TRANSFER OF STOCK.

59

National Debt books. If he disposes of the whole or any part of it, this is again transferred from his name to that of its new proprietor. The registry books are arranged alphabetically in the Bank of England, and distributed in several apartments, marked with the initial letter and syllables of the book they contain. Thus everybody is able to find the exact place where his account is kept. The business of buying and selling stock, however, is almost entirely in the hands of the stockbrokers, who become agents for the parties who wish to procure or part with it, and transact all the necessary operations upon their behalf. The Bank of England manages the payment of interest upon the funds for Government.

The value of a nominal 1007. of stock fluctuates according to the abundance or scarcity of money in circulation. During the last hundred years the market price of 100%. in the 3 per cent. consols has been as low as 471, and as high as 1014. Anything that tends to endanger or lessen the national prosperity causes the Funds to sink, and vice versa. Foreign nations have attempted to keep up the price of their stocks by force of law, but have failed signally. Money, like water, will find its own level, and no legislative enactments will cause any permanent increase, or the contrary, in its value.

I saw that you were much puzzled once when your uncle and I were talking of the price of money. You thought, no doubt, that sovereigns and shillings were of a fixed and unalterable value; and as far as regards their shape and weight they are so. But really and practically they are no more than pieces of gold and silver, worth just as much as you can get in exchange for them, and no more. A sovereign represents so much land or so many legs of mutton, or pieces of ribbon, or cricket-bats, or anything else that we may require. If there are only a very few legs of mutton in the market, and plenty of sovereigns to buy them with, the holders of money must (practically) compete with all other persons requiring meat, and give as much for it as any of them will pay. If, on the other hand, legs of mutton are numerous, and there are very few sovereigns in circulation, the tables are turned-the butcher must compete (in the same way as before) for the money, and give as much meat as others will in return for the gold. Therefore, when you say that certain things are cheap or dear, you mean, in other words, that they are plentiful or the reverse.

For the gradual reduction of the principal of the National

Debt, sinking funds were established; the first by Sir Robert Walpole in the year 1716, the second by Mr. Pitt in 1786. By the latter an estimated surplus of 900,0007. in the revenue was augmented by taxes, so as to make up a sum of one million; and this was to be applied every year towards paying off the public creditors. As long as this, or any surplus remained over expenditure, it might be properly and successfully applied to this purpose; the time came, however, when there was no such thing, but the sinking fund did not disappear with it. We were soon at war again, and obliged to make new loans to supply a deficiency, but the 900,000l. were still applied as before, and the fund still deserved (in one sense) the term by which it was known, for it was sinking the nation deeper and deeper in debt. We were discharging liabilities upon which a small amount of interest was due with one hand, and contracting fresh ones upon which we had to pay a large interest with the other. We were, in fact, following the example of the Irishman in the story, who, finding that his blanket was not long enough to cover the upper part of his bed, cut a piece off its other end to supply the deficiency! The financiers of the day were deluded by a fascinating theory that the sinking fund accumulating upon compound interest (that is, interest upon interest) would in time equal the debt. Dr. Price, at whose instigation the second sinking fund was established, attempted to prove this by calculating how many globes of gold a penny invested at compound interest at the birth of Jesus Christ, would amount to at the date of his investigation. But to secure the marvellous increase effected in time by compound interest, all the proceeds must be re-invested and added to the capital, not expended as income; and this was never actually done. Experience proved that the system was a fallacious one, and it was discontinued. Now nothing but actual excess of revenue over expenditure is applied for the reduction of the National Debt.

One of the methods successfully adopted for decreasing the amount of interest paid upon the funds, was for Government to offer-when it had a surplus in hand—to redeem sums of stock unless the holders agreed to accept a lower rate upon them; and as this was proposed at the market price of the day, they were frequently willing to do so.

Most other nations have contracted public debts, but the National Debt of England exceeds the heaviest known; and this fact is often thrown in our teeth, when the greatness of

AMOUNT OF NATIONAL DEBT.

