The New Student's Reference Work/National Debt

National Debt is the debt of a nation or government contracted by their legislative representatives. In early times these were comparatively small, because the government, as well as the individual, had to give security for the indebtedness; but since the commencement of the present system of banking and the ability of governments to issue interest-bearing evidences of indebtedness in the shape of bonds, the national debts have in many cases, as that of France, become quite enormous. Regarding the origin of these vast obligations, the most prolific cause is the wars in which the different nations have from time to time engaged. Thus the Civil War added about $2,500,000,000 to the national debt of the United States. Of late, however, the governments have borrowed money for different public purposes, as building railroads and telegraph lines and equipping armies and navies. The present system of securing the national debt is by the issue of bonds, bearing a stated rate of interest, payable quarterly, and maturing or becoming due at a certain date. The debt of the United States is in part secured in this way and in part by the issue by the government of greenbacks or paper currency, actually nothing more or less than promissory notes, due upon demand, at presentation at the United States treasury. The method adopted in the United States for the payment of the debt is by the taxation of spirits, whiskey, tobacco and butterine, by charging certain amounts for the traffic in these articles and by the levy of a tax or tariff on articles imported into the country. The greatest amount ever owed by this government was $2,773,236,173 in 1866, directly after the Civil War, but this was reduced to $798,137,603 28 in 1892. The total debt on July 1, 1910, was $2,652,665,838. Deducting $1,725,683,064, the cash in the treasury on the same date, the net debt was $926,982,733. The indebtedness of the chief nations in 1909, according to the Bureau of Statistics of the Department of Commerce and Labor, U. S. A., was: Great Britain (funded and unfunded debt), $3,839,620,745; France, total debt, including interest and annuities, $5,898,675,451; Germany, total debt (bearing interest at 3% and 3½%), less war treasury fund, about $1,094,790,975; Russia, total debt, including that incurred for state railroads, $4,558,152,565; Italy, $2,602,299,757; Austria-Hungary, consolidated and floating debt, $1,063,725,105; China, outstanding foreign debt (raised chiefly to meet expenses connected with the war with Japan), $601,916,605; Japan, $1,287,604,261; Mexico, $219,899,231; and Canada $323,930,279.