Of the 45 billion dollars of national debts in existence at the beginning of the year 1914 about 34 billion dollars were owed by the coun tries which entered the war. France stood at the head of the list with an indebtedness of $6,346,000000; Germany (including the German $5,027,000,000; Russia, $4,536,000,000; Austria-Hungary, $3,869,000000; $4,536,000,000; King dom, $3,486,000,000; Ital, $2,921,000,000; Aus tralia, $1,433,000,000; Japan, $1,241,000,000; United States, $1,028,000,000; Portugal, 000,000; Belgium, $826,000,000; Turkey, $624, 000,000• Canada, $483,000,000; New Zealand, $438,000,000; Rumania, $316,000,000; Bulgaria, $135,000,000. This list of countries whose total debts at the beginning of the war were $33, 657,000,000 includes only those which actively participated in the fighting, and in the war period they practically sextupled their indebt edness as shown by the tabular statement which follows this discussion.
The relation of national debts to national wealth is of course of great importance, but can only be discussed in very general terms, owing to the fact already mentioned, that no country other than the United States takes a wealth census, and figures on the wealth of other countries are at the best only estimates; while figures as to income of a country are therefore estimates based on estimates. Accepting esti mates which have been made of the wealth of the principal countries in 1919 it would appear that the ratio of debt to wealth in 1919 would be in case of the United States about 8 per cent, Great Britain, France and Italy 33 per cent. The per capita indebtedness of the prin cipal countries in 1919 is: United States, $223; Great Britain, $790; France, $800; Germany, $675; Italy, $350.
Practically all of the loans made by the great nations of Europe have been issued by the gov ernments at less than their face or par value. The first of the British war loans in the great European War (that of November 1914) which bore an interest rate of 3% per cent was issued by the government at 95 per cent, or at 5 per cent below par; a part of the third was issued at par and a part at 95 per cent. The German loans were issued at slightly below par, 97% per cent in some cases, 98 per cent in others and 99 per cent in one instance; those of Italy at from 90 to 97 per cent of their face value, while in the case of France the first National Defense Loan bore an interest rate of s/ per cent and was sold by the government at 88 per cent of its face value, and in the second loan, which bore an interest rate of 5 per cent, the issue was made at 68 per cent while a still later loan was issued at about 70 per cent of its face value, the Austria-Hungary loans which bore interest at the rate of 5% per cent in most cases were issued at from 93 to 97 per cent of their face value. As a result of this the amount of money which European governments have actually received upon their loans issued since the beginning of the war is nearly 3 billion dollars below the par value of the securities issued, upon which par value the present generation must pay full interest while the later generations who meet tht principal of the bonds will have to pay approxi mately 3 billion dollars more than was received by the governments which issued them. The United States is in fact the only one of the great nations making popular loans in behalf of the war which actually sold its bonds at their full face value. And many of the securi
ties of the European countries sold at less than par have also been paid for in a paper cur rency more, or less depreciated.
A very large proportion of the national loans issued by governments other than the United States in former years were also sold by the issuing governments at less than their face value, in most cases at from 2 to 5 per cent below par.
Loans made by the United States govern ment have usually been issued at their full face value. In the very early days there were a few exceptions to this general rule. A 22 year bond issued in 1796 was sold at 87% per cent of its face value; a 16-million dollar issue in 1813 was sold at 88 per cent; another in August of that year at lig per cent discount, and in 1814 sundry issues at a discount of 20 per cent. Again in 1842 there was one small issue at 97% per cent, and in 1861 two larger issues at 89 per cent of their face values. Dur ing the Civil War apparently all of the numer ous bond issues made by the government were sold at par, and in a few cases above par, but were paid for in the depreciated currency of that period—greenbacks—which were accepted at their face value.
Of the world's national debts which existed at the beginning of 1914 a large part were held in Europe, and practically all of those issued after 1914, aside from those of the United States, were taken in Europe. Of the total of the world's national debts at the begin ning of 1914, 45 billion dollars, about 32 billions were the obligations of European governments, approximately 4 billions those of Asiatic gov ernments, 234 billions South American, 2 billions Oceania and 1% billions Africa. Practically all of the European government issues, amounting to 32 billion dollars, were then held in Europe, most of them in the countries by which they were issued, except in the case of Russia, Italy, Spain, Portugal and certain of the Balkan States. A very considerable proportion of the Russian securities aggregating about 4% billion dollars at the beginning of the war were held in France, Germany and Great Britain, and this was true to a considerable extent of those of Italy, Spain, Portugal and the Balkan States. Of the South American securities, a large pro Rortion were held in Great Britain and France. Those of North America were chiefly held at home; those of Asia in part in Great Britain, Fiinci and Germany, but a considerable share was held in Asia, while those of the British colonies in Africa and Oceania were largely held in Great Britain. Practically all of the great loans made by the European countries since 1914 (with the exception of the $500,000, 000 marketed by the British and French in the United States) were placed among the people of the country issuing them, in the. form of °popular loans' though some parts of the early Russian loans were probably taken in Great Britain and France. This fact, that most of the obligations of the nations are held by their own people, is the one mitigating feature of the enormous increase in national indebtedness of today. The payment of the debts will not send out of the country the money so paid, while the greatly increased interest payments are also distributed among home population.