1733.

ALIENATION OF THE SINKING FUND.

189

that the produce of the duties, too insignificant to attract the cupidity of the mother-country, lay for many years unclaimed in the royal exchequer. The Americans regarded it purely as a commercial arrangement, and when it was subsequently drawn into a precedent for instituting a regular system of taxation, at once dangerous and unconstitutional, their surprise and resentment broke out into an insurrection that ended in the establishment of their independence.

As the time for announcing the great scheme of revenue reform drew near, Walpole, probably with a view to test his influence with the house beforehand, introduced a motion for alienating a portion of the sinking fund for the present purposes of the state. This daring and dishonourable measure darkens the glory of his life, and has extorted, even from the most partial of his biographers, an unequivocal expression of censure. Such a proposal would have been discreditable coming from any quarter, but at the hands of Walpole, the author of the sinking fund, it was suicidal. In order to render the character of this measure intelligible, it will be necessary to enter into a few retrospective details.

The sinking fund, composed of the surpluses of duties and revenues, was originally formed by act of parliament for the liquidation of the national debt; and its application to that object alone was strictly enjoined by the act, which explicitly declared that it was to be appropriated to and for none other use, intent, or purpose whatever." This enactment was scrupulously observed throughout the reign of George I., and the fund gradually increased to such an amount, that ministers were enabled to reduce the national interest from 6 to 5 per cent., and to discharge in the course of a few years, from 1717 to 1728, no less than 2,698,4167. Its ave rage amount was now estimated at 1,200,000l. had no sooner attained this power than silent encroachments began to be made upon it, by appropriating to other purposes either the taxes which yielded the sur

But it

pluses, or the surpluses themselves, thus forestalling the sums that ought to have been paid into the fund, an ingenious procedure which evaded the direct violation of the law, while it virtually alienated those sources of revenue which the law assigned expressly for the reduction of the debt. As these encroachments, however, were not literally made upon the fund itself, they attracted little notice and less opposition. It was reserved for Walpole to make an open attack upon the sacred deposit he had contributed to create for the national creditor, and which he had fenced round with statutory safeguards.

Half a million of money being voted for the service of the year, Walpole proposed to take it out of the sinking fund, which he said would enable him to continue the land-tax at one shilling in the pound; adding, that if the proposition should be objected to, he knew no means of providing for the expenditure except that of restoring the land-tax to its original rate of two shillings. His speech on this remarkable occasion was short, but it contained the whole of the reasons that could be urged in defence of the measure. He asserted that the public expense ought always to be raised in the way that was least burdensome to the people; that it was absolutely necessary to ease the landed interest; and that, on the other hand, the public creditors, so far from being anxious to have the principal of the debt paid off rapidly, desired nothing so much as to have it protracted. "The competition amongst them," he observed, "is not who shall be paid first, but who shall be paid last.” As to the right to alienate the fund, he maintained that it was wholly at the disposal of parliament.

The sagacity of the minister was never evinced with more effect than in this memorable proceeding, which, violent and faithless as it was, nevertheless was one of the most popular measures of the administration. It was necessary to raise money to meet the expenditure contingent upon a system of pacification which was nearly as costly as a war, because it required the country

1733.

RESISTED BY THE OPPOSITION.

191

But how was that mo

to be always prepared for war. ney to be raised? The people were opposed to an increase of their burdens, and might readily be supposed to favour the alienation of the sinking fund in preference to the imposition of new taxes. The monied interest, suffering serious depression at a time when the bank was making loans at three per cent., could not have been more effectually served than by a measure which arrested the liquidation of the debt, and sustained, if it did not increase, the value of money. And the landed interest, which had hitherto almost uniformly opposed the government, propitiated by the diversion of the burden from their own shoulders, were naturally pleased to see it thrown upon a quarter in which they were not directly involved, and which hardly seemed to affect any class of the people. The proposal, consequently, carried with it the concurrence and support of these three considerable interests, while it conciliated an important parliamentary section which had never before cordially acquiesced in the policy of the government.

