NOTE ON THE PUBLIC DEBT.
THE war in the East has lasted for two years. The bulk of the charge will be borne by the finance of this country for those two years and one year more. The total amount es estimated, with some looseness, at 77,600,0001. we may call it in round numbers
about 80,000,0001. More than two-thirds of that cost will have been extinguished during the three years, and the remainder will be expunged in the course of the next sixteen years. The cost of the great war has been estimated at about ten times the amount of the war in the East ; but the permanent consequences far ex- ceed that proportion of the capital outlay. Instead of having to pay annually a million and a half, or ten times a million and a half—fifteen millions—we have still to pay nearly double that amount. Instead of having extinguished the whole capital in sixteen years, we have passed much more than double that time with a material diminution of the annual charge but with a com- paratively alight abatement of capital. In 1816, the National Debt amounted to 816,311,0001., and the annual charge was 30,000,0001.in 1856, the National Debt amounts to 766,778,0001., and the annual charge is 27,000,0001. In three years we can reduce the expenditure of a new war by more than two-thirds of the capital amount, and extinguish the entire debt in sixteen years : we had nearly forty years of peace, and although we have effected a reduction of 3,000,0001. in the annual charge, we have only relieved ourselves of a sixteenth part of the capital. It may be admitted that the difficulty of relief is proportionately
increased by the magnitude of the original charge; the prin- ciple is.alike in both oases, and the remarkable let is, that suc- cessive Chancellors of the Exchequer should be able to perceive these truths as completely even as the public can perceive them— that a present Chancellor of the Exchequer should provide for the extinction of the burden in one case, but that he and his prede- cessors should treat the old burden as a something which is to be scarcely touched, or at the best only nibbled at. During the late contest we have carried on a war and provided the means of extinguishing the war debt. We have found that we could do so -without impeding the movements of commerce, or preventing the people from acquiring the means to carry out all operations of industry and war at once. On the contrary, we have enlarged the fields of industry. Now these principles also apply to that great enemy which has exercised a fiercer slavery over us than any Czar or Emperor of them all—the perpetual burden of the National Debt. The recent war did not impose upon us a charge so great in amount, and the appreciable part of that re- cent burden will have lasted only for three years. The public cheerfully came forward to assist in conquering the minor enemy ; we may be sure they would be equally willing to assist in subduing the enemy that has vexed us so long One of the grand argu- ments of the debate against raising the loan by terminable an- nuities lay in the smallness of the amount, and in the ex- pediency of closing that great account without difficulty or irregularity. This was a strong argument. The Chancellor of the Exchequer also published, in the body of his speech, an advertisement for Baron Lionel de Rothschild and other capitalists who can command large sums of money; but the cir- cumstance to which he alluded might have recalled to him one in- stance in the history of English loans which has never been effec- tually disposed of. We mean the Loyalty Loan of 1796, when, at the time of the greatest difficulty, the Finance Minister raised 18,000,0001. by opening subscriptions, and raised the money on terms so favourable that the public became losers and were after- wards indemnified by a supplemental act of Parliament. This very fact has been made an argument against loans by open subscriytion, as injurious to the public interests ; while it is, fortiori, evidence that the plan calls forth the greatest amount of assistance from those who possess money, with a minimum of sa- crifice on the part of the public or the poorer tax-paying classes. Baron de Rothschild held in his hands the representative of forty millions belonging to the public who would probably have been
• to contract direct with Government, probably at a rate less be ow the market rate of the day than that which was claimed by the contractors. We admit, however, the validity of the plea against introdu- cing any kind of diversity in the recent loan for so small an amount and for a purpose so purely supplemental. The question only re- minds us of the resources which the country has at command for anew kind of warfare during peace—a great war upon our old enemy the National Debt. It is evident that., from diversities in the condition of the people, and in the special objects of those who
possess personal property, that there always will be a class de- siring to invest their money in public funds, and a public stock is a convenience for society. It affords the means of consolidating the funds of charities and other properties held in trust; to say nothing of its bemg ground upon which conversions of _property may take place. The total extinction of public stock, therefore, is an object not likely to be desired by any practical class in this country. But the reduction of the immense mass, and of the heavy yearly charge, is an object which might to be as deer to us as the suppression of Russian encroachment on the Principalities or on the mud of the Danube. If a new stock can be created upon very favourable terms, with the seeds of its own extinction, for raising the means to subdue the Russian enemy, we see no reason why a new stock should not be created for the suppression of the enemy nearer home—the ancient National Debt. It is quite needless to go into the details of a project that belongs to a future year ; but the occasion is apposite for recording a memorandum that may recur for use at the proper season.
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