f 
 
 msmm^ 
 
 THE UNIVERSITY 
 
 OF ILLINOIS 
 
 LIBRARY 
 
 33'2 
 
 ■BS7 5 
 
 M.15
 
 a 
 
 SUBSTANCE / 
 
 A SPEECH 
 
 ADDRESSED TO THE 
 
 HOUSE OF COMMONS. 
 
 28th APRIL, 1814, 
 
 BT 
 
 PASCOE GRENFELL, ESQ. 
 
 ON THE 
 
 SUBJECT OF APPLYING 
 
 Ct)e g)inftfn5 iTunD 
 
 TOWARDS 
 
 ANY LOANS RAISED 
 
 FOR 
 
 THE PUBLIC SERVICE. 
 
 LONDO:^: 
 
 PRINTED FOR SAMUEL BAGSTER, 
 
 15, PATKRNOSTEU-ROW. 
 
 1817.
 
 PREFACE* 
 
 The manuscript, of which the following pages.contain 
 a copy, was transmitted by Mr. Grenfell, in May 1814, 
 to one of his friends, by whom he had been requested 
 either to print, or to communicate to him, a correct state- 
 ment of some observations addressed by him to the 
 House of Commons, on the 28th of April in that year, 
 on the subject of applying the Sinking Fund, under 
 the provisions of the Act, 26 Geo. III. cap. 31, towards 
 any Loans raised for the public service. 
 
 It will be seen from the letter, dated §th May 1814, 
 which accompanied this manuscript, that there was no 
 intention of publishing it at that period. 
 
 The Sinking Fund, however, having of late attracted 
 much public notice, and an expectation being entertained 
 by many persons that it will become a subject of Par-
 
 VI 
 
 liamentary discussion in the approaching session, it has- 
 been suggested by those who have read this manuscript, 
 that its publication at the present moment may not be 
 useless, or uninteresting ; and it is in deference to these 
 opinions, that it is now submitted to the public. 
 
 It may be proper to add here, that within a short 
 time subsequent to the discussion upon this subject, in 
 the House of Commons, a Loan of Twenty-four 
 Millions was contracted for by Government, for the 
 service of that year; and that the Chancellor of 
 THE Exchequer, in < communicating to the House 
 the terms upon which he had concluded his bargain, 
 stated, that at the meeting held in Downing Street be- 
 twixt himself and the Contractors, who attended him to 
 bid for the Loan, he had thought it right, in consequence 
 of what had recently passed in the House of Commons 
 upon the subject of the Sinking Fund, to ask the opinion 
 of these Gentlemen, as to the expediency of applying 
 the whole, or a part of that Fund, in diminution of the 
 amount of the Loan, for wTiich he was about to treat 
 with them — that, with the exception of one individual,* 
 all the Contractors present had declared, that it would 
 
 * The individual here alluded to was Mr. Ricardo.
 
 vu 
 
 he inexpedient to reduce the amount of the Sum proposed 
 to he borrowed of them, hy any such application of the 
 Sinking Fund; that he had, accordingly, defered to 
 opmions so generally expressed by these Gentlemen, 
 and had contracted with them for the whole Sum of 
 Twenty-four Millions, wanted for the service of 
 the current year. 
 
 It will be perceived, that the view taken in the follow- 
 ing discussion of the Sinking Fund, is strictly limited 
 to the consideration of the means of applying such a 
 Fund, most advantageously, for the public interests, in 
 those periods, when new Loans are to be raised. When 
 that discussion took place, there was no opportunity for 
 considering the still larger question, which now presses 
 itself upon the attention of the public, — namely. What 
 means the present State of the Public Income and Ex- 
 penditure may be expected to furnish, towards the impor- 
 tant object for which the Sinking Fund was originally es- 
 tablished — the object — of redeeming the National Debt. 
 
