The History and Proceedings of the House of Commons: Volume 9, 1734-1737. Originally published by Chandler, London, 1742.
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On March 4, the said Committee came to the following Resolutions, which were reported and all agreed to by the House, viz. That a Sum not exceeding 28,707l. 5s. 10d. should be granted to his Majesty upon Account, for Outpensioners of Chelsea Hospital for the Year 1733. That a Sum not exceeding 56,413l. 14s. 3d. ¼ should be granted to his Majesty for defraying several extraordinary Services and Expences incurred in the Years 1735 and 1736, and not provided for by Parliament: That a Sum not exceeding 10,000l. should be granted to his Majesty upon Account, towards the Support of the Royal Hospital at Greenwich, for the Maintenance of the Seamen of the said Hospital worn out and become decrepid in the Service of their Country.
Several Gentlemen upon that Occasion took Notice of the great Charge that Hospital was like to bring upon the Public. They said they would not oppose the Motion then made; but they could not neglect that Opportunity of taking Notice, that notwithstanding its being a Time of Peace, the Charge of that Hospital seemed to be every Year increasing; for that last Year the Sum provided by Parliament for that Article was but 24,518l. 10s. and the preceding Year it was but 18,850l. 9s. 2d. so that the Sum then demanded was very near 10,000l. more than was found necessary for the same Service but two Years before. They would not, they said, pretend to suggest what were the particular Reasons for that great Increase; but there was one general Reason which would always hold, while we kept up such a large number of regular Forces, and observed the same Rules with respect to admitting Persons into that Hospital. In Time of War there had been two Rules established for intitling Soldiers to the Benefit of that Hospital; one of which was, a Soldier's being wounded or maimed in the Service, and discharged by his Colonel, as unfit for further Service; and the other was, a Soldier's having been twenty Years in the Service, and reduced, or discharged by his Colonel, as an old and decrepid Soldier. While the War continued, no Man could claim a Title to the Hospital by either of these Rules, unless he was by his Age, or his Wounds, become actually unfit for Service; because, as Recruits were then hard to be got, no Colonel would discharge a Soldier, as long as he was any way fit for Service; and there were but very few who could ever claim the Benefit of the last Rule; because most of them were either killed or wounded before they could be discharged as a Soldier grown decrepid with Age: Whereas, now, in Time of Peace, we had not, it was true, many Soldiers who could claim any Title from the first Rule; but the Numbers of those who might claim a Title from the second would be increasing every Day; for as Recruits were now easily procured, the Officers were very apt to discharge an old Soldier, as often as they could find a clever, well-look'd young Fellow ready to list in his stead, tho' the old Soldier might then be as fit for real Service, but not perhaps so proper for a Review, as the Man newly listed; and as none of our Soldiers were in Time of Peace in any great Danger of being killed, almost every Soldier in our Army would at last come to have a Title, by his having been twenty Years in the Service, to claim the Benefit of being admitted into Chelsea Hospital; and that at an Age perhaps when he might not only be fit for Service, but fit for gaining his Livelihood by any industrious Employment; for if a young Fellow listed when but eighteen Years of Age, at his Age of eight and thirty, if he could obtain a Discharge from his Officer, he would have a Title to claim being admitted into Chelsea Hospital; and by Means of a long Beard, a ragged Coat, and good Interest at the Board, he might even at that Age be admitted to a Share of that Charity, which was designed only for the Disabled and Decrepid. From hence they could not but suppose, that a peaceable Army would always furnish Chelsea with more Pensioners than a fighting Army of the same Number could be supposed to do; and the Pensioners drawn from the former would live longer to enjoy their Pension, and to be a Burden upon their Country, than the Pensioners drawn from the latter.
These Things, they said, they took Notice of, not with any Design to oppose the Motion, but only to shew the many Disadvantages that attended the keeping up of a numerous Standing-Army in Time of Peace; and at the same Time they hoped it would contribute towards making those concerned as careful as possible, not to admit any to the Benefit of that Hospital, but such as were truly Objects of Charity, and deserved to be supported at the Expence of their Country.
To this it was answered, That tho' the Nation, by Means of the wise Measures pursued by his Majesty and his Royal Predecessor, had been so fortunate as to remain for many Years in a State of Peace and Tranquillity, tho' that happy State should continue for many Years to come, yet it had always been, and, they believed, would always be deemed necessary to keep up some regular Troops; and while they kept up any such Troops, it would be necessary to grant a Subsistence or Relief to those Soldiers who should grow old and decrepid in the Service; for a poor Man had no other Way to provide for the Infirmities of old Age, but by the Industry and Frugality of his Youth; and if a poor Man should in his Youth forsake every Sort of Business by which he might provide for the Infirmities of old Age, in order to make himself fit for serving his Country as a Soldier, and in order to be ready upon all Emergencies to venture his Life in the Cause of his Country, such a Man, tho' he partook of the Happiness of his Country, and passed thro' Life without Danger, yet he deserved as much to be provided for by his Country in his old Age, as if he had been during his whole Life involved with his Country in Bloodshed and Danger; and in the former Case he would more probably stand in need of it than in the latter; because in Time of Peace, a Soldier had nothing but his bare Pay, out of which it could not be supposed he could save any Thing as a Provision for old Age; whereas in Time of War, Soldiers were often allowed to plunder, and sometimes enriched themselves by the Spoils of their Enemies.
For this Reason, if the Pensioners in Chelsea College should become a little more numerous in Time of Peace than in Time of War, it was a Disadvantage which could not be prevented, but it was a Disadvantage that was sufficiently compensated by the many Advantages the Nation reaped from a State of Peace and Tranquillity; and the maintaining a sufficient Number of regular Troops had contributed, and would always contribute towards securing and prolonging the Enjoyment of those Advantages. However, they said, they could not admit that any Officer would be very apt to discharge a Soldier, as long as he was every Way fit, and properly qualified for the Service; because the Breeding of a young Fellow up to Discipline, and making him thorough Master of his Exercises, was always a great Trouble to the Officer; and if the Officer should discharge such a Man, the Board were not obliged to admit him to the Benefit of Chelsea Hospital, even though he had been twenty Years in the Service, unless he was some Way disabled, or grown very old and decrepid; at least if any such Man was admitted, he was immediately sent to the Regiment, or to some of the Companies, of Invalids, and by that Means was made to serve for that Subsistence which he received from his Country, as long as any Service could be expected from him; so that they believed, there were few or no Soldiers upon the Establishment of Chelsea Hospital, but such as were real Objects of Charity; and they were very sure the Commissioners of that Board had been of late as careful as possible not to admit any Man upon that Establishment who was not every way entitled to the Benefit, as would fully appear if any Enquiry should be made into that Affair; and then the particular Reasons for the late Increase of the Charge of that Hospital would not only be made to appear, but would, they were convinced, be approved of by every Gentleman in that House.
This was the Substance of what was said of each Side upon this Occasion; after which the Question was put upon the Motion, and agreed to without a Division.
The next Affair upon which there was any considerable Debate in the Committee of Supply, was on Wednesday the 9th, and Friday the 11th of March, when the Motion was made for granting a Million to his Majesty, towards redeeming the like Sum of the increased Capital of the South Sea Company, commonly called Old South-Sea Annuities; but as this was a Sort of Resolution which had never before been moved for, or agreed to, in any Committee of Supply, we shall give our Readers an Account, how the Method of Proceeding came to be altered last Session, with respect to the paying off the National Debt, and the Application of the Sinking-Fund for that Purpose.
As soon as the House had upon the said March 9th, resolved itself into a Committee of the whole House to consider of the Supply granted to his Majesty, Sir Robert Walpole stood up, and spoke to the following Effect, viz.
Sir Robert Walpole.
I have a Proposition to make to the House, which I think will tend to the Advantage of the Public, and against which there cannot, in my Opinion, be any Objection made, therefore I hope it will be agreed to without Opposition; but in order to make Gentlemen thoroughly comprehend the Advantage of what I am to propose, I must beg Leave to explain a little the present Circumstances of the SinkingFund, and the Method hitherto observed with respect to the disposing of the Produce of that Fund.
