respective order, so that each of them should be redeemed within 45 years from its being raised."

Mr. Vansittart therefore had his choice of these two plans, or rather of these two principles, upon which to construct his financial arrangements; but the first ap peared to him to have fewer advan tages than the second. By the first, the whole charge of interest and sinking fund would be appropriated, without any relief to the public, until the whole of one of the loans should be completely redeemed by the exclusive operation of the one per cent. originally attached to it: of course, as this could not happen in less than forty years, the public would be unbenefited by this measure during that time.Whereas, by the second mode, several of the loans which were first contracted, even on the supposition of a war of great duration, would be redeemed previously to the conclusion of it, and thus would furnish the means of providing for a fresh charge. Another advantage from this mode would be, that this resource would be continually increasing in proportion to the duration of the war. But a still more important advantage would result from this second mode; for by it the redemption of the debt being more gradually diffused over the whole period, would necessarily produce less alteration in the state of property. This advantage is thus further illustrated and enforced by Mr. Vansittart:- Successive redemption is indeed a point of no small importance to the regulation of the money market, as the rate of interest, and the value of money, might be very inconveniently affected by the too rapid increase, or the too sudden reduction, of the sums brought into circulation by

the sinking fund. It should not therefore be suffered to accumulate for too long a period; while, on the other hand, it should not be too much diminished by extinguishing at once too large a portion of the public debt." This second mode, therefore, seemed preferable to the first, on all these accounts; and it was still further recommended by the circumstance, that throughout nearly the whole period of its operation, a much smaller portion of the national resources would be occupied in paying off the national debt. But it was yet to be determined, whether the present period was favourable or adverse to the adoption of this mode. That it was extremely and peculiarly favourable, Mr. Vansittart contended, was evident from the circumstance already stated, viz. that the amount of the national debt, as it stood when Mr. Pitt first proposed the sinking fund, had actually been redeemed by that fund.

Such were the principles upon which the chancellor of the exchequer proposed his plan for a gradual and equable reduction of debt, with great immediate advantage to the public. The first step towards carrying this plan into effect, was to enact that the debt first contracted should be deemed first paid off; whether purchased by its own sinking fund, or by any other. As a sum equal to the whole debt as it stood in 1786, was already purchased, the execution of this plan only required, with respect either to this sum so redeemed, or to any hereafter redeemed, that a certificate of its redemption should be published in the Gazette; and that this stock should afterwards be at the disposal of parliament; and "liable to be cancelled in such proportions and at such times as parlia

ment

ment may direct; but that the whole sinking fund, created by the act of 1786, shall be continued and applied, until the total redemption of any debt now existing, or which may be created during the war.— Thus only the sinking fund appropriated to each loan would be touched, and not till it had effected its purchase, by redeeming the amount of its loan, while the grand sinking fund would remain in its original state and full operation." "In order, however, effectually to secure the means of redeeming all future loans within 45 years, and to preserve a proper proportion between the sinking fund and the unredeemed debt," Mr. Vansittart further proposed, that whenever the sum borrowed in any year should exceed the sum to be paid off, a sinking fund should be provided for the excess of loan, equal to one half of its interest; and that for the remainder of the loan, the provision of a sinking fund of one per cent. should be made as usual, conformably to the act of 1792. There were also some inferior and less important arrangements, which it is not necessary to detail: but we shall proceed to point out the advantages of this system, as compared with the former system; after which we shall notice some of the principal objections which were urged against it.

By the old system, it is taken for granted, that the loans for a great number of years will be equal to the loan which was raised in 1812; the amount of this, including the exchequer bills funded, was 28,000,0001. By the same system, it would require to fund this sum at five per cent. for four years, new taxes to the amount of nearly 7,500,0007.; and in the whole, till the year 1830, about which time

the debt consolidated in 1802 would, at that rate of interest, be redeemed, if the war lasted so long, taxes would be required to the amount of upwards of 31,000,000%; whereas, by Mr. Vansittart's plan, it would require no new taxes for four years, except about 1,100,000l. for the year 1813, in order to make some necessary immediate additions to the sinking fund; and the whole amount of taxes, till the year 1830, would, by the same plan, not exceed 18,000,000!. By the old plan, the whole amount of the debt, as it stood in the spring of 1813, would be paid off about the year 1845; whereas by Mr. Vansittart's plan it would be paid off about 1837.