 The system of our Sinking Fund rests on the two 
 Acts of 1786 and 1792; the principles of which, it is 
 presumed, were as follows: by the Act of 1786, an 
 actually existing excess of income above expenditure,
 
 Vlll 
 
 (the Fact itself having been previously examined arid 
 ascertained by Parliament^) was made annually, applica- 
 ble to the reduction of debt : such excess being, in truth, 
 the only principle upon which, any solid efficient system 
 for that purpose, ever has been^ or ever can be, founded. 
 By the Act of 1792 it was provided, that all subse- 
 quent accumulation of debt should be accompanied by a 
 corresponding increase of revenue, created by new 
 taxation, to such an extent, as not only to cover the 
 interest and charges of each new Loan, but also to pro- 
 duce, EITHER a Sum of One per Cent on its nominal 
 amount, to be applied to its gradual reduction; or, 
 such a Sum as would be sufficient for discharging the 
 debt in Forty-five Years. In other words, the first 
 measure purported to reduce our old debts by the appli- 
 cation of an existing surplus ; the second went to pro- 
 vide a new surplus, to meet every new debt, and to be 
 in like manner applied to its reduction. Surplus of 
 revenue — the excess of ordinary income above ordinary 
 expenditure — was, in both cases, the only source con- 
 templated for reducing debt ; and seems, indeed, to be 
 the only source from which such reduction ever can be 
 derived.
 
 In what manner, and to what extent, these principles, 
 both or either of them, arc applicable to the present 
 state of our income and expenditure, is among the most 
 urgent of all the momentous subjects, to which the at- 
 tention of Parliament may now be directed — an enquiry, 
 which it is not the purpose of these pages to anticipate. 
 
 25th January, 18ir.
 
 Copy of a Letter from Mr. Grenfell ?o 
 
 " Spring Gardens, 9th May, 1814. 
 My dear Sill, 
 
 *' I am much flattered by what you are pleased to say 
 of the observations which I made in the House of Commons, on 
 the 28th of last month, on the subj ect of applying the Sinking Fund 
 towards the Loan of the year. Interesting, however, as the subject 
 may be, I dp not think either my observations, or the Author of them, 
 of sufficient importance to warrrmt their exhibition in print ; and I 
 must therefore decline what you suggest to me upon this head ; but 
 I shall very readily obey your wishes, by communicating to you the 
 substance of what I addressed to the House on that occasion ; and 
 though, in this statement, there may be some omissions, you may rely 
 upon it, that I shall give you nothing that I did not say. I send you, 
 then, herewith, the Substance of my Observations to the House, 
 together with a Copy of the Clause in the Act, upon which thos* 
 Observations were founded. 
 
 " I am, &c. 
 
 " P. G."
 
 SUBSTANCE 
 
 A SPEECH, &c 
 
 Mr. Grenfell having desired the Clerk to read 
 from the table the 13th sec. of the 2(5th Geo. III., 
 cap. xxxi. *, began by observing, that he was aware 
 that the subject in question was one upon which 
 there existed, in the minds of practical men in par- 
 ticular, a considerable difference of opinion ; and 
 that upon a question so circumstanced, and upon 
 which opinions were so conflicting, any sentiments 
 of his neither would, nor ought to carry with them 
 any weight or authority. Although, therefore, he 
 had certainly, after much and repeated considera- 
 tion, satisfied his own mind upon the subject, he, 
 nevertheless, begged the House distinctly to under- 
 stand, that he did not bring this subject forward for 
 the purpose of expressing his own opinion upon it, 
 but that his chief and sole object was, to invite and 
 attract to it, the notice and consideration of the 
 House and of the Public, and more particularly 
 that of the Right Honourable Gentleman (the 
 Chancellor of the Exchequer,) who was at the head 
 of the Financial Department of the Country. 
 
 * Vide Note at the cud.
 
 12 
 
 He, moreover, flattered himself, that it would not 
 be imputed to him, that he was obtruding upon the 
 House a subject trivial in its nature, or one, from 
 the consideration of which, any mischief could arise 
 to the public credit of the country ; and he felt the 
 more confidence in this expectation, when he recol- 
 lected, what must be within the memory of many 
 who now heard him, and probably within the know- 
 ledge of all, that the clause in the Act of the 25th 
 of the King, which had been read, and which, in a 
 manner, involved the whole of the subject, origi- 
 nated with, and was proposed in the Committee 
 which sat upon the Bill, by the late Mr. Fox, — that 
 it was adopted, with a recognition of the great 
 benefits which the public might derive from the use 
 of it, by the late Mr. Pitt — and that it now stands 
 in our Statute Book, and recommends itself to our 
 notice, under the sanction of the united authorities, 
 of these two great and rival Statesmen. 
 
