principle, we shall have more to say after we have reviewed Professor Hamilton's opinions respecting them.

We have been the more solicitous to make these remarks before we review the work of Professor Hamilton, because, although we adopt nearly all the principles he has laid down, and believe that his arithmetical calculations are generally correct, yet we differ very materially from him in the practical application of them to the extinction or diminution of our national debt. We are not yet convinced that the plan first adopted by Mr. Pitt for that purpose was not far more wisely constructed, with a view to its stability and to the general good consequences arising from it, than the more simple system, of which a preference is implied in the reasoning of Professor Hamilton. We cannot deny that its mechanism is somewhat more costly, but we think the difference amply compensated by its more durable construction. We do not altogether approve some of the changes of the original plan, and still less some essential deviations from it; but with respect to other modifications of it which have been adopted, we have no doubt that they had in view the very same principles which the Professor has so ably established, connected, however, with such practical arrangements as have greatly contributed to their adoption, and without which we are quite convinced that their adoption in any very useful extent would have been altogether impracticable.

In the work before us a short preface and table of contents are followed by a few pages of introductory "Inquiry concerning the national debt."-Having briefly stated the ancient ways of procuring money for extraordinary expences and their inconvenience, the Professor observes,

"This irregular mode of borrowing gradually gave way to one more systematic, which has now been carried by this nation to an extent far beyond what was ever known in any other age or nation; far beyond what any person at its commencement, or even after its considerable advancement, believed to be practicable. This system is still expanding. The public debt, which was inconsiderable at the revolution, has increased in a little more than a century to its present magnitude. The increase during every reign, except the pacific reign of George I., has been greater than during the preceding. The increase during every war has been greater than during the preceding. The increase during the latter period of every war, except the present, has been greater than in the earlier period. The increase by every national exertion has been greater than administration held forth when the measure was undertaken. The part of the national debt paid off in intervals of peace has borne a small proportion to that contracted by the preceding war. No man can foresee how far this system may be carried, or in what manner it will terminate." P. 3, 4.

Some remarks follow on the importance of the subject, and the blunted feelings of the public respecting it. He then adds, that

"Various schemes have been proposed by means of sinking funds for diminishing, and in course of time discharging, our national incumbrances, and some of these have been carried into execution to a certain extent." P. 5.

that "their principles and probable result ought to be scrutinized in the strictest manner," and that

"The most perspicuous mode of conducting this enquiry seems to be,

"First-To lay down some general principles, which if esta blished would lead to general conclusions concerning our financial system, and in a great measure supersede the necessity of examin, ing particular plans which have been proposed or adopted.

Secondly To give a narration of the manner in which we have proceeded in conducting and accumulating our public debt, and a statement of its present amount and annual charge, and an account of the plans which have been proposed or adopted for its discharge, and their operation. The necessary tables in illustration of these particulars will be subjoined in an appendix.

"Thirdly-By means of these general principles to scrutinize the efficacy of the schemes to which we trust for the relief of our national burthens; and examine the propriety of the methods we have adopted in conducting our financial operations." P. 6.

In conformity with this plan he begins the first part of the subsequent Inquiry by stating a series of "general principles of finance." Without meaning to be hypercritical, we would rather have called them propositions, as indeed the author himself does afterwards; for instance, the unqualified statement in the latter part of the second of them, that " we are already far advanced to the utmost limit of taxation," is surely neither a general principle of finance nor an inference from any principle, but an assertion of a fact which requires distinct proof, and of which no proof is given; connected as it is with the preceding part of the sentence, it means the utmost limit of the amount of revenue obtainable by taxation, which, from his observations on the same subject a few pages after, we are sure the author cannot have intended, which allows nothing for the present rapid progress of population and intrinsic national wealth, and makes no distinction between the difficulty of multiplying taxes, or of increasing their rate; nor between indirect and direct taxation. We are quite convinced that the assertion is unfounded in that sense in which it is likely to be generally interpreted; and if unfounded, without any doubt inexpedient. But, passing by this inadvertence, we in the strongest manner wish to recommend to

general attention the important, and we believe, incontrovertible summary of the author's opinion, which he has stated in the fol lowing manner :

"The excess of revenue above expenditure is the only real sinking fund by which public debt can be discharged. The increase of the revenue and the diminution of expence are the only means by which this sinking fund can be enlarged, and its operation rendered more effectual: and every scheme for discharging the public debt by sinking funds operating by compound interest, or in any other manner, unless so far as they are founded upon this principle, are illusory." P. 10.

He gives as a reason for examining minutely the principles which he has stated, that although they are "incontrovertible, or inferred by a very obvious train of reasoning; yet measures inconsistent with them have not only been advanced by men of acknowledged abilities, and expert in calculations, but have been acted on by successive administrations, and annually supported in parliament, and ostentatiously held forth in every ministerial publication." P.11.

We readily allow that measures have been recommended upon principles, and by arguments inconsistent with the truths which Professor Hamilton has so ably established; but we must think the latter part of these assertions a great deal too unqualified; and we expect to prove that Mr. Pitt and others who have succeeded to him have not adopted measures inconsistent with his principles, but have clearly comprehended them, and regulated in conformity with them the more important parts of their arrangements for the redemption of our public debt.

