charge for the interest and the sinking fund of the proposed loans, being taken from the annual produce of the war taxes, a deficiency equal to that charge will be created in the amount of the temporary revenue applicable to the war expenditure. Supplementary loans will be requisite to make good that deficiency. Those supplementary loans must increase in proportion to the increasng deficiency, if the war should be continued; but the whole amount of the loan, in any one year, including that charged upon the war taxes, and the supplementary loan, will wever, even in a period of 20 years war from the present time, exceed 5,000,000l. in any year, beyond the amount to which the combined sinking fund of that year will have been raised; and upon an average of those 20 years, will not exceed 3,800,0001. It is proposed that the supplementary loans shall be formed on the established system of a sinking fund of 1 per cent. on the nominal capital. The charge so created will be provided for, during the first three years, by the expiring annuities; and during that period the country will have the great benefit of an exemption from all additional burthens. A new spring may thus be given to the energy of our commerce: at all events it will obtain a security from the increased pressures which it must otherwise experience. From 1810, and for the six following years, a charge must be provided for, amounting on the average of those seven years to not more than 293,0001. annually: a sum in itself so small, in comparison with the great additions which have necessarily been made to the taxes in each year, for the last fourteen years, that it can scarcely be felt, and cannot create any difficulty as to the means of providing for it: but even this comparatively small amount may. probably be much diminished by the increasing produce of the actual revenues, and by regulations for their further improvement. And thus provision is made, on the scale of actual expenditure, for ten years of war, if it should be necessary, without any additional taxes, except to the inconsiderable amount above stated. At the close of that period, taking the 3 per cents. at 60, and reducing the whole of the public debts at that rate to a money capital, the combined amount of the public debts will be 387,360,0001. and the combined amount of the several sinking funds then existing will be 22,720,000l.: whereas the present amount of the whole public debt, taken on the same scale of calculation, is 352,793,000l. and the present amount of the sinking fund is no more than 8,335,000l. If the war should still be continued beyond the ten years thus provided for, it is proposed to take in aid of the public burthens certain excesses. to accrue from the present sinking fund. That fund, which Mr. Pitt (the great author of a system that will immortalize his name) originally proposed to limit to four millions annually, will, with the very large additions derived to it from this new plan, have accumulated in 1817 to so large an amount as 24 millions sterling. In the application of such a sum, neither the true principles of Mr. Pitt's system, nor any just view of the real interests of the public, or even of the stockholder himself, can be considered as any longer opposing an obstacle to the means of obtain, ing at such a moment some aid in alleviation of the burthens and necessities of the country. But it is not proposed in any case to apply to the charge of new loans a larger portion of the sinking fund than such as will always leave an amount of sinking fund equal to the interest payable on such part of the present debt as shali remain unredeemed. Nor is it meaut that this or any other operation of finance shall ever prevent the redemption of a sum equal to the present debt in as short a period as that in which it would have been redeemed, if this new plan had not been brought forward. Nor will the final redemption of any supplementary loans be postponed beyond the period of 45 years prescribed by the act of 1792 for the extinction of all future loans; while each of the an nual war loans will be successively redeemed in fourteen years from the date of its creation, so long as war shall continue; and whenever peace shall come, it will be redeemed always within a period far short of the 45 years required by the above-mentioned act. In the result therefore of the whole measure, there will not be imposed any new taxes for the first three years from this time. New taxes of less than 300,000l. on an average of seven years from 1810 to 1816, both inclusive, are all that will be necessary, in order to procure for the country the full benefit and advantages of the plan here described; which will continue for twenty years; during the last ten of which again no new taxes whatever will be required. It appears, therefore, that parliament will be enabled to provide for the prolonged expenditure of a necessary war, without violating any right or interest whatever, and withcut imposing further burthens on the country, except to a small and limited amount: and these purposes will be attained with benefit to the public creditor, and in strict conformity both to the wise principles on which the sinking fund was established, and to the several acts of parliament by which it has been regulated. It is admitted, that if the war should be prolonged, certain portions of the war taxes, with the exception of the property tax, will be more or less pledged for periods, inno case exceeding fourteen