§ On the order of the day for bringing up the report of the committee on the said acts,
said, it was his opinion, that the surplus revenue of the country would be more beneficially applied, if 502 appropriated to the relief of the people, by a further remission of taxation, than it would be if appropriated to the purposes to which the chancellor of the exchequer had declared his intention of appropriating it. He was a friend to the principle of a sinking fund; that was to say, to the application of surplus of revenue, to the bonâ fide reduction of the debt. He would say, "apply it to such a purpose now," if he did not think that it would be more beneficial to the public creditor, to have it applied to the remission of taxation. That was his view of the question. But it was said, "If you go on in this manner, no one will lend you money again in your emergencies." Now, he held a contrary opinion; for he would venture to say, that there was no person who lent money to the state, who looked so much to the sinking fund as the security out of which his debt was to be paid, as he did to the substantial wealth and. opulence of the country. Were the funds now at such a price, that it was necessary to increase them by appropriating a large sum to the sinking fund? He saw nothing in the situation of the public creditor, that called on the House to make the proposed application of this surplus revenue. The proposition which he should now make was, that the House should postpone the further consideration of this report till the 21st of April. This proposition, if acceded to, could produce no effect upon the public creditor; for till that period, at any rate, all the surplus revenue would be appropriated to the sinking fund; and the only difference would he, that instead of the public accounts being made up to the 5th of April next, they must be made up to the 5th of July next. It might be asked, what reason he had for making this proposition? His answer was, to try whether, in the interim, a further reduction of taxation could not be effected. For after the appropriation had once taken place, no man could expect a further remission of taxes.
said, if he did not in his conscience believe that a real sinking fund was most necessary for the interests of the country, he would not vote for the bill.
§ Mr. W. Smith
was convinced, that the country at large would be much more benefitted by the further diminution of its burthens, than it would be by the paying off of a comparatively small part of the national debt, for the period during which peace might continue.
§ Mr. Benett,
of Wilts, contended, that the repeal of taxes must always benefit the landed interest. By taking off taxes from the tenant, the parliament, in fact, gave so much to the landlord.
§ Sir J. Shelley
did not think he should be exorbitant, when he asked the chancellor of the exchequer to repeal two millions more taxes, in addition to the two millions of which he had already given notice. A surplus of three millions for a sinking fund, or to meet possible contingencies, would then be preserved.
§ Mr. Hume
said, that the sinking fund had been attended with loss to the country. If it remained on its present footing, at the end of any given number of years, it would not be found to have reduced the national debt one farthing. The minister of the day would always apply the surplus in time of need, to any purpose but that for which it was intended. The chancellor of the exchequer had stated on a former night, that the debt, by means of the sinking fund, had been reduced 24 millions. To show that the statement was not correct, he called upon the House to attend to the following calculations:—The amount of unredeemed funded debt, 5th Jan. 1816, was 816,311,939l. On 5th Jan. 1822, 795,312,767l. Diminution since 5th Jan. 1816, 20,999,172l. Unfunded, 5th Jan. 1816, 43,938,823l. On 5th Jan. 1822, 41,514,061l. Diminution 2,424,762l. Making the real diminution 23,423,924l. But the chancellor of the exchequer had said, that the diminution was 24,766,520l. This was accounted for as follows, viz:—Of the loans raised in 1815, for which no less than 87 millions of capital was created, at the rate of 100l. for every 52l. of money received, 5,939,803l. of the money remained to be paid after the 5th Jan., 1816, although the whole of the capital created was included in the account of 1815; and with the 5,939,803l. of money received in 1816, three per cent stock was purchased at 62, to the amount of 9,563,082l. And there was cancelled between the 5th Jan. 1816, and the 5th of Jan. 1822, by conversion into life annuities, 3,268,964l. In 1816, there was received from the Bank three millions, at an interest of 3 per cent, with which three millions there was cancelled of other 3 per cent stock, 4,840,000l., being an excess of 1,840,000l. And in 1818, 2,999,920l. money was received from certain holders of 3 per cent stock, to the amount of 27,272,000l. for 504 converting that amount into a 3½ per cent stock, and with the 2,999,920l. there was purchased of three per cents, 3,846,000l. And in 1820, seven millions of exchequer bills were funded for 6,930,000l. of 5 per cent stock, with which amount of bills, 10,202,500l. of three per cents were purchased, being an excess of 3,272,500l. And there has been cancelled of 3 per cents by the operation of redemption of land tax, 664,032l. Total diminution accounted for, 22,454,578l. Leaving, by the operation of the sinking fund, a diminution of only 2,311,944l. according to the chancellor of the exchequer's own statement, and of 968,758l. only, according to the real fact; although, in the same period there had been an actual excess of taxes of no less than 7,528,869l.; and so far from there being any diminution in the annual charge, although the rate of interest on the unfunded debt had been reduced from 3½d. to 2d. per day, making a total reduction of no less than 941,500l. per annum, the amount actually charged for interest and management of the unredeemed debt, funded and unfunded together, had been, in 1817, 31,266,601l.; in 1818, 31,351,751l.; in 1819, 30,792,025l.; in 1820, 31,256,120l.; in 1821, 31,966,078l. The hon. gentleman concluded by insisting, that present relief was the policy of the country, until all interests were set straight. He was decidedly against the plan of keeping a surplus in hand, to meet possible future deficiencies of revenue.
