[PDF]Considerations on the proposal for reducing the interest on the national debt

[Barnard ]


CQNSIDERATIDIMS Df\l THE PRDPOAL FDR
REDUCING THE INTEREST ON THE
NATIONAL DEBT


Robert E. Gross
Colleftion

A Memorial to the Founder
of the

(do/'/Hralto/i


Business Administration Library
Los Angeles


i


CONSIDERATIONS


O N T H E


PROPOSAL


m


FOR


Reducing the Interest

«

O N T H E

NATIONAL DEBT


- .-Jpfa.*-''^.


LONDON:
Printed for J. Osborn, in Pater-nojier Row^


M.DCC.L.


[Price 6d.


CONSIDERATIONS


O N T H E


PROPOSAL


FOR

Reducins; the Interest on the
National Debt.

N Ad of Parliament having
been made this prefent Set
fion, giving an Offer to all
the Creditors of the Pub-
lic, who have anyDebt owing them, at
the Rate of Four Pounds per Centtwt
per Artnum^ to continue at the fame
Rate uxiiAChrijlmas 1750. and from
thence for Seven Years, at the Rate of
B Three


[2]

Three Pounds Ten Shillings per Ce7z-
turn per Annu7n^ and after that time at
the Rate of Three Pounds ^£?rGg;7/^/;;^
per Anjmm \ and that none of the
laid Debts fhall be paid off by the
Public, before the End of the Eight
Years, wliich will be at Chrijifnas
1757. provided fuch Creditors do
fubfcribe their Acceptance in the pro-
per Book or Books provided for that
Purpole, on or before the 28th Day
of February ; and as many of the
Creditors may be fo little acquainted
with the Nature of the Funds, that
they may be greatly at a Lofs to
know what is proper for them to do,
whether to fubfcribe, or not fubfcribe ;
and may be liable to be mifled by
falfe Reprcfentations, which have been
induftrioufly fpread abroad ; I Iliall
endeavour to fet this Matter in a true
Light.

In the Firfl: place, it will be necef-
fary to endeavour the removing Pre-
judice


[ 3 ]

judice and Anger from Peoples Minds:
For, whilft they are adnated there-
with, they will not eafily fee what
their real Interefl: is : They are fome-
times taught to look upon the leffen-
ing their Intereft as a Tax upon
them, and confequently as a partial
Tax, becaufe it affeds none but the
Creditors of the Public : They are
fometimes told, that there is Com-
pulfion upon them ; at other times,
that it is a taking away fo much of
their Eftate; and they are taught to
look upon the Parliament as doing
tliem an Injury.

I apprehend all thefe things would
vanifti, if People would coolly con-
fider the true State of die Cafe: Which
I take to be this :

When the Nation is under a Ne-

ceffity of railing Money, more than

can be fupplied by Taxes paid within

the Year, they mortgage fome parti-

B a cular


[4]

cular Taxes for Payment of the In-
tereft of a Sum of Money borrowed ;
and they are obliged to give fuch In-
terefi: and Premiums, as will induce
People to lend their Money, let the
Terms be never fo extravagant : And
if the Public was always to continue
to pay the high Intereft exadled at
the times of lending the Money, the
Nation muft become overloaded with
Debts : But Care is taken to make
it a Condition, and a Stipulation, in
the verv Acl which borrows the Mo-
iiey, that the Parliament fliall be at
Liberty to redeem the Annuity at-
tending the Debt, by Payment of the
Principal Money, in fuch manner as
the Ad: provides. And the Parliament
is not tied down to redeem the An-
nuity by the Produce of the Fund
only : If that was the Cafe, almoft
all the Debts contraded would be for
ever irredeemable. But the Parlia-
ment may raife Money by what
means they can, and apply it to the

Dif-


[5 ]

Difcharge of the Capital : And when-
ever Money can be borrowed cheaper
than the Interefl: paid by the PubHc,
it is incumbent on the Padiament
(with great Deference be it fpoken),
and what the Nation have a Rio-ht to
expecl from them, to make ufe of
the Opportunity, in order to give the
People in general all the Eafe in their
Power.

This Maxim cannot be denied,
that no Money ought to be railed on
the People, but what is employed
for the Good of the Public ; and
confequently, that no more than is
neceffary fhould be paid for Interefl:,
becaufe that is raifed on the People.

