpe time of subscribing ; the 
second payment is about a month after, and 
so on till the whole is paid in, each instal- 
ment being usually either ten or fifteen per 
cent. Those subscribers who choose to pay 
the whole sum before the appointed days of 
payment, are allowed discount at an agreed 
rate per cent, on the sum paid in advance, 
from the time of such payment to the period 
when the whole is required to be paid in by 
instalments. Those who do not complete 
the payment of the sum they have subscrib- 
ed for, forfeit the part they have paid ; and 
this is the case according to the acts of 
parliament, if the money is not paid by the 
clays appointed ; but payments are some- 
times received after the appointed days on 
paying certain fees to the clerk. 
Loans are usually raised upon either re- 
deemable or irredeemable annuities. The 
former are those which according to the 
conditions of the acts by which they are 
created, government may redeem without 
the consent" of the proprietors, by dischar- 
ging the debt at par ; the latter are such as 
being granted for. specific terms, cannot be 
redeemed without the consent of the pro- 
prietors. The various debts that have been 
incurred at different periods by loans on 
either of these species of annuities, constitute 
the funded debt of the nation ; that is, the 
debt which has been secured upon certain 
funds, created bv parliament, and appropri- 
ated to the payment of the annual interest 
on the sums borrowed. The constant hope 
of being able at a future period to redeem 
the debts contracted, has induced the go- 
vernment generally to prefer raising money 
on annuities redeemable at par ; and the 
disadvantage which might arise to the stock- 
holder from being paid off at par, if his 
principal bore a high rate of interest, has 
always made those who advance money on 
loans prefer a large capital bearing a low 
rate per cent, though it may actually 
produce a somewhat less annual interest than 
would have been given on a capital equal 
to the sum advanced : the great speculations 
which are carried on in the public funds are 
also a strong inducement to prefer advancing 
money on these conditions, which have con- 
tributed so much to increase the nominal 
magnitude of the national debt. 
The terms of all the public loans which 
have been raised from the commencement 
of the funding system, have been collected 
by Mr J. J. Grellier, who observes, that 
“ the economy or extravagance of every 
transaction of this kind depends on its cor- 
respondence or disagreement with the price 
of tire public funds, and the current rate of 
interest at which money could be obtained on 
good security at the time the bargain was con- 
cluded; and consequently, a loan on which the 
highest interest is p id, may have been ob- 
tained on the be>t terms that could possibly 
be made at the time it was negotiated.” The 
interest paid, however, forms the real bur- 
then of each loan to the country, and is the 
circumstance to lie chieiiy attended to in 
all comparisons of the advantage or disad- 
vantage of the terms on which the public 
debts have been contracted at different pe- 
riods.. 
LOANS. 
From the difference in the terms of the 
loan, with respect to the capital created, the 
rate of interest it bears, and the different 
periods of the terminable annuities which 
have been granted with most of the loans, it 
is evident, that in order to form a proper 
comparison of the rate of interest paid for the 
money borrowed at different periods, the 
various conditions must be brought into some 
degree of uniformity ; and the most obvious 
mode of doing this is, by converting that 
part of the interest which consists of termi- 
nable annuities into equivalent perpetual an- 
nuities ; that is, into the additional interest, 
which must have been paid in lieu of such 
terminable annuities. 
The rate of interest at which such conver- 
sion is made affects the result in some in- 
stances very materially ; thus, the perpetual 
annuity, which is equal to an annuity of 
10/. for 21 years, is, at 3 per cent. 4/. 12s. 
5 d. but at 5 per cent. 61. 8s. 2d. ; and the 
perpetual annuity equal to an annuity of 
10/. for 60 years, which at 3 per cent, 
is 8/. 6 s. is at 5 per cent. 9/. 9?. 3d. 
