Sinking fund

sinking fund is a financial and administrative entity of state whose mission is the spreading of the public debt .

The case of France

The principle of a “sinking fund” intended to spread the public debt is already in the “Political Testament” of Richelieu : after having conducted a policy of borrowing via the system of constituted annuities , he stresses the urgency of put in place an “extraordinary fund allowing a quick amortization” of these. It states that the increase in the service of the public debt in the long run kills income from taxes and sizes 1 . He took the example of the superintendent of finance of Henry IV, the Duke of Sully , which between 1597 to 1610, paid back nearly 100 million interest accrued interest, while moderating the level of taxation.

The Loan Fund created by Jean-Baptiste Colbert , if it provided for a depreciation over 10 to 30 years, was overwhelmed by the Extraordinary which accounted in liabilities huge amounts of expenses generated by the War of Spanish Succession .

At the beginning of the xviii th century , during the financial reform of his country, Robert Walpole introduced this institution in England. The years 1715-1725 see, for its part, France caught up with a huge debt estimated at the death of Louis XIV to nearly 3 billion pounds tournaments . The service of this debt amounting to 780 million, the financial markets, at that time, do not follow and the bankruptcy is effective in 1720. In an arbitrary manner, including through the operation of the visa , the State divides this debt in half, and a first sinking fund is created by financier Joseph Pâris in 1725: the government can again honor the service of its debt, which means that it can issue new loans and that they will find buyers in the market, especially abroad, the confidence being restored.

In 1749, the minister Machault makes adopt a new plan for France, but the execution is postponed until 1764 when the banker Jean-Joseph de Laborde tries to create a box which is liquidated in 1769.

The organization of the amortization of the public debt, although modified in 1784 and 1799, was not satisfactory: neither the convocation of the States-General which led to the suspension of any reimbursement, nor the liberal reforms introduced under the Directory did not permit the correct amortization of the debt.

The law of April 28th, 1816, separated the Sinking Fund from the deposit and consignment fund ; the former was intended solely for the redemption of the public debt and placed under the supervision of a commission appointed partly by the legislative power, partly by the executive power. A new law of March 25, 1817, doubled the endowment of the sinking fund.

Main article: Public Debt Fund .

On August 7, 1926, Raymond Poincaré instituted a new sinking fund, recovering the profits of SEITA (tobacco control board), the name of which varies over time: “Autonomous fund for the management of national defense bonds and securities.” ‘amortization of the public debt’, then ‘Autonomous fund for the management of national defense bonds, for the industrial exploitation of tobacco and matches, and for the amortization of the public debt’, then, in 1986, ‘Caisse autonome d’amortisation de public debt “(CADEP) and finally in 2003, through its merger with the pension fund ,” Caisse de la Debt Publique “(CDP).

Some cases other than France

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Great Britain

United States

Russia [ change | change the code ]



  • Cash register (France)
  • Guarantee and Depreciation Fund (France, 1800-1816)
  • Caisse d’amortization of the social debt (France)
  • Autonomous Sinking Fund (Cameroon) , renamed National Investment Bank
  • Autonomous Sinking Fund (Benin)
  • Autonomous Sinking Fund (Ivory Coast), renamed Public Debt Accounting Agency


  • The sinking fund in the archives of the Ministry of Finance [1]  [ archive ]
  • Historical Dictionary of the Institutions, Mores and Customs of France Adolphe Chéruel (1809-1891) – Paris, 1899 (public domain) [2]  [ archive ]

Notes and references

  1. ↑ ” Depreciation of the debts of the state, its origin and its history in France until 1790  [ archive ] “, by Maurice Roy, in Library of the School of Charters , 1883, Volume 44, No. 44 , p.  96-98 .

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