Interest and charges on Consolidated Fund, &c. Army, navy, &c. estimated at

£55,000,000

It appears by the above statements that, allowing the consolidated fund to leave the same surplus as last year, and the annual produce of the malt duty and lottery to be the same, and also, that Cobbett is right in his opinion, that the charge for army, navy, &c. cannot possibly be reduced below 25,000,0001," there will be a deficiency of about 19,000,0001. on the peace establishment, unless the war taxes be continued.This view is very different indeed from the declaration of Lord Henry Petty, "that the war taxes will not be necessary after the war." It must however, also be admitted from the above statements, that if the war taxes be continued, and can possibly produce permanently about 20 millions per annum, without lessening the receipt from the old taxes, the Sinking Fund will have its full operation (whatever that may be) for the reduction of the national debt.-March 30, 1806.

PROPERTY. TAX AND SINKING FUND.

To the Right Hon. Charles James Fox. SIR,To the Chancellor of the Exchequer, we look for no other than accidental deviations from the pernicious principles of finance, adopted and pursued by his predecessor in office; 1st. Because prejudice, more or less in their favour, must in a manner, have been born with him, since they were the first that presented themselves to his untutored mind. 2d. Because it is more than ought to be expected from his age, that

£73,378,472

Deficiency 18,970,000 £55,000,000

he should have so far made himself acquainted with the bearings of these principles, as to be able to know, with something in the shape of certainty, the point to which they ought to be carried and no farther, so as to prevent their becoming a greater evil than that which they are intended to avert. And, 3d: Because he has not so far pledged himself, by his opposition to these principles, as to occasion any disappointment to the public, should he unfortunately, carry them farther than ever his predecessor has done. On these grounds, Sir, you can plead no excuse for your pursuit of Mr. Pitt's principles; for if you do not know the point to which they ought to be carried, and no farther, it is universally expected from your long and systematic opposition to his measures, on the score of finance, that you ought to know it; and, therefore, if you do not know it, the public shall not only have to lament the injury which they must sustain from your misinfor mation on this point; but that it shall be a crime in future to place confidence in any public character, however plausible, long, active, and systematic his opposition may be; and to make such opposition even a ground of hope, that the fundamental principles of public oppression shall ever meet with resistance from a man in power. I do not accuse you, Sir, with the relinquishment of those principles which you have so recently and repeatedly held forth to the electors of Westminster, as the criterion by which they are to judge of your title to the continuance of

ingthen that all taxes annihilated the security of public credit, and that the annihilation already exceed 9-10ths of the security, is it possible to conceive that the property tax mikes use of any other principle to support public credit, than public insensibility as to the extent to which the security is already mortgaged? If I have erred, Sir, in this alarming calculation, it will be found, I am contdent,, that Lord Sidmouth is more to blame for taking the income at too little, than I am in giving the expenditure at too much. Ent be this as it may, those who boast of the security of public credit, should take up my principle of calculation, for all others are insecure, and ascertain how far it is loaded, and not take the facility with which loans can be had for their proof; for that prove nothing but public insensibility, the facility with which promises on paper, the thinest and worst of all papers, can be blown into circulation, and the folly, if not the wickedness, of those who pursue measures which demand its support, to "the "annihilation of all property." Having thus, Sir, disposed of the property tax, we come of course to inquire whether public sensibility or insensibility, be the principles which the Sinking Fund makes use of to support public credit. Annihilated as the public security is, this inquiry is more a subject of amusement than of use, but as there is that pleasure in detecting falsehood, which the love of truth inspires, the question ought to be tried as if the public secu-rity were at this moment whole and unincumbered. Lord Henry Petty observes, that "had it not been for the Sinking Fund, we should now have been loaded with the whole charges now born by the country, without deriving any of its advantages; because, if we could borrow at all, it would have been on bad terms, and we should have created more debt, to obtain that which through the Sinking Fund we have obtained on more favourable terms;" namely," the indemnification for the past, and security for the future," which we have derived from the just and necessary wars" of the last fourteen years!!! "The Sinking Fund, over and above that it leads to the extinction of the national debt, has been a saving of the burden, while it seems to increase." Exclusive of indemnity for the past, and security for the future, the point of this statesman or Pitt-like argument is, that the Sinking Fund diminishes the public debt, and leaves the public less interest to pay; and that it keeps up the price of the funds, and therefore bears down the rate of interest. This logic is perfectly good, had the circumstances which go

