Statistics^ 
259 
THE SINKING FUND. 
In 1716 Sir Robert Walpole at the suggestion of Earl Stan- 
hope, proposed that the surplus of the aggregate, the south sea, 
and the general funds, should go to another fund called the sinking 
fund, and be applied to the repurchase and redemption of the na- 
tional debt. Sir Robert Walpole however in 1733 wanting half 
& million sterling, proposed to take it from the sinking fund, un- 
der two pretences, 1 st, that the country would not support an addi- 
tional land tax, and 2dly, that the |5urchasing up so much stock 
and taking it out of market, was a greater defalcation from the 
circulation of the kingdom than the monied interest could well 
bear. He prevailed ; and depredations were committed on this 
fund by him and subsequent ministers, till it was rendered nearly 
inefficient. 
Soon after the dose of the American war, Dr. Price proposed 
to Mr. Pitt, the establishment of a sinking fund, which under 
the controui of commissioners operating perpetually on the nation- 
al debt, might produce an interest approximating to compound 
interest, while the nation paid its creditors at the rate of simple 
interest only. To aid this, he proposed that when loans were re- 
quired, the debt should be created by paying large interest on small 
Sums, rather than by borrowing at a low interest, increase the 
toount of the capital borrowed. Unfortunately, Mr. Pitt through 
timidity as a financier, rejected the last proposal : but in 1786 he 
established the modem sinking fund, 1st, by appropriating a capital 
of a million a year, and then by adding to it divers surpluses of 
taxes. Lord Lauderdale has objected to the principle of the 
sinking fund, as taking out of the productive capital of the 
Jlation, so much as it redeems of the debt, but I do not see the 
force of his reasoning. In my mind, this fund faithfully applied 
during a long continuance of peace, would go far to annihilate the 
debt of England, enormous as it is: but unfortunately, the nation- 
al burthens increase in far greater proportion, than this fujid can 
diminish them. At the close of the year 1812, it hsa.d redeemed 
of the national debt about 222 millions; and the fund to be appro- 
priated to the same purpose, for the next year, would be upwards 
of thirteen niiilions and a half. The great use however of the sink- 
ing fund to the minieter^ is as an engine of Stock-jobbing, to ke.clp 
up the price of funds, which I'tationai disaster:-; terS to reduce. 
