, 1870-02-08

bears IN actual interest OF 81 per cant. and
in case Greas Britain should need to in
crease her debt abs could probably borrow
on new conao!s at from to s per cent.
The Russian S per cents, however ISSUED
in 1922 at II, and bearing therefore Ga per
cent on the value borrowed), sell to-day at
85 to 81, which would mako their present
borrowing rate 7-10 per cent, which, Of
course, would. increase the rnoment
she were actually requirNd to borrow.
Russia tried in 1863 tho OK
pertinent Of issuing a 8 per cent, which
nov sells at IS, being about the same ao-
tual rate Of interest on her 8 per cant as On
her dves; the ono being s 7-l0, the
other ga difference which may arise from
!" accrued interest" or other variations af-
fecting the quotations, bat not really the
rate Of interest. Nearly all the colonial &c.
cnrities Of Great Britain ere per cents,
md I'll arc at premium.-thos of Cauada
being 104, Good Hope 1921, and Nav
Zealand and Nova Scotia at like rates.
These hare all the revenues OF a strong
government, aud none of the risks OF SELF
government Austrian 8 per oents
arc at 10 to so, and her ratio
Of interest, therefore, 10 per
cent. Turkish per cents are at 70, while
her per cents are at II, making her boz
rowing rate s. per cent on her 6 par cents,
and, for some reason, log per cent on her
6ves. Portuguese per cents are at 334,
making their borrowing rate . per cent.
Spanish 8 per cents arc ut ~, making their
actual borrowing rate over IL per cent.
borrowing rate q 81 per cent. Venezuela
per cents are at 10y, while her G per cents
nro ct 20, making the actual borrowing rate
in both cases 30 per cent. India I04 per
cents are at 207t, her S per cents at liz,
and her per cents at 1o0,-the borrowing
rate On the three being obviously the same.
These quotations suffice to prove that tho
rate Of interest ut which q bond is issued
has no influence whatever over the rate Of
interest which must be paid on the money
it will borrow, and raise very strong in
ference that 6 per cent is not very far
from onr minimum rate OF interest, so
long as our debt is in the form Of bonds.
II any profit is to be found in funding it
must be by resorting to annuities.
These are Of two kinds,
limited or perpetual A limited
or terminable annuity is promise to psy
sum annually for number Of years. At
/! the end Of that time there is, OF course, no
| principal to be paid. A slight increase of
the interest would be necessary. A G par
cent bond at par would exchange even for
G3 per cent annuity expiring at the end Of
forty years. A small portion Of the British
debt YES funded into these annuities about
half century ago, by William Pitt, its
author and most powerful advocate, aud is
now expiring.
Tho perpetual annuity would run at
n lower rate Of interest, probably
saving fourth or third of our
enti1e interest, but would have to
be bought up at some time TO e1tiuguiah
it. This would become more expensive as
the annuity became more valuable. The
word perpetual" has an ominous sound
TO the American ear, and would probably
not be acceptable to the people, as it looks
as if the government we're making its debt
perpetual. But this is BY no means synon-
ymous, hs it is az easy for government to
terminate its debt by buying its perpetual
annuities and cancellipg them u by
paying its bonds. The govern
ment whose credit stands highest,
and whose borrowing rate is lowest
among the nations, owes lis debt in q
form, in which the principal has, in fact,
ceased to exist as debt. The very fact
that there is no constantly recurring liabil-
ity to be called On for the principal is the
reason for Eagiands exalted credit. Re
lieved of this impending danger. her states-
men direct their attention calmly and equal
ly to but two duties,-briagipg up the con-
sols and reducing taxation; though very
general opinion exists among them that the
best and most productive use to which sur
plus taxes can ba put is to leave them in the
hauds Of the TAXPAYERS,