The result, therefore, is, that the whole capital of the public debts would have been, at the end of the last war, near Twelve Millions and a Half less than it was; and at the same time, the annual charge not greater.—In 1775, the difference would have been much more considerable. For,
Supposing all the same sums applied since the last war to the discharge of the public debts that we know have been so applied, not only the capital but the annual charge would have been considerably less.—This will be demonstrated by the following account.
It may be learnt from the Postscript at the end of this Tract, that 11.139,793l. of the public debts has been discharged with 10.739,793l. of the public money, derived from various savings and surplusses. All this money might have been employed, and without doubt would have been employed, in redeeming first the capital I have mentioned in [Page 107], of 7.200,000l. bearing 5 per cent. interest; and afterwards, the two other capitals there mentioned of 9 millions, and of 6.180,000l. bearing 4 per cent. interest. It would have been sufficient to redeem the whole of the former capital, and also 3.539,793l. of the two last capitals; which would have set free for the public an annual charge of 501,591l.—To this sum must be added an annual charge of 256,000l. saved in 1765, 1766, 1767 and 1768, by redeeming, with 6.400,000l. borrowed in those years, so much of a debt unfunded at the end of the war, but afterwards funded, and carrying 4 per cent. interest. And also 12,537l. per ann. gained by changing 1.253,700l. from an interest of 4 to 3 per cent. and 7,500l. per ann. gained in 1771, by the ceasing of an annuity of a ½ per cent. annexed for 15 years to 1.500,000l. borrowed in 1756.—The total decrease, therefore, of the annual charge would have been 777,628l.—But at the same time there would have been the following additions to it.—First. There would have been the addition of 199,500l. per ann. being the interest of 6.650,000l. borrowed since 1763.—Secondly. Of 69,187l. per ann. being the interest of 2.306,240l. applied, in 1764 and 1765, to the discharge of German and army debts derived from the war, and which might have been converted into a funded capital bearing 3 per cent. interest, by borrowing money to pay them off, in order to avoid diverting money employed in redeeming capitals bearing 5 per cent.
These two sums make 268,687l. which deducted from 777,628l. leaves 508,941l. And this is the clear annual charge which would have been saved to the public, exclusive of the savings which have arisen from the falling in of life-annuities.
But the annual charge that has in fact been saved is only 382,129[112].—The difference is 126,812l.—With this additional saving, as it fell in and increased from time to time during the course of 12 years, a million more of the public debts bearing 4 per cent. might have been redeemed; and this would have made a farther saving of 40,000l. per ann. It appears, therefore, upon the whole, that had the mistakes I have pointed out, in the loans of the last war, been avoided, (all other public measures remaining the same) the nation would now have had 13 millions and a half less to pay, in order to redeem its debts; and also an annual charge upon it 166,812l. less.
All this supposes that the capitals of the 5 per cent. and 4 per cent. annuities in the improved schemes were redeemable.—But had they been made irredeemable till 1781, as mentioned in [page 98], the public would not have been much less benefited: For, soon after 1781, these 5 and 4 per cents. (the former 7.200,000l. and the latter 15.180,000l.) might have been easily reduced to 3½ per cent. and this would have occasioned an annual saving of 183,900l. over and above the savings, which would have arisen in that year, from the extinction of the short annuities.
I will add, that had these annuities been made not only irredeemable till 1781; but irreducible for some time beyond that year, in the manner intimated in [page 98], the public would still have been greatly benefited. For, the annual charge upon it would not at any time have been greater; but its debts would have been 12 millions and a half less; and, at the same time, they would have been capable of being discharged with more expedition, and at a less expence, than a smaller quantity of its present debts. See the note, [page 94].
I cannot doubt but that all who will attentively examine these observations will find them to be just.—I have confined my enquiries to the loans of the last war. Had I extended them to all our loans, it would have appeared, that a greater sum than most persons can think credible,[113] has been such a needless addition to our debts as I have explained; or, “a pure and uncompensated loss, which might have been avoided by only framing differently the schemes of the public loans.”