Perfons who have lent their Money
on Mortgage at any Rate of Interefl:,
may as juftly complain, that the Bor-
rowers will not continue to pay the
fame Interefl, when they can have
Money cheaper, as the Creditors of

the


[ 6 ]

the Public complain in the like Cafe :
For the Public, in the capacity of a
Debtor, can be confider'd no other-
wife than as a private Perfon, who is
bound, in Juftice, to perform his
Contradl, and no more. The Par-
liament cannot, in Juftice to the Pub-
lic, confider the Cafe of private Per-
fons, however pitiable, to the Preju-
dice of the Public.

The Mortgager may agree with
another Perfon to lend him Money to
pay off the Mortgage, according to
the Agreement ^made at lending the
Money ; and is not bound to give
the prefent Mortgagee the Preference,
in cafe he fhould be willing to reduce
the Rate of Intereft. But if the
Mortgager ufes his Mortgagee with
fo much Civility, as to give him the
Preference ; furely the Mortgagee will
not be angry with him for it.

The


[7]

The Cafe is the fame between the
PubUc and the Creditors : The Par-
liament, by making an Offer to the
Creditors, which they may either
accept or refufe^ intended to do the
Creditors a Favour ; and furely,
whether they think it their Intereft
to accept it, or not, the Offer fliould
be kindly received.

It may be objected, That the Cafe
of a Creditor of the Public is not
altogether the fame with that of a
Mortgagee, becaufe the latter has a
Right to demand his Money, when
he wants it ; v^hich the Creditor of
the Public cannot do.

This Difference between them
muft be admitted ; but will have no
Force againft the Argument I have
iifed ; becaufe the Public, as a Debt-
or, and the Mortgager, are adlually
in the fame Situation: Each has a
Right to pay off the Incumbrance,

accord-


[8]

according to the refpedivc Terms
fcipulated at the time of lending
the Money. The Inconvenience the
Creditors would now complain of,
was known at the time of lending ;
and the Lenders have always taken
Care to make themfelves abundant
Amends, in Intereft and Premiums :
Witnefs the immenfe Eftates which
have been got, by fupplying the Pub-
lic with Money, to the verifying of
Solo?non\ Proverb, That the Borrower
is Servant to the Lender,

I dare now appeal to the Creditors
themfelves, whether the Parliament's
endeavouring to reduce the Intereft
is a Tax upon them ; fuppofing it to
takeEfied : Whether it be taking from
them, any thing that they have a
Right to ; or. Whether the Offer made
them by Parliament has the leaft De-
gree of Compulfion in it, they being
at full Liberty to accept or refufe it ;
unlefs they will fay, that the Terms of

the


[9]

the Offer are fo good, that their oimi
Intereji compels them to accept
thereof.

Hoping I have now cleared the
Way tor preparing the Creditors to
conlider cahnly on which Side their
Interefl lies, whether to be at a Cer-
tainty for Eight Years, by accepting
the Parliament's Offer, or to refufe
the Offer, and fo remain liable, in
the manner they now are, to be paid
off when the Parliament fhall find it
the Intereft of the Public fo to do ;
I fhall apply myfeif to difcufs that
Point.

It may be proper, Firft, to fay
fomething in refped to the Timing
this Propofal, as well as of the Me-
thod which was chofen to proceed
in.

The Honourable Perfon, who pre-

fides- over the Money- Affairs of this

C Kingdom,


[lo]
Kingdom, did, as very well became
him, laft Seffions of Parliament, de-
clare his Hopes, that very foon an
Opportunity would come of reducing
the Intereft then payable on the
greateft Part of the National Debt ;
and that he thought it a Duty in-
cumbent on him, fo long as he
fhould remain in that Station, to em-
brace the firft Opportunity (that
fhould offer of doing it with the
ftrideft Regard to Public Faith) to
bring the Matter before the Houfe of
Commons, for its Cdnfideration. He
declared his Refolution to be fo firm
and fixed, that he defired to be put
in mind of what he then faid, if ever
he was found wanting therein.

This feemed to be generally well
received ; and to be the Opinion
of all, that it would be a right and
neceffary Meafure.


XI]

This public Declaration had a very
good EfFed : For as all the Funds rofe
in the Summer-time by the mere
Force of Money brought to Market,
People were in fuch Expectation, that
fomething would be done this prefent
Seffions towards lowering the In-
tereftj that at no time, after the Three
per Cent. Annuities were got to fell at
Par, did the Four per Cent. Bank
Annuities exceed them in Price, more
than between Four and Five per Cent.
which was a full Proof of the gene-
ral Exped:ation: By this means,
People were prevented from felling
out at very high Prices, to the Lofs
of thofe who fhould buy.

The Honourable Perfon before-
mentioned could not but fee, that a
proper Time was come for his laying
before the Houfe, what he had before
declared his Intention of doing ; and
accordingly was prepared againfl the
C 2 Firft


C X2l

Firft Day of the Sellion ; when an
Opportunity ojffered of his acquaint-
ing the Houfe with what he intended
to propofe, when a Day fhould be fet
apart for that Purpofe.

