CHAPTER III

CONSOLIDATION. THE ORIGIN OF THE STOCKS

In its origin the sinking fund had been associated with a conversion of debt. The surplus which was to be devoted to redemption had been derived from a reduction of the rate of interest on public securities. But there was obviously no necessary connection between these two methods of dealing with the debt. Hence, although the sinking fund had practically disappeared as an effective means of debt redemption after 1733, some relief might still be expected from a reduction through conversion operations of the annual charge.

In 1737 the rise in the price of the stocks led Sir John Barnard to bring forward certain proposals for the reduction of the debt. The prices of the Three Per Cents., South ...

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