 He was aware that, with reference to many in 
 whose presence he was speaking, any explanation 
 on his part, either as to the Act itself, or to its 
 mode of execution, would be perfectly unnecessary 
 and superfluous ; but as financial subjects were not 
 perhaps the subjects of most general attraction 
 amongst Members of that House, it might be proper, 
 and perhaps it might be expected from him on the 
 present occasion, that he should state in some de- 
 tail, what had been the practice observed in carrying
 
 13 
 
 this Act into execution, and what would have been 
 the practice, if the clause to which he had referred 
 had been acted upon ; and he would endeavour to 
 do this, as briefly as possible. 
 ■ He believed it would bcgenerally admitted, that 
 this Act, of the 26th of the King, laid the founda- 
 tion for the system of our Sinking Fund — a 
 system which, he would take that opportunity of 
 observing, had always appeared to him, notwith- 
 standing all the objections and cavillings he had 
 heard urged against it, to be, upon its original 
 principle, the most powerful and efficient for the 
 maintenance and support of our Finances, that ever 
 was devised or acted upon, in this, or in any other 
 financial Country : and after this unqualified de- 
 claration of his sentiments upon the subject of the 
 Sinking Fund, as originally instituted, he trusted it 
 would not be imputed to him by the House, as it 
 had been, he confessed, to his surprise, elsewhere, 
 that there was any thing in his views or intentions, 
 in bringing this subject forward, that was, in the 
 most remote degree, hostile to the principles of that 
 great financial measure : on the contrary, if his 
 view of the subject were a correct one, and if the 
 House should go along with him in it, the effect of 
 this discussion would be, not to impair, but to give 
 fresh energy and vigour to this powerful and bene- 
 ficial system. 
 
 He next proceeded to state, that in consequence
 
 14 
 
 of this Act of the 26th of the King, and of other 
 Acts which had subsequently passed in furtherance 
 of the same object, there had been, and continued 
 to be, annually taken from the Consolidated 
 Fund, and vested in the hands of certain Com^ 
 missioners — called Commissioners for the reduc- 
 tion of the National Debt — of whom the Speaker 
 of the House of Commons was one, — considerable 
 sums of the public money, for the purpose of being by 
 them laid out in the purchase of three per cents, 
 or of other portions of the Public Debt, with a view 
 to its gradual extinction : that this system had been 
 adhered to, without interruption, from the period of 
 its institution in 1786, down to the commencement of 
 the operation of that plan of Finance, which was 
 last year proposed by the Chancellor of the Exche- 
 quer : and although that plan appeared to him, to 
 involve in it a departure from the original principle 
 of the Sinking Fund, yet as it seemed a departure 
 justified by necessity, and by the circumstances in 
 which the Country was now placed, much as he 
 lamented that necessity, it had, nevertheless, re- 
 ceived then, and continued to receive now, his hum- 
 ble, but unqualified support and approbation : and 
 the effect of a steady adherence to this system had 
 been, to accurtiulate, in the names of these Com- 
 misssioners, hundreds of millions of the 
 Public floating Debt, with a view to its final extinc- 
 tion, and to place at their future disposal, annually?
 
 .15 
 
 MANY MILLIONS, applicable' to further accumula- 
 tions of the like nature and description. 
 
 Now, the mode in which these Commissioners had 
 laid out this morie}', he believed to be, by the employ- 
 ment of certain Agents or Brokers, who go, on four 
 days in every week throughout the year, into the 
 Stock-market, and there lay out, on account of the 
 Commissioners, certain limited sums of money, in 
 the purchase of the floating Public Debt. It might 
 be proper to observe here, that when this Act passed 
 in 1786, and during a period of seven years after- 
 wards, (being a period of peace, when no Loans were 
 required for the public service,) this was, in fact, 
 the only way in which the Commissioners could lay 
 out this money : but the clause in the Act to which 
 he had already referred, anticipating a period when 
 it might again be necessary to have recourse to 
 Loans, and the framers of it, no doubt, contemplating, 
 that, whenever such period should arrive, another 
 and more advantageous mode might present itself 
 for investing this money, this clause then pro- 
 vides, that the Commissioners shall be empowered 
 to apply the whole, or any part of the Sinking 
 Fund, to the Loan of the year — in other words, it 
 authorizes them to become subscribers to, and con- 
 tractors for, such Loans ; and entitles them to a par- 
 ticipation in all profits and advantages, of which such 
 contracts may be productive. It must be obvious, 
 then, that ail such profits would, in fact, be savings to
 
