The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1866-11-12
FIN A N CIAL.
The Sinking Fund Systems Of
Great Britain.
Their Origin and Progress
from l717 to 1897.

Britain which larger than that Of any other nation
was In the latter part Of the year 1892 during the
reign Of william and Mary. hundred and seventy
four years ago On the 18th Of December OF that year.
the House Of Commons authorized the financial minis.
cor 10 borrow from the people for the use OF the crown
million Of pounds sterling. From that the debt
went on increasing in magnitude through the contest
with Louis the Fourteenth Of France whom Il rose to nty
millions Of pounds through the Of the Austrian sue
cssson when II reached eighty millions and through
other wars and difficulties with continental nations
upti during the administration OF the nrst William Pitt
II had attained what then thought be tho enor
nous proportions of hundred and forty millions OF
Pounds sterling, or less than hundred millions
Of dollars The unsuccessful 70 keep tho Amer.
can colonies In subsection added one hundred and
thirythree millions to the debt and the great struggle
with republican France and the Napoleonc war raised
tho debt to its eliminating point and when the beaten
Emperor finally and securely placed upon the island
Of 81 Helena the national liabilities Of England consist
Ing Of funded and unfundsd stock aggregated eight hun
drsd millions OF pounds sring equal to four thousand
millions Of dollars.
The first sinking fund system OF Great Britain was In
augurated In lit by Sir Robert Walpole who then
First Lord Commissioner Of the Treasury The debt
then comparatively a mere bagatelle Parliament in
accordance with the recommendation of Mr.. Walpole
enacted that all the public funds bearing higher inter
est than five per should be redeemed or converted
into an annuity not exceeding five per cent that
the surpIussos arising we'll from proposed reduc.
ton of interest from six FIVE per cent from the ex
cesses of the several appropriated the payment
OF interest should be solely and unaienaby applicable
to the discharge of the principal of the national debt
The fund which was thus created was donominated a
sSinkng fund.-
Ten years thereafter in 1921 further reduction OF
interest on the public stock from Ave four per cent
took place, by which this sinking fund made to
yield IL, 600 per annum. In 1888, Mr.. wapole,
thinking doubt that his system was working too WELL
succeeding in getting act through Parliament grant
ing him permission to rob the sinking fund Of half
million of pounds osensioy for expenses The
Toe was thus broken Depredaons having been permitted
TO be made upon the admirable working of the system
1t soon became comparatively valueess and from ,l733
to 1776 it can be said to have existed only in name
From the time Of It's adoption down to the breaking
OF the Of the American revolution, It had contrib
uted to the redemption OF twenty millions OF the
public debt
II was charged upon Mr.. Wapoc that b Is system was
used to foster corruption and evidence of the fact
letter Of his was published, In which he Informed
Cardinal De Fleury that he compelled to SUBJ
sidize King George H., and play Bank of
England notes into the hands Of onehalf
the members Of Parliament order maintain the sue
oessul workings Of his IDEAS and to keep down tho
war spirit which was then inclined to be rampant In
one OF his letters, Mr.. wapoo sad-"Gold is q mctal
that has prodgious effect In cooling hot blood and
martial spirits There 10 mpcuous warrior In the
Parliament but pension Of two thousand pounds would
make exceedingly gentle" The pensions thus referred
TO- wsre abstracted 1t alleged from the sinking fund.-
and thus the main objects OF Mr. walpoles creation ~ore
defeated BY his own acts.
The system itself could DO charged with any lack
Of machinery 10 do the work designed for t. but the
numerous outrages that permitted by special
OF Parliament TO be pcrpetrated upon caused the pub.
Nc TO dsrust and TO denouncc the scheme one aught
with injury 70 70 the finances Of the nation.
In 1850 William Pitt became Primo Minister and Chan
csllor Of the Exchsquer Immediately sftor hts install.
mont into tho ONCE Of head Of tho finances he set about
working up plan for the sxtngushment Of the national
debt which was then about Ave hundred and thirty mil
Hons Of pounda He brought forward . bill In Paria-
mont for the appropriation Of million annually the
sinking fund, and In order TO It's i
legitimate purposes he stipulated that hundred and
any thousand pounds should DO applied quarterly the
purchase Of stock for the period Of twenty years
Me end Of which time no calculated that the sinking
FUND would receive an income Of four millions year.
Mr. Fox at that time tho great leader Of the oppo
son, and he proposed that whenever new loan should
be made the sum In the hands OF the sinking fund Com
should be deducted from the amount Of the
loan; for example, six millions was author
ised to be borrowed, and there should be one
million In The sinking fund, the Commissioners
should take that amount OF the oan that in fact only
%. oo0.0 900 would be borrowed. As this amendment
did not materially Interfere with tho ideas and plans OF
Mr. Pitt he accepted H. tho passed In lTe2
Parliament added 220o 900 the 81 600 900 previously
Appropriated, which would have made tho annual
what has been termed the Old sinking
Fund" 81 200, 900. But Mr. Ptt not satisfied with
this He prevailed upon Parliament 10 pass another act
which provided that upon all thereafter borrowed
by the government in addition 70 the avss necessary 10
pay the interest," one per osnt should be imposed -
applied TO the redemption Of the principal This vs.
termed the "New sinking Fund" and u became /,he
basis Of Mr.. Pitts popularity a. . nnancN An mis-
tor. Under this system Elo, 900 Of The public
stock was redeemed in the year 1900. Saa in 1901
government bonds the amount Of CID 900 600 moro
were paid or Tho system was petsrl Mr. Hirs, ana
during the whole term Of bis adm ,ra.on he applied
himself assduousy to the keeping Of Il in working order
and TO laying by per cent nuaIy for the discharge
Of the public debt For period Of twenty years /.
worked harmonousy With ali the ramncatlons OF trade
and nnanco and seems have given general sag:acon
both 70 the sovernmer and shs people From ne com.
o. the essus century the year 1874 when
.no nnano~i Of the nation fell into new hands the
sums appropriated from the sinking fund
- 'ne ''a'"p Ion or the government stock