VII. 1786. CHAP. tions of the interest of the national debt proportionally diminished the charge upon the three funds, and of course increased those surplusses, which constituted the nominal sinking fund of that day. Had that fund, thus augmented, been really applied to the gradual liquidation of the debt, its operation must have been effectual, and highly advantageous to the country. At the peace of Ryswick in 1697, the national debt amounted to 21 millions, of which 5 millions were paid off in the four following years of peace; and, consequently, when the succession war broke out in 1701, the debt was about 16 millions. That war increased the debt to 544 millions; and in the long period between 1713 and 1740, in which there were only three years of war, there was a reduction of only 7 millions. At the peace of Aix-la-Chapelle in 1748, the national debt amounted to 78 millions, of which only 3 millions had been discharged when the seven years war began in 1755. At the end of that war in 1762, the national 146 millions, of which 10 millions had been discharged, when the American war commenced in 1776. At the beginning of 1786, after all the expences of the American war were funded, the national debt amounted to debt amounted to 239 millions, exclusive of two millions of CHAP. loyalists debentures. From this summary statement it appears, that the increase of the national debt was very rapid in time of war, and its diminution very slow in time of peace, 200 millions of debt having been incurred in 25 years of war, and less than 22 millions paid off in 45. years of peace, from the first establishment of the sinking fund in 1716 to 1786. Its enormous amount at the end of the American war, was the subject of great anxiety and alarm. "The national debt," said the commissioners of public accounts," is swelled to a magnitude that requires the united efforts of the ablest heads, and the purest hearts, to suggest the proper and effectual means of reduction. A plan must be formed for the reduction of this debt, and that without delay. Now is the favorable moment of peace. The evil does not admit of procrastination, palliation, or expedients. It presses on, and must be met with force and firmness what can be done, the support of public credit, the preservation of national honor, and the justice due to the public creditor, demand, should be done. It must be done, or serious consequences will ensue!" The general impression was, that the funding system could not be carried beyond a certain VII. 1786. VII. 1786. CHAP. point; and many persons were apprehensive, that we had already approached very near to that limit, the transgression of which threatened the nation with all the untried evils of public bankruptcy. How soon another war might call for new loans, no one could foresee; but all were aware, that to suffer the debt to remain in its present state, would be to invite aggression. It was therefore universally agreed, that the immediate establishment of some plan for its gradual reduction was essential to the peace and welfare of the country; and the means by which that desirable purpose might be best accomplished, had long occupied the thoughts of speculative men. Mr. Pitt having announced his design of submitting to parliament a proposal upon this subject, received an almost incredible number of schemes and projects, most of which were so visionary as not to deserve a moment's consideration; but others were of a nature, and came from quarters, which entitled them to serious attention. In a few instances, the principles upon which they were founded, at first appeared specious and plausible; but upon a closer examination it was discovered, that they were impracticable, or, if carried into execution, would probably lead to 'disappointment and mischief: they promised advantage, but rested upon hypothetical cases, which, in the judgment of practical experienced men, could not be expected really to exist. After weighing every suggestion of others, to which any regard was due, and maturely and anxiously reflecting upon every idea which occurred to his own fertile mind, he was convinced, that no mode would be so effectual, or so little liable to danger or objection, as the simple plan of purchasing stock at the market price on behalf of the public, accompanied with the strongest provisions and guards which could be devised, to render the fund so applied unalienable, and to secure its increase at compound interest *. * Among other fanciful schemes of theoretical men, Mr. Pitt rejected the specious but delusive projects, of converting low into high stocks. It is easy for a speculative man, sitting in his closet, to invent a plan of this sort, which would be advantageous to the public; but he forgets, that the stockholder will never consent to it--a fatal blow to his ingenuity and patriotism; and such a man is apt enough to complain, that his plan has not been adopted. In Mr. Pitt's plan, the consent of the stockholder is not required any farther than as he wishes to sell his stock; and it is well known, that there are always large quantities of stock in the market for sale. It should be remembered, that the guards and provisions, by which the fund was rendered unalienable, and its increase at compound interest secured, constitute the peculiar and valuable part of Mr. Pitt's system, and were never before attempted by any minister. His grand merit, however, with respect to the point now under consideration, CHAP. VII. 1786. СНА. VII. 1786. Having come to this determination, as a preparatory step, and with a view to give full and complete satisfaction both to parliament and to the nation, upon a point of such great and general concern, he laid before the house a variety of accounts, and then moved that they should be referred to the consideration of a select committee, who were to examine them, and to report to the house, what might be expected to be the amount of the future annual income and expenditure of the country. Mr. Fox approved this mode of proceeding, and observed, that whenever papers, complicated and various as those in question must necessarily be, required investigation and arrangement, before they could be applied to any practical use, it was always proper to refer them to a select committee. The motion was unanimously agreed to; and the committee thus appointed, consisted of nine persons, of whom Mr. W. Grenville was chosen chairman. was, first, the having raised the income of the country to such a height, as to leave a surplus of a million for the reduction of its debt; and secondly, his inviolable adherence to the application of that sum, with all its accruing additions, during the unexampled pressure of a long and expensive war, in which our very existence as an independent nation was at stake; a conduct directly contrary to that of all his predecessors in office, since the establishment of the former sinking fund, and which probably saved this country from becoming a province of France. |