The Wealth of Nations_ Books 4-5 - Adam Smith [322]
During the administration of Mr Pelham, the interest of the public debt was reduced, or at least measures were taken for reducing it, from four to three per cent.; the sinking fund was increased, and some part of the public debt was paid off. In 1755, before the breaking out of the late war, the funded debt of Great Britain amounted to £72,289,673. On the 5th of January 1763, at the conclusion of the peace, the funded debt amounted to £122,603,336 8 s. 2 1/4d. The unfunded debt has been stated at £13,927,589 2 s. 2d. But the expense occasioned by the war did not end with the conclusion of the peace, so that though, on the 5th of January 1764, the funded debt was increased (partly by a new loan, and partly by funding a part of the unfunded debt) to £129,586,789 10 s. 1 3/4d., there still remained (according to the very well informed author of the Considerations on the Trade and Finances of Great Britain) an unfunded debt which was brought to account in that and the following year of £9,975,017 12 s. 2 1/4d. In 1764, therefore, the public debt of great Britain, funded and unfunded together, amounted, according to this author, to £139,516,807 2 s. 4d. The annuities for lives, too, which had been granted as premiums to the subscribers to the new loans in 1757, estimated at fourteen years’ purchase, were valued at £472,500; and the annuities for long terms of years, granted as premiums likewise in 1761 and 1762, estimated at twenty-seven and a half years’ purchase, were valued at £6,826,875. During a peace of about seven years’ continuance, the prudent and truly patriot administration of Mr Pelham was not able to pay off an old debt of six millions. During a war of nearly the same continuance, a new debt of more than seventy-five millions was contracted.
On the 5th of January 1775, the funded debt of Great Britain amounted to £124,996,086 1 s. 6 1/4d. The unfunded, exclusive of a large civil list debt, to £4,150,236 3 s. 11 7/8d. Both together, to £129,146,322 5 s. 6d. According to this account the whole debt paid off during eleven years’ profound peace amounted only to £10,415,474 16 s. 9 7/8d. Eventhis smallreductionof debt, however, has not been all made from the savings out of the ordinary revenue of the state. Several extraneous sums, altogether independent of that ordinary revenue, have contributed towards it. Amongst these we may reckon an additional shilling in the pound land-tax for three years; the two millions received from the East India Company as indemnification for their territorial acquisitions; and the one hundred and ten thousand pounds received from the bank for the renewal of their charter. To these must be added several other sums which, as they arose out of the late war, ought perhaps to be considered as deductions from the expenses of it. The principal are,
£ s. d.
The produce of French prizes . . . 690,449 18 9
Composition for French prisoners . . . 670,000 0 0
What has been received from the sale of the
ceded islands . . . 95,500 0 0
Total £1,455, 949 18 9
If we add to this sum the balance of the Earl of Chatham’s and Mr Calcraft’s accounts, and other army savings of the same kind, together with what has been received from the bank, the East India Company, and the additional shilling in the pound land-tax, the whole must be a good deal more than five millions. The debt, therefore, which since the peace has been paid out of the savings from the ordinary revenue of the state, has not, one year with another, amounted to half a million a year. The sinking fund has, no doubt, been considerably augmented since the peace, by the debt which has been paid off, by the reduction of the redeemable four per cents. to three per cents.,