“Gideon is dead,” writes one of his contemporaries, in 1762, “worth more than the whole land of Canaan. He has left the reversion of all his milk and honey, after his son and daughter, and their children, to the Duke of Devonshire, without insisting on the Duke taking his name, or being circumcised.” That he was a man of liberal views, may be gathered from his annual donation to the Sons of the Clergy, from his legacy of £2,000 to the same charity, and of £1,000 to the London Hospital. He died in the faith of his fathers, leaving £1,000 to the Jewish synagogue, on condition of being interred in the burying-place of the chosen people.”
The question of the sinking fund has greatly occupied the attention of financial men, and upon few schemes have so many and such various opinions been given. To view the subject by the light of common sense, it seems palpably absurd that more money than was necessary should be borrowed for the sake of paying it again, or that, while a surplus fund remained in the Exchequer, new loans should be raised. Paine afterwards declared it was like a man with a wooden leg running after a hare,—the more he ran, the farther he was off.
The first sinking fund is usually called Sir Robert Walpole’s, because it was adopted by him; but its author was the Earl of Stanhope. The taxes, which had at first been for limited periods, being rendered perpetual, proved greater than the charges they were meant to defray. The surpluses, therefore, were united under the name of the Sinking Fund, and appropriated for the discharge of the national debt.
The opinion which Dr. Price has since so strongly urged was very prevalent; and as much anxiety concerning the debt existed, it was considered important to apply this surplus invariably to the discharge of the great debt, and to borrow by new loans when the public exigencies required it. Thus, although from 1718 to 1731 was a period of peace, the following sums were borrowed:—
| 1718 | £505,995 | 1727 | 1,750,000 |
| 1719 | 312,737 | 1728 | 1,230,000 |
| 1720 | 500,000 | 1729 | 550,000 |
| 1721 | 1,000,000 | 1730 | 1,200,000 |
| 1725 | 500,000 | 1731 | 500,000 |
| 1726 | 370,000 | £8,418,732 |
The money procured by the sinking fund for the discharge of the national debt, from 1716 to 1728, amounted to £6,648,000, being a trifle more than the debt contracted during the same period.
In 1728, it was found that the principle could not be preserved; and the interest of the loan of that and the following year was charged on the fund, while the additional taxes imposed to pay the interest of the loans were applied to increase it. A short time after, the plan of preserving the sinking fund inviolate was abandoned; and in 1733, £500,000 was taken to meet the expenses of the year; in 1734, £1,200,000 was taken for the same purpose; and in 1735, it was even anticipated, and the principle, in effect, abandoned. From that time its operations grew feeble, its produce was often devoted to other purposes, and it was found necessary to have recourse to it when the expenses exceeded the revenue, and no new taxes were imposed. In the peace which followed the treaty of Utrecht,—a period of twenty-six years,—£7,231,508 was the amount of debt discharged by the sinking fund; and in war the produce was applied to the expenses of the year,—loans being raised for the additional sums required.
This fund produced at its commencement, in
| 1717 | £323,439 | |
| From | 1717 to 1726, both inclusive | 577,614 |
| ” | 1727 ” 1736 ” | 1,132,251 |
| ” | 1737 ” 1746 ” | 1,062,170 |
| ” | 1747 ” 1756 ” | 1,356,578 |
| ” | 1757 ” 1766 ” | 2,059,406 |
The further and feeble operations of this fund are unnecessary to trace, as, although it continued nominally in the accounts of the Exchequer until 1786, when Mr. Pitt’s sinking fund was introduced, it did little in peace, and nothing in war. From 1717 to 1772 it produced but twenty millions, being about £357,000 annually.