Again. In 1762, in order to raise 12 millions, every contributor of 80l. was entitled to a capital of 100l. to bear 4 per cent. interest for 19 years; and afterwards to become redeemable, and to bear interest at 3 per cent. And for the remaining 20l. necessary to make up a 100l. contributors were entitled to an annuity of 1l. for 98 years.—This was the same with promising, for every 60l. advanced, a 100l. capital in the 3 per cent. annuities, not redeemable for 19 years; and, for the remaining 40l. necessary to make up 100l. an annuity of 2l. for 19 years; and, after that, of 1l. for 79 years.
By this scheme no less a sum than 4.800,000l. was needlessly added to the capital of the public debts. For, had 5 per cent. been offered for every 60l. advanced;[103] and, for the remaining 40l. an annuity of 2l. during 19 years, and afterwards of 1l. for 79 years; equal encouragement would have been given to contributors; the annuity payable by the public would have been the same; and the new capital would have been 7.200,000l. bearing 5 per cent. interest; which might, at any time, have been redeemed with a saving of a million per ann. (the first payment to be made immediately) in five years and a quarter: Whereas now, this debt will not become redeemable till 1781; and then, it will form a capital of 12 millions, not capable of being redeemed with the same saving, in less than nine years and a half. Five millions and a quarter,[104] therefore, will be wasted.
The capital of 12 millions four per cent. annuities created this year, were made irredeemable for 19 years, to guard against the effects of an apprehension then unavoidable, that an interest of 4 per cent. would, if the capitals were redeemable, be reduced, whenever peace came, to 3 per cent. as had been done in the preceding peace.—But this end would have been answered, with equal effect and more advantage to the public, by pledging the faith of Parliament, that whatever interest was promised on any capital, should not be reduced for 19 years; or (which comes to the same) that the capital should not be redeemed, during that term, by borrowing money, and creating a new capital bearing lower interest. This would have placed capitals bearing any interest on the same footing nearly with the 3 per cent. annuities; and an assurance, that no part of them should be discharged, without at the same time discharging an equal capital in the 3 per cents, would have placed them entirely on the same footing.—Had it, however, been necessary, on account of the fear of a reduction of interest, to make the capital here proposed bearing 5 per cent, and the capitals to be mentioned presently bearing 4 per cent. irredeemable, (and therefore the interest irreducible) for any term (suppose till 1781); had, I say, even this been necessary (and more could not have been necessary) no advantage of great consequence would have been lost. These capitals would, during that term, have been exactly the same burden on the public with the capitals which were actually created; and after that term, they would have been a much less burden, as will be shewn at the end of this section.
Again. In January 1760, eight millions were borrowed by offering for this sum a capital of eight millions to carry 4 per cent. interest for 21 years, and afterwards 3 per cent, together with a premium of 240,000l. stock carrying the same interest, and divided into 80,000l. lottery tickets, each 3l. stock.—This was the same with offering, for 80l. of every 100l. advanced, a capital of 100l. in the 3 per cent. annuities,[105] not redeemable for 21 years; and for the remainder besides a lottery ticket an annuity of 1l. for 21 years.—The same sum might have been raised by offering 4 per cent, irreducible during 21 years, or 3l. per ann. for 75l. of every 100l. advanced, and for the remaining 25l. an annuity of 1l. for 21 years, together with a lottery ticket.—In this case, the new capital, instead of 8.240,000l. bearing 3 per cent. not subject to redemption, and having an annuity of 82,400l. annexed to it, for 21 years; would have been 6.000,000l. bearing 4 per cent. with the same annuity annexed, but redeemable at any time; and 240,000l.[106] bearing 4 per cent. for 21 years, and afterwards 3 per cent.
By the scheme likewise in 1761, for borrowing 11.400,000l. a capital of 100l. bearing 3 per cent. interest, was given for part of every 100l. advanced; and for the other part, an annuity of 1l. 2s. 6d. for 99 years. Had, in this case, 75l. FOUR per cent. Stock, been offered for 75l. in money; and, for the remaining 25l. necessary to make up 100l. the said annuity of 1l. 2s. 6d. for 99 years;[107] the whole annual charge would have been the same; subscribers could not have been sensible of any difference in the encouragement offered them; and the public, in paying its debts, would have saved 2.850,000l.
There was also this year 600,000l. received by government for 600,000l. stock, carrying 3 per cent. interest, and divided into 60,000 lottery tickets, each worth 10l. in stock.—As 150,000l. of this sum was paid for the profits of the lottery; and as 4 per cent. could not at this time be made of money laid out in the funds, it is out of doubt, that the same sum (or 600,000l.) would have been given for 450,000l. stock, carrying 4 per cent. and divided into 60,000 lottery tickets, each of the same value with 7l. 10s. four per cent. stock; and thus 150,000l. more would have been saved.
In like manner; it will appear, that three millions, raised in 1757, by creating a capital of three millions bearing 3 per cent. interest,[108] with a life annuity annexed of 1l. 2s. 6d. for every 100l. advanced; and also, four millions and a half raised in 1758, by creating a capital of four millions and a half, bearing 3 per cent. with an annuity of a half per cent. annexed for 24 years; might have been raised by creating, in the former case, a capital of two millions and a half, and, in the latter, a capital of four millions, bearing 3½ per cent. interest, with the same annuities annexed.
In 1758, the additional sum of half a million was borrowed at 3 per cent. by a lottery, consisting of 50,000 tickets, each of the same real value with 10l. stock, but sold to the subscribers for 10l. in money[109]. As the 3 per cents. were now at 94, 3¼ per cent. could not be made of money laid out in the funds. Therefore, 350,000l. of this half million might have been raised at 3½ per cent. interest, and the remaining 150,000l. might have been procured for the profits of the lottery. Or (which is the same) 10l. each would have been given for 50,000 tickets, of the same value taken all together, with 350,000l. carrying 3½ per cent. interest; and a capital of 150,000l. would have been saved.
The same is true of the lottery, by which half a million was borrowed in 1756.—A million and a half also borrowed in this year, by creating a capital of a million and a half, bearing 3½ per cent. for 15 years, and afterwards 3 per cent. might have been procured, by creating a capital of only 1.400,000l. bearing 3¼ per cent. interest. But I will not examine any more of these loans. Let us next consider how detrimental they have been to the public.