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the great organ of Bolingbroke and Pulteney, describing the condition of the country in 1736, says, 'The vast load of debt under which the nation still groans is the true source of all these calamities and gloomy prospects of which we have so much reason to complain. To this has been owing that multiplicity of burthensome taxes which have more than doubled the price of the common necessaries of life within a few years past, and thereby distressed the poor labourer and manufacturer, disabled the farmer to pay his rent, and put even gentlemen of plentiful estates under the greatest difficulties to make a tolerable provision for their families.' Walpole himself declared that the country could not stand under a debt exceeding a hundred millions.2 Hume maintained that the ruinous effect of the debt already threatened the very existence of the nation, and Chesterfield, only a few months before the great ministry of Pitt, predicted that in the next year the army must be unpaid or reduced, as it would be impossible for the country a second time to raise twelve millions.1


By far the larger part of the existing National Debt was created by Tory Governments, and in pursuance of a Tory policy. In the time of Walpole, however, the debt was looked upon as distinctively Whig, the special creation of the Revolution. And this view, though not rigidly accurate, contained a very large measure of truth. The events of the Revolution drew England into a series of great land wars upon the Continent, which made an unprecedented military expenditure inevitable, while the position of the new Government was so insecure that it did not venture largely to increase taxation. The land tax, which was by far the most important addition made to the revenue under William III., was in a great degree merely a compensation for the abolition of the hearth tax. Besides this, the insecurity of the new establishment raised enormously

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the rate of interest on Government loans. It rendered necessary a considerable standing army in time of peace, and it was a temptation to Whig Governments to strengthen their position by multiplying a class of persons who were bound to the new dynasty by pecuniary ties. In the reigns of William and of Anne, money was chiefly raised by anticipating the produce of certain taxes for a limited number of years, by annuities granted on very extravagant conditions for a term of years or for lives, and also, from the great mercantile corporations in return for commercial privileges. After the accession of the Hanoverian dynasty most loans took the form of perpetual annuities. The attempts which were made to diminish the burden of the debt consisted chiefly in the reduction of its interest. This policy appears to have been first pursued in Holland. The Dutch debt bore interest of five per cent., and when in 1655 it was found possible for the State to obtain money at four per cent. the creditors were offered the alternative of the reduction of the interest or the payment of the principal. The former was readily accepted. An annual saving of 1,400,000 guilders was thus made, and it was applied to the gradual payment of the principal of the debt.2 In 1685 Pope Innocent XI., in a similar manner, reduced the interest on the Roman debt from four to three per cent.3 I have already noticed the arrangement which Godolphin made with the East India Company in 1708 for the reduction of the interest upon a large sum which the Government had borrowed from that company; but no general scheme for the reduction of the interest of the debt was devised before that which was originated by Walpole in 1716, and carried out by Stanhope in the following year. For some time the increase of prosperity had greatly lowered the normal rate of interest. Under William the Government had borrowed money at seven and eight per cent. Under Anne it usually borrowed at five or six, and in 1714 the legal rate of interest was reduced to five per cent., though the Government

For the extravagant terms on which loans were raised under William, see Sinclair's Hist. of the Revenue, i. 417-421.

2 Macpherson's Annals of Commerce, ii. 463.

Ibid. p. 622.

funds still paid a much higher rate.

Under these circumstances

it was found practicable to reduce the interest of the debt to five per cent., the Bank and the South Sea Company, which were the chief creditors, not only consenting to the reduction, but also lending money to pay off the creditors who refused to acquiesce. Particular taxes had been appropriated for the payment of the interest, and as they now yielded more than was sufficient, the surplus was formed into a sinking fund accumulating for the payment of the principal of the debt.'

