Two Tracts on Civil Liberty, the War with America, and the Debts and Finances of the Kingdom / With a General Introduction and Supplement

by Richard Price

Notes containing an Explanation and History of the different Articles in the foregoing Account.

Note (1)—Bank Old Capital. See [Page 119].—The Bank was established in 1694. Their original capital was 1.200,000l. bearing 8 per cent. interest, charged on 5/7ths. of 9d. per barrel excise, with 4000l. per ann. for management.—In 1709, they lent to government 400,000l. without interest, which increased their old capital to 1.600,000l. bearing 6 per cent. interest. In 1742, they again lent to government 1.600,000l. without interest; and thereby increased this capital to its present amount, or to 3.200,000l. bearing 3 per cent. with the same annual sum for management.—It is of particular importance to observe with respect to the sums of 400,000l. and of 1.600,000l. just mentioned, that they were properly a compensation from the Bank to the public for continuing their exclusive privileges; and would have been advanced, or at least the greatest part of them, though government had not bound itself to return the purchase money, by making it a part of the principal due to the Bank, provided the same interest had been continued for some time on their former principal, and the same liberty granted to increase their stock.—The like is true of 1.200,000l. advanced by the India Company without interest in 1708.—In these instances, therefore, a needless addition was made to the public debt of 3.200,000l. which, had it been avoided, the public would have had not only a principal so much less to pay; but it would have saved in interest at least 96000l. per ann. for the old capital of the Bank and the capital of the East India Company would have formed, in this case, between them, a debt of only 3.200,000l. (instead of 6.400,000l.) the interest of which might long ago have been reduced at least one half; or from 8 per cent. the original interest, to 4 per cent.

Note (2)—Half a million, part of the Bank Capital. See [Page 119].—This part of the Bank capital consisted originally of two millions in Exchequer bills, cancelled for government by an act of the 3d of Geo. I. But half a million was discharged in 1729; and a million in 1738.

Note (3)—Four millions purchased of the South-Sea Company; part of the Bank Capital. See [Page 119].—In order to procure this money, the Bank sold new stock at 18 per cent. premium. This produced a saving of 610,169l. the sale of 3.389,831l. stock having produced four millions in money. And, consequently, though by this transaction the capital for which they received interest was increased four millions, yet the stock on which they made their dividends was increased only 3.389,831l.

Note (4)—Bank Stock and Dividend.—The stock on which the Bank divides is only 10,780,000l. This dividend varies as their profits vary; but for several years it has been 5½ per cent. payable half-yearly at Lady-day and Michaelmas. Their whole annual dividend is, therefore, 592,900l. which subtracted from 350,604l. the interest paid by government, makes their clear annual profit 242,296l.—Besides interest, they receive for management of their capital 4000l. per ann. on account of their old capital, and 1,898l. per ann. on account of four millions purchased of the South Sea Company; in all, 5,898l. per ann.—The Bank receives farther the sums specified in the foregoing account, towards bearing the expences of managing the annuities commonly called Bank Annuities. All these expences, including the sums granted for managing their capital, amount to 54,645l. per ann.

Note (5)—Consolidated 4 per cent. Bank Annuities. See [Page 120].—The capital of these Annuities consists of two loans, one in 1760, and the other in 1762, consolidated into one stock, and charged on the additional duty of 3d. per bushel on malt, the surplus of the duties on spirituous liquors, and the additional duties on windows; all which duties were ordered by 2d Geo. III. to be carried to the Sinking Fund, and the interest with which they were charged to be paid out of that fund.—I have made some remarks on these loans in [page 96], and [page 99]. They amounted to 20.240,000l. But 1.253,700l. of this capital was changed in 1770, from an interest of 4 to 3 per cent. and the capital reduced to the present sum.—A more full account of these annuities may be found in Mr. Ashmore’s Analysis of the several Bank Annuities, p. 17.

Note (6)—Consolidated 3 per cent. Bank Annuities. See [page 121].—The capital of these annuities is made a distinct stock from that of the annuities called Reduced, because it never bore a higher interest than 3 per cent.—It consisted originally of the following loans—37,821l. remaining in 1727, of 3 per cent. annuities, granted in lieu of St. Christopher’s and Nevis debentures—800,000l. borrowed in 1731—600,000l. borrowed in 1736—300,000l. in 1738—6.400,000l. in 1742, 1743, 1744 and 1745, and charged on additional duties on spirituous liquors, wines, vinegar, &c.—1.000,000l. borrowed in 1750—24.490,000l. borrowed in the course of the last war, and funded on the additional duties on beer, houses, stamps, &c.—4.900,000l. borrowed in 1766, 1767 and 1768—And 1.253,700l. of the 4 per cent. annuities, subscribed into the 3 per cent. annuities in 1770.

All these loans were by 25 Geo. II. 1751, and several subsequent Acts of Parliament, consolidated into one joint stock; and carried, with the duties for paying the interest, to the Sinking Fund. And in 1770, they formed a capital of 39.781,521l. which has been since reduced, by the payments mentioned in the Postscript at the end of this tract, to the sum specified in the account to which this note refers.—See a more full account in Mr. Ashmore’s Analysis, &c. from page 5 to page 11.

Note (7)—Reduced 3 per cent. Bank Annuities. See [page 121].—The capital of these annuities consisted, in 1749, of loans in 1746, 1747, and 1748, and navy, ordnance and transport debts funded in 1749, amounting to 18.402,472l. and all bearing 4 per cent. interest.—By the 23d of Geo. II. 1749, these loans were reduced to an interest of 3 per cent. and by the great consolidating Act in 1751, they were converted into one stock, and carried into the Sinking Fund with the duties on carriages, and the additional duties on glass, spirituous liquors, houses, windows, stamps, merchandize imported, &c. which had been granted for paying the interest.—In 1751, certain exchequer tallies and orders, amounting to 129,750l. were subscribed into this stock; and in 1765, navy bills to the amount of 1,482,000l. were subscribed into it, which made its whole original amount 20.014.222l.—In 1751, there was paid off 830,898l. being stock which had not been subscribed agreeably to the Act in 1749 for reducing interest; and in 1772, 1774, and 1775, so much more of this stock was paid off as reduced it to its present amount.—See Mr. Ashmore’s Analysis, p. 12-16.