This exchange was made from stock of three per cent. to stock of three and a half. The principle of this measure was to raise so much of the required sums for the service of the year without increasing the nominal capital of the debt; that is to say, by creating a new three and a half per cent. stock out of the three per cent. stock; or, in other words, extinguishing so much of the three per cent. by converting it into three and a half per cent. and taking the difference from the purchaser for the public service of the year. The remaining eleven millions were raised in the usual way by the issue of exchequer bills; but that the money-market might not be disadvantageously affected by such an issue, this measure was accompanied by withdrawing and funding twenty-seven millions of debt and exchequer bills previously floating. This reduction of the floating debt was as seasonable this year as the increase of it had been useful in the preceding. In 1817 the Chancellor of the Exehequer had raised the money for the service of the year by exchequer bills rather than by a loan, because there was a saving in this process, and because the state of the unfunded debt in the market admitted the operation. The event justified the prudence of this preference, stocks having risen under its effect from seventy-five to eighty, being a saving to government of five per cent., or nearly two millions upon the capital of the loan. capital of the loan. But whilst this constituted a good reason for having increased the unfunded debt, in 1817, the actual quantity of it in the market, in 1818, formed a reason equally strong for its reduction at that period. Both measures, therefore, had been equally seasonable, according to the different circumstances of the money-market in the two years.

It was another feature in the Finance of this year, that though eighteen millions had been added to the unfunded debt, fifty millions had been paid off the national debt in the course of three years; so that the country had in fact paid off nearly three times as much as it had added, and the beneficial operation of the Sinking Fund was in full activity. In a word, the summary of the financial history for the year 1818 is, that, under the head of the current supply of the year, two millions were reduced from the amount of the former year; that, under the Ways and Means, three millions were raised without adding to the nominal amount of the national debt, and that about sixteen millions were paid off. The funds were raised from seventy-five to eighty, and the public credit of government so elevated in the money-market, as to open no distant prospect of the reduction of the four and five per cent. stock by an advantageous bargain with the capitalists. The number of the army was equally reduced with the amount of the supply. In 1817 the amount of men for Great Britain, Ireland, and

The number of men

the Colonies, was eighty-one thousand men. for the same service in 1818 was seventy-eight thousand men. This reduction was made on the Irish establishment only. In 1816 the amount for Ireland had been twenty-five thousand; in 1817 this had been reduced to twenty-two thousand; and in 1818 to twenty thousand. With such good faith to the country did ministers continue to adhere to their pledge in reduction and economy.

In the following year, 1819, the finances of the country, under this steady and uniform system of retrenchment, continued progressively to improve. The effects of the war, and of the sudden transition to a state of peace, were gradually passing away; and our navigation, trade, and commerce, were now adapting themselves to their new channels. It is true that our agricultural interests were not apparently restored to a firm and solid basis. Our agriculturists, like our manufacturers, had so extended the basis of their supply during the war, as to raise a produce considerably exceeding the general and ordinary demand, and by such an excess they necessarily reduced the price of corn.

In the speech by which the Prince Regent opened the session of parliament of the year 1819, his Royal Highness, as respected the financial state of that year, congratulated the country upon three new circumstances in the public condition-the withdrawing the army from France; the great reduction of the naval and military establishment; and the progressive improvement of the revenue in all its sources. By the evacuation of France, though the army in that country was chiefly supported by the French government, the British empire was necessarily relieved of much extraordinary expenditure, which could not be carried to the account of the pay and sustenance of the troops. In January, 1818, the revenue had been fifty-one millions and a half. In January, 1819, the same revenue had increased to fifty-four millions, an augmentation of three millions and a half upon the face of the accounts. But as the fifty-one millions of 1818 were in fact only raised to that amount by including an extraneous sum of four millions belonging to the arrears of war duties, property-tax, &c. the proper income of 1818 did not exceed forty-eight millions; and of course the real increase in 1819 was upwards of five millions, an increase exceeding ten per cent. upon the whole amount of the revenue and permanent taxes. In 1818 the committee of finance had estimated the whole revenue of the country at fifty-one millions and a half, and the expenditure at fifty millions, leaving a balance of one million and a half towards the expenses of the year. But the revenue of 1819 exceeded this estimate by three millions and a half. The condition of the revenue of 1819, was therefore such as to give an increase of three millions and a half towards the expenses of the year.

In taking the estimates for the supply of this year, his Majesty's ministers did not so presume upon this improved state of the public revenue, as to augment the establishments for the public service; but, on the contrary, persevered in their uniform efforts still further to diminish the expenditure. Throughout the four ordinary branches of the annual expenditure they took the supply at a diminished estimate. It is true, indeed, that the successive reductions, during the three former years, had almost exhausted the possibility of further economy, and that little remained to do where so much had already been done. But, under the actual burden of the national debt, the saving of even half a million in the whole expenditure was an important alleviation. Accordingly they directed their efforts to a further economy, and they accomplished this reduction. In the year 1818 the supply taken for the army was eight millions nine hundred and seventy thousand. In the year 1819, the supply for the same head was eight millions nine hundred thousand. For the year 1818 the supply for the navy was six millions four hundred and fifty-six thousand pounds. For the year 1819 the supply for the same service was six millions four hundred and thirty-six thousand. In 1818 the vote for the ordnance was one million two hundred and forty-five thousand pounds. In 1819 this estimate was diminished to one million one hundred and ninety-one thousand pounds. In 1818, the miscellaneous was taken at one million seven hundred and twenty thousand pounds. In 1819, the supply for this branch, was one million nine hundred and fifty thousand. The aggregate saving on the whole of the estimates, on the account for the year, was about half a million. The total amount of the supply for these four services for 1819 was thus a small excess above eighteen millions four hundred thousand; but including the interest of exchequer bills for the service of the year, and thus removed from the market, the total supply was twenty millions four hundred thousand pounds.