from which it is evident, that, if the termi- 
nable annuities, granted at different periods, 
are all valued at the same rate of interest, 
the comparison will by no means be just; 
for if a high rate is adopted, the loans which 
have been obtained at the lowed interest 
will be set in an unfavourable view ; and if, 
on the contrary, they are all valued at a 
low rate, the charge of tho e loans, for which 
the highest interest is paid,' will appear less 
than it really is. Nor is a medium or aver- 
age rate more proper for exhibiting the real 
difference in the terms on which the several 
loans have been obtained. The least ob- 
jectionable mode appears to be to convert 
the terminable annuities into perpetual an- 
nuities, according to the current rate of in- 
terest at the time when the annuities were 
granted, as it is upon the rate of interest that 
the proportionate value of an annuity for a 
certain term to the perpetuity depends ; and 
in forming the following statements, the 
conversion has been made at the interest pro- 
duced by money invested in the three per 
cents, according to the price of tiiis stock 
at the times when the terms of the respec- 
tive loans were settled : for, though by this 
means, the rate is, in each case, rather 
lower than it would have been had the in- 
terest produced by 4 or 5 per cent, stock 
been adopted, it is most probable, from the 
nature Qf the principal loans, that the stock 
which must have been given in lieu of along 
annuity, would chiefly have been three per 
cents. ; and, therefore, the interest equiva- 
lent to the long annuity should be found ac- 
cording to the interest produced by this 
stock. It may also be proper to remark, 
that, as the terminable annuities have mostly 
been granted for a long term, and form but 
a small part of the whole interest, particu- 
larly on the loans of the last war, the differ- 
ence of a quarter or even half per cent, in 
the rate at which they are valued has in ge- 
neral but little effect on the whole rate per 
cent, of the loan. Thus, if the long annuitv 
of the loan of 14,500,000/., in 1797, is va- 
lued at 6 per cent, (being the interest pro- 
duced by 3 per cents, at that timet it makes 
the whole rate per cent. 6/. 6.s. lOff ; but, 
if the long annuity is valued at 5| per cent, 
it will be 61. 6s. 9±d. ; at 5-§. per cent. 
57 
61. 6.v. Q^d . ; and, at 5 per cent. 61. 65. 8 \d. 
On the loan of 1798, the difference would 
be still less. 
I ill the last war, the lottery g nerally 
formed part of the terms of the loan ; every 
subscriber of a certain sum towards the lat- 
ter being entitled to a certain number of 
tickets, at 10/. each, the price at which the 
lottery-scheme is usually formed. As the 
whole profits of the lotteries were thus given 
up to the subscribers, a part of the money 
advanced must be considered as equivalent 
to the sum which government would other- 
wise have received for the lottery, ami is 
therefore to be deducted from the whole 
sum advanced on the loan. This profit is 
variable, but has generally been taken at the 
average of 2/. 10-v. per ticket; making', on 
a lottery of 50,000 tickets, 125,000/. to be 
deducted from the sum advanced, in estimat- 
ing the rate of interest paid thereon. 
There are some other circumstances which 
affect the interest paid: such as the discount 
allowed for prompt payment, the different 
periods of the instalments, and the times from 
which the annuities commence; but as these 
drawbacks do not in general amount to any 
considerable sum, in comparison with the 
whole amount of the loan, they do not mate- 
rially augment the rate of interest ; and as 
they more or less affect all the loans, they 
are of still less importance in a comparative 
view. In the following statement, however, a 
deduction is made on the loans of 18,000,000/. 
in 1796 and 1797, on account of (he advan- 
tage allowed with respect to the time from 
which the annuities commenced, being greater 
than usual. 
It is unnecessary to enter into a particular 
investigation of the interest paid for the mo- 
ney borrowed in the infancy of the funding 
system, as the first loans differed materially 
from those of subsequent periods, in being 
raised wholly on terminable annuities, and in 
having a particular fund assigned lor each 
loan, by the supposed adequateness or insuf- 
ficiency of which the interest required by the- 
lenders was frequently influenced, as well as 
by other causes, which have since ceased to 
exist. 
During the reign of queen Anne, loans 
were chiefly raised on annuities for 99 years, 
till 1711, when, by the establishment of the 
South Sea company, a variety of debts were 
consolidated ■‘and made a permanent capital, 
bearing 6 per cent, interest. About this pe- 
riod lotteries were also frequently adopted 
for raising money for the public service, un- 
der which form a considerable premium was 
given, in addition to a high rate ot interest. 
This mode of raising money was followed in 
1712, 1713, and 17 1 4. In the latter year, 
though the interest paid was equal to. only 
5/. 7s 2d. per cent, on the sum borrowed, the 
premium allowed was upwards ot 34/. per 
cent. ; bi t as peace was restored, and the 
legal rate of interest had been reduced to 5 
per cent, it seems that a larger premium was 
allowed, for the sake of appearing to borrow 
at a moderate rate of interest. 
In the reign ot George 1. the interest on a 
considerable part of the public-debts was re- 
duced to 5 per cent, and the few loans that 
were raised were compar tively of small 
amount that of the year 1720 was obtained- 
at little more Ilian 4 per cent, interest. 
