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Front Page  Titles (by Subject) FINANCIAL SITUATION OF THE COUNTRY 21 February 1823 - The Works and Correspondence of David Ricardo, Vol. 5 Speeches and Evidence
FINANCIAL SITUATION OF THE COUNTRY 21 February 1823 - David Ricardo, The Works and Correspondence of David Ricardo, Vol. 5 Speeches and Evidence [1819]Edition used:The Works and Correspondence of David Ricardo, ed. Piero Sraffa with the Collaboration of M.H. Dobb (Indianapolis: Liberty Fund, 2005). Vol. 5 Speeches and Evidence 1815-1823.
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FINANCIAL SITUATION OF THE COUNTRY
21 February 1823
The new Chancellor of the Exchequer (Mr. Robinson), anticipating the Budget, made an exposition of the financial situation of the country; he expected a surplus of more than 7,200,000l. and proposed to reduce or repeal several of the assessed taxes. Mr. Maberly intimated his intention to propose a plan for hastening the operation of Pitt’s land tax redemption act [on this plan, see p. 259 below].
Mr. Ricardo said, he remembered, that at the termination of the last session, he had frequently to repel the attacks which were made upon the science of political economy. He had been delighted, however, to hear the plain, sound, practical, and excellent speech, which had been delivered by the right hon. gentleman opposite; and he thought that the science of political economy had never before had so able an expositor as it had now found in that House. He thought that there never yet had been in that House a minister filling the situation which was held by the right hon. gentleman, who had in that capacity delivered sentiments so candid, so wise, and so excellent. In all the statements which he had made, it was impossible not to follow him with the greatest ease and safety; for it was in all these quite clear, that each of them was, in fact, as the right hon. gentleman had put it. But, there was this one difference—an important one, certainly—between him and the right hon. gentleman. The right hon. gentleman had stated the surplus of our income over our expenditure at 7,000,000l. Now he (Mr. Ricardo) had contended last year, and did still contend, that the transaction respecting the commutation of the pension charge, was only a transfer from one hand to the other. This evening the right hon. gentleman had introduced into his surplus of 7,000,000l. a sum of 2,000,000l. to be received; he would like to know from whom? Could the right hon. gentleman himself tell? On the one side of the account he had put an amount of 2,800,000l. to be paid for pensions and half-pay; and on the other side, he had stated, that he was to receive 4,800,000l. from the trustees, whoever they might be, who were to pay such pensions and half-pay; and of these two items, the balance was 2,000,000l. to be repaid, of course, to these trustees or commissioners themselves. Undoubtedly, therefore, from this assumed surplus of 7,000,000l. of actual income over expenditure, there must be deducted these 2,000,000l., which the sinking fund itself was to supply. If this view of the subject was correct, the right hon. gentleman when he should have carried his plan into effect, of giving the proposed relief to the country, would actually leave them with a clear sinking fund, not of 5,000,000l., but of 3,000,000l. This was the only difference in point of statement between him and the right hon. gentleman. But he could go along with the right hon. gentleman in every principle that he had applied to the sinking fund; as applicable to the diminution of our debt in time of peace. But, this was always in the supposition, that we did actually possess such a sinking fund, and that it could be so applied to pay off our debt. So convinced was he of the necessity, the indispensable necessity of getting rid of this tremendous debt, that he had before ventured to suggest the expediency of a general contribution from the capital of the country for that purpose. He would contribute any proportion of his own property, for the attainment of this great end, if others would do the same. If this proposition should be thought extravagant, or if it should be supposed that the contribution he should suggest was excessive, why not ask for a smaller contribution of capital for the same object? As to the other parts of the right hon. gentleman’s speech, he considered that taxes raised in order to pay off debt, ought to be looked upon in a very different light, from those that were raised for the immediate services of the state. The one, we might be considered as paying to ourselves; the other was for ever lost to us. As to the plan proposed by the hon. gentleman who spoke last, he had few or no remarks to offer upon it. His scheme for the reduction of the debt, by paying off the land tax, was, as far as he (Mr. R.) understood it, quite practicable. It did exist, indeed, to some extent, at the present moment; but the hon. gentleman’s plan would, perhaps, increase its facilities. The hon. gentleman, however, in his plan for the reduction of taxes, went much too far; for he seemed to consider, that the clear surplus, which they had to dispose of, after allowing for the 2,200,000l. which the right hon. gentleman proposed to remit in taxes, would give a sinking fund of 5,000,000l. Now, he said, that the hon. gentleman went too far, on this ground—that we could not have such a sinking fund applicable to such a purpose. And here he would beg leave to call the attention of the House to a pamphlet which had been lately published under the auspices of ministers themselves. [Hear, hear! from the Treasury Bench.] Well, he did not know how that might be; but this he knew, that it contained arguments which were constantly in the mouths of ministers. In this pamphlet the sinking fund was made applicable to two or three different objects: and first of all, it was efficient for paying off debt. If so, it was clearly efficient for no other object. If a man applied the surplus of his income to the payment of debts, he surely could not apply it to any other purpose. But the pamphlet proceeded to say, that the fund was efficient for carrying on war in case of an emergency, if allowed, in the mean time, to accumulate at compound interest. This was as if the real object of the fund was, in the event of any aggressions by an enemy, to enable us to fight that enemy, in case of a war. But if so, why did not ministers confess it? Let them at once openly avow their object. But he thought that the more constitutional course would be, in case we should be required to repel the aggressions of an enemy, for the ministers of the crown to come down to the House and acquaint it with the necessity of providing for the expenses of a war that was about to be undertaken, rather than to retain the sinking fund at its present establishment, with the view of making it available on such an emergency. He did think that there was something mysterious in this doctrine of making that which was supposed to be applicable to paying off our debts applicable to the expense of a war.
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