The interest, as it is termed, of the national debt is virtually a multitude of perpetual annuities. In a country where there is so much superabundant wealth, there is so vast an amount of capital for which people only-want interest, that although the lenders of the money are not repaid by the government, yet when any one has invested in the funds, if he wants his money back, he is sure to find a person to take his place at some thing near to the price paid by him. This would not be the case were the quantity of these annuities in the market disproportioned to the number desiring to invest in them, and hence it is that when there is depression of trade, and money wanted to meet obliga tions, the funds fall. The government have the largest field of operation, and therefore it is natural to infer that their annuities are more closely adjusted to their actual value than those of insurance companies and other parties dealing in annuities can be. It may be mentioned, however, that, for the encouragement of the working classes to save and provide for old age and contingencies, government, through the savings-banks, grants small annuities on terms advantageous to the purchasers—that is, at less than their market value (see SAvDms-BAszKs).
Many complicated sets of tables have been prepared to facilitate the calculation of annuities. The latest known to us are the Commutation Tables for Joint Annuities and Surrirorship Assurances, based on the Carlisle Mortality at 3, 4, 5, and 6 per cent, by David Chisholm, 2 vols., royal 8vo, 1858. The calculations are brought out in deci mals. Taking the simplest of these tables—namely, those containing the value of an A. of £1, payable at the end of the first year, and thereafter annually (luring life—we find the following results, commuting the decimals into fractional money through Mr. Chis holm's decimal tables: In political economy, annuities come within the class of payments which tend rather to consumption than to accumulation or reproduction. As the means of attaining a
legitimate object, the establishment of an A. may be an advantage to the community'in benefiting some individual member of it. For instance, a man is naturally extravagant —he would spend his heritage immediately, and come to want, if it were paid to him in capital. It is therefore vested in an A.; the man is kept in comfort, and society is not burdened with a needy member. Women are apt to mismanage by false investments or otherwise any capital sums left at their disposal, and therefore it is often advantageous to give them an equivalent in an A. In serving, however, these its legitimate objects, it will be seen that the money so spent is not in its character reproductive. People do save capital out of annuities; but, as a general rule, the object and effect of annuities are in the direction of consumption as contrasted with accumulation. This is often overlooked in settlements, especially by men who have themselves been accumulators. The con sumptive effect of an A. will depend much on its coming out of fixed or fluctuating property. Take, as an instance of the former, a landed estate. If the clear rent be paid an annuities, the estate will not be improved, and it will be stagnant in the proportion so paid. If, out of a thousand a year, nine hundred be thus paid, the owner, out of his remainder of a hundred, is not likely to accumulate sufficient capital to improve the estate and double its value. But fluctuating property may not only be rendered stag nant, but may be destroyed by the burden of injudicious annuities. This is frequently exemplified in disposing of the profits of a business. Different members of a family are portioned off upon it, as if it were a fixed permanent estate; and consequently, there is not a sufficient balance left to induce any one to give his time and energies to the management of the business.