We all know, Sir, that the whole Produce of the SinkingFund must be regularly, as it arises, deposited in his Majesty's Exchequer, and there wait the future Disposition of Parliament, so that no Part of it can be applied to any Use but that to which it has been appropriated by some preceding Session; and the Method this House has generally taken for disposing of that Fund, has been, To resolve itself into a Committee of the whole House, to consider of the Application of the growing Produce of the Sinking Fund. This has always been the Method we have hitherto taken for applying that Fund towards paying off any Part of the National Debt; and as we seldom or never pay off under a Million at a Time, there is generally 5 or 600,000l. Part of the Produce of that Fund, which lies for several Months quite dead and useless in his Majesty's Exchequer; which we must look on as a great Disadvantage to the Public, especially when we consider that the Government is during that Time obliged to borrow Money at Interest for answering the current Service of the Year.
This, Sir, has been the Case for several Years past, and must always be the Case for every Year to come, if the Proposition I am to make, or something like it, be not agreed to; for it is well known the Funds provided by Parliament for the current Service of the Year do not immediately produce such Sums as are necessary for answering the Charges of the Government, and therefore his Majesty is every Year empowered to borrow Money for that Purpose upon the Credit of some of the Funds granted by Parliament for the current Service of that Year; for which he is obliged to pay an Interest of at least 3 per Cent. which is an annual Charge of 10, 15, or perhaps above 20,000l. a Year to the Public, and a Charge which might, I think, be prevented, by enabling his Majesty to make use of the Produce of the Sinking-Fund then lying dead in the Exchequer; and whatever Sums might be found necessary to be taken from the Sinking-Fund for answering the immediate Service, might be replaced by the Produce of the annual Funds, before Michaelmas, the Time when the Produce of the Sinking Fund is generally to be issued by Direction of Parliament for paying off a Part of the National Debt; or if the Whole should not be replaced before that Time, a small Sum might then, and not till then, be borrowed for making good the Deficiency; so that the Government would never be obliged to borrow so large a Sum, or for so long a Time, as they generally are, according to the present Method.
For Example, Sir, the Produce of the Sinking Fund is generally computed from Michaelmas to Lady-Day, and from Lady Day to Michaelmas; and it is to be supposed this House will, in the present Session, order the Sum of one Million, being the growing Produce of that Fund from Michaelmas last till Michaelmas next, to be applied to the Paying off so much of the National Debt: This Payment cannot be made before Michaelmas next, and as the Produce of that Fund will bring into his Majesty's Exchequer by Lady-Day next, or soon after, 5 or 600,000l. that whole Sum must, according to our former Method of ordering the Application of that Fund, lie dead in the Exchequer, without its being in the Power of the Public, or the Government, to reap any Benefit from it; and in the mean time, as the Produce of the annual Funds cannot answer the immediate Occasions of the Government, his Majesty may probably be obliged at Lady Day next, or soon after, to borrow 5 or 600,000l. at an Interest of 3 per Cent. upon the Credit, I shall suppose, of the Malt Tax, in order to answer those Demands which may occur before the Produce of that Tax can come in to satisfy them: Now if his Majesty were empowered to make use of the Produce of the Sinking-Fund in the mean time, it would prevent his being under a Necessity of borrowing any Money at Lady Day next; and whatever should be found necessary to be taken in the mean time from the Sinking-Fund, might be replaced by the Produce of the Malt Tax, or some of the other Funds provided for the current Service of this next ensuing Year, before Michaelmas next, which is the soonest any Payment can be directed to be made out of the Produce of that Fund; or if the Whole should not then happen to be replaced, a small Sum might be then borrowed for a short Term, in order to make good the Deficiency, and to make that Payment to the public Creditors, which, I suppose, will by this Session be directed to be made at Michaelmas next.
I hope, Sir, I have explained myself so as to be understood by every Gentleman that hears me; and if the House thinks fit to agree to what I propose, the proper Method of doing it will, in my Opinion, be, To come to a Resolution in this Committee, to grant his Majesty a Million towards redeeming the like Sum of some of the public Debts; and when we take this Affair into our Consideration in the Committee of Ways and Means, we may resolve, That towards raising the Supply granted to his Majesty, there be issued and applied the Sum of one Million out of such Monies as have arisen, or shall or may arise of the Surplusses, Excesses, or overplus Monies, commonly called the SinkingFund. This, Sir, I take to be the proper Method of carrying what I have proposed into Execution, and if I find the House approves of it, I shall take the Liberty to rise up again, and make you such a Motion as, I think, ought to be agreed to in the Committee we are now in.
As this new Method of ordering the Application of the Sinking-Fund was generally approved of, the same Gentleman stood up on the 11th, when the House had again resolved itself into the said Committee, and after a short Speech, moved, to resolve, That the Sum of one Million should be granted to his Majesty, towards redeeming the like Sum of the increased Capital of the South-Sea Company, as was then commonly called Old South-Sea Annuites.
Mr. Pultney, Sir William Windham, Mr. Waller.
But as many Gentlemen were of Opinion the said Million ought not to be applied towards redeeming any Part of the South-Sea Capital, but towards redeeming a Part of the Bank Capital, there ensued a long Debate, in which the Arguments for the Motion were by Mr. Pultney and others to the Effect as followeth, viz.
As the Sinking-Fund is one of the most useful Funds that ever was established in this Kingdom, as it is the only Fund from which we can expect a Diminution of our Taxes, and an Ease to ourselves or our Posterity, and as the Disposition of that Fund is left intirely to the Wisdom of Parliament, we ought to be extremely careful of applying it yearly to that Purpose from which the greatest Benefit may redound to our native Country; and when we happen to be in Circumstances so lucky as to be able to apply the whole Produce towards discharging so much of the National Debt, the only two Questions that can fall under our Consideration, are, What Part of the public Debts are most grievous to the Nation in general? and, What Part may be paid off with the greatest Ease to those who are the Creditors of the Public? The first Question deserves, and will certainly meet with our greatest Regard; but if it should appear, that the Interest of the Public is no way concerned, which Part of the National Debt shall be first paid off, the second Question will then deserve our Attention; because the greater Regard we shew to the Creditors of the Public, the more we shall establish the public Credit; and the more the Credit of the Nation is established, the more easy will it be for us to reduce the Interest now payable upon our public Funds.
If there were any of our public Debts that bore an Interest higher than the rest, that Debt would certainly be the most grievous to the Nation, and, consequently, ought to be the first to be paid off; but as the whole Debt of the Nation is now reduced to 4 per Cent. or under, except about 1,600,000l. due to the Bank, which bears an Interest of 6 per Cent. and which cannot be redeemed till their Term be expired, therefore, the Rate of Interest can be of no Weight in the present Question. With Regard to the Interest of the Public, I can think of but three other Motives that can induce us to pay off any one of the public Debts, or a Part of any one of the public Debts, rather than a Part of any other: The first I shall take Notice of is, the Amount of the Sum due; for where several Debts are due to several different Persons, natural or political, that Debt which is the largest is certainly the most grievous, and ought first to be paid off, or at least diminished so as to bring it upon a Par with others. The next Motive may be drawn from the Taxes which are mortgaged for paying the Interest; for those Creditors to whom the most burdensome Taxes are mortgaged, ought to be first paid off, in order that we may have it the sooner in our Power to free the Nation from those Taxes: And the third Motive depends upon the Nature of those Companies or Corporations, to whom our present Debts are owing; for a Company that is engaged in Trade, and is enabled to extend their Trade further than they could otherways do, by Means of that Interest which is payable to them from the Government, deserve better to have that Interest continued to them, than a Company, or Sett of Men, who carry on no Trade, or whose Trade can receive no Increase, by means of the Debt due to them by the Public; and, therefore, no Part of the Debt due to the former ought to be paid off, as long as there is any Thing due from the Public to the latter.
