DEBT, NATIONAL, is the amount which any state admits itself to owe to those who may have advanced money for the use of the government on occasions when its expend iture has exceeded Its ordinary income. As in the case of individual debtors who sometimes engage to pay more than they obtain from the lender, the mount of a national debt may not be the amount which the nation has borrowed; it is Often greater, from the necessity of holding out to capitalists, as an inducement to make a largo advance, that they will be set down as creditors for more than they have given. On the other hand, it may happen, though of rare occurrence on a large scale, when money is bearing low interest, a nation may give its creditors the alternative of receiving pay went, or allowing a deduction from the nominal amount of their debt, and they may prefer the latter alternative. When the term, " the national debt," is used by itself, it is always, understood to refer to that of our own country, which until recently was the heaviest in the world. It amounts, in round numbers, to 731 millions of pounds. It is now exceeded by that of France. That country having been entirely bankrupt during the first revolution (sec ASSIONAT), its existing debt may be said to date no further back than the consulate, when credit was restored. On the first return of the Bourbons, before the battle of Waterloo, it amounted to 123 millions of pounds; it had increased before the Franco-German war to 460 millions; and between 1870 and 1876, it mounted up to 936 millions. The debt of the kingdom of Italy is very large in proportion to its resources, amounting to 395 millions nt the end of 1874. That of the Austrian empire, exclusive of the special debt of Hungary, amounted, on 1st July, 1873, to 306 millions, and a foreign loan of 12 millions was added in Nov., 1873. The separate debt of Hungary amounted, in Nov., 1873, to 27 millions. Spain, the most heavily indebted country in Europe, in proportion to its resources, had, in 1875. a debt of about 375 millions, an increase of 114 millions in two years. Turkey is believed to have a debt of about 197 millions, of which 184 millions consist of foreign loans. The debt of Russia is estimated at 133 millions. Holland had not 1011 g since a debt of 100 millions; it is being rapidly reduced from year to year, and now amounts to 78 millions. The debt of Prussia in 1874 was 45 millions; that of the annexed states, which it was arranged, on the enlargement of Prussia, should bear only the burden of the obligations incurred on their behalf, 7 mil lions. At the end of 1871, the German empire had a debt of 35 millions, incurred for extraordinary expenditure on the army and navy; the whole of which has since been discharged. The debt of the United States of America, in 1862, was 107. millions. In 1866, at the close of the civil war, it had mounted lip to 580 millions. Since that time, the surplus of every year's revenue has been devoted to its gradual reduction, and on 1st July, 1877, its amount was 412 millions of pounds..
The national debt of the United Kingdom has risen along with the supremacy of par liament and the necessity'for a standing army, Through the reigns of the Tudors and the Stuarts, the nation's protection against the power of the crown was the absence of a standing army, whose existence was regarded with great jealousy by the commons. But when the control of parliament over the prerogative was strengthened, jealousy in this direction was no longer necessary. Accordingly, it was when parliament triumphed in the revolution settlement that the national D. began. The first regular loan was obtained in 1693; it consisted of the capital of the newly created bank of England,, amount ing to Lc,'1,200,000. This accommodation to the government was, in fact, the price paid by the bank for its privileges. As the nation was engaged in an expensive war, this
beginning was rapidly followed up, and at the peace of11yswick, in 1697, the national D. exceeded 20 millions. Before the accession of the house of Hanover in 1714, it had exceeded 50 millions, and the rapid rise of this burden was a strong argument in the hands of the Jacobites against the revolutionary settlement. Whenever a loan was negotiated by the government, special terms were offered according to circumstances. In one case, there might be a terminable annuity, say of 60 or 100 years—that is to say, is certain percentage being paid during that period, at the end the D. was to be extin guished by such payments. See ANNUITY. In other instances, there was a perpetual annuity. In a loan negotiated on the latter terms, that annuity was always rather under than above what a borrower would give to a private lender, although such a borrower was bound to repay the money, while the nation was not. It came to pass, in fact, through one of the most curious processes in the whole mystery of finance, that a loan never to be repaid was considered a more eligible investment than a loan to be repaid. The government made this gain—for a distinct gain it was—by the convenience to the public, who, always having money for which they were glad to get the secure interest of the funds, were always ready with a new lender when the old one wanted to be paid. Hence has come the perpetual shifting of the fundholders. And as long as there are moneyed persons who will buy thus into the stocks without any considerable reduction, there is a sure test that the debt is not beyond the capacity of the nation. Raised, how ever, as we have seen, by special loans, each on its own conditions, the different funds became exceedingly varied and complicated. It was one of the projects of the great South sea schemers of 1720, to conjoin them all into one uniform fund, but this plan was interrupted by the failure of the whole affair. Afterwards, in 1751, a general uniform arrangement was carried out, and the stocks were then called the consolidated fund. Seo CONS01.. Meanwhile, the progress of the national D. was in round numbers as follows: In 1756, when the war of the Austrian succession began, it was 75 millions; and seven years afterwards, when this war ended, it was 140 millions. Increased by the American war and the war with France and Spain, memorable by the defense of Gibraltar, it had increased to the amount of 260 millions when, in 1793, the great European war of the French revolution broke out. At the peace of Amiens iu 1803, the D. was 620 millions. When the treaty of Vienna was resumed, after the battle of Waterloo, the amount had risen to 885 millions. It has since decreased, although some further loans have been incurred. The largest of these is connected with one of the most honorable actions of which the British empire, with all its traditions of glory, can boast—the advance of 20 millions, in 1831, for the emancipation of the colonial slaves. The latest considerable addition made to the national D. was during the Russian war of 1854, when 16 millions were raised by loan. In 1837, the amount of the D. was close to 812 millions, but till 1,878 has steadily decreased. In that year the unfunded D. (owing to the war in the east and the inelasticity of the revenue) became nearly as large as in 1858. In 1878, the "funded debt " was ,C710,813,007; unfunded (exclusive of annuities), £20,603,000. The distinction between the two is, that the government do not profess to repay the former —they only givo the creditor an annuity, terminable or perpetual, and if lie wantapayment of his money, lie can only get it by selling his right to this annuity; the other consists of temporary loans, liable to fluctuation, and renewed from time to time.