established by the Revolution, but partly,
too, to the want of the support of the bank
of England.
When this resource is exhausted, and it becomes
necessary, in order to raise money, to
assign or mortgage some particular branch of
the public revenue for the payment of the
debt, government has, upon different occasions,
done this in two different ways. Sometimes
it has made this assignment or mortgage
for a short period of time only, a year, or a
few years, for example; and sometimes for
perpetuity. In the one case, the fund was
supposed sufficient to pay, within the limited
time, both principal and interest of the money
borrowed. In the other, it was supposed sufficient
to pay the interest only, or a perpetual
annuity equivalent to the interest, government
being at liberty to redeem, at any time, this
annuity, upon paying back the principal sum
borrowed. When money was raised in the
one way, it was said to be raised by anticipation;
when in the other, by perpetual funding,
or, more shortly, by funding.
In Great Britain, the annual land and malt
taxes are regularly anticipated every year, by
virtue of a borrowing clause constantly inserted
into the acts which impose them. The
bank of England generally advances at an
interest, which, since the Revolution, has varied
from eight to three per cent., the sums of
which those taxes are granted, and receives
payment as their produce gradually comes in.
If there is a deficiency, which there always is,
it is provided for in the supplies of the ensuing
year. The only considerable branch of
the public revenue which yet remains unmortgaged,
is thus regularly spent before it comes
in. Like an improvident spendthrift, whose
pressing occasions will not allow him to wait
for the regular payment of his revenue, the
state is in the constant practice of borrowing
of its own factors and agents, and of paying
interest for the use of its own money.
In the reign of king William, and during
a great part of that of queen Anne, before
we had become so familiar as we are now
with the practice of perpetual funding, the
greater part of the new taxes were imposed
but for a short period of time (for four, five,
six, or seven years only), and a great part of
the grants of every year consisted in loans upon
anticipations of the produce of those taxes.
The produce being frequently insufficient for
paying, within the limited term, the principal
and interest of the money borrowed, deficiencies
arose; to make good which, it became
necessary to prolong the term.
In 1697, by the 8th of William III., c. 20,
the deficiencies of several taxes were charged
upon what was then called the first general
mortgage or fund, consisting of a prolongation
to the first of August 1706, of several different
taxes, which would have expired within a
shorter term, and of which the produce was
accumulated into one general fund. The deficiencies
charged upon this prolonged term amounted
to L.5,160,459 : 14 : 9½.
In 1701, those duties, with some others,
were still further prolonged, for the like purposes,
till the first of August 1710, and were
called the second general mortgage or fund.
The deficiencies charged upon it amounted to
L.2,055,999 : 7 : 11½.
In 1707, those duties were still further prolonged,
as a fund for new loans, to the first of
August 1712, and were called the third general
mortgage or fund. The sum borrowed
upon it was L.983,254 : 11 : 9¼.
In 1708, those duties were all (except the
old subsidy of tonnage and poundage, of
which one moiety only was made a part of this
fund, and a duty upon the importation of
Scotch linen, which had been taken off by the
articles of union) still further continued, as a
fund for new loans, to the first of August
1714, and were called the fourth general
mortgage or fund. The sum borrowed upon
it was L.925,176 : 9 : 2¼.
In 1709, those duties were all (except the old
subsidy of tonnage and poundage, which was
now left out of this fund altogether) still further
continued, for the same purpose, to the first of
August 1716, and were called the fifth general
mortgage or fund. The sum borrowed
upon it was L.922,029 : 6s.
In 1710, those duties were again prolonged
to the first of August 1720, and were called
the sixth general mortgage or fund. The sum
borrowed upon it was L.1,296,552 : 9 : 11¾.
In 1711, the same duties (which at this
time were thus subject to four different anticipations),
together with several others, were
continued for ever, and made a fund for paying
the interest of the capital of the South-sea
company, which had that year advanced to
government, for paying debts, and making
good deficiencies, the sum of L.9,177,967 : 15 : 4,
the greatest loan which at that time
had ever been made.
Before this period, the principal, so far as I
have been able to observe, the only taxes, which,
in order to pay the interest of a debt, had
been imposed for perpetuity, were these for
paying the interest of the money which had
been advanced to government by the bank and
East-India company, and of what it was expected
would be advanced, but which was
never advanced, by a projected land bank.
The bank fund at this time amounted to
L.3,375,027 : 17 : 10½, for which was paid an
annuity or interest of L.206,501 : 13 : 5. The
East-India fund amounted to L.3,200,000,
for which was paid an annuity or interest of
L.160,000; the bank fund being at six per
cent., the East-India fund at five per cent.
interest.
In 1715, by the first of George I., c. 12,
the different taxes which had been mortgaged
for paying the bank annuity, together with