Now, Sir, with respect to every one of these Motives, I think, they militate strongly in favour of the Motion now made to you. The Debt due to the South-Sea Company is vastly larger than the Debt due to any other Company in the Kingdom, and, therefore, not only according to the Rules of Proportion, but according to that Rule which will always, I hope, be the chief Director of our Resolutions, I mean the Interest of the Nation in general, whatever Payments we are able to make ought to be generally applied towards diminishing the Debt due to that Company: Then as to the Taxes mortgaged for the Payment of our public Debts, those which are mortgaged to the South-Sea Company are the most burdensome, as will appear to any Gentleman who examines into that Affair; and of the three great Companies who are the chief Creditors of the Public, it must be granted, the South-Sea Company carries on the least Trade, and is the least capable of extending their Trade, by means of that Interest or Annuity which is due to them from the Public. Thus in every Light we can put it, if we have a proper Regard for the Interest of the Nation in general, we must conclude, that we ought to apply the Produce of the Sinking-Fund towards paying off a Part of the Debt due to the South-Sea Company, rather than any other; and as the Debt due to them is now divided into three different Parts, I think, the next Payment ought to be applied to that Part now called Old South-Sea Annuities; because the Annuities ought to be all paid off, before we pay off any Part of their Trading Stock; and as the last Payment was made to the New South-Sea Annuities, the next ought to be made to the Old.
But suppose, Sir, that the Interest of the Nation in general is no way concerned, which Part of the public Debt shall be first paid off; in that Case we ought to shew a Regard to the Ease and Advantage of the several public Creditors, by making the next Payment to those who will suffer the least by such Payment's being made to them. It is now the good Fortune of this Nation to have its Credit so well established, that all our public Funds sell at an advanced Price; so that it is a Disadvantage and Loss to every one of the public Creditors to have any Part of the Debt due to him paid off; therefore, if the Interest of the Nation be quite unconcerned, we ought to direct the Payments to be made to those who will suffer the least by having a Part of their Capital paid off; and of all the public Creditors, the Proprietors of the South-Sea Annuities are certainly those that will suffer the least; because as there is a much larger Sum due to them than to any other Sett of public Creditors, the Loss cannot fall so heavy upon each particular Person; and as the Fund they are in Possession of does not sell at a Price near so high as either the Bank or the East-India Stock, consequently the Proprietors of South-Sea Annuities cannot be such Losers as the Proprietors of Bank or EastIndia would be, in case the next Payment were directed to be made to either of them; for a Proprietor of South Sea Annuities can lose but 12 or 13l. by having 100l. of his Capital paid off; whereas a Proprietor of Bank Stock would lose above 50l. and a Proprietor of East-India Stock would lose near 80l. by having 100l. of his Capital paid off. From hence, Sir, it must appear, that if we have any Regard to the Creditors of the Public, we must order the growing Produce of the Sinking-Fund for this current Year to be applied to the paying off so much of the South-Sea Debt; and, therefore, I must conclude, that in Justice to the public Creditors, as well as in Justice to the Nation, the Motion now made ought to be agreed to.
The Answer to this, and the Arguments made use of for shewing the Reasonableness of making the next Payment to the Bank, were in Substance thus, viz.
As to the Usefulness of the Sinking-Fund, and the Advantages the Nation may reap from it, I entirely agree with the Hon. Gentleman who made you the Motion: I think it is one of the most useful Funds that was ever established in this Kingdom; I know it is the only Fund by which we or our Posterity can expect to get free from any of those Taxes which now lie so heavy upon our Trade in general, and upon our poor Labourers and Manufacturers in particular; but I cannot agree with that Hon. Gentleman in Opinion, That the Disposition of the Sinking-Fund is left entirely to the Wisdom of Parliament. The contrary is, in my Opinion, evident from the very Words of those Acts of Parliament by which that Fund was established; for by them it is expresly appropriated to the paying off such of the public Debts and Incumbrances as were incurred before the 25th of December, 1716, so that the only Disposition left entirely to the Wisdom of Parliament is, with respect to the Manner and Method of paying off those Debts: The Parliament may direct what Sum shall be paid off at any one Time, and at what Time such Payment shall be made; or it may direct which of those Debts any future Payment shall be applied to; but by the original Institution of that Fund, it was certainly designed not to leave it in the Power of Parliament to apply that sacred Fund to any other Purpose than that of paying off the National Debt contracted before the 25th of December, 1716; at least so far as any one Parliament can limit or restrain the Power of all future Parliaments. How far, or in what Case, any future Parliament may or ought to break thro' that Restraint, is a Question which, I hope, we shall have no Occasion to discuss in this Session: I am glad to find we have no such Intention at present; for the only Question now before us is, Which of the public Debts contracted before the 25th of December, 1716, the next Payment ought to be applied to ? And in considering that Question, I hope I shall be able to make it appear, that, if we regard the public Good, and that impartial Justice which is due to all the public Creditors, the next Payment ought not to be applied to the South Sea Stock, or Annuities.
With respect to the public Good, or the Interest of the Nation in general, it has been granted, Sir, that if any of our Debts bore a higher Rate of Interest than the rest, that Debt would certainly be the most grievous to the Nation, and consequently ought to be the first paid off; and at the same time it has been granted, that there is a Debt of 1,600,000l. due to the Bank, which bears an Interest of 6 per Cent. Is it not then evident that this Debt of 1,600,000l. ought to be the first to be paid off? But we are told, this Debt cannot be redeemed till the Expiration of their Term. I know it cannot; and I likewise know, we cannot come at the Redemption of this Mortgage, till after we have paid off the whole of the other Debts due to the Bank. Is not this a strong Reason, Sir, for our paying off as fast as possible all the other Debts due to the Bank, in order to come at the Redemption of this Mortgage of 1,600,000l. which is now the heaviest Mortgage this Nation groans under? And what still adds to the Weight of this Argument is, that by the time we have paid off the other Debts due to the Bank, and for which they have only an Interest of 4 per Cent. their Term will be expired, so that we can then redeem this heavy Mortgage without further Delay; whereas, if we do not now begin to pay off the other Debts due to the Bank, we cannot, even when their Term is expired, have it in our Power to redeem this Mortgage, because, by Agreement, we cannot redeem it till we have paid off all the other Sums due by the Public to that Company. Therefore, if we have any Regard to the public Good, we ought to apply every future Payment to the Bank till they are entirely paid off, or at least till they agree to take 4 per Cent. for this 1,600,000l. as well as for the rest of their Fund, which would be a Saving of 32,000l. per Annum to the Public, and a Saving that would greatly contribute towards enabling us to reduce all our public Debts to 3 per Cent. Interest.
Now, Sir, with respect to the other Motives mentioned by the honourable Gentleman, for inducing us to pay off a Part of one Debt rather than a Part of any other, I shall readily admit, that it is more grievous to owe a large Debt than to owe a small Sum; but I cannot admit that, therefore, of two or more Debts the largest ought to be first paid off, or at least diminished, so as to bring it upon a Par with others; for in private Life it is always reckoned better for a Man to owe a large Sum to one Person, than to owe a Sum of equal Value to a great Number of different Persons; and for this Reason we often find Gentlemen of Estates borrowing a large Sum of Money from one Person, in order to pay off a great Number of small Creditors, tho' they seldom or never have, or can obtain that Advantage which the Public at present enjoys, of making partial Payments to that large Creditor. If a private Man owed 1000l. to one Man, and 4 or 5000l. to ten or a dozen different Persons, tho' he had a Privilege of making partial Payments to his large Creditor; yet, if he could save 500 or 1000l. a Year out of his Estate, he would certainly apply that Saving towards discharging his small Debts, rather than towards discharging yearly a Part of the large Debt. In like manner with regard to the Public, it was formerly reckoned better to owe a large Sum to the South Sea Company, than to owe the same Sum to a great Number of private Persons; which was one Reason among others, for inducing the Legislature to grant them a Power to take in by Purchase or Subscription, or pay off all the irredeemable and redeemable Debts then due by the Public to a great Multitude of private Persons. This, I say, was then deemed to be a Benefit to the Public, and will certainly appear to be such, as often as the Public has any Proposition to make to its Creditors; so that the Largeness of the South Sea Debt, in Comparison with the Debt due to any other Company, should rather be an Argument for making no partial Payments to them till all the other smaller Debts be first paid off.
