This bold undertaking had the desired effect. Many obstacles were thrown in the way; but the regorging capitals in the hands of many, made every one fear the reimbursement for himself; and the credit of France was then so low, that very few chose its funds as an outlet for their superfluous money.
But an outlet, unfortunately, was not wanting at the end of the last war in 1763, as we shall shew in its proper place.
Here then is a notable instance of the effects of regorging money. A small sum, when compared with a nation’s debt, operates upon the whole capital; as a small balance upon trade affects the whole mass of reciprocal payments.
The reimbursement of 57 millions offered by government, in 1749, was, to the conviction of all the world, an impracticable scheme; but the stockholders seeing a large sum ready to be subscribed, at the interest offered, and feeling the effects which that regorging money must, in all events, have produced, willingly, and wisely perhaps, consented to the offer made them. Had they refused, and had the scheme proposed become abortive thereby, perhaps the nation might have been so far animated against the creditors, from the disappointment, as to have consented to be at the expence of defraying the service of the following years, without encroaching upon the sinking fund. What effect this would have produced upon the rate of interest, in that conjuncture, no man can tell, nor will the real consequence of such a measure ever be known, until the happy trial be made. That it would have brought interest below 3 per cent. in December 1757, is, I think, evident: for as matters stood, had the creditors of 57 millions been able to hold out, I must do them the justice to believe, they would not have consented to the proposal made to them; and an addition of all the sinking fund thrown among them annually, at a time they could not dispose of what they had, upon better terms than those offered them, would undoubtedly then, as at all times, operate a very great national relief, in bringing down the interest.
During the tranquillity which continued from the peace of Aix-la-Chapelle, in 1748, to the commencement of hostilities in 1755, the money expended for extraordinary services amounted on an average to above four millions per annum. The expence of government was then increased, by supporting the colonies, and by several great and uncommon outgoings at home, for purposes mentioned in the supplies of those years.
A little before the breaking out of the last war, that is to say, on the 5th of January 1755, the national funded debt was reduced to 72 289 674l. upon which was paid an annuity of 2 654 500l. and the sinking fund amounted to 1 308 814l[[27]]. At the end of 1763, the year of the peace, the funded debt amounted to 130 586 789l. 10s. besides above 9 millions not provided for. So that at the end of last war the national debt exceeded 140 millions; besides the value of the annuities granted in 1757, 1761, and 1762. Hence it appears, that the war occasioned an augmentation of upwards of 58 297 116l. upon the funded national debt; besides the difference between the unfunded debts at the beginning and end of the war; and also the value of those annuities[[28]].
[27]. To this funded debt must be added the unfunded debt, which I do not know exactly; and the value of the annuities granted in 1745, and 1746.
[28]. The annuities of 1757, are estimated, by the author of the Considerations on Trade and the Finances, at 472 500l. or at 14 years purchase; and the annuities of 1761, 1762, at 6 826 875l. or at 27½ years purchase. But this valuation seems too low, for the reasons given in the note, p. 394.
I shall, before I conclude this chapter, present a short scheme of the state of the nation at that time: but first let us take a view of the methods used to borrow so large a sum in the short period of eight years.
Until 1757, money was borrowed by government, at a little above 3 per cent. but then a loan of 5 millions being necessary, government consented to create annuities of 4½ per cent. irredeemable for 24 years. By this expedient the monied people eluded the operation of reducing the interest of this fund, upon the return of peace. How far this expedient was to be preferred to the former, of increasing the capital beyond the money paid; or whether it would not have been still better to have paid for the money wanted, according to the current rate of interest in the market at the time, waiting until a peace might afford a favourable opportunity of reducing it, I shall not take upon me to determine.