Catastrophe of the Funding System.

The natural and inevitable tendency of debt, either in nations or individuals, is bankruptcy. Efforts will be made, by the Oligarchy, to avert, as long as possible, this lasting reproach of their unprincipled policy; they will try to economize in this, and retrench in that; they will be like beasts of prey environed by the hunters, they will seek escape on all sides, but, finding every outlet closed against them, they will then resort, as the only refuge from the difficulties in which they have wantanly involved themselves, to their last expedient—an attack on the funds. Perhaps it will not be this session of parliament, nor the next; but, that the period is approaching, we feel as confident as that we are now writing. It is the most feasible of all projects: it would attack a mass of property, and of individuals that are incapable of resistance, who are not represented, and who would sink as silently as a stone dropped into the great deep. Moreover, it would be the salvation of the system; it would not touch the Church, nor the Aristocracy, nor the Rotten Boroughs, nor the Sinecures, nor the Barracks; all the abuses of administration would be saved and perpetuated, for the affliction of the world and posterity. We do, however, trust there is sufficient justice and humanity in the nation to avert the perpetration of this national crime, which would afford complete impunity to those whose mal-administration has, alone, rendered it necessary. The man who first suggests a confiscation of the funds, under the pretext of equitable adjustment, unaccompanied with a radical change in our institutions, ought to be ejected from political communion as the worst enemy of Reform and the People. Let us, however, shortly consider the degree of injustice, the extent of suffering, and the misgovernment that would be perpetuated by the adoption of such a mean of surmounting the public difficulties.

Three points present themselves for consideration: 1st. The obligation imposed on the community to keep faith with the public creditor. 2d. The extent of distress and suffering which would be occasioned by a breach of this obligation. 3d. And lastly, The facilities it would afford for the perpetuation of an usurped and pernicious power.

With respect to the first, it is certain that funded property stands on a higher and more legitimate basis than any other description of property in the kingdom. It is created by recent acts of parliament, of the meaning and import of which there can be no difference of opinion: the present possessors of this property hold it by fair and lawful assignment, and the whole nation are living witnesses of the contract and execution. The estates of the Church, of the Aristocracy, and even of individuals, are not secured and attested by such strong and solemn authority. The Church has, at least, only a life-interest in its possessions, and this under the express stipulation of discharging the religious duties of the community. The estates of the nobility are of extremely dubious origin, mostly obtained by plunder and confiscation, and then held under the tenure of defending the country in war, of coining money, administering justice, and preserving the peace; all which duties they have long ceased to discharge. Next, as to the estates of individuals: they have, in many instances, been obtained without valuable consideration, or are held by a fraudulent and imperfect title; none of which can be alleged against funded property. It follows from this that there is no description, even of real property, which might not be seized with a greater semblance of justice than that of the fundholder, and that any the least encroachment on the funds would be a more flagrant outrage on all those ties by which property is made sacred and secure, than could in any other way be perpetrated.

We come next to the second consideration,—The extent of distress and suffering consequent on a breach of faith with the national creditor.

It is a most mistaken idea to suppose that the great mass of funded property belongs principally to monied men and capitalists. These have rarely much property in the funds; if they have, it is only a portion of their unemployed capital, which they occasionally lodge there for a few days or weeks, to accomplish some stock-jobbing speculation, or till they find for it a more profitable investment. Neither has the Aristocracy or Church considerable deposits in the funds: most of the former, from waste and extravagance, are steeped in debt and mortgage, and, notwithstanding their enormous incomes, from rents, tithes, and taxes, they have hardly a shilling to spare for necessary expenses; and the rich Clergy, from similar want of prudence and economy, are in a not less embarrassed predicament. The great bulk, therefore, of property permanently invested in the public securities is trust-property; property left for charitable uses; property belonging to suitors in Chancery; small sums belonging to officers retired from service in the army and navy; the funds of friendly societies and savings’ banks; and a vast number of small annuitants, consisting of minors, orphans, widows, old maids, bachelors, and families retired from business and the world, whose sole dependence is on the receipt of their half-yearly or quarterly dividends, and who having vested the whole proceeds of a weary life on the faith of the nation, any attack on the funds would, to them, be as sudden and overwhelming as a stroke of lightning.

On this part of the subject we have authentic data to proceed; we know, from accounts laid before parliament, the number of public annuitants, and the amount of property vested in the funds on account of benefit societies, savings’ banks, and suitors in Chancery. From a parliamentary paper, (No. 41, Session 1830,) it appears the total number of persons receiving half-yearly dividends, on the different stocks, constituting the Public Debt, amounts to 274,823; of which number there are who received,—

Several annuitants have property in two or more separate stocks, as in the three per cents. and three-and-a-half per cents. so as to receive dividends quarterly: suppose nearly one-third are of this description, and, instead of 274,823, there are only 200,000 national creditors, who share among them the whole interest of twenty-eight millions, payable on the public debt; in which case each receives, on an average, only £140 a-year.