 16 
 
 the public, and go to increase the power — the impe- 
 tus, if he might use the expression — of this machine, 
 which we call the Sinking Fund, and which is thus 
 working for the gradual and final extinction of the 
 Public Debt. The House would perceive, that 
 under the operation of both these modes of laying 
 out this money by the Commissioners, the eflfect 
 would be precisely the same — so far as this — ^ 
 that in either case, the whole of the money that 
 comes into their hands would, in conformity to the 
 original object of the Act, be invested in the pur- 
 chase of the Public Debt ; and the only circum- 
 stance deserving of any notice, with reference to the 
 two modes, would be, to ascertain, which of the two 
 is the most advantageous for the public interests. 
 
 In examining this part of the subject, he would 
 endeavour to state, as briefly as possible, to the 
 House, the arguments which he had heard urged, on 
 both sides of the question ; but, before he did this, 
 he believed it would render himself, and the subject, 
 more intelligible to the House, if he were permitted 
 to assume, what, however, he believed to be nearly 
 the fact, that the amount of the Sinking Fund, ap- 
 plicable in the present year to the purchase of Stock, 
 was TWELVE MILLIONS. He would further beg 
 to apply his observations upon this subject, to a Loan 
 of TWENTY-TWO MILLIONS. He named this 
 amount of Loan merely, and for no other reason, 
 than because it happened to be the amount of the
 
 17 
 
 last Loan contracted for. It would answer his pur- 
 pose just as well, to apply his observations to the 
 Loan preceding the last, the amount of which was 
 TWENTY-SEVEN MILLIONS; whcu, too, it may 
 be observed, that the Sinking Fund might be 
 stated at fifteen, instead of the Twelve millions, 
 to which it was now reduced, by the operation of the 
 plan of Finance of 1813. 
 
 Now the advocates for the prevailing system, as- 
 suming, that it is for the advantage of the Public, that 
 the price of the Public Funds should be kept as high 
 as possible — a position which he was not disposed 
 to combat, and the truth of which, he conceived, no 
 body could deny^ so iottg as we continue to be a 
 BORROWING Country — that is, so long as we 
 increase our Public Debt, through the medium of 
 Loans, more than we decrease it by the operation 
 of the Sinking Fund — the advocates of this system 
 then, contend, that the price of the Funds is kept 
 higher, in consequence of these Agents and Brokers 
 of the Commissioners being sent weekly into the 
 Stock-market in the way described, than the price 
 would be, if a quantity of Stock, precisely equal to 
 the whole amount purchased in this manner within 
 the year, were withheld from that market — assigned 
 at once, to the Commissioners for the Reduction of 
 the National Debt — and these Agents and Brokers 
 kept out of the market altogether : in otiier \vords, 
 what they contend for is this — that to throw
 
 18 
 
 Stock, to the value of twenty-two millions, 
 upon the market at the begimiing of any year, and 
 to employ Brokers to go into that market, and lay 
 out TWELVE MILLIONS in the purchase of Stock in 
 the course of that year, would leave the price higher 
 at the end of such year, than would be the case, if 
 Stock to the value of twelve millions were, 
 in the first instance, assigned to the Commission- 
 ers, and TEN MILLIONS ONLY thrown upon the 
 market 1 
 
 It was so extremely important that he should be 
 understood upon this part of the subject, that he 
 would, with the leave of the House, explain himself 
 in another way upon it, by stating a fact : — In the 
 month of November last. Government wanted, and 
 raised in the City, twenty-two millions of 
 MONEY ; in exchange for which, they created and 
 gave, to the Loan Contractors, about thirty-nine 
 MILLIONS of Capital Stock in the three per cents : 
 now, in the very same year in which Government 
 -wsiut tzventy-two millions of money, in exchange for 
 three per cents, the Commissioners for the Re- 
 duction of the National Debt (in other words, the 
 Government itself) become possessed of tzvel'vc 
 millions of money, (more thatt one-half of the 
 whole sum required,) which they want to lay out in 
 the purchase of, or to exchange for, three per 
 cents. It appeared to him, then, that the plain, 
 simple, and best mode of effecting this operation
 
 19 
 
 would be, that Government should take, from their 
 oxvn Commissioners, these twelve millions of 
 money, giving them, in exchange, about twenty-one 
 mllions of three per cents, and look to the City 
 only for the remaining teji millions of money, for 
 which they might give, in exchange, about eighteen 
 millions of three per cents. — No! we are told, 
 that this is not the way to go to work ; but that we 
 are to go into the City for the whole twenty-two 
 millio?2s of money — to throw the whole thirty-nine 
 millions of three per cents (instead of eighteen 
 millions only) upon the market — for the purpose, 
 as is gravely alleged, of keeping up the price — 
 and afterwards, to send our own Commissioners 
 into that very market, with their twelve millions of 
 money, to get as much Stock back again for the 
 Public, as they can obtain at the market price of 
 the day ! 
 
