between fourteen per cent. for life, and fourteen
per cent. for ninety-six years, was sold for
sixty-three pounds, or for four and a-half years
purchase. Such was the supposed instability
of government, that even these terms procured
few purchasers. In the reign of queen Anne,
money was, upon different occasions, borrowed
both upon annuities for lives, and upon annuities
for terms of thirty-two, of eighty-nine,
of ninety-eight, and of ninety-nine years. In
1719, the proprietors of the annuities for
thirty-two years were induced to accept, in
lieu of them, South-sea stock to the amount
of eleven and a-half years purchase of the annuities,
together with an additional quantity
of stock, equal to the arrears which happened
then to be due upon them. In 1720, the
greater part of the other annuities for terms
of years, both long and short, were subscribed
into the same fund. The long annuities,
at that time, amounted to L.666,821 :
8 : 3½ a-year. On the 5th of January 1775,
the remainder of them, or what was not subscribed
at that time, amounted only to
L.136,453 : 12 : 8.
During the two wars which began in 1739
and in 1755, little money was borrowed, either
upon annuities for terms of years, or upon
those for lives. An annuity for ninety-eight
or ninety-nine years, however, is worth nearly
as much as a perpetuity, and should therefore,
one might think, be a fund for borrowing
nearly as much. But those who, in order to
make family settlements, and to provide for
remote futurity, buy into the public stocks,
would not care to purchase into one of which
the value was continually diminishing; and such
people make a very considerable proportion,
both of the proprietors and purchasers of stock.
An annuity for a long term of years, therefore,
though its intrinsic value may be very
nearly the same with that of a perpetual annuity,
will not find nearly the same number
of purchasers. The subscribers to a new loan,
who mean generally to sell their subscription
as soon as possible, prefer greatly a perpetual
annuity, redeemable by parliament, to an irredeemable
annuity, for a long term of years,
of only equal amount. The value of the former
may be supposed always the same, or
very nearly the same; and it makes, therefore,
a more convenient transferable stock than
the latter.
During the two last-mentioned wars, annuities,
either for terms of years or for lives,
were seldom granted, but as premiums to the
subscribers of a new loan, over and above the
redeemable annuity or interest, upon the credit
of which the loan was supposed to be made.
They were granted, not as the proper fund
upon which the money was borrowed, but as
an additional encouragement to the lender.
Annuities for lives have occasionally been
granted in two different ways; either upon separate
lives, or upon lots of lives, which, in
French, are called tontines, from the name of
their inventor. When annuities are granted
upon separate lives, the death of every individual
annuitant disburdens the public revenue,
so far as it was affected by his annuity.
When annuities are granted upon tontines, the
liberation of the public revenue does not
commence till the death of all the annuitants
comprehended in one lot, which may, sometimes
consist of twenty or thirty persons,
of whom the survivors succeed to the annuities
of all those who die before them;
the last survivor succeeding to the annuities of
the whole lot. Upon the same revenue, more
money can always be raised by tontines than
by annuities for separate lives. An annuity,
with a right of survivorship, is really worth
more than an equal annuity for a separate life;
and, from the confidence which every man
naturally has in his own good fortune, the
principle upon which is founded the success
of all lotteries, such an annuity generally sells
for something more than it is worth. In
countries where it is usual for government to
raise money by granting annuities, tontines
are, upon this account, generally preferred to
annuities for separate lives. The expedient
which will raise most money, is almost always
preferred to that which is likely to bring about,
in the speediest manner, the liberation of the
public revenue.
In France, a much greater proportion of the
public debts consists in annuities for lives
than in England. According to a memoir
presented by the parliament of Bourdeaux to
the king, in 1764, the whole public debt of
France is estimated at twenty-four hundred
millions of livres; of which the capital, for
which annuities for lives had been granted, is
supposed to amount to three hundred millions,
the eighth part of the whole public
debt. The annuities themselves are computed
to amount to thirty millions a-year, the fourth
part of one hundred and twenty millions, the
supposed interest of that whole debt. These
estimations, I know very well, are not exact;
but having been presented by so very respectable
a body as approximations to the truth,
they may, I apprehend, be considered as such.
It is not the different degrees of anxiety in
the two governments of France and England
for the liberation of the public revenue,
which occasions this difference in their respective
modes of borrowing; it arises altogether
from the different views and interests of the
lenders.
In England, the seat of government being
in the greatest mercantile city in the world,
the merchants are generally the people who
advance money to government. By advancing
it, they do not mean to diminish, but,
on the contrary, to increase their mercantile
capitals; and unless they expected to sell,
with some profit, their share in the subscription
for a new loan, they never would subscribe.