dreadful picture of a madhouse, appropriately represents one of his
principal figures hard at work on it. But the remarkable thing--and
what shews the perilous nature of such speculations--is, that these
theories were worked out by chancellors of the exchequer, and adopted
by parliament. There was a faint sinking-fund so early as 1716; but
Walpole one day swept it up and spent it, having probably just
discovered that it was a fallacy. It was in the days of the younger
Pitt, however, that it came out in full bloom. After it had been for
several years in operation, a retired and absent-minded mathematical
student, Robert Hamilton, shewed its falsity in a book printed in
1813. The exposure was conclusive, and no one since that time has
ventured to support a sinking-fund.

As already stated, it is a very good thing to save something out of
the revenue and pay off part of the debt. But no good is done by
keeping it to accumulate at interest, because the debt it would pay
off is just accumulating against it. 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