SCHEME FOR REDUCING THE INTEREST OF THE NATIONAL DEBT.

The next remarkable contest was occasioned by a motion of sir Robert Walpole, who proposed the sum of one million should be granted to his majesty, towards redeeming the like sum of the increased capital of the South-Sea company, commonly called the South-Sea annuities. Several members argued for the expediency of applying this sum to the payment of the debt due to the Bank, as part of that incumbrance was saddled with an interest of six per cent., whereas the interest paid for the other sums that constituted the public debt did not exceed four per cent. Many plausible arguments were offered on both sides of the question; and at length the motion was carried in the affirmative. The house having resolved itself into a committee to consider of the national debt, sir John Barnard made a motion, for enabling his majesty to raise money either by the sale of annuities, or by borrowing at an interest not exceeding three per cent., to be applied towards redeeming the South-Sea annuities; and that such of the said annuitants as should be inclined to subscribe their respective annuities, should be preferred to all others. He said, that even those public securities which bore an interest of three per cent, only, were sold at a premium in ‘Change-alley: he was therefore persuaded, that all those who were willing to give a premium for a three per cent, security, would gladly lend their money to the government at the same interest, should books of subscription be opened for that purpose, with an assurance that no part of the principal should be paid off for fourteen years. He expatiated on the national advantages that would accrue from a reduction of interest. From easy and obvious calculations he inferred, that in a very little time the interest upon all the South-Sea annuities would be reduced from four to three per cent., without any danger to public credit, or breach of public faith; that then the produce of the sinking fund would amount to fourteen hundred thousand pounds per annum, to be applied only towards redeeming the capital of the several trading companies; he proved that this measure would bring every one of them so much within the power of parliament, that they would be glad to accept of three per cent, interest on any reasonable terms; in which case the sinking-fund would rise to one million six hundred thousand pounds per annum. 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. This salutary scheme was violently opposed by alderman Heathcote, and other partisans of the ministry; yet all their objections were refuted; and, in order to defeat the project, they were obliged to have recourse to artifice. Mr. Winnington moved, that all the public creditors, as well as the South-Sea annuitants, should be comprehended. Sir John Barnard demonstrated that it might be easy for the government to borrow money at three per cent, sufficient for paying off such of the proprietors of four-and-twenty millions as were not willing to accept of that interest; but it would be extremely difficult to borrow enough to satisfy the proprietors of four-and-forty millions, who might choose to have their principal rather than such an interest. Nevertheless, resolutions were founded on this and other alterations of the original scheme; and a bill was immediately prepared. It produced many other debates, and was at last postponed by dint of ministerial influence. The same venerable patriot, who projected this scheme, moved that, as soon as the interest of all the national redeemable debt should be reduced to three per cent., the house would take off some of the heavy taxes which oppressed the poor and the manufacturers: but this motion was rejected by the majority.

1737