Think of the consequence of extinguishing, or even abridging these petty incomes! What impoverishment and destitution it would create among widows, orphans, the aged, and infirm. How many funds, destined for charitable uses, or for mutual assurance against misfortune, and amassed with difficulty out of the earnings of the industrious, would be violated! From official returns, in 1829, it appears there are, in the United Kingdom, half a million of contributors to Savings’ Banks, whose deposits amount to upwards of 17 millions. In 1830 the number of depositors in Savings’ Banks in England only, was 367,812; their total investments £13,080,255, averaging £34 to each depositor. The number of members of Friendly Societies, in 1815, amounted to 925,429; and the property belonging to them, vested in the funds, amounted to 40 millions. These funds have been raised and guaranteed by special acts of parliament, so that to encroach on them would be a shameless and flagrant violation of the public engagements.

It is not, however, the public annuitants only that would suffer by the measure we are considering; the calamity in its direct and indirect consequences would fall almost exclusively on the middling and industrious orders. Nearly the whole interest payable on the Debt is expended in support of the domestic trade, manufactures, and agriculture of the kingdom. A large portion of the revenue of the higher classes is consumed abroad, in the support of menial servants, or in articles of luxury, which create hardly any traffic or employment; whereas the incomes of the public annuitants are chiefly spent among ourselves, in the employment of the artisan and labourer, and in dealings with the grocer, baker, butcher, linen-draper, victualler, builder, carpenter, &c. It follows that any diminution in a revenue so expended would inflict incalculable mischief on the whole internal trade and economy; it would be the most hurtful of all remedies that could be applied to our embarrassments; for there is no other description of property, the violation of which would cause such wide-spread misery, distress, and mercantile stagnation. A man, therefore, who brings forward such a scheme must not only be an enemy to the general welfare, but he must be thoroughly depraved, and an alien to all those principles of justice and feelings of humanity which fit an individual for social communion and intercourse.

We come to the third and last consideration, namely,—The facilities a breach of national faith would afford for the perpetuation of usurped and pernicious power.

If established authority be adverse to the general interests, whatever tends to its continuance and support is pernicious;—whatever adds to the power of the weak and unprincipled is criminal. If the government of this country be so administered as to be unjust and oppressive, whatever tends to avert its reform or prolong its existence must be reprobated by every patriotic mind. Now it is certain that to tolerate any the least attack on the funds would place an uncontrolled and almost unlimited power at the mercy of the administration. Should ministers be once allowed openly to reduce or to tax the public annuities, or to encroach upon them under any form, they would possess an inexhaustible resource for domestic profusion and future war. The whole interest of the Debt would be at their mercy, and, in gradually reducing it, they would have the means, for a century longer, to pursue the same career of folly and injustice which they had pursued in the century that is past. Thus the Debt, instead of an incumbrance, would be a real treasure, to which they could resort on every emergency. No matter how small the tax at first imposed; if the principle be once admitted, they might gradually augment their exactions on the public creditor; the machinery would be made, and would only require working; in a word, it would be merely retaining the money in their own hands, instead of paying it half-yearly to the fundholder.

The first step in this proceeding would be the most delicate, and require great caution and considerable hypocrisy in the execution. First, probably, only a tax of one per cent. or even a quarter per cent. would be proposed, accompanied with deep expressions of regret on the imperious necessity that had rendered necessary such a painful alternative. Having got the handle to the axe, they would proceed with a slow but sure step, screwing up the fund-tax, like the income-tax, till at length it equalled, in amount, the dividends, or, in a word, expunged the Debt!

Such a villainous procedure would, doubtless, raise a great outcry; many would exclaim against the violation of public faith, and of the injustice of sacrificing a part for the whole; but ministers would easily find excuses. They would first eat up all their former declarations on the great advantages of national integrity, and would expatiate on the great advantages of national bankruptcy. They would plead the alteration in the currency as one pretext for their injustice; they would urge the great law of self-preservation, which forbids either individuals or nations to bind themselves to their own destruction; they would enlarge on the impolicy and unreasonableness of adhering to engagements that would destroy the sources of productive industry, and, ultimately, entail ruin on all classes, even the annuitants themselves. Lastly, they would plead the example of other states, of their “magnanimous and august allies,”—the members of the Holy Alliance and Protocol conferences,—all of whom had been once or twice bankrupt, and necessitated to compound with their creditors. The knavery and sophistry of such reasoning would be apparent to all; but the majority being benefited by the injustice, it is probable they would be inclined to wink at the transaction, and the poor fundholder become the scape-goat of the community.

