ilS 
FUND. 
fund, and afterwards to replace the ftim taken from it out 
of the fuppliei for the following year. But whenever a 
tax produced more than the charge upon it, the overplus, 
infiead of being carried to the finking fund, was made a 
part of the fnpplies for the year. By the a£t juft men¬ 
tioned, all the new taxes, together with all the annuities 
to the payment of which they had been appropriated, 
were ordered to be carried into the finking fund, and form¬ 
ed into one general account. Moft of the new taxes hav¬ 
ing proved deficient, this fund at firlt loft more than it 
gained by the change. But the lofs was afterwards more 
than made up ; firft, by the faving which was produced 
by the redudfion of interelt from tiiree and a half per cent, 
to three per cent, in 1757; and, iecondly, by the addi¬ 
tion, in the fame year, of the falt-duties to this fund, af¬ 
ter they had completed the redemption of a million with 
which they had been charged in 1745. 
The war which began in 1756, added feventy-one mil-' 
lions and a half to the public debts. This produced a 
new increafe of raxes, which (in conformity to the con- 
idlidating a6t juft mentioned) have been brought to the 
general finking fund account, together with the annuities 
or intereftswith the payment of which they are charged. 
And it is now the conftant pradtice, whenever a new fund 
or tax is created for paying the intereft of a loan, to car¬ 
ry both into the finking fund ; in confequence of which, 
tliis fund gains when the tax hajipens to produce more, 
but lofes when if produces lefs than the intereft which it 
has been given to pay. The finking fund, therefore, 
which, before the confolidating art, confifted only of the 
furplnftes of the aggregate, general, and South-Sea com¬ 
pany’s, funds, confifts now of the clear furplus of all the 
appropriated taxes. There is but one tax excepted ; and 
that is, the additional tax upon houfes and windows, 
granted in 1758, towards paying the intereft of four mil¬ 
lions and a half then borrowed. This tax has never been 
made a part of tlie finking fund ; and, having always prov¬ 
ed deficient to the amount of about 45,000!. per ann. the 
deficiency is cpnftantly made good by the finking fund, and 
afterwards replaced from the fupplies. 
Before the iaft redurtion of the intereft of the public 
debts, the finking fund, having fuftered greatly from va- 
rious encroachments upon it, produced little more than 
a million per ann. But after this redurtion, and its in¬ 
creafe by the addition of the falt-duties, it produced near 
two millions per ann. In 1764, it produced at Michael¬ 
mas, after making good deficiencies, 2,105,000!. nearly. 
For five years after 1764, its average produce, reckoned to 
Chriftnias in every year, was 2,234,780!. For five years, 
ended in 1774, its average produce was 2,610,759!. In 
1775, it produced 2,917,869!. In 1776, 3,166,^17!. In 
1777, it was cliarged with an annuity of ioo,oool. per 
ann. to tlte civil lift; and, after paying this aimuiiy and 
half a year’s intereft of five millions borrowed in tliat 
year, it produced nearly 2,700,000!. In 177S, it was 
taken at tliree millions; but did not produce, after pay¬ 
ing the laid annuity, and makinggood the interefts of the 
new loans in 1777 and 1778, more than two. 
It appears from this detail, that fince the peace in 1763, 
the income of the finking fund has increafed confiderably. 
The caufes of this have been partly the falling in of life- 
annuities, and the great prcdnrtivenefs of tire t.ixes occa- 
fioned by the incrcaJe of luxury. But the principal caufe 
has been the falling in of the intereft of about ten millions 
and a half of the public debts, which had been difeharg- 
cd during the twelve years of peace between 1763, and 
1775. This diniiiuilion of the public debts has been 
made, not by the finking fund, but by a contribution from 
the Eaft-lndia company of 400,000!. per ann. begun in 
1768, and continued for five years 5 by the profits of ten 
lotteries; by the compofition for maintaining French 
prifoners ; fale of French prizes taken before the declara- 
tionof war in 1756; and other extraordinary receipts, 
amounting in all to above eight millions. This fund, 
there/ore, did pay ofi'aiore than two millions and a 
half, the reft of its produce having been employed in 
bearing the expences of the peace eftablifhment, which, 
during this period, was nearly double to what it had been 
in any former period. 
