William Cobbett - Essential Writings Volume 2

Essential Writings

Volume 2

WILLIAM COBBETT

Essential Writings 2, W. Cobbett

Jazzybee Verlag Jrgen Beck

86450 Altenmnster, Loschberg 9

Deutschland

ISBN: 9783849651770

www.jazzybee-verlag.de

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I have repeatedly stated, and, I think, proved, that our sinking fund does not at all lessen the national debt; that it has not the least tendency to lessen that debt; and that the words, reduce, redeem, liquidate, &c. &c. as applied to the effects of that fund, are totally misapplied, and are intended to deceive the people, or, which is more likely to be the case, are made use of from the deception under which those who make use of them do themselves labour.My position is this: that as the national debt is felt by the people only in the interest, which they are annually called upon to provide in taxes, the amount of that interest is the only measure of the magnitude of the debt; and, that, as the operation of the sinking fund has not, and cannot, lessen the amount of the interest, it cannot lessen the magnitude of the debt. We are told, that the Sinking Fund has accumulated to such an extent, that it has already redeemed 70 millions of the debt. But, how has it redeemed it? How can these 70 millions be said to be redeemed, while we have annually to pay interest on them? So long as we have to pay interest upon the whole of the debt, what is it to us, whether we pay it to individuals or into the hands of ministerial Commissioners? What signifies the name that we give to it, whether redeemed or unredeemed debt, so that we are still compelled to pay the interest upon it; so that it lies just as heavy upon us, as it would have done, if no trick, like that of the Sinking Fund, had been devised? This is so evident to every man of common sense, that the people in generel (I may say nine hundred and ninety-nine out of every thousand) have entertained hopes of relief from the Sinking Fund, only because they understood, and firmly believe, that the effect of that fund was gradually to lessen the amount of the interest and expenses, which constitute the annual charge on account of the national debt, and consequently to lessen the taxes raised upon them on account of debt. Into this error they were deluded by the use, or rather abuse of words, which had never before been used but for the purpose of expressing the act of making a real diminution in the quantity of the thing spoken of. When they were told, that the sinking fund was to reduce, to redeem, to liquidate, to clear off, to pay off, &c. &c. such and such portions of the national debt annually, how were they to avoid supposing, that the interest of the debt would go on diminishing with the principal? This they did believe, and this they do, for the far greater part, believe now. They feel, indeed, that the taxes come on them incessantly; but, they ascribe this to any thing rather than the national debt, because most of them, even down to footmen and chambermaids, have something in the funds. So general is the persuasion, that the sinking fund reduces the interest of the debt, that, no longer than about eighteen months ago, the fact was asserted to me by a merchant of considerable eminence, and one who possessed at the time from thirty to forty thousand pounds in funded property. When I insisted, that the sinking fund produced no relief to us; that it did not, and would not, in the least lessen the annual charge upon us on account of interest of the debt; he not only expressed his astonishment, but contested the point with me, till I brought him to my house, and showed him the accounts, where he saw, that, since the year 1791, the annual interest (including charges) of the national debt, had gone on increasing from 10 to 25,000,000l., and that the sinking fund had not tended to check its increase even in the smallest degree; where he was all the stock still continue in existence, just the same as if there had been no sinking fund, only that part of it was said to be held by government commissioners instead of being held by individuals, but that interest must still, he clearly saw, be continued to be paid upon it all, or else the whole of the paper fabric would instantly vanish. Now, if a person like this was so completely deceived, what must we naturally suppose to be the case with the public in general?

In America they pursue a different course. They have measures for reducing their debt; really reducing it; and they are reducing it accordingly. When Mr. Gallatin Ref. 002 tells the Congress that there is an annual appropriation of 8,000,000 of dollars for the payment of the principal and interest of the public debt, he tells them, at the same time, that 3,700,000 of those dollars are to be applied to the redemption of the principal; that is, to the real redemption of the principal; to the discharge of it; to the paying of the holders for it; to the taking of it up and destroying it. It is truly a shame to employ so many different phrases to express what is equally well expressed in one word, in the word redeem only; but, the fault is not mine; that word, as well as all others of nearly the same signification, have been so abused, their meaning has been so perverted; they are become so equivocal, in consequence of the use that has been made of them with regard to the Pitt sinking fund, that they are, upon subjects of this sort, no longer capable of filling their former places, or of performing their proper functions.

The Americans do, I say, really reduce their national debt. They raise a sum of money in taxes annually, and they redeem with it as much stock as it will purchase. Really redeem it. They buy it, pay for it, take the evidences of it from the individual holders, they throw those evidences in the fire; that which they have so redeemed is no longer in existence, and, of course, they no longer pay interest upon it. This is redeeming; but, can we be said to redeem; we, who continue to pay interest upon all the stock, just the same as if we had no sinking fund?

But, the fact is, that the original intention of our sinking fund, as expressed in the act of parliament, by which it was established, and which was passed in the year 1786, was somewhat similar to the plan pursued in America. Not so good, indeed; but, in principle, bearing some analogy to it. It provided for the redeeming, I mean (good reader, have patience with me!) I mean real redeeming, of a portion of the debt, when the annual income of the fund should amount to 4,000,000l. It did not, like the American plan, raise a sum of money every year, lay it out in stock, destroy the stock, and take from the taxes the amount of the interest before wanted for the said stock. It was not so simple, satisfactory and efficient as this plan; but it afforded some foundation for a rational hope that an alleviation of burdens would arise from it. The commissioners, to whom was to be entrusted the management of it, were to keep it accumulating, till the interest upon it, or, in other words, the amount annually paid by the people on account of it, should amount to 4,000,000l. Then it was to cease accumulating, and its 4,000,000l. a year were thenceforth to be applied to the real redeeming of the debt; that is to say to the purchasing of stock, upon which stock interest was no longer to be paid by the people. The words of the act, as touching this point, are the dividends [that is the quarterly interest] due on such parts of the principal stock, as shall thenceforth be paid off by the said commissioners, shall no longer be issued at the Exchequer, but shall be considered as redeemed by parliament. Yes; that would have been real redeeming; but, if such an effect was required in order to justify the application of the word redeem, with what propriety do the ministers now apply that word to the effect of the sinking fund, which effect, in consequence of subsequent alterations in the plan of the sinking fund, and particularly the last that was made, never can, according even to the calculations of the ministers themselves, take place till about forty or fifty years hence? What front, then, does it require; what a reliance on the forbearance or ignorance or impotence or servility of others does it require to enable the advocates for the act of 1786 now to speak of, and to state in writing, as stock redeemed, that stock upon which the dividends (that is to say, the interest) are still issued at the Exchequer!