§ Mr. John Smith
believed it would have been impossible, without the aid of the sinking fund, to have raised the immense supplies that we had raised during the war. He thought, indeed, that even what was called the sham sinking fund, had been useful during the war, as it had tended to keep up the prices of stocks, and to support public credit. Whenever the funds had fallen, the commercial interest would be found to have suffered. He remembered the three per cents at one time as low as 47; and scarcely a merchant at the time knew one day whether he should be able to take up his acceptances the next. Recommending, in its fullest extent, economy and retrenchment, he should vote for the propositions of the chancellor of the exchequer.
§ Mr. Monck,
under the present circumstances of the country, contended, that a sinking fund was not only useless, but decidedly mischievous. The arguments 505 in support of one were—I, to keep up the price of stocks; 2, to extinguish the debt. With respect to the first, he doubted whether the mass of the fund-holders derived much benefit from the high price of stocks. If they received the interest for their money, that was all that they wanted. Perhaps to large capitalists, who speculated much in foreign loans, it might be advantageous, because their object was to sell out. But even this effect had been exaggerated; as in 1792, when the sinking fund was very low, the three per cents were at 97. The national debt had been so contracted, that it could never be reduced. The more that was paid, the more we had to pay. We had, in fact, sold annuities of 3l. for 571., which we were to redeem, if at all, at 100l.—a bargain which would never be maintainable in a court of equity. If the nominal capital of the debt was 1,000 millions, and the price of stocks 70, the country, according to the selling price, was 700 millions in debt. If we paid off 100 millions of this debt, though the capital would be numerically reduced, the price of stocks would have risen from 70 to 90; so that, instead of having reduced, we should have increased the real amount of the debt. It would be much better, instead of attempting to pay off that debt, to apply the surplus revenue to the reduction of taxes. In this way, the Americans, at the close of the war, having an expenditure of four millions of dollars beyond their revenue, raised small loans, till, in the last year, their revenue had increased so as to enable them to reduce their debt.
§ Mr. Ricardo
said, it was true that the government of America had borrowed 4,000,000 dollars, and that, by bringing capital from other countries, it had, in fact, improved its resources. It was also true, that the effect of the sinking fund was at present to raise prices against ourselves. But this was true of every sinking fund. The question was, had not the sinking fund reduced the annual charge? It certainly would do so if correctly applied. A real sinking fund, if properly appropriated, was a great good. To a fictitious sinking fund he had many objections. But there was a great difference between the two. A real sinking fund applied to pay off the debt, would raise the price of stocks, and enable us to borrow on better terms. Many members had no hopes that a real sinking 506 fund would be preserved. They, therefore, objected to grant a sum for a purpose, the beneficial effects of which they were never likely to see. His hon. friend, the member for Taunton, had facetiously observed, that because he (Mr. R.) thought ministers were going to rob the sinking fund, he would willingly take it away himself. It was, he thought, good policy, when his purse was in danger, rather to spend the money himself than allow it to be taken from him. He did not, he confessed, think the national purse safe in the hands of ministers. It was too great a temptation to entrust them with. What he wanted was a real sinking fund, and therefore he supported the present as far as it was real. But there was every reason to believe it would become fictitious; for every sinking fund had, in its origin, been real, but had all been turned into fictitious funds. As to the Annuity bill of last year, he hoped the whole of it would be repealed, and the amount be transferred to the sinking fund. It had been estimated that 2,000,000l. of those annuities would die off annually. Let this sum be applied to the purposes of the sinking fund. The hon. member for Taunton had, on a former evening, been severe on him, giving him credit for the ability of his calculations, but denying that he looked sufficiently at their political and moral consequences. Now, he claimed the merit of extent in the scope of his views beyond the hon. member. He felt deep alarm at the heavy amount of the debt, and at the want of proper means to lighten it. His hon. friend, with his enlarged views, wished for a sinking fund, not to pay off the debt, but to furnish ministers with the means of going to war, in cases of extremity. But, if this fund were to be so appropriated, how was the debt to be paid off? He would tell his hon. friend, if no means were taken to pay it off, that he was sleeping on a volcano. He thought a national debt of 800 millions a very serious evil; and he thought so from the heart-burnings which were occasioned by the taxes levied to pay it, which in one year affected one interest, and the next year another interest. Taxation pressed on every interest; and did he not propose to benefit mankind when he said we ought to endeavour to get rid of the debt? By doing this, should we not get rid of the expense of collecting taxes Should we not get rid of the im- 507 morality of smuggling, and of the excise laws? By getting rid of smuggling, should we not benefit trade? For all the profit of the smuggler was a tax on the whole community. Neither would it be a trifling benefit, in a constitutional