CHAP. V.

OF STOCK-HOLDING.

SECT. I.

THE NATURE OF THE PUBLIC STOCKS.

THE public ftocks of Great Britain is an invention in imitation of the ftate of Florence, which, in the year 1344, owing 60,000l. and being unable to pay the principal, converted the debt into a public stock, transferable from one individual to another, with intereft at 5 per cent.: these public ftocks were called a bank or mount, and the prices varied according to the state of public affairs.

In imitation of this, foon after the revolution in Great Britain, the expenfes of fettling the new establishment, carrying on long wars on the Continent for reducing the French monarchy, fecuring the Dutch barrier, fettling the Spanish fucceffion, &c. increased to such a degree, that it was thought advisable to draw upon pofterity, rather than reduce the state by an immediate payment.

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It was therefore the policy of minifters of that day to raise a public ftock with transferable flares, thus converting the debt into a new species of property, for the fecurity of which Parliament pledged their faith; and this example has been clofely followed ever fince.

This fyftem laid the foundation of what is called the national debt, to which every stock-holder is a creditor.

Thus

Thus the property in the kingdom in idea has been greatly increased, compared to that of former times; but if we in quire into the nature of this property, we shall find it exifts only in name, in paper, and public faith; but that is fuffi cient for the public creditor to rely upon, for the pledge is nothing less than the land, the trade, and perfonal industry of the fubject, from which fources the money must arise to pay the intereft; in thefe, therefore, the property of the public creditors does really exift, confequently the value of the land, the trade, and industry of the fubject, are diminished in proportion as the debt increases.

To demonftrate this, if a debtor owes 100l. the creditor has a demand upon him to that amount, and though he may not call upon him for the principal, yet so much of the debtor's estate is always transferable to the creditor; and the fame principle holds good with regard to the public creditor.

Therefore the property of every stockholder consists in a certain portion of the national debt.

To pay the intereft, and, if required, the principal of this debt, certain taxes are appropriated: these taxes were originally separate and distinct funds, and each of them was a fecurity for a certain fum advanced; they were afterwards united together in three capital funds, which are the principal funds of any account, called the general fund, the aggregate fund, and South Sea fund; and the funds thus united together are become mutual fecurities for each other, and the whole produce of them liable to pay the intereft charged upon each.

The furpluffes of these three funds, over and above the intereft charged upon them, are directed to be at the dif pofal of the Parliament, and are ufually called the finking fund, because originally defigned to reduce the national.debt: to this have lately been added several other duties granted in later years.

This finking fund, with the other duties added thereto, is the laft refort of the nation, on which muft depend all our

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hopes of discharging our incumbrances. But by a statute paffed in the 26th year of Geo. III. Parliament vefted one million annually in commiffioners for the reduction of the debt: in which act several provifions are made to prevent this fund from being appropriated to any other purpose at any future time. In confequence of this act 8,200,000l. had been redeemed in February 1792.

Since which period imposts have been applied to the fame purpose, particularly the redemption of the land-tax; and several new loans have been opened on different conditions.

SECT. II.

SIMPLE AND COMPOUND INTEREST.

SIMPLE intereft is the allowance made by the borrower any fum of money to the lender, according to a certain rate per cent. per annum, which is limited by law to 5 per cent. per annum, that is, 51. for the ufe of 100l. for one year, and 10l. for the use of it for two years, or 1ol. for the use of 2001. for one year.

Principal is the fum of money lent.

Intereft or rate is the fum agreed upon for the use of the principal.

Amount is the principal and interest added together *.

*In the courts of law intereft for money lent is computed for years, quarters of years, and fingle days. But for the intereft on public bonds belonging to the South Sea and India Companies, and the fecurities of the Bank of England, the time is generally computed in calendar months and days, and on Exchequer bills in quarters of a year and days.

Simple Intereft.

Rule. Queftions that concern interest are refolved by the rule of three; thus

Multiply the principal by the rate of intereft, and divide the product by too, and the quotient will be the intereft for one year.

Then multiply the intereft for one year by the number of years given, and the product is the intereft for that time. But when parts of a year are given, then find what aliquot part or parts of a year such part is, and take an equivalent part of the interest for one year; or find the interest for such part by the rule of three direct.

Example. What is the intereft of 2451. 10s. for 2 years 4 months and 50 days, at 3 per cent. per annum?

In this example I first multiply the 2451. 10s. by the rate per cent. 3, and the product divided by 100 quotes 8. 11. 1od. for the interest of one year. Then by the rule of three direct I find the intereft for 50 days, which is 14. 35. 64d.

And by the rule of practice I find the intereft for 2 years 171. 35. 8d. and also the interest for 4 months, or one third of the year, 24.175. 34d. which 3 added together, the fum is 21. 45. d. for the answer.

Questions concerning intereft alfo are refolved by the double rule of three; thus the foregoing example may be wrought, faying, if rool. gain 31. 10s. per cent. in 1 year, what will 245/. 10s. gain in 2 years 4 months and 50 days? Qu. 2. What is the intereft of 461l. for 1 year, at 4 per cent. per annum? Ans. 181. 8s. Ed.

Qu. 3. What is the amount of 345%. for 3 years, at 4 per cent. per annum ?—Anf. 3911. 115, 6d.

Qu. 4. What is the intereft of 4117, 10s. for 3 months, at 4 per cent, per annum ?-Anf. 41. 25. 3 d.

2.5. What is the amount of 2411. for 2 years, at 44 per cent. per annum? Answer 2691. 125. 4d.

2u. 6. What is the amount of 400 guineas for 4 years 7 months and 25 days, at 4 per cent. per annum?-Answer 5071. 185. 9d.

Qu. 7. What is the intereft due upon an Exchequer bill of 900l. at 3 per cent. per annum, for 2 years and 67 days?-Anfwer 991, os. 11d.

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