years. How far some parts of those taxes are of a description to remain in force after the war; and what may be the provision to be made hereafter for a peace establishment, probably much larger than in former periods of peace; are considerations which, at present, need not be anticipated. It is reasonable to assume, that the means and resources which can now maintain the prolonged expenditure of an extensive war, will be invigorated and increased by the return of peace, and will then be found amply sufficient for the exigencies of the public service. Those exigencies must, at all events, be comparatively small, whatever may still be the troubled and precarious circumstances of Europe. Undoubtedly there prevails in the country a disposition to make any further sacrifices that the safety, independance, and honour of the nation may require; but it would bean abuse of that disposition, to apply it to unnecessary and overstrained exertions. And it must not pass unobserved, that in the supposition of a continued war, if the loans for the the annual expenditure should be raised according to the system hitherto pursued, permanent taxes must be imposed, amounting in the period assumed, to 13 millions additional revenue. Such an addition would add heavily to the public burthens, and would be more felt after the return of peace than a temporary continuance of the war taxes. In the mean time; and amidst the other evils of war, the country would be subjected to the accumulated pressure of all the old revenues, and of the war taxes, and of new permanent taxes. The means of effectuating a plan of such immense importance, arise partly from the extent to which the system of the sinking fund has already been carried in pursuance of the intentions of its author, and partly from the great exertions made by parliament, during the war, to raise the war taxes to their present very large amount. It now appears, that the strong measure adopted in the last session, by which all the war taxes, and particularly the property tax, were so much augmented, was a step taken not merely with a view to provide for present necessities, but in order to lay the foundation of a system which should be adequate to the full exigencies of this unexpected crisis, and should combine the two apparently irreconcileable objects, of relieving the public from all future pressure of taxation, and of exhibiting to the enemy resources by which we may defy his implacable hostility, to whatever period it may be prolonged. To have done this, is certainly a recompence for many sacrifices and privations. This is a consideration which will enable the country to submit with chearfulness to its present burthens, knowing, that although they may be continued in part for a limited time, they will now be no further increased. Lord Castlereagh's Plan of Finance. In the house of commons, Feb. 12, his lordship said, that he never rose with greater diffidence in the course of his parliamentary experience than at present; for, considering the attention which the noble lord (H. Petty, see p. 680,) must have given the subject, and the able assistance which he had, it was painful and embarrassing to an individual to press upon the attention of the house a view so different from his. But as a considerable error existed between them, however the house might be disposed to think that the error was on his side, yet he felt so strongly that it lay with the noble lord, that he could not forbear to state the view which he had of this subject. He was anxious that ministers might be in possession of it, that they might prove its fallacy if founded in error. Therefore he hoped that his motives would receive an indulgent construction from the house; as this was a task which he would not have undertaken had it not have been for a strong impression that there were good grounds of doubt as to the solidity of the noble lord's plan. While he said this, he was anxious that the house should not suppose the difference between the noble lord and him to be greater than it really was. He had no objection to the mode of taking a general view of the subject. There was no principle, for instance, which he thought more clear, than that the rapid reduction of the debt by the sinking fund, fund, might be dangerous to the in- ed; and subsidies must be raised, terests of the country, and he thought unless we were to be "Britannos that a maximum ought undoubtedly toto orbe divisos.”—The noble lord, to be established. But he objected indeed, fairly and candidly stated, to the superstructure which the noble that such extraordinary supplies must lord had raised, by taking the ordi- be provided for, independent of his nary expenditure of the year, with- plan. But certainly he might have out providing for the extraordinary taken an average of the sums that expences which might be necessary would be required in this way, and in time of war, and by mortgaging considered what provision was to be the war taxes. He was glad that made for them; as in all probability the noble lord took an extended view they would be no less necessary than of the subject; and he was only other expences. The war expendisorry that he had adopted a princi- ture at the time of the union was 32 ple inconsistent with the proper plans millions, and now it was 38 millions, which such a view would suggest. independent of extraordinary exThe noble lord had thought proper pences.