fion fhould take place. That, if it be not for the interest of the public, it should not be done at all. And that if it be not for the intereft of the stockholder, he (the stockholder) will not fubfcribe. To which I reply, that fingular as it may (at firft fight) feem to fome people, yet, upon a very little confideration, it will appear, that both the public and the ftockholder will be gainers by this propofed bargain; and for this reafon, namely, because the public has it (moft fortunately) in its power to give to the holder of 3 per cent, stock, that which it will not coft the public any thing to give, but which it will be very advantageous to the faid ftockholder to receive. And this is the hinge upon which the whole of my plan turns. I will now explain this diftinctly. $38. The nature of the agreement, which now fubfifts between the stockholder and the public, is this. The public has promifed to pay 3 pounds per annum as intereft for every 100l. capital of confolidated 3 per cents (for inftance). The public has promifed alfo never to pay off this 100l. capital at lefs than 100l. unless the holder of that stock, for the time being, fhall be willing (at any time) to accept of lefs than the faid 1ool. But, the public has not promised to pay off the faid capital upon demand. The public has not promifed to pay off the faid capital either on any fixed day, or within any given time. And the public has not bound itself to pay off the faid confolidated 3 per cents in any given order. But, the public are at perfect liberty to give the preference, in that refpect, to whichever of the holders of the faid 3 per cents the public may deem it expedient to prefer. 'Therefore, what the public has to give to the holder of confolidated 3 per cents, and which it will cost nothing to the public fo to give, is the right of priority of redemption. But this right of priority of redemption is, however, of great value to the faid holder of 3 per cent, ftock to receive.' Earl Stanhope afcribes to this fcheme, of priority of redemption, an extraordinary efficacy, of which, if maturely confidered, there seems very little reafon to expect that it would ever be productive. Inftead of the priority of redemption being an attractive object to the stockholders, we may fafely affirm that the stockholders in general are far from entertaining any defire that their stock should be redeemed. His lordship, however, flushed with the idea of its powerful operation, cenfures the conduct of Mr. Pitt, for not propofing to parliament a plan of converfion, before there was any expectation of a finking fund; because the profpect of redemption raises the funds, and prevents an advantageous bargain with the stockholders. The noble author appears not to be aware of the confequence which would have naturally refulted from such conduct. conduct. In propofing to parliament fuch a conversion, preparatory to the inftitution of a finking fund, Mr. Pitt muft have prepofterously published to the world a defign, which would have entirely fruftrated every beneficial effect of the propofal. His lordship's arguments are not more fatisfactory in a number of other particulars, which it would be tedious to enumerate. We have already, we fear, trespassed too much upon the patience of our readers on this subject. Before we conclude, we shall therefore only obferve in general, that these Obfervations are far from evincing fuch a degree of political fagacity as ought to have accompanied an address to the public on a fubject of fo great national importance. A Short Answer to Earl Stanhope's Obfervations on Mr. Pitt's Is. 6d. ON examining this pamphlet, we find that feveral of the remarks which it contains have been anticipated in our review of the preceding article. In giving an account of it, we fhall therefore confine ourselves to fuch parts as do not interfere with the obfervations already fuggefted on the subject. We fhall firft fubmit to our readers the author's observations on earl Stanhope's firft axiom, which are as follow. "When a commodity, which is intended to be purchased, is cheap, it ought to be bought before it becomes dear. And if the party intending to purchase has not money fufficient to buy the commodity forthwith, he ought to bargain for it; the price ought to he fixed; and the time in which the money is to be paid ought to be correctly afcertained." This, which he calls an axiom, is deficient in that clearnefs and fimplicity which fhould conftitute the very effence of fuch propofitions, and as far as it applies to the prefent queftion it refts entirely on a fallacy. The price of any commodity to be delivered at a given time does not depend on the actual price which it bears when the bargain is made, but on the price which the parties bargaining fuppofe it will bear at the time when it is to be deli vered. This confideration enters into the calculation made by the perfon contracting to deliver, as well as into that made by the perfon contracting to purchase. No advantage therefore neceffarily arifes to the buyer from making a time bargain at the period when the commodity is cheap. If the future value of the commodity can be known with certainty, both parties will avail themselves of that knowledge at the time of making the bargain, and no advantage will arife to either from the prefent value; if the future value is matter only of conjecture, and and fpeculation, both parties will fpeculate upon it, and the fpeculation of the buyer may be falfe as well as that of the feller. The axiom is not therefore generally true. It is not true in the particular inftance to which lord Stanhope applies it, because the future price of flock is matter entirely of speculation and conjecture. If the price of 3 per cents. fhould in the course of a few years rife confiderably above its present value, the stockholder who had accepted lord Stanhope's offer, and fold at 75, would lofe, and the public would make a proportionable profit. If on the other hand the price of 3 per cents. fhould in the fame period fall confiderably below its prefent value, the ftockholder felling now at 75 would gain, and the public would lofe exactly in the fame proportion. Lord Stanhope's axiom is not therefore true in this cafe, unless the public had any means of fpeculating on the future price of flock with greater certainty than the flockholder: but the public has no fuch means. If therefore, on juft grounds. of calculation, lord Stanhope's offer to the 3 per cent. ftockholders of 75 per cent. is only equal to the probable average value of that stock during the period of redemption, the public gain nothing by making the bargain now; but if it is lefs than fuch probable value, that is, if his fcheme is more profitable to the public than purchafing the ftock gradually at prices which it fhall bear at the feveral times of purchase, the ftockholders muft neceffarily lofe; there is therefore no ground to fuppofe that the stockholder will accept it. And this last feems in fact to be the cafe.' The remarks which occur in the anfwer, immediately after this extract, are likewife worthy of notice. In fec. 