Mr. Pitt's War Finance

Mr. Gladstone to Herbert Gladstone

March 10, 1876.—Mr. Pitt's position in the Revolutionary war was, I think, a false one. To keep out of that war demanded from the people of this country an extraordinary degree of self-control, and this degree of it they did not possess. The consequence of our going into it was to give an intensity and vitality to the struggle, which but for the tenacity of English character it would not have possessed. Mr. Pitt did not show the great genius in war which he possessed as a peace minister. Until the epoch [pg 638] of the Peninsula our military performances were small and poor, and the method of subsidy was unsatisfactory and ineffective. The effect of borrowing money in three per cents. was to load us with a very heavy capital of national debt. I think at one time we only got £46, or some such amount, for the £100. It must, however, be taken into view that a perpetual annuity of £3, redeemable upon paying £100, brought more than 3/4 of what a perpetual annuity of £4, similarly redeemable, would have brought; or than 3/5 of what a £5 annuity, similarly redeemable, would have brought. It is not easy to strike the balance. Mr. Newmarch, a living economist of some authority, I believe, thinks Mr. Pitt was right. I do not think the case is so clear against him as to detract from his great reputation. But were I in the unhappy position of having to call for a large loan, I should be disposed to ask for the tender in more than one form, e.g., to ask for a tender in three per cents, pure and simple, and an alternative in 4 or 5 per cents., with that rate of interest guaranteed for a certain number of years. Sir Robert Walpole had not to contend with like difficulties, and I think his administration should be compared with the early years of Pitt's, in which way of judging he would come off second, though a man of cool and sagacious judgment, while morally he stood low.