But, Sir, there is another Advantage which will accrue to the Public from paying off the Whole, or a great Part of the Debt, due to the other Companies, which will appear evident to every Gentleman, who considers, that a Trading Company possessed of an exclusive Privilege, must always come to be a great Disadvantage to the Trade of every Country, where such a Company is established, and continued; for tho' in the Infancy of any particular sort of Trade, it may be necessary to erect a Company for setting it up; yet, when the Trade comes to be sufficiently established, when great Numbers of our own People are well acquainted with it, and willing to carry it on in a private way, the continuing of the Company, or at least the continuing of their exclusive Privilege, must be a Disadvantage to the Trade of our Country; because a Company can never carry on a Trade at so cheap a Rate as private Persons can do, and are therefore not so capable of preventing Foreigners from interfering with us in the Trade; for as they are always at a great Expence, they must have great Profits, and great Profits not only tempt, but enable Foreigners to interfere with us in any Trade. It is not now necessary to shew that the exclusive Privilege enjoy'd by the Bank and EastIndia Company is a Disadvantage to the Trade of the Nation in general: It is sufficient at present to observe, that this exclusive Privilege cannot be taken from either of them, till every Shilling due to them by the Public be paid off; so that the Expiration of the Term for which that Privilege has been granted signifies nothing, as long as there is any Money due to them; and surely it would be an Advantage to the Public, to have it in our Power to put an End to that Privilege as soon as the Term expires, in case it should then appear to be a Disadvantage to the Trade of the Nation; which Power we cannot acquire but by paying off, in the mean Time, a great Part of the Capital of each. This is an Advantage we cannot acquire by any Payment made to the South-Sea Company; because the exclusive Privilege granted to and enjoy'd by that Company, is a Privilege granted to them for ever; and therefore the public Good of the Nation is not so much concerned, nor can ever be so much concerned, in the paying off the whole Capital due to them, as it may be in paying off the whole Capital due to either of the other two.
From what I have said, Sir, in relation to Trading Companies with an exclusive Privilege, it must appear, that when the Trade is once generally known, and thoroughly established, if you can redeem and abolish their exclusive Privilege by the Redemption of the Annuity or Interest payable to them, you ought as soon as possible to redeem both the one and the other; because, by laying the Trade open you will increase rather than diminish the Trade of your Country. Indeed, if the Company has an exclusive Privilege which you cannot take from them, even after you have paid off the whole Debt due to them, the paying off such a Debt may be a Disadvantage to your Trade, because you may, by so doing, prevent the Company's being able to push their Trade so far as they might otherwise have done; and at the same Time all private Adventurers are precluded from engaging in it by the Continuance of the Company's exclusive Privilege; therefore, it is inconsistent with the public Good to pay off any such Debt, or any Part of such a Debt, as long as there are any other public Debts to be paid off; and does not every one see, that this is a good Argument against making any future Payments to the SouthSea Company ? For the Interest payable upon their Annuities may contribute as much as the Interest payable upon their Stock, towards enabling them to extend their Trade; because, the only Way by which either can contribute towards enabling them to extend their Trade, is, by the Money's lying for some time in their Hands, before they be obliged to issue it to the Proprietors; and the Interest Money of their Annuities lies as long in the Company's Hands before they be obliged to issue it for paying the halfyearly Annuities grown due to the Annuitants, as the Interest Money of their Stock can do, before they be obliged to issue it for paying the half yearly Dividends grown due to the Proprietors of their Trading Stock.
As for the Taxes mortgaged to the South Sea Company, or to any other Company, they can be of no Weight in the present Debate; for whenever we have a Mind to abolish any of our present heavy Taxes, we know, Sir, there is no Company, nor public Creditor in England, but will be glad to consent to the abolishing of any such Tax, and to accept of an Annuity payable out of the Sinking-Fund, in Lieu of the Annuity payable to them out of the Produce of that Tax. This we know by a late Experiment in the Case of the Salt Duty, which was once by this House resolved to be the most grievous Tax in England, and was therefore abolished. In that Case we know, Sir, how readily the SouthSea and other Companies agreed to take Annuities payable out of the Sinking-Fund, in Lieu of the Annuities payable to them out of the Produce of that Tax; but so variable are the Sentiments of some Gentlemen, that in two Years Time, that very Tax was deemed not near so grievous as a Shilling in the Pound upon Land, and therefore it was re-established for three Years, and granted for supplying the current Service of the Year, in order to prevent our being obliged to lay an additional Shilling in the Pound but for one Year upon Land; and I think it has since been continued for seven Years longer, for the very same Reason and Purpose: Nay I am afraid we are loaded with it for ever; for as it is a Tax that creates a great deal of Power, tho' it produces but little Money, I believe it will always be preferred by a certain Sort of Men to any Tax that may produce a much greater Revenue without propagating any Sort of Power. As for my own Part, I still continue to think it one of the most burdensome and dangerous Taxes we are subject to; and notwithstanding the low Interest paid for the Money due upon it, I should think, one of the best Uses we could convert the Sinking-Fund to, would be, to apply it towards redeeming and abolishing of this Tax; because if we consider the Expences of collecting it, and add that Expence to the Interest paid for the Money borrowed upon it, we must conclude, the Nation pays a heavy Interest for that Money, besides the Danger our Liberties may be exposed to by continuing a Tax which creates so much Power and produces so small a Revenue, and besides the Danger our Trade may be exposed to by a Tax which enhances the Price of Labour in every Branch both of our Manufacture, Agriculture, and Navigation. Nor would the applying the Sinking. Fund to such an Use be a new Perverting of it; for as this Tax was formerly one of the Taxes appropriated to the Payment of our Debts contracted before December 25, 1716, the applying the Sinking Fund towards abolishing it, and then reviving it for supplying the current Service of the Year, was the same Thing as if we had then taken such a Sum from the Sinking-Fund, as would have been sufficient not only for supplying the current Service of the Year, but for redeeming the Tax we had then a Mind to abolish, for the Ease of our poor Labourers and Manufacturers. But as I have at present no Intention to make any Proposition for applying the Sinking-Fund to such a Purpose, I shall insist no longer upon this Subject.
The proper Question now before us I take to be, Sir, Whether the next Payment from the Sinking Fund ought to be made to the South-Sea Company or the Bank? And as I set out with saying, that if we shew any Regard to the public Good, or to that impartial Justice which is due to all the public Creditors, we ought not to apply the next Payment to the South-Sea Company, I think I have shewn that, with respect to the public Good, none of the Motives mentioned can induce us to apply the next Payment to that Company, but that on the contrary, every one of those Motives are strong Arguments for not making any future Payment to them, till all or most of our other Debts be entirely paid off. Now, Sir, with regard to that impartial Justice which we ought to shew to all our Creditors, I shall grant the Credit of the Nation is now so well established, that all our public Funds sell at an advanced Price, and that therefore it is a Disadvantage to the public Creditors to be paid a Part of what is due to them; but the only Way of preserving the Credit we now have, is to pay off our Debts as fast as possible without contracting any new Debt, and in making such Payments, to shew no Partiality or Favour to one Sett of public Creditors more than another. No Man can find Fault with us, or complain of Partiality, on account of our having a Regard to the public Good, and paying off those Creditors first, whose Debts, by reason of any Interest, Privilege, or Circumstance attending them, are most burdensome or inconvenient to the Nation in general; but so far as our Creditors are upon an equal Footing with respect to the public Good, as it is a Disadvantage to every one of them to receive Payment of the whole, or any Part of the Debt due to him, we ought to regulate our Payments in such a Manner as that the Disadvantage may fall upon all, exactly in Proportion to the Share each Man, or every Sett of Men, have in those Debts.
