NATIONAL FINANCE 



5648 



NATIONAL FINANCE 



War the price touched 45, about 

 1886 it rose to overpar, and in 1888 

 it became possible to arrange for 

 the conversion of the debt, first into 

 2f p.c. consols, and subsequently, 

 in 1903, into 2 p.c. consols. The 

 S. African War, which began in 

 1899, caused the issue of nearly 

 150,000,000 of fresh debt, and 

 the total debt in 1903 rose to 

 798,000,000. Upon the close of the 

 war the efforts to reduce the debt 

 became still more strenuous, and 

 by March, 1914, the total had been 

 brought again to 706,000,000. 



At the commencement of the 

 Great War in 1914, the national 

 debt of a little over 700,000,000 

 was 152,000,000 less than its total 

 at the end of the war with Napoleon. 



The Great War fundamentally 

 affected the country's credit. The 

 amount of debt created in five 

 years amounted to 7,165,000,000, 

 and the total debt at the end of 

 March, 1920, was 7,881,893,000, 

 after allowing for the conversion of 

 228,000,000 of consols, and other 

 obligations bearing low interest, 

 into debt carrying a high rate of 

 interest and of smaller nominal 

 amount. In 1920 the sale of war 

 stores and other special income 

 enabled a substantial sum to be 

 redeemed, and at the end of March, 

 1921, the total debt had been 

 reduced to 7,644,000,000. In the 

 year ending March 31, 1922, the 

 debt charge was estimated to 

 reach 345,000,000, against a debt 

 charge prior to the war of only 

 24,500,000. 



A considerable part of the exist- 

 ing debt is what is termed floating 

 debt, that is, debt which matures 

 from day to day, and the govern- 

 ment endeavoured to overcome 

 this difficulty by offering to convert 

 a large part of the floating debt into 

 long term bonds, at prices which 

 gave total rates of interest ranging 

 from 5 12s. to 5 14s. p.c. over a 

 period of forty years. The Bank of ' 

 England was directly responsible 

 for the issue of the whole of the 

 Great War loans, as well as for pro- 

 viding the government with tem- 

 porary loans. '") v 



In Jan., 1923, the British govern- 

 ment accepted the terms for repay- 

 ment of its debt to U.S.A. The 

 total debt was 856,000,000, plus 

 interest unpaid for 2J years, mak- 

 ing approximately 900,000,000. 

 The interest is at 3 p.c. for ten 

 years, then 3 p.c. The total 

 annual payment by Britain is ap- 

 proximately 31,500,000 for 10 

 years, then 36,000,000 for another 

 52 years. See Consols ; Sinking 

 JS'and ; Treasury Bill ; War Loans. 



Sir George Paish 

 Bibliography. Collection of Valu- 

 able Tracts on the National Debt 



BRITISH NATIONAL DEBT, MARCH 31, 1920 



Internal Debt : 

 Funded Debt (Consols and other Pre-war Debt) 

 Terminable Annuities 

 3i p.c. War Loan, 1925-8 . . 

 4J p.c. 1925-45 



6 p.c. 1929-47 



4 p.c. 1929-42 



4 p.c. Funding Loan, 1960-90 



4 p.c. Victory Bonds 



6 p.c. National War Bonds, 1922 (Oct. 1) 



5 p.c. 1924 (Oct. 1) 



5 p.c. 



4 p.o. 



5 p.c. 

 5 p.o. 

 5 p.c. 



4 p.o. 



5 p.c. 

 5 p.c. 

 5 p.o. 



4 p.c. 



5 p.c. 

 5 p.o. 

 4 p.c. 



