As an apology for Dr. Price, as well as for those who listened so eagerly to his doctrines, it is but fair to mention, that he lived at a time when the world had run mad on the subject of compound interest. The abstract qualities of numbers had at that period completely superseded all attention to the real transactions of human life, as well as to those limits which are imposed upon the increase of wealth, by the actual wants and uses of mankind. In order to prove the practical value of any speculation, it was held enough if the author made out that it was theoretically correct; and the most extravagant opinions were entertained by men in other respects reasonable, and recommended too as the basis of the most important financial arrangements, on no other ground, than that it was impossible on mathematical principles to demonstrate their absurdity. Nothing can more strikingly illustrate this predominance of wild hypothesis, than the facts already stated, in regard to the origin of the Sinking Fund; but had not the natural prudence of Mr. Pitt regulated the ardent zeal of his theological adviser, there would have been represented on the theatre of English finance, one of the most ridiculous and destructive pieces of political quackery, that ever disgraced the annals of a civilized government.

We may give as an example of the specious delusion, which political writers were at that period disposed to practise on themselves, the following position maintained by Dr. Price. He asserted, that a debt of 258,000,000l. might be discharged in eighty six years, at no greater expense than an annual appropriation during that period, of 200,0001. This appeared extremely encouraging to the British people, who happened at the time when Dr. Price wrote, to find themserves loaded with pecuniary obligations, approaching very nearly to the large sum just specified. The dullest of them cour at once find out that 200,0001. multiplied by 86, does not nuch exceed 17,000,000l. an amount which would still leave unliquidated the considerable balance of more than 240,000,000l. But the operations of the Sinking Fund on the principle of omne ignotum pro magnifico, were allowed on all hands to be exceedingly marvellous; and as Dr. Price had actually stated on paper, and illustrated by much laborious calculation, that the means proposed were fully adequate to the effect announced, no one was bold enough to call in question the accuracy of his views. Subsequent inquirers have however discovered, that the Doctor, in his operose exposition of this flattering system, omitted one essential element. He passed over in his calculation, the

amount of taxes which would have been necessary year by year, to improve the annual grant of two hundred thousand pounds into two hundred and fifty eight millions and the taxes thus omitted, would in the last years of the period specified, have exceeded ten million sterling. In the eighty sixth year, they would have amounted to more than 13,000,000l. This discovery dissolved the charm. As soon as it was mentioned, that in addition to the moderate sum of two hundred thousand pounds, it would be necessary to raise eight, ten, or twelve millions a year in the shape of taxes, the mystical operation of the Sinking Fund began to be understood, and the simplest of our countrymen were led to perceive, that the National Debt was after all to be paid off like every other debt, by contributing annually a part of their incomes.

But the Doctor continued to shut his eyes to this important particular, throughout his whole scheme of finance; and he maintained that it would be wise in a great nation to borrow money at simple interest, in order to improve it at compound interest, and thereby pay off its debts. He admitted that such conduct in a private individual would be absurd and ruinous and how it should have been otherwise, merely because the scale of the transaction was to be enlarged, he has no where condescended to explain. It is enough to observe, that money if borrowed, must accumulate as fast against him who borrows it, as it can do in his favour, the rate of interest being the same in both cascs; and all the advantage that a man could derive from so foolish a measure, would be the trouble of borrowing with the one hand and paying with the other, in addition to the expense of transacting this nugatory business. Such however, it is now admitted, was the sort of operation, which for several years during the late war, employed the Commissioners who had been appointed to superintend the payment of the National Debt. Money was borrowed, and put into their hands to purchase stock-which stock, in general, amounted to somewhat less in actual value than the money with which it was purchased; in other words, the purchase money cost Government more than the stock redeemed with it would have been sold for in the market. It is accordingly no longer denied, that the transactions of the Sinking Find, during all the time that it was maintained on the prodice of loans, were attended with a positive loss to the country;-a loss which was, however, in some degree compersated, by the advantageous effect which the regular demand of the Commissioners produced on the price of stocks, and indirectly on the public credit of the Empire.

One of the greatest absurdities with which Dr. Price is chargeable, and which has been well exposed by Hamilton, is the assertion that it is of little consequence what interest a nation pays for its loans, inasmuch as a debt bearing a high rate of interest with a Sinking Fund attached, is redeemed in less time than the same debt, with the same sinking fund at a low rate of interest. But this paradoxical opinion is supported by a species of reasoning, which at once betrays the absurdity of the principle on which it rests. He overlooks, as in the former case, the large sums which must be raised year after year by means of taxation; confining his attention to the comparatively unimportant circumstance, of the more expeditious redemption of a given amount of debt. If this debt be ten millions with a sinking fund of one per cent. attached and bearing interest at six per cent, it would be redeemed by the said fund (100,0007.) in about 33 years. If the rate of interest were only three per cent. it would require 47 years. But in the former case, as Dr. Hamilton observes, the annual burden on the public would be 700,000l. and the whole burden 23,450,000l. whereas, in the latter case, the annual burden would be only 400,000l. and the whole burden 18,800,0007. If the sum of 700,000l. had been raised annually, while the debt bore interest at 3 per cent. it would have been discharged in 19 years, for 13,300,000.