This was ading the moft fair and
honourable Part, to put every one
Upon a Level, as much as lay in his
Power ; and that no one fliould get
^ny Advantage, by knowing more
than others.

People have differed in Opinion,
which would be the beft Method to
be purfued in lowering the Intereft on
the National Debt. Some were for
borrowing of Money of thofe who
would lend it, by Lotteries, or other-
v/ife, and paying it to the Creditors ;
others for making an Offer to the
Creditors, to a certain Extent, of fuch
as fhould firfl come in, and the reft
not to have fo good Terms ; and
others, by the Method of making one

general


[ ^3]

general Offer to all the Creditors, who
Ihould accept thereof by a limited
Time.

It is probable, that the Firft would
turn out to be the cheapeft for the
Public : But then it muft have been
much the worfe for the Creditors ;
efpecially fuch of them, as could not
have received any Benefit by Sub-
fcriptions ; which I take to be by
much the larG;eft Number.

If the Second Method had been
taken, and fucceeded, great Num-
bers muft have been fliut out, for
want of being able, from feveral Cir-
cumftances, to make their Accept-
ance fo foon as other Creditors :
And, if all were inclined to accept,
there would not be room for them.
What juft Caufe of Complaint this
would have given to thofe who fhould
be fhut out without their own Fault,
is very evident.

The


C 14 ]

The laft Way feems to be the
faireft, and m oft becoming the Parlia-
ment to do ; becaufe none of the
Creditors can now complain, that
they have not had an Opportunity to
accept of the Propofal : For it has
been fufficiently publifh'd ; and they
have had Time enough to confider
of it, and to advife with their Friends
what is beft for them to do. And,
belides all this, in the Method taken,
there is nobody to ftep in, between
the Public and the Creditors, to get
any Money from both or either. And
furely this Method muft be moft
agreeable to the Creditors, and better
liked by them, than either of the
other Ways. They may be unwilling
to have theii' Intereft leflened by any
means ; but if they will fuppofe, that
it can be done in any fhape, without
cofting the Public more than the
Offer now made, they muft approve
of the Method taken: I fpeak of

Creditors


[ 15 ]

Creditors more particularly, who have
Annuities in the South-Sea or Bank,
and have no Profped of getting any
thing by any Sublcriptions for railing
Money. Every one of thefe has now
an Opportunity to judge for himfelf,
and accept the Propofal, if he pleafes,
without being out-voted in a General
Court, by People who, out of other
Views, may oppofe the true Intereft
of the Society : As for thofe who de-
fire Money- Subfcriptions for their own
private Advantage; I have nothing
to fay to them : I only wi(h, that
every Annuitant, who is not in that
Clafs, would follow his own Intereft,
and leave the others to raife Money
their own Way, to pay off them^
felves.

It is very remarkable, that in the
Houfe of Commons, when the Refo-
lution was come to, of making the
prefent Offer to tjie Creditors, there

was


[ i6 ]

was not one Perfon, who exprefled
any Defire of making the Terms bet-
ter for the Creditors. An Objedion
was made to the Method of pro-
ceeding by a general Offer ; becaufe,
as was alleged, it might have been
done cheaper by other means. After-
wards, in the Progrefs of the Bill,
it was propofed to leave out the
main Part of the Bill ; to wit, that
of the Creditors accepting of an An-
nuity of Three Pounds per Cent, per
Ann. after Chriji^nas 1757. But
this met with no Countenance; and
it would have been much better for
the Public to have laid the Bill afide,
than to give the Creditors an Annui-
ty of Three Pounds Ten Shillings
per Ce7tt. per Ann. to that time unre-
deemable by Parliament, without the
Creditors now confenting to receive
but Three Pounds per Centum per
Annum from that time ; which is
the Confideration for which the

Par-


[ 17 ]

Parliament grants that irredeemable
Term.

Had It been propofed in the Houfe
at the proper time, that the Creditors
were willing to accept of Three
Pounds Ten Shillings per Cent, per
Ann. redeemable by Parliament in the
fame manner as they now are, it is
not improbable, that the Parliament
would have accepted thereof: But
the Creditors were on the Referve,
and would not fay what they fhould
have been contented with; And
therefore the Parliament fixed fuch
Terms as they thought moft equal
and fair, between the Public and the
Creditors: And it cannot be denied,
but that the Terms are better for the
Creditors than it was generally ex-
pelled they would be ; and the Cre-
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