According to this Proportion, Sir, we have already done Injustice to the South Sea Company; for to take the Capitals of the South-Sea, Bank, and East India, as they stood in the Year 1727, when the great Reduction of public Interest took Place, and to which National Advantage the SouthSea Company contributed a great deal more than its Share, we must reckon that every sourth Payment at least ought to have been made to the Bank, and every eleventh or twelsth to the East-India Company; whereas we have already made five several Payments of a Million each to the South Sea Company, and one of 500,000l. without paying so much as one Shilling of the Capital either of the Bank or East-India Company; for tho' one Million has been paid to the Bank, yet Care was taken their Capital should not be thereby diminished, because the very next following Year, a new Sum of 1,250,000l. was borrowed from them, which must be redeemed, as well as every other Shilling due to them, before the Nation can get free of their exclusive Privilege. Can this, Sir, be called impartial Justice, or can it be said we have shewn this partial Favour to the Bank and East-India, for the Sake of public Good, and because it is for the Interest of the Nation to support these two Companies, and continue them in Possession of that exclusive Privilege they now enjoy, and by which they have for many Years made so great an Advantage?. No, Sir; I have shewn that if the public Good be engaged on, either Side of the Question, it is on the Side of the SouthSea Company, both because the greatest Debt is due to them, and because we cannot redeem their exclusive Privilege by the Redemption of their Capital, which we may do with respect to the other two.
But, Sir, we are told we ought to shew a Regard to the private Interest of the public Creditors, by directing all future Payments to be made to those who will suffer the least by having a Part of their Capital paid off. With all my Heart, Sir, let us shew as much Regard to the private Interest of our Creditors as the public Interest will admit; but do not let us shew a partial Regard to any one of them, or to any Sett of them. We have already shewn a partial Regard to the Bank and East-India Company; we have already done Injustice to the South-Sea Company. This is the chief Reason for their Annuities selling at so low a Price; and from this, which is the Effect of our former Partiality and Injustice, an Argument is now drawn for continuing that Injustice in all Times to come. I say in all Time to come, at least till our Debts be all paid off, which must be a very long time, if we are to form a Judgment of it from our Management for these twenty Years past; for if this Argument be now of any Force, it will every Year acquire new Vigour, because the Partiality we shew to our other Funds, will make them increase in their current Value from Year to Year. From hence we may see the Weakness of this Argument, and surely if we are to shew a Favour to any of our Creditors, or a partial Regard to the private Interest of any Sett of them, it ought to be to those who have made the least Advantage by lending their Money to the Government; consequently the Bank and East India ought to be the first paid off, because the Proprietors of both these Companies have been for many Years receiving large additional Dividends from the Profits of their Trade; whereas the Proprietors of South-Sea Steck or Annuities have never received so large additional Dividends from the Profits of their Trade, nor have they received any such Dividend for so long a time.
For this Reason, Sir, it must be granted, that tho' the Proprietors of Bank and East India should really lose a little more than the Proprietors of South-Sea Annuities, the former will be much better able to bear that Loss than we can suppose the latter to be; because the more they have got by additional Dividends, the better able will they be to bear the Loss they may sustain by being paid off. But, Sir, I must upon this Occasion take Notice, that the South Sea Annuities are not at so low a Price in Proportion to our other Funds as some Gentlemen may imagine, nor will the Difference between the Loss they may sustain by having this next Payment applied to them, and the Loss the Bank or East-India Proprierors might sustain by its being applied to them, be near so great as the honourable Gentleman has been pleased to represent. For South-Sea Annuities, in Proportion to their Dividend, are really at a higher Price than Bank Stock is at present; because, if 4 per Cent. per Annum; the Dividend of these Annuities, gives 113l. their present Price 5d. ½. per Cent. per Annum, the Dividend upon Bank Stock, ought to give above 155l. which is more than the present Price of Bank Stock; and with respect to EastIndia Stock, the present Price of it is not, in Proportion to its Dividend, much above the present Price of South Sea Annuities; for if 4 per Cent. per Annum give 113l. 6 per Cent. per Annum, the present East-India Dividend, ought to give near 170l. so that at 180l. the present high Price, it is but 10 per Cent. above the Proportion, and this Advance, we may believe, is in a great measure owing to the Certainty the Proprietors have of not being obliged to receive any partial Payments for many Years to come.
Now, Sir, with respect to the Loss either of these Setts of public Creditors may sustain by having the next Payment applied to them, it is certain the South-Sea Annuitants will lose the whole Advance Price, that is, every one of them will lose at the Rate of 13l. per Cent. upon whatever Money he receives as his Share of that partial Payment; but we are not to suppose, that the Proprietors of East-India Stock will lose at the Rate of 80l. per Cent. or that the Proprietors of Bank Stock will lose at the Rate of 50l. per Cent. upon whatever Money any of them shall receive as his Share of this next Payment, if it were to be made to either of them; because, tho' a proportional Part of the Annuity due from the Government will cease in every one of the three Cases, yet, in the Case of the Bank and EastIndia Company, the Proprietors have another Sort of Annuity, an additional Dividend, which arises from their Trade; and as the Trade of neither of them cannot either cease or be diminished by this next partial Payment's being made to them, by the Reduction of their Capital, this additional Dividend must of course increase upon the whole remaining Capital, and, consequently, the current Price of the whole remaining Capital must rise a great deal above the present Market-Price.
To illustrate what I have said, Sir, by Figures, as far as the present Opportunity will permit, I shall suppose the Capital of the South-Sea Old Annuities not to exceed 10,000,000l. the Capital of the Bank not to exceed the like Sum, and the Capital of the East-India Company not to exceed 3,000,000l. I know every one of these Capitals exceed the Sums I have mentioned, but in the present Case the Calculations will be the same, let their Capitals amount to what they will; and, I suppose these round Sums, that my Calculations may be the more easily understood. Now, suppose the next Payment is to be made to South-Sea Old Annuities, as the honourable Gentleman has proposed; in that Case a Proprietor of 1000l. Capital will receive 100l. of his Capital, and, consequently, will for the future, without a new Purchase, stand possessed of 900l. Capital only; so that he will lose the advanced Price, being 13l. upon the 100l. paid off, no Part of which Loss can be replaced to him by any Advantage his remaining Capital will receive, by means of the Payment then made by the Public. Let me next suppose the Payment now under our Consideration to be made to the Bank: In that Case a Proprietor of 1000l. Capital Bank Stock will receive 100l. consequently he must have 100l. of his Capital annihilated, and will, therefore, for the future, without a new Purchase, stand possessed of 900l. Capital only; so that he will lose the advanced Price, being 50l. but I shall now shew that a great Part of this 50l. will be replaced to him by an Advantage his remaining Capital must necessarily receive, by means of the Payment made by the Public; for as the Bank make at present an additional Dividend of 1d. ½. per Cent. per Annum, out of the Profits by their Trade, upon their whole Capital of 10,000,000l. as that Capital will then be reduced to nine Millions, and no Part of the Profits by their Trade will cease or be diminished, because of the Payment thus made to them by the Public, their whole Profits which were formerly divided upon ten Millions Capital, will for the future come to be divided upon nine Millions Capital only, which must necessarily increase their future Dividends, and consequently enhance the Price of every Man's remaining Stock: As the Bank divides at present 1d. ½. per Cent. from the Profits of their Trade upon the supposed Capital of 10,000,000l. we must reckon the nett Profits of their Trade to amount to 150,000l. per Annum, and as this 150,000l. per Annum will afterwards come to be divided upon nine Millions Capital only, the additional Dividend from the Profits of their Trade will then amount to 1l. 13s. 4d. per Cent. instead of 1l. 10s. therefore the future Dividend of the Bank, if this Payment be made to them, must necessarily be 5l. 13s. 4d. and if a Dividend of 5l. 10s. makes their Capital sell at 150l. per Cent. a Dividend of 5l. 13s. 4d. will make their remaining Capital, after a Million paid off, sell at 154l. 10s. and upwards; so that every Proprietor of 1000l. Capital, will gain by the advanced Price of his remaining 900l. Capital, very near 41l. and, consequently, we must reckon, that no Proprietor of Bank Stock will lose more than at the Rate of about 9l. per Cent. by this next public Payment's being made to the Bank; whereas every Proprietor of South-Sea Old Annuities will lose at the Rate of 13l. per Cent. by its being made to them.