But the gross delusion under which Dr Price addressed the public on the subject of the National Debt, is most strikingly manifested in the circumstances of a case, which he imagines solely for the sake of illustrating his argument. The case he supposes, is that of a state burthened with debt, bearing five millions of interest, and able by its utmost exertions to raise annually a million more as a sinking fund. "This, says he, (Reversionary Payments) if the debts bear interest at 6 per cent, will pay off three fifths of them in twenty three years, and the state may be saved; but if the interest be no more than three per cent, it will not give the same relief in less than double that time, and a public bankruptcy may prove unavoidable." What a powerful argument have we here in support of high interest! But the good Doctor fails to mention that, in this supposed case, a prin cipal which at 3 per cent. yields the same amount of interest, that another principal at 6 per cent. yields, must be precisely double of that other; that is, while the one is 166,666,6661, the other is only 83,333,333. Instead therefore of proving as Dr. Price appears to do, that two sums of the same amount but bearing interest at different rates, will be paid off

as he has described; he has only proved that a sum half the amount of another, but bearing interest at a double rate will be discharged in less time than that other, by means of the sinking fund. In a word, he had either grossly deceived himself, or what we are very loathe to imagine, attempted to practice deceit upon his readers.

It cannot be surprising then, that the celebrated Sinking Fund, originating in such views, and being supported by such reasoning, should have entailed upon its authors only vexation and disappointment. Like an ill contrived machine, it stood in constant want of adjustment or alteration. Every session of Parliament, even during the administration of Mr. Pitt, it was found necessary to add to its apparatus, or to withdraw some portion of it; to accelerate its movement or retard its progress: And the first step taken by every succeeding financier upon his entrance to office, has been to modify, and in some cases to suspend entirely the operations of that unmanageable instrument. In the year 1813, Mr. Vansittart virtually relinquished the principle upon which its supposed efficacy was understood to rest; and in 1819, the same statesman abolished the system of accumulated payments altogether. The name indeed was retained in the parliamentary language, which continued to be used in regard to it, and the minister even spoke of borrowing annually large sums from the Sinking Fund. But no one required to be told, that the famous financial contrivance so long associated with the policy of Mr. Pitt, and so commonly identified with the political salvation of the country, had altogether ceased to exist. To borrow from the Sinking Fund since the year 1819, was exactly the same thing, as to borrow from a dead man whose estate has fallen into your hands, but which, owing to some remains of prudish delicacy, or hereditary veneration, you do not choose at first to enjoy in your own right.

Nothing has ever surprised us more than the unresisting and pliant unanimity, with which this renowned fiscal expedient was relinguished by both sides of the House of Commons. Not a single struggle was made to retain it: no expression of regret accompanied the vote by which it was numbered among those obsolete schemes, which for a time had amused and deceived the public; and the same favourite measure, which, not twenty years before, had been pronounced the palladium of British faith and the sanctuary of public credit, was cast away as a nugatory and even a mischievous novelty. In the present session of Parliament, the grand discovery of 1786, and the more matured invention of 1792,

are never spoken of, but as bye-gone absurdities, and as precedents which ought to be studied for warning and not for imitation. The wisdom which was hailed as the happiest exercise of human talent, and as the means of conferring upon the financial establishment of this great country, an immortality of youth, and an ever increasing vigour, has now been found to be nothing better than ignorant drivelling, or mere contemptible trickery. The omnipotent power of compound interest is now laughed to scorn, both by Peers and Commoners. Statesmen who agree on nothing else, are of one mind in reprobating a Sinking Fund to be maintained on borrowed money: and it is now every where admitted, that a measure which was acknowledged to prove pernicious in conducting the money business of private life, would also prove pernicious in the pecuniary transactions of a nation. The only Sinking Fund that will be now tolerated, is one composed of the excess of income over expenditure;-the only means that will ever be found effectual for the liquidation of public burdens.

We have entered into these details principally with the view of shewing that, as the errors of the financial system now exploded were originally introduced by the speculations of a retired student, there can be no impropriety in correcting them upon the warrant of a similar authority. At first sight, no doubt, it appears reasonable to give to the opinions of practical men a much greater weight than can be claimed for the inferences of those more private individuals, who view things only in connection with their abstract relations. But experience has now sufficiently impressed on the conviction of mankind, that the details of office are not the best school for the appreciation of general principles, nor even of the very maxims upon which those details are conducted. The labours of the closet must occasionally come in aid of the rules which are followed in the actual administration of affairs; and of the value of this assistance we have nowhere a finer illustration than is supplied to us by the change of opinions that now generally prevails in regard to the bullion question, and on the necessity of approximating in our currency to a fixed and regular standard of value. The admirable" Letter" from Oxford was the means of enlightening many who were in the dark, and of putting right many who were in the wrong, in relation to the important points just specified; whilst the masterly work of Dr. Hamilton on the National Debt has completely atoned for the evil counsel which was administered to the statesmen of the last century,