The National Debt is money borrowed by successive Governments, the interest being paid out of general
taxation. This debt was instituted when the needs of the Government compelled it to appeal for aid to the
moneyed classcs.
In early times loans were secured on the King’s or Queen’s personal credit, but after the
revolution of 1688 the credit of the nation replaced that of the Sovereign. Every war adds enormously to the
mount of the debt.
I t is reduced in peace time by using sums of money set aside by Parliament for that
purpose and also by using surplus revenue. The Government broker buys debt in the Stock Exchange. This
debt is then cancelled.
