ledged grievances never fails to produce. These considerations, though sufficiently obvious, do not seem to be generally attended to. The redemption of the debt is considered (and it no doubt is so) as the mere prelude to relief from taxation; but it never seems to be imagined, that the repealing of taxes to the enormous annual amount of 32,000,000l. will be a work either of difficulty or delicacy. It appears to us, however, that the same skill and contrivance which was called forth when those taxes were imposed, will be required to guard against the evils which may be produced by their repeal. We do not know, indeed, any business of finance, in which a departure from the line of considerate caution would produce such extensive evil.

There is not the same risk in imposing taxes, because an unexceptionable tax may be repealed; and the imposition of a new tax raises the price of the commodity on hand, and must in this respect be an advantage to the dealers; but by rashly repealing a tax on any commodity to a great amount, the dealers might be all ruined by the fall which would take place in the value of their stock in hand. By relieving one particular article from a tax, its consumption might be greatly increased, and it might drive from the market all other rival commodities, on which the taxes were still continued. The repeal of one tax might thus render various taxes unproductive, and, what would be still a greater evil, it might diminish the demand for other commodities, and produce a stagnation in their respective manufactures. It would be impossible, we should imagine, without great inconvenience, to repeal, in one year, taxes to the amount of more than 2,000,000!., in which case, even supposing the debt to be redeemed, it would be sixteen years before the country could be released from its burdens. It must be confessed, however, that as long as the war continues, there is not much reason to apprehend any inconvenient increase in the sinking fund; and that the present scheme of finance, though it no doubt guards against this evil, yet originates in the necessity of limiting the increasing amount of our permanent taxes. This is the principal object of the plan, which we cannot help thinking both wise and reasonable, and well calculated to guard against those financial embarrassments into which we might be involved by blindly adhering to a system, and pushing it to an extreme, under circumstances totally different from those which rendered it originally expedient. Highly approving, therefore, of the principle of the measure, we shall now give a short view of its details, which we think however of less consequence, as being in some degree matters of arbitrary arrangement. The war expenditure of Britain, to be provided for by the present plan, exclusive of subsidies, or any other unforeseen contingencies,

tingencies, is taken at 32,000,0001. Towards defraying this heavy expenditure, we have already war taxes to the annual amount of 21,000,0001. It is proposed to make up the deficiency by means of loans, and to take annually from the war taxes as much as will amount to 10 per cent. on the sum borrowed; 5 per cent. for the payment of interest, and 5 per cent. to be set apart as a sinking fund for the redemption of the principal. The war taxes are to be charged with the interest and sinking fund of the loan of each year until they be exhausted. This will take place in fourteen years, in which time it is calculated that the first loan will be redeemed, and will be again available for the service of the state. In the same manner in each succeeding year, a new loan will be redeemed; so that the plan presents a series of loans and redemptions which is inexhaustible.

For the first three years, the loans will amount to twelve millions; in the fourth year fourteen millions, and in the last ten years sixteen millions will be borrowed. As the war taxes, however, are all required to make up the necessary supplies of the year, whatever portion of them may be taken away for the interest and the sinking fund of the war loans, must necessarily be replaced. In addition, therefore, to the principal loan, another loan must be borrowed for this purpose. In the first year, the war loan will consist of 12,000,000l.; to pay the interest of which, and to constitute a fund for its redemption, 1,200,000l. will be detached from the war taxes. The sum taken from the war taxes will be made up by 1,000,0001. taken from the war loan, and 200,0001. raised by a supplementary loan. To the interest of the supplementary loans, a sinking fund of 1 per cent. is to be added for the redemption of the principal. This charge is to be defrayed by new taxes. As the plan continues to operate, the war taxes must be gradually decreasing, and the supplementary loans must proportionally increase. Their increase, however, cannot occasion, during the first ten years, any very great addition to the existing taxes, as in the years 1807 and 1808 annuities will expire to the amount of 385,5151. The charge of the first three years is to be defrayed wholly from these annuities; and what remains is to be equally distributed over the next seven years; so that in each year taxes to the amount only of 293,0001. will be required. If the war should unfortunately last till this resource should fail, another arrangement presents itself for the next ten years. It is proposed, when the interest of the sinking fund shall have accumulated, so as to exceed the interest of the present unredeemed debt, to appropriate such part of the excess as shall be required, to the payment of the interest of the supplementary loans; never, however, so far encroaching on the sinking fund, as either to

prevent

prevent the redemption of the whole debt which existed previous to the year 1802, within forty-five years from that period, or to postpone the redemption of any future loan longer than forty

five years

years from the period when it was first contracted. By limiting, therefore, the operation of the sinking fund, the war expenditure of Britain, amounting to 32,000,000l., will be provided for during the second ten years of the war, without materially adding to her burdens; and the great object of the plan will thus be completely attained.