 Knowing tliis to be the opinion of many grave 
 and respectable persons, he would not presume to 
 say, confidently, that this contrivance — this dex- 
 terous — but, at the same time, apparently cir- 
 cuitous mode recommended for the investment of this 
 money by the Commissioners, might not produce 
 the beneficial effects ascribed to it : its most san- 
 guine advocates, however, must admit, that the ad- 
 vantages imputed to it rest, after all, upon mere 
 opinion, and are utterly incapable of any thing like 
 proof or demonstration.
 
 20 
 
 Now, in the absence of all proof or demonstra- 
 tion, he knew of no way by which we could bring 
 our minds to a satisfactory conclusion upon this, or 
 any other subject, but by a reference to general 
 principles — to the common and ordinary transac- 
 tions of life, — and to the maxims of common sense. 
 He was^ aware, that great stress was laid on the 
 opinions of p7^actical men on this subject : no per- 
 son ought to feel a greater respect for that class, of 
 which he was himself an humble Member, than he 
 did : but he really could not compliment that class 
 so far as not to believe (and, believing it, nothing 
 should prevent his statingjt,) that Statesmen, Mem- 
 bers of that House, persons who had never been 
 concerned in Loan Contracts, or in dealings in the 
 Funds, and who, perhaps, had never even seen the 
 Stock-market, were, upon a subject of this nature, 
 fully as competent to form a correct judgment — at 
 least, as likely to form an unbiassed and disinter- 
 ested judgment, as the most practical man of busi- 
 ness that was to be met with, either east or west of 
 Temple-bar. Looking at the subject, therefore, upoii 
 general principles, and according to the ordinary 
 transactions in life, it appeared to him, that the 
 permanent price of this article, which we call 
 Stock, depended upon, and was governed by, the 
 same principles, which fix and determine the price of 
 every other marketable commodity — namely, by 
 the proportion that the supply sent to market bears
 
 to the demand that exists for it. Measuring, then, 
 the question by this standard, he should say, that 
 to throw txventy-two millions upon the market, at 
 the beginning of the year^ employing Agents and 
 Brokers afterwards to go into that very market and 
 buy up twelve millions^ leaving the excess of the 
 Public Debt at the end of the year at ten mil- 
 lions, would permanently affect the price of Stock 
 no more, than if you were, in the first instance, to 
 bring only ten millions into the market, and keep 
 the Brokers of the Commissioners out of the mar- 
 ket altogether, leaving the addition to the Public 
 Debt, at the end of the year, in both cases, pre- 
 cisely the same — namely, at ten millions. 
 
 He was so extremely anxious to be distinctly 
 understood by the House upon this part of the sub- 
 ject, that he would request their leave to illustrate 
 his view of it, by supposing one or two cases, more 
 perhaps within the sphere of every man's observa- 
 tion, in the ordinary occurrences, and transactions of 
 life :— 
 
 He would suppose, then, that a gentleman, pos- 
 sessed of a landed property of tzvelve thoiisaiid 
 pounds per annum, should want, for some particular 
 purpose, to raise, in the next, and for some follow- 
 ing years, the sum of twenty-two thousand pounds 
 annually ; the ordinary uay in which a jjcrson, 
 under those circumstances, it is presumed, would 
 endeavour to accomplish his object, would be, by
 
 22 
 
 looking out for, or going amongst, the money- 
 lenders, to raise ten thousand pounds at tlie cheap- 
 est rate possible : now, he should like to know, what 
 it is probable, a person so circumstanced would 
 think of an agent or steward, who should propose to 
 him to borrow tzventy-two, instead of ten thousand 
 pounds — to send his bonds or notes of hand for 
 the former sum into the Money-market — and em- 
 ploy a broker to go into that market to buy up to 
 the amount of twelve thousand of these bonds — in 
 order that he might get a better price for the remain- 
 ing ten thousand? 
 
