DEBT. NATIONAL. 
gate, South Sea, and General Funds, tlie 
siirplusses 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 the principal and 
interest of such national debts and incum- 
brances as were incurred before the 25th of 
December, 1716. Sec Sinking Fund. 
The memorable South Sea sclierae, in the 
year 1720, was to have furnished a consi- 
derable sum to be employed in the reduc- 
tion of the public debts ; instead of which 
it increased their amount by an addition to 
the capital of 3,034,7691. 11s. lid. while the 
annual charge was rather augmented than 
diminished by the allowance for manage- 
ment on the^increased capital. The reduc- 
tion of a part of the interest was, however, 
secured ; and as the company’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 wdiich 
were converted into redeemable perpe- 
tuities by this scheme remained in their ori- 
ginal state, there was a certainty of their 
expiring at a fixed period. 
In 1727 the interest on 37,738,0071. of 
the public debts was reduced from 5 to 4 
per cent, which produced an important ad- 
dition to the Sinking Fund. An opinion, 
however, began to prevail, that the public 
debts had increased since the establishment 
of the fund, and that this provision was in- 
adequate to the purpose for which it was 
designed. This occasioned the publication 
of an excellent essay on the public debts, 
which has been generally ascribed to Sir 
Nath. Gould, in which it was clearly shewn, 
that although from the South Sea subscrip- 
tion, and from several articles being brought 
to account which were actually dud before 
the 25th of December, 1716, there was an 
appearance 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 flirther reduction ofinte- 
rest in a shorter period. 
Tlie application of the sinking fund to its 
original object was, however, of short dura- 
tion : 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 esta- 
blishment to the year 1739, was only 
8,328,3541. leaving the total amount of the 
national debt 47,314,8291. The w'ar which 
began in this year increased the debt to 
78,293,3131. the interest on which amounted 
to 3,061,0041. per annum ; but the rise in 
the price of the public funds on the peace 
enabled government, in 1749, to lessen the 
annual charge, by reducing the interest on 
57,703,4751. from 4 to 3i per cent, till the 
25th December, 1757, and tlience 3 per 
cent. This feduction produced a saving of 
612,7351. per annum; and with the salt 
duties, amounting to about 220,0001. per 
annum, formed another important addition 
to the sinking fund, the yearly produce of 
which, on an average of ten years previous 
to tliis augmentation, was 1,356,5781.; an 
income sufficient to have effected a very 
considerable diminution of tlie public debts, 
if it had been strictly applied to the pur- 
pose for which it was designed ; but being 
constantly taken towards the yearly sup- 
plies, scarce any progress was made in the 
reduction of the debt. 
The total amount of the national debt at 
the commencement of the seven years’ war, 
in 1756, was 74,980,8861.; and as the in- 
creased expenditure beyond the charge of 
preceding Wars, which is one of the inevi- 
table consequences of perpetuating taxes, 
rendered it necessary to borrow larger sums 
than had ever before been raised on loan, 
the debt increased rapidly, and at the end 
of the war, including the loan of 1763, and 
a valuation of the terminable annuities, it 
amounted to 136,367,7571., exclusive of the 
unfunded debt. 
After the peace in 1763, the income of 
the sinking fund increased considerably. 
The causes of this were partly the falling in 
of life annuities, and the greater produc- 
tiveness of the taxes arising from the in- 
crease of commerce aind population. But 
the principal cause was the falling in of the 
interest of about ten millions and a half of 
the public debt, which was discharged during 
the twelve years of peace ending with 1775; 
This diminntion of the public debt could not, 
however, be said to be made by the sinking 
fund, as other sources supplied the princb 
pal part of the amount: these were, a con- 
tribution from the East India Company of 
400,0001. per annum, begun in 1768, and 
continued for five years; the profits of ten 
lotteries; the composition agreed to be 
paid by the King of France for the main- 
tainance of French prisoners ; monies 
arishig from the sale of French prizes taken 
before the declaration of war, and other 
Hh 2 