The next thing to be considered is, whether by the old plan, or that of Mr. Vansittart, the sinking fund would be most affected. Till the year 1830, it would be much greater, according to the former; but after that period the amount will be nearly equal. In one respect, however, Mr. Vansittart's plan, as has been already hinted, has the advantage: its operation on the sinking fund will be more equable and uniform.

This comparative view of the two plans has proceeded on the idea, that for a considerable number of years the annual loan will not exceed 28,000,000. If it should, however, be necessary to raise a larger sum, Mr. Vansittart acknowledges that the advantages of his plan would be somewhat di minished; but, on the other hand, the redemption of the existing debt would be accelerated, and the sinking fund would increase more rapidly. The effects of the two plans would, of course, be opposite, if the sums borrowed were diminish ed, or if they were obtained at a rate of interest below 5 per cent,

But

But in detailing the benefits of this plan, we ought to look beyond the single and bare circumstance that no fresh taxes would be requisite for some years; since it is highly probable that this cessation of taxes would improve the revenue, and thus lessen the amount to be borrowed. That this is not a rash anticipation of the beneficial effects of this plan, is evident from the consequences which have resulted from the adoption of lord Henry Petty's plan, since the year 1806. The immediate consequence of it was a partial relief from additional taxes, and this lessened the amount of the sums borrowed. Her.ce, as the relief from taxation by Mr. Vansittart's plan will be more complete, at least for some years, we are justified in expecting that there will not be occasion for such heavy loans, on the supposition that no extraordinary and unforeseen circumstances render them requisite; for it ought always to be recollected, that this and every other financial scheme must proceed on the assumption that the rate of our expenditure will be similar to what it has latterly been: even should it be greater, the plan will still be effectual, though not to such extent; and its policy will be evident, if it render the loans less than they otherwise would have been.

It is now necessary to consider this plan of Mr. Vansittart's in its operations during peace: in this event, the sinking fund would continue to accumulate, as it does at present, at compound interest, unless parliament should deem it proper, in order to prevent the inconveniences which would be produced by too rapid a diminution of the rate of interest, to cancel the stock purchased by the commissioners. Even this cannot be con

sidered as peculiarly affecting the plan now under consideration; since it must equally take place under the old mode of redemption, whenever the progress of the sinking fund should be found to be too rapid. "In case our old mode of redemption should be adhered to, such a change, whenever it might take place, would, however, be attended with the disadvantage of appearing to be a deviation from the established principles of his sinking fund; while, according to Mr. Vansittart's plan, it would obviously be a consequence flowing from them." In order, however, that no alarm or apprehension might arise, under the idea that, by this or any other plan which interfered with the operations of the sinking fund, any particular portion of the national debt would be ultimately redeemed within forty-five years from its creation, according to the provisions of the act of 1792, Mr. Vansittart proposed that sufficient security should be preserved for that purpose.

There is still another point of view in which this plan of finance may be advantageously placed, on the supposition that peace was restored to this country; for during peace, from it would result the facility of keeping in reserve the means of funding a large sum, as a resource in case of the renewal of hostilities: this fund would be produced in a few years, by his re deemed stock standing in the name of the commissioners; and it is evident that it would be continually increasing. It would be adviseable, however, not to reduce it below such a sum as might be thought necessary to keep up the public credit and confidence at home, and to maintain the dignity of the country abroad. This fund

would

would, when created, present a novel and gratifying spectacle; as it would be the first instance of an immense accumulation of public product, "formed without the impoverishment of any individual, or any embarrassment of the general circulation."