34, lord Stanhope accufes Mr. Pitt of having fuf fered the time to pafs when the 3 per cents, were at to, without ever attempting to fix their price; that is, without taking any meafure which fhould have prevented their rifing higher: his lordship complains that Mr. Pitt has raised the 3 per cents. from 60, he might have faid from 55, to 70. I believe that this is the first time any minifter was ever blamed for having raifed the public credit of the country: Mr. Pitt, by propofing efficient taxes; by checking the practices of illicit trade, and by a general and uniform attention to the collection of our revenue; by the encouragement of our commerce, and by the eftablishment of ftrict economy in all the various departments of the ftate, has added 15 per cent. to the value of the 3 per cent. flocks; he has confequently increafed all the other property in the kingdom, if not precifely in the fame proportion, certainly to a confiderable amount he has not only made the income of the country equal to its expenditure, but has alfo procured a furplus of a million per annum, to be employed in the reduction of the national debt. Such conduct earl Stanhope confiders as a fit fubject of serious accufation: he gravely com complains, that Mr. Pitt, by raifing the flocks, has wafted 18,600,000l. of the public money. I rejoice that his lordfhip feels him felf compelled to acknowledge, thas the prefent price of the flocks is owing to thofe wife and vigorous meafures which Mr. Pitt has adopted. I believe that the people of England will readily forgive Mr. Pitt for having brought public credit into its prefent,fituation: they will not be dif pofed to attend to lord Stanhope's attacks, when they know that the principal ground of his accufation is, that Mr. Pitt has raifed the 3 per cents. from 60 to 70; nor will they be more difpofed to liften to lord Stanhope's own plan of redemption, when they underftand that his profeffed object is to deprefs the value of the public funds, or, in other words, to make in this commercial country the intereft of money as high as poffible. Let us however fuppofe that Mr. Pitt had last year attempted to convert the 3 per cents. into fome higher flock, and that the inducement propofed had been that which is recommended by lord Stanhope-priority of redemption. We must recollect that last year our income was by no means equal to our expenditure, and that the idea of a finking fund of a million per annum, was treated by many as chimerical: under thefe circumstances, is it probable that priority of redemption would have operated as an inducement to convert? Such a preference would, I believe, at any time have very little effect; but at a moment when there was no finking fund, nor much hope of one in the minds of most men, an offer of converting, upon the condition of being first paid, would have been received with ridicule and contempt.' The author places in a very clear and strong light the fallacy of earl Stanhope's principle, refpecting the priority of redemption; and we have the pleafure to find that he coincides in opinion with the fentiments which we have expreffed. 6 It is afferted by his lordship, fays he, that the right of priority of redemption is of great value to the ftockholders. This is by no means true in general: that there are certain flockholders who may wish to be paid off, either from a want of their money, or a readinefs to alienate if they can derive any prefent advantage, I do not deny; but I contend that the ftockholders, in general are not defirous of their flock being redeemed. A moment's reflection will convince us that this muft neceffarily, be the cafe. The intereft arifing from the public flocks in molt cafes conftitutes a confiderable part of their annual income, and fupplies them with the means of fubfiftence. The nature of the fecurity, the ease with which the principal is invested, and the punctuality with which the interest is paid, are circumftances which render the public flocks more convenient and defirable to many perfons than any other mode of lending their money. money. Priority of redemption would by no means operate as an inducement to convert with perfons of this description; nor would the threat of poftponing the payment of their principal to a very diftant day, if they refuse to convert, in any degree induce them to accept the proposed terms of conversion: nay, I am convinced, that even that eloquent fpeech, delivered in earl Stanhope's best manner, which his lordship reprefents himfelf as making to an obftinate ftockholder, would not prevail upon him to change his determination. Priority of redemption, abstractedly confidered, is certainly nothing for the public to give; and as far as the generality of stockholders are concerned, it is worfe than nothing to receive. It appears, therefore, that this priority of redemption, which lord Stanhope is fo anxious to bring into the market, does not promise to be a commodity of a very valuable nature: its noble inventor feems, indeed, deeply impreffed with the idea of its merit; he regards it with a parental fondness, and attributes to it qualities which exift not but in his own imagination. Since, however, priority of redemption is the characteristic and leading principle of his plan, let us confider it in another point of view. If early redemption be really an object to the ftockholders, they will only be difpofed to convert, whilst they know, by the quantity of stock already converted, that their own ftock, if converted, will foon come in courfe of payment: when therefore there is a confiderable quantity of stock already converted, a person who knows that he fhall foon want his money, will in that cafe look only to the felling of his ftock, and will therefore have no inducement to convert. Thus this boafted inducement of priority of redemption cannot, from its nature, prevail to any great extent; it is weakened by every operation, and very foon becomes too languid to have any effect. I admit, that whilft the stocks are at 75, if lord Stanhope's terms of converfion were propofed, a certain quantity of stock would be fubfcribed: the amount of that quantity would depend upon this circumstance; whilst any stockholder thinks that his stock, if converted, will come in courfe of payment before the market price of the 3 per cents. rifes to 75, fo long the subscription will continue; not because the stockholder wants his money, or cares about the priority of redemption, on any other account, except that by converting on these conditions, he is certain of felling out at 75, and hopes to buy again into another stock under that price; but the moment a stockholder thinks that by the time the prefent converted stock is paid off, the 3 per cents. will be at 75, from that moment he will refufe to fubfcribe; or, in other words, whilst the terms of converfion are disadvantageous to the public, fo long the fubfcriptions will continue; but the moment the terms would ceafe to be difadvantageous to the public, from that moment the fubfcription would alfo cease. The fact is, that the stockholders will not convert under an engage. ment |