 He would put another case : — He would sup- 
 pose the East India Company, who are in pos- 
 session of the monopoly of the tea-trade, to have in 
 their warehouses, at any given period, twenty-two' 
 thousand chests of tea, and that they know, from 
 previous experience, that the consumption of the 
 Country, in the next year, will require no more than 
 ten thousand chests, which it must, nevertheless, be 
 their object to sell at the highest possible price ; he 
 would ask the House, what the East India Com- 
 pany would be likely to think of a broker, who 
 should seriously propose to them, to employ him to 
 bring the whole twenty-tivo thousand chests into the 
 market, and, at the same time, authorize another 
 broker to go into that market, and buy up, for their 
 account, twelve thousand of these chests, with the 
 view, by this contrivance, of obtaining a higher price
 
 23 
 
 for the remaining ten thousand chests ? It was 
 obvious, thatr^ncii a transaction might be very ad- 
 vantageous to the two brokers thus employed to sell 
 and to buy ; but, he believed, it would be extremely 
 difficult to persuade the East India Company that 
 it v\'ould be to their advantage, to lend themselves 
 to so extraor<3inary — to so absurd an operation; 
 and yet, extraordinary and absurd as it must appear 
 in this case, he confessed he could not see how it 
 differed, so far as price was considered^ with 
 the system that had been adopted, ever since 
 the year 1793, in laying out the money of the 
 Sinking Fund, in the redemption of our National 
 Debt 
 
 There was another ground, upon which, he had 
 heard the prevailing system defended. It had been 
 said, that the effect of the introduction of these 
 twelve millions of money, into the Stock-market, 
 was, to keep the market active, — to facilitate the 
 sales; — nay, he had heard some persons go so far 
 as to contend, that without this facility, it might 
 often happen, that those who had a large quantity 
 of stock to sell, on any particular day, might abso- 
 lutely be unable to accomplish the sale of it at any 
 price ! The first observation he would make upon 
 this would be, to ask, why, if the effects of this 
 practice were so beneficial to the public, was its 
 operation confined to four days in the week ? 
 Why was not the public to have the benefit of it
 
 24 
 
 every day? And what became of those unfortu- 
 nate Stockholders who might be obliged to bring 
 their stock to market, on either of those two days 
 in the week, on which the Brokers of the Commis- 
 sioners keep out of it ? But, really, if gentlemen 
 would look beyond the mere surface of this ques- 
 tion, they must be persuaded, that the benefits as- 
 cribed to the prevailing practice, in this point of 
 view too, were altogether unfounded and chimerical ; 
 and for this reason : He would not deny, no person 
 could be so absurd as to deny, that the effect of the 
 introduction into the market of twelve millions of 
 money annually^ which was at the rate of about 
 two hundred and thirty thousand pounds weekly, 
 or from fifty to sixty thousand pounds on each 
 of the four buying days in the week, must be a 
 tendency to raise the price of the Funds : but would 
 gentlemen be pleased to recollect, that at the very 
 moment whien the Commissioners thus appear in 
 the Stock-market, with their bank notes to buy 
 Stock, they are met by the Loan Contractors, with 
 Stock in their hands, in the shape of Omnium, or 
 Scrip, /or saU? that the sale of this Omnium, by the 
 Loan Contractors, has precisely the same effect in 
 depressing the price, that the purchase of the Com- 
 missioners has in raising it ? and that tiie one 
 operation completely counteracts the effects of the 
 other? Nothing being more clear, than that, if 
 the trvehe millions of money belonging to the
 
 25 
 
 Commissioners, were kept out of the market, and 
 applied, in the first instance, to the Loan of tlie 
 year, the quantity of Stock, equal in value to those 
 twelve millions, which is now brought to market 
 for . sale, would also be kept out of the market 
 altogether. 
 
