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It might be said that the identical money which was borrowed was not the same which was used for paying the debt; but it came to the same thing if the sinking-fund was kept up while the nation was borrowing.
He was to allow him to buy for the sinking-fund, supposedly, such amounts as he might have to buy in order to keep the price up to par. To do this, once a considerable number of the loan certificates had been unloaded on the public, it might be necessary to buy back a great deal. However, these would be sold again.
To be very exact, the city treasurer, under the law, was not supposed to pay him for any transaction of this kind until he or his agents presented a voucher from the bank or other organization carrying the sinking-fund for the city showing that the certificates so purchased had actually been deposited there.
The estimated receipts for the fiscal year ending June 30, 1894, are $490,121,365.38, and the estimated appropriations $457,261,335.33, leaving an estimated surplus of receipts over expenditures of $32,860,030.05. This does not include any payment to the sinking fund. In the recommendation of the Secretary that the sinking-fund law be repealed I concur.
His sinking-fund scheme was taken up by the younger Pitt, and proved, though the latter believed in it to the last, to be founded upon an arithmetical fallacy which did not sit well upon a fellow of the Royal Society.
We still have an enormous debt of over $20,000,000,000, on which the interest and sinking-fund requirements are $1,320,000,000. Our appropriations for the Pension Office and the Veterans' Bureau are $600,000,000. The War and Navy Departments call for $642,000,000.
Huskisson was a thorough man of business, capable of wrestling with blue-books, of understanding the sinking-fund, and having theories about the currency; a master of figures and statistics and the whole machinery of commerce. Though eminently useful, he might at any moment be applying some awkward doctrine from Adam Smith.
The second, granting to his majesty a certain sum of money out of the sinking-fund, for the service of the year one thousand seven hundred and sixty, comprehended a clause of credit for borrowing the money thereby granted; and another clause, empowering the Bank to lend it without any limitation or interest; and the third, enabling his majesty to raise a certain sum of money towards discharging the debt of the navy, and for naval services during the ensuing year, enacted, that the exchequer bills thereby to be issued should not be received, or pass to any receiver or collector of the public revenue, or at the receipt of the exchequer, before the twenty-sixth day of March, in the year one thousand seven hundred and sixty-one.
But the remarkable thing and what shews the perilous nature of such speculations is, that these theories were worked out by chancellors of the exchequer, and adopted by parliament. There was a faint sinking-fund so early as 1716; but Walpole one day swept it up and spent it, having probably just discovered that it was a fallacy.
Then the parliament might venture to annihilate one half of it, by freeing the people from the taxes upon coals, candles, soap, leather, and other such impositions as lay heavy upon the poor labourers and manufacturers; the remaining part of the sinking-fund might be applied towards the discharge of those annuities and public debts which bore an interest of three per cent, only, and afterwards towards diminishing the capitals of the several trading companies till the term of fourteen years should be expired; then the sinking-fund would again amount to above a million yearly, which would be sufficient for paying them off, and freeing the nation entirely from all its incumbrances.
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