point of view, that it would deprive ministers of a great deal of patronage. It would also confer great benefits on our commerce, by putting it in a natural state. At present, from the duties and restrictions of customs and excise, it was in a most unnatural state. Was this legislating for men, or for stocks and stones? He had before stated, that he thought a great effort should be made to stet rid of the debt; and he had mentioned a plan which he thought should be adopted. The hon. and learned member for Winchelsea had opposed his plan; and had said, that it would throw the whole land of the country into the hands of pettifogging attorneys; but of this there was no danger. Parliament might interfere, and give secure titles to the land which was disposed of, without the interference of pettifogging attorneys. Let it not be said, that he was not aware of the difficult situation in which the country stood. Nothing else could have induced him to recommend the measure. He could be quite easy in recommending the measure of a sinking fund, if they had a different kind of parliament—one that moved in more direct sympathy with the people. He confessed his fear of the present parliament, and its disposition to ministerial compliance. His hon. friend asked, in case of applying the sinking fund, what they were to do should a new war break out? If that was the real view, they should not call it a sinking fund. They might call it a fund for ministers to divert to particular purposes, but not a sinking fund. But, suppose a new war to break out, no such thing as a sinking fund ever having been heard of—was his hon. friend ready to vote a fund prospectively to be at the disposal of ministers, in that event? Let him say yes, and they would understand each other.
said, that, with every respect which he might have for his hon. friend's talents and the ingenuity which marked the speech which he had just made, he must be allowed to say he had never listened to one which led to such—(not to say absurd—that term would savour of want of courtesy), but so singular a conclusion. To begin with the plan of pay- 508 ing off a part of the debt, by a new disposition of the property of the country, he must be allowed to say, that it was the plan of a man who might calculate well and read deeply, but who had not studied mankind. It was ingenious in theory, and obvious enough; but not very sound for practice. His hon. friend said, that they could give a good parliamentary title to the property to be disposed of. He would put it to the country gentle men, whether all the burthens of taxation, of which they had complained, could make them experience half of what they must feel, on having a proposition put to them to convey, by "a good parliamentary title," not less than one-third of their property to the fund-holders. He did not pretend to ally thing like the reach of intellect possessed by his hon. friend, but he thought his hon. friend sometimes over-reached himself, and lost sight of man, and of all practical conclusions: On another point, the sinking fund, his conclusions appeared equally extraordinary. He admitted that a sinking fund was good in itself. Then, it must be good as it should last in a real state. Were it only for a year, pro tanto it must, by his own admission, be a benefit. Ministers had his hon. friend's argument to set off against his vote. He had always thought the question of finance unfairly stated, when one interest was set up against another. The question was, as to what should be done, upon a general view of the finances of a great empire. When hon. gentlemen talked of getting rid of taxation, and relieving the country of burthens, they should also say what course of general policy they could suggest to relieve the country from the responsibility and consequences of the war. He considered the sinking fund useful, as something to begin upon, in case of a war. In making a loan, much saving would be effected through it. They all knew, that if the war did come, loans must be made, because the expenses would always go beyond the ways and means of the year: but that contingency could be no objection to the operation of a sinking fund, employed, in the mean time, to decrease the debt. The case of America, cited by an hon. member, appeared to him to be the strongest of all. Except in time of war, and during the declaration of independence, America always had a sinking fund in action. Since the late war, all their surplus had been applied to the 509 immediate reduction of debt. The real principle of a sinking fund went farther than to the reduction of debt: it gave certainty to the transactions both of the government and of the country. The sinking fund, during the war, served as a barometer to ascertain the pitch of public credit, and by that the limits of the nation's resources. The hon. member for Aberdeen had gone over a long string of figures; but the argument, that applying a sinking fund to the reduction of debt would plunge the country deeper into it, was as much be could listen to—more than be would undertake to reason upon. It was like arguing him into a belief, that the place in which he was then standing, was in perfect darkness. The power of the sinking fund over the debt had been under-rated. It was said, what are 5,000,000l. towards the reduction of 800,000,000l. But the 5,000,000l. should be compared with 30,000,000l. of interest, and not with 800,000,000l. of capital: 5,000,000l. of interest represented 120,000,000l. of capital. That sum settled in permanency, would soon exhaust the debt. He was convinced that we were pursuing a right course. If the people were to be continually invited to petition for the reduction of taxation, they would not stop while a single tax existed.
§ The House divided: For the amendment, 57; Against it, 93. The report was then agreed to.