It may, however, be objected to this plan, that it interferes with the very principle of the sinking fund; but this objection, when closely examined, will be found to be irrelevant; in fact, this plan interferes with the sinking fund less than any other modification of that fund, and is less liable to be abused as a precedent for encroaching upon it: for these reasons in the first place, it arises out of the principles of the sinking fund itself; and in the second place, it depends en tirely on the application of the stock purchased by the commis. sioners. Now the object for which the stock is purchased, is undoubtedly that it should be cancelled, sooner or later. This must take place in any possible arrange. ment of the sinking fund; and under these circumstances, the only question that can arise, or produce a difference of opinion, must respect the time and mode of cancelling it. Some people, who entertain indistinct notions of the sinking fund, seem to mistake its very nature and purpose; and feel violently and unaccountably prejudiced a gainst any scheme which should have a tendency to modify its operations: but the great and ultimate object of it undoubtedly is, to relieve the nation from the burden of taxes which would be entailed upon it by the indefinite extension of the public debt. With this view it was originally created; and to answer this purpose, government have aided it by the act of

1792. If, therefore, it is made to answer this purpose more quickly or more certainly, or at a period when the nation particularly requires not to be pressed with additional taxes; in any or all of these cases, any modification of it must be agreeable to its original principles and purposes, instead of a deviation from them; and it would be absurd to object to such a beneficial modification, thus consonant to the original principles and purposes of the smking fund, because it might interfere with some of the collateral advantages of that fund, which were not contemplated when it was created, and which, in every point of view, are, when compared with its grand object, of infinitely small consequence. Now, as it cannot be less important to prevent the immediate increase of taxes, than to provide for their future possible reduction, that would seem to be the best arrangement of a sinking fund, which, while it provide for the ultimate discharge of debt, within a certain moderate period, afforded the earliest relief to the public, and limited the maximum of total charge within the narrowest compass."

We have thus given the principal statements and illustrations which prove the expediency of Mr. Vansittart's plan of finance. We have been induced to go so much into detail, from the conviction that it is a plan of great political wisdom, which, if steadily and judiciously persevered in, must afford great relief to the public. That it was suggested, or rather rendered necessary, by the peculiar circumstances of the times, ought not to bc brought forward as an argument against it, if its tendency is to lessen the public burdens, at a period when they could not be safely in

creased,

creased, but which still required great exertions and sacrifices. It ought to be viewed as highly beneficial to the nation, even though, for the sake of present relief, it cut off part of the hope which the sinking fund had created, that the national debt would be entirely annihilated at a given period; for it is evident, if our burdens are now as great as we can bear, and if there is an absolute necessity that our expenditures hould be increased, we must either trench upon the sinking fund entirely, or modify it in such a manner as still to preserve its principles and the progress of its operation, while we benefit the present generation. The statements and illustrations which we have given, have been principally derived from a pamphlet which Mr. Vansittart distributed on the subject; the concluding paragraph of which deserves to be quoted :"There is, however, no wish to disguise the weight which the political circumstances of the present moment have had in recommend. ing it; but, on the contrary, a very confident persuasion that the more fully those circumstances are investigated, the more they will be found to enforce the expediency of such a system."

It was not to be expected that the financial plan of Mr. Vansittart would pass without discussion or objection, either in or out of parliament. For the observations made upon it in parliament, by Mr. Huskisson, Mr. Tierney, and other members of the house of commons, we refer our readers to the debates: in this place we shall notice only those objections which were either not urged in parlament, or were noticed and enforced there incidentally. In the statement and lustration which we have given

of this plan, it was hinted that the sinking fund was calculated, though not perhaps originally intended, to produce collateral advantages, be sides the direct and main advan tage of relieving the nation from debt. One of the most obvious and important of these collateral advantages, undoubtedly is the effect which it produces on the funds: at first, while the commis sioners were able only to purchase small quantities of stock every quarter, this effect must have been inconsiderable; but when the sums to be purchased became large, the effect would, of course, be propor tionally increased. The price of stock, like the price of all other commodities, must depend entirely on the proportion between the supply and the demand; if that proportion is changed, either by a larger demand, while the supply continues the same, or by a larger supply while the demand is stationary; or, in short, by any alteration, either in the supply or demand, the price of stock must be affected. Now, it is obvious that when the commissioners for the reduction of the national debt were enabled to come into the stock market with large sums for the purchase of stock, the price of that stock, supposing the quantity of it not to be increased, must rise; and the great steadiness, as well as the comparatively high price of stocks, during this long and expensive war, may, in a great measure, be ascribed to the effect of the sums with which the commissioners came into the stock market. It was therefore objected to Mr. Vansittart's plan, that it would tend to lower the price of stocks, by taking away from the commissioners a portion of that sum with which they would otherwise have purchased stock.