It

vern the case been duly attended to. cannot, however, mean actually that the debt is less, and that, throwing the influence of the hopes of a speedy peace on the price of the funds out of the question, the rate of interest is lower than it was when the Sinking Fund commenced its operations in 1786." For, by comparison, and allowing for the effect, on the price of the funds, of that degree of boldness, which the suspension of cash payments at the Bank, and the consequent facility (because there is no other danger of being called upon for cash) of circu lating paper money have given to the loanmongers, we shall find that the debt has greatly increased, and the rate of interest considerably risen since 1786. His lordship, therefore, can only mean that the debt and rate of interest are relatively less than they would have been, but for the influence of the Sinking Fund. He has, however, forgot. the circumstances which govern the case. The annual accumulation of the public debt, far exceeds its yearly liquidation. In reality, therefore, and it is impossible to misconceive the fact when once brought into mind, the sum paid off, for instance, in 1805, is again borrowed in the loan of 1305, and so on from the beginning of the Sinking Fund. The Sinking Fund, therefore, recreates the very debt which it discharges; and the truth of the fact is proved by the conviction, that if the sum annually allowed to discharge the debt were applied to the yearly payment of the army or navy, the necessity of borrowing annually to that amount for such purpose, could not possibly exist; consequently, it is impossible, naturally so, that the Sinking Fund, relatively any more actually, can have diminished the debt or lowered the rate of interest, more than they would have been had the fand never been applied. This being the fact, all the merits which you allow to the Sinking Fund, naturally falls to the ground, and it brings us to a positive conviction that the fund makes use of no other principle to support public credit, than public insensibility, as to the impotence of its power, under an accumulating debt, even to its own amount. How then comes it, Sir, that men equally interested in the truth, and equally sincere in their endeavours to avoid error on this subject, should hold down right opposite opinions as to its merits? I will give you, Sir, what I believe even to positive conviction to be the cause, and I hope that, to prevent any suspicion of your own financial talents or political integrity, you will give your reason, in the course of the observations which you shall have to make on the Sinking Fund, before you are

able to dispose of the Property Tax; that last great effort "TO ANNIHILATE ALL PROPERTY," and to save what? Taking those who differ with me in opinion to be honest men, and leaving public insensibility on the subject to which I have so often alluded out of the question, I take the cause of our opposite opinions to be, the supposed tendency, in their opinion, which the weekly application of the sum applied to the redemption of the debt, has to create a scarcity of stock; and, therefore, to raise the value of the funds so as to enable us to borrow at a proportional low rate of interest. But, it is forgotten in this supposition that the Sinking Fund recreates the very debt which it redeems; or, in effect, that money is borrowed to purchase the sun redeemed. In this supposition, therefore, it is forgotten that the annual funding of this sum lowers the value of the stocks in the very proportion in which the annual redemption of its equivalent raises their price; and forgetting these consideratons, it is not conceived that the supposition would almost disgrace the intellects of an infant, because it is false and inapplicable under the circumstances of the case, on the clearest principle of gravitation or of weight, placed against an equal weight in a balancing scale. But, granting for the sake of argument, that which is the end will prove false in all cases; namely, that, in this case, the laws of nature give way to the rules of art, and, therefore, that the bustle created weekly in the market by the redeeming commissioners, raises the price of stocks, more than the annual noise made by the funding minister lowers their value; will you, Sir, underfake to exhibit what the consequent saving of interest will amount to per cent. on the sum annually borrowed? If you will not, you are, Sir, but grovelling in the dark for your object; and your dependance upon an ideal principle, will only expose your country and fame to ruin, because a patriot and a man of information, will not hold as politically good, a mere principle which is morally bad, so far as it has a tendency to, nay, actually do create public insensibility, as to the danger which must sooner or later result from any farther encroachment on the less than a tenth of our property, which yet remains unannihilated. The subject of these remarks may be thus compressed. You assume, Sir, that the Property Tax naturally helps to support public credit, because it keeps up the price of the funds, by removing the necessity of an annual loan to the amount of its yearly production. I deny this effect, and impute the continent inAuence upon the funds, which I amit, to

public insensibility of the annihilating effct which the tax naturally has upon pulic security; and to the facility with which millions of the promises lent may be writen, and, therefore, borrowed. And, as a ollateral proof, I appeal to your own convêtion, Sir, whether it be a sense of the soliaty of public security, or, the fear of one party that the other will overbid it for that loan, that produces what is called their LIBERA. terms ; or, your proof of undiminished resources *. You assume, Sir, that the Sinking Fund naturally supports public credit, because it relatively extinguishes the national debt. I deny the relative extinction, because the ap-. plication of the millions applied to the liqui dation of the debt, creates the necessity of borrowing an equal sum for the public service. But, admitting that I am altogether mistaken on those points, am I so, Sir, on these? 1st. If the Sinking Fund is capable of discharging the debt, will not the stockholder be put into possession of the capital at present invested in the funds? 2d. Befors they are put into possession of it, must not government take it from the public in taxes; and when they are in possession of it, must they not invest it in land and trade? 3d. If circulating medium be in the proportion so invested, will not the depreciation on the which the capital of the debt bears to the medium of exchange at present in circulation? And, 4th. If so, will not the evil of taking the capital of the debt from the pub ciation in money, far outdo the oppression lic in taxes, added to that of the then depre which at present arises from its interest; and annihilate public credit altogether? If you are unable, Sir, by fair reasoning, and in a detailed argument, to put the negative an these questions, I shall flatter myself that you have heard an argument which has altered your opinion as to the merits of the Sinking Fund; if not opened your eyes to to adopt, to prevent the annihilation of all the principle of the remedy which you ought property, or rather the transfer and re-transfer of it, God only knows how many times, by the time that the Sinking Fund extin guishes the national debt. -C. $.

*The advantages of this competition, if the false ideas of national prosperity which it gives, ever left, it any merit, is now lost for ever. For the competition for the last loan is confessedly a sham, the parties themselves having confessed, if I am not mista ken, that it was priorly agreed upon to divide it between them. And to my own knowledge this is not the only case in which the plan was adopted by former competitors.