To the fum juft mentioned, add three millions paid off 
in the peace between 1748 and 1756, and three millions 
paid off in 1736 and 1737, and it will appear tb.at the 
w hole amount of the public debts paid off by the finking 
fund, fince its firft alienation in 1733, only-eight 
millions and a half ; whereas it has been (hewn, that had 
only i,2i2,oo.ol. per ann. of it been applied inviolably to 
the redemption of the public debts, one hundred and for- 
ty-nine millions would have been paid. 
It has been faid, that when money is wanted for defray, 
ing public expences, it makes no diffetence whether it is 
obtained by diverting the finking fund, or by a new loan. 
There cannot be a more delufive fallacy than tliis. Mo¬ 
ney in a finking fund, if never alienated, is improved at 
compound intereft; but, when procured by a loan, bears 
only limple intereft. A nation therefore, whenever it ap¬ 
plies the incomeof fuch a fund to current expences rather 
than the redemption of its debts, choofes to lofe the bene¬ 
fit of compound intereft in order to avoid paying fimple 
intereft ; and the lolsin this cate is equal to tlie difference 
between the increale of money at compound and fimple in¬ 
tereft. This obfervation was very fully eftablifhed in an 
ingenious pamphlet publiflied by a Mr. John Adam in 
the year 1727, when the redurtion of intereft on the na¬ 
tional debt from five to tour per cent, took place ; by 
which meafure this famous li..king fund was increafed to 
above a million per annum. He obferves, “that. Cup- 
pofing thenational debt, wliicli was fifty millions, 
and the faid finking fund of one million, to be both at 
four percent, interefi, the latter increaling annually in 
like proportion as fuch a fum put out at compound in¬ 
tereft would do, the whole national debt would have 
been difeharged by the year 1756. Thus,” for illuftra- 
tion, “ at Miduiminer 1728, one million would be paid 
off; and at Midfummer 1729, the fitiking fund would be 
one m.illion and forty ihoufand pounds, and that fame 
year and term the debts would be leflened two millions 
and forty thoufand pounds. At Midfummer 1730, the 
finking fund would be increafed to one million and eighty 
thoiifand-ponnds, and the debts would be leffened three 
millions on'e luindrcd and twenty-one thoufand_^ fix hun¬ 
dred pounds; and (0 on to the faid year 1756, when the 
faid finking fund would be increafed to thirty m.illion?. and 
the total amount of the debts paid vvoul '. be fifty millions. 
Again, Cnppofing the fifty millions liad been at three per 
cent, from Midfimuner 1727, then at Midfummer 1751, 
inftead of 1756, the (inking fund would be increafed to 
thirty millions, and the debi of fifty millions would then 
be difeharged.” 
Thefe obfervations of Mr. Adam, have been fince car¬ 
ried farther by the late Dr. Price, who, in his Appeal to 
the Public on the national debt, proves, “ that one pen¬ 
ny put out at our Saviour’s birth to 5 per cent, compound 
intereft, would in the year 1781 have increafed to a great¬ 
er fum than would be contained in 200,000,000 of earths 
all folid gold ; but, if put out at fimple intereft, it at the 
fame time would have amounted to no more than feven 
ftiillings and fixpence. He adds, a mil.lion borrowed an¬ 
nually for twenty years, will pay oft', in this time, 
5; millions 3 per cent, flock, if difeharged at 60]. in mo- 
ney for every lool. flock; and in 40 years more, without 
any farther aid from loans, 333 millions (that is 3,88 mil¬ 
lions in all) would be paid oft. The addition of nineteen 
years to this period would pay oft' 1000 millions. A fur- 
plus of half a million per annum, made up to a million 
by borrowing half a million every year for twenty years, 
W'ould difeharge the fame Aims in the fame periods.” 
The finking fund, notwithftanding the force of thefe 
obfervations, went on from year to year alienated and 
neglerted; until the opening of parliament in 1786, when 
the late chancellor of the exchequer, Mr. Pitt, with 
a zeaA 