 " Oh ! but," 'tis said, " this practice has a very 
 beneficial effect upon circulation, upon pub- 
 lic CREDIT, and upon the Money-market!" 
 The terms circulation, public credit, and Money- 
 market, were, indeed, high sounding, imposing 
 terms : very intelligible certainly, and very proper, 
 when py^operly applied ; but it had often happened 
 to hini; to hear these phrases, and others of the 
 like nature, dexterously made use of for the purpose, 
 either of misleading the judgement of those to 
 whom they were addressed, or of concealing tlie igno- 
 rance of those who used them ; and at any events, he 
 conceived, they were wholly inapplicable' to the pur- 
 pose for which they were here adopted : for that in 
 which ever of the two modes the Commissioners 
 lay out their twelve millions in -Stock, whether 
 as Loan Contractors themselves, and through the 
 medium of a subscription to the Loan of the yeai", 
 or by weekly purchases in tiie Stock-market, the 
 effect upon the Money-market, and upon circula- 
 tion must, in both instances, be jM'ecisely the same ; 
 and of this, lie trusted the House must be con- 
 vinced, if they would examine into, and trace the
 
 26 
 
 progress of these two modes of proceeding, and see 
 how what is called the Money-market is affected 
 by either, and both of them. He had somewhere 
 heard, or read of this Money-market being com- 
 pared to a RESERVOIR, which is enriched by every 
 thing that is poured in, and impoverished by all 
 that is tapped, and taken out of it. Now, cer- 
 tainly, according to the prevailing practice, the 
 Commissioners pour into this Reservoir, or Money- 
 market, twelve millions annually j or about two hun- 
 dred and thirty thousand pounds every week : but, 
 on the other hand, let it always be remembered, 
 that as fast, (nay faster, as might be easily 
 shewn,) as the Commissioners pour money into this 
 reservoir, it is tapped out of it, by the Loan Con- 
 tractors, and by them carried to the Exchequer : 
 whereas, if the Commissioners had laid out their 
 twelve millions in part of the Loan of the year, 
 in the manner provided for by the Act of 1786, 
 the money would have been taken at once to the 
 Exchequer, without passing through this reservoir 
 at all ! It appeared to him, therefore, that the 
 Money-market could not be beneficially affected by 
 this transaction ; that the only parties enriched by 
 it were, the Loan Contractors; and the party 
 impoverished was, the Public. 
 
 Having now endeavoured to state the principal 
 arguments urged on the side of those who contend 
 for the prevailing practice, it would be naturally
 
 27 
 
 expected from him, that he should point out some 
 positive advantages on the other side, vvliich would 
 render it expedient, and, indeed, justify the change 
 in a practice that had now prevailed, ever since 
 the year 1793; and certainly unless he were pre- 
 pared to do so, he should feel that he had been 
 guilty of an unwarrantable intrusion on the valuable 
 time of the House : but he was happy to think, that 
 on this side of the question, he could point out posi- 
 tive, specific advantages to the Public, not resting 
 upon theory, speculation, or opinion, but capable of 
 proof and demonstration. He was sure the House 
 would anticipate what he was going to say, when he 
 stated, that the first, the great, the paramount benefit 
 to be derived hbm the proposed alteration would be 
 this, — that the Public would save that profit which 
 is now made by the Loan Contractors, upon the 
 whole amount of the Sinking Fund, that would be 
 thus applied towards the Loan of the year. Are 
 gentlemen aware of the sum to which this saving 
 would have amounted upon the last two Loans ? 
 The last Loan^ for instance, which was for twenty- 
 two millions, came out at a premium of three or 
 four per cent; the premium lias since risen as high 
 as thii'ty-two per cew^, and at this moment exceeds 
 twenty per cent ; Now, taking the average pre- 
 mium, as applicable to the amount of the Sinking 
 Fund, at twenty per cent, which, instead of being 
 an exaggerated average, must, lie was sure, be ad-
 
 28 
 
 mitted, by every person conversant in these matters, 
 to be much below its probable amount, the posi- 
 tive saving to the Public ^ if the Sinking Fund had 
 been applied to .the Loan raised in November 
 last, would amount to no less a sum than two mil- 
 lions FOUR HUNDRED THOUSAND POUNDS ! An 
 
 immense profit to the Commissioners, or saving 
 to the Public, resulting from the same causes, 
 would have been secured, if the Sinking Fund had 
 been subscribed, and taken as a part of the pre- 
 ceding Loan of twenty-seven millions ! 
 