In his remarks (pages 44-57) on the principle of redeeming debt by appropriated sinking funds increasing by compound interest, Professor Hamilton has given a series of perspicuous arithmetical statements which demonstrate the futility of some opinions on the subject, that we would rather call vulgar than popular; because, as far as our observation has extended, few, if any, intelligent persons have ever been so much deceived by the magic of numbers, as to believe that the national debt can ever be diminished but by an average surplus of revenue beyond the average expenditure. The error has long since been refuted in various publications, and particularly by Sir F. D'Ivernois.

The Professor (page 57) states, that "the point at issue is, whether, taxation and expenditure being the same, a sinking fund produces any beneficial effect?" Certainly not, if this is the only point at issue. If we are to limit our views solely by arithmetical calculations of direct profit and loss, we cannot discover that a sinking fund has any peculiar advantages in diminishing debt or retarding its increase; and it may be that the same

money may be employed with equal efficacy by less expensive mechanism. But we have before stated, that the mechanism of our sinking fund appears to us to have been originally framed and since improved with far more extensive views of political

economy.

The second part of this work contains a useful "history of the present public debt of Great Britain, from its commencement to the 1st of February, 1812," which is continued in a postscript to the 1st of November in the same year. The first section of this part describes concisely the methods of borrowing the funded debt, which have successively been adopted, and subjoins a clear, arithmetical statement of its progress. The second section is employed in describing "the plans which have been adopted for the reduction of the funded debt, and their operation" and the third section is employed in stating the nature and amount of the unfunded part of the public debt." The third part of the work contains an "examination of plans for the redemption of the national debt, and other financial operations," in four sections; of which, the first examines Dr. Price's views of finance; the second reviews Mr. Pitt's sinking funds; the third comments on the plan introduced by Lord Henry Petty; and the fourth contains an "examination of the system of funding by increase of capital."

This part of the work is written with considerable ability, and for that reason we regret that it is not a little more comprehensive. We wish it had included the Professor's opinions of some earlier plans for reducing the national debt; and especially the propositions of Mr. Archibald Hutcheson, which influenced the first attempts to reduce it, and have evidently been the basis of some important measures adopted with the same intention by Mr. Pitt.

The object of the examination of Dr. Price's plans is to disprove the arithmetical principle on which he founded their efficacy. To us it has always appeared that the Doctor perplexed

* One of these plans, namely, the redemption of the land-tax, and a provision by excise in lieu of it, was adopted from Mr. Hutcheson's Propositions for paying off the National Debt in the year 1713. Professor Hamilton's view of this measure is very singular. He considers it as having only transferred a still existing debt from one description of creditor to another. To us it appears to be as truly an extinction of so much public debt, as when a private person sells a part of his estate to pay off a mortgage on the whole of it. Neither the one nor the other may gain much revenue by the transaction, but that is a perfectly different question. In this instance the primary object seems to have been a reduction of the nominal capital of the debt; the great magnitude of it being considered as depressing its market price. As a question of more or less revenue it was almost immaterial, but its collateral advantages have undoubtedly been considerable in its connexion with other questions of political economy, and especially as clearing away obstructions to a more efficient use of the most important and equitable source of public revenue,

himself and a large proportion of the public, by a distinction without a difference between his first and second methods of employing a sinking fund; meaning, as we believe he must have done in both cases, a real fund, and not one existing in form only; that is, an actual average surplus of public revenue beyond the average expenditure for all other purposes. Without doubt this only can be a real and efficient sinking fund; but yet it appears to us that the form and mechanism of an uninterrupted sinking fund, alternately real and nominal, that is, acting during war as well as peace, though overbalanced in the former case by increasing debt for military expences, and even itself causing some increase of expence, may, nevertheless, have peculiar efficacy in facilitating the creation of a surplus revenue. The indistinct view which Dr. Price seems to have had of his own arguments, or his want of precision in explaining them, is, we think, evident, in an assertion quoted by Professor Hamilton,

"A state may, without difficulty, redeem its debts by borrowing money at an equal or even a higher interest than the funds bear, and without providing any other funds than such small ones as are necessary to pay the interest of the sums borrowed. In private life such a measure would be justly deemed absurd; but in a state it would be the effect of the soundest policy. It is borrowing money at simple interest, in order to improve it at compound interest, P. 125.

The first part of this assertion is not untrue; but yet is only a sort of arithmetical riddle, calculated to produce useless wonder, and fitter for the Ladies Diary than for a practical essay on one of the most important questions of political economy. If in the next part of the sentence he had said “increase of revenue, &c." instead of using funds in the double sense of capital and annual income, his real meaning would have been more correctly expressed. He goes on to make a distinction between the application of this proposition to private and public debts, which it is doubtful if he himself rightly comprehended. In truth, there is no arithmetical difference; but, it may be "in extent of sum and duration of time," as Professor Hamilton has clearly shewn. In either case, and adopting any mechanism of finance, a continual deficiency must increase a previously existing debt; and a continual surplus, unless hoarded, may diminish it by the progress of compound interest, varying in efficacy according to the contemporary profit of money. Yet we can conceive that such an alternately real and nominal sinking fund as we have described may, from collateral causes, be very fit to be adopted as a national measure, though little adapted to exonerate a private estate.

If, in either case, whether public or private, the system itself