The Simplified Wealth of Nations of Adam Smith, Book 5, Chapter 3: Perpetual funding

Chapter 3b: Anticipations and Perpetual Funding

13 In Great Britain, the land and malt taxes are regularly anticipated every year by a borrowing clause. 14 In the reign of King William and Queen Anne perpetual funding was not yet familiar. 15 In 1697, by the 8th of William III., c. 20, the deficiencies of several taxes were charged on the first general mortgage or fund. [first anticipation]16 In 1701, those duties with some others, were further prolonged until August 1, 1710 for the same purposes. 17 In 1707, those duties were further prolonged as a fund for new loans to August 1, 1712. 18 In 1708, those duties were all further continued as a fund for new loans to August 1, 1714 except for: It was called the fourth general mortgage or fund. [third anticipation]19 In 1709, those duties were all continued to August 1, 1716 except for the Old Subsidy of Tonnage and Poundage which was now all left out of this fund. 20 In 1710, those duties were again prolonged to August 1, 1720. 21 In 1711, the same duties, with several others, were continued forever. 22 Before this period, the only perpetual debts were the money advanced to government by: 23 In 1715, by the 1st of George I., c. 12, the taxes mortgaged for paying the bank annuity were accumulated into one common fund called The Aggregate Fund. 24 In 1717, by the 3rd of George I., c. 7, several other taxes were rendered perpetual and accumulated into another common fund, called The General Fund. 25 Because of those different acts, most of the taxes which before were only anticipated for a few years were rendered perpetual. 26 Had money only been raised by anticipation, the public revenue would have been liberated after a few years.27 During the reign of Queen Anne, the market interest rate fell from 6% to 5%. 28A sinking fund is instituted for the payment of old debts.

Next: Chapter 3c: Annuitues