-The probability of increase to adopt a legislative measure for ought, therefore, to have been conthe next twenty years. But, on sidered. However, he would argue such a subject as this, he contended the point with the noble lord upon that no legislative measure ought to his own data, and his own facts. be adopted for such a long period, His plan, if acted on in the mode because it would reduce parliament to which he proposed, was calculated the greatest difficulties; and however to produce embarrassment, if not beautiful the noble lord's plan at pre- ruin; and he contended, that this sent might appear, he would find that embarrassment was gratuitous and it would soon occasion very consider- unnecessary; for the indulgence able embarrassment. Nothing was which he proposed to grant might more impolitic than legislating for be given without any such embarrass-* future years, during which many ment. This might be difficult to circumstances might occur which shew; but he hoped he should be could not at present be foreseen. allowed to state the view which he He admitted, that it was proper to had of the subject. As to the exlook forward, and to reason on pro- pediency of making any arrangebable data; and to the reasoning ments with respect to the sinking itself he had only to object that it fund, he admitted that the excesses was founded on data so fallacious, would so far answer his purposes; that it would serve only to raise ex- but he begged of the noble lord also pectations which must be disappoint- to admit him, that the excesses from ed. This would add material diffi- 1816 would afford ways and means culties to the raising of the necessary for any other system. From the supplies, when disappointed hope written explanation that he had seen, would be a grievance strongly felt, (p. 682) he thought the noble lord's as accompanied with the additional was one of the worst plans that could burthens which must be borne by the be adopted, and this was one fallacy. people. The noble lord must feel Another fallacy was, the assumption that the difficulty of raising necessary that the war taxes might be absorbsubsidies would be materially increased, without the greatest prejudice to to the country. This system of absorbing the war taxes was one which, if acted upon,. would be considered as borrowing money on its own loans. Yet this was the way in which the noble lord proposed to provide for his war loans of 210 millions.-He would compare this system of war loans with the former plan of finance; for it was impossible to doubt that, if the result was in favour of the former plan, the noble lord's plan was fundamentally vicious.. Why, then, taking any given sum and borrowing it on the system of double loans the one funded at 10 per cent. and the supplementary loan at 6 per cent. one for the fund, and the other for the interest, and comparing this with the single loan at 1 per cent. as usual;--he would find, that in the former case there would be 60 millions and a fraction added to the debt at the close of the period, and in the latter case only 30 mil lions and a fraction; the loss being upwards of 29 millions, and nearly in the proportion of 2 to 1. In comparing the two systems on consideration of prudence, the only way in which this could be done was upon five tests-1st, relative to the amount of borrowed capital in twenty years-2dly, relative to the effects of the plan on the sinking fund— 3dly, their comparative qualities to create charges to the country-4thly, what were their comparative qualities in admitting a mitigation of the present pressure on the nationand, 5thly, how they would leave the finance of the country at the close of the period. As to the first head, the comparative quantity of capital to be borrowed in twenty years; as the finance plan stood at present, by borrowing 11 millions, making in all 220 mil lions, for twenty years, we should be relieved from the war loans and supplementary loans. By the noble lord's plan, as taken from his own table, it appeared, that in twenty years he would raise a capital of 210 millions, by the war loans and supplementary loans, on another credit; making, together, 416,200,000l.; so that, deducting the actual increase of capital, there would be an addition of 196,200,0001. by the noble lord's plan, independent of 82 millions liquidated by the ten per cent. It was no light matter, the raising of so great a capital; for, at the end of fourteen years, the war taxes being absorbed, it would be necessary to raise 32 millions annually, by way of loans; and this would derange the circulating medium of the country, no less than the total extinction of the debt by the sinking fund. Therefore it appeared, that the plan was not only more objectionable than the present simple system, by raising the increased capital of 196,200,000l. in twenty years; but that there would be a great difficulty in the execution of it, such as it was. He would next proceed to the second head, and consider the relative state of the debt and the sinking fund; for he admitted, that though a greater amount of the debt should be contracted, the effects of this might be counteracted by a propor tionably larger sinking fund. On looking at the present state of the sinking fund, it appeared that though 11 millions should be annually borrowed, yet, in 1826, the debt would be reduced to about 270 millions; the decrease being 93,350,000). in twenty years. Now, by the noble lord's plan, the state of the debt in 1826 would be 455,537,000l. being an increase beyond go millions |