By the same Method of Calculation, Sir, we may find, that if a Million were to be paid at Michaelmas next to the East-India Company, and their Stock supposed not to exceed 3,000,000l. the Proprietors would not lose above 20l. per Cent. upon the Stock annihilated by such Payment; because, as the whole Profits of their Trade would then come to be divided upon two Millions Capital, instead of three, every Man's remaining Stock would rise in Proportion to the Increase of the Dividend, which Advantage upon his remaining Stock would atone for the far greatest Part of the Loss upon his annihilated Stock. But, as I do not intend at present to make any Proposition for applying the growing Produce of the Sinking Fund to the East India Company, I shall not trouble you with the Particulars of the Calculation. I know it may be said, that as every Payment made by the Public sends a greater Number of Purchasers to Market, the Price of South Sea Old Annuities will certainly rise by such Payments being made to them; but this I have taken no Notice of, because it is an Advantage will accrue equally to the three Companies, or to which either of them the Payment shall be made to; and, therefore, can make little or no Difference with respect to the Loss the Proprietors of either of them may sustain by having a Part of their Capital paid off.
Thus, Sir, it must appear, that if we have a Mind to shew a proper and impartial Regard to the public Creditors, we cannot order the present growing Produce of the Sinking Fund to be applied towards paying off any Part of the South Sea Company's Capital; and if we have a Mind to direct this next Payment to be made to those who will suffer the least by having a Part of their Capital paid off, I have shewn that the Proprietors of the Bank will suffer the least, and therefore the next Payment ought to be made to them. But if we have a Mind to shew a partial Favour to any one Sett of public Creditors, certainly the South Sea Old and New Annuities deserve it more than any other; for upon Examination it will be found, there are among them more Creditors in Proportion for small Sums, than there are in any of our other public Funds; and as a rich Man is better able to bear a Loss than a poor Man, that Fund which has the greatest Number of poor Men in it deserves surely most of our Compassion, and consequently most of our Favour. To this I shall add another Motive for shewing more Favour to the South-Sea Annuitants, than to any other Sett of public Creditors, which is this: It will, I believe, upon Examination appear, that among the South-Sea Annuitants, there is a much smaller Number of Foreigners in Proportion, than there is among the Proprietors of any other of our Funds; and I must think, that Fund deserves most Favour from a British Parliament, which is most generally possessed by British Subjects, or at least it deserves equal Favour, which is all I have Occasion for at present, for shewing that the next Payment ought not to be made to the South-Sea Company.
And now, Sir, I shall conclude with taking Notice of a Circumstance relating to the Bank, which ought, I think, to be a prevailing Argument for our resolving that the next Payment shall be made to that Company. I mean the Expiration of their Term which now draws pretty near; for upon the first of August 1743, we may, upon giving proper Notice, pay off all that shall then remain due to that Company, and so put an End to their subsisting as a Corporation, unless they obtain from Parliament a Renewal of their Term, which certainly will not be granted without a very valuable Consideration. While the Debt due to them continues as large as it is at present, they need be under no Uneasiness, were their Term to expire To-morrow; because they know the Parliament cannot pay them off in two or three Years; and while they are under no Uneasiness it is certain they will not be so fond of renewing, nor will they offer so large a Consideration. For this Reason I think it is absolutely necessary to begin now to pay them off; in order that we may have it in our Power, at the End of their Term, or soon after, to pay off the Whole, in Case we should then find it necessary to put an End to the Corporation, or in Case they should refuse to give such a Consideration for a Renewal as may be then thought just and reasonable.
I hope, Sir, I have now shewn that it is absolutely inconsistent with the public Good, and with that impartial Justice which is due to all the Creditors of the Public, to apply the present growing Produce of the Sinking-Fund towards paying off any Part of the South-Sea Company's Capital; and that by applying it towards paying off the Annuitants of that Company, we do an Injustice to those who are best intitled to our Compassion and Favour. On the other hand, I think I have shewn, that if we have any Regard for the public Good, if we have a Mind to distribute Justice impartially to all our Creditors, if we have a Mind to shew a Regard to the private Interest of our Creditors, by applying the next Payment to those who will suffer the least by its being made to them, we ought to resolve, That the Sum of one Million shall be granted to his Majesty, towards redeeming the like Sum of the increased Capital of the Governor and Company of the Bank of England. Therefore I hope the Hon. Gentleman will amend his Motion by leaving out the Words, of the South-Sea Company, as is now commonly called Old South-Sea Annuities, and inserting in their stead, these Words, of the Governor and Company of the Bank of England.
To this it was replied in Substance as follows, viz.
As to the Power of Parliament over the Sinking-Fund, I must still think it absolute and unlimited, notwithstanding all that has been now or formerly said to the contrary; and I have this Advantage, that I have several joint Resolutions of all the Branches of our Legislature in Favour of my Opinion. I cannot easily imagine the Parliament which established the Sinking-Fund had any Intention to limit or restrain the Power of all future Parliaments, with respect to the Disposition of the Produce of that Fund: They knew it was an Intention they could not make effectual, and I cannot think the Wisdom of the Nation would propose or form to themselves an Intention which they knew they had no Power to make effectual; but this is not the Question now before us, and therefore I shall not take up your Time with expatiating upon the Subject.
If we could immediately redeem the original Fund of the Bank, which now bears an Interest of 6 per Cent. I must acknowledge, Sir, it would be a very good Argument for our applying this next Payment to that Company: Nay, it would be a good Argument for our borrowing Money at 4 per Cent. sufficient to pay off their whole Capital, in order to come at the Redemption of that Part of it which bears so high an Interest, in case they refused to comply with our Terms; but we know we cannot redeem or pay off that original Fund, till the Expiration of their Term, which has six Years to run from the first of August next; therefore, the high Interest upon that Part of their Capital can be no Reason for applying the present growing Produce of the Sinking-Fund towards redeeming any other Part of their Fund, which bears the same Interest now payable upon almost all the public Funds. We have at least five Years to think of Means for reducing the Interest payable upon their original Fund; and if at the End of that Term, it should be thought necessary to abolish that Company, or put an End to their exclusive Privilege, it will be then easy, more easy than at present, to find Money at 4 per Cent. for paying off their whole Capital, tho' not a Shilling of it should be paid off before that times for as the Number of Lenders upon public Securities will be every Year increasing by the Payments made out of the Sinking-Fund, let them be made to whom they will, it will of course become every Year more easy for the Public to borrow Money at 4 per Cent. nay, perhaps, even at 3 per Cent. than it can be now, or in any preceding Year. On the other hand, if upon the Expiration of that Term, it should be thought proper to continue the Bank, and to continue them in the Possession of their present exclusive Privilege, the more Capital they are then possessed of, the more able will they be to pay a large Consideration to the Public, for a new Term; and if they should refuse to comply with any reasonable Terms that may then be proposed by the Public, I am convinced the larger their Capital then is, the more easy will it be to find a new Company of Adventurers ready to accept of the Terms offered by the Public, and willing to advance Money sufficient for paying off and abolishing the old Company; for every one knows, it must always be a great Advantage to a Banking Company to have a large Capital, and considerable Sums of ready Money coming in to them weekly from his Majesty's Exchequer.