Such being our opinion, it may perhaps appear unnecessary to enter into any further discussion respecting the merits of this measure. We cannot help observing, however, (although with great deference to the talents of the author), that it rather appears to us to be too complicated, and that some of its provisions are even superfluous. We do not, in the first place, see what end is answered by interfering with the war taxes. As the war taxes are all required for the supplies of the year, whatever portion of them is detached for the interest and sinking fund of the war loans, must be replaced by means of supplementary loans. It appears to us, therefore, that it would be a more direct and simple method, to apply thofe fupplementary loans at once to the purpofe for which portions of the war taxes are detached. In which cafe, the intervention of the war taxes would be quite unneceffary. This will appear more evident by an example. To make up the fum of 32,000,000l., 11,000,000l. is wanted in addition to the war taxes. L. 12,0c0,000 are borrowed, together with a fupplementary loan of 200,000l., for which taxes are impofed. For the intereft and finking fund of this war loan, the fum of 1,200,000l. is required; 1,000,000l. of which being deducted from the war loan, and 200,000l. being made up by the fupplementary loan, leaves 11,000,000l., the fum wanted for the fervice of the ftate; the war taxes being all applied as they are at this moment, and neither broken in upon nor replaced.

It appears to us, alfo, that the operation of the finking fund is quite nugatory. When nations or individuals set apart a portion of their annual revenue to accumulate at compound intereft, this is no doubt the fure way to grow rich. But we do not well fee how they can improve their circumstances, by borrowing money, and allowing it to accumulate at compound intereft. If a fum of money be borrowed, and 10 per cent. be annually borrowed along with it, 5 per cent. for the payment of intereft, and 5 per cent. for a finking fund, the borrower will always be precifely in the fame fituation as if nothing had been borrowed for a finking fund; because, as he can only add to the finking fund by borrowing, the more he adds to it, the more he adds to his debt. It may be

thought

thought, perhaps, that something may be gained by the compound interest which the sinking fund accumulates. But it is evident that no compound interest can accumulate on a sum of borrowed money, because the interest must be paid annually. Although the interest were borrowed, this would not alter the case. It would no doubt allow the sinking fund to accumulate; but the borrower would, in the mean time, accumulate his debts in the same proportion. It is impossible that the circumstances either of a nation, or of an individual, can be altered, by accumulating a fund of borrowed money.

We have already endeavoured to shew, that the interest and sinking fund of the war loans is really paid by the supplementary loans, the intervention of the war taxes being noway necessary for that purpose. The supplementary loans, however, are borrowed. By setting apart, therefore, a portion of them for a sinking fund, we are accumulating debt as fast as we are accumulating funds for its payment. The sinking fund will leave our affairs precisely in the same situation in which it found them. But although we conceive that these provisions respecting the intervention of the war taxes and the sinking fund, might be dis pensed with, we do not think that they will contribute in the slightest degree to defeat the great object of the measure, far less will they be attended with ruinous consequences to the finances of the country.

We are aware, indeed, that a contrary opinion has been asserted, and that a great deal of absurd declamation has been poured forth upon this topic, in order to discredit the measure. A series of financial resolutions is said to have been moved in the House of Commons by Lord Castlereagh, in which it was actually pretended, that by the plan of double loans, i. e. by borrowing annually 10 per cent. on the principal loans, 5 per cent. for interest, and 5 per cent. for a sinking fund, a loss of twentynine millions would be ultimately incurred by the public. Now, it may be asked, how can this happen? By what process, in the mysterious art of borrowing and lending money, can such unheard of results be produced? To borrow annually 5 per cent. to be set apart as a sinking fund for the redemption of debt, is, we allow, a nugatory operation. But as long as what is borrowed is neither wasted nor misapplied, we cannot well conceive how money can in this way be either saved or lost. We throw out these plain considerations for the benefit of the noble person alluded to, and of all future calculators. We are sanguine e nough to hope, that if they duly attend to them, they will not plod on from blunder to blunder, through a mass of laborious calculations, until their imagination, heated with the prospect of

VOL. X. NO. 19.

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great discoveries, scorns the sober results of arithmetic, and will be content with nothing short of the marvellous. We will not be so cruel as to annoy our readers with all the idle details of those resolutions. We may however subjoin, as a specimen of their general truth and accuracy, the following calculations, in which the expense of redeeming a principal, by means of a one per cent. annuity, is contrasted with the expense incurred by means of Lord Henry Petty's plan. The sum to be redeemed is twelve millions. NEW PLAN.

Ten per cent. interest and sinking fund on 12,000,0001. for one year L. 1,200,000

A like charge for thirteen years more, at which time the principal is redeemed

15,600,000

Total payments L. 16,800,000

To cover the interest and sinking fund of 1,200,0001. at six per cent., a fund of 72,000l. must be provided in each of the fourteen years; the amount thereof is 1,008,0001.

The latter sum being raised on a one per cent. sinking fund, may be considered as an annuity of forty

three years.

Payments on account thereof
Payments as above

PRESENT SYSTEM.

The interest and sinking fund on a loan of 12,000,000l., at six

per cent., amounts, per annum, to 720,0001.

This charge being raised on a one per cent. sinking fund, may be considered as an annuity of forty-three years.

Payments to be made on account thereof till its redemption, 30,960,0001.

Payments on new system, upon a loan of 12,000,0001.

Ditto on present system

L. 60,144,000

30,960,000

Excess of the charge of redemption by new system L. 29,184,000 It is evident that two plans are here compared, which are in all respects totally different from each other; and that, while the expenses of what is called the new plan, are very absurdly exaggerated, its benefits are in a great measure overlooked. The in genious calculator seems so intent on swelling out the debtor side of the account, that he has omitted the creditor side altogether.

He