Apply this to private
transactions. You are in debt L.110. You have L.10, and the question
is: Are you to pay it at once, and reduce your debt to L.100, or are
you to keep it accumulating at interest? It is much the same which you
do, only the latter is the more troublesome mode. If you pay it at
once, you will just have so much less interest to hand over to your
creditor. If you put it out at interest, you will have to pay over to
him what you receive for it, in addition to the interest of the L.100.
There is an incidental purpose for which it has been deemed right that
the government should, however, have a fund at its disposal--that is
for buying into the funds when they fall very low, and thus
accomplishing two services--the one the paying a portion of the debt
at a cheap rate, the other stopping the depreciation of the funds.
This is in itself we doubt not a very just practical object, but we
believe the sums that can be applied to it are very small in
comparison with the reserves which formed the old sinking-fund.
But another and a very different argument has been adduced, not
certainly for the re-establishment and support of a sinking-fund,
since its fallacy has been exposed, but against the policy of having
exposed it.
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