I confess, Sir, I am a little surprized to hear it infinuated, that it would be more advantageous or convenient for the Public, to owe a large Debt to any one Company, than to owe a Debt of equal Value to three or four different Companies. If the whole Debt we now owe were in the Hands of any one Company, it would be in the Power of that Company to distress the Public whenever they had a Mind; whereas, while that Debt is in the Hands of several Companies, if one should resolve to distress, the others would probably resolve to support, and by that Means the Public can never be in Danger of being distressed by either. Likewise, while the Debt continues to be in the Hands of several Companies, and while it continues to be a Disadvantage to each of them to be paid off, as long as the Sinking-Fund produces any Thing, it will be in the Power of the Public to keep every one of them in Awe, and in some Manner to prescribe to each, by threatning to apply the Sinking Fund solely to that Company which shall refuse to comply with any reasonable Proposition that may be offered. In private Life, as well as public, it is not so convenient to owe a large Debt to one Person, as to owe a Debt of equal Value, and at the same Interest, to several, provided the Debtor can be assured, that none of his Creditors will demand Payment till he is ready to offer it; for the Reason why Gentlemen of Estates generally borrow a large Sum from one Person, is because a Man of Estate can borrow a large Sum at a lower Rate of Interest than he can borrow small Sums; or because some one or other of his small Creditors is every Day teazing him for Payment, which keeps him in a constant State of Uneasiness and Trouble; but if a private Man owed 10,000l. to ten different Persons, neither of whom, he was sure, would ever ask Payment till he was ready to offer it, he would not surely, in common Prudence, offer to borrow 10,000l. at the same Interest from any one Person, in order to pay off these ten different Creditors; and if a Man had several Mortgages upon his Estate, and could make partial Payments, without irritating his Creditor, I believe common Prudence would direct him to apply all his partial Payments towards diminishing the largest Mortgage; because a Creditor for a large Sum, has it always more in his Power to distress his Debtor, than a Creditor for a small Sum can have, unless the Debtor be a Man who has neither Fortune nor Credit. I shall grant it is better for the Public to owe a large Debt to a Company, than to a great and disunited Multitude of private Persons; because to such a Multitude the Public can offer no new Terms, nor can it enter into any Treaty or Transaction with them; whereas a Multitude united in a Company is always governed by the Majority, and is in Effect but one Person, so that Means may always be found for getting them all to agree to any new and reasonable Terms that may be offered. This was a good Reason for the Legislature's enabling the South-Sea Company to purchase in, or pay off all our redeemable and irredeemable Debts; but this can be no Reason for saying, that it would be better to have the whole public Debts placed in the Hands of one great Company, than to have it placed in the Hands of three or four different Corporations; because the Public may treat with each, and will always be able to treat more upon the Par with each, than if it had only one powerful and numerous Body to deal with.
As for the Disadvantage which an exclusive Privilege may be of to the Trade of the Nation in general, it cannot be of any Weight in the present Debate; because, if at the End of the Term granted to the Bank or East-India Company, it should be found necessary to abolish the Bank, or not to renew the exclusive Privilege of either of the two, it will, I am certain, be in the Power of the Public to borrow as much Money, at a moderate Interest, as will be sufficient for redeeming either the one or the other, tho' not a Shilling should be paid to either of them before the Expiration of their Term; and if it should be thought fit to continue them, and to renew their exclusive Privilege, it would be a Disadvantage to both, but especially the Bank, even with respect to their Trade, to have a great Part of their Capital paid off; in which Case the making of such Payments would certainly be an Injury done to the Trade of the Nation. But tho' in most Sorts of Trade, an exclusive Privilege may be of bad Consequence, I am nevertheless of Opinion, that with respect to the Banking Trade, and the Trade to the East-Indies, neither the one nor the other can be carried on with such Success, or in such an extensive manner, by private Adventurers, as by a public Company with such an exclusive Privilege as our present Companies have; and in this Opinion I am supported by the Example of our Neighbours the Dutch, who, I believe, understand Trade as well as most of their Neighbours, and, I may say, I hope, without giving any Offence, that they generally shew as disinterested a Regard for the Good of their Country, as any Nation now in Europe. The Circulating of Bank Bills, or Cash Notes, must certainly increase the current Cash of any Country, and must therefore be of great Use in Trade; consequently the more extensive and the more general such a Circulation is, the better will it be for the Inland Trade of that Country. It is true, a private Man, or a Sett of private Men, may, by a long Series of good Management, gain a very extensive Credit, but that Credit can never come to be so extensive, or near so general, as the Credit of a rich public Company, that has supported itself with Honour for perhaps some Ages; because the Credit of a private Man always depends upon himself, so that when he dies, his Credit, as to any future Circulation, generally dies with him; for it must require some time, before those who succeed can revive or regain it; whereas a public Company never dies, nor can their Credit meet with any such Interruption; and as their Managers are always chosen annually by the Company, there is a greater Security for its being under good Management, than a private Bank, whose chief Managers are always appointed by the Chance of natural or legal Succession; therefore I shall always think it better for a Trading Country to have a public Bank, than to trust entirely to private Bankers. Then as to the East-India Trade, it is certain that Trade could not be carried on by private Adventurers, unless the Nation should be at the Expence of supporting the Settlements, Forts, and Factories now supported by the Company; and even in that Case, the Ships proper for the Trade are so large and expensive, and the Cargoes so rich, that I question much if it could be carried on by private Men trading separately. In short, Sir, we know how our Banking and East-India Trade have prospered under their present Regulation, but we cannot certainly judge how they would prosper in the Hands of private and separate Adventurers; therefore, I must think, it would be a dangerous Experiment to dissolve the Companies, and I am of Opinion neither of them can subsist without such an exclusive Privilege as they now enjoy. However, we have now no Occasion for determining this Question; for, as I have said, whatever way it may be determined, when the Opportunity offers, it can be of no Weight in the present Debate; at least if it is of any Weight, it must be in favour of the Motion; because if we should once pay off any Part of the Capital of Bank or East-India, we cannot replace it, but by contracting a new Debt, which I hope we never shall, even tho' we should afterwards resolve to grant the Company a new Term.
With respect to the Trade carried on by our three great Companies, it must be granted, Sir, that the South-Sea Company has hitherto been far from carrying on such a Trade as either of the other two; and altho' I am convinced, a Diminution of the Capital of the Bank or EastIndia would be a Disadvantage to their Trade, yet I am far from being of Opinion, that the Diminution of the SouthSea Capital would be a Disadvantage to any fort of Trade they can be supposed to carry on in any time to come; for their Capital is so large, that tho' the greatest Part of it were paid off, they would, I think, have sufficient remain, ing for enabling them to push their Trade as far as the Nature of it will admit of. But supposing, that by some extraordinary and unforeseen Accident it should happen otherwise, supposing the South Sea Company should become one of the most flourishing Trading Companies in the World, (which I should be extremely glad to see) where any present Measure is to be taken, I shall always think it much safer to form a Judgment upon the Experience of what is passed, than upon any Conjecture of what may happen in time to come; and if we are now to be directed by the Experience of what is past, I am sure it will be very easy to determine which of the three Capitals we may diminish, without running any risk of injuring the Trade of the Company by such Diminution.
