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64 that there was no burden on the tax-payer, but rather that the burden was not perceived; just as in the modern arrangements connected with the Terminable Annuities, debt is paid off by an arrangement which in reality lays on the tax-payer a burden just as heavy, though not so easily discovered, as the sum annually voted for the direct extinction of debt. There are however other objections to the plans of Dr. Price besides those just mentioned. A Sinking Fund is apt to be looked upon by ministers as furnishing resources which in a time of need they may squander at pleasure. A war is begun. The operation or the fund is at once stopped, and a few millions are taken from it to be spent on warlike preparations. Meanwhile no increase of taxation takes place, and no increase of the national burdens being felt, no attention is given to the additional expenditure. It may also often happen that a greater benefit will accrue from lightening the public burdens than by keeping up taxation for the reduction of debt, and this objection was certainly full of force in the last century.

Price, and following him Shelburne, had the merit also of being among the first to attack the practice begun by North, and since frequently followed, of funding by increase of capital; a practice originating in the neglect of the consideration, that the country when it borrows may have to look forward not merely to paying a perpetual annuity, but eventually to repaying the principal of the debt. It may seem to be a matter of indifference whether £100 is borrowed in a five per cent stock at par or in three per cent stocks at 60. When however the moment for repayment arrives, the stocks originally worth sixty in a time of national distress, will probably have risen to a far higher quotation, and the nation will have to repay at that quotation, losing the difference. Moreover a three per cent stock at 60 afforded greater prospects to speculation than a five per cent stock at par, and it was therefore easier to negotiate loans by increase of capital than by increase of interest.