 Another advantage that would result, from apply- 
 ing the Sinking Fund to the Loan of the year, would 
 be, that the Chancellor of the Exchequer would 
 thereby have a better chance of creating a compe- 
 tition amongst the monied men, for that part of 
 the Loan, for the supply of which he would have to 
 treat with the Gentlemen in the City : the, benefits 
 to the Public, arising from competition on those 
 occasions, are too obvious to require to be stated. 
 Now, with reference to the two last Loans con- 
 tracted for, the one amounting to twenty-seven 
 millions, and the other to twenty-two millions, 
 there was no competition zvhatever. The Chan- 
 cellor of the Exchequer had only one parti/ to 
 treat with, and this was attributable to the magni- 
 tude of the Loans ! But if, in either of those cases, 
 he had reduced the Amount of the Loan to be 
 contracted for in the City, by the application of
 
 ^9 
 
 the Sinking Fund, in part of the whole siun 
 raised, he would have reduced the twenty-seven 
 millions to twelve, and the twenty-two millions 
 to ten ; and there can be no doubt, but that there 
 would then have been a competition amongst the 
 bidders ; inasmuch as many parties in the City 
 would have been found, to offer for a Loan of ten 
 or twelve millions, who could not grajjple with so 
 large a sum, as twenty-seven or twenty-two 
 millions. 
 
 Many other collateral advantages might be 
 stated, in support of the view which he had pre- 
 sumed to take of this question ; but-he would tres- 
 pass no longer upon the time of the House than 
 to observe, that without imputing any thing like 
 blame, either to the Right Honourable Gentleman, 
 the present Chancellor of the Exchequer, or to his 
 predecessors, for not having hitherto availed them- 
 selves of the clause in the Act to which he had so 
 often referred, he would entreat the Right Honour- 
 able Gentleman to take the subject into his most 
 serious consideration, previously to the period when 
 he would have to contract for another Loan, for 
 the service of the current year;" his sole object 
 being, to bring the subject under the consideration 
 of the House : and in the Motion with whicli he 
 should conclude, he had carefully abstained from 
 committing the House to any opinion, upon thi-? 
 subject.
 
 30 
 
 He then moved that there be laid before th<} 
 House 
 
 " An Account of the Money expended by the 
 " Commissioners for the Reduction of the National 
 " Debt, together with the Amount of the Capital 
 " Stock obtained for the same, in any of the Public 
 " Funds, bearing interest at Three Pounds per Cent 
 '* per annum, in the Quarter ending 5th April 
 " instant." 
 Also J 
 
 " An Account of the Average Price in Money 
 " at which every One Hund^'ed Pounds of the said 
 " capital Stock has been thus obtained, during 
 " the above period." 
 
 Also, 
 
 " An Account shewing the Price in Money 
 " payable for every One Hundred Pounds Capital 
 " Stock, (without distinguishing between the Re- 
 " duced Annuities and the Consolidated Annuities) 
 " by every Contributor to the Sum of Twenty-two 
 *' Millions, raised by Annuities, agreeably to the 
 " Resolutions of this House, of the l^th of 
 ** November last." 
 
 These Accounts were ordered.
 
 31 
 
 The Clause referred to in page 11. 
 " Provided also, and be it further enacted, by the authority 
 " aforesaid, That it shall and may be lawful for the said Com- 
 " missioners, if they shall think it expedient, at any time be- 
 " tween the end of any quarter and the first day of the 
 " calendar month which shall commence next after the end of 
 " such quarter, to subscribe any of the monies which shall have 
 " been placed to their account at the end of such quarter, 
 " and also all such monies as shall be to be placed to their 
 " account, by virtue of this Act, during the remainder of the 
 " then current year, computed, as by this Act directed, towards 
 " any Public Loan, to be raised by virtue of any future Act or 
 '* Acts of Parliament, by such Annuities as are herein after- 
 *' mentioned, that is to say. Perpetual Annuities, subject only to 
 " redemption at par, for which the Sinking Fund shall be 
 " collateral security : Provided always. That the Capital 
 *• Stock of such Annuities so to be granted, shall bear the 
 " same rate of interest with some Capital Stock of redeemable 
 " Public Annuities then subsisting ; and that the amount of 
 " the Capital Stock to be given for every sum of One Hundred 
 " Pounds so to be subscribed, shall be estimated according to 
 " the Market price of such subsisting Stock at the time of such 
 " subscription." 
 
 THE END. 
 
 Printtd by J. Mojcs, Greville Street, London.
 
 ii=.
 
 UNIVERSITY OF ILLINOIS-URBANA 
 
 3 0112 062406761