Then, Sir, with respect to the Taxes mortgaged to the several Companies, it seems to be admitted that the Taxes mortgaged to the South-Sea Company are the most grievous; and if so, it would certainly be much better for the Parliament to have an absolute Power of abolishing all those Taxes, than to have only a conditional Power subject to the Controul of any Company in England; for tho' it may be probable that their Consent will always be readily obtained, by offering them a Security upon the Sinking-Fund, for an Annuity equal to the yearly Produce of the Tax so to be abolished, yet the obtaining of such a Consent is what we cannot pretend to be infallibly sure of; and therefore I must think it most prudent for us to proceed as fast as possible in the Redemption of those Taxes which are allowed to be the most burdensome to the Nation in general. As for what has been said with regard to the Salt-Duty, it can have no Relation to the present Question, therefore I shall not take much Notice of it; but I must declare I am far from thinking it near so burdensome or inconvenient as the Hon. Gentleman was pleased to represent, nor did I ever think it so grievous as the Land Tax. There is not a Man in the Kingdom that feels or complains of what he pays to the Salt-Tax, but most of the Land-holders in England severely feel every Shilling that is laid upon their Land, and most of them would complain if they were not convinced that the Parliament takes every Opportunity to relieve them. We must remember, that when the Salt-Duty was abolished, there was then no Competition in Parliament between it and the Land-Tax; if there had, I make no Doubt but that both Houses of Parliament would have been of the same Opinion they afterwards were, and would then, as well as afterwards, have determined that the Land-Tax was by far the most grievous of the two. But however grievous or dangerous the Salt Duty may be, there can be no Occasion for applying the Produce of the Sinking-Fund towards its Redemption; because in seven or eight Years it will of course expire; and if any Attempt should hereafter be made for continuing or reviving it, the Hon. Gentleman may then give his Reasons against it, when. I am persuaded they will have great Weight, as they always have with every Man that hears him.
I hope, Sir, I have now shewn that all the Arguments which can be drawn from the public Good of the Nation in general, plead strongly for your applying the next Payment towards redeeming so much of the South-Sea Capital, and that there is no Weight in any Thing that has been said to the contrary. I shall next consider that impartial Justice which is due to all our Creditors, and the Regard we ought to have for the private Interest of every one. As for that Rule of Proportion which has been laid down, and according to which it has been said we ought to make all our future Payments, I cannot think it would be either just or impartial, or that it would shew a proper Regard for our Creditors in general; for as every Payment we make must be attended with a Loss to those to whom it is made, we ought to make our Payments in such a Manner as that the Loss may always fall upon the greatest Number of Persons: A Loss that falls upon 3 or 400 Persons may be almost insensible to every one, whereas if the same Loss be made to fall upon 100 Persons only, it will be severely felt by every one, and may in all Probability prove ruinous to a great many. For this Reason we ought to make all or most of our Payments to that Capital which is the largest, till such Time as it be reduced upon a Par, or near upon Par, with some one of the other Capitals; consequently the next Payment, and perhaps several future Payments, ought to be applied to the South-Sea Company, because their Capital is by much the largest, and their Proprietors by far the most numerous, and therefore the Loss cannot fall so heavy upon those to whom the Payment is made.
'Tis true, Sir, there are, I believe, among the South Sea Annuitants a great many Proprietors for small Sums, perhaps more in Proportion than in any of our other public Funds; but such Proprietors have all something else to depend on, and therefore are not so much Objects of Compassion as the Hon. Gentlemen would represent. They are generally Persons concerned in some Sort of Trade or Business, and the small Sum of Money that will fall to each Person's Share, out of any Payment to be made by the Public, will, or at least may, be usefully employ'd by them in the Business they are engaged in. The greatest Objects of Compassion are the Proprietors for middling Sums, such as have 1000l. two, or three, in some one of the public Funds, and have no Trade or Business, nor any Thing to depend on for a Subsistence, but the Annuity or Dividends they receive from the Company. By such Proprietors the Loss will be severely felt, because they can make no Use of the Money they receive, but by laying it out again upon the Purchase of Stock or Annuities at a very great Disadvantage, and many of them may perhaps be tempted to waste it in some Sort of Extravagance; but of such Proprietors there are, I believe, in Proportion, as many in our other Funds as in the South-Sea Annuities, and therefore the latter deserve no particular Favour upon that Account. As for Foreigners, I shall not take upon me to say which of our public Funds are most generally possessed by them; but I am surprized to hear it so much as insinuated, that we ought to shew any greater Favour to our own Subjects than to those Foreigners who have put such a Confidence in the Honour of this Nation, as to trust us with the whole or the greatest Part of their Fortunes: I hope I shall never see any such Doctrine established, because I am of Opinion it would tend both to the Dishonour and Discredit of the Nation, and might be of the most dangerous Consequence, if ever this Nation should again be plunged in a War as expensive as the last. I wish it had not been mentioned; but since it has, I thing it one of the strongest Arguments can be made use of for inducing us to agree to the Motion, in order to convince the whole World, that this House will never give the least Countenance to such a Doctrine. I must now, Sir, beg Leave to consider the Calculations that have been made for shewing that the South-Sea Annuitants will sustain a greater Loss by the next Payment's being made to them, than the Proprietors of Bank Stock would sustain, if the next Payment should be applied to them. The Calculations I must confess are ingenious enough, but they are all founded upon two Suppositions, neither of which, I am afraid, will hold. They are all founded upon these two Suppositions, that neither the Trade of the Bank or East-India Company will be in the least diminished by our paying off a Part of their Capital, and that the remaining Stock will rise in its Value according to the Increase of the future Dividends. As to the first of these Suppositions, I am convinced it will not hold, especially with respect to the Bank; for by paying a Million to them, we shall make them lose near 800l. a Week, which is now coming in to them weekly from the Exchequer, as a Supply for the ready Specie they find it necessary to keep always by them, in order to circulate the Cash Notes or Bank Bills they have out; therefore, upon the ceasing of that weekly Supply, they must either diminish the Number of Notes they now have in Circulation, or they must keep a greater Stock of ready Specie by them; by either of which they must necessarily diminish the Profits of their Trade, and consequently this Supposition must appear not to be well founded. Then as to the other Supposition, I do not think there is the least Foundation for it, because we know, the Price of any Sort of Stock depends as much upon the particular Whim or Humour that may happen to prevail, as the Price of any Commodity whatever. It neither depends upon the Dividend to be made, nor upon the Certainty or Probability that the Dividend will be increased or continued. Of this the present Market Prices of our Stocks is a convincing Proof; for if one were to judge from common Sense, or the Reason of Things, it is certain the Price of Bank Stock ought to be higher in Proportion to its Dividend than the Price of any other public Fund in England, and yet we find it is lower than either East-India Stock or South-Sea Annuities; therefore to suppose that any Stock will rise in Proportion to the Increase of its Dividend, must be a very uncertain and deceitful Foundation for any Calculation. On the contrary, our disecting the next Payment to be made to the Bank would I believe, possess the Generality of Mankind with an Opinion, that we were resolved to abolise the Company at the End of their Term, which would of course run the Price of their Stock down to very near Par, and consequently I think it most reasonable to believe, that the Proprietors of Bank Stock would not only lose at the Rate of 50l. per Cent. upon their Stock annihilated, but very near 50l. per Cent. upon all their remaining Stock, in Case we now resolve that the next Payment shall be made to them.
For these Reasons, Sir, and a great many others, which I shall wave troubling you with at present, I am still of Opinion, notwithstanding what has been said by the Hon. Gentlemen on the other Side of the Question, that if we have a Mind to shew a proper Regard to the public Good, and to the private Interest of our public Creditors in general, we ought to apply the present growing Produce of the Sinking-Fund towards redeeming the like Sum of the South-Sea Company's Capital; and that, considering the great Amount of that Company's Capital, considering how far it exceeds the Capital of any other Company, neither our having applied so many successive Payments towards the reducing of that Capital, nor our applying this next Payment to the same Purpose, can be charged with any Injustice or Partiality; therefore, I am for agreeing to the Motion as it now stands, and, I hope, the House will join with me in Opinion.
After this Debate, the Question was put upon the Motion, and carried in the Affirmative without a Division.
The Speakers for the Motion were, Sir Robert Walpole, Thomas Winnington, Esq; John Bance, Esq; Samuel E—n, Esq; Sir William Younge, Mr. Alderman Heathcote, and the Lord Sundon; and the Speakers against the Motion were, Sir John Barnard, William Pultney, Esq; Sir William Windbam, Sir John Hind Cotton, Sir John Rushout, Sir Thomas Sanderson, the Lord Baltimore, Samuel Sand,s, Esq; and the Master of the Roils.