There were, moreover, two special demands belonging to the year 1819; the one for five millions in repayment to the Bank of five of the ten millions owing to that establishment; the other, also, for five millions in discharge of exchequer bills. The whole sum to be raised for the ordinary and extraordinary service of the year was a small excess above thirty millions. The Ways and Means of the year, for raising this large amount, and for establishing public credit upon a solid basis, were distinguished by two new measures; the one, a compliance with the recommendation of the finance committee in imposing new taxes to the amount of three millions, in aid of a surplus from the Consolidated Fund; the other, a loan of twelve millions from the Sinking Fund, for the service of the year. The first of these measures necessarily paved the way for

the adoption of the other, and, together with the actual amount of the Sinking Fund, (now nearly fourteen millions), added to the benefit of deriving some present relief from its immense accumulation, induced the ministers to yield to the strong representation of public opinion, and to raise a portion of the service of the year by the appropriation of some of this excess. The finance committee had passed a resolution, that the national finances of the country. would not be established upon a basis sufficiently solid and permanent, until the income of the year should exceed the expenditure by at least five millions. In order to raise the income of the country so as to produce this surplus, the same committee had recommended that three millions of new taxes should be imposed. Such was the origin of the new taxes The total supply for the year 1819, was therefore raised by the produce of the unappropriated annual taxes, by the three millions of new taxes, by twelve millions taken from the Sinking Fund, and the remainder by loan and exchequer bills.

It is assuredly not too much to say, that in the imposition of four out of five of these new taxes, the Chancellor of the Exchequer made such a selection of the subject-matter upon which they were imposed, that the burden of them is in practice so insensibly felt, that not one person out of five hundred can enumerate the subjects taxed. Indeed, so considerately, and with such just selection, were these new taxes imposed, that, up to the present period, they are paid by the consumer, and almost by the dealer, without the consciousness of any increase.

A third measure in the history of the finance of 1819, and which has only not received its due praise, because, like many other measures of his Majesty's ministers, the process of it has been less ostentatious than the effect visible, was in the transfer of several articles, under the heads of coffee, tea, cocoa, pepper, and tobacco, from the customs to the excise; by the effect of which almost all the expense of the officers hitherto employed in one department of the custom-house was saved, and a very considerable reduction thus made in the general expense of collection. It would far exceed the possible extent of this summary, to enumerate the many other examples of this mode of economy, in which, so much, and with so little pretension, has been saved to the nation. With his Majesty's ministers, economy has been a business, and reduction a duty; and they have felt it more to their honor to act than to talk. If they could reconcile it to their personal feelings to produce a claim to the public gratitude, with as much frequency and pertinacity, as their opponents can deem it consistent with candor to repeat day after day the same exploded charges; if in acts of duty, as in acts of grace, this commemoratio beneficiorum

was not quasi exprobatio in ingratam patriam; if it were as much a matter of course to repeat one's own deserts, as it appears to be to reiterate popular calumnies; it would be easy for ministers or their advocates to produce a long account of services of this nature, and to vindicate their claim to an uniform course of economy in every branch of the public service.

A fourth and prominent feature in the finances of the year 1819, was the bill, now popularly denominated Mr. Peel's bill; in which his Majesty's ministers first acted upon their resolute purpose to restore the currency to its original state; and, in the resumption of cash-payments, to re-establish the ancient security against an excessive issue of paper-money. It is but justice to recall to public recollection, that through all the difficulties of the latter period of the war, they never lost sight of this purpose. In distinction from the merely speculative opinions of their political adversaries, they never regarded the question of cash and paper to be a mere question of saving, as respected the price of bullion and coin. On the contrary, in concurrence with all practical men of the present day, they considered the main and principal value of cash payments to be in the single circumstance, that they contained in themselves a control and security against a too extensive issue of paper, and confined such issues to the real exigencies of trade and business. It is unnecessary to suggest the difficulties with which ministers had to contend in accomplishing this great national object of cash-payments; for national it may truly be called, inasmuch as if ministers had consulted their own personal convenience, and the facility of the administration, they would either not have attempted this measure at all, or have postponed it to a remoter period. It was not one of those measures into which they were pushed, either by party contest, or popular clamor. Their political adversaries were divided amongst themselves even as to the expediency of the object; and a very large portion of them advised and recommended a measure, which, though in form apparently the same, would in its practical operation, and by the difficulties in the way of procuring circulating cash, have perpetuated the paper system. But with the simplicity, and it is not too much to add, with the sincerity and directness, which have always distinguished the acts of the present government, ministers resolved upon a real and not a nominal execution of what they deemed a public service. Accordingly, the enactments of Mr. Peel's bill were directed at once to the resumption of cash-payments, and they have effected their purpose. When time shall have cleared away the political prejudices of the day, and public measures shall be regarded according to their real character, it will become the long praise of his Majesty's ministers, that they held this steady VOL. XX. NO. XXXIX. B

Pam.