MYSTIFICATIONS IN FINANCE.
THE Manchester Guardian contains a long article on our last week's observations, and promises another. Its present paper is confined to finance; the next is to deal with general polity.
The only point for us to notice is that which relates to the Debt ; for this involves on our part a mendacious audacity, or on his a degree of recklessness in assertion, or (as we rather incline to think) an extent of ignorance with practical finance combined with a flippant swagger, unbecoming in a person assuming the office of a public instructor. The charge is thus courteously and charitably stated.
We cannot, however, permit even a day to elapse without exposing one enormous misstatement—we would fain hope it is not wilful—in which we have detected our contemporary. He asserts, on the alleged authority of the Finance Reports, that, at the close of 1830, the interest due to the public creditor was 27,399,5751.' It happens, that we have not the Finance Report for 1830 in our possession ; but we have 'Porter's Official Tables of Revenue, Population, and on the strength of these we state, that the interest on the public debt in the year 1830 amounted to 28,325,827L—or was more, by no less than 926,252/., than the Spectator states it at ! After having found such an astounding discrepancy as this, we may well be excused for not pursuing the Spectator s figures further, until we have had an opportunity of examining the papers to which he refers."
In the words of GIBBON when replying to an unscrupulous assailant, "if we could possess the reader with the original autho- rities, we should be satisfied, and be silent." As we cannot, we must throw ourselves upon the reader's patience to listen to an exposition of practical finance.
The Finance Accounts is an official volume published annually, containing an account of the public income, expenditure, debt, trade, navigation, &c. The items are arranged in eight different "Classes," illustrated, where needful, by elaborate "Appendixes ;" and though the volume partakes of that complexity and mystifica- tion which characterize all official book-keeping, it contains the fullest and most complete account of the subjects enumerated, which is anywhere to be found (excepting the estimates for certain classes of expenditure.) But, besides the sources of error arising from the construction of the accounts, one, the blunder of the Manchester Guardian, is to be particularly guarded against—the confounding partial, accidental, or temporary payments, with permanent charges. For example—A pension is granted of 1,0001. a year, and it commences with the last quarter : the payment (and in this case the "annual charge" also) would only appear as 250/. Let another pension of the like amount be granted three years earlier, but only now drawn: that "annual charge" would give the true amount of the pension ; yet the ignorant, looking at the pay- ment, would make out the pension three thousand a year instead of one thousand. The best chance of avoiding these official pitfalls, is to look at every thing in its simplest form. In so complicated a subject as the Debt, the ways are more thickly beset than in other matters, and into one of these traps the unwary Guardian has fallen. We must again be expositional to tell how.
In the Finance Accounts there are various statements, in various places, and of varying amount, respecting the Debt ; but the one to get at an exact account of the interest for the year, is to be found in Class IV, devoted to the Funded Debt. When the Guar- dian has enriched his financial library with the volume in question, (but not with the "Finance Reports,") he will find the account numbered 100; but as it occupies four pages, he must look to the page we referred to, where he will find the amount of the interest as we published it. If he wishes to trace out his error, he may then turn to account No. 4, page 19, where he will find the amount paid as Mr. PORTER'S Tables state it. Let him next look to the little column on his left side, and be will see " 79 "— which means the number of the account where the particulars are ex- hibited. When he gets there, we imagine he will stick. But we may tell our readers, that the discrepancy arises from the difference between the interest due and the sums actually paid, or the insertion of items which do not strictly belong to the Debt. For example, on the 31 and 4 per Cents., (then, we think, in the course of conversion,—another gain, by the by, to the Whigs in appearing "largely to diminish debt,") the excess of payment over charge was 460,0001. In the payment to the Bank of England for management of loans, the amount was greater by 110,000/. in 1830 than in 1839. Their allowance for the payment of the Dividends, reduced on the renewal of the Charter, was less by 120,000/. in 1839 than in 1830. And, to show how useless these accounts of payments are for purposes of exact comparison at long or indeed at any periods, in 1830 no payment was made for interest on the 5 per Cents., in 1839 it was upwards of 21,000/. We need hardly add, that we took our respective statements of the two years front the same class of account—in the words of the official document, "Annual Charge due to the Public Creditor." Into the other points of the Guardian's paper it is needless to enter : (the Exchequer Bills and the excess of expenditure he is only going to " investigate" ; and the remarks on the Terminable Annuities, he says, are not intelligible to him—which we readily believe.) To apply his own language—" after having found such an astounding discrepancy, we may well be excused for not pursuing the Guardian's figures further." Having seen the space which it requires to answer one random charge by a financial sciolist, who has got hold of a stray volume of statistics without knowing their nature or their use, our readers will appreciate the propriety of our declining to trouble them any further with the finance of the Man- chester Guardian.
There was a typographical error in our article of last week— though the Manchester editor did not detect it. In estimating the interest on the West India Loan, a 4 was printed instead of a 7; which was the same, in effect, as saying that a medium of 3 and 4 was 31 instead of 3. For distinctness we reprint the table itself with the error corrected— TABLE SHOWING THE INCREASE ON TIM ANNUAL INTEREST OF TUE DEBT BETWEEN 1830 AND 1839.
Increase of annual interest on the Funded Debt in 1839, as compared with the annual interest in 1830 £1,189,386 Increase on Exchequer Bills in the same period 63,730 "Life Annuities" expired between the close of the years 1830 and 1839 469,018 Other classes of annuities Unknown.
Gross increase of the annual interest on the National Debt
between 1830 and 1839, so far as known £1,722,134
The loan for Negro Emancipation, (though clearly a Whig addition,) 20 millions at to 36 per cent. per annum, say 672,134
Beal increase of annual interest on the National D•bt between
1830 and 1839 after deducting the Emancipation loan £1,050,000