1927 (Oct. 1) 



1927 (Oct. 1) 

 1923 (April 1) 

 1925 (April 1) 



1928 (April 1) 

 1928 (April 1) 



1923 (Sept. 1) 

 1925 (Sept. 1) 

 1928 (Sept. 1) 



1928 (Sept. 1) 



1924 (Feb. 1) 



1929 (Feb. 1) 

 1929 (Feb. 1) 



T >.\J* ., , J.V&V \i'vu. A/ Vf*Uw)U\m 



Exchequer Bonds. 1920, 1921, 1922, 1925. 1930 319,107,000 



War Savings Certificates . 275,081,000 



Straits Settlements Loan (repayable in sterling) 1,375,000 



Treasury Bills 



Ways and Means Advances 



6.556,316,000 

 External Debt (at par) 1,278,714,000 



314,952,000 



19,314,000 



62,745,000 



13,007,000 



1,977,109,000 



64,143,000 



409,100,000 



359,500,000 



National 



Democratic 

 Party. British 

 political party 



212,000,000 

 101,700,000 

 212,700,000 



11,900,000 

 149,300,000 



48,000,000 

 153,800,000 



237,700,000 

 26,200,000 

 26,950,000 



5450000 



vanced o p i n- 

 ions. It origin- 

 a t e d in a 

 Socialist organ- 

 ization which, 

 in 1915, sup- 

 ported the 

 vigorous p r o- 

 secution of the 

 Great War. 

 This became, in 

 1916, the Brit- 

 ish Workers' 

 League, and 

 later took its 

 present name. 



"204,887,000 



Total Dead Weight Debt 



. . 7,835,030,000 



Capital raised under special Acts for the Interest 

 on and repayment of which provision is made by 

 annuities charged on Votes or otherwise outside 

 the general debt service 



Total Debt 



and Sinking Fund, J. R. M'Cul- 

 loch, 1587; Public Finance, C. F. 

 Bastable, 3rd ed. 1903 ; Science of 

 Finance, H. C. Adams, 1909 ; British 

 National Finance, J. W. Root, 1909 ; 

 National and Local Finance, J. W. 

 Grice, 1910. 



election of 1918 

 the party put 

 forward 27 can- 

 didates, ten of 

 whom were 

 returned to the 

 House of Com- 

 mons, where 

 they elected 

 ..7,881,893,000 their own chair " 



as a separate group. The party has 

 an organization with headquarters 

 at Sicilian House, Southampton 

 Row, London, and runs a weekly 

 paper, The British Citizen and 

 Empire Worker. 



46,863,000 



NATIONAL FINANCE & ITS CONTROL 



Sir George Paish, formerly Editor of The Statist 

 Following the article on National Debt, this article sketches the 

 development of the financial system of the United Kingdom. The 

 items of revenue, e.g. Customs, Death Duties, Excise, Income Tax, 

 are the subjects of separate articles. See also Budget ; Civil 

 List; Taxation; Wealth 



In the United Kingdom we un- 

 derstand by national finance the 

 revenue and expenditure of the 

 state as a whole, and in this sense 

 it is used here. In a wider sense 

 it may be defined as the collective 

 revenue and expenditure of all the 

 people in the country, and in any 

 case the relation of this factor to 

 the former one cannot be ignored. 

 As generally used it excludes the 

 revenue and expenditure of the 

 various local authorities. 



From the historical point of view 

 national finance is the financial 

 system of the English nation, to 

 which was added after 1707 that of 

 Scotland, and after 1800 that of 

 Ireland. It is remarkable for the 

 manner in which it has enabled the 

 British people to obtain self-govern- 

 ment through their control of 

 expenditure, and still more for the 

 manner in which it has assisted a 

 small and poor nation to become 

 great and wealthy. 



Until 1740 the people of Eng- 

 land and Wales did not number 

 6,000,000, the total national in- 

 come being only 60,000,000. For 

 that time the foreign trade was not 

 inconsiderable, but the exports of 

 British goods were only 12,000,000 

 per annum and the imports 

 8,000,000 per annum. The total 

 wealth of the nation was no more 

 than 500,000,000. The industrial 

 revolution brought with it an enor- 

 mous increase in the wealth of the 

 country.- The nation's total in- 

 come reached, in 1850, nearly 

 650,000,000, and the nation's 

 wealth amounted, in 1850, to about 

 5,000,000,000. This immense 

 growth in income and in wealth 

 enabled the Government to in- 

 crease its revenue and its expen- 

 diture during the same period from 

 5,000,000 to over 50,000,000. 



Great as had been the increase in 

 income, in wealth, and in commerce 

 in the century between 1750 and 