In vain the opposition laid bare the seeds of flagrant injustice and future ruin that were sown by the project in vain they warned the minister of the iniquity of pillaging a sacred deposit that was intended to accumulate for the benefit of posterity, to free the nation from encumbrances, and strengthen her resources by liberating her trade and industry; in vain they conjured him not to destroy with his own hand the great monument of his own fame; and in vain sir John Barnard, in the heat of a prolonged and furious debate, emphatically prophesied " that the author of such an expedient must expect the curses of posterity." That minister, says a modern historian, must have been more than man had he preferred the blessings of posterity to the curses of his own age, or sacrificed present ease to the dread of remote evils.*

The predictions of the opposition were accomplished

* Coxe.

even more swiftly than their worst fears could have led them to anticipate. The sanction of parliament being once obtained for the alienation of the fund, it continued to be appropriated without intermission to the necessities of the state. In 1734, the whole produce of the year,, 1,200,000l., was taken from it; in 1735 it was antiticipated; and in 1736 it was mortgaged. Walpole must have foreseen this result, and, probably, contemplated it as inevitable. But he legislated, not for England, but for his own age; and relied upon his excise scheme to restore, in times to come, the fabric he thus wantonly sacrificed to the pressure of expediency. Nor can he be very seriously blamed for adopting such a course, when we find that in a house consisting of 380 members he carried the motion by a majority of 110

votes.

In the course of the debate, Pulteney attempted to force Walpole into some explanation of the views he was suspected to entertain concerning the institution of an excise. "There is another thing," he exclaimed,

66

a very terrible affair impending! A monstrous project! Yea, more monstrous than has ever yet been represented! It is such a project as has struck terror into the minds of most gentlemen within this house, and into the minds of all men without doors, who have any regard to the happiness or constitution of their country —I mean, that monster, the excise! that plan of arbitrary power, which is expected to be laid before this house in the present session of parliament." Walpole remained silent under this infliction; and on the 27th of February moved for a call of the house on that day fortnight, which again roused all the fury of the opposition. Sir John Rushout declared that they had waited with impatience ever since the beginning of the session for the " glorious scheme" that was to make them all happy, and he hoped it would not be put off till the end of the session, when gentlemen were tired out with attendance, and obliged to return home to mind their own

*Price on the National Debt.

1733.

POPULAR FRENZY.

193

private affairs. To this insinuation Walpole calmly replied, that he certainly had a scheme which he intended very soon to lay before them; that he never desired to surprise the house in any thing, and thanked God that he never had any occasion to use the low art of taking ad`vantage of the end of the session for any thing he had to propose. He concluded by observing, that if a project could be framed to prevent the frauds committed in the revenue, the author of such project would deserve the thanks of his country and of every fair trader; because taxes not duly collected were a premium to the smuggler, and an oppression on the fair trader, which frequently ended in his ruin. The soundness of this reasoning was incontrovertible; and sir William Wyndham, the mouthpiece of his party on this occasion, was driven to the stale expedient of lustily demanding whether the constitution was to be sacrificed to the prevention of frauds in the revenue?

The interval between this by-scene and the call of the house was busily occupied on both sides; by the minister in preparing his measure, and by the opposition in inflaming the clamour out of doors, and making a strong party against it within. All this time, nobody knew what the scheme really was to be, in what form it was to be submitted, or what interests it was intended to touch. All that was known, or, more properly, suspected, was that Walpole intended to introduce something in the shape of an excise; an experiment which was regarded with such horror, that it was represented as a monster feeding on its own vitals, and compared to the Trojan horse, which contained an army in its belly.

The agitation that was created by the prospect of such a measure, amounted to a species of popular frenzy. The writers and orators in the ranks of the opposition left no means untried to work up this frantic spirit into commotion: they sounded the trumpet of alarm from one end of the kingdom to the other; and did not hesitate to assert that the plan would tear up the constitution by the roots, annihilate the parliament, invest the

VOL. X.