In this manner a very considerable saving was made, and a step taken which was more than once repeated. The payment of the debt, however, was not pursued with any energy by Walpole. A second reduction of interest took place in 1727, and it greatly increased the sinking fund, but that sinking fund was at the disposal of the Government, and the temptation of drawing from it in every season of emergency was irresistible. It is not necessary

to attribute any very high motives to Walpole in this matter, but he would probably have maintained that in the condition in which England then was, it was more important to make the' people contented, and to reconcile the country gentry to the new dynasty, than to pay off the debt. Certain it is that he made the reduction of the land tax rather than the payment of the debt the end of his policy. For a few years the sinking fund was applied to the purpose for which it was intended, but in 1733 500,000l. were taken from it for the services of the year; in 1734 1,200,000l. were taken for similar purposes, and in 1735 it was all anticipated. But though no great credit can in this respect be given to Walpole, his Government was at least an economical one, and the care with which he husbanded the resources of the country, and the skill with which he developed its commerce, broke the chain of associations which connected the Whig party with a policy of debt and of extravagance.

Still more remarkable, when we consider the period in which he lived, was his deference to public opinion. Parliament, was at this time no faithful representative of the public feeling

1 See Macpherson, Chalmers, and Sinclair.

and in Parliament he was supreme. But no Court favour, no confidence in an obsequious majority, ever induced him, except in a single case to which I shall hereafter advert, to fall into that neglect of unrepresented public opinion which has been the fatal error of so many politicians and the parent of so many revolutions. In few periods of English history have libels against the Government been more virulent or more able; but, from policy or temperament, or both, Walpole treated them, for the most part, with perfect indifference. No Government,' he boasted in one of his speeches, 'ever punished so few libels, and no Government ever had provocation to punish so many.' In the last reign Parliament and the tribunals had vied with each other in their persecution of the press. Defoe, Steele, Drake, Binckes, Tutchin, Sacheverell, Asgill, and a crowd of obscure printers had been fined, imprisoned, pilloried, censured, or expelled from Parliament. But under Walpole the system of repression almost ceased, and if the extreme violence and scurrility of the stage, and the success with which Gay and Fielding employed it against his administration, induced him, in 1737, to carry a law providing that no play could be publicly acted without the licence of the Chamberlain, this measure can hardly be regarded as one of excessive severity, as it remains in force to the present day. As a minister, Walpole combined an extreme and exaggerated severity of party discipline within Parliament, with the utmost deference for the public opinion beyond its walls. In his party he aspired to and attained the position of sole minister. He gradually displaced every man of eminence and character who could become his rival, avoided as much as possible calling cabinet councils, lest they should furnish the elements of an opposition, and usually matured his measures around a dinner-table with two or three colleagues who were specially conversant with the matter in question; sometimes, when the project was one of law reform, with lawyers of the Opposition. Important despatches were received and answered without being communicated to his col

'See Campbell's Lives of the Chancellors, vi. p. 110.

leagues, and if they ventured to resist his decisions he treated them with the utmost despotism. Sir Robert,' said the old Duchess of Marlborough, with her usual shrewdness, never likes any but fools and such as have lost all credit.' Lord Hardwicke and Mr. Pelham were constantly employed in composing the quarrels which arose from the slights he continually inflicted on the Duke of Newcastle; and the strength of the Opposition that overwhelmed him was mainly due to the number of men of talent whom he had discarded. When the excise scheme was abandoned he peremptorily dismissed Lord Chesterfield, the Duke of Montrose, Lord Marchmont, and Lord Clinton, who had revolted against his standard, and, by an extreme and unjustifiable stretch of authority, even deprived the Duke of Bolton and Lord Cobham of their military rank. But the minister who was so imperious in his dealings with his colleagues or subordinates rarely failed to mark and obey the first indication of a public opinion that was hostile to his projects. His withdrawal of Wood's halfpence, when they had excited the opposition of the Irish people, the uniform moderation of his religious policy, his abandonment of his project of excise, are all examples of his constant respect for the wishes of the people. Few ministers have had greater facilities for carrying out a favourite line of policy in defiance of their wishes. No minister more steadily resisted the temptation. His conduct on the excise question, as it is related by an old Member of Parliament who enjoyed his intimate friendship, is typical of his whole career. He possessed in a full degree the pride and parental affection of a statesman for the great measure of his creation, and he was keenly sensible of the humiliation of abandoning it at the dictation of an Opposition. No one knew better how irrational was the popular clamour, or how factious were the motives of those who instigated it. The Bill passed by large majorities through its earlier stages, but the minister saw that the country was deeply moved; and the evening before the final stage was reached he summoned his adherents, who had so far borne him in triumph, and he consulted with them on the

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