It may appear improbable, at first sight, that a government, founded on the basis of a regard to “property, morality, religion,” and an abhorrence of “blasphemy,” should resort to such a disgraceful expedient, to such unprincipled sophistry; especially, too, as a breach of national faith would be a violation of the principle to which they have been accustomed, on all occasions, to ascribe the prosperity, glory, and independence, of the empire. This, certainly, at first view, appears improbable; but, if we examine the subject more closely, we shall find that it is not without precedent, and that it would be less inconsistent with former practices than former professions of our rulers.

First, there is the Bank Restriction Act of 1797. This measure, in its nature, was full as unprincipled an attack on the rights of private property and the sacredness of previous engagements as a breach of national faith could possibly be. Secondly, there are various suspensions of the Habeas Corpus Act—the passing of bills of indemnity for all sorts of crimes—the forging of French assignats—the attack of Copenhagen—the blowing up of the Spanish ships, and the affair of Terceira: all these measures are so atrocious, so repugnant to every principle of law, humanity, and justice, that it would be chimerical, in the highest degree, to suppose that the men who could advise and participate in them, would be scrupulous in the observance of their engagements with the public creditor.

Yet the shame, the disgrace, the infamy of a breach of faith would be so great; it would lay bare so completely the unprincipled policy of the last forty years; it would so entirely unmask the principles of the Oligarchy, exposing them to such execration and derision, that we may expect it to be staved off to the last day; and when, at length, it is attempted, it will be disguised, under a thousand pretexts, to hide its deformity from the world. Come, however, it must; for there is no other alternative likely to be adopted; the contest is betwixt rent and tithe, and high official emoluments on one hand, and the payment of the dividends on the other: to pay the latter the former must be sacrificed. But can any one doubt the issue of the conflict? Can it be doubted which party will go to the wall, should the Borough proprietors continue to monopolise the franchises of the people? The lords of the soil possess all political power; they have the boroughs, the barracks, and the powder-mills at their command; they will take care of themselves; and, judging from the facts we have enumerated, there is no reason to suppose their love of justice is so extreme as to induce them to abandon their all to preserve inviolate public faith.

Before, however, the fundholders are sacrificed, all other classes will be degraded: so loth will be the Boroughmongers to touch their great stalking-horse of public credit, that they will endeavour to support it on the ruins of the other orders of society. First, probably, as being most exposed to their attacks, the poor-rate will be attempted; next in order come the other unrepresented interests of the community, the profits of all the productive classes—the farmers, merchants, and tradesmen. If the degradation of these classes, if the appropriation of the whole of their revenue, except that portion necessary to a bare subsistence, be insufficient, then the fundholder will be assailed, rather than rent and tithe should be materially reduced. This is what we call the catastrophe of the funding system. Without a parliamentary reform all classes will be sacrificed to the preservation of the Aristocracy. When the full payment of the dividends encroaches on the sources of their own incomes, they will be forcibly reduced, and the only favour shown to the fundholder will be that of being last devoured!

We have thus briefly traced what appears likely to be the catastrophe of the funding system, the consequence of an attack on the funds, its flagrant injustice, the distress and suffering it would occasion, and the lasting impunity it would afford to corruption and misgovernment. We were anxious to do this at the present moment, because if by any unforeseen event the hopes of the nation should be a second time shipwrecked in regard to the “Bill,” and the Tories regain their ascendancy, it is not improbable the desperate expedient of robbing the fundholder would be tried, in order to silence the cry of a starving population for economy and reform. We trust, however, the public will be on its guard against this horrible project; like all frauds, it will be clandestinely and insidiously introduced; therefore it behoves them to be constantly on the alert. So long as the Debt is safe, it is the best ally of the People, but the moment it is violated, it is the best ally of Corruption.

If a general sacrifice be required to save the country, a change in the representation is an indispensable preliminary. The House of Commons, in lieu of representing the people, represents only the government which it ought to control, in the various branches of the executive, the aristocracy, the church, the army, navy, and public offices. Embodying such partial interests, the general weal must be invariably compromised, and no equitable settlement can be made. Admit the intelligence and property of the nation to have their due weight in the public councils, and the best and most salutary measures must necessarily be adopted, and equity and safety found for all.

This is all the people require; they do not want pity nor charity; and those who, during their periodical sufferings, are constantly preaching patience to a famishing population, would do well to change the word for justice from their rulers. Justice from oppression is a virtue; patience under undeserved suffering a crime!