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our country is the subject of discussion. But such is the vastness of our trade and the elasticity of our resources, that the impost is by no means insupportable. Indeed some maintain that we are better off with it, than we should be without it. I do not go so far as this. The debt, however, is the price we pay for the position (out of all proportion to their geographical limits) which these little islands have won. Some of the wars for carrying on which it was incurred, might have been averted probably, or brought to speedier termination; but others were most necessary, and, taking the rough with the smooth, it is very fair that posterity should bear a portion of the burden, as they participate in the experiences and benefits it secured.

The following table will show you the amount of the National Debt (both funded and unfunded) at various periods of our history down to the year 1866

1802.

1763. At the end of the Seven Years' war Three years after the American war

1786.

1798. After the Irish rebellion and foreign war Close of the French revolutionary war

1814.

139,000,000

268,000,000

462,000,000

571,000,000

Close of the war against Buonaparte

865,000,000

When the English and Irish Exchequers were

consolidated

840,850,491

Our average revenue during the reign of William III. was about 4,000,000Z.; in that of George I. it was 6,000,0007.; in that of George II., 8,000,0007.; in the year 1788, it had risen to 15,572,9717. In 1820 the sum raised by taxes in the United Kingdom was 65,599,5707.; in 1825 it fell to 62,871,3007.; in 1830 it was 55,431,3177.; in 1835 it was 50,494,732; in 1845 it was 51,067,8567.; in 1850 it was 52,951,4787.; in 1855, during the Russian war, it was 84,505,7887.; in 1864, 70,313,000l.; and in 1868 it was 70,000,000Z.

To show you the wealth of our country, the declared value of our exports was—

With regard to the disparity in value which exists between our exports and our imports, I may observe that it used to be urged that this showed an unsound state of commerce. The balance of trade, it was said, was against us, as we took more from foreign nations than we gave. I can show you the fallacy of this argument by a very simple illustration. Suppose a merchant were to send to America (for example) 10007. worth of goods, and selling them at a profit, ship homeward a cargo of the value of 1500%. If this arrives safely his imports exceed his exports, and (according to the above theory) he is rapidly becoming bankrupt; but if they all sink to the bottom of the sea and are lost, then he is a most flourishing trader. Exports are the price of imports, and (as gold is now reckoned in the category of both as an article of commerce) it is quite clear that if we buy more than we sell it must be because we are selling at a profit.

LETTER IX.

LOCAL GOVERNMENT.

Its Principle, Origin, and Objects-High Sheriff and Lord Lieutenant of the County-Local Rates-the Parish and its Officers-The Constable-Church wardens-Surveyor of Highways-The Vestry, General and Select-The Poor Law-The Law of SettlementOperation of the old Poor Law-The new Poor Law-Municipal Corporations-Town Councils-Mayor and Aldermen—Boards of Health-Improvement Commissioners.

You now know how the general government of the kingdom is carried on. I purpose, in this Letter, to show you how the affairs of the counties, cities, boroughs, and parishes of which it is composed are regulated.

It is a fundamental principle of the British Constitution, that all persons and communities shall be allowed to manage their own affairs as long as they do so regularly and according to law. For it is only natural to conclude, that those whose comfort and welfare are to be considered, who will be the first and principal sufferers by neglectful or bad government, are much more likely to know what ought to be done than strangers, however well intentioned they may be, who have not the same knowledge and experience. The powers of local governments are fixed by the common law, by charter from the Crown, and by Act of Parliament.

The most ancient division of the country for the purpose of self-government was into shires, hundreds, and tithings. At present the usual divisions are counties, hundreds, boroughs, and parishes. The ministerial and judicial business of the county is transacted by the High Sheriff, the Coroner, and the Justices of the Peace, and is enforced in it by the former and his officers. Its military government is confided to the Lord Lieutenant, who, when occasion requires, with the aid of his Deputy Lieutenants, calls out the Militia, of which force he has the command; and the commissions of all its officers, with the exceptions which I shall state hereafter, are signed by him.