This is the broad outline of the facts as they exist. The events whereby this debt has attained these vast proportions may be thus briefly narrated.

The National Debt at the period of the Revolution in 1688 amounted to about £664,000, principally in the form of Terminable Annuities, specially charged upon certain branches of the revenue. The system of borrowing money on Annuities for terms of years and lives was continued by Government for several years subsequent to this period, until the magnitude of the public debt, and the heavy annual charge thus created, rendered the method no longer practicable.

It was during the war with France in which this country engaged at the time of the Revolution, and which continued for a period of nearly ten years, that the foundation of the present National Debt was laid. At the close of this war in 1697, at the Peace of Ryswick, the debt was found to amount to nearly £15,000,000, and the revenue was deficient the sum of £5,000,000. At this time, also, from the irregularity with which the interest upon the floating debt was paid, Exchequer tallies and orders were at a discount of 40 per cent., and Government, to redeem the credit of the nation, as well as to provide for the deficiency of the revenue, was obliged to contract a further debt, and to fund a portion of the floating securities. The Terminable Annuities gradually expiring effected a reduction in the amount of the public debt, which, at the close of the reign of William and Mary, in 1702, was £12,767,225, taking the Terminable Annuities at a valuation, and the annual charge for interest and annuities was £1,215,324.

The return of war, on the accession of Queen Anne, brought with it an increased expenditure to the country, and a consequent addition to the public debt. Various expedients were resorted to in order to raise money, and the terms of the loans appear to have been but little regarded; life annuities and annuities for fixed terms, tontines, and lotteries, were the means most frequently made use of in order to provide the necessary supplies for the exigencies of the State. The financial embarrassment of the nation led to the establishment of the South Sea Company in the year 1711, after the war had continued for nine years. This association was projected with the avowed intention of carrying on trading intercourse with the South Seas and the North-West Coast of America; but its chief object appears to have been to assist the Government in its financial operations. The various Government obligations outstanding at this period amounted to about £9,000,000, upon which little or no interest had been paid owing to the exigencies of the State, and as a consequence they were greatly depreciated. The South Sea Company were empowered to receive these obligations as subscriptions for stock in the company, and were thus constituted the chief creditors of the State. The amount of stock thus created was £9,177,968, which was increased in 1715 to £10,000,000, by the addition of certain arrears of interest to the capital stock; for this sum the company received 6 per cent. interest, and £8000 per annum for the expenses of management.

At the close of the reign of Queen Anne, in 1714, the public debt had increased to about £36,175,460, bearing an annual charge for interest and annuities of £3,063,135. Of this the permanent debt was about £28,000,000, and the unfunded obligations £8,355,000.

In the year 1718, the interest on part of the permanent debt, £3,775,028, was reduced from 6 to 5 per cent., and a regular sinking fund was provided by Act of Parliament (3 Geo. I., c. 7) for the redemption of the permanent debt. By the former operation an annual saving was effected of £328,560; but very little appears to have been accomplished by the action of the sinkingfund. In 1720 the funded debt was greatly increased; the stock of the South Sea Company, which had then proved a failure, having been charged to the Consolidated Fund; so that, although the falling in of annuities effected a trifling reduction in the annual charge upon the revenue, the National Debt, at the close of the reign of George I., amounted to upwards of £52,000,000, or above £16,000,000 more than at the conclusion of the previous reign. The annual charge was considerably

diminished by the reduction of interest in 1717, and by a further reduction from 5 per cent. to 4 per cent. in 1727, at the end of which year the annual charge was £2,360,934.

In the peace which prevailed during the greater part of the interval from 1727 to 1739, about £6,000,000 of the debt was discharged by the operation of the sinking fund, and the falling in of temporary annuities. On the 31st December in the latter year it amounted to about £47,000,000, whereof about £40,000,000 constituted the permanent debt, and the remainder consisted of terminable annuities and unfunded securities: the annual charge was about £1,900,000.

