NATIONAL DEBT 



4076 



NATIONAL MUSEUM 



Adam Smith prophesied before the year 1790 

 that the enormous obligations they assumed 

 would eventually ruin European countries; to- 

 day the nations owe ten times as much as in 

 his day, and there is no indication that his 

 warning had a logical basis. 



United States Debt. After the Revolution 

 the young nation was in debt for expenses in- 

 curred by Congress to carry on the war, and it 

 also assumed the war debts of the thirteen 

 States. Thus, in 1791, the national debt was 

 $75,463,746.52. It increased to nearly $87,000,- 

 000 in 1804, then decreased gradually until the 

 second war for independence. That conflict left 

 a debt of $127,334,933.74 in 1816, but by 1835 

 the country was so nearly free fr"om indebted- 

 ness that it owed only $33,733.05. Not since 

 then has it been so low; the Mexican War in- 

 creased it, and the War of Secession raised it 

 to the tremendous total of $2,773,236,173.69 in 

 1866. By 1893 this was reduced nearly one- 

 half, which means that the reduction during 

 this time averaged $5,185 for every hour of the 

 intervening twenty-seven years. After 1893 the 

 debt began to increase, and in 1912 again passed 

 beyond its highest war total, with a new record 

 of over $2,868,000,000, due to large expenditures 

 for the Spanish-American War, to resulting in- 

 crease in the pension roll, to lavish expenditures 

 for public buildings and for river and harbor 

 improvement, and for the construction of the 

 Panama Canal. When the United States en- 

 tered the War of the Nations, in April, 1917, 

 the unprecedented cost of quick preparation for 

 the conflict increased the country's expenditures 

 to previously unheard of sums. A part of this 

 expense was raised by various taxes, principal 

 among which were greatly increased income 

 taxes, but most of the money was acquired by 

 the sale of Liberty Bonds and Victory Bonds, 

 each bond sold representing an increase in the 

 national debt. The country's short participa- 

 tion in the war cost about twelve times the 

 entire financial burden entailed by four years of 

 civil war (1861-1865). The public debt for 

 various years since 1860 is given in the table : 



Canada's Debt. The public debt of Canada 

 was created in 1867 by the formation of the 

 Dominion, which assumed the liabilities of the 

 separate colonies to a total of $92,500,000. Un- 

 like the United States and most other countries, 

 Canada has had no great wars to burden the 

 population with a large and sudden increase in 

 the national debt. There has been, however, a 

 steady growth, due chiefly to expenditures for 

 internal improvements of all kinds, including 

 the construction of public works, canals and 

 railways, and to cash subsidies to railways. The 

 participation of Canada in the War of the Na- 

 tions added very largely to its debt. The fol- 

 lowing table shows the increase: 



In Other Countries. France had the largest 

 national debt of any country in the world when 

 the War of the Nations began in 1914. To the 

 credit of the nation it can be said that it was 

 very largely owed to French citizens, who have 

 always been notably thrifty and always able to 

 respond to government calls for loans. The 

 great war embroiled over twenty nations, and 

 the debts of each increased at an appalling rate. 

 A correct statement of the total debt of each 

 European country could not ,be published in 

 1919. However, Great Britain owed over $28,- 

 000,000,000 in 1918; Germany, 1916, $21,000,000,- 

 000; France, 1917, $23,000,000,000; Italy, 1917, 

 $6,690,000,000; Russia, 1916, $25,500,000,000; 

 Austria-Hungary, 1918, $18,000,000,000. 



After the war it was feared that Germany 

 would repudiate its debt; no indication of such 

 a probability existed in 1919; the new govern- 

 ment's first task was to make peace and put 

 down local revolutions, and the financial re- 

 habilitation of the country had not been at- 

 tempted. 



NATIONAL EDUCATION ASSOCIATION, 

 see subtitle, in article EDUCATION, page 1952. 



NATIONAL GUARD, volunteer defense 

 forces of the several states of the American 

 Union. See MILITIA. 



NATIONAL HYMNS. See HYMNS, NA- 

 TIONAL. 



NATIONAL MUSEUM OF THE UNITED 

 STATES, a government collection of antiqui- 

 ties, scientific specimens; etc., at Washington, 

 D. C., under the control of the Smithsonian 

 Institution. In 1876 the Smithsonian authori- 



