20. NATIONAL FINANCE. National Debt.— The National Debt of the United King dom, in the sense in which the term is under stood in several official returns, amounted ou 31 March 1914 to i650,000,000, but in addition to this there were various amounts outstanding which had been borrowed for military, naval, and other works and brought the "Aggregate Gross Liabilities" up to £706,000,000. Further, a sum of £74,000,000 bad been borrowed and lent to local authorities, and another sum of f95,000, 000 had been borrowed for the purpose of establishing occupying land-ownership in Ire land by the expropriation of the former land lords. The total £875,000,000 nominally con sisted of L539,000,000 of consolidated per cent stock ("consols") redeemable at par at the option of the State only after April 1923, £47, 000,000 of nearly similar stocks and permanent debt to the Banks of England and Ireland, £33,000,000 of treasury bills and exchequer bonds repayable at various dates, 186,000,000 of the capital value of terminable annuities includ ing those raised for various works chiefly con nected with the navy and the post-office, 174, 000,000 of local loans 3 per cent stock and 195,000,000 of 234 per cent and 3 per cent Irish land stock. But most of the terminable annu ities, about 186,000,000 of the consols, and about £91,000,000 of the other securities were not in the hands of the public but were held by the State itself against its liability to the savings bank depositors, so that it would give a truer account of the real position to say that the total debt consisted of about 1640,000,000 in the securities just enumerated, and about £240,000,000 in money payable on demand. or at very short notice to savings bank depositors.
The main body of the debt was chiefly due to the wars in which the country was engaged between 1688 and 1815. During that period the debt grew from nothing (except a trifling sum which Charles II had borrowed from the goldsmiths) to £900,000,000. It then under went steady diminution till in 1899 it had fallen to 1628,000,000. The South African war brought it up again to £771,000,000 in 1903, since which year it had once more been diminishing. The #56,000,000 of works debt had all been incurred since 1890, and most of it since 1900, when it only amounted to #10,000,000. The amount
lent to local authorities was only 18,000,000 in 1840 and £26,000,000 in 1887. The Irish land debt took its rise in 1891, but most of it is much more recent.
The interest and sinking fund of the Irish land debt is naturally provided for chiefly by the payments made by the new Irish land owners, who are paying for their land by in stalments, but a portion falls on funds which would otherwise benefit Irish local taxpayers and another portion is defrayed by the tax payers of the United Kingdom. The local loans debt is adequately provided for by the interest and repayments received from the local authori ties. The works debt is made a charge upon the annual parliamentary votes for the departments concerned, in such a way that each loan will be extinguished in 30 years at most For the main body of the debt the practice has been since 1876 to devote by legislation a certain annual sum, called the °permanent" or "fixed" annual charge, to interest and repayment taken to gether. As the sum thus devoted considerably exceeds the interest, this plan, if carried out without modification and without interruption owing to fresh borrowing, would practically convert the whole debt into a terminable an nuity and extinguish it in a very moderate length of time. But as a matter of fact the °fixed charge" was reduced from 128,000.000 to £26,000,000 in 1888 and by two steps to 123, 000,000 in 1900, and it was only the fresh bor rowings of the South African war which led to its restoration to £28,000,000 in 1905 from which it was reduced to £24,500,000 in 1910-11. The difference between the °fixed charge" and • the interest is sometimes called the "New Sink ing Fund." The "Old Sinking Fund" is any actual surplus realized in the year. The gen eral law is that this also must be devoted to re payment of debt, but when any considerable surplus happens to be realized, special legisla tion usually interferes with the operation of the rule. As stated above, the foregoing_ shows the development and position of the National Debt at 31 March 1914. By the same date in 1918, after 44 months of the European War, the gross debt was estimated at i5,850,000,000, of which sum about £1,600,000,000 represented advances made by Great Britain to her Allies and Dominions.