The Sun.
London, England, 1839-11-09 00:00:00

A small pamphlet, the object of which is to
develope a plan for the extinction of the public
debt, has been sent to us. The author sets out by
anticipating the objection which will be made to
his proposal, namely, that it involves a breach of
contract with the fundholders, and this objection
he answers by appealing to the experience of the
past for proof that a breach of faith, has often
been committed before now with the public credi-
tor, for instance, in the reduction of the 4 per
Cents. to 3, and the discontinuing of the Sinking
Fund. We are not sure that this is sound financial
morality. All must depend upon the particular
circumstances of the breaches, nothing upon the
mere fact that a breach has taken place. It will,
we think, puzzle the cleverest financier in the world
to show what injury the fundholder has sustained
by the abandonment of a system which professed to
pay debts with borrowed money. A greater piece of
humbug was never hatched in the brain of a char-
latan. If Mr. PITT had stuck to the plan laid
down for him by Dr. PRICE, of reserving a cer-
, tain annual surplus out of the produce of the taxes,
to be nursed as a nest egg for liquidating
the National Debt, the case would have
been different ; but this he neither did nor
ever meant to do. His business was to raise money
for the exigencies of the moment, and provided he
could gain this point by throwing out a lure to
those who had more money than wit, he cared for
nothing more.

As to the reduction of the rate of interest on the
Funds, that was no breach of faith. The creditors
were offered their principal in full, which some of
them accepted. Others preferred accepting the
lower rate of interest offered by the Government to
the withdrawing of their money ; that is to say, they
cancelled the old bargain and made a new one, which
they would not have doge had it not been for their
advantage. Where is the cause of complaint here ?
The main argument which the author advances
for placing the National Debt on a new footing,
and for reconciling the public creditor to the change,
is the danger attending the continuance of the pre-
sent system. A future war, he argues, is inevitable,
and cannot in the ordinary course of events be far
off ; war brings an increased national expenditure ;
this must add greatly, incalculably, to the amount
of the debt, and, as a consequence, to that of annual
taxation. But increased taxation adds to the
cost of production, and if our manufactures are
already so dear that they are excluded from
many markets which we used to 'ommand, we must
cease to manufacture for foreign countries, if the
cost is to be enhanced by additional taxation. This
being the case, taking these things and their inevi-
table consequences into consideration, is it nit
better, he asks, to take a composition, as in the
case of a private creditor, than to " wait a few years,
and then, in all probability, lose the whole ?"
There can be no question as to which of the two
courses is the best; the great difficulty is to per-
suade the fundholder that the alternative offered to
him is the only possible or probable one.
The author, having thus prepared the way for
a favourable reception of his plan, proceeds to its
details; premising the observation that the Legisla-
ture should allow the dissentient creditors no voice
in the way of objection, inasmuch as there is no
breach of faith in a measure which gives him in ex-
change for his present doubtful security, another as
productive for the present, and less doubtful for the
future :

The plan of convers;on to be proposed would, in its
effect, be prospective only with regard to the amount of
interest payable on the debt ; but immediate with re-
spect to the amount of the debt itself. The same in-
terest would for the next fifty years be paid to the fund-
holders, but the debt of the nation would be greatly
and immediately reduced. The burthens of the people
would for a limited period remain as they are, but they
would gradually lessen, and in a century and a half at
most, possibly within a century, be altogether removed.
The unredeemed debt of Great Britain and Ireland
consists, in round numbers, of
509,750,000 3 per Cents. and interest thereon X 15,292,500
249,956,000 3i
1,615,000 4
72,450
1,449,000 5