ot directed against it in this simple form. A surplus
of revenue obtained by moderate taxation, saved through frugal
expenditure, and applied to the reduction of the national debt, is
always a good thing. But the sinking-fund to which we chiefly refer
was a system of borrowing money to pay debt. It might be said that the
identical money which was borrowed was not the same which was used for
paying the debt; but it came to the same thing if the sinking-fund was
kept up while the nation was borrowing. Thus, taking the case of the
private borrower as we have already put it, if he took L.10 of his own
money and put it out at interest, that it might increase and pay off
his loan, and if, by so doing, he found it necessary to borrow L.110,
instead of merely L.100, it was virtually the same as if he applied
L.10 of the borrowed money for his sinking-fund. Thus for the year
1808, the state required L.12,200,000 in loan above what the taxes
produced. But in the same year L.1,200,000 were applied to the
sinking-fund; consequently, it was necessary to borrow so much more,
and therefore the whole loan of that year amounted to L.13,400,000.
The loan was increased exactly in the way in which our friend added
the L.10 to the L.100. It was borrowing money to pay loans.

The application of millions in this manner by our statesmen, was in a
great measure owing to the enthusiastic speculations of Dr Richard
Price, a benevolent, ingenious, and laborious man, who, unfortunately
for the public, possessed the power of giving his wild speculations a
tangible and practical appearance. He was, to use a common expression,
'carried off his feet' by arithmetical calculations. He believed
compound interest to be omnipotent. He made a calculation of what a
penny could have come to if laid out at compound interest from the
birth of Christ to the nineteenth century, and found it would make--we
forget precisely how many globes of gold the size of this earth. He
did not say, however, where the proper investments were to be made;
how the money was to be procured; and, most serious of all, he
overlooked that where one party received such an accumulating amount
of money, some other party must pay it, and to pay it must make it. In
fact, the doctor looked on the increase of money by compound interest
as a mere arithmetical process. The world, however, finds it to be a
process of working, and the making of money by toil, parsimony, and
anxiety.

When any on