From the year 1739, the National Debt received vast additions annually for several years. The disturbed state of this country, owing to the landing of Charles Edward Stuart in 1745, and the war in which the nation engaged in 1740, in support of the Queen of Hungary's pretensions to the throne of Austria, involved the Government necessarily in very large expenses. The debt on the 31st December, 1748, soon after the Treaty of Peace, concluded at Aix-la-Chapelle, amounted to nearly £76,000,000 being an increase during the war of about £29,000,000.

In the short interval of peace which succeeded the Treaty of 1748, the Government was enabled by the rise in the price of stocks to effect a reduction of interest on the 4 per cents. to 3 per cent. This was done on the 29th November, 1749; the stockholders were to receive 4 per cent. until the 25th December, 1750; from that time till the 25th December, 1757, they were to be allowed 3 per cent., after which time the interest was to be reduced to 3 per cent. In the year 1751, several of these stocks were consolidated into one fund, amounting collectively to £9,137,821. This was the origin of the present Consolidated 3 per cent. Annuities. Various other stocks were consolidated at the same period to the amount of £17,701,324, forming the commencement of the present 3 per cent. Reduced Annuities.

The war with France, which broke out in 1756 by an attack on two French frigates in South America, though it continued but seven years, added nearly £60,000,000 to the public debt, which at the conclusion of the war in 1763 amounted to £133,000,000, entailing an annual charge upon the nation of £5,000,000. During the twelve years of tranquillity, which

There appears to be some difference amongst writers on the amount of public debt at this period. Sir John Sinclair, in his "History of the Revenue," gives the amount of the funded and unfunded debt at £146,682,844, and the annual charge at £4,849,821, which is the amount given by Dr. Price.

succeeded the Peace of Paris, about £6,000,000 of the debt was discharged, so that at the commencement of the American War, in 1775, the debt amounted to £126,842,811. During the seven years in which this country was engaged in war with the United States, the National Debt was more than doubled; for although the independence of America was acknowledged in 1782, yet loans were raised in several subsequent years in order to defray the remaining expenses of the war; and it was not until 1786 that the revenue was found to be sufficient for the expenditure. On the 5th January in that year, the debt amounted to £245,466,855, including the terminable annuities taken at a valuation, and the annual charge was £9,666,541. It was in this year that a new sinking fund was established for the reduction of the debt; that constituted by 3 Geo. I., c. 7, having become obsolete. The Act of Parliament by which the sinking fund of 1786 was established (26 Geo. III., c. 31) appointed certain Commissioners to carry its object into effect, who are continued in office by the Act 9 Geo. IV. The Commissioners are the Speaker of the House of Commons, the Chancellor of the Exchequer, the Master of the Rolls, the Accountant-General of the Court of Chancery, and the Governor and Deputy-Governor of the Bank of England for the time being. The fund, which was to consist of £1,000,000 annually, after passing through various modifications, was finally amended by the Act 10 Geo. IV., c. 27, passed the 1st of June, 1829, which provides that from the 5th of July, 1829, there shall be issued out of the Consolidated Fund only such annual sum as shall appear to be the actual surplus revenue of the United Kingdom, to be applied towards the Reduction of the National Debt by the Commissioners appointed for that purpose; and that the Lords Commissioners of the Treasury shall, every quarter, make up accounts of the annual revenue for the four preceding quarters, and one-fourth of the annual surplus is to be issued to the Commissioners for the Reduction of the National Debt, who are to publish in the London Gazette the sum which will be so applicable in the ensuing quarter. It was further enacted, that all stock and annuities for terms of years standing in the names of the Commissioners for the Reduction of the National Debt on the 5th of July, 1829, should be cancelled, and the dividends cease to be issued out of the Consolidated Fund, and that in future all stock purchased by the Commissioners should be cancelled from the day of transfer. The Commissioners are empowered to purchase Exchequer Bills, which are to be cancelled within seven days after the expiration of each quarter.

Early in the year 1793, the war with France commenced,

which continued, with only a very short interruption, until 1815, a period of 22 years. This long contest brought with it an immense increase in the expenditure of the country, and a consequent augmentation of the public debt: stock to the amount of upwards of £613,000,000 was added to the National Debt during this contest, and about £23,000,000 to the annual charge.

The following Table shows the progress of the National Debt, Funded and Unfunded, from its commencement to the close of the war in 1815, and its decrease since: