Democratic Sentinel, Volume 18, Number 17, Rensselaer, Jasper County, 11 May 1894 — Sinking Funds. [ARTICLE]

Sinking Funds.

The sinking fund is a plan origi. nally devised by Sir Robert Walpole to wipe out the debt owed by Great Britain to the Bank of England. The first sinking fund act of 1716 provided for the setting aside each year of a certain portion of the revenue to pay off the principal of the debt. In 1786 William Pitt cansed the second sinking fund act to be passed by parliament. By this one million pounds a year were to be set aside at compound interest, and in a few years the amount was to be enough to discharge the national debt. This is like lifting one’s self by his boot straps, for taxation was to provide the interest on the principal, which in time was to abolish taxation. But the English sinking fund continued with modifications until 1875, when a “new sinking fund” was established, and a third was begun in 1883, by which a large portion of the British debt will be cancelled in a few years. In this country a sinking fund was established in 1862, by which a large part of the surplus over revenue has been applied to paying off our public debt. Ours is a real sinking fund; that of Great Britain, when the payment to it is made from surplus receipts, is also one.—[Trenton (N. J.) American.