receives payment of them, and the management of the system is expensive; if a man who is in debt borrows merely for the purpose of paying his debt, and transacts the business himself, he merely exposes himself to more trouble than he would have encountered by continuing debtor to his former creditor; if he employ an agent to transact the business, he is a loser by the amount of fees paid to that agent. These truths Dr Hamilton is not content with proving argumentatively—he has coupled them with a minute history of the various financial proceedings of the country, and tables of practical calculation, giving, on the one hand, historical information ; and, on the other, showing the exact sums which the government has at different periods misapplied. Along with Mr Pitt's system of finance, he has given an account of that of lord Henry Petty, established in 1807; a complicated scheme, the operation of which seems not to have been perceived by its inventor, and which, had it continued for any length of time, might have produced effects-more ruinous than those of any system which has been devised. The summary of his proofs and discussions on the subject, as expressed in his own words, is not very flattering to the principle which has been in general followed: "The excess of revenue above expenditure is the only real sinking find by which the public debt can be discharged. The increase of the revenue, or the diminution of expense, are the only means by which a sinking fund can be enlarged, and its operations rendered more effectual; and all schemes for discharging the national debt, by sinking funds, operating by compound interest, or in any other manner, unless so far as they are founded upon this principle, are illusory." But it cannot be said that Dr Hamilton has looked with a feeling of anything resembling enmity on the object of his attack; he has allowed the sinking fund all that its chief supporters now pretend to arrogate to it, although the admission comes more in the form of palliation than of approbation. "If the nation," he says, "impressed with a conviction of the importance of a system established by a popular minister, has, in order to adhere to it, adopted measures, either of frugality in expenditure, or exertion in raising taxes, which it would not otherwise "have done, the sinking fund ought not to be considered inefficient: and its effects may be of great importance."—"The sinking fund," says an illustrious commentator on Dr Hamilton's work, in the Supplement to the Encyclopaedia Britannica, following up the same train of reasoning, " is therefore useful as an engine of taxation;" and now that the glorious vision of the great financial dreamer has vanished, and left nothing behind it but the operation of the ordinary dull machinery, by which debts are paid off through industry and economy, one can hardly suppose that the great minister who set the engine in motion, was himself ignorant (however much he might have chosen others to remain so) of its real powerlessness. The discovery made by Dr Hamilton was one of those few triumphant achievements, which, founded on the indisputable ground of practical calculation, can never be controverted or doubted: and although a few individuals, from a love of system, while apparently admitting the truths demonstrated by Dr Hamilton, in attempting to vindicate the system on separate grounds, have fallen, mutato nomine, into the same fallacy,[1] the Edinburgh reviewers, Ricardo, Say, and all the eminent political economists of the age, have supported his doctrine; while the venerable lord Grenville—a member of the administration which devised the sinking fund, and for some time first lord of the treasury—has, in a pamphlet which affords a striking and noble specimen of political candour, admitted that the treatise of Br Hamilton opened; his eyes to the fallacy of his once favourite measure.
A year after the publication of this great work, the laborious services of the
- ↑ Vide "A Letter to lord Grenville on the sinking fund, by Thomas Peregrine Courtenay, Esq., M. P., London, 1828."
