VIEW OF LONDON FROM THE TOWER TO LONDON BRIDGE IN THE LATTER PART OF THE 18TH CENTURY. (After the Picture by Maurer.)

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The great financial questions of 1786 were the Duke of Richmond's plan of fortifying Portsmouth and Plymouth, and Pitt's proposal of a sinking fund to pay off the national debt, an excise duty on wines, and Pitt's commercial treaty with France. During the previous Session the Duke of Richmond, Master-General of the Ordnance, had proposed a plan of fortifying these large arsenals, so that, in the supposed absence of our fleet on some great occasion, they would be left under the protection of regiments of militia, for whom enormous barracks were to be erected. A board of officers had been appointed to inquire into the advantages of the plan, and their report was now brought up on the 27th of February, and introduced by Mr. Pitt, who moved that the plan be adopted. This scheme was strongly opposed by General Burgoyne, Colonel Barré, and others. Mr. Bastard moved an amendment declaring the proposed fortifications inexpedient. He said the militia had been called the school of the army, but to shut them up in these strongholds, separate from their fellow-subjects, was the way to convert them into universities for prætorian bands. He protested against taking the defence of the nation from our brave fleet and conferring it on military garrisons; tearing the ensign of British glory from the mast-head, and fixing a standard on the ramparts of a fort. The Bill was rejected, Fox, Sheridan, Windham, and all the leading Oppositionists declaiming against it.

On the 21st of March a Committee which had been appointed early in the Session to inquire into the public income and expenditure, and to suggest what might in future be calculated on as the clear revenue, presented its report through Mr. Grenville, their chairman. On the 29th, Pitt, in a Committee of the whole House, entered upon the subject, and detailed the particulars of a plan to diminish progressively and steadily the further debt. It appeared from the report of the Select Committee that there was, at present, a clear surplus revenue of nine hundred thousand pounds sterling, and that this surplus could, without any great additional burthen to the public, be made a million per annum. This he declared to be an unexpected state of financial vigour after so long and unfortunate a war. The plan which he proposed was to pay two hundred and fifty thousand pounds quarterly into the hands of Commissioners appointed for the purpose to purchase stock to that amount, which was under par, or to pay stock above par, and thus cancel so much debt. In addition to this, the annuities for lives, or for limited terms, would gradually cancel another portion. All dividends arising from such purchases were to be similarly applied. Pitt calculated that by this process, and by the compound interest on the savings to the revenue by it, in twenty-eight years no less than four millions sterling per annum of surplus revenue would be similarly applied, or employed for the exigencies of the State. By this halcyon process he contemplated the eventual extinction of that enormous debt, to pay the mere interest of which every nerve had been stretched, and every resource nearly exhausted. In a delightful state of self-gratulation, Pitt declared that he was happy to say that all this was readily accomplishable; that we had nothing to fear, except one thing—the possibility of any Minister in need violating this fund. Had the original Sinking Fund, he said, been kept sacred, we should have had now very little debt. To prevent the recurrence of this fatal facility of Ministers laying their hands on this Fund, he proposed to place it in the hands of Commissioners, and he declared that "no Minister could ever have the confidence to come down to that House and desire the repeal of so beneficial a law, which tended so directly to relieve the people from their burthens." He added that he felt that he had by this measure "raised a firm column, upon which he was proud to flatter himself that his name might be inscribed." He said not a word about the name of Dr. Price being inscribed there, to whom the whole merit of the scheme belonged; he never once mentioned his name at all. On his own part, Dr. Price complained not of this, but that he had submitted three schemes to Pitt, and that he had chosen the worst.

The greater part of the House, as well as the public out of doors, were captivated with the scheme, which promised thus easily to relieve them of the monster debt; but Sir Grey Cooper was the first to disturb these fairy fancies. He declared that the whole was based on a fallacious statement; that it was doubtful whether the actual surplus was as described; but even were it so, that it was but the surplus of a particular year, and that it was like the proprietor of a hop-ground endeavouring to borrow money on the guarantee of its proceeds in a particularly favourable year. Fox, Burke, and Sheridan followed in the same strain. They argued that, supposing the assumed surplus actually to exist, which they doubted, it would immediately vanish in case of war, and a fresh mass of debt be laid on. Sheridan said, the only mode of paying off a million a year would be to make a loan of a million a year, for the Minister reminded him of the person in the comedy who said, "If you won't lend me the money, how can I pay you?" On the 14th of May he moved a string of fourteen resolutions unfavourable to the report of the Committee, which he said contained facts which could not be negatived; but the House did negative them all without a division, and on the 15th of May passed the Bill. In the Lords it met with some proposals from Earl Stanhope, which were to render the violation of the Act equivalent to an act of bankruptcy, but these were negatived, and the Bill was passed there on the 26th. It was not until 1828 that the fallacy on which the Bill rested was finally exposed by Lord Grenville, who, curiously enough, had been chairman of the Committee which recommended its adoption.

In order to enable the revenue to furnish the required million surplus for the Sinking Fund, Pitt found it necessary to propose to extend the excise laws to foreign wine, which had hitherto been under the jurisdiction of the Custom House. He contended that, on a moderate calculation, the sum lost to the revenue by the frauds in the trade in wine amounted to upwards of two hundred and eighty thousand pounds per annum. To remedy this, and to prevent at once smuggling and the adulteration of wine, the excise officers were to have free access to the cellars of all who sold wine, but not into private ones. To abate that repugnance to the law which excise laws awaken in the public mind, Pitt stated that the change would not amount to more than thirteen thousand pounds a year, and that not more than one hundred and seventy additional officers would be required, who could add little to the influence of the Crown, as they were by law incapable of voting at elections. He carried his Bill with little difficulty through the Commons; but in the Lords, Lord Loughborough made a decided set against it, and pointed out one most shameful provision in it—namely, that in case of any suit against an exciseman for improper seizure, a jury was prohibited giving more damages than twopence, or any costs of suit, or inflicting a fine of more than one shilling if the exciseman could show a probable cause for such a seizure. Lord Loughborough declared justly that this was a total denial of justice to the complaint against illegal conduct on the part of excisemen, for nothing would be so easy as for the excise to plead false information as a probable cause. It was a disgraceful infringement of the powers of juries, and Lord Loughborough called on Lord Camden to defend the sacred right of juries as he had formerly done. Camden was compelled to confess that the clause was objectionable; but that to attempt an alteration would destroy the Bill for the present Session, and so it was suffered to pass with this monstrous provision.

The commercial treaty with France, Pitt's greatest achievement as a financier, was not signed until the recess—namely, in September. It was conceived entirely in the spirit of Free Trade, and was an honest attempt to establish a perpetual alliance between the two nations. Its terms were:—That it was to continue in force for twelve years; with some few exceptions prohibitory duties between the two countries were repealed; the wines of France were admitted at the same rate as those of Portugal; privateers belonging to any nation at war with one of the contracting parties might no longer equip themselves in the ports of the other; and complete religious and civil liberty was granted to the inhabitants of each country while residing in the other. One result of the treaty was the revival of the taste for light French wines which had prevailed before the wars of the Revolution, and a decline in the sale of the fiery wines of the Peninsula. But the treaty was bitterly attacked by the Opposition. Flood reproduced the absurd argument that wealth consists of money, and that trade can only be beneficial to the country which obtains the largest return in gold. Fox and Burke, with singular lack of foresight, declaimed against Pitt for making a treaty with France, "the natural political enemy of Great Britain," and denounced the perfidy with which the French had fostered the American revolt. In spite of the illiberality of these arguments, Pitt, with the acquiescence of the commercial classes, carried the treaty through Parliament by majorities of more than two to one.